LOAN AGREEMENT
Dated as of September 28, 1999
By and Among
ATLAS AMERICA, INC.,
RESOURCE ENERGY, INC.
and
VIKING RESOURCES CORPORATION
as the Borrowers,
PNC BANK, NATIONAL ASSOCIATION,
as the Issuing Bank,
PNC BANK, NATIONAL ASSOCIATION,
as Agent,
FIRST UNION NATIONAL BANK,
as Syndication Agent,
and
THE BANKS PARTY HERETO
LOAN AGREEMENT
TABLE OF CONTENTS
Page
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SECTION 1. DEFINITIONS........................................................1
1.1 Definitions; Construction..........................................1
SECTION 2. LOANS ............................................................12
2.1 Revolving Credit Loans............................................12
2.2 Borrowing Limits; Collateral Value................................15
(i) Annual Determination........................................15
(ii) Special Determinations......................................16
(iii) Scheduled Reductions of Individual Collateral Values........16
2.3 Discounted Future Net Income......................................16
2.4 Mandatory Prepayments.............................................18
2.5 Interest Rate Options, Interest Payments and
Certain Related Payments Pertaining to the Loans..................18
2.6 Capital Adequacy Requirements.....................................23
2.7 Time, Place and Manner of Payments................................24
2.8 Loan Account......................................................24
2.9 Letter of Credit Subfacility......................................24
SECTION 3. REPRESENTATIONS AND WARRANTIES....................................29
3.1 Existence and Authority...........................................29
3.2 Capitalization and Subsidiaries...................................30
3.3 Rights, Titles and Interests......................................30
3.4 Financial Statements and Projections..............................30
3.5 Litigation........................................................32
3.6 Validity; Binding Effect; Enforceability; No Conflicts............32
3.7 Permits ..........................................................33
3.8 Operation of Xxxxx and the Pipeline...............................33
3.9 Public Utility Holding Company....................................33
3.10 ERISA.............................................................33
3.11 Regulation U, T and X.............................................33
3.12 Compliance with Law...............................................33
3.13 Taxes.............................................................33
3.14 Relationship of Borrowers.........................................34
3.15 Status as Producers of Gas........................................34
3.16 Year 2000.........................................................34
3.17 Environmental Matters.............................................34
3.18 Investment Company Act............................................34
3.19 Disclosure........................................................34
3.20 Delivery of Acquisition Agreement.................................35
3.21 Updates to Schedules..............................................35
3.22 Solvency .........................................................35
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SECTION 4. SECURITY..........................................................35
4.1 Security Documents................................................35
4.2 Set-Off...........................................................36
4.3 Additional Security - Generally...................................36
4.4 Certain Additional Security.......................................37
4.5 Operating Accounts................................................37
4.6 Guaranties........................................................37
4.7 Subordination of Indebtedness and Liens...........................37
SECTION 5. AFFIRMATIVE COVENANTS.............................................37
5.1 First Lien Undertakings...........................................38
5.2 Protection of Rights, Titles and Interests........................38
5.3 Operation and Maintenance.........................................38
5.4 Permits ..........................................................38
5.5 Compliance with Law...............................................38
5.6 Corporate Reorganization..........................................38
5.7 Existence and Ownership...........................................39
5.8 Reports, Certifications and Other Information.....................39
5.9 Records and Access................................................40
5.10 Payment of Taxes and Mechanics' Claims............................40
5.11 Insurance.........................................................40
5.12 Duty to Plug......................................................41
5.13 Expenses, Fees and Disbursements..................................41
5.14 Assigned Payments.................................................41
5.15 Notification......................................................42
5.16 Current Ratio.....................................................42
5.17 Debt to EBITDA....................................................42
5.18 Fixed Charge Coverage Ratio.......................................42
5.19 Minimum Consolidated Tangible Net Worth...........................43
5.20 Additional Documents..............................................43
5.21 Environmental Matters.............................................43
SECTION 6. NEGATIVE COVENANTS................................................45
6.1 Alienation........................................................45
6.2 Encumbrances......................................................45
6.3 Guaranty .........................................................46
6.4 Debt..............................................................46
6.5 Loans; Investments................................................46
6.6 Business Activities...............................................47
6.7 Consolidation or Merger; Change of Control........................47
6.8 Acquisitions......................................................47
6.9 Redemption........................................................47
6.10 Distributions.....................................................47
6.11 Leases............................................................48
6.12 Capital Expenditures..............................................48
6.13 Negative Pledges..................................................48
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SECTION 7. BORROWING REQUIREMENTS............................................48
7.1 Conditions to Borrowing...........................................48
SECTION 8. DISBURSEMENT......................................................50
8.1 Procedure.........................................................50
8.2 Use of Proceeds...................................................51
8.3 Charging Account..................................................51
SECTION 9. DEFAULTS..........................................................51
SECTION 10. REMEDIES..........................................................54
SECTION 11. MISCELLANEOUS.....................................................54
11.1 Waiver and Modification...........................................54
11.2 Notices ..........................................................55
11.3 Certain Taxes.....................................................56
11.4 Right to Cure.....................................................56
11.5 Venue and Jurisdiction; Waiver of Jury Trial......................56
11.6 Applicable Law....................................................57
11.7 Severability......................................................57
11.8 Successors and Assigns............................................57
11.9 Nature and Survival of Representations............................58
11.10 Certain Matters Regarding the Prior Loan Agreement................58
11.11 Number and Gender.................................................58
11.12 Joint and Several Liability; Insolvency Laws......................58
11.13 Tax Withholding...................................................59
11.14 Headings .........................................................59
11.15 Confidentiality...................................................59
SECTION 12. AGREEMENT AMONG BANKS.............................................60
12.1 Appointment and Grant of Authority................................60
12.2 Reliance by Agent on Banks for Funding............................60
12.3 Non-Reliance on Agent.............................................61
12.4 Responsibility of Agent and Other Matters.........................61
12.5 Action on Instructions............................................62
12.6 Required Banks....................................................62
12.7 Action Upon Occurrence of an Event of Default.....................62
12.8 Indemnification...................................................62
12.9 Agent's Rights as a Bank..........................................62
12.10 Payment to Banks..................................................63
12.11 Pro Rata Sharing..................................................63
12.12 Successor Agent...................................................63
12.13 Amendments and Waivers............................................63
12.14 Agent's Fees......................................................64
12.15 Funding by Branch, Subsidiary or Affiliate........................64
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LIST OF EXHIBITS
EXHIBIT A - Form of Revolving Credit Note
EXHIBIT B - Form of Request for/Confirmation of Loan
EXHIBIT C - Guaranty Agreement
EXHIBIT D - Mortgages
EXHIBIT E-1 - Security Agreement (Partnerships, Accounts, Inventory)
EXHIBIT E-2 - Security Agreement (Note)
EXHIBIT F - Pledge Agreement
EXHIBIT G - Compliance Certificate
EXHIBIT H - Assignment and Assumption Agreement
LIST OF SCHEDULES
SCHEDULE 2.9. - Existing Letters of Credit
SCHEDULE 3.2. - Ownership/Subsidiaries
SCHEDULE 3.5. - Litigation
ANNEX I - Interest Rate Margins
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LOAN AGREEMENT
This Loan Agreement dated as of this 28th day of September, 1999 (as
more fully defined below, the "Agreement"), and made and entered into by and
among ATLAS AMERICA, INC., a Pennsylvania Corporation ("Atlas"), RESOURCE
ENERGY, INC., a Delaware corporation ("REI") and VIKING RESOURCES CORPORATION, a
Pennsylvania corporation ("Viking"; Atlas, REI and Viking, each, individually a
"Borrower" and collectively the "Borrowers"), the financial institutions listed
on the signature pages hereto, (together with each other financial institution
which hereafter becomes a party hereunder in accordance with Section 11.8 below
(collectively, the "Banks", and each individually, a "Bank"), PNC BANK, NATIONAL
ASSOCIATION as the issuer of the Letters of Credit (in such capacity, the
"Issuing Bank") and PNC BANK, NATIONAL ASSOCIATION, in its capacity as agent for
the Banks (in such capacity, the "Agent") and FIRST UNION NATIONAL BANK, in its
capacity as Syndication Agent.
WITNESSETH:
WHEREAS, the Borrowers desire to obtain a commitment from each of
the Banks pursuant to which Loans, in a maximum aggregate principal amount at
any one time outstanding not to exceed $45,000,000, will be made to the
Borrowers from time to time prior to the Termination Date (as defined below);
and
WHEREAS, the Borrowers also desire to provide for the issuance, for
the account of the Borrowers, of Letters of Credit with an aggregate stated
amount not to exceed a sublimit of $14,000,000; and
WHEREAS, the Banks are willing, on the terms and subject to the
conditions hereinafter set forth, to extend such commitment and make such Loans
to the Borrowers.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and with the intent to be legally bound hereby, the parties hereto
hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Definitions; Construction.
(a) Certain Definitions. For purposes of this Agreement, the
following terms shall have the following meanings:
"Accounts" shall have the meaning ascribed to it in Section
8.1.
"Acquisition" shall mean the acquisition by Viking (then known
prior to a name change as "Viking America, Inc.") of all of the issued and
outstanding stock of Viking Resources Corporation, an Ohio corporation, and the
merger of such corporation with and into Viking, and all actions and
transactions contemplated to occur in connection therewith or as a condition
thereto, including without limitation, the acquisition by Viking Resources
Corporation of the stock of certain corporations and of certain oil and gas well
interests, all as more specifically set forth in the Acquisition Agreement.
"Acquisition Agreement" shall mean the Agreement and Plan of
Merger, including all exhibits and schedules thereto, dated as of August 20,
1999 among Resource America, Inc., Viking (then known prior to a name change as
"Viking America, Inc."), the former Viking Resources Corporation and the
shareholders of the former Viking Resources Corporation.
"Adjusted Base Rate" means the interest rate relating to the
Base Rate Option as described in item (i) of Subsection 2.5(b).
"Adjusted Euro-Rate" means the interest rate relating to the
Euro-Rate Option as described in item (ii) of Subsection 2.5(b).
"Agent" shall mean PNC Bank, National Association, and its
successors and assigns.
"Aggregate Collateral Value" shall have the meaning ascribed
to it in Section 2.2(c).
"Agreement" means this Loan Agreement dated as of September
_____, 1999, by and among Atlas, REI and Viking, as borrowers, the banks a party
hereto, from time to time, PNC Bank, National Association, as agent for the
Banks, and First Union National Bank, as syndication agent, together with all
extensions, renewals, amendments, substitutions and replacements hereof.
"Aggregate Outstandings" shall have the meaning ascribed to it
in Section 2.2(a).
"Applicable Base Rate Margin" shall mean that rate per annum
shown in the appropriate place on Annex I, attached hereto and made a part
hereof.
"Applicable Euro-Rate Margin" shall mean that rate per annum
shown in the appropriate place on Annex I, attached hereto and made a part
hereof.
"Atlas" shall mean Atlas America, Inc., a Pennsylvania
corporation.
"Authority" shall have the meaning ascribed to it in Section
5.20.
"Bank" shall have the meaning ascribed to it in the preamble
to this Agreement, and shall be deemed to include within its meaning the Issuing
Bank for the purposes of obtaining the benefit of any security, indemnification
or reimbursement provision contained herein or in any other Loan Document in
favor of the Banks.
"Base Rate" means a rate per annum equal to the higher of (i)
the Prime Rate and (ii) the sum of (x) the Federal Funds Rate plus (y) fifty
(50) basis points (1/2 of 1%). The Base Rate shall be adjusted automatically
from time to time upon each change in the Prime Rate or the Federal Funds Rate,
as applicable.
"Base Rate Option" means the interest rate option described in
item (i) of Subsection 2.5(b).
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"Base Rate Portion" means a Loan or a portion thereof which
bears, or is to bear, interest at the Adjusted Base Rate.
"Borrower" and "Borrowers" shall have the meaning ascribed to
it in the preamble of this Agreement.
"Borrower's Proceeds" shall mean, with respect to any
Borrower, (i) such Borrower's or any of such Borrower's Restricted Subsidiary's
share (at least equal to the share on which the Discounted Future Net Income is
determined) of the total gross proceeds generated in connection with the Xxxxx
and the Pipeline payable to such Borrower or such Restricted Subsidiary
including but not limited to such Borrower's or Restricted Subsidiary's share of
such proceeds derived from, in connection with and/or relating to the
production, sale, transportation and/or compression of gas and oil produced from
the Xxxxx and transported through the Pipeline and such Borrower's or Restricted
Subsidiary's share (at least equal to the share on which the Discounted Future
Net Income is determined) of reimbursements of all severance taxes relating
thereto, less (ii) the share (no greater than the share on which the Discounted
Future Net Income is determined) of the costs and expenses (including severance,
real estate and windfall profits taxes but not income or other taxes) paid by
such Borrower or such Restricted Subsidiary to others for the operation of the
Xxxxx and the Pipeline and the removal and sale of gas and oil produced from the
Xxxxx and the share (no greater than the share on which the Discounted Future
Net Income is determined) of royalties and overriding royalties paid by such
Borrower or such Restricted Subsidiary to others for the production of gas and
oil from the Xxxxx, provided, however, that such costs and expenses (including
royalties and overriding royalties) shall not exceed those customarily paid by
prudent gas and oil operators, and prudent operators of pipelines, of
established reputations in the areas in which the Xxxxx and the Pipeline are
located.
"Business Day" means a day on which the Agent's principal
office is open for the conduct of normal commercial banking business.
"Change in Control" shall have the meaning ascribed to it in
Subsection 6.7(b).
"Closing Fee" shall have the meaning ascribed to it in
Subsection 2.1(e).
"Combined" shall mean the combination in accordance with GAAP
of the items as to which such term applies with respect to Atlas, REI, Viking
and their respective Subsidiaries.
"Commitment Fee" shall have the meaning ascribed to it in
Subsection 2.1(d).
"Commitment Fee Rate" shall have the meaning ascribed to it in
Subsection 2.1(d).
"Commitment Percentage" shall have the meaning ascribed to it
in Subsection 2.1(a).
"Deficiency Amount" shall have the meaning ascribed to it in
Section 2.5.
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"Designated Borrower" shall have the meaning ascribed to it in
Subsection 2.2(b).
"Discounted Future Net Income" shall have the meaning ascribed
to it in Section 2.3.
"Dollar(s)" or "$" means the legal tender of the United States
of America.
"Draw" shall mean a payment of funds by the Issuing Bank or
the Banks pursuant to a request by the beneficiary of any Letter of Credit for
funds in accordance with the terms of such Letter of Credit.
"Drawing Date" shall have the meaning ascribed to it in
Subsection 2.9(b).
"EBITDA" shall have the meaning ascribed to it in Section
5.17.
"Engineering Report(s)" shall have the meaning ascribed to it
in Section 2.3.
"ERISA" shall have the meaning ascribed to it in Section 3.10.
"Euro-Rate" means, with respect to Portions of the Loans to
which the Euro-Rate Option applies for any Euro-Rate Interest Period, the
interest rate per annum determined by the Agent by dividing (the resulting
quotient rounded upwards, if necessary, to the nearest 1/100th of 1% per annum)
(i) the rate of interest determined by the Agent in accordance with its usual
procedures (which determination shall be conclusive, absent manifest error) to
be the average of the London interbank offered rates for U.S. Dollars quoted by
the British Bankers' Association as set forth on Dow Xxxxx Markets Service
(formerly known as Telerate) display page 3750 (or appropriate successor or, if
British Bankers' Association or its successor ceases to provide such quotes, a
comparable replacement determined by the Agent), two (2) Business Days prior to
the first day of such Euro-Rate Interest Period for an amount comparable to such
Loan and having a borrowing date and a maturity comparable to such Euro-Rate
Interest Period by (ii) a number equal to 1.00 minus the Euro-Rate Reserve
Percentage. The Euro-Rate may also be expressed by the following formula:
Average of London interbank offered rates on
Dow Xxxxx Markets Service display page 3750
Euro-Rate = as quoted by BBA or appropriate successor
---------------------------------------------
1.00 - Euro-Rate Reserve Percentage
The Euro-Rate shall be adjusted automatically with respect to any Euro-Rate
Portion outstanding on the effective date of any change in the Euro-Rate Reserve
Percentage, as of such effective date.
"Euro-Rate Interest Period(s)" means any individual period of
one (1), two (2), three (3) or six (6) months selected by the Borrowers
commencing on the borrowing, conversion date or renewal date of a Euro-Rate
Portion to which such period shall apply.
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"Euro-Rate Option" means the interest rate option described in
item (ii) of Subsection 2.5(b).
"Euro-Rate Portion(s)" means a Loan or portion thereof which
bears, or is to bear, interest at the Adjusted Euro-Rate.
"Euro-Rate Reserve Percentage" means the maximum effective
percentage (expressed as a decimal, rounded upward to the nearest 1/100 of 1%),
as determined in good faith by the Agent (which determination shall be
conclusive), which is in effect on such day as prescribed by the Board of
Governors of the Federal Reserve System (or any successor) for determining the
reserve requirements (including, without limitation, supplemental, marginal and
emergency reserve requirements) with respect to eurocurrency funding (currently
referred to as "Eurocurrency liabilities").
"Existing Letters of Credit" shall mean those Letters of
Credit issued under the Prior Loan Agreement and outstanding on the date hereof
as shown on Schedule 2.9 attached hereto and made a part hereof.
"Federal Funds Rate" shall mean, for any day, (i) the interest
rate (rounded upward, if necessary, to the nearest 1/100 of 1%) determined by
the Agent (such determination shall be conclusive absent manifest error) to be
equal to the weighted average of rates on federal funds transactions among
members of the Federal Reserve System arranged by Federal funds brokers at or
about 9:00 am (Pittsburgh, Pennsylvania time) on such day; provided, however,
that if such day is not a Business Day, the Federal Funds Rate for such day
shall be such rate for such transactions on the immediately preceding Business
Day or (ii) if no such rate shall be quoted by Federal funds brokers at such
time, such other rate as determined by the Agent in accordance with its usual
procedures (such determination shall be conclusive absent manifest error).
"Fee" shall mean any fee payable by the Borrowers to the
Agent, the Banks or the Issuing Bank hereunder, or under any of the other Loan
Documents, including without limitation the Closing Fee, the Commitment Fee, and
the Letter of Credit Fee.
"Financing Statements" shall mean any Uniform Commercial Code
financing statements executed and delivered in connection with any Security
Document.
"Future Net Income" shall have the meaning ascribed to it in
Section 2.3.
"GAAP" shall mean generally accepted accounting principles in
the United States of America in effect from time to time.
"Gas and oil" or "oil and gas" shall mean gas, oil, casinghead
gas, drip gasoline, natural gasoline and all other liquid and gaseous
hydrocarbons.
"Governmental Person" means the government of the United
States or the government of any state or locality therein, any political
subdivision or any governmental, quasi- governmental, judicial, public or
statutory instrumentality, authority, body or entity, or other regulatory
bureau, authority, body or entity of the United States or any state or locality
therein, including the Federal Deposit Insurance Company, the Comptroller of the
Currency or the Board of Governors of the Federal Reserve System, any central
bank or any comparable authority.
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"Governmental Rule" means any law, statute, rule, regulation,
ordinance, order, judgment, guideline or decision of any Governmental Person.
"Guarantor" shall mean each Restricted Subsidiary of a
Borrower in existence on the date hereof and each person which becomes a
Restricted Subsidiary of a Borrower on and after the date hereof.
"Guaranty Agreement" shall mean any Guaranty Agreement in the
form of Exhibit "C" hereto, together with all extensions, renewals, amendments,
supplements, substitutions and replacements thereof and thereto.
"Hazardous Substances" shall have the meaning ascribed to it
in Section 3.17.
"Indebtedness" shall mean, collectively, (i) all unpaid
principal of, and accrued and unpaid interest on, the Loans, (ii) all accrued
and unpaid Fees, (iii) any other amounts due hereunder or under any of the other
Loan Documents, including any and all reimbursements, indemnities, Fees, costs,
expenses, prepayment premiums, break-funding costs and other obligations of the
Borrowers to the Agent, the Banks, or the Issuing Bank, or any indemnified party
hereunder and thereunder, and (iv) all reasonable out-of-pocket costs and
expenses incurred by the Agent and the Banks, to the extent permitted herein, in
connection with this Agreement and the other Loan Documents, including but not
limited to the reasonable fees and expenses of the Agent's counsel, which the
Borrowers are responsible to pay pursuant to the terms of this Agreement and the
other Loan Documents.
"Individual Collateral Value" shall have the meaning ascribed
to it in Subsection 2.2(c).
"Individual Collateral Value Reduction Amount" shall have the
meaning ascribed to it in Subsection 2.2(d)(iii).
"Individual Outstandings" shall have the meaning ascribed to
it in Subsection 2.2(a).
"Issuing Bank" shall mean PNC Bank, National Association, in
its capacity as the issuer of Letters of Credit hereunder.
"Letter(s) of Credit" means any standby letter(s) of credit as
to which the account party, the Issuing Bank and the beneficiary contemplate
that the beneficiary will receive a direct payment from the account party and
that the beneficiary shall draw upon the Letter of Credit only if the account
party fails to honor its obligation to the beneficiary, including, but not
limited to, standby letters of credit issued by the Issuing Bank in accordance
with Section 2.9 hereof and the Existing Letters of Credit.
"Letter of Credit Borrowing" shall mean an extension of credit
resulting from a drawing under any Letter of Credit which shall not have been
reimbursed on the date when made and shall not have been converted into a Loan
under Section 2.9.
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"Letter of Credit Fee" shall mean that fee described in
Subsection 2.9(i) hereof.
"Lien" shall mean any encumbrance, mortgage, lien, charge,
pledge, security interest, priority payment, conditional sales agreement right,
or other title retention agreement right including but not limited to any right
under a capitalized lease, in, upon or against any asset of the affected Person.
"Limits" shall mean the individual and aggregate limitations
on Loans and Letters of Credit hereunder set forth in Section 2.2.
"Loan" and "Loans" shall have the meanings ascribed to each in
Subsection 2.1(a).
"Loan Account" shall have the meaning ascribed to it in
Section 2.8.
"Loan Documents" shall mean any of this Agreement, the Notes,
each application for Letter of Credit, the Guaranty Agreements, the Security
Documents and all other agreements, documents and instruments executed and
delivered from time to time to govern, evidence or secure the Indebtedness or
any of the foregoing documents and instruments, and the statements, reports,
certificates and other documents required by, or related to, any of the
foregoing, together with all extensions, renewals, amendments, substitutions and
replacements to and of any of the foregoing.
"Loan Party" shall mean each Borrower and each Guarantor.
"Mortgage" shall mean the open-end mortgage and security
agreement in the form of Exhibit "D" hereto, together with all extensions,
renewals, amendments, supplements, substitutions and replacements thereto and
thereof.
"Note" and "Notes" shall have the meanings ascribed to each in
Subsection 2.1(a).
"Option(s)" means any one or more of the Base Rate Option or
the Euro-Rate Option.
"Original Borrowers" shall mean Atlas America, Inc., Atlas
Energy Corporation, Atlas Resources, Inc., Transatco Corporation, Atlas Gas
Marketing, Inc., Pennsylvania Industrial Energy, Inc., AIC, Inc., Atlas Energy
Group, Inc., Mercer Gas Gathering, Inc., AED Investments, Inc. and ARD
Investments, Inc.
"Participation Advance" shall mean, with respect to any Bank,
such Bank's payment in respect of its participation in a Letter of Credit
Borrowing according to its Ratable Share pursuant to Section 2.9.
"Partnership" and "Partnerships" shall have the meaning
ascribed to each in Section 2.3.
"Partnership Xxxxx" shall have the meaning ascribed to it in
Section 3.7.
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"PBGC" shall have the meaning ascribed to it in Section 3.10.
"Permitted Liens" shall mean with respect to any asset:
(a) Liens securing the Indebtedness in favor of Banks;
(b) Minor defects in title which do not secure the payment of
money and otherwise have no material adverse effect on the value or operation of
oil and gas properties, and for the purposes of this Agreement, a minor defect
in title shall include (i) those instances where record title to an oil and gas
lease is in a predecessor in title to any Borrower or any of its Subsidiaries,
but where any Borrower or any of its Subsidiaries, by reason of a farmout or
other instrument is presently entitled to receive an assignment of its interests
or other evidence of title and the appropriate Person is proceeding diligently
to obtain the assignment, and (ii) easements, rights-of-way, servitudes,
permits, surface leases and other similar rights in respect of surface
operations, and easements for pipelines, streets, alleys, highways, telephone
liens, power lines, railways, and other easements and rights-of-way, on, over or
in respect of any of the properties of Borrower (or its Subsidiaries, as
applicable) that are customarily granted in the oil and gas industry; so long
as, with respect to any of the minor defects in title, the same are minor
defects which are customary and usual in the oil and gas industry and which are
customarily accepted by a reasonably prudent operator dealing with its
properties;
(c) Inchoate statutory or operators' liens which are not
delinquent securing obligations for labor, services, materials, and supplies
furnished to oil and gas properties;
(d) Production sales, contracts, gas balancing agreements, and
joint operating agreements entered into in the ordinary course of business and
which do not involve any advance payments for production to be produced at a
later date;
(e) All rights to consent by, required notices to, filings
with, or other actions by, Governmental Persons in connection with the sale or
conveyance of oil and gas leases or interests therein if any Borrower (or its
Subsidiaries, if applicable) is entitled to such consent, the same are
customarily obtained subsequent to the sale or conveyance, and the appropriate
Person is proceeding diligently to obtain the consent, notice or filing; and
(f) Now existing oil and gas lease burdens payable to third
parties which are deducted in the calculation of discounted present value in the
Engineering Reports including, without limitation, any royalty, overriding
royalty, net profits interest, production payment, carried interest, or
reversionary working interest customarily and usually found in the oil and gas
industry.
"Permitted Merger" shall have the meaning ascribed to it in
Section 6.7.
"Person" shall mean any individual, partnership, corporation,
trust, joint venture, unincorporated organization, association, limited
liability company, entity or Governmental Person.
"Pipeline" shall have the meaning ascribed to it in Section
2.3.
-8-
"Plan" shall have the meaning ascribed to it in Section 3.10.
"Pledge Agreement" shall mean any Pledge Agreement in the form
of Exhibit "F" hereto, together with all extensions, renewals, amendments,
supplements, substitutions, and replacements thereof and thereto.
"Portion(s)" means any Base Rate Portion or Euro-Rate Portion,
as the case may be or both taken collectively.
"Prime Rate" means the interest rate per annum announced from
time to time by the Agent as its prime rate, which rate may not be the lowest
rate of interest then being charged by the Agent.
"Prior Loan Agreement" shall mean that certain Ninth Amended
and Restated Loan Agreement dated as of September 28, 1998, as amended, by and
among Agent, PNC Bank, National Association (as the sole Bank) and the Original
Borrowers.
"Prior Notes" shall have the meaning ascribed to it in
Subsection 2.1(f).
"Pro Forma Balance Sheets" shall have the meaning ascribed to
it in Subsection 3.4(b).
"Projections" shall have the meaning ascribed to it in
Subsection 3.4(b).
"Property" shall mean collectively, the real and personal
property (tangible and intangible) in which any Borrower or Restricted
Subsidiary has granted to or will in the future grant to or for the benefit of
the Agent (for the benefit of the Banks) a security interest and lien to secure
the payment of the Indebtedness, and shall further include the real and personal
property (tangible or intangible) of any Partnership, including the Partnership
Xxxxx.
"Quarterly Reports" shall have the meaning ascribed to it in
Section 5.8.
"Ratable Share" shall have the meaning ascribed to it in
Subsection 2.1(a).
"REI" shall mean Resource Energy, Inc., a Delaware
corporation.
"Reimbursement Obligation" shall have the meaning ascribed to
it in Subsection 2.9(b).
"Required Banks" shall have the meaning ascribed to it in
Section 12.6.
"Restricted Subsidiary" shall mean (i) each Subsidiary of a
Borrower designated on Schedule 3.2 as a Restricted Subsidiary and (ii) each
other Subsidiary of a Borrower designated as a Restricted Subsidiary by such
Borrower.
"Revolving Credit" shall have the meaning ascribed to it in
Subsection 2.1(a).
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"Revolving Credit Period" shall have the meaning ascribed to
it in Subsection 2.1(a).
"Security Agreement" shall mean any Security Agreement in the
form of either Exhibit "E-1" or "E-2" hereto, together with all extensions,
renewals, amendments, supplements, substitutions and replacements thereof and
thereto.
"Security Documents" shall mean any or all of the Mortgages,
the Security Agreements, the Pledge Agreements, the Financing Statements and all
additional documents and instruments entered into from time to time for the
purpose of securing the Indebtedness and any and all ancillary documents and
instruments related to any of the foregoing.
"Solvent" shall mean, with respect to any Person on a
particular date, that on such date (i) the fair value of the property of such
Person is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person, (ii) the present fair
salable value of the assets of such Person is not less than the amount that will
be required to pay the probable liability of such Person on its debts as they
become absolute and matured, (iii) such Person is able to realize upon its
assets and pay its debts and other liabilities, contingent obligations and other
commitments as they mature in the normal course of business, (iv) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and liabilities
mature, and (v) such Person is not engaged in business or a transactions, and is
not about to engage in business or a transaction, for which such Person's
property would constitute unreasonably small capital after giving due
consideration to the prevailing practice in the industry in which such Person is
engaged. In computing the amount of contingent liabilities at any time, it is
intended that such liabilities will be computed at the amount which, in light of
all the facts and circumstances existing at such time, represents the amount
that can reasonably be expected to become an actual or matured liability.
"Stated Amount" shall mean the amount available to the
beneficiaries of the Letters of Credit for one or more drawings thereunder as
such amount is reduced and reinstated from time to time in accordance with the
provisions of the Letters of Credit.
"Subsidiary" shall mean either any corporation or limited
liability company more than 25% of the outstanding voting securities of which
shall at the time be owned or controlled, directly or indirectly, by a Borrower
or one or more Subsidiaries of a Borrower, or by a Borrower and one or more
Subsidiaries.
"Tangible Net Worth" shall mean with respect to any Borrower,
at a particular date, (i) the aggregate amount of all assets of such Borrower as
may be properly classified as such in accordance with GAAP consistently applied
excluding such other assets as are properly classified as intangible assets
under GAAP, less (ii) the aggregate amount of all liabilities of such Borrower.
"Termination Date" shall mean November 30, 2002, or, if such
day is not a Business Day, the Business Day next preceding such date.
"Total Indebtedness" shall have the meaning ascribed to it in
Section 5.17.
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"UCC" shall mean the Uniform Commercial Code as adopted and in
effect from time to time in the Commonwealth of Pennsylvania, except when the
provisions of the UCC as adopted in another jurisdiction are applicable due to
the location of any collateral in such other jurisdiction.
"Unrestricted Subsidiary" shall mean each Subsidiary of a
Borrower which is not a Restricted Subsidiary.
"Utilization Rate" means, at the time of determination by
Agent, the quotient (expressed as a percentage) determined by dividing (i) the
then current Aggregate Outstandings by (ii) the then current Aggregate
Collateral Value.
"Viking" shall mean Viking Resources Corporation, a
Pennsylvania corporation, formerly known prior to a name change as "Viking
America, Inc."
"Xxxxx" shall have the meaning ascribed to it in Section 2.3.
(b) Construction. (i) Unless the context of this Agreement
otherwise clearly requires, references to the plural include the singular, the
singular the plural and the part the whole, "or" has the inclusive meaning
represented by the phrase "and/or," and "including" has the meaning represented
by the phrase "including without limitation." References in this Agreement to
"determination" of or by the Agent or the Banks shall be deemed to include
reasonable good faith estimates by the Agent or the Banks (in the case of
quantitative determinations) and reasonable and good faith beliefs by the Agent
or the Banks (in the case of qualitative determinations). Whenever the Agent or
the Banks are granted the right herein to act in its or their sole discretion or
to grant or withhold consent such right shall be exercised reasonably and in
good faith. The words "hereof," "herein," "hereunder" and similar terms in this
Agreement refer to this Agreement as a whole and not to any particular provision
of this Agreement. The article, section and other headings contained in this
Agreement are for reference purposes only and shall not control or affect the
construction of this Agreement or the interpretation thereof in any respect.
Article, Section, schedule and exhibit references are to this Agreement unless
otherwise specified. Except as otherwise specified in this Agreement, all
references in this Agreement (i) to any Person, other than a Borrower, shall be
deemed to include such Person's successors and assigns, and (ii) to any
Governmental Rule, agreement or contract specifically defined or referred to in
Agreement shall be deemed references to such Governmental Rule, agreement or
contract as the same may be amended, supplemented, modified, extended, waived,
consolidated, replaced or renewed from time to time, but only to the extent
permitted by, and effected in accordance with, the terms thereof.
(ii) For purposes of this Agreement, all terms used in Article
9 of the UCC and not specifically defined in this Agreement shall herein have
the meanings assigned to such terms in the UCC as from time to time in effect in
the Commonwealth of Pennsylvania.
(iii) References to "writing" include printing, typing,
lithography and other means of reproducing words in a tangible visible form.
References to "written" include "printed," "typed," "lithographed" and other
adjectives relating to words reproduced in a tangible visible form consistent
with the preceding sentence and also include electronic images and images stored
on computer disks, magnetic tape and like media.
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(c) Accounting Principles. Except as otherwise provided in this
Agreement, all computations and determinations as to accounting or financial
matters and all financial statements to be delivered pursuant to this Agreement
shall be made and prepared in accordance with GAAP (including principles of
consolidation where appropriate), and all accounting or financial terms shall
have the meanings ascribed to such terms by GAAP.
SECTION 2 LOANS.
2.1 Revolving Credit Loans.
(a) Credit. Subject to the terms and conditions hereof
(including but not limited to the conditions contained in Section 8.1 hereof),
and relying on the representations and warranties herein contained, the Banks
agree to, and shall be obligated to, lend to Borrowers, from time to time and
upon request of Borrowers as provided in Section 8.1, during the period (the
"Revolving Credit Period") commencing on the date hereof and ending on the
Termination Date, an amount or amounts (the "Revolving Credit") not exceeding in
the aggregate at any one time outstanding Forty-Five Million Dollars
($45,000,000), subject to the limits set forth in Section 2.2 below.
Each Bank agrees, for itself only, and subject to the terms
and conditions of this Agreement, to make loans under the Revolving Credit to
the Borrowers from time to time not to exceed an aggregate principal amount at
any one time outstanding equal to the amount of its Commitment Percentage of the
Revolving Credit, subject to the Limits set forth in Section 2.2 below. For the
purposes of this Agreement, the term "Commitment Percentage(s)" shall mean, with
respect to each Bank, its percentage commitment of the Revolving Credit which
shall be the percentage initially set forth opposite its name on the signature
page hereto signed by such Bank, and thereafter as shown on the most recent
Assignment and Assumption Agreement. The term "Ratable Share" shall mean the
proportion that a Bank's Commitment Percentage of the Revolving Credit bears to
the total Revolving Credit.
The joint and several obligations of the Borrowers to repay
the aggregate unpaid principal amount of the advances to the Borrowers under the
Revolving Credit (each such advance under the Revolving Credit, a "Loan" and
collectively the "Loans") by each Bank, together with interest thereon, shall be
evidenced by one or more Revolving Credit Notes executed in favor of each Bank
in the maximum amount of that Bank's Commitment Percentage of the Revolving
Credit and substantially in the form of Exhibit "A" attached hereto and made a
part hereof with appropriate insertions (each, a "Note" and collectively, the
"Notes"). Notwithstanding the aggregate principal amount of the Notes as stated
on the faces thereof in the amount of Forty-Five Million ($45,000,000) Dollars,
the actual principal amount due from the Borrowers to each Bank on account of
such Bank's Note, as of any date of computation, shall be the sum of all
advances then and theretofore made on account thereof by such Bank less all
payments of principal actually received by such Bank in collected funds during
the same period all as shown on such Bank's Loan Account established pursuant to
Section 2.8 hereof.
Subject to the Limits sets forth in Section 2.2 below, during
the Revolving Credit Period, the Borrowers may borrow, repay and reborrow funds
under the Revolving Credit, provided, however, that at no time shall the
aggregate unpaid principal balance outstanding under the Notes exceed Forty-Five
Million ($45,000,000) Dollars less the sum of (x) the aggregate Stated Amounts
of outstanding Letters of Credit and (y) the aggregate amount of unreimbursed
Draws under the Letters of Credit. The amount of any borrowing and reborrowing
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under the Revolving Credit at the Base Rate Option shall be in the minimum
aggregate principal amount of One Hundred Thousand ($100,000) Dollars or an
integral multiple thereof. The amount of any borrowing or reborrowing under the
Revolving Credit of the Euro-Rate Option shall be subject to the limitations set
forth in Subsection 2.5(c) below. The Borrowers may from time to time repay the
Loans outstanding upon compliance with the terms of this Subsection 2.1(a) and
Subsection 2.5(f) hereof. The Borrowers shall not be permitted to repay any
Euro-Rate Portion of the Loans other than at the end of the relevant Euro-Rate
Interest Period, unless such payment is accompanied by the prepayment premium
provided for in Subsection 2.5(f). Except as set forth in the preceding sentence
and so long as each repayment is in a minimum amount of One Hundred Thousand
($100,000) Dollars or the outstanding principal balances of, and unpaid and
accrued interest on, the Notes, whichever is less, the Borrowers, upon proper
notice as provided in Subsection 2.5(f), may repay, without premium or penalty,
(i) any Base Rate Portion of the Loans at any time, and (ii) any Euro-Rate
Portion of the Loans at the end of the Euro-Rate Interest Period therefor.
(b) Interest. The principal balance outstanding under each Note
shall bear interest, on the actual unpaid principal amount thereof from time to
time outstanding, from the date thereof until payment in full, at the rates of
interest set forth in Section 2.5. The Borrower shall pay accrued interest on
the unpaid principal balance of each Note in arrears (i) with respect to each
Base Rate Portion, at the Adjusted Base Rate (A) on the last Business Day of
each March, June, September and December during the Revolving Credit Period
commencing September 30, 1999, (B) at maturity, whether by acceleration or
otherwise, of such Note, and (C) after maturity, on demand until paid in full,
and (ii) with respect to each Euro-Rate Portion, at the Adjusted Euro-Rate (A)
on the last day of each Euro-Rate Interest Period (provided, however, if the
Euro-Rate Interest Period chosen for a Euro-Rate Portion exceeds three (3)
months, interest on that Euro-Rate Portion shall be due and payable every three
(3) months during such Euro-Rate Interest Period and on the last day of such
Euro-Rate Interest Period), (B) at maturity, whether by acceleration or
otherwise, of such Note, and (C) after maturity, on demand until paid in full.
(c) Repayment. All Indebtedness, including the entire principal
balance outstanding under the Notes, and all unpaid and accrued interest thereon
on the Termination Date, shall be due and payable on such date.
(d) Commitment Fee; Voluntary Reductions. During and for the
Revolving Credit Period, the Borrowers shall pay to the Agent for the ratable
account of each Bank a commitment fee ("Commitment Fee") computed on the actual
number of days elapsed on the basis of a 360 day year and at the Commitment Fee
Rate per annum on the average daily difference between (i) the lesser of (x)
Forty-Five Million ($45,000,000) Dollars and (y) the then current Aggregate
Collateral Value and (ii) the sum of (w) the aggregate principal balances
outstanding under the Notes plus (x) the aggregate Stated Amount of Letters of
Credit outstanding plus (y) the aggregate amount of unreimbursed Draws under the
Letters of Credit. The Commitment Fee shall be due and payable quarter-annually
beginning on the last Business Day of September, 1999 and on the last Business
Day of each December, March, June and September thereafter and on the
Termination Date. For the purposes of this section, the term "Commitment Fee
Rate" shall mean a rate per annum equal to (i) thirty-seven and five-tenths
(37.5) basis points (.375%) if the then current Utilization Rate is less than
50%, and (ii) fifty (50) basis points (.5%) if the then current Utilization Rate
is equal to or greater than 50%.
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To the extent that the Borrowers have availability under the
Revolving Credit, as it may be reduced pursuant to Subsection 2.1(a), the
Borrowers may, by written notice to the Agent at least ten (10) Business Days
prior to the date on which such reduction is to become effective, notify the
Agent that the Borrowers desire to reduce permanently all or a portion of the
Revolving Credit available to them [provided, however, such reduction shall be
in the amount of One Million ($1,000,000) Dollars or an integral multiple
thereof] and thereafter the Banks shall have no obligation whatsoever to advance
any funds (or to issue any Letters of Credit) hereunder to the Borrowers for the
portion of the Revolving Credit that has been terminated; further, the
Commitment Fee for that terminated portion shall not be payable for any period
of time after such termination becomes effective.
(e) Closing Fee. Upon the execution hereof, the Borrowers shall
pay to the Agent, for the benefit of the Banks, a fee (the "Closing Fee") of
$180,000, which Closing Fee is to be allocated among the Banks pro rata in
accordance with each Bank's Commitment Percentage.
(f) No Novation; Assignment of Interest Under Prior Loan
Agreement.
(i) No Novation. The principal balances outstanding under (x)
that certain Revolving Credit Note in the face amount of $40,000,000 dated
September 28, 1998 and made by the Original Borrowers in favor of PNC Bank,
National Association and (y) that certain Term Note in the face amount of
$7,000,000 dated September 28, 1998 and made by the Original Borrowers in favor
of PNC Bank, National Association (collectively, the "Prior Notes") evidencing
the indebtedness under the Prior Loan Agreement are to be converted and recast
into a Loan under the Revolving Credit. The converted and recast loan shall be
evidenced by the Notes executed in connection herewith and allocated among each
Bank's Note in amounts proportionate with such Bank's Commitment Percentage of
the Revolving Credit. The indebtedness evidenced by the Prior Notes (including
without limitation thereto any accrued and unpaid interest evidenced by the
Prior Notes) will continue to be evidenced by the Notes, no advances have been
made, or are being made, by the Banks to satisfy the indebtedness evidenced by
the Prior Notes and the Notes are not a novation of the indebtedness evidenced
by the Prior Notes. Nothing contained herein or in any other Loan Document shall
be construed to release, cancel, terminate or otherwise impair the status or
priority of the liens or security for the Prior Notes or any other Loan
Document, which are hereby assigned to the Banks proportionate with each Bank's
Commitment Percentage of the Revolving Credit.
(ii) Assignment of Interest Under Prior Loan Agreement.
Effective upon the advance by each Bank of its Ratable Share of the initial
Loans hereunder, PNC Bank, National Association, as sole Bank under the Prior
Loan Agreement, hereby agrees to sell without recourse, and the Banks each
hereby agree to purchase without recourse, such an interest (with respect to the
Prior Loan Agreement) in the outstanding "Loans" (as such term is defined in the
Prior Loan Agreement) and the Existing Letters of Credit as is required
(together with its commitment to lend set forth in Subsection 2.1(a) above) to
give each Bank (x) its Ratable Share of the initial Loans to be outstanding
under this Agreement and of the risk participation interest in the Stated Amount
of the Existing Letters of Credit and (y) its Commitment Percentage of the
Revolving Credit set forth opposite its name of the signature page hereto signed
by such Bank.
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2.2 Borrowing Limits; Collateral Value.
(a) Borrowing Limits. Notwithstanding any term or provision
contained herein to the contrary, (i) with respect to each Borrower, the sum of
(x) the aggregate unpaid principal balance of Loans designated to such Borrower
in the manner provided herein plus (y) the aggregate Stated Amounts of
outstanding Letters of Credit designated to such Borrower in the manner provided
herein plus (z) the aggregate amount of unreimbursed Draws under the Letters of
Credit designated to such Borrower in the manner provided herein (such amount
with respect to any Borrower, its "Individual Outstandings;" and collectively,
for all Borrowers, the "Aggregate Outstandings") at any one time shall not
exceed such Borrower's Individual Collateral Value, as such term is defined in
Subsection 2.2 (c) below, and (ii) with respect to all Borrowers, the Aggregate
Outstandings at any one time shall not exceed the Aggregate Collateral Value, as
such term is defined in Subsection 2.2(c) below.
(b) Designation of Loans and Letters of Credit. Each request for
an advance of a Loan under the Revolving Credit pursuant to Section 8.1 and each
request for the issuance of a Letter of Credit pursuant to Section 2.9 shall
designate one of the Borrowers as the "Designated Borrower" with respect thereto
in accordance with the next sentence. The Designated Borrower, with respect to
any Loan made or Letter of Credit issued hereunder, shall be that Borrower who
is to receive the proceeds of such Loan, or who is to be the account party for
such Letter of Credit. If no Designated Borrower is identified in such request,
then the requesting Borrower shall be deemed to be the Designated Borrower with
respect to such Loan or Letter of Credit, as the case may be. Atlas shall be the
Designated Borrower with respect to the Existing Letters of Credit. The
Borrowers shall give notice to the Agent in connection with all prepayments of
Loans of the Designated Borrower or Borrowers to whom such prepayment should be
allocated. In the absence of such notice, the Borrowers hereby authorize the
Agent to allocate such prepayment among the Borrowers on a basis in accordance
with the direction of the Required Banks and such allocation to be deemed
conclusive. No designation of Loans or Letters of Credit to any Borrower
pursuant to this provision shall in any way affect the joint and several nature
of the Borrowers' obligations hereunder.
(c) "Individual Collateral Value" Definition. For the purposes of
this Agreement, the term "Individual Collateral Value" shall mean, with respect
to each Borrower, the amount of indebtedness for borrowed money that the Banks
shall determine in accordance with Subsection 2.2(d) below can be supported by
the Discounted Future Net Income of such Borrower and its Restricted
Subsidiaries, as such amount is determined pursuant to Section 2.3 below:
provided, that from the date hereof until the next determination of the
Individual Collateral Values pursuant to Subsection 2.2(d) below, (x) the
Individual Collateral Value for Atlas shall be Twenty Two Million ($22,000,000)
Dollars, (y) the Individual Collateral Value for Viking shall be Eighteen
Million ($18,000,000) Dollars, and (z) the Individual Collateral Value for REI
shall be Five Million ($5,000,000) Dollars. For the purposes of this Agreement,
the term "Aggregate Collateral Value" shall mean the sum of the Individual
Collateral Values of Atlas, Viking and REI as of the date of determination.
(d) "Individual Collateral Value" Determinations.
(i) Annual Determinations. Within thirty (30) days of the
delivery by the Borrowers of the information required in Section 2.3 below, the
Agent, in its reasonable judgment and in accordance with its customary
standards, will determine the proposed Individual Collateral Value and any
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proposed change in the Individual Collateral Value Reduction Amount (as such
term is defined in clause below) for each Borrower and its Restricted
Subsidiaries and notify each of the Banks of such determinations. Unless each
Bank notifies the Agent that it approves such proposed Individual Collateral
Values and Individual Collateral Value Reduction Amounts within thirty (30) days
of receipt of notice from the Agent as aforesaid, the Individual Collateral
Values and Individual Collateral Value Reduction Amounts as proposed shall be
assumed disapproved. If affirmatively approved by each of the Banks, the
Individual Collateral Values and Individual Collateral Value Reduction Amounts
shall become effective on such thirtieth (30th) day, and shall remain in effect
until the next determination thereof in accordance herewith. If such proposed
Individual Collateral Values and Individual Collateral Value Reduction Amounts
are so disapproved, then the Banks shall consult with one another to determine
Individual Collateral Values and Individual Collateral Value Reduction Amounts
which are acceptable to all of the Banks. The Individual Collateral Values and
Individual Collateral Value Reduction Amounts so determined by the Banks shall
be promptly notified in writing by the Agent to the Borrowers, and upon such
notification shall be binding on all parties.
(ii) Special Determinations. In addition to the periodic
determinations of Individual Collateral Values and Individual Collateral Value
Reduction Amounts pursuant to paragraph (i) above, the Agent shall also
redetermine the Individual Collateral Values and Individual Collateral Value
Reduction Amounts (w) upon the request of the Borrowers one additional time per
year, (x) upon the request of the Required Banks one additional time per year,
(y) upon the request of the Required Banks at any time after the occurrence of a
default under Section 9 hereof, and (z) at any time that any Loan Party sells or
otherwise disposes of any material part of the Property (which sale or other
disposition is subject to the prior written consent of the Banks, which consent
shall be in the Banks' sole and absolute discretion). Each of the foregoing
special redeterminations shall be made in accordance with Subsections 2.2(c) and
2.3 based upon such Engineering Reports and other information provided by the
Borrowers as requested by the Agent, and must be approved by the Banks.
(iii) Scheduled Reductions of Individual Collateral Values.
Commencing December 31, 1999, and continuing quarterly on the last day of each
March, June, September and December until the Termination Date, the Borrowers'
Individual Collateral Values shall be reduced by the following amounts: (x)
Atlas: $416,666; (y) Viking: $333,333; and (z) REI: $83,333 (the "Individual
Collateral Value Reduction Amounts"). In the Banks' sole discretion, the
Individual Collateral Value Reduction Amounts may be increased or decreased at
each periodic and special redetermination of the Individual Collateral Values.
2.3 Discounted Future Net Income.
By October 30 of each year during the term hereof, the
Borrowers shall furnish to the Agent and each of the Banks such information as
the Agent and the Banks may request in order to enable the Agent to cause to be
prepared, at Borrowers' sole cost and expense, reports in form and substance
satisfactory to the Agent and the Banks and meeting the requirements of this
Section 2.3, which reports ("Engineering Reports") shall be dated as of
September 30 of such year and shall set forth (i) the remaining proved developed
producing, proved developed non-producing and proved undeveloped gas and oil
reserves attributable to each of the xxxxx (the "Xxxxx") in which a Borrower or
any Restricted Subsidiary then has an interest, whether directly or indirectly,
as an owner of a working interest, royalty or overriding royalty, as a general
or limited partner of a partnership, as a co-venturer of a joint venture or
otherwise, and a projection of the rate of gas and oil production from the Xxxxx
as well as a projection of the total future net operating income payable to such
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Borrower or Restricted Subsidiary with respect thereto for a thirty (30) year
period ("Future Net Income") and (ii) projected fees, revenues and proceeds
payable to a Borrower or Restricted Subsidiary and derived from, in connection
with and/or relating to (x) the transportation, compression and/or sale of gas
transported through pipeline in which a Borrower or Restricted Subsidiary then
has an interest, (y) the operation by a Borrower or Restricted Subsidiary of gas
and oil xxxxx and (z) the management and administration by a Borrower or
Restricted Subsidiary of any partnerships, in each case as of such dates. In
addition, at any time and from time to time upon request of the Agent, the
Borrowers shall furnish to the Agent such information as the Agent may request
in order to enable the Agent to prepare, or cause to be prepared, at Borrowers'
sole cost and expense if requested by the Agent after the occurrence of a
default under Section 9 hereof, interim reports in form and substance
satisfactory to the Agent and meeting the requirements of this Section 2.3,
which reports shall be dated as of the last day of the month preceding the month
in which the Agent makes the request and shall set forth the remaining proved
developed producing, proved developed non-producing and proved undeveloped gas
and oil reserves attributable to the Xxxxx, and a projection of the rate of gas
and oil production from the Xxxxx as well as a projection of the Future Net
Income therefrom, as of such dates. After the preparation of report(s) [the
"Engineering Report(s)"], the Agent shall make a determination, as set forth in
the following paragraph, of the Discounted Future Net Income for each Borrower
and its Restricted Subsidiaries as of such dates.
For the purposes of this Agreement, the "Discounted Future Net
Income" shall be (i) an amount based upon the remaining proven and producing gas
and oil reserves attributable to the Xxxxx and the Partnerships (as such term is
defined below in this paragraph) in which the Banks have valid and perfected
first liens and security interests free and clear of all other encumbrances and
impairments, as set forth in the Engineering Reports and determined by Agent
(after consultation with the Banks) in accordance with its usual and customary
engineering practices and methods and economic parameters plus (ii) an amount
determined by Agent (after consultation with the Banks) in its sole discretion
and based upon the actual and/or expected fees, revenues and proceeds in which
the Agent for the benefit of the Banks have valid and perfected first liens and
security interests, paid and payable to a Borrower or Restricted Subsidiary and
derived from, in connection with and/or relating to (x) the transportation,
compression and/or sale of gas transported through the gathering lines (herein
referred to collectively and individually as the "Pipeline") described in a
Mortgage, (y) the operation by a Borrower or Restricted Subsidiary of gas and
oil xxxxx and (z) the management and administration by a Borrower or Restricted
Subsidiaries of any Partnerships. The Agent shall determine (after consultation
with the Banks) in its sole discretion whether any oil and gas reserves,
revenues and proceeds are encumbered or impaired in favor of others and the
Agent (after consultation with the Banks) may conclude that oil and gas reserves
in which no Borrower or Restricted Subsidiary has a direct interest as the owner
of a working interest, royalty or overriding royalty are encumbered or impaired
even though such oil and gas reserves are not subject to any liens or security
interests; as an example, and without limiting the Agent's right to make such a
determination in other instances, the Agent may conclude that oil and gas
reserves owned by a partnership or joint venture (hereinafter referred to
individually as a "Partnership" and collectively as "Partnerships") in which a
Borrower or Restricted Subsidiary is a partner or co-venturer are impaired if
such Partnership suffers any loss or incurs any liability other than reasonable
charges of trade creditors incurred and paid in the normal course of business.
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The Engineering Reports contemplated by this Section 2.3 shall
be prepared on the basis of price and other economic assumptions specified by
the Agent (after consultation with the Banks) to the Borrowers not less than
sixty (60) days prior to the date the related report is due and in accordance
with their customary oil and gas lending practices for Persons engaged in the
same or similar businesses and similarly situated as the Borrowers, provided
that the natural gas price assumptions shall take into account the Borrowers'
end product sales value for natural gas as most recently furnished by the
Borrowers in writing to the Banks (together with a description of the applicable
period of sales data from which such end product sales value was derived) and
derived from the financial statements furnished to the Banks.
2.4 Mandatory Prepayments. In the event that at any time the
Aggregate Outstandings exceed the maximum amount available under the Revolving
Credit, the Borrowers shall immediately repay to the Banks an amount equal to
such excess. In the event that the Aggregate Outstandings shall, at any time, be
in excess of the then current Aggregate Collateral Value, or, the Individual
Outstandings for any Borrower shall, at any time, be in excess of the then
current Individual Collateral Value for such Borrower (the difference between
such amounts in either such case shall be referred to herein as a "Deficiency
Amount"), whether as a result of a scheduled automatic reduction of the
Aggregate Collateral Value or the Individual Collateral Values or otherwise, the
Borrowers shall (x) within ninety (90) days after such occurrence, make a
payment on the Notes in an aggregate amount equal to at least one-half (1/2) of
the Deficiency Amount (plus interest on such amount accrued to the date of
payment and any amounts due under Subsections 2.5(e) or (h) arising as a result
of such payment) and (y) within one hundred eighty (180) days after such
occurrence, make a payment on the Notes in an aggregate amount equal to the
remaining amount of the Deficiency Amount (plus interest on such amount accrued
to the date of payment and any amounts due under Subsections 2.5(e) or (h)
arising as a result of such payment) such that, after giving effect to such
payments, the Aggregate Outstandings shall not exceed the Aggregate Collateral
Value, and the Individual Outstandings of each Borrower shall not exceed the
Individual Collateral Value for such Borrower.
2.5 Interest Rate Options, Interest Payments and Certain Related
Payments Pertaining to the Loans.
(a) Interest. Each of the Notes shall bear interest, on the actual
unpaid principal amount thereof from time to time outstanding, from the date
thereof until payment in full, at the rates of interest set forth in this
Section 2.5. The Borrowers may call the Agent to receive an indication of the
rates then in effect, but it is acknowledged that any such projection shall not
be binding on the Banks nor affect the rate of interest which thereafter is
actually in effect when the election is made. The Borrowers shall pay accrued
interest on the unpaid principal balance of each Note in arrears as set forth in
Subsection 2.1(b). If at any time the designated rate applicable to the Loans
made by any Bank exceeds such Bank's highest lawful rate, the rate of interest
on the such Loans shall be limited to such Bank's highest lawful rate.
(b) Interest Rate Options. The unpaid principal amount of the
Loans then outstanding shall bear interest, for each day until due, at one or
more rates selected, at any time or from time to time, by the Borrowers from
among the Options set forth below subject to the provisions of Subsections
2.5(c) and 2.5(d) below; it being understood that, subject to the provisions of
this Agreement, the Borrowers may select different Options, subject to the
provisions of Subsections 2.5(c) and 2.5(d) below, to apply simultaneously to
different
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Portions of the Loans, and may select different Euro-Rate Interest Periods to
apply simultaneously to different Portions of the Euro-Rate Portions of the
Loans.
(i) Base Rate Option: A fluctuating rate per annum (computed
upon the basis of a year of 365/366 days, and the actual number of days elapsed)
equal to the sum of (I) the Base Rate, plus (II) the Applicable Base Rate
Margin, with respect to the Loans outstanding. The foregoing rate shall be
adjusted automatically from time to time upon each change in the Base Rate and
each change in the Applicable Base Rate Margin.
(ii) Euro-Rate Option: A rate per annum (computed upon the
basis of a year of 360 days and the actual number of days elapsed) equal to the
sum of (I) the Euro-Rate, plus (II) the Applicable Euro-Rate Margin, with
respect to the Loans outstanding. The foregoing note shall be adjusted
automatically, with respect to any Euro-Rate Portion, from time to time upon
each change in the Applicable Euro-Rate Margin.
(c) Euro-Rate Interest Periods; Limitations on Elections. At any
time when the Borrowers shall select, convert to or renew the Euro-Rate Option
to apply to all or any Portion of the outstanding Loans, it shall fix one or
more periods during which such Option shall apply, such periods to be one (1),
two (2), three (3), or six (6) months, in each case commencing on the borrowing,
conversion or renewal date. All of the foregoing, however, is subject to the
following:
(i) any Euro-Rate Interest Period which would otherwise end on
a day which is not a Business Day shall be extended to the next
Business Day unless such Business Day falls in the succeeding
calendar month in which case such Euro-Rate Interest Period shall
end on the next preceding Business Day;
(ii) any Euro-Rate Interest Period which begins on the last
day of a calendar month or on a day for which there is no
numerically corresponding day in the subsequent calendar month
during which such Euro-Rate Interest Period is to end shall end on
the last Business Day of such subsequent month; and
(iii) in the case of the renewal of a Euro-Rate Option at the
end of a Euro-Rate Interest Period, the first day of the new
Euro-Rate Interest Period shall be the last day of the preceding
Euro-Rate Interest Period, without duplication in payment of
interest for such day.
Elections by the Borrowers of the Euro-Rate Option shall be subject
to the following further limitations:
(i) The Euro-Rate Portion for each Euro-Rate Interest Period
shall be in an aggregate principal amount of $500,000 or more;
provided, however, that each incremental unit in excess of $500,000
shall be $250,000 or an integral multiple thereof;
(ii) No Euro-Rate Interest Period may be elected with regard
to amounts outstanding under the Note which Euro-Rate Interest
Period would end after the Termination Date;
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(iii) Upon the occurrence of any automatic default set forth
in Section 9 hereof, or upon the declaration of any optional default
pursuant to Section 9 hereof, the ability of the Borrowers to elect
the Euro-Rate Option shall cease; and
(iv) At no time may there be more than ten (10) Euro-Rate
Interest Periods in effect.
(d) Election, Conversion or Renewal of Euro-Rate and Base Rate
Interest Rate Options. Elections of or conversions to the Base Rate Option shall
continue in effect until converted as hereinafter provided. Elections of,
conversions to or renewals of the Euro-Rate Option shall expire as to each
Euro-Rate Portion at the expiration of the applicable Euro-Rate Interest Period.
At any time with respect to the Base Rate Portion or at the
expiration of the applicable Euro-Rate Interest Period with respect to any
Euro-Rate Portion, the Borrowers, subject to Subsection 2.5(c), may cause all or
any part of the principal amount of such Portion to be converted to and/or (in
the case of a Euro-Rate Portion) to be renewed under the Euro-Rate Option by
notice to the Agent as hereinafter provided. Such notice (i) shall be oral or in
writing and if oral immediately confirmed in writing to the Agent, (ii) shall be
irrevocable, (iii) shall be given not later than 11:00 A.M., Pittsburgh,
Pennsylvania time not less than three (3) Business Days prior to the proposed
effective date for conversion to or renewal of, either in whole or in part, the
Euro-Rate Option and (iv) shall set forth:
(A) the effective date, which shall be a Business Day;
(B) the new Euro-Rate Interest Period(s) selected; and
(C) with respect to each such Euro-Rate Interest Period, the
aggregate principal amount of the corresponding Euro-Rate Portion.
At the expiration of each Euro-Rate Interest Period, any part
(including the whole) of the principal amount of the corresponding Euro-Rate
Portion, as to which no notice of conversion or renewal has been received as
provided above, shall automatically be converted to the Base Rate Option. The
Agent shall promptly notify the Borrowers and the Banks of any such automatic
conversion.
(e) Repayments and Prepayments. The Borrowers, upon (i) one (1)
Business Day's oral or written notice to the Agent, in the case of Loans bearing
interest at the Adjusted Base Rate or (ii) three (3) Business Days' oral or
written notice to the Agent, in the case of Loans bearing interest at the
Adjusted Euro-Rate, followed immediately thereafter by the Borrowers' written
confirmation to the Agent of any oral notice, may repay, or prepay, as the case
may be, the outstanding amount of the Loans in whole or in part with accrued
interest, fees and other amounts then due and payable on the amount repaid or
prepaid, as the case may be, to the date of such repayment or prepayment, as the
case may be, all as set forth below.
The Borrowers may repay, or prepay, as the case may be, a Portion of
the Loans bearing interest at the Adjusted Base Rate without premium or penalty.
If the Borrowers shall repay, or prepay, as the case may be, a Portion of the
Loans bearing interest at the Adjusted Euro-Rate prior to the end of the
Euro-Rate Interest Period relating to such Euro-Rate, the Borrowers shall pay
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(in addition to principal and interest) such additional amounts as may be
necessary to compensate each Bank for any loss and any direct or indirect costs,
including the cost of reemployment of funds so prepaid at rates lower than the
cost to such Bank of such funds. Such losses and costs shall be specified in
writing (setting forth the manner of calculation) to the Borrowers by such Bank
and, absent manifest error in computation, shall be binding and conclusive on
the Borrowers.
Such losses and costs shall be specified in writing (setting
forth the manner of calculation) to the Borrowers by the affected Bank and,
absent manifest error in computation, shall be binding and conclusive on the
Borrowers.
(f) Yield Protection. If any Governmental Rule or the
interpretation or application thereof by any court or by any Governmental Person
charged with the administration thereof:
(i) subjects any Bank to any tax, levy, impost, charge, fee,
deduction or withholding of any kind hereunder (other than a tax
imposed or based upon the income of such Bank) or changes the basis
of taxation of any Bank with respect to the payments by the
Borrowers of principal or interest due hereunder (other than any
change which affects, and to the extent that it affects, the
taxation of the total net income of such Bank); or
(ii) imposes, modifies or deems applicable any reserve,
special deposit or similar requirements against assets held by any
Bank; or
(iii) imposes upon any Bank any other condition with respect
to this Agreement,
such Bank shall notify the Agent in writing as soon as practicable after such
Bank becomes aware thereof; and if the result of any of the foregoing is to
increase the cost to such Bank, reduce the income receivable by such Bank or
impose any expense upon such Bank, with regard to all or any portion of the
Loans bearing interest at the Adjusted Euro-Rate or the Fixed Rate, by an amount
determined by such Bank in good faith and which such Bank in good xxxxx xxxxx
material, such Bank shall notify, from time to time, the Agent and the Borrowers
of the amount determined by such Bank (which determination, absent manifest
error in computation, shall be conclusive) to be necessary to compensate it (on
an after-tax basis) for such increase in cost, reduction in income or additional
expense, setting forth the calculations and the reasons therefor. The Borrowers
shall pay such amount to such Bank, as additional consideration hereunder,
within ten (10) days of the Borrowers' receipt of such notice.
(g) Euro-Rate Unascertainable.
(i) If on any date on which a Euro-Rate would otherwise be
determined, the Agent shall have determined (which determination shall be final
and conclusive) that:
(a) adequate and reasonable means do not exist for
ascertaining such Euro-Rate, or
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(b) a contingency has occurred which materially and
adversely affects the London interbank market relating to the
Euro-Rate, or
(ii) if at any time any Bank shall have determined (which
determination shall be final and conclusive) that:
(a) the making, maintenance or funding of the Portion of
the Loans to which a Euro-Rate Option applies has been made
impracticable or unlawful by compliance by such Bank in good faith
with any Governmental Rule or any interpretation or application
thereof by any Governmental Person or with any request or directive
of any such Governmental Person (whether or not having the force of
law), or
(b) such Euro-Rate Option will not adequately and fairly
reflect the cost to such Bank of the establishment or maintenance of
the Portions of the Loans to which a Euro-Rate Option applies or
(c) after making all reasonable efforts that deposits of
the relevant amount in Dollars for the relevant Euro-Rate Interest
Period for the Loans to which a Euro-Rate Option applies,
respectively, are not available to such Bank at the effective cost
of funding a proposed Euro-Rate Interest Period, in the London
interbank market,
then, in the case of any event specified in part (a) above, the Agent shall
promptly so notify the Borrowers and the other Banks thereof; and in the case of
any event specified in part (b) above, the affected Bank shall promptly so
notify the Agent thereof, and the Agent shall send a copy of such notice to the
Borrowers and the other Banks. Upon such date as shall be specified in such
notice (which shall not be earlier than the date such notice is given) the
obligation of the Banks to allow the Borrowers to select, convert to or renew a
Euro-Rate Option shall be suspended until the Agent or such Bank (as the case
may be) shall have later notified the Borrowers of the Bank's determination
(which determination shall be final and conclusive) that the circumstances
giving rise to such previous determination no longer exist. If at any time the
Agent or any Bank makes a determination under parts (a) or (b) of this
Subsection 2.5(g) and the Borrowers have previously notified the Agent of the
Borrowers' selection of, conversion to or renewal of a Euro-Rate Option and such
Option has not yet gone into effect, such notification shall be deemed to
provide for selection of, conversion to or renewal of the Base Rate Option
otherwise available with respect to the Portion of the Loans. On the date of the
occurrence of any event described in item (i) of part (b), the Loans bearing
interest at the Adjusted Euro-Rate then outstanding shall be automatically
converted to the Base Rate Option and the Borrowers shall pay to the Banks the
accrued and unpaid interest on the Loans to (but not including) the date of such
conversion.
The Borrowers shall pay each Bank any additional amounts determined
by such Bank in good faith to be reasonably necessary to compensate such Bank
for any costs incurred by such Bank as a result of any conversion pursuant to
item (i) of part (b) above on a day other than the last day of the relevant
Euro-Rate Interest Period, including, but not limited to, any interest or fees
payable by such Bank to lenders of funds obtained by it to loan or maintain the
lending of the Loans so converted. The affected Bank shall furnish to the
Borrower a certificate as to the amount necessary to compensate such Bank for
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such costs (which certificate shall set forth the calculation in reasonable
detail, and, absent manifest error in computation, shall be conclusive), and the
Borrowers shall pay such amount to such Bank, as additional consideration
hereunder, within ten (10) days of the Borrowers' receipt of such certificate.
(h) Indemnity. The Borrowers shall indemnify the Agent and each
Bank against all liabilities, losses or expenses (including loss of margin, any
loss or expense incurred in liquidating or employing deposits from third parties
and any loss or expense incurred in connection with funds acquired by a Bank to
fund or maintain Loans subject to the Euro-Rate Option) which any Bank sustains
or incurs as a consequence of any
(a) payment, prepayment, conversion or renewal of the Loans
to which the Euro-Rate Option applies on a day other than
the last day of the corresponding Euro-Rate Interest
Period (whether or not such payment or prepayment is
mandatory, voluntary or automatic and whether or not such
payment or prepayment is then due),
(b) attempt by the Borrowers to revoke (expressly, by later
inconsistent notices or otherwise) in whole or part any
notice relating to the making, maintenance, renewal or
conversion of the Loans or any voluntary prepayments of
the Loans, or
(c) default by the Borrowers in the payment of any principal
of, or interest on, the Loans when due (whether by
acceleration or otherwise).
If any Bank sustains or incurs any such loss or expense it
shall from time to time notify the Borrowers and the Agent of the amount
determined in good faith by such Bank (which determination shall be final and
conclusive and may include such assumptions, allocations of costs and expenses
and averaging or attribution methods as such Bank shall deem reasonable) to be
necessary to indemnify such Bank for such loss or expense. Such notice shall set
forth in reasonable detail the basis for such determination. Such amount shall
be due and payable by the Borrowers to such Bank ten (10) Business Days after
such notice is given. In no event shall the indemnity payment provided for in
this Subsection 2.5(h) require any payment to any Bank for a specific liability,
loss or expense incurred by such Bank by the Borrowers which duplicates the
reimbursement of such Bank for any loss suffered by such Bank upon a voluntary
prepayment of the Loans for which the Borrowers have paid the prepayment premium
required by Subsection 2.5(e) hereof.
(i) Interest After Default; Maturity. Upon the occurrence of and
during the continuance of a default under Section 9 hereof, and after the
principal amount of all or any part of the Loans shall have become due and
payable, whether by acceleration or otherwise, the Loans shall bear interest at
a rate per annum which shall be two hundred (200) basis points (2%) per annum
above the rate otherwise in effect under the Base Rate Option, such interest
rate to change automatically from time to time, effective as of the effective
date of each change in the Base Rate.
2.6 Capital Adequacy Requirements. If any law or guideline or
interpretation or application thereof by any official body charged with the
interpretation or administration thereof or compliance with any request or
directive of any official body (whether or not having the force of law), now
existing or hereafter adopted or imposed, modifies or deems applicable any
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capital adequacy, reserve requirements, special deposit or similar requirements
against assets (funded or contingent) of, or credits extended by or commitments
to extend credit by, any Bank and the result thereof is to have the effect of
reducing the rate of return on such Bank's capital as a consequence of its
obligations hereunder to make and continue the Loans or to issue or participate
in any Letter of Credit to a level below that which such Bank could have
achieved but for such adoption, imposition or modification, taking into
consideration such Bank's policies with respect to capital adequacy or reserve
requirements or special deposit or similar requirements, by an amount which such
Bank deems to be material, such Bank shall notify the Borrowers of such events.
After such Bank notifies the Borrowers of such events, such Bank shall promptly
deliver to the Borrowers a statement of the amount necessary to compensate such
Bank for the reduction in the rate of return on its capital attributable to such
Bank's obligations hereunder to make and continue the Loans or to issue or
participate in any Letter of Credit. Such Bank shall determine the capital
compensation amount in good faith, using reasonable attribution and averaging
methods. Such Bank shall from time to time notify the Borrowers of the amount so
determined and such amount shall be due and payable by the Borrowers to such
Bank thirty (30) days after such notice is given; provided, however, that if the
Borrowers pay the Loans in full (including principal and interest), cancel any
outstanding Letters of Credit, and terminate the Revolving Credit and the
commitment hereunder to issue Letters of Credit, within such thirty (30) day
period, the Borrowers shall not be liable to such Bank to pay such amount
determined pursuant to this Section 2.6. All amounts determined in accordance
with this Section 2.6 shall be effective from the date on which such Bank first
gave notice to the Borrowers of a reduction in such Bank's rate of return.
2.7 Time, Place and Manner of Payments. All payments and
prepayments to be made by the Borrowers hereunder or under any Note in respect
of any principal, interest, or fee shall be made to the Agent for the ratable
accounts of the Banks at the principal office of Agent in Pittsburgh,
Pennsylvania. Such payments shall be made in immediately available funds no
later than 12:00 noon (Pittsburgh, Pennsylvania time) on the date such payment
is due.
2.8 Loan Account. Each Bank shall open and maintain on its books a
loan account (each, a "Loan Account") in the name of the Borrowers, with respect
to advances made, payments and prepayments of principal, and the computations
and payments of interest and all other amounts due and sums paid to such Bank
hereunder or under its Note. Such Loan Account, absent manifest error, shall be
conclusive and binding on the Borrowers as to the amount at any time due to such
Bank from the Borrowers.
2.9 Letter of Credit Subfacility.
(a) Terms of Letter of Credit. The Issuing Bank shall issue,
subject to the terms and conditions hereof (including but not limited to the
conditions contained in Section 8.1 hereof) and at the request of any Borrower,
Letters of Credit for the account of such Borrower or a Restricted Subsidiary of
such Borrower, all as more fully set forth in this Section 2.9.
(i) No Letter of Credit shall be issued hereunder which has an
expiry date later than five (5) Business Days prior to the Termination Date;
provided, however, that any Letter of Credit with a one (1) year maturity may
provide for the renewal thereof for an additional one (1) year period, which
shall in no event extend beyond five (5) Business Days prior to the Termination
Date.
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(ii) Each Letter of Credit, whether now outstanding or
hereafter issued by the Issuing Bank upon written request received by the
Issuing Bank not less than five (5) Business Days prior to the proposed date of
issuance pursuant to this Section 2.9, has been or shall be issued in accordance
with the Issuing Bank's then current practices relating to the issuance by the
Issuing Bank of Letters of Credit, including but not limited to the execution
and delivery by the Borrowers of an application for and/or confirmation of
standby letter of credit and the payment by the Borrowers of the customary
processing fees. Each issuance or renewal of a Letter of Credit hereunder shall
be conditioned on (and be deemed to be a representation and warranty by the
Borrowers as to) the following: that, at the time of such issuance or renewal,
the representations and warranties contained in this Agreement are true and
correct and no default set forth in Section 9 hereof shall have occurred and be
continuing and no event which, with the giving of notice or lapse of time or
both would become such a default, shall have occurred or shall have failed to
occur and be continuing.
(iii) In no event shall the aggregate undrawn face amount of
the Letters of Credit plus any unreimbursed Draws exceed, at any one time,
Fourteen Million ($14,000,000) Dollars. The Stated Amount of each Letter of
Credit, while the same is issued and outstanding, and any unreimbursed Draws
under the Letters of Credit, shall reduce the maximum amount otherwise available
for Loans under the Revolving Credit as set forth in Subsection 2.1(a) hereof.
No Letters of Credit may be issued hereunder to the extent that such issuance
would either (x) cause the Aggregate Outstandings to exceed the lesser of (a)
the then current Aggregate Collateral Value or (b) Forty-Five Million
($45,000,000) Dollars or (y) cause any Borrower's Individual Outstandings to
exceed such Borrower's then current Individual Collateral Value.
(iv) Each Borrower agrees that it shall be bound by the terms
of this Agreement and each related application for letter of credit or
reimbursement agreement with respect to the Existing Letters of Credit as if the
Existing Letters of Credit were issued hereunder for the account of the
Borrowers, including without limitation any and all reimbursement obligations,
liability for fees or costs and indemnifications (all such obligations to be
joint and several with the related account party, if such Person is not a
Borrower hereunder). The Existing Letter of Credit shall be deemed, for all
purposes, to be issued under this Agreement, including, without limitation, for
the purpose of calculating the aggregate Stated Amount of Letters of Credit
permitted to be issued hereunder.
(b) Disbursements, Reimbursement.
(i) Immediately upon the issuance of each Letter of Credit,
each Bank shall be deemed to, and hereby irrevocably and unconditionally agrees
to, purchase from the Issuing Bank a participation in such Letter of Credit and
each Draw thereunder in an amount equal to such Bank's Ratable Share of the
maximum amount available to be drawn under such Letter of Credit and the amount
of such Draw, respectively.
(ii) In the event of any request for a Draw under a Letter of
Credit by the beneficiary or transferee thereof, the Issuing Bank will promptly
notify the Borrowers and the Agent and the Borrowers shall reimburse (such
obligation to reimburse the Issuing Bank shall sometimes be referred to as a
"Reimbursement Obligation") the Issuing Bank prior to 12:00 noon, Pittsburgh
time on each date that an amount is paid by the Issuing Bank under any Letter of
Credit (each such date, a "Drawing Date") in an amount equal to the amount so
paid by the Issuing Bank. In the event the Borrowers fail to reimburse the
Issuing Bank for the full amount of any drawing under any Letter of Credit by
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12:00 noon, Pittsburgh time, on the Drawing Date, the Issuing Bank will promptly
notify the Agent and each Bank thereof, and the Borrowers shall be deemed to
have requested that Loans be made by the Banks under the Base Rate Option to be
disbursed on the Drawing Date under such Letter of Credit, subject to the
conditions set forth in Section 8 below, other than any notice requirements. Any
notice given by the Issuing Bank pursuant to this paragraph may be oral if
immediately confirmed in writing; provided that the lack of such an immediate
confirmation shall not affect the conclusiveness or binding effect of such
notice.
(iii) Each Bank shall upon any notice pursuant to paragraph
(ii) above make available to the Agent for the account of the Issuing Bank an
amount in immediately available funds equal to its Ratable Share of the amount
of the drawing, whereupon the participating Banks shall (subject to paragraph
(iv) below) each be deemed to have made a Loan under the Base Rate Option to the
Borrowers in that amount. If any Bank so notified fails to make available to the
Agent for the account of the Issuing Bank the amount of such Bank's Ratable
Share of such amount by no later than 2:00 p.m., Pittsburgh time on the Drawing
Date, then interest shall accrue on such Bank's obligation to make such payment,
from the Drawing Date to the date on which such Bank makes such payment, (i) at
a rate per annum equal to the Federal Funds Rate in effect during the first
three days following the Drawing Date and (iii) at a rate per annum equal to the
rate applicable to Loans under the Base Rate Option on and after the fourth day
following the Drawing Date. The Issuing Bank will promptly give notice of the
occurrence of the Drawing Date, but failure of the Issuing Bank to give any such
notice on the Drawing Date or in sufficient time to enable any Bank to effect
such payment on such date shall not relieve such Bank from its obligation under
this paragraph.
(iv) With respect to any unreimbursed Draw that is not
converted into a Loan under the Base Rate Option to the Borrowers in whole or in
part as contemplated by paragraph (ii) above, the Borrowers shall be deemed to
have incurred from the Issuing Bank a Letter of Credit Borrowing in the amount
of such Draw. Such Letter of Credit Borrowing shall be due and payable on demand
(together with interest) and shall bear interest at the rate per annum
applicable to the Loans under the Base Rate Option. Each Bank's payment to the
Issuing Bank pursuant to paragraph (iii) above, shall be deemed to be a payment
in respect of its participation in such Letter of Credit Borrowing and shall
constitute a Participation Advance from such Bank in satisfaction of its
participation obligation under this Section 2.9.
(c) Repayment of Participation Advances.
(i) Upon (and only upon) receipt by the Issuing Bank for its
account of immediately available funds from the Borrowers (x) in reimbursement
of any payment made by the Issuing Bank under the Letter of Credit with respect
to which any Bank has made a Participation Advance to the Issuing Bank, or (y)
in payment of interest on such a payment made by the Issuing Bank under such a
Letter of Credit, the Issuing Bank will pay to each Bank, in the same funds as
those received by the Issuing Bank, the amount of such Bank's Ratable Share of
such funds, except the Issuing Bank shall retain the amount of the Ratable Share
of such funds of any Bank that did not make a Participation Advance in respect
of such payment by Issuing Bank.
(ii) If the Issuing Bank is required at any time to return to
the Borrowers, or to a trustee, receiver, liquidator, custodian, or any official
in any insolvency or similar proceeding, any portion of the payments made by the
Borrowers to the Issuing Bank pursuant to paragraph (i) immediately above in
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reimbursement of a payment made under the Letter of Credit or interest or fee
thereon, each Bank shall, on demand of the Issuing Bank, forthwith return to the
Issuing Bank the amount of its Ratable Share of any amounts so returned by the
Issuing Bank plus interest thereon from the date such demand is made to the date
such amounts are returned by such Bank to the Issuing Bank, at a rate per annum
equal to the Federal Funds Rate in effect from time to time.
(d) Documentation.
The Borrowers agree to be bound by the terms of the Issuing
Bank's application and agreement for letters of credit and the Issuing Bank's
written regulations and customary practices relating to letters of credit,
though such interpretation may be different from the Borrowers' own. In the
event of a conflict between such application or agreement and this Agreement,
this Agreement shall govern. It is understood and agreed that, except in the
case of gross negligence or willful misconduct, the Issuing Bank shall not be
liable for any error, negligence and/or mistakes, whether of omission or
commission, in following the Borrowers' instructions or those contained in the
Letters of Credit or any modifications, amendments or supplements thereto.
(e) Determinations to Honor Drawing Requests.
In determining whether to honor any request for drawing under
any Letter of Credit by the beneficiary thereof, the Issuing Bank shall be
responsible only to determine that the documents and certificates required to be
delivered under such Letter of Credit have been delivered and that they comply
on their face with the requirements of such Letter of Credit.
(f) Nature of Participation and Reimbursement Obligations.
Each Bank's obligation in accordance with this Agreement to
make the Loans or Participation Advances, as contemplated by Subsection 2.9(b),
as a result of a drawing under a Letter of Credit, and the obligations of the
Borrowers to reimburse the Issuing Bank upon a draw under a Letter of Credit,
shall be absolute, unconditional and irrevocable, and shall be performed
strictly in accordance with the terms of this Section 2.9 under all
circumstances, including the following circumstances:
(i) any set-off, counterclaim, recoupment, defense or other
right which such Bank may have against the Issuing Bank, any Borrower or any
other Person for any reason whatsoever;
(ii) the failure of any Borrower or any other Person to
comply, in connection with a Letter of Credit Borrowing, with the conditions set
forth in Section 8.1 or as otherwise set forth in this Agreement for the making
of a Loan, it being acknowledged that such conditions are not required for the
making of a Letter of Credit Borrowing and the obligation of the Banks to make
Participation Advances under Subsection 2.9(b);
(iii) any lack of validity or enforceability of any Letter of
Credit;
(iv) the existence of any claim, set-off, defense or other
right which any Borrower or any Bank may have at any time against a beneficiary
or any transferee of any Letter of Credit (or any Persons for whom any such
transferee may be acting), the Agent, the Issuing Bank or any Bank or any other
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Person or, whether in connection with this Agreement, the transactions
contemplated herein or any unrelated transaction (including any underlying
transaction between a Borrower or any Subsidiary and the beneficiary for which
any Letter of Credit was procured);
(v) any draft, demand, certificate or other document presented
under any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect even if the Issuing Bank has been notified thereof;
(vi) payment by the Issuing Bank under any Letter of Credit
against presentation of a demand, draft or certificate or other document which
does not comply with the terms of such Letter of Credit, provided that such
payment shall not have constituted gross negligence or willful misconduct of the
Issuing Bank;
(vii) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or prospects of any
Borrower or any Subsidiary;
(viii) any breach of this Agreement or any other Loan Document
by any party thereto;
(ix) the occurrence or continuance of an insolvency or similar
proceeding with respect to any Borrower;
(x) the fact that a default or event of default under Section
9 hereof shall have occurred and be continuing;
(xi) the fact that the Termination Date shall have passed or
this Agreement or the commitments hereunder shall have been terminated; and
(xii) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing, not resulting from gross negligence or
willful misconduct of the Issuing Bank.
(g) Liability for Acts and Omissions.
As between the Borrowers and the Issuing Bank, the Borrowers
assume all risks of the acts and omissions of, or misuse of the Letters of
Credit by, the respective beneficiaries of such Letters of Credit. In
furtherance and not in limitation of the foregoing, the Issuing Bank shall not
be responsible for: (i) the form, validity, sufficiency, accuracy, genuineness
or legal effect of any document submitted by any party in connection with the
application for an issuance of any such Letter of Credit, even if it should in
fact prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged (even if the Issuing Bank shall have been notified
thereof); (ii) the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign any such Letter of Credit or the
rights or benefits thereunder or proceeds thereof, in whole or in part, which
may prove to be invalid or ineffective for any reason; (iii) the failure of the
beneficiary of any such Letter of Credit, or any other party to which such
Letter of Credit may be transferred, to comply fully with any conditions
required in order to draw upon such Letter of Credit or any other claim of any
Borrower against any beneficiary of such Letter of Credit, or any such
transferee, or any dispute between or among any Borrower and any beneficiary of
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any Letter of Credit or any such transferee; (iv) errors, omissions,
interruptions or delays in transmission or delivery of any messages, by mail,
cable, telegraph, telex or otherwise, whether or not they be in cipher; (v)
errors in interpretation of technical terms; (vi) any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under any such Letter of Credit or of the proceeds thereof; (vii) the
misapplication by the beneficiary of any such Letter of Credit of the proceeds
of any drawing under such Letter of Credit; or (viii) any consequences arising
from causes beyond the control of the Issuing Bank, including any action of any
Governmental Person, and none of the above shall affect or impair, or prevent
the vesting of, any of the Issuing Bank's rights or powers hereunder. Nothing in
the preceding sentence shall relieve the Issuing Bank from liability for the
Issuing Bank's gross negligence or willful misconduct in connection with actions
or omissions described in such clauses(i) through (viii) of such sentence.
In furtherance and extension and not in limitation of the
specific provisions set forth above, any action taken or omitted by the Issuing
Bank under or in connection with the Letters of Credit issued by it or any
documents and certificates delivered thereunder, if taken or omitted in good
faith, shall not put the Issuing Bank under any resulting liability to the
Borrowers or any Bank.
(h) Reimbursement for Charges and Fees. The Borrowers agree to pay
or cause to be paid to the Issuing Bank on demand, all normal and customary
transaction charges that the Issuing Bank may charge (i) for drawings under the
Letters of Credit, (ii) for transfers of each respective Letter of Credit in
accordance with its terms and (iii) for amendments of the Letters of Credit,
payable without any requirement of notice or demand by the Issuing Bank on the
day of such drawing, transfer or amendment.
(i) Letter of Credit Fees. The Borrowers shall pay to the Agent
for the ratable account of the Banks quarterly in arrears, on the last day of
each September, December, March and June, a commission equal to the Applicable
Euro-Rate Margin on the average daily aggregate Stated Amount of Letters of
Credit outstanding during the three month period ending on such date; provided,
however, that upon the occurrence of and during the continuance of an event of
default under Section 9 hereof, the foregoing fee shall automatically be
increased by two hundred (200) basis points (2%) per annum above the rate
otherwise in effect.
SECTION 3. REPRESENTATIONS AND WARRANTIES.
To induce the Banks to enter into this Agreement and to make and
continue the loans and to issue and renew the Letters of Credit, each as herein
provided for, the Borrowers represent and warrant to the Banks that:
3.1 Existence and Authority. Each Loan Party is a corporation or
limited liability company duly organized, validly existing and in good standing
under the laws of the state of its formation, and is duly qualified to do
business, and is in good standing as a foreign corporation, in all jurisdictions
wherein its ownership of property or the nature of its business requires such
qualification and has the right, power and authority to own, and hold under
lease, its properties and to carry on its business as now being conducted.
Each of the Partnerships is a limited partnership duly
organized, validly existing and in good standing under the laws of the state of
its formation, and has the right, power and authority to own, and hold under
lease, its property and to carry on its business as now being conducted.
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3.2 Capitalization and Subsidiaries. (a) The authorized securities
of Atlas America, Inc. consist of One Thousand (1,000) shares of common stock
and all issued and outstanding shares of such stock have been validly issued and
are fully paid and nonassessable and are owned by and issued to Resource
America, Inc.
(b) The authorized securities of Resource Energy, Inc. consist of
One Hundred (100) shares of common stock and all issued and outstanding shares
of such stock have been validly issued and are fully paid and nonassessable and
are owned by and issued to Resource America, Inc.
(c) The authorized securities of Viking Resources Corporation
consist of One Thousand (1,000) shares of common stock and all issued and
outstanding shares of such stock have been validly issued and are fully paid and
nonassessable and are owned by and issued to Resource America, Inc.
(d) Except for the Subsidiaries and other investments in other
Persons set forth on Schedule 3.2, no Borrower or Subsidiary of a Borrower owns
directly or indirectly any capital stock of any other Person. Each Borrower, and
each Subsidiary of a Borrower, has good and marketable title to all the
securities of the Subsidiaries issued to it, free and clear of all liens and
encumbrances, and all such securities have been duly and validly issued and are
fully paid and nonassessable. The authorized securities of the Subsidiaries and
the ownership thereof are as shown on Schedule 3.2 attached hereto and made a
part hereof.
3.3 Rights, Titles and Interests. The Borrowers, the Subsidiaries
and the Partnerships have, and will have, good and marketable rights, titles and
interests in and to all of their properties including all the Property free and
clear of all Liens, except for Permitted Liens and any other Liens permitted
under Section 6.2 below. Each Borrower warrants that, at its expense it will,
and will cause the Subsidiaries and the Partnerships to, defend generally their
properties including the Property, and the rights, titles and interests of the
Banks therein and thereto, against the claims and demands of all persons,
corporations and any other entities whatsoever. No defaults have occurred under
any of the documents or instruments pursuant to which, or establishing that,
Borrowers, the Subsidiaries and the Partnerships acquired interests in their
properties including the Property which have not been cured or waived and such
documents and instruments are in full force and effect and they have not been
modified or amended.
3.4 Financial Statements and Projections.
(a) Financial Statements. The financial statements described below
in this Section 3.4, together with the notes and reports thereto, (copies of
which have been furnished to the Agent), are complete and correct, have been
prepared in accordance with generally accepted accounting principles, practices
and procedures consistently applied and present fairly the financial positions
of the Borrowers and the Subsidiaries as at the dates set forth below and the
results of their operations for the periods set forth below, subject only to
ordinary and usual year end audit adjustments in the case of the statements
described in clauses (ii), (iv) and (vi) below:
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(i) With respect to The Atlas Group, Inc. (predecessor to
Atlas America, Inc.) and its Subsidiaries, the balance
sheet as of June 30, 1998 and the related statements of
income, changes in stockholder's equity and changes in
financial position for the eleven (11) month period
ended on such date, prepared and certified by XxXxxxxxxx
& Xxxxxxx, independent certified public accountants; and
(ii) With respect to Atlas America, Inc. and its
Subsidiaries, the balance sheets as of July 31, 1998,
for The Atlas Group, Inc., predecessor to Atlas America,
Inc., September 30, 1998 and June 30, 1999 and the
related statements of income, changes in stockholder's
equity and changes in financial position for the twelve
(12) month, two (2) month and nine (9) month periods,
respectively, ended on such dates, prepared by the chief
financial officer of Atlas America, Inc.
(iii) With respect to Resource Energy, Inc. and its
Subsidiaries, the balance sheet as of September 30, 1998
and the related statements of income, changes in
stockholder's equity and changes in financial position
for the fiscal year ended on such date, prepared by the
chief financial officer of Resource Energy, Inc.; and
(iv) With respect to Resource Energy, Inc. and its
Subsidiaries, the balance sheet as of June 30, 1999 and
the related statements of income, changes in
stockholder's equity and changes in financial position
for the nine (9) month period ended on such date,
prepared by the chief financial officer of Resource
Energy, Inc.
(v) With respect to Viking Resources Corporation and its
Subsidiaries, the balance sheet as of December 31, 1998
and the related statements of income, changes in
stockholder's equity and changes in financial position
for the fiscal year ended on such date, prepared and
certified by Ernst & Young, independent certified public
accountants; and
(vi) With respect to Viking Resources Corporation and its
Subsidiaries, the balance sheet as of June 30, 1999 and
the related statements of income, changes in
stockholder's equity and changes in financial position
for the six (6) month period ended on such date,
prepared by the chief financial officer of Viking
Resources Corporation.
Except as reflected or referred to in the above described
financial statements, neither any Borrower nor any of the Subsidiaries has any
contingent or disputed liabilities or unrealized or anticipated losses or
commitments which in the aggregate are material. Since the last date shown above
for the balance sheets of each Borrower, there has been no change in the
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condition, business or prospects, financial or otherwise, of such Borrower or
its Subsidiaries as shown on the balance sheet as of such date and no change in
the aggregate value of the property owned by such Borrower and its Subsidiaries,
including the Property, except changes in the ordinary course of business.
(b) Financial Projections and Pro Forma Balance Sheets. The
Borrowers have delivered to the Agent (i) five year income and cash flow
projections of the Borrowers prepared on a Combined basis (the "Projections")
and (ii) a pro forma balance sheet of the Borrowers prepared on a Combined basis
and dated as of June 30, 1999, as adjusted through the date hereof on a pro
forma basis (the "Pro Forma Balance Sheets"). Such Projections and Pro Forma
Balance Sheets set forth in the Borrowers' judgment a reasonable range of
possible results in light of the history of the businesses the Borrowers are
currently engaged in or are acquiring, present and reasonably foreseeable
conditions and the intentions of the Borrowers' management. Such Projections and
Pro Forma Balance Sheets accurately reflect the liabilities of the Borrowers
upon consummation of the transactions contemplated hereby as of the date hereof.
To the Borrowers' knowledge, no material events have occurred since the
preparation of the Projections and Pro Forma Balance Sheets which would cause
such projections and pro forma balance sheet taken as a whole, not to be
reasonably attainable.
3.5 Litigation. Except as set forth on Schedule 3.5 attached
hereto, there is no material litigation or proceeding of any kind whatsoever
pending, nor to the knowledge of Borrowers threatened, nor any judgment, order,
writ, injunction, decree or award outstanding, which could adversely affect the
Borrowers or the Subsidiaries or the operation of any of their businesses, or
their properties including the Property, nor do the Borrowers know or have
reasonable grounds to know of any basis for any such action or any governmental
investigation or any claim relating to the Borrowers or the Subsidiaries or the
operation of any of their businesses, or their properties including the
Property. Except as set forth on Schedule 3.5 attached hereto, the Borrowers and
the Subsidiaries have each complied with all material provisions of all
agreements to which they are parties or by which they are bound and are not in
default under any of them or in the payment of any of their obligations.
3.6 Validity; Binding Effect; Enforceability; No Conflicts. The
execution and delivery of the Loan Documents to be executed and/or delivered by
any Loan Party, the borrowings under the Loan Documents, the performance by each
Loan Party of its obligations under the Loan Documents and the assignment of,
and the grant of the liens on and security interests in, the Loan Parties'
various rights, titles and interests, to the Agent (for the benefit of the
Banks) by the Loan Documents, do not, and will not, contravene any provision of
law, or of the articles of incorporation or by-laws of any Loan Party, or of any
agreement, instrument or other document or of any judicial, arbitration or
local, state or federal governmental requirement or restriction to which any
Loan Party is a party or by which it is bound, or result in the creation or
imposition of any lien or other encumbrance on any of the property of any Loan
Party including the Property except the liens and security interests granted by
the Loan Documents; and any and all consents or approvals of any kind
whatsoever, including approvals and consents of any local, state or federal
governmental unit, commission, authority, agency or other body, required to be
obtained in connection therewith have been obtained and are in full force and
effect. This Agreement constitutes, and the other Loan Documents when duly
executed will constitute, legal, valid and binding obligations of any Loan Party
enforceable in accordance with their respective terms. Each Loan Party is duly
authorized to execute and deliver this Agreement and the other Loan Documents to
which it is a party; all action necessary and proper to authorize the execution
and delivery of the Loan Documents has occurred; and each Loan Party is, and
will continue to be, duly authorized, and has, and shall continue to have, the
right, power and authority, to execute and deliver the Loan Documents and to
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make the assignment and grant the liens and security interests pursuant to the
Loan Documents as well as to borrow under the Loan Documents to which it is a
party and to perform all of the other terms and conditions of the Loan
Documents.
3.7 Permits. The Borrowers have obtained, or caused to be
obtained, all permissions, licenses, easements, rights-of-way, leasehold and fee
interests and all local, state and federal governmental approvals,
authorizations, consents and permits as well as all other rights, titles and
interests necessary to the ownership, development and operation of the
properties of the Borrowers and the Restricted Subsidiaries (including the
Property) and the gas and oil xxxxx (the "Partnership Xxxxx") in which the
Partnerships have ownership interests, and the conduct of their businesses, all
of which are in full force and effect.
3.8 Operation of Xxxxx and the Pipeline. The statements relating
to the transportation of gas and oil through the Pipeline and the production of
gas and oil from the Xxxxx for the period ending January 31, 1999 heretofore
furnished by the Borrowers to the Agent are accurate; since January 31, 1999
there has been no damage, destruction or loss to the Pipeline or to any of the
Xxxxx; the Pipeline is currently in operation and the monthly transportation of
gas and oil through the Pipeline has not materially changed; and except for
temporary, involuntary shut-ins, all of the Xxxxx are currently in production
and the monthly production from each of the Xxxxx has not materially changed.
3.9 Public Utility Holding Company. No Borrower, nor any
Subsidiary of a Borrower, is a holding company or a subsidiary of a holding
company or a public utility company as such terms are defined in the Public
Utility Holding Company Act of 1935.
3.10 ERISA. No Borrower or Subsidiary has received notice that the
Pension Benefit Guaranty Corporation ("PBGC") has made a determination that,
with respect to any Plan (as hereinafter defined) of any Borrower, or any
Subsidiary or other affiliate of any Borrower, an event or condition has
occurred which constitutes grounds under the Employee Retirement Income Security
Act of 1974, as amended ("ERISA") for the termination of, or for the appointment
of a trustee to administer, any such Plan. As used herein, "Plan" shall be
defined as any employee benefit plan or other plan maintained for employees of
any Borrower, or any Subsidiary or other affiliate of any Borrower, covered by
ERISA.
3.11 Regulation U, T and X. No Borrower nor any Subsidiary is
engaged in the business of extending credit for the purpose of purchasing or
carrying margin stock (within the meaning of Regulation U, T or X of the Board
of Governors of the Federal Reserve System), and no part of the proceeds of any
advance under the Loan Documents will be used to purchase or carry any margin
stock or to extend credit to others for the purpose of purchasing or carrying
any margin stock.
3.12 Compliance with Law. Each Loan Party has complied with, and is
in compliance with, all applicable local, state and federal laws, rules and
regulations relating to all of its activities including, but not limited to, the
operation of the Xxxxx and the Pipeline and the offer and sale of securities.
3.13 Taxes. All tax returns and reports of the Borrowers and the
Subsidiaries required by law to be filed have been duly filed, and all taxes,
assessments, fees and other governmental charges upon the Borrowers and the
Subsidiaries or upon any of the property of the Borrowers and the Subsidiaries
including the Property and upon any of the other assets, income or franchises of
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the Borrowers and the Subsidiaries which are due and payable have been paid,
except taxes, assessments, fees and other governmental charges being contested
in good faith as set forth in Section 5.10 hereof unless required to be paid as
set forth in such Section and subject to the reserve requirements set forth in
Section 5.10 hereof.
3.14 Relationship of Borrowers. The Borrowers are engaged in
related businesses operated as part of one consolidated business entity and each
Borrower is directly and indirectly dependent upon each other Borrower for and
in connection with their business activities and their financial resources; and
each Borrower has determined, reasonably and in good faith, that such Borrower
will receive substantial direct and indirect economic and financial benefits
from the borrowings made under this Agreement, and such borrowings are in the
best interests of such Borrower, having regard to all relevant facts and
circumstances.
3.15 Status as Producers of Gas. Atlas Energy Group, Inc., Atlas
Energy Corporation, Atlas Resources, Inc., Resource Energy, Inc., Viking
Resources Corporation, DAC Acquisition Corporation, St. Julien III Corporation
and REI-NY, Inc. are producers of oil and/or natural gas; none of the other Loan
Parties is a producer of oil and/or natural gas.
3.16 Year 2000. The Borrowers and their Subsidiaries have reviewed
the areas within their business and operations which could be adversely affected
by, and have developed or are developing a program to address on a timely basis,
the risk that certain computer applications used by the Borrowers or their
Subsidiaries (or any of their respective material suppliers, customers or
vendors) may be unable to recognize and perform properly date-sensitive
functions involving dates prior to and after December 31, 1999 (the "Year 2000
Problem"). Any Year 2000 Problem of the Loan Parties is not reasonably expected
to result in any material adverse change in the business, properties, assets,
financial condition, results of operations or prospects of any such Loan Party,
or impair materially the ability of any such Loan Party to duly and punctually
pay or perform the Indebtedness.
3.17 Environmental Matters. To the best of each Borrower's
knowledge, (i) the Property is and has been in compliance, in all material
respects, with all applicable local, state and federal environmental laws, rules
and regulations, (ii) there have been no releases of any chemical, material,
substance or waste which is a threat to the public health, safety or welfare or
the environment or the health of living organisms, or any hazardous, toxic,
contaminating or polluting substance as defined by any environmental law, rule
or regulation (individually and collectively "Hazardous Substances") and (iii)
there is no basis for the imposition of environmental liability against the
Property or for the imposition of any environmental liability against any
former, present or future owner or operator of the Property.
3.18 Investment Company Act. No Borrower or any Subsidiary is an
"investment company" registered or required to be registered under the
Investment Company Act of 1940, as amended from time to time, or a company under
the "control" of an "investment company," as those terms are defined in such
Act, and shall not become such an "investment company" or under such "control."
3.19 Disclosure. No representation or warrant made by any Borrower
in this Agreement or in the Acquisition Agreement, or in any financial
statement, report, certificate or any other document furnished in connection
herewith or therewith contains any untrue statement of fact or omits to state
any fact necessary to make the statements herein or therein not misleading.
There is no fact known to Borrowers or which reasonably should be known to
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Borrowers which Borrowers have not disclosed to Agent in writing with respect to
the transactions contemplated by the Acquisition Agreement, or this Agreement
which could reasonably be expected to have a material adverse effect on any
Borrower or any Subsidiary.
3.20 Delivery of Acquisition Agreement. Agent has received complete
copies of the Acquisition Agreement (including all exhibits, schedules and
disclosure letters referred to therein or delivered pursuant thereto, if any)
and all amendments thereto, waivers relating thereto and other side letters or
agreements affecting the terms thereof. None of such documents and agreements
has been amended or supplemented, nor have any of the provisions thereon been
waived, except pursuant to a written agreement or instrument which has
heretofore been delivered to Agent.
3.21 Updates to Schedules. Should any of the information or
disclosures provided on any of the schedules attached hereto or to any other
Loan Document become outdated or incorrect in any material respect, the affected
Loan Party shall promptly provide the Agent in writing with such revisions or
updates to such schedules as may be necessary or appropriate to update or
correct same; provided, however, that no schedule shall be deemed to have been
amended, modified or superseded by any such correction or update, nor shall any
breach of warrant or representation resulting from the inaccuracy or
incompleteness of any such schedule be deemed to have been cured thereby, unless
and until the Required Banks, in their sole and absolute discretion, shall have
accepted in writing such revisions or updates to such schedule.
3.22 Solvency. On the date hereof, and as of the date of each
advance of a Loan and issuance or renewal of any Letter of Credit, as the case
may be, and after giving effect to such advance or the issuance or renewal of a
Letter of Credit, and after giving effect to the consummation of the
transactions contemplated by this Agreement and the Acquisition Agreement, each
Borrower is, and will be, Solvent.
SECTION 4. SECURITY.
To secure the payment of principal of, and interest on, the Note,
all reimbursement and other obligations relating to the Letters of Credit, and
all fees, costs, expenses and other charges to be paid or reimbursed by the Loan
Parties under the Loan Documents and all other Indebtedness and other
obligations of the Loan Parties to the Agent and the Banks under the Loan
Documents and the performance of the terms of the Loan Documents and all other
instruments and documents executed by any Loan Party in favor of, or for the
benefit of, the Agent and the Banks with respect thereto:
4.1 Security Documents. The Borrowers hereby agree to execute and
deliver, or cause to be executed and delivered, to the Agent, on behalf of the
Banks, the following:
A. One or more mortgages and security agreements (and/or
amendments thereto) substantially in the form of Exhibit "D" attached hereto and
made a part hereof, as one or more may be amended, modified or supplemented from
time to time, which shall assign to Agent, and grant to Agent, on behalf of the
Banks, a lien on and security interest in, all the property of the Borrowers and
the Restricted Subsidiaries described in the Mortgages including the Xxxxx, the
Pipeline and the premises known as 000 Xxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxxxxx.
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B. One or more security agreements substantially in the form of
Exhibits "E-1" and "E-2" attached hereto and made a part hereof, as one or more
may be amended, modified or supplemented from time to time, which shall assign
to Agent, and grant to Agent, on behalf of the Banks, a security interest in,
all the property of the Borrower and the Restricted Subsidiaries described in
the Security Agreements including all rights, titles and interests of the
Borrowers and the Restricted Subsidiaries in and to the Partnerships, accounts,
general intangibles and inventory and in any notes evidencing intercompany loans
or advances.
C. One or more pledge agreements substantially in the form of
Exhibit "F" attached hereto and made a part hereof, as one or more may be
amended, modified or supplemented from time to time, which assign to Agent, and
grant to Agent, on behalf of the Banks, a lien on and security interest in, all
the property of the Borrowers and the Restricted Subsidiaries described in the
Pledge Agreement including all of the Borrowers' rights, titles and interest in
and to the stock of the Restricted Subsidiaries, together with undated stock
powers executed in blank.
D. All Financing Statements and all amendments and modifications
thereof and all supplements thereto and all notification and control agreements
required by Agent in connection with the liens and security interests granted
pursuant to the Mortgage, the Security Agreements and the Pledge Agreement.
E. A pledge and collateral assignment of escrow account rights,
as amended, modified or supplemented from time to time, which shall assign to
Agent, and grant to Agent on behalf of the Banks, a security interest in and to
the proceeds owed to Resource America, Inc. of the escrow account established
and maintained pursuant to the terms of the Acquisition Agreement.
4.2 Set-Off. Each Borrower hereby gives to each Bank a lien on,
and security interest in, any and all property, credits, securities, monies and
claims of such Borrower which may at any time be delivered to, or be in the
possession of, or owed to such Borrower by, such Bank in any capacity whatsoever
including the balances of any and all accounts maintained by such Borrower with
such Bank. Each Borrower authorizes each Bank in case of a default under Section
9 hereof, at such Bank's option, at any time and from time to time, to apply to
the payment of the Indebtedness any such property, credits, securities, monies
and claims. In the event that in the exercise of the rights set forth in this
Section 4.2 any Bank applies to the payment of the Indebtedness any property,
credits, securities, monies or claims which belong to a person, corporation or
entity other than a Borrower, such Bank shall promptly deliver such property,
credits, securities, monies or claims (or at the option of such Bank, an amount
of cash equivalent to the value thereof at the time such Bank makes such
application) to the persons, corporations or other entities entitled thereto, or
at the option of such Bank to such Borrower, upon being furnished with evidence
satisfactory to such Bank of such property, credits, securities, monies or
claims and the identity of the persons, corporations or other entities entitled
thereto.
4.3 Additional Security - Generally. In the event that any
Borrower or Restricted Subsidiary is to provide additional security for the
payment of the Indebtedness and the performance of the Loan Documents, such
additional security shall be of such kind, in such form and have such value as
Agent shall in its sole discretion require and shall be otherwise acceptable to
Agent. The Borrowers shall execute and deliver, or cause to be executed and
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delivered to Agent, on behalf of the Banks, such new or amended Mortgage and/or
Security Agreement and/or Pledge Agreement relating to such additional
collateral, as well as such other instruments, papers and other documents, and
take such further action in connection therewith, as the Agent shall in its sole
discretion require (including but not limited to providing reports and opinions
relating to matters concerning title to such additional security and concerning
the priority of the lien(s) and security interest(s) granted by such new or
amended mortgage and/or security agreement and/or pledge agreement).
4.4 Certain Additional Security. The Borrowers hereby agree to
deliver, or cause to be delivered, to the Agent, within thirty (30) days of the
date hereof, and within thirty (30) days of the acquisition of any new oil and
gas properties or interests, such new or amended Mortgage(s) and/or Security
Agreement(s) necessary to grant to the Agent for the benefit of the Banks a lien
on and security interest in substantially all of the interests of the Borrowers
and the Restricted Subsidiaries in producing oil and gas xxxxx and associated
reserves, related pipeline and related contract rights and other property, and
further agrees to take such other action as required by Section 4.3 in
accordance therewith.
4.5 Operating Accounts. Each Borrower agrees to maintain, or cause
to be maintained, all of the principal operating accounts of the Borrowers and
each Restricted Subsidiary at the Agent and agrees to deposit, or cause to be
deposited, in such accounts substantially all of its and their respective funds.
4.6 Guaranties. The Borrowers hereby agree to cause to be
delivered to the Agent for the benefit of the Banks, one or more Guaranty
Agreements executed by each Restricted Subsidiary of any Borrower, each
substantially in the form of Exhibit "C" attached hereto and made a part hereof,
whereby the Guarantors shall guarantee, and be surety for, the prompt and
punctual payment of the Indebtedness and the prompt and punctual performance of
the other obligations of the Borrowers under the Loan Documents. The Borrowers
shall cause each Subsidiary which becomes a Restricted Subsidiary after the date
hereof to execute and deliver to the Agent, for the benefit of the Banks, a
Guaranty Agreement. Such execution and delivery shall occur within fifteen (15)
days of such Subsidiary becoming a Restricted Subsidiary.
4.7 Subordination of Indebtedness and Liens. Any intercompany
loans or advances of any Borrower now or hereafter owed to or held by any other
Borrower are hereby subordinated to the Indebtedness of such other Borrower to
the Banks, and any document or instrument evidencing such loans or advances
shall contain a legend giving notice of such subordination. Any intercompany
loans or advances of any other Borrower due to such Borrower, if the Agent so
requests, shall be collected, enforced and received by such Borrower as trustee
for the Banks and be paid over to the Agent for the account of the Banks on
account of the Indebtedness but without affecting in any manner the liability of
such Borrower under the other provisions of this Agreement or any other Loan
Document. Any Lien, claim, right or other encumbrance on any property of any
Loan Party in favor of any Borrower is hereby subordinated in all respects to
the Liens granted to the Agent for the benefit of the Banks.
SECTION 5. AFFIRMATIVE COVENANTS.
For so long as any Indebtedness remains unpaid, unless the Agent
(with the approval of the Required Banks) otherwise consents in writing, each
Borrower agrees that:
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5.1 First Lien Undertakings. The Borrowers shall obtain and
deliver, or cause to be obtained and delivered, to the Agent and the Banks such
legal opinions, title reports, representations, letters, acknowledgments,
attornment agreements, releases, disclaimers, subordinations of prior liens and
security interests, non-disturbance agreements, certificates of non-interference
with easements, rights-of-way or coal operations and such other documents as may
be requested by the Agent and the Banks from time to time, and shall take, or
cause to be taken, all steps, to satisfy all requirements of the Agent and the
Banks that the Borrowers and the Subsidiaries and the Partnerships have, and
will have, good and marketable rights, titles and interests in and to all of
their properties including the Property and the Partnership Xxxxx and that the
liens and security interests described in Section 4 hereof are valid and
perfected first liens and security interests, free and clear of all liens and
encumbrances except Permitted Liens.
5.2 Protection of Rights, Titles and Interests. Each Borrower will
take, or cause to be taken, all steps necessary and proper (i) to protect and
enforce its, the Subsidiaries' and the Partnerships' rights, titles and
interests in and to all their respective properties (including the Property) and
in connection with their respective businesses and (ii) to comply with all
duties, terms and conditions undertaken or assumed by the Borrowers, the
Subsidiaries and the Partnerships in connection with their properties (including
the Property) and their businesses.
5.3 Operation and Maintenance. Each Borrower will continuously
operate, or cause to be operated, its and the Subsidiaries' properties
(including the Property) and the Partnership Xxxxx in a good and workmanlike
manner and in accordance with sound and approved practices and shall use its
best efforts consistent with good business practices to generate, or cause to be
generated, the greatest amount of revenue in connection with its and the
Subsidiaries' properties (including the Property) and the Partnership Xxxxx.
Borrower shall maintain, or cause to be maintained, all of its and the
Subsidiaries' properties (including the Property) and the Partnership Xxxxx in
good condition and, shall make, or cause to be made, all necessary renewals,
repairs, replacements, additions, betterments and improvements thereto.
5.4 Permits. Each Borrower will obtain and keep in full force and
effect, or shall cause to be obtained and kept in full force and effect, all
permissions, licenses, easements, rights-of-way, leasehold and fee interests and
all local, state and federal governmental approvals, authorizations, consents
and permits as well as all other rights, titles and interests necessary to the
ownership, development and operation of its and the Subsidiaries' properties
(including the Property) and the Partnership Xxxxx and to the conduct of their
businesses.
5.5 Compliance with Law. Each Borrower will comply with, or cause
to be complied with, all applicable local, state and federal laws, rules and
regulations relating to all of its and the Subsidiaries' activities including,
but not limited to, the operation of its and the Subsidiaries' properties
(including the Property) and the Partnership Xxxxx and the offer and sale of
securities.
5.6 Corporate Reorganization. The Borrowers shall, on or before
March 31, 2000, restructure and reorganize their capital structure such that
Viking and REI shall either merge with and into, or become wholly-owned
subsidiaries of, Atlas.
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5.7 Existence and Ownership. Each Borrower shall do, or cause to
be done, all things necessary to preserve and keep in full force and effect its
and the Subsidiaries' existences as corporations or limited liability companies,
their good standing under the laws of the states of their incorporation and
their qualification to do business, and their good standing as foreign
corporations, in all jurisdictions wherein their ownership of property or the
nature of their businesses requires such qualification. Each Loan Party shall
continue to be the legal and beneficial owner of at least the percentages of the
issued and outstanding securities of the Subsidiaries which it owns currently
plus all additional percentages of such securities which it may acquire
hereafter.
5.8 Reports, Certifications and Other Information. Upon request of
Agent and the Banks, the Borrowers shall deliver, or cause to be delivered, to
Agent and the Banks, within sixty (60) days after the end of each fiscal quarter
(and if a default as set forth in Section 9 hereof shall have occurred and be
continuing, within thirty (30) days after the end of each calendar month), a
report of operating, management and administration fees paid to the Borrowers or
any Subsidiary during such month together with statements setting forth the
quantity of gas and oil produced from the Xxxxx and the quantity of oil and gas
transported through the Pipeline during such month, the price paid or to be paid
for such gas and oil and the transportation and compression thereof, the
Borrowers' Proceeds (showing in detail the computation whereby the Borrowers'
Proceeds are determined) and such other information as the Agent and the Banks
may request which may include but not be limited to a report prepared by the
Borrowers showing the performance of each Well and Partnership on a quarterly or
monthly, as the case may be, basis and on a cumulative basis as well as such
information as is customarily set forth in a meter statement.
Within fifty-five (55) days after the end of each fiscal
quarter of each fiscal year of the Borrowers and the Subsidiaries, the Borrowers
shall furnish to Agent and each Bank such unaudited financial statements of the
Borrowers and the Subsidiaries ("Quarterly Reports") as Agent and the Banks
shall request (consisting of at least a balance sheet as of the close of such
quarter and a profit and loss statement and a statement of cash flow for such
quarter and for the period from the beginning of the fiscal year to the close of
such quarter), which statements shall be in such detail as Agent shall require,
shall show the Borrowers' and the Subsidiaries' financial conditions at the
close of such fiscal quarter and the results of their operations for the period
then ended (in each case prepared on a Combined and a consolidating basis) and
shall be prepared by the chief financial officers of the Borrowers and the
Subsidiaries in accordance with GAAP consistently applied and certified by such
officer, subject only to ordinary and usual year end audit adjustments.
Within one hundred one hundred (100) days after the end of
each fiscal year of the Borrowers and the Subsidiaries, the Borrowers shall
furnish to Agent and the Banks a copy of the annual audited financial statements
of the Borrowers and the Subsidiaries prepared on a Combined and a consolidating
basis in conformity with GAAP consistently applied by certified public
accountants satisfactory to Agent and the Banks and certified without
qualification as to scope.
The Borrowers shall deliver to the Agent and the Banks,
together with each delivery of financial statements required by this Section
5.8, a certificate substantially in the form of Exhibit "G" hereto,
appropriately completed, (A) stating that the signer has reviewed the terms of
this Agreement and of the other Loan Documents and has made, or caused to be
made under his supervision, a review of the transactions and condition of the
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Borrowers and the Subsidiaries during the accounting period covered by such
financial statements and that such review has not disclosed the existence during
such accounting period, and that the signer does not have knowledge of the
existence, as at the date of such certificate, of any condition or event which
constitutes a default under Section 9 hereunder with respect to the covenants
set forth in Sections 5.16, 5.17, 5.18, 5.19, and 6.12 hereof, or which, after
notice or lapse of time or both, would constitute a default with respect to the
covenants set forth in Sections 5.16, 5.17, 5.18, 5.19 and 6.12 hereof, or, if
any such condition or event existed or exists, specifying the nature and period
of existence thereof and what action the Borrowers have taken or are taking or
propose to take with respect thereto, (B) demonstrating in reasonable detail
compliance, as at the end of such accounting period, with the restrictions
contained in Sections 5.16, 5.17, 5.18, 5.19 and 6.12 hereof and (C) setting
forth in reasonable detail (i) any advances or payments made with respect to
intercompany notes or accounts during the accounting period covered by such
financial statements together with the closing balance of each such note and
account and the interest accrued thereon and (ii) the amount of any management
fees or similar advances made during the applicable accounting period.
The Borrowers shall give to the Agent and the Banks prompt
notice in writing of the occurrence or existence of any default under Section 9
hereof, or of any event which, with the giving of notice or lapse of time or
both would become such a default.
At any time and from time to time, the Borrowers will submit,
or cause to be submitted, to the Agent and the Banks promptly, in such form as
Agent and the Banks shall require, such other information relating to the
financial affairs of the Borrowers and the Subsidiaries, to the properties of
the Borrowers and the Subsidiaries including the Property, to the businesses of
the Borrowers and the Subsidiaries or otherwise as Agent and the Banks shall
reasonably request.
5.9 Records and Access. Each Borrower shall keep, or cause to be
kept, full and complete books and records in which correct and accurate entries
will be made of all of its and the Subsidiaries business transactions and their
properties including the Property and at any time and from time to time shall
give, or cause to be given, to the Agent or the Banks or their representatives
full access during normal business hours to examine and copy all of the
Borrowers' and the Subsidiaries' properties including the Property and their
books, contracts and records.
5.10 Payment of Taxes and Mechanics' Claims. Each Borrower will
pay, or cause to be paid, all taxes, assessments, license fees and other
governmental charges and all claims of mechanics and materialmen to which it or
any of the Subsidiaries or any of their properties including the Property shall
be subject, and all other charges on or relating to any of their properties
including the Property, before such charges and claims become delinquent, except
that no such charge or claim need be paid for so long as its validity or amount
shall be contested in good faith by appropriate proceedings duly prosecuted and
such Borrower and the Subsidiaries shall have set up in their books such
reserves with respect thereto as shall be dictated by sound accounting
practices; provided, however, that all such charges and claims shall be paid,
subject to refund proceedings, if failure to pay would adversely affect the
rights or titles of any Borrower or any of the Subsidiaries to any of their
properties including the Property.
5.11 Insurance. Each Borrower will keep, or cause to be kept, with
financially sound and reputable insurers, such insurance with respect to its and
the Subsidiaries' businesses and properties including the Property, in such
amounts and insuring against such risks, casualties and contingencies of such
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types (including but not limited to insurance for loss or damage by fire and
other hazards and insurance for liability for damage to persons and property in
connection with their properties including the Property and the activities
conducted thereon or relating thereto) as is customary for persons, corporations
and other entities of established reputations engaged in the same or similar
businesses as the Borrowers and the Subsidiaries and similarly situated, naming
Agent (for the benefit of the Banks) as mortgagee or lender loss payee or
additional insured as its interests may appear, and will keep, or cause to be
kept, such insurance as required by any applicable workmen's compensation laws,
and will furnish, or cause to be furnished, certificates of all such insurance
to Agent upon the execution hereof and within one hundred twenty (120) days
after the end of each of its fiscal years. All policies shall provide that they
may not be altered or cancelled except on thirty (30) days' prior written notice
to Agent.
5.12 Duty to Plug. If and when any of the Xxxxx ceases producing
gas and oil in paying quantities or is of no further use, or any Borrower,
Subsidiary or Partnership or any other person, corporation or other entity is
required to do so under any agreement or law, the Borrowers will plug and
abandon, or cause to be plugged and abandoned, any and all such Xxxxx in
accordance with the local, state and/or federal laws and regulations then in
force and regulating the plugging of gas and oil xxxxx. Each Borrower further
consents and agrees that it will save harmless Agent, the Banks, their
respective officers, directors and employees, and their respective successors
and assigns, of and from any loss, damage and penalty through failure, if any,
to plug, or cause to be plugged, such Well or Xxxxx as herein provided.
5.13 Expenses, Fees and Disbursements. The Borrowers shall pay, or
cause to be paid, all reasonable expenses, fees and disbursements incurred in
connection with the recordation, filing, continuation, satisfaction and
termination of the Mortgage, the Financing Statements and any other Loan
Documents and any other instruments or documents relating thereto and the
reasonable fees, expenses and disbursements of Agent's counsel in connection
with this Agreement and the other Loan Documents, and any other instruments or
documents relating thereto, their preparation, administration and enforcement as
well as the fees, expenses and disbursements of the Agent and its counsel, and
others (including but not limited to geologists and engineers) engaged by Agent
to provide information and advice in connection with this Agreement and the
other Loan Documents and any other instruments or documents relating thereto,
their preparation, administration and enforcement. Upon and after the occurrence
of any default under Section 9 hereof, the Borrowers shall also pay, or cause to
be paid, all reasonable fees, expenses and disbursements of the Banks and their
counsel and others (including but not limited to, geologists and engineers)
engaged by the Banks in connection with the enforcement, amendment, waiver or
restrictive of this Agreement and the other Loan Documents.
5.14 Assigned Payments. In connection with any amounts due to any
Loan Party which are assigned to Agent (for the benefit of the Banks) pursuant
to the Mortgage, the Security Agreement and/or any other Loan Document, upon
notice to the payor thereof by Agent, such payments shall be made directly by
the payor thereof to Agent. Agent is, and/or its duly authorized agents are,
hereby authorized by each Borrower to endorse for and on such Borrower's behalf
and deposit all drafts and checks payable to such Borrower, and such authority
shall continue while any Indebtedness is outstanding. In the event that any such
assigned amounts paid to Agent consist of amounts belonging in whole or in part
to any person, corporation or entity other than a Loan Party, the Agent shall
promptly deliver such amounts or parts thereof to such persons, corporations or
entities, or at the option of Agent to the Borrowers, upon being furnished with
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evidence satisfactory to the Agent of such amounts or parts thereof and the
identity of such persons, corporations or other entities.
5.15 Notification. Within ten (10) days after any Borrower, any
Subsidiary or any Partnership receives notice of any litigation or any judicial
or administrative proceeding pending or threatened against it which might result
in such Borrower, Subsidiary or Partnership being liable for the payment or
performance of obligations in excess of Two Hundred Fifty Thousand ($250,000)
Dollars with respect to any single such litigation or proceeding, or in excess
of One Million ($1,000,000) Dollars in the aggregate with respect to all such
litigations or proceedings, the Borrowers shall notify the Agent and the Banks,
or cause the Agent and the Banks to be notified, in writing of such litigation
or proceeding.
5.16 Current Ratio. The current assets of the Borrowers on a
Combined basis (determined in accordance with GAAP) divided by the positive
difference between (i) the current liabilities of the Borrowers on a Combined
basis (determined in accordance with GAAP) and (ii) the product of (x) the
advance payments received by the Borrowers for the drilling and completion of
oil and gas xxxxx which are classified as current liabilities times (y) fifteen
percent (15%), shall at all times exceed the ratio of .85 to 1.00.
For the purposes of this Section 5.16 alone, (i) the principal
balances outstanding under the Notes shall be deemed not to be a current
liability and (ii) the unused availability under the Revolving Credit shall be
deemed to be a current asset.
5.17 Debt to EBITDA. The Total Indebtedness of the Borrowers on a
Combined basis divided by the EBITDA of the Borrowers on a Combined basis
(calculated for the four most recently completed fiscal quarters) shall at all
times be less than the following ratios for the fiscal periods ending on the
following dates (inclusive):
Fiscal Periods Ending: Maximum Ratio:
---------------------- --------------
9/30/99 through 3/31/00 3.25 to 1.00
6/30/00 and each fiscal 3.00 to 1.00
period ending thereafter
For the purposes of this Section 5.17 and of Section 5.18, (i)
the term "Total Indebtedness" shall mean total indebtedness of the Borrowers,
including all indebtedness for money borrowed or credit advanced, purchase price
obligations, obligations evidenced by bonds, notes or similar indentures,
capitalized lease obligations, guaranties, obligations with respect to letters
of credit, obligations under any commodity, interest or currency swap, future,
option or other similar agreement (except where any such swap, future, option or
other similar agreement is matched to an offsetting asset as in the case of
hedging with respect to the physical production and sale of oil and gas), and
any liability in the nature of any of the foregoing in its capacity as a general
partner, and (ii) the term "EBITDA" shall mean the sum of the Borrowers'
Combined net income plus interest expense plus tax expense plus depreciation
plus amortization plus other noncash charges to income minus noncash credits to
income (determined in accordance with GAAP).
5.18 Fixed Charge Coverage Ratio. The EBITDA of the Borrowers on a
Combined basis (calculated for the four most recently completed fiscal quarters)
divided by the sum of (i) the interest expense of Borrowers on a Combined basis
(calculated for the four most recently completed fiscal quarters) plus (ii)
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Current Maturities of Long Term Debt of Borrowers on a Combined basis plus (iii)
the aggregate amount of cash payments of contingent consideration made by or on
behalf of Viking pursuant to Section 3.3c of the Acquisition Agreement during
the four most recently completed fiscal quarters, must not be less than the
following ratios for the fiscal periods ending on the following dates
(inclusive):
Fiscal Periods Ending: Minimum Ratio:
---------------------- --------------
9/30/99 through 6/30/00 1.50 to 1.00
9/30/01 through 12/31/01 2.00 to 1.00
3/31/02 and each fiscal 2.50 to 1.00
period ending thereafter
For the purposes of this Section 4.18, the term "Current
Maturities of Long Term Debt" shall mean that portion of the Borrowers' total
indebtedness for money borrowed or credit advanced (other than (i) trade credit
incurred in the ordinary course of business and (ii) indebtedness to the Banks
under the Revolving Credit), however evidenced, which had a scheduled maturity
during the preceding four fiscal quarters.
5.19 Minimum Combined Tangible Net Worth. The Combined Tangible Net
Worth of the Borrowers shall at all times exceed the sum of (i) eighty-five
(85%) percent of the Combined Tangible Net Worth of the Borrowers as of
September 30, 1999 (provided that the Combined Tangible Net Worth of the
Borrowers on such date shall not be less than $27,000,000), plus (ii) an amount
equal to fifty percent (50%) of the cumulative positive Combined net income of
the Borrowers earned after September 30, 1999.
5.20 Additional Documents. From time to time, at the Agent's and
the Required Banks' request, whether before or after any borrowings hereunder,
the Borrowers at their expense will execute and deliver, or cause to be executed
and delivered, to Agent such instruments, papers and other documents and take,
or cause to be taken, such further action as Agent and the Required Banks
reasonably may require in connection with the transactions contemplated hereby
including the enforcement of the Loan Documents.
5.21 Environmental Matters. (a) The Borrowers will ensure that the
Property remains in compliance, in all material respects, with all local, state
and federal environmental laws, rules and regulations, and will not place or
permit to be placed on the Property any Hazardous Substances, except as not
prohibited by applicable environmental laws, rules or regulations, or in such
quantities as to not constitute a hazard to the environment or subject any
Borrower or Subsidiary to prosecution or liability in connection therewith.
(b) The Borrowers will employ, or cause to be employed, in
connection with the use of the Property, appropriate technology as the Borrowers
determine reasonably necessary to maintain compliance with any applicable
environmental law, rule or regulation and dispose, or cause to be disposed, of
any and all Hazardous Substances generated at the Property only at facilities
and with carriers that maintain valid permits under applicable environmental
laws, rules and regulations.
(c) In the event any Borrower or any Subsidiary obtains, gives or
receives notice of any release or threat of release of a reportable quantity of
any Hazardous Substances at the Property or receives any notice of violation,
request for information or notification that it is potentially responsible for
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investigation or cleanup of environmental conditions at the Property, or any
demand letter, complaint, order, citation or other written notice with regard to
any Hazardous Substances or violation of any environmental law, rule or
regulation, affecting the Property from any person or entity, including any
state agency responsible in whole or in part for environmental matters in the
state in which the Property is located or the United States Environmental
Protection Agency (any such person or entity is hereinafter referred to as the
"Authority") which might result in any Borrower or any Subsidiary being liable
for the payment or performance of obligations in excess of Ten Thousand
($10,000) Dollars with respect to any such event or in excess of One Hundred
Thousand ($100,000) Dollars in the aggregate with respect to all such events,
then the Borrowers shall, within five (5) days, give written notice of same to
the Agent detailing non-privileged and non-confidential facts and circumstances
of which the Borrowers are aware in connection therewith. Such information is to
be provided to allow Agent to protect its security interest in the Property and
is not intended to create any obligation upon the Agent or the Banks with
respect thereto.
(d) The Borrowers shall promptly forward to the Agent and the
Banks copies of any request for information, notification of potential
liability, demand letter for information, notification of potential liability,
demand letter relating to potential responsibility with respect to the
investigation or cleanup of Hazardous Substances at the Property and shall
continue to forward to the Agent and the Banks copies of correspondence between
any Borrower or any Subsidiary and the Authority regarding such claims until the
claims are settled. The Borrowers shall promptly forward to the Agent and the
Banks copies of all documents and reports concerning Hazardous Substances at the
Property that any Borrower or any Subsidiary is required to file under any
environmental law, rule or regulation. Such information is to be provided to
allow the Agent and the Banks to protect its security interest in the Property
and is not intended to create any obligation upon the Agent or the Banks with
respect thereto.
(e) If any Borrower or any Subsidiary shall fail to comply, or
cause to be complied, with any of the requirements of any environmental law,
rule or regulation, the Agent may, at its election, but without the obligation
to do so, for the sole purpose of protecting its security interest in the
Property, enter onto the Property (or authorize third parties to enter onto the
Property) and take such actions as the Agent (or such third parties as directed
by the Agent) deems reasonably necessary or advisable, after consultation with
the Borrowers, to comply with the requirements of such environmental laws, rules
and regulations including but not limited to cleaning up, removing, mitigating
or otherwise dealing with any release of Hazardous Substances. All reasonable
costs and expenses incurred by the Agent (or such third parties) in the exercise
of any such rights, including any sums paid in connection with any judicial or
administrative investigation or proceedings, fines and penalties, together with
interest thereon from the date expended at the highest lawful rate then payable
under the Notes then outstanding, shall be paid upon demand by the Borrowers.
(f) Promptly upon the written request of the Agent from time to
time, which written request may be made by the Agent only in the event of notice
to the Agent of discovery or occurrence of a release of Hazardous Substances at
the Property, the Borrowers shall provide, or cause to be provided and
addressed, to Agent for the benefit of the Banks, at the Borrowers' expense,
with an environmental site assessment or environmental audit report prepared by
an environmental engineering firm acceptable to the Agent in its reasonable
opinion, to assess with a reasonable degree of certainty the existence of a
release of Hazardous Substances and the potential costs in connection with the
abatement, cleanup and removal of any Hazardous Substances found on, under, or
within the Property. Any report or investigation of such release of Hazardous
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Substances proposed and acceptable to an appropriate Authority that is charged
to oversee the cleanup of such release of Hazardous Substances shall be
acceptable to the Agent. If such estimates, individually or in the aggregate,
exceed Fifty Thousand ($50,000) Dollars, the Agent shall have the right to
require the Borrowers to post a bond, letter of credit or other security
reasonably satisfactory to the Agent to secure payment of these costs and
expenses.
(g) The Borrowers shall defend and indemnify the Agent and each
Bank, their respective directors, officers and employees and each legal entity,
if any, who controls the Agent or any Bank (the "Indemnified Parties") and hold
each Indemnified Party harmless from and against all loss, liability, damage and
expense, claims, costs, fines and penalties, including attorney's fees, suffered
or incurred by any Indemnified Party, whether as a mortgagee in possession, or
as successor-in-interest to any Borrower or any Subsidiary, or otherwise, under
or on account of any environmental law, rule or regulation, including the
assertion of any lien thereunder, with respect to any release of Hazardous
Substances, the presence of any Hazardous Substances affecting the Property,
whether or not the same originates or emanates from the Property or any
contiguous real estate, including any loss of value of the Property as a result
of the foregoing so long as no such loss, liability, damage and expense is
attributable to any release of Hazardous Substances resulting from actions on
the part of such Indemnified Party. The Borrowers' obligations under this
Section 5.21 shall arise upon the discovery of the presence of any Hazardous
Substances at the Property, whether or not any Authority has taken or threatened
any action in connection with the presence of any Hazardous Substances. The
Borrowers' obligations and the indemnification hereunder shall survive the
payment in full of the indebtedness secured hereby and the satisfaction in full
of the other obligations secured hereby.
SECTION 6. NEGATIVE COVENANTS.
For so long as any Indebtedness remains unpaid, each Borrower agrees
that it will not, without the prior written consent of the Agent (with the
approval of the Required Banks):
6.1 Alienation. Sell, lease, transfer or otherwise dispose of or
alienate any of its property including the Property, or permit the sale, lease,
transfer or other disposition or alienation of any of the property of any
Subsidiary or any Partnership, except (i) the current sale in the ordinary
course of business of gas and oil transported through the Pipeline and gas and
oil as and when produced from the Xxxxx, (ii) the sale, lease, transfer or other
disposition or alienation for fair consideration in the ordinary course of
business of its, the Subsidiaries' and the Partnerships' properties other than
the Property, (iii) the sale, lease, transfer or other disposition or alienation
for fair consideration other than in the ordinary course of business of its and
the Subsidiaries' properties other than the Property having a fair market value
not to exceed One Million ($1,000,000) Dollars in the aggregate in any twelve
(12) month period, and (iv) the sale, lease, transfer or other disposition or
alienation for fair consideration of the Property having a fair market value not
to exceed Two Hundred Fifty Thousand ($250,000) Dollars in the aggregate in any
twelve month period; provided, that no Property may be sold, leased, transferred
or otherwise disposed of or alienated after the occurrence and during the
continuance of any default under Section 9 below.
6.2 Encumbrances. Permit, create, assume or incur any mortgage,
pledge, charge, security interest, lien or encumbrance of any kind upon any of
its, any Subsidiaries' or any Partnerships' properties (whether now owned or
hereafter acquired) including the Property, or commit any act or make any
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election which will require it or any of the Subsidiaries or any of the
Partnerships to reassign any of their properties including the Property, except
encumbrances (i) created and granted in this Agreement or any other Loan
Document or otherwise created or granted in favor of the Agent for the benefit
of the Banks, (ii) relating to current taxes, assessments, license fees and
other governmental charges and claims of mechanics and materialmen not
delinquent, or if delinquent being contested in good faith as set forth in
Section 5.10 hereof unless required to be paid as set forth in such Section and
subject to the reserve requirements set forth in such Section, (iii) imposed in
the normal course of the oil and gas business of the Borrowers and the
Subsidiaries in connection with obtaining surety bonds, (iv) imposed in the
normal course of business of the Borrowers and the Subsidiaries, other than in
favor of the Agent for the benefit of the Banks, on properties of the Borrowers
and the Subsidiaries hereafter acquired by them, provided that such liens and
encumbrances are imposed in connection with the financing of the acquisition of
such properties and are imposed only on the properties acquired on a nonrecourse
basis and (v) the Permitted Liens.
6.3 Guaranty. Become or be, or permit any Subsidiary to become or
be, a guarantor or endorser of, or surety for, or responsible in any manner
whatsoever with respect to, the payment or performance of any indebtedness,
obligation or undertaking of any other person, corporation or other entity, (i)
except in favor of the Banks in connection with the payment and/or performance
of any such indebtedness, obligation or undertaking, (ii) except by the
endorsement of negotiable instruments for deposit or collection in the ordinary
course of business, (iii) except (a) guarantees by a Borrower of the performance
by the Subsidiaries which are engaged in the oil and gas business of obligations
incurred by such Subsidiaries to provide goods and services in such business and
(b) the obligations of any Borrower or any Subsidiary arising in the ordinary
course of business in such party's capacity as a general partner of any
Partnership; provided that the obligations guaranteed pursuant to Subsection
6.3(iii)(b) shall not exceed Two Million ($2,000,000) Dollars at any one time,
and provided further that the aggregate amount of the outstanding obligations
guaranteed pursuant to Subsections 6.3(iii)(a) and 6.3(iii)(b) shall not exceed
Five Million ($5,000,000) Dollars at any one time, and (iv) except as permitted
in accordance with Section 6.6 hereof.
6.4 Debt. Create, assume, incur or permit to exist, any
indebtedness or obligation for the payment or repayment of money, whether
borrowed by, or advanced to or for the benefit of, any Borrower or any
Subsidiary, or otherwise, except (i) the borrowings under the Loan Documents and
any other indebtedness or obligation of any Borrower or any Subsidiary to the
Banks thereunder, (ii) indebtedness with respect to the intercompany advances
described in Subsection 6.5(vi) hereof, and (iii) other indebtedness, other than
in favor of the Banks, not exceeding Two Million ($2,000,000) Dollars in the
aggregate at any one time outstanding.
6.5 Loans; Investments. Make, or permit any Subsidiary to make,
any loan or advance to any person, corporation or other entity, or purchase or
otherwise acquire, or permit any such Subsidiary to purchase or otherwise
acquire, any capital stock, assets, obligations or other securities of, make any
capital contribution to, or otherwise invest in, or acquire any interest in, any
person, corporation or other entity, except: (i) direct obligations of the
United States of America or any agency thereof with maturities of one year or
less from the date of acquisition; (ii) commercial paper of a domestic issuer
rated at least "A-1" by Standard & Poor's Corporation or "P-1" by Xxxxx'x
Investors Service, Inc.; (iii) certificates of deposit with maturities of one
year or less from the date of acquisition issued by any Bank or any commercial
bank operating within the United States of America having capital and surplus in
excess of $50,000,000; (iv) for stock, obligations or securities received in
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settlement of debts (created in the ordinary course of business) owing to any
Borrower or any such Subsidiary; (v) loans from Transatco Corporation to TOPICO,
a partnership, not exceeding $850,000 Dollars in the aggregate at any one time
outstanding; (vi) loans from a Borrower or Restricted Subsidiary to another
Borrower or Restricted Subsidiary, so long as the Banks shall have been granted
a first perfected lien in such indebtedness, (vii) the stock held by a Borrower
on the date hereof as described in Section 3.2 hereof and (viii) other loans not
exceeding $2,000,000 in the aggregate at any one time outstanding.
6.6 Business Activities. (a) Subject to the provisions of
paragraph (b) below, engage in, or permit any Subsidiary to engage in, any
business other than the business which it now conducts.
(b) Notwithstanding anything to the contrary contained in this
Agreement, Atlas America, Inc., AIC, Inc., AED Investments, Inc. and ARD
Investments, Inc. shall not be permitted to engage in any business or conduct
any activity except (i) make the advances permitted in Subsection 6.5(vi)
hereof, (ii) hold the stock held by such Borrower on the date hereof as
described in Section 3.2 hereof, (iii) the ownership, maintenance and management
of intangible investments (which includes, without limitation, investments in
the types of assets listed in Subsection 6.5 (i), (ii) and (iii) hereof),
patents, patent applications, trademarks, trade names and similar types of
intangible assets), and the collection and distribution of income from such
investments and (iv) with respect to Atlas America, Inc. only, perform certain
administrative and management services on behalf of the other Borrowers in
exchange for a fee.
6.7 Consolidation or Merger, Change of Control. (a) Consolidate
with or merge into, or permit any Subsidiary to consolidate with or merge into,
any person, corporation or other entity or permit any person, corporation or
other entity to consolidate with or merge into any Borrower or any Subsidiary,
except for the merger of any Borrower or any Subsidiary of any other Borrower or
any Subsidiary of any Borrower (each, a "Permitted Merger").
(b) Permit any Change in Control. For the purposes of this
Agreement, the term "Change in Control" shall mean any change in the ownership
of the shares of stock of any Borrower or any Subsidiary of any Borrower other
than pursuant to a Permitted Merger or the recapitalization required by Section
5.6 above.
6.8 Acquisitions. Except as otherwise permitted or required in
this Agreement, purchase or otherwise acquire, or permit any Subsidiary to
purchase or acquire, any obligations or stock of, or any other interest in, or
all or substantially all of the assets of, any person, corporation or other
entity whatsoever, other than pursuant to a Permitted Merger or the
recapitalization required by Section 5.6 above.
6.9 Redemption. Directly or indirectly, purchase or redeem any of
the stock issued by any Borrower or permit any Subsidiary to purchase or redeem
any of the stock issued by such Subsidiary.
6.10 Distributions. Directly or indirectly, declare or make, or
incur any liability to make, any dividend or other distribution on the stock of
such Borrower or otherwise to the stockholders of such Borrower.
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6.11 Leases. Become, or permit any Subsidiary to become, lessee
under any lease of any real or personal property, except gas and oil leases in
the ordinary courses of their businesses and except such other leases entered
into in the ordinary courses of their businesses so long as the aggregate
payments to be made by the Borrowers and the Subsidiaries in connection with
such other leases in any fiscal year of the Borrowers do not exceed One Million
($1,000,000) Dollars.
6.12 Capital Expenditures. Make or permit during any fiscal year
the aggregate amount of the Borrowers' and Subsidiaries' exploration expenses to
exceed an amount equal to twenty (20%) percent of the Borrowers' and
Subsidiaries' total capital expenditures (on a consolidated basis) during such
fiscal year. For the purposes of this section, exploration expenses shall be
included within the calculation of the Borrowers' and Subsidiaries' total
capital expenditures.
6.13 Negative Pledges. Directly or indirectly enter into or assume,
or permit any Subsidiary to enter into or assume, any agreement (other than this
Agreement) prohibiting the creation or assumption of any lien or encumbrance
upon any of the Borrowers' or Subsidiaries' properties (including, without
limitation, the Property), whether now owned or hereafter created or acquired,
or otherwise prohibiting or restricting any transaction contemplated hereby.
SECTION 7. BORROWING REQUIREMENTS.
7.1 Conditions to Borrowing. Unless otherwise agreed to by the
Agent and the Banks and subject to the performance by the Loan Parties of their
other obligations under the Loan Documents, the Banks shall have no obligation
to advance any funds to the Borrowers or to issue or renew any Letter of Credit
until all legal matters incident to the transactions contemplated by the Loan
Documents are resolved in a manner satisfactory to Agent and the Banks and until
the Borrowers shall have provided Agent with the following:
A. This Agreement, the Notes, Mortgage, Guaranty Agreements,
Security Agreements, Pledge Agreement, Financing Statements and other Loan
Documents duly executed by the appropriate Loan Parties and all in form and
substance satisfactory to Agent and the Banks.
B. Evidence satisfactory to Agent and the Banks authorizing the
execution and delivery by each Loan Party of this Agreement, the Notes, the
Mortgage, the Guaranty Agreements, the Security Agreement, the Pledge Agreement,
the Financing Statements and the other Loan Documents.
C. Opinions of counsel for the Loan Parties, addressed to Agent
and the Banks, satisfactory to Agent's counsel, relating to such matters as the
Agent may reasonably require.
D. Certificates executed by the Borrowers stating that no
defaults have occurred which are unremedied or unwaived under any agreement,
lease, assignment or other document or instrument by or through which any
Borrower or Subsidiary has any rights, titles or interests in connection with
the Property.
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X. Xxxxxxxx satisfactory to Agent and the Banks that there has
been recorded in the appropriate offices documents and instruments establishing
that the Borrowers and the Partnerships have good and marketable rights, titles
and interests in and to the Property and the Partnership Xxxxx and delivery to
the Banks of copies of all the documents and instruments pursuant to which, or
establishing that, the Borrowers and the Partnerships acquired such rights,
titles and interests.
F. Evidence satisfactory to Agent and the Banks of the
recordation and filing of the Mortgage, the Financing Statements and any other
Loan Document as soon as possible after the date hereof, but in any event no
later than ten (10) days after the date hereof.
G. Delivery to the Agent of all original stock certificates of
all Restricted Subsidiaries of the Borrowers, together with duly executed
undated stock powers in blank.
H. Delivery to the Agent of all original executed intercompany
notes, if any, to be pledged in accordance with Section 6.5(vi) hereof.
I. A current certificate of good standing of each Loan Party and
a certificate of incumbency for each, together with certified resolutions of
each Loan Party's board of directors authorizing the execution of the Loan
Documents to which it is a party, and the performance by such Loan Party
pursuant thereto, and certified copies of each Loan Party's articles or
certificate of incorporation, by-laws, and all amendments thereto.
J. Payment of the Fees provided for herein to be paid upon the
execution hereof.
X. Xxxx searches covering the Borrowers, the Restricted
Subsidiaries and the Property and satisfactory to Agent and the Banks.
L. Payoff letters from each existing creditor to the Borrowers
and Subsidiaries whose loans are being repaid with proceeds of the Loans, in
form satisfactory to Agent and the Banks.
M. All UCC-3 termination statements, mortgage satisfaction
pieces, and other documents deemed reasonably necessary by the Agent and the
Banks in order to release the security interests and other Liens in or upon the
Borrowers' and the Subsidiaries' properties and assets held by any and all
creditors, executed and in recordable form where necessary.
N. Evidence satisfactory to the Agent and the Banks that all
conditions precedent to the consummation of the Acquisition have been satisfied
or provided for and that all other consideration required in connection with the
Acquisition has been paid or delivered (as appropriate), on terms and conditions
acceptable to the Banks, for a total effective purchase price of no more than
$42,000,000 consisting of $18,000,000 in cash, $18,000,000 in stock of Resource
America, Inc., and $6,000,000 in deferred consideration (consisting of
$3,000,000 in cash and $3,000,000 in stock), and receipt by the Banks of (A) a
fully-executed copy of the Acquisition Agreement and all agreements,
instruments, approvals and documents executed and delivered in connection
therewith, certified as true, correct and complete by an authorized officer of
the Borrowers, (B) any other evidence deemed reasonably necessary by and
satisfactory to the Banks that the Acquisition has been consummated upon the
terms and conditions of the Acquisition Agreement, including, without
limitation, the execution and delivery of all documents and agreements to be
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executed and delivered pursuant to the Acquisition Agreement, (C) a copy,
certified by an authorized officer of Viking, of all corporation action taken by
Viking to authorize the Acquisition, and (D) evidence satisfactory to the Banks
that all consents, waivers and permits required to be obtained in connection
with the Acquisition from any Person have been obtained and are in effect and
unconditional.
O. Evidence satisfactory to the Agent that the Borrowers shall
have established certain accounts with the Agent as set forth in Section 4.5
hereof.
P. Evidence of the Borrowers' insurance satisfactory to the Agent
and the Banks and which in all other respects comply with the requirements of
Section 5.11 hereof.
Q. A closing certificate executed by each of the Borrowers and
certifying the accuracy of the representations and warranties made to the Banks
in the Loan Documents, compliance with all agreements and covenants set forth
therein and that there exists no default under Section 9 hereof.
R. After giving effect to the initial Loans hereunder, the
Aggregate Collateral Value shall exceed the Aggregate Outstandings by at least
$1,000,000, and each Borrower's Individual Collateral Value shall exceed such
Borrower's Individual Outstandings.
S. Copies of the five year income Projections of the Borrowers
and their Pro Forma Balance Sheets, each prepared on a Combined basis and
acceptable in all respects to the Banks.
T. Evidence satisfactory to the Agent and the Banks that the
Borrowers are in compliance with Section 5.16 above on the date hereof.
U. Such other documents and instruments, and evidence of the
performance by Borrower of such other obligations, as the Banks may reasonably
request.
SECTION 8. DISBURSEMENT.
8.1 Procedure. Except as otherwise provided herein, the Borrowers
may request a borrowing or reborrowing hereunder by delivering to the Agent, not
later than 11:00 A.M. (Pittsburgh, Pennsylvania time) (i) on the proposed
borrowing or reborrowing date with respect to Loans to which the Base Rate
Option applies and (ii) three (3) Business Days prior to the proposed borrowing
or reborrowing date with respect to Loans to which the Euro-Rate Option applies,
a written notice in the form of Exhibit "B" hereto requesting, and specifying
the date (if other than the date of such request), the amount of the applicable
interest rate Option (and, in the case of a borrowing or reborrowing for which
the Euro-Rate Option shall apply, the applicable Euro-Rate Interest Period), the
Designated Borrower with respect to such Loan and the manner of, each borrowing
and reborrowing hereunder. Each request for a borrowing or reborrowing to which
the Euro-Rate Option shall apply shall be irrevocable and shall be further
subject to the provisions of Subsections 2.5(c) and 2.5(d) hereof. Subject to
Section 12.2 hereof, the Agent shall promptly notify the Banks of each request
for a borrowing or reborrowing on the same day on which the Agent receives such
a request, and each Bank shall make its Commitment Percentage of the requested
borrowing or reborrowing available to the Borrowers, in immediately available
funds at the principal office of the Agent, prior to 2:00 P.M. (Pittsburgh,
Pennsylvania time) on the date specified by the Borrowers in their request, and
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upon availability of such funds Agent shall, as directed by the Borrowers,
credit one or more of the accounts of deposit (the "Accounts") maintained by the
Borrowers at the Agent in the amount to be borrowed or reborrowed. Each
borrowing or reborrowing by the Borrowers or issuance or renewal of any Letter
of Credit hereunder issuance or renewal shall be conditioned on the following:
that at the time of such borrowing, reborrowing issuance or renewal the
representations and warranties contained in this Agreement are true and correct
and no default set forth in Section 9 hereof shall have occurred and be
continuing and no event which, with giving of notice or lapse of time or both
would become such a default, shall have occurred or shall have failed to occur
and be continuing; and each such borrowing, reborrowing, issuance or renewal
shall be deemed to be a representation and warranty by the Borrowers that the
foregoing conditions exist, and upon the request of Agent, the Borrowers shall
execute and deliver to the Agent a certificate as to the existence of the
foregoing conditions.
8.2 Use of Proceeds. Each Borrower represents, warrants and agrees
that all funds lent or advanced pursuant to this Agreement or any other Loan
Document have been, and shall be, used only for the following purposes: (i)
financing oil or natural gas drilling, producing, gathering and associated
activities and facilities by the Borrowers or Restricted Subsidiaries, (ii) the
prepayment in full of the indebtedness owed by Resource Energy, Inc. to KeyBank,
(iii) for the repayment by Viking to Atlas of a loan in the amount of $9,000,000
used to finance part of the cash portion of the purchase price due under the
Acquisition Agreement, (iv) for the repayment by Viking to Resource America,
Inc. of a loan in the amount of $9,000,000 used to finance the remaining part of
the cash portion of the purchase price due under the Acquisition Agreement, (v)
to refinance certain existing indebtedness owed under the Prior Loan Agreement,
which indebtedness is hereby expressly assumed by the Borrowers, each of whom
hereby agrees to be jointly and severally liable for the repayment of such
indebtedness as renewed and recast hereunder, and (vi) for the purpose of
funding other general corporate activities of the Borrowers and the Restricted
Subsidiaries. No proceeds of the Loans shall be advanced to any Unrestricted
Subsidiary.
8.3 Charging Account. Borrower agrees that each Bank and the Agent
may charge and is hereby authorized to charge any demand deposit account of the
Borrower maintained with the Agent or the Banks (including without limitation
the Accounts) for payment of principal of, or interest on, the Notes when due
and payable, reimbursement of Draws under the Letters of Credit and all other
charges set forth in the Loan Documents when due and payable including but not
limited to the Closing Fee, the Commitment Fee, any Letter of Credit Fee, the
fees provided for in the side letter among Borrowers and Agent and the charges
set forth in Sections 5.13 and 11.3 hereof.
SECTION 9. DEFAULTS.
If one or more of the following events occur:
A. Any Borrower or any Subsidiary or any Partnership makes an
assignment for the benefit of its creditors, becomes insolvent or admits in
writing its inability to pay its debts as they become due; or any Borrower or
any Subsidiary or any Partnership files a voluntary petition in bankruptcy or
files a petition or answer seeking for itself any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
present or future statute, law or regulation; or any Borrower or any Subsidiary
or any Partnership files an answer admitting or not contesting the material
allegations of any petition filed in any action commenced against such Borrower
or such Subsidiary or such Partnership in bankruptcy or seeking the relief
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described above in this Subsection 9.A, or any such action shall not have been
dismissed within thirty (30) days after it is commenced; or any Borrower or any
Subsidiary, or any of its officers, directors or shareholders, or any
Partnership, or any of its partners, takes any action looking to the dissolution
or liquidation of such Borrower or such Subsidiary or such Partnership; or any
Borrower or any Subsidiary or any Partnership applies for, consents to, or
acquiesces in the appointment of a trustee, receiver or liquidator for itself or
for any of its property or in the absence of such application, consent or
acquiescence such a trustee, receiver or liquidator is appointed and is not
discharged within thirty (30) days after being appointed; or
B. Any garnishment proceeding by attachment, levy or otherwise is
instituted against any deposit balance maintained, or any property deposited,
with any Bank by any Borrower or Subsidiary in an aggregate amount greater than
Fifty Thousand ($50,000) Dollars:
then this Agreement and the other Loan Documents shall immediately and
automatically be in default, any obligation of the Banks or the Agent under the
Loan Documents or otherwise to make any further advances to or for the benefit
of the Borrowers shall immediately and automatically terminate and the principal
of, and interest on, the Notes and all other indebtedness of the Borrowers and
the Subsidiaries to the Banks including, but not limited to all other
Indebtedness, shall immediately be due and payable without necessity of demand,
presentment, protest, notice of dishonor, notice of default or any other notice
whatsoever, all of which are hereby expressly waived by the Borrowers.
If one or more of the following events occur:
C. Default by any Borrower (i) in the payment of interest on the
Notes, in the payment of any obligation with respect to any Letter of Credit, or
in the payment of any Fee or in the payment of items of expense or other charges
to be paid by any Borrower pursuant to the Loan Documents, including but not
limited to the times set forth in Section 5.13 or 11.3 hereof, when due and
payable, and continuance thereof for ten (10) days thereafter, or (ii) in any
payment of any principal of the Loans made hereunder or of any reimbursement
obligation with respect to any Letter of Credit when due and payable.
D. One or more courts shall render a final judgment or judgments
against any Borrower or any Subsidiary or any Partnership in an aggregate amount
greater than One Hundred Thousand ($100,000) Dollars in excess of any insurance
protecting against the liability on which such judgment or judgments are based
and such judgment or judgments shall not be satisfactorily stayed, discharged,
vacated or set aside within thirty (30) days after the entry thereof, or, except
as set forth in Subsection 9.B hereof, one or more properties of any Borrower or
any Subsidiary or any Partnership shall be liened or attached under a claim or
claims in an aggregate amount greater than One Hundred Thousand ($100,000)
Dollars in excess of any insurance protecting against the liability on which
such lien or attachment is based and such lien or attachment shall not be
released or provided for to the satisfaction of the Agent within thirty (30)
days after the property is liened or attached;
E. Any Borrower or any Subsidiary shall fail to take, or cause to
be taken, corrective measures reasonably satisfactory to Agent within thirty
(30) days after notice to such Borrower or such Subsidiary with respect to any
litigation or any judicial or administrative proceedings pending or threatened
against such Borrower or such Subsidiary or any Partnership or the Property or
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any Partnership Well, the outcome of which, in the reasonable judgment of the
Agent, would materially and adversely affect the financial condition of such
Borrower or such Subsidiary or such Partnership or the Property or the
Partnership Xxxxx;
F. The PBGC shall make a determination that there has occurred an
event or condition which constitutes grounds under ERISA for the termination of,
or for the appointment of a trustee to administer, any Plan;
G. Default in the performance or observance of any negative
covenant contained in Section 6 hereof, or, the default in the performance or
observance of any other agreement, covenant or obligation of any Loan Party set
forth in this Agreement or any other Loan Document, which default does not
constitute a specific default set forth in this Section 9, and continuance
thereof for thirty (30) days;
H. Default in the performance or observance of any agreement,
covenant or obligation of any Borrower or any Subsidiary or any Partnership in
any agreement between any Bank and such Borrower and/or such Subsidiary and/or
such Partnership in addition to any Loan Document, or the existence of any
misrepresentation in connection therewith or related thereto, and continuance
thereof for more than the permitted period of grace, if any;
I. Except as set forth in Subsections 9.C, 9.G and 9.H hereof,
default in the payment or performance of any obligation for borrowed money for
which any Borrower or any Subsidiary or any Partnership is liable (directly, by
assumption, as guarantor, or otherwise) or in the payment or performance of any
obligation secured by any mortgage, pledge, charge, security interest or other
encumbrance with respect to any property of any Borrower or any Subsidiary or
any Partnership, or default under the Acquisition Agreement or any document or
agreement executed in connection therewith, and continuance thereof for more
than the permitted period of grace, if any;
J. Any representation or warranty made by any Loan Party herein
or in any other Loan Document is untrue in any material respect or any
certificate, schedule, statement, report, notice or writing furnished or made to
Agent or any Bank in connection with the transactions contemplated by the Loan
Documents is untrue in any material respect on the date as of which the facts
set forth therein are stated or certified;
K. Any Loan Party shall terminate its existence, dissolve,
liquidate substantially all of its assets, cease to exist or permanently cease
operations except as specifically permitted herein.
L. Any Change in Control.
M. If Xxxx X. Xxxxx [or any other person(s) acceptable to Agent
and the Required Banks as set forth in this Subsection 9.M] does not, regardless
of the reason therefor, continue to act as a senior officer and management
executive of each Borrower and to devote his entire time and attention to the
business and affairs of each Borrower; provided, however, that if such default
occurs, the Borrowers may cure such default by engaging, within sixty (60) days
after such occurrence such other person(s) as shall be reasonably acceptable to
Agent and the Required Banks:
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then the Agent, upon the instruction or with the approval of the Required Banks,
at their option, may immediately declare this Agreement and/or the other Loan
Documents in default, may terminate any obligations of the Agent or the Banks or
the Issuing Bank under the Loan Documents or otherwise to make any further
advances to or for the benefit of the Borrowers or issue or renew any Letter of
Credit and/or may declare the principal of, and interest on, the Notes and/or
all other indebtedness of the Borrowers and the Subsidiaries to the Agent, the
Banks and the Issuing Bank including but not limited to all other Indebtedness
immediately due and payable, whereupon all such indebtedness including but not
limited to the Indebtedness shall immediately become due and payable without
necessity of demand, presentment, protest, notice of dishonor, notice of default
or any other notice whatsoever, all of which are hereby expressly waived by each
Borrower.
Notwithstanding anything to the contrary contained in this Section
9, for purposes of this Section 9, neither this Agreement nor any other Loan
Document shall be, or be declared to be, in default upon the occurrence of any
of the events set forth above unless (i) any such event relates to a person,
corporation or other entity other than, or in addition to, any Partnership, or
(ii) any such event relates only to one or more Partnerships and the occurrence
of such event, together with all other such events occurring theretofore or
thereafter, does, or might, impair the collateral value of the Property in an
amount equal to at least Five Hundred Thousand ($500,000) Dollars as determined
by the Banks in their sole discretion; provided, however, that this paragraph
shall in no way affect the calculation of any Individual Collateral Value
hereunder or the Borrowers' obligations to make mandatory prepayments under
Section 2.4 above.
SECTION 10. REMEDIES.
The Agent (on behalf of the Banks) shall be entitled at the election
of the Required Banks, in their sole discretion, to exercise each and every
remedy accorded it by law and/or specifically set forth in the Loan Documents,
which remedies are specifically incorporated herein by reference. Such remedies
may be asserted concurrently, cumulatively, successively or independently from
time to time so long as any part of the Indebtedness remains unpaid. No delay on
the part of the Agent, the Banks and the Issuing Bank or failure by the Agents,
the Banks and the Issuing Bank to exercise any power, right or remedy under this
Agreement or any other Loan Document shall operate as a waiver thereof, nor
shall any single or partial exercise of any power, right, or remedy or any
abandonment or discontinuance of steps to enforce such right, power or remedy
preclude other or further exercises thereof, or the exercise of any other power,
right or remedy.
In addition to the remedies set forth above, upon the occurrence of any default
set forth above, (i) the Issuing Bank shall have the right to require the
Borrowers to establish with the Issuing Bank and fund a cash collateral account
to cash collateralize the Stated Amount of each outstanding Letter of Credit,
and (ii) the Agent, the Banks and the Issuing Bank shall have all of the rights
and remedies granted to them under this Agreement and the other Loan Documents
and all other rights and remedies granted by law to creditors.
SECTION 11. MISCELLANEOUS.
11.1 Waiver and Modification. No waiver by Agent or the Banks of any
default shall operate as a waiver of any other default or of the same default on
a future occasion. No failure to exercise, and no delay in exercising, on the
part of Agent or the Banks, any power, remedy or right shall operate as a waiver
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thereof, nor shall any single or partial exercise of any power, remedy or right
preclude other or further exercise thereof or the exercise of any other power,
remedy or right. This Agreement and the other Loan Documents contain the entire
agreement of the parties with respect to their subject matter and the terms,
conditions and covenants of this Agreement and the other Loan Documents may only
be modified or waived by a written document executed by the Borrowers and the
Agent.
11.2 Notices. All notices or other correspondence required or made
necessary by the terms of this Agreement and the other Loan Documents shall be
in writing and shall be sent to the following addresses, by hand delivery,
recognized national overnight courier service, telex, telegram, facsimile
transmission or by United States Mail, first class, postage prepaid as follows:
(a) To the Borrowers:
c/o Atlas America, Inc.
000 Xxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxx X. Xxxxx
President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Ledgewood Law Firm
Ledgewood Law Firm Building
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Xxxxxxx X. Abt, Esquire
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(b) To the Agent or the Issuing Bank:
PNC Bank, National Association
Agency Services
One PNC Plaza - 22nd Floor
000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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with a copy to:
PNC Bank, National Association
One PNC Plaza
000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Energy, Metals & Mining
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(c) To Banks:
All notices to Banks shall be sent to the notice address of
each Bank as set forth on such Bank's signature page to this
Agreement or to its Assignment and Assumption Agreement.
Each party shall have the right to change its address at any time, and from time
to time, by giving written notice thereof to the other parties hereto. All such
notices shall be effective three (3) days after mailing or when received,
whichever is earlier.
11.3 Certain Taxes. The Borrowers agree to pay, and save Agent and
the Banks harmless from, all liability for any federal or state documentary
stamp or other tax liability, together with any interest or penalty, which is
payable or determined to be payable with respect to the execution or delivery of
this Agreement or any other Loan Document, which obligation of the Borrowers
shall survive the termination of this Agreement.
11.4 Right to Cure. In the event that the Borrowers shall fail for
any reason to pay any fee, cost, expense or other charge to be paid or
reimbursed by the Borrowers, Agent shall have the right but not the duty to make
such payment and if Agent makes such payment the amount thereof shall be added
to the balance of the Indebtedness secured by the Loan Documents, shall be
payable on demand and shall bear interest at the highest lawful rate of interest
then payable under the Notes then outstanding until paid.
11.5 Venue and Jurisdiction; Waiver of Jury Trial. THE PARTIES
HERETO AGREE THAT ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT SHALL BE COMMENCED IN THE COURT OF
COMMON PLEAS OF ALLEGHENY COUNTY, PENNSYLVANIA AND EACH PARTY AGREES THAT A
SUMMONS AND COMPLAINT COMMENCING AN ACTION OR PROCEEDING IN SUCH COURT SHALL BE
PROPERLY SERVED AND SHALL CONFER PERSONAL JURISDICTION IF SERVED PERSONALLY OR
BY CERTIFIED MAIL TO IT AT ITS ADDRESS DESIGNATED PURSUANT HERETO, OR AS
OTHERWISE PROVIDED UNDER THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA. THE
PARTIES HERETO WAIVE ANY CLAIM THAT PITTSBURGH, PENNSYLVANIA IS AN INCONVENIENT
FORUM AND ANY CLAIM THAT ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
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THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT IN THE AFOREMENTIONED COURT
LACKS PROPER VENUE AND/OR JURISDICTION. EACH BORROWER, THE AGENT AND THE BANKS
HEREBY WAIVE TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF
ANY KIND ARISING OUT OF OR RELATED TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR
THE COLLATERAL PROVIDED IN CONNECTION HEREWITH TO THE FULL EXTENT PERMITTED BY
LAW.
11.6 Applicable Law. THIS AGREEMENT SHALL BE A CONTRACT MADE UNDER
AND GOVERNED BY THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA.
11.7 Severability. In the event that any term or provision of this
Agreement or any other Loan Document is lawfully held or declared to be invalid,
illegal or unenforceable, it shall be deemed deleted to the extent necessary
under the applicable law and the validity of the other terms and provisions
shall not be affected thereby.
11.8 Successors and Assigns. (a) This Agreement and the other Loan
Documents shall be binding upon the Borrowers, the Agent and the Banks and their
respective successors and assigns, and shall inure to the benefit of the
Borrowers, the Agent and the Banks and the successors and assigns of the Agent
and the Banks (except that the Borrowers shall have no right to assign,
voluntarily or by operation of law, any of their rights hereunder or under any
other Loan Document without Agent's prior written consent at the consent of the
Required Bank, and provided further that nothing herein is intended by any party
hereto to confer any rights upon any third party as a beneficiary hereof).
(b) Subject to the remaining provisions of this Section 11.8, any
Bank (the "Transferor Bank") may at any time, in the ordinary course of its
commercial lending business, in accordance with applicable law, sell to one or
more financial institutions (each, a "Purchasing Bank") (which Purchasing Bank
may be an affiliate of the Transferor Bank), a portion of its rights and
obligations under this Agreement and the Notes then held by it, pursuant to an
Assignment and Assumption Agreement substantially in the form of Exhibit "H" and
satisfactory to the Agent, executed by the Transferor Bank, such Purchasing
Bank, the Agent and the Borrowers; provided, however, that prior to the
occurrence of any default under Section 9 hereof, the Borrowers and the Agent
must each give its prior consent to any such assignment (other than an
assignment made by a Bank to an affiliate of such Bank), which consent shall not
be unreasonably withheld and subsequent to any such default only the consent of
the Agent shall be required, which consent shall not be unreasonably withheld.
Upon the execution, delivery, acceptance and recording of any
such Assignment and Assumption Agreement, from and after the "Transfer Effective
Date," as defined and determined pursuant to such Assignment and Assumption
Agreement, and the payment by Purchasing Bank to Agent of an assignment service
fee of $3,000, (i) the Purchasing Bank thereunder shall be a party hereto as a
Bank and, to the extent provided in such Assignment and Assumption Agreement,
shall have the rights and obligations of a Bank hereunder with a Commitment
Percentage as set forth therein, and (ii) the Transferor Bank thereunder shall,
to the extent provided in such Assignment and Assumption Agreement, be released
from its obligations under this Agreement as a Bank. Such Assignment and
Assumption Agreement shall be deemed to amend this Agreement to the extent, and
only to the extent, necessary to reflect the addition of such Purchasing Bank as
a Bank and the resulting adjustment of Commitment Percentage and Ratable Share
arising from the purchase by such Purchasing Bank of all or a portion of the
rights and obligations of such Transferor Bank under this Agreement and the
Notes. On or prior to the Transfer Effective Date, the Borrowers shall execute
and deliver to the Agent, in exchange for the surrendered Notes held by the
Transferor Bank, new Notes to the order of such Purchasing Bank in an amount
equal to the Commitment Percentage of the Revolving Credit and the Loans assumed
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by it and purchased by it pursuant to such Assignment and Assumption Agreement,
and new Notes to the order of the Transferor Bank in an amount equal to the
Commitment Percentage of the Revolving Credit and the Loans retained by it
hereunder.
(c) The Agent shall maintain at its address referred to in Section
11.2 a copy of each Assignment and Assumption Agreement delivered to it and a
register (the "Register") for the recordation of the names and addresses of the
Banks and the amount of the Loans owing to each Bank from time to time. The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrowers, the Agent and the Banks may treat each person whose name is
recorded in the Register as the owner of the Loans recorded therein for all
purposes of this Agreement. The Register shall be available at the office of the
Agent for inspection by the Borrowers or any Bank at any reasonable time and
from time to time upon reasonable prior notice.
(d) Notwithstanding any other provision in this Agreement, any
Bank may at any time pledge or grant a security interest in all or any portion
of its rights under this Agreement, its Notes and the other Loan Documents to
any Federal Reserve Bank in accordance with Regulation A of the FRB or U.S.
Treasury Regulation 31 CFR Section 203.14 without notice to or consent of the
Borrowers or the Agent. No such pledge or grant of a security interest shall
release the transferor Bank of its obligations hereunder or under any other Loan
Document.
11.9 Nature and Survival of Representations. All statements
contained in any certificate or other document or instrument of any kind
whatsoever delivered by or on behalf of any Borrower pursuant hereto or any
other Loan Document, or in connection with the transactions contemplated hereby
or thereby, shall be deemed representations and warranties made by any Borrower
in this Agreement or other Loan Document, or pursuant hereto or thereto, and,
together with all representations and warranties contained herein or in any
other Loan Document, shall survive the execution and delivery thereof and of
this Agreement and any other Loan Document, the making of any loans under the
Loan Documents, and the making of any investigation made at any time by or on
behalf of Agent and/or the Banks.
11.10 Certain Matters Regarding the Prior Loan Agreement. This
Agreement is intended to amend, restate and replace the Prior Loan Agreement
except with respect to any provisions thereof which by their terms expressly
survive the payment of Borrowers' obligations thereunder.
11.11 Number and Gender. Whenever required by the context of this
Agreement or any other Loan Document the singular shall include the plural, and
vice-versa; and the neuter gender shall include the masculine and feminine
genders, and vice-versa.
11.12 Joint and Several Liability; Insolvency Laws.
(a) Each Borrower is, and shall be, jointly and severally
bound by, and responsible for the making and performance of, all of the
representations, warranties, covenants, provisions, terms, conditions and
agreements made and to be performed by any Borrower under and pursuant to this
Agreement and the other Loan Documents.
(b) If at any time any payment of the principal of, or
interest on, the Loans, any unreimbursed Draws or any other amounts payable by
the Borrowers under this Agreement, the Notes, or the other Loan Documents is
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rescinded or must be otherwise restored or returned upon the insolvency,
bankruptcy or reorganization of a Loan Party or otherwise, the obligations of
the other Borrowers under this Agreement, the Notes and the other Loan Documents
with respect to such payment shall be reinstated at such time as though such
payment had become due but had not been made at such time.
(c) Anything in this Agreement to the contrary
notwithstanding, the maximum liability of each Borrower hereunder shall in no
event exceed the amount for which such Borrower can be liable under applicable
federal and state laws relating to the insolvency of debtors.
(d) Each Borrower agrees that the Indebtedness owing by any
other Borrower may at any time and from time to time exceed the amount of the
liability of such Borrower under this Agreement without impairing the liability
of such Borrower under this Agreement or affecting the rights and remedies of
the Banks under this Agreement or under any other Loan Document.
11.13 Tax Withholding. At least five (5) business days prior to the
first date on which interest or fees are payable hereunder for the account of
any Bank, each such Bank that is not incorporated under the laws of the United
States of America or a state thereof agrees that it will deliver to the Agent
and the Borrowers two (2) duly completed copies of either (i) United States
Internal Revenue Service Form W-9, 1001 or 4224 or such other applicable form
prescribed by the Internal Revenue Service of the United States, certifying in
each case that such Bank is entitled to receive payments under this Agreement or
the Notes without deduction or withholding of United States federal income
taxes, or is subject to such tax at a reduced rate under an applicable tax
treaty or (ii) Form W-8 or such other applicable form prescribed by the Internal
Revenue Service of the United States or a certificate of such Bank indicating
that no such exemption or reduced rate of taxation is allowable with respect to
such payments. Each Bank which delivers a Form W-8, W-9, 4224 or 1001 further
undertakes to deliver to the Agent and the Borrowers two (2) additional copies
of such form (or any successor form) on or before that form expires or becomes
obsolete or after the occurrence of any event requiring a change in the most
recent form so delivered by it, and such amendments thereto or extensions or
renewals thereof as may be reasonably requested by the Borrowers or the Agent,
either certifying that such Bank is entitled to receive payments under this
Agreement or its Note without deduction or withholding of any United States
federal income taxes or is subject to such tax at a reduced rate under an
applicable tax treaty or stating that no such exemption or reduced rate is
allowable. The Agent shall be entitled to withhold United States federal income
taxes at the full withholding rate unless each such Bank establishes an
exemption or at the applicable reduced rate established pursuant to the above
provisions.
11.14 Headings. The headings of the Sections of this Agreement are
inserted for convenience only and shall not be deemed to constitute a part
hereof.
11.15 Confidentiality.
(a) General. The Agent and the Banks each agree to keep
confidential all information obtained from the Borrowers or their Subsidiaries
which is nonpublic and confidential or proprietary in nature (including any
information the Borrowers specifically designate as confidential), except as
provided below, and to use such information only in connection with their
respective capacities under this Agreement and for the purposes contemplated
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hereby. The Agent and the Banks shall be permitted to disclose such information
(i) to outside legal counsel, accountants and other professional advisors who
need to know such information in connection with the administration and
enforcement of this Agreement, subject to agreement of such Persons to maintain
the confidentiality, (ii) to assignees and participants as contemplated by
Section 11.8, (iii) to the extent requested by any bank regulatory authority or,
with notice to the Borrowers, as otherwise required by applicable Governmental
Rule or by any subpoena or similar legal process, or in connection with any
investigation or proceeding arising out of the transactions contemplated by this
Agreement, (iv) if it becomes publicly available other than as a result of a
breach of this Agreement or becomes available from a source not known to be
subject to confidentiality restrictions, or (v) if the Borrowers shall have
consented to such disclosure.
(b) Sharing Information With Affiliates of the Banks. Each
Borrower acknowledges that from time to time financial advisory, investment
banking and other services may be offered or provided to a Borrower or its
Subsidiaries (in connection with this Agreement or otherwise) by any Bank or by
one or more subsidiaries or affiliates of such Bank and each of the Borrowers
hereby authorizes each Bank to share any information delivered to such Bank by
such Borrower and its Subsidiaries pursuant to this Agreement, or in connection
with the decision of such Bank to enter into this Agreement, to any such
subsidiary or affiliate of such Bank, it being understood that any such
subsidiary or affiliate of any Bank receiving such information shall be bound by
the provisions of Section 11.14 as if it were a Bank hereunder. Such
authorization shall survive the repayment of the Loans and other Indebtedness
and the termination of any commitment to lend or to issue Letters of Credit
hereunder.
SECTION 12. AGREEMENT AMONG BANKS
12.1 Appointment and Grant of Authority. The Banks hereby appoint
PNC, and PNC hereby agrees to act as, Agent under this Agreement, the other Loan
Documents, and Agent under the Security Documents for the benefit of the Banks.
The Agent shall have and may exercise such powers under this Agreement as are
specifically delegated to it by the terms hereof or of the other Loan Documents,
together with such other powers as are incidental thereto. Without limiting the
foregoing, the Agent, on behalf of the Banks, is authorized to execute all of
the Loan Documents (other than this Agreement) and to accept all of the Loan
Documents and all other agreements, documents or instruments reasonably required
to carry out the intent of the parties to this Agreement. Without limiting the
foregoing, the Agent, on behalf of the Banks as secured parties, is authorized
to execute and/or accept the Mortgage, any Financing Statements, any other Loan
Documents and all other agreements, documents or instruments reasonably required
to carry out the intent of the parties to this Agreement.
12.2 Reliance by Agent on Banks for Funding. Unless the Agent shall
have received notice from a Bank prior to a funding date that such Bank will not
make available to the Agent such Bank's portion of net disbursements of Loans,
the Agent may assume that such Bank has made such portion available to the Agent
in accordance with Section 8.1 above and the Agent may, in reliance upon such
assumption, make Loans to the Borrowers. If and to the extent that such Bank has
not made such portion available to the Agent on or prior to any funding date,
such Bank and the Borrowers severally agree to repay to the Agent immediately
upon demand, in immediately available funds, such unpaid amount, together with
interest thereon at the Federal Funds Rate for each day from the applicable
funding date until such amount is repaid to the Agent. If such Bank shall repay
to the Agent such corresponding amount, such amount shall constitute a Loan made
by such Bank for purposes of this Agreement. The failure by any Bank to pay its
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portion of a Loan made by the Agent shall not relieve any other Bank of its
obligation to pay its portion of net disbursements of Loans, but no Bank shall
be responsible for the failure of any other Bank to make its net share of Loans
to be made by such other Bank on such funding date.
12.3 Non-Reliance on Agent. Each Bank agrees that it has,
independently and without reliance on the Agent, and based on such documents and
information as it has deemed appropriate, made its own credit analysis of the
Borrowers and decision to enter into this Agreement and that it will,
independently and without reliance upon the Agent, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own analysis and decisions in taking or not taking action under this Agreement.
Except as otherwise provided herein, the Agent shall have no duty to keep the
Banks informed as to the performance or observance by the Borrowers of this
Agreement or any other document referred to or provided for herein or to inspect
the properties or books of the Borrowers. The Agent, in the absence of gross
negligence or willful misconduct, shall not be liable to any Bank for its
failure to relay or furnish to the Bank any information. The preceding
provisions of this Section 12.3 to the contrary notwithstanding, the Agent shall
notify each of the Banks as soon as practicable after it receives notice of the
occurrence of any default hereunder or under any other Loan Document.
12.4 Responsibility of Agent and Other Matters.
(a) Ministerial Nature of Duties. As between the Banks and itself,
the Agent shall not have any duties or responsibilities except those expressly
set forth in this Agreement or in the other Loan Documents, and those duties and
responsibilities shall be subject to the limitations and qualifications set
forth in this Section 12. The duties of the Agent shall be ministerial and
administrative in nature.
(b) Limitation of Liability. As between the Banks and itself,
neither the Agent nor any of its respective directors, officers, employees or
agents shall be liable, except for gross negligence or willful misconduct, for
any action taken or omitted (whether or not such action taken or omitted is
within or without the Agent's responsibilities and duties expressly set forth in
this Agreement) under or in connection with this Agreement or any other
instrument or document in connection herewith. Without limiting the foregoing,
neither the Agent nor any of its directors, officers or employees, shall be
responsible for, or have any duty to examine (i) the genuineness, execution,
validity, effectiveness, enforceability, value or sufficiency of (A) this
Agreement or any of the other Loan Documents or (B) any other document or
instrument furnished pursuant to or in connection with this Agreement, (ii) the
collectibility of any amounts owed by the Borrowers to the Banks, (iii) the
truthfulness of any recitals or statements or representations or warranties made
to the Agent or the Banks in connection with this Agreement, (iv) any failure of
any party to this Agreement to receive any communication sent, including any
telegram, telex, teletype, telecopy, bank wire, cable, radiogram or telephone
message or any writing, application, notice, report, statement, certificate,
resolution, request, order, consent letter or other instrument or paper or
communication entrusted to the mails or to a delivery service, or (v) the assets
or liabilities or financial condition or results of operations or business or
creditworthiness of the Borrowers.
(c) Reliance. The Agent shall be entitled to act, and shall be fully
protected in acting upon, any telegram, telex, teletype, telecopy, bank wire,
cable or radiogram or any writing, application, notice, report, statement,
certificate, resolution, request, order, consent, letter or other instrument or
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paper or communication believed by the Agent in good faith to be genuine and
correct and to have been signed or sent or made by a proper person. The Agent
may consult counsel and shall be entitled to act, and shall be fully protected
in any action taken in good faith, in accordance with advice given by counsel.
The Agent may employ agents and attorneys-in-fact and shall not be liable for
the default or misconduct of any such agents or attorneys-in-fact selected by
the Agent with reasonable care. The Agent shall not be bound to ascertain or
inquire as to the performance or observance of any of the terms, provisions or
conditions of this Agreement or any of the other Loan Documents on the part of
the Borrower or any other party thereto.
12.5 Action on Instructions. The Agent shall be entitled to act or
refrain from acting, and shall be fully protected in acting or refraining from
acting, under this Agreement, the other Loan Documents or any other instrument
or document in connection herewith or therewith, in accordance with the
instructions of the Required Banks (as such term is defined in Section 12.6
below) or, in the case of the matters set forth in items (i) through (viii) of
Section 12.13, from all of the Banks.
12.6 Required Banks. For the purposes of this Agreement, the term
"Required Banks" shall mean Banks with aggregate Commitment Percentages equal to
at least 66-2/3% of all Commitment Percentages.
12.7 Action Upon Occurrence of an Event of Default. If an event of
default set forth in Section 9 hereof has occurred, the Banks shall immediately
consult with one another in an attempt to agree upon a mutually acceptable
course of conduct. Failing agreement upon a course of conduct and if the
Required Banks wish to declare an event of default and/or exercise their rights
hereunder, the Agent will exercise the rights of the Banks hereunder as directed
by the Required Banks.
12.8 Indemnification. To the extent the Borrowers do not reimburse
and save harmless the Agent according to the terms hereof for and from all
costs, expenses and disbursements in connection herewith, such costs, expenses
and disbursements, shall be borne by the Banks ratably in accordance with their
respective Commitment Percentages. Each Bank hereby agrees on such basis (i) to
reimburse the Agent for such Bank's pro rata share of all such reasonable costs,
expenses and disbursements on request and (ii) to the extent of each such Bank's
pro rata share, to indemnify and save harmless the Agent against and from any
and all losses, obligations, penalties, actions, judgments and suits and other
costs, expenses and disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against the Agent, other than as a
consequence of gross negligence or willful misconduct on the part of the Agent,
arising out of or in connection with this Agreement, the other Loan Documents or
any other agreement, instrument or document in connection herewith or therewith,
or any request of the Required Banks, including without limitation the
reasonable costs, expenses and disbursements in connection with defending itself
against any claim or liability related to the exercise or performance of any of
its powers or duties under this Agreement, the other Loan Documents, or any of
the other agreements, instruments or documents delivered in connection herewith
or the taking of any action under or in connection with any of the foregoing.
12.9 Agent's Rights as a Bank. With respect to the commitments of
the Agent as a Bank hereunder, and any loans of the Agent to the Borrowers under
this Agreement, the other Loan Documents and any other agreements, instruments
and documents delivered pursuant hereto, the Agent shall have the same rights
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and powers, duties and obligations under this Agreement, the other Loan
Documents or other agreement, instrument or document as any Bank and may
exercise such rights and powers and shall perform such duties and fulfill such
obligations as though it were not the Agent. The Agent may accept deposits from,
lend money to, and generally engage, and continue to engage, in any kind of
business with the Borrowers as if it were not the Agent.
12.10 Payment to Banks. Promptly after receipt from the Borrowers of
any principal repayment of any Loan, any interest due thereunder, and any other
interest or fees or other amounts due under any of the Loan Documents, the Agent
shall distribute to each Bank in immediately available funds that Bank's
Commitment Percentage of the funds so received, provided that in the event
payments are received by 11:00 a.m., Pittsburgh time, by the Agent with respect
to the Loans and such payments are not distributed to the Banks on the same day
received by the Agent, the Agent shall pay the Banks the Federal Funds Rate with
respect to the amount of such payments for each day held by the Agent and not
distributed to the Banks.
12.11 Pro Rata Sharing. All interest and principal payments on the
Notes, the Closing Fee, all Commitment Fees and all Letter of Credit Fees are to
be divided pro rata among the Banks in accordance with their respective Ratable
Share. Any sums obtained from any Loan Party by any Bank by reason of the
exercise of its rights of setoff or banker's lien shall be shared pro rata among
the Banks. Nothing in this Section 12.11 shall be deemed to require the sharing
among the Banks of collections specifically relating to any other indebtedness
of any Loan Party to any Bank.
12.12 Successor Agent. The Agent may resign as Agent upon ninety
(90) days' notice to the Banks and the Borrowers. If such notice shall be given,
the Banks shall appoint a successor agent for the Banks, during such ninety (90)
day period, which successor agent shall, if no default under Section 9 has
occurred and is continuing, be consented to by the Borrowers (which consent
shall not be unreasonably withheld), to serve as agent hereunder and under the
several documents. Following the occurrence and continuance of any default under
Section 9, Borrower's consent shall not be required for appointment of a
successor Agent. If at the end of such ninety (90) day period the Banks have not
appointed such a successor, the Agent shall procure a successor reasonably
satisfactory to the Banks and the Borrowers, to serve as agent for the Banks
hereunder and under the several documents. Any such successor agent shall
succeed to the rights, powers and duties of the Agent. Upon the appointment of
such successor agent or upon the expiration of such ninety (90) day period (or
any longer period to which the Agent has agreed), the former Agent's rights,
powers and duties as Agent shall be terminated, without any other or further act
or deed on the part of such former Agent or any of the parties to this
Agreement. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Section 12.12 shall inure to the benefit of such retiring
Agent as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement.
12.13 Amendments and Waivers. The Required Banks, or the Agent with
the consent in writing of the Required Banks, and the Borrowers may, subject to
the provisions of this Section 12.13, from time to time enter into written
supplemental agreements to this Agreement and the other Loan Documents for the
purpose of adding or deleting any provisions or otherwise changing, varying or
waiving in any manner the rights of the Banks, the Agent or the obligor
thereunder or the conditions, provisions or terms thereof or waiving any event
of default thereunder or consenting to an action of the Borrowers, but only to
the extent specified in such written agreements; provided, however, that no such
supplemental agreement shall, without the consent of all the Banks:
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(i) waive any event of default by any Loan Party in any payment
of principal and/or interest due hereunder and under any of the Notes or any
Reimbursement Obligation or other amount due with respect to the Letters of
Credit;
(ii) decrease any interest rate provided for herein;
(iii) change the Termination Date or otherwise extend the maturity
of any obligation hereunder;
(iv) release any guarantor of the Indebtedness, any of the
Property from the Mortgage, any Security Agreement, any Pledge Agreement and/or
any Financing Statement or any other collateral described in any Security
Document except as permitted in Section 6.1 above;
(v) reduce the Commitment Fee;
(vi) increase the maximum principal amount of the Revolving Credit
or increase any Individual Collateral Value, the Aggregate Collateral Value or
any Individual Collateral Value Reduction Amount;
(vii) permit any Loan Party to assign its rights or duties
hereunderor under any of the other Loan Documents; or
(viii) amend or waive the provisions of this Section 12.13;
Any such supplemental agreement shall apply equally to each of the Banks and
shall be binding upon the Borrowers, the Banks, the Agent and all future holders
of the Notes. In the case of any waiver, the Borrowers, the Banks and the Agent
shall be restored to their former positions and rights, and any event of default
hereunder or under the other Loan Documents waived shall be deemed to be cured
and not continuing, but no such waiver shall extend to any subsequent or other
event of default hereunder or under the other Loan Documents, or impair any
right consequent thereon.
12.14 Agent's Fees. The Borrowers shall pay to the Agent certain
fees under the terms of a letter among the Borrowers and Agent, as amended from
time to time.
12.15 Funding by Branch, Subsidiary or Affiliate.
(a) Notional Funding. Each Bank shall have the right from time to
time, without notice to the Borrowers, to deem any branch, subsidiary or
affiliate (which for the purposes of this Section 12.15 shall mean any
corporation or association which is directly or indirectly controlled by or is
under direct or indirect common control with any corporation or association
which directly or indirectly controls such Bank) of such Bank to have made,
maintained or funded any Loan to which the Euro-Rate Option applies at any time,
provided that immediately following (on the assumption that a payment were then
due from the Borrowers to such other office), and as a result of such change,
the Borrowers would not be under any greater financial obligation pursuant to
Subsection 2.5(h) than they would have been in the absence of such change.
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Notional funding offices may be selected by each Bank without regard to such
Bank's actual methods of making, maintaining or funding the Loans or any sources
of funding actually used by or available to such Bank.
(b) Actual Funding. Each Bank shall have the right from time to
time to make or maintain any Loan by arranging for a branch, subsidiary or
affiliate of such Bank to make or maintain such Loan subject to the last
sentence of this Subsection 12.15(b). If any Bank causes a branch, subsidiary or
affiliate to make or maintain any part of the Loans hereunder, all terms and
conditions of this Agreement shall, except where the context clearly requires
otherwise, be applicable to such part of the Loans to the same extent as if such
Loans were made or maintained by such Bank, but in no event shall any Bank's use
of such a branch, subsidiary or affiliate to make or maintain any part of the
Loans hereunder cause such Bank or such branch, subsidiary or affiliate to incur
any cost or expenses payable by the Borrowers hereunder or require the Borrowers
to pay any other compensation to any Bank (including any expenses incurred or
payable pursuant to Subsection 2.5(h)) which would otherwise not be incurred.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto, intending to be
legally bound hereby, have caused this Loan Agreement to be executed by their
respective officers as of the date first written above.
WITNESS: ATLAS AMERICA, INC., a Pennsylvania corporation
____________________ By_____________________________________________ (SEAL)
Name: Xxxxxxxx X. Xxxxx
Title: Vice Chairman
WITNESS: RESOURCE ENERGY, INC., a Delaware corporation
____________________ By_____________________________________________ (SEAL)
Name: Xxxxxxx X. Xxxxxxx
Title: President
WITNESS: VIKING RESOURCES CORPORATION, a Pennsylvania corporation
____________________ By_____________________________________________ (SEAL)
Name: Xxxxxxxx X. Xxxxx
Title: Chairman
PNC BANK, NATIONAL ASSOCIATION, in its capacity as the
Agent and as the Issuing Bank hereunder
By______________________________________________________
Name:___________________________________________________
Title:__________________________________________________
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, intending to be legally bound hereby, the
undersigned Bank has caused this Agreement by and among ATLAS AMERICA, INC.,
RESOURCE ENERGY, INC., VIKING RESOURCES CORPORATION, the Banks party hereto, the
Issuing Bank, PNC BANK, NATIONAL ASSOCIATION, as the Agent to be executed by its
duly authorized officers as of the date first above written.
Initial Commitment: $17,500,000 PNC BANK, NATIONAL ASSOCIATION
Commitment Percentage: 38.8889%
By:______________________________
Name:____________________________
Title:___________________________
Addresses for notice purposes:
PNC Bank, National Association
Agency Services
One PNC Plaza - 22nd Floor
000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
PNC Bank, National Association
Energy, Metals & Mining
One PNC Plaza - Third Floor
000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Vice President
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Address for Euro-Rate Loan Funding if different from above:
N/A
-----------------------------------
Telephone:_________________________
Telecopier:________________________
Telex:_____________________________
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, intending to be legally bound hereby, the
undersigned Bank has caused this Agreement by and among ATLAS AMERICA, INC.,
RESOURCE ENERGY, INC., VIKING RESOURCES CORPORATION, the Banks party hereto, the
Issuing Bank, PNC BANK, NATIONAL ASSOCIATION, as the Agent to be executed by its
duly authorized officers as of the date first above written.
Initial Commitment: $17,500,000 FIRST UNION NATIONAL BANK
Commitment Percentage: 38.8889%
By:______________________________
Name:____________________________
Title:___________________________
Addresses for notice purposes:
First Union National Bank
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx Xxxxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Address for Euro-Rate Loan Funding if different from above:
N/A
-----------------------------------
Telephone:_________________________
Telecopier:________________________
Telex:_____________________________
-68-
IN WITNESS WHEREOF, intending to be legally bound hereby, the
undersigned Bank has caused this Agreement by and among ATLAS AMERICA, INC.,
RESOURCE ENERGY, INC., VIKING RESOURCES CORPORATION, the Banks party hereto, the
Issuing Bank, PNC BANK, NATIONAL ASSOCIATION, as the Agent to be executed by its
duly authorized officers as of the date first above written.
Initial Commitment: $10,000,000 KEYBANK NATIONAL ASSOCIATION
Commitment Percentage: 22.2222%
By:______________________________
Name:____________________________
Title:___________________________
Addresses for notice purposes:
KeyBank National Association
Mail Code: OH-12-06-0205
000 Xxxxxxx Xxxxx Xxxxx
Xxxxxx, Xxxx 00000
Attention: Xxx Xxxxxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Address for Euro-Rate Loan Funding if different from above:
N/A
-----------------------------------
Telephone:_________________________
Telecopier:________________________
Telex:_____________________________
-69-
AGREEMENT OF FORMER BORROWERS
Intending to be legally bound as of the date of this Loan Agreement
(this "Agreement"), each of the undersigned parties (each, a "Former Borrower"),
hereby (a) accepts and agrees to the terms and provisions of this Agreement, (b)
agrees to deliver to Agent for the benefit of the Banks a guaranty agreement
whereby such Former Borrower shall guaranty and become surety for all of the
Indebtedness (as defined in this Agreement) and shall continue to be jointly and
severally responsible for all obligations of a Borrower hereunder, (c)
acknowledges and agrees that such Former Borrower shall continue to be bound by
the provisions of this Agreement (specifically including, without limitation,
all of the terms and provisions of Section 2.9 of this Agreement) and liable to
the Banks for all reimbursement, Letter of Credit Fee, indemnification and other
obligations with respect to the Existing Letters of Credit, as if such Existing
Letters of Credit were Letters of Credit issued hereunder, and (d) ratifies and
confirms in all respects any reimbursement agreement or application for letter
of credit executed by such Former Borrower and further acknowledges that any
such reimbursement agreement and each such application for letter of credit
shall continue and remain in full force and effect and binding upon such Former
Borrower.
ATLAS ENERGY GROUP, INC.
ATLAS RESOURCES, INC.
TRANSATCO CORPORATION
ATLAS ENERGY CORPORATION
XXXXXX GAS GATHERING, INC.
PENNSYLVANIA INDUSTRIAL ENERGY, INC.
WITNESS:
__________________________________ By:______________________________________
Name: Xxxx X. Xxxxx
Title: Senior Vice President
AIC, INC.
AED INVESTMENTS, INC.
ARD INVESTMENTS, INC.
WITNESS:
__________________________________ By:______________________________________
Name: Xxxx X. Xxxxx
Title: President
ANNEX I
TO
LOAN AGREEMENT
Each of the "Applicable Euro-Rate Margin" and "Applicable Base Rate
Margin" means, for any date, the rate set forth below in the row opposite such
term and in the column corresponding to the Utilization Rate that exists on such
date.
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Utilization Rate <= 50% > 50% - <=65% > 65% - <=80% > 80% - <=90% > 90
----------------------------------------------------------------------------------------------------------------------
Applicable Euro-Rate Margin 150.0 162.5 175.0 200.0 225.0
----------------------------------------------------------------------------------------------------------------------
Applicable Base Rate Margin 0 12.5 25 50 75
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