EXHIBIT 99.1
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RESTATED CREDIT AGREEMENT
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NEO ENERGY, INC.,
as Borrower
AVIVA PETROLEUM INC.,
and
ING (U.S.) CAPITAL CORPORATION
as initial Lender
and
ING (U.S.) CAPITAL CORPORATION
as Administrative Agent
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October 28, 1998,
amending and restating the Credit Agreement dated August 6, 1993
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TABLE OF CONTENTS
Page
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RESTATED CREDIT AGREEMENT..................................................... 1
ARTICLE I - Definitions and References........................................ 3
Section 1.1. Defined Terms............................................. 3
Section 1.2. Annexes, Exhibits and Schedules; Additional Definitions... 6
Section 1.3. Amendment of Defined Instruments.......................... 7
Section 1.4. References and Titles..................................... 7
Section 1.5. Calculations and Determinations........................... 7
ARTICLE II - The Loan......................................................... 7
Section 2.1. Commitment to Lend; Notes................................. 7
Section 2.2. Requests for New Loan..................................... 8
Section 2.3. Continuations and Conversions of Existing Loans........... 8
Section 2.4. Use of Proceeds........................................... 9
Section 2.5. Interest Rates and Fees................................... 9
Section 2.6. Optional Prepayments......................................10
Section 2.7. Mandatory Prepayments.....................................10
Section 2.8. Payments to Lenders.......................................10
Section 2.9. Initial Borrowing Base....................................11
Section 2.10. Subsequent Determinations of Borrowing Base...............12
Section 2.11. Capital Reimbursement.....................................12
Section 2.12. Increased Cost of Eurodollar Loans........................12
Section 2.13. Availability..............................................13
Section 2.14. Funding Losses............................................14
Section 2.15. Reimbursable Taxes........................................14
ARTICLE III - Conditions Precedent to Lending.................................15
Section 3.1. Documents to be Delivered.................................15
Section 3.2. Additional Conditions Precedent to the First Advance......16
ARTICLE IV - Representations and Warranties...................................17
Section 4.1. Related Persons' Representations and Warranties...........17
Section 4.2. Representation by Lenders.................................18
ARTICLE V - Covenants of Borrower.............................................18
Section 5.1. Covenants.................................................18
ARTICLE VI - Security.........................................................19
Section 6.1. The Security..............................................19
Section 6.2 Security Covenants........................................19
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ARTICLE VII - Events of Default and Remedies.................................19
Section 7.1. Events of Default.........................................19
Section 7.2. Acceleration..............................................20
Section 7.3. Remedies..................................................20
Section 7.4. INDEMNITY.................................................20
ARTICLE VIII - Administrative Agent...........................................22
Section 8.1. Appointment and Authority.................................22
Section 8.2. Exculpation, Administrative Agent's Reliance, Etc.........22
Section 8.3. Credit Decisions..........................................23
Section 8.4. Indemnification...........................................23
Section 8.5. Rights as Lender..........................................24
Section 8.6. Sharing of Set-Offs and Other Payments....................24
Section 8.7. Investments...............................................25
Section 8.8. Benefit of Article VIII...................................25
Section 8.9. Resignation...............................................25
ARTICLE IX - Miscellaneous..................................................26
Section 9.1. Waivers and Amendments; Acknowledgments...................26
Section 9.2. Survival of Agreements; Cumulative Nature.................27
Section 9.3. Notices...................................................28
Section 9.4. Joint and Several Liability; Parties in Interest;
Assignments...............................................28
Section 9.5. Governing Law; Submission to Process......................29
Section 9.6. Limitation on Interest....................................30
Section 9.7. Termination; Limited Survival.............................30
Section 9.8. Severability..............................................31
Section 9.9. Counterparts..............................................31
Section 9.10. Waiver of Jury Trial, Punitive Damages, etc...............31
Section 9.11. Renewal and Extension.....................................31
*EXHIBIT A - Promissory Note
*EXHIBIT B - Borrowing Notice
*EXHIBIT C - Continuation/Conversion Notice
*EXHIBIT D - Opinion of Obligors' Counsel
*EXHIBIT E - Certificate Accompanying Financial Statements
*EXHIBIT F - Environmental Compliance Certificate
EXHIBIT G - Intercreditor Agreement
* The above exhibits have been omitted. The Company will provide them to the
Securities and Exchange Commission Supplementally upon request.
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RESTATED CREDIT AGREEMENT
THIS RESTATED CREDIT AGREEMENT is made as of October 28, 1998, by and
among:
. Neo Energy, Inc., a Texas corporation (herein called "Borrower"), as
borrower,
. Aviva Petroleum Inc., a Texas corporation (herein called "Parent"),
. ING (U.S.) Capital Corporation, a Delaware corporation (herein called
"ING"), as the initial lender, and
. ING (U.S.) Capital Corporation, as agent for the Lenders (herein, in
such capacity, called "Administrative Agent");
and amends and restates the Credit Agreement dated August 26, 1993 among
Borrower, Parent, Aviva America, Inc., a Delaware corporation (herein called
"Aviva America") and Internationale Nederlanden Bank N.V., New York Branch
(predecessor in interest to ING)(as heretofore amended, herein called the
"Original Credit Agreement")
RECITALS:
1. Pursuant to the Original Credit Agreement, Borrower executed and
delivered that certain promissory note in the original principal amount of
$25,000,000 (herein called the "Original ING Note"), of which ING is now the
holder.
2. Parent is the owner of 100% of the stock of Aviva America, and Aviva
America is the owner of 100% of the stock of Borrower.
3. Argosy Energy International, a Utah limited partnership (herein called
"Argosy International") and Texas Commerce Bank National Association,
predecessor in interest to Chase Bank of Texas, National Association (herein
called "Chase"), have heretofore entered into that certain Loan Agreement dated
as of August 3, 1994 (as heretofore amended, herein called the "Chase Loan
Agreement"), pursuant to which Argosy International executed and delivered that
certain promissory note in the original principal amount of $4,400,000 and that
certain promissory note in the original principal amount of $4,800,000 (herein
collectively called the "Chase Notes"), of which Chase is now the holder.
4. Argosy International and the Overseas Private Investment Corporation,
an agency of the United States of America (herein called "OPIC"), entered into
that certain Finance Agreement dated as of May 5, 1994 (as heretofore amended,
herein called the "OPIC Finance Agreement"), pursuant to which OPIC executed and
delivered its Guaranty dated July 26, 1994
(as heretofore amended, herein called the "OPIC Guaranty") under which OPIC
guaranteed the payment when due of the Chase Notes.
5. Garnet Resources Corporation, a Delaware corporation (herein called
"Garnet"), has entered into an Agreement and Plan of Merger (the "Merger
Agreement") dated June 24, 1998 with Parent and Aviva Merger Inc., a Delaware
corporation ("Aviva Merger") pursuant to which Garnet will be merged with and
into Aviva Merger, an indirect wholly owned subsidiary of Parent, with Garnet
being the surviving corporation and thereby becoming an indirect wholly owned
subsidiary of Parent.
6. Garnet is the owner of 100% of the stock of Argosy Energy Incorporated
(herein called "AEI"), and is the owner of a limited partnership interest in
Argosy International representing an approximately 10.13% interest in Argosy
International, and AEI owns a general partnership interest in Argosy
International representing an approximately 89.11% interest in Argosy
International. The remaining interests in Argosy International are limited
partnership interests owned by two individuals.
7. The principal asset of both Borrower and Argosy International is a
Joint Operating Agreement (the "▇▇▇▇▇▇▇ Contract") among Borrower, Argosy
International and Empresa Colombiana de Petroleos, the Colombian National Oil
Company ("ECOPETROL"). The Related Persons (defined herein) have determined
that the operation of the ▇▇▇▇▇▇▇ Contract and the other assets of Borrower and
Argosy International in a single company will be advantageous to Borrower,
Argosy International and each of the other Related Persons. Accordingly,
Borrower and Argosy International have entered into a Purchase and Sale
Agreement, pursuant to which, Borrower will transfer to Argosy International
substantially all of Borrower's assets in consideration of (i) the assumption by
Argosy International of all of Borrower's indebtedness, obligations and
liabilities, including the indebtedness, obligations and liabilities under this
Agreement and (ii) the issuance to Borrower of limited partnership interests in
Argosy International (the "Purchase and Sale"), subject to the consent of
ECOPETROL and to the consent of the Lenders (defined herein).
8. The parties hereto desire to enter into this Agreement in order to
renew and extend the indebtedness outstanding under the Original ING Note by
means of the Notes to be issued hereunder, to amend and restate the Original
Credit Agreement to provide for additional credit to Neo, to provide for the
execution and delivery of the Joint Finance and Intercreditor Agreement among
the Related Persons, ING, Chase, OPIC and ING as Collateral Agent, and to
provide for the assumption of the Obligations hereunder by Argosy International
upon consummation of the transactions under the Purchase and Sale Agreement, in
each case on the terms and conditions set forth herein.
In consideration of the mutual covenants and agreements contained herein
the parties hereto agree as follows:
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AGREEMENT:
ARTICLE I - Definitions and References
Section 1.1. Defined Terms. Certain terms used in this Agreement are
defined in Annex A to the Intercreditor Agreement. Certain other terms used in
this Agreement (including use in Annexes A, B, C, D, or E to the Intercreditor
Agreement as incorporated herein) are defined below in this Section 1.1 or in
the sections and subsections referred to below:
"Adjusted Base Rate" means the Base Rate plus one and one-half percent
(1.5%) per annum. The Adjusted Eurodollar Rate shall in no event, however,
exceed the Highest Lawful Rate.
"Adjusted Eurodollar Rate" means, for any Eurodollar Loan for any Interest
Period therefor, the rate per annum calculated by Administrative Agent (rounded
upwards, if necessary, to the next higher 0.01%) determined on a daily basis
pursuant to the following formula:
Adjusted Eurodollar Rate =
Eurodollar Rate + A
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100.0% - Reserve Percentage
where A means three percent (3%). If the Reserve Percentage changes during the
Interest Period for a Eurodollar Loan, the Adjusted Eurodollar Rate for such
Eurodollar Loan will be deemed automatically recalculated at the same time.
"Administrative Agent" means ING, as administrative agent hereunder, and
its successors in such capacity.
"Agreement" means this Restated Credit Agreement.
"Base Rate" means the higher of (a) the Reference Rate and (b) the Federal
Funds Rate plus one-half percent (0.5%) per annum. For purposes of this
definition, "Reference Rate" means the arithmetic average of the rates of
interest publicly announced by The Chase Manhattan Bank, Citibank, N.A. and
▇▇▇▇▇▇ Guaranty Trust Company of New York (or their respective successors) as
their respective prime commercial lending rates (or, as to any such bank that
does not announce such a rate, such bank's 'base' or other rate determined by
Administrative Agent to be the equivalent rate announced by such bank), except
that, if any such bank shall, for any period, cease to announce publicly its
prime commercial lending (or equivalent) rate, Administrative Agent shall,
during such period, determine the "Reference
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Rate" based upon the prime commercial lending (or equivalent) rates announced
publicly by the other such banks.
"Base Rate Loan" means a Loan which does not bear interest at the
Eurodollar Rate.
"Borrower" means Neo and its successors and assigns hereunder. Upon the
assumption of the Obligations hereunder by Argosy International, "Borrower"
shall mean Argosy International and its successors and assigns hereunder.
"Borrowing" means a continuation or conversion of existing Loans into a
single Type (and, in the case of Eurodollar Loans, with the same Interest
Period) pursuant to Section 2.3.
"Borrowing Base" means, at the particular time in question, either the
amount provided for in Section 2.9 or the amount determined by Administrative
Agent and Majority Lenders in accordance with the provisions of Section 2.10.
"Borrowing Notice" means a written or telephone request, or a written
confirmation, made by Borrower which meets the requirements of Section 2.2.
"Business Day" has the meaning given to such term in Annex A, provided that
any Business Day in any way relating to Eurodollar Loans (such as the day on
which an Interest Period begins or ends) must also be a day on which, in the
judgment of Administrative Agent, significant transactions in dollars are
carried out in the interbank eurocurrency market.
"Continuation" shall refer to a continuation pursuant to Section 2.3 hereof
of a Eurodollar Loan as a Eurodollar Loan from one Interest Period to the next
Interest Period.
"Continuation/Conversion Notice" means a written or telephone request, or a
written confirmation, made by Borrower, which meets the requirements of Section
2.3.
"Conversion" shall refer to a conversion pursuant to Section 2.3 of one
Type of Loan into another Type of Loan.
"Default Rate" means, at the time in question, three percent (3.0%) per
annum plus the Base Rate then in effect; provided that, with respect to any
Eurodollar Loan with an Interest Period extending beyond the date such
Eurodollar Loan becomes due and payable, the Default Rate shall mean one and
one-half percent (1.5%) per annum plus the related Adjusted Eurodollar Rate.
The Default Rate shall in no event, however, exceed the Highest Lawful Rate.
"Determination Date" has the meaning given it in Section 2.10.
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"Eurodollar Loan" means a Loan that bears interest at a rate based upon the
Adjusted Eurodollar Rate.
"Eurodollar Rate" means, with respect to each particular Eurodollar Loan
and the related Interest Period, the rate per annum (rounded upwards, if
necessary, to the nearest 1/16 of 1%) reported, on the date two Business Days
prior to the first day of such Interest Period, on Telerate Access Service Page
3750 (British Bankers Association Settlement Rate) as the London Interbank
Offered Rate for dollar deposits having a term comparable to such Interest
Period and in an amount of $1,000,000 or more (or, if such Page shall cease to
be publicly available or if the information contained on such Page, in
Administrative Agent's sole judgment, shall cease to accurately reflect such
London Interbank Offered Rate, as reported by any publicly available source of
similar market data selected by Administrative Agent that, in Administrative
Agent's sole judgment, accurately reflects such London Interbank Offered Rate).
"Highest Lawful Rate" means, with respect to each Lender, the maximum
nonusurious rate of interest that such Lender is permitted under applicable law
to contract for, take, charge, or receive with respect to its Loan. All
determinations herein of the Highest Lawful Rate, or of any interest rate
determined by reference to the Highest Lawful Rate, shall be made separately for
each Lender as appropriate to assure that the Loan Documents are not construed
to obligate any Person to pay interest to any Lender at a rate in excess of the
Highest Lawful Rate applicable to such Lender.
"Intercreditor Agreement" means that certain Joint Finance and
Intercreditor Agreement dated of even date herewith among the Related Persons,
ING, Chase, OPIC and ING, as Collateral Agent for the Creditors, in the form
attached hereto as Exhibit G.
"Interest Period" means, with respect to each particular Eurodollar Loan in
a Borrowing, the period specified in the Borrowing Notice or
Continuation/Conversion Notice applicable thereto, beginning on and including
the date specified in such Borrowing Notice or Continuation/Conversion Notice
(which must be a Business Day), and ending one month thereafter; provided that:
(a) any Interest Period which would otherwise end on a day which is not a
Business Day shall be extended to the next succeeding Business Day unless such
Business Day falls in another calendar month, in which case such Interest Period
shall end on the next preceding Business Day; (b) any Interest Period which
begins on the last Business Day in a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day in a calendar month; and (c)
notwithstanding the foregoing, no Interest Period may be selected which would
reasonably be expected to require the prepayment of the particular Eurodollar
Loan prior to the end of such Interest Period in order for Borrower to make any
prepayment required under Section 2.7.
"Lenders" means ING and its successors and assigns hereunder.
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"Loans" has the meaning given it in Section 2.1.
"Majority Lenders" means ING, so long as it is the sole Lender under this
Agreement, and otherwise means Lenders whose aggregate Percentage Shares equal
or exceed sixty-six and two thirds percent (66 2/3%).
"Note" has the meaning given it in Section 2.1.
"Original Credit Agreement" has the meaning given to such term in the
recitals to this Agreement.
"Original ING Note" has the meaning given to such term in the recitals to
this Agreement.
"Percentage Share" means, with respect to any Lender (a) when used in
Sections 2.1 or in the Borrowing Notice or when no Loans are outstanding
hereunder, the percentage set forth opposite such Lender's name on its signature
page hereto, and (b) when used otherwise, the percentage obtained by dividing
(i) the unpaid principal balance of such Lender's Loans at the time in question,
by (ii) the sum of the aggregate unpaid principal balance of all Loans at such
time.
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect.
"Reserve Percentage" means, on any day with respect to each particular
Eurodollar Loan, the maximum reserve requirement, as determined by
Administrative Agent (including without limitation any basic, supplemental,
marginal, emergency or similar reserves), expressed as a percentage and rounded
to the next higher 0.01%, which would then apply to any Lender under Regulation
D with respect to "Eurocurrency liabilities" (as such term is defined in
Regulation D) equal in amount to such Eurodollar Loan, were such Lender to have
any such "Eurocurrency liabilities". If such reserve requirement shall change
after the date hereof, the Reserve Percentage shall be automatically increased
or decreased, as the case may be, from time to time as of the effective time of
each such change in such reserve requirement.
"Type" means, with respect to any Loans, the characterization of such Loans
as either Base Rate Loans or Eurodollar Loans.
Section 1.2. Annexes, Exhibits and Schedules; Additional Definitions.
All Annexes, Exhibits and Schedules attached to this Agreement are a part hereof
for all purposes, and terms defined in this Agreement have the same meanings
when used in the Annexes and Schedules hereto. Reference is hereby made to the
Security Schedule for the meaning of certain terms defined therein and used but
not defined herein, which definitions are incorporated herein by reference.
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Section 1.3. Amendment of Defined Instruments. Unless the context
otherwise requires or unless otherwise provided herein the terms defined in this
Agreement which refer to a particular agreement, instrument or document also
refer to and include all renewals, extensions, modifications, amendments and
restatements of such agreement, instrument or document, provided that nothing
contained in this section shall be construed to authorize any such renewal,
extension, modification, amendment or restatement.
Section 1.4. References and Titles. All references in this Agreement to
Annexes, Exhibits, Schedules, Recitals, articles, sections, subsections and
other subdivisions refer to the Annexes, Exhibits, Schedules, Recitals,
articles, sections, subsections and other subdivisions of this Agreement unless
expressly provided otherwise. Titles appearing at the beginning of any
subdivisions are for convenience only and do not constitute any part of such
subdivisions and shall be disregarded in construing the language contained in
such subdivisions. The words "this Agreement", "this instrument", "herein",
"hereof", "hereby", "hereunder" and words of similar import refer to this
Agreement as a whole and not to any particular subdivision unless expressly so
limited. The phrases "this section" and "this subsection" and similar phrases
refer only to the sections or subsections hereof in which such phrases occur.
The word "or" is not exclusive, and the word "including" (in its various forms)
means "including without limitation". Pronouns in masculine, feminine and
neuter genders shall be construed to include any other gender, and words in the
singular form shall be construed to include the plural and vice versa, unless
the context otherwise requires.
Section 1.5. Calculations and Determinations. All fees and interest
accruing under the Loan Documents shall be calculated on the basis of actual
days elapsed (including the first day but excluding the last) and a year of 360
days. Each determination by any Lender of amounts to be paid under Sections
2.11 through 2.15 or any other matters which are to be determined hereunder by a
Lender (such as any Eurodollar Rate, Adjusted Eurodollar Rate, Business Day,
Interest Period, or Reserve Percentage) shall, in the absence of manifest error,
be conclusive and binding. Unless otherwise expressly provided herein or unless
Majority Lenders otherwise consent all financial statements and reports
furnished to any Lender hereunder shall be prepared and all financial
computations and determinations pursuant hereto shall be made in accordance with
GAAP.
ARTICLE II - The Loan
Section 2.1. Commitment to Lend; Notes. Upon satisfaction by Borrower of
the conditions set forth in Article III, the unpaid principal and accrued unpaid
interest on the loans under the Original Credit Agreement and Original ING Note
will be evidenced and governed by the Note and this Agreement. Subject to the
terms and conditions hereof, ING, as initial Lender, agrees to make a single
advance to Borrower (such advance together with the outstanding principal
balance owing on the Original Note herein called such Lender's "Loan"), upon
Borrower's written request on or before October 31, 1998 in an amount equal to
the
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remainder of (i) $9,000,000 minus (ii) the outstanding principal balance of
the Original Note. The obligation of Borrower to repay to each Lender the Loan
made by such Lender, together with interest accruing in connection therewith,
shall be evidenced by a single promissory note (herein called such Lender's
"Note") made by Borrower payable to the order of such Lender in the form of
Exhibit A with appropriate insertions. The amount of principal owing on any
Lender's Note at any given time shall be the amount of the Loan by such Lender
minus all payments of principal theretofore received by such Lender on such
Lender's Note. Interest on each Note shall accrue and be due and payable as
provided herein and therein. Borrower may not reborrow amounts repaid
hereunder.
Section 2.2. Requests for New Loan. Borrower must give to Administrative
Agent written notice of the requested advance under Section 2.1 in writing in
the form and substance of the "Borrowing Notice" attached hereto as Exhibit B,
duly completed. Such Borrowing Notice must specify the amount of any Eurodollar
Loan (which amount must be greater than or equal to $500,000), the date the
requested advance is to be made, and must be received by Administrative Agent
not later than 11:00 a.m. Eastern time on (i) the first day preceding the
advance in the case of a Base Rate Loan or (ii) the third day preceding the
advance in the case of a Eurodollar Loan.
Section 2.3. Continuations and Conversions of Existing Loans. Borrower
may make the following elections with respect to Eurodollar Rate Loans or Base
Rate Loans outstanding: to convert Base Rate Loans to Eurodollar Loans, to
convert Eurodollar Loans to Base Rate Loans on the last day of the Interest
Period applicable thereto, and to Continue Eurodollar Loans beyond the
expiration of such Interest Period by designating a new Interest Period to take
effect at the time of such expiration. In making such elections, Borrower may
combine or divide existing Eurodollar Rate Loans or Base Rate Loans, provided
that Borrower may have no more than five (5) Borrowings of Eurodollar Loans
outstanding at any time and that each Borrowing of Eurodollar Loans must be
greater than or equal to $500,000. To make any such election, Borrower must
give to Administrative Agent written notice (or telephonic notice promptly
confirmed in writing) of any such Conversion or continuation of existing Loans,
with a separate notice given for each new Borrowing. Each such notice
constitutes a "Continuation/Conversion Notice" hereunder and must:
(a) specify the Loans which are to be Continued or Converted;
(b) specify (i) the aggregate amount of any Borrowing of Base Rate
Loans into which such Loans are to be Continued or Converted and the date
on which such Continuation or Conversion is to occur, or (ii) the aggregate
amount of any Borrowing of Eurodollar Loans into which such Loans are to be
Continued or Converted, the date on which such Continuation or Conversion
is to occur (which shall be the first day of the Interest Period which is
to apply to such Eurodollar Loans), and the length of the applicable
Interest Period; and
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(c) be received by Administrative Agent not later than 11:00 a.m.,
Eastern time, on (i) the day on which any such Continuation or Conversion
to Base Rate Loans is to occur, or (ii) the third Business Day preceding
the day on which any such Continuation or Conversion to Eurodollar Loans is
to occur.
Each such written request or confirmation must be made in the form and substance
of the "Continuation/Conversion Notice" attached hereto as Exhibit C, duly
completed. Each such telephonic request shall be deemed a representation,
warranty, acknowledgment and agreement by Borrower as to the matters which are
required to be set out in such written confirmation. Upon receipt of any such
Continuation/Conversion Notice, Administrative Agent shall give each Lender
prompt notice of the terms thereof. Each Continuation/Conversion Notice shall
be irrevocable and binding on Borrower. During the continuance of any Default,
Borrower may not make any election to convert existing Loans into Eurodollar
Loans or Continue existing Loans as Eurodollar Loans. If (due to the existence
of a Default or for any other reason) Borrower fails to timely and properly give
any notice of Continuation or Conversion with respect to a Borrowing of existing
Eurodollar Loans at least three days prior to the end of the Interest Period
applicable thereto, such Eurodollar Loans shall automatically be converted into
Base Rate Loans at the end of such Interest Period. No new funds shall be
repaid by Borrower or advanced by any Lender in connection with any Continuation
or Conversion of existing Loans pursuant to this section, and no such
Continuation or Conversion shall be deemed to be a new advance of funds for any
purpose; such Continuations and Conversions merely constitute a change in the
interest rate applicable to already outstanding Loans.
Section 2.4. Use of Proceeds. Borrower shall use all proceeds of the
advance of new funds for working capital purposes. In no event shall the funds
from any Loan be used directly or indirectly by any Person for personal, family,
household or agricultural purposes or for the purpose, whether immediate,
incidental or ultimate, of purchasing, acquiring or carrying any "margin stock"
or any "margin securities" (as such terms are defined in Regulation U
promulgated by the Board of Governors of the Federal Reserve System) or to
extend credit to others directly or indirectly for the purpose of purchasing or
carrying any such margin stock or margin securities. Borrower and Parent
represent and warrant to Administrative Agent and each Lender that none of them,
and none of the other Related Persons, is engaged principally, or as one of its
important activities, in the business of extending credit to others for the
purpose of purchasing or carrying such margin stock or margin securities.
Section 2.5. Interest Rates and Fees.
(a) Interest Rates. Each Base Rate Loan shall bear interest on each
day (unless the Default Rate shall apply) outstanding at the Adjusted Base
Rate in effect on such day. Each Eurodollar Loan shall bear interest on
each day (unless the Default Rate shall apply) during the related Interest
Period at the related Adjusted Eurodollar Rate in effect on such day. Upon
the occurrence and during the continuance of an Event of Default, each Loan
shall bear interest at the Default Rate.
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(b) Fees. Any one or more of the Related Persons shall pay to
Administrative Agent, for the account of Lenders, an arrangement fee
specified in a separate letter agreement of even date herewith among
Parent, Neo and Administrative Agent.
Section 2.6. Optional Prepayments. Borrower may, upon one Business Day's
notice to each Lender, from time to time and without premium or penalty prepay
the Notes, in whole or in part, so long as each partial prepayment of principal
on the Notes is greater than or equal to $100,000, and so long as Borrower does
not prepay any Eurodollar Loan other than on the last day of an Interest Period.
Each partial prepayment of principal shall be applied to the regular
installments of principal due under the Notes in the inverse order of their
maturities. Each prepayment of principal under this section shall be
accompanied by all interest then accrued and unpaid on the principal so prepaid.
Any principal or interest prepaid pursuant to this section shall be in addition
to, and not in lieu of, all payments otherwise required to be paid under the
Loan Documents at the time of such prepayment.
Section 2.7. Mandatory Prepayments.
(a) By the last Business Day of each month, beginning with October 31,
1998 and continuing until all Obligations under the Loan Documents are paid
in full, Borrower shall make payments of principal on the Loans equal to
60% of the greater of (i) the Minimum Monthly Payment or (ii) 100% of the
ANCF for the immediately preceding month. Together with each payment made
pursuant to this Section 2.7(a), Borrower shall deliver to Collateral Agent
and each other Creditor a report in detail acceptable to Collateral Agent
setting out a detailed calculation of the ANCF for such month.
(b) If the unpaid principal balance of the Combined Loans ever exceeds
the Borrowing Base, Borrower shall, within thirty (30) days after
Administrative Agent gives notice of such fact to Borrower, prepay the
principal of the Loans under this Agreement in an amount at least equal to
60% of such excess. Each prepayment of principal under this section shall
be accompanied by all interest then accrued and unpaid on the principal so
prepaid.
(c) Any principal or interest prepaid pursuant to any section of this
Agreement shall be in addition to, and not in lieu of, all payments
otherwise required to be paid under the Loan Documents at the time of such
prepayment. Each prepayment of principal under this section shall be
accompanied by all interest then accrued and unpaid on the principal so
prepaid.
Section 2.8. Payments to Lenders. Borrower will make each payment which
it owes to the Lenders under the Loan Documents not later than noon, New York,
New York time, on the date such payment becomes due and payable, in lawful money
of the United States of
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America, without set-off, deduction or counterclaim, and in immediately
available funds, such payments to be made to Administrative Agent for the
account of the Lender to whom such payment is owed. Any payment received by
Administrative Agent after such time will be deemed to have been made on the
next following Business Day. Except as provided in clause (a) of the definition
of "Interest Period", should any such payment become due and payable on a day
other than a Business Day, the maturity of such payment shall be extended to the
next succeeding Business Day, and, in the case of a payment of principal or past
due interest, interest shall accrue and be payable thereon for the period of
such extension as provided in the Loan Document under which such payment is due.
Each payment to a Lender or the Administrative Agent under a Loan Document shall
be due and payable at the place provided therein and, if no specific place of
payment is provided, shall be due and payable at the place of payment of
Administrative Agent's Note. When Administrative Agent collects or receives
money on account of the Obligations owed to the Lenders that is insufficient to
pay all Obligations owed to the Lenders then due and payable, Administrative
Agent shall distribute all money so collected or received, and each Lender shall
apply all such money so distributed, as follows:
(a) first, for the payment of all Obligations owed to the Lenders
which are then due (and if such money is insufficient to pay all such
Obligations, first to any reimbursements due Administrative Agent under
Section 5.1(c) or 5.1(d) and then to the partial payment of all other
Obligations then due in proportion to the amounts thereof, or as Lenders
shall otherwise agree);
(b) then for the prepayment of amounts owing under the Loan Documents
(other than principal on the Notes) if so specified by Borrower;
(c) then for the prepayment of principal on the Notes, together with
accrued and unpaid interest on the principal so prepaid; and
(d) last, for the payment or prepayment of any other Obligations owed
to the Lenders.
All payments applied to principal or interest on any Note shall be applied first
to any interest then due and payable, then to principal then due and payable,
and last to any prepayment of principal and interest in compliance with Sections
2.6 and 2.7. All distributions of amounts described in any of subsections (b),
(c) or (d) above shall be made by Administrative Agent pro rata to each Lender
then owed Obligations described in such subsection in proportion to all amounts
owed to all Lenders which are described in such subsection.
Section 2.9. Initial Borrowing Base. During the period from the date
hereof to the first Determination Date the Borrowing Base shall be $15,000,000.
11
Section 2.10. Subsequent Determinations of Borrowing Base. By April 1
and October 1 of each year, Parent shall furnish to each Lender all information,
reports and data which Administrative Agent has then reasonably requested
concerning the Related Persons' businesses and properties (including their oil
and gas properties and interests and the reserves and production relating
thereto), together with the Engineering Report described in Section C.1(e) or
C.1(f) of Annex C to the Intercreditor Agreement, as applicable. Within thirty
days after receiving such information, reports and data, or as promptly
thereafter as practicable, Majority Lenders shall agree upon an amount for the
Borrowing Base and Administrative Agent shall by notice to Borrower, Collateral
Agent and the other Lenders designate such amount as the new Borrowing Base for
the period beginning on and including the date such notice is sent (herein
called a "Determination Date") and continuing until but not including the next
date as of which the Borrowing Base is redetermined. If Parent does not furnish
all such information, reports and data by the date specified in the first
sentence of this section Administrative Agent may nonetheless designate the
Borrowing Base at any amount which Majority Lenders determine and may
redesignate the Borrowing Base from time to time thereafter until each Lender
receives all such information, reports and data, whereupon Majority Lenders
shall designate a new Borrowing Base as described above. Majority Lenders shall
determine the amount of the Borrowing Base based upon the loan collateral value
which they in their discretion assign to the various Oil and Gas Properties of
the Related Persons at the time in question and based upon such other credit
factors (including, without limitation, the Collateral and the assets,
liabilities, cash flow, business, properties, prospects, management and
ownership of Related Persons and applicable country risks and political risks)
as they in their discretion deem significant. It is expressly understood that
Lenders and Administrative Agent have no obligation to designate the Borrowing
Base at any particular amount.
Section 2.11. Capital Reimbursement. If, after the date of this
Agreement, either (a) the introduction or implementation of or the compliance
with or any change in or in the interpretation of any law, rule or regulation,
or (b) the introduction or implementation of or the compliance with any request,
directive or guideline from any central bank or other governmental authority
(whether or not having the force of law) affects or would affect the amount of
capital required or expected to be maintained by any Lender or any corporation
controlling any Lender, then, upon demand by such Lender, Borrower will pay to
Administrative Agent for the benefit of such Lender, from time to time as
specified by such Lender, such additional amount or amounts which such Lender
shall determine to be appropriate to compensate such Lender or any corporation
controlling such Lender in light of such circumstances, to the extent that such
Lender reasonably determines that the amount of any such capital would be
increased, or the rate of return on any such capital would be reduced by, or in
whole or in part based on, the existence of the face amount of such Lender's
Loans or commitments under this Agreement.
Section 2.12. Increased Cost of Eurodollar Loans. If any applicable
domestic or foreign law, treaty, rule or regulation (whether now in effect or
hereinafter enacted or promulgated, including Regulation D) or any
interpretation or administration thereof by any
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governmental authority charged with the interpretation or administration thereof
(whether or not having the force of law):
(a) shall change the basis of taxation of payments to any Lender of
any principal, interest, or other amounts attributable to any Eurodollar
Loan or otherwise due under this Agreement in respect of any Eurodollar
Loan (other than taxes imposed on the overall net income of such Lender or
any lending office of such Lender by any jurisdiction in which such Lender
or any such lending office is located); or
(b) shall change, impose, modify, apply or deem applicable any
reserve, special deposit or similar requirements in respect of any
Eurodollar Loan (excluding those for which such Lender is fully compensated
pursuant to adjustments made in the definition of Eurodollar Rate) or
against assets of, deposits with or for the account of, or credit extended
by, such Lender; or
(c) shall impose on any Lender or the interbank eurocurrency deposit
market any other condition affecting any Eurodollar Loan, the result of
which is to increase the cost to any Lender of funding or maintaining any
Eurodollar Loan or to reduce the amount of any sum receivable by any Lender
in respect of any Eurodollar Loan by an amount deemed by such Lender to be
material,
then such Lender shall promptly notify Administrative Agent and Borrower in
writing of the happening of such event and (1) Borrower shall upon demand pay to
Administrative Agent for the account of such Lender such additional amount or
amounts as will compensate such Lender for such event (on an after-tax basis)
and (2) Borrower may elect, by giving to Administrative Agent and such Lender
not less than three Business Days' notice, to convert all (but not less than
all) of any such Eurodollar Loan into Base Rate Loans.
Section 2.13. Availability. If (a) any change in applicable laws,
treaties, rules or regulations or in the interpretation or administration
thereof of or in any jurisdiction whatsoever, domestic or foreign, shall make it
unlawful or impracticable for any Lender to fund or maintain Eurodollar Loans,
or shall materially restrict the authority of any Lender to purchase or take
offshore deposits of dollars (i.e., "eurodollars"), or (b) any Lender determines
that matching deposits appropriate to fund or maintain any Eurodollar Loan are
not available to it, or (c) any Lender determines that the formula for
calculating the Eurodollar Rate does not fairly reflect the cost to such Lender
of making or maintaining loans based on such rate, then Borrower's right to
elect Eurodollar Loans shall be suspended to the extent and for the duration of
such illegality, impracticability or restriction and all Eurodollar Loans (or
portions thereof) which are then outstanding or are then the subject of any
Borrowing Notice or any Continuation/Conversion Notice and which cannot lawfully
or practicably be maintained or funded shall immediately become or remain as
Base Rate Loans of such Lender. Borrower agrees to indemnify Administrative
Agent and each Lender and hold it harmless against all costs, expenses, claims,
penalties, liabilities and damages which may result from any such
13
change in law, treaty, rule, regulation, interpretation or administration. Such
indemnification shall be on an after-tax basis, taking into account any taxes
imposed on the amounts paid as indemnity.
Section 2.14. Funding Losses. In addition to its other obligations
hereunder, Borrower will indemnify each Lender against, and reimburse each
Lender on demand for, any loss or expense incurred or sustained by any Lender
(including without limitation any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by any Lender to
fund or maintain Eurodollar Loans), as a result of (a) any payment or prepayment
(whether authorized or required hereunder or otherwise) of all or a portion of a
Eurodollar Loan on a day other than the day on which the applicable Interest
Period ends, (b) any payment or prepayment, whether required hereunder or
otherwise, of a Loan made after the delivery, but before the effective date, of
a Continuation/Conversion Notice, if such payment or prepayment prevents such
Continuation/Conversion Notice from becoming fully effective, (c) the failure of
any Loan to be made or of any Continuation/Conversion Notice to become effective
due to any condition precedent not being satisfied or due to any other action or
inaction of any Related Person, or (d) any conversion (whether authorized or
required hereunder or otherwise) of all or any portion of any Eurodollar Loan
into a Base Rate Loan or into a different Eurodollar Loan on a day other than
the day on which the applicable Interest Period ends.
Section 2.15. Reimbursable Taxes. Borrower covenants and agrees that:
(a) Borrower will indemnify each Lender against and reimburse each
Lender for all present and future income, stamp and other taxes, levies,
costs and charges whatsoever imposed, assessed, levied or collected on or
in respect of this Agreement or any Eurodollar Loans (whether or not
legally or correctly imposed, assessed, levied or collected), excluding,
however, any taxes imposed on or measured by the overall net income of
Administrative Agent or such Lender or any lending office of such Lender by
any jurisdiction in which such Lender or any such lending office is located
(all such non-excluded taxes, levies, costs and charges being collectively
called "Reimbursable Taxes" in this section). Such indemnification shall
be on an after-tax basis, taking into account any income taxes imposed on
the amounts paid as indemnity.
(b) All payments on account of the principal of, and interest on, each
Lender's Loans and Note, and all other amounts payable by Borrower to any
Lender hereunder, shall be made in full without set-off or counterclaim and
shall be made free and clear of and without deductions or withholdings of
any nature by reason of any Reimbursable Taxes, all of which will be for
the account of Borrower. In the event of Borrower being compelled by law
or other regulations to make any such deduction or withholding from any
payment to any Lender, Borrower shall pay on the due date of such payment,
by way of additional interest, such additional amounts as are needed to
cause the amount receivable by such Lender after such deduction or
withholding to
14
equal the amount which would have been receivable in the absence of such
deduction or withholding. If Borrower should make any deduction or
withholding as aforesaid, Borrower shall within 60 days thereafter forward
to such Lender an official receipt or other official document evidencing
payment of such deduction or withholding.
(c) If Borrower is ever required to pay any Reimbursable Tax with
respect to any Eurodollar Loan Borrower may elect, by giving to
Administrative Agent and such Lender not less than three Business Days'
notice, to convert all (but not less than all) of any such Eurodollar Loan
into a Base Rate Loan, but such election shall not diminish Borrower's
obligation to pay all Reimbursable Taxes.
ARTICLE III - Conditions Precedent to Lending
Section 3.1. Documents to be Delivered. No Lender has any obligation to
make the Loan, and this Agreement shall not be effective, unless Administrative
Agent shall have received all of the following, duly executed and delivered and
in form, substance and date satisfactory to Administrative Agent:
(a) This Agreement.
(b) Each Note.
(c) An "Omnibus Certificate" of the Secretary and of the Chairman of
the Board or President of each Related Person, which shall contain the
names and signatures of the officers of such Related Person authorized to
execute Loan Documents and which shall certify to the truth, correctness
and completeness of the following exhibits attached thereto: (i) a copy of
resolutions duly adopted by the Board of Directors of such Related Person
and in full force and effect at the time this Agreement is entered into,
authorizing the execution of this Agreement and the other Loan Documents
delivered or to be delivered in connection herewith and the consummation of
the transactions contemplated herein and therein, (ii a copy of the charter
documents of such Related Person and all amendments thereto, certified by
the appropriate official of such Related Person's state of organization,
and (ii a copy of any bylaws of such Related Person.
(d) A certificate (or certificates) of the due formation, valid
existence and good standing of each Related Person in its state of
organization, issued by the appropriate authorities of such jurisdiction.
(e) A "Compliance Certificate" of the Chairman of the Board or
President and of the chief financial officer of Borrower, of even date with
such Loan, in which such officers certify to the best of their knowledge,
after reasonable inquiry, to the
15
satisfaction of the conditions set out in subsections (a), (d), (e), (f),
(g) and (h) of Section 3.3.
(f) A favorable opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P., counsel for each
Related Person, substantially in the form set forth in Exhibit D.
(g) The Intercreditor Agreement and all documents required to be
delivered thereunder.
(h) Each Security Document listed in the Security Schedule to the
Intercreditor Agreement.
(i) Certificates of Aviva America's good standing and due
qualification to do business, issued by appropriate officials in any states
in which Aviva America owns property subject to Security Documents.
(j) A report from Parent's independent insurance consultant or by an
insurance broker or consultant acceptable to Administrative Agent in form
and detail acceptable to Administrative Agent confirming the insurance that
is in effect as of the date hereof and that such insurance is adequate and
customary for the businesses conducted by the Related Persons.
(k) Documents confirming the assignment of all Liens securing the Debt
evidenced by the Chase Loan Agreement to Collateral Agent for the benefit
of Lenders.
Section 3.2. Additional Conditions Precedent to the First Advance. No
Lender has any obligation to make the Loan, and this Agreement shall not be
effective, unless the following additional conditions precedent have been
satisfied:
(a) The mergers and consolidations described in Recital 5 shall have
taken place, and Parent's Board of Directors shall consist of ▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇.
(b) All outstanding Restricted Debt of the Related Persons to any
Person shall have been paid in full, except for the Obligations and other
Restricted Debt permitted under Section C.11 of Annex C to the
Intercreditor Agreement.
(c) Administrative Agent shall have received payment in full of the
balance of the arrangement fee pursuant to the provisions of Section
2.5(b).
(d) All representations and warranties made by any Related Person in
any Loan Document shall be true in all material respects on and as of the
date of such Loan (except to the extent that the facts upon which such
representations are based have been
16
changed by the extension of credit hereunder or are limited to an earlier
date) as if such representations and warranties had been made as of the
date of such Loan.
(e) No Default shall exist at the date of such Loan.
(f) No material adverse change shall have occurred to Parent's
Consolidated financial condition or the businesses or assets of any Related
Person since the date of the Initial Financial Statements.
(g) Each Related Person shall have performed and complied with all
agreements and conditions required in the Loan Documents to be performed or
complied with by it on or prior to the date of such Loan.
(h) The making of such Loan shall not be prohibited by any law or any
regulation or order of any court or governmental agency or authority and
shall not subject any Lender to any penalty or other onerous condition
under or pursuant to any such law, regulation or order.
(i) Administrative Agent shall have received all documents and
instruments which Administrative Agent has then requested, in addition to
those described in Section 3.1 (including opinions of legal counsel for the
Related Persons and Lenders; corporate documents and records; documents
evidencing governmental authorizations, consents, approvals, licenses and
exemptions; and certificates of public officials and of officers and
representatives of the Related Persons and other Persons, such certificates
being based on such officers' and representatives' knowledge after
reasonable inquiry), as to (i) the accuracy and validity of or compliance
with all representations, warranties and covenants made by any of the
Related Persons in this Agreement and the other Loan Documents, (ii the
satisfaction of all conditions contained herein or therein, and (ii all
other matters pertaining hereto and thereto. All such additional documents
and instruments shall be satisfactory to Administrative Agent in form,
substance and date.
(j) All legal matters relating to the Loan Documents and the
consummation of the transactions contemplated thereby shall be reasonably
satisfactory to ▇▇▇▇▇▇▇▇ & Knight, P.C., counsel to Administrative Agent.
ARTICLE IV - Representations and Warranties
Section 4.1. Related Persons' Representations and Warranties. To confirm
each Lender's understanding concerning the Related Persons and their businesses,
properties and obligations and to induce each Lender to enter into this
Agreement and to make its Loans, each of Parent and Borrower represents and
warrants to each Lender that each of the statements set forth in Annex B to the
Intercreditor Agreement is true and correct.
17
Section 4.2. Representation by Lenders. Each Lender hereby represents
that it will acquire its Note for its own account in the ordinary course of its
commercial lending business; however, the disposition of any Lender's property
shall at all times be and remain within its control and, in particular and
without limitation, each Lender may sell or otherwise transfer its Note, any
participation interest or other interest in such Note, or any of its other
rights and obligations under the Loan Documents.
ARTICLE V - Covenants of Borrower
Section 5.1. Covenants. To conform with the terms and conditions under
which each Lender is willing to have credit outstanding hereunder, and to induce
each Lender to enter into this Agreement and extend credit hereunder, each of
Parent and Borrower warrants, covenants and agrees that until the full and final
payment of the Obligations owed to the Administrative Agent and the Lenders and
the termination of this Agreement, unless Majority Lenders have previously
agreed otherwise:
(a) Payment of Obligations. Parent and Borrower will, and Parent will
cause each other Related Person to, pay all amounts due under the Loan
Documents in accordance with the terms thereof.
(b) Common Covenants. Parent and Borrower will, and Parent will cause
each other Related Person to, observe, perform and comply with every
covenant, term and condition expressed in Annex C to the Intercreditor
Agreement and every other covenant, term and condition expressed in any of
the other Loan Documents.
(c) Payment of Expenses. Whether or not the transactions contemplated
by this Agreement are consummated, Borrower will promptly (and in any
event, within 30 days after any invoice or other statement or notice) pay:
(i) all transfer, stamp, mortgage, documentary or other similar taxes,
assessments or charges levied by any governmental or revenue authority in
respect of this Agreement or any of the other Loan Documents or any other
document referred to herein or therein, (ii) all reasonable costs and
expenses incurred by or on behalf of Administrative Agent (including
attorneys' fees, consultants' fees and engineering fees, travel costs and
miscellaneous expenses) in connection with (1) the negotiation,
preparation, execution and delivery of the Loan Documents, and any and all
consents, waivers or other documents or instruments relating thereto, (2)
the filing, recording, refiling and re-recording of any Loan Documents and
any other documents or instruments or further assurances required to be
filed or recorded or refiled or re-recorded by the terms of any Loan
Document, (3) the borrowings hereunder and other action reasonably required
in the course of administration hereof, (4) monitoring or confirming (or
preparation or negotiation of any document related to) the Related Persons'
compliance with any covenants or conditions contained in this Agreement or
in any Loan Document, and (iii)
18
all reasonable costs and expenses incurred by or on behalf of any Lender
(including attorneys' fees, consultants' fees and accounting fees) in
connection with the defense or enforcement of any of the Loan Documents
(including this section) or the defense of any Lender's exercise of its
rights thereunder. In addition to the foregoing, until all Obligations have
been paid in full, Borrower will also pay or reimburse Administrative Agent
for all reasonable out-of-pocket costs and expenses of Administrative Agent
or its agents or employees in connection with the continuing administration
of the Loans and the related due diligence of Administrative Agent,
including travel and miscellaneous expenses and fees and expenses of
Administrative Agent's outside counsel, reserve engineers and consultants
engaged in connection with the Loan Documents.
(d) Performance on Borrower's Behalf. If any Related Person fails to
pay any taxes, insurance premiums, expenses, attorneys' fees or other
amounts it is required to pay under any Loan Document, Administrative Agent
may pay the same. Borrower shall immediately reimburse Administrative Agent
for any such payments and each such amount paid by Administrative Agent
shall constitute an Obligation owed hereunder which is due and payable on
the date such amount is paid by Administrative Agent.
(e) Interest. Borrower hereby promises to pay interest to each Lender
at the Late Payment Rate on all Obligations which Borrower has in this
Agreement promised to pay to such Lender (including Obligations to pay fees
or to reimburse or indemnify such Lender) and which are not paid when due.
Such interest shall accrue from the date such Obligations become due until
they are paid.
ARTICLE VI - Security
Section 6.1. The Security. The Obligations will be secured by the
Security Documents listed in the Security Schedule to the Intercreditor
Agreement and any additional Security Documents hereafter delivered by any
Related Person and accepted by Collateral Agent.
Section 6.2. Security Covenants. Parent and Borrower will, and Parent
will cause each other Related Person to, observe, perform and comply with every
covenant, term and condition expressed in Annex D to the Intercreditor Agreement
and every other covenant, term and condition expressed in any of the other Loan
Documents.
ARTICLE VII - Events of Default and Remedies
Section 7.1. Events of Default. Each of the events described in Annex E
of the Intercreditor Agreement constitutes an Event of Default under this
Agreement.
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Section 7.2. Acceleration. Upon the occurrence of an Event of Default
described in subsection E.8(a), (b) or (c) of Annex E of the Intercreditor
Agreement with respect to any Related Person, all of the Obligations shall
thereupon be immediately due and payable, without demand, presentment, notice of
demand or of dishonor and nonpayment, protest, notice of protest, notice of
intention to accelerate, declaration or notice of acceleration, or any other
notice or declaration of any kind, all of which are hereby expressly waived by
Parent and Borrower and each other Related Person who at any time ratifies or
approves this Agreement. Upon any such acceleration, any obligation of any
Lender to make any further Loans shall each be permanently terminated. During
the continuance of any other Event of Default, Administrative Agent at any time
and from time to time may (and upon written instructions from Majority Lenders,
Administrative Agent shall) without notice to Parent, Borrower or any other
Related Person do either or both of the following: (1) terminate any obligation
of Lenders to make Loans hereunder and (2) declare any or all of the Obligations
immediately due and payable, and all such Obligations shall thereupon be
immediately due and payable, without demand, presentment, notice of demand or of
dishonor and nonpayment, protest, notice of protest, notice of intention to
accelerate, declaration or notice of acceleration, or any other notice or
declaration of any kind, all of which are hereby expressly waived by Parent and
Borrower and each other Related Person who at any time ratifies or approves this
Agreement.
Section 7.3. Remedies. If any Event of Default shall occur and be
continuing, each Lender may protect and enforce its rights under the Loan
Documents by any appropriate proceedings, including proceedings for specific
performance of any covenant or agreement contained in any Loan Document, and
each Lender may enforce the payment of any Obligations due or enforce any other
legal or equitable right. All rights, remedies and powers conferred upon
Administrative Agent and each Lender under the Loan Documents shall be deemed
cumulative and not exclusive of any other rights, remedies or powers available
under the Loan Documents or at law or in equity.
SECTION 7.4. INDEMNITY.
(a) EACH OF PARENT AND BORROWER AGREES TO INDEMNIFY AND HOLD HARMLESS
EACH LENDER, UPON DEMAND, FROM AND AGAINST, AND WILL REIMBURSE EACH LENDER
FOR, ANY AND ALL LIABILITIES, OBLIGATIONS, CLAIMS, LOSSES, DAMAGES,
PENALTIES, FINES, ACTIONS, JUDGMENTS, SUITS, SETTLEMENTS, COSTS, EXPENSES
OR DISBURSEMENTS (INCLUDING REASONABLE FEES OF ATTORNEYS, ACCOUNTANTS,
EXPERTS AND ADVISORS) OF ANY KIND OR NATURE WHATSOEVER (IN THIS SECTION
COLLECTIVELY CALLED "LIABILITIES AND COSTS") WHICH TO ANY EXTENT (IN WHOLE
OR IN PART) MAY BE IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST ANY LENDER
GROWING OUT OF, RESULTING FROM OR IN ANY OTHER WAY ASSOCIATED WITH ANY OF
THE COLLATERAL, THE LOAN DOCUMENTS, OR THE TRANSACTIONS AND EVENTS
(INCLUDING THE ENFORCEMENT OR DEFENSE THEREOF) AT ANY TIME ASSOCIATED
THEREWITH OR CONTEMPLATED THEREIN, WHICH LIABILITIES AND COSTS SHALL
INCLUDE WITHOUT LIMITATION THOSE RELATING TO OR ARISING OUT OF (A) ANY
BODILY INJURY OR DEATH OR PROPERTY DAMAGE OCCURRING IN OR UPON OR IN THE
VICINITY OF THE COLLATERAL THROUGH ANY CAUSE
20
WHATSOEVER, (B) ANY ACT PERFORMED OR OMITTED TO BE PERFORMED HEREUNDER OR
UNDER ANY SECURITY DOCUMENT OR THE BREACH OF ANY REPRESENTATION OR WARRANTY
CONTAINED HEREIN OR IN ANY SECURITY DOCUMENT, (C) THE EXERCISE OF ANY
RIGHTS AND REMEDIES HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT, (D) ANY
TRANSACTION, ACT, OMISSION, EVENT OR CIRCUMSTANCE ARISING OUT OF OR IN ANY
WAY CONNECTED WITH THE COLLATERAL OR WITH ANY LOAN DOCUMENT, (E) ANY
VIOLATION OF OR NONCOMPLIANCE WITH ANY ENVIRONMENTAL LAW, (F) ANY ACT,
OMISSION, EVENT OR CIRCUMSTANCE RESULTING FROM OR IN CONNECTION WITH THE
OWNERSHIP, CONSTRUCTION, OCCUPANCY, OPERATION, USE AND/OR MAINTENANCE OF
THE COLLATERAL OR THE ASSOCIATED PROPERTY (AS SUCH TERM IS DEFINED IN THE
MORTGAGE) REGARDLESS OF WHETHER THE ACT, OMISSION, EVENT OR CIRCUMSTANCE
CONSTITUTED A VIOLATION OF ANY ENVIRONMENTAL LAW AT THE TIME OF ITS
EXISTENCE OR OCCURRENCE, INCLUDING THE PRESENCE ON OR IN THE COLLATERAL OR
THE "ASSOCIATED PROPERTY" OR ANY DISPOSAL OR RELEASE FROM, ON OR INTO THE
COLLATERAL OR THE ASSOCIATED PROPERTY OF "HAZARDOUS SUBSTANCES" OR "SOLID
WASTES" (AS SUCH TERMS ARE DEFINED IN THE MORTGAGE), AND (G) ANY AND ALL
CLAIMS OR PROCEEDINGS (WHETHER BROUGHT BY PRIVATE PARTY OR GOVERNMENTAL
AGENCIES) FOR BODILY INJURY, PROPERTY DAMAGE, ABATEMENT OR REMEDIATION,
ENVIRONMENTAL DAMAGE OR IMPAIRMENT OR ANY OTHER INJURY OR DAMAGE RESULTING
FROM OR RELATING TO ANY HAZARDOUS SUBSTANCE, SOLID WASTE OR CONTAMINATED
MATERIALS LOCATED UPON OR MIGRATING INTO, FROM OR THROUGH THE COLLATERAL OR
THE ASSOCIATED PROPERTY (WHETHER OR NOT THE RELEASE OF SUCH MATERIALS WAS
CAUSED BY A RELATED PERSON, A TENANT OR SUBTENANT OR A PRIOR OWNER OR
TENANT OR SUBTENANT ON THE COLLATERAL OR THE ASSOCIATED PROPERTY AND
WHETHER OR NOT THE ALLEGED LIABILITY IS ATTRIBUTABLE TO THE HANDLING,
STORAGE, GENERATION, TRANSPORTATION, REMOVAL OR DISPOSAL OF SUCH SUBSTANCE,
WASTE OR MATERIAL OR THE MERE PRESENCE OF SUCH SUBSTANCE, WASTE OR MATERIAL
ON THE COLLATERAL OR THE ASSOCIATED PROPERTY), WHICH SUCH LENDER MAY HAVE
LIABILITY WITH RESPECT TO DUE TO THE MAKING OF THE LOAN OR LOANS EVIDENCED
BY THE NOTES, THE EXECUTION OF THE MORTGAGE, THE EXERCISE OF ANY RIGHTS
UNDER THE LOAN DOCUMENTS, OR OTHERWISE. THE FOREGOING INDEMNIFICATION SHALL
APPLY WHETHER OR NOT SUCH LIABILITIES AND COSTS ARE IN ANY WAY OR TO ANY
EXTENT OWED, IN WHOLE OR IN PART, UNDER ANY CLAIM OR THEORY OF STRICT
LIABILITY, OR ARE CAUSED, IN WHOLE OR IN PART, BY ANY NEGLIGENT ACT OR
OMISSION OF ANY KIND BY ANY LENDER, PROVIDED ONLY THAT A LENDER SHALL BE
NOT ENTITLED UNDER THIS SECTION TO RECEIVE INDEMNIFICATION FOR THAT
PORTION, IF ANY, OF ANY LIABILITIES AND COSTS WHICH IS PROXIMATELY CAUSED
BY ITS OWN INDIVIDUAL GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, AS DETERMINED
IN A FINAL JUDGMENT. IF ANY PERSON (INCLUDING ANY RELATED PERSON) EVER
ALLEGES SUCH GROSS NEGLIGENCE OR WILLFUL MISCONDUCT BY ANY LENDER, THE
INDEMNIFICATION PROVIDED FOR IN THIS SECTION SHALL NONETHELESS BE PAID UPON
DEMAND, SUBJECT TO LATER ADJUSTMENT OR REIMBURSEMENT, UNTIL SUCH TIME AS A
COURT OF COMPETENT JURISDICTION ENTERS A FINAL JUDGMENT AS TO THE
EXISTENCE, EXTENT AND EFFECT OF THE ALLEGED GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT. AS USED IN THIS SECTION THE TERM "LENDER" SHALL REFER NOT ONLY
TO THE PERSON DESIGNATED AS SUCH IN ANNEX A,
21
BUT ALSO TO (I) EACH DIRECTOR, OFFICER, AGENT, ATTORNEY, EMPLOYEE,
REPRESENTATIVE AND AFFILIATE OF SUCH PERSON, AND (II) THE PERSON OR PERSONS
WHO, AT ANY TIME OR FROM TIME TO TIME, SERVE AS THE TRUSTEE ON BEHALF OF
LENDERS UNDER THE MORTGAGE.
(b) If any Lender proposes to settle or compromise any claim for
liabilities or costs (in this section, a "Litigated Liability") for which
Parent or Borrower may be liable for payment hereunder, such Lender shall
give such Parent and Borrower written notice of the terms of such proposed
settlement or compromise reasonably in advance of settling or compromising
such Litigated Liability, but shall have no obligation to obtain the
concurrence or approval of Parent or Borrower, and Parent and Borrower
shall remain liable for the payment of such claim. Any obligation or
liability of Borrower or Parent to any Lender under this section shall
survive the expiration or termination of this Agreement and the repayment
of the Obligations.
ARTICLE VIII - Administrative Agent
Section 8.1. Appointment and Authority. Each Lender hereby irrevocably
authorizes Administrative Agent, and Administrative Agent hereby undertakes, to
receive payments of principal, interest and other amounts due hereunder as
specified herein and to take all other actions and to exercise such powers under
this Agreement as are specifically delegated to Administrative Agent by the
terms hereof or thereof, together with all other powers reasonably incidental
thereto. The relationship of Administrative Agent to the other Lenders is only
that of one commercial lender acting as administrative agent for others, and
nothing in the Loan Documents shall be construed to constitute Administrative
Agent a trustee or other fiduciary for any Lender or any holder of any
participation in a Note nor to impose on Administrative Agent duties and
obligations other than those expressly provided for in the Loan Documents. With
respect to any matters not expressly provided for in the Loan Documents and any
matters which the Loan Documents place within the discretion of Administrative
Agent, Administrative Agent shall not be required to exercise any discretion or
take any action, and it may request instructions from the other Lenders with
respect to any such matter, in which case it shall be required to act or to
refrain from acting (and shall be fully protected and free from liability to all
Lenders in so acting or refraining from acting) upon the instructions of
Majority Lenders (including itself), provided, however, that Administrative
Agent shall not be required to take any action which exposes it to a risk of
personal liability that it considers unreasonable or which is contrary to the
Loan Documents or to applicable Law. Upon receipt by Administrative Agent from
Borrower of any communication calling for action on the part of Lenders or upon
notice from any other Lender to Administrative Agent of any Default or Event of
Default, Administrative Agent shall promptly notify each other Lender thereof.
Section 8.2. Exculpation, Administrative Agent's Reliance, Etc. Neither
Administrative Agent nor any of its directors, officers, agents, attorneys, or
employees shall be liable for any action taken or omitted to be taken by any of
them under or in connection
22
with the Loan Documents, INCLUDING THEIR NEGLIGENCE OF ANY KIND, except that
each shall be liable for its own gross negligence or willful misconduct. Without
limiting the generality of the foregoing, Administrative Agent (a) may treat the
payee of any Note as the holder thereof until Administrative Agent receives
written notice of the assignment or transfer thereof in accordance with this
Agreement, signed by such payee and in form satisfactory to Administrative
Agent; (b) may consult with legal counsel (including counsel for Borrower),
independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (c) makes no
warranty or representation to any other Lender and shall not be responsible to
any other Lender for any statements, warranties or representations made in or in
connection with the Loan Documents; (d) shall not have any duty to ascertain or
to inquire as to the performance or observance of any of the terms, covenants or
conditions of the Loan Documents on the part of any Related Person or to inspect
the property (including the books and records) of any Related Person; (e) shall
not be responsible to any other Lender for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of any Loan Document
or any instrument or document furnished in connection therewith; (f) may rely
upon the representations and warranties of each Related Person or Lender in
exercising its powers hereunder; and (g) shall incur no liability under or in
respect of the Loan Documents by acting upon any notice, consent, certificate or
other instrument or writing (including any facsimile, telegram, cable or telex)
believed by it to be genuine and signed or sent by the proper Person or Persons.
Section 8.3. Credit Decisions. Each Lender acknowledges that it has,
independently and without reliance upon any other Lender, made its own analysis
of Borrower and the transactions contemplated hereby and its own independent
decision to enter into this Agreement and the other Loan Documents. Each Lender
also acknowledges that it will, independently and without reliance upon any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Loan Documents.
Section 8.4. Indemnification. Each Lender agrees to indemnify
Administrative Agent (to the extent not reimbursed by Borrower within ten (10)
days after demand) from and against such Lender's Percentage Share of any and
all liabilities, obligations, claims, losses, damages, penalties, fines,
actions, judgments, suits, settlements, costs, expenses or disbursements
(including reasonable fees of attorneys, accountants, experts and advisors) of
any kind or nature whatsoever (in this section collectively called "liabilities
and costs") which to any extent (in whole or in part) may be imposed on,
incurred by, or asserted against Administrative Agent growing out of, resulting
from or in any other way associated with any of the Collateral, the Loan
Documents and the transactions and events (including the enforcement thereof) at
any time associated therewith or contemplated therein (whether arising in
contract or in tort and otherwise and including any violation or noncompliance
with any Environmental Laws by any
23
Person or any liabilities or duties of any Person with respect to Hazardous
Materials found in or released into the environment).
THE FOREGOING INDEMNIFICATION SHALL APPLY WHETHER OR NOT SUCH LIABILITIES AND
COSTS ARE IN ANY WAY OR TO ANY EXTENT OWED, IN WHOLE OR IN PART, UNDER ANY CLAIM
OR THEORY OF STRICT LIABILITY, OR ARE CAUSED, IN WHOLE OR IN PART, BY ANY
NEGLIGENT ACT OR OMISSION OF ANY KIND BY ADMINISTRATIVE AGENT,
provided only that no Lender shall be obligated under this section to indemnify
Administrative Agent for that portion, if any, of any liabilities and costs
which is proximately caused by Administrative Agent's own individual gross
negligence or willful misconduct, as determined in a final judgment. Cumulative
of the foregoing, each Lender agrees to reimburse Administrative Agent promptly
upon demand for such Lender's Percentage Share of any costs and expenses to be
paid to Administrative Agent by Borrower under Section 5.1(c) to the extent that
Administrative Agent is not timely reimbursed for such expenses by Borrower as
provided in such section. As used in this section the term "Administrative
Agent" shall refer not only to the Person designated as such in Section 1.1 but
also to each director, officer, agent, attorney, employee, representative and
Affiliate of such Person.
Section 8.5. Rights as Lender. In its capacity as a Lender,
Administrative Agent shall have the same rights and obligations as any Lender
and may exercise such rights as though it were not Administrative Agent.
Administrative Agent may accept deposits from, lend money to, act as trustee
under indentures of, and generally engage in any kind of business with any
Related Person or their Affiliates, all as if it were not Administrative Agent
hereunder and without any duty to account therefor to any other Lender.
Section 8.6. Sharing of Set-Offs and Other Payments. Each Lender agrees
that if it shall, whether through the exercise of rights under Security
Documents or rights of banker's lien, set off, or counterclaim against Borrower
or otherwise, obtain payment of a portion of the aggregate Obligations owed to
it which, taking into account all distributions made by Administrative Agent
under Section 2.8, causes such Lender to have received more than it would have
received had such payment been received by Administrative Agent and distributed
pursuant to Section 2.8, then (a) it shall be deemed to have simultaneously
purchased and shall be obligated to purchase interests in the Obligations owed
to the Lenders as necessary to cause all Lenders to share all payments as
provided for in Section 2.8, and (b) such other adjustments shall be made from
time to time as shall be equitable to ensure that Administrative Agent and all
Lenders share all payments of Obligations as provided in Section 2.8; provided,
however, that nothing herein contained shall in any way affect the right of any
Lender to obtain payment (whether by exercise of rights of banker's lien, set-
off or counterclaim or otherwise) of indebtedness other than the Obligations.
Borrower expressly consents to the foregoing
24
arrangements and agrees that any holder of any such interest or other
participation in the Obligations, whether or not acquired pursuant to the
foregoing arrangements, may to the fullest extent permitted by law exercise any
and all rights of banker's lien, set-off, or counterclaim as fully as if such
holder were a holder of the Obligations in the amount of such interest or other
participation. If all or any part of any funds transferred pursuant to this
section is thereafter recovered from the seller under this section which
received the same, the purchase provided for in this section shall be deemed to
have been rescinded to the extent of such recovery, together with interest, if
any, if interest is required pursuant to the order of a court order to be paid
on account of the possession of such funds prior to such recovery.
Section 8.7. Investments. Whenever Administrative Agent in good faith
determines that it is uncertain about how to distribute to Lenders any funds
which it has received, or whenever Administrative Agent in good faith determines
that there is any dispute among Lenders about how such funds should be
distributed, Administrative Agent may choose to defer distribution of the funds
which are the subject of such uncertainty or dispute. If Administrative Agent
in good faith believes that the uncertainty or dispute will not be promptly
resolved, or if Administrative Agent is otherwise required to invest funds
pending distribution to Lenders, Administrative Agent shall invest such funds
pending distribution; all interest on any such Investment shall be distributed
upon the distribution of such Investment and in the same proportion and to the
same Persons as such Investment. All moneys received by Administrative Agent
for distribution to Lenders (other than to the Person who is Administrative
Agent in its separate capacity as a Lender) shall be held by Administrative
Agent pending such distribution solely as Administrative Agent for such Lenders,
and Administrative Agent shall have no equitable title to any portion thereof.
Section 8.8. Benefit of Article VIII. The provisions of this Article
(other than the following Section 8.9) are intended solely for the benefit of
Lenders, and no other Creditor or Related Person shall be entitled to rely on
any such provision or assert any such provision in a claim or defense against
any Lender. Lenders may waive or amend such provisions as they desire without
any notice to or consent of Borrower or any Related Person.
Section 8.9. Resignation. Administrative Agent may resign at any time by
giving written notice thereof to Lenders and Borrower. Each such notice shall
set forth the date of such resignation. Upon any such resignation, Majority
Lenders shall have the right to appoint a successor Administrative Agent. A
successor must be appointed for any retiring Administrative Agent, and such
Administrative Agent's resignation shall become effective when such successor
accepts such appointment. If, within thirty days after the date of the retiring
Administrative Agent's resignation, no successor Administrative Agent has been
appointed and has accepted such appointment, then the retiring Administrative
Agent may appoint a successor Administrative Agent, which shall be a commercial
bank organized or licensed to conduct a banking or trust business under the laws
of the United States of America or of any state thereof. Upon the acceptance of
any appointment as Administrative Agent hereunder by a successor Administrative
Agent, the retiring Administrative Agent shall be
25
discharged from its duties and obligations under this Agreement and the other
Loan Documents. After any retiring Administrative Agent's resignation hereunder
the provisions of this Article VIII shall continue to inure to its benefit as to
any actions taken or omitted to be taken by it while it was Administrative Agent
under the Loan Documents.
ARTICLE IX - Miscellaneous
Section 9.1. Waivers and Amendments; Acknowledgments.
(a) Waivers and Amendments. No failure or delay (whether by course of
conduct or otherwise) by any Lender in exercising any right, power or
remedy which any Lender may have under any of the Loan Documents shall
operate as a waiver thereof or of any other right, power or remedy, nor
shall any single or partial exercise by any Lender of any such right, power
or remedy preclude any other or further exercise thereof or of any other
right, power or remedy. No waiver of any provision of any Loan Document
and no consent to any departure therefrom shall ever be effective unless it
is in writing and signed as provided below in this section, and then such
waiver or consent shall be effective only in the specific instances and for
the purposes for which given and to the extent specified in such writing.
No notice to or demand on any Related Person shall in any case of itself
entitle any Related Person to any other or further notice or demand in
similar or other circumstances. This written agreement and the other loan
documents represent the final agreement between the parties and may not be
contradicted by evidence of prior, contemporaneous, or subsequent oral
agreements of the parties, and no modification or amendment of or
supplement to this Agreement or the other Loan Documents shall be valid or
effective unless the same is in writing and signed by (i) if such party is
Borrower, by Borrower, (ii if such party is Administrative Agent, by such
party, and (ii if such party is a Lender, by such Lender or by
Administrative Agent on behalf of Lenders with the written consent of
Majority Lenders (which consent has already been given as to the
termination of the Loan Documents as provided in Section 9.7).
Notwithstanding the foregoing or anything to the contrary herein,
Administrative Agent shall not, without the prior consent of each
individual Lender, execute and deliver on behalf of such Lender any waiver
or amendment which would: (1) waive any of the conditions specified in
Article III (provided that Administrative Agent may in its discretion
withdraw any request it has made under Section 3.2(i)), (2) increase the
Percentage Share of such Lender or subject such Lender to any additional
obligations, (3) reduce any fees payable to such Lender hereunder, or the
principal of, or interest on, such Lender's Note, (4) postpone any date
fixed for any payment of any such fees, principal or interest, (5) amend
the definition herein of "Majority Lenders" or otherwise change the
aggregate amount of Percentage Shares which is required for Administrative
Agent, Collateral Agent, Lenders or any of them to take any particular
action under the Loan Documents, (6)
26
amend this Section 9.1, or (7) release Borrower from its obligation to pay
such Lender's Note or any Guarantor from its guaranty of such payment.
(b) Acknowledgments and Admissions. Each of Borrower and Parent
hereby represents, warrants, acknowledges and admits that (i) it has been
advised by counsel in the negotiation, execution and delivery of the Loan
Documents to which it is a party, (ii it has made an independent decision
to enter into this Agreement and the other Loan Documents to which it is a
party, without reliance on any representation, warranty, covenant or
undertaking by any Lender, whether written, oral or implicit, other than as
expressly set out in this Agreement or in another Loan Document delivered
on or after the date hereof, (ii there are no representations, warranties,
covenants, undertakings or agreements by any Creditor as to the Loan
Documents except as expressly set out in this Agreement or in another Loan
Document delivered on or after the date hereof, (iv no Creditor owes no
fiduciary duty to any Related Person with respect to any Loan Document or
the transactions contemplated thereby, (v) the relationship pursuant to
the Loan Documents between each Related Person, on one hand, and each
Creditor, on the other hand, is and shall be solely that of debtor and
creditor, respectively, (vi no partnership or joint venture exists with
respect to the Loan Documents between Borrower and any Creditor, (vi should
an Event of Default or Default occur or exist each Creditor will determine
in its sole discretion and for its own reasons what remedies and actions it
will or will not exercise or take at that time, (vi without limiting any of
the foregoing, no Related Person is relying upon any representation or
covenant by any Creditor, or any representative thereof, and no such
representation or covenant has been made, that any Creditor will, at the
time of an Event of Default or Default, or at any other time, waive,
negotiate, discuss, or take or refrain from taking any action permitted
under the Loan Documents with respect to any such Event of Default or
Default or any other provision of the Loan Documents, and (ix each Lender
has relied upon the truthfulness of the acknowledgments in this section in
deciding to execute and deliver this Agreement and to make its Loan.
THIS WRITTEN AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
Section 9.2. Survival of Agreements; Cumulative Nature. All of the
Related Persons' various representations, warranties, covenants and agreements
in the Loan Documents shall survive the execution and delivery of this Agreement
and the other Loan Documents and the performance hereof and thereof, including
the making or granting of the Loans and the delivery of the Notes and the other
Loan Documents, and shall further survive until all of the
27
Obligations owed to the Administrative Agent and the Lenders are paid in full
and all of Lenders' obligations to any Related Person are terminated. All
statements and agreements contained in any certificate or other instrument
delivered by any Related Person to any Creditor under any Loan Document shall be
deemed representations and warranties by the Related Persons or agreements and
covenants of the Related Persons under this Agreement. The representations,
warranties, and covenants made by the Related Persons in the Loan Documents, and
the rights, powers, and privileges granted to each Creditor in the Loan
Documents, are cumulative, and, except for expressly specified waivers and
consents and Section 9.6, no Loan Document shall be construed in the context of
another to diminish, nullify, or otherwise reduce the benefit to any Creditor of
any such representation, warranty, covenant, right, power or privilege. In
particular and without limitation, no exception set out in this Agreement to any
representation, warranty or covenant herein contained shall apply to any similar
representation, warranty or covenant contained in any other Loan Document, and
each such similar representation, warranty or covenant shall be subject only to
those exceptions which are expressly made applicable to it by the terms of the
various Loan Documents.
Section 9.3. Notices. All notices, requests, consents, demands and other
communications to any Related Person or to any Lender which are required or
permitted under any Loan Document shall be in writing, unless otherwise
specifically provided in such Loan Document (provided that Administrative Agent
may give telephonic notices to the other Lenders), and shall be deemed
sufficiently given or furnished if delivered by personal delivery, by telecopy,
by delivery service with proof of delivery, or by registered or certified United
States mail, postage prepaid, to any such Related Person at the address of
Parent specified on the signature pages hereto and to each Lender at its address
specified on the signature pages hereto (unless changed by similar notice in
writing given by the particular Person whose address is to be changed). Any
such notice or communication shall be deemed to have been given (a) in the case
of personal delivery or delivery service, as of the date of first attempted
delivery at the address and in the manner provided herein, (b) in the case of
telecopy, upon receipt, or (c) in the case of registered or certified United
States mail, three days after deposit in the mail; provided, however, that no
Borrowing Notice shall become effective until actually received by
Administrative Agent.
Section 9.4. Joint and Several Liability; Parties in Interest;
Assignments.
(a) All Obligations which are incurred by two or more Related Persons
shall be their joint and several obligations and liabilities. All grants,
covenants and agreements contained in the Loan Documents shall bind and
inure to the benefit of the parties thereto and their respective successors
and assigns; provided, however, that no Related Person may assign or
transfer any of its rights or delegate any of its duties or obligations
under any Loan Document without the prior consent of Majority Lenders.
28
(b) Lenders may sell a participation interest in and may assign in
whole or in part its rights under its Loan or under the Loan Documents to
any Person with the consent of the Administrative Agent which consent shall
not be unreasonably withheld.
(c) Administrative Agent shall maintain a register for the recordation
of the names and addresses of Lenders and the Percentage Shares of, and
principal amount of the Loans owing to, each Lender from time to time (in
this section called the "Register"). The entries in the Register shall be
conclusive, in the absence of manifest error, and Borrower and each Lender
may treat each Person whose name is recorded in the Register as a Lender
hereunder for all purposes. The Register shall be available for inspection
by Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
SECTION 9.5. GOVERNING LAW; SUBMISSION TO PROCESS. EXCEPT TO THE EXTENT
THAT THE LAW OF ANOTHER JURISDICTION IS EXPRESSLY ELECTED IN A LOAN DOCUMENT,
THE LOAN DOCUMENTS SHALL BE DEEMED CONTRACTS AND INSTRUMENTS MADE UNDER THE LAWS
OF THE STATE OF NEW YORK AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK AND THE LAWS OF THE UNITED
STATES OF AMERICA, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. EACH
RELATED PERSON HEREBY AGREES THAT ANY LEGAL ACTION OR PROCEEDING AGAINST ANY
RELATED PERSON WITH RESPECT TO THIS AGREEMENT, THE NOTES OR ANY OF THE LOAN
DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR (TO THE
EXTENT THEY HAVE SUBJECT MATTER JURISDICTION) OF THE UNITED STATES OF AMERICA
FOR THE SOUTHERN DISTRICT OF NEW YORK AS LENDERS MAY ELECT, AND, BY EXECUTION
AND DELIVERY HEREOF, EACH RELATED PERSON ACCEPTS AND CONSENTS FOR ITSELF AND IN
RESPECT TO ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, TO THE JURISDICTION OF
THE AFORESAID COURTS AND AGREES THAT SUCH JURISDICTION SHALL BE EXCLUSIVE,
UNLESS WAIVED BY LENDERS IN WRITING, WITH RESPECT TO ANY ACTION OR PROCEEDING
BROUGHT BY IT AGAINST ANY LENDER AND ANY QUESTIONS RELATING TO USURY. EACH
RELATED PERSON AGREES THAT SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS
LAW OF THE STATE OF NEW YORK SHALL APPLY TO THE LOAN DOCUMENTS AND WAIVES ANY
RIGHT TO STAY OR TO DISMISS ANY ACTION OR PROCEEDING BROUGHT BEFORE SAID COURTS
ON THE BASIS OF FORUM NON CONVENIENS. IN FURTHERANCE OF THE FOREGOING, EACH
RELATED PERSON HEREBY IRREVOCABLY DESIGNATES AND APPOINTS CT CORPORATION SYSTEM,
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, AS ITS ADMINISTRATIVE AGENT TO RECEIVE
SERVICE OF ALL PROCESS BROUGHT AGAINST IT WITH RESPECT TO ANY SUCH PROCEEDING IN
ANY SUCH COURT IN NEW YORK, SUCH SERVICE
29
BEING HEREBY ACKNOWLEDGED TO BE EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT.
COPIES OF ANY SUCH PROCESS SO SERVED SHALL ALSO, IF PERMITTED BY LAW, BE SENT BY
REGISTERED MAIL TO SUCH RELATED PERSON AT THE ADDRESS OF PARENT SET FORTH BELOW,
BUT THE FAILURE OF SUCH RELATED PERSON TO RECEIVE SUCH COPIES SHALL NOT AFFECT
IN ANY WAY THE SERVICE OF SUCH PROCESS AS AFORESAID. EACH RELATED PERSON SHALL
FURNISH TO THE ADMINISTRATIVE AGENT A CONSENT OF CT CORPORATION SYSTEM AGREEING
TO ACT HEREUNDER PRIOR TO THE EFFECTIVE DATE OF THIS AGREEMENT. NOTHING HEREIN
SHALL AFFECT THE RIGHT OF ANY LENDER TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF ANY LENDER TO BRING PROCEEDINGS
AGAINST ANY RELATED PERSON IN THE COURTS OF ANY OTHER JURISDICTION. IF FOR ANY
REASON CT CORPORATION SYSTEM SHALL RESIGN OR OTHERWISE CEASE TO ACT AS AGENT,
EACH RELATED PERSON HEREBY IRREVOCABLY AGREES TO (A) IMMEDIATELY DESIGNATE AND
APPOINT A NEW AGENT ACCEPTABLE TO LENDERS TO SERVE IN SUCH CAPACITY AND, IN SUCH
EVENT, SUCH NEW AGENT SHALL BE DEEMED TO BE SUBSTITUTED FOR CT CORPORATION
SYSTEM FOR ALL PURPOSES HEREOF AND (B) PROMPTLY DELIVER TO LENDERS THE WRITTEN
CONSENT (IN FORM AND SUBSTANCE SATISFACTORY TO LENDER) OF SUCH NEW AGENT
AGREEING TO SERVE IN SUCH CAPACITY.
Section 9.6. Limitation on Interest. Each Lender, the Related Persons
and the other parties to the Loan Documents intend to contract in strict
compliance with applicable usury law from time to time in effect. In
furtherance thereof such Persons stipulate and agree that none of the terms and
provisions contained in the Loan Documents shall ever be construed to provide
for interest in excess of the maximum amount of interest permitted to be charged
by applicable law from time to time in effect. Neither any Related Person nor
any present or future guarantors, endorsers, or other Persons hereafter becoming
liable for payment of any Obligation shall ever be liable for unearned interest
thereon or shall ever be required to pay interest thereon in excess of the
maximum amount that may be lawfully charged under applicable law from time to
time in effect, and the provisions of this section shall control over all other
provisions of the Loan Documents which may be in conflict or apparent conflict
herewith.
Section 9.7. Termination; Limited Survival. In their sole and absolute
discretion, Related Persons may at any time that no Obligations are owing elect
in a notice delivered to Administrative Agent to terminate this Agreement. Upon
receipt by Administrative Agent of such a notice, if no Obligations are then
owing this Agreement and all other Loan Documents shall thereupon be terminated
and the parties thereto released from all prospective obligations thereunder.
Notwithstanding the foregoing or anything herein to the contrary, any waivers or
admissions made by any Related Person in any Loan Documents, any Obligations
under
30
Sections 2.11 through 2.15, and any obligations which any Person may have
to indemnify or compensate any Lender shall survive any termination of this
Agreement or any other Loan Document. At the request and expense of Related
Persons, Administrative Agent shall prepare and execute all necessary
instruments to reflect and effect such termination of the Loan Documents.
Administrative Agent is hereby authorized to execute all such instruments on
behalf of all Lenders, without the joinder of or further action by any Lender.
Section 9.8. Severability. If any term or provision of any Loan Document
shall be determined to be illegal or unenforceable all other terms and
provisions of the Loan Documents shall nevertheless remain effective and shall
be enforced to the fullest extent permitted by applicable law.
Section 9.9. Counterparts. This Agreement may be separately executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to constitute one
and the same Agreement.
SECTION 9.10. WAIVER OF JURY TRIAL, PUNITIVE DAMAGES, ETC. TO THE EXTENT
PERMITTED BY LAW, LENDERS AND EACH RELATED PERSON HEREBY KNOWINGLY, VOLUNTARILY,
AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION BASED HEREON, OR DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER,
OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE
OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS
OF ANY LENDER OR ANY RELATED PERSON. THIS PROVISION IS A MATERIAL INDUCEMENT
FOR LENDERS ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS. EACH OF
RELATED PERSONS AND LENDERS HEREBY FURTHER (A) IRREVOCABLY WAIVES, TO THE
MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER
IN ANY SUCH LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL
DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; (B) CERTIFIES
THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR ADMINISTRATIVE AGENT OR COUNSEL
FOR ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT
SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVERS, AND (C) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT, THE OTHER LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND
THEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED
IN THIS SECTION.
Section 9.11. Renewal and Extension. This Agreement is an amendment and
restatement and not a novation of the Original Credit Agreement, as amended,
restated, or
31
supplemented to the date hereof. Neo and Parent hereby represent and warrant
that as of the date hereof all conditions under Section 3.1 of this Agreement
have been met. Neo and Parent hereby agree that (i) the Loans outstanding under
the Original Credit Agreement and all accrued and unpaid interest thereon, and
(ii) all accrued and unpaid fees under the Original Credit Agreement shall be
deemed to be outstanding under and governed by this Agreement. Neither this
Agreement nor any other Loan Document shall limit or impair the validity,
priority or enforceability of any of the indebtedness or liabilities of Parent,
Aviva America or Neo under the Original Credit Agreement, the Original Note or
any Liens securing such indebtedness or liabilities.
32
IN WITNESS WHEREOF, this Agreement is executed as of the date first written
above.
AVIVA PETROLEUM INC.
By: /s/ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
Address:
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
NEO ENERGY, INC.
By: /s/ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
Address:
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Percentage Share ING (U.S.) CAPITAL CORPORATION,
----------------
100% as Administrative Agent and a Lender
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President
Address:
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇