EXHIBIT 10.10
TERMINATION AND RELEASE AGREEMENT
TERMINATION AND RELEASE AGREEMENT, dated as of July 7, 2004 (this
"Agreement"), by and among Xxxxxx & Xxxxx Corporation, an Ohio corporation (the
"Borrower"), each subsidiary of the Borrower listed as a "Guarantor" on the
signature pages hereto (each a "Guarantor" and collectively, the "Guarantors"
and, together with the Borrower, each a "Loan Party" and collectively, the "Loan
Parties"), Ableco Finance LLC, a Delaware limited liability company ("Ableco"),
as collateral agent and administrative agent on behalf of the Lenders referred
to in the Credit Agreement defined below (in such capacity, the "Collateral
Agent" or the "Administrative Agent"), and Xxxxx Fargo Foothill, Inc., a
California corporation, formerly known as Foothill Capital Corporation
("Foothill"), as funding agent on behalf of the Lenders (in such capacity, the
"Funding Agent", and together with the Administrative Agent and the Collateral
Agent, each an "Agent" and collectively the "Agents").
W I T N E S S E T H:
WHEREAS, the Borrower, the Guarantors, the Agents and the Lenders
are parties to the Amended and Restated Credit Agreement, dated as of August 23,
2000 (as amended, restated, supplemented, modified or otherwise changed, the
"Credit Agreement"; capitalized terms not otherwise defined shall have the
meanings assigned to them in the Credit Agreement);
WHEREAS, the obligations of the Loan Parties to the Agents and the
Lenders in respect of the Credit Agreement and the other Loan Documents (the
"Obligations") are secured pursuant to the terms of the Credit Agreement and the
other Loan Documents;
WHEREAS, the Borrower has advised the Agents that it intends to (a)
prepay all the principal of all Loans outstanding under the Credit Agreement and
to pay all interest and fees payable under the Credit Agreement that will have
accrued and be unpaid on the date hereof (and any interest and fees shall accrue
at a per diem rate of $7,072.78, if payment is not received on the date hereof
as provided in Section 5 below), (b) pay all other monetary obligations of the
Borrower under the Credit Agreement and the other Loan Documents that have
accrued or otherwise arisen on or before the date hereof, including amounts
payable pursuant to any indemnity or expense reimbursement provisions, and
provide an expense deposit for monetary obligations arising in accordance with
Section 5 below, (c) cause each Letter of Credit (other than the Surviving
Letter of Credit (as defined below)) to be returned to Funding Agent for
cancellation and (d) cash collateralize the Surviving Letter of Credit as set
forth below.
NOW, THEREFORE, in consideration of the premises and agreements
herein and the payment of the Obligations, the parties hereby agree as follows:
1. Subject to (a) the satisfaction of the conditions precedent set
forth in Section 6 below (including the payment of all amounts referred to in
Section 5 below), (b) the agreement, acknowledgement and understanding that the
provisions of the Credit Agreement and the other Loan Documents that are
explicitly stated to survive the repayment of the Obligations shall remain in
full force and effect and (c) the agreement, acknowledgment and understanding
that the Borrower's reimbursement obligations with respect to the Surviving
Letter of Credit
and the Borrower's obligations under the Cash Collateral Agreement (as defined
below) shall remain in full force and effect, the Agents (on behalf of Lenders)
acknowledge and agree that all liability of the Borrower and the Guarantors in
respect of the Obligations under the Loan Documents shall be deemed to be and
shall be paid and discharged in full, provided that the foregoing shall not be
construed to relieve the Borrower or Guarantors from their obligations under any
indemnity or expense reimbursement provisions of any Loan Document in respect of
any amounts that may become payable thereunder after the date hereof (including,
without limitation, Section 11.15 of the Credit Agreement).
2. Without recourse and without any representation or warranty of
any kind, subject to satisfaction of the conditions precedent set forth in
Section 6 hereof, the Agents (on behalf of the Lenders) hereby terminate and
release any and all liens, security interests or other charges or encumbrances
in favor of the Agents or Lenders now existing or hereafter arising under the
Credit Agreement or the other Loan Documents (other than the liens on the Cash
Collateral (as defined below) under the Cash Collateral Agreement). The Borrower
acknowledges and agrees that any commitments of the Agents or the Lenders to
provide loans, letters of credit or other financial accommodations under the
Loan Documents are hereby terminated.
3. Subject to satisfaction of the conditions precedent set forth in
Section 6 hereof, the Agents (on behalf of the Lenders):
(a) hereby authorize the Loan Parties, their counsel or their
designee to file UCC termination statements in respect of the UCC financing
statements filed previously by the Agents against the Loan Parties in connection
with the Loan Documents and releases of mortgages in respect of Mortgages filed
by the Agents against the Loan Parties in connection with the Loan Documents, in
each case without representation, warranty, or recourse to the Agents or the
Lenders and at the sole cost and expense of the Loan Parties;
(b) hereby agree on the Payoff Date (as defined below) to send
to the Borrower (or its designee or their respective counsel) any certificates,
instruments or other possessory collateral (other than the Cash Collateral and
other than with respect to other cash which shall be governed in accordance with
the terms of Section 7 hereof) pledged to or held by the Agents as collateral
under the Loan Documents, without representation, warranty, or recourse to the
Agents or the Lenders and at the sole cost and expense of the Loan Parties;
(c) hereby agree promptly to provide termination notices or
agreements sufficient to terminate, in accordance with their terms, any
depository account, blocked account, lockbox account or similar agreements,
entered into pursuant to the Loan Documents (if such agreements are not
terminated automatically in accordance with their terms by reason of the receipt
of the Payoff Amount (as defined below)), without representation, warranty, or
recourse to the Agents or the Lenders and at the sole cost and expense of the
Loan Parties; and
(d) will, at the reasonable request of the Borrower, execute
such additional instruments and other writings, and take such other actions, to
effect or evidence the release of any liens, security interests or other charges
or encumbrances in favor of the Agents
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now or hereafter arising under the Credit Agreement or the other Loan Documents
(including, without limitation, (i) releases of Mortgages and (ii) releases of
filings made with respect to patents, trademarks, copyrights, or other
intellectual property rights of the Loan Parties (to the extent any such filings
were made), but, in each case, without representation, warranty, or recourse to
the Agents or the Lenders and at the sole cost and expense of the Loan Parties.
4. This Agreement shall be binding on and shall inure to the benefit
of the Agents and the Loan Parties and their respective successors and assigns.
5. (a) As of the date hereof, the outstanding principal amount of
the Loans and accrued and unpaid interest and all fees related thereto (other
than the amounts specified in Sections 5(b) and (c) below) is $28,664,841.88. If
payment of the Obligations is not made on July 7, 2004, on or before 12:00 noon
(New York City time), or such later time as may be agreed to by the Agents,
interest and fees shall accrue at the per diem rate of $7,072.78, provided that,
(i) the interest rate and the outstanding principal amount of the Loans do not
change after the date hereof and (ii) notwithstanding anything in the Credit
Agreement to the contrary, such interest and fee payment shall be made in full
in cash. If the assumptions set forth with respect to the calculation of the
principal, interest and fee components are not correct, the Administrative Agent
will notify the Borrower in writing before the Payoff Date (as defined below) of
the appropriate changes in the amounts of principal, interest and fees and such
adjusted amounts shall be required to be paid hereunder.
(b) The aggregate amount of the accrued and unpaid fees and
expenses of counsel and other experts and specialists to the Agents and the
Lenders, and the expense deposit related to unpaid fees and expenses (the
"Expense Deposit"), in each case in connection with the administration of this
matter, including, without limitation, the termination and the release of the
Collateral, is $150,000.00, which shall be paid in accordance with Section 7
below.
(c) There is currently outstanding for the account of the
Borrower a Letter of Credit (No. 5750965) (the "Surviving Letter of Credit")
issued by Xxxxx Fargo Bank, National Association pursuant to the Credit
Agreement, in the face amount of $1,200,000, with respect to which the Funding
Agent will accept cash collateral in the amount of $1,320,000 pursuant to a cash
collateral agreement (the "Cash Collateral Agreement") in favor of the Funding
Agent, in form and substance satisfactory to the Funding Agent (the "Cash
Collateral"), that may be drawn upon in the event of any payment by the Funding
Agent, or Xxxxx Fargo, on account of the Surviving Letter of Credit and on
account of fees and expenses payable to the Funding Agent with respect to the
Surviving Letter of Credit.
The sum of the amounts in clauses (a), (b) and (c) above is referred
to as the "Payoff Amount."
6. The effectiveness of this Agreement is subject to the condition
precedent that (i) the Agents and the Agents' counsel, as the case may be, shall
have received (a) full payment of the Payoff Amount set forth in Section 5
hereof by wire transfer of immediately available funds in the amounts and in
accordance with the wire transfer instructions set forth on Annex A hereto and
(b) counterparts of this Agreement and the Cash Collateral Agreement duly
executed by each Loan Party and received by the Administrative Agent (the date
on which the
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foregoing conditions shall first be satisfied herein called the "Payoff Date")
and (ii) Xxxxx Fargo Bank, National Association or its designee shall have
received for cancellation all outstanding original Letters of Credit (other than
the Surviving Letter of Credit) at the address set forth on Annex C hereto and
shall have received a letter, in form and substance satisfactory to Xxxxx Fargo
Bank, National Association, requesting cancellation of such Letters of Credit.
Such letter shall be on letterhead of the beneficiary of the Letter of Credit,
shall refer to the Letter of Credit number and the account for whom such Letter
of Credit was issued and shall include a request that such Letter of Credit be
cancelled. If the Payoff Date does not occur on or prior to 5:00 pm (New York
City time) on July 7, 2004, then this Agreement shall automatically terminate.
7. On and after the Payoff Date, the Funding Agent agrees to
forward, but not more than once on any Business Day, any cleared and immediately
available funds (other than Cash Collateral) (the "Remaining Funds") of the Loan
Parties received by it in the Funding Agent's account from any of the Borrower's
bank accounts (the "Bank Accounts") as a result of the cash management systems
established under the Credit Agreement and the other Loan Documents. Such
Remaining Funds will be forwarded to the Borrower in accordance with the wire
instructions set forth on Annex B hereto. In consideration of the foregoing and
the other terms of this Agreement, the Loan Parties hereby:
(a) agree that the Funding Agent's customary wire transfer
fees shall be setoff from any Remaining Funds that the Funding Agent forwards to
the Borrower pursuant to this Section 7, and
(b) confirm that they are obligated pursuant to, and on the
terms of, Section 11.15 of the Credit Agreement to indemnify, hold harmless and
reimburse the Funding Agent for any losses, liabilities, damages, claims
(including, but not limited to, claims by any bank at which a Bank Account is
maintained or any other third party), demands, obligations, actions, suits,
judgments, penalties, costs or expenses, including, but not limited to,
attorneys' fees, suffered or incurred by the Funding Agent in any way relating
to the Bank Accounts or any related agreement, instrument or document in
connection with the Bank Accounts or any transaction arising in connection
therewith, and to reimburse the Funding Agent for amounts it incurs as a result
of checks and other remittances that are returned unpaid for any reason, the
proceeds of which the Funding Agent credited to the Obligations or remitted to
the Borrower.
8. (a) The Loan Parties acknowledge and agree that (a) the
amounts referred to in Section 5 above are enforceable obligations of the Loan
Parties and, other than with respect to the Expense Deposit, are payable to
the Agents and the Lenders, as applicable, pursuant to the provisions of the
Credit Agreement and the other Loan Documents, without any deduction, offset,
defenses or counterclaim, (b) prior to the Payoff Date, nothing contained
herein shall constitute a waiver of any Default or Event of Default or any
Agent's or any Lender's rights and remedies under the Credit Agreement or any
other Loan Document and (c) as of the Payoff Date, the Credit Agreement and
the other Loan Documents are terminated, and the Agents, the Lenders, and their
respective participants, if any, have no further obligation, duty or
responsibility under the Credit Agreement and any other Loan Document or any
other document or agreement executed and/or delivered in connection therewith.
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(b) The Loan Parties hereby irrevocably, unconditionally and
generally release and discharge the Agents, the Lenders, their respective
participants, if any, and successors and assigns, and their respective officers,
directors, shareholders, affiliates, agents, attorneys and employees (the
"Released Parties"), from or in connection with any and all actions, accounts,
suits, debts, controversies, agreements, promises, damages, judgments,
executions, any liability, claims or demands and any acts or omissions of any
such Released Parties, known or unknown and of any nature whatsoever which the
Loan Parties or their successors and assigns ever had, now have or hereafter
can, shall or may have, against any or all of the Loan Parties to the date of
this Agreement arising directly or indirectly under, pursuant to, or out of, the
Loan Documents.
(c) As to each and every claim released hereunder, each Loan
Party hereby represents that it has received the advice of legal counsel with
regard to the releases contained herein, and having been so advised, each of
them specifically waives the benefit of the provisions of Section 1542 of the
Civil Code of California which provides as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH A CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING
THE RELEASE, WHICH IF KNOWN BY HIM, MUST HAVE MATERIALLY AFFECTED
HIS SETTLEMENT WITH THE DEBTOR."
(d) As to each and every claim released hereunder, each Loan
Party also waives the benefit of each other similar provision of applicable
federal or state law (including without limitation the laws of the state of New
York), if any, pertaining to general releases after having been advised by their
legal counsel with respect thereto.
9. This Agreement may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which shall be
deemed to be an original, but all of which taken together shall constitute one
and the same agreement. Delivery of an executed counterpart of this Agreement by
telefacsimile or electronic mail shall be equally effective as delivery of an
original executed counterpart of this Agreement.
10. This Agreement shall be governed by and construed in accordance
with the law of the State of New York. EACH LOAN PARTY AND EACH AGENT, FOR
ITSELF AND ON BEHALF OF THE LENDERS HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS
AGREEMENT, OR UNDER ANY INSTRUMENT, DOCUMENT OR OTHER AGREEMENT DELIVERED OR
WHICH IN THE FUTURE MAY BE DELIVERED IN CONNECTION HEREWITH, AND AGREES THAT ANY
SUCH ACTION, PROCEEDINGS OR COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT
BEFORE A JURY.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered by their duly authorized officers as of the date first
above written.
ADMINISTRATIVE AGENT AND
COLLATERAL AGENT:
ABLECO FINANCE LLC
By: /s/ Xxxxxx Xxxx
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Name: Xxxxxx Xxxx
Title: Vice President
FUNDING AGENT:
XXXXX FARGO FOOTHILL, INC.
By: /s/ Xxxx Xxxxxx
------------------------------------
Name: Xxxx Xxxxxx
Title: Senior Vice President
BORROWER:
XXXXXX & BLAKE CORPORATION
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Treasurer
GUARANTORS:
THE CANTON OIL & GAS COMPANY
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Treasurer
XXXX LAKE DRILLING, INC.
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Treasurer
Annex A
WIRE TRANSFER INSTRUCTIONS FOR FUNDING
Name of Bank: JPMorgan Chase Bank
0 Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
ABA No: 000000000
Account Name: Xxxxx Fargo Foothill, Inc.
Account No: 323-266193
Ref: Xxxxxx & Blake
Amount: $30,134,841.88
Annex B
Borrower's Wire Transfer Instructions
Name of Bank: KeyBank
0000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
ABA No: 000000000
Account Name: Xxxxxx & Xxxxx Corporation
Account No: 042-818-4440
Ref: Termination and Release of Ableco Loan
Annex C
Address:
Xxxxx Fargo Bank, N.A.
Trade Services Division, Northern California
Xxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Xxx Xxxxxxxxx
