NINTH AMENDED AND RESTATED LOAN AGREEMENT
Dated as of September 28, 1998
By and Among
THE ATLAS GROUP, INC.,
ATLAS ENERGY CORPORATION,
ATLAS RESOURCES, INC.,
TRANSATCO CORPORATION,
ATLAS GAS MARKETING, INC.,
PENNSYLVANIA INDUSTRIAL ENERGY, INC.,
AIC, INC.,
ATLAS ENERGY GROUP, INC.,
MERCER GAS GATHERING, INC.,
AED INVESTMENTS, INC.,
And
ARD INVESTMENTS, INC.,
as the Borrowers
And
PNC BANK, NATIONAL ASSOCIATION,
as Agent
And
THE BANKS SIGNATORY HERETO
NINTH AMENDED AND RESTATED LOAN AGREEMENT
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TABLE OF CONTENTS
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Page
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SECTION 1. LOANS .......................................................... 2
1.1 REVOLVING CREDIT LOANS ........................................... 2
1.2 TERM LOAN ........................................................ 4
1.3 SEVEN-YEAR TERM LOAN ............................................. 5
1.4 DISCOUNTED FUTURE NET INCOME ..................................... 6
1.5 MANDATORY PREPAYMENTS ............................................ 7
1.6 INTEREST RATE OPTIONS, INTEREST PAYMENTS AND CERTAIN RELATED
PAYMENTS PERTAINING TO THE LOANS ................................. 8
1.7 CAPITAL ADEQUACY REQUIREMENTS ....................................15
1.8 TIME, PLACE AND MANNER OF PAYMENTS ...............................16
1.9 LOAN ACCOUNT .....................................................16
1.10 LETTER OF CREDIT SUBFACILITY .....................................16
1.11 DEFINITIONS; CONSTRUCTION ........................................21
SECTION 2. REPRESENTATIONS AND WARRANTIES .................................28
2.1 EXISTENCE AND AUTHORITY
2.2 STOCK OWNERSHIP AND SUBSIDIARIES .................................28
2.3 RIGHTS, TITLES AND INTERESTS .....................................29
2.4 FINANCIAL STATEMENTS .............................................29
2.5 LITIGATION .......................................................30
2.6 VALIDITY OF AGREEMENT, NOTES, MORTGAGE, SECURITY AGREEMENT
(PARTNERSHIPS), SECURITY AGREEMENT (NOTE), PLEDGE AGREEMENT,
FINANCING STATEMENTS AND OTHER LOAN DOCUMENTS ....................30
2.7 PERMITS ..........................................................30
2.8 OPERATION OF ▇▇▇▇▇ AND THE PIPELINE ..............................31
2.9 PUBLIC UTILITY HOLDING COMPANY ...................................31
2.10 ERISA ............................................................31
2.11 REGULATION U .....................................................31
2.12 COMPLIANCE WITH LAW ..............................................31
2.13 TAXES ............................................................31
2.14 RELATIONSHIP OF BORROWER .........................................31
2.15 STATUS AS PRODUCERS OF GAS .......................................32
2.16 Year 2000 ........................................................32
2.17 ENVIRONMENTAL MATTERS ............................................32
2.18 INVESTMENT COMPANY ACT ...........................................32
SECTION 3. SECURITY. ......................................................32
3.1 MORTGAGE, SECURITY AGREEMENT (PARTNERSHIPS), SECURITY AGREEMENT
(NOTE) AND PLEDGE AGREEMENT ......................................32
3.2 SET-OFF ..........................................................33
3.3 ADDITIONAL SECURITY ..............................................34
3.4 OPERATING ACCOUNTS ...............................................34
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SECTION 4. AFFIRMATIVE COVENANTS ..........................................34
4.1 FIRST LIEN UNDERTAKINGS ..........................................34
4.2 PROTECTION OF RIGHTS, TITLES AND INTERESTS .......................34
4.3 OPERATION AND MAINTENANCE ........................................34
4.4 PERMITS ..........................................................35
4.5 COMPLIANCE WITH LAW ..............................................35
4.6 STATUS AS PRODUCERS OF GAS .......................................35
4.7 EXISTENCE AND OWNERSHIP ..........................................35
4.8 REPORTS, CERTIFICATIONS AND OTHER INFORMATION ....................35
4.9 RECORDS AND ACCESS ...............................................36
4.10 PAYMENT OF TAXES AND MECHANICS' CLAIMS ...........................36
4.11 INSURANCE ........................................................37
4.12 DUTY TO PLUG .....................................................37
4.13 EXPENSES, FEES AND DISBURSEMENTS .................................37
4.14 ASSIGNED PAYMENTS ................................................37
4.15 NOTIFICATION .....................................................38
4.16 CURRENT RATIO ....................................................38
4.17 DEBT To EBITDA ...................................................38
4.18 FIXED CHARGE COVERAGE RATIO ......................................39
4.19 ADDITIONAL DOCUMENTS .............................................39
4.20 ENVIRONMENTAL MATTERS ............................................39
SECTION 5. NEGATIVE COVENANTS .............................................41
5.1 ALIENATION .......................................................41
5.2 ENCUMBRANCES .....................................................41
5.3 GUARANTY .........................................................42
5.4 DEBT .............................................................42
5.5 LOANS; INVESTMENTS ...............................................42
5.6 BUSINESS ACTIVITIES ..............................................42
5.7 CONSOLIDATION OR MERGER; CHANGE OF CONTROL .......................43
5.8 ACQUISITIONS .....................................................43
5.9 REDEMPTION .......................................................43
5.10 DISTRIBUTIONS ....................................................43
5.11 LEASES ...........................................................43
5.12 CAPITAL EXPENDITURES .............................................44
5.13 NEGATIVE PLEDGES .................................................44
SECTION 6. BORROWING REQUIREMENTS .........................................44
6.1 CONDITIONS To BORROWING ..........................................44
SECTION 7. DISBURSEMENT ...................................................45
7.1 PROCEDURE ........................................................45
7.2 USE OF PROCEEDS ..................................................46
7.3 CHARGING ACCOUNT .................................................46
SECTION 8. DEFAULTS .......................................................46
SECTION 9. REMEDIES .......................................................49
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SECTION 10. MISCELLANEOUS .................................................49
10.1 WAIVER AND MODIFICATION ..........................................49
10.2 NOTICES ..........................................................49
10.3 CERTAIN TAXES ....................................................50
10.4 RIGHT TO CURE ....................................................50
10.5 VENUE AND JURISDICTION; WAIVER OF JURY TRIAL .....................50
10.6 APPLICABLE LAW ...................................................51
10.7 SEVERABILITY .....................................................51
10.8 SUCCESSORS AND ASSIGNS ...........................................51
10.9 NATURE AND SURVIVAL OF REPRESENTATIONS ...........................52
10.10 NUMBER AND GENDER ................................................52
10.11 JOINT AND SEVERAL LIABILITY ......................................52
10.12 TAX WITHHOLDING ..................................................53
10.13 HEADINGS .........................................................53
10.14 CONFIDENTIALITY ..................................................53
SECTION 11. AGREEMENT AMONG BANKS .........................................54
11.1 APPOINTMENT AND GRANT OF AUTHORITY ...............................54
11.2 RELIANCE By AGENT ON BANKS FOR FUNDING ...........................54
11.3 NON-RELIANCE ON AGENT ............................................54
11.4 RESPONSIBILITY OF AGENT AND OTHER MATTERS ........................55
11.5 ACTION ON INSTRUCTIONS ...........................................55
11.6 REQUIRED BANKS ...................................................56
11.7 ACTION UPON OCCURRENCE OF AN EVENT OF DEFAULT ....................56
11.8 INDEMNIFICATION ..................................................56
11.9 AGENT's RIGHTS AS A BANK .........................................56
11.10 PAYMENT To BANKS .................................................56
11.11 PRO RATA SHARING .................................................57
11.12 SUCCESSOR AGENT ..................................................57
11.13 AMENDMENTS AND WAIVERS ...........................................57
11.14 AGENT's FEES .....................................................58
11.15 FUNDING By BRANCH, SUBSIDIARY OR AFFILIATE .......................58
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LIST OF EXHIBITS
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EXHIBIT A - REVOLVING CREDIT NOTE
EXHIBIT B - TERM NOTE
EXHIBIT C - Seven-Year Term Note
EXHIBIT D - Mortgages
EXHIBIT E - Security Agreement (Partnership)
EXHIBIT F - Security Agreement (Note)
EXHIBIT G - Pledge Agreement
EXHIBIT H - Compliance Certificate of Financial Statement
EXHIBIT I - Assignment and Assumption Agreement
LIST OF SCHEDULES
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SCHEDULE 2.2 - Ownership/Subsidiaries
SCHEDULE 2.5 - Litigation
ANNEX I - Interest Rate Margins
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NINTH AMENDED AND RESTATED LOAN AGREEMENT
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This Agreement dated as of this 28th day of September, 1998, and made and
entered into by and among ATLAS ENERGY GROUP, INC., an Ohio corporation ("AEG"),
ATLAS RESOURCES, INC., a Pennsylvania corporation ("ARI"), TRANSATCO
CORPORATION, an Ohio corporation, ATLAS ENERGY CORPORATION, an Ohio corporation,
▇▇▇▇▇▇ GAS GATHERING, INC., a Pennsylvania corporation, ATLAS GAS MARKETING,
INC., a Pennsylvania corporation, PENNSYLVANIA INDUSTRIAL ENERGY, INC., a
Pennsylvania corporation, THE ATLAS GROUP, INC. (f/k/a "AEG Holdings, Inc."), a
Pennsylvania corporation, AED INVESTMENTS, INC., a Delaware corporation, ARD
INVESTMENTS, INC., a Delaware corporation, and AIC, INC., a Delaware
corporation, having offices and places of business at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter sometimes referred
to collectively and individually as the "Borrower") and PNC BANK, NATIONAL
ASSOCIATION, a national banking association having an office at One PNC Plaza,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("PNC") in
its capacity as the initial bank hereunder (together with any other financial
institutions that hereafter become a Bank hereunder in accordance with Section
10.8 below, the "Banks", and each individually, a "Bank" and PNC BANK, NATIONAL
ASSOCIATION, in its capacity as agent for the Banks (in such capacity, the
"Agent").
WITNESSETH:
WHEREAS, pursuant to an Eighth Amended and Restated Loan Agreement dated as
of July 31, 1995 (the Eighth Amended and Restated Loan Agreement is hereinafter
referred to as the "Original Loan Agreement"), as amended by an Amendment dated
as of December 1, 1997, and certain letter agreements among Borrower and PNC
(the Original Loan Agreement, as amended, the "Existing Loan Agreement") PNC
agreed to lend to Borrower certain amounts; and
WHEREAS, the Borrower and PNC, as the initial Bank hereunder, wish to,
inter alia, (i) continue the loans made pursuant to the Existing Loan Agreement,
(ii) provide for the joinder of additional "Banks" as lenders with respect to
such loans, and (iii) appoint PNC as Agent for such Banks now or hereafter party
hereto; and
WHEREAS, the Borrower, the Banks and the Agent desire to amend and restate
the Existing Loan Agreement as herein set forth.
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
and with the intent to be legally bound hereby, the parties hereto hereby agree
that the Existing Loan Agreement is hereby amended and restated as follows:
SECTION 1. LOANS.
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1.1 Revolving Credit Loans.
(a) Credit. Subject to the terms and conditions hereof (including but not
limited to the conditions contained in Section 7.1 hereof), and relying on the
representations and warranties herein contained, the Banks agree to, and shall
be obligated to, lend to Borrower, from time to time and upon request of
Borrower as provided in Section 7.1, during the period (the "Revolving Credit
Period") commencing on the date hereof and ending on September 28, 2001 (the
"Termination Date"), an amount or amounts (the "Revolving Credit") not exceeding
in the aggregate at any one time outstanding the lesser of (i) FORTY MILLION
($40,000,000) DOLLARS or (ii) the then current Collateral Value (as such term is
defined in Section 1.5 hereof), less in each case the sum of (x) the aggregate
Stated Amounts of outstanding Letters of Credit, (y) the aggregate amount of
unreimbursed Draws under the Letters of Credit and (z) the aggregate outstanding
principal amounts of the Term Notes; provided, however, that notwithstanding the
foregoing provisions, the aggregate principal amount of advances outstanding
under the Revolving Credit shall not exceed TWENTY MILLION ($20,000,000) DOLLARS
at any time from the date of this Agreement until the next redetermination of
the Collateral Value by Agent pursuant to Section 1.5(iii) below.
Each Bank agrees, for itself only, and subject to the terms and
conditions of this Agreement, to make revolving credit loans to the Borrower
from time to time not to exceed an aggregate principal amount at any one time
outstanding equal to the amount of its Commitment Percentage of the Revolving
Credit. For the purposes of this Agreement, the term "Commitment Percentage(s)"
shall mean, with respect to each Bank, its percentage commitment of the
Revolving Credit, the Term Credit and the Seven-Year Term Credit which shall be
the percentage initially set forth opposite its name on the signature page
hereto signed by such Bank, and thereafter as shown on the most recent
Assignment and Assumption Agreement. The term "Ratable Share" shall mean the
proportion that a Bank's Commitment Percentage of the Revolving Credit bears to
the total Revolving Credit.
The obligation of the Borrower to repay the aggregate unpaid principal
amount of the advances to the Borrower under the Revolving Credit (each such
advance under the Revolving Credit, a "Revolving Credit Loan" and collectively
the "Revolving Credit Loans") by each Bank, together with interest thereon,
shall be evidenced by one or more revolving credit notes executed in favor of
each Bank in the maximum amount of that Bank's Commitment Percentage of the
Revolving Credit and substantially in the form of Exhibit "A" attached hereto
and made a part hereof with appropriate insertions (each, a "Revolving Credit
Note" and collectively, the "Revolving Credit Notes"). Notwithstanding the
aggregate principal amount of the Revolving Credit Notes as stated on the faces
thereof in the amount of FORTY MILLION ($40,000,000) DOLLARS, the actual
principal amount due from the Borrower to each Bank on account of such Bank's
Revolving Credit Note, as of any date of computation, shall be the sum of all
advances then and theretofore made on account thereof by such Bank less all
payments of principal actually received by such Bank in collected funds during
the same period all as shown on such Bank's Loan Account established pursuant to
Section 1.9 hereof.
During the Revolving Credit Period, Borrower may borrow, repay and
reborrow funds under the Revolving Credit, provided, however, that at no time
shall the aggregate unpaid principal balance outstanding under the Revolving
Credit Notes exceed the lesser of (i) FORTY MILLION ($40,000,000) DOLLARS or
(ii) the Collateral Value, less in each
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case the sum of (x) the aggregate Stated Amounts of outstanding Letters of
Credit, (y) the aggregate amount of unreimbursed Draws under the Letters of
Credit and (z) the aggregate outstanding principal amounts of the Term Notes.
The Borrower may from time to time repay the Revolving Credit Loans outstanding
upon compliance with the terms of this Subsection 1.1 (a) and Subsection 1.6(f)
hereof. The Borrower shall not be permitted to repay any Euro-Rate Portion of
the Revolving Credit Loans other than at the end of the relevant Euro-Rate
Interest Period, unless such payment is accompanied by the prepayment premium
provided for in Subsection 1.6(f). Except as set forth in the preceding sentence
and so long as each repayment is in a minimum amount of FIFTY THOUSAND ($50,000)
DOLLARS or the outstanding principal balances of, and unpaid and accrued
interest on, the Revolving Credit Notes, whichever is less, the Borrower, upon
proper notice as provided in Subsection 1.6(f), may repay, without premium or
penalty, (i) any Base Rate Portion of the Revolving Credit Loans at any time,
and (ii) any Euro-Rate Portion of the Revolving Credit Loans at the end of the
Euro-Rate Interest Period therefor.
(b) Interest. The principal balance outstanding under each Revolving
Credit Note shall bear interest, on the actual unpaid principal amount thereof
from time to time outstanding, from the date thereof until payment in full, at
the rates of interest set forth in Section 1.6. The Borrower shall pay accrued
interest on the unpaid principal balance of each Revolving Credit Note in
arrears (i) with respect to each Base Rate Portion, at the Adjusted Base Rate
(A) on the last Business Day of each March, June, September and December during
the Revolving Credit Period, (B) at maturity, whether by acceleration or
otherwise, of such Revolving Credit Note, and (C) after maturity, on demand
until paid in full, and (ii) with respect to each Euro-Rate Portion, at the
Adjusted Euro-Rate (A) on the last day of each Euro-Rate Interest Period
(provided, however, if the Euro-Rate Interest Period chosen for a Euro-Rate
Portion exceeds three (3) months, interest on that Euro-Rate Portion shall be
due and payable every three (3) months during such Euro-Rate Interest Period and
on the last day of such Euro-Rate Interest Period), (B) at maturity, whether by
acceleration or otherwise, of such Revolving Credit Note, and (C) after
maturity, on demand until paid in full.
(c) Repayment. The entire principal balance outstanding under the
Revolving Credit Notes, and all unpaid and accrued interest thereon on the
Termination Date, shall be due and payable on such date.
(d) Commitment Fee; Voluntary Reductions. During and for the Revolving
Credit Period, Borrower shall pay to the Agent for the ratable account of each
Bank a commitment fee ("Commitment Fee") computed on the actual number of days
elapsed on the basis of a 360 day year and at the Commitment Fee Rate per annum
on the average daily difference between (i) the lesser of (x) Forty Million
($40,000,000) Dollars and (y) the then Current Collateral Value and (ii) the sum
of (w) the aggregate principal balances outstanding under the Revolving Credit
Notes plus (x) the aggregate Stated Amount of Letters of Credit outstanding plus
(y) the aggregate amount of unreimbursed Draws under the Letters of Credit plus
(z) the aggregate principal balances outstanding under the Term Notes. The
Commitment Fee shall be due and payable quarter-annually beginning on the last
Business Day of September, 1998 and on the last Business Day of each December,
March, June and September thereafter and on the Termination Date. For the
purposes of this section, the term "Commitment Fee Rate" shall mean a rate per
annurn equal to (i) thirty-seven and five-tenths (37.5) basis points (.375%) if
the then current Utilization Rate is less than 55%, and (ii) fifty (50) basis
points (.5%) if the then current Utilization Rate is equal to or greater than
55%; provided, however, that in the event the Term Loans are repaid in full by
the Borrower on or before the
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sixtieth (60th) day from the date of this Agreement, the Commitment Fee Rate
shall thereafter equal thirty-seven and five-tenths (37.5) basis points (.375%),
notwithstanding the foregoing provisions.
To the extent that the Borrower has availability under the Revolving
Credit, as it may be reduced pursuant to Section 1.1(a), the Borrower may, by
written notice to the Agent at least ten (10) Business Days prior to the date on
which such reduction is to become effective, notify the Agent that the Borrower
desires to reduce permanently all or a portion of the Revolving Credit available
to it [provided, however, such reduction shall be in the amount of One Million
($1,000,000) Dollars or an integral multiple thereof] and thereafter the Banks
shall have no obligation whatsoever to advance any funds (or to issue any
Letters of Credit) hereunder to Borrower for the portion of the Revolving Credit
that has been terminated; further, the Commitment Fee for that terminated
portion shall not be payable for any period of time after such termination
becomes effective.
1.2 Term Loan.
(a) Term Credit. Subject to the terms and conditions hereof (including but
not limited to the conditions contained in Section 7.1 hereof), and relying on
the representations and warranties herein contained, the Banks agree to make
term loans to the Borrower in an aggregate principal amount equal to SEVEN
MILLION ($7,000,000) DOLLARS (the "Term Credit"); provided, that each Bank's
obligation to advance loans hereunder shall not exceed such Bank's Commitment
Percentage of the Term Credit. The loans (each, a "Term Loan" and collectively,
the "Term Loans") under the Term Credit shall be evidenced by one or more term
notes executed in favor of each Bank in the maximum amount of that Bank's
Commitment Percentage of the Term Credit and substantially in the form of
Exhibit "B" attached hereto and made a part hereof with appropriate insertions
(each, a "Term Note" and collectively, the "Term Notes").
(b) Interest. The principal balance under each Term Note shall bear
interest, on the actual unpaid principal amount thereof from time to time
outstanding, from the date thereof until payment in full, at the rates of
interest set forth in Section 1.6. The Borrower shall pay accrued interest on
the unpaid principal balance of each Term Note in arrears (i) with respect to
each Base Rate Portion, at the Adjusted Base Rate (A) on the last Business Day
of each March, June, September and December during the term thereof, (B) at
maturity, whether by acceleration or otherwise, of such Term Note, and (C) after
maturity, on demand until paid in full, and (ii) with respect to each Euro-Rate
Portion, at the Adjusted Euro-Rate (A) on the last day of each Euro-Rate
Interest Period (provided, however, if the Euro-Rate Interest Period chosen for
a Euro-Rate Portion exceeds three (3) months, interest on that Euro-Rate Portion
shall be due and payable every three (3) months during such Euro-Rate Interest
Period and on the last day of such Euro-Rate Interest Period), (B) at maturity,
whether by acceleration or otherwise, of such Term Note, and (C) after maturity,
on demand until paid in full.
(c) Repayment. The aggregate principal balances outstanding under the Term
Notes, and all unpaid and accrued interest thereon, is to be repaid in twenty
(20) consecutive quarterly installments, in an amount equal to all unpaid and
accrued interest plus $350,000, beginning on the last day of December, 1998, and
thereafter on the last day of each December, March, June and September until
repaid in full; provided, however, that notwithstanding anything to the contrary
herein contained, the entire principal balance
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outstanding under the Term Notes, and all unpaid and accrued interest thereon,
on September 30, 2003 shall be due and payable on such date.
(d) Prepayment. The Borrower may from time to time prepay the Term Loan
outstanding upon compliance with the terms of this Subsection 1.2(d) and
Subsection 1.6(f) hereof. The Borrower shall not be permitted to repay any
Euro-Rate Portion of the Term Loan other than at the end of the relevant
Euro-Rate Interest Period, unless such prepayment is accompanied by the
prepayment premium provided for in Subsection 1.6(f). Except as set forth in the
preceding sentence and so long as each prepayment is in a minimum amount of
FIFTY THOUSAND ($50,000) DOLLARS or the aggregate outstanding principal balances
of the Term Notes, whichever is less, plus the accrued and unpaid interest on
the principal amounts prepaid, accrued to the prepayment date, the Borrower,
upon proper notice as provided in Subsection 1.6(f), may prepay, without premium
or penalty, (i) any Base Rate Portion of the Term Loan at any time, and (ii) any
Euro-Rate Portion of the Term Loan at the end of the Euro-Rate Interest Period
therefor. Each partial prepayment on the Term Loan shall be applied in payment
of (x) the Portions of the Term Loan as the Borrower may select, and (y) the
last amounts of principal to be paid under the Term Notes.
1.3 Seven-Year Term Loan.
(a) Seven-Year Term Credit. Subject to the terms and conditions hereof
(including but not limited to the conditions contained in Section 7.1 hereof),
and relying on the representations and warranties herein contained, the Banks
agree to continue to have on loan to Borrower SEVEN HUNDRED TWENTY SEVEN
THOUSAND THREE HUNDRED EIGHTY and 97/100 ($727,380.97) DOLLARS (the "Seven-Year
Term Credit"). The loan (the "Seven-Year Term Loan") under the Seven-Year Term
Credit, which was in the original principal amount of $1,300,000, shall be
evidenced by one or more notes executed in favor of each Bank in the maximum
amount of that Bank's Commitment Percentage of the Seven-Year Term Credit and
substantially in the form of Exhibit "C" attached hereto and made a part hereof
(each, a "Seven-Year Term Note" and collectively, the "Seven-Year Term Notes").
(b) Interest. The principal balance under each Seven-Year Term Note has
borne, and will continue to bear interest, on the actual unpaid principal amount
thereof from time to time outstanding, from the date thereof until payment in
full, at the rates of interest set forth in Section 1.6. The Borrower shall pay
accrued interest on the unpaid principal balance of each Seven-Year Term Note in
arrears (i) with respect to each Base Rate Portion, at the Adjusted Base Rate
(A) on the last Business Day of each month during the term thereof, (B) at
maturity, whether by acceleration or otherwise, of such Seven-Year Term Note,
and (C) after maturity, on demand until paid in full, and (ii) with respect to
each Euro-Rate Portion, at the Adjusted Euro-Rate (A) on the last day of each
Euro-Rate Interest Period (provided, however, if the Euro-Rate Interest Period
chosen for a Euro-Rate Portion exceeds three (3) months, interest on that
Euro-Rate Portion shall be due and payable every three (3) months during such
Euro-Rate Interest Period and on the last day of such Euro-Rate Interest
Period), (B) at maturity, whether by acceleration or otherwise, of such
Seven-Year Term Note, and (C) after maturity, on demand until paid in full.
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In the event that Borrower elects to have the Seven-year Term Loan bear interest
at a Fixed Rate Option as provided in Subsection 1.6(e) below, the Borrower
shall pay accrued interest on the unpaid principal balance of each Seven-Year
Term Note in arrears at the applicable Fixed Rate (A) on the last Business Day
of each month during the remaining term thereof, (B) at maturity, whether by
acceleration or otherwise, of such Seven-Year Term Note, and (C) after maturity,
on demand until paid in full.
(c) Repayment. (i) The aggregate principal balances outstanding under the
Seven-Year Term Notes, and all unpaid and accrued interest thereon, was to be
repaid in eighty-four (84) consecutive monthly installments in amounts equal to
all unpaid and accrued interest plus the Seven-Year Term Loan Payment Amount [as
such term is defined in clause (ii) below], the first such payment having been
due on the first day of September, 1995 and thereafter on the first day each
month until repaid in full; provided, however, that notwithstanding anything to
the contrary herein contained, the entire aggregate principal balances
outstanding under the Seven-Year Term Notes, and all unpaid and accrued interest
thereon, on the first day of August, 2002 shall be due and payable on such date.
(ii) For the purposes of this Section 1.3(c), the term "Seven-Year Term
Loan Payment Amount" shall mean (a) FIFTEEN THOUSAND FOUR HUNDRED SEVENTY-SIX
AND 19/100 ($15,476.19) DOLLARS prior to the Fixed Rate Effective Date [as such
term is defined in Subsection 1.6(e) below] with respect to any election by
Borrower to have the Seven-Year Term Loan bear interest at the Adjusted
Amortization Fixed Rate, and (b) thereafter, an amount equal to the quotient
(rounded to the nearest dollar) of (x) the outstanding principal balance of the
Seven-Year Term Loan as of such Fixed Rate Effective Date divided by (y) the
number of months included in the period from and including the month after such
Fixed Rate Effective Date to and including August, 2005.
(d) Prepayment. The Borrower may from time to time prepay the Seven-Year
Term Loan outstanding upon compliance with the terms of this Subsection 1.3(d)
and Subsection 1.6(f) hereof. The Borrower shall not be permitted to repay any
Euro-Rate Portion of the Seven-Year Term Loan other than at the end of the
relevant Euro-Rate Interest Period, or to repay any Fixed Rate Portion of the
Seven-Year Term Loan other than at the maturity thereof, unless such prepayment
is accompanied by the prepayment premium provided for in Subsection 1.6(f).
Except as set forth in the preceding sentence with respect to prepayments of any
Euro-Rate Portion of the Seven-Year Term Loan, and so long as each prepayment is
in a minimum amount of FIFTY THOUSAND ($50,000) DOLLARS or the aggregate
outstanding principal balances of the Seven-Year Term Notes, whichever is less,
plus the accrued and unpaid interest on the principal amounts prepaid, accrued
to the prepayment date, the Borrower, upon proper notice as provided in
Subsection 11.6(f) may prepay, without premium or penalty, (i) any Base Rate
Portion of the Seven-Year Term Loan at any time, and (ii) any Euro-Rate Portion
of the Seven-Year Term Loan at the end of the Euro-Rate Interest Period
therefor. Each partial prepayment on the Seven-Year Term Loan shall be applied
in payment of (x) the Portion of the Seven-Year Term Loan as the Borrower may
select, and (y) the last amounts of principal to be paid under the Seven-Year
Term Notes.
1.4 Discounted Future Net Income.
Promptly after September 30, 1998 and September 30 of each year thereafter,
and in any event prior to the thirty-first (31st) day of December of each year,
the Borrower shall furnish to the Agent such information as the Agent may
request in order to enable the Agent to prepare, or cause to be prepared, at
Borrower's sole cost and expense, reports in form and substance and based upon
assumptions satisfactory to the Agent, which reports shall be dated as of
January of such year and shall set forth (i) the remaining proven and producing
gas and oil (as defined in Section 1.11 hereof) reserves attributable to each
of the ▇▇▇▇▇ (the "▇▇▇▇▇") in which the Borrower now or hereafter has an
interest, whether directly or indirectly, as an owner of a working interest,
royalty or overriding royalty, as a general or limited partner of a
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partnership, as a co-venturer of a joint venture or otherwise, and a projection
of the rate of gas and oil production from the ▇▇▇▇▇ as well as a projection of
the total future net operating income payable to the Borrower with respect
thereto for a thirty (30) year period ("Future Net Income") and (ii) projected
fees, revenues and proceeds payable to Borrower and derived from, in connection
with and/or relating to (x) the transportation, compression and/or sale of gas
transported through pipeline in which the Borrower now or hereafter has an
interest, (y) the operation by Borrower of gas and oil ▇▇▇▇▇ and (z) the
management and administration by Borrower of any partnerships, in each case as
of such dates. In addition, at any time and from time to time upon request of
Agent, the Borrower shall furnish to the Agent such information as the Agent may
request in order to enable the Agent to prepare, or cause to be prepared, at
Borrowers sole cost and expense if requested by Agent after the occurrence of a
default under Section 8 hereof, interim reports in form and substance and based
upon assumptions satisfactory to the Bank, which reports shall be dated as of
the last day of the month preceding the month in which Agent makes the request
and shall set forth the remaining proven and producing gas and oil reserves
attributable to the ▇▇▇▇▇, and a projection of the rate of gas and oil
production from the ▇▇▇▇▇ as well as a projection of the Future Net Income
therefrom, as of such dates. After the preparation of such report(s)
[Engineering Report(s)], the Agent shall make a determination, as set forth in
the following paragraph, of the Discounted Future Net Income as of such dates.
For the purpose of this Agreement, the "Discounted Future Net Income" shall
be (i) an amount based upon the remaining proven and producing gas and oil
reserves attributable to the ▇▇▇▇▇ and the Partnerships (as such term is defined
below in this paragraph) in which the Bank has valid and perfected first liens
and security interests free and clear of all other encumbrances and
improvements, as set forth in the Engineering Reports and determined by Agent in
accordance with its usual and customary engineering practices and methods and
economic parameters plus (ii) an amount determined by Agent in its sole
discretion and based upon the actual and/or expected fees, revenues and proceeds
in which the Agent has valid and perfected first liens and security interests,
paid and payable to Borrower and derived from, in connection with and/or
relating to (x) the transportation, compression and/or sale of gas transported
through the gathering lines (herein referred to collectively and individually as
the "Pipeline") described in the Mortgage (as such term is defined in Section
3.1 hereof), (y) the operation by Borrower of gas and oil ▇▇▇▇▇ and (z) the
management and administration by Borrower of any partnerships. The Agent shall
determine in its sole discretion whether any oil and gas reserves, revenues and
proceeds are encumbered or impaired in favor of others and the Agent may
conclude that oil and gas reserves in which the Borrower does not have a direct
interest as the owner of a working interest, royalty or overriding royalty are
encumbered or impaired even though such oil and gas reserves are not subject to
any liens or security interests; as an example, and without limiting the Agent's
right to make such a determination in other instances, the Agent may conclude
that oil and gas reserves owned by a partnership or joint venture (hereinafter
referred to individually as a "Partnership" and collectively as "Partnerships")
in which the Borrower is a partner or co-venturer are impaired if such
Partnership suffers any loss or incurs any liability other than reasonable
charges of trade creditors incurred and paid in the normal course of business.
1.5 (i) Mandatory Prepayments. In the event that the total of the aggregate
principal balances outstanding under the Revolving Credit Notes plus the
aggregate principal balances outstanding under the Term Notes plus the aggregate
Stated Amounts of the Letters of Credit outstanding (the total of such amounts
is herein referred to as the "Aggregate Outstandings"), shall, at any time, be
in excess of the then current Collateral Value (as such
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term is defined in clause (ii) below) (the difference between such amounts shall
be referred to herein as the "Deficiency Amount"), the Borrower shall (x) within
ninety (90) days after such occurrence, make a payment first on the Term Notes
[such payment to be applied in the manner set forth in Section 1.2(d)], and then
on the Revolving Credit Notes, in an aggregate amount equal to at least one-half
(1/2) of the Deficiency Amount (plus interest on such amount accrued to the date
of payment) and (y) within one hundred eighty (180) days after such occurrence,
make a payment first on the Term Notes [such payment to be applied in the manner
set forth in Section 1.2(d)], and then on the Revolving Credit Notes, in an
aggregate amount equal to the remaining amount of the Deficiency Amount (plus
interest on such amount accrued to the date of payment) such that, after giving
effect to such payment, the Aggregate Outstandings shall not exceed the
Collateral Value.
(ii) "Collateral Value" Definition. For the purposes of this Agreement, the
term "Collateral Value" shall mean the amount of indebtedness for borrowed money
that the Agent shall determine in its reasonable judgment and in accordance with
its customary standards can be supported by the Discounted Future Net Income, as
such amount is determined pursuant to Section 1.4 above; provided, that from the
date hereof until the next determination of the Collateral Value pursuant to
clause (iii) below, the Collateral Value shall be Twenty-Seven Million
($27,000,000) Dollars.
(iii) "Collateral Value" Redetermination. The Agent shall redetermine the
Collateral Value annually based upon the Discounted Future Net Income
determination made pursuant to Section 1.4 above; provided, however, that (x)
the Agent shall also redetermine the Collateral Value upon the request of
Borrower one additional time per year thereafter (in addition to the annual
redetermination provided for above), (y) the Agent may, at its option, make one
additional redetermination of the Collateral Value each year and (z) the Agent
may redetermine the Collateral Value at any time after the occurrence of a
default under Section 8 hereof.
1.6 Interest Rate Options, Interest Payments and Certain Related Payments
Pertaining to the Loans.
(a) Interest. Each of the Revolving Credit Notes, the Seven-Year Term Notes
and the Term Notes (hereinafter referred to collectively as the "Notes" and
individually as a "Note") shall bear interest, on the actual unpaid principal
amount thereof from time to time outstanding, from the date thereof until
payment in full, at the rates of interest set forth in this Section 1.6. The
Borrower may call the Agent to receive an indication of the rates then in
effect, but it is acknowledged that any such projection shall not be binding on
the Banks nor affect the rate of interest which thereafter is actually in effect
when the election is made. The Borrower shall pay accrued interest on the unpaid
principal balance of each Note in arrears as set forth in Subsection 1.1(b),
Subsection 1.2(b) or Subsection 1.3(b), as the case maybe. If at any time the
designated rate applicable to the Revolving Credit Loans, the Seven-Year Term
Loan, or the Term Loan, as the case may be, made by any Bank exceeds such Bank's
highest lawful rate, the rate of interest on the Revolving Credit Loans, the
Seven-Year Term Loan or the Term Loan, as the case may be, shall be limited to
such Bank's highest lawful rate.
(b) Interest Rate Options. The unpaid principal amount of the Revolving
Credit Loans, the Seven-Year Term Loan or the Term Loan then outstanding shall
bear interest, for each day until due, at one or more rates selected, at any
time or from time to time, by the Borrower from among the Options set forth
below subject to the provisions of Subsections
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1.6(c), 1.6(d) and 1.6(e) below; it being understood that, subject to the
provisions of this Agreement, the Borrower may select different Options, subject
to the provisions of Subsections 1.6(c), 1.6(d) and 1.6(e) below, to apply
simultaneously to different Portions of the Revolving Credit Loans, the
Seven-Year Term Loan or the Term Loan, as the case may be, and may select
different Euro-Rate Interest Periods to apply simultaneously to different
Portions of the Euro-Rate Portions of the Revolving Credit Loans, the Seven-Year
Term Loan or the Term Loan, as the case may be.
(i) Base Rate Option: A fluctuating rate per annum (computed upon the
basis of a year of 365/366 days, and the actual number of days elapsed) equal to
(A) the sum of (I) the Base Rate, plus (II) the Applicable Base Rate Margin,
with respect to the Revolving Credit Loans outstanding, (B) the sum of (I) the
Base Rate, plus (II) the Applicable Base Rate Margin, plus (III) twelve and
five-tenths (12.5) basis points (.125%) per annum, with respect to the Term
Loan outstanding, and (C) the sum of (I) the Base Rate, plus (II) fifty (50)
basis points (.5%) per annum, with respect to the Seven-Year Term Loan
outstanding. The foregoing rate shall be adjusted automatically from time to
time upon each change in the Base Rate.
(ii) Euro-Rate Option: A rate per annum (computed upon the basis of a
year of 360 days and the actual number of days elapsed) equal to (A) the sum of
(I) the Euro-Rate, plus (II) the Applicable Euro-Rate Margin, with respect to
the Revolving Credit Loans outstanding, (B) the sum of (I) the Euro-Rate, plus
(II) the applicable Euro-Rate Margin, plus (III) twelve and five-tenths (12.5)
basis points (.125%) per annum with respect to the Term Loan outstanding. and
(C) the sum of (I) the Euro-Rate, plus (II) two hundred twenty-five (225) basis
points (2.25%) per annum with respect to the Seven-Year Term Loan outstanding.
(iii) Fixed Rate Option. The rate of interest (computed upon the basis
of a year of 360 days and the actual number of days elapsed) on all amounts
borrowed and outstanding under the Seven-Year Term Loan under this Option shall
be an amount equal to the sum of (a) the Banks' fully-absorbed cost of funds (as
determined by the Banks in accordance with their respective customary practices,
which determination shall be conclusive and binding on the Borrower) plus (b)
the Applicable Fixed Rate Margin as specified by Borrower in accordance with
Subsection 1.6(e) below.
(c) Euro-Rate Interest Periods, Limitations on Elections. At any time when
the Borrower shall select, convert to or renew the Euro-Rate Option to apply to
all or any Portion of the outstanding Revolving Credit Loans, the Seven-Year
Term Loan or the Term Loan, as the case may be, it shall fix one or more periods
during which such Option shall apply, such periods to be (x) one (1) month if
the Borrower selects the Euro-Rate Option during the Syndications Period and
(ii) one (1), two (2), three (3), or six (6) months if the Borrower selects the
Euro-Rate Option after the Syndications Period has ended, in each case
commencing on the borrowing, conversion or renewal date. All of the foregoing,
however, is subject to the following:
(i) any Euro-Rate Interest Period which would otherwise end on a day
which is not a Business Day shall be extended to the next Business Day
unless such Business Day falls in the succeeding calendar month in which
case such Euro-Rate Interest Period shall end on the next preceding
Business Day;
(ii) any Euro-Rate Interest Period which begins on the last day of a
calendar month or on a day for which there is no numerically corresponding
day in the subsequent calendar month during which such Euro-Rate Interest
Period is to end shall end on the last Business Day of such subsequent
month; and
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(iii) in the case of the renewal of a Euro-Rate Option at the end of a
Euro-Rate Interest Period, the first day of the new Euro-Rate Interest
Period shall be the last day of the preceding Euro-Rate Interest Period,
without duplication in payment of interest for such day.
Elections by the Borrower of the Euro-Rate Option shall be subject to
the following further limitations:
(i) The Euro-Rate Portion for each Euro-Rate Interest Period shall be
in an aggregate principal amount of $500,000 or more; provided, however,
that each incremental unit in excess of $500,000 shall be $100,000 or an
integral multiple thereof;
(ii) No Euro-Rate Interest Period may be elected with regard to amounts
outstanding under the Revolving Credit Note which Interest Period would end
after the Termination Date;
(iii) No Euro-Rate Interest Period may be elected with regard to
amounts outstanding under the Term Note or the Seven-Year Term Note which
Euro-Rate Interest Period would end after the then last scheduled principal
payment of the Term Loan or the Seven-Year Term Note (as the case may be);
(iv) The Borrower shall maintain a Base Rate Portion, or must schedule
the expiration of Euro-Rate Interest Periods with sufficient principal
portions, or must cause the existence of a combination of a Base Rate
Portion plus expirations of Euro-Rate Interest Periods with sufficient
principal portions, equal to the next scheduled principal payment of the
Term Loan and the Seven-Year Term Loan;
(v) Upon the occurrence of a default set forth in items A or B of
Section 8 hereof, or upon the declaration of default pursuant to items C
through and including L of Section 8 hereof, the ability of the Borrower to
elect the Euro-Rate Option shall cease; and
(vi) At no time may there be more than ten (10) Euro-Rate Interest
Periods in effect.
(d) Election, Conversion or Renewal of Euro-Rate and Base Rate Interest
Rate Options. Elections of or conversions to the Base Rate Option shall continue
in effect until converted as hereinafter provided. Elections of, conversions to
or renewals of the Euro-Rate Option shall expire as to each Euro-Rate Portion at
the expiration of the applicable Euro-Rate Interest Period.
At any time with respect to the Base Rate Portion or at the expiration
of the applicable Euro-Rate Interest Period with respect to any Euro-Rate
Portion, the Borrower, subject to Subsection 1.6(c), may cause all or any part
of the principal amount of such Portion to be converted to and/or (in the case
of a Euro-Rate Portion) to be renewed under the
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Euro-Rate Option by notice to the Agent as hereinafter provided. Such notice (i)
shall be oral or in writing and if oral immediately confirmed in writing to the
Agent, (ii) shall be irrevocable, (iii) shall be given not later than 11:00
A.M., Pittsburgh, Pennsylvania time not less than two (2) Business Days prior to
the proposed effective date for conversion to or renewal of, either in whole or
in part, the Euro-Rate Option and (iv) shall set forth:
(A) the effective date, which shall be a Business Day;
(B) the new Euro-Rate Interest Period(s) selected; and
(C) with respect to each such Euro-Rate Interest Period, the aggregate
principal amount of the corresponding Euro-Rate Portion.
At the expiration of each Euro-Rate Interest Period, any part
(including the whole) of the principal amount of the corresponding Euro-Rate
Portion, as to which no notice of conversion or renewal has been received as
provided above, shall automatically be converted to the Base Rate Option. The
Agent shall promptly notify the Borrower and the Banks of any such automatic
conversion.
(e) Election of Fixed Rate Option. The Borrower shall have the option
once during the term of this Agreement with respect to the Seven-Year Term Loan
to elect to have the entire principal balance outstanding under the Seven-Year
Term Loan, on the effective date of such election (the "Fixed Rate Effective
Date"), bear interest for the remaining term thereof at a Fixed Rate Option,
subject to the other provisions of this Agreement. It is understood that if the
Borrower makes such an election pursuant to this clause (e) of Subsection 1.6,
then from and after the Fixed Rate Effective Date the Seven-Year Term Loan shall
bear interest at the applicable Fixed Rate until paid in full, and the Borrower
shall have no further right to elect either the Base Rate Option or the
Euro-Rate Option hereunder with respect to any Portion of the Seven-Year Term
Loan. Notice of the Borrower's election of the Fixed Rate Option shall be made
to the Agent in writing at least three (3) Business Days prior to the proposed
Fixed Rate Effective Date; such notice shall set forth the Fixed Rate Effective
Date and the Applicable Fixed Rate Margin elected by Borrower and such notice of
election and choice of Applicable Fixed Rate Margin shall be irrevocable and
shall commit the Borrower to the election of the Fixed Rate Option hereunder.
(f) Repayments and Prepayments. The Borrower, upon (i) one (1) Business
Day's oral or written notice to the Agent, in the case of Revolving Credit
Loans, the Seven-Year Term Loan or the Term Loan, as the case may be, bearing
interest at the Adjusted Base Rate or (ii) three (3) Business Days' oral or
written notice to the Agent, in the case of Revolving Credit Loans, the
Seven-Year Term Loan or the Term Loan, as the case may be, bearing interest at
the Adjusted Euro-Rate, followed immediately thereafter by the Borrower's
written confirmation to the Agent of any oral notice, may repay, or prepay, as
the case may be, the outstanding amount of the Revolving Credit Loans, the
Seven-Year Term Loan or the Term Loan, as the case may be, in whole or in part
with accrued interest, fees and other amounts then due and payable on the amount
repaid or prepaid, as the case may be, to the date of such repayment or
prepayment, as the case may be, all as set forth below.
The Borrower may repay, or prepay, as the case may be, a Portion of the
Revolving Credit Loans, the Seven-Year Term Loan or the Term Loan, as the case
may be, bearing interest at the Adjusted Base Rate without premium or penalty.
If the Borrower shall
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repay, or prepay, as the case may be, a Portion of the Revolving Credit Loans,
the Seven-Year Term Loan or the Term Loan, as the case may be, bearing interest
at the Adjusted Euro-Rate prior to the end of the Euro-Rate Interest Period
relating to such Euro-Rate, the Borrower shall pay (in addition to principal and
interest) such additional amounts as may be necessary to compensate each Bank
for any loss and any direct or indirect costs, including the cost of
reemployment of funds so prepaid at rates lower than the cost to such Bank of
such funds. Such losses and costs shall be specified in writing (setting forth
the manner of calculation) to the Borrower by such Bank and, absent manifest
error in computation, shall be binding and conclusive on the Borrower. If the
Borrower shall prepay any portion of the Seven-Year Term Loan bearing interest
at the Fixed Rate, the Borrower shall pay within thirty (30) days from the date
of such prepayment a Fixed Rate Prepayment Premium (as defined below) on the
amount of such prepayment.
For the purposes of this Subsection 1.6(f), the term "Fixed Rate
Prepayment Premium" shall mean an amount equal to the present value, if
positive, of the product of (i) the difference between (x) the yield of a
security issued by the United States Treasury and selected by the Agent in its
sole discretion (including bonds, notes and bills), available to the public at
the time the Borrower elected to convert the Seven-Year Term Loan into a Fixed
Rate Option, and maturing on or about the final maturity date of the Seven-Year
Term Loan and (y) the yield of a similar type of security issued by the United
States Treasury and selected by the Agent in its sole discretion (including
bonds, notes and bills), available to the public at the time of the prepayment,
and maturing on or about the final maturity date of the Seven-Year Term Loan and
(ii) the principal amount of such prepayment to be applied to the reduction of
the Seven-Year Term Loan and (iii) the number of years computed on the actual
number of days on the basis of a 360-day year (including any fractional year)
from the time of the prepayment to the final maturity date of the Seven-Year
Term Loan.
Such losses and costs shall be specified in writing (setting forth the
manner of calculation) to the Borrower by the Agent and, absent manifest error
in computation, shall be binding and conclusive on the Borrower.
(g) Yield Protection. If any Governmental Rule or the interpretation or
application thereof by any court or by any Governmental Person charged with the
administration thereof:
(i) subjects any Bank to any tax, levy, impost, charge, fee, deduction
or withholding of any kind hereunder (other than a tax imposed or based
upon the income of such Bank) or changes the basis of taxation of any Bank
with respect to the payments by the Borrower of principal or interest due
hereunder (other than any change which affects, and to the extent that it
affects, the taxation of the total net income of such Bank); or
(ii) imposes, modifies or deems applicable any reserve, special deposit
or similar requirements against assets held by any Bank; or
(iii) imposes upon any Bank any other condition with respect to this
Agreement,
such Bank shall notify the Agent in writing as soon as practicable after such
Bank becomes aware thereof; and if the result of any of the foregoing is to
increase the cost to such Bank,
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reduce the income receivable by such Bank or impose any expense upon such Bank,
with regard to all or any portion of the Revolving Credit Loans, the Seven-Year
Term Loan or the Term Loan, as the case may be, bearing interest at either the
Adjusted Euro-Rate or the Fixed Rate, by an amount determined by such Bank in
good faith and which such Bank in good ▇▇▇▇▇ ▇▇▇▇▇ material, such Bank shall
notify, from time to time, the Agent and the Borrower of the amount determined
by such Bank (which determination, absent manifest error in computation, shall
be conclusive) to be necessary to compensate it (on an after-tax basis) for such
increase in cost, reduction in income or additional expense, setting forth the
calculations and the reasons therefor. The Borrower shall pay such amount to
such Bank, as additional consideration hereunder, within ten (10) days of the
Borrower's receipt of such notice.
(h) Euro-Rate Unascertainable.
(i) If on any date on which a Euro-Rate would otherwise be determined,
the Agent shall have determined (which determination shall be final and
conclusive) that:
(a) adequate and reasonable means do not exist for ascertaining
such Euro-Rate, or
(b) a contingency has occurred which materially and adversely
affects the London interbank market relating to the Euro-Rate, or
(ii) if at any time any Bank shall have determined (which determination
shall be final and conclusive) that:
(a) the making, maintenance or funding of the Portion of the
Revolving Credit Loans, the Seven-Year Term Loan or the Term Loan, as the
case may be, to which a Euro-Rate Option applies has been made
impracticable or unlawful by compliance by such Bank in good faith with any
Governmental Rule or any interpretation or application thereof by any
Governmental Person or with any request or directive of any such
Governmental Person (whether or not having the force of law), or
(b) such Euro-Rate Option will not adequately and fairly reflect
the cost to such Bank of the establishment or maintenance of the Portions
of the Revolving Credit Loans, the Seven-Year Term Loan or the Term Loan,
as the case may be, to which a Euro-Rate Option applies or
(c) after making all reasonable efforts that deposits of the
relevant amount in Dollars for the relevant Euro-Rate Interest Period for
the Revolving Credit Loans, the Seven-Year Term Loan or the Term Loan, as
the case may be, to which a Euro-Rate Option applies, respectively, are not
available to such Bank at the effective cost of funding a proposed
Euro-Rate Interest Period, in the London interbank market,
then, in the case of any event specified in part (a) above, the Agent shall
promptly so notify the Borrower and the other Banks thereof; and in the case of
any event specified in part (b) above, the affected Bank shall promptly so
notify the Agent thereof, and the Agent shall send a copy of such notice to the
Borrower and the other Banks. Upon such date as shall be specified in such
notice (which shall not be earlier than the date such notice is given) the
obligation of the Banks
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to allow the Borrower to select, convert to or renew a Euro-Rate Option shall be
suspended until the Agent or such Bank (as the case may be) shall have later
notified the Borrower of the Bank's determination (which determination shall be
final and conclusive) that the circumstances giving rise to such previous
determination no longer exist. If at any time the Agent or any Bank makes a
determination under parts (a) or (b) of this Subsection 1.6(h) and the Borrower
has previously notified the Agent of the Borrower's selection of, conversion to
or renewal of a Euro-Rate Option and such Option has not yet gone into effect,
such notification shall be deemed to provide for selection of, conversion to or
renewal of the Base Rate Option otherwise available with respect to the Portion
of the Revolving Credit Loans, the Seven-Year Term Loan or the Term Loan, as the
case may be. On the date of the occurrence of any event described in item (i) of
part (b), the Revolving Credit Loans, the Seven-Year Term Loan or the Term Loan,
as the case may be, bearing interest at the Adjusted Euro-Rate then outstanding
shall be automatically converted to the Base Rate Option and the Borrower shall
pay to the Banks the accrued and unpaid interest on the Revolving Credit Loans,
the Seven-Year Term Loan or the Term Loan, as the case may be, to (but not
including) the date of such conversion.
The Borrower shall pay each Bank any additional amounts determined by
such Bank in good faith to be reasonably necessary to compensate such Bank for
any costs incurred by such Bank as a result of any conversion pursuant to item
(i) of part (b) above on a day other than the last day of the relevant Euro-Rate
Interest Period, including, but not limited to, any interest or fees payable by
such Bank to lenders of funds obtained by it to loan or maintain the lending of
the Revolving Credit Loans, the Seven-Year Term Loan or the Term Loan, as the
case may be, so converted. The affected Bank shall furnish to the Borrower a
certificate as to the amount necessary to compensate such Bank for such costs
(which certificate shall set forth the calculation in reasonable detail, and,
absent manifest error in computation, shall be conclusive), and the Borrower
shall pay such amount to such Bank, as additional consideration hereunder,
within ten (10) days of the Borrower's receipt of such certificate.
(i) Indemnity. The Borrower shall indemnify the Agent and each Bank against
all liabilities, losses or expenses (including loss of margin, any loss or
expense incurred in liquidating or employing deposits from third parties and any
loss or expense incurred in connection with funds acquired by a Bank to fund or
maintain Revolving Credit Loans, the Seven-Year Term Loan or the Term Loan, as
the case may be, subject to either the Fixed Rate Option or the Euro-Rate
Option) which any Bank sustains or incurs as a consequence of any
(a) payment, prepayment, conversion or renewal of the Revolving Credit
Loans, the Seven-Year Term Loan or the Term Loan, as the case may
be, to which the Euro-Rate Option applies on a day other than the
last day of the corresponding Euro-Rate Interest Period (whether
or not such payment or prepayment is mandatory, voluntary or
automatic and whether or not such payment or prepayment is then
due),
(b) attempt by the Borrower to revoke (expressly, by later
inconsistent notices or otherwise) in whole or part any notice
relating to the making, maintenance, renewal or conversion of the
Revolving Credit Loans, the Seven-Year Term Loan or the Term Loan,
as the case may be, or the conversion of the Revolving Credit Loan
to the Term Loan, or any voluntary prepayments of the Revolving
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Credit Loans, the Seven-Year Term Loan or the Term Loan, as the
case may be, or
(c) default by the Borrower in the payment of any principal of, or
interest on, the Revolving Credit Loans, the Seven-Year Term Loan
or the Term Loan, as the case may be, when due (whether by
acceleration or otherwise).
If any Bank sustains or incurs any such loss or expense it shall from
time to time notify the Borrower and the Agent of the amount determined in good
faith by such Bank (which determination shall be final and conclusive and may
include such assumptions, allocations of costs and expenses and averaging or
attribution methods as such Bank shall deem reasonable) to be necessary to
indemnify such Bank for such loss or expense. Such notice shall set forth in
reasonable detail the basis for such determination. Such amount shall be due and
payable by the Borrower to such Bank ten (10) Business Days after such notice is
given. In no event shall the indemnity payment provided for in this Subsection
1.6(i) require any payment to any Bank for a specific liability, loss or expense
incurred by such Bank by the Borrower which duplicates the reimbursement of such
Bank for any loss suffered by such Bank upon a voluntary prepayment of the
Revolving Credit Loans, the Seven-Year Term Loan or the Term Loan, as the case
may be, for which the Borrower has paid the prepayment premium required by
Subsection 1.6(f) hereof.
(j) Interest After Default; Maturity. Upon the occurrence of and during the
continuance of an event of default under Section 8 hereof, and after the
principal amount of all or any part of the Revolving Credit Loan, the Term Loan
or the Seven-Year Term Loan shall have become due and payable, whether by
acceleration or otherwise, the Revolving Credit Loan, the Term Loan and the
Seven-Year Term Loan shall bear interest at a rate per annum which shall be two
hundred (200) basis points (2%) per annum above the rate otherwise in effect
under the Base Rate Option, such interest rate to change automatically from time
to time, effective as of the effective date of each change in the Base Rate.
1.7 Capital Adequacy Requirements. If any law or guideline or
interpretation or application thereof by any official body charged with the
interpretation or administration thereof or compliance with any request or
directive of any official body (whether or not having the force of law), now
existing or hereafter adopted or imposed, modifies or deems applicable any
capital adequacy, reserve requirements, special deposit or similar requirements
against assets (funded or contingent) of, or credits extended by or commitments
to extend credit by, any Bank and the result thereof is to have the effect of
reducing the rate of return on such Bank's capital as a consequence of its
obligations hereunder to make and continue the Revolving Credit Loan or to issue
or participate in any Letter of Credit to a level below that which such Bank
could have achieved but for such adoption, imposition or modification, taking
into consideration such Bank's policies with respect to capital adequacy or
reserve requirements or special deposit or similar requirements, by an amount
which such Bank deems to be material, such Bank shall notify the Borrower of
such events. After such Bank notifies Borrower of such events, such Bank shall
promptly deliver to the Borrower a statement of the amount necessary to
compensate such Bank for the reduction in the rate of return on its capital
attributable to such Bank's obligations hereunder to make and continue the
Revolving Credit Loan or to issue or participate in any Letter of Credit. Such
Bank shall determine the capital compensation amount in good faith, using
reasonable attribution and averaging methods. Such Bank shall from time to time
notify the Borrower of the amount so determined and such amount
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shall be due and payable by the Borrower to such Bank thirty (30) days after
such notice is given; provided, however, that if the Borrower pays the Revolving
Credit Loan in full (including principal and interest), and terminates the
Revolving Credit and the commitment hereunder to issue Letters of Credit, within
such thirty (30) day period, the Borrower shall not be liable to such Bank to
pay such amount determined pursuant to this Section 1.7. All amounts determined
in accordance with this Section 1.7 shall be effective from the date on which
such Bank first gave notice to the Borrower of a reduction in such Bank's rate
of return.
1.8 Time, Place and Manner of Payments. All payments and prepayments to be
made by the Borrower hereunder or under any Note in respect of any principal,
interest, or fee shall be made to the Agent for the ratable accounts of the
Banks at the principal office of Agent in Pittsburgh, Pennsylvania. Such
payments shall be made in immediately available funds no later than 12:00 noon
(Pittsburgh, Pennsylvania time) on the date such payment is due.
1.9 Loan Account. Each Bank shall open and maintain on its books a loan
account (each, a "Loan Account") in the name of the Borrower, with respect to
advances made, payments and prepayments of principal, and the computations and
payments of interest and all other amounts due and sums paid to such Bank
hereunder or under its Notes. Such Loan Account, absent manifest error, shall be
conclusive and binding on the Borrower as to the amount at any time due to such
Bank from the Borrower.
1.10 Letter of Credit Subfacility.
(a) Terms of Letter of Credit. The Agent shall issue, subject to the terms
and conditions hereof (including but not limited to the conditions contained in
Section 7.1 hereof) and at the request of the Borrower, Letters of Credit, all
as more fully set forth in this Section 1.10.
(i) No Letter of Credit shall be issued hereunder which has an expiry
date more than one (1) year from the date of issuance and shall in no event
expire later than five (5) Business Days prior to the Termination Date;
provided, however, that any Letter of Credit with a one (1) year maturity may
provide for the renewal thereof for an additional one (1) year period, which
shall in no event extend beyond five (5) Business Days prior to the Termination
Date.
(ii) Each Letter of Credit, whether now outstanding or hereafter issued
by the Agent upon written request received by the Agent not less than five (5)
Business Days prior to the proposed date of issuance pursuant to this Section
1.10, has been or shall be issued in accordance with the Agent's then current
practices relating to the issuance by the Agent of Letters of Credit, including
but not limited to the execution and delivery by the Borrower of an application
for and/or confirmation of standby letter of credit and the payment by the
Borrower of the customary processing fees. Each issuance or renewal of a Letter
of Credit hereunder shall be conditioned on (and be deemed to be a
representation and warranty by Borrower as to) the following: that at the time
of such issuance or renewal the representations and warranties contained in this
Agreement are true and correct and no default set forth in Section 8 hereof
shall have occurred and be continuing and no event which, with the giving of
notice or lapse of time or both would become such a default, shall have occurred
or shall have failed to occur and be continuing.
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(iii) In no event shall (x) the aggregate undrawn face amount of the
Letters of Credit exceed, at any one time, Two Million ($2,000,000) Dollars, or
(y) the sum of the aggregate outstanding principal balance of the Revolving
Credit Loans, the aggregate outstanding principal balance of the Term Loans, the
aggregate unpaid balance of any unreimbursed Draws under the Letters of Credit
and the aggregate Stated Amounts of the Letters of Credit exceed, at any one
time, the lesser of (x) Forty Million ($40,000,000) Dollars or (y) the then
current Collateral Value. The Stated Amount of each Letter of Credit, while the
same is issued and outstanding, and any unreimbursed Draws under the Letters of
Credit, shall reduce the maximum amount otherwise available under the Revolving
Credit as set forth in Section 1.1(a) hereof.
(b) Disbursements, Reimbursement.
(i) Immediately upon the issuance of each Letter of Credit, each Bank
shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from the Agent a participation in such Letter of Credit and each Draw
thereunder in an amount equal to such Bank's Ratable Share of the maximum amount
available to be drawn under such Letter of Credit and the amount of such Draw,
respectively.
(ii) In the event of any request for a Draw under a Letter of Credit by
the beneficiary or transferee thereof, the Agent will promptly notify the
Borrower. Provided that it shall have received such notice, the Borrower shall
reimburse (such obligation to reimburse the Agent shall sometimes be referred to
as a "Reimbursement Obligation") the Agent prior to 12:00 noon, Pittsburgh time
on each date that an amount is paid by the Agent under any Letter of Credit
(each such date, a "Drawing Date") in an amount equal to the amount so paid by
the Agent. In the event the Borrower fails to reimburse the Agent for the full
amount of any drawing under any Letter of Credit by 12:00 noon, Pittsburgh time,
on the Drawing Date, the Agent will promptly notify each Bank thereof, and the
Borrower shall be deemed to have requested that Revolving Credit Loans be made
by the Banks under the Base Rate Option to be disbursed on the Drawing Date
under such Letter of Credit, subject to the conditions set forth in Section 7
below, other than any notice requirements. Any notice given by the Agent
pursuant to this paragraph may be oral if immediately confirmed in writing
provided that the lack of such an immediate confirmation shall not affect the
conclusiveness or binding effect of such notice.
(iii) Each Bank shall upon any notice pursuant to paragraph (ii) above
make available to the Agent an amount in immediately available funds equal to
its Ratable Share of the amount of the drawing, whereupon the participating
Banks shall (subject to paragraph (iv) below) each be deemed to have made a
Revolving Credit Loan under the Base Rate Option to the Borrower in that amount.
If any Bank so notified fails to make available to the Agent for the account of
the Agent the amount of such Bank's Ratable Share of such amount by no later
than 2:00 p.m., Pittsburgh time on the Drawing Date, then interest shall accrue
on such Bank's obligation to make such payment, from the Drawing Date to the
date on which such Bank makes such payment, (i) at a rate per annum equal to the
Federal Funds Effective Rate in effect during the first three days following the
Drawing Date and (iii) at a rate per annum equal to the rate applicable to Loans
under the Base Rate Option on and after the fourth day following the Drawing
Date. The Agent will promptly give notice of the occurrence of the Drawing Date,
but failure of the Agent to give any such notice on the Drawing Date or in
sufficient time to enable any Bank to effect such payment on such date shall not
relieve such Bank from its obligation under this paragraph.
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(iv) With respect to any unreimbursed Draw that is not converted into
Revolving Credit Loans under the Base Rate Option to the Borrower in whole or in
part as contemplated by paragraph (ii) above, because of the Borrower's failure
to satisfy the conditions set forth in Section 7 below other than any notice
requirements or for any other reason, the Borrower shall be deemed to have
incurred from the Agent a Letter of Credit Borrowing in the amount of such Draw.
Such Letter of Credit Borrowing shall be due and payable on demand (together
with interest) and shall bear interest at the rate per annum applicable to the
Revolving Credit Loans under the Base Rate Option. Each Bank's payment to the
Agent pursuant to paragraph (iii) above, shall be deemed to be a payment in
respect of its participation in such Letter of Credit Borrowing and shall
constitute a Participation Advance from such Bank in satisfaction of its
participation obligation under this Section 1.10.
(c) Repayment of Participation Advances.
(i) Upon (and only upon) receipt by the Agent for its account of
immediately available funds from the Borrower (x) in reimbursement of any
payment made by the Agent under the Letter of Credit with respect to which any
Bank has made a Participation Advance to the Agent, or (y) in payment of
interest on such a payment made by the Agent under such a Letter of Credit, the
Agent will pay to each Bank, in the same funds as those received by the Agent,
the amount of such Bank's Ratable Share of such funds, except the Agent shall
retain the amount of the Ratable Share of such funds of any Bank that did not
make a Participation Advance in respect of such payment by Agent.
(ii) If the Agent is required at any time to return to Borrower, or to
a trustee, receiver, liquidator, custodian, or any official in any insolvency or
similar proceeding, any portion of the payments made by Borrower to the Agent
pursuant to paragraph (i) immediately above in reimbursement of a payment made
under the Letter of Credit or interest or fee thereon, each Bank shall, on
demand of the Agent, forthwith return to the Agent the amount of its Ratable
Share of any amounts so returned by the Agent plus interest thereon from the
date such demand is made to the date such amounts are returned by such Bank to
the Agent, at a rate per annum equal to the Federal Funds Rate in effect from
time to time.
(d) Documentation.
The Borrower agrees to be bound by the terms of the Agent's application
and agreement for letters of credit and the Agent's written regulations and
customary practices relating to letters of credit, though such interpretation
may be different from the Borrower's own. In the event of a conflict between
such application or agreement and this Agreement, this Agreement shall govern.
It is understood and agreed that, except in the case of gross negligence or
willful misconduct, the Agent shall not be liable for any error, negligence
and/or mistakes, whether of omission or commission, in following the Borrower's
instructions or those contained in the Letters of Credit or any modifications,
amendments or supplements thereto.
(e) Determinations to Honor Drawing Requests.
In determining whether to honor any request for drawing under any
Letter of Credit by the beneficiary thereof, the Agent shall be responsible only
to determine that the documents and certificates required to be delivered under
such Letter of Credit have been delivered and that they comply on their face
with the requirements of such Letter of Credit.
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(f) Nature of Participation and Reimbursement Obligations.
Each Bank's obligation in accordance with this Agreement to make the
Revolving Credit Loans or Participation Advances, as contemplated by Section
1.10(b), as a result of a drawing under a Letter of Credit, and the obligations
of the Borrower to reimburse the Agent upon a draw under a Letter of Credit,
shall be absolute, unconditional and irrevocable, and shall be performed
strictly in accordance with the terms of this Section 1.10 under all
circumstances, including the following circumstances:
(i) any set-off, counterclaim, recoupment, defense or other right which
such Bank may have against the Agent, the Borrower or any other Person for any
reason whatsoever;
(ii) the failure of Borrower or any other Person to comply, in
connection with a Letter of Credit Borrowing, with the conditions set forth in
Section 7.1 or as otherwise set forth in this Agreement for the making of a
Revolving Credit Loan, it being acknowledged that such conditions are not
required for the making of a Letter of Credit Borrowing and the obligation of
the Banks to make Participation Advances under Section 1.10(b);
(iii) any lack of validity or enforceability of any Letter of Credit;
(iv) the existence of any claim, set-off, defense or other right which
the Borrower or any Bank may have at any time against a beneficiary or any
transferee of any Letter of Credit (or any Persons for whom any such transferee
may be acting), the Agent or any Bank or any other Person or, whether in
connection with this Agreement, the transactions contemplated herein or any
unrelated transaction (including any underlying transaction between the Borrower
or any Subsidiary and the beneficiary for which any Letter of Credit was
procured);
(v) any draft, demand, certificate or other document presented under
any Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect even if the Agent has been notified thereof;
(vi) payment by the Agent under any Letter of Credit against
presentation of a demand, draft or certificate or other document which does not
comply with the terms of such Letter of Credit;
(vii) any adverse change in the business, operations, properties,
assets, condition (financial or otherwise) or prospects of the Borrower or any
Subsidiary;
(viii) any breach of this Agreement or any other Loan Document by any
party thereto;
(ix) the occurrence or continuance of an insolvency or similar
proceeding with respect to the Borrower;
(x) the fact that a default or event of default under Section 8 hereof
shall have occurred and be continuing;
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(xi) the fact that the Termination Date shall have passed or this
Agreement or the commitments hereunder shall have been terminated; and
(xii) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing.
(g) Liability for Acts and Omissions.
As between the Borrower and the Agent, the Borrower assumes all risks
of the acts and omissions of, or misuse of the Letters of Credit by, the
respective beneficiaries of such Letters of Credit. In furtherance and not in
limitation of the foregoing, the Agent shall not be responsible for: (i) the
form, validity, sufficiency, accuracy, genuineness or legal effect of any
document submitted by any party in connection with the application for an
issuance of any such Letter of Credit, even if it should in fact prove to be in
any or all respects invalid, insufficient, inaccurate, fraudulent or forged
(even if the Agent shall have been notified thereof); (ii) the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign any such Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (iii) the failure of the beneficiary of
any such Letter of Credit, or any other party to which such Letter of Credit may
be transferred, to comply fully with any conditions required in order to draw
upon such Letter of Credit or any other claim of the Borrower against any
beneficiary of such Letter of Credit, or any such transferee, or any dispute
between or among the Borrower and any beneficiary of any Letter of Credit or any
such transferee; (iv) errors, omissions, interruptions or delays in transmission
or delivery of any messages, by mail, cable, telegraph, telex or otherwise,
whether or not they be in cipher; (v) errors in interpretation of technical
terms; (vi) any loss or delay in the transmission or otherwise of any document
required in order to make a drawing under any such Letter of Credit or of the
proceeds thereof; (vii) the misapplication by the beneficiary of any such Letter
of Credit of the proceeds of any drawing under such Letter of Credit; or (viii)
any consequences arising from causes beyond the control of the Agent, including
any action of any Governmental Person, and none of the above shall affect or
impair, or prevent the vesting of, any of the Agent's rights or powers
hereunder. Nothing in the preceding sentence shall relieve the Agent from
liability for the Agent's gross negligence or willful misconduct in connection
with actions or omissions described in such clauses(i) through (viii) of such
sentence.
In furtherance and extension and not in limitation of the specific
provisions set forth above, any action taken or omitted by the Agent under or in
connection with the Letters of Credit issued by it or any documents and
certificates delivered thereunder, if taken or omitted in good faith, shall not
put the Agent under any resulting liability to the Borrower or any Bank.
(h) Reimbursement for Charges and Fees. The Borrower agrees to pay or cause
to be paid to the Agent on demand, all normal and customary transaction charges
that the Agent may charge (i) for drawings under the Letters of Credit, (ii) for
transfers of each respective Letter of Credit in accordance with its terms and
(iii) for amendments of the Letters of Credit, payable without any requirement
of notice or demand by the Agent on the day of such drawing, transfer or
amendment.
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(i) Letter of Credit Fees. The Borrower shall pay to the Agent for the
ratable account of the Banks quarterly in arrears, on the last day of each
September, December, March and June, a commission equal to the Applicable
Euro-Rate Margin on the average daily aggregate Stated Amount of Letters of
Credit outstanding during the three month period ending on such date; provided,
however, that upon the occurrence of and during the continuance of an event of
default under Section 8 hereof, the foregoing fee shall automatically be
increased by two hundred (200) basis points (2%) per annum above the rate
otherwise in effect.
1.11 Definitions: Construction.
(a) Certain Definitions. For purposes of this Agreement, the following
terms shall have the following meanings:
"Accounts" shall have the meaning ascribed to it in Section 7.1.
"Adjusted Amortization Fixed Rate" means the Fixed Rate Option elected
by Borrower to incorporate an Applicable Fixed Rate Margin of three hundred
(300) basis points (3%).
"Agent" shall mean PNC Bank, National Association, and its successors
and assigns.
"Adjusted Base Rate" means the interest rate relating to the Base Rate
Option as described in item (i) of Subsection 1.6(b).
"Adjusted Euro-Rate" means the interest rate relating to the Euro-Rate
Option as described in item (ii) of Subsection 1.6(b).
"Applicable Base Rate Margin" shall mean that rate per annum shown in
the appropriate place on Annex I, attached hereto and made a part hereof.
"Applicable Euro-Rate Margin" shall mean that rate per annum shown in
the appropriate place on Annex I, attached hereto and made a part hereof.
"Applicable Fixed Rate Margin" means a rate per annum equal to either
(i) two hundred eighty (280) basis points (2.8%) or (ii) three hundred (300)
basis points (3%), as irrevocably specified by the Borrower in the notice of
election of the Fixed Rate Option delivered pursuant to Section 1.6(e) hereof.
"Authority" shall have the meaning ascribed to it in Section 4.20.
"Bank" means initially PNC Bank, National Association, a national
banking association, and any other financial institution from time to time a
party hereto as "Bank."
"Base Rate" means a rate per annum equal to the higher of (i) the Prime
Rate and (ii) the sum of (x) the Federal Funds Rate plus (y) fifty (50) basis
points (1/2 of 1%). The Base Rate shall be adjusted automatically from time to
time upon each change in the Prime Rate or the Federal Funds Rate, as
applicable.
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"Base Rate Option" means the interest rate option described in item (i)
of Subsection 1.6(b).
"Base Rate Portion" means a Revolving Credit Loan, the Seven-Year Term
Loan or the Term Loan, as the case may be, or a portion thereof which bears, or
is to bear, interest at the Adjusted Base Rate.
"Borrower" shall have the meaning ascribed to it in the first paragraph
of this Agreement.
"Borrower's Proceeds" shall mean (i) the Borrower's share [at least
equal to the share on which the Discounted Future Net Income is determined] of
the total gross proceeds generated in connection with the ▇▇▇▇▇ and the Pipeline
payable to Borrower including but not limited to the Borrower's share of such
proceeds derived from, in connection with and/or relating to the production,
sale, transportation and/or compression of gas and oil produced from the ▇▇▇▇▇
and transported through the Pipeline and the Borrowers share (at least equal to
the share on which the Discounted Future Net Income is determined) of
reimbursements of all severance taxes relating thereto, less (ii) the share (no
greater than the share on which the Discounted Future Net Income is determined)
of the costs and expenses (including severance, real estate and windfall profits
taxes but not income or other taxes) paid by the Borrower to others for the
operation of the ▇▇▇▇▇ and the Pipeline and the removal and sale of gas and oil
produced from the ▇▇▇▇▇ and the share (no greater than the share on which the
Discounted Future Net Income is determined) of royalties and overriding
royalties paid by Borrower to others for the production of gas and oil from the
▇▇▇▇▇, provided, however, that such costs and expenses (including royalties and
overriding royalties) shall not exceed those customarily paid by prudent gas and
oil operators, and prudent operators of pipelines, of established reputations in
the areas in which the ▇▇▇▇▇ and the Pipeline are located.
"Business Day" means a day on which the Agent's principal office is
open for the conduct of normal commercial banking business.
"Collateral Value" shall have the meaning ascribed to it in Section
1.5.
"Commitment Fee" shall have the meaning ascribed to it in Subsection
1.1(d).
"Commitment Percentage" shall have the meaning ascribed to it in
Subsection 1.1(a).
"Discounted Future Net Income" shall have the meaning ascribed to it in
Section 1.4.
"Dollar(s)" or "$" means the legal tender of the United States of
America.
"Draw" shall mean a payment of funds by the Banks pursuant to a request
by the beneficiary of any Letter of Credit for funds in accordance with the
terms of such Letter of Credit.
"ERISA" shall have the meaning ascribed to it in Section 2.10.
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"Euro-Rate" means for any day, as used herein, for each segment of the
Euro-Rate Portion corresponding to a proposed or existing Euro-Rate Interest
Period, the interest rate per annum determined by the Agent by dividing (the
resulting quotient to be rounded upward to the nearest 1/16 of 1%) (i) the rate
of interest (which shall be the same for each day in such Euro-Rate Interest
Period) determined in good faith by the Agent in accordance with its usual
procedures (which determination shall be conclusive absent manifest error) to be
the "offered" eurodollar rate as quoted by Exco-▇▇▇▇▇▇ Incorporated (or
appropriate successor or, if Exco-▇▇▇▇▇▇ Incorporated or its successor cease to
provide such quotes, a comparable replacement as determined by Agent) as
evidenced on Dow ▇▇▇▇▇ Markets Service display page 4756 (or any replacement
display page) two (2) Business Days prior to the first day of such Euro-Rate
Interest Period for an amount comparable to the Euro-Rate Portion for such
Euro-Rate Interest Period and having a borrowing date and a maturity comparable
to such Euro-Rate Interest Period by (ii) a number equal to 1.00 minus the
Euro-Rate Reserve Percentage.
The "Euro-Rate" may also be expressed by the following formula:
[ Dow ▇▇▇▇▇ Markets Service as quoted by Exco- ]
Euro-Rate = [ ▇▇▇▇▇▇ Incorporated or appropriate successor ]
------------------------------------------------
[ 1.00 - Euro-Rate Reserve Percentage ]
The Euro-Rate shall be adjusted automatically with respect to any Euro-Rate
Portion outstanding on the effective date of any change in the Euro-Rate Reserve
Percentage, as of such effective date.
"Euro-Rate Interest Period(s)" means any individual period of one (1),
two (2), three (3) or six (6) months selected by the Borrower commencing on the
borrowing, conversion date or renewal date of a Euro-Rate Portion to which such
period shall apply.
"Euro-Rate Option" means the interest rate option described in item
(ii) of Subsection 1.6(b).
"Euro-Rate Portion(s)" means a Revolving Credit Loan, the Seven-Year
Term Loan or the Term Loan, as the case may be, or portion thereof which bears,
or is to bear, interest at the Euro-Rate.
"Euro-Rate Reserve Percentage" means the maximum effective percentage
(expressed as a decimal, rounded upward to the nearest 1/100 of 1%), as
determined in good faith by the Agent (which determination shall be conclusive),
which is in effect on such day as prescribed by the Board of Governors of the
Federal Reserve System (or any successor) for determining the reserve
requirements (including, without limitation, supplemental, marginal and
emergency reserve requirements) with respect to eurocurrency funding (currently
referred to as "Eurocurrency liabilities").
"Existing Loan Agreement" shall have the meaning ascribed to it in the
first "Whereas" clause to this Agreement.
"Federal Funds Rate" shall mean, for any day, (i) the interest rate
(rounded upward, if necessary, to the nearest 1/100 of 1%) determined by the
Agent (such determination shall be conclusive absent manifest error) to be equal
to the weighted average of
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rates on federal funds transactions among members of the Federal Reserve System
arranged by Federal funds brokers at or about 9:00 am (Pittsburgh, Pennsylvania
time) on such day; provided, however, that if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate for such transactions on
the immediately preceding Business Day or (ii) if no such rate shall be quoted
by Federal funds brokers at such time, such other rate as determined by the
Agent in accordance with its usual procedures (such determination shall be
conclusive absent manifest error).
"Financing Statements" shall have the meaning ascribed to it in item E.
of Section 3.1.
"Fixed Rate" means the interest rate relating to the Fixed Rate Option
as described in item (iii) of Subsection 1.6(b).
"Fixed Rate Option" shall mean the interest rate option described in
item (iii) of Subsection 1.6(b).
"Fixed Rate Portion" means the Seven-Year Term Loan which bears, or is
to bear, interest at the Fixed Rate in accordance with Subsection 1.6(e).
"Future Net Income" shall have the meaning ascribed to it in Section
1.4.
"Gas and oil" or "oil and gas" shall mean gas, oil, casinghead gas,
drip gasoline, natural gasoline and all other liquid and gaseous hydrocarbons.
"Governmental Person" means the government of the United States or the
government of any state or locality therein, any political subdivision or any
governmental, quasi-governmental, judicial, public or statutory
instrumentality, authority, body or entity, or other regulatory bureau,
authority, body or entity of the United States or any state or locality therein,
including the Federal Deposit Insurance Company, the Comptroller of the Currency
or the Board of Governors of the Federal Reserve System, any central bank or any
comparable authority.
"Governmental Rule" means any law, statute, rule, regulation,
ordinance, order, judgment, guideline or decision of any Governmental Person.
"Hazardous Substances" shall have the meaning ascribed to it in Section
2.17.
"Indebtedness" shall have the meaning ascribed to it in Section 3.
"Letter(s) of Credit" means any standby letter(s) of credit as to which
the account party, the issuing Bank and the beneficiary contemplate that the
beneficiary will receive a direct payment from the account party and that the
beneficiary shall draw upon the Letter of Credit only if the account party fails
to honor its obligation to the beneficiary, including, but not limited to,
standby letters of credit issued by the Agent in accordance with Section 1.10
hereof.
"Letter of Credit Borrowing" shall mean an extension of credit
resulting from a drawing under any Letter of Credit which shall not have been
reimbursed on the date
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when made and shall not have been converted into a Revolving Credit Loan under
Section 1.10.
"Letter of Credit Fee" shall mean that fee described in Section 1.10(i)
hereof.
"Loan" shall mean any of the Revolving Credit Loans, the Term Loan or
the Seven-Year Term Loan.
"Loan Documents" shall have the meaning ascribed to it in Section 2.6.
"Mortgage" shall have the meaning ascribed to it in item A. of Section
3.1.
"Note" and "Notes" shall have the meanings ascribed to each in
Subsection 1.6(a).
"Option(s)" means any one or more of the Base Rate Option, the
Euro-Rate Option or the Fixed Rate Option.
"Original Loan Agreement" shall have the meaning ascribed to it in the
first "Whereas" clause to this Agreement.
"Participation Advance" shall mean, with respect to any Bank, such
Bank's payment in respect of its participation in a Letter of Credit Borrowing
according to its Ratable Share pursuant to Section 1.10.
"Partnership" and "Partnerships" shall have the meaning ascribed to
each in Section 1.4.
"Partnership ▇▇▇▇▇" shall have the meaning ascribed to it in Section
2.7.
"PBGC" shall have the meaning ascribed to it in Section 2.10.
"Pipeline" shall have the meaning ascribed to it in Section 1.3.
"Plan" shall have the meaning ascribed to it in Section 2.10.
"Pledge Agreement" shall have the meaning ascribed to it in item D. of
Section 3.1.
"Portion(s)" means any Base Rate Portion, Euro-Rate Portion, or Fixed
Rate Portion, as the case may be or all three taken collectively.
"Prime Rate" means the interest rate per annum announced from time to
time by the Agent as its prime rate, which rate may not be the lowest rate of
interest then being charged by the Agent.
"Property" shall have the meaning ascribed to it in Section 2.3.
"Quarterly Reports" shall have the meaning ascribed to it in Section
4.8.
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"Ratable Share" shall have the meaning ascribed to it in Subsection
1.1(a).
"Revolving Credit" shall have the meaning ascribed to it in Subsection
1.1(a).
"Revolving Credit Loan" and "Revolving Credit Loans" shall have the
meanings ascribed to each in Subsection 1.1 (a).
"Revolving Credit Note" shall have the meaning ascribed to it in
Subsection 1.1(a).
"Revolving Credit Period" shall have the meaning ascribed to it in
Subsection 1.1(a).
"Security Agreement (Note)" shall have the meaning ascribed to it in
item C. of Section 3.1.
"Security Agreement (Partnerships)" shall have the meaning ascribed to
it in item B. of Section 3.1.
"Senior Indebtedness" shall have the meaning ascribed to it in Section
4.18.
"Seven-Year Term Credit" shall have the meaning ascribed to it in
Subsection 1.3(a).
"Seven-Year Term Loan" shall have the meaning ascribed to it in
Subsection 1.3(a).
"Seven-Year Term Note" shall have the meaning ascribed to it in
Subsection 1.3(a).
"Stated Amount" shall mean the amount available to the beneficiaries of
the Letters of Credit for one or more drawings thereunder as such amount is
reduced and reinstated from time to time in accordance with the provisions of
the Letters of Credit.
"Stockholders" shall have the meaning ascribed to it in Section 2.2.
"Subsidiary" and "Subsidiaries" shall have the meaning ascribed to each
in Subsection 2.2(e).
"Syndications Period" shall mean the period between the date of this
Agreement and the earlier of the following dates: (a) the date on which PNC
Bank, National Association has reduced its Commitment Percentage below 100%, or
(b) the date which is one hundred twenty (120) days after the date of this
Agreement.
"Term Credit" shall have the meaning ascribed to it in Subsection
1.2(a).
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"Term Loan" shall have the meaning ascribed to it in Subsection 1.2(a).
"Term Note" shall have the meaning ascribed to it in Subsection 1.2(a).
"Termination Date" shall have the meaning ascribed to it in Subsection
1.1(a).
"Utilization Rate" means, at the time of determination by Bank, the
quotient (expressed as a percentage) determined by dividing (i) the sum of (w)
the aggregate principal balances outstanding under the Revolving Credit Notes
plus (x) the aggregate Stated Amounts of Letters of Credit outstanding plus (y)
the aggregate amount of unreimbursed Draws under the Letters of Credit plus (z)
the aggregate principal balances outstanding under the Term Notes by (ii) the
then current Collateral Value.
"▇▇▇▇▇" shall have the meaning ascribed to it in Section 1.4.
(b) Construction. (i) Unless the context of this Agreement otherwise
clearly requires, references to the plural include the singular, the singular
the plural and the part the whole, "or" has the inclusive meaning represented by
the phrase "and/or," and "including" has the meaning represented by the phrase
"including without limitation." References in this Agreement to "determination"
of or by the Agent or the Banks shall be deemed to include reasonable good faith
estimates by the Agent or the Banks (in the case of quantitative determinations)
and reasonable and good faith beliefs by the Agent or the Banks (in the case of
qualitative determinations). Whenever the Agent or the Banks are granted the
right herein to act in its or their sole discretion or to grant or withhold
consent such right shall be exercised reasonably and in good faith. The words
"hereof," "herein," "hereunder" and similar terms in this Agreement refer to
this Agreement as a whole and not to any particular provision of this Agreement.
The article, section and other headings contained in this Agreement are for
reference purposes only and shall not control or affect the construction of this
Agreement or the interpretation thereof in any respect. Article, Section,
schedule and exhibit references are to this Agreement unless otherwise
specified. Except as otherwise specified in this Agreement, all references in
this Agreement (i) to any Person, other than the Borrower, shall be deemed to
include such Person's successors and assigns, and (ii) to any Governmental Rule,
agreement or contract specifically defined or referred to in Agreement shall be
deemed references to such Governmental Rule, agreement or contract as the same
may be amended, supplemented, modified, extended, waived, consolidated, replaced
or renewed from time to time, but only to the extent permitted by, and effected
in accordance with, the terms thereof.
(ii) For purposes of this Agreement, all terms used in Article 9 of the
UCC and not specifically defined in this Agreement shall herein have the
meanings assigned to such terms in the UCC as from time to time in effect in the
Commonwealth of Pennsylvania.
(iii) References to "Writing" include printing, typing, lithography and
other means of reproducing words in a tangible visible form. References to
"written" include "printed", "typed", "lithographed" and other adjectives
relating to words reproduced in a tangible visible form consistent with the
preceding sentence and also include electronic images and images stored on
computer disks, magnetic tape and like media.
(c) Accounting Principles. Except as otherwise provided in this Agreement,
all computations and determinations as to accounting or financial matters and
all financial statements
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to be delivered pursuant to this Agreement shall be made and prepared in
accordance with GAAP (including principles of consolidation where appropriate),
and all accounting or financial terms shall have the meanings ascribed to such
terms by GAAP.
SECTION 2. REPRESENTATIONS AND WARRANTIES.
------------------------------------------
To induce the Banks to enter into this Agreement and to make and
continue the loans and to issue and renew the Letters of Credit, each as herein
provided for, Borrower represents and warrants to the Banks that:
2.1 Existence and Authority. Borrower and the Subsidiaries are
corporations or limited liability company duly organized, validly existing and
in good standing under the laws of the states of their formation, and are duly
qualified to do business, and are in good standing as foreign corporations, in
all jurisdictions wherein their ownership of property or the nature of their
businesses requires such qualification and have the right, power and authority
to own, and hold under lease, their properties and to carry on their businesses
as now being conducted.
2.2 Stock Ownership and Subsidiaries. (a) The authorized securities of
The Atlas Group, Inc. consist of two million (2,000,000) shares of common stock
and all issued and outstanding shares of such stock are owned by and issued to
the persons shown on Schedule 2.2 attached hereto and made a part hereof.
(b) The authorized securities of AIC, Inc. consist of one thousand
(1,000) shares of common stock and all issued and outstanding shares of such
stock are owned by and issued to The Atlas Group, Inc.
(c) The authorized securities of AED Investments, Inc. consist of one
thousand (1,000) shares of common stock and all issued and outstanding shares of
such stock are owned by and issued to Atlas Energy Group, Inc.
(d) The authorized securities of ARD Investments, Inc. consist of one
thousand (1,000) shares of common stock and all issued and outstanding shares of
such stock are owned by and issued to Atlas Resources, Inc.
(e) AIC, Inc. is the legal and beneficial owner of all of the issued
and outstanding securities of Atlas Energy Corporation, an Ohio corporation,
Atlas Resources, Inc., a Pennsylvania corporation, Transatco Corporation, an
Ohio corporation, Pennsylvania Industrial Energy, Inc., a Pennsylvania
corporation, Atlas Information Management, LLC, a Pennsylvania Limited Liability
Company, Atlas Energy Group, Inc., an Ohio corporation, Atlas Gas Marketing,
Inc., a Pennsylvania corporation and Mercer Gas Gathering, Inc., a Pennsylvania
corporation, and Atlas Information Management, LLC is the legal and beneficial
owner of forty-nine (49%) percent of the issued and outstanding shares of each
of Record Imaging, Ltd. and fifty (50%) percent of Atlas Technologies, LLC.
[hereinafter referred to collectively as the "Subsidiaries" and individually as
the "Subsidiary"; as used herein the terms Subsidiaries and Subsidiary shall
also include any corporation with respect to which any Borrower owns directly or
indirectly more than twenty-five (25%) percent of the outstanding stock issued
by such corporation]; Borrower presently does not own directly or indirectly
more than twenty-five (25%) percent of the outstanding stock issued by any other
corporation. AIC, Inc. has good and marketable title to all the securities of
the Subsidiaries issued to it, free and
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clear of all liens and encumbrances, and all such securities have been duly and
validly issued and are fully paid and nonassessable. The authorized securities
of the Subsidiaries and the ownership thereof are as shown on Schedule 2.2
attached hereto and made a part hereof.
2.3 Rights, Titles and Interests. Borrower and the Subsidiaries have,
and will have, good and marketable rights, titles and interests in and to all of
their properties including all the property (the "Property") described in the
Mortgage and the Security Agreement (as such terms are defined in Section 3.1
hereof) free and clear of all liens and encumbrances, except such liens and
encumbrances, if any, set forth in writings heretofore delivered to, and
acknowledged in writing to have been received by, the Banks, and which are
acknowledged in writing to be acceptable to the Banks; as defined herein the
term Property shall include but shall not be limited to the additional security
provided by Borrower pursuant to Section 1.5 and Section 3.3 hereof. Borrower
warrants that at its expense it will, and will cause the Subsidiaries to, defend
generally their properties including the Property, and the rights, titles and
interests of the Banks therein and thereto, against the claims and demands of
all persons, corporations and any other entities whatsoever. No defaults have
occurred under any of the documents or instruments pursuant to which, or
establishing that, Borrower and the Subsidiaries acquired interests in their
properties including the Property which have not been cured or waived and such
documents and instruments are in full force and effect and they have not been
modified or amended.
2.4 Financial Statements. The financial statements described below in
this Section 2.4, together with the notes and reports thereto, (copies of which
have been furnished to the Agent), are complete and correct, have been prepared
in accordance with generally accepted accounting principles, practices and
procedures consistently applied and present fairly the financial positions of
the Borrower and the Subsidiaries as at the dates set forth below and the
results of their operations for the periods set forth below, subject only to
ordinary and usual year end audit adjustments in the case of the statements
described in clause (ii) below:
(i) Balance sheet as of July 31, 1997 and the related statements of
income, changes in stockholders equity and changes in financial
position for the fiscal year ended on such date, prepared and
certified by ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, independent certified public
accountants; and
(ii) Balance sheet as of June 30, 1998 and the related statements of
income, changes in stockholders equity and changes in financial
position for the eleven (11) month period ended on such date,
prepared by the chief financial officer of Borrower.
Except as reflected or referred to in the above described financial
statements, neither the Borrower nor any of the Subsidiaries has any contingent
or disputed liabilities or unrealized or anticipated losses or commitments which
in the aggregate are material. Since June 30, 1998 there has been no change in
the condition, business or prospects, financial or otherwise, of the Borrower or
the Subsidiaries as shown on the balance sheet as of such date and no change in
the aggregate value of the property owned by the Borrower and the Subsidiaries,
including the Property, except changes in the ordinary course of business.
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2.5 Litigation. Except as set forth on Schedule 2.5 attached hereto,
there is no material litigation or proceeding of any kind whatsoever pending,
nor to the knowledge of Borrower threatened, nor any judgment, order, writ,
injunction, decree or award outstanding, which could adversely affect Borrower
or the Subsidiaries or the operation of any of their businesses, or their
properties including the Property, nor does the Borrower know or have reasonable
grounds to know of any basis for any such action or any governmental
investigation or any claim relating to the Borrower or the Subsidiaries or the
operation of any of their businesses, or their properties including the
Property. Except as set forth on Schedule 2.5 attached hereto, the Borrower and
the Subsidiaries have each complied with all material provisions of all
agreements to which they are parties or by which they are bound and are not in
default under any of them or in the payment of any of their obligations.
2.6 Validity of Agreement, Notes, Mortgage, Security Agreement
(Partnerships), Security Agreement (Note), Pledge Agreement, Financing
Statements and Other Loan Documents. The execution and delivery of this
Agreement, the Notes, the Mortgage, the Security Agreement (Partnerships), the
Pledge Agreement, the Security Agreement (Note) and the Financing Statements (as
such terms are defined in Section 3.1 hereof) and the documents and instruments
referred to herein and therein to be executed and/or delivered by Borrower, as
one or more may be amended, modified or supplemented (the "Loan Documents"), the
borrowings under the Loan Documents, the performance by the Borrower of its
obligations under the Loan Documents and the assignment of, and the grant of the
liens on and security interests in, the Borrower's various rights, titles and
interests, to the Agent (for the benefit of the Banks) by the Loan Documents, do
not, and will not, contravene any provision of law, or of the articles of
incorporation or by-laws of Borrower or any Subsidiary, or of any agreement,
instrument or other document or of any judicial, arbitration or local, state or
federal governmental requirement or restriction to which Borrower or any
Subsidiary is a party or by which it is bound, or result in the creation or
imposition of any lien or other encumbrance on any of the property of the
Borrower or any Subsidiary including the Property except the liens and security
interests granted by the Loan Documents; and any and all consents or approvals
of any kind whatsoever, including approvals and consents of any local, state or
federal governmental unit, commission, authority, agency or other body, required
to be obtained in connection therewith have been obtained and are in full force
and effect. This Agreement constitutes, and the other Loan Documents when duly
executed will constitute, legal, valid and binding obligations of Borrower
enforceable in accordance with their respective terms. Borrower is duly
authorized to execute and deliver this Agreement and the other Loan Documents;
all action necessary and proper to authorize the execution and delivery of the
Loan Documents has occurred; and Borrower is, and will continue to be, duly
authorized, and has, and shall continue to have, the right, power and authority,
to execute and deliver the Loan Documents and to make the assignment and grant
the liens and security interests pursuant to the Loan Documents as well as to
borrow under the Loan Documents and to perform all of the other terms and
conditions of the Loan Documents.
2.7 Permits. Borrower has obtained, or caused to be obtained, all
permissions, licenses, easements, rights-of-way, leasehold and fee interests and
all local, state and federal governmental approvals, authorizations, consents
and permits as well as all other rights, titles and interests necessary to the
ownership, development and operation of the properties of the Borrower and the
Subsidiaries (including the Property) and the gas and oil ▇▇▇▇▇ (the
"Partnership ▇▇▇▇▇") in which the Partnerships (as such term is defined in
Section 1.4 hereof) have ownership interests, and the conduct of their
businesses, all of which are in full force and effect.
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2.8 Operation of ▇▇▇▇▇ and the Pipeline. The statements relating to the
transportation of gas and oil through the Pipeline and the production of gas and
oil from the ▇▇▇▇▇ for the period ending January 1, 1998 heretofore furnished by
Borrower to Bank are accurate; since January 1, 1998 there has been no damage,
destruction or loss to the Pipeline or to any of the ▇▇▇▇▇; the Pipeline is
currently in operation and the monthly transportation of gas and oil through the
Pipeline has not materially changed; and except for temporary, involuntary
shut-ins, all of the ▇▇▇▇▇ are currently in production and the monthly
production from each of the ▇▇▇▇▇ has not materially changed.
2.9 Public Utility Holding Company. Neither the Borrower, nor any
Subsidiary of the Borrower, is a holding company or a subsidiary of a holding
company or a public utility company as such terms are defined in the Public
Utility Holding Company Act of 1935.
2.10 ERISA. The Pension Benefit Guaranty Corporation ("PBGC") has not
made a determination that, with respect to any Plan (as hereinafter defined) of
the Borrower, or any Subsidiary or other affiliate of the Borrower, an event or
condition has occurred which constitutes grounds under the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") for the termination of, or for
the appointment of a trustee to administer, any such Plan. As used herein,
"Plan" shall be defined as any employee benefit plan or other plan maintained
for employees of the Borrower, or any Subsidiary or other affiliate of the
Borrower, covered by ERISA.
2.11 Regulation G, U, T and X. Neither the Borrower nor any Subsidiary
is engaged in the business of extending credit for the purpose of purchasing or
carrying margin stock (within the meaning of Regulation G, U, T or X of the
Board of Governors of the Federal Reserve System), and no part of the proceeds
of any advance under the Loan Documents will be used to purchase or carry any
margin stock or to extend credit to others for the purpose of purchasing or
carrying any margin stock.
2.12 Compliance with Law. Borrower and the Subsidiaries have each
complied with, and are in compliance with, all applicable local, state and
federal laws, rules and regulations relating to all of their activities
including, but not limited to, the operation of the ▇▇▇▇▇ and the Pipeline and
the offer and sale of securities.
2.13 Taxes. All tax returns and reports of the Borrower and the
Subsidiaries required by law to be filed have been duly filed, and all taxes,
assessments, fees and other governmental charges upon the Borrower and the
Subsidiaries or upon any of the property of the Borrower and the Subsidiaries
including the Property and upon any of the other assets, income or franchises of
the Borrower and the Subsidiaries which are due and payable have been paid,
except taxes, assessments, fees and other governmental charges being contested
in good faith as set forth in Section 4.10 hereof unless required to be paid as
set forth in such Section and subject to the reserve requirements set forth in
Section 4.10 hereof.
2.14 Relationship of Borrower. The Borrowers are operated as part of
one consolidated business entity and each Borrower is directly dependent upon
each other Borrower for and in connection with their business activities and
their financial resources; and each Borrower will receive a direct economic and
financial benefit from the borrowings made under this Agreement, and such
borrowings are in the best interests of each Borrower.
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2.15 Status as Producers of Gas. Atlas Energy Group, Inc., Atlas Energy
Corporation and Atlas Resources, Inc. are producers of oil and/or natural gas;
none of the Subsidiaries (other than Atlas Resources, Inc., Atlas Energy Group,
Inc. and Atlas Energy Corporation) is a producer of oil and/or natural gas.
2.16 Year 2000. The Borrower and its Subsidiaries have reviewed the
areas within their business and operations which could be adversely affected by,
and have developed or are developing a program to address on a timely basis, the
risk that certain computer applications used by the Borrower or its Subsidiaries
(or any of their respective material suppliers, customers or vendors) may be
unable to recognize and perform properly date-sensitive functions involving
dates prior to and after December 31, 1999 (the "Year 2000 Problem"). The Year
2000 Problem will not result in any material adverse change in the business,
properties, assets, financial condition, results of operations or prospects of
the Borrower or its Subsidiaries, or impair materially the ability of the
Borrower or its Subsidiaries to duly and punctually pay or perform the
Indebtedness.
2.17 Environmental Matters. To the best of the Borrower's knowledge,
(i) the Property is and has been in compliance, in all material respects, with
all applicable local, state and federal environmental laws, rules and
regulations, (ii) there have been no releases of any chemical, material,
substance or waste which is a threat to the public health, safety or welfare or
the environment or the health of living organisms, or any hazardous, toxic,
contaminating or polluting substance as defined by any environmental law, rule
or regulation (individually and collectively "Hazardous Substances") and (iii)
there is no basis for the imposition of environmental liability against the
Property or for the imposition of any environmental liability against any
former, present or future owner or operator of the Property.
2.18 Investment Company Act. The Borrower is not an "investment
company" registered or required to be registered under the Investment Company
Act of 1940, as amended from time to time, or a company under the "control" of
an "investment company", as those terms are defined in such Act, and shall not
become such an "investment company" or under such "control".
SECTION 3. SECURITY.
--------------------
To secure the payment of principal of, and interest on, the Notes, all
reimbursement and other obligations relating to the Letters of Credit, and all
fees, costs, expenses and other charges to be paid or reimbursed by Borrower
under the Loan Documents and all other indebtedness and other obligations of the
Borrower to the Agent and the Banks under the Loan Documents (collectively, the
"Indebtedness") and the performance of the terms of the Loan Documents and all
other instruments and documents executed by Borrower in favor of, or for the
benefit of, the Agent and the Banks with respect thereto:
3.1 Mortgage, Security Agreement (Partnerships), Security Agreement
(Note) and Pledge Agreement. Borrower has executed and delivered, and hereby
agrees to execute and deliver, or cause to be executed and delivered, to the
Agent, on behalf of the Banks, the following:
A. One or more mortgages and security agreements (and/or amendments
thereto) substantially in the form of Exhibit "D" attached hereto and made a
part hereof, as one or more may be amended, modified or supplemented from time
to time (herein referred to
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collectively and individually as the "Mortgage"), which shall assign to Agent,
and grant to Agent, on behalf of the Banks, a lien on and security interest in,
all the property of Borrower described in the Mortgage including the ▇▇▇▇▇, the
Pipeline and the premises known as ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇.
B. One or more security agreements substantially in the form of Exhibit
"E" attached hereto and made a part hereof, as one or more may be amended,
modified or supplemented from time to time [herein referred to collectively and
individually as the "Security Agreement (Partnerships)"], which shall assign to
Agent, and grant to Agent, on behalf of the Banks, a security interest in, all
the property of Borrower described in the Security Agreement including all
rights, titles and interests of the Borrower in and to the Partnerships.
C. One or more security agreements substantially in the form of Exhibit
"F" attached hereto and made a part hereof, as one or more may be amended,
modified or supplemented from time to time [herein referred to collectively and
individually as the "Security Agreement (Note)"], which shall assign to Agent,
and grant to Agent, on behalf of the Banks, a security interest in, all the
property of Borrower described in the Security Agreement (Note) including all
rights, titles and interests of the Borrower in and to certain intercompany
notes.
D. One or more pledge agreements substantially in the form of Exhibit
"G" attached hereto and made a part hereof, as one or more may be amended,
modified or supplemented from time to time (herein referred to collectively and
individually as the "Pledge Agreement"), which assign to Agent, and grant to
Agent, on behalf of the Banks, a lien on and security interest in, all the
property of Borrower described in the Pledge Agreement including all of
Borrower's rights, titles and interest in and to the stock of Transatco
Corporation.
E. All financing statements and all amendments and modifications
thereof and all supplements thereto (herein referred to collectively and
individually as the "Financing Statements") required by Agent in connection with
the liens and security interests granted pursuant to the Mortgage, the Security
Agreement (Partnerships), the Security Agreement (Note) and the Pledge
Agreement.
3.2 Set-Off. Borrower hereby gives to each Bank a lien on, and security
interest in, any and all property, credits, securities, monies and claims of
Borrower which may at any time be delivered to, or be in the possession of, or
owed to Borrower by, such Bank in any capacity whatsoever including the balances
of any and all accounts maintained by Borrower with such Bank. Borrower
authorizes each Bank in case of a default as defined in Section 8 hereof, at
such Banks option, at any time and from time to time, to apply to the payment of
the Indebtedness any such property, credits, securities, monies and claims. In
the event that in the exercise of the rights set forth in this Section 3.2 any
Bank applies to the payment of the Indebtedness any property, credits,
securities, monies or claims which belong to a person, corporation or entity
other than Borrower, such Bank shall promptly deliver such property, credits,
securities, monies or claims (or at the option of such Bank, an amount of cash
equivalent to the value thereof at the time such Bank makes such application) to
the persons, corporations or other entities entitled thereto, or at the option
of such Bank to the Borrower, upon being furnished with evidence satisfactory to
such Bank of such property, credits, securities, monies or claims and the
identity of the persons, corporations or other entities entitled thereto.
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3.3 Additional Security. In the event that Borrower is to provide
additional security for the payment of the Indebtedness and the performance of
the Loan Documents, such additional security shall be of such kind, in such form
and have such value as Agent shall in its sole discretion require and shall be
otherwise acceptable to Agent. Borrower shall execute and deliver to Agent, on
behalf of the Banks, such new or amended mortgage and/or security agreement
and/or pledge agreement relating to such additional collateral, as well as such
other instruments, papers and other documents, and take such further action in
connection therewith, as the Agent shall in its sole discretion require
[including but not limited to providing reports and opinions relating to matters
concerning title to such additional security and concerning the priority of the
lien(s) and security interest(s) granted by such new or amended mortgage and/or
security agreement and/or pledge agreement].
3.4 Operating Accounts. The Borrower agrees to maintain, or cause to be
maintained, all of the Borrower's principal operating accounts at the Agent and
agrees to deposit, or cause to be deposited, in such accounts substantially all
of its funds.
SECTION 4. AFFIRMATIVE COVENANTS.
---------------------------------
For so long as any Indebtedness remains unpaid, unless the Agent
otherwise consents in writing, Borrower agrees that:
4.1 First Lien Undertakings. Borrower shall obtain and deliver, or
cause to be obtained and delivered, to the Agent such legal opinions, title
reports, representations, letters, acknowledgments, attornment agreements,
releases, disclaimers, subordinations of prior liens and security interests,
non-disturbance agreements, certificates of non-interference with easements,
rights-of-way or coal operations and such other documents as may be requested by
Agent from time to time, and shall take, or cause to be taken, all steps, to
satisfy all requirements of Agent that Borrower and the Subsidiaries and the
Partnerships have, and will have, good and marketable rights, titles and
interests in and to all of their properties including the Property and the
Partnership ▇▇▇▇▇ and that the liens and security interests described in Section
3 hereof are valid and perfected first liens and security interests, free and
clear of all liens and encumbrances.
4.2 Protection of Rights, Titles and Interests. Borrower will take, or
cause to be taken, all steps necessary and proper (i) to protect and enforce its
and the Subsidiaries' rights, titles and interests in and to all their
properties including the Property and in connection with their businesses and
(ii) to comply with all duties, terms and conditions undertaken or assumed by
Borrower and the Subsidiaries in connection with their properties including the
Property and their businesses.
4.3 Operation and Maintenance. Borrower will continuously operate, or
cause to be operated, its and the Subsidiaries' properties (including the
Property) and the Partnership ▇▇▇▇▇ in a good and workmanlike manner and in
accordance with sound and approved practices and shall use its best efforts
consistent with good business practices to generate, or cause to be generated,
the greatest amount of revenue in connection with its and the Subsidiaries'
properties (including the Property) and the Partnership ▇▇▇▇▇. Borrower shall
maintain, or cause to be maintained, all of its and the Subsidiaries' properties
(including the Property) and the Partnership ▇▇▇▇▇ in good condition and, shall
make, or cause to be made, all necessary renewals, repairs, replacements,
additions, betterments and improvements thereto.
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4.4 Permits. Borrower will obtain and keep in full force and effect, or
shall cause to be obtained and kept in full force and effect, all permissions,
licenses, easements, rights-of-way, leasehold and fee interests and all local,
state and federal governmental approvals, authorizations, consents and permits
as well as all other rights, titles and interests necessary to the ownership,
development and operation of its and the Subsidiaries' properties (including the
Property) and the Partnership ▇▇▇▇▇ and to the conduct of their businesses.
4.5 Compliance with Law. Borrower will comply with, or cause to be
complied with, all applicable local, state and federal laws, rules and
regulations relating to all of its and the Subsidiaries' activities including,
but not limited to, the operation of its and the Subsidiaries' properties
(including the Property) and the Partnership ▇▇▇▇▇ and the offer and sale of
securities.
4.6 Status as Producers of Gas. Atlas Energy Group, Inc., Atlas Energy
Corporation and Atlas Resources, Inc. shall each continue to be a producer of
oil and/or natural gas.
4.7 Existence and Ownership. Borrower shall do, or cause to be done,
all things necessary to preserve and keep in full force and effect its and the
Subsidiaries' existences as corporations, their good standing under the laws of
the states of their incorporation and their qualification to do business, and
their good standing as foreign corporations, in all jurisdictions wherein their
ownership of property or the nature of their businesses requires such
qualification. Borrower shall continue to be the legal and beneficial owner of
at least the percentages of the issued and outstanding securities of the
Subsidiaries which it owns currently plus all additional percentages of such
securities which it may acquire hereafter.
4.8 Reports, Certifications and Other Information. Upon request of
Agent, Borrower shall deliver, or cause to be delivered, to Agent, within sixty
(60) days after the end of each fiscal quarter (and if a default as set forth in
Section 8 hereof shall have occurred and be continuing, within thirty (30) days
after the end of each calendar month), a report of operating, management and
administration fees paid to Borrower during such month together with statements
setting forth the quantity of gas and oil produced from the ▇▇▇▇▇ and
transported through the Pipeline during such month, the price paid or to be paid
for such gas and oil and the transportation and compression thereof, the
Borrower's Proceeds (showing in detail the computation whereby the Borrower's
Proceeds are determined) and such other information as Agent may request which
may include but not be limited to a report prepared by Borrower showing the
performance of each Well on a quarterly or monthly, as the case may be, basis
and on a cumulative basis as well as such information as is customarily set
forth in a meter statement.
Within sixty (60) days after the end of each fiscal quarter of each
fiscal year of the Borrower and the Subsidiaries, the Borrower shall furnish to
Agent such unaudited financial statements of the Borrower and the Subsidiaries
("Quarterly Reports") as Agent shall request (consisting of at least a balance
sheet as of the close of such quarter and a profit and loss statement and a
statement of cash flow for such quarter and for the period from the beginning of
the fiscal year to the close of such quarter), which statements shall be in such
detail as Agent shall require, shall show the Borrower's and the Subsidiaries'
financial conditions at the close of such fiscal quarter and the results of
their operations for the period
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then ended and shall be prepared by the chief financial officer of Borrower and
the Subsidiaries in accordance with generally accepted accounting principles,
practices and procedures consistently applied and certified by such officer,
subject only to ordinary and usual year end audit adjustments.
Within one hundred twenty (120) days after the end of each fiscal
year of the Borrower and the Subsidiaries, Borrower shall furnish to Agent a
copy of the annual audited financial statements of the Borrower and the
Subsidiaries prepared in conformity with generally accepted accounting
principles, practices and procedures consistently applied by ▇▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, or other certified public accountants satisfactory to Agent and
certified without qualification as to scope.
The Borrower shall deliver to the Agent, together with each
delivery of financial statements required by this Section 4.8, a certificate
substantially in the form of Exhibit "H" hereto, appropriately completed, (A)
stating that the signer has reviewed the terms of this Agreement and of the
other Loan Documents and has made, or caused to be made under his supervision, a
review of the transactions and condition of the Borrower during the accounting
period covered by such financial statements and that such review has not
disclosed the existence during such accounting period, and that the signer does
not have knowledge of the existence, as at the date of such certificate, of any
condition or event which constitutes a default under Section 8 hereunder with
respect to the covenants set forth in Sections 4.16, 4.17, 4.18, and 5.12
hereof, or which, after notice or lapse of time or both, would constitute a
default with respect to the covenants set forth in Sections 4.16, 4.17, 4.18,
and 5.12 hereof, or, if any such condition or event existed or exists,
specifying the nature and period of existence thereof and what action the
Borrower has taken or is taking or proposes to take with respect thereto, (B)
demonstrating in reasonable detail compliance as at the end of such accounting
period with the restrictions contained in Sections 4.16, 4.17, 4.18, and 5.12
hereof and (C) setting forth in reasonable detail (i) any advances or payments
made with respect to intercompany notes or accounts during the accounting period
covered by such financial statements together with the closing balance of each
such note and account and the interest accrued thereon and (ii) the amount of
any management fees or similar advances made during the applicable accounting
period.
At any time and from time to time, Borrower will submit, or cause
to be submitted, to Agent promptly, in such form as Agent shall require, such
other information relating to the financial affairs of the Borrower and the
Subsidiaries, to the properties of the Borrower and the Subsidiaries including
the Property, to the businesses of the Borrower and the Subsidiaries or
otherwise as Agent shall reasonably request.
4.9 Records and Access. Borrower shall keep, or cause to be kept, full
and complete books and records in which correct and accurate entries will be
made of all of its and the Subsidiaries business transactions and their
properties including the Property and at any time and from time to time shall
give, or cause to be given, to the Agent or the Banks or their representatives
full access during normal business hours to examine and copy all of the
Borrower's and the Subsidiaries' properties including the Property and their
books, contracts and records.
4.10 Payment of Taxes and Mechanics' Claims. Borrower will pay, or
cause to be paid, all taxes, assessments, license fees and other governmental
charges and all claims of mechanics and materialmen to which it or any of the
Subsidiaries or any of their properties
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including the Property shall be subject, and all other charges on or relating to
any of their properties including the Property, before such charges and claims
become delinquent, except that no such charge or claim need be paid for so long
as its validity or amount shall be contested in good faith by appropriate
proceedings duly prosecuted and Borrower and the Subsidiaries shall have set up
in their books such reserves with respect thereto as shall be dictated by sound
accounting practices; provided, however, that all such charges and claims shall
be paid, subject to refund proceedings, if failure to pay would adversely affect
the rights or titles of Borrower or any of the Subsidiaries to any of their
properties including the Property.
4.11 Insurance. Borrower will keep, or cause to be kept, with
financially sound and reputable insurers, such insurance with respect to its and
the Subsidiaries' businesses and properties including the Property, in such
amounts and insuring against such risks, casualties and contingencies of such
types (including but not limited to insurance for loss or damage by fire and
other hazards and insurance for liability for damage to persons and property in
connection with their properties including the Property and the activities
conducted thereon or relating thereto) as is customary for persons, corporations
and other entities of established reputations engaged in the same or similar
businesses as the Borrower and the Subsidiaries and similarly situated, naming
Agent (for the benefit of the Banks) as mortgagee or lender loss payee or
additional insured as its interests may appear, and will keep, or cause to be
kept, such insurance as required by any applicable workmen's compensation laws,
and will furnish, or cause to be furnished, certificates of all such insurance
to Agent upon the execution hereof and within one hundred twenty (120) days
after the end of each of its fiscal years. All policies shall provide that they
may not be altered or cancelled except on thirty (30) days' prior written notice
to Agent.
4.12 Duty to Plug. If and when any of the ▇▇▇▇▇ ceases producing gas
and oil in paying quantities or is of no further use, or Borrower or any other
person, corporation or other entity is required to do so under any agreement or
law, Borrower will plug and abandon, or cause to be plugged and abandoned, any
and all such ▇▇▇▇▇ in accordance with the local, state and/or federal laws and
regulations then in force and regulating the plugging of gas and oil ▇▇▇▇▇.
Borrower further consents and agrees that it will save harmless Agent, and the
Banks, and the respective successors and assigns, of and from any loss, damage
and penalty through failure, if any, to plug, or cause to be plugged, such Well
or ▇▇▇▇▇ as herein provided.
4.13 Expenses, Fees and Disbursements. Borrower shall pay, or cause to
be paid, all expenses, fees and disbursements incurred in connection with the
recordation, filing, continuation, satisfaction and termination of the Mortgage,
the Financing Statements and any other Loan Documents and any other instruments
or documents relating thereto and the fees, expenses and disbursements of
Agent's counsel in connection with this Agreement and the other Loan Documents,
and any other instruments or documents relating thereto, their preparation,
administration and enforcement as well as the fees, expenses and disbursements
of the Agent and its counsel, and others (including but not limited to
geologists and engineers) engaged by Agent to provide information and advice in
connection with this Agreement and the other Loan Documents and any other
instruments or documents relating thereto, their preparation, administration and
enforcement.
4.14 Assigned Payments. In connection with any amounts due to Borrower
which are assigned to Agent (for the benefit of the Banks) pursuant to the
Mortgage, the Security Agreement and/or any other Loan Document, upon notice to
the payor thereof by Agent, such payments shall be made directly by the payor
thereof to Agent. Agent is, and/or its
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duly authorized agents are, hereby authorized by Borrower to endorse for and on
Borrower's behalf and deposit all drafts and checks payable to Borrower, and
such authority shall continue while any Indebtedness is outstanding. In the
event that any such assigned amounts paid to Agent consist of amounts belonging
in whole or in part to any person, corporation or entity other than Borrower,
the Agent shall promptly deliver such amounts or parts thereof to such persons,
corporations or entities, or at the option of Agent to the Borrower, upon being
furnished with evidence satisfactory to the Agent of such amounts or parts
thereof and the identity of such persons, corporations or other entities.
4.15 Notification. Within ten (10) days after Borrower or any
Subsidiary receives notice of any litigation or any judicial or administrative
proceeding pending or threatened against it which might result in Borrower or
such Subsidiary being liable for the payment or performance of obligations in
excess of Two Hundred Fifty Thousand ($250,000) Dollars with respect to any
single such litigation or proceeding, or in excess of One Million ($1,000,000)
Dollars in the aggregate with respect to all such litigations or proceedings,
Borrower shall notify the Agent, or cause the Agent to be notified, in writing
of such litigation or proceeding.
4.16 Current Ratio. The current assets of the Borrower on a
consolidated basis (as determined by Agent in accordance with generally accepted
accounting principles) divided by the positive difference between (i) the
current liabilities of the Borrower on a consolidated basis (as determined by
Agent in accordance with generally accepted accounting principles) and (ii) the
product of (x) the advance payments received by Borrower for the drilling and
completion of oil and gas ▇▇▇▇▇ which are classified as current liabilities
times (y) fifteen (15%) percent, shall at all times exceed the ratio of 0.75 to
1.00.
For the purposes of this Section 4.16 alone, (i) the principal
balance outstanding under the Revolving Credit Notes shall be deemed not to be a
current liability and (ii) the unused availability under the Revolving Credit
shall be deemed to be a current asset.
4.17 Debt to EBITDA. The Total Indebtedness of the Borrower on a
consolidated basis divided by the EBITDA of Borrower on a consolidated basis
(calculated for the four most recently completed fiscal quarters) shall at all
times be less than the following ratios for the fiscal periods ending on the
following dates (inclusive):
Fiscal Period Ending Maximum Ratio:
-------------------- --------------
6/30/98 through 12/31/98 3.75 to 1.00
3/31/99 through 9/30/99 3.50 to 1.00
12/31/99 through 3/31/00 3.25 to 1.00
6/30/00 and each fiscal 3.00 to 1.00
period ending thereafter
For the purposes of this Section 4.17 and of Section 4.18, (i) the
term "Total Indebtedness" shall mean total indebtedness of Borrower, including
all indebtedness for money borrowed or credit advanced, purchase price
obligations, obligations evidenced by bonds, notes or similar indentures,
capitalized lease obligations, guaranties, obligations with respect to letters
of credit, obligations under any interest or currency swap, future, option or
other similar agreement (except where any such swap, future, option or other
similar agreement is matched to an offsetting asset as in the case of hedging
with respect to the physical
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production and sale of oil and gas), and any liability in the nature of any of
the foregoing in its capacity as a general partner, and (ii) the term "EBITDA"
shall mean the sum of the Borrower's net income plus interest expense plus tax
expense plus depreciation plus amortization plus other noncash charges to income
minus noncash credits to income (as determined by Agent in accordance with
generally accepted accounting principles).
4.18 Fixed Charge Coverage Ratio. The EBITDA of the Borrower on a
consolidated basis (calculated for the four most recently completed fiscal
quarters) divided by the sum of (i) interest expense of Borrower on a
consolidated basis (calculated for the four most recently completed fiscal
quarters) plus (ii) Current Maturities of Long Term Debt of Borrower on a
consolidated basis, must not be less than 2.0 to 1.0 at any time.
For the purposes of this Section 4.18, the term "Current Maturities
of Long Term Debt" (as reasonably determined by Agent in accordance with its
customary practices) shall mean that portion of the Borrowers' total
indebtedness for money borrowed or credit advanced (other than (i) trade credit
incurred in the ordinary course of business and (ii) indebtedness to the Banks
under the Revolving Credit), however evidenced, which had a scheduled maturity
during the preceding four fiscal quarters.
4.19 Additional Documents. From time to time, at the Agent's request,
whether before or after any borrowings hereunder, the Borrower at its expense
will execute and deliver, or cause to be executed and delivered, to Agent such
instruments, papers and other documents and take, or cause to be taken, such
further action as Agent reasonably may require in connection with the
transactions contemplated hereby including the enforcement of the Loan
Documents.
4.20 Environmental Matters. (a) Borrower will ensure that the Property
remains in compliance, in all material respects, with all local, state and
federal environmental laws, rules and regulations, and that it will not place or
permit to be placed on the Property any Hazardous Substances, except as not
prohibited by applicable environmental laws, rules or regulations, or in such
quantities as to not constitute a hazard to the environment or subject the
Borrower to prosecution or liability in connection therewith.
(b) Borrower will employ, or cause to be employed, in connection with
the use of the Property appropriate technology as the Borrower determines
reasonably necessary to maintain compliance with any applicable environmental
law, rule or regulation and dispose, or cause to be disposed, of any and all
Hazardous Substances generated at the Property only at facilities and with
carriers that maintain valid permits under applicable environmental laws, rules
and regulations.
(c) In the event the Borrower obtains, gives or receives notice of any
release or threat of release of a reportable quantity of any Hazardous
Substances at the Property or receives any notice of violation, request for
information or notification that it is potentially responsible for investigation
or cleanup of environmental conditions at the Property, or any demand letter,
complaint, order, citation or other written notice with regard to any Hazardous
Substances or violation of any environmental law, rule or regulation, affecting
the Property from any person or entity, including any state agency responsible
in whole or in part for environmental matters in the state in which the Property
is located or the United States Environmental Protection Agency (any such person
or entity is hereinafter referred to as the "Authority") which might result in
the Borrower being liable for the payment or performance of
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obligations in excess of Ten Thousand ($10,000) Dollars with respect to any such
event or in excess of One Hundred Thousand ($100,000) Dollars in the aggregate
with respect to all such events, then the Borrower shall, within five (5) days,
give written notice of same to the Agent detailing non-privileged and
non-confidential facts and circumstances of which the Borrower is aware in
connection therewith. Such information is to be provided to allow Agent to
protect its security interest in the Property and is not intended to create any
obligation upon the Agent or the Banks with respect thereto.
(d) Borrower shall promptly forward to the Agent copies of any request
for information, notification of potential liability, demand letter for
information, notification of potential liability, demand letter relating to
potential responsibility with respect to the investigation or cleanup of
Hazardous Substances at the Property and shall continue to forward to the Agent
copies of correspondence between the Borrower and the Authority regarding such
claims until the claims are settled. The Borrower shall promptly forward to the
Agent copies of all documents and reports concerning Hazardous Substances at the
Property that the Borrower is required to file under any environmental law, rule
or regulation. Such information is to be provided to allow the Agent to protect
its security interest in the Property and is not intended to create any
obligation upon the Agent or the Banks with respect thereto.
(e) If the Borrower shall fail to comply, or cause to be complied, with
any of the requirements of any environmental law, rule or regulation, the Agent
may, at its election, but without the obligation to do so, for the sole purpose
of protecting its security interest in the Property, enter onto the Property (or
authorize third parties to enter onto the Property) and take such actions as the
Agent (or such third parties as directed by the Agent) deems reasonably
necessary or advisable, after consultation with the Borrower, to comply with the
requirements of such environmental laws, rules and regulations including but not
limited to cleaning up, removing, mitigating or otherwise dealing with any
release of Hazardous Substances. All reasonable costs and expenses incurred by
the Agent (or such third parties) in the exercise of any such rights, including
any sums paid in connection with any judicial or administrative investigation or
proceedings, fines and penalties, together with interest thereon from the date
expended at the highest lawful rate then payable under the Note then
outstanding, shall be paid upon demand by the Borrower.
(f) Promptly upon the written request of the Agent from time to time,
which written request may be made by the Agent only in the event of notice to
the Agent of discovery or occurrence of a release of Hazardous Substances at the
Property, the Borrower shall provide, or cause to be provided, to Agent, at the
Borrower's expense, with an environmental site assessment or environmental audit
report prepared by an environmental engineering firm acceptable to the Agent in
its reasonable opinion, to assess with a reasonable degree of certainty the
existence of a release of Hazardous Substances and the potential costs in
connection with the abatement, cleanup and removal of any Hazardous Substances
found on, under, or within the Property. Any report or investigation of such
release of Hazardous Substances proposed and acceptable to an appropriate
Authority that is charged to oversee the cleanup of such release of Hazardous
Substances shall be acceptable to the Agent. If such estimates, individually or
in the aggregate, exceed FIFTY THOUSAND DOLLARS ($50,000), the Agent shall have
the right to require the Borrower to post a bond, letter of credit or other
security reasonably satisfactory to the Agent to secure payment of these costs
and expenses.
(g) Borrower shall defend and indemnify the Agent and the Banks and
hold the Agent and the Banks harmless from and against all loss, liability,
damage and expense,
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claims, costs, fines and penalties, including attorney's fees, suffered or
incurred by the Agent, whether as a mortgagee in possession, or as
successor-in-interest to the Borrower, or otherwise, under or on account of any
environmental law, rule or regulation, including the assertion of any lien
thereunder, with respect to any release of Hazardous Substances, the presence of
any Hazardous Substances affecting the Property, whether or not the same
originates or emanates from the Property or any contiguous real estate,
including any loss of value of the Property as a result of the foregoing so long
as no such loss, liability, damage and expense is attributable to any release of
Hazardous Substances resulting from actions on the part of the Agent. The
Borrower's obligations under this Section 4.20 shall arise upon the discovery of
the presence of any Hazardous Substances at the Property, whether or not any
Authority has taken or threatened any action in connection with the presence of
any Hazardous Substances. The Borrower's obligation and the indemnification
hereunder shall survive the payment in full of the indebtedness secured hereby
and the satisfaction in full of the other obligations secured hereby.
SECTION 5. NEGATIVE COVENANTS.
------------------------------
For so long as any Indebtedness remains unpaid, Borrower agrees that it
will not, without the prior written consent of the Agent:
5.1 Alienation. Sell, lease, transfer or otherwise dispose of or
alienate any of its property including the Property, or permit the sale, lease,
transfer or other disposition or alienation of any of the property of any
Subsidiary, except the sale in the ordinary course of business of gas and oil
transported through the Pipeline and gas and oil produced from the ▇▇▇▇▇ and
except the sale, lease, transfer or other disposition or alienation for fair
consideration in the ordinary course of business of its and the Subsidiaries'
properties other than the Property and except the sale, lease, transfer or other
disposition or alienation for fair consideration other than in the ordinary
course of business of its and the Subsidiaries' properties other than the
Property having a fair market value not to exceed One Million ($1,000,000)
Dollars in the aggregate.
5.2 Encumbrances. Permit, create, assume or incur any mortgage, pledge,
charge, security interest, lien or encumbrance of any kind upon any of its or
the Subsidiaries' properties (whether now owned or hereafter acquired) including
the Property, or commit any act or make any election which will require it or
any of the Subsidiaries to reassign any of their properties including the
Property, except encumbrances (i) created and granted in this Agreement, the
Mortgage, the Security Agreement (Partnerships), the Security Agreement (Note)
and the Pledge Agreement or otherwise created or granted in favor of the Banks,
(ii) relating to current taxes, assessments, license fees and other governmental
charges and claims of mechanics and materialmen not delinquent, or if delinquent
being contested in good faith as set forth in Section 4.10 hereof unless
required to be paid as set forth in such Section and subject to the reserve
requirements set forth in such Section, (iii) imposed in the normal course of
the oil and gas business of the Borrower and the Subsidiaries in connection with
obtaining surety bonds and (iv) imposed in the normal course of business of the
Borrower and the Subsidiaries, other than in favor of the Banks, on properties
of the Borrower and the Subsidiaries hereafter acquired by them, provided that
such liens and encumbrances are imposed in connection with the financing of the
acquisition of such properties and are imposed only on the properties acquired.
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5.3 Guaranty. Become or be, or permit any Subsidiary to become or be, a
guarantor or endorser of, or surety for, or responsible in any manner whatsoever
with respect to, the payment or performance of any indebtedness, obligation or
undertaking of any other person, corporation or other entity, except in favor of
the Banks in connection with the payment and/or performance of any such
indebtedness, obligation or undertaking, except by the endorsement of negotiable
instruments for deposit or collection in the ordinary course of business, except
guarantees by the Borrower of the performance by the Subsidiaries which are
engaged in the oil and gas business of obligations incurred by such Subsidiaries
to provide goods and services in such business and except as permitted in
accordance with Section 5.6 hereof.
5.4 Debt. Create, assume, incur or permit to exist, any indebtedness or
obligation for the payment or repayment of money, whether borrowed by, or
advanced to or for the benefit of, Borrower or any Subsidiary, or otherwise,
except (i) the borrowings under the Loan Documents and any other indebtedness or
obligation of Borrower or any Subsidiary to the Banks thereunder, (ii)
indebtedness with respect to the intercompany advances described in Subsection
5.5(vii) hereof, provided, however, that Bank shall at all times have a first
perfected lien on any instrument evidencing such indebtedness, and (iii) with
respect to the Borrowers other than AIC, Inc., AED Investments, Inc. and ARD
Investments, Inc., other indebtedness, other than in favor of the Banks, not
exceeding Two Million ($2,000,000) Dollars in the aggregate at any one time
outstanding.
5.5 Loans; Investments. Make, or permit any Subsidiary to make, any
loan or advance to any person, corporation or other entity, or purchase or
otherwise acquire, or permit any such Subsidiary to purchase or otherwise
acquire, any capital stock, assets, obligations or other securities of, make any
capital contribution to, or otherwise invest in, or acquire any interest in, any
person, corporation or other entity, except: (i) direct obligations of the
United States of America or any agency thereof with maturities of one year or
less from the date of acquisition; (ii) commercial paper of a domestic issuer
rated at least "A-1" by Standard & Poor's Corporation or "P-1" by ▇▇▇▇▇'▇
Investors Service, Inc.; (iii) certificates of deposit with maturities of one
year or less from the date of acquisition issued by any Bank or any commercial
bank operating within the United States of America having capital and surplus in
excess of $50,000,000; (iv) for stock, obligations or securities received in
settlement of debts (created in the ordinary course of business) owing to the
Borrower or any such Subsidiary; (v) loans from Transatco Corporation to TOPICO,
a partnership, not exceeding One Million Twenty Thousand ($1,020,000) Dollars in
the aggregate at any one time outstanding; (vi) loans from a Borrower to another
Borrower's pursuant to one or more intercompany notes as described in, and
subject to, the Security Agreement (Note), (vii) the stock held by a Borrower on
the date hereof as described in Section 2.2 hereof, (viii) with respect to the
Borrowers other than AIC, Inc., AED Investments, Inc. and ARD Investments, Inc.,
other loans not exceeding One Million One Hundred Thousand ($1,100,000) Dollars
in the aggregate at any one time outstanding; (ix) loans not to exceed $250,000
in the aggregate to Atlas Technologies, LLC; and (x) loans not to exceed
$250,000 in the aggregate to Record Imaging, Ltd.
5.6 Business Activities. (a) Subject to the provisions of paragraph (b)
below, engage in, or permit any Subsidiary to engage in, any business other than
the business which it now conducts.
(b) Notwithstanding anything to the contrary contained in this
Agreement, The Atlas Group, Inc., AIC, Inc., AED Investments, Inc. and ARD
Investments, Inc. shall not be
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permitted to engage in any business or conduct any activity except (i) make the
advances permitted in Subsection 5.5(vi) hereof, (ii) hold the stock held by
such Borrower on the date hereof as described in Section 2.2 hereof, (iii) the
ownership, maintenance and management of intangible investments (which includes,
without limitation, investments in the types of assets listed in Section 5.5
(i), (ii) and (iii) hereof), patents, patent applications, trademarks, trade
names and similar types of intangible assets), and the collection and
distribution of income from such investments and (iv) with respect to The Atlas
Group, Inc. only, perform certain administrative and management services on
behalf of the other Borrowers in exchange for a fee.
5.7 Consolidation or Merger, Change of Control. (a) Consolidate with or
merge into, or permit any Subsidiary to consolidate with or merge into, any
person, corporation or other entity or permit any person, corporation or other
entity to consolidate with or merge into Borrower or any Subsidiary, except for
(i) the merger of The Atlas Group, Inc. with and into Atlas America, Inc.
("Atlas America") so long as, at the time of such merger, Atlas America is
engaged in no business other than owning the stock of The Atlas Group, Inc. and
Resource Energy, Inc. ("Resource Energy") and (ii) the merger of Atlas America
(as successor by merger to The Atlas Group, Inc.) with Resource Energy (the
"Permitted Merger"), so long as (x) prior to the effective date of the Permitted
Merger, the Agent and the Banks shall have received from the Borrower (A) such
information and documentation regarding Resource Energy as they may reasonably
request and (B) pro forma financial statements reflecting the Permitted Merger,
and such information, documentation and financial statements are satisfactory to
the Banks in all material respects, (y) the consummation of the Permitted Merger
shall not cause or result in any event of default under Section 8 hereof, and
(z) Resource Energy, the Permitted Merger and all documentation relating thereto
shall be otherwise satisfactory in all material respects to the Banks.
(b) Permit any Change in Control, except for the acquisition of 100% of
the issued and outstanding shares of The Atlas Group, Inc. by Resource America,
Inc. or Atlas America (the "Permitted Acquisition"). For the purposes of this
Agreement, the term "Change in Control" shall mean any change in the ownership
of the shares of stock of any Borrower.
5.8 Acquisitions. Purchase or otherwise acquire, or permit any
Subsidiary to purchase or acquire, any obligations or stock of, or any other
interest in, or all or substantially all of the assets of, any person,
corporation or other entity whatsoever.
5.9 Redemption. Directly or indirectly, purchase or redeem any of the
stock issued by Borrower or permit any Subsidiary to purchase or redeem any of
the stock issued by such Subsidiary; except the purchase of 131,425 shares of
The Atlas Group, Inc. from ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ for an
aggregate purchase price of up to $12,000,000 in contemplation of the Permitted
Acquisition described in Section 5.7 (b) above.
5.10 Distributions. Directly or indirectly, declare or make, or incur
any liability to make, any dividend or other distribution on the stock of such
Borrower or otherwise to the stockholders of The Atlas Group, Inc. (or its
successor), except stock options to be issued to employees of The Atlas Group,
Inc.
5.11 Leases. Become, or permit any Subsidiary to become, lessee under
any lease of any real or personal property, except gas and oil leases in the
ordinary courses of their businesses and except such other leases entered into
in the ordinary courses of their
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businesses so long as the aggregate payments to be made by the Borrower and the
Subsidiaries in connection with such other leases in any fiscal year of the
Borrower do not exceed One Million ($1,000,000) Dollars and except equipment
leases from any Bank or any affiliate thereof) to Borrower or any Subsidiary.
5.12 Capital Expenditures. Make or permit during any fiscal year the
aggregate amount of Borrower's exploration expenses to exceed an amount equal to
twenty (20%) percent of the Borrower's total capital expenditures (on a
consolidated basis) during such fiscal year. For the purposes of this section,
exploration expenses shall be included within the calculation of Borrower's
total capital expenditures.
5.13 Negative Pledges. Directly or indirectly enter into or assume any
agreement (other than this agreement) prohibiting the creation or assumption of
any lien or encumbrance upon any of the Borrower's properties (including without
limitation the Property), whether now owned or hereafter created or acquired, or
otherwise prohibiting or restricting any transaction contemplated hereby.
SECTION 6. BORROWING REQUIREMENTS.
----------------------------------
6.1 Conditions to Borrowing. Unless otherwise agreed to by Agent and
subject to the performance by Borrower of its other obligations under the Loan
Documents, the Banks shall have no obligation to advance any funds to Borrower,
to issue or renew any Letter of Credit or to continue any loans outstanding
under the Existing Loan Agreement until all legal matters incident to the
transactions contemplated by the Loan Documents are resolved in a manner
satisfactory to Agent and its counsel and until Borrower shall have provided
Agent with the following:
A. The Notes, Mortgage, Security Agreement (Partnerships), Security
Agreement (Note), Pledge Agreement, Financing Statements and other Loan
Documents duly executed and all in form and substance satisfactory to Agent.
B. Evidence satisfactory to Agent authorizing the execution and
delivery by Borrower of this Agreement, the Notes, the Mortgage, the Security
Agreement (Partnerships), Security Agreement (Note), the Pledge Agreement, the
Financing Statements and the other Loan Documents.
C. Opinions of counsel for Borrower, addressed to Agent and the Banks,
satisfactory to Agent's counsel, relating to such matters as the Agent may
reasonably require, including opinions that on the dates of delivery of such
opinions and at the times the funds to be lent pursuant to this Agreement are
advanced (a) the representations set forth in Sections 2.1, 2.2 and 2.6 hereof
(which representations shall be repeated at length in such opinions) are
accurate, (b) to the best of the knowledge of Borrower's counsel, the
representations set forth in Sections 2.5, 2.9, 2.10, 2.11, 2.12 and 2.13 hereof
(which representations shall be repeated at length in such opinions) are
accurate, and (c) the interest rate options applicable to the Notes, the
Commitment Fee or any other Fee provided for herein, the maintenance of the
Borrower's principal accounts as required by Section 3.4 hereof and the
depositing therein of substantially all of Borrower's funds, and the payment of
all other amounts to be paid by Borrower pursuant to this Agreement and the
other Loan Documents do not violate any usury
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or other law of the State of Ohio or the Commonwealth of Pennsylvania relating
to interest payments.
D. Opinions, addressed to the Agent and the Banks, of Borrower's
counsel or such other counsel satisfactory to Agent, in form and substance
satisfactory to Agent's counsel, that on the dates of delivery of such opinions
and at the times the funds to be lent pursuant to this Agreement are advanced
(a) Borrower and the Partnerships have good and marketable rights, titles and
interests in and to all the Property and the Partnership ▇▇▇▇▇, (b) all
documents or instruments pursuant to which, or establishing that, Borrower and
the Partnerships acquired interests in the Property and the Partnership ▇▇▇▇▇
are valid and subsisting and have not been modified or amended, (c) the extent
of Borrowers and the Partnerships' interests in the Property and the Partnership
▇▇▇▇▇ are as described in the documents and instruments pursuant to which, or
establishing that, Borrower and the Partnerships acquired their interests in the
Property and the Partnership ▇▇▇▇▇ and (d) the Property and the Partnership
▇▇▇▇▇ are free and clear of all liens and encumbrances except such liens and
encumbrances as shall be acceptable to Agent in its sole discretion.
E. Certificates executed by Borrower stating that no defaults have
occurred which are unremedied or unwaived under any agreement, lease, assignment
or other document or instrument by or through which Borrower has any rights,
titles or interests in connection with the Property.
F. Evidence satisfactory to Agent that there has been recorded in the
appropriate offices documents and instruments establishing that Borrower and the
Partnerships have good and marketable rights, titles and interests in and to the
Property and the Partnership ▇▇▇▇▇ and delivery to Agent of copies of all the
documents and instruments pursuant to which, or establishing that, Borrower and
the Partnerships acquired such rights, titles and interests.
G. Evidence satisfactory to Agent of the recordation and filing of the
Mortgage, the Financing Statements and any other Loan Document.
H. A current certificate of good standing of the each Borrower and a
certificate of incumbency for each Borrower.
I. A mortgagee title insurance policy issued in favor of Bank with
respect to the premises located at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, in
form and substance acceptable to Agent and its counsel.
J. Payment of the Fees provided for in the side letter among Borrower
and Agent relating thereto.
K. Such other documents and instruments, and evidence of the
performance by Borrower of such other obligations, as Agent may reasonably
request.
SECTION 7. DISBURSEMENT.
------------------------
7.1 Procedure. Except as otherwise provided herein, Borrower may
request Revolving Credit Loans by delivering to the Agent, not later than 11:00
A.M. (Pittsburgh, Pennsylvania time) on the proposed borrowing date a written
notice requesting, and specifying
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the date (if other than the date of such request), the amount and the manner of,
each borrowing and reborrowing hereunder. Subject to Section 11.2 hereof, the
Agent shall promptly notify the Banks of each request for a borrowing or
reborrowing on the same day on which the Agent receives such a request, and each
Bank shall make its Commitment Percentage of the requested borrowing or
reborrowing available to the Borrower, in immediately available funds at the
principal office of the Agent, prior to 2:00 P.M. (Pittsburgh, Pennsylvania
time) on the date specified by Borrower in its request, and upon availability of
such funds Agent shall credit one or more of the accounts of deposit (the
"Accounts") maintained by Borrower at the Agent in the amount to be borrowed or
reborrowed. Each borrowing or reborrowing by Borrower or issuance or renewal of
any Letter of Credit hereunder issuance or renewal shall be conditioned on the
following: that at the time of such borrowing, reborrowing issuance or renewal
the representations and warranties contained in this Agreement are true and
correct and no default set forth in Section 8 hereof shall have occurred and be
continuing and no event which, with giving of notice or lapse of time or both
would become such a default, shall have occurred or shall have failed to occur
and be continuing; and each such borrowing, reborrowing issuance or renewal
shall be deemed to be a representation and warranty by the Borrower that the
foregoing conditions exist and upon the request of Agent the Borrower shall
execute and deliver to the Agent a certificate as to the existence of the
foregoing conditions.
7.2 Use of Proceeds. Borrower represents, warrants and agrees that all
funds lent or advanced pursuant to this Agreement or any other Loan Document
have been, and shall be, used only for the purpose of (i) financing oil or
natural gas drilling, producing, gathering and associated activities and
facilities by the Borrower, (ii) the prepayment in full of the indebtedness
evidenced by those certain Promissory Notes each dated November 14, 1990 and
executed in favor of ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and the purchasing of the
shares of The Atlas Group, Inc. from ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ in
accordance with Section 5.9 above and (iii) for the purpose of funding other
general corporate activities of the Borrower.
7.3 Charging Account. Borrower agrees that each Bank and the Agent may
charge and is hereby authorized to charge any demand deposit account of the
Borrower maintained with the Agent or the Banks (including without limitation
the Accounts) for payment of principal of, or interest on, the Notes when due
and payable, reimbursement of Draws under the Letters of Credit and all other
charges set forth in the Loan Documents when due and payable including but not
limited to the Commitment Fee, the Fees provided for in the side letter among
Borrower and Agent, any Letter of Credit Fee and the charges set forth in
Sections 4.13 and 10.3 hereof.
SECTION 8. DEFAULTS.
--------------------
If one or more of the following events occur:
A. Borrower or any Subsidiary or any Partnership makes an assignment
for the benefit of its creditors, becomes insolvent or admits in writing its
inability to pay its debts as they become due; or Borrower or any Subsidiary or
any Partnership files a voluntary petition in bankruptcy or files a petition or
answer seeking for itself any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any present or
future statute, law or regulation; or Borrower or any Subsidiary or any
Partnership files an answer admitting or not contesting the material allegations
of any petition filed in any action commenced against the Borrower or such
Subsidiary or such Partnership in bankruptcy or
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seeking the relief described above in this Subsection 8.A, or any such action
shall not have been dismissed within thirty (30) days after it is commenced; or
the Borrower or any Subsidiary, or any of its officers, directors or
shareholders, or any Partnership, or any of its partners, takes any action
looking to the dissolution or liquidation of Borrower or such Subsidiary or such
Partnership; or the Borrower or any Subsidiary or any Partnership applies for,
consents to, or acquiesces in the appointment of a trustee, receiver or
liquidator for itself or for any of its property or in the absence of such
application, consent or acquiescence such a trustee, receiver or liquidator is
appointed and is not discharged within thirty (30) days after being appointed;
or
B. Any garnishment proceeding by attachment, levy or otherwise is
instituted against any deposit balance maintained, or any property deposited,
with the Bank by the Borrower:
then this Agreement and the other Loan Documents shall immediately and
automatically be in default, any obligation of the Banks or the Agent under the
Loan Documents or otherwise to make any further advances to or for the benefit
of Borrower shall immediately and automatically terminate and the principal of,
and interest on, the Notes and all other indebtedness of Borrower and the
Subsidiaries to Bank including but not limited to all other Indebtedness shall
immediately be due and payable without necessity of demand, presentment,
protest, notice of dishonor, notice of default or any other notice whatsoever,
all of which are hereby expressly waived by Borrower.
If one or more of the following events occur:
C. Default by Borrower in the payment of principal of, or interest on,
the Notes, in the payment of any reimbursement or other obligation with respect
to any Letter of Credit, or in the payment of the Commitment Fee, the Fees
provided for in the side letter among Borrower and the Agent, the Letter of
Credit Fee or in the payment of items of expense or other charges to be paid by
the Borrower pursuant to the Loan Documents, including but not limited to the
times set forth in Section 4.13 or 10.3 hereof, when due and payable, and
continuance thereof for ten (10) days thereafter or for ten (10) days after
bills therefor are sent to Borrower, whichever last occurs.
D. One or more courts shall render a final judgment or judgments
against Borrower or any Subsidiary or any Partnership in an aggregate amount
greater than Ten Thousand ($10,000) Dollars in excess of any insurance
protecting against the liability on which such judgment or judgments are based
and such judgment or judgments shall not be satisfactorily stayed, discharged,
vacated or set aside within thirty (30) days after the entry thereof, or, except
as set forth in Subsection 8.13 hereof, one or more properties of Borrower or
any Subsidiary or any Partnership shall be liened or attached under a claim or
claims in an aggregate amount greater than Ten Thousand ($10,000) Dollars in
excess of any insurance protecting against the liability on which such lien or
attachment is based and such lien or attachment shall not be released or
provided for to the satisfaction of Bank within thirty (30) days after the
property is liened or attached;
E. Borrower or any Subsidiary shall fail to take, or cause to be taken,
corrective measures reasonably satisfactory to Agent within thirty (30) days
after notice to Borrower or such Subsidiary with respect to any litigation or
any judicial or administrative proceedings pending or threatened against
Borrower or such Subsidiary or any Partnership or
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the Property or any Partnership Well, the outcome of which, in the reasonable
judgment of Bank, would materially and adversely affect the financial condition
of Borrower or such Subsidiary or such Partnership or the Property or the
Partnership ▇▇▇▇▇;
F. The PBGC shall make a determination that there has occurred an event
or condition which constitutes grounds under ERISA for the termination of, or
for the appointment of a trustee to administer, any Plan;
G. Default in the performance or observance of any agreement, covenant
or obligation of Borrower set forth in this Agreement or any other Loan
Document, including but not limited to the Mortgage, the Security Agreement
(Partnerships), the Security Agreement (Note), the Pledge Agreement and the
Notes, which default does not constitute a specific default set forth in this
Section 8, and continuance thereof for thirty (30) days;
H. Default in the performance or observance of any agreement, covenant
or obligation of Borrower or any Subsidiary or any Partnership in any agreement
between Bank and Borrower and/or such Subsidiary and/or such Partnership in
addition to any Loan Document, or the existence of any misrepresentation in
connection therewith or related thereto, and continuance thereof for more than
the permitted period of grace, if any;
I. Except as set forth in Subsections 8.C, 8.G and 8.H hereof, default
in the payment or performance of any obligation for borrowed money for which the
Borrower or any Subsidiary or any Partnership is liable (directly, by
assumption, as guarantor, or otherwise) or in the payment or performance of any
obligation secured by any mortgage, pledge, charge, security interest or other
encumbrance with respect to any property of the Borrower or any Subsidiary or
any Partnership, and continuance thereof for more than the permitted period of
grace, if any;
J. Any representation or warranty made by Borrower herein or in any
other Loan Document is untrue in any material respect or any certificate,
schedule, statement, report, notice or writing furnished or made to Agent or any
Bank in connection with the transactions contemplated by the Loan Documents is
untrue in any material respect on the date as of which the facts set forth
therein are stated or certified;
K. Any Change in Control, except for the Permitted Acquisition
contemplated in Section 5.7 above.
L. If ▇▇▇▇▇ ▇. ▇'▇▇▇▇ [or any other person(s) acceptable to Agent as
set forth in this Subsection 8.L] does not, regardless of the reason therefor,
continue to act as the chief executive officer of the Borrower and to devote his
entire time and attention to the business and affairs of the Borrower; provided,
however, that if such default occurs, Borrower may cure such default by
engaging, within sixty (60) days after such occurrence, as the chief executive
officer of the Borrower or such other person(s) as shall be reasonably
acceptable to Agent:
then the Agent, at its option, may immediately declare this Agreement and/or the
other Loan Documents in default, may terminate any obligations of the Agent or
the Banks under the Loan Documents or otherwise to make any further advances to
or for the benefit of Borrower and/or may declare the principal of, and interest
on, the Notes and/or all other indebtedness of Borrower and the Subsidiaries to
the Banks including but not limited to all other Indebtedness
-48-
immediately due and payable, whereupon all such indebtedness including but not
limited to the Indebtedness shall immediately become due and payable without
necessity of demand, presentment, protest, notice of dishonor, notice of default
or any other notice whatsoever, all of which are hereby expressly waived by
Borrower.
Notwithstanding anything to the contrary contained in this Section 8,
for purposes of this Section 8, neither this Agreement nor any other Loan
Document shall be, or be declared to be, in default upon the occurrence of any
of the events set forth above unless (i) any such event relates to a person,
corporation or other entity other than, or in addition to, any Partnership, or
(ii) any such event relates only to one or more Partnerships and the occurrence
of such event, together with all other such events occurring theretofore or
thereafter, does, or might, impair the collateral value of the Property in an
amount equal to at least Five Hundred Thousand ($500,000) Dollars as determined
by Bank in its sole discretion; provided, however, that this paragraph shall in
no way affect the calculation of the Collateral Value hereunder or the
Borrower's obligation to make mandatory prepayments under Section 1.4 above.
SECTION 9. REMEDIES.
--------------------
The Agent (on behalf of the Banks) shall be entitled at its option to
exercise each and every remedy accorded it by law and/or specifically set forth
in the Loan Documents, including in that limitation the Mortgage, the Security
Agreement (Partnerships), the Security Agreement (Note), the Pledge Agreement
and the Notes, which remedies are specifically incorporated herein by reference.
Such remedies may be asserted concurrently, cumulatively, successively or
independently from time to time so long as any part of the Indebtedness remains
unpaid.
SECTION 10. MISCELLANEOUS.
--------------------------
10.1 Waiver and Modification. No waiver by Agent or the Banks of any
default shall operate as a waiver of any other default or of the same default on
a future occasion. No failure to exercise, and no delay in exercising, on the
part of Agent or the Banks, any power, remedy or right shall operate as a waiver
thereof, nor shall any single or partial exercise of any power, remedy or right
preclude other or further exercise thereof or the exercise of any other power,
remedy or right. This Agreement and the other Loan Documents, including the
Notes, the Mortgage, the Security Agreement (Partnerships), the Security
Agreement (Note) and the Pledge Agreement, contain the entire agreement of the
parties with respect to their subject matter and the terms, conditions and
covenants of this Agreement and the other Loan Documents, including the Notes,
the Mortgage, the Security Agreement (Partnerships), the Security Agreement
(Note) and the Pledge Agreement, may only be modified or waived by a written
document executed by Borrower and Bank.
10.2 Notices. All notices or other correspondence required or made
necessary by the terms of this Agreement and the other Loan Documents shall be
in writing and shall be considered as having been given to each party if served
personally or if mailed by registered or certified mail, postage prepaid, to the
respective addresses as follows:
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(a) To Borrower:
c/o The Atlas Group, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇'▇▇▇▇
Chief Executive Officer
(b) To Agent:
PNC Bank, National Association
One PNC Plaza
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Energy, Metals & Mining
(c) To Banks:
All notices to Banks shall be sent to the notice
address of each Bank as set forth on such Bank's
signature page to its Assignment and Assumption
Agreement.
Each party shall have the right to change its address at any time, and from time
to time, by giving written notice thereof to the other party.
10.3 Certain Taxes. Borrower agrees to pay, and save Agent and the
Banks harmless from, all liability for any federal or state documentary stamp or
other tax liability, together with any interest or penalty, which is payable or
determined to be payable with respect to the execution or delivery of this
Agreement or any other Loan Document including the Notes, the Mortgage, the
Security Agreement (Partnerships), the Security Agreement (Note), the Pledge
Agreement and the Financing Statements, which obligation of the Borrower shall
survive the termination of this Agreement.
10.4 Right to Cure. In the event that Borrower shall fail for any
reason to pay any fee, cost, expense or other charge to be paid or reimbursed by
Borrower, Agent shall have the right but not the duty to make such payment and
if Agent makes such payment the amount thereof shall be added to the balance of
the indebtedness secured by the Mortgage, the Security Agreement (Partnerships),
the Security Agreement (Note) and the Pledge Agreement, shall be payable on
demand and shall bear interest at the highest lawful rate of interest then
payable under the Note then outstanding until paid.
10.5 Venue and Jurisdiction: Waiver of Jury Trial. THE PARTIES HERETO
AGREE THAT ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT SHALL BE COMMENCED IN THE COURT OF
COMMON PLEAS OF ALLEGHENY COUNTY, PENNSYLVANIA AND EACH PARTY AGREES THAT A
SUMMONS AND COMPLAINT COMMENCING AN ACTION OR PROCEEDING IN SUCH COURT SHALL BE
PROPERLY SERVED AND SHALL CONFER PERSONAL JURISDICTION IF SERVED PERSONALLY OR
BY CERTIFIED MAIL TO IT AT ITS ADDRESS DESIGNATED PURSUANT HERETO, OR AS
OTHERWISE PROVIDED UNDER THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA. THE
PARTIES
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this is it!
HERETO WAIVE ANY CLAIM THAT PITTSBURGH, PENNSYLVANIA IS AN INCONVENIENT FORUM
AND ANY CLAIM THAT ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT IN THE AFOREMENTIONED COURT LACKS
PROPER VENUE AND/OR JURISDICTION. EACH BORROWER, THE AGENT AND THE BANKS HEREBY
WAIVE TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND
ARISING OUT OF OR RELATED TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE
COLLATERAL PROVIDED IN CONNECTION HEREWITH TO THE FULL EXTENT PERMITTED BY LAW.
10.6 Applicable Law. THIS AGREEMENT SHALL BE A CONTRACT MADE UNDER AND
GOVERNED BY THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA.
10.7 Severability. In the event that any term or provision of this
Agreement or any other Loan Document including the Notes, the Mortgage, the
Security Agreement (Partnerships), the Security Agreement (Note) and the Pledge
Agreement is lawfully held or declared to be invalid, illegal or unenforceable,
it shall be deemed deleted to the extent necessary under the applicable law and
the validity of the other terms and provisions shall not be affected thereby.
10.8 Successors and Assigns. (a) This Agreement and the other Loan
Documents shall be binding upon the Borrower, the Agent and the Banks and their
respective successors and assigns, and shall inure to the benefit of Borrower,
the Agent and the Banks and the successors and assigns of the Agent and the
Banks (except that Borrower shall have no right to assign, voluntarily or by
operation of law, any of its rights hereunder or under any other Loan Document
without Agent's prior written consent, and provided further that nothing herein
is intended by any party hereto to confer any rights upon any third party as a
beneficiary hereof).
(b) Subject to the remaining provisions of this Section 10.8, any Bank
(the "Transferor Bank") may at any time, in the ordinary course of its
commercial lending business, in accordance with applicable law, sell to one or
more financial institutions (each, a "Purchasing Bank") (which Purchasing Bank
may be an affiliate of the Transferor Bank), a portion of its rights and
obligations under this Agreement and the Notes then held by it, pursuant to an
Assignment and Assumption Agreement substantially in the form of Exhibit "I" and
satisfactory to the Agent, executed by the Transferor Bank, such Purchasing
Bank, the Agent and the Borrower; provided, however, that the Borrower and the
Agent must each give its prior consent to any such assignment (other than an
assignment made by a Bank to an affiliate of such Bank), which consent shall not
be unreasonably withheld.
Upon the execution, delivery, acceptance and recording of any such
Assignment and Assumption Agreement, from and after the "Transfer Effective
Date," as defined and determined pursuant to such Assignment and Assumption
Agreement, and the payment by Purchasing Bank to Agent of an assignment service
fee of $3,000, (i) the Purchasing Bank thereunder shall be a party hereto as a
Bank and, to the extent provided in such Assignment and Assumption Agreement,
shall have the rights and obligations of a Bank hereunder with a Commitment
Percentage as set forth therein, and (ii) the Transferor Bank thereunder shall,
to the extent provided in such Assignment and Assumption Agreement, be released
from its obligations under this Agreement as a Bank. Such Assignment and
Assumption Agreement shall be deemed to amend this Agreement to the extent, and
only to the extent, necessary to reflect the addition of such Purchasing Bank as
a Bank and the
-51 -
resulting adjustment of Commitment Percentage and Ratable Share arising from the
purchase by such Purchasing Bank of all or a portion of the rights and
obligations of such Transferor Bank under this Agreement and the Notes. On or
prior to the Transfer Effective Date, the Borrower shall execute and deliver to
the Agent, in exchange for the surrendered Notes held by the Transferor Bank,
new Notes to the order of such Purchasing Bank in an amount equal to the
Commitment Percentage of the Revolving Credit, the Revolving Credit Loans, the
Term Loan and the Seven-Year Term Loan assumed by it and purchased by it
pursuant to such Assignment and Assumption Agreement, and new Notes to the order
of the Transferor Bank in an amount equal to the Commitment Percentage of the
Revolving Credit, the Revolving Credit Loans, the Term Loan and the Seven-Year
Term Loan retained by it hereunder.
(c) The Agent shall maintain at its address referred to in Section 10.2
a copy of each Assignment and Assumption Agreement delivered to it and a
register (the "Register") for the recordation of the names and addresses of the
Banks and the amount of the Loans owing to each Bank from time to time. The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrower, the Agent and the Banks may treat each person whose name is
recorded in the Register as the owner of the Loans recorded therein for all
purposes of this Agreement. The Register shall be available at the office of the
Agent for inspection by the Borrower or any Bank at any reasonable time and from
time to time upon reasonable prior notice.
(d) Notwithstanding any other provision in this Agreement, any Bank may
at any time pledge or grant a security interest in all or any portion of its
rights under this Agreement, its Notes and the other Loan Documents to any
Federal Reserve Bank in accordance with Regulation A of the FRB or U.S. Treasury
Regulation 31 CFR Section 203.14 without notice to or consent of the Borrower or
the Agent. No such pledge or grant of a security interest shall release the
transferor Bank of its obligations hereunder or under any other Loan Document.
10.9 Nature and Survival of Representations. All statements contained
in any certificate or other document or instrument of any kind whatsoever
delivered by or on behalf of Borrower pursuant hereto or any other Loan
Document, or in connection with the transactions contemplated hereby or thereby,
shall be deemed representations and warranties made by the Borrower in this
Agreement or other Loan Document, or pursuant hereto or thereto, and, together
with all representations and warranties contained herein or in any other Loan
Document, shall survive the execution and delivery thereof and of this Agreement
and any other Loan Document, the making of any loans under the Loan Documents,
and the making of any investigation made at any time by or on behalf of Agent
and/or the Banks.
10.10 Number and Gender. Whenever required by the context of this
Agreement or any other Loan Document the singular shall include the plural, and
vice-versa; and the neuter gender shall include the masculine and feminine
genders, and vice-versa.
10.11 Joint and Several Liability. Each Borrower is, and shall be,
jointly and severally bound by, and responsible for the making and performance
of, all of the representations, warranties, covenants, provisions, terms,
conditions and agreements made and to be performed by the Borrower under and
pursuant to this Agreement and the other Loan Documents including the Notes, the
Mortgage, the Security Agreement (Partnerships), the Security Agreement (Note)
and the Pledge Agreement.
-52-
10.12 Tax Withholding. At least five (5) business days prior to the
first date on which interest or fees are payable hereunder for the account of
any Bank, each such Bank that is not incorporated under the laws of the United
States of America or a state thereof agrees that it will deliver to the Agent
and the Borrower two (2) duly completed copies of either (i) United States
Internal Revenue Service Form W-9, 1001 or 4224 or such other applicable form
prescribed by the Internal Revenue Service of the United States, certifying in
each case that such Bank is entitled to receive payments under this Agreement or
the Notes without deduction or withholding of United States federal income
taxes, or is subject to such tax at a reduced rate under an applicable tax
treaty or (ii) Form W-8 or such other applicable form prescribed by the Internal
Revenue Service of the United States or a certificate of such Bank indicating
that no such exemption or reduced rate of taxation is allowable with respect to
such payments. Each Bank which delivers a Form W-8, W-9, 4224 or 1001 further
undertakes to deliver to the Agent and the Borrower two (2) additional copies of
such form (or any successor form) on or before that form expires or becomes
obsolete or after the occurrence of any event requiring a change in the most
recent form so delivered by it, and such amendments thereto or extensions or
renewals thereof as may be reasonably requested by the Borrower or the Agent,
either certifying that such Bank is entitled to receive payments under this
Agreement or its Note without deduction or withholding of any United States
federal income taxes or is subject to such tax at a reduced rate under an
applicable tax treaty or stating that no such exemption or reduced rate is
allowable. The Agent shall be entitled to withhold United States federal income
taxes at the full withholding rate unless each such Bank establishes an
exemption or at the applicable reduced rate established pursuant to the above
provisions.
10.13 Headings. The headings of the Sections of this Agreement are
inserted for convenience only and shall not be deemed to constitute a part
hereof.
10.14 Confidentiality.
(a) General. The Agent and the Banks each agree to keep confidential
all information obtained from Borrower or its Subsidiaries which is nonpublic
and confidential or proprietary in nature (including any information the
Borrower specifically designates as confidential), except as provided below, and
to use such information only in connection with their respective capacities
under this Agreement and for the purposes contemplated hereby. The Agent and the
Banks shall be permitted to disclose such information (i) to outside legal
counsel, accountants and other professional advisors who need to know such
information in connection with the administration and enforcement of this
Agreement, subject to agreement of such Persons to maintain the confidentiality,
(ii) to assignees and participants as contemplated by Section 10.8, (iii) to the
extent requested by any bank regulatory authority or, with notice to the
Borrower, as otherwise required by applicable Governmental Rule or by any
subpoena or similar legal process, or in connection with any investigation or
proceeding arising out of the transactions contemplated by this Agreement, (iv)
if it becomes publicly available other than as a result of a breach of this
Agreement or becomes available from a source not known to be subject to
confidentiality restrictions, or (v) if the Borrower shall have consented to
such disclosure.
(b) Sharing Information With Affiliates of the Banks. Each Borrower
acknowledges that from time to time financial advisory, investment banking and
other services may be offered or provided to the Borrower or one or more of its
affiliates (in connection with this Agreement or otherwise) by any Bank or by
one or more Subsidiaries or affiliates of such Bank and each of the Borrowers
hereby authorizes each Bank to share any information
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delivered to such Bank by such Borrower and its Subsidiaries pursuant to this
Agreement, or in connection with the decision of such Bank to enter into this
Agreement, to any such Subsidiary or affiliate of such Bank, it being understood
that any such Subsidiary or affiliate of any Bank receiving such information
shall be bound by the provisions of Section 10.15 as if it were a Bank
hereunder. Such authorization shall survive the repayment of the Loans and other
Indebtedness and the termination of any commitment to lend or to issue Letters
of Credit hereunder.
SECTION 11. AGREEMENT AMONG BANKS
----------------------------------
11.1 Appointment and Grant of Authority. The Banks hereby appoint PNC,
and PNC hereby agrees to act as, Agent under this Agreement, the other Loan
Documents, and Agent under the Mortgage, the Guaranty and Financing Statements
for the benefit of the Banks. The Agent shall have and may exercise such powers
under this Agreement as are specifically delegated to it by the terms hereof or
of the other Loan Documents, together with such other powers as are incidental
thereto. Without limiting the foregoing, the Agent, on behalf of the Banks, is
authorized to execute all of the Loan Documents (other than this Agreement) and
to accept all of the Loan Documents and all other agreements, documents or
instruments reasonably required to carry out the intent of the parties to this
Agreement. Without limiting the foregoing, the Agent, on behalf of the Banks as
secured parties, is authorized to execute and/or accept the Mortgage, any
Financing Statements, any other Loan Documents and all other agreements,
documents or instruments reasonably required to carry out the intent of the
parties to this Agreement.
11.2 Reliance by Agent on Banks for Funding. Unless the Agent shall
have received notice from a Bank prior to a funding date that such Bank will not
make available to the Agent such Bank's portion of net disbursements of
Revolving Credit Loans, the Agent may assume that such Bank has made such
portion available to the Agent in accordance with Section 7.1 above and the
Agent may, in reliance upon such assumption, make Revolving Credit Loans to the
Borrower. If and to the extent that such Bank has not made such portion
available to the Agent on or prior to any funding date, such Bank and the
Borrower severally agree to repay to the Agent immediately upon demand, in
immediately available funds, such unpaid amount, together with interest thereon
at the Federal Funds Rate for each day from the applicable funding date until
such amount is repaid to the Agent. If such Bank shall repay to the Agent such
corresponding amount, such amount shall constitute a Revolving Credit Loan made
by such Bank for purposes of this Agreement. The failure by any Bank to pay its
portion of a Revolving Credit Loan made by the Agent shall not relieve any other
Bank of its obligation to pay its portion of net disbursements of Revolving
Credit Loans, but no Bank shall be responsible for the failure of any other Bank
to make its net share of Revolving Credit Loans to be made by such other Bank on
such funding date.
11.3 Non-Reliance on Agent. Each Bank agrees that it has, independently
and without reliance on the Agent, and based on such documents and information
as it has deemed appropriate, made its own credit analysis of the Borrower and
decision to enter into this Agreement and that it will, independently and
without reliance upon the Agent, and based on such documents and information as
it shall deem appropriate at the time, continue to make its own analysis and
decisions in taking or not taking action under this Agreement. Except as
otherwise provided herein, the Agent shall have no duty to keep the Banks
informed as to the performance or observance by the Borrower of this Agreement
or any other document referred
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to or provided for herein or to inspect the properties or books of the Borrower.
The Agent, in the absence of gross negligence or willful misconduct, shall not
be liable to any Bank for its failure to relay or furnish to the Bank any
information. The preceding provisions of this Section 11. 3 to the contrary
notwithstanding, the Agent shall notify each of the Banks as soon as practicable
after it receives notice of the occurrence of any default hereunder or under any
other Loan Document.
11.4 Responsibility of Agent and Other Matters.
(a) Ministerial Nature of Duties. As between the Banks and itself, the
Agent shall not have any duties or responsibilities except those expressly set
forth in this Agreement or in the other Loan Documents, and those duties and
responsibilities shall be subject to the limitations and qualifications set
forth in this Section 11. The duties of the Agent shall be ministerial and
administrative in nature.
(b) Limitation of Liability. As between the Banks and itself, neither
the Agent nor any of its respective directors, officers, employees or agents
shall be liable, except for gross negligence or willful misconduct, for any
action taken or omitted (whether or not such action taken or omitted is within
or without the Agent's responsibilities and duties expressly set forth in this
Agreement) under or in connection with this Agreement or any other instrument or
document in connection herewith. Without limiting the foregoing, neither the
Agent nor any of its directors, officers or employees, shall be responsible for,
or have any duty to examine (i) the genuineness, execution, validity,
effectiveness, enforceability, value or sufficiency of (A) this Agreement or any
of the other Loan Documents or (B) any other document or instrument furnished
pursuant to or in connection with this Agreement, (ii) the collectibility of any
amounts owed by the Borrower to the Banks, (iii) the truthfulness of any
recitals or statements or representations or warranties made to the Agent or the
Banks in connection with this Agreement, (iv) any failure of any party to this
Agreement to receive any communication sent, including any telegram, telex,
teletype, telecopy, bank wire, cable, radiogram or telephone message or any
writing, application, notice, report, statement, certificate, resolution,
request, order, consent, letter or other instrument or paper or communication
entrusted to the mails or to a delivery service, or (v) the assets or
liabilities or financial condition or results of operations or business or
creditworthiness of the Borrower.
(c) Reliance. The Agent shall be entitled to act, and shall be fully
protected in acting upon, any telegram, telex, teletype, telecopy, bank wire,
cable or radiogram or any writing, application, notice, report, statement,
certificate, resolution, request, order, consent, letter or other instrument or
paper or communication believed by the Agent in good faith to be genuine and
correct and to have been signed or sent or made by a proper person. The Agent
may consult counsel and shall be entitled to act, and shall be fully protected
in any action taken in good faith, in accordance with advice given by counsel.
The Agent may employ agents and attorneys-in-fact and shall not be liable for
the default or misconduct of any such agents or attorneys-in-fact selected by
the Agent with reasonable care. The Agent shall not be bound to ascertain or
inquire as to the performance or observance of any of the terms, provisions or
conditions of this Agreement or any of the other Loan Documents on the part of
the Borrower or any other party thereto.
11.5 Action on Instructions. The Agent shall be entitled to act or
refrain from acting, and shall be fully protected in acting or refraining from
acting, under this Agreement, the other Loan Documents or any other instrument
or document in connection herewith or
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therewith, in accordance with the instructions of the Required Banks (as such
term is defined in Section 11.6 below) or, in the case of the matters set forth
in items (i) through (viii) of Section 11.13, from all of the Banks.
11.6 Required Banks. For the purposes of this Agreement, the term
"Required Banks" shall mean Banks with aggregate Commitment Percentages equal to
at least 66-2/3% of all Commitment Percentages.
11.7 Action Upon Occurrence of an Event of Default. If an event of
default set forth in Section 8 hereof has occurred, the Banks shall immediately
consult with one another in an attempt to agree upon a mutually acceptable
course of conduct. Failing agreement upon a course of conduct and if the
Required Banks wish to declare an event of default and/or exercise their rights
hereunder, the Agent will exercise the rights of the Banks hereunder as directed
by the Required Banks.
11.8 Indemnification. To the extent the Borrower does not reimburse and
save harmless the Agent according to the terms hereof for and from all costs,
expenses and disbursements in connection herewith, such costs, expenses and
disbursements, shall be borne by the Banks ratably in accordance with their
respective Commitment Percentages. Each Bank hereby agrees on such basis (i) to
reimburse the Agent for such Bank's pro rata share of all such reasonable costs,
expenses and disbursements on request and (ii) to the extent of each such Bank's
pro rata share, to indemnify and save harmless the Agent against and from any
and all losses, obligations, penalties, actions, judgments and suits and other
costs, expenses and disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against the Agent, other than as a
consequence of gross negligence or willful misconduct on the part of the Agent,
arising out of or in connection with this Agreement, the other Loan Documents or
any other agreement, instrument or document in connection herewith or therewith,
or any request of the Required Banks, including without limitation the
reasonable costs, expenses and disbursements in connection with defending itself
against any claim or liability related to the exercise or performance of any of
its powers or duties under this Agreement, the other Loan Documents, or any of
the other agreements, instruments or documents delivered in connection herewith
or the taking of any action under or in connection with any of the foregoing.
11.9 Agent's Rights as a Bank. With respect to the commitments of the
Agent as a Bank hereunder, and any loans of the Agent to Borrower under this
Agreement, the other Loan Documents and any other agreements, instruments and
documents delivered pursuant hereto, the Agent shall have the same rights and
powers, duties and obligations under this Agreement, the other Loan Documents or
other agreement, instrument or document as any Bank and may exercise such rights
and powers and shall perform such duties and fulfill such obligations as though
it were not the Agent. The Agent may accept deposits from, lend money to, and
generally engage, and continue to engage, in any kind of business with the
Borrower as if it were not the Agent.
11.10 Payment to Banks. Promptly after receipt from the Borrower of
any principal repayment of any Loan, any interest due thereunder, and any other
interest or fees or other amounts due under any of the Loan Documents, the Agent
shall distribute to each Bank in immediately available funds that Bank's
Commitment Percentage of the funds so received, provided that in the event
payments are received by 11:00 a.m., Pittsburgh time, by the Agent with respect
to the Loans and such payments are not distributed to the Banks on the same day
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received by the Agent, the Agent shall pay the Banks the Federal Funds Rate with
respect to the amount of such payments for each day held by the Agent and not
distributed to the Banks.
11.11 Pro Rata Sharing. All interest and principal payments on the
Notes and all Commitment Fees are to be divided pro rata among the Banks in
accordance with their respective Ratable Share. Any sums obtained from the
Borrower by any Bank by reason of the exercise of its rights of setoff or
banker's lien shall be shared pro rata among the Banks. Nothing in this Section
11.11 shall be deemed to require the sharing among the Banks of collections
specifically relating to any other indebtedness of the Borrower to any Bank.
11.12 Successor Agent. The Agent may resign as Agent upon ninety (90)
days' notice to the Banks and the Borrower. If such notice shall be given, the
Banks shall appoint a successor agent for the Banks, during such ninety (90) day
period, which successor agent shall be reasonably satisfactory to the Borrower,
to serve as agent hereunder and under the several documents. If at the end of
such ninety (90) day period the Banks have not appointed such a successor, the
Agent shall procure a successor reasonably satisfactory to the Banks and the
Borrower, to serve as agent for the Banks hereunder and under the several
documents. Any such successor agent shall succeed to the rights, powers and
duties of the Agent. Upon the appointment of such successor agent or upon the
expiration of such ninety (90) day period (or any longer period to which the
Agent has agreed), the former Agent's rights, powers and duties as Agent shall
be terminated, without any other or further act or deed on the part of such
former Agent or any of the parties to this Agreement. After any retiring Agent's
resignation hereunder as Agent, the provisions of this Article XI shall inure to
the benefit of such retiring Agent as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement.
11.13 Amendments and Waivers. The Required Banks, or the Agent with the
consent in writing of the Required Banks, and the Borrower may, subject to the
provisions of this Section 11.13, from time to time enter into written
supplemental agreements to this Agreement and the other Loan Documents for the
purpose of adding or deleting any provisions or otherwise changing, varying or
waiving in any manner the rights of the Banks, the Agent or the obligor
thereunder or the conditions, provisions or terms thereof or waiving any event
of default thereunder or consenting to an action of the Borrower, but only to
the extent specified in such written agreements; provided, however, that no such
supplemental agreement shall, without the consent of all the Banks:
(i) waive any event of default by the Borrower in any payment of
principal and/or interest due hereunder and under any of the Notes or any
Reimbursement Obligation or other amount due with respect to the Letters of
Credit;
(ii) decrease any interest rate provided for herein;
(iii) change the Termination Date or otherwise extend the maturity of
any obligation hereunder;
(iv) release any guarantor of the Indebtedness, any of the Property
from the Mortgage, any Security Agreement and/or any Financing Statement or any
other collateral described in any Loan Document except in the case of incidental
sales of the Property in the ordinary course of the business of the Borrower;
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(v) reduce the Commitment Fee;
(vi) increase the maximum principal amount of the Revolving Credit;
(vii) permit the Borrower to assign its rights or duties hereunder or
under any of the other Loan Documents; or
(viii) amend or waive the provisions of this Section 11.13;
Any such supplemental agreement shall apply equally to each of the Banks and
shall be binding upon the Borrower, the Banks, the Agent and all future holders
of the Notes. In the case of any waiver, the Borrower, the Banks and the Agent
shall be restored to their former positions and rights, and any event of default
hereunder or under the other Loan Documents waived shall be deemed to be cured
and not continuing, but no such waiver shall extend to any subsequent or other
event of default hereunder or under the other Loan Documents, or impair any
right consequent thereon.
11.14 Agent's Fees. The Borrower shall pay to the Agent certain fees
(the "Fees") under the terms of a letter among the Borrower and Agent, as
amended from time to time.
11.15 Funding by Branch, Subsidiary or Affiliate.
(a) Notional Funding. Each Bank shall have the right from time to time,
without notice to the Borrower, to deem any branch, subsidiary or affiliate
(which for the purposes of this Section 11.15 shall mean any corporation or
association which is directly or indirectly controlled by or is under direct or
indirect common control with any corporation or association which directly or
indirectly controls such Bank) of such Bank to have made, maintained or funded
any Loan to which the Euro-Rate Option applies at any time, provided that
immediately following (on the assumption that a payment were then due from the
Borrower to such other office), and as a result of such change, the Borrower
would not be under any greater financial obligation pursuant to Section 1.6(i)
than it would have been in the absence of such change. Notional funding offices
may be selected by each Bank without regard to such Bank's actual methods of
making, maintaining or funding the Loans or any sources of funding actually used
by or available to such Bank.
(b) Actual Funding. Each Bank shall have the right from time to time to
make or maintain any Loan by arranging for a branch, subsidiary or affiliate of
such Bank to make or maintain such Loan subject to the last sentence of this
Section 11.15(b). If any Bank causes a branch, subsidiary or affiliate to make
or maintain any part of the Loans hereunder, all terms and conditions of this
Agreement shall, except where the context clearly requires otherwise, be
applicable to such part of the Loans to the same extent as if such Loans were
made or maintained by such Bank, but in no event shall any Bank's use of such a
branch, subsidiary or affiliate to make or maintain any part of the Loans
hereunder cause such Bank or such branch, subsidiary or affiliate to incur any
cost or expenses payable by the Borrower hereunder or require the Borrower to
pay any other compensation to any Bank (including any expenses incurred or
payable pursuant to Section 1.6(i)) which would otherwise not be incurred.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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WITNESS the due execution hereof the day and year first above written.
WITNESS: ATLAS ENERGY GROUP, INC., an Ohio
corporation
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇ By /s/ J.R. O'Mara
------------------------------- --------------------------------
Name: J.R. O'Mara
Title: President and C.E.O.
WITNESS: ATLAS RESOURCES, INC., a
Pennsylvania corporation
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇ By /s/ J.R. O'Mara
------------------------------- --------------------------------
Name: J.R. O'Mara
Title: President and C.E.O.
WITNESS: TRANSATCO CORPORATION, an Ohio
corporation
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇ By /s/ J.R. O'Mara
------------------------------- --------------------------------
Name: J.R. O'Mara
Title: President and C.E.O.
WITNESS: ATLAS ENERGY CORPORATION, an Ohio
corporation
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇ By /s/ J.R. O'Mara
------------------------------- --------------------------------
Name: J.R. O'Mara
Title: President and C.E.O.
[SIGNATURES CONTINUED ON NEXT PAGE]
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[CONTINUATION OF SIGNATURES TO NINTH AMENDED
AND RESTATED LOAN AGREEMENT]
WITNESS: ▇▇▇▇▇▇ GAS GATHERING, INC., a
Pennsylvania corporation
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇ By /s/ J.R. O'Mara
------------------------------- --------------------------------
Name: J.R. O'Mara
Title: President and C.E.O.
WITNESS: ATLAS GAS MARKETING, INC., a
Pennsylvania corporation
/s/ XXXXXXXXXX By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------- --------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: President
WITNESS: PENNSYLVANIA INDUSTRIAL ENERGY,
INC., a Pennsylvania corporation
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇ By /s/ J.R. O'Mara
------------------------------- --------------------------------
Name: J.R. O'Mara
Title: President and C.E.O.
WITNESS: THE ATLAS GROUP, INC. (f/k/a "AEG
HOLDINGS, INC."), a Pennsylvania
corporation
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇ By /s/ J.R. O'Mara
------------------------------- --------------------------------
Name: J.R. O'Mara
Title: President and C.E.O.
[SIGNATURES CONTINUED ON NEXT PAGE]
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[CONTINUATION OF SIGNATURES TO NINTH AMENDED
AND RESTATED LOAN AGREEMENT]
WITNESS: AED INVESTMENTS, INC., a Delaware
corporation
/s/ XXXXXXXXXX By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------- --------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: President
WITNESS: ARD INVESTMENTS, INC., a Delaware
corporation
/s/ XXXXXXXXXX By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------- --------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: President
WITNESS: AIC, INC., a Delaware corporation
/s/ XXXXXXXXXX By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------- --------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: President
WITNESS: BANK:
PNC BANK, NATIONAL ASSOCIATION, as
Agent and as Initial Bank
/s/ XXXXXXXXXX By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------- --------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
Initial Commitment Percentage: 100%
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