EXHIBIT 4.1
EXECUTION COPY
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$155,000,000
CREDIT AGREEMENT
DATED AS OF JULY 22, 2004,
AMONG
QUEST CHEROKEE, LLC,
AS BORROWER,
THE OTHER GUARANTORS PARTY HERETO,
AS GUARANTORS,
THE LENDERS PARTY HERETO
AND
UBS SECURITIES LLC,
AS ARRANGER, BOOKMANAGER, DOCUMENTATION AGENT AND SYNDICATION AGENT,
AND
UBS AG, STAMFORD BRANCH,
AS ISSUING BANK, LC FACILITY ISSUING BANK, ADMINISTRATIVE AGENT
AND COLLATERAL AGENT,
AND
UBS LOAN FINANCE LLC,
AS SWINGLINE LENDER
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
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TABLE OF CONTENTS
Section Page
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ARTICLE I
DEFINITIONS
SECTION 1.01 Defined Terms....................................................... 2
SECTION 1.02 Classification of Loans and Borrowings.............................. 35
SECTION 1.03 Terms Generally..................................................... 35
SECTION 1.04 Accounting Terms; GAAP.............................................. 36
SECTION 1.05 Petroleum Terms..................................................... 36
SECTION 1.06 Resolution of Drafting Ambiguities.................................. 36
ARTICLE II
THE CREDITS
SECTION 2.01 Commitments......................................................... 36
SECTION 2.02 Loans............................................................... 36
SECTION 2.03 Borrowing Procedure................................................. 37
SECTION 2.04 Evidence of Debt; Repayment of Loans................................ 38
SECTION 2.05 Fees................................................................ 39
SECTION 2.06 Interest on Loans................................................... 40
SECTION 2.07 Termination and Reduction of Commitments and LC Facility Deposit.... 41
SECTION 2.08 Interest Elections.................................................. 42
SECTION 2.09 Amortization of Term B Borrowings................................... 43
SECTION 2.10 Optional and Mandatory Prepayments.................................. 43
SECTION 2.11 Alternate Rate of Interest.......................................... 46
SECTION 2.12 Increased Costs..................................................... 47
SECTION 2.13 Breakage Payments................................................... 48
SECTION 2.14 Payments Generally; Pro Rata Treatment; Sharing of Setoffs.......... 48
SECTION 2.15 Taxes............................................................... 50
SECTION 2.16 Mitigation Obligations; Replacement of Lenders...................... 51
SECTION 2.17 Swingline Loans..................................................... 52
SECTION 2.18 Letters of Credit................................................... 53
SECTION 2.19 LC Facility Deposit Account......................................... 60
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01 Organization; Powers................................................ 61
SECTION 3.02 Authorization; Enforceability....................................... 61
SECTION 3.03 No Conflicts........................................................ 62
SECTION 3.04 Financial Statements; Projections................................... 62
SECTION 3.05 Properties.......................................................... 62
SECTION 3.06 Intellectual Property............................................... 63
SECTION 3.07 Equity Interests and Subsidiaries................................... 64
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Section Page
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SECTION 3.08 Litigation; Compliance with Laws.......................................... 64
SECTION 3.09 Agreements................................................................ 64
SECTION 3.10 Federal Reserve Regulations............................................... 65
SECTION 3.11 Investment Company Act; Public Utility Holding Company Act................ 65
SECTION 3.12 Use of Proceeds........................................................... 65
SECTION 3.13 Taxes..................................................................... 65
SECTION 3.14 No Material Misstatements................................................. 66
SECTION 3.15 Labor Matters............................................................. 66
SECTION 3.16 Solvency.................................................................. 66
SECTION 3.17 Employee Benefit Plans.................................................... 66
SECTION 3.18 Environmental Matters..................................................... 67
SECTION 3.19 Insurance................................................................. 68
SECTION 3.20 Security Documents........................................................ 68
SECTION 3.21 Anti-Terrorism Law........................................................ 69
SECTION 3.22 Mineral Interests......................................................... 69
SECTION 3.23 Gas Balancing Agreements and Advance Payment Contracts.................... 70
ARTICLE IV
CONDITIONS TO CREDIT EXTENSIONS
SECTION 4.01 Conditions to Initial Credit Extension.................................... 70
SECTION 4.02 Conditions to All Credit Extensions....................................... 74
ARTICLE V
AFFIRMATIVE COVENANTS
SECTION 5.01 Financial Statements, Reports, etc........................................ 75
SECTION 5.02 Litigation and Other Notices.............................................. 78
SECTION 5.03 Existence; Businesses and Properties...................................... 78
SECTION 5.04 Insurance................................................................. 79
SECTION 5.05 Taxes..................................................................... 80
SECTION 5.06 Employee Benefits......................................................... 80
SECTION 5.07 Maintaining Records; Access to Properties and Inspections; Audit; Annual
Meetings............................................................... 81
SECTION 5.08 Use of Proceeds........................................................... 81
SECTION 5.09 Compliance with Environmental Laws; Environmental Reports................. 81
SECTION 5.10 Interest Rate Protection.................................................. 82
SECTION 5.11 Additional Collateral; Additional Guarantors.............................. 82
SECTION 5.12 Security Interests; Further Assurances.................................... 83
SECTION 5.13 Information Regarding Collateral.......................................... 84
SECTION 5.14 Post-Closing Collateral Matters........................................... 84
SECTION 5.15 Operation of Properties, Equipment and Mineral Interests.................. 84
SECTION 5.16 Change to Fiscal Year..................................................... 85
ARTICLE VI
NEGATIVE COVENANTS
SECTION 6.01 Indebtedness.............................................................. 85
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Section Page
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SECTION 6.02 Liens..................................................................... 86
SECTION 6.03 Sale and Leaseback Transactions........................................... 89
SECTION 6.04 Investment, Loan and Advances............................................. 89
SECTION 6.05 Mergers and Consolidations................................................ 90
SECTION 6.06 Asset Sales............................................................... 91
SECTION 6.07 Acquisitions.............................................................. 91
SECTION 6.08 Dividends; Subordinated Note Payments..................................... 91
SECTION 6.09 Transactions with Affiliates.............................................. 92
SECTION 6.10 Financial Covenants....................................................... 93
SECTION 6.11 Prepayments of Other Indebtedness; Modifications of Organizational
Documents and Other Documents, etc..................................... 93
SECTION 6.12 Limitation on Certain Restrictions on Subsidiaries........................ 94
SECTION 6.13 Limitation on Issuance of Capital Stock................................... 94
SECTION 6.14 Limitation on Creation of Subsidiaries.................................... 94
SECTION 6.15 Business.................................................................. 94
SECTION 6.16 Limitation on Accounting Changes.......................................... 94
SECTION 6.17 Fiscal Year............................................................... 95
SECTION 6.18 Lease Obligations......................................................... 95
SECTION 6.19 No Further Negative Pledge................................................ 95
SECTION 6.20 Anti-Terrorism Law; Anti-Money Laundering................................. 95
SECTION 6.21 Embargoed Person.......................................................... 95
ARTICLE VII
GUARANTEE
SECTION 7.01 The Guarantee............................................................. 96
SECTION 7.02 Obligations Unconditional................................................. 96
SECTION 7.03 Reinstatement............................................................. 97
SECTION 7.04 Subrogation; Subordination................................................ 97
SECTION 7.05 Remedies.................................................................. 97
SECTION 7.06 Instrument for the Payment of Money....................................... 98
SECTION 7.07 Continuing Guarantee...................................................... 98
SECTION 7.08 General Limitation on Guarantee Obligations............................... 98
SECTION 7.09 Release of Guarantors..................................................... 98
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.01 Events of Default......................................................... 98
ARTICLE IX
COLLATERAL ACCOUNT; APPLICATION OF COLLATERAL PROCEEDS
SECTION 9.01 Collateral Account........................................................ 101
SECTION 9.02 Proceeds of Destruction, Taking and Collateral Dispositions............... 102
SECTION 9.03 Application of Proceeds................................................... 102
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Section Page
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ARTICLE X
THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT
SECTION 10.01 Appointment........................................................ 103
SECTION 10.02 Agent in Its Individual Capacity................................... 103
SECTION 10.03 Exculpatory Provisions............................................. 103
SECTION 10.04 Reliance by Agent.................................................. 103
SECTION 10.05 Delegation of Duties............................................... 104
SECTION 10.06 Successor Agent.................................................... 104
SECTION 10.07 Non-Reliance on Agent and Other Lenders............................ 104
SECTION 10.08 Name Agents........................................................ 104
SECTION 10.09 Indemnification.................................................... 105
ARTICLE XI
MISCELLANEOUS
SECTION 11.01 Notices............................................................ 105
SECTION 11.02 Waivers; Amendment................................................. 106
SECTION 11.03 Expenses; Indemnity................................................ 108
SECTION 11.04 Successors and Assigns............................................. 109
SECTION 11.05 Survival of Agreement.............................................. 111
SECTION 11.06 Counterparts; Integration; Effectiveness........................... 112
SECTION 11.07 Severability....................................................... 112
SECTION 11.08 Right of Setoff.................................................... 112
SECTION 11.09 Governing Law; Jurisdiction; Consent to Service of Process......... 112
SECTION 11.10 Waiver of Jury Trial............................................... 113
SECTION 11.11 Headings........................................................... 113
SECTION 11.12 Confidentiality.................................................... 113
SECTION 11.13 Interest Rate Limitation........................................... 114
SECTION 11.14 Lender Addendum.................................................... 114
SECTION 11.15 Obligations Absolute............................................... 114
ANNEX I Amortization Table
SCHEDULES
Schedule 1.01(b) Refinancing Indebtedness to Be Repaid
Schedule 1.01(c) Subsidiary Guarantor
Schedule 2.01 LC Facility Deposits
Schedule 3.03 Governmental Approvals; Compliance with Laws
Schedule 3.05(b) Real Property
Schedule 3.06(c) Violations or Proceedings
Schedule 3.07(a) Subsidiaries
Schedule 3.07(c) Corporate Organizational Chart
Schedule 3.09(c) Material Agreements
Schedule 3.18 Environmental Matters
Schedule 3.19 Insurance
Schedule 5.01(l) Reserve Information
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Schedule 5.14 Post-Closing Matters
Schedule 6.01(b) Existing Indebtedness
Schedule 6.02(c) Existing Liens
Schedule 6.04(b) Existing Investments
EXHIBITS
Exhibit A Form of Administrative Questionnaire
Exhibit B Form of Assignment and Assumption
Exhibit C Form of Borrowing Request
Exhibit D Form of Compliance Certificate
Exhibit E Form of Interest Election Request
Exhibit F Form of Joinder Agreement
Exhibit G [Reserved]
Exhibit H Form of LC Request
Exhibit I Form of Lender Addendum
Exhibit J [Reserved]
Exhibit K-1 Form of Term B Note
Exhibit K-2 Form of Revolving Note
Exhibit K-3 Form of Swingline Note
Exhibit L-1 Form of Perfection Certificate
Exhibit L-2 Form of Perfection Certificate Supplement
Exhibit M Form of Security Agreement
Exhibit N-1 Form of Opinion of Company Counsel
Exhibit N-2 Form of Opinion of Local Counsel
Exhibit O Form of Solvency Certificate
Exhibit P Form of Intercompany Note
Exhibit Q Form of Non-Bank Certificate
Exhibit R-1 Form of Assignment of and Amendment to Mortgages
Exhibit R-2 Form of Amended and Restated Mortgage
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CREDIT AGREEMENT
This CREDIT AGREEMENT (this "AGREEMENT") dated as of July 22, 2004,
among QUEST CHEROKEE, LLC, a Delaware limited liability company ("BORROWER"),
the Subsidiary Guarantors (such term and each other capitalized term used but
not defined herein having the meaning given to it in Article I), the Lenders,
UBS SECURITIES LLC, as lead arranger (in such capacity, "ARRANGER"), as
documentation agent (in such capacity, "DOCUMENTATION AGENT") and as syndication
agent (in such capacity, "SYNDICATION AGENT"), UBS LOAN FINANCE LLC, as
swingline lender (in such capacity, "SWINGLINE LENDER"), UBS AG, STAMFORD
BRANCH, as issuing bank (in such capacity, "ISSUING BANK"), and UBS AG, STAMFORD
BRANCH, as LC Facility issuing bank (in such capacity, "LC FACILITY ISSUING
BANK"), as administrative agent (in such capacity, "ADMINISTRATIVE AGENT") for
the Lenders and as collateral agent (in such capacity, "COLLATERAL AGENT") for
the Secured Parties.
WITNESSETH:
WHEREAS, Borrower, Bank One, NA, a national banking association
("BANK ONE"), acting as administrative agent and collateral agent (in such
capacities, the "EXISTING AGENTS") and the financial institutions (including
Bank One) party thereto (collectively, the "EXISTING LENDERS") are parties to
that certain Revolving Credit Agreement and Senior Term Second Lien Secured
Credit Agreement, both dated as of December 22, 2003 (collectively, as each may
have been amended, modified or restated from time to time, the "EXISTING CREDIT
AGREEMENTS"), pursuant to which the Existing Lenders have made revolving and
term loans evidenced by the Existing Credit Agreements and one or more
promissory notes (collectively, the "EXISTING LOANS") to Borrower.
WHEREAS, pursuant to that certain Loan Transfer Agreement and that
certain Assignment of and Amendment to Mortgages, the Existing Agents and the
Existing Lenders have sold, assigned and transferred to the Administrative
Agent, the Collateral Agent and Lenders all right, title and interest of the
Existing Agents and the Existing Lenders (excepting those rights and interests
specifically reserved pursuant to the terms of said Loan Transfer Agreement) in
and to the Existing Loans and all collateral and other security for the Existing
Loans, including, without limitation, the Existing Credit Agreements, the
promissory note(s), mortgages, deeds of trust, security agreements, assignments
of production, guarantees and other instruments and documents given as evidence
of or security for the Existing Loans (collectively, the "EXISTING LOAN
DOCUMENTS").
WHEREAS, this Agreement represents a renewal, extension, amendment
and modification of the Existing Loans and the other existing indebtedness and
obligations owed under the Existing Credit Agreements and the other Existing
Loan Documents, but is not a satisfaction or novation thereof, and the Existing
Credit Agreement is hereby being amended and restated in its entirety by this
Agreement, the existing mortgages are being amended and restated and the other
Existing Loan Documents are being terminated and replaced by the other Loan
Documents (as defined below), as applicable.
WHEREAS, Borrower has requested the Lenders to extend credit in the
form of (a) Term B Loans on the Closing Date, in an aggregate principal amount
not in excess of $120.0 million, (b) Revolving Loans at any time and from time
to time after the Closing Date and prior to the Revolving Maturity Date, in an
aggregate principal amount at any time outstanding not in excess of $20.0
million and (c) an LC Facility Letter of Credit on the Closing Date in an
aggregate principal amount not in excess of $15.0 million.
WHEREAS, Borrower has requested the Swingline Lender to make
Swingline Loans, at any time and from time to time after the Closing Date and
prior to the Revolving Maturity Date, in an aggregate principal amount at any
time outstanding not in excess of $5.0 million.
WHEREAS, Borrower has requested the Issuing Bank to issue Revolving
Letters of Credit, in an aggregate face amount at any time outstanding not in
excess of $15.0 million, to support payment obligations incurred by Borrower and
its Subsidiaries.
WHEREAS, Borrower has requested the LC Facility Issuing Bank to
issue the LC Facility Letter of Credit, in an aggregate face amount equal to
$15.0 million on the Closing Date, to provide credit support for certain
Commodity Hedging Obligations.
WHEREAS, the proceeds of the Loans are to be used in accordance with
Section 3.12.
NOW, THEREFORE, the Lenders are willing to extend such credit to
Borrower and the Issuing Bank and the LC Facility Issuing Bank are willing to
issue Letters of Credit for the account of Borrower on the terms and subject to
the conditions set forth herein. Accordingly, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 DEFINED TERMS. As used in this Agreement, the following
terms shall have the meanings specified below:
"ABR," when used in reference to any Loan or Borrowing, is used when
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Alternate Base Rate.
"ABR BORROWING" shall mean a Borrowing comprised of ABR Loans.
"ABR LOAN" shall mean any ABR Term Loan or ABR Revolving Loan.
"ABR REVOLVING LOAN" shall mean any Revolving Loan bearing interest
at a rate determined by reference to the Alternate Base Rate in accordance with
the provisions of Article II.
"ABR TERM LOAN" shall mean any Term B Loan bearing interest at a
rate determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.
"ACQUISITION CONSIDERATION" shall mean the purchase consideration
for any Permitted Acquisition and all other payments by Borrower or any of its
Subsidiaries in exchange for, or as part of, or in connection with, any
Permitted Acquisition, whether paid in cash or by exchange of Equity Interests
or of properties or otherwise and whether payable at or prior to the
consummation of such Permitted Acquisition or deferred for payment at any future
time, whether or not any such future payment is subject to the occurrence of any
contingency, and includes any and all payments representing the purchase price
and any assumptions of Indebtedness, "earn-outs" and other agreements to make
any payment the amount of which is, or the terms of payment of which are, in any
respect subject to or contingent upon the revenues, income, cash flow or profits
(or the like) of any person or business; provided that any such future payment
that is subject to a contingency shall be considered Acquisition Consideration
only to the extent of
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the reserve, if any, required under GAAP at the time of such sale to be
established in respect thereof by Borrower or any of its Subsidiaries.
"ADJUSTED LIBOR RATE" shall mean, with respect to any Eurodollar
Borrowing for any Interest Period, (a) an interest rate per annum (rounded
upward, if necessary, to the nearest 1/100th of 1%) determined by the
Administrative Agent to be equal to the LIBOR Rate for such Eurodollar Borrowing
in effect for such Interest Period divided by (b) 1 minus the Statutory Reserves
(if any) for such Eurodollar Borrowing for such Interest Period.
"ADMINISTRATIVE AGENT" shall have the meaning assigned to such term
in the preamble hereto and includes each other person appointed as the successor
pursuant to Article X.
"ADMINISTRATIVE AGENT FEE" shall have the meaning assigned to such
term in Section 2.05(b).
"ADMINISTRATIVE QUESTIONNAIRE" shall mean an Administrative
Questionnaire in the form of Exhibit A, or such other form as may be supplied
from time to time by the Administrative Agent.
"ADVANCE PAYMENT CONTRACT" shall mean any contract whereby any Loan
Party either (a) receives or becomes entitled to receive (either directly or
indirectly) any payment (an "ADVANCE PAYMENT") to be applied toward payment of
the purchase price of Hydrocarbons produced or to be produced from Mineral
Interests owned by any Loan Party and which Advance Payment is, or is to be,
paid in advance of actual delivery of such production to or for the account of
the purchaser regardless of such production, or (b) grants an option or right of
refusal to the purchaser to take delivery of such production in lieu of payment,
and, in either of the foregoing instances, the Advance Payment is, or is to be,
applied as payment in full for such production when sold and delivered or is, or
is to be, applied as payment for a portion only of the purchase price thereof or
of a percentage or share of such production; provided that inclusion of the
standard "take or pay" provision in any gas sales or purchase contract or any
other similar contract shall not, in and of itself, constitute such contract as
an Advance Payment Contract for the purposes hereof.
"AFFILIATE" shall mean, when used with respect to a specified
person, another person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by or is under common Control with the
person specified; provided, however, that, for purposes of Section 6.09, the
term "Affiliate" shall also include (i) any person that directly or indirectly
owns more than 10% of any class of Equity Interests of the person specified or
(ii) any person that is an executive officer or director of the person
specified.
"AGENTS" shall mean the Arranger, the Documentation Agent, the
Syndication Agent, the Administrative Agent and the Collateral Agent; and
"AGENT" shall mean any of them.
"AGREEMENT" shall have the meaning assigned to such term in the
preamble hereto.
"ALTERNATE BASE RATE" shall mean, for any day, a rate per annum
(rounded upward, if necessary, to the nearest 1/100th of 1%) equal to the
greater of (a) the Base Rate in effect on such day and (b) the Federal Funds
Effective Rate in effect on such day plus 0.50%. If the Administrative Agent
shall have determined (which determination shall be conclusive absent manifest
error) that it is unable to ascertain the Federal Funds Effective Rate for any
reason, including the inability or failure of the Administrative Agent to obtain
sufficient quotations in accordance with the terms of the definition thereof,
the Alternate Base Rate shall be determined without regard to clause (b) of the
preceding sentence until the circumstances giving rise to such inability no
longer exist. Any change in the Alternate Base Rate due to a
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change in the Base Rate or the Federal Funds Effective Rate shall be effective
on the effective date of such change in the Base Rate or the Federal Funds
Effective Rate, respectively.
"ANTI-TERRORISM LAWS" shall have the meaning assigned to such term
in Section 3.21.
"APPLICABLE FEE" shall mean 0.50% per annum.
"APPLICABLE MARGIN" shall mean, for any day, with respect to any
Revolving Loan or Term B Loan, as the case may be, the applicable basis points
set forth below under the appropriate caption.
Eurodollar ABR
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B Loans 400 300
Revolving Loans 375 275
"APPROVED COUNTERPARTY" means, at any time and from time to time,
(i) any person engaged in the business of writing ▇▇▇▇▇▇ for commodity, interest
rate or currency risk that is acceptable to the Administrative Agent and has, at
the time Borrower enters into a Hedging Agreement with such person, a credit
rating of A+ or better from Standard & Poor's Ratings Services or A1- or better
from ▇▇▇▇▇'▇ Investors Service, Inc. and (ii) the Administrative Agent, any
Lender or any Affiliate of the Administrative Agent or any Lender.
"APPROVED FUND" shall mean any Fund that is administered or managed
by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate
of an entity that administers or manages a Lender.
"APPROVED PETROLEUM ENGINEER" shall mean ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ &
Associates, Inc. or any other reputable firm of independent petroleum engineers
as shall be selected by Borrower and approved by Administrative Agent, such
approval not to be unreasonably withheld.
"ARCLIGHT" means ArcLight Capital Holdings, LLC.
"ARRANGER" shall have the meaning assigned to such term in the
preamble hereto.
"ASSET COVERAGE RATIO" shall mean, at any date of determination, the
ratio of PV-10 Value to Total Net Debt for the Test Period then most recently
ended.
"ASSET SALE" shall mean (a) any conveyance, sale, lease, sublease,
assignment, transfer or other disposition (including by way of merger or
consolidation and including any Sale and Leaseback Transaction) of any property
(excluding sales of inventory and dispositions of cash equivalents, in each
case, in the ordinary course of business), by Borrower or any of its
Subsidiaries and (b) any issuance or sale of any Equity Interests of any
Subsidiary of Borrower, in each case, to any person other than (i) Borrower,
(ii) any Subsidiary Guarantor or (iii) other than for purposes of Section 6.06,
any other Subsidiary.
"ASSIGNMENT AND ASSUMPTION" shall mean an assignment and assumption
entered into by a Lender and an Eligible Assignee (with the consent of any party
whose consent is required by Section 11.04(b)), and accepted by the
Administrative Agent, substantially in the form of Exhibit B, or such other form
as shall be approved by the Administrative Agent.
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"ASSIGNMENT OF AND AMENDMENT TO MORTGAGES" shall mean an assignment
and amendment substantially in the form of Exhibit R-1.
"ATTRIBUTABLE INDEBTEDNESS" shall mean, when used with respect to
any Sale and Leaseback Transaction, as at the time of determination, the present
value (discounted at a rate equivalent to Borrower's then-current weighted
average cost of funds for borrowed money as at the time of determination,
compounded on a semi-annual basis) of the total obligations of the lessee for
rental payments during the remaining term of the lease included in any such Sale
and Leaseback Transaction.
"AUTHORIZED OFFICER" shall mean the Chairman of the Board of
Directors (if an officer), the chief executive officer, the President or any
Financial Officer of Borrower.
"BASE RATE" shall mean, for any day, a rate per annum that is equal
to the corporate base rate of interest established by the Administrative Agent
from time to time; each change in the Base Rate shall be effective on the date
such change is effective. The corporate base rate is not necessarily the lowest
rate charged by the Administrative Agent to its customers.
"BENCHMARK LIBOR RATE" shall have the meaning assigned to such term
in Section 2.19(b).
"BLUESTEM" means Bluestem Pipeline, LLC, a Delaware limited
liability company, which is a wholly owned Subsidiary of Borrower.
"BOARD" shall mean the Board of Governors of the Federal Reserve
System of the United States.
"BOARD OF DIRECTORS" shall mean, with respect to any person, (i) in
the case of any corporation, the board of directors of such person, (ii) in the
case of any limited liability company, the board of managers of such person,
(iii) in the case of any partnership, the Board of Directors of the general
partner of such person and (iv) in any other case, the functional equivalent of
the foregoing.
"BORROWER" shall have the meaning assigned to such term in the
preamble hereto.
"BORROWING" shall mean (a) Loans of the same Class and Type, made,
converted or continued on the same date and, in the case of Eurodollar Loans, as
to which a single Interest Period is in effect, or (b) a Swingline Loan.
"BORROWING REQUEST" shall mean a request by Borrower in accordance
with the terms of Section 2.03 and substantially in the form of Exhibit C, or
such other form as shall be approved by the Administrative Agent and Borrower.
"BUDGETED CAPITAL EXPENDITURES" shall mean, for any Excess Cash Flow
Period, the Capital Expenditures for proved, probable and possible reserves
reflected in the most recent Reserve Report delivered pursuant to Section
5.01(l) plus an additional 15%.
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday or
other day on which banks in New York City are authorized or required by law to
close; provided, however, that when used in connection with a Eurodollar Loan,
the term "Business Day" shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market.
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"CAPITAL EXPENDITURES" shall mean, for any period, without
duplication, the increase during that period in the gross property, plant or
equipment account in the consolidated balance sheet of Borrower and its
Subsidiaries, determined in accordance with GAAP, whether such increase is due
to purchase of properties for cash or financed by the incurrence of
Indebtedness, but excluding (i) expenditures made in connection with the
replacement, substitution or restoration of property pursuant to Section
2.10(f), (ii) any portion of such increase attributable solely to acquisitions
of property, plant and equipment in Permitted Acquisitions and (iii)
expenditures made with the proceeds of the Term B Loan. For the avoidance of
doubt, the acquisition of undeveloped oil and gas leasehold interests in the
Cherokee Basin shall be considered Capital Expenditures.
"CAPITAL LEASE OBLIGATIONS" of any person shall mean the obligations
of such person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"CASH EQUIVALENTS" shall mean, as to any person, (a) securities
issued, or directly, unconditionally and fully guaranteed or insured, by the
United States or any agency or instrumentality thereof (provided that the full
faith and credit of the United States is pledged in support thereof) having
maturities of not more than one year from the date of acquisition by such
person; (b) time deposits and certificates of deposit of any Lender or any
commercial bank having, or which is the principal banking subsidiary of a bank
holding company organized under the laws of the United States, any state thereof
or the District of Columbia having, capital and surplus aggregating in excess of
$500.0 million and a rating of "A" (or such other similar equivalent rating) or
higher by at least one nationally recognized statistical rating organization (as
defined in Rule 436 under the Securities Act) with maturities of not more than
one year from the date of acquisition by such person; (c) repurchase obligations
with a term of not more than 30 days for underlying securities of the types
described in clause (a) above entered into with any bank meeting the
qualifications specified in clause (b) above, which repurchase obligations are
secured by a valid perfected security interest in the underlying securities; (d)
commercial paper issued by any person incorporated in the United States rated at
least A-1 or the equivalent thereof by Standard & Poor's Ratings Services or at
least P-I or the equivalent thereof by ▇▇▇▇▇'▇ Investors Services ,Inc., and in
each case maturing not more than one year after the date of acquisition by such
person; (e) investments in money market funds substantially all of whose assets
are comprised of securities of the types described in clauses (a) through (d)
above; and (f) demand deposit accounts maintained in the ordinary course of
business.
"CASH INTEREST EXPENSE" shall mean, for any period, Consolidated
Interest Expense for such period, less the sum of (a) interest on any debt paid
by the increase in the principal amount of such debt including by issuance of
additional debt of such kind, (b) items described in clause (c) or, other than
to the extent paid in cash by Borrower or any of its Subsidiaries, clause (g) of
the definition of "Consolidated Interest Expense" and (c) gross interest income
of Borrower and its Subsidiaries for such period.
"CASUALTY EVENT" shall mean any loss of title or any loss of or
damage to or destruction of, or any condemnation or other taking (including by
any Governmental Authority) of, any property of Borrower or any of its
Subsidiaries. "Casualty Event" shall include but not be limited to any taking of
all or any part of any Real Property, Mineral Interest or Pipeline of any person
or any part thereof, in or by condemnation or other eminent domain proceedings
pursuant to any law, or by reason of the temporary requisition of the use or
occupancy of all or any part of any Real Property, Mineral Interest or Pipeline
of any person or any part thereof by any Governmental Authority, civil or
military, or any settlement in lieu thereof.
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"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601 et
seq.
"CHANGE IN LAW" shall mean (a) the adoption of any law, treaty,
order, rule or regulation after the date of this Agreement, (b) any change in
any law, treaty, order, rule or regulation or in the interpretation or
application thereof by any Governmental Authority after the date of this
Agreement or (c) compliance by any Lender, Issuing Bank or LC Facility Issuing
Bank (or for purposes of Section 2.12(b), by any lending office of such Lender
or by such Lender's, Issuing Bank's or LC Facility Issuing Bank's holding
company, if any) with any request, guideline or directive (whether or not having
the force of law) of any Governmental Authority made or issued after the date of
this Agreement.
"CHANGE OF CONTROL" shall mean the occurrence of any of the
following, whether voluntary or involuntary, including by operation of law: (a)
any Loan Party (other than Borrower) shall cease to be a Wholly Owned Subsidiary
of Borrower, (b) Cherokee Partners and the Quest Group shall collectively cease,
for any reason, to own at least fifty-one percent (51%) of the outstanding
Equity Interests of Borrower and at least fifty-one percent (51%) of the Voting
Stock of Borrower, or (c) ▇▇▇▇▇ ▇▇▇▇ shall cease for any reason to be an
executive officer of Borrower; provided that, with respect to this clause (c),
it shall not be a "Change of Control" hereunder if Borrower appoints a successor
reasonably acceptable to the Administrative Agent within sixty (60) days
thereafter.
"CHARGES" shall have the meaning assigned to such term in Section
11.13.
"CHATTEL PAPER" shall mean all "chattel paper," as such term is
defined in the UCC as in effect on the date hereof in the States of Delaware,
Oklahoma, or Kansas or such other applicable jurisdiction, as applicable, now
owned or hereafter acquired by any Loan Party.
"CHEROKEE BASIN" shall mean the region in southeast Kansas and
northeast Oklahoma generally known as the Cherokee Basin.
"CHEROKEE PARTNERS" shall mean Cherokee Energy Partners LLC, a
Delaware limited liability company and a wholly owned subsidiary of ArcLight
Energy Partners Fund I, L.P.
"CLASS," when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans,
Term B Loans or Swingline Loans and, when used in reference to any Commitment,
refers to whether such Commitment is a Revolving Commitment, LC Facility
Commitment, Term B Commitment or Swingline Commitment, and when used in
reference to any Lender, refers to whether such Lender is a Revolving Lender, a
Term B Lender or an LC Facility Lender.
"CLOSING DATE" shall mean the date of the initial Credit Extension
hereunder.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"COLLATERAL" shall mean, collectively, all of the Security Agreement
Collateral, the Mortgaged Property and all other property of whatever kind and
nature pledged as collateral under any Security Document.
"COLLATERAL ACCOUNT" shall mean a collateral account or sub-account
established and maintained by the Collateral Agent for the benefit of the
Secured Parties, in accordance with the provisions of Section 9.01.
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"COLLATERAL AGENT" shall have the meaning assigned to such term in
the preamble hereto.
"COMMITMENT" shall mean, with respect to any Lender, such Lender's
Revolving Commitment, Term B Commitment, LC Facility Commitment or Swingline
Commitment or any combination thereof (as the context requires).
"COMMITMENT FEE" shall have the meaning assigned to such term in
Section 2.05(a).
"COMMODITY HEDGING AGREEMENT" shall mean a commodity price risk
management or purchase agreement or similar arrangement (including commodity
price swap agreements, forward agreements or contracts of sale which provide for
prepayment for deferred shipment or delivery of oil, gas or other commodities).
"COMPANIES" shall mean Borrower and its Subsidiaries; and "COMPANY"
shall mean any one of them.
"COMPLIANCE CERTIFICATE" shall mean a certificate of a Financial
Officer substantially in the form of Exhibit D.
"CONSOLIDATED AMORTIZATION EXPENSE" shall mean, for any period, the
amortization expense of Borrower and its Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED CURRENT ASSETS" shall mean, as at any date of
determination, the total assets of Borrower and its Subsidiaries which may
properly be classified as current assets on a consolidated balance sheet of
Borrower and its Subsidiaries in accordance with GAAP.
"CONSOLIDATED CURRENT LIABILITIES" shall mean, as at any date of
determination, the total liabilities of Borrower and its Subsidiaries which may
properly be classified as current liabilities (other than the current portion of
any Loans) on a consolidated balance sheet of Borrower and its Subsidiaries in
accordance with GAAP.
"CONSOLIDATED DEPRECIATION EXPENSE" shall mean, for any period, the
depreciation expense of Borrower and its Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED EBITDA" shall mean, for any period, Consolidated Net
Income for such period, adjusted by (x) adding thereto, in each case only to the
extent (and in the same proportion) deducted in determining such Consolidated
Net Income (and with respect to the portion of Consolidated Net Income
attributable to any Subsidiary of Borrower only if a corresponding amount would
be permitted at the date of determination to be distributed to Borrower by such
Subsidiary without prior approval (that has not been obtained), pursuant to the
terms of its Organizational Documents and all agreements, instruments,
judgments, decrees, orders, statutes, rules and regulations applicable to such
Subsidiary or its equityholders):
(a) Consolidated Interest Expense and interest expense on the
Subordinated Notes for such period,
(b) Consolidated Amortization Expense for such period,
(c) Consolidated Depreciation Expense for such period,
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(d) Consolidated Tax Expense for such period,
(e) costs and expenses directly incurred in connection with the
Transactions (not to exceed $6.3 million), and
(f) the aggregate amount of all other non-cash items reducing
Consolidated Net Income (excluding any non-cash charge that results in an
accrual of a reserve for cash charges in any future period) for such
period, and
(y) subtracting therefrom, in each case only to the extent (and in the same
proportion) added in determining Consolidated Net Income, the aggregate amount
of all non-cash items increasing Consolidated Net Income (other than the accrual
of revenue or recording of receivables in the ordinary course of business) for
such period.
Other than for purposes of calculating Excess Cash Flow,
Consolidated EBITDA shall be calculated on a Pro Forma Basis to give effect to
any Permitted Acquisition and Asset Sales (other than any dispositions in the
ordinary course of business) consummated at any time on or after the first day
of the Test Period thereof as if each such Permitted Acquisition had been
effected on the first day of such period and as if each such Asset Sale had been
consummated on the day prior to the first day of such period.
"CONSOLIDATED FIXED CHARGE COVERAGE RATIO" shall mean, for any Test
Period, the ratio of (a) Consolidated EBITDA for such Test Period to (b)
Consolidated Fixed Charges for such Test Period.
"CONSOLIDATED FIXED CHARGES" shall mean, for any period, the sum,
without duplication, of:
(a) Consolidated Interest Expense for such period;
(b) the aggregate amount of Capital Expenditures for such period
(other than to the extent financed by Excluded Issuances or out of that
portion of Excess Cash Flow not required to be applied to the Term B Loans
pursuant to Section 2.10(g));
(c) all cash payments in respect of income taxes made during such
period (net of any cash refund in respect of income taxes actually
received during such period);
(d) the principal amount of all scheduled amortization payments on
all Indebtedness (including the principal component of all Capital Lease
Obligations) of Borrower and its Subsidiaries for such period (as
determined on the first day of the respective period);
(e) the product of (i) all dividend payments on any series of
Disqualified Capital Stock of Borrower or any of its Subsidiaries (other
than dividend payments to Borrower or any of its Subsidiaries) multiplied
by (ii) a fraction, the numerator of which is one and the denominator of
which is one minus the then current combined federal, state and local
statutory tax rate of Borrower and its Subsidiaries, expressed as a
decimal; and
(f) the product of (i) all cash dividend payments on any Preferred
Stock (other than Disqualified Capital Stock) of Borrower or any of its
Subsidiaries (other than dividend payments to Borrower or any of its
Subsidiaries) multiplied by (ii) a fraction, the numerator of which is one
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and the denominator of which is one minus the then current combined
federal, state and local statutory tax rate of Borrower and its
Subsidiaries, expressed as a decimal.
"CONSOLIDATED INTEREST COVERAGE RATIO" shall mean, for any Test
Period, the ratio of (x) Consolidated EBITDA for such Test Period to (y)
Consolidated Interest Expense for such Test Period.
"CONSOLIDATED INTEREST EXPENSE" shall mean, for any period, the
total consolidated interest expense of Borrower and its Subsidiaries for such
period determined on a consolidated basis in accordance with GAAP plus, without
duplication:
(a) imputed interest on Capital Lease Obligations and Attributable
Indebtedness of Borrower and its Subsidiaries for such period;
(b) commissions, discounts and other fees and charges owed by
Borrower or any of its Subsidiaries with respect to letters of credit
securing financial obligations, bankers' acceptance financing and
receivables financings for such period;
(c) amortization of debt issuance costs, debt discount or premium
and other financing fees and expenses incurred by Borrower or any of its
Subsidiaries for such period;
(d) cash contributions to any employee stock ownership plan or
similar trust made by Borrower or any of its Subsidiaries to the extent
such contributions are used by such plan or trust to pay interest or fees
to any person (other than Borrower or a Wholly Owned Subsidiary) in
connection with Indebtedness incurred by such plan or trust for such
period;
(e) all interest paid or payable with respect to discontinued
operations of Borrower or any of its Subsidiaries for such period;
(f) the interest portion of any deferred payment obligations of
Borrower or any of its Subsidiaries for such period; and
(g) all interest on any Indebtedness of Borrower or any of its
Subsidiaries of the type described in clause (f) or (k) of the definition
of "Indebtedness" for such period;
provided that (a) to the extent directly related to the Transactions, debt
issuance costs, debt discount or premium and other financing fees and expenses
shall be excluded from the calculation of Consolidated Interest Expense, (b)
Consolidated Interest Expense shall be calculated after giving effect to Hedging
Agreements (including associated costs), but excluding unrealized gains and
losses with respect to Hedging Agreements and (c) any interest expense
associated with the Subordinated Notes shall be excluded from the calculation of
Consolidated Interest Expense.
Consolidated Interest Expense shall be calculated on a Pro Forma
Basis to give effect to any Indebtedness incurred, assumed or permanently repaid
or extinguished during the relevant Test Period in connection with any Permitted
Acquisitions and Asset Sales (other than any dispositions in the ordinary course
of business) as if such incurrence, assumption, repayment or extinguishing had
been effected on the first day of such period.
"CONSOLIDATED NET INCOME" shall mean, for any period, the
consolidated net income (or loss) of Borrower and its Subsidiaries determined on
a consolidated basis in accordance with GAAP; provided that there shall be
excluded from such net income (to the extent otherwise included therein),
without duplication:
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(a) the net income (or loss) of any person (other than a Subsidiary
of Borrower) in which any person other than Borrower and its Subsidiaries
has an ownership interest, except to the extent that cash in an amount
equal to any such income has actually been received by Borrower or
(subject to clause (b) below) any of its Subsidiaries during such period;
(b) the net income of any Subsidiary of Borrower during such period
to the extent that the declaration or payment of dividends or similar
distributions by such Subsidiary of that income is not permitted by
operation of the terms of its Organizational Documents or any agreement,
instrument, judgment, decree, order, statute, rule or regulation
applicable to that Subsidiary during such period, except that Borrower's
equity in net loss of any such Subsidiary for such period shall be
included in determining Consolidated Net Income;
(c) any gain (or loss), together with any related provisions for
taxes on any such gain (or the tax effect of any such loss), realized
during such period by Borrower or any of its Subsidiaries upon any Asset
Sale (other than any dispositions in the ordinary course of business) by
Borrower or any of its Subsidiaries;
(d) gains and losses due solely to fluctuations in currency values
and the related tax effects determined in accordance with GAAP for such
period;
(e) earnings (or loss) resulting from any reappraisal, revaluation
or write-up of assets;
(f) unrealized gains and losses with respect to Hedging Obligations
for such period; and
(g) any extraordinary or nonrecurring gain (or extraordinary or
nonrecurring loss), together with any related provision for taxes on any
such gain (or the tax effect of any such loss), recorded or recognized by
Borrower or any of its Subsidiaries during such period.
For purposes of this definition of "Consolidated Net Income,"
"NONRECURRING" means any gain or loss as of any date that is not reasonably
likely to recur within the two years following such date; provided that if there
was a gain or loss similar to such gain or loss within the two years preceding
such date, such gain or loss shall not be deemed nonrecurring.
"CONSOLIDATED TAX EXPENSE" shall mean, for any period, the tax
expense of Borrower and its Subsidiaries, for such period, determined on a
consolidated basis in accordance with GAAP.
"CONTESTED COLLATERAL LIEN CONDITIONS" shall mean, with respect to
any Permitted Lien of the type described in clauses (a), (b), (e) and (f) of
Section 6.02, the following conditions:
(a) Borrower shall cause any proceeding instituted contesting such
Lien to stay the sale or forfeiture of any portion of the Collateral on
account of such Lien;
(b) at the option and at the request of the Administrative Agent, to
the extent such Lien is in an amount in excess of $100,000, the
appropriate Loan Party shall maintain cash reserves in an amount
sufficient to pay and discharge such Lien and the Administrative Agent's
reasonable estimate of all interest and penalties related thereto; and
(c) such Lien shall in all respects be subject and subordinate in
priority to the Lien and security interest created and evidenced by the
Security Documents, except if and to the extent
-11-
that the law or regulation creating, permitting or authorizing such Lien
provides that such Lien is or must be superior to the Lien and security
interest created and evidenced by the Security Documents.
"CONTINGENT OBLIGATION" shall mean, as to any person, any
obligation, agreement, understanding or arrangement of such person guaranteeing
or intended to guarantee any Indebtedness, leases, dividends or other
obligations ("PRIMARY OBLIGATIONS") of any other person (the "PRIMARY OBLIGOR")
in any manner, whether directly or indirectly, including any obligation of such
person, whether or not contingent, (a) to purchase any such primary obligation
or any property constituting direct or indirect security therefor; (b) to
advance or supply funds (i) for the purchase or payment of any such primary
obligation or (ii) to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency of the primary
obligor; (c) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation; (d) with respect
to bankers' acceptances, letters of credit and similar credit arrangements,
until a reimbursement obligation arises (which reimbursement obligation shall
constitute Indebtedness); or (e) otherwise to assure or hold harmless the holder
of such primary obligation against loss in respect thereof; provided, however,
that the term "Contingent Obligation" shall not include endorsements of
instruments for deposit or collection in the ordinary course of business or any
product warranties. The amount of any Contingent Obligation shall be deemed to
be an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Contingent Obligation is made (or, if less,
the maximum amount of such primary obligation for which such person may be
liable, whether singly or jointly, pursuant to the terms of the instrument
evidencing such Contingent Obligation) or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof (assuming such
person is required to perform thereunder) as determined by such person in good
faith.
"CONTROL" shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
person, whether through the ownership of voting securities, by contract or
otherwise, and the terms "CONTROLLING" and "CONTROLLED" shall have meanings
correlative thereto.
"COST AMOUNT" shall have the meaning assigned to such term in
Section 2.19(b).
"CREDIT EXTENSION" shall mean, as the context may require, (i) the
making of a Loan by a Lender or (ii) the issuance of any Letter of Credit, or
the amendment, extension or renewal of any existing Letter of Credit, by the
Issuing Bank or the LC Facility Issuing Bank, as applicable.
"DEBT ISSUANCE" shall mean the incurrence by Borrower or any of its
Subsidiaries of any Indebtedness after the Closing Date (other than as permitted
by Section 6.01).
"DEFAULT" shall mean any event, occurrence or condition which is, or
upon notice, lapse of time or both would constitute, an Event of Default.
"DEFAULT RATE" shall have the meaning assigned to such term in
Section 2.06(c).
"DISQUALIFIED CAPITAL STOCK" shall mean any Equity Interest which,
by its terms (or by the terms of any security into which it is convertible or
for which it is exchangeable), or upon the happening of any event, (a) matures
(excluding any maturity as the result of an optional redemption by the issuer
thereof) or is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, or is redeemable at the option of the holder thereof, in whole or in
part, on or prior to the first anniversary of the Final Maturity Date, (b) is
convertible into or exchangeable (unless at the sole option of the issuer
thereof) for (i) debt securities or (ii) any Equity Interests referred to in (a)
above, in each case at any time on or prior
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to the first anniversary of the Final Maturity Date, or (c) contains any
repurchase obligation which may come into effect prior to payment in full of all
Obligations.
"DIVIDEND" with respect to any person shall mean that such person
has declared or paid a dividend or returned any equity capital to the holders of
its Equity Interests or authorized or made any other distribution, payment or
delivery of property (other than Qualified Capital Stock of such person) or cash
to the holders of its Equity Interests as such, or redeemed, retired, purchased
or otherwise acquired, directly or indirectly, for consideration any of its
Equity Interests outstanding (or any options or warrants issued by such person
with respect to its Equity Interests), or set aside any funds for any of the
foregoing purposes, or shall have permitted any of its Subsidiaries to purchase
or otherwise acquire for consideration any of the Equity Interests of such
person outstanding (or any options or warrants issued by such person with
respect to its Equity Interests). Without limiting the foregoing, "Dividends"
with respect to any person shall also include all payments made or required to
be made by such person with respect to any stock appreciation rights, plans,
equity incentive or achievement plans or any similar plans or setting aside of
any funds for the foregoing purposes.
"DOCUMENTATION AGENT" shall have the meaning assigned to such term
in the preamble hereto.
"DOLLARS" or "$" shall mean lawful money of the United States.
"ELIGIBLE ASSIGNEE" shall mean (a) a Lender, (b) an Affiliate of a
Lender, (c) an Approved Fund, and (d) any other person (other than a natural
person) approved by (i) the Administrative Agent, (ii) in the case of any
assignment of a Revolving Commitment, the Issuing Bank and the Swingline Lender,
and (iii) unless an Event of Default has occurred and is continuing and after
the achievement of a Successful Syndication, the Borrower (each such approval
not to be unreasonably withheld or delayed); provided that notwithstanding the
foregoing, "Eligible Assignee" shall not include the Borrower or any of the
Borrower's Affiliates or Subsidiaries.
"EMBARGOED PERSON" shall have the meaning assigned to such term in
Section 6.21.
"ENVIRONMENT" shall mean ambient air, surface water and groundwater
(including potable water, navigable water and wetlands), the land surface or
subsurface strata, natural resources, the workplace or as otherwise defined in
any Environmental Law.
"ENVIRONMENTAL CLAIM" shall mean any claim, notice, demand, order,
action, suit, proceeding or other communication alleging liability for
investigation, remediation, removal, cleanup, response, corrective action,
damages to natural resources, personal injury, property damage, fines, penalties
or other costs resulting from, related to or arising out of (i) the presence,
Release or threatened Release in or into the Environment of Hazardous Material
at any location or (ii) any violation of Environmental Law, and shall include
any claim seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief resulting from, related to or arising out of
the presence, Release or threatened Release of Hazardous Material or alleged
injury or threat of injury to health, safety or the Environment.
"ENVIRONMENTAL LAW" shall mean any and all applicable present and
future treaties, laws, statutes, ordinances, regulations, rules, decrees,
orders, judgments, consent orders, consent decrees or other binding
requirements, and the common law, relating to protection of public health or the
Environment, the Release or threatened Release of Hazardous Material, natural
resources or natural resource damages, or occupational safety or health.
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"ENVIRONMENTAL PERMIT" shall mean any permit, license, approval,
consent or other authorization required by or from a Governmental Authority
under Environmental Law.
"EQUIPMENT" shall have the meaning assigned to such term in the
Security Agreement.
"EQUITY INTEREST" shall mean, with respect to any person, any and
all shares, interests, participations or other equivalents, including membership
interests (however designated, whether voting or nonvoting), of equity of such
person, including, if such person is a partnership, partnership interests
(whether general or limited) and any other interest or participation that
confers on a person the right to receive a share of the profits and losses of,
or distributions of property of, such partnership, whether outstanding on the
date hereof or issued after the Closing Date, but excluding debt securities
convertible or exchangeable into such equity.
"EQUITY ISSUANCE" shall mean, without duplication, (i) any issuance
or sale by Borrower after the Closing Date of any Equity Interests in Borrower
(including any Equity Interests issued upon exercise of any warrant or option)
or any warrants or options to purchase Equity Interests or (ii) any contribution
to the capital of Borrower; provided, however, that an Equity Issuance shall not
include (x) any Preferred Stock Issuance or Debt Issuance and (y) so long as no
Event of Default then exists or would occur as a result thereof, any Excluded
Issuance.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as the same may be amended from time to time.
"ERISA AFFILIATE" shall mean, with respect to any person, any trade
or business (whether or not incorporated) that, together with such person, is
treated as a single employer under Section 414(b) or (c) of the Code, or solely
for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as
a single employer under Section 414 of the Code.
"ERISA EVENT" shall mean (a) any "reportable event," as defined in
Section 4043 of ERISA or the regulations issued thereunder, with respect to a
Plan (other than an event for which the 30-day notice period is waived by
regulation); (b) the existence with respect to any Plan of an "accumulated
funding deficiency" (as defined in Section 412 of the Code or Section 302 of
ERISA), whether or not waived, the failure to make by its due date a required
installment under Section 412(m) of the Code with respect to any Plan or the
failure to make any required contribution to a Multiemployer Plan; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by any Company or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by any Company or any of its ERISA Affiliates from the PBGC or a
plan administrator of any notice relating to the intention to terminate any Plan
or Plans or to appoint a trustee to administer any Plan, or the occurrence of
any event or condition which could reasonably be expected to constitute grounds
under ERISA for the termination of, or the appointment of a trustee to
administer, any Plan; (f) the incurrence by any Company or any of its ERISA
Affiliates of any liability with respect to the withdrawal from any Plan or
Multiemployer Plan; (g) the receipt by any Company or its ERISA Affiliates of
any notice, concerning the imposition of Withdrawal Liability or a determination
that a Multiemployer Plan is, or is expected to be, insolvent or in
reorganization, within the meaning of Title IV of ERISA; (h) the making of any
amendment to any Plan which could result in the imposition of a lien or the
posting of a bond or other security; and (i) the occurrence of a nonexempt
prohibited transaction (within the meaning of Section 4975 of the Code or
Section 406 of ERISA) which could reasonably be expected to result in liability
to any Company.
"EURODOLLAR BORROWING" shall mean a Borrowing comprised of
Eurodollar Loans.
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"EURODOLLAR LOAN" shall mean any Eurodollar Revolving Loan or
Eurodollar Term B Loan.
"EURODOLLAR REVOLVING BORROWING" shall mean a Borrowing comprised of
Eurodollar Revolving Loans.
"EURODOLLAR REVOLVING LOAN" shall mean any Revolving Loan bearing
interest at a rate determined by reference to the Adjusted LIBOR Rate in
accordance with the provisions of Article II.
"EURODOLLAR TERM B LOAN" shall mean any Term B Loan bearing interest
at a rate determined by reference to the Adjusted LIBOR Rate in accordance with
the provisions of Article II.
"EVENT OF DEFAULT" shall have the meaning assigned to such term in
Section 8.01.
"EXCESS AMOUNT" shall have the meaning assigned to such term in
Section 2.10(h)(ii).
"EXCESS CASH FLOW" shall mean, for any Excess Cash Flow Period, net
cash from operating activities (calculated in accordance with GAAP, in a manner
consistent with the statement of cash flows delivered to the Lenders pursuant to
Section 3.04(b)) for such Excess Cash Flow Period, minus, without duplication:
(a) principal payments of Term B Loans required by Section 2.09(a)
that are actually made during such period;
(b) the lower of actual Capital Expenditures and Budgeted Capital
Expenditures during such period; and
(c) Permitted Tax Distributions that are paid during such period or
will be paid within six months after the close of such period.
"EXCESS CASH FLOW PERIOD" shall mean (i) the period taken as one
accounting period from July 1, 2004 and ending on December 31, 2004 and (ii) the
two fiscal quarter periods ending at the end of Borrower's second and fourth
quarters.
"EXCESS LC FACILITY DEPOSITS" means, at any time, the excess, if
any, of the Total LC Facility Deposit over the LC Facility LC Exposure at such
time.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"EXCLUDED ISSUANCE" shall mean an issuance and sale of Qualified
Capital Stock of Borrower to ArcLight, QRC or any Controlled Affiliate of either
ArcLight or QRC (that does not result in a recapitalization or distribution), to
the extent such Qualified Capital Stock is used, or the Net Cash Proceeds
thereof shall be, within 45 days of the consummation of such issuance and sale,
used, without duplication, to finance Capital Expenditures or one or more
Permitted Acquisitions.
"EXCLUDED TAXES" shall mean, with respect to the Administrative
Agent, any Lender, the Issuing Bank, the LC Facility Issuing Bank or any other
recipient of any payment to be made by or on account of any obligation of
Borrower hereunder, (a) income, franchise or similar taxes imposed on (or
measured by) its net income by the United States, or by the jurisdiction under
the laws of which such recipient is organized or in which its principal office
is located or, in the case of any Lender, in which its applicable lending office
is located, and (b) in the case of a Foreign Lender (other than an assignee
pursu-
-15-
ant to a request by Borrower under Section 2.16), any withholding tax that
is imposed on amounts payable to such Foreign Lender at the time such Foreign
Lender becomes a party to this Agreement (or designates a new lending office) or
is attributable to such Foreign Lender's failure to comply with Section 2.15(e),
except to the extent that such Foreign Lender (or its assignor, if any) was
entitled, at the time of designation of a new lending office (or assignment), to
receive additional amounts from Borrower with respect to such withholding tax
pursuant to Section 2.15(a) (it being understood and agreed, for the avoidance
of doubt, that any withholding tax imposed on a Foreign Lender as a result of a
Change in Law or regulation or interpretation thereof occurring after the time
such Foreign Lender became a party to this Agreement shall not be an Excluded
Tax).
"EXECUTIVE ORDER" shall have the meaning assigned to such term in
Section 3.21.
"EXECUTIVE ORDERS" shall have the meaning assigned to such term in
Section 6.21.
"EXISTING LIEN" shall have the meaning assigned to such term in
Section 6.02(c).
"FEDERAL FUNDS EFFECTIVE RATE" shall mean, for any day, the weighted
average of the rates on overnight federal funds transactions with members of the
Federal Reserve System of the United States arranged by federal funds brokers,
as published on the next succeeding Business Day by the Federal Reserve Bank of
New York, or, if such rate is not so published for any day that is a Business
Day, the average of the quotations for the day for such transactions received by
the Administrative Agent from three federal funds brokers of recognized standing
selected by it.
"FEE LETTER" shall mean the confidential Fee Letter, dated July 6,
2004, among Borrower, UBS Loan Finance LLC and UBS Securities LLC.
"FEES" shall mean the Commitment Fees, the Administrative Agent
Fees, the Revolving LC Participation Fees, the LC Facility LC Fees and the
Fronting Fees.
"FINAL MATURITY DATE" shall mean the later of the Revolving Maturity
Date, the Term B Loan Maturity Date and LC Facility Maturity Date.
"FINANCIAL OFFICER" of any person shall mean the chief financial
officer, principal accounting officer, treasurer or controller of such person.
"FIRREA" shall mean the Federal Institutions Reform, Recovery and
Enforcement Act of 1989, as amended.
"FOREIGN LENDER" shall mean any Lender that is not, for United
States federal income tax purposes, (i) a citizen or resident of the United
States, (ii) a corporation or entity treated as a corporation created or
organized in or under the laws of the United States, or any political
subdivision thereof, (iii) an estate whose income is subject to United States
federal income taxation regardless of its source or (iv) a trust if a court
within the United States is able to exercise primary supervision over the
administration of such trust and one or more United States persons have the
authority to control all substantial decisions of such trust.
"FOREIGN SUBSIDIARY" shall mean a Subsidiary that is organized under
the laws of a jurisdiction other than the United States or any state thereof or
the District of Columbia.
"FRONTING FEE" shall have the meaning assigned to such term in
Section 2.05(c).
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"FUND" shall mean any person (other than a natural person) that is
(or will be) engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course of its
business.
"GAAP" shall mean generally accepted accounting principles in the
United States applied on a consistent basis.
"GAS BALANCING AGREEMENT" means any agreement or arrangement whereby
any Loan Party, or any other party having an interest in any Hydrocarbons to be
produced from Mineral Interests in which any Loan Party owns an interest, has a
right to take more than its proportionate share of production therefrom.
"GOVERNMENTAL AUTHORITY" shall mean any federal, state, local or
foreign court, central bank or governmental agency, authority, instrumentality
or regulatory body or any subdivision thereof.
"GOVERNMENTAL REAL PROPERTY DISCLOSURE REQUIREMENTS" shall mean any
Requirement of Law of any Governmental Authority requiring notification of the
buyer, lessee, mortgagee, assignee or other transferee of any Real Property,
facility, establishment or business, or notification, registration or filing to
or with any Governmental Authority, in connection with the sale, lease,
mortgage, assignment or other transfer (including any transfer of control) of
any Real Property, facility, establishment or business, of the actual or
threatened presence or Release in or into the Environment, or the use, disposal
or handling of Hazardous Material on, at, under or near the Real Property,
facility, establishment or business to be sold, leased, mortgaged, assigned or
transferred.
"GUARANTEED OBLIGATIONS" shall have the meaning assigned to such
term in Section 7.01.
"GUARANTEES" shall mean the guarantees issued pursuant to Article
VII by the Subsidiary Guarantors.
"GUARANTORS" shall mean the Subsidiary Guarantors.
"HAZARDOUS MATERIALS" shall mean the following: hazardous
substances; hazardous wastes; polychlorinated biphenyls ("PCBS") or any
substance or compound containing PCBs; asbestos or any asbestos-containing
materials in any form or condition; radon or any other radioactive materials
including any source, special nuclear or by-product material; petroleum, crude
oil or any fraction thereof; and any other pollutant or contaminant or
chemicals, wastes, materials, compounds, constituents or substances, subject to
regulation or which can give rise to liability under any Environmental Laws.
"HEDGING AGREEMENT" shall mean any swap, cap, collar, forward
purchase or similar agreements or arrangements dealing with interest rates,
currency exchange rates or commodity prices, either generally or under specific
contingencies including without limitation Commodity Hedging Agreements.
"HEDGING OBLIGATIONS" shall mean obligations under or with respect
to Hedging Agreements.
"HYDROCARBONS" means oil, gas, coalbed methane gas, casinghead gas,
drip gasolines, natural gasoline, condensate, distillate, and all other liquid
and gaseous hydrocarbons produced or to be produced in conjunction therewith,
and all products, by-products and all other substances derived therefrom or the
processing thereof, and all other minerals and substances, including, but not
limited to, sul-
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phur, lignite, coal, uranium, thorium, iron, geothermal steam, water, carbon
dioxide, helium, and any and all other minerals, ores, or substances of value,
and the products and proceeds therefrom, including, without limitation, all gas
resulting from the in-situ combustion of coal or lignite.
"IMMATERIAL TITLE DEFICIENCIES" means, defects or clouds on title,
discrepancies in reported net revenue and working interest ownership percentages
and other Liens, defects, discrepancies and similar matters which do not,
individually or in the aggregate, affect Mineral Interests with a value greater
than four percent (4%) of the Mineral Interests.
"INDEBTEDNESS" of any person shall mean, without duplication, (a)
all obligations of such person for borrowed money or advances; (b) all
obligations of such person evidenced by bonds, debentures, notes or similar
instruments; (c) all obligations of such person upon which interest charges are
customarily paid or accrued (excluding trade accounts payable and accrued
obligations incurred in the ordinary course of business on normal trade terms
and not overdue by more than 90 days); (d) all obligations of such person under
conditional sale or other title retention agreements relating to property
purchased by such person; (e) all obligations of such person issued or assumed
as the deferred purchase price of property or services (excluding trade accounts
payable and accrued obligations incurred in the ordinary course of business on
normal trade terms and not overdue by more than 90 days); (f) all Indebtedness
of others secured by any Lien on property owned or acquired by such person,
whether or not the obligations secured thereby have been assumed, but limited to
the fair market value of such property; (g) all Capital Lease Obligations,
Purchase Money Obligations and synthetic lease obligations of such person; (h)
all Hedging Obligations to the extent required to be reflected on a balance
sheet of such person; (i) all Attributable Indebtedness of such person; (j) all
obligations of such person for the reimbursement of any obligor in respect of
letters of credit, letters of guaranty, bankers' acceptances and similar credit
transactions; and (k) all Contingent Obligations of such person in respect of
Indebtedness or obligations of others of the kinds referred to in clauses (a)
through (j) above. The Indebtedness of any person shall include the Indebtedness
of any other entity (including any partnership in which such person is a general
partner) to the extent such person is liable therefor as a result of such
person's ownership interest in or other relationship with such entity, except
(other than in the case of general partner liability) to the extent that terms
of such Indebtedness expressly provide that such person is not liable therefor.
"INDEMNIFIED TAXES" shall mean Taxes other than Excluded Taxes.
"INDEMNITEE" shall have the meaning assigned to such term in Section
11.03(b).
"INFORMATION" shall have the meaning assigned to such term in
Section 11.12.
"INSTRUMENTS" shall mean all "instruments," as such term is defined
in the UCC as in effect on the date hereof in the State of Delaware, now owned
or hereafter acquired by any Loan Party.
"INSURANCE POLICIES" shall mean the insurance policies and coverages
required to be maintained by each Loan Party which is an owner of Mortgaged
Property with respect to the applicable Mortgaged Property pursuant to Section
5.04 and all renewals and extensions thereof.
"INSURANCE REQUIREMENTS" shall mean, collectively, all provisions of
the Insurance Policies, all requirements of the issuer of any of the Insurance
Policies and all orders, rules, regulations and any other requirements of the
National Board of Fire Underwriters (or any other body exercising similar
functions) binding upon each Loan Party which is an owner of Mortgaged Property
and applicable to the Mortgaged Property or any use or condition thereof.
"INTELLECTUAL PROPERTY" shall have the meaning assigned to such term
in Section 3.06(a).
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"INTERCOMPANY NOTE" shall mean a promissory note substantially in
the form of Exhibit P.
"INTEREST ELECTION REQUEST" shall mean a request by Borrower to
convert or continue a Revolving Borrowing or Term B Borrowing in accordance with
Section 2.08(b), substantially in the form of Exhibit E.
"INTEREST PAYMENT DATE" shall mean (a) with respect to any ABR Loan
(including Swingline Loans), the last Business Day of each March, June,
September and December to occur during any period in which such Loan is
outstanding, (b) with respect to any Eurodollar Loan, the last day of the
Interest Period applicable to the Borrowing of which such Loan is a part and, in
the case of a Eurodollar Loan with an Interest Period of more than three months'
duration, each day prior to the last day of such Interest Period that occurs at
intervals of three months' duration after the first day of such Interest Period,
(c) with respect to any Revolving Loan or Swingline Loan, the Revolving Maturity
Date or such earlier date on which the Revolving Commitments are terminated and
(d) with respect to the Term B Loan, the Term B Loan Maturity Date.
"INTEREST PERIOD" shall mean, with respect to any Eurodollar
Borrowing, the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three or
six months (or, if each affected Lender so agrees, nine months) thereafter, as
Borrower may elect; provided that (a) if any Interest Period would end on a day
other than a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless such next succeeding Business Day would fall in
the next calendar month, in which case such Interest Period shall end on the
next preceding Business Day, and (b) any Interest Period that commences on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of such Interest
Period) shall end on the last Business Day of the last calendar month of such
Interest Period. For purposes hereof, the date of a Borrowing initially shall be
the date on which such Borrowing is made and thereafter shall be the effective
date of the most recent conversion or continuation of such Borrowing.
"INVESTMENT PROPERTY" shall have the meaning assigned to such term
in the Security Agreement.
"INVESTMENTS" shall have the meaning assigned to such term in
Section 6.04.
"ISDA HEDGE AGREEMENT" shall mean the ISDA Master Agreement dated as
of July 22 , 2004 between UBS AG, Stamford Branch and Quest Cherokee, LLC.
"ISSUING BANK" shall mean, as the context may require, (a) UBS AG,
Stamford Branch, with respect to Letters of Credit issued by it; (b) any other
Lender that may become an Issuing Bank pursuant to Sections 2.18(j) and (k) with
respect to Letters of Credit issued by such Lender; or (c) collectively, all of
the foregoing, and related confirmations, as amended from time to time.
"▇-▇ GAS" means ▇-▇ Gas Gathering, L.L.C., a Kansas limited
liability company, which is a wholly owned Subsidiary of PSI.
"JOINDER AGREEMENT" shall mean a joinder agreement substantially in
the form of Exhibit F.
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"LAW" means all applicable statutes, laws, ordinances, regulations,
orders, writs, injunctions, or decrees of any state, commonwealth, nation,
territory, possession, county, township, parish, municipality or Governmental
Authority.
"LC DISBURSEMENT" shall mean a Revolving LC Disbursement or an LC
Facility LC Disbursement.
"LC EXPOSURE" shall mean, at any time, the sum of the Revolving LC
Exposure and the LC Facility LC Exposure at such time.
"LC FACILITY AVAILABILITY PERIOD" shall mean the period from and
including the Closing Date to but excluding the earliest of (i) the LC Facility
Maturity Date and (ii) the date on which all of the LC Facility Deposits are
returned to the LC Facility Lenders.
"LC FACILITY COMMITMENT" shall mean, with respect to each LC
Facility Lender, the commitment, if any, of such LC Facility Lender to make LC
Facility Deposits hereunder up to the amount set forth on Schedule 2.01 attached
hereto or in the Assignment and Assumption pursuant to which such LC Facility
Lender assumed its LC Facility Commitment, as applicable, as the same may be (a)
reduced from time to time pursuant to Section 2.07 and (b) reduced or increased
from time to time pursuant to assignments by or to such Lender pursuant to
Section 11.04. The aggregate amount of the Lenders' LC Facility Commitments on
the Closing Date is $15.0 million.
"LC FACILITY DEPOSIT" shall mean, as to each LC Facility Lender, the
cash deposit made by the LC Facility Lender pursuant to Section 2.18(d)(ii), as
such deposit may be (i) reduced from time to time pursuant to Section 2.07(c)
and (ii) reduced or increased from time to time pursuant to assignments by or to
such Lender pursuant to Section 11.04. The amount of each LC Facility Lender's
LC Facility Deposit on the Closing Date is set forth on Schedule 2.01, or in the
Assignment and Acceptance pursuant to which such LC Facility Lender shall have
acquired its LC Facility Deposit, as applicable. The initial aggregate amount of
the LC Facility Deposits is $15.0 million.
"LC FACILITY DEPOSIT ACCOUNT" shall mean the account established by
the Administrative Agent under its sole and exclusive control maintained at the
office of UBS AG, Stamford Branch, as of the Closing Date located at ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, designated as the "LC Facility Deposit
Account" that shall be used solely to hold the LC Facility Deposits.
"LC FACILITY ISSUING BANK" shall mean, as the context may require,
(a) UBS AG, Stamford Branch, with respect to the LC Facility Letter of Credit
issued by it; (b) any other Lender that may become an LC Facility Issuing Bank
pursuant to Section 2.18(k) with respect to the LC Facility Letter of Credit
issued by such LC Facility Lender; or (c) collectively, all of the foregoing.
"LC FACILITY LC DISBURSEMENT" shall mean any payment or disbursement
made by the LC Facility Issuing Bank pursuant to an LC Facility Letter of
Credit.
"LC FACILITY LC EXPOSURE" shall mean, at any time, the sum of (a)
the aggregate amount required to be outstanding under the LC Facility Letter of
Credit at such time pursuant to the ISDA Hedge Agreement plus (b) the aggregate
amount of all LC Facility LC Disbursements that have not yet been reimbursed
pursuant to Section 2.18(e) by or on behalf of Borrower at such time plus (c)
the amount, if any, of LC Facility LC Disbursements coverted into Term B Loans
pursuant to Section 2.18(e). The LC Facility LC Exposure of any LC Facility
Letter at any time shall be its Pro Rata Percentage of the total LC Facility LC
Exposure at such time.
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"LC FACILITY LC FEES" has the meaning assigned to such term in
Section 2.05(d).
"LC FACILITY LENDER" shall mean a Lender having an LC Facility
Deposit.
"LC FACILITY LETTER OF CREDIT" shall mean, on the Closing Date, the
Letter of Credit issued by the LC Facility Issuing Bank pursuant to Section
2.18(a) in an aggregate principal amount not to exceed $15.0 million (including
all amendments, renewals or extensions thereof).
"LC FACILITY MATURITY DATE" shall mean December 31, 2008.
"LC PARTICIPATION FEE" shall have the meaning assigned to such term
in Section 2.05(c).
"LC REQUEST" shall mean a request by Borrower in accordance with the
terms of Section 2.18(b) and substantially in the form of Exhibit H, or such
other form as shall be approved by the Administrative Agent and Borrower.
"LC SUB-ACCOUNT" shall have the meaning assigned to such term in
Section 9.01(d).
"LEASES" shall mean any and all leases, subleases, tenancies,
options, concession agreements, rental agreements, occupancy agreements,
franchise agreements, access agreements and any other agreements (including all
amendments, extensions, replacements, renewals, modifications and/or guarantees
thereof), whether or not of record and whether now in existence or hereafter
entered into, affecting the use or occupancy of all or any portion of any Real
Property.
"LENDER ADDENDUM" shall mean with respect to any Lender on the
Closing Date, a lender addendum in the form of Exhibit I, to be executed and
delivered by such Lender on the Closing Date as provided in Section 11.14.
"LENDERS" shall mean (a) the financial institutions that have become
a party hereto pursuant to a Lender Addendum and (b) any financial institution
that has become a party hereto pursuant to an Assignment and Assumption, other
than, in each case, any such financial institution that has ceased to be a party
hereto pursuant to an Assignment and Assumption. Unless the context clearly
indicates otherwise, the term "Lenders" shall include the Swingline Lender and
the LC Facility Lenders.
"LETTER OF CREDIT" shall mean any Revolving Letter of Credit and any
LC Facility Letter of Credit, in each case, issued or to be issued by an Issuing
Bank for the account of Borrower pursuant to Section 2.18.
"LETTER OF CREDIT EXPIRATION DATE" shall mean the date which is (a)
fifteen days prior to the Revolving Maturity Date, with respect to a Revolving
Letter of Credit, or (b) the LC Facility Maturity Date, with respect to the LC
Facility Letter of Credit.
"LIBOR RATE" shall mean, with respect to any Eurodollar Borrowing
for any Interest Period or any LC Facility Deposit for any calculation period,
the rate per annum determined by the Administrative Agent to be the arithmetic
mean (rounded upward, if necessary, to the nearest 1/100th of 1%) of the offered
rates for deposits in dollars with a term comparable to such Interest Period
that appears on the Telerate British Bankers Assoc. Interest Settlement Rates
Page (as defined below) at approximately 11:00 a.m., London, England time, on
the second full Business Day preceding the first day of such Interest Period;
provided, however, that (i) if no comparable term for an Interest Period is
available, the LIBOR Rate shall be determined using the weighted average of the
offered rates in dollars for the two terms most nearly corresponding to such
Interest Period and (ii) if there shall at any time no longer exist a Tel-
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erate British Bankers Assoc. Interest Settlement Rates Page, "LIBOR Rate" shall
mean, with respect to each day during each Interest Period pertaining to
Eurodollar Borrowings comprising part of the same Borrowing, the rate per annum
equal to the rate at which the Administrative Agent is offered deposits in
dollars at approximately 11:00 a.m., London, England time, two Business Days
prior to the first day of such Interest Period in the London interbank market
for delivery on the first day of such Interest Period for the number of days
comprised therein and in an amount comparable to its portion of the amount of
such Eurodollar Borrowing to be outstanding during such Interest Period or any
such LC Facility Deposit for any calculation period. "TELERATE BRITISH BANKERS
ASSOC. INTEREST SETTLEMENT RATES PAGE" shall mean the display designated as Page
3750 on the Telerate System Incorporated Service (or such other page as may
replace such page on such service for the purpose of displaying the rates at
which dollar deposits are offered by leading banks in the London interbank
deposit market).
"LIEN" shall mean, with respect to any property, (a) any mortgage,
deed of trust, lien, pledge, encumbrance, claim, charge, assignment,
hypothecation, security interest or encumbrance of any kind or any filing of any
financing statement under the UCC or any other similar notice of Lien under any
similar notice or recording statute of any Governmental Authority, including any
easement, right-of-way or other encumbrance on title to Real Property, Mineral
Interests or Pipelines in each of the foregoing cases whether voluntary or
imposed by law, and any agreement to give any of the foregoing; (b) the interest
of a vendor or a lessor under any conditional sale agreement, capital lease or
title retention agreement (or any financing lease having substantially the same
economic effect as any of the foregoing) relating to such property; and (c) in
the case of securities, any purchase option, call or similar right of a third
party with respect to such securities.
"LOAN DOCUMENTS" shall mean this Agreement, the Letters of Credit,
the Notes (if any), the Security Documents, each Hedging Obligation relating to
the Loans entered into with any counterparty that was a Lender or an Affiliate
of a Lender at the time such Hedging Obligation was entered into and solely for
purposes of Section 8.01(a), the Fee Letter.
"LOAN PARTIES" shall mean Borrower and the Subsidiary Guarantors.
"LOAN TRANSFER AGREEMENT" shall mean the Loan Transfer Agreement
dated July 22, 2004 between Bank One, UBS and the other parties named therein.
"LOANS" shall mean, as the context may require, a Revolving Loan, a
Term B Loan or a Swingline Loan.
"MARGIN STOCK" shall have the meaning assigned to such term in
Regulation U.
"MATERIAL ADVERSE EFFECT" shall mean an event or events that has or
causes or could reasonably expect to have or cause (a) a material adverse effect
on the business, property, results of operations, condition, financial or
otherwise, or material agreements of Borrower and its Subsidiaries, taken as a
whole; (b) a material impairment of the ability of the Loan Parties to fully and
timely perform any of their obligations under any Loan Document; (c) a material
impairment of the rights of or benefits or remedies available to the Lenders or
the Collateral Agent under any Loan Document; or (d) a material adverse effect
on the Collateral or the Liens in favor of the Collateral Agent (for its benefit
and for the benefit of the other Secured Parties) on the Collateral or the
priority of such Liens.
"MATERIAL GAS IMBALANCE" means, with respect to all Gas Balancing
Agreements to which any Loan Party is a party or by which any Mineral Interest
owned by any Loan Party is bound, a net gas imbalance to any Loan Party in
excess of $500,000.
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"MAXIMUM RATE" shall have the meaning assigned to such term in
Section 11.13.
"MINERAL INTERESTS" means rights, estates, titles, and interests in
and to oil and gas leases and any oil and gas interests, royalty and overriding
royalty interest, production payment, net profits interests, oil and gas fee
interests, and other rights therein, including, without limitation, any
reversionary or carried interests relating to the foregoing, together with
rights, titles, and interests created by or arising under the terms of any
unitization, communization, and pooling agreements or arrangements, and all
properties, rights and interests covered thereby, whether arising by contract,
by order, or by operation of Law, which now or hereafter include all or any part
of the foregoing.
"MORTGAGE" shall mean an agreement, including, but not limited to, a
mortgage, deed of trust, Assignment of and Amendment to Mortgages, amended and
restated mortgage, or any other document, creating and evidencing a Lien on a
Mortgaged Property, which (i) in the case of Real Property owned in fee, shall
be in such form as may be reasonably satisfactory to the Collateral Agent, and
(ii) in the case of Mineral Interests, shall be reasonably satisfactory to the
Collateral Agent, in each case, with such schedules and including such
provisions as shall be necessary to conform such document to applicable local or
foreign law or as shall be customary under applicable local or foreign law.
"MORTGAGED PROPERTY" shall mean (a) all Mineral Interests owned or
leased on the Closing Date and (b) each Real Property or Mineral Interest, if
any, which shall be subject to a Mortgage delivered after the Closing Date
pursuant to Section 5.11(c) or (d), as applicable, or 5.14.
"MULTIEMPLOYER PLAN" shall mean a multiemployer plan within the
meaning of Section 4001(a)(3) or Section 3(37) of ERISA (a) to which any Company
or any ERISA Affiliate is then making or accruing an obligation to make
contributions; (b) to which any Company or any ERISA Affiliate has within the
preceding five plan years made contributions; or (c) with respect to which any
Company could incur liability.
"NET CASH PROCEEDS" shall mean:
(a) with respect to any Asset Sale (other than any issuance or sale
of Equity Interests), the cash proceeds received by Borrower or any of its
Subsidiaries (including cash proceeds subsequently received (as and when
received by Borrower or any of its Subsidiaries) in respect of non-cash
consideration initially received) net of (i) selling expenses (including
reasonable brokers' fees or commissions, legal, accounting and other
professional and transactional fees, transfer and similar taxes and
Borrower's good faith estimate of income taxes paid or payable in
connection with such sale); (ii) amounts provided as a reserve, in
accordance with GAAP, against (x) any liabilities under any
indemnification obligations associated with such Asset Sale or (y) any
other liabilities retained by Borrower or any of its Subsidiaries
associated with the properties sold in such Asset Sale (provided that, to
the extent and at the time any such amounts are released from such
reserve, such amounts shall constitute Net Cash Proceeds); (iii)
Borrower's good faith estimate of payments required to be made with
respect to unassumed liabilities relating to the properties sold within 90
days of such Asset Sale (provided that, to the extent such cash proceeds
are not used to make payments in respect of such unassumed liabilities
within 90 days of such Asset Sale, such cash proceeds shall constitute Net
Cash Proceeds); and (iv) the principal amount, premium or penalty, if any,
interest and other amounts on any Indebtedness for borrowed money which is
secured by a Lien on the properties sold in such Asset Sale (so long as
such Lien was permitted to encumber such properties under the Loan
Documents at the time of such sale) and which is repaid with such proceeds
(other than any such Indebtedness assumed by the purchaser of such
properties);
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(b) with respect to any Debt Issuance, any Equity Issuance or any
other issuance or sale of Equity Interests by Borrower or any of its
Subsidiaries, the cash proceeds thereof, net of customary fees,
commissions, costs and other expenses incurred in connection therewith;
and
(c) with respect to any Casualty Event, the cash insurance proceeds,
condemnation awards and other compensation received in respect thereof,
net of all reasonable costs and expenses incurred in connection with the
collection of such proceeds, awards or other compensation in respect of
such Casualty Event.
"NET WORKING CAPITAL" shall mean, at any time, Consolidated Current
Assets at such time minus Consolidated Current Liabilities at such time.
"NON-BANK CERTIFICATE" shall mean a non-bank certificate
substantially in the form of Exhibit Q.
"NOTES" shall mean any notes evidencing the Term B Loans, Revolving
Loans or Swingline Loans issued pursuant to this Agreement, if any,
substantially in the form of Exhibit K-1, K-2 or K-3.
"OBLIGATIONS" shall mean (a) obligations of Borrower and the other
Loan Parties from time to time arising under or in respect of the due and
punctual payment of (i) the principal of and premium, if any, and interest
(including interest accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding) on the Loans, when and as due, whether at
maturity, by acceleration, upon one or more dates set for prepayment or
otherwise, (ii) each payment required to be made by Borrower and the other Loan
Parties under this Agreement in respect of any Letter of Credit, when and as
due, including payments in respect of Reimbursement Obligations, interest
thereon and obligations to provide cash collateral and (iii) all other monetary
obligations, including fees, costs, expenses and indemnities, whether primary,
secondary, direct, contingent, fixed or otherwise (including monetary
obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), of Borrower and the other Loan Parties under this
Agreement and the other Loan Documents, (b) the due and punctual performance of
all covenants, agreements, obligations and liabilities of Borrower and the other
Loan Parties under or pursuant to this Agreement and the other Loan Documents,
(c) the due and punctual payment and performance of all obligations of Borrower
and the other Loan Parties under each Hedging Agreement relating to the Loans
entered into with any counterparty that was a Lender or an Affiliate of a Lender
at the time such Hedging Agreement was entered into and (d) the due and punctual
payment and performance of all obligations in respect of overdrafts and related
liabilities owed to any Lender, any Affiliate of a Lender, the Administrative
Agent or the Collateral Agent arising from treasury, depositary and cash
management services or in connection with any automated clearinghouse transfer
of funds.
"OFAC" shall have the meaning assigned to such term in Section
3.21(b)(v).
"OFFICERS' CERTIFICATE" shall mean a certificate executed by the
chairman of the Board of Directors (if an officer), the chief executive officer
or the president and one of the Financial Officers, each in his or her official
(and not individual) capacity.
"OPERATING AND MANAGEMENT AGREEMENT" shall mean the operating and
management agreement between Borrower and Quest Energy Service, Inc., dated
December 22, 2003.
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"ORGANIZATIONAL DOCUMENTS" shall mean, with respect to any person,
(i) in the case of any corporation, the certificate of incorporation and by-laws
(or similar documents) of such person, (ii) in the case of any limited liability
company, the certificate of formation and operating agreement (or similar
documents) of such person, (iii) in the case of any limited partnership, the
certificate of formation and limited partnership agreement (or similar
documents) of such person, (iv) in the case of any general partnership, the
partnership agreement (or similar document) of such person and (v) in any other
case, the functional equivalent of the foregoing.
"OTHER LIST" shall have the meaning assigned to such term in Section
6.21.
"OTHER TAXES" shall mean any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies (including interest, fines, penalties and additions to tax) arising from
any payment made or required to be made under any Loan Document or from the
execution, delivery or enforcement of, or otherwise with respect to, any Loan
Document.
"PARTICIPANT" shall have the meaning assigned to such term in
Section 11.04(e).
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred
to and defined in ERISA.
"PERFECTION CERTIFICATE" shall mean a certificate in the form of
Exhibit L-1 or any other form approved by the Collateral Agent, as the same
shall be supplemented from time to time by a Perfection Certificate Supplement
or otherwise.
"PERFECTION CERTIFICATE SUPPLEMENT" shall mean a certificate
supplement in the form of Exhibit L-2 or any other form approved by the
Collateral Agent and Borrower.
"PERMITTED ACQUISITION" shall mean any transaction or series of
related transactions for the direct or indirect (a) acquisition of all or
substantially all of the property of any person, or of any business or division
of any person; (b) acquisition of in excess of 50% of the Equity Interests of
any person, and otherwise causing such person to become a Subsidiary of such
person; or (c) merger or consolidation or any other combination with any person,
if each of the following conditions is met:
(i) no Default then exists or would result therefrom;
(ii) after giving effect to such transaction on a Pro Forma Basis,
(A) Borrower shall be in compliance with all covenants set forth in
Section 6.10 as of the most recent Test Period (assuming, for purposes of
Section 6.10, that such transaction, and all other Permitted Acquisitions
consummated since the first day of the relevant Test Period for each of
the financial covenants set forth in Section 6.10 ending on or prior to
the date of such transaction, had occurred on the first day of such
relevant Test Period), and (B) unless expressly approved by the
Administrative Agent, the person or business to be acquired shall have
generated positive cash flow from operations for the Test Period most
recently ended prior to the date of consummation of such acquisition;
(iii) no Company shall, in connection with any such transaction,
assume or remain liable with respect to any Indebtedness or other
liability (including any material tax or ERISA liability) of the related
seller or the business, person or properties acquired, except (A) to the
extent permitted under Section 6.01 and (B) obligations not constituting
Indebtedness incurred in the ordinary course of business and necessary or
desirable to the continued operation of the underlying properties, and any
other such liabilities or obligations not permitted to be assumed or
otherwise
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supported by any Company hereunder shall be paid in full or released as to
the business, persons or properties being so acquired on or before the
consummation of such acquisition;
(iv) the person or business to be acquired shall be, or shall be
engaged in, a business of the type that Borrower and the Subsidiaries are
permitted to be engaged in under Section 6.15 and the property acquired in
connection with any such transaction shall be made subject to the Lien of
the Security Documents (to the extent required hereunder) and shall be
free and clear of any Liens, other than Permitted Collateral Liens;
(v) the Board of Directors of the person to be acquired shall not
have indicated publicly its opposition to the consummation of such
acquisition (which opposition has not been publicly withdrawn);
(vi) all transactions in connection therewith shall be consummated
in accordance with all applicable laws of all applicable Governmental
Authorities;
(vii) with respect to any transaction for which audited financial
statements would be required to be filed on Form 8-K if Borrower were
subject to Sections 15 and 13(d) of the Exchange Act, unless the
Administrative Agent shall otherwise agree, Borrower shall have provided
the Administrative Agent and the Lenders with (A) historical financial
statements of the person or business to be acquired (audited if available
without undue cost or delay) for the periods that would be required under
Form 8-K if Borrower were subject to Section 15 and 13(d) of the Exchange
Act and unaudited financial statements thereof for the most recent interim
period which are available, (B) reasonably detailed projections for the
succeeding five years pertaining to the person or business to be acquired
and updated projections for Borrower after giving effect to such
transaction, (C) a reasonably detailed description of all material
information relating thereto and copies of all material documentation
pertaining to such transaction, and (D) all such other information and
data relating to such transaction or the person or business to be acquired
as may be reasonably requested by the Administrative Agent or the Required
Lenders;
(viii) at least ten (10) Business Days prior to the proposed date of
consummation of the transaction, Borrower shall have delivered to the
Agents and the Lenders an Officers' Certificate certifying that (A) such
transaction complies with this definition (which shall have attached
thereto reasonably detailed backup data and calculations showing such
compliance), and (B) such transaction could not reasonably be expected to
result in a Material Adverse Effect; and
(ix) the Acquisition Consideration (exclusive of any amounts
financed by Excluded Issuances) for such acquisition shall not exceed
$25.0 million, and the aggregate amount of the Acquisition Consideration
(exclusive of any amounts financed by Excluded Issuances) for all
Permitted Acquisitions since the Closing Date shall not exceed $100.0
million; provided that any Equity Interests constituting all or a portion
of such Acquisition Consideration shall not have a cash dividend
requirement on or prior to the Final Maturity Date.
"PERMITTED COLLATERAL LIENS" means (i) Contested Liens (as defined
in the Security Agreement), (ii) the Liens described in clauses (a), (b), (c),
(d), (e), (f), (g), (h), (j), (k), (l), (m), (n) (o), (p) and (q) of Section
6.02 and (iii) in the case of Mortgaged Property, "Permitted Collateral Liens"
shall mean the Liens described in clauses (a), (b), (d), (e), (g), (k), (l) and
(o) of Section 6.02; provided, however, upon the Closing Date, Permitted
Collateral Liens shall mean, with respect to Mortgaged Property set forth on
Schedule 3.05(b), only those Liens set forth in Schedule B to the applicable
Mortgage and Immaterial Title Deficiencies.
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"PERMITTED LIENS" shall have the meaning assigned to such term in
Section 6.02.
"PERMITTED TAX DISTRIBUTIONS" shall mean, for any applicable tax
year of Borrower, quarterly tax distributions, to be designated as such, within
twenty (20) days of each quarterly estimated payment date for individuals, or
shortly thereafter if computations are not complete at or near the quarterly
estimated payments dates, to the members in an amount equal to the aggregate
federal, state and local income tax liability then due and owing with respect to
the net income of Borrower for such tax year (calculated using the highest
federal, state and local effective marginal income tax rates applicable to an
individual) taking into account losses of Borrower from prior periods.
"PERSON" shall mean any natural person, corporation, business trust,
joint venture, association, company, limited liability company, partnership or
government, or any agency or political subdivision thereof, in any case, whether
acting in a personal, fiduciary or other capacity.
"PIPELINE" shall mean gathering systems and pipelines, together with
all contracts, rights-of-way, easements, fixtures, equipment, improvements,
permits, records, and other real property appertaining thereto.
"PLAN" shall mean any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA which is maintained or contributed to by
any Company or its ERISA Affiliate or with respect to which any Company could
incur liability (including under Section 4069 of ERISA).
"PONDEROSA" means Ponderosa Gas Pipeline Company, Inc., a Kansas
corporation, which is a wholly owned Subsidiary of QRC.
"PREFERRED STOCK" shall mean, with respect to any person, any and
all preferred or preference Equity Interests (however designated) of such person
whether now outstanding or issued after the Closing Date.
"PREFERRED STOCK ISSUANCE" shall mean the issuance or sale by
Borrower or any of its Subsidiaries of any Preferred Stock after the Closing
Date (other than any Excluded Issuance).
"PREMISES" shall have the meaning assigned thereto in the applicable
Mortgage.
"PRO FORMA BASIS" shall mean on a basis in accordance with GAAP and
Regulation S-X and otherwise reasonably satisfactory to the Administrative
Agent.
"PRO RATA PERCENTAGE" shall mean (i) with respect to any Revolving
Lender the percentage of the total Revolving Commitments of all Revolving
Lenders represented by such Lender's Revolving Commitment and (ii) with respect
to any LC Facility Lender, the percentage of the Total LC Facility Deposits
represented by such LC Facility Lender's LC Facility Deposit.
"PROPERTY" shall mean any right, title or interest in or to property
or assets of any kind whatsoever, whether real, personal or mixed and whether
tangible or intangible and including Equity Interests or other ownership
interests of any person and whether now in existence or owned or hereafter
entered into or acquired, including all Real Property, Mineral Interest or
Pipelines.
"PROVED MINERAL INTERESTS" means, collectively, Proved Producing
Mineral Interests, Proved Nonproducing Mineral Interests, and Proved Undeveloped
Mineral Interests.
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"PROVED NONPRODUCING MINERAL INTERESTS" means all Mineral Interests
which constitute proved developed nonproducing reserves.
"PROVED PRODUCING MINERAL INTERESTS" means all Mineral Interests
which constitute proved developed producing reserves.
"PROVED UNDEVELOPED MINERAL INTERESTS" means all Mineral Interests
which constitute proved undeveloped reserves.
"PSI" means Producers Service Incorporated, a Kansas corporation,
which is a wholly owned Subsidiary of Ponderosa.
"PURCHASE MONEY OBLIGATION" shall mean, for any person, the
obligations of such person in respect of Indebtedness (including Capital Lease
Obligations) incurred for the purpose of financing all or any part of the
purchase price of any property (including Equity Interests of any person) or the
cost of installation, construction or improvement of any property and any
refinancing thereof; provided, however, that (i) such Indebtedness is incurred
within 90 days after such acquisition of such property by such person and (ii)
the principal amount of such Indebtedness does not exceed 100% of the cost of
such acquisition, installation, construction or improvement, as the case may be.
"PV-10 VALUE" shall mean, as of any date of determination, the
present value of future cash flows from Proved Mineral Interests on the
Borrower's Mineral Interests as set forth in the most recent Reserve Report
delivered pursuant to Section 5.01(l), utilizing the Three-Year Strip Price for
crude oil (WTI ▇▇▇▇▇▇▇) or natural gas (▇▇▇▇▇ Hub), as applicable, quoted on the
New York Mercantile Exchange (or its successor), as of the date as of which the
information set forth in such Reserve Report is provided (as adjusted for basis
differentials) and utilizing a 10% discount rate. PV-10 Value shall be adjusted
to give effect to the Commodity Hedging Agreements of the Borrower then in
effect.
"QES" means Quest Energy Service, Inc., a Kansas corporation, which
is a wholly owned subsidiary of QRC.
"QRC" means Quest Resource Corporation, a Nevada corporation.
"QUALIFIED CAPITAL STOCK" of any person shall mean any Equity
Interests of such person that are not Disqualified Capital Stock.
"QUEST GROUP" means, collectively, QRC, Ponderosa, PSI, Quest Oil &
Gas, QES, STP Cherokee, ▇-▇ Gas and their respective Subsidiaries other than
Borrower and Bluestem.
"QUEST OIL & GAS" means Quest Oil & Gas Corporation, a Kansas
corporation, which is a wholly owned Subsidiary of QRC.
"REAL PROPERTY" shall mean, collectively, all right, title and
interest (including any leasehold estate) in and to any and all parcels of or
interests in real property owned, leased or operated by any person, whether by
lease, license or other means, together with, in each case, all easements,
hereditaments and appurtenances relating thereto, all improvements and
appurtenant fixtures and equipment, all general intangibles and contract rights
and other property and rights incidental to the ownership, lease or operation
thereof. Real Property does not include Mineral Interests or Pipelines.
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"REFINANCING" shall mean the purchase of and the termination of any
commitment to make extensions of credit under all of the outstanding
Indebtedness of Borrower or any of its Subsidiaries listed on Schedule 1.01(b).
"REGISTER" shall have the meaning assigned to such term in Section
11.04(c).
"REGULATION D" shall mean Regulation D of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"REGULATION S-X" shall mean Regulation S-X promulgated under the
Securities Act.
"REGULATION T" shall mean Regulation T of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"REGULATION U" shall mean Regulation U of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"REGULATION X" shall mean Regulation X of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"REIMBURSEMENT OBLIGATIONS" shall mean Borrower's obligations under
Section 2.18(e) to reimburse LC Disbursements.
"RELEASE" shall mean any spilling, leaking, seepage, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching,
dumping, disposing, depositing, dispersing, emanating or migrating of any
Hazardous Material in, into, onto or through the Environment.
"REQUIRED LENDERS" shall mean, at any time, Lenders having Loans, LC
Exposure and unused Revolving and Term B Commitments representing more than 50%
of the sum of all Loans outstanding, LC Exposure and unused Revolving and Term B
Commitments at such time.
"REQUIREMENTS OF LAW" shall mean, collectively, any and all
requirements of any Governmental Authority including any and all laws,
ordinances, rules, regulations or similar statutes or case law.
"RESERVE REPORT" shall mean an unsuperseded engineering analysis of
the Mineral Interests owned by Borrower, in form and substance reasonably
acceptable to Administrative Agent, prepared in accordance with customary and
prudent practices in the petroleum engineering industry and Financial Accounting
Standards Board Statement 69. Each Reserve Report required to be delivered
pursuant to Section 5.01(l) shall be prepared by the Approved Petroleum
Engineer.
"RESPONSE" shall mean (a) "response" as such term is defined in
CERCLA, 42 U.S.C. Sction 9601(24), and (b) all other actions required by any
Governmental Authority or voluntarily undertaken to (i) clean up, remove, treat,
▇▇▇▇▇ or in any other way address any Hazardous Material in the environment;
(ii) prevent the Release or threat of Release, or minimize the further Release,
of any Hazardous Material; or (iii) perform studies and investigations in
connection with, or as a precondition to, clause (i) or (ii) above.
"RESPONSIBLE OFFICER" of any person shall mean any executive officer
or Financial Officer of such person and any other officer or similar official
thereof with responsibility for the administration of the obligations of such
person in respect of this Agreement.
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"REVOLVING AVAILABILITY PERIOD" shall mean the period from and
including the Closing Date to but excluding the earlier of (i) the Business Day
preceding the Revolving Maturity Date and (ii) the date of termination of the
Revolving Commitments.
"REVOLVING BORROWING" shall mean a Borrowing comprised of Revolving
Loans.
"REVOLVING COMMITMENT" shall mean, with respect to each Lender, the
commitment, if any, of such Lender to make Revolving Loans hereunder up to the
amount set forth on Schedule I to the Lender Addendum executed and delivered by
such Lender or in the Assignment and Assumption pursuant to which such Lender
assumed its Revolving Commitment, as applicable, as the same may be (a) reduced
from time to time pursuant to Section 2.07 and (b) reduced or increased from
time to time pursuant to assignments by or to such Lender pursuant to Section
11.04. The aggregate amount of the Lenders' Revolving Commitments on the Closing
Date is $20.0 million.
"REVOLVING EXPOSURE" shall mean, with respect to any Lender at any
time, the aggregate principal amount at such time of all outstanding Revolving
Loans of such Lender, plus the aggregate amount at such time of such Lender's
Revolving LC Exposure, plus the aggregate amount at such time of such Lender's
Swingline Exposure.
"REVOLVING LC COMMITMENT" shall mean the commitment of the Issuing
Bank to issue Revolving Letters of Credit pursuant to Section 2.18. The amount
of the Revolving LC Commitment shall initially be $15.0 million, but in no event
exceed the Revolving Commitment.
"REVOLVING LC DISBURSEMENT" shall mean a payment made by the Issuing
Bank pursuant to a Revolving Letter of Credit.
"REVOLVING LC EXPOSURE" shall mean at any time the sum of (a) the
aggregate undrawn amount of all outstanding Revolving Letters of Credit at such
time plus (b) the aggregate principal amount of all Reimbursement Obligations
outstanding at such time. The Revolving LC Exposure of any Revolving Lender at
any time shall mean its Pro Rata Percentage of the aggregate Revolving LC
Exposure at such time.
"REVOLVING LENDER" shall mean a Lender with a Revolving Commitment.
"REVOLVING LETTER OF CREDIT" means, at any time, a Standby Letter of
Credit issued by an Issuing Bank pursuant to Section 2.18.
"REVOLVING LOAN" shall mean a Loan made by the Lenders to Borrower
pursuant to Section 2.01(b). Each Revolving Loan shall either be an ABR
Revolving Loan or a Eurodollar Revolving Loan.
"REVOLVING MATURITY DATE" shall mean the date which is five (5)
years after the Closing Date or, if such date is not a Business Day, the
immediately preceding Business Day.
"SALE AND LEASEBACK TRANSACTION" has the meaning assigned to such
term in Section 6.03.
"SDN LIST" shall have the meaning assigned to such term in Section
6.21.
"SECURED PARTIES" shall mean, collectively, the Administrative
Agent, the Collateral Agent, the Issuing Bank, each other Agent, the Lenders and
each party to a Hedging Agreement relating
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to the Loans if at the date of entering into such Hedging Agreement such person
was a Lender or an Affiliate of a Lender and such person executes and delivers
to the Administrative Agent a letter agreement in form and substance acceptable
to the Administrative Agent pursuant to which such person (i) appoints the
Collateral Agent as its agent under the applicable Loan Documents and (ii)
agrees to be bound by the provisions of Sections 11.03 and 11.09.
"SECURITIES ACT" shall mean the Securities Act of 1933.
"SECURITIES COLLATERAL" shall have the meaning assigned to such term
in the Security Agreement.
"SECURITY AGREEMENT" shall mean a Security Agreement substantially
in the form of Exhibit M among the Loan Parties and Collateral Agent for the
benefit of the Secured Parties.
"SECURITY AGREEMENT COLLATERAL" shall mean all property pledged or
granted as collateral pursuant to the Security Agreement delivered on the
Closing Date or thereafter pursuant to Section 5.11.
"SECURITY DOCUMENTS" shall mean the Security Agreement, the
Mortgages and each other security document or pledge agreement delivered in
accordance with applicable local or foreign law to grant a valid, perfected
security interest in any property as collateral for the Obligations, and all UCC
or other financing statements or instruments of perfection required by this
Agreement, the Security Agreement, any Mortgage or any other such security
document or pledge agreement to be filed with respect to the security interests
in property and fixtures created pursuant to the Security Agreement or any
Mortgage and any other document or instrument utilized to pledge as collateral
for the Obligations any property.
"STANDBY LETTER OF CREDIT" shall mean any standby letter of credit
or similar instrument issued for the purpose of supporting (a) workers'
compensation liabilities of Borrower or any of its Subsidiaries, (b) the
obligations of third-party insurers of Borrower or any of its Subsidiaries
arising by virtue of the laws of any jurisdiction requiring third-party insurers
to obtain such letters of credit, (c) performance, payment, deposit or surety
obligations of Borrower or any of its Subsidiaries or (d) Hedging Obligations.
"STATUTORY RESERVES" shall mean, for any Interest Period for any
Eurodollar Borrowing, the average maximum rate at which reserves (including any
marginal, supplemental or emergency reserves) are required to be maintained
during such Interest Period under Regulation D by member banks of the United
States Federal Reserve System in New York City with deposits exceeding one
billion dollars against "Eurodollar liabilities" (as such term is used in
Regulation D). Eurodollar Borrowings shall be deemed to constitute Eurodollar
liabilities and to be subject to such reserve requirements without benefit of or
credit for proration, exceptions or offsets which may be available from time to
time to any Lender under Regulation D.
"STP CHEROKEE" means STP Cherokee, Inc., an Oklahoma corporation,
which is a wholly owned Subsidiary of QRC.
"SUBORDINATED INDEBTEDNESS" shall mean Indebtedness of Borrower or
any Guarantor that is by its terms subordinated in right of payment to the
Obligations of Borrower and such Guarantor, as applicable, including the
Subordinated Notes.
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"SUBORDINATED NOTE AGREEMENT" shall mean the agreement between
Borrower and Cherokee Energy Partners LLC dated as of December 22, 2003 pursuant
to which the Subordinated Notes were issued and as thereafter amended from time
to time subject to the requirements of this Agreement.
"SUBORDINATED NOTES" shall mean Borrower's $51.0 million 15% Junior
Subordinated Notes due 2008 issued pursuant to the Subordinated Note Agreement,
as the same may be amended from time to time subject to the requirements of this
Agreement.
"SUBSIDIARY" shall mean, with respect to any person (the "PARENT")
at any date, (i) any person the accounts of which would be consolidated with
those of the parent in the parent's consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such date, (ii)
any other corporation, limited liability company, association or other business
entity of which securities or other ownership interests representing more than
50% of the voting power of all Equity Interests entitled (without regard to the
occurrence of any contingency) to vote in the election of the Board of Directors
thereof are, as of such date, owned, controlled or held by the parent and/or one
or more subsidiaries of the parent, (iii) any partnership (a) the sole general
partner or the managing general partner of which is the parent and/or one or
more subsidiaries of the parent or (b) the only general partners of which are
the parent and/or one or more subsidiaries of the parent and (iv) any other
person that is otherwise Controlled by the parent and/or one or more
subsidiaries of the parent. Unless the context requires otherwise, "Subsidiary"
refers to a Subsidiary of Borrower.
"SUBSIDIARY GUARANTOR" shall mean the Subsidiary listed on Schedule
1.01(c), and each other Subsidiary that becomes a party to this Agreement
pursuant to Section 5.11.
"SUCCESSFUL SYNDICATION" shall have the meaning given to such term
in the Fee Letter.
"SUPERMAJORITY LENDERS" shall mean at any time, Lenders having
Loans, LC Exposure and unused Revolving and Term B Commitments representing at
least 66-2/3% of the sum of all Loans outstanding, LC Exposure and unused
Revolving and Term B Commitments at such time.
"SURVEY" shall mean a survey of any Mortgaged Property (and all
improvements thereon) related to Real Property to the extent required by Section
5.11 which is (a) (i) prepared by a surveyor or engineer licensed to perform
surveys in the state where such Mortgaged Property is located, (ii) dated (or
redated) not earlier than six months prior to the date of delivery thereof
unless there shall have occurred within six months prior to such date of
delivery any exterior construction on the site of such Mortgaged Property or any
easement, right of way or other interest in the Mortgaged Property has been
granted or become effective through operation of law or otherwise with respect
to such Mortgaged Property which, in either case, can be depicted on a survey,
in which events, as applicable, such survey shall be dated (or redated) after
the completion of such construction or if such construction shall not have been
completed as of such date of delivery, not earlier than 20 days prior to such
date of delivery, or after the grant or effectiveness of any such easement,
right of way or other interest in the Mortgaged Property, (iii) certified by the
surveyor (in a manner reasonably acceptable to the Administrative Agent) to the
Administrative Agent, the Collateral Agent and the Title Company, (iv) complying
in all respects with the minimum detail requirements of the American Land Title
Association as such requirements are in effect on the date of preparation of
such survey and (v) sufficient for the Title Company to remove all standard
survey exceptions from the title insurance policy (or commitment) relating to
such Mortgaged Property and issue the endorsements of the type described in the
definition of Title Policy or (b) otherwise acceptable to the Collateral Agent.
"SWINGLINE COMMITMENT" shall mean the commitment of the Swingline
Lender to make loans pursuant to Section 2.17, as the same may be reduced from
time to time pursuant to Section 2.07 or
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Section 2.17. The amount of the Swingline Commitment shall initially be $5.0
million, but in no event exceed the Revolving Commitment.
"SWINGLINE EXPOSURE" shall mean at any time the aggregate principal
amount at such time of all outstanding Swingline Loans. The Swingline Exposure
of any Revolving Lender at any time shall equal its Pro Rata Percentage of the
aggregate Swingline Exposure at such time.
"SWINGLINE LENDER" shall have the meaning assigned to such term in
the preamble hereto.
"SWINGLINE LOAN" shall mean any loan made by the Swingline Lender
pursuant to Section 2.17.
"SYNDICATION AGENT" shall have the meaning assigned to such term in
the preamble hereto.
"TAX RETURN" shall mean all returns, statements, filings,
attachments and other documents or certifications required to be filed in
respect of Taxes.
"TAXES" shall mean (i) any and all present or future taxes, duties,
levies, imposts, assessments, deductions, withholdings or other similar charges,
whether computed on a separate, consolidated, unitary, combined or other basis
and any and all liabilities (including interest, fines, penalties or additions
to tax) with respect to the foregoing, and (ii) any transferee, successor, joint
and several, contractual or other liability (including liability pursuant to
Treasury Regulation Section 1.1502-6 (or any similar provision of state, local
or non-United States law)) in respect of any item described in clause (i).
"TERM B BORROWING" shall mean a Borrowing comprised of Term B Loans.
"TERM B COMMITMENT" shall mean, with respect to each Lender, the
commitment, if any, of such Lender to make a Term B Loan hereunder on the
Closing Date in the amount set forth on Schedule I to the Lender Addendum
executed and delivered by such Lender, or in the Assignment and Assumption
pursuant to which such Lender shall have assumed its Term B Commitment, as
applicable, as the same may be (a) reduced from time to time pursuant to Section
2.07 and (b) reduced or increased from time to time pursuant to assignments by
or to such Lender pursuant to Section 11.04. The aggregate amount of the
Lenders' Term B Commitments is $120.0 million.
"TERM B LENDER" shall mean a Lender with a Term B Commitment or an
outstanding Term B Loan.
"TERM B LOAN" shall mean a loan made by the Lenders to Borrower
pursuant to Section 2.01(a). Each Term B Loan shall be either an ABR Term Loan
or a Eurodollar Term B Loan.
"TERM B LOAN REPAYMENT DATE" shall have the meaning assigned to such
term in Section 2.09(a).
"TERM B LOAN MATURITY DATE" shall mean July 22, 2010, or if such day
is not a Business Day, the immediately preceding Business Day.
"TEST PERIOD" shall mean, at any time, the four consecutive fiscal
quarters of Borrower then last ended (in each case taken as one accounting
period) for which financial statements have been or are required to be delivered
pursuant to Section 5.01(a) or (b); provided that for each Test Period occur-
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ring on or before June 30, 2005, Consolidated Interest Expense and Consolidated
EBITDA shall be equal to the product of the amount of Consolidated Interest
Expense or Consolidated EBITDA, as applicable, from September 1, 2004 to the end
of such Test Period and a fraction, the numerator of which is 365 and the
denominator is the number of days elapsed during such period since the Closing
Date.
"THREE-YEAR STRIP PRICE" shall mean, as of any date of
determination, (a) for the 36-month period commencing with the month immediately
following the month in which the date of determination occurs, the monthly
futures contract prices for crude oil and natural gas for the 36 succeeding
months as quoted on the applicable commodities exchange or other price quotation
source as contemplated in the definition of "PV-10 Value" and (b) for periods
after such 36-month period, the average of such quoted prices for the period
from and including the 25th month in such 36-month period through the 36th month
in such period.
"TITLE COMPANY" shall mean any title insurance company as shall be
retained by Borrower and reasonably acceptable to the Administrative Agent.
"TITLE POLICY" shall mean a policy of title insurance (or marked-up
title insurance commitment having the effect of a policy of title insurance)
insuring the Lien of a Mortgage as a valid first mortgage Lien on any Mortgaged
Property that is Real Property, to the extent required by Section 5.11, and
fixtures described therein in the amount equal to not less than 115% of the fair
market value of such Mortgaged Property and fixtures, which policy (or such
marked-up commitment) shall (A) be issued by the Title Company, (B) to the
extent necessary, include such reinsurance arrangements (with provisions for
direct access, if necessary) as shall be reasonably acceptable to the Collateral
Agent, (C) contain a "tie-in" or "cluster" endorsement, if available under
applicable law (i.e., policies which insure against losses regardless of
location or allocated value of the insured property up to a stated maximum
coverage amount), (D) have been supplemented by such endorsements (or where such
endorsements are not available, opinions of special counsel, architects or other
professionals reasonably acceptable to the Collateral Agent) as shall be
reasonably requested by the Collateral Agent (including endorsements on matters
relating to usury, first loss, last dollar, zoning, contiguity, revolving
credit, doing business, non-imputation, public road access, survey, variable
rate, environmental lien, subdivision, separate tax lot, revolving credit,
creditors' rights and so-called comprehensive coverage over covenants and
restrictions), and (E) contain no exceptions to title other than exceptions
acceptable to the Collateral Agent.
"TOTAL LC FACILITY DEPOSIT" means, at any time, the sum of all LC
Facility Deposits at such time, as the same may be reduced from time to time
pursuant to Section 2.07.
"TOTAL LEVERAGE RATIO" shall mean, at any date of determination, the
ratio of Total Net Debt on the last day of the applicable Test Period then most
recently ended to Consolidated EBITDA for such Test Period.
"TOTAL NET DEBT" shall mean, at any time, (a) the total principal
amount of Indebtedness of Borrower and its Subsidiaries at such time (excluding
Indebtedness of the type described in clauses (j) and (k) (except to the extent
of any unreimbursed drawings thereunder) and (h) of the definition of such
term), less (b) the amount, not in excess of $10.0 million, of unrestricted cash
on hand at Borrower and the Subsidiary Guarantors. The fact that the Collateral
Agent holds a Lien against funds on deposit in accounts will not cause such
funds to be considered restricted for purposes of this definition.
"TRANSACTION DOCUMENTS" shall mean the Loan Documents and the
Subordinated Note Agreement.
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"TRANSACTIONS" shall mean, collectively, the transactions to occur
on or prior to the Closing Date pursuant to the Transaction Documents, including
(a) the execution, delivery and performance of the Loan Documents and the
initial borrowings hereunder; (b) the Refinancing; (c) the amendment of the
Subordinated Note Agreement; and (d) the payment of all fees and expenses to be
paid on or prior to the Closing Date and owing in connection with the foregoing.
"TRANSFERRED GUARANTOR" shall have the meaning assigned to such term
in Section 7.09.
"TYPE," when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBOR Rate or the
Alternate Base Rate.
"UCC" shall mean the Uniform Commercial Code as in effect from time
to time (except as otherwise specified) in any applicable state or jurisdiction.
"UNITED STATES" shall mean the United States of America.
"VOTING STOCK" shall mean, with respect to any person, any class or
classes of Equity Interests pursuant to which the holders thereof have the
general voting power under ordinary circumstances to elect at least a majority
of the Board of Directors of such person.
"WHOLLY OWNED SUBSIDIARY" shall mean, as to any person, (a) any
corporation 100% of whose capital stock (other than directors' qualifying
shares) is at the time owned by such person and/or one or more Wholly Owned
Subsidiaries of such person and (b) any partnership, association, joint venture,
limited liability company or other entity in which such person and/or one or
more Wholly Owned Subsidiaries of such person have a 100% equity interest at
such time.
"WITHDRAWAL LIABILITY" shall mean liability to a Multiemployer Plan
as a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02 CLASSIFICATION OF LOANS AND BORROWINGS. For purposes of
this Agreement, Loans may be classified and referred to by Class (e.g., a
"Revolving Loan") or by Type (e.g., a "Eurodollar Loan") or by Class and Type
(e.g., a "Eurodollar Revolving Loan"). Borrowings also may be classified and
referred to by Class (e.g., a "Revolving Borrowing," "Term B Borrowing") or by
Type (e.g., a "Eurodollar Borrowing") or by Class and Type (e.g., a "Eurodollar
Revolving Borrowing").
SECTION 1.03 TERMS GENERALLY. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include," "includes" and "including" shall
be deemed to be followed by the phrase "without limitation." The word "will"
shall be construed to have the same meaning and effect as the word "shall."
Unless the context requires otherwise (a) any definition of or reference to any
Loan Document, agreement, instrument or other document herein shall be construed
as referring to such agreement, instrument or other document as from time to
time amended, supplemented or otherwise modified (subject to any restrictions on
such amendments, supplements or modifications set forth herein), (b) any
reference herein to any person shall be construed to include such person's
successors and assigns, (c) the words "herein," "hereof" and "hereunder," and
words of similar import, shall be construed to refer to this Agreement in its
entirety and not to any particular provision hereof and (d) all references
herein to Articles, Sections, Exhibits and Schedules shall be construed to refer
to Articles and Sections of, and Exhibits and Schedules to, this Agreement,
unless otherwise indicated.
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SECTION 1.04 ACCOUNTING TERMS; GAAP. Except as otherwise expressly
provided herein, all financial statements to be delivered pursuant to this
Agreement shall be prepared in accordance with GAAP as in effect from time to
time, except that interim financial statements shall be subject to year-end
adjustments, and all terms of an accounting or financial nature shall be
construed and interpreted in accordance with GAAP, as in effect on the date
hereof unless otherwise agreed to by Borrower and the Required Lenders.
SECTION 1.05 PETROLEUM TERMS. As used herein, the terms "PROVED
RESERVES," "PROVED DEVELOPED RESERVES," "PROVED DEVELOPED PRODUCING RESERVES,"
"PROVED DEVELOPED NONPRODUCING RESERVES," and "PROVED UNDEVELOPED RESERVES" have
the meaning given such terms from time to time and at the time in question by
the Society of Petroleum Engineers of the American Institute of Mining
Engineers.
SECTION 1.06 RESOLUTION OF DRAFTING AMBIGUITIES. Each Loan Party
acknowledges and agrees that it was represented by counsel in connection with
the execution and delivery of the Loan Documents to which it is a party, that it
and its counsel reviewed and participated in the preparation and negotiation
hereof and thereof and that any rule of construction to the effect that
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation hereof or thereof.
ARTICLE II
THE CREDITS
SECTION 2.01 COMMITMENTS. Subject to the terms and conditions and
relying upon the representations and warranties herein set forth, each Lender
agrees, severally and not jointly:
(a) to make a Term B Loan to Borrower on the Closing Date in the
principal amount not to exceed such Lender's Term B Commitment and, at any
time and from time to time during the LC Facility Availability Period, to
the extent provided in clause (ii) to the proviso of Section 2.18(e), to
make a Term B Loan in an aggregate principal amount at any time
outstanding that will not result in such Lender's LC Facility LC Exposure
exceeding such Lender's original LC Facility Commitment;
(b) to make Revolving Loans to Borrower, at any time and from time
to time during the Revolving Availability Period in accordance with the
terms hereof, in an aggregate principal amount at any time outstanding
that will not result in such Lender's Revolving Exposure exceeding such
Lender's Revolving Commitment; and
(c) to make LC Facility Deposits into the LC Facility Deposit
Account on the Closing Date in an aggregate principal amount not to exceed
such LC Facility Lender's LC Facility Commitment.
Amounts paid or prepaid in respect of Term B Loans may not be
reborrowed. Within the limits set forth in clause (b) above and subject to the
terms, conditions and limitations set forth herein, Borrower may borrow, pay or
prepay and reborrow Revolving Loans.
SECTION 2.02 LOANS. (a) Each Loan (other than Swingline Loans) shall
be made as part of a Borrowing consisting of Loans made by the Lenders ratably
in accordance with their applicable Commitments; provided that the failure of
any Lender to make any Loan shall not in itself relieve any other Lender of its
obligation to lend hereunder (it being understood, however, that no Lender shall
be responsible for the failure of any other Lender to make any Loan required to
be made by such other
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▇▇▇▇▇▇). Except for Loans deemed made pursuant to Section 2.18(e)(ii), (x) ABR
Loans comprising any Borrowing shall be in an aggregate principal amount that is
(i) an integral multiple of $500,000 and not less than $1.0 million or (ii)
equal to the remaining available balance of the applicable Commitments and (y)
the Eurodollar Loans comprising any Borrowing shall be in an aggregate principal
amount that is (i) an integral multiple of $500,000 and not less than $1.0
million or (ii) equal to the remaining available balance of the applicable
Commitments.
(b) Subject to Sections 2.11 and 2.12, each Borrowing shall be
comprised entirely of ABR Loans or Eurodollar Loans as Borrower may request
pursuant to Section 2.03. Each Lender may at its option make any Eurodollar Loan
by causing any domestic or foreign branch or Affiliate of such Lender to make
such Loan; provided that any exercise of such option shall not affect the
obligation of Borrower to repay such Loan in accordance with the terms of this
Agreement. Borrowings of more than one Type may be outstanding at the same time;
provided that Borrower shall not be entitled to request any Borrowing that, if
made, would result in more than eight (8) Eurodollar Borrowings outstanding
hereunder at any one time. For purposes of the foregoing, Borrowings having
different Interest Periods, regardless of whether they commence on the same
date, shall be considered separate Borrowings.
(c) Except with respect to Loans made pursuant to Section
2.18(e)(ii), each Lender shall make each Loan to be made by it hereunder on the
proposed date thereof by wire transfer of immediately available funds to such
account in New York City as the Administrative Agent may designate not later
than 11:00 a.m., New York City time, and the Administrative Agent shall promptly
credit the amounts so received to an account as directed by Borrower in the
applicable Borrowing Request maintained with the Administrative Agent or, if a
Borrowing shall not occur on such date because any condition precedent herein
specified shall not have been met, return the amounts so received to the
respective Lenders.
(d) Unless the Administrative Agent shall have received notice from
a Lender prior to the date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender's portion of such Borrowing,
the Administrative Agent may assume that such Lender has made such portion
available to the Administrative Agent on the date of such Borrowing in
accordance with paragraph (c) above, and the Administrative Agent may, in
reliance upon such assumption, make available to Borrower on such date a
corresponding amount. If the Administrative Agent shall have so made funds
available, then, to the extent that such Lender shall not have made such portion
available to the Administrative Agent, each of such Lender and Borrower
severally agrees to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to Borrower until the date such amount is repaid
to the Administrative Agent at (i) in the case of Borrower, the interest rate
applicable at the time to the Loans comprising such Borrowing and (ii) in the
case of such Lender, the greater of the Federal Funds Effective Rate and a rate
determined by the Administrative Agent in accordance with banking industry rules
on interbank compensation. If such Lender shall repay to the Administrative
Agent such corresponding amount, such amount shall constitute such Lender's Loan
as part of such Borrowing for purposes of this Agreement, and Borrower's
obligation to repay the Administrative Agent such corresponding amount pursuant
to this Section 2.02(d) shall cease.
(e) Notwithstanding any other provision of this Agreement, Borrower
shall not be entitled to request, or to elect to convert or continue, any
Borrowing if the Interest Period requested with respect thereto would end after
the Revolving Maturity Date or the Term B Loan Maturity Date, as applicable.
SECTION 2.03 BORROWING PROCEDURE. To request a Revolving Borrowing
or Term B Borrowing, Borrower shall deliver, by hand delivery or telecopy, a
duly completed and executed
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Borrowing Request to the Administrative Agent (i) in the case of a Eurodollar
Borrowing, not later than 11:00 a.m., New York City time, three Business Days
before the date of the proposed Borrowing or (ii) in the case of an ABR
Borrowing, not later than 11:00 a.m., New York City time, one Business Day
before the date of the proposed Borrowing. Each Borrowing Request shall be
irrevocable and shall specify the following information in compliance with
Section 2.02:
(a) whether the requested Borrowing is to be a Borrowing of
Revolving Loans or Term B Loans;
(b) the aggregate amount of such Borrowing;
(c) the date of such Borrowing, which shall be a Business Day;
(d) whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing; provided that Eurodollar Borrowings shall not be available
until the earlier of (i) August 31, 2004 and (ii) the date on which the
Syndication Agent shall have notified Borrower that a Successful
Syndication has been achieved ; provided further, however, that if on
August 31, 2004, the Syndication Agent shall not have notified Borrower
that a Successful Syndication has been achieved, then Borrower shall only
be entitled to select Interest Periods for Eurodollar Borrowings of one
month until it has been so notified;
(e) in the case of a Eurodollar Borrowing, the initial Interest
Period to be applicable thereto, which shall be a period contemplated by
the definition of the term "Interest Period";
(f) the location and number of Borrower's account to which funds are
to be disbursed, which shall comply with the requirements of Section
2.02(c); and
(g) that the conditions set forth in Sections 4.02(b)-(d) have been
satisfied as of the date of the notice.
If no election as to the Type of Borrowing is specified, then the
requested Borrowing shall be an ABR Borrowing. If no Interest Period is
specified with respect to any requested Eurodollar Revolving Borrowing, then
Borrower shall be deemed to have selected an Interest Period of one month's
duration. Promptly following receipt of a Borrowing Request in accordance with
this Section, the Administrative Agent shall advise each Lender of the details
thereof and of the amount of such Lender's Loan to be made as part of the
requested Borrowing.
SECTION 2.04 EVIDENCE OF DEBT; REPAYMENT OF LOANS. (a) Borrower
hereby unconditionally promises to pay (i) to the Administrative Agent for the
account of each Term B Lender, the principal amount of each Term B Loan of such
Term B Lender as provided in Section 2.09, (ii) to the Administrative Agent for
the account of each Revolving Lender, the then unpaid principal amount of each
Revolving Loan of such Revolving Lender on the Revolving Maturity Date and (iii)
to the Swingline Lender, the then unpaid principal amount of each Swingline Loan
on the earlier of the Revolving Maturity Date and the first date after such
Swingline Loan is made that is the 15th or last day of a calendar month and is
at least two Business Days after such Swingline Loan is made; provided that on
each date that a Revolving Borrowing is made, Borrower shall repay all Swingline
Loans that were outstanding on the date such Borrowing was requested.
(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness of Borrower to such Lender
resulting from each Loan made by such
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Lender from time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time under this Agreement.
(c) The Administrative Agent shall maintain accounts in which it
will record (i) the amount of each Loan made hereunder, the Type and Class
thereof and the Interest Period applicable thereto; (ii) the amount of any
principal or interest due and payable or to become due and payable from Borrower
to each Lender hereunder; and (iii) the amount of any sum received by the
Administrative Agent hereunder for the account of the Lenders and each Lender's
share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraphs (b) and (c) above shall be prima facie evidence of the existence and
amounts of the obligations therein recorded; provided that the failure of any
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligations of Borrower to repay the
Loans in accordance with their terms.
(e) Any Lender by written notice to Borrower (with a copy to the
Administrative Agent) may request that Loans of any Class made by it be
evidenced by a promissory note. In such event, Borrower shall prepare, execute
and deliver to such Lender a promissory note payable to the order of such Lender
(or, if requested by such Lender, to such Lender and its registered assigns) in
the form of Exhibit K-I, K-2 or K-3, as the case may be. Thereafter, the Loans
evidenced by such promissory note and interest thereon shall at all times
(including after assignment pursuant to Section 11.04) be represented by one or
more promissory notes in such form payable to the order of the payee named
therein (or, if such promissory note is a registered note, to such payee and its
registered assigns).
SECTION 2.05 FEES.
(a) Commitment Fee. Borrower agrees to pay to the Administrative
Agent for the account of each Lender a commitment fee (a "COMMITMENT FEE") equal
to the Applicable Fee per annum on the average daily unused amount of each
Revolving Commitment of such Lender during the period from and including the
date hereof to but excluding the date on which such Revolving Commitment
terminates. Accrued Commitment Fees shall be payable in arrears (A) on the last
Business Day of March, June, September and December of each year, commencing on
the first such date to occur after the date hereof, and (B) on the date on which
such Revolving Commitment terminates. Commitment Fees shall be computed on the
basis of a year of 360 days and shall be payable for the actual number of days
elapsed (including the first day but excluding the last day). For purposes of
computing Commitment Fees with respect to Revolving Commitments, a Revolving
Commitment of a Lender shall be deemed to be used to the extent of the
outstanding Revolving Loans and Revolving LC Exposure of such Lender (and the
Swingline Exposure of such Lender shall be disregarded for such purpose).
(b) Administrative Agent Fees. Borrower agrees to pay to the
Administrative Agent, for its own account, the administrative fees set forth in
the Fee Letter or such other fees payable in the amounts and at the times
separately agreed upon between Borrower and the Administrative Agent (the
"ADMINISTRATIVE AGENT FEES").
(c) LC and Fronting Fees. Borrower agrees to pay (i) to the
Administrative Agent for the account of each Revolving Lender a participation
fee ("LC PARTICIPATION FEE") with respect to its participations in Revolving
Letters of Credit, which shall accrue at a rate equal to the Applicable Margin
from time to time used to determine the interest rate on Eurodollar Revolving
Loans pursuant to Section 2.06 on the average daily amount of such Lender's
Revolving LC Exposure (excluding any portion thereof attributable to
Reimbursement Obligations) during the period from and including the Closing Date
to but excluding the later of the date on which such Lender's Revolving
Commitment terminates and the
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date on which such Lender ceases to have any Revolving LC Exposure, and (ii) to
the Issuing Bank a fronting fee ("FRONTING FEE"), which shall accrue at the rate
of 0.125% per annum on the average daily amount of the Revolving LC Exposure
(excluding any portion thereof attributable to Reimbursement Obligations) during
the period from and including the Closing Date to but excluding the later of the
date of termination of the Revolving Commitments and the date on which there
ceases to be any Revolving LC Exposure, as well as the Issuing Bank's customary
fees with respect to the issuance, amendment, renewal or extension of any
Revolving Letter of Credit or processing of drawings thereunder. Accrued LC
Participation Fees and Fronting Fees shall be payable in arrears (i) on the last
Business Day of March, June, September and December of each year, commencing on
the first such date to occur after the Closing Date, and (ii) on the date on
which the Revolving Commitments terminate. Any such fees accruing after the date
on which the Revolving Commitments terminate shall be payable on demand. Any
other fees payable to the Issuing Bank pursuant to this paragraph shall be
payable within 10 days after demand therefor. All LC Participation Fees and
Fronting Fees shall be computed on the basis of a year of 360 days and shall be
payable for the actual number of days elapsed (including the first day but
excluding the last day).
(d) LC Facility Fee. Borrower agrees to pay (i) in addition to the
fees payable to the LC Facility Lenders pursuant to Section 2.19(b), to the
Administrative Agent for the account of each LC Facility Lender a participation
fee with respect to its participations in LC Facility Letters of Credit ("LC
FACILITY LC FEES"), which shall accrue at a rate equal to the Applicable Margin
from time to time used to determine the interest rate on Eurodollar Term Loans
pursuant to Section 2.06 on the average daily amount of such LC Facility
Lender's LC Facility Deposit during the period from and including the Closing
Date to but excluding the date on which the entire amount of such Lender's LC
Facility Deposit is returned to it, and (ii) the LC Facility Issuing Bank's
customary fees with respect to the amendment, renewal or extension of any LC
Facility Letter of Credit, or processing of drawings thereunder. Accrued
participation fees shall be payable (i) on the last Business Day of March, June,
September and December of each year, commencing on the first such date to occur
after the Closing Date, and (ii) on the date on which the full amounts of the LC
Facility Deposits are returned to the LC Facility Lenders. Any other fees
payable to the LC Facility Issuing Bank pursuant to this paragraph shall be
payable within ten (10) days after demand. All participation fees in respect of
LC Facility Letters of Credit shall be computed on the basis of a year of 360
days and shall be payable for the actual number of days elapsed (including the
first day but excluding the last day).
(e) All Fees shall be paid on the dates due, in immediately
available funds in dollars, to the Administrative Agent for distribution, if and
as appropriate, among the Lenders, except that Borrower shall pay the Fronting
Fees directly to the Issuing Bank. Once paid, none of the Fees shall be
refundable under any circumstances.
SECTION 2.06 INTEREST ON LOANS. (a) Subject to the provisions of
Section 2.06(c), the Loans comprising each ABR Borrowing, including each
Swingline Loan, shall bear interest at a rate per annum equal to the Alternate
Base Rate plus the Applicable Margin in effect from time to time.
(b) Subject to the provisions of Section 2.06(c), the Loans
comprising each Eurodollar Borrowing shall bear interest at a rate per annum
equal to the Adjusted LIBOR Rate for the Interest Period in effect for such
Borrowing plus the Applicable Margin in effect from time to time.
(c) Notwithstanding the foregoing, during the continuance of an
Event of Default, all Obligations shall, to the extent permitted by applicable
law, bear interest, after as well as before judgment, at a per annum rate equal
to (i) in the case of principal of or interest on any Loan, 2% plus the rate
otherwise applicable to such Loan as provided in the preceding paragraphs of
this Section 2.06 or (ii) in the case of any other amount, 2% plus the rate
applicable to ABR Revolving Loans as provided in Section 2.06(a) (in either
case, the "DEFAULT RATE").
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(d) Accrued interest on each Loan shall be payable in arrears on
each Interest Payment Date for such Loan; provided that (i) interest accrued
pursuant to Section 2.06(c) shall be payable on demand, (ii) in the event of any
repayment or prepayment of any Loan (other than a prepayment of an ABR Revolving
Loan or a Swingline Loan), accrued interest on the principal amount repaid or
prepaid shall be payable on the date of such repayment or prepayment and (iii)
in the event of any conversion of any Eurodollar Loan prior to the end of the
current Interest Period therefor, accrued interest on such Loan shall be payable
on the effective date of such conversion.
(e) All interest hereunder shall be computed on the basis of a year
of 360 days, except that interest computed by reference to the Alternate Base
Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap
year), and in each case shall be payable for the actual number of days elapsed
(including the first day but excluding the last day). The applicable Alternate
Base Rate or Adjusted LIBOR Rate shall be determined by the Administrative Agent
in accordance with the provisions of this Agreement and such determination shall
be conclusive absent manifest error.
SECTION 2.07 TERMINATION AND REDUCTION OF COMMITMENTS AND LC
FACILITY DEPOSIT. (a) The Term B Commitments and the LC Facility Commitments
shall automatically terminate at 5:00 p.m., New York City time, on the Closing
Date. The Revolving Commitments, the Swingline Commitment and the Revolving LC
Commitment shall automatically terminate on the Revolving Maturity Date.
Notwithstanding the foregoing, all the Commitments shall automatically terminate
at 5:00 p.m., New York City time, on August 1, 2004, if the initial Credit
Extension shall not have occurred by such time.
(b) At its option, Borrower may at any time terminate, or from time
to time permanently reduce, the Commitments of any Class; provided that (i) each
reduction of the Commitments of any Class shall be in an amount that is an
integral multiple of $500,000 and not less than $1.0 million and (ii) the
Revolving Commitments shall not be terminated or reduced if, after giving effect
to any concurrent prepayment of the Revolving Loans in accordance with Section
2.10, the aggregate amount of Revolving Exposures would exceed the aggregate
amount of Revolving Commitments.
(c) At its option, Borrower may at any time, or from time to time,
direct the Administrative Agent to reduce the Total LC Facility Deposit;
provided that (i) each reduction of the LC Facility Deposits shall be in an
amount that is an integral multiple of $500,000 and not less than $1.0 million,
and (ii) the LC Facility Deposits shall not be reduced, if after giving effect
to such reduction (and to the provisions of Section 2.18(a)), the aggregate LC
Facility LC Exposure would exceed the Total LC Facility Deposit. In the event
the LC Facility Deposits shall be reduced as provided in the preceding sentence,
the Administrative Agent will return all amounts invested in the LC Facility
Deposit Account in excess of the reduced Total LC Facility Deposit to the LC
Facility Lenders, ratably in accordance with their Pro Rata Percentages of the
Total LC Facility Deposit (as determined immediately prior to such reduction).
(d) Borrower shall notify the Administrative Agent in writing of any
election to terminate or reduce the Commitments under Section 2.07(b) or Total
LC Facility Deposits under Section 2.07(c) at least three (3) Business Days
prior to the effective date of such termination or reduction, specifying such
election and the effective date thereof. Promptly following receipt of any
notice, the Administrative Agent shall advise the Lenders of the contents
thereof. Each notice delivered by Borrower pursuant to this Section shall be
irrevocable. Any termination or reduction of the Commitments of any Class or LC
Facility Deposits, as the case may be, shall be permanent. Each reduction of the
Commitments of any Class or LC Facility Deposits, as the case may be, shall be
made ratably among the Lenders in accordance with their respective Commitments
of such Class or LC Facility Deposits, as the case may be.
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SECTION 2.08 INTEREST ELECTIONS. (a) Each Revolving Borrowing and
Term B Borrowing initially shall be of the Type specified in the applicable
Borrowing Request and, in the case of a Eurodollar Borrowing, shall have an
initial Interest Period as specified in such Borrowing Request. Thereafter,
Borrower may elect to convert such Borrowing to a different Type or to continue
such Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest
Periods therefor, all as provided in this Section. Borrower may elect different
options with respect to different portions of the affected Borrowing, in which
case each such portion shall be allocated ratably among the Lenders holding the
Loans comprising such Borrowing, and the Loans comprising each such portion
shall be considered a separate Borrowing. Notwithstanding anything to the
contrary, Borrower shall not be entitled to request any conversion or
continuation that, if made, would result in more than eight (8) Eurodollar
Borrowings outstanding hereunder at any one time. This Section shall not apply
to Swingline Borrowings, which may not be converted or continued.
(b) To make an election pursuant to this Section, Borrower shall
deliver, by hand delivery or telecopy, a duly completed and executed Interest
Election Request to the Administrative Agent not later than the time that a
Borrowing Request would be required under Section 2.03 if Borrower were
requesting a Revolving Borrowing or Term B Borrowing of the Type resulting from
such election to be made on the effective date of such election. Each Interest
Election Request shall be irrevocable.
(c) Each Interest Election Request shall specify the following
information in compliance with Section 2.02:
(i) the Borrowing to which such Interest Election Request applies
and, if different options are being elected with respect to different
portions thereof, or if outstanding Borrowings are being combined,
allocation to each resulting Borrowing (in which case the information to
be specified pursuant to clauses (iii) and (iv) below shall be specified
for each resulting Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; provided that Eurodollar Borrowings shall not be
available until the earlier of (i) August 31, 2004 and (ii) the date on
which the Syndication Agent shall have notified Borrower that a Successful
Syndication has been achieved; provided further, however, that if on
August 31, 2004, the Syndication Agent shall not have notified Borrower
that a Successful Syndication has been achieved, then Borrower shall only
be entitled to select Interest Periods for Eurodollar Borrowings of one
month until it has been so notified; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the
term "Interest Period".
If any such Interest Election Request requests a Eurodollar
Borrowing but does not specify an Interest Period, then Borrower shall be deemed
to have selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender's portion of each resulting Borrowing.
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(e) If an Interest Election Request with respect to a Eurodollar
Borrowing is not timely delivered prior to the end of the Interest Period
applicable thereto, then, unless such Borrowing is repaid as provided herein, at
the end of such Interest Period such Borrowing shall be converted to an ABR
Borrowing. Notwithstanding any contrary provision hereof, if an Event of Default
has occurred and is continuing, the Administrative Agent or the Required Lenders
may require, by notice to Borrower, that (i) no outstanding Borrowing may be
converted to or continued as a Eurodollar Borrowing and (ii) unless repaid, each
Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the
Interest Period applicable thereto.
SECTION 2.09 AMORTIZATION OF TERM B BORROWINGS. (a) Borrower
shall pay to the Administrative Agent, for the account of the Lenders, on the
dates set forth on Annex I, or if any such date is not a Business Day, on the
immediately preceding Business Day (each such date, a "TERM B LOAN REPAYMENT
DATE"), a principal amount of the Term B Loans equal to the amount set forth on
Annex I for such date (as adjusted from time to time (i) pursuant to Section
2.10(h) or (ii) in the event of a conversion of an LC Facility LC Disbursement
into Term B Loans pursuant to Section 2.18(e), to increase such amortization
amount to proportionally reflect any additional Term B Loans made after the
Closing Date), together with accrued and unpaid interest on the principal amount
to be paid to but excluding the date of such payment.
(b) To the extent not previously paid, all Term B Loans shall be due
and payable on the Term B Loan Maturity Date.
SECTION 2.10 OPTIONAL AND MANDATORY PREPAYMENTS.
(a) Optional Prepayments. Borrower shall have the right at any time
and from time to time to prepay any Borrowing, in whole or in part, subject to
the requirements of this Section 2.10; provided that each partial prepayment
shall be in an amount that is an integral multiple of $500,000 and not less than
$1.0 million.
(b) Revolving Loan Prepayments. (i) In the event of the termination
of all the Revolving Commitments, Borrower shall, on the date of such
termination, repay or prepay all its outstanding Revolving Borrowings and all
outstanding Swingline Loans and replace all outstanding Revolving Letters of
Credit or cash collateralize all outstanding Revolving Letters of Credit in
accordance with the procedures set forth in Section 2.18(i).
(ii) In the event of any partial reduction of the Revolving
Commitments, then (x) at or prior to the effective date of such reduction, the
Administrative Agent shall notify Borrower and the Revolving Lenders of the sum
of the Revolving Exposures after giving effect thereto and (y) if the sum of the
Revolving Exposures would exceed the aggregate amount of Revolving Commitments
after giving effect to such reduction, then Borrower shall, on the date of such
reduction, first, repay or prepay Swingline Loans, second, repay or prepay
Revolving Borrowings and third, replace outstanding Revolving Letters of Credit
or cash collateralize outstanding Revolving Letters of Credit in accordance with
the procedures set forth in Section 2.18(i), in an aggregate amount sufficient
to eliminate such excess.
(iii) In the event that the sum of all Lenders' Revolving Exposures
exceeds the Revolving Commitments then in effect, Borrower shall, without notice
or demand, immediately first, repay or prepay Swingline Loans second, repay or
prepay Revolving Borrowings, and third, replace outstanding Revolving Letters of
Credit or cash collateralize outstanding Revolving Letters of Credit in
accordance with the procedures set forth in Section 2.18(i), in an aggregate
amount sufficient to eliminate such excess.
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(iv) In the event that the aggregate Revolving LC Exposure exceeds
the Revolving LC Commitment then in effect, Borrower shall, without notice or
demand, immediately replace outstanding Revolving Letters of Credit or cash
collateralize outstanding Revolving Letters of Credit in accordance with the
procedures set forth in Section 2.18(i), in an aggregate amount sufficient to
eliminate such excess.
(c) Asset Sales. Not later than one Business Day following the
receipt of any Net Cash Proceeds of any Asset Sale by Borrower or any of its
Subsidiaries, Borrower shall apply 100% of such Net Cash Proceeds to make
prepayments in accordance with Sections 2.10(h) and (i); provided that:
(i) so long as no Default shall then exist or arise therefrom, no
such prepayment shall be required under this Section 2.10(c)(i) with
respect to (A) any Asset Sale permitted by Section 6.06(a), (B) the
disposition of property which constitutes a Casualty Event, or (C) Asset
Sales for fair market value resulting in no more than $100,000 in Net Cash
Proceeds per Asset Sale (or series of related Asset Sales) and less than
$1.0 million in Net Cash Proceeds in any fiscal year; provided that clause
(C) shall not apply in the case of any Asset Sale described in clause (b)
of the definition thereof; and
(ii) so long as no Default shall then exist or would arise therefrom
and the aggregate of such Net Cash Proceeds of Asset Sales shall not
exceed $5.0 million in any fiscal year of Borrower, such proceeds shall
not be required to be so applied on such date to the extent that (A)
Borrower shall have delivered an Officers' Certificate to the
Administrative Agent on or prior to such date stating that such Net Cash
Proceeds are expected to be reinvested in fixed or capital assets within
180 days following the date of such Asset Sale (which Officers'
Certificate shall set forth the estimates of the proceeds to be so
expended); and (B) all Net Cash Proceeds in respect of all Asset Sales
(other than those referred to in clause (C) of Section 2.10(c)(i)) in
excess of $5.0 million in the aggregate at any time shall be held in the
Collateral Account and released therefrom only in accordance with the
provisions of Article IX; provided that if all or any portion of such Net
Cash Proceeds is not so reinvested within such 180-day period, such unused
portion shall be applied on the last day of such period as a mandatory
prepayment as provided in this Section 2.10(c); and provided, further,
that if the property subject to such Asset Sale constituted Collateral,
then all property purchased with the Net Cash Proceeds thereof pursuant to
this subsection shall be made subject to the Lien of the applicable
Security Documents in favor of the Collateral Agent, for its benefit and
for the benefit of the other Secured Parties in accordance with Sections
5.11 and 5.12.
With respect to the sale of any Collateral that is sold as permitted by this
Agreement, such Collateral (unless sold to a Company) shall be sold free and
clear of the Liens created by the Security Documents.
(d) Debt Issuance or Preferred Stock Issuance. Not later than one
(1) Business Day following the receipt of any Net Cash Proceeds of any Debt
Issuance or Preferred Stock Issuance by Borrower or any of its Subsidiaries,
Borrower shall make prepayments in accordance with Sections 2.10(h) and (i) in
an aggregate principal amount equal to 100% of such Net Cash Proceeds.
(e) Equity Issuance. Not later than one (1) Business Day following
the receipt of any Net Cash Proceeds of any Equity Issuance (other than
compensation options), Borrower shall make prepayments in accordance with
Sections 2.10(h) and (i) in an aggregate principal amount equal to 50% of such
Net Cash Proceeds.
(f) Casualty Events. Not later than one (1) Business Day following
the receipt of any Net Cash Proceeds from a Casualty Event by Borrower or any of
its Subsidiaries, Borrower shall ap-
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ply an amount equal to 100% of such Net Cash Proceeds to make prepayments in
accordance with Sections 2.10(h) and (i); provided that:
(i) so long as no Default shall then exist or arise therefrom, such
proceeds shall not be required to be so applied on such date to the extent
that (A) in the event such Net Cash Proceeds shall not exceed $10.0
million, Borrower shall have delivered an Officers' Certificate to the
Administrative Agent on or prior to such date stating that such proceeds
are expected to be used, or (B) in the event that such Net Cash Proceeds
exceed $10.0 million, the Administrative Agent has elected by notice to
Borrower on or prior to such date to require such proceeds to be used, in
each case, to repair, replace or restore any property in respect of which
such Net Cash Proceeds were paid, no later than 180 days following the
date of receipt of such proceeds; provided that if the property subject to
such Casualty Event constituted Collateral under the Security Documents,
then all property purchased with the Net Cash Proceeds thereof pursuant to
this subsection shall be made subject to the Lien of the applicable
Security Documents in favor of the Collateral Agent, for its benefit and
for the benefit of the other Secured Parties in accordance with Sections
5.11 and 5.12;
(ii) all Net Cash Proceeds in respect of all Casualty Events in
excess of $1.0 million in the aggregate shall be held in the Collateral
Account and released therefrom only in accordance with the provisions of
Article IX; and
(iii) if any portion of such Net Cash Proceeds shall not be so
applied within such 180-day period, such unused portion shall be applied
on the last day of such period as a mandatory prepayment as provided in
this Section 2.10(f).
(g) Excess Cash Flow. No later than the earlier of (i) 90 days after
the end of each Excess Cash Flow Period and (ii) the date on which the financial
statements with respect to such fiscal year in which such Excess Cash Flow
Period occurs are delivered pursuant to Section 5.01(a), Borrower shall make
prepayments in accordance with Sections 2.10(h) and (i) in an aggregate
principal amount equal to 50% (which amount will be reduced to 25% if Borrower's
Asset Coverage Ratio for the immediately preceding Test Period is greater than
or equal to 2.25 to 1.0) of Excess Cash Flow for the Excess Cash Flow Period
then ended.
(h) Application of Prepayments. (i) Prior to any optional or
mandatory prepayment hereunder, Borrower shall select the Borrowing or
Borrowings to be prepaid and shall specify such selection in the notice of such
prepayment pursuant to Section 2.10(i), subject to the provisions of this
Section 2.10(h). Any prepayments of Term B Loans pursuant to Section 2.10(c),
(d), (e), (f) or (g) shall be applied to reduce scheduled prepayments required
under Section 2.09(a) on a pro rata basis among the prepayments remaining to be
made on each other Term B Loan Repayment Date. After application of mandatory
prepayments described above in this Section 2.10(h) and to the extent there are
mandatory prepayment amounts remaining after such application, the Revolving
Commitments shall be permanently reduced ratably among the Revolving Lenders in
accordance with their applicable Revolving Commitments in an aggregate amount
equal to such excess, and Borrower shall comply with Section 2.10(b).
(ii) Amounts to be applied pursuant to this Section 2.10 to the
prepayment of Term B Loans and Revolving Loans shall be applied, as applicable,
first to reduce outstanding ABR Term Loans and ABR Revolving Loans,
respectively. Any amounts remaining after each such application shall be applied
to prepay Eurodollar Term B Loans or Eurodollar Revolving Loans, as applicable.
Notwithstanding the foregoing, if the amount of any prepayment of Loans required
under this Section 2.10 shall be in excess of the amount of the ABR Loans at the
time outstanding (an "EXCESS AMOUNT"), only the portion of the amount of such
prepayment as is equal to the amount of such outstanding ABR Loans shall be
im-
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mediately prepaid and, at the election of Borrower, the balance of such required
prepayment shall be either (A) deposited in the Collateral Account and applied
to the prepayment of Eurodollar Loans on the last day of the then next-expiring
Interest Period for Eurodollar Loans; provided that (i) interest in respect of
such Excess Amount shall continue to accrue thereon at the rate provided
hereunder for the Loans which such Excess Amount is intended to repay until such
Excess Amount shall have been used in full to repay such Loans and (ii) at any
time while an Event of Default has occurred and is continuing, the
Administrative Agent may, and upon written direction from the Required Lenders
shall, apply any or all proceeds then on deposit in the Collateral Account to
the payment of such Loans in an amount equal to such Excess Amount or (B)
prepaid immediately, together with any amounts owing to the Lenders under
Section 2.13.
(i) Notice of Prepayment. Borrower shall notify the Administrative
Agent (and, in the case of prepayment of a Swingline Loan, the Swingline Lender)
by written notice of any prepayment hereunder (i) in the case of prepayment of a
Eurodollar Borrowing, not later than 11:00 a.m., New York City time, three
Business Days before the date of prepayment, (ii) in the case of prepayment of
an ABR Borrowing, not later than 11:00 a.m., New York City time, one Business
Day before the date of prepayment and (iii) in the case of prepayment of a
Swingline Loan, not later than 11:00 a.m., New York City time, on the date of
prepayment. Each such notice shall be irrevocable. Each such notice shall
specify the prepayment date, the principal amount of each Borrowing or portion
thereof to be prepaid and, in the case of a mandatory prepayment, a reasonably
detailed calculation of the amount of such prepayment. Promptly following
receipt of any such notice (other than a notice relating solely to Swingline
Loans), the Administrative Agent shall advise the Lenders of the contents
thereof. Such notice to the Lenders may be by electronic communication. Each
partial prepayment of any Borrowing shall be in an amount that would be
permitted in the case of a Credit Extension of the same Type as provided in
Section 2.02, except as necessary to apply fully the required amount of a
mandatory prepayment. Each prepayment of a Borrowing shall be applied ratably to
the Loans included in the prepaid Borrowing and otherwise in accordance with
this Section 2.10. Prepayments shall be accompanied by accrued interest to the
extent required by Section 2.06.
SECTION 2.11 ALTERNATE RATE OF INTEREST. If prior to the
commencement of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination shall
be final and conclusive absent manifest error) that adequate and
reasonable means do not exist for ascertaining the Adjusted LIBOR Rate for
such Interest Period; or
(b) the Administrative Agent is advised in writing by the Required
Lenders that the Adjusted LIBOR Rate for such Interest Period will not
adequately and fairly reflect the cost to such Lenders of making or
maintaining their Loans included in such Borrowing for such Interest
Period;
then the Administrative Agent shall give written notice thereof to Borrower and
the Lenders as promptly as practicable thereafter and, until the Administrative
Agent notifies Borrower and the Lenders that the circumstances giving rise to
such notice no longer exist, (i) any Interest Election Request that requests the
conversion of any Borrowing to, or continuation of any Borrowing as, a
Eurodollar Borrowing shall be ineffective and (ii) if any Borrowing Request
requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR
Borrowing.
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SECTION 2.12 INCREASED COSTS. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit
or similar requirement against property of, deposits with or for the
account of, or credit extended by, any Lender (except any such reserve
requirement reflected in the Adjusted LIBOR Rate) or the Issuing Bank; or
(ii) impose on any Lender or the Issuing Bank or the LC Facility
Issuing Bank or the London interbank market any other condition affecting
this Agreement or Eurodollar Loans made by such Lender or any Letter of
Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender, the
Issuing Bank, the LC Facility Issuing Bank or such Lender's or the Issuing
Bank's or the LC Facility Issuing Bank's holding company, if any, of
participating in, issuing or maintaining any Letter of Credit or to reduce the
amount of any sum received or receivable by such Lender or the Issuing Bank or
the LC Facility Issuing Bank hereunder (whether of principal, interest or
otherwise), then Borrower will pay to such Lender or the Issuing Bank or the LC
Facility Issuing Bank, as the case may be, such additional amount or amounts as
will compensate such Lender or the Issuing Bank or the LC Facility Issuing Bank,
as the case may be, for such additional costs incurred or reduction suffered, it
being understood that, to the extent duplicative of the provisions of Section
2.15, this Section 2.12 shall not apply to Taxes. If any Lender requests
compensation by Borrower under this Section 2.12, Borrower may, by notice to
such Lender (with a copy to the Administrative Agent), suspend the obligation of
such Lender to make or continue Eurodollar Loans or to convert all or part of
the ABR Loans owing to such Lender into Eurodollar Loans, until the event or
condition giving rise to such request ceases to be in effect; provided that such
suspension shall not affect the right of such Lender to receive the compensation
so requested.
(b) If any Lender or the Issuing Bank or the LC Facility Issuing
Bank determines (in good faith, but in its sole absolute discretion) that any
Change in Law regarding capital requirements has or would have the effect of
reducing the rate of return on such Lender's or the Issuing Bank's or the LC
Facility Issuing Bank's capital or on the capital of such Lender's or the
Issuing Bank's or the LC Facility Issuing Bank's holding company, if any, as a
consequence of this Agreement or the Loans made by, or participations in letters
of credit held by, such Lender, or the Letters of Credit issued by the Issuing
Bank or the LC Facility Issuing Bank, to a level below that which such Lender or
the Issuing Bank or the LC Facility Issuing Bank or such Lender's or the Issuing
Bank's or the LC Facility Issuing Bank's holding company could have achieved but
for such Change in Law (taking into consideration such Lender's or the Issuing
Bank's or the LC Facility Issuing Bank's policies and the policies of such
Lender's or the Issuing Bank's or the LC Facility Issuing Bank's holding company
with respect to capital adequacy), then from time to time Borrower will pay to
such Lender or the Issuing Bank or the LC Facility Issuing Bank, as the case may
be, such additional amount or amounts as will compensate such Lender or the
Issuing Bank or the LC Facility Issuing Bank or such Lender's or the Issuing
Bank's or the LC Facility Issuing Bank's holding company for any such reduction
suffered.
(c) A certificate of a Lender or the Issuing Bank or the LC Facility
Issuing Bank setting forth in reasonable detail the amount or amounts necessary
to compensate such Lender or the Issuing Bank or the LC Facility Issuing Bank or
its holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section 2.12 shall be delivered to Borrower (with a copy to the
Administrative Agent) and shall be conclusive and binding absent manifest error.
Borrower shall pay such Lender or the Issuing Bank or the LC Facility Issuing
Bank, as the case may be, the amount shown as due on any such certificate within
5 days after receipt thereof.
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(d) Each Lender shall promptly notify Borrower and the
Administrative Agent of any event of which it has knowledge, occurring after the
date hereof, which will entitle such Lender to compensation pursuant to this
Section 2.12. Failure or delay on the part of any Lender or the Issuing Bank or
the LC Facility Issuing Bank to demand compensation pursuant to this Section
2.12 shall not constitute a waiver of such Lender's or the Issuing Bank's or the
LC Facility Issuing Bank's right to demand such compensation; provided that
Borrower shall not be required to compensate a Lender or the Issuing Bank or the
LC Facility Issuing Bank pursuant to this Section 2.12 for any increased costs
or reductions incurred more than 180 days prior to the date that such Lender or
the Issuing Bank or the LC Facility Issuing Bank, as the case may be, notifies
Borrower of the Change in Law giving rise to such increased costs or reductions
and of such Lender's or the Issuing Bank's or the LC Facility Issuing Bank's
intention to claim compensation therefor; provided, further, that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then
the 180-day period referred to above shall not begin earlier than the date of
effectiveness of the Change in Law.
SECTION 2.13 BREAKAGE PAYMENTS. In the event of (a) the payment or
prepayment, whether optional or mandatory, of any principal of any Eurodollar
Loan earlier than the last day of an Interest Period applicable thereto
(including as a result of an Event of Default), (b) the conversion of any
Eurodollar Loan earlier than the last day of the Interest Period applicable
thereto, (c) the failure to borrow, convert, continue or prepay any Revolving
Loan or Term B Loan on the date specified in any notice delivered pursuant
hereto or (d) the assignment of any Eurodollar Loan earlier than the last day of
the Interest Period applicable thereto as a result of a request by Borrower
pursuant to Section 2.16, then, in any such event, Borrower shall compensate
each Lender for the loss, cost and expense attributable to such event. In the
case of a Eurodollar Loan, such loss, cost or expense to any Lender shall be
deemed to include an amount determined by such Lender to be the excess, if any,
of (i) the amount of interest which would have accrued on the principal amount
of such Loan had such event not occurred, at the Adjusted LIBOR Rate that would
have been applicable to such Loan, for the period from the date of such event to
the last day of the then current Interest Period therefor (or, in the case of a
failure to borrow, convert or continue, for the period that would have been the
Interest Period for such Loan), over (ii) the amount of interest which would
accrue on such principal amount for such period at the interest rate which such
Lender would bid were it to bid, at the commencement of such period, for dollar
deposits of a comparable amount and period from other banks in the Eurodollar
market. A certificate of any Lender setting forth in reasonable detail any
amount or amounts that such Lender is entitled to receive pursuant to this
Section 2.13 shall be delivered to Borrower (with a copy to the Administrative
Agent) and shall be conclusive and binding absent manifest error. Borrower shall
pay such Lender the amount shown as due on any such certificate within 5 days
after receipt thereof.
SECTION 2.14 PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING OF
SETOFFS. (a) Borrower shall make each payment required to be made by it
hereunder or under any other Loan Document (whether of principal, interest, fees
or Reimbursement Obligations, or of amounts payable under Section 2.12, 2.13 or
2.15, or otherwise) on or before the time expressly required hereunder or under
such other Loan Document for such payment (or, if no such time is expressly
required, prior to 2:00 p.m., New York City time), on the date when due, in
immediately available funds, without setoff, deduction or counterclaim. Any
amounts received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, except payments to be made directly to the
Issuing Bank, LC Facility Issuing Bank or Swingline Lender as expressly provided
herein and except that payments pursuant to Sections 2.12, 2.13, 2.15 and 11.03
shall be made directly to the persons entitled thereto and payments pursuant to
other Loan Documents shall be made to the persons specified therein. The
Administrative Agent shall distribute any such payments received by it for the
account of any other person to the appropriate recipient promptly following
receipt thereof. If any payment under any Loan
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Document shall be due on a day that is not a Business Day, unless specified
otherwise, the date for payment shall be extended to the next succeeding
Business Day, and, in the case of any payment accruing interest, interest
thereon shall be payable for the period of such extension. All payments under
each Loan Document shall be made in dollars, except as expressly specified
otherwise.
(b) If at any time insufficient funds are received by and available
to the Administrative Agent to pay fully all amounts of principal, Reimbursement
Obligations, interest and fees then due hereunder, such funds shall be applied
(i) first, towards payment of interest and fees then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of interest
and fees then due to such parties, and (ii) second, towards payment of principal
and Reimbursement Obligations then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal and Reimbursement
Obligations then due to such parties.
(c) If any Lender shall, by exercising any right of setoff or
counterclaim or otherwise (including by exercise of its rights under Section 9.1
of the Security Agreement), obtain payment in respect of any principal of or
interest on any of its Revolving Loans, Term B Loans or participations in LC
Disbursements or Swingline Loans resulting in such Lender receiving payment of a
greater proportion of the aggregate amount of its Revolving Loans, Term B Loans
and participations in LC Disbursements and Swingline Loans and accrued interest
thereon than the proportion received by any other Lender, then the Lender
receiving such greater proportion shall purchase (for cash at face value)
participations in the Revolving Loans, Term B Loans and participations in LC
Disbursements and Swingline Loans of other Lenders to the extent necessary so
that the benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Revolving Loans, Term B Loans and participations in LC
Disbursements and Swingline Loans; provided that (i) if any such participations
are purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by Borrower pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans or participations
in LC Disbursements to any assignee or participant, other than to Borrower or
any of its Subsidiaries or Affiliates (as to which the provisions of this
paragraph shall apply). Each Loan Party consents to the foregoing and agrees, to
the extent it may effectively do so under applicable law, that any Lender
acquiring a participation pursuant to the foregoing arrangements may exercise
against such Loan Party rights of setoff and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of such Loan
Party in the amount of such participation. If under applicable bankruptcy,
insolvency or any similar law any Secured Party receives a secured claim in lieu
of a setoff or counterclaim to which this Section 2.14(c) applies, such Secured
Party shall to the extent practicable, exercise its rights in respect of such
secured claim in a manner consistent with the rights to which the Secured Party
is entitled under this Section 2.14(c) to share in the benefits of the recovery
of such secured claim.
(d) Unless the Administrative Agent shall have received notice from
Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders hereunder that Borrower will not make such
payment, the Administrative Agent may assume that Borrower has made such payment
on such date in accordance herewith and may, in reliance upon such assumption,
distribute to the Lenders the amount due. In such event, if Borrower has not in
fact made such payment, then each of the Lenders severally agrees to repay to
the Administrative Agent forthwith on demand the amount so distributed to such
Lender with interest thereon, for each day from and including the date such
amount is distributed to it to but excluding the date of payment to the
Administrative Agent, at the greater of the Federal Funds Effective Rate and a
rate determined by the Administrative Agent in accordance with banking industry
rules on interbank compensation.
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(e) If any Lender shall fail to make any payment required to be made
by it pursuant to Section 2.02(c), 2.14(d), 2.17(d), 2.18(d), 2.18(e) or
11.03(d), then the Administrative Agent may, in its discretion (notwithstanding
any contrary provision hereof), apply any amounts thereafter received by the
Administrative Agent for the account of such Lender to satisfy such Lender's
obligations under such Sections until all such unsatisfied obligations are fully
paid.
SECTION 2.15 TAXES. (a) Any and all payments by or on account of
any obligation of Borrower hereunder or under any other Loan Document shall be
made without setoff, counterclaim or other defense and free and clear of and
without deduction or withholding for any and all Indemnified Taxes; provided
that if Borrower shall be required by law to deduct any Indemnified Taxes from
such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions or withholdings
applicable to additional sums payable under this Section 2.15) the
Administrative Agent, any Lender, the Issuing Bank or the LC Facility Issuing
Bank as the case may be, receives an amount equal to the sum it would have
received had no such deductions or withholdings been made, (ii) Borrower shall
make such deductions or withholdings and (iii) Borrower shall pay the full
amount deducted or withheld to the relevant Governmental Authority in accordance
with applicable law.
(b) In addition, Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
(c) Borrower shall indemnify the Administrative Agent, each Lender,
the Issuing Bank and the LC Facility Issuing Bank, as applicable, within ten
(10) Business Days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes paid by the Administrative Agent, such Lender,
the Issuing Bank or the LC Facility Issuing Bank, as applicable, on or with
respect to any payment by or on account of any obligation of Borrower hereunder
or under any other Loan Document (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section
2.15) and any penalties, interest and reasonable expenses arising therefrom or
with respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
A certificate as to the amount of such payment or liability delivered to
Borrower by a Lender, the Issuing Bank, the LC Facility Issuing Bank or by the
Administrative Agent on its own behalf or on behalf of a Lender, the Issuing
Bank or the LC Facility Issuing Bank shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes and in any event within 30 days of any such payment being due by
Borrower to a Governmental Authority, Borrower shall deliver to the
Administrative Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which Borrower
is located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law and
reasonably requested by Borrower, such properly completed and executed
documentation prescribed by applicable law and reasonably requested by Borrower
or the Administrative Agent as will permit such payments to be made without
withholding or at a reduced rate; provided that such Lender is legally entitled
to complete, execute and deliver such documentation and in such Lender's
reasonable judgment such completion, execution or submission would not
materially prejudice the legal position of such Lender, would not subject such
Lender to any material unreimbursed cost and would not otherwise be
disadvantageous to such Lender in any way. Each Foreign Lender shall (i) furnish
either (a) two accurate and complete originally
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executed U.S. Internal Revenue Service Form W-8BEN (or successor form) or (b) an
accurate and complete U.S. Internal Revenue Service Form W-8ECI (or successor
form), certifying, in either case, to such Foreign Lender's legal entitlement to
an exemption or reduction from U.S. federal withholding tax with respect to all
interest payments hereunder, and (ii) to the extent it may lawfully do so at
such times, upon reasonable request by Borrower or the Administrative Agent,
provide a new Form W-8BEN (or successor form) or Form W-8ECI (or successor form)
upon the expiration or obsolescence of any previously delivered form to
reconfirm any complete exemption from, or any entitlement to a reduction in,
U.S. federal withholding tax with respect to any interest payment hereunder;
provided that any Foreign Lender that is not a "bank" within the meaning of
Section 881(c)(3)(A) of the Code shall also furnish a "Non-Bank Certificate" in
the form of Exhibit Q if it is furnishing a Form W-8BEN.
(f) If the Administrative Agent or a Lender (or an assignee)
determines in its reasonable discretion that it has received a refund of any
Indemnified Taxes or Other Taxes as to which it has been indemnified by Borrower
or with respect to which Borrower has paid additional amounts pursuant to this
Section 2.15, it shall pay over such refund to Borrower (but only to the extent
of indemnity payments made, or additional amounts paid, by Borrower under this
Section 2.15 with respect to the Indemnified Taxes or the Other Taxes giving
rise to such refund), net of all out-of-pocket expenses of the Administrative
Agent or such Lender (or assignee) and without interest (other than any interest
paid by the relevant Governmental Authority with respect to such refund);
provided, however, that Borrower, upon the request of the Administrative Agent
or such Lender (or assignee), agrees to repay the amount paid over to Borrower
(plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) to the Administrative Agent or such Lender (or assignee)
within a reasonable time (not to exceed 20 days) after receipt of written notice
that the Administrative Agent or such Lender (or assignee) is required to repay
such refund to such Governmental Authority. Nothing contained in this Section
2.15(f) shall require the Administrative Agent or any Lender (or assignee) to
make available its Tax Returns or any other information which it deems
confidential to Borrower or any other person. Notwithstanding anything to the
contrary, in no event will any Lender be required to pay any amount to Borrower
the payment of which would place such Lender in a less favorable net after-tax
position than such Lender would have been in if the additional amounts giving
rise to such refund of any Indemnified Taxes or Other Taxes had never been paid.
SECTION 2.16 MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS.
(a) Mitigation of Obligations. If any Lender requests compensation
under Section 2.12, or if Borrower is required to pay any additional amount to
any Lender or any Governmental Authority for the account of any Lender pursuant
to Section 2.15, then such Lender shall use reasonable efforts to designate a
different lending office for funding or booking its Loans hereunder or to assign
its rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the reasonable judgment of such Lender, such designation or
assignment (i) would eliminate or reduce amounts payable pursuant to Section
2.12 or 2.15, as the case may be, in the future and (ii) would not subject such
Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender. Borrower hereby agrees to pay all reasonable
costs and expenses incurred by any Lender in connection with any such
designation or assignment. A certificate setting forth such costs and expenses
in reasonable detail submitted by such Lender to the Administrative Agent shall
be conclusive absent manifest error.
(b) Replacement of Lenders. If any Lender requests compensation
under Section 2.12, or if Borrower is required to pay any additional amount to
any Lender or any Governmental Authority for the account of any Lender pursuant
to Section 2.15, or if any Lender defaults in its obligation to fund Loans
hereunder, then Borrower may, at its sole expense and effort, upon notice to
such Lender and the Administrative Agent, require such Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions
contained in Section 11.04), all of its interests, rights and
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obligations under this Agreement to an assignee selected by Borrower that shall
assume such obligations (which assignee may be another Lender, if a Lender
accepts such assignment); provided that (i) Borrower shall have received the
prior written consent of the Administrative Agent (and, if a Revolving
Commitment is being assigned, the Issuing Bank and Swingline Lender), which
consents shall not unreasonably be withheld, (ii) such Lender shall have
received payment of an amount equal to the outstanding principal of its Loans
and participations in LC Disbursements and Swingline Loans, the principal amount
of their LC Facility Deposit, accrued interest thereon, accrued fees and all
other amounts payable to it hereunder (assuming for this purpose that the Loans
of such Lender were being prepaid) from the assignee (to the extent of such
outstanding principal and accrued interest and fees) or Borrower (in the case of
all other amounts) and (iii) in the case of any such assignment resulting from a
claim for compensation under Section 2.12 or payments required to be made
pursuant to Section 2.15, such assignment will result in a material reduction in
such compensation or payments. A Lender shall not be required to make any such
assignment and delegation if, prior thereto, as a result of a waiver by such
Lender or otherwise, the circumstances entitling Borrower to require such
assignment and delegation cease to apply.
SECTION 2.17 SWINGLINE LOANS.
(a) Swingline Commitment. Subject to the terms and conditions set
forth herein, the Swingline Lender agrees to make Swingline Loans to Borrower
from time to time during the Revolving Availability Period, in an aggregate
principal amount at any time outstanding that will not result in (i) the
aggregate principal amount of outstanding Swingline Loans exceeding $10.0
million or (ii) the sum of the total Revolving Exposures exceeding the total
Revolving Commitments; provided that the Swingline Lender shall not be required
to make a Swingline Loan to refinance an outstanding Swingline Loan. Within the
foregoing limits and subject to the terms and conditions set forth herein,
Borrower may borrow, repay and reborrow Swingline Loans.
(b) Swingline Loans. To request a Swingline Loan, Borrower shall
deliver, by hand delivery or telecopy, a duly completed and executed Borrowing
Request to the Administrative Agent and the Swingline Lender, not later than
2:00 p.m., New York City time, on the day of a proposed Swingline Loan. Each
such notice shall be irrevocable and shall specify the requested date (which
shall be a Business Day) and the amount of the requested Swingline Loan. Each
Swingline Loan shall be an ABR Loan. The Swingline Lender shall make each
Swingline Loan available to Borrower by means of a credit to the general deposit
account of Borrower with the Swingline Lender (or, in the case of a Swingline
Loan made to finance the reimbursement of a Revolving LC Disbursement as
provided in Section 2.18(e), by remittance to the Issuing Bank) by 3:00 p.m.,
New York City time, on the requested date of such Swingline Loan. Borrower shall
not request a Swingline Loan if at the time of or immediately after giving
effect to the Extension of Credit contemplated by such request a Default has
occurred and is continuing or would result therefrom. Swingline Loans shall be
made in minimum amounts of $500,000 and integral multiples of $100,000 above
such amount.
(c) Prepayment. Borrower shall have the right at any time and from
time to time to repay any Swingline Loan, in whole or in part, upon giving
written notice to the Swingline Lender and the Administrative Agent before 12:00
noon, New York City time, on the proposed date of repayment.
(d) Participations. The Swingline Lender may at any time in its
discretion by written notice given to the Administrative Agent (provided such
notice requirement shall not apply if the Swingline Lender and the
Administrative Agent are the same entity) not later than 11:00 a.m., New York
City time, on the next succeeding Business Day following such notice require the
Revolving Lenders to acquire participations on such Business Day in all or a
portion of the Swingline Loans then outstanding. Such notice shall specify the
aggregate amount of Swingline Loans in which Revolving Lenders will participate.
Promptly upon receipt of such notice, the Administrative Agent will give notice
thereof to each
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Revolving Lender, specifying in such notice such Lender's Pro Rata Percentage of
such Swingline Loan or Loans. Each Revolving Lender hereby absolutely and
unconditionally agrees, upon receipt of notice as provided above, to pay to the
Administrative Agent, for the account of the Swingline Lender, such Lender's Pro
Rata Percentage of such Swingline Loan or Loans. Each Revolving Lender
acknowledges and agrees that its obligation to acquire participations in
Swingline Loans pursuant to this paragraph is absolute and unconditional and
shall not be affected by any circumstance whatsoever, including the occurrence
and continuance of a Default or reduction or termination of the Commitments, and
that each such payment shall be made without any offset, abatement, withholding
or reduction whatsoever (so long as such payment shall not cause such Lender's
Revolving Exposure to exceed such Lender's Revolving Commitment). Each Revolving
Lender shall comply with its obligation under this paragraph by wire transfer of
immediately available funds, in the same manner as provided in Section 2.02(c)
with respect to Loans made by such Lender (and Section 2.02 shall apply, mutatis
mutandis, to the payment obligations of the Revolving Lenders), and the
Administrative Agent shall promptly pay to the Swingline Lender the amounts so
received by it from the Revolving Lenders. The Administrative Agent shall notify
Borrower of any participations in any Swingline Loan acquired by the Revolving
Lenders pursuant to this paragraph, and thereafter payments in respect of such
Swingline Loan shall be made to the Administrative Agent and not to the
Swingline Lender. Any amounts received by the Swingline Lender from Borrower (or
other party on behalf of Borrower) in respect of a Swingline Loan after receipt
by the Swingline Lender of the proceeds of a sale of participations therein
shall be promptly remitted to the Administrative Agent. Any such amounts
received by the Administrative Agent shall be promptly remitted by the
Administrative Agent to the Revolving Lenders that shall have made their
payments pursuant to this paragraph, as their interests may appear. The purchase
of participations in a Swingline Loan pursuant to this paragraph shall not
relieve Borrower of any default in the payment thereof.
SECTION 2.18 LETTERS OF CREDIT.
(a) General. Subject to the terms and conditions set forth herein,
Borrower may request (i) the Issuing Bank, and the Issuing Bank agrees, to issue
Revolving Letters of Credit for its own account or the account of a Subsidiary
in a form reasonably acceptable to Borrower and the Administrative Agent and the
Issuing Bank, at any time and from time to time during the Revolving
Availability Period (provided that Borrower shall be a co-applicant, and be
jointly and severally liable, with respect to each Letter of Credit issued for
the account of a Subsidiary) and (ii) the LC Facility Issuing Bank, and the LC
Facility Issuing Bank agrees, to issue the LC Facility Letter of Credit for its
own account in a form reasonably acceptable to Borrower and the Administrative
Agent and the LC Facility Issuing Bank, on the Closing Date for the purpose of
providing credit support for certain Commodity Hedging Obligations. The Issuing
Bank or the LC Facility Issuing Bank, as applicable, shall have no obligation to
issue, and Borrower shall not request the issuance of, any Letter of Credit at
any time if after giving effect to such issuance, (i) the Revolving LC Exposure
would exceed the Revolving LC Commitment or the total Revolving Exposure would
exceed the total Revolving Commitments or (ii) the LC Facility LC Exposure would
exceed the LC Facility Deposit, as applicable. In the event of any inconsistency
between the terms and conditions of this Agreement and the terms and conditions
of any form of letter of credit application or other agreement submitted by
Borrower to, or entered into by Borrower with, the Issuing Bank or the LC
Facility Issuing Bank, as applicable, relating to any Letter of Credit, the
terms and conditions of this Agreement shall control.
(b) Request for Issuance, Amendment, Renewal, Extension; Certain
Conditions. To request the issuance of a Letter of Credit or the amendment,
renewal or extension of an outstanding Letter of Credit, Borrower shall hand
deliver or telecopy (or transmit by electronic communication, if arrangements
for doing so have been approved by the Issuing Bank or the LC Facility Issuing
Bank, as applicable) an LC Request to the Issuing Bank or the LC Facility
Issuing Bank, as applicable, and the Administrative Agent not later than 11:00
a.m. on the third Business Day preceding the requested date of issuance,
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amendment, renewal or extension (or such later date and time as is acceptable to
the Issuing Bank or the LC Facility Issuing Bank, as applicable).
A request for an initial issuance of a Letter of Credit shall
specify in form and detail satisfactory to the Issuing Bank:
(i) the proposed issuance date of the requested Letter of Credit
(which shall be a Business Day) provided that with respect to the LC
Facility Letter of Credit the issue date shall be the Closing Date;
(ii) the amount thereof provided that with respect to the LC
Facility Letter of Credit the amount shall be $15.0 million;
(iii) the expiry date thereof (which shall not be later than the
close of business on the Letter of Credit Expiration Date);
(iv) the name and address of the beneficiary thereof;
(v) whether the Letter of Credit is to be issued for its own account
or for the account of one of its Subsidiaries (provided that Borrower
shall be a co-applicant, and therefore jointly and severally liable, with
respect to each Letter of Credit issued for the account of a Subsidiary);
(vi) the documents to be presented by such beneficiary in connection
with any drawing thereunder;
(vii) the full text of any certificate to be presented by such
beneficiary in connection with any drawing thereunder; and
(viii) such other matters as the Issuing Bank or the LC Facility
Issuing Bank, as applicable, may reasonably require.
A request for an amendment, renewal or extension of any outstanding
Letter of Credit shall specify in form and detail satisfactory to the Issuing
Bank or the LC Facility Issuing Bank, as the case may be:
(i) the Letter of Credit to be amended, renewed or extended;
(ii) the proposed date of amendment, renewal or extension thereof
(which shall be a Business Day);
(iii) the nature of the proposed amendment, renewal or extension;
and
(iv) such other matters as the Issuing Bank or the LC Facility
Issuing Bank, as applicable, may reasonably require.
If requested by the Issuing Bank or the LC Facility Issuing Bank, as applicable,
Borrower also shall submit a letter of credit application on the Issuing Bank's
or the LC Facility Issuing Bank's, as applicable, standard form in connection
with any request for a Letter of Credit. A Letter of Credit shall be issued,
amended, renewed or extended only if (and, upon issuance, amendment, renewal or
extension of each Letter of Credit, Borrower shall be deemed to represent and
warrant that), after giving effect to such issuance, amendment, renewal or
extension, (i) with respect to Revolving Letters of Credit, the Revolving LC
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Exposure shall not exceed the Revolving LC Commitment, (ii) with respect to
Revolving Letters of Credit, the total Revolving Exposures shall not exceed the
total Revolving Commitments, (iii) with respect to the LC Facility Letter of
Credit, the LC Facility LC Exposure shall not exceed the Total LC Facility
Deposit, and (iv) the conditions set forth in Article IV in respect of any such
issuance, amendment, renewal or extension shall have been satisfied. In the case
of a Revolving Letter of Credit, unless the Issuing Bank shall agree otherwise,
no Revolving Letter of Credit shall be in an initial amount less than $20,000.
(c) Expiration Date. Each Revolving Letter of Credit shall expire at
or prior to the close of business on the earlier of (x) the date which is one
year after the date of the issuance of such Letter of Credit (or, in the case of
any renewal or extension thereof, one year after such renewal or extension) and
(y) the Letter of Credit Expiration Date. The LC Facility Letter of Credit shall
expire on the Letter of Credit Expiration Date.
(d) Participations. (i) By the issuance of a Revolving Letter of
Credit (or an amendment to a Revolving Letter of Credit increasing the amount
thereof) and without any further action on the part of the Issuing Bank or the
Lenders, the Issuing Bank hereby irrevocably grants to each Revolving Lender,
and each Revolving Lender hereby acquires from the Issuing Bank, a participation
in such Revolving Letter of Credit equal to such Revolving Lender's Pro Rata
Percentage of the aggregate amount available to be drawn under such Revolving
Letter of Credit. In consideration and in furtherance of the foregoing, each
Revolving Lender hereby absolutely and unconditionally agrees to pay to the
Administrative Agent, for the account of the Issuing Bank, such Revolving
Lender's Pro Rata Percentage of each Revolving LC Disbursement made by the
Issuing Bank and not reimbursed by Borrower on the date due as provided in
Section 2.18(e), or of any reimbursement payment required to be refunded to
Borrower for any reason. Each Revolving Lender acknowledges and agrees that its
obligation to acquire participations pursuant to this paragraph in respect of
Revolving Letters of Credit is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including any amendment, renewal or
extension of any Revolving Letter of Credit or the occurrence and continuance of
a Default or reduction or termination of the Commitments, and that each such
payment shall be made without any offset, abatement, withholding or reduction
whatsoever.
(ii) By the issuance of an LC Facility Letter of Credit without any
further action on the part of the LC Facility Issuing Bank or the LC Facility
Lenders, the LC Facility Issuing Bank hereby grants to each LC Facility Lender,
and each LC Facility Lender hereby acquires from the LC Facility Issuing Bank, a
participation in each LC Facility Letter of Credit equal to such LC Facility
Lender's Pro Rata Percentage of the aggregate amount available to be drawn under
such LC Facility Letter of Credit. The aggregate purchase price for the
participations of each LC Facility Lender in LC Facility Letters of Credit shall
equal the amount of the LC Facility Deposit of such LC Facility Lender. Each LC
Facility Lender shall pay to the Administrative Agent its LC Facility Deposit in
full on the Closing Date. Each LC Facility Lender hereby absolutely and
unconditionally agrees that if the LC Facility Issuing Bank makes an LC Facility
LC Disbursement which is not reimbursed by Borrower on the date due as provided
in paragraph (e) of this Section 2.18, or is required to refund any
reimbursement payment in respect of an LC Facility LC Disbursement to Borrower
for any reason, the Administrative Agent shall reimburse the LC Facility Issuing
Bank for the amount of such LC Facility LC Disbursement from each LC Facility
Lender's LC Facility Deposit invested in the LC Facility Deposit Account in
proportion to their respective LC Facility Pro Rata Percentages. In the event
the LC Facility Deposit Account is charged by the Administrative Agent to
reimburse the LC Facility Issuing Bank for an unreimbursed LC Facility LC
Disbursement, Borrower shall have the right, at any time prior to the LC
Facility Maturity Date, to pay over to the Administrative Agent in reimbursement
thereof an amount equal to the amount so charged, and such payment shall be
invested by the Administrative Agent in the LC Facility Deposit Account. Each LC
Facility Lender acknowledges and agrees that its authorization granted hereby
and obligations
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hereunder are unconditional and irrevocable and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of any LC
Facility Letter of Credit or the occurrence and continuance of a Default or the
return of the LC Facility Deposits and that each such payment shall be made
without any offset, abatement, withholding or reduction whatsoever. Without
limiting the foregoing, each LC Facility Lender irrevocably authorizes the
Administrative Agent to apply amounts of its LC Facility Deposit as provided in
this subparagraph (ii).
(e) Reimbursement. (i) If the Issuing Bank or the LC Facility
Issuing Bank, as applicable, shall make any LC Disbursement in respect of a
Letter of Credit, Borrower shall reimburse such LC Disbursement by paying to the
Issuing Bank or the LC Facility Issuing Bank, as applicable, an amount equal to
such LC Disbursement not later than 3:00 p.m., New York City time, on the date
that such LC Disbursement is made if Borrower shall have received notice of such
LC Disbursement prior to 11:00 a.m., New York City time, on such date, or, if
such notice has not been received by Borrower prior to such time on such date,
then not later than 3:00 p.m., New York City time, on the Business Day
immediately following the day that Borrower receives such notice; provided that
Borrower may, subject to the conditions to borrowing set forth herein, request
in accordance with Section 2.03 that such payment (i) in respect of a Revolving
LC Disbursement be financed with ABR Revolving Loans in an equivalent amount
and, to the extent so financed, Borrower's obligation to make such payment shall
be discharged and replaced by the resulting ABR Revolving Loans or (ii) in
respect of an LC Facility LC Disbursement be financed with ABR Term Loans in an
equivalent amount and, to the extent so financed, Borrower's obligation to make
such payment shall be discharged and replaced by the resulting ABR Term Loans.
(ii) If Borrower fails to make payment due under paragraph (i) above
with respect to a Revolving Letter of Credit when due, the Issuing Bank shall
notify the Administrative Agent and the Administrative Agent shall notify each
Revolving Lender of the applicable Revolving LC Disbursement, the payment then
due from Borrower in respect thereof and such Revolving Lender's Pro Rata
Percentage thereof. Each Revolving Lender shall pay by wire transfer of
immediately available funds to the Administrative Agent not later than 2:00
p.m., New York City time, on such date (or, if such Revolving Lender shall have
received such notice later than 12:00 noon, New York City time, on any day, not
later than 11:00 a.m., New York City time, on the immediately following Business
Day), an amount equal to such Revolving Lender's Pro Rata Percentage of the
unreimbursed Revolving LC Disbursement in the same manner as provided in Section
2.02(c) with respect to Revolving Loans made by such Revolving Lender, and the
Administrative Agent will promptly pay to the Issuing Bank the amounts so
received by it from the Revolving Lenders. The Administrative Agent will
promptly pay to the Issuing Bank any amounts received by it from Borrower
pursuant to the above paragraph prior to the time that any Revolving Lender
makes any payment pursuant to the preceding sentence and any such amounts
received by the Administrative Agent from Borrower thereafter will be promptly
remitted by the Administrative Agent to the Revolving Lenders that shall have
made such payments and to the Issuing Bank, as appropriate.
(iii) If Borrower fails to make any payment when due under paragraph
(i) with respect to an LC Facility Letter of Credit when due, the LC Facility
Issuing Bank shall notify the Administrative Agent and the Administrative Agent
shall notify each LC Facility Lender of the applicable LC Facility LC
Disbursement, the payment then due from Borrower in respect thereof and such LC
Facility Lender's Pro Rata Percentage thereof. The Administrative Agent will
promptly pay to the LC Facility Issuing Bank each LC Facility Lender's Pro Rata
Percentage of such LC Facility LC Disbursement from such LC Facility Lender's LC
Facility Deposit. Promptly following receipt by the Administrative Agent of any
payment by Borrower in respect of any LC Facility LC Disbursement, the
Administrative Agent shall distribute such payment to the LC Facility Issuing
Bank or, to the extent payments have been made from the LC Facility Deposits, to
the LC Facility Deposit Account to be added to the LC Facility Deposits of the
LC Facility Lenders in accordance with their respective Pro Rata Percentages.
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(iv) If any Revolving Lender shall not have made its Pro Rata
Percentage of such Revolving LC Disbursement available to the Administrative
Agent as provided above, each of such Revolving Lender and Borrower severally
agrees to pay interest on such amount, for each day from and including the date
such amount is required to be paid in accordance with the foregoing to but
excluding the date such amount is paid, to the Administrative Agent for the
account of the Issuing Bank at (i) in the case of Borrower, the rate per annum
set forth in Section 2.18(h) and (ii) in the case of such Lender, at a rate
determined by the Administrative Agent in accordance with banking industry rules
or practices on interbank compensation.
(f) Obligations Absolute. The Reimbursement Obligation of Borrower
as provided in Section 2.18(e) shall be absolute, unconditional and irrevocable,
and shall be paid and performed strictly in accordance with the terms of this
Agreement under any and all circumstances whatsoever and irrespective of (i) any
lack of validity or enforceability of any Letter of Credit or this Agreement, or
any term or provision therein; (ii) any draft or other document presented under
a Letter of Credit being proved to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect; (iii) payment by the Issuing Bank or LC Facility Issuing Bank,
as applicable, under a Letter of Credit against presentation of a draft or other
document that fails to comply with the terms of such Letter of Credit; (iv) any
other event or circumstance whatsoever, whether or not similar to any of the
foregoing, that might, but for the provisions of this Section 2.18, constitute a
legal or equitable discharge of, or provide a right of setoff against, the
obligations of Borrower hereunder; (v) the fact that a Default shall have
occurred and be continuing; or (vi) an event or events that has or could
reasonably be expected to result in any material adverse change to the business,
property, results of operations or condition, financial or otherwise, of
Borrower and its Subsidiaries. None of the Agents, the Lenders, the Issuing
Bank, the LC Facility Issuing Bank or any of their Affiliates shall have any
liability or responsibility by reason of or in connection with the issuance or
transfer of any Letter of Credit or any payment or failure to make any payment
thereunder (irrespective of any of the circumstances referred to in the
preceding sentence), or any error, omission, interruption, loss or delay in
transmission or delivery of any draft, notice or other communication under or
relating to any Letter of Credit (including any document required to make a
drawing thereunder), any error in interpretation of technical terms or any
consequence arising from causes beyond the control of the Issuing Bank or LC
Facility Issuing Bank, as applicable; provided that nothing in this Section
2.18(f) shall be construed to excuse the Issuing Bank or LC Facility Issuing
Bank, as applicable, from liability to Borrower to the extent of any direct
damages (as opposed to consequential damages, claims in respect of which are
hereby waived by Borrower to the extent permitted by applicable law) suffered by
Borrower that are caused by the Issuing Bank's or the LC Facility Issuing
Bank's, as applicable, failure to exercise care when determining whether drafts
and other documents presented under a Letter of Credit comply with the terms
thereof. The parties hereto expressly agree that, in the absence of gross
negligence or willful misconduct on the part of the Issuing Bank or LC Facility
Issuing Bank, as applicable (as finally determined by a court of competent
jurisdiction), the Issuing Bank or LC Facility Issuing Bank, as applicable,
shall be deemed to have exercised care in each such determination. In
furtherance of the foregoing and without limiting the generality thereof, the
parties agree that, with respect to documents presented which appear on their
face to be in substantial compliance with the terms of a Letter of Credit, the
Issuing Bank or LC Facility Issuing Bank, as applicable, may, in its sole
discretion, either accept and make payment upon such documents without
responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.
(g) Disbursement Procedures. The Issuing Bank or the LC Facility
Issuing Bank, as applicable, shall, promptly following its receipt thereof,
examine all documents purporting to represent a demand for payment under a
Letter of Credit. The Issuing Bank or the LC Facility Issuing Bank, as
applicable, shall promptly give written notice to the Administrative Agent and
Borrower of such demand for
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payment and whether the Issuing Bank or the LC Facility Issuing Bank, as
applicable, has made or will make an LC Disbursement thereunder; provided that
any failure to give or delay in giving such notice shall not relieve Borrower of
its Reimbursement Obligation to the Issuing Bank or the LC Facility Issuing
Bank, as applicable, and the Revolving Lenders and the LC Facility Lenders with
respect to any such LC Disbursement (other than with respect to the timing of
such Reimbursement Obligation set forth in Section 2.18(e)).
(h) Interim Interest. If the Issuing Bank or the LC Facility Issuing
Bank, as applicable, shall make any LC Disbursement, then, unless Borrower shall
reimburse such LC Disbursement in full on the date such LC Disbursement is made,
the unpaid amount thereof shall bear interest payable on demand, for each day
from and including the date such LC Disbursement is made to but excluding the
date that Borrower reimburses such LC Disbursement, at the rate per annum
determined pursuant to Section 2.06(c). Interest accrued pursuant to this
paragraph shall be for the account of the Issuing Bank or the LC Facility
Issuing Bank, as applicable, except that interest accrued on and after the date
of payment by any Revolving Lender or LC Facility Lender pursuant to Section
2.18(e) to reimburse the Issuing Bank or the LC Facility Issuing Bank, as
applicable, shall be for the account of such Lender to the extent of such
payment.
(i) Cash Collateralization. If any Event of Default shall occur and
be continuing, on the Business Day that Borrower receives notice from the
Administrative Agent or the Required Lenders (or, if the maturity of the Loans
has been accelerated, in the case of Revolving Letters of Credit, Revolving
Lenders with Revolving LC Exposure representing greater than 50% of total
Revolving LC Exposure or in the case of LC Facility Letters of Credit, LC
Facility Lenders with LC Facility LC Exposure representing greater than 50% of
total LC Facility LC Exposure) demanding the deposit of cash collateral pursuant
to this paragraph, Borrower shall deposit in the LC Sub-Account, in the name of
the Collateral Agent and for the benefit of the Revolving Lenders and LC
Facility Lenders, as applicable, an amount in cash equal to the LC Exposure as
of such date plus any accrued and unpaid interest thereon; provided that the
obligation to deposit such cash collateral shall become effective immediately,
and such deposit shall become immediately due and payable, without demand or
other notice of any kind, upon the occurrence of any Event of Default with
respect to Borrower described in paragraph (g) or (h) of Article VIII. Funds in
the LC Sub-Account shall be applied by the Collateral Agent to reimburse the
Issuing Bank or the LC Facility Issuing Bank, as applicable, for LC
Disbursements for which it has not been reimbursed and, to the extent not so
applied, shall be held for the satisfaction of outstanding Reimbursement
Obligations or, if the maturity of the Loans has been accelerated (but subject
to the consent of the Revolving Lenders and LC Facility Lenders with LC Exposure
representing greater than 50% of such class's total LC Exposure), be applied to
satisfy other Obligations of Borrower under this Agreement. If Borrower is
required to provide an amount of cash collateral hereunder as a result of the
occurrence of an Event of Default, such amount plus any accrued interest or
realized profits with respect to such amounts (to the extent not applied as
aforesaid) shall be returned to Borrower within three Business Days after all
Events of Default have been cured or waived.
(j) Additional Issuing Banks. Borrower may, at any time and from
time to time, designate one or more additional Revolving Lenders to act as an
Issuing Bank under the terms of this Agreement, with the consent of the
Administrative Agent (which consent shall not be unreasonably withheld), the
Issuing Bank and such Revolving Lender(s). Any Lender designated as an Issuing
Bank pursuant to this paragraph (j) shall be deemed (in addition to being a
Revolving Lender) to be the Issuing Bank with respect to Letters of Credit
issued or to be issued by such Revolving Lender, and all references herein and
in the other Loan Documents to the term "Issuing Bank" shall, with respect to
such Letters of Credit, be deemed to refer to such Revolving Lender in its
capacity as Issuing Bank, as the context shall require.
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(k) Resignation or Removal of the Issuing Bank. (i) The Issuing Bank
may resign as Issuing Bank hereunder at any time upon at least 30 days' prior
notice to the Lenders, the Administrative Agent and Borrower. The Issuing Bank
may be replaced at any time by written agreement among Borrower, each Agent, the
replaced Issuing Bank and the successor Issuing Bank. The Administrative Agent
shall notify the Lenders of any such replacement of the Issuing Bank or any such
additional Issuing Bank. At the time any such resignation or replacement shall
become effective, Borrower shall pay all unpaid fees accrued for the account of
the replaced Issuing Bank pursuant to Section 2.05(c). From and after the
effective date of any such resignation or replacement or addition, as
applicable, (i) the successor or additional Issuing Bank shall have all the
rights and obligations of the Issuing Bank under this Agreement with respect to
Letters of Credit to be issued by it thereafter and (ii) references herein to
the term "Issuing Bank" shall be deemed to refer to such successor or such
addition or to any previous Issuing Bank, or to such successor or such addition
and all previous Issuing Banks, as the context shall require. After the
resignation or replacement of an Issuing Bank hereunder, the replaced Issuing
Bank shall remain a party hereto and shall continue to have all the rights and
obligations of an Issuing Bank under this Agreement with respect to Letters of
Credit issued by it prior to such resignation or replacement, but shall not be
required to issue additional Letters of Credit. If at any time there is more
than one Issuing Bank hereunder, Borrower may, in its discretion, select which
Issuing Bank is to issue any particular Letter of Credit.
(i) Resignation or Removal of the LC Facility Issuing Bank. The LC
Facility Issuing Bank may resign as LC Facility Issuing Bank hereunder at any
time upon at least 30 days' prior notice to the Lenders, the Administrative
Agent and Borrower. The LC Facility Issuing Bank may be replaced at any time by
written agreement among Borrower, each Agent, the replaced LC Facility Issuing
Bank and the successor LC Facility Issuing Bank. The Administrative Agent shall
notify the Lenders of any such replacement of the LC Facility Issuing Bank or
any such additional LC Facility Issuing Bank. At the time any such resignation
or replacement shall become effective, Borrower shall pay all unpaid fees
accrued for the account of the replaced LC Facility Issuing Bank pursuant to
Section 2.05(d). From and after the effective date of any such resignation or
replacement or addition, as applicable, (i) the successor or additional LC
Facility Issuing Bank shall have all the rights and obligations of the LC
Facility Issuing Bank under this Agreement with respect to LC Facility Letters
of Credit and (ii) references herein to the term "LC Facility Issuing Bank"
shall be deemed to refer to such successor or such addition or to any previous
LC Facility Issuing Bank, or to such successor or such addition and all previous
LC Facility Issuing Banks, as the context shall require. After the resignation
or replacement of the LC Facility Issuing Bank hereunder, the replaced LC
Facility Issuing Bank shall remain a party hereto and shall continue to have all
the rights and obligations of an LC Facility Issuing Bank under this Agreement
with respect to LC Facility Letters of Credit issued by it prior to such
resignation or replacement, but shall not be required to issue additional LC
Facility Letters of Credit.
(l) Other. The Issuing Bank or the LC Facility Issuing Bank, as
applicable, shall be under no obligation to issue any Letter of Credit if
(i) any order, judgment or decree of any Governmental Authority or
arbitrator shall by its terms purport to enjoin or restrain the Issuing
Bank or the LC Facility Issuing Bank, as applicable, from issuing such
Letter of Credit, or any law applicable to the Issuing Bank or the LC
Facility Issuing Bank, as applicable, or any request or directive (whether
or not having the force of law) from any Governmental Authority with
jurisdiction over the Issuing Bank or the LC Facility Issuing Bank, as
applicable, shall prohibit, or request that the Issuing Bank or the LC
Facility Issuing Bank, as applicable, refrain from, the issuance of
letters of credit generally or such Letter of Credit in particular or
shall impose upon the Issuing Bank or the LC Facility Issuing Bank, as
applicable, with respect to such Letter of Credit any restriction, reserve
or capital requirement (for which the Issuing Bank or the LC Facility
Issuing Bank, as applicable, is not oth-
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erwise compensated hereunder) not in effect on the Closing Date, or shall
impose upon the Issuing Bank or the LC Facility Issuing Bank, as
applicable, any unreimbursed loss, cost or expense which was not
applicable on the Closing Date and which the Issuing Bank or the LC
Facility Issuing Bank, as applicable, in good ▇▇▇▇▇ ▇▇▇▇▇ material to it;
or
(ii) the issuance of such Letter of Credit would violate one or more
policies of the Issuing Bank or the LC Facility Issuing Bank, as
applicable.
The Issuing Bank or the LC Facility Issuing Bank, as applicable, shall be under
no obligation to amend any Letter of Credit if (A) the Issuing Bank, as
applicable, would have no obligation at such time to issue such Revolving Letter
of Credit in its amended form under the terms hereof, or (B) the beneficiary of
such Letter of Credit does not accept the proposed amendment to such Letter of
Credit.
SECTION 2.19 LC FACILITY DEPOSIT ACCOUNT. (a) The LC Facility
Deposits shall be held in escrow by UBS AG, Stamford Branch, as escrow agent,
subject to disbursement in accordance with the terms of Sections 2.07, 2.18 and
this Section 2.19, in the LC Facility Deposit Account, and no party other than
UBS AG, Stamford Branch shall have a right of withdrawal from the LC Facility
Deposit Account or any other right or power with respect to the LC Facility
Deposits, except as expressly set forth in Section 2.07. Notwithstanding any
provision in this Agreement to the contrary, the sole funding obligation of each
LC Facility Lender in respect of its participation in LC Facility Letters of
Credit shall be satisfied in full upon the funding of its LC Facility Deposit on
the Closing Date.
(b) Each of Borrower, the Administrative Agent, the LC Facility
Issuing Bank issuing the LC Facility Letter of Credit and each LC Facility
Lender hereby acknowledges and agrees that each LC Facility Lender is funding
its LC Facility Deposit to the Administrative Agent for application in the
manner contemplated by Section 2.18 and that the Administrative Agent has agreed
to invest the LC Facility Deposits (except during periods when, and to the
extent to which, such LC Facility Deposits are used to cover unreimbursed LC
Facility LC Disbursements for the LC Facility Lenders) and pay to the LC
Facility Lenders (i) the rate for one month LIBOR deposits (the "BENCHMARK LIBOR
RATE") minus (ii) 0.125% (such 0.125% being the "COST AMOUNT"). The Cost Amount
will be subject to annual review and adjustment by UBS AG Stamford Branch, in
light of then prevailing market conditions. Such interest will be paid to the LC
Facility Lenders by the Administrative Agent quarterly in arrears when LC
Facility LC Fees are payable pursuant to Section 2.05. In addition to the
foregoing payments by the Administrative Agent, Borrower agrees to make payments
to the LC Facility Lenders quarterly in arrears when LC Facility LC Fees are
payable pursuant to Section 2.05 (and together with the payment of such fees) in
an amount equal to the Cost Amount.
(c) Neither Borrower nor any other Loan Party shall have any right,
title or interest in or to the LC Facility Deposits and no obligations with
respect thereto (except for the reimbursement obligations provided in Section
2.18), it being acknowledged and agreed by the parties hereto that the making of
the LC Facility Deposits by the LC Facility Lenders, the provisions of this
Section 2.19 and the application of the LC Facility Deposits in the manner
contemplated by Section 2.18(b) constitute agreements among the Administrative
Agent, the LC Facility Issuing Bank issuing any LC Facility Letter of Credit and
each LC Facility Lender with respect to the funding obligations of each LC
Facility Lender in respect of its participation in LC Facility Letters of Credit
and do not constitute any loan or extension of credit to the Borrower.
Notwithstanding anything in the preceding sentence to the contrary and if,
notwithstanding the intent of the parties to this Agreement, the LC Facility
Deposits are deemed to be an asset of a Loan Party, each Loan Party shall be
deemed to have granted to the Administrative Agent, as of the Closing Date, for
the sole and exclusive benefit of the LC Facility Issuing Bank and the LC
Facility Lenders, a first priority security interest in and lien upon the LC
Facility Deposit Account and all funds deposited therein.
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(d) The Administrative Agent shall return any remaining LC Facility
Deposits to the LC Facility Lenders on the LC Facility Maturity Date. If at any
time there exists Excess LC Facility Deposits, the Administrative Agent shall
upon the written request of the Borrower distribute each LC Facility Lender's
pro rata share of the amount of such excess and the LC Facility Deposit Account
shall be reduced by such amount. Once distributed, amounts previously deposited
in the LC Facility Deposit Account will not be redeposited and the LC Facility
LC Exposure shall thereafter not exceed the new balance in the LC Facility
Deposit Account.
(e) If the Administrative Agent is advised that deposits (in the
applicable amounts) are not being offered in the London interbank market, or the
Administrative Agent determines that adequate and fair means do not otherwise
exist for ascertaining the Benchmark LIBOR Rate, then the LC Facility Deposits
shall be invested so as to earn a return equal to (i) the greater of the Federal
Funds Effective Rate and a rate determined by the Administrative Agent in
accordance with banking industry rules on interbank compensation (ii) minus the
Cost Amount. In addition, the Borrower shall reimburse the Administrative Agent
for any breakage or other losses or expenses incurred by it in connection with
the termination of the LC Facility Deposits (and the related termination of the
investment of the funds held in the LC Facility Deposit Account) prior to any
scheduled investment termination date (which will be in one-month LIBOR periods
unless otherwise agreed).
(f) If the Administrative Agent from time to time withdraws any
amounts from the LC Facility Deposit Account in accordance with the terms of
this Agreement, other than to reimburse the LC Facility Issuing Bank pursuant to
Section 2.18(e)(iii), such amounts shall be distributed by the Administrative
Agent to each LC Facility Lender in accordance with such LC Facility Lender's
Pro Rata Percentage with respect to the LC Facility Deposits.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each Loan Party represents and warrants to the Administrative Agent,
the Collateral Agent, the Issuing Bank and each of the Lenders (with references
to the Companies being references thereto after giving effect to the
Transactions unless otherwise expressly stated) that:
SECTION 3.01 ORGANIZATION; POWERS. Each Company (a) is duly
organized and validly existing under the laws of the jurisdiction of its
organization, (b) has all requisite power and authority to carry on its business
as now conducted and to own and lease its property and (c) is qualified and in
good standing (to the extent such concept is applicable in the applicable
jurisdiction) to do business in every jurisdiction where such qualification is
required, except in such jurisdictions where the failure to so qualify or be in
good standing, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect. There is no existing default
under any Organizational Document of any Company or any event which, with the
giving of notice or passage of time or both, would constitute a default by any
party thereunder.
SECTION 3.02 AUTHORIZATION; ENFORCEABILITY. The Transactions to be
entered into by each Loan Party are within such Loan Party's powers and have
been duly authorized by all necessary action on the part of such Loan Party.
This Agreement has been duly executed and delivered by each Loan Party and
constitutes, and each other Loan Document to which any Loan Party is to be a
party, when executed and delivered by such Loan Party, will constitute, a legal,
valid and binding obligation of such Loan Party, enforceable in accordance with
its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights generally and subject to
general principles of equity, regardless of whether considered in a proceeding
in equity or at law.
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SECTION 3.03 NO CONFLICTS. Except as set forth on Schedule 3.03, the
Transactions (a) do not require any consent or approval of, registration or
filing with, or any other action by, any Governmental Authority, except (i) such
as have been obtained or made and are in full force and effect, (ii) filings
necessary to perfect Liens created by the Loan Documents and (iii) consents,
approvals, registrations, filings, permits or actions the failure to obtain or
perform which could not reasonably be expected to result in a Material Adverse
Effect, (b) will not violate the Organizational Documents of any Company or any
judgment, decree or order of any Governmental Authority, (c) will not violate or
result in a default or require any consent or approval under any indenture,
agreement, Organizational Document or other instrument binding upon any Company
or its property, or give rise to a right thereunder to require any payment to be
made by any Company that could reasonably be expected to result in a Material
Adverse Effect, and (d) will not result in the creation or imposition of any
Lien on any property of any Company, except Liens created by the Loan Documents
and Permitted Liens.
SECTION 3.04 FINANCIAL STATEMENTS; PROJECTIONS. (a) Borrower has
heretofore delivered to the Lenders the (i) consolidated balance sheet of
Borrower as of February 29, 2004, audited by and accompanied by the unqualified
opinion of Murrell, Hall, ▇▇▇▇▇▇▇▇ & Co., PLLP, independent public accountants,
certified by the chief financial officer of Borrower. Such financial statement
and all financial statements delivered pursuant to Sections 5.01(a), (b) and (c)
have been prepared in accordance with GAAP and fairly present in all material
respects the financial condition and results of operations and cash flows of
Borrower as of the dates and for the periods to which they relate. Except as set
forth in such financial statements, there are no liabilities of any Company of
any kind, whether accrued, contingent, absolute, determined, determinable or
otherwise, which could reasonably be expected to result in a Material Adverse
Effect, and there is no existing condition, situation or set of circumstances
which could reasonably be expected to result in such a Material Adverse Effect,
other than liabilities under the Loan Documents.
(b) Borrower has heretofore delivered to the Lenders Borrower's
unaudited consolidated balance sheet and statements of income and cash flows and
EBITDA and other operating data as of and for the period December 23, 2003 to
February 29, 2004.
(c) Borrower has heretofore delivered to the Lenders forecasts of
the financial performance of Borrower and its Subsidiaries for the period
February 29, 2004 to February 28, 2010.
(d) The forecasts of financial performance of Borrower and its
Subsidiaries furnished to the Lenders have been prepared in good faith by
Borrower and based on assumptions believed by Borrower to be reasonable as of
the Closing Date.
(e) Since February 29, 2004 there has been no event, change,
circumstance or occurrence that, individually or in the aggregate, has had or
could reasonably be expected to result in a Material Adverse Effect.
SECTION 3.05 PROPERTIES. (a) Except as set forth on Schedule 3.05,
each Company has good title to, or valid leasehold interests in, all its
property material to its business, free and clear of all Liens except for, in
the case of Collateral, Permitted Collateral Liens and, in the case of all other
material property, Permitted Liens and minor irregularities or deficiencies in
title that, individually or in the aggregate, do not interfere with its ability
to conduct its business as currently conducted or to utilize such property for
its intended purpose. The property of the Companies, taken as a whole, (i) is in
good operating order, condition and repair (ordinary wear and tear excepted),
except to the extent that the failure to be in such condition could not
reasonably be expected to result in a Material Adverse Effect, and (ii)
constitutes all the property which is required for the business and operations
of the Companies as presently conducted.
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(b) Schedule 3.05(b) contains a true and complete list of each
interest in Real Property with a value of over $500,000 (i) owned by any Company
as of the date hereof and describes the type of interest therein held by such
Company and (ii) leased, subleased or otherwise occupied or utilized by any
Company, as lessee, sublessee, franchisee or licensee, as of the date hereof and
describes the type of interest therein held by such Company and whether such
lease, sublease or other instrument requires the consent of the landlord
thereunder or other parties thereto to the Transactions.
(c) No Company has received any notice of, nor has any knowledge of,
the occurrence or pendency or contemplation of any Casualty Event affecting all
or any portion of its property. No Mortgage encumbers improved Real Property
that is located in an area that has been identified by the Secretary of Housing
and Urban Development as an area having special flood hazards within the meaning
of the National Flood Insurance Act of 1968 unless flood insurance available
under such Act has been obtained in accordance with Section 5.04.
(d) Each Company owns or has rights to use all of the Collateral and
all rights with respect to any of the foregoing used in, necessary for or
material to each Company's business as currently conducted. The use by each
Company of such Collateral and all such rights with respect to the foregoing do
not infringe on the rights of any person other than such infringement which
could not, individually or in the aggregate, reasonably be expected to result in
a Material Adverse Effect. No claim has been made and remains outstanding that
any Company's use of any Collateral does or may violate the rights of any third
party that could, individually or in the aggregate, reasonably be expected to
result in a Material Adverse Effect.
(e) The Equipment of each Company is in good repair, working order
and condition, reasonable wear and tear excepted. Each Company shall cause the
Equipment to be maintained and preserved in good repair, working order and
condition, reasonable wear and tear excepted, and shall as quickly as
commercially practicable make or cause to be made all repairs, replacements and
other improvements which are necessary or appropriate in the conduct of each
Company's business.
SECTION 3.06 INTELLECTUAL PROPERTY.
(a) Ownership/No Claims. Each Loan Party owns, or is licensed to
use, all patents, patent applications, trademarks, trade names, servicemarks,
copyrights, technology, trade secrets, proprietary information, domain names,
know-how and processes necessary for the conduct of its business as currently
conducted (the "INTELLECTUAL PROPERTY"), except for those the failure to own or
license which, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect. No claim has been asserted and
is pending by any person challenging or questioning the use of any such
Intellectual Property or the validity or effectiveness of any such Intellectual
Property, nor does any Loan Party know of any valid basis for any such claim.
The use of such Intellectual Property by each Loan Party does not infringe the
rights of any person, except for such claims and infringements that,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.
(b) Registrations. Except pursuant to licenses and other user
agreements entered into by each Loan Party in the ordinary course of business
that are listed in Schedules 14(a) and 14(b) to the Perfection Certificate, on
and as of the date hereof (i) each Loan Party owns and possesses the right to
use, and has done nothing to authorize or enable any other person to use, any
copyright, patent or trademark (as such terms are defined in the Security
Agreement) listed in Schedules 14(a) and 14(b) to the Perfection Certificate and
(ii) all registrations listed in Schedules 14(a) and 14(b) to the Perfection
Certificate are valid and in full force and effect.
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(c) No Violations or Proceedings. To each Loan Party's knowledge, on
and as of the date hereof, there is no material violation by others of any right
of such Loan Party with respect to any copyright, patent or trademark listed in
Schedules 14(a) and 14(b) to the Perfection Certificate, respectively, pledged
by it under the name of such Loan Party except as may be set forth on Schedule
3.06(c).
SECTION 3.07 EQUITY INTERESTS AND SUBSIDIARIES. (a) Schedule 3.07(a)
sets forth a list of (i) all the Subsidiaries of Borrower and their jurisdiction
of organization as of the Closing Date and (ii) the number of each class of its
Equity Interests authorized, and the number outstanding, on the Closing Date and
the number of shares covered by all outstanding options, warrants, rights of
conversion or purchase and similar rights at the Closing Date. All Equity
Interests of each Company are duly and validly issued and are fully paid and
non-assessable, and, other than the Equity Interests of Borrower, are owned by
Borrower, directly or indirectly through Wholly Owned Subsidiaries. Each Loan
Party is the record and beneficial owner of, and has good and marketable title
to, the Equity Interests pledged by it under the Security Agreement, free of any
and all Liens, rights or claims of other persons, except the security interest
created by the Security Agreement, and there are no outstanding warrants,
options or other rights to purchase, or shareholder, voting trust or similar
agreements outstanding with respect to, or property that is convertible into, or
that requires the issuance or sale of, any such Equity Interests.
(b) No consent of any person including any other general or limited
partner, any other member of a limited liability company, any other shareholder
or any other trust beneficiary is necessary or reasonably desirable (from the
perspective of a secured party) in connection with the creation, perfection or
first priority status of the security interest of the Collateral Agent in any
Equity Interests pledged to the Collateral Agent for the benefit of the Secured
Parties under the Security Agreement or the exercise by the Collateral Agent of
the voting or other rights provided for in the Security Agreement or the
exercise of remedies in respect thereof.
(c) An accurate organization chart, showing the ownership structure
of Borrower and each Subsidiary on the Closing Date, and after giving effect to
the Transactions, is set forth on Schedule 3.07(c).
SECTION 3.08 LITIGATION; COMPLIANCE WITH LAWS. (a) There are no
actions, suits or proceedings at law or in equity by or before any Governmental
Authority now pending or, to the knowledge of any Company, threatened against or
affecting any Company or any business, property or rights of any Company (i)
that involve any Loan Document or any of the Transactions or (ii) as to which
there is a reasonable possibility of an adverse determination and that, if
adversely determined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect.
(b) Except for matters covered by Section 3.18, no Company or any of
its property is in violation of, nor will the continued operation of its
property as currently conducted violate, any Requirements of Law (including any
zoning or building ordinance, code or approval or any building permits) or any
restrictions of record affecting any Company's Real Property, Mineral Interests
or Pipelines or is in default with respect to any judgment, writ, injunction,
decree, rule or order of any Governmental Authority, where such violation or
default, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect.
SECTION 3.09 AGREEMENTS. (a) No Company is a party to any
agreement or instrument or subject to any corporate or other constitutional
restriction that has resulted or could reasonably be expected to result in a
Material Adverse Effect.
(b) No Company is in default in any manner under any provision of
any indenture or other agreement or instrument evidencing Indebtedness, or any
other agreement or instrument to which it
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is a party or by which it or any of its property is or may be bound, where such
default could reasonably be expected to result in a Material Adverse Effect, and
no condition exists which, with the giving of notice or the lapse of time or
both, would constitute such a default.
(c) Schedule 3.09(c) accurately and completely lists all material
agreements (other than leases or easements relating to Mineral Interests or
Pipelines) to which any Company is a party which are in effect on the date
hereof in connection with the operation of the business conducted thereby and
Borrower has delivered to the Administrative Agent complete and correct copies
of all such material agreements, including any amendments, supplements or
modifications with respect thereto, and all such agreements are in full force
and effect.
SECTION 3.10 FEDERAL RESERVE REGULATIONS. (a) No Company is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of buying or carrying Margin Stock.
(b) No part of the proceeds of any Loan or any Letter of Credit will
be used, whether directly or indirectly, and whether immediately, incidentally
or ultimately, for any purpose that entails a violation of, or that is
inconsistent with, the provisions of the regulations of the Board, including
Regulation T, U or X. The pledge of the Securities Collateral pursuant to the
Security Agreement does not violate such regulations.
SECTION 3.11 INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY
ACT. No Company is (a) an "investment company" as defined in, or subject to
regulation under, the Investment Company Act of 1940, as amended, (b)
"controlled" by an "investment company" subject to regulation under the
Investment Company Act of 1940, as amended, or (c) a "holding company," an
"affiliate" of a "holding company" or a "subsidiary company" of a "holding
company," as defined in, or subject to regulation under, the Public Utility
Holding Company Act of 1935, as amended.
SECTION 3.12 USE OF PROCEEDS. Borrower will use (a) the proceeds of
the Term B Loans to effect the Refinancing, pay related fees, commissions and
expenses, and for working capital and general corporate purposes (including to
effect Permitted Acquisitions), (b) the Revolving Loans and Swingline Loans
after the Closing Date for working capital and general corporate purposes
(including to effect Permitted Acquisitions), it being understood that no
Revolving Loans shall be made on the Closing Date and (c) the LC Facility Letter
of Credit to provide credit support for certain Commodity Hedging Obligations.
SECTION 3.13 TAXES. Each Company has (a) timely filed or caused to
be timely filed all federal Tax Returns and all material state, local and
foreign Tax Returns or materials required to have been filed by it and all such
Tax Returns are true and correct in all material respects, (b) duly and timely
paid or caused to be duly and timely paid all Taxes (whether or not shown on any
Tax Return) due and payable by it and all assessments received by it, except
Taxes (i) that are being contested in good faith by appropriate proceedings and
for which such Company has set aside on its books adequate reserves in
accordance with GAAP and (ii) which could not, individually or in the aggregate,
have a Material Adverse Effect. Each Company has made adequate provision in
accordance with GAAP for all Taxes not yet due and payable. Each Company is
unaware of any proposed or pending tax assessments, deficiencies or audits that
could be reasonably expected to, individually or in the aggregate, result in a
Material Adverse Effect. No Company has ever been a party to any understanding
or arrangement constituting a "tax shelter" within the meaning of Section
6111(c), Section 6111(d) or Section 6662(d)(2)(C)(iii) of the Internal Revenue
Code, or has ever "participated" in a "reportable transaction" within the
meaning of Treasury Regulation Section 1.6011-4, except as could not be
reasonably expected to, individually or in the aggregate, result in a Material
Adverse Effect.
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SECTION 3.14 NO MATERIAL MISSTATEMENTS. No information, report,
financial statement, certificate, Borrowing Request, LC Request, exhibit or
schedule furnished by or on behalf of any Company to the Administrative Agent or
any Lender in connection with the negotiation of any Loan Document or included
therein or delivered pursuant thereto, taken as a whole, contained or contains
any material misstatement of fact or omitted or omits to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were or are made, not misleading as of the date such
information is dated or certified; provided that to the extent any such
information, report, financial statement, exhibit or schedule was based upon or
constitutes a forecast or projection, each Company represents only that it acted
in good faith and utilized reasonable assumptions and due care in the
preparation of such information, report, financial statement, exhibit or
schedule.
SECTION 3.15 LABOR MATTERS. As of the date hereof and the Closing
Date, there are no strikes, lockouts or slowdowns against any Company pending
or, to the knowledge of any Company, threatened. The hours worked by and
payments made to employees of any Company have not been in violation of the Fair
Labor Standards Act of 1938, as amended, or any other applicable federal, state,
local or foreign law dealing with such matters in any manner which could
reasonably be expected to result in a Material Adverse Effect. All payments due
from any Company, or for which any claim may be made against any Company, on
account of wages and employee health and welfare insurance and other benefits,
have been paid or accrued as a liability on the books of such Company except
where the failure to do so could not reasonably be expected to result in a
Material Adverse Effect. The consummation of the Transactions will not give rise
to any right of termination or right of renegotiation on the part of any union
under any collective bargaining agreement to which any Company is bound.
SECTION 3.16 SOLVENCY. Immediately after the consummation of the
Transactions to occur on the Closing Date and immediately following the making
of each Loan and after giving effect to the application of the proceeds of each
Loan, (a) the fair value of the properties of each Loan Party (individually and
on a consolidated basis with its Subsidiaries) will exceed its debts and
liabilities, subordinated, contingent or otherwise; (b) the present fair
saleable value of the property of each Loan Party (individually and on a
consolidated basis with its Subsidiaries) will be greater than the amount that
will be required to pay the probable liability of its debts and other
liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (c) each Loan Party (individually
and on a consolidated basis with its Subsidiaries) will not have unreasonably
small capital with which to conduct its business in which it is engaged as such
business is now conducted and is proposed to be conducted following the Closing
Date.
SECTION 3.17 EMPLOYEE BENEFIT PLANS. Each Company and its ERISA
Affiliates is in compliance in all material respects with the applicable
provisions of ERISA and the Code and the regulations and published
interpretations thereunder. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events,
could reasonably be expected to result in material liability of any Company or
any of its ERISA Affiliates or the imposition of a Lien on any of the property
of any Company. The present value of all accumulated benefit obligations of all
underfunded Plans (based on the assumptions used for purposes of Statement of
Financial Accounting Standards No. 87) did not, as of the date of the most
recent financial statements reflecting such amounts, exceed by more than
$250,000 the fair market value of the property of all such underfunded Plans.
Using actuarial assumptions and computation methods consistent with subpart I of
subtitle E of Title IV of ERISA, the aggregate liabilities of each Company or
its ERISA Affiliates to all Multiemployer Plans in the event of a complete
withdrawal therefrom, as of the close of the most recent fiscal year of each
such Multiemployer Plan, could not reasonably be expected to result in a
Material Adverse Effect.
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SECTION 3.18 ENVIRONMENTAL MATTERS.(a) Except as set forth in
Schedule 3.18 and except as, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect:
(i) The Companies and their businesses, operations and Real
Property, Mineral Interests or Pipelines are and in the last six years
have been in compliance with, and the Companies have no liability under,
Environmental Law;
(ii) The Companies have obtained all Environmental Permits required
for the conduct of their businesses and operations, and the ownership,
operation and use of their property, under Environmental Law, all such
Environmental Permits are valid and in good standing and, under the
currently effective business plan of the Companies, no expenditures or
operational adjustments will be required in order to renew or modify such
Environmental Permits during the next five years;
(iii) There has been no Release or threatened Release of Hazardous
Material on, at, under or from any Real Property, Mineral Interests or
Pipelines or facility presently or formerly owned, leased or operated by
the Companies or their predecessors in interest that could result in
liability by the Companies under Environmental Law; provided that with
respect to formerly owned, leased or operated properties, such
representation is to the Company's knowledge with respect to periods after
the Company's ownership, lease or operation thereof.
(iv) There is no Environmental Claim pending or, to the knowledge of
the Companies, threatened against the Companies, or relating to the Real
Property, Mineral Interests or Pipelines currently or formerly owned,
leased or operated by the Companies or relating to the operations of the
Companies, and there are no actions, activities, circumstances,
conditions, events or incidents that could form the basis of such an
Environmental Claim; and
(v) No person with an indemnity or contribution obligation to the
Companies relating to compliance with or liability under Environmental Law
is in default with respect to such obligation.
(b) Except as set forth in Schedule 3.18:
(i) No Company is obligated to perform any action or otherwise incur
any expense under Environmental Law pursuant to any order, decree,
judgment or agreement by which it is bound or has assumed by contract or
agreement, and no Company is conducting or financing any Response pursuant
to any Environmental Law with respect to any Real Property, Mineral
Interests or Pipelines or any other location;
(ii) No Real Property or facility owned, operated or leased by the
Companies and, to the knowledge of the Companies, no Real Property or
facility formerly owned, operated or leased by the Companies or any of
their predecessors in interest is (i) listed or proposed for listing on
the National Priorities List promulgated pursuant to CERCLA or (ii) listed
on the Comprehensive Environmental Response, Compensation and Liability
Information System promulgated pursuant to CERCLA or (iii) included on any
similar list maintained by any Governmental Authority including any such
list relating to petroleum;
(iii) No Lien has been recorded or, to the knowledge of any Company,
threatened under any Environmental Law with respect to any Real Property,
Mineral Interests or Pipelines or property of the Companies;
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(iv) The execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby will not require
any notification, registration, filing, reporting, disclosure,
investigation, remediation or cleanup pursuant to any Governmental Real
Property Disclosure Requirements or any other Environmental Law; and
(v) The Companies have made available to the Lenders all material
records and files in the possession, custody or control of, or otherwise
reasonably available to, the Companies concerning compliance with or
liability under Environmental Law, including those concerning the
existence of Hazardous Material at Real Property, Mineral Interests or
Pipelines or facilities currently or formerly owned, operated, leased or
used by the Companies.
SECTION 3.19 INSURANCE. Schedule 3.19 sets forth a true, complete
and correct description of all insurance maintained by each Company as of the
Closing Date. All insurance maintained by the Companies is in full force and
effect, all premiums have been duly paid when due, no Company has received
notice of violation or cancellation thereof, the Premises, and the use,
occupancy and operation thereof, comply in all material respects with all
Insurance Requirements, and there exists no default under any Insurance
Requirement that would result in a reduction, limitation or cancellation of such
insurance. Each Company has insurance in such amounts and covering such risks
and liabilities as are customary for companies of a similar size engaged in
similar businesses in similar locations.
SECTION 3.20 SECURITY DOCUMENTS. (a) The Security Agreement is
effective to create in favor of the Collateral Agent for the benefit of the
Secured Parties, legal, valid and enforceable Liens on, and security interests
in, the Security Agreement Collateral and, when (i) financing statements and
other filings in appropriate form are filed in the offices specified on Schedule
7 to the Perfection Certificate and (ii) upon the taking of possession or
control by the Collateral Agent of the Security Agreement Collateral with
respect to which a security interest may be perfected only by possession or
control (which possession or control shall be given to the Collateral Agent to
the extent possession or control by the Collateral Agent is required by each
Security Agreement), the Liens created by the Security Agreement shall
constitute fully perfected Liens on, and security interests in, all right, title
and interest of the grantors thereunder in the Security Agreement Collateral
(other than such Security Agreement Collateral in which a security interest
cannot be perfected under the UCC as in effect at the relevant time in the
relevant jurisdiction by the filing of a statement or the taking of possession
or control, as applicable), in each case subject to no Liens other than
Permitted Collateral Liens.
(b) When the Security Agreement or a short form thereof is filed in
the United States Patent and Trademark Office and the United States Copyright
Office, the Liens created by such Security Agreement shall constitute fully
perfected Liens on, and security interests in, all right, title and interest of
the grantors thereunder in the Intellectual Property Collateral (as defined in
such Security Agreement), if any, in each case subject to no Liens other than
Permitted Collateral Liens.
(c) Each Mortgage is effective to create, in favor of the Collateral
Agent, for its benefit and the benefit of the Secured Parties, legal, valid and
enforceable first priority Liens on, and security interests in, all of the Loan
Parties' right, title and interest in and to the Mortgaged Properties thereunder
and the proceeds thereof, subject only to Permitted Collateral Liens or other
Liens acceptable to the Collateral Agent, and when the Mortgages are filed in
the offices specified on Schedule 3.05(b) (or, in the case of any Mortgage
executed and delivered after the date thereof in accordance with the provisions
of Sections 5.11, 5.12 and 5.14, when such Mortgage is filed in the offices
specified in the local counsel opinion delivered with respect thereto in
accordance with the provisions of Sections 5.11, 5.12 and 5.14), the Mortgages
shall constitute fully perfected Liens on, and security interests in, all right,
title and interest of the Loan Parties in the Mortgaged Properties and the
proceeds thereof, in each case prior and superior in right to any other person,
other than Liens permitted by such Mortgage.
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(d) Each Security Document delivered pursuant to Sections 5.11, 5.12
and 5.14 will, upon execution and delivery thereof, be effective to create in
favor of the Collateral Agent, for the benefit of the Secured Parties, legal,
valid and enforceable Liens on, and security interests in, all of the Loan
Parties' right, title and interest in and to the Collateral thereunder, and when
all appropriate filings or recordings are made in the appropriate offices as may
be required under applicable law, such Security Document will constitute fully
perfected Liens on, and security interests in, all right, title and interest of
the Loan Parties in such Collateral, in each case subject to no Liens other than
the applicable Permitted Collateral Liens.
SECTION 3.21 ANTI-TERRORISM LAW. (a) No Loan Party and, to the
knowledge of the Loan Parties, none of its Affiliates is in violation of any
laws relating to terrorism or money laundering ("ANTI-TERRORISM LAWS"),
including Executive Order No. 13224 on Terrorist Financing, effective September
24, 2001 (the "EXECUTIVE ORDER"), and the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001, Public Law 107-56.
(b) No Loan Party and, to the knowledge of the Loan Parties, no
Affiliate or broker or other agent of any Loan Party acting or benefiting in any
capacity in connection with the Loans is any of the following:
(i) a person that is listed in the annex to, or is otherwise subject
to the provisions of, the Executive Order;
(ii) a person owned or controlled by, or acting for or on behalf of,
any person that is listed in the annex to, or is otherwise subject to the
provisions of, the Executive Order;
(iii) a person with which any Lender is prohibited from dealing or
otherwise engaging in any transaction by any Anti-Terrorism Law;
(iv) a person that commits, threatens or conspires to commit or
supports "terrorism" as defined in the Executive Order; or
(v) a person that is named as a "specially designated national and
blocked person" on the most current list published by the U.S. Treasury
Department Office of Foreign Assets Control ("OFAC") at its official
website or any replacement website or other replacement official
publication of such list.
(c) No Loan Party and, to the knowledge of the Loan Parties, no
broker or other agent of any Loan Party acting in any capacity in connection
with the Loans (i) conducts any business or engages in making or receiving any
contribution of funds, goods or services to or for the benefit of any person
described in paragraph (b) above, (ii) deals in, or otherwise engages in any
transaction relating to, any property or interests in property blocked pursuant
to the Executive Order, or (iii) engages in or conspires to engage in any
transaction that evades or avoids, or has the purpose of evading or avoiding, or
attempts to violate, any of the prohibitions set forth in any Anti-Terrorism
Law.
SECTION 3.22 MINERAL INTERESTS. Borrower has good and defensible
title to all Mineral Interests described in the Reserve Report, free and clear
of all Liens except Permitted Liens and Immaterial Title Deficiencies. With the
exception of Immaterial Title Deficiencies, all such Mineral Interests are
valid, subsisting, and in full force and effect, and all rentals, royalties, and
other amounts due and payable in respect thereof have been duly paid. Without
regard to any consent or non-consent provisions of any joint operating agreement
covering any of Borrower's Proved Mineral Interests, and with the exception of
Immaterial Title Deficiencies, Borrower's share of (a) the costs for each Proved
Mineral In-
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terest described in the Reserve Report is not greater than the decimal fraction
set forth in the Reserve Report, before and after payout, as the case may be,
and described therein by the respective designations "working interests," "WI,"
"gross working interest," "GWI," or similar terms, and (b) production from,
allocated to, or attributed to each such Proved Mineral Interest is not less
than the decimal fraction set forth in the Reserve Report, before and after
payout, as the case may be, and described therein by the designations "net
revenue interest," "NRI," or similar terms. Each well drilled in respect of each
Proved Producing Mineral Interest described in the Reserve Report (y) is capable
of, and is presently, either producing Hydrocarbons in commercially profitable
quantities or in the process of being worked over or enhanced, and Borrower is
currently receiving payments for its share of any such production, with no funds
in respect of any thereof being presently held in suspense, other than any such
funds being held in suspense pending delivery of appropriate division orders,
and (z) has been drilled, bottomed, completed, and operated in compliance with
all applicable Laws, in each case except where such failure would not have a
Material Adverse Effect, and no such well which is currently producing
Hydrocarbons is subject to any penalty in production by reason of such well
having produced in excess of its allowable production.
SECTION 3.23 GAS BALANCING AGREEMENTS AND ADVANCE PAYMENT CONTRACTS.
On the Closing Date, (a) there is no Material Gas Imbalance, and (b) the
aggregate amount of all Advance Payments received by any Loan Party under
Advance Payment Contracts which have not been satisfied by delivery of
production does not exceed $500,000.
ARTICLE IV
CONDITIONS TO CREDIT EXTENSIONS
SECTION 4.01 CONDITIONS TO INITIAL CREDIT EXTENSION. The obligation
of each Lender and, if applicable, each Issuing Bank and the LC Facility Issuing
Bank, as the case may be, to fund the initial Credit Extension requested to be
made by it shall be subject to the prior or concurrent satisfaction of each of
the conditions precedent set forth in this Section 4.01.
(a) Loan Documents. All legal matters incident to this Agreement,
the Credit Extensions hereunder and the other Loan Documents shall be
satisfactory to the Lenders, to the Issuing Bank and the LC Facility Issuing
Bank, as applicable, and to the Administrative Agent and there shall have been
delivered to the Administrative Agent an executed counterpart of each of the
Loan Documents and the Perfection Certificate.
(b) Corporate and Limited Liability Company Documents. The
Administrative Agent shall have received:
(i) a certificate of the secretary or assistant secretary of each
Loan Party dated the Closing Date, certifying (A) that attached thereto is
a true and complete copy of each Organizational Document of such Loan
Party certified (to the extent applicable) as of a recent date by the
Secretary of State of the state of its organization, (B) that attached
thereto is a true and complete copy of resolutions duly adopted by the
Board of Directors of such Loan Party authorizing the execution, delivery
and performance of the Loan Documents to which such person is a party and,
in the case of Borrower, the borrowings hereunder, and that such
resolutions have not been modified, rescinded or amended and are in full
force and effect and (C) as to the incumbency and specimen signature of
each officer executing any Loan Document or any other document delivered
in connection herewith on behalf of such Loan Party (together with a
certificate of another officer as to the incumbency and specimen signature
of the secretary or assistant secretary executing the certificate in this
clause (i));
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(ii) a certificate as to the good standing of each Loan Party (in
so-called "long-form" if available) as of a recent date, from such
Secretary of State; and
(iii) such other documents as the Lenders, the Issuing Bank or the
Administrative Agent may reasonably request.
(c) Officers' Certificate. The Administrative Agent shall have
received a certificate, dated the Closing Date and signed by the chief executive
officer and the chief financial officer of Borrower, confirming compliance with
the conditions precedent set forth in this Section 4.01 and Sections 4.02(b),
(c) and (d).
(d) Financings and Other Transactions, Etc. (i) The Transactions
shall have been consummated or shall be consummated simultaneously on the
Closing Date, in each case in all material respects in accordance with the terms
hereof and the terms of the Transaction Documents, without the waiver or
amendment of any such terms not approved by the Administrative Agent and the
Arranger other than any waiver or amendment thereof that is not materially
adverse to the interests of the Lenders.
(ii) The Lenders shall be satisfied with the capitalization, the
terms and conditions of any equity arrangements and the corporate, legal, tax,
management and capital or other organizational structure of the Companies.
(iii) The Refinancing shall have been consummated in full to the
satisfaction of the Lenders with all liens in favor of the existing lenders
being assigned to the Administrative Agent; the Administrative Agent shall have
received a fully executed Loan Transfer Agreement and Assignment of and
Amendment to Mortgages, each in form and substance reasonably satisfactory to
the Administrative Agent with respect to all debt being refinanced in the
Refinancing; and the Administrative Agent shall have received from any person
holding any Lien securing any such debt, such UCC amendments, mortgage
assignments, releases or assignments, as applicable, of security interests in
other instruments, in each case in proper form for recording, as the
Administrative Agent shall have reasonably requested to assign of record the
Liens securing such debt.
(e) Financial Statements; Projections. The Lenders shall have
received and shall be satisfied with the form and substance of the financial
statements described in Section 3.04 and with the forecasts of the financial
performance of Borrower and the Subsidiaries.
(f) Indebtedness and Minority Interests. After giving effect to the
Transactions and the other transactions contemplated hereby, no Company shall
have outstanding any Indebtedness or preferred stock other than (i) the Loans
and Credit Extensions hereunder, (ii) the Subordinated Notes, (iii) the
Indebtedness listed on Schedule 6.01(b) and (iv) Indebtedness owed to Borrower
or any Guarantor.
(g) Opinions of Counsel. The Administrative Agent shall have
received, on behalf of itself, the other Agents, the Arranger, the Lenders and
the Issuing Bank, a favorable written opinion of (i) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
LLP, special counsel for the Loan Parties, substantially to the effect set forth
in Exhibit N-1 and (ii) ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.C., Oklahoma local counsel
for the Loan Parties, substantially to the effect set forth in Exhibit N-2, in
each case (A) dated the Closing Date, (B) addressed to the Agents, the Issuing
Bank and the Lenders and (C) covering such other matters relating to the Loan
Documents and the Transactions as the Administrative Agent shall reasonably
request.
(h) Other Reports. The Lenders shall have received all other reports
and opinions of appraisers, consultants or other advisors retained by it to
review the business, operation or condition of
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Borrower and its subsidiaries giving effect to the Transactions. The
Administrative Agent shall be satisfied with all such reports.
The Administrative Agent shall have received a solvency certificate
in the form of Exhibit O, dated the Closing Date and signed by the chief
financial officer of Borrower.
(i) Requirements of Law. The Lenders shall be satisfied that the
Borrower, its Subsidiaries and the Transactions shall be in full compliance with
all material Requirements of Law, including Regulations T, U and X of the Board,
and shall have received satisfactory evidence of such compliance reasonably
requested by them.
(j) Consents. The Lenders shall be satisfied that all requisite
Governmental Authorities and third parties shall have approved or consented to
the Transactions, and there shall be no governmental or judicial action, actual
or threatened, that has or would have, singly or in the aggregate, a reasonable
likelihood of restraining, preventing or imposing burdensome conditions on the
Transactions or the other transactions contemplated hereby.
(k) Litigation. There shall be no litigation, public or private, or
administrative proceedings, governmental investigation or other legal or
regulatory developments, actual or threatened, that, singly or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect, or could
materially and adversely affect the ability of Borrower and the Subsidiaries to
fully and timely perform their respective obligations under the Transaction
Documents, or the ability of the parties to consummate the financings
contemplated hereby or the other Transactions.
(l) Sources and Uses. The sources and uses of the Loans shall be as
set forth in Section 3.12.
(m) Fees. The Arranger and Administrative Agent shall have received
all Fees and other amounts due and payable on or prior to the Closing Date,
including, to the extent invoiced, reimbursement or payment of all out-of-pocket
expenses (including the legal fees and expenses of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP,
special counsel to the Agents, and the fees and expenses of any local counsel,
foreign counsel, appraisers, consultants and other advisors) required to be
reimbursed or paid by Borrower hereunder or under any other Loan Document. The
fees and expense of the Transactions shall not exceed $6.3 million.
(n) Personal Property Requirements. The Collateral Agent shall have
received:
(i) all certificates, agreements or instruments representing or
evidencing the Securities Collateral accompanied by instruments of
transfer and stock powers undated and endorsed in blank;
(ii) the Intercompany Note executed by and among Borrower and its
Subsidiary, accompanied by instruments of transfer undated and endorsed in
blank;
(iii) all other certificates, agreements, including control
agreements, or instruments necessary to perfect the Collateral Agent's
security interest in all Chattel Paper, all Instruments, all Deposit
Accounts and all Investment Property of each Loan Party (as each such term
is defined in the Security Agreement and to the extent required by the
Security Agreement);
(iv) UCC financing statements in appropriate form for filing under
the UCC, and such other documents under applicable Requirements of Law in
each jurisdiction as may be nec-
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▇▇▇▇▇▇ or appropriate or, in the opinion of the Collateral Agent,
desirable to perfect the Liens created, or purported to be created, by the
Security Documents and, with respect to all UCC financing statements
required to be filed pursuant to the Loan Documents, evidence satisfactory
to the Administrative Agent that Borrower has retained, at its sole cost
and expense, a service provider acceptable to the Administrative Agent for
the tracking of all such financing statements and notification to the
Administrative Agent, of, among other things, the upcoming lapse or
expiration thereof;
(v) certified copies of UCC, tax and judgment lien searches,
bankruptcy and pending lawsuit searches or equivalent reports or searches,
each of a recent date listing all effective financing statements, lien
notices or comparable documents that name any Loan Party as debtor and
that are filed in those state and county jurisdictions in which any
property of any Loan Party is located and the state and county
jurisdictions in which any Loan Party is organized or maintains its
principal place of business and such other searches that the Collateral
Agent deems necessary or appropriate, none of which encumber the
Collateral covered or intended to be covered by the Security Documents
(other than Permitted Collateral Liens or any other Liens acceptable to
the Collateral Agent); and
(vi) evidence acceptable to the Collateral Agent of payment or
arrangements for payment by the Loan Parties of all applicable recording
taxes, fees, charges, costs and expenses required for the recording of the
Security Documents.
(o) Real Property Requirements. The Collateral Agent shall have
received:
(i) a Mortgage encumbering each Mortgaged Property in favor of the
Collateral Agent, for the benefit of the Secured Parties, duly executed
and acknowledged by each Loan Party that is the owner of or holder of any
interest in such Mortgaged Property, and otherwise in form for recording
in the recording office of each applicable political subdivision where
each such Mortgaged Property is situated, together with such certificates,
affidavits, questionnaires or returns as shall be required in connection
with the recording or filing thereof to create a lien under applicable
law, and such financing statements and any other instruments necessary to
grant a mortgage lien under the laws of any applicable jurisdiction, all
of which shall be in form and substance reasonably satisfactory to
Collateral Agent;
(ii) with respect to each Mortgaged Property, such consents,
approvals, amendments, supplements, estoppels or other instruments as
necessary to consummate the Transactions or as shall reasonably be deemed
necessary by the Collateral Agent in order for the owner or holder of the
Mineral Interest constituting such Mortgaged Property to grant the Lien
contemplated by the Mortgage with respect to such Mortgaged Property; and
(iii) evidence reasonably acceptable to the Collateral Agent of
payment by Borrower of all mortgage recording taxes, fees, charges, costs
and expenses required for the recording of the Mortgages referred to
above.
(p) Insurance. The Administrative Agent shall have received a copy
of, or a certificate as to coverage under, the insurance policies required by
Section 5.04 and the applicable provisions of the Security Documents, each of
which shall be endorsed or otherwise amended to include a "standard" or "New
York" lender's loss payable or mortgagee endorsement (as applicable) and shall
name the Collateral Agent, on behalf of the Secured Parties, as additional
insured, in form and substance satisfactory to the Administrative Agent.
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(q) Subordinated Note Amendment. The Subordinated Note shall (i)
have been amended to the effect that the final maturity or any required payment
of principal shall not be prior to three months after the Final Maturity Date
and (ii) be otherwise satisfactory to the Administrative Agent.
(r) Pro Forma Consolidated Annualized EBITDA. The Lenders shall have
received and shall be satisfied with the Borrower's pro forma consolidated
annualized EBITDA for the calendar quarter ended March 31, 2004, calculated
pursuant to Section 3.04(b) and otherwise in a manner and with adjustments
acceptable to the Lenders in their sole discretion, and shall not be less than
$27,000,000.
(s) Title Review of Mineral Interests. ▇▇▇▇▇▇ & ▇▇▇▇▇▇, special
local counsel for the Agents, Issuing Bank and the Lenders, shall have completed
a review of title to each Mortgaged Property set forth on Schedule 4.01(p), and
such review shall not have revealed any condition or circumstance which would
reflect that the representations and warranties contained in Sections 3.05 and
3.22 hereof are inaccurate in any material respect.
(t) Gas Hedging Program. The Administrative Agent shall be
reasonably satisfied with Borrower's gas hedge transactions entered into with
Approved Counterparties, with respect to not less than ninety-one percent (91%)
of Borrower's forecasted production from Proved Producing Mineral Interests for
a period ending December 31, 2008.
SECTION 4.02 CONDITIONS TO ALL CREDIT EXTENSIONS. The obligation of
each Lender and each Issuing Bank to make any Credit Extension (including the
initial Credit Extension) shall be subject to, and to the satisfaction of, each
of the conditions precedent set forth below.
(a) Notice. The Administrative Agent shall have received a Borrowing
Request as required by Section 2.03 (or such notice shall have been deemed
given in accordance with Section 2.03) if Loans are being requested or, in
the case of the issuance, amendment, extension or renewal of a Letter of
Credit, the Issuing Bank and the Administrative Agent shall have received
a notice requesting the issuance, amendment, extension or renewal of such
Letter of Credit as required by Section 2.18(b) or, in the case of the
Borrowing of a Swingline Loan, the Swingline Lender and the Administrative
Agent shall have received a Borrowing Request as required by Section
2.17(b).
(b) No Default. Borrower and each other Loan Party shall be in
compliance in all material respects with all the terms and provisions set
forth herein and in each other Loan Document on its part to be observed or
performed, and, at the time of and immediately after giving effect to such
Credit Extension and the application of the proceeds thereof, no Default
or Event of Default shall have occurred and be continuing on such date.
(c) Representations and Warranties. Each of the representations and
warranties made by any Loan Party set forth in Article III hereof or in
any other Loan Document shall be true and correct in all material respects
(except that any representation and warranty that is qualified as to
"materiality" or "Material Adverse Effect" shall be true and correct in
all respects) on and as of the date of such Credit Extension with the same
effect as though made on and as of such date, except to the extent such
representations and warranties expressly relate to an earlier date.
(d) No Legal Bar. No order, judgment or decree of any Governmental
Authority shall purport to restrain any Lender from making any Loans to be
made by it. No injunction or other restraining order shall have been
issued, shall be pending or noticed with respect to any action, suit or
proceeding seeking to enjoin or otherwise prevent the consummation of, or
to recover
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any damages or obtain relief as a result of, the transactions contemplated
by this Agreement or the making of Loans hereunder.
Each of the delivery of a Borrowing Request or notice requesting the
issuance, amendment, extension or renewal of a Letter of Credit and the
acceptance by Borrower of the proceeds of such Credit Extension shall constitute
a representation and warranty by Borrower and each other Loan Party that on the
date of such Credit Extension (both immediately before and after giving effect
to such Credit Extension and the application of the proceeds thereof) the
conditions contained in this Section 4.02 have been satisfied. Borrower shall
provide such information (including calculations in reasonable detail of the
covenants in Section 6.10) as the Administrative Agent may reasonably request to
confirm that the conditions in this Section 4.02 have been satisfied.
ARTICLE V
AFFIRMATIVE COVENANTS
Each Loan Party warrants, covenants and agrees with each Lender that
so long as this Agreement shall remain in effect and until the Commitments have
been terminated and the principal of and interest on each Loan, all Fees and all
other expenses or amounts payable under any Loan Document shall have been paid
in full and all Letters of Credit have been canceled or have expired and all
amounts drawn thereunder have been reimbursed in full, unless the Required
Lenders shall otherwise consent in writing, each Loan Party will, and will cause
each of its Subsidiaries to:
SECTION 5.01 FINANCIAL STATEMENTS, REPORTS, ETC. Furnish to the
Administrative Agent and each Lender:
(a) Annual Reports. As soon as available and in any event within 90
days after the end of each fiscal year beginning December, 2004 (but no
later than the date on which Borrower would be required to file a Form
10-KSB or a Form 10-K under the Exchange Act if it were subject to
Sections 13(d) and 15 of the Exchange Act as a non-accelerated filer);
provided, however, that so long as QRC is a public company, such reports
shall be required to be furnished no later than the date that QRC is
required to timely file its annual report on Form 10-K or Form 10-KSB with
the Securities Exchange Commission (taking into account any extension of
time available under Rule 12b-25 under the Exchange Act), (i) the
consolidated balance sheet of Borrower as of the end of such fiscal year
and related consolidated statements of operations, cash flows and members'
equity for such fiscal year, in comparative form with such financial
statements as of the end of, and for, the preceding fiscal year, and notes
thereto, all prepared in accordance with Regulation S-X and accompanied by
an opinion of Murrell, Hall, ▇▇▇▇▇▇▇▇ & Co., PLLP or other independent
public accountants of recognized national standing satisfactory to the
Administrative Agent (which opinion shall not be qualified as to scope or
contain any going concern or other qualification), stating that such
financial statements fairly present, in all material respects, the
consolidated financial condition, results of operations including
Consolidated EBITDA and cash flows of Borrower as of the dates and for the
periods specified in accordance with GAAP, (ii) a management report in a
form reasonably satisfactory to the Administrative Agent setting forth, on
a consolidated basis, the financial condition, results of operations and
cash flows as of the end of and for such fiscal year, compared to the end
of and for the previous fiscal year and budgeted amounts, and (iii) a
management's discussion and analysis of the financial condition and
results of operations for such fiscal year, as compared to the previous
fiscal year and, commencing with the first full fiscal year after the
Closing Date, budgeted amounts;
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(b) Quarterly Reports. As soon as available and in any event within
45 days after the end of each of the first three fiscal quarters of each
fiscal year beginning August, 2004 (but no later than the date on which
Borrower would be required to file a Form 10-Q under the Exchange Act if
it were subject to Sections 13(d) and 15 of the Exchange Act as a
non-accelerated filer); provided, however, that so long as QRC is a public
company, such reports shall be required to be furnished no later than the
date that QRC is required to timely file its annual report on Form 10-Q or
Form 10-QSB with the Securities Exchange Commission (taking into account
any extension of time available under Rule 12b-25 under the Exchange Act),
(i) the consolidated balance sheet of Borrower as of the end of such
fiscal quarter and related consolidated statements of operations and cash
flows for such fiscal quarter and for the then elapsed portion of the
fiscal year, in comparative form with the consolidated statements of
income and cash flows for the comparable periods in the previous fiscal
year, and notes thereto, all prepared in accordance with Regulation S-X
under the Securities Act and accompanied by a certificate of a Financial
Officer stating that such financial statements fairly present, in all
material respects, the consolidated financial condition, results of
operations and cash flows of Borrower as of the date and for the periods
specified in accordance with GAAP consistently applied, and on a basis
consistent with audited financial statements referred to in clause (a) of
this Section, subject to normal year-end audit adjustments, (ii) a
management report in a form reasonably satisfactory to the Administrative
Agent setting forth, on a consolidated basis, the financial condition,
results of operations (including Consolidated EBITDA) and cash flows as of
the end of and for such fiscal quarter and for the then elapsed portion of
the fiscal year, compared in reasonable detail to the end of such fiscal
quarter and for the comparable periods in the previous fiscal year and
budgeted amounts; provided that with respect to the consolidated statement
of operations (including Consolidated EBITDA) the comparisons shall show
the dollar and percentage variances with respect to the previous year and,
commencing with the first fiscal year ended after the Closing Date,
budgeted amounts and (iii) a management's discussion and analysis of the
financial condition and results of operations for such fiscal quarter and
the then elapsed portion of the fiscal year, as compared to the comparable
periods in the previous fiscal year and, commencing with the first fiscal
year ended after the Closing Date, budgeted amounts;
(c) Monthly Reports. Within 45 days after the end of each of the
first two months of each fiscal quarter beginning with September, 2004,
(i) the consolidated balance sheet of Borrower as of the end of such two
months and the related consolidated statements of operations, cash flows
and members' equity of Borrower for such month and for the then elapsed
portion of the fiscal year, in comparative form (including operational and
statistical information consistent with internal and industry wide
reporting standards in form reasonably satisfactory to the Administrative
Agent), with the consolidated statements of operations and cash flows for
the comparable periods in the previous fiscal year, accompanied by a
certificate of a Financial Officer stating that such financial statements
fairly present, in all material respects, the consolidated results of
operations and cash flows of Borrower as of the date and for the periods
specified in accordance with GAAP consistently applied, subject to normal
year-end audit adjustments and (ii) a management report in a form
reasonably satisfactory to the Administrative Agent setting forth, on a
consolidated basis, the financial condition, results of operations and
cash flows for such month and for the then elapsed portion of the fiscal
year compared in reasonable detail to the comparable periods in the
previous fiscal year and, commencing with the first fiscal year ended
after the Closing Date;
(d) Financial Officer's Certificate. (i) Concurrently with any
delivery of financial statements under Section 5.01(a), (b) or (c) above,
a Compliance Certificate certifying that no Default has occurred or, if
such a Default has occurred, specifying the nature and extent thereof and
any corrective action taken or proposed to be taken with respect thereto;
(ii) concurrently with
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any delivery of financial statements under Section 5.01(a) or (b) above, a
Compliance Certificate setting forth computations in reasonable detail
satisfactory to the Administrative Agent demonstrating compliance with the
covenants contained in Section 6.10 (including the aggregate amount of
Excluded Issuances for such period and the uses therefor) and, in the case
of Section 5.01(a) above, setting forth Borrower's calculation of Excess
Cash Flow; and (iii) in the case of Section 5.01(a) above, a report of the
accounting firm opining on or certifying such financial statements stating
that in the course of its regular audit of the financial statements of
Borrower and its Subsidiaries, which audit was conducted in accordance
with GAAP, such accounting firm obtained no knowledge that any Default has
occurred or, if in the opinion of such accounting firm such a Default has
occurred, specifying the nature and extent thereof;
(e) Financial Officer's Certificate Regarding Collateral.
Concurrently with any delivery of financial statements under Section
5.01(a) above, a certificate of a Financial Officer setting forth the
information required pursuant to the Perfection Certificate Supplement or
confirming that there has been no change in such information since the
date of the Perfection Certificate or latest Perfection Certificate
Supplement;
(f) Public Reports. Promptly after the same become publicly
available, copies of all periodic and other reports, proxy statements and
other materials filed by any Company with the Securities and Exchange
Commission, or any Governmental Authority succeeding to any or all of the
functions of said Commission, or with any national securities exchange, or
distributed to holders of its Indebtedness pursuant to the terms of the
documentation governing such Indebtedness (or any trustee, agent or other
representative therefor), as the case may be;
(g) Management Letters. Promptly after the receipt thereof by any
Company, a copy of any "management letter" received by any such person
from its certified public accountants and the management's responses
thereto;
(h) Budgets. No later than 30 days prior to the first day of each
fiscal year of Borrower beginning January 1, 2005, a budget in form
reasonably satisfactory to the Administrative Agent (including budgeted
statements of operations and cash flows for each of Borrower's business
units and balance sheets) prepared by Borrower for each quarter of such
fiscal year prepared in detail, Borrower and its Subsidiaries, with
appropriate presentation and discussion of the principal assumptions upon
which such budgets are based, accompanied by the statement of a Financial
Officer of Borrower to the effect that the budget of Borrower is a
reasonable estimate for the period covered thereby;
(i) Organization. Within 30 days after the close of each fiscal year
of Borrower, Borrower shall deliver an accurate organization chart as
required by Section 3.07(c), or confirm that there are no changes to
Schedule 3.07(c);
(j) Organizational Documents. Promptly provide copies of any
Organizational Documents that have been amended or modified in accordance
with the terms hereof and deliver a copy of any notice of default given or
received by any Company under any Organizational Document within 15 days
after such Company gives or receives such notice; and
(k) Other Information. Promptly, from time to time, such other
information regarding the operations, business affairs and financial
condition of any Company, or compliance with the terms of any Loan
Document, as the Administrative Agent or any Lender may reasonably
request.
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(l) Reserve Information. (i) As soon as available and in any event
by February 15 and August 31 of each year, commencing August 31, 2004,
Borrower shall deliver to the Administrative Agent and each Lender a
Reserve Report prepared as of the immediately preceding November 30 and
May 31, respectively; provided if Borrower changes its fiscal year in
accordance with Section 6.17, the Reserve Reports shall be delivered by
August 15 and March 31 as of the immediately preceding June 30 and
December 31.
(ii) Concurrently with the delivery of the Reserve Reports under
Section 5.01(l)(i), a forecast prepared by the Borrower, in form
reasonably satisfactory to the Administrative Agent, of expected
production volumes, on a monthly basis, from the preceding January 1 or
July 1, as the case may be, through December 31, 2008.
(iii) Beginning with September, 2004, no later than sixty (60) days
after the end of each month, (i) lease operating statements setting forth
production volumes, revenues, expenses and cash flow and product prices
for all oil and gas properties owned or leased by Borrower for such month,
each such statement to be accompanied by a management discussion and
analysis of major variances from the preceding monthly report delivered
hereunder, and (ii) drilling reports setting forth (A) a list of new ▇▇▇▇▇
drilled during such month, (B) a list of ▇▇▇▇▇ requiring pipeline
connections, and the status of such connections, and (C) gas and water
production on a per diem basis from each well.
SECTION 5.02 LITIGATION AND OTHER NOTICES. Furnish to the
Administrative Agent and each Lender written notice of the following promptly
(and, in any event, within five (5) Business Days of the occurrence thereof):
(a) any Default, specifying the nature and extent thereof and the
corrective action (if any) taken or proposed to be taken with respect
thereto;
(b) the filing or commencement of, or any threat or notice of
intention of any person to file or commence, any action, suit, litigation
or proceeding, whether at law or in equity by or before any Governmental
Authority, (i) against any Company or any Affiliate thereof that could
reasonably be expected to result in a Material Adverse Effect or (ii) with
respect to any Loan Document;
(c) any development that has resulted in, or could reasonably be
expected to result in a Material Adverse Effect;
(d) the occurrence of a Casualty Event; involving more than $1.0
million; and
(e) (i) the incurrence of any material Lien (other than Permitted
Collateral Liens) on, or claim asserted against any of the Collateral or
(ii) the occurrence of any other event which could materially affect the
value of the Collateral.
SECTION 5.03 EXISTENCE; BUSINESSES AND PROPERTIES. (a) Do or
cause to be done all things necessary to preserve, renew and maintain in full
force and effect its legal existence, except as otherwise expressly permitted
under Section 6.05 or Section 6.06 or, in the case of any Subsidiary, where the
failure to perform such obligations, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
(b) Do or cause to be done all things necessary to obtain, preserve,
renew, extend and keep in full force and effect the rights, licenses, permits,
privileges, franchises, authorizations, ▇▇▇-
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ents, copyrights, trademarks and trade names material to the conduct of its
business; maintain and operate such business in substantially the manner in
which it is presently conducted and operated; comply with all applicable
Requirements of Law (including any and all zoning, building, Environmental Law,
ordinance, code or approval or any building permits or any restrictions of
record affecting the Real Property) and decrees and orders of any Governmental
Authority, whether now in effect or hereafter enacted, except where the failure
to comply, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect; pay and perform its obligations under all
Leases and Transaction Documents except where the failure to comply,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect; and at all times maintain, preserve and protect all
property material to the conduct of such business and keep such property in good
repair, working order and condition (other than wear and tear occurring in the
ordinary course of business) and from time to time make, or cause to be made,
all needful and proper repairs, renewals, additions, improvements and
replacements thereto necessary in order that the business carried on in
connection therewith may be properly conducted at all times; provided that
nothing in this Section 5.03(b) shall prevent (i) sales of property,
consolidations or mergers by or involving any Company in accordance with Section
6.05 or Section 6.06; (ii) the withdrawal by any Company of its qualification as
a foreign corporation in any jurisdiction where such withdrawal, individually or
in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect; or (iii) the abandonment by any Company of any rights,
franchises, licenses, trademarks, trade names, copyrights or patents that such
person reasonably determines are not useful to its business or no longer
commercially desirable.
SECTION 5.04 INSURANCE. (a) Keep its insurable property adequately
insured at all times by financially sound and reputable insurers; maintain such
other insurance, to such extent and against such risks as is customary with
companies in the same or similar businesses operating in the same or similar
locations, including insurance with respect to Mortgaged Properties and other
properties material to the business of the Companies against such casualties and
contingencies and of such types and in such amounts with such deductibles as is
customary in the case of similar businesses operating in the same or similar
locations, including (i) workmen's compensation insurance (to the extent
required and applicable); (ii) employer's liability insurance (to the extent
required and applicable); (iii) comprehensive general public liability and
property damage insurance; (iv) insurance against losses customarily insured
against as a result of damage by fire, lighting, hail, tornado, explosion and
other similar risk; (v) comprehensive automobile liability insurance; and (vi)
such other insurance against risks as the Administrative Agent may from time to
time reasonably require (such policies to be in such form and amounts and having
such coverage as may be reasonably satisfactory to the Administrative Agent and
the Collateral Agent); provided that with respect to physical hazard insurance,
neither the Collateral Agent nor the applicable Company shall agree to the
adjustment of any claim thereunder without the consent of the other (such
consent not to be unreasonably withheld or delayed); provided, further, that no
consent of any Company shall be required during an Event of Default.
(b) All such insurance shall (i) provide that no cancellation,
material reduction in amount or material change in coverage thereof shall be
effective until at least 30 days after the Collateral Agent has been sent
written notice thereof, provided that Borrower shall use its reasonable best
efforts to ensure that any such notice shall be sent via a nationally recognized
overnight delivery service, (ii) name the Collateral Agent as mortgagee (in the
case of property insurance) or additional insured on behalf of the Secured
Parties (in the case of liability insurance) or loss payee (in the case of
property insurance), as applicable and (iii) be reasonably satisfactory in all
other respects to the Collateral Agent.
(c) Notify the Administrative Agent and the Collateral Agent
immediately whenever any separate insurance concurrent in form or contributing
in the event of loss with that required to be maintained under this Section 5.04
is taken out by any Company; and promptly deliver to the Administrative Agent
and the Collateral Agent a duplicate original copy of such policy or policies.
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(d) With respect to each Mortgage encumbering improved Real
Property, obtain flood insurance in such total amount as the Administrative
Agent or the Required Lenders may from time to time require, if at any time the
area in which any improvements located on any Mortgaged Property is designated a
"flood hazard area" in any Flood Insurance Rate Map published by the Federal
Emergency Management Agency (or any successor agency) and otherwise comply with
the National Flood Insurance Program as set forth in the Flood Disaster
Protection Act of 1973, as amended from time to time.
(e) Deliver to the Administrative Agent and the Collateral Agent and
the Lenders a report of a reputable insurance broker with respect to such
insurance and such supplemental reports with respect thereto as the
Administrative Agent or the Collateral Agent may from time to time reasonably
request.
(f) No Loan Party that is an owner of Mortgaged Property shall take
any action that is reasonably likely to be the basis for termination, revocation
or denial of any insurance coverage required to be maintained under such Loan
Party's respective Mortgage or that could be the basis for a defense to any
claim under any Insurance Policy maintained in respect of the Premises, and each
Loan Party shall otherwise comply in all material respects with all Insurance
Requirements in respect of the Premises; provided, however, that each Loan Party
may, at its own expense and after written notice to the Administrative Agent,
(i) contest the applicability or enforceability of any such Insurance
Requirements by appropriate legal proceedings, the prosecution of which does not
constitute a basis for cancellation or revocation of any insurance coverage
required under this Section 5.04 or (ii) cause the Insurance Policy containing
any such Insurance Requirement to be replaced by a new policy complying with the
provisions of this Section 5.04.
SECTION 5.05 TAXES. (a) Pay and discharge promptly when due all
Taxes, assessments and governmental charges or levies imposed upon it or upon
its income or profits or in respect of its property, before the same shall
become delinquent or in default, as well as all lawful claims for labor,
services, materials and supplies or otherwise that, if unpaid, might give rise
to a Lien other than a Permitted Lien upon such properties or any part thereof;
provided that such payment and discharge shall not be required with respect to
any such Tax, assessment, charge, levy or claim so long as (i) the validity or
amount thereof shall be contested in good faith by appropriate proceedings
timely instituted and diligently conducted and the applicable Company shall have
set aside on its books adequate reserves or other appropriate provisions with
respect thereto in accordance with GAAP, (ii) such contest operates to suspend
collection of the contested obligation, Tax, assessment or charge and
enforcement of a Lien other than a Permitted Lien and (iii) in the case of
Collateral, the applicable Company shall have otherwise complied with the
Contested Collateral Lien Conditions.
(b) Timely and correctly file all material Tax Returns required to
be filed by it.
(c) Borrower does not intend to treat the Loans as being a
"reportable transaction" within the meaning of Treasury Regulation Section
1.6011-4. In the event Borrower determines to take any action inconsistent with
such intention, it will promptly notify the Administrative Agent thereof.
SECTION 5.06 EMPLOYEE BENEFITS. (a) Comply in all material respects
with the applicable provisions of ERISA and the Code and (b) furnish to the
Administrative Agent (x) as soon as possible after, and in any event within 5
days after any Responsible Officer of any Company or any ERISA Affiliates of any
Company knows or has reason to know that, any ERISA Event has occurred that,
alone or together with any other ERISA Event could reasonably be expected to
result in liability of the Companies or any of their ERISA Affiliates in an
aggregate amount exceeding $500,000 or the imposition of a Lien, a statement of
a Financial Officer of Borrower setting forth details as to such ERISA Event and
the action, if any, that the Companies propose to take with respect thereto, and
(y) upon request by
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the Administrative Agent, copies of (i) each Schedule B (Actuarial Information)
to the annual report (Form 5500 Series) filed by any Company or any ERISA
Affiliate with the Internal Revenue Service with respect to each Plan; (ii) the
most recent actuarial valuation report for each Plan; (iii) all notices received
by any Company or any ERISA Affiliate from a Multiemployer Plan sponsor or any
governmental agency concerning an ERISA Event; and (iv) such other documents or
governmental reports or filings relating to any Plan (or employee benefit plan
sponsored or contributed to by any Company) as the Administrative Agent shall
reasonably request.
SECTION 5.07 MAINTAINING RECORDS; ACCESS TO PROPERTIES AND
INSPECTIONS; AUDIT; ANNUAL MEETINGS. (a) Keep proper books of record and account
in which full, true and correct entries in conformity with GAAP and all
Requirements of Law are made of all dealings and transactions in relation to its
business and activities. Each Company will permit any representatives designated
by the Administrative Agent or any Lender to visit and inspect the financial
records and the property of such Company at reasonable times and as often as
reasonably requested and to make extracts from and copies of such financial
records, and permit any representatives designated by the Administrative Agent
or any Lender to discuss the affairs, finances, accounts, condition and Mineral
Interests of any Company with the officers and employees thereof and advisors
therefor (including without limitation the Approved Petroleum Engineer and
independent accountants). The Administrative Agent shall have the right, at its
expense, to audit any Reserve Report provided by the Approved Petroleum
Engineer, and Borrower shall, and shall use its reasonable efforts to cause the
Approved Petroleum Engineer to, cooperate fully in connection with any such
audit.
(b) Within 120 days after the close of each fiscal year of the
Companies, at the request of the Administrative Agent or Required Lenders, hold
a meeting (at a mutually agreeable location and time or, at the option of the
Administrative Agent, by conference call) with all Lenders who choose to attend
such meeting at which meeting shall be reviewed the financial results of the
previous fiscal year and the financial condition of the Companies and the
budgets presented for the current fiscal year of the Companies.
SECTION 5.08 USE OF PROCEEDS. Use the proceeds of the Loans only for
the purposes set forth in Section 3.12 and request the issuance of Letters of
Credit only for the purposes set forth in the definitions of Standby Letter of
Credit and LC Facility Letter of Credit.
SECTION 5.09 COMPLIANCE WITH ENVIRONMENTAL LAWS; ENVIRONMENTAL
REPORTS. (a) Comply, and cause all lessees and other persons occupying Real
Property owned, operated or leased by any Company to comply, in all material
respects with all Environmental Laws and Environmental Permits applicable to its
operations and Real Property; obtain and renew all material Environmental
Permits applicable to its operations and Real Property; and conduct all
Responses required by, and in accordance with, Environmental Laws; provided that
no Company shall be required to undertake any Response to the extent that its
obligation to do so is being contested in good faith and by proper proceedings
and appropriate reserves are being maintained with respect to such circumstances
in accordance with GAAP.
(b) If a Default caused by reason of a breach of Section 3.18 or
Section 5.09(a) shall have occurred and be continuing for more than 20 days
without the Companies commencing activities reasonably likely to cure such
Default, at the written request of the Administrative Agent or the Required
Lenders through the Administrative Agent, provide to the Lenders within 45 days
after such request, at the expense of Borrower, an environmental assessment
report regarding the matters which are the subject of such Default, including,
where appropriate, any soil and/or groundwater sampling, prepared by an
environmental consulting firm and, in form and substance, reasonably acceptable
to the Administrative Agent and indicating the presence or absence of Hazardous
Materials and the estimated cost of any compliance or Response to address them.
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(c) Each Loan Party that is an owner of Mortgaged Property shall not
install nor permit to be installed in the Mortgaged Property any Hazardous
Materials, other than in compliance with applicable Environmental Laws, except
where the failure to so comply could not reasonably be expected to have a
Material Adverse Effect.
SECTION 5.10 INTEREST RATE PROTECTION. No later than the 180th day
after the Closing Date, Borrower shall enter into Hedging Agreements with terms
and conditions reasonably acceptable to the Administrative Agent with respect to
the hedging of the Borrower's interest rate risk to its Indebtedness.
SECTION 5.11 ADDITIONAL COLLATERAL; ADDITIONAL GUARANTORS. (a)
Subject to this Section 5.11, with respect to any personal property acquired
after the Closing Date by any Loan Party that is intended to be subject to the
Lien created by the Security Agreement but is not so subject, promptly (and in
any event within 30 days after the acquisition thereof) (i) execute and deliver
to the Administrative Agent and the Collateral Agent such amendments or
supplements to the relevant Security Agreement or such other documents as the
Administrative Agent or the Collateral Agent shall deem necessary or advisable
to grant to the Collateral Agent, for its benefit and for the benefit of the
other Secured Parties, a Lien on such property subject to no Liens other than
Permitted Collateral Liens, and (ii) take all actions necessary to cause such
Lien to be duly perfected to the extent required by the Security Agreement in
accordance with all applicable Requirements of Law, including the filing of
financing statements in such jurisdictions as may be reasonably requested by the
Administrative Agent. Borrower shall otherwise take such actions and execute
and/or deliver to the Collateral Agent such documents as the Administrative
Agent or the Collateral Agent shall require to confirm the validity, perfection
and priority of the Lien of the Security Agreement against such after-acquired
properties.
(b) With respect to any person that is or becomes a Subsidiary after
the Closing Date, promptly (and in any event within 30 days after such person
becomes a Subsidiary) (i) deliver to the Collateral Agent the certificates, if
any, representing all of the Equity Interests of such Subsidiary, together with
undated stock powers or other appropriate instruments of transfer executed and
delivered in blank by a duly authorized officer of the holder(s) of such Equity
Interests, and all intercompany notes owing from such Subsidiary to any Loan
Party together with instruments of transfer executed and delivered in blank by a
duly authorized officer of such Loan Party and (ii) cause such new Subsidiary
(A) to execute a Joinder Agreement or such comparable documentation to become a
Subsidiary Guarantor and a joinder agreement to the applicable Security
Agreement, substantially in the form annexed thereto or, in the case of a
Foreign Subsidiary, execute a security agreement compatible with the laws of
such Foreign Subsidiary's jurisdiction in form and substance reasonably
satisfactory to the Administrative Agent, and (B) to take all actions necessary
or advisable in the opinion of the Administrative Agent or the Collateral Agent
to cause the Lien created by the applicable Security Agreement to be duly
perfected to the extent required by such agreement in accordance with all
applicable Requirements of Law, including the filing of financing statements in
such jurisdictions as may be reasonably requested by the Administrative Agent or
the Collateral Agent. Notwithstanding the foregoing, (1) the Equity Interests
required to be delivered to the Collateral Agent pursuant to clause (i) of this
Section 5.11(b) shall not include any Equity Interests of a Foreign Subsidiary
created or acquired after the Closing Date and (2) no Foreign Subsidiary shall
be required to take the actions specified in clause (ii) of this Section
5.11(b), if, in the case of either clause (1) or (2), doing so would constitute
an investment of earnings in United States property under Section 956 (or a
successor provision) of the Code, which investment would or could reasonably be
expected to trigger a material increase in the net income of a United States
shareholder of such Subsidiary pursuant to Section 951 (or a successor
provision) of the Code, as reasonably determined by the Administrative Agent;
provided that this exception shall not apply to (A) Voting Stock of any
Subsidiary which is a first-tier controlled foreign corporation (as defined in
Section 957(a) of the Code) representing 66% of the total voting power of all
outstanding Voting Stock of such Subsidiary and (B) 100% of the Equity In-
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terests not constituting Voting Stock of any such Subsidiary, except that any
such Equity Interests constituting "stock entitled to vote" within the meaning
of Treasury Regulation Section 1.956-2(c)(2) shall be treated as Voting Stock
for purposes of this Section 5.11(b).
(c) Promptly grant to the Collateral Agent, within 60 days of the
acquisition thereof, a security interest in and Mortgage on its interest in (i)
Real Property owned in fee by such Loan Party as is acquired by such Loan Party
after the Closing Date and that, together with any improvements thereon,
individually has a fair market value of at least $500,000, and (ii) unless the
Collateral Agent otherwise consents, each leased Real Property of such Loan
Party which lease individually has a fair market value of at least $500,000, in
each case, as additional security for the Obligations (unless the subject
property is already mortgaged to a third party to the extent permitted by
Section 6.02). Such Mortgages shall be granted pursuant to documentation
reasonably satisfactory in form and substance to the Administrative Agent and
the Collateral Agent and shall constitute valid and enforceable perfected Liens
subject only to Permitted Collateral Liens or other Liens acceptable to the
Collateral Agent. The Mortgages or instruments related thereto shall be duly
recorded or filed in such manner and in such places as are required by law to
establish, perfect, preserve and protect the Liens in favor of the Collateral
Agent required to be granted pursuant to the Mortgages and all taxes, fees and
other charges payable in connection therewith shall be paid in full. Such Loan
Party shall otherwise take such actions and execute and/or deliver to the
Collateral Agent such documents as the Administrative Agent or the Collateral
Agent shall require to confirm the validity, perfection and priority of the Lien
of any existing Mortgage or new Mortgage against such after-acquired Real
Property (including, without limitation, a Title Policy, a Survey and local
counsel opinion in respect of such Mortgage).
(d) Promptly grant to the Collateral Agent, within 60 days after the
end of each Excess Cash Flow Period, a security interest in and Mortgage on each
Mineral Interest (whether leasehold or owned in fee) by such Loan Party as
additional security for the Obligations (unless the subject property is already
mortgaged to a third party to the extent permitted by Section 6.02); provided
that in the event that the aggregate value of all such Mineral Interests not
subject to a Mortgage exceeds $1.0 million, then the Company shall promptly
grant to the Collateral Agent, within 60 days after exceeding such threshold, a
security interest in and Mortgage on such Mineral Interests. Such Mortgages
shall be granted pursuant to documentation reasonably satisfactory in form and
substance to the Administrative Agent and the Collateral Agent and shall
constitute valid and enforceable perfected Liens subject only to Permitted
Collateral Liens or other Liens acceptable to the Collateral Agent. The
Mortgages or instruments related thereto shall be duly recorded or filed in such
manner and in such places as are required by law to establish, perfect, preserve
and protect the Liens in favor of the Collateral Agent required to be granted
pursuant to the Mortgages and all taxes, fees and other charges payable in
connection therewith shall be paid in full. Such Loan Party shall otherwise take
such actions and execute and/or deliver to the Collateral Agent such documents
as the Administrative Agent or the Collateral Agent shall require to confirm the
validity, perfection and priority of the Lien of any existing Mortgage or new
Mortgage against such after-acquired Mineral Interests (including and without
limitation, local counsel opinion in respect of such Mortgage).
SECTION 5.12 SECURITY INTERESTS; FURTHER ASSURANCES. Promptly, upon
the reasonable request of the Administrative Agent, the Collateral Agent or any
Lender, at Borrower's expense, execute, acknowledge and deliver, or cause the
execution, acknowledgment and delivery of, and thereafter register, file or
record, or cause to be registered, filed or recorded, in an appropriate
governmental office, any document or instrument supplemental to or confirmatory
of the Security Documents or otherwise deemed by the Administrative Agent or the
Collateral Agent reasonably necessary or desirable for the continued validity,
perfection and priority of the Liens on the Collateral covered thereby subject
to no other Liens except as permitted by the applicable Security Document, or
obtain any consents or waivers as may be necessary or appropriate in connection
therewith. Deliver or cause to be delivered to the Administrative Agent and the
Collateral Agent from time to time such other documentation, consents,
au-
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thorizations, approvals and orders in form and substance reasonably
satisfactory to the Administrative Agent and the Collateral Agent as the
Administrative Agent and the Collateral Agent shall reasonably deem necessary to
perfect or maintain the Liens on the Collateral pursuant to the Security
Documents. Upon the exercise by the Administrative Agent, the Collateral Agent
or any Lender of any power, right, privilege or remedy pursuant to any Loan
Document which requires any consent, approval, registration, qualification or
authorization of any Governmental Authority execute and deliver all
applications, certifications, instruments and other documents and papers that
the Administrative Agent, the Collateral Agent or such Lender may require. If
the Administrative Agent, the Collateral Agent or the Required Lenders determine
that they are required by law or regulation to have appraisals prepared in
respect of the Real Property of any Loan Party constituting Collateral, Borrower
shall provide to the Administrative Agent appraisals that satisfy the applicable
requirements of the Real Estate Appraisal Reform Amendments of FIRREA and are
otherwise in form and substance satisfactory to the Administrative Agent and the
Collateral Agent.
SECTION 5.13 INFORMATION REGARDING COLLATERAL. (a) Not effect any
change (i) in any Loan Party's legal name, (ii) in the location of any Loan
Party's chief executive office, (iii) in any Loan Party's identity or
organizational structure, (iv) in any Loan Party's Federal Taxpayer
Identification Number or organizational identification number, if any, or (v) in
any Loan Party's jurisdiction of organization (in each case, including by
merging with or into any other entity, reorganizing, dissolving, liquidating,
reorganizing or organizing in any other jurisdiction), until (A) it shall have
given the Collateral Agent and the Administrative Agent not less than 30 days'
prior written notice (in the form of an Officers' Certificate), or such lesser
notice period agreed to by the Collateral Agent, of its intention so to do,
clearly describing such change and providing such other information in
connection therewith as the Collateral Agent or the Administrative Agent may
reasonably request and (B) it shall have taken all action reasonably
satisfactory to the Collateral Agent to maintain the perfection and priority of
the security interest of the Collateral Agent for the benefit of the Secured
Parties in the Collateral, if applicable. Each Loan Party agrees to promptly
provide the Collateral Agent with certified Organizational Documents reflecting
any of the changes described in the preceding sentence. Each Loan Party also
agrees to promptly notify the Collateral Agent of any change in the location of
any office in which it maintains books or records relating to Collateral owned
by it or any office or facility at which Collateral is located (including the
establishment of any such new office or facility).
(b) Concurrently with the delivery of financial statements pursuant
to Section 5.01(a), deliver to the Administrative Agent and the Collateral Agent
a Perfection Certificate Supplement and a certificate of a Financial Officer and
the chief legal officer of Borrower certifying that all UCC financing statements
(including fixture filings, as applicable) or other appropriate filings,
recordings or registrations, including all refilings, rerecordings and
reregistrations, containing a description of the Collateral have been filed of
record in each governmental, municipal or other appropriate office in each
jurisdiction necessary to protect and perfect the security interests and Liens
under the Security Documents for a period of not less than 18 months after the
date of such certificate (except as noted therein with respect to any
continuation statements to be filed within such period).
SECTION 5.14 POST-CLOSING COLLATERAL MATTERS. Execute and deliver
the documents and complete the tasks set forth on Schedule 5.14, in each case
within the time limits specified on such schedule.
SECTION 5.15 OPERATION OF PROPERTIES, EQUIPMENT AND MINERAL
INTERESTS. Maintain, develop and operate its Mineral Interests in a good and
workmanlike manner, and observe and comply with all of the terms and provisions,
express or implied, of all oil and gas leases relating to such Mineral Interests
so long as such Mineral Interests are capable of producing Hydrocarbons and
accompa-
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nying elements in paying quantities, except where such failure to comply could
not reasonably be expected to have a Material Adverse Effect.
Comply in all respects with all contracts and agreements applicable
to or relating to its Mineral Interest or the production and sale of
Hydrocarbons and accompanying elements therefrom, except to the extent a failure
to so comply could not reasonably be expected to have a Material Adverse Effect.
At all times maintain, preserve and keep all operating equipment
used with respect to its Mineral Interests in proper repair, working order and
condition, and make all necessary or appropriate repairs, renewals,
replacements, additions and improvements thereto so that the efficiency of such
operating equipment shall at all times be properly preserved and maintained,
except where such failure to comply could not reasonably be expected to have a
Material Adverse Effect; provided, further, that no item of operating equipment
need be so repaired, renewed, replaced, added to or improved, if Borrower shall
in good faith determine that such action is not necessary or desirable for the
continued efficient and profitable operation of the business of such Loan Party.
SECTION 5.16 CHANGE TO FISCAL YEAR No later than December 31, 2004
the Borrower shall change its fiscal year to December 31.
ARTICLE VI
NEGATIVE COVENANTS
Each Loan Party warrants, covenants and agrees with each
Lender that, so long as this Agreement shall remain in effect and until the
Commitments have been terminated and the principal of and interest on each Loan,
all Fees and all other expenses or amounts payable under any Loan Document have
been paid in full and all Letters of Credit have been canceled or have expired
and all amounts drawn thereunder have been reimbursed in full, unless the
Required Lenders shall otherwise consent in writing, no Loan Party will, nor
will they cause or permit any Subsidiaries to:
SECTION 6.01 INDEBTEDNESS. Incur, create, assume or permit to exist,
directly or indirectly, any Indebtedness, except:
(a) Indebtedness incurred under this Agreement and the other Loan
Documents;
(b) (i) Indebtedness outstanding on the Closing Date and listed on
Schedule 6.01(b), (ii) refinancings or renewals thereof; provided that (A)
any such refinancing Indebtedness is in an aggregate principal amount not
greater than the aggregate principal amount of the Indebtedness being
renewed or refinanced, plus the amount of any premiums required to be paid
thereon and reasonable fees and expenses associated therewith, (B) such
refinancing Indebtedness has a later or equal final maturity and longer or
equal weighted average life than the Indebtedness being renewed or
refinanced and (C) the covenants, events of default, subordination and
other provisions thereof (including any guarantees thereof) shall be, in
the aggregate, no less favorable to the Lenders than those contained in
the Indebtedness being renewed or refinanced;
(c) the Subordinated Notes; provided that the aggregate principal
amount of such Subordinated Note does not exceed $51,000,000 (plus the
amount of any interest paid in kind which may be added to the principal of
such Subordinated Notes) at any time;
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(d) Indebtedness under Hedging Obligations that are designed to
protect against fluctuations in interest rates, foreign currency exchange
rates or commodity prices, in each case not entered into for speculative
purposes; provided that if such Hedging Obligations relate to interest
rates, (i) such Hedging Obligations relate to payment obligations on
Indebtedness otherwise permitted to be incurred by the Loan Documents and
(ii) the notional principal amount of such Hedging Obligations at the time
incurred does not exceed the principal amount of the Indebtedness to which
such Hedging Obligations relate;
(e) Indebtedness permitted by Section 6.04(f);
(f) Indebtedness in respect of Purchase Money Obligations and the
principal amount of Capital Lease Obligations, and refinancings or
renewals thereof, in an aggregate amount not to exceed $5.0 million at any
time outstanding;
(g) Indebtedness in respect of bid, performance or surety bonds
issued for the account of any Company in the ordinary course of business,
including guarantees or obligations of any Company with respect to letters
of credit supporting such bid, performance or surety obligations (in each
case other than for an obligation for money borrowed), in an aggregate
amount not to exceed $1.0 million at any time outstanding;
(h) Contingent Obligations of any Loan Party in respect of
Indebtedness otherwise permitted under this Section 6.01;
(i) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument
inadvertently (except in the case of daylight overdrafts) drawn against
insufficient funds in the ordinary course of business; provided, however,
that such Indebtedness is extinguished within five Business Days of
incurrence;
(j) Indebtedness arising in connection with endorsement of
instruments for deposit in the ordinary course of business; and
(k) Indebtedness of any Company in an aggregate amount not to exceed
$2.0 million at any time outstanding, provided that up to $1.0 million may
be secured by Liens described in Section 6.02(k) or (q).
SECTION 6.02 LIENS. Create, incur, assume or permit to exist,
directly or indirectly, any Lien on any property now owned or hereafter acquired
by it or on any income or revenues or rights in respect of any thereof, except
the following (collectively, the "PERMITTED LIENS"):
(a) inchoate Liens for taxes, assessments or governmental charges or
levies not yet due and payable or delinquent and Liens for taxes,
assessments or governmental charges or levies, which (i) are being
contested in good faith by appropriate proceedings for which adequate
reserves have been established in accordance with GAAP, which proceedings
(or orders entered in connection with such proceedings) have the effect of
preventing the forfeiture or sale of the property subject to any such
Lien, or (ii) in the case of any such charge or claim which has or may
become a Lien against any of the Collateral, such Lien and the contest
thereof shall satisfy the Contested Collateral Lien Conditions;
(b) Liens in respect of property of any Company imposed by law,
which were incurred in the ordinary course of business and do not secure
Indebtedness for borrowed money, such as carriers', warehousemen's,
materialmen's, landlords', workmen's, suppliers', repairmen's
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and mechanics' Liens and other similar Liens arising in the ordinary
course of business, and (i) which do not in the aggregate materially
detract from the value of the property of the Companies, taken as a whole,
and do not materially impair the use thereof in the operation of the
business of the Companies, taken as a whole, (ii) which, if they secure
obligations that are then due and unpaid, are being contested in good
faith by appropriate proceedings for which adequate reserves have been
established in accordance with GAAP, which proceedings (or orders entered
in connection with such proceedings) have the effect of preventing the
forfeiture or sale of the property subject to any such Lien, and (iii) in
the case of any such Lien which has or may become a Lien against any of
the Collateral, such Lien and the contest thereof shall satisfy the
Contested Collateral Lien Conditions;
(c) any Lien in existence on the Closing Date and set forth on
Schedule 6.02(c) and any Lien granted as a replacement or substitute
therefor; provided that any such replacement or substitute Lien (i) except
as permitted by Section 6.01(b)(ii)(A), does not secure an aggregate
amount of Indebtedness, if any, greater than that secured on the Closing
Date and (ii) does not encumber any property other than the property
subject thereto on the Closing Date (any such Lien, an "EXISTING LIEN");
(d) easements, rights-of-way, restrictions (including zoning
restrictions), covenants, licenses, encroachments, protrusions and other
similar charges or encumbrances, and minor title deficiency on or with
respect to any Real Property, Mineral Interest, or Pipeline in each case
whether now or hereafter in existence, not (i) securing Indebtedness, (ii)
individually or in the aggregate materially impairing the value or
marketability of such Real Property, Mineral Interest or Pipeline or (iii)
individually or in the aggregate materially interfering with the ordinary
conduct of the business of the Companies at such Real Property, Mineral
Interest or Pipeline and for the purposes of this Agreement, a minor title
deficiency shall include, but not be limited to, easements, rights-of-way,
servitudes, permits, surface leases and other similar rights in respect of
surface operations, and easements for pipelines, streets, alleys,
highways, telephone lines, power lines, railways and other easements and
rights-of-way, on, over or in respect of any of the properties of any Loan
Party that are customarily granted in the oil and gas industry; provided,
however, that such deficiencies shall not have, individually or in the
aggregate, a Material Adverse Effect.
(e) Liens arising out of judgments, attachments or awards not
resulting in a Default and in respect of which such Company shall in good
faith be prosecuting an appeal or proceedings for review in respect of
which there shall be secured a subsisting stay of execution pending such
appeal or proceedings and, in the case of any such Lien which has or may
become a Lien against any of the Collateral, such Lien and the contest
thereof shall satisfy the Contested Collateral Lien Conditions;
(f) Liens (other than any Lien imposed by ERISA) (x) imposed by law
or deposits made in connection therewith in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security legislation, (y) incurred in the
ordinary course of business to secure the performance of tenders,
statutory obligations (other than excise taxes), surety, stay, customs and
appeal bonds, statutory bonds, bids, leases, government contracts, trade
contracts, performance and return of money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed money)
or (z) arising by virtue of deposits made in the ordinary course of
business to secure liability for premiums to insurance carriers; provided
that (i) with respect to clauses (x), (y) and (z) of this paragraph (f),
such Liens are for amounts not yet due and payable or delinquent or, to
the extent such amounts are so due and payable, such amounts are being
contested in good faith by appropriate proceedings for which adequate
reserves have been established in accordance with GAAP, which proceedings
for
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orders entered in connection with such proceedings have the effect of
preventing the forfeiture or sale of the property subject to any such
Lien, (ii) to the extent such Liens are not imposed by law, such Liens
shall in no event encumber any property other than cash and Cash
Equivalents, (iii) in the case of any such Lien against any of the
Collateral, such Lien and the contest thereof shall satisfy the Contested
Collateral Lien Conditions and (iv) the aggregate amount of deposits at
any time pursuant to clause (y) and clause (z) of this paragraph (f) shall
not exceed $250,000 in the aggregate;
(g) Leases of the properties of any Company, in each case entered
into in the ordinary course of such Company's business so long as such
Leases are subordinate in all respects to the Liens granted and evidenced
by the Security Documents and do not, individually or in the aggregate,
(i) interfere in any material respect with the ordinary conduct of the
business of any Company or (ii) materially impair the use (for its
intended purposes) or the value of the property subject thereto;
(h) Liens arising out of conditional sale, title retention,
consignment or similar arrangements for the sale of goods entered into by
any Company in the ordinary course of business in accordance with the past
practices of such Company;
(i) Liens securing Indebtedness incurred pursuant to Section
6.01(f); provided that any such Liens attach only to the property being
financed pursuant to such Indebtedness and do not encumber any other
property of any Company;
(j) bankers' Liens, rights of setoff and other similar Liens
existing solely with respect to cash and Cash Equivalents on deposit in
one or more accounts maintained by any Company, in each case granted in
the ordinary course of business in favor of the bank or banks with which
such accounts are maintained, securing amounts owing to such bank with
respect to cash management and operating account arrangements, including
those involving pooled accounts and netting arrangements; provided that,
unless such Liens are non-consensual and arise by operation of law, in no
case shall any such Liens secure (either directly or indirectly) the
repayment of any Indebtedness;
(k) Liens on property of a person existing at the time such person
is acquired or merged with or into or consolidated with any Company to the
extent permitted hereunder (and not created in anticipation or
contemplation thereof); provided that such Liens do not extend to property
not subject to such Liens at the time of acquisition (other than
improvements thereon) and are no more favorable to the lienholders than
such existing Lien;
(l) Liens granted pursuant to the Security Documents to secure the
Obligations;
(m) licenses of Intellectual Property granted by any Company in the
ordinary course of business and not interfering in any material respect
with the ordinary conduct of business of the Companies;
(n) the filing of UCC financing statements solely as a precautionary
measure in connection with operating leases or consignment of goods;
(o) inchoate statutory or operators' Liens securing obligations for
labor, services, materials and supplies furnished to Mineral Interests,
(i) which, if they secure obligations that are then due and unpaid, are
being contested in good faith by appropriate proceedings for which
adequate reserves have been established in accordance with GAAP, which
proceedings (or orders en-
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tered in connection with such proceedings) have the effect of preventing
the forfeiture or sale of the property subject to any such Lien, and (ii)
in the case of any such Lien which has or may become a Lien against any of
the Collateral, such Lien and the contest thereof shall satisfy the
Contested Collateral Lien Conditions;
(p) lease burdens payable to third parties which are deducted in the
calculation of discounted present value in the Reserve Report including,
without limitation, any royalty, overriding royalty, net profits interest,
production payment, carried interest or reversionary working interest; and
(q) Liens incurred in the ordinary course of business of any Company
with respect to obligations that do not in the aggregate exceed $500,000
at any time outstanding, so long as such Liens, to the extent covering any
Collateral, are junior to the Liens granted pursuant to the Security
Documents;
provided, however, that no consensual Liens shall be permitted to exist,
directly or indirectly, on any Securities Collateral, other than Liens granted
pursuant to the Security Documents.
SECTION 6.03 SALE AND LEASEBACK TRANSACTIONS. Enter into any
arrangement, directly or indirectly, with any person whereby it shall sell or
transfer any property, real or personal, used or useful in its business, whether
now owned or hereafter acquired, and thereafter rent or lease such property or
other property which it intends to use for substantially the same purpose or
purposes as the property being sold or transferred (a "SALE AND LEASEBACK
TRANSACTION") unless (i) the sale of such property is permitted by Section 6.06
and (ii) any Liens arising in connection with its use of such property are
permitted by Section 6.02.
SECTION 6.04 INVESTMENT, LOAN AND ADVANCES. Directly or indirectly,
lend money or credit (by way of guarantee or otherwise) or make advances to any
person, or purchase or acquire any stock, bonds, notes, debentures or other
obligations or securities of, or any other interest in, or make any capital
contribution to, any other person, or purchase or own a futures contract or
otherwise become liable for the purchase or sale of currency or other
commodities at a future date in the nature of a futures contract (all of the
foregoing, collectively, "INVESTMENTS"), except that the following shall be
permitted:
(a) the Companies may consummate the Transactions in accordance with
the provisions of the Transaction Documents;
(b) Investments outstanding on the Closing Date and identified on
Schedule 6.04(b);
(c) the Companies may (i) acquire and hold accounts receivables
owing to any of them if created or acquired in the ordinary course of
business and payable or dischargeable in accordance with customary terms,
(ii) invest in, acquire and hold cash and Cash Equivalents, (iii) endorse
negotiable instruments held for collection in the ordinary course of
business or (iv) make lease, utility and other similar deposits in the
ordinary course of business;
(d) Hedging Obligations incurred pursuant to Section 6.01(c);
(e) loans and advances to directors, employees and officers of
Borrower and the Subsidiaries for bona fide business purposes and to
purchase Equity Interests of Borrower, in aggregate amount not to exceed
$1.0 million at any time outstanding;
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(f) Investments (i) by Borrower in any Subsidiary Guarantor, (ii) by
any Company in Borrower or any Subsidiary Guarantor, (iii) by a Subsidiary
Guarantor in another Subsidiary Guarantor and (iv) by a Subsidiary that is
not a Subsidiary Guarantor in any other Subsidiary that is not a
Subsidiary Guarantor; provided that any Investment in the form of a loan
or advance shall be evidenced by the Intercompany Note and, in the case of
a loan or advance by a Loan Party, pledged by such Loan Party as
Collateral pursuant to the Security Documents;
(g) Investments in securities of trade creditors or customers in the
ordinary course of business and consistent with such Company's past
practices that are received in settlement of bona fide disputes or
pursuant to any plan of reorganization or liquidation or similar
arrangement upon the bankruptcy or insolvency of such trade creditors or
customers;
(h) Investments made by Borrower or any Subsidiary as a result of
consideration received in connection with an Asset Sale made in compliance
with Section 6.06;
(i) Investments in persons not an Affiliate of a Loan Party that are
(i) customary in the oil and gas business, (ii) made in the ordinary
course of such Loan Party's business, and (iii) made in the form of, or
pursuant to, operating agreements, farm-in agreements, farm-out
agreements, development agreements, unitization agreements, joint bidding
agreements, services contracts and other similar agreements which a
reasonable and prudent oil and gas industry owner or operator would find
acceptable; and
(j) other investments in an aggregate amount not to exceed $1.0
million at any time outstanding.
SECTION 6.05 MERGERS AND CONSOLIDATIONS. Wind up, liquidate or
dissolve its affairs or enter into any transaction of merger or consolidation
(or agree to do any of the foregoing at any future time), except that the
following shall be permitted:
(a) Asset Sales in compliance with Section 6.06;
(b) acquisitions in compliance with Section 6.07;
(c) any Company may merge or consolidate with or into Borrower or
any Subsidiary Guarantor (as long as Borrower or a Subsidiary Guarantor is
the surviving person in such merger or consolidation and in the case of a
merger or consolidation with or into any subsidiary Guarantor, remains a
Wholly Owned Subsidiary of Borrower); provided that the Lien on and
security interest in such property granted or to be granted in favor of
the Collateral Agent under the Security Documents shall be maintained or
created in accordance with the provisions of Section 5.11 or Section 5.12,
as applicable; and
(d) any Subsidiary may dissolve, liquidate or wind up its affairs at
any time; provided that such dissolution, liquidation or winding up, as
applicable, could not reasonably be expected to have a Material Adverse
Effect.
To the extent the Required Lenders waive the provisions of this
Section 6.05 with respect to the sale of any Collateral, or any Collateral is
sold as permitted by this Section 6.05, such Collateral (unless sold to a
Company) shall be sold free and clear of the Liens created by the Security
Documents, and the Agents shall take all actions they deem appropriate in order
to effect the foregoing.
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SECTION 6.06 ASSET SALES. Effect any Asset Sale, or agree to effect
any Asset Sale, except that the following shall be permitted:
(a) disposition of used, worn out, obsolete or surplus property by
any Loan Party in the ordinary course of business and the abandonment or
other disposition of Intellectual Property that is, in the reasonable
judgment of Borrower, no longer economically practicable to maintain or
useful in the conduct of the business of the Companies taken as a whole;
(b) Asset Sales; provided that the aggregate consideration received
in respect of all Asset Sales pursuant to this clause (b) shall not exceed
$10.0 million in any four consecutive fiscal quarters of Borrower, but, in
any event, shall not exceed $5.0 million with respect to any single Asset
Sale;
(c) leases of real or personal property in the ordinary course of
business and in accordance with the applicable Security Documents;
(d) mergers and consolidations in compliance with Section 6.05; and
(e) Investments in compliance with Section 6.04.
To the extent the Required Lenders waive the provisions of this
Section 6.06 with respect to the sale of any Collateral, or any Collateral is
sold as permitted by this Section 6.06, such Collateral (unless sold to a
Company) shall be sold free and clear of the Liens created by the Security
Documents, and the Agents shall take all actions they deem appropriate in order
to effect the foregoing.
SECTION 6.07 ACQUISITIONS. Purchase or otherwise acquire (in one or
a series of related transactions) any part of the property (whether tangible or
intangible) of any person (or agree to do any of the foregoing at any future
time), except that the following shall be permitted:
(a) Capital Expenditures by Borrower and the Subsidiaries shall be
permitted to the extent permitted by Section 6.10(e);
(b) purchases and other acquisitions of inventory, materials,
equipment and intangible property in the ordinary course of business;
(c) Investments in compliance with Section 6.04;
(d) leases of real or personal property in the ordinary course of
business and in accordance with the applicable Security Documents;
(e) Permitted Acquisitions; and
(f) mergers and consolidations in compliance with Section 6.05;
provided that the Lien on and security interest in such property granted or to
be granted in favor of the Collateral Agent under the Security Documents shall
be maintained or created in accordance with the provisions of Section 5.11 or
Section 5.12, as applicable.
SECTION 6.08 DIVIDENDS; SUBORDINATED NOTE PAYMENTS. Authorize,
declare or pay, directly or indirectly, any Dividends with respect to any
Company, except that the following shall be permitted:
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(a) Dividends by any Company to Borrower or any Guarantor that is a
Wholly Owned Subsidiary of Borrower;
(b) so long as no Default or Event of Default has occurred and is
continuing or would result therefrom, Permitted Tax Distributions; and
(c) beginning with the delivery of the Reserve Report dated on or
after November 30, 2004, so long as no Default or Event of Default then
exists or would arise therefrom, Dividends and cash payments paid on the
Subordinated Notes in an amount equal to that portion of Excess Cash Flow
not required to be applied to the Term B Loans pursuant to Section
2.10(g), less any such portion used to make Capital Expenditures pursuant
to clause (ii) of the proviso to Section 6.10(e), so long as, for the
immediately preceding Test Period, (i) the Asset Coverage Ratio is at
least 1.75:1.0 and (ii) the Total Leverage Ratio does not exceed 3.00:1.0,
in each case, after giving effect to such payment.
SECTION 6.09 TRANSACTIONS WITH AFFILIATES. Enter into, directly or
indirectly, any transaction or series of related transactions, whether or not in
the ordinary course of business, with any Affiliate of any Company (other than
between or among Borrower and one or more Subsidiary Guarantors), other than on
terms and conditions at least as favorable to such Company as would reasonably
be obtained by such Company at that time in a comparable arm's-length
transaction with a person other than an Affiliate, except that the following
shall be permitted:
(a) Dividends and cash payments paid on the Subordinated Notes
permitted by Section 6.08;
(b) Investments permitted by Sections 6.04(e) and (f);
(c) reasonable and customary director, officer and employee
compensation (including bonuses) and other benefits (including retirement,
health, stock option and other benefit plans) and indemnification
arrangements, in each case approved by the Board of Directors;
(d) transactions with customers, clients, suppliers, joint venture
partners or purchasers or sellers of goods and services, in each case in
the ordinary course of business and otherwise not prohibited by the Loan
Documents;
(e) the existence of, and the performance by any Loan Party of its
obligations under the terms of, any limited liability company, limited
partnership or other Organizational Document or securityholders agreement
(including any registration rights agreement or purchase agreement related
thereto) to which it is a party on the Closing Date, and which has been
disclosed to the Lenders as in effect on the Closing Date, and similar
agreements that it may enter into thereafter; provided, however, that the
existence of, or the performance by any Loan Party of obligations under,
any amendment to any such existing agreement or any such similar agreement
entered into after the Closing Date shall only be permitted by this
Section 6.09(e) to the extent not more adverse to the interest of the
Lenders in any material respect, when taken as a whole, than any of such
documents and agreements as in effect on the Closing Date;
(f) any transaction with an Affiliate where the only consideration
paid by any Loan Party is Qualified Capital Stock;
(g) the Transactions as contemplated by the Transaction Documents;
and
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(h) any transactions related to the Operating and Management
Agreement.
SECTION 6.10 FINANCIAL COVENANTS.
(a) Maximum Total Leverage Ratio. Permit the Total Leverage Ratio
for any Test Period (i) in 2004 (commencing September 1, 2004) to exceed 4.0 to
1.0, (ii) in 2005 to exceed 3.5 to 1.0 and (iii) thereafter to exceed 2.5 to
1.0:
(b) Minimum Asset Coverage Ratio. Permit the Asset Coverage Ratio
for any Test Period to be less than 1.25 to 1.0.
(c) Minimum Interest Coverage Ratio. Permit the Consolidated
Interest Coverage Ratio, for any Test Period to be less than 3.5 to 1.0.
(d) Minimum Fixed Charge Coverage Ratio. Permit the Consolidated
Fixed Charge Coverage Ratio, for any Test Period (i) ending in 2005 (beginning
in June 2005) to be less than 1.0 to 1.0 and (ii) thereafter to be less than
1.5:1.0.
(e) Limitation on Capital Expenditures. Permit Capital Expenditures
in any Excess Cash Flow Period to exceed Budgeted Capital Expenditures for such
Excess Cash Flow Period; provided such amount for any Excess Cash Flow Period
shall be increased by an amount, if any, equal to (i) the amount of Net Cash
Proceeds of Excluded Issuances designated for Capital Expenditures for such
Excess Cash Flow Period and (ii) the portion of Excess Cash Flow not required to
be applied to Loans pursuant to Section 2.10(g) for the immediately preceding
Excess Cash Flow Period or used to pay a Dividend or Subordinated Note payment
pursuant to Section 6.08(c).
At the request of Borrower, and upon demonstration by Borrower to
the Administrative Agent of Borrower's compelling need to make Capital
Expenditures in excess of the limitations referred to in this Section 6.10(e),
the Administrative Agent in its sole discretion shall be entitled to approve an
increase in the Capital Expenditures limitations for any Excess Cash Flow Period
set forth above of up to 5% of the aggregate amount set forth above with respect
to such Excess Cash Flow Period.
SECTION 6.11 PREPAYMENTS OF OTHER INDEBTEDNESS; MODIFICATIONS OF
ORGANIZATIONAL DOCUMENTS AND OTHER DOCUMENTS, ETC. Directly or indirectly:
(a) make (or give any notice in respect thereof) any voluntary or
optional payment or prepayment on or redemption or acquisition for value
of, or any prepayment or redemption as a result of any asset sale, change
of control or similar event of, any Indebtedness outstanding under any
Subordinated Indebtedness, except as otherwise permitted by Section 6.08
of this Agreement; or
(b) terminate, amend, modify (including electing to treat any
Pledged Interests (as defined in the Security Agreement) as a "security"
under Section 8-103 of the UCC) or change the Subordinated Note Agreement,
the Subordinated Notes or any of its Organizational Documents (including
by the filing or modification of any certificate of designation) or any
agreement to which it is a party with respect to its Equity Interests
(including any stockholders' agreement), or enter into any new agreement
with respect to its Equity Interests, other than any such amendments,
modifications or changes or such new agreements which are not adverse in
any material respect to the interests of the Lenders; provided that
Borrower may issue such Equity Interests, so long as such issuance is not
prohibited by Section 6.13 or any other provision of this Agreement, and
may amend its Organizational Documents to authorize any such Equity
Interests.
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SECTION 6.12 LIMITATION ON CERTAIN RESTRICTIONS ON SUBSIDIARIES.
Directly or indirectly, create or otherwise cause or suffer to exist or become
effective any encumbrance or restriction on the ability of any Subsidiary to (a)
pay dividends or make any other distributions on its capital stock or any other
interest or participation in its profits owned by Borrower or any Subsidiary, or
pay any Indebtedness owed to Borrower or a Subsidiary, (b) make loans or
advances to Borrower or any Subsidiary or (c) transfer any of its properties to
Borrower or any Subsidiary, except for such encumbrances or restrictions
existing under or by reason of (i) applicable law; (ii) this Agreement and the
other Loan Documents; (iii) customary provisions restricting subletting or
assignment of any lease governing a leasehold interest of a Subsidiary; (iv)
customary provisions restricting assignment of any agreement entered into by a
Subsidiary in the ordinary course of business; (v) any holder of a Lien
permitted by Section 6.02 restricting the transfer of the property subject
thereto; (vi) customary restrictions and conditions contained in any agreement
relating to the sale of any property permitted under Section 6.06 pending the
consummation of such sale; (vii) any agreement in effect at the time such
Subsidiary becomes a Subsidiary of Borrower, so long as such agreement was not
entered into in connection with or in contemplation of such person becoming a
Subsidiary of Borrower; (viii) in the case of any joint venture which is not a
Loan Party in respect of any matters referred to in clauses (b) and (c) above,
restrictions in such person's Organizational Documents or pursuant to any joint
venture agreement or stockholders agreements solely to the extent of the Equity
Interests of or property held in the subject joint venture or other entity; or
(ix) any encumbrances or restrictions imposed by any amendments or refinancings
that are otherwise permitted by the Loan Documents of the contracts, instruments
or obligations referred to in clause (vii) above; provided that such amendments
or refinancings are no more materially restrictive with respect to such
encumbrances and restrictions than those prior to such amendment or refinancing.
SECTION 6.13 LIMITATION ON ISSUANCE OF CAPITAL STOCK. (a) With
respect to Borrower, issue any Equity Interest that is not Qualified Capital
Stock.
(b) With respect to Borrower or any Subsidiary, issue any Equity
Interest (including by way of sales of treasury stock) or any options or
warrants to purchase, or securities convertible into, any Equity Interest,
except (i) for stock splits, stock dividends and additional issuances of Equity
Interests which do not decrease the percentage ownership of Borrower or any
Subsidiaries in any class of the Equity Interest of such Subsidiary and (ii)
Subsidiaries of Borrower formed after the Closing Date in accordance with
Section 6.14 may issue Equity Interests to Borrower or the Subsidiary of
Borrower which is to own such Equity Interests. All Equity Interests issued in
accordance with this Section 6.13(b) shall, to the extent required by Sections
5.11 and 5.12 or any Security Agreement, be delivered to the Collateral Agent
for pledge pursuant to the applicable Security Agreement.
SECTION 6.14 LIMITATION ON CREATION OF SUBSIDIARIES. Establish,
create or acquire any additional Subsidiaries without the prior written consent
of the Required Lenders; provided that, without such consent, Borrower may (i)
establish or create one or more Wholly Owned Subsidiaries of Borrower, (ii)
establish, create or acquire one or more Subsidiaries in connection with an
Investment made pursuant to Section 6.04(f) or (iii) acquire one or more
Subsidiaries in connection with a Permitted Acquisition, so long as, in each
case, Section 5.11(b) shall be complied with.
SECTION 6.15 BUSINESS. With respect to Borrower and its
Subsidiaries, engage (directly or indirectly) in any business other than those
businesses in which Borrower and its Subsidiaries are engaged on the Closing
Date and that are reasonably related or ancillary thereto; provided that the
focus of any such business is on the Cherokee Basin.
SECTION 6.16 LIMITATION ON ACCOUNTING CHANGES. Make or permit, any
change in accounting policies or reporting practices, without the consent of the
Required Lenders, which consent shall not be unreasonably withheld, except
changes that are required by GAAP.
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SECTION 6.17 FISCAL YEAR. Except as provided in Section 5.16, change
its fiscal year-end to a date other than May 31, or after Borrower has complied
with Section 5.16, December 31.
SECTION 6.18 LEASE OBLIGATIONS. Create, incur, assume or suffer to
exist any obligations as lessee for the rental or hire of real or personal
property of any kind (other than Mineral Interests, Pipelines or compressor
leases) under leases or agreements to lease having an original term of one year
or more that would cause the direct and contingent liabilities of Borrower and
its Subsidiaries, on a consolidated basis, in respect of all such obligations to
exceed $2.0 million payable in any period of 12 consecutive months.
SECTION 6.19 NO FURTHER NEGATIVE PLEDGE. Enter into any agreement,
instrument, deed or lease which prohibits or limits the ability of any Loan
Party to create, incur, assume or suffer to exist any Lien upon any of their
respective properties or revenues, whether now owned or hereafter acquired, or
which requires the grant of any security for an obligation if security is
granted for another obligation, except the following: (1) this Agreement and the
other Loan Documents; (2) covenants in documents creating Liens permitted by
Section 6.02 prohibiting further Liens on the properties encumbered thereby; (3)
any other agreement that does not restrict in any manner (directly or
indirectly) Liens created pursuant to the Loan Documents on any Collateral
securing the Obligations and does not require the direct or indirect granting of
any Lien securing any Indebtedness or other obligation by virtue of the granting
of Liens on or pledge of property of any Loan Party to secure the Obligations;
and (4) any prohibition or limitation that (a) exists pursuant to applicable
law, (b) consists of customary restrictions and conditions contained in any
agreement relating to the sale of any property permitted under Section 6.06
pending the consummation of such sale, (c) restricts subletting or assignment of
any lease governing a leasehold interest of Borrower or a Subsidiary, (d) exists
in any agreement in effect at the time such Subsidiary becomes a Subsidiary of
Borrower, so long as such agreement was not entered into in contemplation of
such person becoming a Subsidiary or (e) is imposed by any amendments or
refinancings that are otherwise permitted by the Loan Documents of the
contracts, instruments or obligations referred to in clause (3) or (4)(e);
provided that such amendments and refinancings are no more materially
restrictive with respect to such prohibitions and limitations than those prior
to such amendment or refinancing.
SECTION 6.20 ANTI-TERRORISM LAW; ANTI-MONEY LAUNDERING. (a) Directly
or indirectly, (i) knowingly conduct any business or engage in making or
receiving any contribution of funds, goods or services to or for the benefit of
any person described in Section 3.25, (ii) knowingly deal in, or otherwise
engage in any transaction relating to, any property or interests in property
blocked pursuant to the Executive Order or any other Anti-Terrorism Law, or
(iii) knowingly engage in or conspire to engage in any transaction that evades
or avoids, or has the purpose of evading or avoiding, or attempts to violate,
any of the prohibitions set forth in any Anti-Terrorism Law (and the Loan
Parties shall deliver to the Lenders any certification or other evidence
requested from time to time by any Lender in its reasonable discretion,
confirming the Loan Parties' compliance with this Section 6.20).
(b) Cause or permit any of the funds of such Loan Party that are
used to repay the Loans to be derived from any unlawful activity with the result
that the making of the Loans would be in violation of law.
SECTION 6.21 EMBARGOED PERSON. Cause or permit (a) any of the funds
or properties of the Loan Parties that are used to repay the Loans to constitute
property of, or be beneficially owned directly or indirectly by, any person
subject to sanctions or trade restrictions under United States law ("EMBARGOED
PERSON" or "EMBARGOED PERSONS") that is identified on (1) the "List of Specially
Designated Nationals and Blocked Persons" (the "SDN LIST") maintained by OFAC
and/or on any other similar list ("OTHER LIST") maintained by OFAC pursuant to
any authorizing statute including, but not limited to, the International
Emergency Economic Powers Act, 50 U.S.C. Sections 1701 et seq., The Trading
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with the Enemy Act, 50 U.S.C. App. 1 et seq., and any Executive Order or
regulation promulgated thereunder, with the result that the investment in the
Loan Parties (whether directly or indirectly) is prohibited by law, or the Loans
made by the Lenders would be in violation of law, or (2) the Executive Order,
any related enabling legislation or any other similar Executive Orders
(collectively, "EXECUTIVE ORDERS"), or (b) any Embargoed Person to have any
direct or indirect interest, of any nature whatsoever in the Loan Parties, with
the result that the investment in the Loan Parties (whether directly or
indirectly) is prohibited by law or the Loans are in violation of law.
ARTICLE VII
GUARANTEE
SECTION 7.01 THE GUARANTEE. The Guarantors hereby, jointly and
severally guarantee, as a primary obligor and not as a surety to each Secured
Party and their respective successors and assigns, the prompt payment in full
when due (whether at stated maturity, by required prepayment, declaration,
demand, by acceleration or otherwise) of the principal of and interest
(including any interest, fees, costs or charges that would accrue but for the
provisions of the Title 11 of the United States Code after any bankruptcy or
insolvency petition under Title 11 of the United States Code) on the Loans made
by the Lenders to, and the Notes held by each Lender of, Borrower, and all other
Obligations from time to time owing to the Secured Parties by any Loan Party
under any Loan Document in each case strictly in accordance with the terms
thereof (such obligations being herein collectively called the "GUARANTEED
OBLIGATIONS"). The Guarantors hereby jointly and severally agree that if
Borrower or other Guarantor(s) shall fail to pay in full when due (whether at
stated maturity, by acceleration or otherwise) any of the Guaranteed
Obligations, the Guarantors will promptly pay the same in cash, without any
demand or notice whatsoever, and that in the case of any extension of time of
payment or renewal of any of the Guaranteed Obligations, the same will be
promptly paid in full when due (whether at extended maturity, by acceleration or
otherwise) in accordance with the terms of such extension or renewal.
SECTION 7.02 OBLIGATIONS UNCONDITIONAL. The obligations of the
Guarantors under Section 7.01 shall constitute a guaranty of payment and to the
fullest extent permitted by applicable law, are absolute, irrevocable and
unconditional, joint and several, irrespective of the value, genuineness,
validity, regularity or enforceability of the Guaranteed Obligations of Borrower
under this Agreement, the Notes, if any, or any other agreement or instrument
referred to herein or therein, or any substitution, release or exchange of any
other guarantee of or security for any of the Guaranteed Obligations, and,
irrespective of any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a surety or Guarantor
(except for payment in full). Without limiting the generality of the foregoing,
it is agreed that the occurrence of any one or more of the following shall not
alter or impair the liability of the Guarantors hereunder which shall remain
absolute, irrevocable and unconditional under any and all circumstances as
described above:
(i) at any time or from time to time, without notice to the
Guarantors, the time for any performance of or compliance with any of the
Guaranteed Obligations shall be extended, or such performance or
compliance shall be waived;
(ii) any of the acts mentioned in any of the provisions of this
Agreement or the Notes, if any, or any other agreement or instrument
referred to herein or therein shall be done or omitted;
(iii) the maturity of any of the Guaranteed Obligations shall be
accelerated, or any of the Guaranteed Obligations shall be amended in any
respect, or any right under the Loan Documents or any other agreement or
instrument referred to herein or therein shall be amended or
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waived in any respect or any other guarantee of any of the Guaranteed
Obligations or any security therefor shall be released or exchanged in
whole or in part or otherwise dealt with;
(iv) any Lien or security interest granted to, or in favor of,
Issuing Bank or any Lender or Agent as security for any of the Guaranteed
Obligations shall fail to be perfected; or
(v) the release of any other Guarantor pursuant to Section 7.09.
The Guarantors hereby expressly waive diligence, presentment, demand
of payment, protest and all notices whatsoever, and any requirement that any
Secured Party exhaust any right, power or remedy or proceed against Borrower
under this Agreement or the Notes, if any, or any other agreement or instrument
referred to herein or therein, or against any other person under any other
guarantee of, or security for, any of the Guaranteed Obligations. The Guarantors
waive any and all notice of the creation, renewal, extension, waiver,
termination or accrual of any of the Guaranteed Obligations and notice of or
proof of reliance by any Secured Party upon this Guarantee or acceptance of this
Guarantee, and the Guaranteed Obligations, and any of them, shall conclusively
be deemed to have been created, contracted or incurred in reliance upon this
Guarantee, and all dealings between Borrower and the Secured Parties shall
likewise be conclusively presumed to have been had or consummated in reliance
upon this Guarantee. This Guarantee shall be construed as a continuing,
absolute, irrevocable and unconditional guarantee of payment without regard to
any right of offset with respect to the Guaranteed Obligations at any time or
from time to time held by Secured Parties, and the obligations and liabilities
of the Guarantors hereunder shall not be conditioned or contingent upon the
pursuit by the Secured Parties or any other person at any time of any right or
remedy against Borrower or against any other person which may be or become
liable in respect of all or any part of the Guaranteed Obligations or against
any collateral security or guarantee therefor or right of offset with respect
thereto. This Guarantee shall remain in full force and effect and be binding in
accordance with and to the extent of its terms upon the Guarantors and the
successors and assigns thereof, and shall inure to the benefit of the Lenders,
and their respective successors and assigns, notwithstanding that from time to
time during the term of this Agreement there may be no Guaranteed Obligations
outstanding.
SECTION 7.03 REINSTATEMENT. The obligations of the Guarantors under
this Article VII shall be automatically reinstated if and to the extent that for
any reason any payment by or on behalf of Borrower or other Loan Party in
respect of the Guaranteed Obligations is rescinded or must be otherwise restored
by any holder of any of the Guaranteed Obligations, whether as a result of any
proceedings in bankruptcy or reorganization or otherwise.
SECTION 7.04 SUBROGATION; SUBORDINATION. Each Guarantor hereby
agrees that until the indefeasible payment and satisfaction in full in cash of
all Guaranteed Obligations and the expiration and termination of the Commitments
of the Lenders under this Agreement it shall waive any claim and shall not
exercise any right or remedy, direct or indirect, arising by reason of any
performance by it of its guarantee in Section 7.01, whether by subrogation or
otherwise, against Borrower or any other Guarantor of any of the Guaranteed
Obligations or any security for any of the Guaranteed Obligations. Any
Indebtedness of any Loan Party permitted pursuant to Section 6.01(d) shall be
subordinated to such Loan Party's Obligations in the manner set forth in the
Intercompany Note evidencing such Indebtedness.
SECTION 7.05 REMEDIES. The Guarantors jointly and severally agree
that, as between the Guarantors and the Lenders, the obligations of Borrower
under this Agreement and the Notes, if any, may be declared to be forthwith due
and payable as provided in Article VIII (and shall be deemed to have become
automatically due and payable in the circumstances provided in said Article
VIII) for purposes of Section 7.01, notwithstanding any stay, injunction or
other prohibition preventing such declaration (or such obligations from becoming
automatically due and payable) as against Borrower and that, in
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the event of such declaration (or such obligations being deemed to have become
automatically due and payable), such obligations (whether or not due and payable
by Borrower) shall forthwith become due and payable by the Guarantors for
purposes of Section 7.01.
SECTION 7.06 INSTRUMENT FOR THE PAYMENT OF MONEY. Each Guarantor
hereby acknowledges that the guarantee in this Article VII constitutes an
instrument for the payment of money, and consents and agrees that any Lender or
Agent, at its sole option, in the event of a dispute by such Guarantor in the
payment of any moneys due hereunder, shall have the right to bring a
motion-action under New York CPLR Section 3213.
SECTION 7.07 CONTINUING GUARANTEE. The guarantee in this Article VII
is a continuing guarantee of payment, and shall apply to all Guaranteed
Obligations whenever arising.
SECTION 7.08 GENERAL LIMITATION ON GUARANTEE OBLIGATIONS. In any
action or proceeding involving any state corporate limited partnership or
limited liability company law, or any applicable state, federal or foreign
bankruptcy, insolvency, reorganization or other law affecting the rights of
creditors generally, if the obligations of any Guarantor under Section 7.01
would otherwise be held or determined to be void, voidable, invalid or
unenforceable, or subordinated to the claims of any other creditors, on account
of the amount of its liability under Section 7.01, then, notwithstanding any
other provision to the contrary, the amount of such liability shall, without any
further action by such Guarantor, any Loan Party or any other person, be
automatically limited and reduced to the highest amount that is valid and
enforceable and not subordinated to the claims of other creditors as determined
in such action or proceeding.
SECTION 7.09 RELEASE OF GUARANTORS. If, in compliance with the terms
and provisions of the Loan Documents, all or substantially all of the Equity
Interests or property of any Guarantor are sold or otherwise transferred (a
"TRANSFERRED GUARANTOR") to a person or persons, none of which is Borrower or a
Subsidiary, such Transferred Guarantor shall, upon the consummation of such sale
or transfer, be released from its obligations under this Agreement (including
under Section 11.03 hereof) and its obligations to pledge and grant any
Collateral owned by it pursuant to any Security Document and, in the case of a
sale of all or substantially all of the Equity Interests of the Transferred
Guarantor, the pledge of such Equity Interests to the Collateral Agent pursuant
to the Security Agreements shall be released, and the Collateral Agent shall
take such actions as are necessary to effect each release described in this
Section 7.09 in accordance with the relevant provisions of the Security
Documents.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.01 EVENTS OF DEFAULT. Upon the occurrence and during the
continuance of the following events ("EVENTS OF DEFAULT"):
(a) default shall be made in the payment of any principal of any
Loan or any Reimbursement Obligation when and as the same shall become due
and payable, whether at the due date thereof (including a Term B Loan
Repayment Date) or at a date fixed for prepayment (whether voluntary or
mandatory) thereof or by acceleration thereof or otherwise;
(b) default shall be made in the payment of any interest on any Loan
or any Fee or any other amount (other than an amount referred to in
paragraph (a) above) due under any Loan Document, when and as the same
shall become due and payable, and such default shall continue unremedied
for a period of three Business Days;
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(c) any representation or warranty made or deemed made in or in
connection with any Loan Document or the borrowings or issuances of
Letters of Credit hereunder, or any representation, warranty, statement or
information contained in any report, certificate, financial statement or
other instrument furnished in connection with or pursuant to any Loan
Document, shall prove to have been false or misleading in any material
respect when so made, deemed made or furnished;
(d) default shall be made in the due observance or performance by
any Company of any covenant, condition or agreement contained in Sections
5.02(a), (b) and (c), 5.03(a), 5.04, 5.06, 5.07, 5.08, 5.09, 5.10, 5.14 or
5.15 or in Article VI;
(e) default shall be made in the due observance or performance by
any Company of any covenant, condition or agreement contained in any Loan
Document (other than those specified in paragraphs (a), (b) or (d)
immediately above) and such default shall continue unremedied or shall not
be waived for a period of 30 days after the earlier of (i) the date any
Authorized Officer of Borrower acquires knowledge of such failure or (ii)
written notice thereof has been given to Borrower from the Administrative
Agent or any Lender to Borrower;
(f) any Company shall (i) fail to pay any principal or interest,
regardless of amount, due in respect of any Indebtedness (other than the
Obligations), when and as the same shall become due and payable beyond any
applicable grace period, or (ii) fail to observe or perform any other
term, covenant, condition or agreement contained in any agreement or
instrument evidencing or governing any such Indebtedness if the effect of
any failure referred to in this clause (ii) is to cause, or to permit the
holder or holders of such Indebtedness or a trustee or other
representative on its or their behalf (with or without the giving of
notice, the lapse of time or both) to cause, such Indebtedness to become
due prior to its stated maturity or become subject to a mandatory offer to
purchase by the obligor; provided that it shall not constitute an Event of
Default pursuant to this paragraph (f) unless the aggregate amount of all
such Indebtedness referred to in clauses (i) and (ii) exceeds $2.5 million
at any one time (provided that, in the case of Hedging Obligations, the
notional amount thereof shall be counted for this purpose);
(g) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (i)
relief in respect of any Company, or of a substantial part of the property
of any Company, under Title 11 of the Code, as now constituted or
hereafter amended, or any other federal, state or foreign bankruptcy,
insolvency, receivership or similar law; (ii) the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar
official for any Company or for a substantial part of the property of any
Company; or (iii) the winding-up or liquidation of any Company; and such
proceeding or petition shall continue undismissed for 60 days or an order
or decree approving or ordering any of the foregoing shall be entered;
(h) any Company shall (i) voluntarily commence any proceeding or
file any petition seeking relief under Title 11 of the United States Code,
as now constituted or hereafter amended, or any other federal, state or
foreign bankruptcy, insolvency, receivership or similar law; (ii) consent
to the institution of, or fail to contest in a timely and appropriate
manner, any proceeding or the filing of any petition described in clause
(g) above; (iii) apply for or consent to the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for any
Company or for a substantial part of the property of any Company; (iv)
file an answer admitting the material allegations of a petition filed
against it in any such proceeding; (v) make a general assignment for the
benefit of creditors; (vi) become unable, admit in writing its inability
or fail
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generally to pay its debts as they become due; (vii) take any action for
the purpose of effecting any of the foregoing; or (viii) wind up or
liquidate;
(i) one or more judgments, orders or decrees for the payment of
money in an aggregate amount in excess of $2.5 million shall be rendered
against any Company or any combination thereof and the same shall remain
undischarged, unvacated or unbonded for a period of 30 consecutive days
during which execution shall not be effectively stayed, or any action
shall be legally taken by a judgment creditor to levy upon properties of
any Company to enforce any such judgment;
(j) one or more ERISA Events shall have occurred that, in the
opinion of the Required Lenders, when taken together with all other such
ERISA Events, could reasonably be expected to result in liability of any
Company and its ERISA Affiliates in an aggregate amount exceeding $2.5
million or the imposition of a Lien on any properties of a Company;
(k) any security interest and Lien purported to be created by any
Security Document shall cease to be in full force and effect, or shall
cease to give the Collateral Agent, for the benefit of the Secured
Parties, the Liens, rights, powers and privileges purported to be created
and granted under such Security Documents (including a perfected first
priority security interest in and Lien on, all of the Collateral
thereunder (except as otherwise expressly provided in such Security
Document)) in favor of the Collateral Agent, or shall be asserted by
Borrower or any other Loan Party not to be, a valid, perfected, first
priority (except as otherwise expressly provided in this Agreement or such
Security Document) security interest in or Lien on the Collateral covered
thereby;
(l) any Loan Document or any material provisions thereof shall at
any time and for any reason be declared by a court of competent
jurisdiction to be null and void, or a proceeding shall be commenced by
any Loan Party or any other person, or by any Governmental Authority,
seeking to establish the invalidity or unenforceability thereof (exclusive
of questions of interpretation of any provision thereof), or any Loan
Party shall repudiate or deny any portion of its liability or obligation
for the Obligations;
(m) there shall have occurred a Change of Control;
(n) any Loan Party shall be prohibited or otherwise restrained from
conducting the business theretofore conducted by it in any manner that has
or could reasonably be expected to result in a Material Adverse Effect by
virtue of any determination, ruling, decision, decree or order of any
court or Governmental Authority of competent jurisdiction;
then, and in every such event (other than an event with respect to Borrower
described in paragraph (g) or (h) above), and at any time thereafter during the
continuance of such event, the Administrative Agent may, and at the request of
the Required Lenders shall, by notice to Borrower, take either or both of the
following actions, at the same or different times: (i) terminate forthwith the
Commitments and (ii) declare the Loans and Reimbursement Obligations then
outstanding to be forthwith due and payable in whole or in part, whereupon the
principal of the Loans and Reimbursement Obligations so declared to be due and
payable, together with accrued interest thereon and any unpaid accrued Fees and
all other liabilities of Borrower accrued hereunder and under any other Loan
Document, shall become forthwith due and payable, without presentment, demand,
protest or any other notice of any kind, all of which are hereby expressly
waived by Borrower and the Guarantors, anything contained herein or in any other
Loan Document to the contrary notwithstanding; and in any event, with respect to
any Company described in paragraph (g) or (h) above, the Commitments shall
automatically terminate and the principal of the Loans
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and Reimbursement Obligations then outstanding, together with accrued interest
thereon and any unpaid accrued Fees and all other liabilities of Borrower
accrued hereunder and under any other Loan Document, shall automatically become
due and payable, without presentment, demand, protest or any other notice of any
kind, all of which are hereby expressly waived by Borrower and the Guarantors,
anything contained herein or in any other Loan Document to the contrary
notwithstanding.
ARTICLE IX
COLLATERAL ACCOUNT; APPLICATION OF COLLATERAL PROCEEDS
SECTION 9.01 COLLATERAL ACCOUNT. (a) The Collateral Agent is hereby
authorized to establish and maintain at its office at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, in the name of the Collateral Agent, a restricted
deposit account designated "Quest Cherokee Collateral Account." Each Loan Party
shall deposit into the Collateral Account from time to time (i) the cash
proceeds of any of the Collateral (including pursuant to any disposition
thereof) to the extent contemplated herein or in any other Loan Document, (ii)
the cash proceeds of any Casualty Event with respect to Collateral, to the
extent contemplated herein or in any other Loan Document, and (iii) any cash
such Loan Party is required to pledge as additional collateral security
hereunder pursuant to the Loan Documents.
(b) The balance from time to time in the Collateral Account shall
constitute part of the Collateral and shall not constitute payment of the
Obligations until applied as hereinafter provided. So long as no Event of
Default has occurred and is continuing or will result therefrom, the Collateral
Agent shall within two Business Days of receiving a request of the applicable
Loan Party for release of cash proceeds (i) from the Collateral Account
constituting Net Cash Proceeds relating to any Casualty Event or Asset Sale
remit such cash proceeds on deposit in the Collateral Account to or upon the
order of such Loan Party, so long as such Loan Party has satisfied the
conditions relating thereto set forth in Section 9.02 and (ii) with respect to
the LC Sub-Account, remit such Net Cash Proceeds on deposit in the LC
Sub-Account to or upon the order of such Loan Party (x) at such time as all
Letters of Credit shall have been terminated and all of the liabilities in
respect of the Letters of Credit have been paid in full or (y) otherwise in
accordance with Section 2.18(i). At any time following the occurrence and during
the continuance of an Event of Default, the Collateral Agent may (and, if
instructed by the Required Lenders as specified herein, shall) in its (or their)
discretion apply or cause to be applied (subject to collection) the balance from
time to time outstanding to the credit of the Collateral Account to the payment
of the Obligations in the manner specified in Section 9.03 hereof subject,
however, in the case of amounts deposited in the LC Sub-Account, to the
provisions of Sections 2.18(i) and 9.03. The Loan Parties shall have no right to
withdraw, transfer or otherwise receive any funds deposited in the Collateral
Account except to the extent specifically provided herein.
(c) Amounts on deposit in the Collateral Account shall be invested
and reinvested from time to time in Cash Equivalents as the applicable Loan
Party (or, after the occurrence and during the continuance of an Event of
Default, the Collateral Agent) shall determine by written instruction to the
Collateral Agent, or if no such instructions are given, then as the Collateral
Agent, in its sole discretion, shall determine which Cash Equivalents shall be
held in the name and be under the control of the Collateral Agent (or any
sub-agent); provided that at any time after the occurrence and during the
continuance of an Event of Default, the Collateral Agent may (and, if instructed
by the Required Lenders as specified herein, shall) in its (or their) discretion
at any time and from time to time elect to liquidate any such Cash Equivalents
and to apply or cause to be applied the proceeds thereof to the payment of the
Obligations in the manner specified in Section 9.03 hereof subject, however, in
the case of amounts deposited in the LC Sub-Account, to the provisions of
Section 2.18(i).
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(d) Amounts deposited into the Collateral Account as cover for
liabilities in respect of Letters of Credit under any provision of this
Agreement requiring such cover shall be held by the Administrative Agent in a
separate sub-account designated as the "LC Sub-Account" (the "LC SUB-ACCOUNT")
and, subject to Section 2.18(i), all amounts held in the LC Sub-Account shall
constitute collateral security to be applied in accordance with Section 2.18(i).
SECTION 9.02 PROCEEDS OF DESTRUCTION, TAKING AND COLLATERAL
DISPOSITIONS. So long as no Event of Default shall have occurred and be
continuing, in the event the applicable Loan Party elects to reinvest Net Cash
Proceeds in respect of any Asset Sale or Casualty Event in accordance with the
provisions of Sections 2.10(c) and 2.10(f) as applicable, the Collateral Agent
shall receive at least 10 days' prior notice of each request for payment and
shall not release any part of such Net Cash Proceeds, until the applicable Loan
Party has furnished to the Collateral Agent (i) an Officers' Certificate setting
forth: (A) a brief description of the reinvestment to be made, (B) the dollar
amount of the expenditures to be made, or costs incurred by such Loan Party in
connection with such reinvestment and (C) evidence that the properties acquired
in connection with such reinvestment have a fair market value at least equal to
the amount of such Net Cash Proceeds requested to be released from the
Collateral Account and (ii) all security agreements and Mortgages and other
items required by the provisions of Sections 5.11 and 5.12 to, among other
things, subject such reinvestment properties to the Lien of the Security
Documents in favor of the Collateral Agent, for its benefit and for the benefit
of the other Secured Parties.
SECTION 9.03 APPLICATION OF PROCEEDS. The proceeds received by the
Collateral Agent in respect of any sale of, collection from or other realization
upon all or any part of the Collateral pursuant to the exercise by the
Collateral Agent of its remedies shall be applied, in full or in part, together
with any other sums then held by the Collateral Agent pursuant to this
Agreement, promptly by the Collateral Agent as follows:
(a) First, to the payment of all reasonable costs and expenses,
fees, commissions and taxes of such sale, collection or other realization
including compensation to the Collateral Agent and its agents and counsel,
and all expenses, liabilities and advances made or incurred by the
Collateral Agent in connection therewith and all amounts for which the
Collateral Agent is entitled to indemnification pursuant to the provisions
of any Loan Document, together with interest on each such amount at the
highest rate then in effect under this Agreement from and after the date
such amount is due, owing or unpaid until paid in full;
(b) Second, to the payment of all other reasonable costs and
expenses of such sale, collection or other realization including
compensation to the other Secured Parties and their agents and counsel and
all costs, liabilities and advances made or incurred by the other Secured
Parties in connection therewith, together with interest on each such
amount at the highest rate then in effect under this Agreement from and
after the date such amount is due, owing or unpaid until paid in full;
(c) Third, without duplication of amounts applied pursuant to
clauses (a) and (b) above, to the indefeasible payment in full in cash,
pro rata, of interest and other amounts constituting Obligations (other
than principal and Reimbursement Obligations) in each case equally and
ratably in accordance with the respective amounts thereof then due and
owing;
(d) Fourth, to the indefeasible payment in full in cash, pro rata,
of principal amount of the Obligations (including Reimbursement
Obligations); and
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(e) Fifth, the balance, if any, to the person lawfully entitled
thereto (including the applicable Loan Party or its successors or assigns)
or as a court of competent jurisdiction may direct.
In the event that any such proceeds are insufficient to pay in full
the items described in clauses (a) through (e) of this Section 9.03, the Loan
Parties shall remain liable, jointly and severally, for any deficiency.
ARTICLE X
THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT
SECTION 10.01 APPOINTMENT. Each Lender hereby irrevocably designates
and appoints each of the Administrative Agent and the Collateral Agent as an
agent of such Lender under this Agreement and the other Loan Documents. Each
Lender irrevocably authorizes each Agent, in such capacity, through its agents
or employees, to take such actions on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to such Agent by the terms of this
Agreement and the other Loan Documents, together with such actions and powers as
are reasonably incidental thereto.
SECTION 10.02 AGENT IN ITS INDIVIDUAL CAPACITY. Each person serving
as an Agent hereunder shall have the same rights and powers in its capacity as a
Lender as any other Lender and may exercise the same as though it were not an
Agent, and such person and its Affiliates may accept deposits from, lend money
to and generally engage in any kind of business with Borrower or any Subsidiary
or other Affiliate thereof as if it were not an Agent hereunder.
SECTION 10.03 EXCULPATORY PROVISIONS. No Agent shall have any duties
or obligations except those expressly set forth in the Loan Documents. Without
limiting the generality of the foregoing, (a) no Agent shall be subject to any
fiduciary or other implied duties, regardless of whether a Default has occurred
and is continuing, (b) no Agent shall have any duty to take any discretionary
action or exercise any discretionary powers, except discretionary rights and
powers expressly contemplated by the Loan Documents that such Agent is required
to exercise in writing by the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 11.02), and (c) except as expressly set forth in the Loan
Documents, no Agent shall have any duty to disclose or shall be liable for the
failure to disclose, any information relating to Borrower or any of its
Subsidiaries that is communicated to or obtained by the bank serving as such
Agent or any of its Affiliates in any capacity. No Agent shall be liable for any
action taken or not taken by it with the consent or at the request of the
Required Lenders (or such other number or percentage of the Lenders as shall be
necessary under the circumstances as provided in Section 11.02) or in the
absence of its own gross negligence or willful misconduct. No Agent shall be
deemed to have knowledge of any Default unless and until written notice thereof
is given to such Agent by Borrower or a Lender, and no Agent shall be
responsible for or have any duty to ascertain or inquire into (i) any statement,
warranty or representation made in or in connection with any Loan Document, (ii)
the contents of any certificate, report or other document delivered thereunder
or in connection therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth in any Loan
Document, (iv) the validity, enforceability, effectiveness or genuineness of any
Loan Document or any other agreement, instrument or document or (v) the
satisfaction of any condition set forth in Article IV or elsewhere in any Loan
Document.
SECTION 10.04 RELIANCE BY AGENT. Each Agent shall be entitled to
rely upon, and shall not incur any liability for relying upon, any notice,
request, certificate, consent, statement, instrument, document or other writing
believed by it to be genuine and to have been signed or sent by a proper
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person. Each Agent also may rely upon any statement made to it orally and
believed by it to be made by a proper person, and shall not incur any liability
for relying thereon. Each Agent may consult with legal counsel (who may be
counsel for Borrower), independent accountants and other advisors selected by
it, and shall not be liable for any action taken or not taken by it in
accordance with the advice of any such counsel, accountants or advisors.
SECTION 10.05 DELEGATION OF DUTIES. Each Agent may perform any and
all its duties and exercise its rights and powers by or through any one or more
sub-agents appointed by such Agent. Each Agent and any such sub-agent may
perform any and all its duties and exercise its rights and powers through their
respective Affiliates. The exculpatory provisions of the preceding paragraphs
shall apply to any such sub-agent and to the Affiliates of each Agent and any
such sub-agent, and shall apply to their respective activities in connection
with the syndication of the credit facilities provided for herein as well as
activities as Agent.
SECTION 10.06 SUCCESSOR AGENT. Each Agent may resign as such at any
time upon at least 30 days' prior notice to the Lenders, the Issuing Bank, the
LC Facility Issuing Bank and Borrower. Upon any such resignation, the Required
Lenders shall have the right, in consultation with Borrower, to appoint a
successor Agent from among the Lenders. If no successor shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Agent gives notice of its resignation, then
the retiring Agent may, on behalf of the Lenders, the Issuing Bank and the LC
Facility Issuing Bank appoint a successor Agent, which successor shall be a
commercial banking institution organized under the laws of the United States (or
any State thereof) or a United States branch or agency of a commercial banking
institution, in each case, having combined capital and surplus of at least
$250.0 million; provided that if such retiring Agent is unable to find a
commercial banking institution which is willing to accept such appointment and
which meets the qualifications set forth above, the retiring Agent's resignation
shall nevertheless thereupon become effective, and the Lenders shall assume and
perform all of the duties of the Agent hereunder until such time, if any, as the
Required Lenders appoint a successor Agent.
Upon the acceptance of its appointment as an Agent hereunder by a
successor, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder. The fees
payable by Borrower to a successor Agent shall be the same as those payable to
its predecessor unless otherwise agreed between Borrower and such successor.
After an Agent's resignation hereunder, the provisions of this Article X and
Section 11.03 shall continue in effect for the benefit of such retiring Agent,
its sub-agents and their respective Affiliates in respect of any actions taken
or omitted to be taken by any of them while it was acting as Agent.
SECTION 10.07 NON-RELIANCE ON AGENT AND OTHER LENDERS. Each Lender
acknowledges that it has, independently and without reliance upon any Agent or
any other Lender and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon any Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan Document or related agreement or any document furnished hereunder
or thereunder.
SECTION 10.08 NAME AGENTS. The parties hereto acknowledge that the
Documentation Agent and the Syndication Agent hold such titles in name only, and
that such titles confer no additional rights or obligations relative to those
conferred on any Lender hereunder.
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SECTION 10.09 INDEMNIFICATION. The Lenders severally agree to
indemnify each Agent in its capacity as such (to the extent not reimbursed by
Borrower or the Guarantors and without limiting the obligation of Borrower or
the Guarantors to do so), ratably according to their respective outstanding
Loans and Commitments in effect on the date on which indemnification is sought
under this Section 10.09 (or, if indemnification is sought after the date upon
which all Commitments shall have terminated and the Loans and Reimbursement
Obligations shall have been paid in full, ratably in accordance with such
outstanding Loans and Commitments as in effect immediately prior to such date),
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind whatsoever that may at any time (whether before or after the payment of the
Loans and Reimbursement Obligations) be imposed on, incurred by or asserted
against such Agent in any way relating to or arising out of, the Commitments,
this Agreement, any of the other Loan Documents or any documents contemplated by
or referred to herein or therein or the transactions contemplated hereby or
thereby or any action taken or omitted by such Agent under or in connection with
any of the foregoing; provided that no Lender shall be liable for the payment of
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements that are found by a
final and nonappealable decision of a court of competent jurisdiction to have
resulted from such Agent's gross negligence or willful misconduct. The
agreements in this Section shall survive the payment of the Loans and all other
amounts payable hereunder.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01 NOTICES. Notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed by certified or registered mail or sent by telecopy, as follows:
(a) if to any Loan Party, to Borrower at:
Quest Cherokee, LLC
▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇., ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇;
(b) if to the Administrative Agent or the Collateral Agent, to it
at:
UBS AG, Stamford Branch
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇;
(c) if to a Lender, to it at its address (or telecopy number) set
forth on the applicable Lender Addendum or in the Assignment and
Assumption pursuant to which such Lender shall have become a party hereto;
and
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(d) if to the Swingline Lender, to it at:
UBS Loan Finance LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service or sent by
telecopy or by certified or registered mail, in each case delivered, sent or
mailed (properly addressed) to such party as provided in this Section 11.01 or
in accordance with the latest unrevoked direction from such party given in
accordance with this Section 11.01, and failure to deliver courtesy copies of
notices and other communications shall in no event affect the validity or
effectiveness of such notices and other communications.
SECTION 11.02 WAIVERS; AMENDMENT. (a) No failure or delay by any
Agent, the Issuing Bank, the LC Facility Issuing Bank or any Lender in
exercising any right or power hereunder or under any other Loan Document shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment or discontinuance of steps to enforce
such a right or power, preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and remedies of each Agent, the
Issuing Bank, the LC Facility Issuing Bank and the Lenders hereunder and under
the other Loan Documents are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provision of any Loan
Document or consent to any departure by any Loan Party therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b) of this
Section, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. Without limiting the generality of
the foregoing, the making of a Loan, the funding of an LC Facility Deposit or
issuance of a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether any Agent, any Lender, the Issuing Bank or the LC
Facility Issuing Bank may have had notice or knowledge of such Default at the
time.
(b) Except as provided in paragraphs (c) and (d) below, neither this
Agreement nor any other Loan Document nor any provision hereof or thereof may be
waived, amended, supplemented or modified except, in the case of this Agreement,
pursuant to an agreement or agreements in writing entered into by Borrower and
the Required Lenders or, in the case of any other Loan Document, pursuant to an
agreement or agreements in writing entered into by the Administrative Agent, the
Collateral Agent (in the case of any Security Document) and the Loan Party or
Loan Parties that are parties thereto, in each case with the written consent of
the Required Lenders; provided that no such agreement shall:
(i) increase the Commitment of any Lender without the written
consent of such Lender; reduce the principal amount or premium of any Loan
or LC Disbursement or reduce the rate of interest thereon, or reduce any
Fees payable hereunder, or change the currency of payment of any
Obligation, without the written consent of each Lender affected thereby;
(ii) postpone or extend the maturity of any Loan, or any scheduled
date of payment of or the installment otherwise due on the principal
amount of any Term B Loan under Section 2.09, or the required date of
payment of any Reimbursement Obligation, or the date on which the LC
Facility Deposits are required to be returned to the LC Facility Lenders
or any date for the payment of any interest or fees payable hereunder, or
reduce the amount of, waive or excuse any such payment, or postpone the
scheduled date of expiration of any Commitment or postpone the scheduled
date of expiration of any Letter of Credit beyond the Revolving Maturity
Date or the
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LC Facility Maturity Date, as applicable, without the written consent of
each Lender affected thereby;
(iii) change Section 2.14(b) or (c) in a manner that would alter the
pro rata sharing of payments or setoffs required thereby, without the
written consent of each Lender;
(iv) change the percentage set forth in the definition of "Required
Lenders" or any other provision of any Loan Document (including this
Section) specifying the number or percentage of Lenders (or Lenders of any
Class) required to waive, amend or modify any rights thereunder or make
any determination or grant any consent thereunder, without the written
consent of each Lender (or each Lender of such Class, as the case may be);
(v) release any Guarantor from its Guarantee (except as expressly
provided in Article VII), or limit its liability in respect of such
Guarantee, without the written consent of each Lender;
(vi) release all or a substantial portion of the Collateral from the
Liens of the Security Documents or alter the relative priorities of the
Obligations entitled to the Liens of the Security Documents (except in
connection with securing additional Obligations equally and ratably with
the other Obligations), in each case without the written consent of each
Lender;
(vii) change any provisions of any Loan Document in a manner that by
its terms adversely affects the rights in respect of payments due to
Lenders holding Loans of any Class differently than those holding Loans of
any other Class, without the written consent of Lenders holding a majority
in interest of the outstanding Loans and unused Commitments of each
affected Class; or
(viii) without the consent of the Required Lenders and Term B
Lenders holding more than 50% of the principal amount of the outstanding
Term B Loans, change the order of application of prepayments among Term B
Loans and Revolving Commitments under Section 2.10(h) or change the
application of prepayments of Term B Loans set forth in Section 2.10(h) to
the remaining scheduled amortization payments to be made thereon under
Section 2.09;
provided, further, that (1) no such agreement shall amend, modify or otherwise
affect the rights or duties of the Administrative Agent, the Collateral Agent,
the Issuing Bank, the LC Facility Issuing Bank or the Swingline Lender without
the prior written consent of the Administrative Agent, the Issuing Bank, the LC
Facility Issuing Bank or the Swingline Lender, as the case may be, (2) any
waiver, amendment or modification of this Agreement that by its terms affects
the rights or duties under this Agreement of the Revolving Lenders (but not the
Term B Lenders) or the Term B Lenders (but not the Revolving Lenders) may be
effected by an agreement or agreements in writing entered into by Borrower and
requisite percentage in interest of the affected Class of Lenders that would be
required to consent thereto under this Section if such Class of Lenders were the
only Class of Lenders hereunder at the time and (3) any waiver, amendment or
modification prior to the achievement of a Successful Syndication may not be
effected without the written consent of the Arranger. Notwithstanding the
foregoing, any provision of this Agreement may be amended by an agreement in
writing entered into by Borrower, the Required Lenders and the Administrative
Agent (and, if their rights or obligations are affected thereby, the Issuing
Bank, the LC Facility Issuing Bank and the Swingline Lender) if (x) by the terms
of such agreement the Commitment of each Lender not consenting to the amendment
provided for therein shall terminate upon the effectiveness of such amendment
and (y) at the time such amendment becomes effective, each Lender not consenting
thereto receives payment in full of the principal of, premium, if any, and
interest accrued on each Loan made by it and all other amounts owing to it or
accrued for its account under this Agreement.
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(c) If, in connection with any proposed change, waiver, discharge or
termination of the provisions of this Agreement as contemplated by Section
11.02(b) (other than clause (iii) of such Section), the consent of the
Supermajority Lenders is obtained but the consent of one or more of such other
Lenders whose consent is required is not obtained, then Borrower shall have the
right to replace all, but not less than all, of such non-consenting Lender or
Lenders (so long as all non-consenting Lenders are so replaced) with one or more
persons pursuant to Section 2.16 so long as at the time of such replacement each
such new Lender consents to the proposed change, waiver, discharge or
termination; provided, however, that Borrower shall not have the right to
replace a Lender solely as a result of the exercise of such Lender's rights (and
the withholding of any required consent by such Lender) pursuant to clause (iii)
of Section 11.02(b).
SECTION 11.03 EXPENSES; INDEMNITY. (a) The Loan Parties agree,
jointly and severally, to pay, promptly upon demand:
(i) all reasonable costs and expenses incurred by the Arranger, the
Administrative Agent, the Collateral Agent, the Swingline Lender, the
Issuing Bank and the LC Facility Issuing Bank, including the reasonable
fees, charges and disbursements of Advisors for the Arranger, the
Administrative Agent, the Collateral Agent, the Swingline Lender, the
Issuing Bank and the LC Facility Issuing Bank in connection with the
syndication of the Loans, the LC Facility Deposits and Commitments, the
preparation, execution and delivery of the Loan Documents, the
administration of the Loans, the LC Facility Deposits and Commitments, the
perfection and maintenance of the Liens securing the Collateral and any
actual or proposed amendment, supplement or waiver of any of the Loan
Documents (whether or not the transactions contemplated hereby or thereby
shall be consummated);
(ii) all costs and expenses incurred by the Administrative Agent or
the Collateral Agent, including the reasonable fees, charges and
disbursements of Advisors for the Administrative Agent and the Collateral
Agent, in connection with any action, suit or other proceeding affecting
the Collateral or any part thereof, in which action, suit or proceeding
the Administrative Agent or the Collateral Agent is made a party or
participates or in which the right to use the Collateral or any part
thereof is threatened, or in which it becomes necessary in the judgment of
the Administrative Agent or the Collateral Agent to defend or uphold the
Liens granted by the Security Documents (including any action, suit or
proceeding to establish or uphold the compliance of the Collateral with
any Requirements of Law);
(iii) all costs and expenses incurred by the Arranger, the
Administrative Agent, the Collateral Agent, the Swingline Lender, the
Issuing Bank, the LC Facility Issuing Bank or any Lender, including the
reasonable fees, charges and disbursements of Advisors for the Arranger,
the Administrative Agent, the Collateral Agent, the Swingline Lender, the
Issuing Bank, the LC Facility Issuing Bank or any Lender, incurred in
connection with the enforcement or protection of its rights under the Loan
Documents, including its rights under this Section 11.03(a), or in
connection with the Loans made, the LC Facility Deposit funded or Letters
of Credit issued hereunder and the collection of the Obligations,
including all such costs and expenses incurred during any workout,
restructuring or negotiations in respect of the Obligations; and
(iv) all documentary and similar taxes and charges in respect of the
Loan Documents.
For purposes of this Section 11.03(a), "ADVISORS" shall mean legal counsel
(including local counsel), auditors, accountants, consultants, appraisers or
other advisors; provided that (x) in the case of clause (i), the engagement of
any Advisors other than legal counsel (including local counsel) shall be subject
to approval by Borrower (which approval shall not be unreasonably withheld) and
(y) in the case of clause
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(iii), the engagement of any Advisors other than one firm of legal counsel by
any Lender shall be subject to approval by the Administrative Agent.
(b) The Loan Parties agree, jointly and severally, to indemnify the
Agents, each Lender, the Issuing Bank, the LC Facility Issuing Bank and the
Swingline Lender, each Affiliate of any of the foregoing persons and each of
their respective partners, controlling persons, directors, officers, trustees,
employees and agents (each such person being called an "INDEMNITEE") against,
and to hold each Indemnitee harmless from, all reasonable out-of-pocket costs
and any and all losses, claims, damages, liabilities (including, but not limited
to, environmental liabilities), penalties, judgments, suits and related
expenses, including reasonable counsel fees, charges and disbursements, incurred
by or asserted against any Indemnitee arising out of, in any way connected with,
or as a result of (i) the execution, delivery, performance, administration or
enforcement of the Loan Documents, (ii) any actual or proposed use of the
proceeds of the Loans or issuance of Letters of Credit, (iii) any claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether or not any Indemnitee is a party thereto, or (iv) any actual or alleged
presence or Release or threatened Release of Hazardous Materials, on, at, under
or from any property owned, leased or operated by any Company at any time, or
any Environmental Claim related in any way to any Company; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted primarily from the gross negligence or willful misconduct of such
Indemnitee.
(c) The provisions of this Section 11.03 shall remain operative and
in full force and effect regardless of the expiration of the term of this
Agreement, the consummation of the transactions contemplated hereby, the
repayment of the Loans and Reimbursement Obligations, the release of all or any
portion of the Collateral, the expiration of the Commitments, the expiration of
any Letter of Credit, the invalidity or unenforceability of any term or
provision of this Agreement or any other Loan Document, or any investigation
made by or on behalf of the Agents, the Issuing Bank, the LC Facility Issuing
Bank or any Lender. All amounts due under this Section 11.03 shall be payable on
written demand therefor accompanied by reasonable documentation with respect to
any reimbursement, indemnification or other amount requested.
(d) To the extent that Borrower fails to promptly pay any amount
required to be paid by it to the Agents, the Issuing Bank, the LC Facility
Issuing Bank or the Swingline Lender under paragraph (a) or (b) of this Section,
each Lender severally agrees to pay to the Agents, the Issuing Bank, the LC
Facility Issuing Bank or the Swingline Lender, as the case may be, such Lender's
pro rata share (determined as of the time that the applicable unreimbursed
expense or indemnity payment is sought) of such unpaid amount; provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against any of the
Agents, the Issuing Bank, the LC Facility Issuing Bank or the Swingline Lender
in its capacity as such. For purposes hereof, a Lender's "pro rata share" shall
be determined based upon its share of the sum of the total Revolving Exposure,
the LC Facility LC Exposure, outstanding Term B Loans and unused Commitments at
the time.
SECTION 11.04 SUCCESSORS AND ASSIGNS. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby (including any
Affiliate of the Issuing Bank or LC Facility Issuing Bank, as applicable, that
issues any Letter of Credit), except that Borrower may not assign or otherwise
transfer any of its rights or obligations hereunder without the prior written
consent of the Administrative Agent, the Collateral Agent, the Issuing Bank, the
LC Facility Issuing Bank, the Swingline Lender and each Lender (and any
attempted assignment or transfer by Borrower without such consent shall be null
and void). Nothing in this Agreement, express or implied, shall be construed to
confer upon any person (other than the parties hereto, their respective
successors and assigns permitted hereby (including any Affiliate of the Issuing
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Bank or LC Facility Issuing Bank, as applicable, that issues any Letter of
Credit) and, to the extent expressly contemplated hereby, the other Indemnitees)
any legal or equitable right, remedy or claim under or by reason of this
Agreement.
(b) Any Lender shall have the right at any time to assign to an
Eligible Assignee all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment, LC Facility Deposit,
and the Loans at the time owing to it); provided that (i) except in the case of
an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, or an
assignment of the entire remaining amount of the assigning Lender's Commitment,
LC Facility Deposit, or Loans, the amount of the Commitment, LC Facility
Deposit, or Loans of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Assumption with respect to such
assignment is delivered to the Administrative Agent) shall not be less than $1.0
million unless each of Borrower and the Administrative Agent otherwise consents,
(ii) each partial assignment shall be made as an assignment of a proportionate
part of all the assigning Lender's rights and obligations under this Agreement,
except that this clause (ii) shall not be construed to prohibit the assignment
of a proportionate part of all the assigning Lender's rights and obligations in
respect of one Class of Commitments, LC Facility Deposits or Loans, (iii) the
parties to each assignment shall execute and deliver to the Administrative Agent
an Assignment and Assumption, together with a processing and recordation fee of
$3,500, and (iv) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire. Subject to acceptance and
recording thereof pursuant to paragraph (d) of this Section, from and after the
effective date specified in each Assignment and Assumption the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned
by such Assignment and Assumption, have the rights and obligations of a Lender
under this Agreement (provided that any liability of Borrower to such assignee
under Section 2.12, 2.13 or 2.15 shall be limited to the amount, if any, that
would have been payable thereunder by Borrower in the absence of such
assignment, except to the extent any such amounts are attributable to a Change
in Law occurring after the date of such assignment), and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Sections 2.12,
2.13, 2.15 and 11.03 and subject to the obligations of Section 2.16).
(c) The Administrative Agent, acting for this purpose as an agent of
Borrower, shall maintain at one of its offices a copy of each Assignment and
Assumption delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitment of, and principal amount of the
Loans, LC Facility Deposits and LC Disbursements owing to, each Lender pursuant
to the terms hereof from time to time (the "REGISTER"). The entries in the
Register shall be conclusive in the absence of manifest error, and Borrower, the
Administrative Agent, the Issuing Bank, the LC Facility Issuing Bank and the
Lenders may treat each person whose name is recorded in the Register pursuant to
the terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by Borrower, the Issuing Bank, the LC Facility Issuing Bank, the
Collateral Agent, the Swingline Lender and any Lender (with respect to its own
interest only), at any reasonable time and from time to time upon reasonable
prior notice.
(d) Upon its receipt of a duly completed Assignment and Assumption
executed by an assigning Lender and an assignee, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by paragraph
(b) of this Section, the Administrative Agent shall accept such Assignment and
Assumption and record the information contained therein in the Register. No
assignment shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this paragraph.
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(e) Any Lender shall have the right at any time, without the consent
of Borrower, the Administrative Agent, the Issuing Bank, the LC Facility Issuing
Bank or the Swingline Lender, to sell participations to one or more banks or
other entities (a "PARTICIPANT") in all or a portion of such Lender's rights and
obligations under this Agreement (including all or a portion of its Commitment,
LC Facility Deposits and the Loans owing to it); provided 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 and (iii) Borrower, the Administrative Agent, the Issuing Bank,
the LC Facility Issuing Bank and the other Lenders shall continue to deal solely
and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce the Loan Documents and to approve any amendment,
modification or waiver of any provision of the Loan Documents; provided that
such agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
described in clause (i), (ii) or (iii) of the first proviso to Section 11.02(b)
that affects such Participant. Subject to paragraph (f) of this Section,
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.12, 2.13 and 2.15 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this Section,
but only if such participant agrees to comply with Section 2.16 as if it was a
Lender. To the extent permitted by law, each Participant also shall be entitled
to the benefits of Section 11.08 as though it were a Lender; provided that such
Participant agrees in writing to be subject to Section 2.14(c) as though it were
a Lender. Each Lender shall, acting for this purpose as an agent of Borrower,
maintain at one of its offices a register for the recordation of the names and
addresses of its Participants, and the amount and terms of its participations;
provided that no Lender shall be required to disclose or share the information
contained in such register with Borrower or any other party, except as required
by applicable law.
(f) A Participant shall not be entitled to receive any greater
payment under Section 2.12, 2.13 or 2.15 than the applicable Lender would have
been entitled to receive with respect to the participation sold to such
Participant, (i) unless the sale of the participation to such Participant is
made with the prior written consent of Borrower (which consent shall not be
unreasonably withheld or delayed) or (ii) except to the extent such entitlement
to a greater payment results from a Change in Law after such Participant became
a Participant. A Participant that would be a Foreign Lender if it were a Lender
shall not be entitled to the benefits of Section 2.15 unless Borrower is
notified of the participation sold to such Participant and such Participant
agrees, for the benefit of Borrower, to comply with Sections 2.15(e) and (f) as
though it were a Lender.
(g) Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement to secure obligations
of such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or assignment of
a security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or assignee for such Lender as a party hereto. In
the case of any Lender that is a fund that invests in bank loans, such Lender
may, without the consent of Borrower or the Administrative Agent, collaterally
assign or pledge all or any portion of its rights under this Agreement,
including the Loans and Notes or any other instrument evidencing its rights as a
Lender under this Agreement, to any holder of, trustee for, or any other
representative of holders of, obligations owed or securities issued, by such
fund, as security for such obligations or securities.
SECTION 11.05 SURVIVAL OF AGREEMENT. All covenants, agreements,
representations and warranties made by the Loan Parties in the Loan Documents
and in the certificates or other instruments delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the other parties hereto and shall survive the
execution and de-
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livery of the Loan Documents and the making of any Loans and issuance of any
Letters of Credit, regardless of any investigation made by any such other party
or on its behalf and notwithstanding that the Agents, the Issuing Bank, the LC
Facility Issuing Bank or any Lender may have had notice or knowledge of any
Default or incorrect representation or warranty at the time any credit is
extended hereunder, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or any fee or any other amount
payable under this Agreement is outstanding and unpaid or any Letter of Credit
is outstanding and so long as the Commitments have not expired or terminated.
The provisions of Sections 2.12, 2.14, 2.15, 2.16 and 11.03 and Article X shall
survive and remain in full force and effect regardless of the consummation of
the transactions contemplated hereby, the repayment of the Loans, the payment of
the Reimbursement Obligations, the expiration or termination of the Letters of
Credit and the Commitments or the termination of this Agreement or any provision
hereof.
SECTION 11.06 COUNTERPARTS; INTEGRATION; EFFECTIVENESS. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement,
the other Loan Documents and the Fee Letter constitute the entire contract among
the parties relating to the subject matter hereof and supersede any and all
previous agreements and understandings, oral or written, relating to the subject
matter hereof. This Agreement shall become effective when it shall have been
executed by the Administrative Agent and when the Administrative Agent shall
have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an executed counterpart of a signature page
of this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 11.07 SEVERABILITY. Any provision of this Agreement held to
be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 11.08 RIGHT OF SETOFF. If an Event of Default shall have
occurred and be continuing, each Lender and each of its Affiliates are hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other obligations at any time
owing by such Lender or Affiliate to or for the credit or the account of
Borrower against any and all of the obligations of Borrower now or hereafter
existing under this Agreement held by such Lender, irrespective of whether or
not such Lender shall have made any demand under this Agreement and although
such obligations may be unmatured. The rights of each Lender under this Section
are in addition to other rights and remedies (including other rights of setoff)
which such Lender may have.
SECTION 11.09 GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF
PROCESS. (a) This Agreement shall be construed in accordance with and governed
by the law of the State of New York, without regard to conflicts of law
principles that would require the application of the laws of another
jurisdiction.
(b) Each Loan Party hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of the Supreme
Court of the State of New York sitting in New York County and of the United
States District Court of the Southern District of New York, and any appellate
court from any thereof, in any action or proceeding arising out of or relating
to any Loan Document, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be heard
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and determined in such New York State or, to the extent permitted by law, in
such federal 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 law.
Nothing in this Agreement or any other Loan Document shall affect any right that
the Administrative Agent, the Issuing Bank, the LC Facility Issuing Bank or any
Lender may otherwise have to bring any action or proceeding relating to this
Agreement or any other Loan Document against any Loan Party or its properties in
the courts of any jurisdiction.
(c) Each Loan Party hereby irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection which
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any other Loan
Document in any court referred to in Section 11.09(b). Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.
(d) Each party to this Agreement irrevocably consents to service of
process in any action or proceeding arising out of or relating to any Loan
Document, in the manner provided for notices (other than telecopy) in Section
11.01. Nothing in this Agreement or any other Loan Document will affect the
right of any party to this Agreement to serve process in any other manner
permitted by applicable law.
SECTION 11.10 WAIVER OF JURY TRIAL. Each party hereto hereby waives,
to the fullest extent permitted by applicable law, any right it may have to a
trial by jury in any legal proceeding directly or indirectly arising out of or
relating to this Agreement, any other Loan Document or the transactions
contemplated hereby (whether based on contract, tort or any other theory). Each
party hereto (a) certifies that no representative, agent or attorney of any
other party has represented, expressly or otherwise, that such other party would
not, in the event of litigation, seek to enforce the foregoing waiver and (b)
acknowledges that it and the other parties hereto have been induced to enter
into this Agreement by, among other things, the mutual waivers and
certifications in this Section.
SECTION 11.11 HEADINGS. Article and Section headings and the Table
of Contents used herein are for convenience of reference only, are not part of
this Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 11.12 CONFIDENTIALITY. Each of the Administrative Agent, the
Issuing Bank, the LC Facility Issuing Bank and the Lenders agrees to maintain
the confidentiality of the Information (as defined below), except that
Information may be disclosed (a) to its and its Affiliates' and affiliated
Approved Fund's directors, officers, employees and agents, including
accountants, legal counsel and other advisors (it being understood that the
persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information confidential
pursuant to the terms hereof), (b) to the extent requested by any regulatory
authority, (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process, (d) to any other party to this Agreement,
(e) in connection with the exercise of any remedies hereunder or any suit,
action or proceeding relating to this Agreement or any other Loan Document or
the enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section 11.12, to
(i) any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement, (ii) any
actual or prospective counterparty (or its advisors) to any swap or derivative
transaction relating to Borrower and its obligations or (iii) any rating agency
for the purpose of obtaining a credit rating applicable to any Loan or Loan
Party, (g) with the consent of Borrower or (h) to the extent such Information
(i) is publicly available at the time of disclosure or becomes publicly
available other than as a result of a breach of this Section or (ii) becomes
available to the Admin-
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istrative Agent, the Issuing Bank, the LC Facility Issuing Bank or any Lender on
a nonconfidential basis from a source other than Borrower or any Subsidiary. For
the purposes of this Section, "INFORMATION" means all information received from
Borrower or any Subsidiary relating to Borrower or any Subsidiary or its
business that is clearly identified at the time of delivery as confidential,
other than any such information that is available to the Administrative Agent,
the Issuing Bank, the LC Facility Issuing Bank or any Lender on a
nonconfidential basis prior to disclosure by Borrower or any Subsidiary. Any
person required to maintain the confidentiality of Information as provided in
this Section shall be considered to have complied with its obligation to do so
if such person has exercised the same degree of care to maintain the
confidentiality of such Information as such person would accord to its own
confidential information.
SECTION 11.13 INTEREST RATE LIMITATION. Notwithstanding anything
herein to the contrary, if at any time the interest rate applicable to any Loan,
together with all fees, charges and other amounts which are treated as interest
on such Loan under applicable law (collectively, the "CHARGES"), shall exceed
the maximum lawful rate (the "MAXIMUM RATE") which may be contracted for,
charged, taken, received or reserved by the Lender holding such Loan in
accordance with applicable law, the rate of interest payable in respect of such
Loan hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Loan but were not payable as a
result of the operation of this Section shall be cumulated and the interest and
Charges payable to such Lender in respect of other Loans or periods shall be
increased (but not above the Maximum Rate therefor) until such cumulated amount,
together with interest thereon at the Federal Funds Effective Rate to the date
of repayment, shall have been received by such Lender.
SECTION 11.14 LENDER ADDENDUM. Each Lender to become a party to this
Agreement on the date hereof shall do so by delivering to the Administrative
Agent a Lender Addendum duly executed by such Lender, Borrower and the
Administrative Agent.
SECTION 11.15 OBLIGATIONS ABSOLUTE. To the fullest extent permitted
by applicable law, all obligations of the Loan Parties hereunder shall be
absolute and unconditional irrespective of:
(a) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of any Loan Party;
(b) any lack of validity or enforceability of any Loan Document or
any other agreement or instrument relating thereto against any Loan Party;
(c) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations, or any other amendment or
waiver of or any consent to any departure from any Loan Document or any
other agreement or instrument relating thereto;
(d) any exchange, release or non-perfection of any other Collateral,
or any release or amendment or waiver of or consent to any departure from
any guarantee, for all or any of the Obligations;
(e) any exercise or non-exercise, or any waiver of any right,
remedy, power or privilege under or in respect hereof or any Loan
Document; or
(f) any other circumstances which might otherwise constitute a
defense available to, or a discharge of, the Loan Parties.
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[Signature Pages Follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
QUEST CHEROKEE, LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Manager
BLUESTEM PIPELINE, LLC
by Quest Cherokee, LLC, its sole member
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Manager
UBS SECURITIES LLC, as Arranger, Syndication
Agent and Documentation Agent
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Director
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇
Title: Director
S-1
UBS AG, STAMFORD BRANCH, as Issuing Bank, LC
Facility Issuing Bank, Administrative Agent
and Collateral Agent
By: /s/ ▇▇▇▇▇▇▇ ▇. SAINT
------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. Saint
Title: Director Banking Products Services, U.S.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Associate Director Banking Products
Services, U.S.
UBS LOAN FINANCE LLC, as Swingline Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. SAINT
------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. Saint
Title: Director Banking Products Services, U.S.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Associate Director Banking Products
Services, U.S.
S-2
ANNEX I
AMORTIZATION TABLE
DATE TERM B LOAN AMOUNT
------------------ ------------------
December 31, 2004 $ 300,000
March 31, 2005 $ 300,000
June 30, 2005 $ 300,000
September 30, 2005 $ 300,000
December 31, 2005 $ 300,000
March 31, 2006 $ 300,000
June 30, 2006 $ 300,000
September 30, 2006 $ 300,000
December 31, 2006 $ 300,000
March 31, 2007 $ 300,000
June 30, 2007 $ 300,000
September 30, 2007 $ 300,000
December 31, 2007 $ 300,000
March 31, 2008 $ 300,000
June 30, 2008 $ 300,000
September 30, 2008 $ 300,000
December 31, 2008 $ 300,000
March 31, 2009 $ 300,000
June 30, 2009 $ 300,000
September 30, 2009 $ 300,000
December 31, 2009 $ 300,000
March 31, 2010 $ 300,000
June 30, 2010 $113,400,000
Total $120,000,000
EXHIBIT A
[Form of]
ADMINISTRATIVE QUESTIONNAIRE
ADMINISTRATIVE QUESTIONNAIRE -- QUEST CHEROKEE, LLC
LENDING INSTITUTION: ___________________________________________________________
Name for Signature Pages: ______________________________________________________
Will sign Credit Agreement: [ ]
Will come via Assignment: [ ] Number of Days post-closing: __________
Name for Signature Blocks: _____________________________________________________
Name for Publicity: _____________________________________________________
Address: _____________________________________________________
Main Telephone: ______________________________________________
Telex No./Answer back: ______________________________________________
CONTACT-Credit Name: _________________________________________________
Address: _________________________________________________
Telephone: _________________________________________________
Fax: _________________________________________________
CONTACT-Operations Name: _________________________________________________
Address: _________________________________________________
Telephone: _________________________________________________
Fax: _________________________________________________
PAYMENT INSTRUCTIONS
Bank Name: ______________________________________________________
ABA/Routing No.: ______________________________________________________
Account Name: ______________________________________________________
Account No.: ______________________________________________________
For further credit: ______________________________________________________
Account No.: ______________________________________________________
Attention: ______________________________________________________
Reference: ______________________________________________________
UBS AG, STAMFORD BRANCH, ADMINISTRATIVE DETAILS
UBS AG, Stamford Branch Account Administrator Secondary Contact
--------------------- -----------------
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Attn: [ ] Attn: [ ]
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Tel: [ ] Tel: [ ]
Main Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: [ ] Fax: [ ]
Wire Instructions: The Agent's wire instructions will be disclosed at the time
of closing.
A-1
EXHIBIT B
[Form of]
ASSIGNMENT AND ASSUMPTION
This Assignment and Assumption (the "ASSIGNMENT AND
ASSUMPTION") is dated as of the Effective Date set forth below and is entered
into by and between [Insert name of Assignor] (the "Assignor") and [Insert name
of Assignee] (the "ASSIGNEE"). Capitalized terms used but not defined herein
shall have the meanings given to them in the Credit Agreement identified below
(as amended, the "Credit Agreement"), receipt of a copy of which is hereby
acknowledged by the Assignee. The Standard Terms and Conditions set forth in
Annex 1 attached hereto are hereby agreed to and incorporated herein by
reference and made a part of this Assignment and Assumption as if set forth
herein in full.
For an agreed consideration, the Assignor hereby irrevocably
sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases
and assumes from the Assignor, subject to and in accordance with the Standard
Terms and Conditions and the Credit Agreement, as of the Effective Date inserted
by the Administrative Agent as contemplated below, (i) all of the Assignor's
rights and obligations in its capacity as a Lender under the Credit Agreement
and any other documents or instruments delivered pursuant thereto to the extent
related to the amount and percentage interest identified below of all of such
outstanding rights and obligations of the Assignor under the respective
facilities identified below (including participations in any Letters of Credit
and Swingline Loans included in such facilities) and (ii) to the extent
permitted to be assigned under applicable law, all claims, suits, causes of
action and any other right of the Assignor (in its capacity as a Lender) against
any person, whether known or unknown, arising under or in connection with the
Credit Agreement, any other documents or instruments delivered pursuant thereto
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 (the rights and obligations sold and assigned pursuant to
clauses (i) and (ii) above being referred to herein collectively as, the
"ASSIGNED INTEREST"). Such sale and assignment is without recourse to the
Assignor and, except as expressly provided in this Assignment and Assumption,
without representation or warranty by the Assignor.
1. Assignor: ______________________________
2. Assignee: ______________________________
[and is an Affiliate/Approved Fund of
[identify Lender]1]
3. Borrower(s): ______________________________
4. Administrative Agent: UBS AG, Stamford Branch, as the administrative
agent under the Credit Agreement
5. Credit Agreement: The Credit Agreement dated as of July [ ], 2004 (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the "CREDIT AGREEMENT") among QUEST CHEROKEE, LLC, a Delaware limited
liability company ("BORROWER"), the Guarantors (such term and each other
capitalized term used but not defined herein having the meaning given it in
Article I
__________________________________
(1) Select as applicable.
B-1
of the Credit Agreement), the Lenders, UBS SECURITIES LLC, as lead arranger (in
such capacity, "ARRANGER"), documentation agent (in such capacity,
"DOCUMENTATION AGENT") and syndication agent (in such capacity, "SYNDICATION
AGENT"), UBS LOAN FINANCE LLC, as swingline lender (in such capacity, "SWINGLINE
LENDER"), and UBS AG, STAMFORD BRANCH, as administrative agent (in such
capacity, "ADMINISTRATIVE AGENT") for the Lenders, collateral agent (in such
capacity, "COLLATERAL AGENT") for the Secured Parties and Issuing Bank.
6. Assigned Interest:
Facility Assigned Aggregate Amount of Amount of Percentage Assigned
Commitment/Loans for Commitment/ of Commitment/
all Lenders Loans Assigned Loans(2)
----------- -------------- --------
Term B Loan $ $ %
Revolving Loans $ $ %
L/C Facility Letter of $ $ %
Credit
[Page break]
_______________________________
(2) Set forth, to at least 9 decimals, as a percentage of the
Commitment/Loans of all Lenders thereunder.
B-2
Effective Date: _____________ ___, 20___ [TO BE INSERTED BY ADMINISTRATIVE AGENT
AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]3
The terms set forth in this Assignment and Assumption are hereby agreed to:
ASSIGNOR
[NAME OF ASSIGNOR]
By:
-----------------------------------
Title:
ASSIGNEE
[NAME OF ASSIGNEE]
By:
-----------------------------------
Title:
Consented to and Accepted:
QUEST CHEROKEE, LLC(4)
By:
----------------------------------------------
Name:
Title:
UBS AG, STAMFORD BRANCH,
as Administrative Agent and Issuing Bank(5)
By:
----------------------------------------------
Name:
Title:
By:
----------------------------------------------
Name:
Title:
_________________________________
(3) This date may not be fewer than 5 Business days after the date of
assignment unless the Administrative Agent otherwise agrees.
(4) To be included to the extent consent is required under Section
11.04(b).
(5) Reference to Issuing Bank required for an assignment of Revolving
Commitments or LC Facility Commitments.
B-3
UBS LOAN FINANCE, LLC
as Swingline Lender
By:
----------------------------------------------
Name:
Title:
By:
----------------------------------------------
Name:
Title:
___________________________
(6) Reference to Swingline Lender required for an assignment of Revolving
Commitments.
B-4
ANNEX 1 to Assignment and Assumption
QUEST CHEROKEE, LLC
CREDIT AGREEMENT
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1. Representations and Warranties.
1.1 Assignor. The Assignor (a) represents and warrants that (i) it is
the legal and beneficial owner of the Assigned Interest, (ii) the Assigned
Interest is free and clear of any lien, encumbrance or other adverse claim and
(iii) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby; and (b) assumes no responsibility with respect
to (i) any statements, warranties or representations made in or in connection
with the Credit Agreement or any other Loan Document, (ii) the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the
Loan Documents or any collateral thereunder, (iii) the financial condition of
each of the Borrowers, any of their Subsidiaries or Affiliates or any other
person obligated in respect of any Loan Document or (iv) the performance or
observance by any of Subsidiaries or Affiliates or any other person of any of
their respective obligations under any Loan Document.
1.2. Assignee. The Assignee (a) represents and warrants that (i) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement, (ii) it
meets all requirements of an Eligible Assignee under the Credit Agreement
(subject to receipt of such consents as may be required under the Credit
Agreement), (iii) 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 Assigned Interest, shall have the obligations of a Lender thereunder, (iv)
it has received a copy of the Credit Agreement, together with copies of the most
recent financial statements delivered pursuant to Sections 4.01(e) or 5.01
thereof, as applicable, and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Assumption and to purchase the Assigned Interest on the
basis of which it has made such analysis and decision independently and without
reliance on the Administrative Agent or any other Lender, (v) if it is not
already a Lender under the Credit Agreement, attached to the Assignment and
Assumption an Administrative Questionnaire in the form of Exhibit A to the
Credit Agreement, (vi) the Administrative Agent has received a processing and
recordation fee of $3,500 as of the Effective Date and (vii) if it is a Foreign
Lender, attached to the Assignment and Assumption is any documentation required
to be delivered by it pursuant to Section 2.15 of the Credit Agreement, duly
completed and executed by the Assignee; and (b) agrees that (i) it will,
independently and without reliance on the Administrative Agent, the Assignor or
any other 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 Loan Documents, and (ii) it will perform in
accordance with their terms all of the obligations that by the terms of the Loan
Documents are required to be performed by it as a Lender.
2. Payments. From and after the Effective Date, the Administrative
Agent shall make all payments in respect of the Assigned Interest (including
payments of principal, interest, fees and other amounts) to the Assignor for
amounts that have accrued to but excluding the Effective Date and to the
Assignee for amounts that have accrued from and after the Effective Date.
B-5
3. General Provisions. This Assignment and Assumption shall be binding
upon, and inure to the benefit of, the parties hereto and their respective
successors and assigns. This Assignment and Assumption may be executed in any
number of counterparts, which together shall constitute one instrument. Delivery
of an executed counterpart of a signature page of this Assignment and Assumption
by telecopy shall be effective as delivery of a manually executed counterpart of
this Assignment and Assumption. This Assignment and Assumption shall be
construed in accordance with and governed by, the law of the State of New York
without regard to conflicts of principles of law that would require the
application of the laws of another jurisdiction.
B-6
EXHIBIT C
[Form of]
BORROWING REQUEST
UBS AG, Stamford Branch,
as Administrative Agent for
the Lenders referred to below,
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: [ ]
Re: Quest Cherokee, LLC
[Date]
Ladies and Gentlemen:
Reference is made to the Credit Agreement dated as of July [ ], 2004
(as amended, amended and restated, supplemented or otherwise modified from time
to time, the "CREDIT AGREEMENT") among QUEST CHEROKEE, LLC, a Delaware limited
liability company ("BORROWER"), the Guarantors (such term and each other
capitalized term used but not defined herein having the meaning given it in
Article I of the Credit Agreement), the Lenders, UBS SECURITIES LLC, as lead
arranger (in such capacity, "ARRANGER"), documentation agent (in such capacity,
"DOCUMENTATION AGENT") and syndication agent (in such capacity, "SYNDICATION
AGENT"),UBS LOAN FINANCE LLC, as swingline lender (in such capacity, "SWINGLINE
LENDER"), and UBS AG, STAMFORD BRANCH, as administrative agent (in such
capacity, "ADMINISTRATIVE AGENT") for the Lenders, collateral agent (in such
capacity, "COLLATERAL AGENT") for the Secured Parties and Issuing Bank. Borrower
hereby gives you notice pursuant to Section 2.03 of the Credit Agreement that it
requests a Borrowing under the Credit Agreement, and in that connection sets
forth below the terms on which such Borrowing is requested to be made:
(A) Class of Borrowing [Revolving Borrowing]
[Term B Borrowing]
(B) Principal amount of
Borrowing(7) _________________________
(C) Date of Borrowing
(which is a Business Day)
________________________
(D) Type of Borrowing [ABR] [Eurodollar](8)
(E) Interest Period and the last day thereof(9) _________________________
___________________________________
(7) ABR and Eurodollar Loans must be in an amount that is at least
$1,000,000 and an integral multiple of $500,000 or equal to the
remaining available balance of the applicable Commitments.
(8) Shall be ABR for Swingline Loans.
(9) Shall be subject to the definition of "INTEREST PERIOD" in the Credit
Agreement.
C-1
(F) Funds are requested to be disbursed to Borrower's account with UBS AG,
Stamford Branch (Account No. ).
Borrower hereby represents and warrants that the conditions to lending
specified in Sections 4.02(b), (c) and (d) of the Credit Agreement are satisfied
as of the date hereof.
[Signature Page Follows]
C-2
QUEST CHEROKEE, LLC
By:
-----------------------------------
Title: [Responsible Officer]
C-3
EXHIBIT D
[Form of]
COMPLIANCE CERTIFICATE
I, [ ], the [Financial Officer] of [ ] (in such capacity and not in my
individual capacity), hereby certify that, with respect to that certain Credit
Agreement dated as of July [ ], 2004 (as it may be amended, modified, extended
or restated from time to time, the "CREDIT AGREEMENT"; all of the defined terms
in the Credit Agreement are incorporated herein by reference) among Quest
Cherokee, LLC, a Delaware limited liability company, as borrower (the
"BORROWER"), the Guarantors party thereto, the Lenders party thereto, UBS
Securities LLC, as Arranger, Documentation Agent and Syndication Agent, and UBS
AG, Stamford Branch, as Administrative Agent and Collateral Agent:
a. Attached hereto as Schedule 1 are detailed calculations(10)
demonstrating compliance by Borrower with Section 6.10 of the Credit
Agreement. Borrower is in compliance with such Sections as of the date
hereof. Attached hereto as Schedule 2 are detailed calculations setting
forth the Borrower's Excess Cash Flow.(11) Attached hereto as Schedule
3 is the report of [accounting firm.](12)
b. The Borrower was in compliance with each of the covenants
set forth in Section 6.10 of the Credit Agreement [at all times during
and] since [ ].
c. No Default has occurred under the Credit Agreement which
has not been previously disclosed, in writing, to the Administrative
Agent pursuant to a Compliance Certificate.(13)
_________________________________
(10) To accompany annual and quarterly financial statements only. Which
calculations shall be in reasonable detail satisfactory to the
Administrative Agent and shall include, among other things, an
explanation of the methodology used in such calculations and a
breakdown of the components of such calculations.
(11) To be provided during the Excess Cash Flow Period.
(12) To accompany annual financial statements only. The report must opine or
certify that, with respect to its regular audit of such financial
statements, which audit was conducted in accordance with GAAP, the
accounting firm obtained no knowledge that any Default has occurred or,
if in the opinion of such accounting firm such a Default has occurred,
specifying the nature and extent thereof.
(13) If a Default shall have occurred, an explanation specifying the nature
and extent of such Default shall be provided on a separate page
together with an explanation of the corrective action taken or proposed
to be taken with respect thereto (include, as applicable, information
regarding actions, if any, taken since prior certificate).
D-1
Dated this [ ] day of [ ], 20[ ].
[ ]
By:
-----------------------------------
Name:
Title: [Financial Officer]
D-2
SCHEDULE 1
Financial Covenants
(A) Maximum Total Leverage Ratio: Total Net Debt to Consolidated EBITDA
Total Net Debt for the four quarter period ended
[ ], 20[ ] ________________________
Consolidated EBITDA ________________________
Total Net Debt to Consolidated EBITDA [ ]:1.00
Covenant Requirement No more than [ ]:1.00
D-3
(B) Minimum Asset Coverage Ratio: PV-10 Value to Total Net Debt: _______ :
1.0
D-4
(C) Minimum Interest Coverage Ratio: Consolidated EBITDA to Consolidated
Interest Expense
Consolidated EBITDA _________________
Consolidated Interest Expense calculation: total
consolidated interest expense under GAAP _________________
plus imputed interest on Capital Lease Obligations
and Attributable Indebtedness of Borrower and its
Subsidiaries for such period;
plus commissions, discounts and other fees and
charges owed by Borrower or any of its Subsidiaries
with respect to letters of credit securing financial
obligations, bankers' acceptance financing and
receivables financings for such period;
plus amortization of debt issuance costs, debt
discount or premium and other financing fees and
expenses incurred by Borrower or any of its
Subsidiaries for such period;
plus cash contributions to any employee stock
ownership plan or similar trust made by Borrower or
any of its Subsidiaries to the extent such
contributions are used by such plan or trust to pay
interest or fees to any person (other than Borrower
or a Wholly Owned Subsidiary) in connection with
Indebtedness incurred by such plan or trust for such
period;
plus all interest paid or payable with respect to
discontinued operations of Borrower or any of its
Subsidiaries for such period;
plus the interest portion of any deferred payment
obligations of Borrower or any of its Subsidiaries
for such period;
plus all interest on any Indebtedness of Borrower or
any of its Subsidiaries of the type described in
clause (f) or (k) of the definition of "Indebtedness"
for such period;
less debt issuance costs, debt discount or premium
and other financing fees and expenses directly
related to the Transactions;
less any expense associated with the Subordinated
Notes;
D-5
and
less after giving effect to Hedging Agreements
including payments to obtain Hedging Agreements but
excluding unrealized gains and losses with respect to
Hedging Agreements.
Consolidated Interest Expense __________________
Consolidated EBITDA to Consolidated Interest
Expense [ ]:1.00
Covenant Requirement Greater than or equal
to 3.5:1.00
D-6
(D) Minimum Consolidated Fixed Charge Ratio: Consolidated EBITDA to
Consolidated Fixed Charges
Consolidated EBITDA for the four quarter period ended [ ],
20[ ]. __________________
Consolidated Fixed Charges Calculation is Consolidated
Interest Expense plus
Consolidated Fixed Charges Consolidated Interest Expense
calculation:
total consolidated interest expense under GAAP
plus imputed interest on Capital Lease Obligations
and Attributable Indebtedness of Borrower and its
Subsidiaries for such period;
plus commissions, discounts and other fees and
charges owed by Borrower or any of its Subsidiaries
with respect to letters of credit securing financial
obligations, bankers' acceptance financing and
receivables financings for such period;
plus amortization of debt issuance costs, debt
discount or premium and other financing fees and
expenses incurred by Borrower or any of its
Subsidiaries for such period;
plus cash contributions to any employee stock
ownership plan or similar trust made by Borrower or
any of its Subsidiaries to the extent such
contributions are used by such plan or trust to pay
interest or fees to any person (other than Borrower
or a Wholly Owned Subsidiary) in connection with
Indebtedness incurred by such plan or trust for such
period;
plus all interest paid or payable with respect to
discontinued operations of Borrower or any of its
Subsidiaries for such period;
plus the interest portion of any deferred payment
obligations of Borrower or any of its Subsidiaries
for such period;
plus all interest on any Indebtedness of Borrower or
any of its Subsidiaries of the type described in
clause (f) or (k) of the definition of "Indebtedness"
for such period;
less debt issuance costs, debt discount or premium
and
D-7
other financing fees and expenses directly related to
the Transactions;
less any expense associated with the Subordinated
Notes; and
less after giving effect to Hedging Agreements
including payments to obtain Hedging Agreements but
excluding unrealized gains and losses with respect to
Hedging Agreements.
Consolidated Interest Expense
Consolidated Fixed Charges calculation:
Consolidated Interest Expense for such period;
plus the aggregate amount of Capital Expenditures for
such period (other than to the extent financed by
Excluded Issuances or out of that portion of Excess
Cash Flow not required to be applied to the Term B
Loans pursuant to Section 2.10(g));
plus all cash payments in respect of income taxes
made during such period (net of any cash refund in
respect of income taxes actually received during such
period);
plus the principal amount of all scheduled
amortization payments on all Indebtedness (including
the principal component of all Capital Lease
Obligations) of Borrower and its Subsidiaries for
such period (as determined on the first day of the
respective period);
plus the product of (i) all dividend payments on any
series of Disqualified Capital Stock of Borrower or
any of its Subsidiaries (other than dividend payments
to Borrower or any of its Subsidiaries) multiplied by
(ii) a fraction, the numerator of which is one and
the denominator of which is one minus the then
current combined federal, state and local statutory
tax rate of Borrower and its Subsidiaries, expressed
as a decimal; and
plus the product of (i) all cash dividend payments on
any Preferred Stock (other than Disqualified Capital
Stock) of Borrower or any of its Subsidiaries (other
than dividend payments to Borrower or any of its
Subsidiaries) multiplied by (ii) a fraction, the
numerator of which is one and the denominator of
D-8
which is one minus the then current combined federal,
state and local statutory tax rate of Borrower and
its Subsidiaries, expressed as a decimal.
Consolidated Fixed Charges Expense. _________________________
Consolidated EBITDA to Consolidated Fixed Charges [ ]:1.00
Covenant Requirement Greater than or equal to
[ ]:1.00
D-9
(E) Maximum Capital Expenditures
Capital Expenditures __________________
Covenant Requirement No more than [ ]
D-10
SCHEDULE 2
Excess Cash Flow Calculation:
Net cash from operating activities for the Excess Cash Flow Period _____________
less principal payments of Term B Loans required by
Section 2.09(a) that are actually made during such
period;
less the lower of actual Capital Expenditures and
Budgeted Capital Expenditures during such period; and
less Permitted Tax Distributions that are paid during
such period or will be paid within six months after
the close of such period.
Excess Cash Flow ______________
D-11
EXHIBIT E
[Form of]
INTEREST ELECTION REQUEST
UBS AG, Stamford Branch,
as Administrative Agent
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: [ ]
[Date]
Re: Quest Cherokee, LLC
Ladies and Gentlemen:
This Interest Election Request is delivered to you pursuant to Section
2.08 of the Credit Agreement dated as of July [ ], 2004 (as amended, amended and
restated, supplemented or otherwise modified from time to time, the "CREDIT
AGREEMENT") among QUEST CHEROKEE, LLC, a Delaware limited liability company
("BORROWER"), the Guarantors (such term and each other capitalized term used but
not defined herein having the meaning given it in Article I thereof), the
Lenders, UBS SECURITIES LLC, as lead arranger (in such capacity, "ARRANGER"),
documentation agent (in such capacity, "DOCUMENTATION AGENT") and syndication
agent (in such capacity, "SYNDICATION AGENT"), UBS LOAN FINANCE LLC, as
swingline lender (in such capacity, "SWINGLINE LENDER"), and UBS AG, STAMFORD
BRANCH, as administrative agent (in such capacity, "ADMINISTRATIVE AGENT") for
the Lenders, collateral agent (in such capacity, "COLLATERAL AGENT") for the
Secured Parties and Issuing Bank.
Borrower hereby requests that on [__________](14) (the "INTEREST ELECTION
DATE"),
1. $[__________] of the presently outstanding principal amount of
the Loans originally made on [__________],
2. and all presently being maintained as [ABR Loans] [Eurodollar
Loans],
3. be [converted into] [continued as],
4. [Eurodollar Loans having an Interest Period of
[one/two/three/six[/nine] months] [ABR Loans].
----------
(14) Shall be a Business Day that is (a) the date hereof in the case of a
conversion into ABR Loans to the extent this Interest Election Request is
delivered to the Administrative Agent prior to 11:00 a.m., New York City
time on the date hereof, otherwise the Business Day following the date of
delivery hereof and (b) three Business Days following the date hereof in
the case of a conversion into/continuation of Eurodollar Loans to the
extent this Interest Election Request is delivered to the Administrative
Agent prior to 11:00 a.m. New York City time on the date hereof, otherwise
the fourth Business Day following the date of delivery hereof, in each
case.
E-1
The undersigned hereby certifies that the following statements are true on
the date hereof, and will be true on the proposed Interest Election Date, both
before and after giving effect thereto and to the application of the proceeds
therefrom:
(a) the foregoing [conversion] [continuation] complies with the
terms and conditions of the Credit Agreement (including, without
limitation, Section 2.08 of the Credit Agreement); and
(b) no Default has occurred and is continuing, or would result from
such proposed [conversion] [continuation].
[Signature Page Follows]
E-2
Borrower has caused this Interest Election Request to be executed and
delivered by its duly authorized officer as of the date first written above.
QUEST CHEROKEE, LLC
By:
----------------------------------
Name:
Title:
E-3
EXHIBIT F
[Form of]
JOINDER AGREEMENT
Reference is made to the Credit Agreement, dated as of July [ ], 2004 (the
"CREDIT AGREEMENT") among QUEST CHEROKEE, LLC, a Delaware limited liability
company ("BORROWER"), the Guarantors (such term and each other capitalized term
used but not defined herein having the meaning given to it in Article I of the
Credit Agreement), the Lenders, UBS SECURITIES LLC, as lead arranger (in such
capacity, "ARRANGER"), documentation agent (in such capacity, "DOCUMENTATION
AGENT") and syndication agent (in such capacity, "SYNDICATION AGENT"), UBS LOAN
FINANCE LLC, as swingline lender (in such capacity, "SWINGLINE LENDER"), and UBS
AG, STAMFORD BRANCH, as administrative agent (in such capacity, "ADMINISTRATIVE
AGENT") for the Lenders, collateral agent (in such capacity, "COLLATERAL AGENT")
for the Secured Parties and Issuing Bank.
W I T N E S S E T H:
WHEREAS, the Guarantors have entered into the Credit Agreement and the
Security Agreement in order to induce the Lenders to make the Loans and the
Issuing Bank to issue Letters of Credit to or for the benefit of Borrower;
WHEREAS, pursuant to Section 5.11(b) of the Credit Agreement, each
Subsidiary that was not in existence on the date of the Credit Agreement is
required to become a Guarantor under the Credit Agreement by executing a Joinder
Agreement. The undersigned Subsidiary (the "NEW GUARANTOR") is executing this
joinder agreement ("JOINDER AGREEMENT") to the Credit Agreement in order to
induce the Lenders to make additional Revolving Loans and the Issuing Bank to
issue Letters of Credit and as consideration for the Loans previously made and
Letters of Credit previously issued.
NOW, THEREFORE, the Administrative Agent, Collateral Agent and the New
Guarantor hereby agree as follows:
1. GUARANTEE. In accordance with Section 5.11(b) of the Credit Agreement,
the New Guarantor by its signature below becomes a Guarantor under the Credit
Agreement with the same force and effect as if originally named therein as a
Guarantor.
2. REPRESENTATIONS AND WARRANTIES. The New Guarantor hereby (a) agrees to
all the terms and provisions of the Credit Agreement applicable to it as a
Guarantor thereunder and (b) represents and warrants that the representations
and warranties made by it as a Guarantor thereunder are true and correct in all
material respects (except that any representation and warranty that is qualified
as to "materiality" or "Material Adverse Effect" shall be true and correct in
all respects) on and as of the date hereof. Each reference to a Guarantor in the
Credit Agreement shall be deemed to include the New Guarantor. The New Guarantor
hereby attaches supplements to each of the schedules to the Credit Agreement
applicable to it.
3. SEVERABILITY. Any provision of this Joinder Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
F-1
4. COUNTERPARTS. This Joinder Agreement may be executed in counterparts,
each of which shall constitute an original. Delivery of an executed signature
page to this Joinder Agreement by facsimile transmission shall be as effective
as delivery of a manually executed counterpart of this Joinder Agreement.
5. NO WAIVER. Except as expressly supplemented hereby, the Credit
Agreement shall remain in full force and effect.
6. NOTICES. All notices, requests and demands to or upon the New
Guarantor, any Agent or any Lender shall be governed by the terms of Section
11.01 of the Credit Agreement.
7. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW
OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THAT
WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.
[Signature Pages Follow]
F-2
IN WITNESS WHEREOF, the undersigned have caused this Joinder Agreement to
be duly executed and delivered by their duly authorized officers as of the day
and year first above written.
[NEW GUARANTOR]
By:
-----------------------------------
Name:
Title:
Address for Notices:
UBS AG, STAMFORD BRANCH, as
Administrative Agent and Collateral Agent
By:
-----------------------------------
Name:
Title:
By:
-----------------------------------
Name:
Title:
F-3
[Note: Schedules to be attached.]
F-4
EXHIBIT H
[Form of]
LC REQUEST [AMENDMENT]
Dated [(15)]
UBS AG, Stamford Branch, as Administrative Agent under the Credit
Agreement (as amended, modified or supplemented from time to time, the "CREDIT
AGREEMENT"), dated as of July [ ], 2004, among Quest Cherokee, LLC, a Delaware
limited liability company, the Lenders from time to time party thereto, UBS
Securities LLC, as Arranger, Documentation Agent and Syndication Agent and UBS
AG, Stamford Branch, as Administrative Agent, Collateral Agent and Issuing Bank
as applicable,
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: [ ]
[Name and Address of Issuing Bank
if different from Administrative Agent]
Ladies and Gentlemen:
We hereby request that [name of proposed Issuing Bank], as Issuing Bank
under the Credit Agreement, [issue] [amend] [renew] [extend] [a] [an existing]
[Revolving] [LC Facility] Letter of Credit (the "Letter of Credit") for the
account of the undersigned [(16)] on [(17)] (the "Date of [Issuance] [Amendment]
[Renewal] [Extension]") in the aggregate stated amount of [(18)]. [Such Letter
of Credit was originally issued on [date].] The requested Letter of Credit
[shall be] [is] denominated in dollars.
For purposes of this LC Request, unless otherwise defined herein, all
capitalized terms used herein which are defined in the Credit Agreement shall
have the respective meaning provided therein.
The beneficiary of the requested Letter of Credit [will be] [is] [19], and
such Letter of Credit [will be] [is] in support of [(20)] and [will have] [has]
a stated expiration date of [(21)]. [Describe the nature of the amendment,
renewal or extension.]
----------
(15) Date of LC Request.
(16) Note that if the LC Request is for the account of a Subsidiary, Borrower
shall be a co-applicant, and be jointly and severally liable, with respect
to each Letter of Credit issued for the account or in favor of any
Subsidiary.
(17) Date of Issuance [Amendment] [Renewal] [Extension] which shall be at least
three Business Days after the date of this LC Request, if this LC Request
is delivered to the Issuing Bank by 11:00 a.m., New York City time (or
such shorter period as is acceptable to the Issuing Bank).
(18) Aggregate initial stated amount of Letter of Credit.
(19) Insert name and address of beneficiary.
H-1
We hereby certify that:
(1) Each of Borrower and each other Loan Party is in compliance in
all material respects with all the terms and provisions set forth in each
Loan Document on its part to be observed or performed, and, as of today
and at the time of and immediately after giving effect to the [issuance]
[amendment] [renewal] [extension] of the Letter of Credit requested
herein, no Default has or will have occurred and be continuing.
(2) Each of the representations and warranties made by any Loan
Party set forth in any Loan Document are true and correct in all material
respects (except that any representation and warranty that is qualified as
to "materiality" or "Material Adverse Effect" is true and correct in all
respects) on and as of today's date and with the same effect as though
made on and as of today's date, except to the extent such representations
and warranties expressly relate to an earlier date.
(3) No order, judgment or decree of any Governmental Authority
purports to restrain any Lender from taking any actions to be made
hereunder or from making any Loans to be made by it. No injunction or
other restraining order has been issued, is pending or noticed with
respect to any action, suit or proceeding seeking to enjoin or otherwise
prevent the consummation of, or to recover any damages or obtain relief as
a result of, the transactions contemplated by this LC Request, the Credit
Agreement or the making of Loans thereunder.
(4) After giving effect to the request herein, [the Revolving LC
Exposure will not exceed the Revolving LC Commitment] [the LC Facility LC
Exposure will not exceed the LC Facility Commitment] [the total Revolving
Exposures will not exceed the total Revolving Commitments].
Copies of all relevant documentation with respect to the supported
transaction are attached hereto.
[ ]
By:
-----------------------------------
Name:
Title:
----------------------------------------
Footnote continued from previous page.
(20) Insert description of the obligation to which it relates in the case of
Revolving Letters of Credit and a description of the Hedging Obligations
which are being supported in the case of the LC Facility Letter of Credit.
(21) Insert last date upon which drafts may be presented which may not be later
than (i) in the case of a Revolving Letter of Credit, (x) the date which
is one year after the date of the issuance of such Revolving Letter of
Credit (or, in the case of any renewal or extension thereof, one year
after such renewal or extension) and (y) the Letter of Credit Expiration
Date, as applicable and (ii) in the case of the LC Facility Letter of
Credit the Letter of Credit Expiration Date, as applicable.
H-2
EXHIBIT I
[Form of]
LENDER ADDENDUM
Reference is made to the Credit Agreement dated as of July [ ], 2004 (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the "CREDIT AGREEMENT") among QUEST CHEROKEE, LLC, a Delaware limited
liability company ("BORROWER"), the Guarantors (such term and each other
capitalized term used but not defined herein having the meaning given it in
Article I of the Credit Agreement), the Lenders, UBS SECURITIES LLC, as lead
arranger (in such capacity, "ARRANGER"), documentation agent (in such capacity,
"DOCUMENTATION AGENT") and syndication agent (in such capacity, "SYNDICATION
AGENT") "),UBS LOAN FINANCE LLC, as swingline lender (in such capacity,
"SWINGLINE LENDER"), and UBS AG, STAMFORD BRANCH, as administrative agent (in
such capacity, "ADMINISTRATIVE AGENT") for the Lenders, collateral agent (in
such capacity, "COLLATERAL AGENT") for the Secured Parties and Issuing Bank.
Upon execution and delivery of this Lender Addendum by the parties hereto
as provided in Section 11.14 of the Credit Agreement, the undersigned hereby
becomes a Lender thereunder having the Commitment set forth in Schedule 1
hereto, effective as of the Closing Date.
THIS LENDER ADDENDUM SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES
THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.
This Lender Addendum may be executed by one or more of the parties hereto
on any number of separate counterparts, and all of said counterparts taken
together shall be deemed to constitute one and the same instrument. Delivery of
an executed signature page hereof by facsimile transmission shall be effective
as delivery of a manually executed counterpart hereof.
I-1
IN WITNESS WHEREOF, the parties hereto have caused this Lender Addendum to
be duly executed and delivered by their proper and duly authorized officers as
of this day __ of [ ], 200[ ].
,(22)
------------------------------------
as a Lender
[Please type legal name of Lender above]
By:
-----------------------------------
Name:
Title:
[If second signature is necessary:]
By:
-----------------------------------
Name:
Title:
----------
(22) Use this form of signature page if there is a syndicate of lenders to
avoid having to keep track of correct legal names.
I-2
Accepted and agreed:
QUEST CHEROKEE, LLC
By:
------------------------------------
Name:
Title:
UBS AG, STAMFORD BRANCH, as
Administrative Agent
By:
------------------------------------
Name:
Title:
By:
------------------------------------
Name:
Title:
I-3
SCHEDULE 1
COMMITMENTS AND NOTICE ADDRESS
1. NAME OF LENDER: _______________________
NOTICE ADDRESS: _______________________
_______________________
_______________________
ATTENTION: _______________________
TELEPHONE: _______________________
FACSIMILE: _______________________
2. COMMITMENT: _______________________
I-4
EXHIBIT J
[Reserved]
J-1
EXHIBIT K-1
[Form of]
TERM B NOTE
$_______________ New York, New York
[Date]
FOR VALUE RECEIVED, the undersigned, QUEST CHEROKEE, LLC, a Delaware
limited liability company ("BORROWER"), hereby promises to pay to the order of
[name of lender] (the "LENDER") on the Term Loan Maturity Date (as defined in
the Credit Agreement referred to below) in lawful money of the United States and
in immediately available funds, the principal amount of ____________ DOLLARS
($____________), or, if less, the aggregate unpaid principal amount of all Term
Loans of the Lender outstanding under the Credit Agreement referred to below,
which sum shall be due and payable in such amounts and on such dates as are set
forth in the Credit Agreement. Borrower further agrees to pay interest in like
money at such office specified in Section 2.14 of the Credit Agreement on the
unpaid principal amount hereof from time to time from the date hereof at the
rates, and on the dates, specified in Section 2.06 of the Credit Agreement.
The holder of this Note may endorse and attach a schedule to reflect the
date, Type and amount of each Term Loan of the Lender outstanding under the
Credit Agreement, the date and amount of each payment or prepayment of principal
hereof, and the date of each interest rate conversion or continuation pursuant
to Section 2.08 of the Credit Agreement and the principal amount subject
thereto; provided that the failure of the Lender to make any such recordation
(or any error in such recordation) shall not affect the obligations of Borrower
hereunder or under the Credit Agreement.
This Note is one of the Notes referred to in the Credit Agreement dated as
of July [ ], 2004 (as amended, amended and restated, supplemented or otherwise
modified from time to time, the "CREDIT AGREEMENT"), among Borrower, the
Guarantors, the Lenders, UBS SECURITIES LLC, as lead arranger, documentation
agent and syndication agent, UBS LOAN FINANCE LLC, as swingline lender and UBS
AG, STAMFORD BRANCH, as administrative agent for the Lenders, collateral agent
for the Secured Parties and Issuing Bank is subject to the provisions thereof
and is subject to optional and mandatory prepayment in whole or in part as
provided therein. Terms used herein which are defined in the Credit Agreement
shall have such defined meanings unless otherwise defined herein or unless the
context otherwise requires.
This Note is secured and guaranteed as provided in the Credit Agreement
and the Security Documents. Reference is hereby made to the Credit Agreement and
the Security Documents for a description of the properties and assets in which a
security interest has been granted, the nature and extent of the security and
guarantees, the terms and conditions upon which the security interest and each
guarantee was granted and the rights of the holder of this Note in respect
thereof.
Upon the occurrence of any one or more of the Events of Default specified
in the Credit Agreement, all amounts then remaining unpaid on this Note shall
become, or may be declared to be, immediately due and payable all as provided
therein.
All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
K-1-1
THIS NOTE MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS OF
THE CREDIT AGREEMENT. TRANSFERS OF THIS NOTE MUST BE RECORDED IN THE REGISTER
MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT TO THE TERMS OF THE CREDIT
AGREEMENT.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS
OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THAT
WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.
[Signature Page Follows]
K-1-2
QUEST CHEROKEE, LLC,
as Borrower
By:
-----------------------------------
Name:
Title:
K-1-3
EXHIBIT K-2
[Form of]
REVOLVING NOTE
$_________________ New York, New York
[Date]
FOR VALUE RECEIVED, the undersigned, QUEST CHEROKEE, LLC, a Delaware
limited liability company ("BORROWER"), hereby promises to pay to the order of
[name of lender] (the "LENDER") on the Revolving Maturity Date (as defined in
the Credit Agreement referred to below), in lawful money of the United States
and in immediately available funds, the principal amount of the lesser of (a)
____________ DOLLARS ($____________) and (b) the aggregate unpaid principal
amount of all Revolving Loans of the Lender outstanding under the Credit
Agreement referred to below. Borrower further agrees to pay interest in like
money at such office specified in Section 2.14 of the Credit Agreement on the
unpaid principal amount hereof from time to time from the date hereof at the
rates, and on the dates, specified in Section 2.06 of the Credit Agreement.
The holder of this Note may endorse and attach a schedule to reflect the
date, Type and amount of each Revolving Loan of the Lender outstanding under the
Credit Agreement, the date and amount of each payment or prepayment of principal
hereof, and the date of each interest rate conversion or continuation pursuant
to Section 2.08 of the Credit Agreement and the principal amount subject
thereto; provided that the failure of the Lender to make any such recordation
(or any error in such recordation) shall not affect the obligations of Borrower
hereunder or under the Credit Agreement.
This Note is one of the Notes referred to in the Credit Agreement dated as
of July [ ], 2004 (as amended, amended and restated, supplemented or otherwise
modified from time to time, the "CREDIT AGREEMENT"), among Borrower, the
Guarantors, the Lenders, UBS SECURITIES LLC, as lead arranger, documentation
agent and syndication agent, UBS LOAN FINANCE LLC, as swingline lender and UBS
AG, STAMFORD BRANCH, as administrative agent for the Lenders, collateral agent
for the Secured Parties and Issuing Bank is subject to the provisions thereof
and is subject to optional and mandatory prepayment in whole or in part as
provided therein. Terms used herein which are defined in the Credit Agreement
shall have such defined meanings unless otherwise defined herein or unless the
context otherwise requires.
This Note is secured and guaranteed as provided in the Credit Agreement
and the Security Documents. Reference is hereby made to the Credit Agreement and
the Security Documents for a description of the properties and assets in which a
security interest has been granted, the nature and extent of the security and
guarantees, the terms and conditions upon which the security interest and each
guarantee was granted and the rights of the holder of this Note in respect
thereof.
Upon the occurrence of any one or more of the Events of Default specified
in the Credit Agreement, all amounts then remaining unpaid on this Note shall
become, or may be declared to be, immediately due and payable, all as provided
therein.
All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
K-2-1
THIS NOTE MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS OF
THE CREDIT AGREEMENT. TRANSFERS OF THIS NOTE MUST BE RECORDED IN THE REGISTER
MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT TO THE TERMS OF THE CREDIT
AGREEMENT.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS
OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THAT
WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.
[Signature Page Follows]
K-2-2
QUEST CHEROKEE, LLC,
as Borrower
By:
-----------------------------------
Name:
Title:
K-2-3
EXHIBIT K-3
[Form of]
SWINGLINE NOTE
$____________ New York, New York
[Date]
FOR VALUE RECEIVED, the undersigned, QUEST CHEROKEE, LLC, a Delaware
limited liability company ("BORROWER"), hereby promises to pay to the order of
[name of swingline lender] (the "LENDER") on the Revolving Maturity Date (as
defined in the Credit Agreement referred to below), in lawful money of the
United States and in immediately available funds, the principal amount of the
lesser of (a) Five Million Dollars ($5,000,000) and (b) the aggregate unpaid
principal amount of all Swingline Loans made by Lender to the undersigned
pursuant to Section 2.17 of the Credit Agreement referred to below. Borrower
further agrees to pay interest on the unpaid principal amount hereof in like
money at such office specified in Section 2.17(c) of the Credit Agreement from
time to time from the date hereof at the rates and on the dates specified in
Section 2.06 of the Credit Agreement.
The holder of this Note may endorse and attach a schedule to reflect the
date, the amount of each Swingline Loan and the date and amount of each payment
or prepayment of principal thereof; provided that the failure of Lender to make
such recordation (or any error in such recordation) shall not affect the
obligations of Borrower hereunder or under the Credit Agreement.
This Note is one of the Notes referred to in the Credit Agreement, dated
as of July [ ], 2004 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the "CREDIT AGREEMENT"), among Borrower,
the Guarantors, the Lenders, UBS SECURITIES LLC, as lead arranger, documentation
agent and syndication agent, UBS LOAN FINANCE LLC, as swingline lender and UBS
AG, STAMFORD BRANCH, as swingline lender, administrative agent for the Lenders,
collateral agent for the Secured Parties and Issuing Bank is subject to the
provisions thereof and is subject to optional and mandatory prepayment in whole
or in part as provided therein. Terms used herein which are defined in the
Credit Agreement shall have such defined meanings unless otherwise defined
herein or unless the context otherwise requires.
This Note is secured and guaranteed as provided in the Credit Agreement
and the Security Documents. Reference is hereby made to the Credit Agreement and
the Security Documents for a description of the properties and assets in which a
security interest has been granted, the nature and extent of the security and
guarantees, the terms and conditions upon which the security interest and each
guarantee was granted and the rights of the holder of this Note in respect
thereof.
Upon the occurrence of any one or more of the Events of Default specified
in the Credit Agreement, all amounts then remaining unpaid on this Note may
become, or may be declared to be, immediately due and payable as provided in the
Credit Agreement.
All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
THIS NOTE MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS OF
THE CREDIT AGREEMENT. TRANSFERS OF THIS NOTE MUST BE RE-
K-3-1
CORDED IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT TO THE
TERMS OF THE CREDIT AGREEMENT.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS
OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THAT
WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.
[Signature Page Follows]
K-3-2
QUEST CHEROKEE, LLC,
as Borrower
By:
-----------------------------------
Name:
Title:
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
[Form of]
PERFECTION CERTIFICATE
[Previously provided under separate cover]
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
[Form of]
PERFECTION CERTIFICATE SUPPLEMENT
[Previously provided under separate cover]
L-2-1
EXHIBIT M
[Form of]
SECURITY AGREEMENT
[To be provided under separate cover]
M-1
EXHIBIT N-1
[Form of]
OPINION OF COMPANY COUNSEL
[Form of opinion to be based on 2003 deal]
N-1-1
EXHIBIT N-2
[Form of]
OPINION OF LOCAL COUNSEL
[Form of opinion to be based on 2003 deal]
N-2-1
EXHIBIT O
[Form of]
SOLVENCY CERTIFICATE
I, the undersigned, [financial officer] of QUEST CHEROKEE, LLC, a Delaware
limited liability company ("BORROWER"), DO HEREBY CERTIFY on behalf of Borrower
that:
1. This Certificate is furnished pursuant to Section 4.01(h) of the Credit
Agreement as in effect on the date of this Certificate. The capitalized terms
defined therein being used herein as therein defined) dated as of July [ ], 2004
among Borrower, the Guarantors, the Lenders, UBS SECURITIES LLC, as lead
arranger (in such capacity, "ARRANGER"), documentation agent (in such capacity,
"DOCUMENTATION AGENT") and syndication agent (in such capacity, "SYNDICATION
AGENT"), UBS LOAN FINANCE LLC, as swingline lender (in such capacity, "SWINGLINE
LENDER"), and UBS AG, STAMFORD BRANCH administrative agent (in such capacity,
"ADMINISTRATIVE AGENT") for the Lenders, collateral agent (in such capacity,
"COLLATERAL AGENT") for the Secured Parties and Issuing Bank (as from time to
time in effect, the "CREDIT AGREEMENT").
2. Immediately following the consummation of the Transactions and
immediately following the making of each Loan and after giving effect to the
application of the proceeds of each Loan on the date hereof, (a) the fair value
of the assets of each Loan Party (individually and on a consolidated basis with
its Subsidiaries) exceeds its debts and liabilities, subordinated, contingent or
otherwise; (b) the present fair saleable value of the property of each Loan
Party (individually and on a consolidated basis with its Subsidiaries) is
greater than the amount that will be required to pay the probable liability of
its debts and other liabilities, subordinated, contingent or otherwise, as such
debts and other liabilities become absolute and matured; (c) each Loan Party
(individually and on a consolidated basis with its Subsidiaries) is able to pay
its debts and liabilities, subordinated, contingent or otherwise, as such debts
and liabilities become absolute and matured; and (d) each Loan Party
(individually and on a consolidated basis with its Subsidiaries) does not have
unreasonably small capital with which to conduct the business in which it is
engaged as such business is now conducted and is proposed to be conducted
following the Closing Date.
[Signature Page Follows]
O-1
IN WITNESS WHEREOF, I have hereunto set my hand this [ ]th day of
[ ].
QUEST CHEROKEE, LLC
By:
-----------------------------------
Name:
Title: [Financial Officer]
O-2
EXHIBIT P
[Form of]
INTERCOMPANY NOTE
New York, New York
[date]
FOR VALUE RECEIVED, each of the undersigned, to the extent a borrower from
time to time from any other entity listed on the signature page hereto (each, in
such capacity, a "PAYOR"), hereby promises to pay on demand to the order of such
other entity listed below (each, in such capacity, a "PAYEE"), in lawful money
of the United States of America in immediately available funds, at such location
in the United States of America as a Payee shall from time to time designate,
the unpaid principal amount of all loans and advances (including trade payables)
made by such Payee to such Payor. Each Payor promises also to pay interest on
the unpaid principal amount of all such loans and advances in like money at said
location from the date of such loans and advances until paid at such rate per
annum as shall be agreed upon from time to time by such Payor and such Payee.
This note ("NOTE") is an Intercompany Note referred to in the Credit
Agreement dated as of July [ ], 2004 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the "CREDIT AGREEMENT")
among QUEST CHEROKEE, LLC, a Delaware limited liability company, the Lenders
(such term and each other capitalized term used but not defined herein having
the meaning given it in Article I of the Credit Agreement), UBS SECURITIES LLC,
as lead arranger, documentation agent and syndication agent, UBS LOAN FINANCE
LLC, as swingline lender (in such capacity, "SWINGLINE LENDER"), and UBS AG,
STAMFORD BRANCH, as administrative agent (in such capacity, the "ADMINISTRATIVE
AGENT") for the Lenders, and collateral agent for the Secured Parties and
Issuing Bank, and is subject to the terms thereof, and shall be pledged by each
Payee pursuant to the Security Agreement, to the extent required pursuant to the
terms thereof. Each Payee hereby acknowledges and agrees that the Administrative
Agent may exercise all rights provided in the Credit Agreement and the Security
Agreement with respect to this Note.
Anything in this Note to the contrary notwithstanding, the indebtedness
evidenced by this Note owed by any Payor that is Borrower or a Guarantor to any
Payee other than Borrower shall be subordinate and junior in right of payment,
to the extent and in the manner hereinafter set forth, to all Obligations of
such Payor under the Credit Agreement, including, without limitation, where
applicable, under such Payor's guarantee of the Obligations under the Credit
Agreement (such Obligations and other indebtedness and obligations in connection
with any renewal, refunding, restructuring or refinancing thereof, including
interest thereon accruing after the commencement of any proceedings referred to
in clause (i) below, whether or not such interest is an allowed claim in such
proceeding, being hereinafter collectively referred to as "SENIOR
INDEBTEDNESS"):
(i) In the event of any insolvency or bankruptcy proceedings, and
any receivership, liquidation, reorganization or other similar proceedings
in connection therewith, relative to any Payor or to its creditors, as
such, or to its property, and in the event of any proceedings for
voluntary liquidation, dissolution or other winding up of such Payor,
whether or not involving insolvency or bankruptcy, then (x) the holders of
Senior Indebtedness shall be paid in full in cash in respect of all
amounts constituting Senior Indebtedness before any Payee is entitled to
receive (whether directly or indirectly), or make any demands for, any
payment on account of this Note
P-1
and (y) until the holders of Senior Indebtedness are paid in full in cash
in respect of all amounts constituting Senior Indebtedness, any payment or
distribution to which such Payee would otherwise be entitled (other than
debt securities of such Payor that are subordinated, to at least the same
extent as this Note, to the payment of all Senior Indebtedness then
outstanding (such securities being hereinafter referred to as
"RESTRUCTURED DEBT SECURITIES")) shall be made to the holders of Senior
Indebtedness;
(ii) if any event of default occurs and is continuing with respect
to any Senior Indebtedness (including any Event of Default under the
Credit Agreement), then no payment or distribution of any kind or
character shall be made by or on behalf of the Payor or any other Person
on its behalf with respect to this Note; and
(iii) if any payment or distribution of any character, whether in
cash, securities or other property (other than Restructured Debt
Securities), in respect of this Note shall (despite these subordination
provisions) be received by any Payee in violation of clause (i) or (ii)
before all Senior Indebtedness shall have been paid in full in cash, such
payment or distribution shall be held in trust for the benefit of, and
shall be paid over or delivered to, the holders of Senior Indebtedness (or
their representatives), ratably according to the respective aggregate
amounts remaining unpaid thereon, to the extent necessary to pay all
Senior Indebtedness in full in cash.
To the fullest extent permitted by law, no present or future holder of
Senior Indebtedness shall be prejudiced in its right to enforce the
subordination of this Note by any act or failure to act on the part of any Payor
or by any act or failure to act on the part of such holder or any trustee or
agent for such holder. Each Payee and each Payor hereby agree that the
subordination of this Note is for the benefit of the Administrative Agent, the
Issuing Bank and the Lenders and the Administrative Agent, the Issuing Bank and
the Lenders are obligees under this Note to the same extent as if their names
were written herein as such and the Administrative Agent may, on behalf of the
itself, the Issuing Bank and the Lenders, proceed to enforce the subordination
provisions herein.
The indebtedness evidenced by this Note owed by any Payor that is not
Borrower or a Guarantor shall not be subordinated to, and shall rank pari passu
in right of payment with, any other obligation of such Payor.
Nothing contained in the subordination provisions set forth above is
intended to or will impair, as between each Payor and each Payee, the
obligations of such Payor, which are absolute and unconditional, to pay to such
Payee the principal of and interest on this Note as and when due and payable in
accordance with its terms, or is intended to or will affect the relative rights
of such Payee and other creditors of such Payor other than the holders of Senior
Indebtedness.
Each Payee is hereby authorized to record all loans and advances made by
it to any Payor (all of which shall be evidenced by this Note), and all
repayments or prepayments thereof, in its books and records, such books and
records constituting prima facie evidence of the accuracy of the information
contained therein.
Each Payor hereby waives presentment, demand, protest or notice of any
kind in connection with this Note. All payments under this Note shall be made
without offset, counterclaim or deduction of any kind.
P-2
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS
THEREOF.
[List Borrower and All Subsidiaries]
By:
-----------------------------------
Name:
Title:
P-3
EXHIBIT Q
[Form of]
NON-BANK CERTIFICATE
Reference is made to the Credit Agreement dated as of July [ ], 2004 (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the "CREDIT AGREEMENT") among QUEST CHEROKEE, LLC, a Delaware limited
liability company ("BORROWER"), the Guarantors (such term and each other
capitalized term used but not defined herein having the meaning given it in
Article I of the Credit Agreement), the Lenders, UBS SECURITIES LLC, as lead
arranger (in such capacity, "ARRANGER"), documentation agent (in such capacity,
"DOCUMENTATION AGENT") and syndication agent (in such capacity, "SYNDICATION
AGENT"), UBS LOAN FINANCE LLC, as swingline lender (in such capacity, "SWINGLINE
LENDER"), and UBS AG, STAMFORD BRANCH, as administrative agent (in such
capacity, "ADMINISTRATIVE AGENT") for the Lenders, collateral agent (in such
capacity, "COLLATERAL AGENT") for the Secured Parties and Issuing Bank.
The undersigned is not a bank (as such term is used in Section
881(c)(3)(A) of the Internal Revenue Code of 1986, as amended).
[NAME OF LENDER]
By:
-----------------------------------
Name:
Title:
[ADDRESS]
Dated: , 200 .
------------------------- ---
Q-1
EXHIBIT R-1
[Form of]
ASSIGNMENT OF AND AMENDMENT TO MORTGAGES
[Provided by V&E under separate cover]
R-1
EXHIBIT R-2
[Form of]
AMENDED AND RESTATED MORTGAGE
[Provided by V&E under separate cover]
R-2
SCHEDULE 1.01(B)
TO
CREDIT AGREEMENT
REFINANCING INDEBTEDNESS
Obligations under the Existing Credit Agreements (as defined in the Credit
Agreement) other than obligations under the outstanding letters of credit issued
thereunder.
SCHEDULE 1.01(C)
TO
CREDIT AGREEMENT
SUBSIDIARY GUARANTOR
Bluestem Pipeline, LLC
Schedule 2.01
LC Facility Deposits
UBS Loan Finance LLC - $15,000,000
SCHEDULE 3.03
TO
CREDIT AGREEMENT
GOVERNMENT APPROVALS; COMPLIANCE WITH LAWS
Required consents or approvals of, registrations or filings with, or any other
action by, any Governmental Authority: None.
Violations of the Organizational Documents of any Company or any judgment,
decree or order of any Governmental Authority: None.
Violations of or default or required consents or approvals under any indenture,
agreement, Organizational Document or other instrument binding upon any Company
or its property, or that gives rise to a right thereunder to require any payment
to be made by any Company that could reasonably be expected to result in a
Material Adverse Effect: None.
Creation or imposition of any Lien on any property of any Company, except Liens
created by the Loan Documents and Permitted Liens: None.
SCHEDULE 3.05(B)
TO
CREDIT AGREEMENT
REAL PROPERTY
None
SCHEDULE 3.06(C)
TO
CREDIT AGREEMENT
VIOLATIONS OR PROCEEDINGS
Known material violation by others of any right of such Loan Party with respect
to any copyright, patent or trademark: None
SCHEDULE 3.07(A)
TO
CREDIT AGREEMENT
SUBSIDIARIES
SUBSIDIARY JURISDICTION EQUITY PERCENTAGE OF NO. SUBJECT TO OPTIONS, WARRANTS,
INTERESTS OUTSTANDING RIGHTS OF CONVERSION, OR OTHER
MEMBERSHIP PURCHASE RTS.
INTERESTS
---------- ------------ ------ ------------- ---------------------------------
Bluestem Pipeline, LLC Delaware Membership 100% None
Interests
SCHEDULE 3.07(C)
TO
CREDIT AGREEMENT
ORGANIZATION CHART
Attached is an organization chart showing the ownership structure of Borrower
and each Subsidiary on the Closing Date
(FLOW CHART)
8
SCHEDULE 3.09(C)
TO
CREDIT AGREEMENT
MATERIAL AGREEMENTS
1. Purchase and Sale Agreement among Devon Energy Production Company, L.P.
("Devon"), Tall Grass Gas Service, LLC ("Tall Grass"), and Quest Resource
Corporation ("QRC") and dated December 10, 2003.
2. Assignment Agreement between QRC and Quest Cherokee, LLC and dated
December 22, 2003.
3. Hold Back Agreement between Devon, Quest Cherokee, LLC and Bank One, N.A.
("Bank One") and dated December 22, 2003.
4. Note Purchase Agreement between Quest Cherokee, LLC and Cherokee Energy
Partners, LLC ("Cherokee Partners") and dated December 22, 2003, as
amended by that certain First Amendment to Note Purchase Agreement between
Borrower and Cherokee Partners dated as of July 22, 2004.
5. Amended and Restated Junior Subordinated Promissory Note by Quest
Cherokee, LLC in favor of Cherokee Partners dated as of July 22, 2004.
6. Operating and Management Agreement between Quest Cherokee, LLC and QES and
dated December 22, 2003.
7. Gas Gathering Agreement between Borrower and Bluestem and dated December
22, 2003.
8. Non-Competition and Non-Disclosure Agreement among QRC, Quest Cherokee,
LLC, QOG, QES STP, Ponderosa, PSI, JWGG and Cherokee Partners and dated
December 22, 2003.
9. Operational Balancing Agreements between Southern Star Central Gas
Pipeline, Inc. and Bluestem Pipeline, LLC dated January 27, 2004 and March
25, 2004.
10. Facility, Construction, Ownership and Operating Agreement between ▇▇▇▇▇▇▇▇
Gas Pipelines Central, Inc. and Lenapah Gas, LLC dated April 4, 2001.
11. Facility, Construction, Ownership and Operating Agreement between Southern
Star Central Gas Pipeline, Inc. and Bluestem Pipeline, LLC dated April 18,
2004.
12. Master Rental Agreement between Universal Compression, Inc. and Bluestem
Pipeline, LLC dated January 16, 2004.
9
13. Master Rental and Servicing Agreement between Hanover Compression, Inc.
and Bluestem Pipeline, LLC dated June 24, 2004.
14. International Swap Derivatives Account, Inc. agreement with Quest Resource
Corporation, ▇▇▇▇▇ Fargo Bank, and Bank One.
15. NAESB Agreement (Sale and Purchase of Natural Gas) between ONEOK Energy
Marketing and Trading Company, L.P. and Bluestem Pipeline, LLC dated
January 1, 2003.
16. NAESB Agreement (Sale and Purchase of Natural Gas) between Seminole Energy
Services, LLC and Bluestem Pipeline, LLC dated March 26, 2004.
10
SCHEDULE 3.18
TO
CREDIT AGREEMENT
ENVIRONMENTAL MATTERS
Matters disclosed in the following reports:
1. September 2002 Limited Due Diligence Review, Cherokee Basin Coal Bed
Methane Project, Southeastern Kansas and Northeastern Oklahoma prepared
for STP Inc., ▇▇▇▇▇ Fargo Bank Texas, N.A., and ▇▇▇▇▇ Fargo Energy
Capital, Inc. and prepared by O&G Environmental Consulting, LLC, ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
2. May 2003 Draft Limited Due Diligence Review, Southeastern Kansas Coal Bed
Methane Project, Southeastern Kansas prepared for Quest Oil & Gas
Corporation and prepared by O&G Environmental Consulting, LLC, ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
3. December 2003 Limited Due Diligence Review Update, Cherokee Basin Coal Bed
Methane Project, Southeastern Kansas and Northeastern Oklahoma prepared
for Quest Cherokee, LLC, ArcLight Capital Partners, LLC and Banc One
Capital Markets, Inc. and prepared by O&G Environmental Consulting, LLC,
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
4. December 2003 Limited Due Diligence Review, Devon Lease Coal Bed Methane
Project, Southeastern Kansas and Northeastern Oklahoma prepared for Quest
Cherokee, LLC, ArcLight Capital Partners, LLC and Banc One Capital
Markets, Inc. and prepared by O&G Environmental Consulting, LLC, ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
11
SCHEDULE 3.19
TO
CREDIT AGREEMENT
INSURANCE
1. Property Insurance
Insured: Quest Cherokee, LLC
Bluestem Pipeline, LLC
Company: Chubb Group of Insurance Companies
Additional Insured: UBS AG, Stamford Branch
2. Liability Insurance
Insured: Quest Cherokee, LLC
Bluestem Pipeline, LLC
Company: Chubb Group of Insurance Companies\Liberty Mutual
Coverage: General Liability ($1,000,000 each occurrence)
Automobile Liability ($1,000,000 combined single limit)
Excess\Umbrella Liability ($10,000,000 aggregate) Workers
Compensation ($1,000,000 each accident) Pollution Liability
($2,000,000 aggregate/$1,000,000 each incident)
Additional Insured: UBS AG, Stamford Branch
12
SCHEDULE 5.01 (1)
TO
CREDIT AGREEMENT
RESERVE REPORT
Borrower has delivered to Agent the reserve report dated June 1, 2004 prepared
by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and Associates
13
Schedule 5.14
Post-Closing Collateral Matters
(a) The Borrower shall, and shall cause each of its Subsidiaries to, as
expeditiously as possible, but in no event later than the number of days after
the Closing Date applicable to each item set forth below, provided, that (1) in
each case, the Administrative Agent may extend such number of days at any time
and from time to time by such additional term as it deems appropriate in its
sole discretion and (2) in each case, the Administrative Agent may, from time to
time and at any time, in its sole discretion, waive any requirement hereof in
whole or in part, subject to such conditions as the Administrative Agent may
reasonably determine.
To the extent not delivered at the Closing Date:
Diligence
(i) within 30 days after the Closing Date, to the extent
reasonably requested by Administrative Agent, make available copies
and lists in the Borrower's or any of its Subsidiary's possession,
or reasonably available to the Borrower or any of its Subsidiary's,
as applicable, of the following diligence items relating to the
Borrower and each of its Subsidiaries: (A) leases or other
agreements pursuant to which the Borrower or any of its Subsidiaries
uses or occupies Mineral Interests, and any ground leases or
superior leases affecting any such Mineral Interests, or options to
purchase or renew, rights of first refusal and operating or payment
covenants associated therewith, provided, however, that Borrower
shall only be required to make such leases, documents or other
agreements available at its corporate offices during normal business
hours; (B) existing surveys in the Borrower's or any of its
Subsidiary's possession with respect to any owned or leased Mineral
Interests described above; (C) all material agreements among
contiguous or adjacent land owners, development agreements or other
space sharing arrangements necessary for the operation of owned or
leased Mineral Interests described in the clauses above; (D) all
material federal, state, local or quasi-governmental agency permits,
authorizations and licenses necessary for the operation of owned or
leased Mineral Interests described in the clauses above provided,
however, that Borrower shall only be required to make such leases,
documents or other agreements available at its corporate offices
during normal business hours;
(ii) within 30 days after the Closing Date, deliver to
Administrative Agent, an update to the preliminary perfection
certificate delivered on the Closing Date substantially in the form
of Exhibit L-1, together with evidence of the completion (to the
extent required pursuant hereto) of all related recordings and
filings of, or with respect to, the Security Documents and delivery
of such other security and other documents as may be necessary or,
in the reasonable opinion of the Collateral Agent, desirable to
perfect the Liens created, or purported or intended to be created,
by the Security Documents delivered at such time.
SCHEDULE 6.01(B)
TO
CREDIT AGREEMENT
EXISTING INDEBTEDNESS
EQUIPMENT AND MORTGAGE LENDERS(1)
Note payable to ▇▇▇▇▇ Center Branch Bank in the amount of $430,638 (as of July
14, 2004)
Indebtedness to FCC Equipment Financing, Inc. in the amount of $33,435 (as of
July 14, 2004)
Indebtedness to Toyota Financial Services in the amount of $43,760 (as of July
14, 2004)
Indebtedness to Daimler Chrysler, LLC in the amount of $10,832 (as of July 14,
2004)
Indebtedness to Ford Motor Credit in the amount of $344,333 (as of July 14,
2004)
Indebtedness to Case Credit Corporation in the amount of $288 (as of July 14,
2004)
Indebtedness to Community National Bank in the amount of $28,755 (as of July 14,
2004)
Indebtedness to K.A. Equipment in the amount of $21,000 (as of July 14, 2004)
Indebtedness to Caterpillar Financial Services Corporation in the amount of
$289,375 (as of July 14, 2004)
Indebtedness to Commercial Bank in the amount of $69,338 (as of July 14, 2004)
Indebtedness to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ in the amount of $203,711 (as of July 14, 2004)
Indebtedness to Chrysler Financial Services, LC in the amount of $81,408 (as of
July 14, 2004)
Indebtedness to D. C. Financial Services, Inc. in the amount of $25,947 (as of
July 14, 2004)
Indebtedness to Daimler Chrysler Financial in the amount of $18,210 (as of July
14, 2004)
Indebtedness to Bank of Commerce in the amount of $47,875 (as of July 14, 2004)
--------
(1) Equipment and mortgage lender indebtedness has been assumed by Borrower
from certain members of the Quest Group in connection with the formation of
Borrower. Such assumption has not been documented by the issuance of new or
amended instruments evidencing such indebtedness. Members of the Quest
Group are still named as the borrowers of record with the equipment
lenders. After Closing, the equipment lender indebtedness will be
refinanced by Borrower on a secured basis and the liens securing such
refinanced indebtedness will be permitted under Section 6.02(c) of this
Agreement.
14
Indebtedness to Challenger Finance in the amount of $25,216
Indebtedness to Quest Energy Service, Inc. in the amount of $222,572
15
SCHEDULE 6.02(C)
TO
CREDIT AGREEMENT
EXISTING LIENS
Liens on the cash collateral account established in favor of Bank One, N.A.
pursuant to that certain Loan Transfer Agreement dated as of July 22, 2004 among
Borrower, Guarantor, the Quest Group, Cherokee Partners, the Existing Agents,
the Existing Lenders, the Agents and the Lenders securing certain letters of
credit initially issued under the Existing Credit Agreements.
EQUIPMENT\VEHICLE AND OTHER MORTGAGE LIENS(2)
Liens on vehicles and/or equipment securing note payable to ▇▇▇▇▇ Center Branch
Bank in the amount of $430,638 (as of July 14, 2004)
Liens on vehicles and/or equipment securing indebtedness to FCC Equipment
Financing, Inc. in the amount of $33,435 (as of July 14, 2004)
Liens on vehicles and/or equipment securing indebtedness to Toyota Financial
Services in the amount of $43,760 (as of July 14, 2004)
Liens on vehicles and/or equipment securing indebtedness to Daimler Chrysler,
LLC in the amount of $10,832 (as of July 14, 2004)
Liens on vehicles and/or equipment securing indebtedness to Ford Motor Credit in
the amount of $344,333 (as of July 14, 2004)
Liens on vehicles and/or equipment securing indebtedness to Case Credit
Corporation in the amount of $288 (as of July 14, 2004)
Liens on vehicles and/or equipment securing indebtedness to Community National
Bank in the amount of $28,755 (as of July 14, 2004)
Liens on vehicles and/or equipment securing indebtedness to K.A. Equipment in
the amount of $21,000 (as of July 14, 2004)
--------
(2) Equipment and mortgage lender indebtedness has been assumed by Borrower
from certain members of the Quest Group in connection with the formation of
Borrower. Such assumption has not been documented by the issuance of new or
amended instruments evidencing such indebtedness. Members of the Quest
Group are still named as the borrowers of record with the equipment
lenders. After Closing, the equipment lender indebtedness will be
refinanced by Borrower on a secured basis and the liens securing such
refinanced indebtedness will be permitted under Section 6.02(c) of this
Agreement.
16
Liens on vehicles and/or equipment securing indebtedness to Caterpillar
Financial Services Corporation in the amount of $289,375 (as of July 14, 2004)
Liens on vehicles and/or equipment securing indebtedness to Commercial Bank in
the amount of $69,338 (as of July 14, 2004)
Liens on vehicles and/or equipment securing indebtedness to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ in
the amount of $203,711 (as of July 14, 2004)
Liens on vehicles and/or equipment securing indebtedness to Chrysler Financial
Services, LC in the amount of $81,408 (as of July 14, 2004)
Liens on vehicles and/or equipment securing indebtedness to D. C. Financial
Services, Inc. in the amount of $25,947 (as of July 14, 2004)
Liens on vehicles and/or equipment securing indebtedness to Daimler Chrysler
Financial in the amount of $18,210 (as of July 14, 2004)
Liens on vehicles and/or equipment securing indebtedness to Bank of Commerce in
the amount of $47,875 (as of July 14, 2004)
Liens on vehicles and/or equipment securing Indebtedness to Challenger Finance
in the amount of $25,216
Liens on vehicles and/or equipment securing Indebtedness to Quest Energy
Service, Inc. in the amount of $222,572
17
SCHEDULE 6.04(B)
TO
CREDIT AGREEMENT
EXISTING INVESTMENTS
Loans of money or credit (by way of guarantee or otherwise) or advances to any
person, or purchases of any stock, bonds, notes, debentures or other obligations
or securities of, or any other interest in, or capital contributions to, any
other person, or purchase or own a futures contract or otherwise become liable
for the purchase or sale of currency or other commodities at a future date in
the nature of a futures contract (except investment in Subsidiary Guarantor and
Hedging Obligations): None
18
Real Property
(iii) within 60 days after the Closing Date, execute and
deliver an amended and restated Mortgage encumbering each leasehold
interest disclosed in subparagraph (i) of this Schedule, in each
case duly executed and acknowledged by the Borrower or Subsidiary
that is the owner of or holder of an interest in such Mortgaged
Property, and otherwise in form for recording in the recording
office of each political subdivision where each such Mortgaged
Property is situated, together with such certificates, affidavits,
questionnaires, financing statements or returns as shall be required
in connection with the recording or filing thereof to create a lien
under applicable law, all of which shall be in form and substance
reasonably satisfactory to the Collateral Agent, and any other
instruments necessary to grant a mortgage lien under the laws of
each applicable jurisdiction, which Mortgage and financing
statements and other instruments shall when recorded be effective to
create a first priority Lien on and security interest in such
Mortgaged Property to the Collateral Agent for the benefit of the
Secured Parties, subject to no other Liens except Liens expressly
permitted by such Mortgage (including, without limitation, Permitted
Collateral Liens);
(iv) within 60 days after the Closing Date, deliver to
Administrative Agent evidence of proper conveyance to Borrower or a
Subsidiary of each leasehold interest disclosed in subparagraph (i)
of this Schedule, to the extent such conveyances were either (i) not
recorded prior to the Closing Date, or (ii) previously recorded but
corrective filings were deemed necessary during the course of
Borrower's review of property files of Devon Energy Production
Company, LP;
(v) within 60 days after the Closing Date, deliver to
Administrative Agent comprehensive lists of the Mortgaged Property
(to include each leasehold interest disclosed in subparagraph (i) of
this Schedule), in form suitable for attachment to amended and
restated Mortgages, accurately and completely describing the
Mortgaged Property, including any additional or corrective
conveyances made as described in subparagraph (iv) of this Schedule;
(vi) to the extent available to Borrower or any of its
Subsidiaries, within 60 days after the Closing Date, deliver
evidence reasonably acceptable to the Collateral Agent of payment by
the Borrower of all mortgage recording taxes, fees, charges, costs
and expenses required for the recording of the Mortgages referred to
above;
Personal Property
(vii) within 30 days after the Closing Date execute and
deliver and have each deposit bank execute and deliver, Control
Agreements (as such term is defined in the Security Agreement)
necessary to perfect the Collateral Agent's security interest in all
Deposit Accounts of each Pledgor (as each such term is defined in
the Security Agreement).