Dated as of June 19, 2000
GREKA AM, INC.,
as the Borrower,
GREKA ENERGY CORPORATION,
as the Guarantor
and
CANADIAN IMPERIAL BANK OF COMMERCE,
as Agent
and
CIBC WORLD MARKETS CORP.,
as Arranger
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CREDIT AND GUARANTEE AGREEMENT
================================================================================
CONTENTS
SECTION Page
1. DEFINITIONS AND ACCOUNTING TERMS.....................................1
Defined Terms...........................................................1
Use of Defined Terms...................................................20
Cross-References.......................................................20
Accounting, and Financial Determinations...............................20
2. THE COMMITMENTS, BORROWING PROCEDURES, NOTES AND BORROWING BASE.....21
The Commitments........................................................21
Reduction of Maximum Available Amount..................................21
Borrowing Procedures for Loans.........................................22
Continuation and Conversion Elections..................................22
Funding................................................................23
Notes..................................................................23
Determination of the Borrowing Base....................................24
3. REPAYMENTS, PREPAYMENTS, INTEREST AND FEES..........................24
Repayments and Prepayments.............................................24
Interest Provisions....................................................25
Fees...................................................................26
4. CERTAIN LIBO RATE AND OTHER PROVISIONS..............................26
Fixed Rate Lending Unlawful............................................26
Deposits Unavailable...................................................27
Increased LIBO Rate Loan Costs, Etc....................................27
Funding Losses.........................................................28
Increased Capital Costs................................................29
Taxes..................................................................30
Payments, Computations, Etc............................................32
Sharing of Payments....................................................33
Set off................................................................33
Use of Proceeds........................................................34
Maximum Interest.......................................................34
5. THE GUARANTEE.......................................................35
The Guarantee..........................................................35
Guarantees Unconditional...............................................35
Reinstatement in Certain Circumstances.................................36
Waiver of Notice.......................................................37
Subrogation............................................................37
Stay of Acceleration...................................................37
6. CONDITIONS TO BORROWING.............................................38
Initial Borrowing......................................................38
All Borrowings.........................................................42
7. REPRESENTATIONS AND WARRANTIES......................................43
Organization, Etc......................................................44
Due Authorization, Non-Contravention, Etc..............................44
Government Approval, Regulation, Etc...................................44
Validity, Etc..........................................................45
Financial Information..................................................45
No Material Adverse Change.............................................46
Litigation, Labor Controversies, Etc...................................46
Subsidiaries...........................................................46
Ownership of Properties; Reserve Report................................46
Taxes..................................................................46
Pension and Welfare Plans..............................................47
Environmental Warranties...............................................47
Regulations U and X....................................................48
Accuracy of Information................................................49
No Defaults under Other Agreements.....................................49
Solvency...............................................................49
Compliance with Laws, Etc..............................................50
Creation and Perfection of Security Interests..........................50
8. COVENANTS...........................................................50
Affirmative Covenants..................................................50
Negative Covenants.....................................................56
9. EVENTS OF DEFAULT...................................................63
Listing of Events of Default...........................................63
Action if Bankruptcy...................................................66
Action if Other Event of Default.......................................66
10. THE AGENT...........................................................66
Actions................................................................66
Funding Reliance, Etc..................................................67
Exculpation............................................................68
Successor..............................................................68
Extensions of Credit by the Agent and the Arranger.....................69
Credit Decisions.......................................................69
Copies, Etc............................................................69
11. MISCELLANEOUS PROVISIONS............................................70
Waivers, Amendments, Etc...............................................70
Notices................................................................70
Payment of Costs and Expenses..........................................71
Indemnification........................................................72
Survival.................................................................
Severability...........................................................73
Heading................................................................73
Execution in Counterparts, Effectiveness, Etc..........................73
Governing Law; Entire Agreement........................................74
Successors and Assigns.................................................74
Sale and Transfer of Loans and Note, Participations in Loans and Note..74
Other Transactions.....................................................76
Treatment of Certain Information; Confidentiality......................77
Forum Selection and Consent to Jurisdiction............................77
Waiver of Jury Trial...................................................78
No Oral Agreements.....................................................79
Exhibits
Exhibit A.........Form of Note
Exhibit B.........Form of Borrowing Request
Exhibit C.........Form of Continuation/Conversion Notice
Exhibit D.........Form of Security Agreement
Exhibit E.........Form of Pledge Agreement
Exhibit F.........Form of Bank Assignment Agreement
Exhibit G.........Form of Inter-Company Note
Exhibit H-1.......Form of Opinion of Counsel to the Borrower and the Guarantor
Exhibit H-2.......Form of Opinion of General Counsel to the Borrower and the
Guarantor
Exhibit H-3.......Form of Opinion of Counsel to the Agent
Exhibit H-4.......Form of Opinion of Counsel to the Guarantor
Exhibit H-5.......Form of Opinion of Dutch Counsel to GREKA Energy
Exhibit I.........Form of Mortgage
Exhibit J.........Form of Assignment of Account Agreement
Exhibit K.........Form of Pledge of Shares
Schedule 1 .......Mortgaged Properties
Schedule 2........Disclosure Schedule
THIS CREDIT AND GUARANTEE AGREEMENT, dated as of June 19, 2000, among GREKA AM,
INC., a Colorado corporation (the Borrower), GREKA Energy Corporation, a
Colorado corporation (the Guarantor, or GREKA ENERGY), CIBC, INC. as lender
(together with any commercial bank or other financial institution that becomes a
Lender pursuant to Section 11.11, the Lenders), CANADIAN IMPERIAL BANK OF
COMMERCE (CIBC), as administrative agent (the Agent) and CIBC WORLD MARKETS
CORP. as arranger (the Arranger).
WHEREAS, the Borrower has requested the Lenders to make revolving loans to the
Borrower in an amount not to exceed $47,500,000 for the purpose of consummating
the Acquisition (as defined below), refinancing of the Borrower's indebtedness
to Bank One, Texas, N.A. for working capital purposes and for other general
corporate purposes;
WHEREAS, the Guarantor has agreed to guarantee the obligations of the Borrower
hereunder and under the other Loan Documents to which the Borrower is a party;
and
WHEREAS, the Lenders are willing to make the loans to the Borrower on the terms
and conditions contained herein;
NOW THEREFORE, the parties hereto agree as follows:
DEFINITIONS AND ACCOUNTING TERMS
Defined Terms
1.1 The following terms (whether or not underscored or highlighted in bold) when
used in this Agreement, including its preamble and recitals, shall, except where
the context otherwise requires, have the following meanings (such meanings to be
equally applicable to the singular and plural forms thereof):
Acquisition means the acquisition by GREKA Colombia of certain Oil and Gas
Properties located in Colombia from Omimex Resources, Inc., a Delaware
corporation, pursuant to the terms of the Acquisition Documents.
Acquisition Documents means the Purchase and Sale Agreement dated as of March
17, 1999, by and among Sabacol, Inc., Omimex Resources, Inc., Omimex de
Colombia, Ltd. and Omimex International Corporation as the same has been
amended, supplemented or otherwise modified prior to the date hereof.
Page 1
Affiliate means, when used with respect to any Person, any other Person
(including any member of the immediate family of any such natural person) who,
directly or indirectly, beneficially owns or controls ten percent (10%) or more
of the total voting power of shares of capital stock of such Person having the
right to vote for directors under ordinary circumstances, and any Person
controlling, controlled by or under common control with any such Person. As used
in this definition, "control" means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
Agent is defined in the preamble and includes each other Person as shall have
subsequently been appointed as the successor Agent pursuant to Section 10.4.
Agreement means, on any date, this Credit and Guarantee Agreement as originally
in effect and as thereafter from time to time amended, supplemented and
restated, or otherwise modified and in effect on such date.
Alternate Base Rate means, on any date and with respect to all Base Rate Loans,
a fluctuating rate of interest per annum equal to the higher of (a) the rate of
interest most recently determined by CIBC at its Domestic Office as its base
rate for Dollar loans and (b) the Federal Funds Rate most recently determined by
the Agent plus 1%. The Alternate Base Rate is not necessarily intended to be the
lowest rate of interest determined by CIBC in connection with extensions of
credit. Changes in the rate of interest on that portion of any Loans maintained
as Base Rate Loans will take effect simultaneously with each change in the
Alternate Base Rate. The Agent will give notice promptly to the Borrower and the
Lenders of changes in the Alternate Base Rate; provided that failure to give
such notice shall not give rise to any liability.
Applicable Margin means, on any date, with respect to any Base Rate Loan then
outstanding, 1.25%; and with respect to any LIBO Rate Loan then outstanding,
3.25%.
Arranger is defined in the preamble.
Asset means, as to any Person, all property of any kind, name or nature, real or
personal, tangible or intangible, legal or equitable, whether now owned or
hereafter acquired, including, without limitation, the Hydrocarbon Interests,
money, stock, contract rights, franchises, value as a going concern, causes of
action, undivided fractional ownership interests, intellectual property, rights,
and anything of any value which can be made available for, or may be
appropriated to, the payment of debts.
Page 2
Assignee Banks is defined in Section 11.11.1.
Assignment of Account Agreement means the Assignment of Account Agreement dated
as of June 19, 2000 between the Guarantor and the Agent, in substantially the
form of Exhibit J hereto, as amended from time to time.
Authorization means any consent, registration, filing, agreement, notarization,
certificate, license, approval, permit, authority, grant, right, easement,
decree, waiver, privilege or exemption from, by or with any government or
Governmental Authority, whether given or withheld by express action or deemed
given or withheld by failure to act within any specified time period, and all
corporate, creditors and stockholders' approvals or consents.
Authorized Officer means relative to the Borrower, those of its officers whose
signatures and incumbency shall have been certified to the Agent and the Lenders
pursuant to Section 6.1.1.
Bank Assignment Agreement means a Bank Assignment Agreement substantially in the
form of Exhibit F hereto.
Base Rate Loan means a Loan bearing interest at a fluctuating rate determined by
reference to the Alternate Base Rate.
Borrower is defined in the preamble.
Borrowing means each extension of credit made by the Lenders by way of Loans of
the same type, having the same Interest Period made by the same Lenders on the
same Business Day pursuant to the same Borrowing Request.
Borrowing Base means the Borrowing Base from time to time established pursuant
to Section 2.7.
Borrowing Base Deficiency means the excess of (x) the outstanding aggregate
principal amount of all Loans over (y) the Borrowing Base then in effect.
Borrowing Base Deficiency Determination means any date on which the outstanding
aggregate principal amount of all Loans exceeds the Borrowing Base then in
effect.
Borrowing Base Deficiency Payment Date means the 10th day occurring after the
receipt by the Borrower of funds from (i) the sale of assets of the Borrower or
any Subsidiaries, (ii) the sale of assets by GREKA Colombia, (iii) the sale by
GREKA of all or a portion of its ownership interest in GREKA Colombia or (iv)
any Casualty Event with respect to the Borrower or any Subsidiaries or GREKA
Colombia.
Page 3
Borrowing Request means a loan request and certificate duly executed by an
Authorized Officer of a Borrower, substantially in the form of Exhibit B hereto.
Business Day means (a) any day which is neither a Saturday or Sunday nor a legal
holiday on which Lenders are authorized or required to be closed in New York,
New York and (b) relative to the making, continuing, prepaying or repaying of
any LIBO Rate Loans, any day on which dealings in Dollars are carried on in the
London interbank market.
Capital Expenditures means, for any period, the sum of (a) the aggregate amount
of all expenditures of the Borrower and its Subsidiaries for fixed or capital
assets made during such period which, in accordance with GAAP, would be
classified as capital expenditures and (b) the aggregate amount of all
Capitalized Lease Liabilities incurred during such period.
Capital Stock means any and all shares, interests, participations, or other
equivalents (however designated) of capital stock of a corporation, any and all
equivalent ownership interests in a Person (other than a corporation) and any
and all warrants or options to purchase any of the foregoing.
Capitalized Lease Liabilities means all monetary obligations of any Person under
any leasing or similar arrangement which, in accordance with GAAP, would be
classified as capitalized leases, and, for purposes of this Agreement and each
other Loan Document, the amount of such obligations shall be the capitalized
amount thereof, determined in accordance with GAAP, and the stated maturity
thereof shall be the date of the last payment of rent or any other amount due
under such lease prior to the first date upon which such lease may be terminated
by the lessee without payment of a penalty.
Cash Collateral Account is defined in the Pledge Agreement.
Cash Equivalent Investment means, at any time:
(a) any evidence of Indebtedness, maturing not more than six months after
such time, issued or guaranteed by the United States Government;
(b) commercial paper, maturing not more than six months from the date of
issue, which is issued by (i) a corporation (other than an Affiliate of
the Borrower) organized under the laws of any state of the United
States or of the District of Columbia and rated one of the three
highest rating categories by S&P or Xxxxx'x, or (ii) any Lender (or its
holding company);
Page 4
(c) any certificate of deposit or bankers acceptance, maturing not more
than six months after such time, which is issued by either (i) a
commercial banking institution that is a member of the Federal Reserve
System and has a combined capital and surplus and undivided profits of
not less than $250,000,000, or (ii) any Lender;
(d) any repurchase agreement entered into with any bank (or other
commercial banking institution of the stature referred to in clause
(c)(i) which (i) is in any obligation of the type described in any of
clauses (a) through (c) and (ii) has a market value at the time such
repurchase agreement is entered into of not less than 100% of the
repurchase obligation of such bank (or other commercial banking
institution) thereunder;
(e) investments in certificates of deposit maturing within six months from
the date of issuance thereof issued by a bank or trust company
organized under the laws of the United States or any state thereof or
the laws of Canada, having capital, surplus and undivided profits
aggregating at least $250,000,000 and whose long-term certificates of
deposit are, at the time of acquisition thereof by the Borrower, rated
A-1 by S&P or P-1 by Xxxxx'x;
(f) deposit accounts (i) in a bank or trust company organized under the
laws of the United States or any state thereof or Canada, having
capital, surplus and undivided profits aggregating at least
$250,000,000 and whose commercial paper (or that of the holding company
with which such bank or trust company is affiliated) is rated A-1 by
S&P or P-1 by Xxxxx'x:
(g) marketable direct obligations issued or unconditionally guaranteed by
the United States or Canadian government or issued by any agency
thereof and backed by the full faith and credit of the United States or
Canada, as the case may be, in each case maturing no later than six
months from the date of acquisition; or
(h) money market, mutual or similar funds that invest in obligations
referred to in clauses (a), (b), (c), (e), (f), or (g) of this
definition, and in each case such funds having assets in excess of
$250,000,000.
Casualty Event means, with respect to any property of any Person, any loss of or
damage to, or any condemnation or other taking of, such property for which such
Person or any of its Subsidiaries receives insurance proceeds or proceeds of a
condemnation award or other compensation.
Page 5
CERCLA means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended.
CERCLIS means the Comprehensive Environmental Response Compensation Liability
Information System List.
Change of Control means (i) any individual or group shall own, collectively,
directly or indirectly more than 20% (on a fully diluted basis) of the aggregate
voting shares of capital stock of all classes of the Guarantor or shall have the
ability to appoint or remove, directly or indirectly (including through voting
rights obtained from other shareholders), the majority of the members of the
board of directors of the Guarantor, except that Capco Resources Ltd., a
Canadian company, may hold up to, but not more than, 35% of the aggregate voting
shares of capital stock of the Guarantor, or (ii) the Guarantor shall cease to
own 100% of the issued and outstanding Capital Stock of GREKA Colombia and the
Borrower.
CIBC is defined in the preamble.
Closing Date means the date of the initial Borrowing in accordance with Article
VI.
Code means the Internal Revenue Code of 1986, as amended, reformed or otherwise
modified from time to time.
Colombia means the Republic of Colombia.
Collateral Property means any "Mortgaged Property", "Collateral" or "Pledged
Collateral" as defined in any Security Document.
Commitment means, relative to any Lender, such Lender's obligation to make Loans
pursuant to Section 2.1.1.
Commitment Amount means, on any date, the lesser of (a) the Maximum Available
Amount then in effect and (b) the Borrowing Base then in effect.
Commitment Termination Date means the earliest of (a) the Maturity Date; (b) the
date on which the Commitment Amount is terminated in full or reduced to zero
pursuant to Section 2.2; and (c) the date on which any Commitment Termination
Event occurs. Upon the occurrence of any event described in clause (b) or (c),
the Commitments shall terminate automatically and without further action.
Page 6
Commitment Termination Event means (a) the occurrence of any Default described
in clauses (a) through (d) of Section 9.1.9; or (b) the occurrence and
continuance of any other Event of Default and either (i) the declaration of the
Loans to be due and payable pursuant to Section 9.3, or (ii) in the absence of
such declaration, the giving of notice by the Agent, acting at the direction of
the Majority Lenders, to the Borrower that the Commitments have been terminated
as a result of such Event of Default.
Contingent Liability means any agreement, undertaking or arrangement by which
any Person guarantees, endorses or otherwise becomes or is contingently liable
upon (by direct or indirect agreement, contingent or otherwise, to provide funds
for payment, to supply funds to, or otherwise to invest in, a debtor, or
otherwise to assure a creditor against loss) the indebtedness or monetary
obligation of any other Person (other than by endorsements of instruments in the
course of collection), or guarantees the payment of dividends or other
distributions upon the shares of any other Person. The amount of any Person's
obligation under any Contingent Liability shall (subject to any limitation set
forth therein) be deemed to be the outstanding principal amount (or maximum
principal amount, if larger) of the debt or monetary obligation guaranteed
thereby.
Continuation/Conversion Notice means a notice of continuation or conversion and
certificate duly executed by an Authorized Officer of the Borrower,
substantially in the form of Exhibit C hereto.
Controlled Group means all members of a controlled group of corporations and all
members of a controlled group of trades or businesses (whether or not
incorporated) under common control which, together with the Borrower, are
treated as a single employer under Section 414(b) or 414(c) of the Code or
Section 4001 of ERISA.
Default means any Event of Default or any condition, occurrence or event which,
after notice or lapse of time or both, would constitute an Event of Default.
Default Rate is defined in Section 3.2.2.
Disclosure Schedule means the Disclosure Schedule attached hereto as Schedule 2,
as it may be amended, supplemented or otherwise modified from time to time by
the Borrower with the written consent of the Majority Lenders.
Page 7
Dollar and the sign $ mean lawful money of the United States.
Domestic Office means, relative to any Lender, the office of such Lender
designated as such below its signature hereto or designated in the Bank
Assignment Agreement for such Lender or such other office of a Lender (or any
successor or assign of such Lender) within the United States as may be
designated from time to time by notice from such Lender, as the case may be, to
each other Person party hereto.
EBITDA means, at any date of determination and for any period of determination
thereof, the sum, without duplication, of the amounts for such period of net
income plus Total Interest Expense, plus depreciation, depletion and
amortization expense; plus U.S. federal and U.S. state income taxes, plus other
non-cash charges and expenses deducted from revenues in determining net income,
all as determined on a combined basis for the Borrower and GREKA Colombia;
provided that there shall be excluded the income of any other Person (other than
the Borrower) in which the Borrower has an ownership or similar interest, except
to the extent of the amount of cash dividends or other cash distributions
actually paid to the Borrower during such period.
Effective Date means the date this Agreement becomes effective pursuant to
Section 11.8.
Environmental Laws means federal, state or local laws, rules or regulations, and
any judicial, arbitral or administrative interpretations thereof, including,
without limitation, any applicable judicial, arbitral or administrative order,
judgment, permit, approval, decision or determination pertaining to health,
safety or the environment in effect at the time in question, including, without
limitation, CERCLA, the Federal Water Pollution Control Act, as amended, the
Occupational Safety and Health Act, as amended, the Resource Conservation and
Recovery Act, as amended (RCRA), the Safe Drinking Water Act, as amended, the
Toxic Substances Control Act, as amended, the Superfund Amendment and
Reauthorization Act of 1986, as amended, the Hazardous Materials Transportation
Act, as amended, comparable state and local laws, and other environmental
conservation and protection laws. The terms "hazardous substance," "release" and
"threatened release" shall have the meanings specified in the CERCLA, and the
terms "solid waste" and "disposal" (or "disposed") shall have the meanings
specified in RCRA and the term "oil" shall have the meaning specified in Oil
Pollution Act, as amended (OPA); provided, that (i) in the event either CERCLA,
RCRA or OPA is amended so as to broaden the meaning of any term defined thereby,
such broader meaning shall apply subsequent to the effective date of such
amendment with respect to all provisions of this Agreement and (ii) to the
extent the laws of the state or states in which any property of the Borrower is
located establish a meaning for "hazardous substance," "release," "threatened
release," "solid waste," "disposal" or "oil" which is broader than that
specified in CERCLA, RCRA or OPA, such broader meaning shall apply subsequent to
the effective date of the establishment of such meaning.
Page 8
ERISA means the Employee Retirement Income Security Act of 1974, as amended, and
any successor statute of similar import, together with the regulations
thereunder, in each case as in effect from time to time. References to sections
of ERISA also refer to any successor sections.
Event of Default is defined in Section 9.1.
Existing Indebtedness means Indebtedness of the Borrower in a principal amount
of not more than $2,980,000 and accrued interest thereon under the credit
agreement dated September 23, 1996 between the Borrower, Bank One, Texas, N.A.,
as agent, and the lenders named therein.
Federal Funds Rate means, for any period, a fluctuating interest rate per annum
equal for each day during such period to (a) the weighted average of the rates
on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York; or (b) if such rate is not so published for any day
which is a Business Day, the average of the quotations for such day on such
transactions received by CIBC from three federal funds brokers of recognized
national standing selected by it.
Fee Letter means the fee letter dated June 19, 2000 between the Borrower, the
Guarantor, the Agent and the Arranger, as the same may be amended, supplemented,
restated or otherwise modified from time to time.
Fiscal Quarter means any calendar quarter of a Fiscal Year.
Fiscal Year means any period of twelve consecutive calendar months ending on
December 31; references to a Fiscal Year with a number corresponding to any
calendar year (e.g., the "1999 Fiscal Year") refer to the Fiscal Year ending on
the December 31 occurring during such calendar year.
F.R.S. Board means the Board of Governors of the Federal Reserve System or any
successor thereto.
Page 9
GAAP is defined in Section 1.4.
Governmental Authority means the government of the United States or any other
nation or country or any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government.
GREKA Colombia means GREKA Energy Colombia B.V., a Netherlands company.
GREKA Colombia Reduction Date is defined in Section 1.5.
GREKA Integrated means GREKA Integrated, Inc., a Colorado corporation.
Guarantor is defined in the preamble.
Hazardous Material means any pollutant or contaminant or hazardous, dangerous or
toxic chemical, material or substance within the meaning of any applicable
national, regional, state or local law, regulation, ordinance or requirement
(including consent decrees and administrative orders) relating to or imposing
liability or standards of conduct concerning any hazardous, toxic or dangerous
waste, substance or material, all as amended or hereafter amended.
Hedging Obligations means, with respect to any Person, (a) all liabilities of
such Person under interest rate swap agreements, interest rate cap agreements
and interest rate collar agreements, and all other agreements or arrangements
designed to protect such Person against fluctuations in interest rates or
currency exchange rates and (b) all liabilities of such Person under commodity
xxxxxx, commodity swaps, exchanges, forward, future, collar or cap agreements,
fixed price agreements, and all other agreements or arrangements designed to
protect such Person against the fluctuations in commodity prices.
herein, hereof, hereto, hereunder and similar terms contained in this Agreement
or any other Loan Document refer to this Agreement or such other Loan Document,
as the case may be, as a whole and not to any particular Section, paragraph or
provision of this Agreement or such other Loan Document.
Highest Lawful Rate is defined in Section 4.11.
Hydrocarbons means oil, gas, casing head gas, condensate, distillate, liquid
hydrocarbons, gaseous hydrocarbons, all products refined, separated, settled and
dehydrated therefrom and all products refined therefrom, including, without
limitation, kerosene, liquefied petroleum gas, refined lubricating oils, diesel
fuel, drip gasoline, natural gasoline, helium, sulfur and all other minerals.
Page 10
Hydrocarbon Interests means all rights, titles, interests and estates now owned
or hereafter acquired by the Borrower in any and all oil, gas and other liquid
or gaseous hydrocarbon properties and interests, including without limitation,
mineral fee or lease interests, production sharing agreements, concession
agreements, association agreements, license agreements, service agreements, risk
service agreements or similar Hydrocarbon interests granted by an appropriate
Governmental Authority, farmout, overriding royalty and royalty interests, net
profit interests, oil payments, production payment interests and similar
interests in Hydrocarbons, including any reserved or residual interests of
whatever nature.
Impermissible Qualification means, relative to the opinion or certification of
any independent public accountant as to any financial statement of the Borrower,
any qualification or exception to such opinion or certification (a) which is of
a "going concern" or similar nature; (b) which relates to the limited scope of
examination of matters relevant to such financial statement; or (c) which
relates to the treatment or classification of any item in such financial
statement and which, as a condition to its removal, would require an adjustment
to such item the effect of which would be to cause the Borrower to be in default
of any of its obligations under Section 8.2.4.
including means including without limiting the generality of any description
preceding such term, and, for purposes of this Agreement and each other Loan
Document, the parties hereto agree that the rule of ejusdem generis shall not be
applicable to limit a general statement, which is followed by or referable to an
enumeration of specific matters, to matters similar to the matters specifically
mentioned.
Indebtedness of any Person means, without duplication: (a) all obligations of
such Person for borrowed money and all obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments; (b) all obligations,
contingent or otherwise, relative to the face amount of all letters of credit,
whether or not drawn, and banker's acceptances issued for the account of such
Person; (c) all obligations of such Person as lessee under leases which have
been or should be, in accordance with GAAP, recorded as Capitalized Lease
Liabilities; (d) liabilities of such Person under all Hedging Obligations; (e)
whether or not so included as liabilities in accordance with GAAP, all
obligations of such Person to pay the deferred purchase price of property or
services (except trade accounts payable arising in the ordinary course of
business), and indebtedness (excluding prepaid interest thereon) secured by a
Lien on property owned or being purchased by such Person (including indebtedness
arising under conditional sales or other title retention agreements), whether or
not such indebtedness shall have been assumed by such Person or is limited in
recourse; (f) all obligations of such Person in respect of production payments,
whether monetary or volumetric; and (g) all Contingent Liabilities of such
Person in respect of any of the foregoing. For all purposes of this Agreement,
the Indebtedness of any Person shall include the Indebtedness of any partnership
or joint venture in which such Person is a general partner or a joint venturer.
Page 11
Indemnified Liabilities is defined in Section 11.4.
Indemnified Parties is defined in Section 11.4.
Inter-Company Note means a promissory note in substantially the form of Exhibit
G issued by the Borrower or GREKA Colombia, to any affiliate of either such
Person, which promissory note shall by its terms provide that, without the
consent of the Majority Lenders, no payments of principal, interest or other
amounts thereunder shall be made until the payment and performance in full of
the Obligations and the termination of the Commitments.
Interest Period means, relative to any LIBO Rate Loans, the period beginning on
(and including) the date on which such LIBO Rate Loan is made or continued as,
or converted into, a LIBO Rate Loan pursuant to Section 2.3 or 2.4 and shall end
on (but exclude) the day which numerically corresponds to such date one, two or
three months thereafter (or, if such month has no numerically corresponding day,
on the last Business Day of such month), in either case as the Borrower may
select in its relevant notice pursuant to Section 2.3 or 2.4; provided, however,
that (a) the Borrower shall not be permitted to select Interest Periods to be in
effect at any one time which have expiration dates occurring on more than four
different dates; (b) if such Interest Period would otherwise end on a day which
is not a Business Day, such Interest Period shall end on the next following
Business Day (unless, if such Interest Period applies to LIBO Rate Loans, such
next following Business Day is the first Business Day of a calendar month, in
which case such Interest Period shall end on the Business Day next preceding
such numerically corresponding day); and (c) no Interest Period may end later
than the date set forth in clause (a) of the definition of "Commitment
Termination Date".
Investment means, relative to any Person, (a) any loan or advance made by such
Person to any other Person (excluding commission, travel and similar advances to
officers and employees made in the ordinary course of business); (b) any
Contingent Liability of such Person; and (c) any ownership or similar interest
held by such Person in any other Person. The amount of any Investment shall be
the original principal or capital amount thereof less all returns of principal
or equity thereon (and without adjustment by reason of the financial condition
of such other Person) and shall, if made by the transfer or exchange of property
other than cash, be deemed to have been made in an original principal or capital
amount equal to the fair market value of such property.
Page 12
Knowledge means either (a) actual knowledge of a responsible officer of the
Borrower or the Guarantor (as the case may be) or employee of the Borrower or
the Guarantor charged with responsibility for the matter at issue or in question
or (b) knowledge that a prudent responsible officer of the Borrower or the
Guarantor or employee of the Borrower or the Guarantor charged with
responsibility for the matter at issue or in question could reasonably be
expected to discover or otherwise become aware of in the course of conducting
the Borrower's business or the Guarantor's business (as the case may be).
Law or law means any present or future federal, state or local law or other
constitution, charter, act, statute, law, ordinance, code, rule, regulation,
order, judgment of a court or standards contained in any applicable permit or
approval, or any other legislative, judicial or administrative action of any
Governmental Authority.
Lenders is defined in the preamble.
LIBO Rate means, relative to any Interest Period for LIBO Rate Loans, the rate
of interest equal to the offered quotation appearing on Telerate Page 3750 or if
such Telerate Page shall not be available, on the LIBO page on the Reuters
Screen (or on any page that can reasonably be considered a replacement page) at
approximately 11:00 a.m. New York time (or as soon thereafter as practicable)
two Business Days prior to the beginning of such Interest Period for Dollar
deposits having a term comparable to such Interest Period. If no such Telerate
Page 3750 or Reuters Screen LIBO page (or replacement page) is available, then
the "LIBO Rate" shall mean, relative to any Interest Period for LIBO Rate Loans,
the rate of interest equal to (rounded upwards, if necessary, to the nearest
1/100 of 1%) the rate per annum, at which Dollar deposits in immediately
available funds are offered to CIBC's LIBOR Office in the London interbank
market as at or about 11:00 a.m. New York time (or as soon thereafter as
practicable) two Business Days prior to the beginning of such Interest Period
for delivery on the first day of such Interest Period, and in an amount
approximately equal to the amount of CIBC's LIBO Rate Loan and for a period
approximately equal to such Interest Period.
Page 13
LIBO Rate Loan means a Loan bearing interest, at all times during an Interest
Period applicable to such Loan, at a fixed rate of interest determined by
reference to the LIBO Rate (Reserve Adjusted).
LIBO Rate (Reserve Adjusted) means, relative to any Loan to be made, continued
or maintained as, or converted into, a LIBO Rate Loan for any Interest Period, a
rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
determined pursuant to the following formula:
LIBO Rate = LIBO Rate
-------------------------------
(Reserve Adjusted) 1.00 - LIBOR Reserve Percentage
The LIBO Rate (Reserve Adjusted) for any Interest Period for LIBO Rate Loans
will be determined by the Agent on the basis of the LIBOR Reserve Percentage in
effect on, and the applicable rates furnished to and received by the Agent from
CIBC, two Business Days before the first day of such Interest Period.
LIBOR Office means, relative to any Lender, the office of such Lender designated
as such below its signature hereto or designated in the Bank Assignment
Agreement for such Lender or such other office of a Lender as designated from
time to time by notice from such Lender to the Borrower and the Agent, whether
or not outside the United States, which shall be making or maintaining LIBO Rate
Loans of such Lender hereunder.
LIBOR Reserve Percentage means, relative to any Interest Period for LIBO Rate
Loans, the average maximum rate (expressed as a decimal) at which reserves are
required to be maintained during such Interest Period under Regulation D of the
F.R.S. Board by member Lenders of the Federal Reserve System in New York City
with deposits exceeding $1,000,000,000 (including all basic, emergency,
supplemental, marginal and other reserves and taking into account any
transitional adjustments or other scheduled changes in reserve requirements) as
"Eurocurrency Liabilities", as such term is defined in Regulation D of the
F.R.S. Board. Without limiting the effect of the foregoing, the LIBOR Reserve
Percentage shall reflect any other reserves required to be maintained by such
member Lenders by reason of any Regulatory Change against (i) any category of
liabilities which includes deposits by reference to which the LIBOR Rate
(Reserve Adjusted) is to be determined, or (ii) any category of extensions of
credit or other assets which include LIBO Rate Loans.
Page 14
Lien means, with respect to any Person, any security interest, mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
otherwise), charge against or interest in property to secure payment of a debt
or performance of an obligation or other priority or preferential arrangement of
any kind or nature whatsoever but excluding set-off or netting arrangements
pursuant to any Hedging Agreement.
Loan is defined in Section 2.1.1.
Loan Document means this Agreement, the Notes, each Security Document, each
Borrowing Request, together in each case with all exhibits, schedules and
attachments thereto, the Fee Letter and all other agreements, documents or
instruments from time to time executed or delivered in connection with or
pursuant to any of the foregoing.
Majority Lenders means, at anytime, Lenders in the aggregate holding at least
66-2/3% of the then aggregate unpaid principal amount of the outstanding
Borrowings, or, if no such principal amount is then outstanding, Lenders having
at least 66-2/3% of the Commitments.
Material Adverse Effect means a material adverse effect on (i) the business,
operations, affairs, property, financial condition, prospects, assets, or
results of operations of the Borrower or the Guarantor or (ii) the ability of
the Borrower or the Guarantor to perform its obligations under any of the Loan
Documents or (iii) the validity or enforceability of this Agreement or the other
Loan Documents.
Materiality Threshold means, with respect to the Guarantor, $1,000,000, and,
with respect to the Borrower, $250,000.
Maturity Date means December 1, 2000.
Maximum Available Amount means $14,200,000, as such amount may be reduced from
time to time pursuant to Section 2.2 or terminated pursuant to Section 9.3;
provided that prior to the fulfillment of the conditions precedent specified in
Section 6.3, the Maximum Available Amount shall be $6,700,000.
Monthly Payment Date means the first day of each calendar month, commencing
August 1, 2000 provided that if any such day is not a Business Day, the next
succeeding Business Day.
Moody's means Xxxxx'x Investors Service, Inc.
Page 15
Mortgage means the Mortgage, Deed of Trust, Assignment of Production and
Security Agreement in substantially the form of Exhibit I, between the Borrower,
CIBC and Ian X.X. Xxxxxxxxxxxxx, as trustee, as amended from time to time.
Mortgaged Properties means the properties listed on Schedule 1 hereto.
Note means a promissory note of the Borrower payable to any Lender, in the form
of Exhibit A hereto (as such promissory note may be amended, endorsed or
otherwise modified from time to time), evidencing the aggregate Indebtedness of
the Borrower to such Lender resulting from outstanding Loans, and also means all
other promissory notes accepted from time to time in substitution therefor or
renewal thereof.
Obligations means all obligations, Indebtedness and liabilities of the Borrower
to the Agent or the Lenders, now existing or hereafter arising under or in
connection with this Agreement, the Notes, and each other Loan Document, whether
direct, indirect, related, unrelated, fixed, contingent, liquidated,
unliquidated, joint, several, or joint and several, including the obligations,
Indebtedness and liabilities of the Borrower, and all interest accruing thereon
(including any interest that accrues after the commencement of any proceeding by
or against the Borrower or any other Person under any bankruptcy, insolvency,
liquidation, moratorium, receivership, reorganization or other debtor relief
law) and all attorneys' fees and other expenses incurred in the collection or
enforcement thereof.
Obligors means, collectively, the Borrower and the Guarantor.
Oil and Gas Business means (a) the acquisition, exploration, exploitation,
development, operation and disposition of interests in Hydrocarbon Interests and
Hydrocarbons; (b) gathering, marketing, treating, processing, storage, selling
and transporting of any production from such interests or Hydrocarbon Interests,
including, without limitation, the marketing of Hydrocarbons obtained from
unrelated Persons; (c) any business relating to or arising from exploration for
or development, production, treatment, processing, storage, transportation or
marketing of oil, gas and other minerals and products produced in association
therewith; and (d) any activity that is ancillary or necessary or desirable to
facilitate the activities described in clauses (a) through (c) of this
definition, except that for purposes of this Agreement and the other Loan
Documents, the crude oil refining and contract drilling businesses are not
considered to be the Oil and Gas Businesses.
Page 16
Oil and Gas Properties means Hydrocarbon Interests; the Assets now or hereafter
pooled or unitized with Hydrocarbon Interests; all presently existing or future
unitization, pooling agreements and declarations of pooled units and the units
created thereby (including without limitation all units created under orders,
regulations and rules of any Governmental Authority) which may affect all or any
portion of the Hydrocarbon Interests; all operating agreements, contracts and
other agreements which relate to any of the Hydrocarbon Interests or the
production, sale, purchase, exchange or processing of Hydrocarbons from or
attributable to such Hydrocarbon Interest; all Hydrocarbons in and under and
which may be produced and saved or attributable to the Hydrocarbon Interests,
the lands covered thereby and all oil in tanks and all rents, issues, profits,
proceeds, products, revenues and other income from or attributable to the
Hydrocarbon Interests; all tenements, hereditaments, appurtenances and Assets in
any manner appertaining, belonging, affixed or incidental to the Hydrocarbon
Interests, Assets, rights, titles, interests and estates described or referred
to above, including any and all Assets, real or personal, now owned or
hereinafter acquired and situated upon, used, held for use or useful in
connection with the operating, working or development of any of such Hydrocarbon
Interests or Asset (excluding drilling rigs, automotive equipment or other
personal property which may be on such premises for the purpose of drilling a
well or for other similar temporary uses) and including any and all oil xxxxx,
gas xxxxx, injection xxxxx or other xxxxx, buildings, structures, fuel
separators, liquid extraction plants, plant compressors, pumps, pumping units,
field gathering systems, tanks and tank batteries, fixtures, valves, fittings,
machinery and parts, engines, boilers, meters, apparatus, equipment, appliances,
tools, implements, cables, wires, towers, casing, tubing and rods, surface
leases, rights-of-way, easements and servitudes together with all additions,
substitutions, replacements, accessions and attachments to any and all of the
foregoing.
Organic Document means, for any Person, its certificate or articles of
incorporation, its by-laws, certificate of formation, regulations, limited
liability company agreement, partnership agreement, or similar governing
document, and all shareholder membership or partnership agreements, voting
trusts and similar arrangements.
Participant is defined in Section 11.11.
PBGC means the Pension Benefit Guaranty Corporation and any entity succeeding to
any or all of its functions under ERISA.
Pension Plan means a "pension plan", as such term is defined in section 3(2) of
ERISA, which is subject to Title IV of ERISA (other than a multiemployer plan as
defined in section 4001(a)(3) of ERISA), and to which the Borrower or any
corporation, trade or business that is, along with such Borrower, a member of a
Controlled Group, may have liability, including any liability by reason of
having been a substantial employer within the meaning of section 4063 of ERISA
at any time during the preceding five years, or by reason of being deemed to be
a contributing sponsor under section 4069 of ERISA.
Page 17
Percentage means, relative to any Lender, the percentage set forth opposite its
signature hereto or set forth in the Bank Assignment Agreement for such Lender,
as such percentage may be adjusted from time to time pursuant to Bank Assignment
Agreement(s) executed by such Lender and its Assignee Bank(s) and delivered
pursuant to Section 11.11.
Person means any natural person, corporation, limited liability company,
partnership, firm, association, trust, government, governmental agency or any
other entity, whether acting in an individual, fiduciary or other capacity.
Plan means any Pension Plan or Welfare Plan.
Pledge Agreement means the Pledge and Security Agreement, in substantially the
form of Exhibit E, between the Guarantor and the Agent, as amended from time to
time.
Pledge of Shares means the Pledge of Shares among the Guarantor, GREKA Colombia
and the Agent, in substantially the form of Exhibit K hereto, as amended from
time to time.
Proved Reserves means collectively, "proved oil and gas reserves", "proved
developed producing oil and gas reserves", "proved developed non-producing oil
and gas reserves" (consisting of proved developed shut-in oil and gas reserves
and proved developed behind pipe oil and gas reserves), and "proved undeveloped
oil and gas reserves", as such terms are defined by the U.S. Securities and
Exchange Commission in its standards and guidelines.
Regulatory Change means, with respect to any Lender, any change after the date
of this Agreement in United States federal, state, or foreign laws or
regulations (including Regulation D of the F.R.S. Board) or the adoption or
making after such date of any interpretations, directives, or requests applying
to a class of Lenders including such Lender of or under any United States
federal or state, or any foreign laws or regulations (whether or not having the
force of law) by any court or governmental or monetary authority charged with
the interpretation or administration thereof.
Release means "release" as such terms are defined in CERCLA.
Page 18
Required Deficiency Payment means for each Borrowing Base Deficiency Payment
Date occurring after a Borrowing Base Deficiency Determination (the Subject
Determination) in accordance with the terms hereof, an amount sufficient to
reduce to zero the Borrowing Base Deficiency existing on the date of the Subject
Determination in a single lump sum payment on or before the Borrowing Base
Deficiency Payment Date; provided, that if the amount of the Borrowing Base
Deficiency increased after the date of the Subject Determination then the
Required Deficiency Payment shall be in an amount sufficient to reduce to zero
the Borrowing Base Deficiency.
S&P means Standard & Poor's Ratings Group.
Security Agreement means the Security Agreement in substantially the form of
Exhibit D, between the Borrower and the Agent, as amended from time to time.
Security Documents means, individually, (i) the Security Agreement and all
amendments, supplements, restatements or other modifications made from time to
time thereto; (ii) the Pledge Agreement and all amendments, supplements,
restatements or other modifications made from time to time; (iii) the Pledge of
Shares and all amendments, supplements, restatements or other modifications made
from time to time; (iv) Assignment of Accounts Agreement and all amendments,
supplements, restatements or other modifications made from time to time; (v) any
Mortgage and all amendments, supplements, restatements or other modifications
made from time to time thereto; (vi) any additional similar document required by
the Agent pursuant to Section 8.1.7; and (vii) collectively, all of the
foregoing.
Solvent means, with respect to any Person at any time, a condition under which:
(a) the fair saleable value of such Person's assets is, on the date of
determination, greater than the total amount of such Person's liabilities
(including contingent and unliquidated liabilities) at such time; (b) such
Person is able to pay all of its liabilities as such liabilities mature; and (c)
such Person does not have unreasonably small capital with which to conduct its
business. For purposes of this definition (i) the amount of a Person's
contingent or unliquidated liabilities at any time shall be that amount which,
in light of all the facts and circumstances then existing, represents the amount
which can reasonably be expected to become an actual or matured liability; (ii)
the "fair saleable value" of an asset shall be the amount which may be realized
within a reasonable time either through collection or sale of such asset at its
regular market value; and (iii) the "regular market value" of an asset shall be
the amount which a capable and diligent business person could obtain for such
asset from an interested buyer who is willing to purchase such asset under
ordinary selling conditions.
Page 19
Stockholders' Equity means, as of the time of any determination thereof is to be
made, the sum of the Guarantor's capital stock (which shall exclude treasury
stock and any capital stock subject to mandatory redemption by the issuer at the
option of the holder thereof) and additional paid-in capital, plus retained
earnings (minus accumulated deficit), all as shown on the consolidated balance
sheet of the Guarantor and the Guarantor's Subsidiaries and based on GAAP.
Subsidiary means, with respect to any Person, (a) a corporation a majority of
whose voting stock is at the time, directly or indirectly, owned by such Person,
by one or more Subsidiaries of such Person or by such Person and one or more
subsidiaries of such Person; (b) a partnership in which such Person or a
Subsidiary of such Person is, at the date of determination, a general or limited
partner of such partnership, but only if such Person or its subsidiary is
entitled to receive more than 50% of the assets of such partnership upon its
dissolution and which is otherwise directly or indirectly controlled by such
Person, or (c) any other Person (other than a corporation or partnership) in
which such Person, directly or indirectly, at the date of determination thereof,
has (i) at least a majority ownership interest or (ii) the power to elect or
direct the election of a majority of the directors or other governing body of
such Person. Unless the context otherwise clearly requires, references in this
Agreement to a "Subsidiary" or the "Subsidiaries" refer to a Subsidiary or the
Subsidiaries of the Guarantor.
Taxes is defined in Section 4.6.
Total Interest Expense means with respect to any period for which a
determination thereof is to be made, the sum, without duplication, of (i) the
aggregate amount of all interest accrued (whether or not paid) or capitalized
during such period, on all Indebtedness of the Borrower and GREKA Colombia, on a
combined basis, plus (ii) the portion of any Capitalized Lease Liabilities of
such Persons allocable to interest expense in accordance with GAAP plus (iii)
the interest portion of any deferred payment obligation of such Persons minus
(iv) the non-cash accretion of the discount and amortization of the fees payable
hereunder to the Agent and the Lenders, all determined on a combined basis.
Transfer is defined in Section 8.2.9.
type means, relative to any Loan, the portion thereof, if any, being maintained
as a Base Rate Loan or a LIBO Rate Loan.
Page 00
Xxxxxx Xxxxxx xx X.X. xxxxx xxx Xxxxxx Xxxxxx of America, its fifty States and
the District of Columbia.
Welfare Plan means a "welfare plan", as such term is defined in section 3(1) of
ERISA.
Working Capital means the excess of: (a) current assets of the Borrower and
GREKA Colombia, on a combined basis, excluding amounts payable to either the
Borrower or GREKA Colombia by the Guarantor or any other Affiliate of the
Borrower or GREKA Colombia over (b) consolidated current liabilities of the
Borrower and GREKA Colombia, on a combined basis, excluding amounts payable in
respect of the Loans.
Use of Defined Terms
1.2 Unless otherwise defined or the context otherwise requires, terms for which
meanings are provided in this Agreement shall have such meanings when used in
the Disclosure Schedule and in each Note, Borrowing Request, Continuation/
Conversion Notice, other Loan Document, notice and other communication delivered
from time to time in connection with this Agreement or any other Loan Document.
Cross-References
1.3 Unless otherwise specified, references in this Agreement and in each other
Loan Document to any Article or Section are references to such Article or
Section of this Agreement or such other Loan Document, as the case may be, and,
unless otherwise specified, references in any Article, Section or definition to
any clause are references to such clause of such Article, Section or definition.
Accounting, and Financial Determinations
1.4 Unless otherwise specified, all accounting terms used herein or in any other
Loan Document shall be interpreted, all accounting determinations and
computations hereunder or thereunder (including under Section 8.2.4) shall be
made, and all financial statements required to be delivered hereunder or
thereunder shall be prepared in accordance with, those United States generally
accepted accounting principles (GAAP) applied in the preparation of the
financial statements referred to in Section 7.5. In the event any change in GAAP
after the date hereof would materially affect the calculation of the financial
covenants contained in Section 8.2.4, the Guarantor and the Majority Lenders
agrees to enter into good faith negotiations for an agreement to revise such
financial covenants or the definitions of terms used therein to take into
account such changes in GAAP; provided, however, that until the Guarantor and
the Lenders have entered into such an agreement, such financial calculations
shall continue to be made in accordance with GAAP as in effect immediately prior
to such change.
Page 00
XXXXX Xxxxxxxx Covenants, Representations and Warranties
1.5 All covenants, representations and warranties contained herein that refer
specifically to GREKA Colombia shall be of no further force or effect as soon as
(x) the Lenders shall have received $7,500,000 from the Borrower as partial
repayment of the Loans and (y) the Borrower has reduced the Maximum Available
Amount to not more than $6,700,000 in accordance with Section 2.2 (the GREKA
Reduction Date).
THE COMMITMENTS, BORROWING PROCEDURES, NOTES AND BORROWING BASE
The Commitments
2.1 On the terms and subject to the conditions of this Agreement (including
Article VI), each Lender severally agrees to make Loans as described in this
Section 2.1.
Loan Commitment
2.1.1 On the terms and subject to the conditions of this Agreement (including
Article VI), each Lender hereby severally agrees to make loans to the Borrower
(relative to such Lender, and of any type, its Loans) from time to time on any
Business Day occurring prior to the Commitment Termination Date, equal to such
Lender's Percentage of the aggregate amount of the Borrowing requested by the
Borrower to be made on such Business Day. The commitment of each Lender
described in this Section 2.1.1 is herein referred to as its Commitment. On the
terms and conditions hereof, the Borrower may from time to time borrow, prepay
and reborrow Loans.
Lenders Not Permitted or Required to Make Loans
2.1.2 No Lender shall be permitted or required to make any Loan and the Borrower
shall not be permitted to effectuate a reduction in the Maximum Available Amount
pursuant to Section 2.2 if, after giving effect thereto,
Page 22
(a) the aggregate outstanding principal amount of all Loans of all Lenders
would exceed the Commitment Amount, or
(b) the aggregate outstanding principal amount of all Loans of such Lender
would exceed such Lender's Percentage of the Commitment Amount.
Reduction of Maximum Available Amount
2.2 The Borrower may, from time to time on any Business Day occurring after the
time of the initial extension of credit hereunder, voluntarily reduce the
Maximum Available Amount; provided, however that all such reductions shall
require at least three (3) Business Days' prior notice to the Agent and shall be
permanent, and any partial reduction of the Maximum Available Amount shall be in
a minimum amount of $500,000 and in an integral multiple of $250,000.
Borrowing Procedures for Loans
2.3 By delivering a Borrowing Request to the Agent on or before (i) 12:00 noon,
New York time in the case of Base Rate Loans one (1) Business Day prior to the
Business Day on which such Borrowing is to be made and (ii) 12:00 noon, New York
time in the case of a LIBO Rate Loan three (3) Business Days prior to the
Business Day on which such Borrowing is to be made, the Borrower may from time
to time irrevocably request that a Borrowing be made in the amount of (a)
$1,000,000 and integral multiples of $50,000 thereafter, in the case of LIBO
Rate Loans and (b) $250,000 and integral multiple of $50,000 thereafter, in the
case of Base Rate Loans or in the unused amount of the Commitments. The Agent at
its option may accept telephonic requests for Loans, provided that such
acceptance shall not constitute a waiver of the Agent's right to delivery of a
Borrowing Request in connection with subsequent Loans. Any telephonic request
for a Loan by the Borrower shall be promptly confirmed by submission of a
properly completed Borrowing Request to the Agent. On the terms and subject to
the conditions of this Agreement, each Borrowing comprised of Loans shall be
comprised of the type of Loans, and shall be made on the Business Day, specified
in such Borrowing Request. On or before 11:00 a.m. (New York time) on such
Business Day each Lender shall deposit with the Agent same day funds in an
amount equal to such Lender's Percentage of the requested Borrowing. Such
deposit will be made to an account which the Agent shall specify from time to
time by notice to the Lenders. To the extent funds are received from the
Lenders, the Agent shall make such funds available to the Borrower by wire
transfer to the accounts the Borrower shall have specified in its Borrowing
Request. No Lender's obligation to make any Loan shall be affected by any other
Lender's failure to make any Loan.
Page 23
Continuation and Conversion Elections
2.4 By delivering a Continuation/Conversion Notice to the Agent on or before
12:00 noon, New York time, on a Business Day, the Borrower may from time to time
irrevocably elect, on not less than three (3) nor more than five (5) Business
Days' notice, that all or any portion of any Loans (subject to the minimum
amounts for each type of Loan specified in Sections 2.2 and 2.3) to the Borrower
be, in the case of Base Rate Loans, converted into LIBO Rate Loans or, in the
case of LIBO Rate Loans, converted on the last day of the then current Interest
Period into a Base Rate Loan or continued as a LIBO Rate Loan (in the absence of
delivery of a Continuation/Conversion Notice with respect to any LIBO Rate Loan
at least three (3) Business Days before the last day of the then current
Interest Period with respect thereto, such LIBO Rate Loan shall, on such last
day, automatically convert to a LIBO Rate Loan having an Interest Period of one
month except as provided in clause (ii) of the proviso to this Section 2.4);
provided, however, that (i) each such conversion or continuation shall be pro
rated among the applicable outstanding Loans of all Lenders to the Borrower;
(ii) no portion of the outstanding principal amount of any Loans may be so
continued as, or be so converted into, LIBO Rate Loans when any Default has
occurred and is continuing; and (iii) continuation of a LIBO Rate Loan, the
conversion of a Base Rate Loan into a LIBO Rate Loan or the conversion of a LIBO
Rate Loan into a Base Rate Loan pursuant to this Section 2.4 shall not
constitute a Borrowing for purposes of Section 6.2.1 or Article VI of this
Agreement.
Funding
2.5 Each Lender may, if it so elects, fulfill its obligation to make, continue
or convert LIBO Rate Loans hereunder by causing one of its foreign branches or
Affiliates (or an international banking facility created by such Lender) to make
or maintain such LIBO Rate Loan; provided, however, that such LIBO Rate Loan
shall nonetheless be deemed to have been made and to be held by such Lender, and
the obligations of the Borrower to repay such LIBO Rate Loan shall nevertheless
be to such Lender for the account of such foreign branch, Affiliate or
international banking facility. In addition, the Borrower hereby consents and
agrees that, for purposes of any determination to be made for purposes of
Sections 4.1, 4.2, 4.3 or 4.4, it shall be conclusively assumed that each Lender
elected to fund all LIBO Rate Loans by purchasing Dollar deposits in its LIBOR
Office's interbank eurodollar market.
Page 24
Notes
2.6 Each Lender's Loans under its Commitment shall be evidenced by a Note
payable to the order of such Lender in a maximum principal amount equal to such
Lender's Percentage of Forty-Seven Million Five Hundred Thousand Dollars. The
Borrower hereby irrevocably authorizes each Lender to make (or cause to be made)
appropriate notations on the grid attached to such Lender's Note (or on any
continuation of such grid or otherwise in its records), which notations, if
made, shall evidence, inter alia, the date of, the outstanding principal of, and
the interest rate and Interest Period applicable to the Loans evidenced thereby.
Such notations shall be conclusive and binding on the Borrower absent manifest
error; provided, however that the failure of any Lender to make any such
notations shall not limit or otherwise affect any Obligations.
Determination of the Borrowing Base
2.7 The Borrower, the Agent and the Lenders agree that the Borrowing Base shall
be $14,200,000. Without limiting Section 8.2.8 or 8.2.9, if the Borrower sells,
transfers or otherwise disposes of any property that has an aggregate sale price
in excess of $1,000,000, the Borrowing Base shall be reduced by amounts
determined by the Majority Lenders. In addition, if any loss, destruction of or
damage to, or any taking, casualty or condemnation of, any such property occurs,
the Borrowing Base shall be reduced by the greater of (i) the amount of the
proceeds of insurance or other compensation received by the Borrower in respect
of such loss, destruction, damage, taking or condemnation and (ii) the amount
determined by the Required Lenders.
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
Repayments and Prepayments
3.1 The Borrower shall repay in full the unpaid principal amount of each Loan
upon the Maturity Date. Prior thereto, the Borrower
(a) may, from time to time on any Business Day, make a voluntary
prepayment, in whole or in part, of the outstanding principal amount of
any Loans, provided, however, that (i) any such prepayment shall be
made pro rata among Loans to the Borrower of the same type and, if
applicable, having the same Interest Period, of all Lenders; (ii) if
the Borrower makes such prepayment of any LIBO Rate Loan on any day
other than the last day of the Interest Period for such Loan then the
Borrower shall be responsible for the increased cost to the Lenders as
provided more fully in Section 4.4; (iii) all such voluntary
prepayments shall require at least three but no more than five (5)
Business Days' prior written notice to the Agent; and (iv) all such
voluntary partial payments shall be in an aggregate minimum amount of
$250,000 and an integral multiple of $50,000;
Page 25
(b) shall, on each date when any reduction in or termination of the
Commitment Amount shall become effective (including pursuant to Section
2.2, but excluding any such reduction or termination resulting from a
Borrowing Base Deficiency), make a mandatory prepayment in an amount at
least equal to the aggregate, outstanding principal amount of all Loans
in excess of the Commitment Amount as reduced or terminated;
(c) shall, on each Borrowing Base Deficiency Payment Date when the sum of
the then aggregate outstanding principal amount of all Loans exceeds
the Borrowing Base then in effect, first make a mandatory prepayment
equal to at least the amount by which all Loans exceed the Borrowing
Base; and
(d) shall, immediately upon any acceleration of the Maturity Date of any
Loans pursuant to Section 9.2 or Section 9.3, repay all Loans.
Each prepayment of any Loan made pursuant to this Section shall be without
premium or penalty, except for any breakage costs and any other reimbursements
as may be required by Section 4.4. No prepayment of principal of any Loans shall
cause a reduction in the Commitment Amount.
Interest Provisions
3.2 Interest on the outstanding principal amount of Loans shall accrue and be
payable by the Borrower in accordance with this Section 3.2.
Rates
3.2.1 Pursuant to an appropriately delivered Borrowing Request or
Continuation/Conversion Notice, the Borrower may elect that Loans comprising a
Borrowing accrue interest at a rate per annum:
(a) on that portion maintained from time to time as a Base Rate Loan, equal
to the sum of the Alternate Base Rate from time to time in effect plus
the Applicable Margin with respect to Base Rate Loans; and
Page 26
(b) on that portion maintained as a LIBO Rate Loan, during each Interest
Period applicable thereto, equal to the sum of the LIBO Rate (Reserve
Adjusted) for such Interest Period plus the Applicable Margin with
respect to LIBO Rate Loans.
All LIBO Rate Loans shall bear interest from and including the first day of the
applicable Interest Period to (but not including) the last day of such Interest
Period at the interest rate determined as applicable to such LIBO Rate Loan.
Post-Default Rates
3.2.2 After the occurrence of any Event of Default or after the date (after
giving effect to any grace period) any principal amount of any Loan is due and
payable (whether on the Maturity Date, upon acceleration or otherwise), or after
any other monetary Obligation of the Borrower shall have become due and payable,
the Borrower shall pay, but only to the extent permitted by law, interest (after
as well as before judgment) at a rate per annum (the Default Rate) equal to the
sum of (x) the Alternate Base Rate or LIBO Rate (Reserve Adjusted) (as the case
may be) plus (y) 3.00% plus (z) the Applicable Margin from time to time in
effect for the applicable type of Loans.
Payment Dates
3.2.3 Interest accrued on each Loan shall be payable, without duplication, by
the Borrower: (a) in the case of any Base Rate Loans, in arrears on each Monthly
Payment Date; (b) on the Maturity Date; (c) with respect to any Base Rate Loans
converted into LIBO Rate Loans on a day when interest would not otherwise have
been payable pursuant to clause (a), on the date of such conversion; (d) in the
case of a LIBO Rate Loan, on the last day of each Interest Period but no less
frequently than monthly and (e) on that portion of any Loans which is
accelerated pursuant to Section 9.2 or Section 9.3, immediately upon such
acceleration. Interest accrued on Loans or other monetary Obligations arising
under this Agreement or any other Loan Document after the date such amount is
due and payable (whether on the Maturity Date, upon acceleration or otherwise)
shall be payable by the Borrower upon demand.
Fees
3.3 The Borrower agrees to pay the fees set forth in this Section 3.3. All such
fees shall be non-refundable.
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Commitment Fee
3.3.1 The Borrower agrees to pay to the Agent for the account of each Lender,
for the period commencing on the Effective Date and continuing through the final
Commitment Termination Date, a commitment fee at the rate of 1/2 of 1% per annum
on such Lender's Percentage of the sum of the average daily unused portion of
the Borrowing Base during the period preceding each Monthly Payment Date and
occurring on or after the prior Monthly Payment Date. Such commitment fees shall
be payable by the Borrower in arrears on each Monthly Payment Date, commencing
with the first such day following the Effective Date, and on the Commitment
Termination Date.
Participation Fees
3.3.2 The Borrower agrees to pay on the Closing Date to the Agent for its own
account as provided in the Fee Letter, all fees set forth therein on the dates
and in the amounts set forth therein.
CERTAIN LIBO RATE AND OTHER PROVISIONS
Fixed Rate Lending Unlawful
4.1 If any Lender shall determine that the introduction of or any change in or
in the interpretation of any law after the Effective Date makes it unlawful, or
any central bank or other governmental authority asserts that it is unlawful,
for such Lender to make, continue or maintain any Loan as, or to convert any
Loan into, a LIBO Rate Loan, the obligations of such Lender to make, continue,
maintain or convert any such Loans shall, upon such determination, forthwith be
suspended until such Lender shall notify the Agent that the circumstances
causing such suspension no longer exist, and all such Lender's LIBO Rate Loans
shall automatically convert into Base Rate Loans at the end of the then current
Interest Periods with respect thereto or sooner, if required by such law or
assertion.
Deposits Unavailable
4.2 If the Agent shall have determined (which determination shall be generally
applicable to all borrowers from CIBC similar to the Borrower and having similar
provisions in agreements with CIBC as Agent) that (a) Dollar deposits, as the
case may be, in the relevant amount and for the relevant Interest Period are not
available to CIBC in its relevant market; or (b) by reason of circumstances
affecting CIBC's relevant market, adequate means do not exist for ascertaining
the interest rate applicable hereunder to LIBO Rate Loans, then, upon notice
from the Agent to the Borrower and the Lenders, (x) the obligations of all
Lenders under Section 2.3 and Section 2.4 to make or continue any Loans as, or
to convert any Loans into, LIBO Rate Loans shall forthwith be suspended until
the Agent shall notify the Borrower and the Lenders that the circumstances
causing such suspension no longer exist; and (y) all LIBO Rate Loans shall
automatically convert into Base Rate Loans at the end of the then current
Interest Periods with respect thereto.
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Increased LIBO Rate Loan Costs, Etc.
4.3 The Borrower agrees to reimburse each Lender for any increase in the cost to
such Lender of, or any reduction in the amount of any sum receivable by such
Lender in respect of, making, continuing or maintaining (or of its obligation to
make, continue or maintain) any Loans as, or of converting (or of its obligation
to convert) any Loans into, LIBO Rate Loans. Such Lender shall promptly notify
the Agent and the Borrower in writing of the occurrence of any such event, and
in any event, within 180 days, after it obtains knowledge thereof and determines
to request such compensation such notice to state, in reasonable detail, the
reasons therefor, the additional amount required fully to compensate such Lender
for such increased cost or reduced amount, the basis upon which such amount is
computed (and including calculations in reasonable detail) and such Lender is
generally requesting compensation from all borrowers from such Lender which are
similar to the Borrower and having similar provisions in agreements with such
Lender. Such additional amount shall be payable by the Borrower directly to such
Lender upon forty-five days of its receipt of such notice, and such notice
shall, in the absence of manifest error, be presumed correct. The Borrower shall
not, and shall not cause its Subsidiaries to, be obligated to pay for any such
amounts if such Lender does not notify the Borrower that such additional amounts
are owing within 180 days of the date such Lender obtains knowledge thereof.
Anything in this Section 4.3 or in Section 4.5 below notwithstanding, if any
Lender elects to require payment by the Borrower of any amount under this
Section 4.3 or Section 4.5, the Borrower may, within 60 days after the date of
receiving notice thereof and so long as no Default shall have occurred and be
continuing, elect to terminate such Lender (for purposes of this paragraph, the
Terminated Lender) as a party to this Agreement; provided that, concurrently
with such termination the Borrower shall (i) if the Agent and each of the
Lenders other than the Terminated Lender shall consent, pay the Terminated
Lender all principal, interest and fees and other amounts owed to such
Terminated Lender through such date of termination or (ii) have arranged for an
assignee acceptable to the Agent become a substitute Lender for all purposes
under this Agreement in the manner provided in Section 11.11.1; provided further
that, prior to substitution for any Terminated Lender, the Borrower shall have
given written notice to the Agent of such intention and, if requested by the
Borrower, the Lenders (other than the Terminated Lenders) shall have the option,
but no obligation, for a period of sixty (60) days after receipt of such notice,
to increase their Commitments in order to replace the Terminated Lender.
Page 29
Funding Losses
4.4 In the event any Lender shall incur any loss or expense (including any loss
or expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by such Lender to make, continue or maintain any portion of
the principal amount of any Loan as, or to convert any portion of the principal
amount of any Loan into, a LIBO Rate Loan) as a result of (a) any conversion or
repayment or prepayment of the principal amount of any LIBO Rate Loans on a date
other than the scheduled last day of the Interest Period applicable thereto,
whether pursuant to Section 3.1 or otherwise; (b) any Loans not being made as
LIBO Rate Loans in accordance with the Borrowing Request therefor; or (c) any
Loans not being continued as, or converted into, LIBO Rate Loans in accordance
with the Continuation/Conversion Notice therefor, then, upon the written notice
of such Lender to the Borrower (with a copy to the Agent), the Borrower shall,
within forty-five days of its receipt thereof, pay directly to such Lender such
amount as will reimburse such Lender for such loss or expense. Such written
notice (which shall include calculations in reasonable detail) shall, in the
absence of manifest error, be conclusive.
Increased Capital Costs
4.5 If after the Effective Date any change in, or the introduction, adoption,
effectiveness, interpretation, reinterpretation or phase-in of, any law or
regulation, directive, guideline, decision or request (whether or not having the
force of law) of any court, central bank, regulator or other governmental
authority affects or would affect the amount of capital required or expected to
be maintained by any Lender or any Person controlling such Lender, and such
Lender determines (in its sole and absolute discretion) that the rate of return
on its or such controlling Person's capital as a consequence of its Commitment
or the Loans made by such Lender is reduced to a level materially below that
which such Lender or such controlling Person could have achieved but for the
occurrence of any such circumstance, then, in any such case upon notice from
time to time by such Lender to the Borrower but in no event later than 180 days
after such Lender makes such determination, the Borrower shall immediately pay
directly to such Lender additional amounts sufficient to compensate such Lender
or such controlling Person for such reduction in rate of return; provided,
however, that the Borrower shall not be required to make such payment if such
Lender does not provide notice of such determination within 180 days thereof. A
certificate of any Lender claiming compensation under this Section and setting
forth the additional amount or amounts to be paid to it hereunder shall be
conclusive in the absence of manifest error. In determining such amount, such
Lender may use any reasonable averaging and attribution methods. A statement of
such Lender as to any such additional amount or amounts (including calculations
thereof in reasonable detail) shall, in the absence of manifest error or written
objection by the Borrower within 10 days after its receipt of such statement, be
conclusive. In determining such amount, such Lender may use any reasonable
method of averaging and attribution that it shall deem applicable.
Page 30
Each Lender will promptly notify the Borrower and the Agent of any event of
which it has knowledge, occurring after the date hereof, which will entitle such
Lender to compensation pursuant to this Section and will designate a different
lending office if such designation will avoid the need for, or reduce the amount
of, such compensation and will not, in the judgment of such Lender, be otherwise
disadvantageous to such Lender.
Any certificate delivered by a Lender pursuant to this Section 4.5 requesting
compensation shall certify that such request for compensation is being made
pursuant to a policy adopted by such Lender to seek such compensation generally
from customers similar to the Borrower and having similar provisions in
agreements with such Lender.
Taxes
4.6(a) All payments by any Obligor of principal of, and interest on, the Loans
and all other amounts payable hereunder and under any other Loan
Document shall be made free and clear of and without deduction for any
present or future excise, stamp or other similar taxes, fees, duties,
withholdings or other charges of any nature whatsoever imposed by any
taxing authority, but excluding franchise taxes and taxes imposed on or
measured by any Lender's income or gross receipts (such non-excluded
items being called Taxes). In the event that any withholding or
deduction from any payment to be made by any Obligor hereunder is
required in respect of any Taxes pursuant to any applicable law, rule
or regulation (except for any withholding required in respect of a
Lender or any Agent by the laws of any jurisdiction (other than the
United States) where such Lender or Agent is doing business), then the
Borrower or the Guarantor (as the case may be) will (i) pay directly to
the relevant authority the full amount required to be so withheld or
deducted; (ii) promptly forward to the Agent an official receipt or
other documentation satisfactory to the Agent evidencing such payment
to such authority; and (iii) pay to the Agent for the account of the
Agent and the Lenders such additional amount or amounts as is necessary
to ensure that the net amount actually received by the Agent or each
Lender will equal the full amount such Lender would have received had
no such withholding or deduction been required. Moreover, if any Taxes
are directly asserted against the Agent or any Lender with respect to
any payment received by the Agent or such Lender hereunder, the Agent
or such Lender may pay such Taxes and the Borrower or the Guarantor (as
the case may be) will promptly pay such additional amounts (including
any penalties, interest or expenses (other than any such penalties,
interest or expense as a result of acts or omissions constituting gross
negligence on the part of such Person)) as is necessary in order that
the net amount received by such Person after the payment of such Taxes
(including any Taxes on such additional amount) shall equal the amount
such Person would have received had such Taxes not been asserted.
Page 31
If a Lender becomes aware that any such withholding or deduction from
any payment to be made by any Obligor hereunder or under any other Loan
Document is required, then such Lender shall promptly notify the Agent
and the applicable Obligor thereof stating the reasons therefor and the
additional amount required to be paid under this Section. Each Lender
shall execute and deliver to the Agent and the applicable Obligor such
forms as it may be required to execute and deliver pursuant to Section
4.6(b). To the extent that any such withholding or deduction results
from the failure or delay of a Lender to provide a form required by
Section 4.7(b) (unless such failure or delay is due to some prohibition
under applicable requirement of Law), the applicable Obligor shall have
no obligation to pay the additional amount required by clause (b)
below. Anything in this Section 4.6 notwithstanding, if any Lender
elects to require payment by any Obligor of any material amount under
this Section, the Borrower may, within 60 days after the date of
receiving notice thereof and so long as no Default shall have occurred
and be continuing, elect to terminate such Lender (for purposes of this
paragraph, the Terminated Lender) as a party to this Agreement;
provided that, concurrently with such termination the Borrower shall
(i) if the Agent and each of the Lenders other than the Terminated
Lender shall consent, pay the Terminated Lender all principal, interest
and fees and other amounts owed to such Terminated Lender through such
date of termination or (ii) have arranged for an assignee acceptable to
the Agent to become a substitute Lender for all purposes under this
Agreement in the manner provided in Section 11.11.1; provided further
that, prior to substitution for any Terminated Lender, the Borrower
shall have given written notice to the Agent of such intention and, if
requested by the Borrower, the Lenders (other than the Terminated
Lenders) shall have the option, but no obligation, for a period of
sixty (60) days after receipt of such notice, to increase their
Commitments in order to replace the Terminated Lender.
Page 32
If any Obligor fails to pay any Taxes when due to the appropriate
taxing authority or fails to remit to the Agent, for the account of the
respective Lenders, the required receipts or other required documentary
evidence, the Borrower and the Guarantor shall indemnify the Lenders
for any incremental Taxes, interest or penalties that may become
payable by any Lender as a result of any such failure. For purposes of
this Section 4.6 a distribution hereunder by the Agent or any Lender to
or for the account of the Agent or any Lender shall be deemed a payment
by the Borrower.
(b) Each Lender which is organized under the laws of a jurisdiction outside
the United States shall, (i) on the day of the initial borrowing from
each such Lender hereunder and (ii) from time to time thereafter if
requested by the Borrower or the Agent, provide the Agent and the
Borrower with the forms prescribed by the Internal Revenue Service of
the United States certifying as to such Lender's status for purposes of
determining exemption from United States withholding taxes with respect
to all payments to be made to such Lender hereunder and under the other
Loan Documents or other documents satisfactory to such Lender, the
Borrower and the Agent and indicating that all payments to be made to
such Lender hereunder and under the other Loan Documents are not
subject to United States withholding tax. Unless the Borrower and the
Agent shall have received such forms or such documents indicating that
payments to such Lender hereunder and under the other Loan Documents
are not subject to United States withholding tax, the Borrower and the
Agent shall be entitled to withhold United States withholding taxes
from such payments at the applicable statutory rate.
Page 33
(c) For any period with respect to which a Lender has failed to provide the
Borrower or the Agent with the appropriate form referred to in Section
4.6(b) (unless such failure is due to a change in treaty, law or
regulation occurring after the date of which such form originally was
required to be provided), such Lender shall not be entitled to
indemnification under Section 4.6(a) with respect to Taxes imposed by
the United States, provided that, if a Lender that is otherwise exempt
from or subject to a reduced rate of withholding tax, becomes subject
to Taxes because of its failure to deliver a form required hereunder,
the Borrower shall take such steps, at the expense of such Lender, as
such Lender shall reasonably request to assist such Bank to recover
such Taxes.
(d) If the Borrower is required to pay additional amounts to or for the
account of any Lender pursuant to this Section as a result of a change
in law or treaty occurring after such Lender first became a party to
this Agreement, then such Lender will, at the Borrower's request,
change the jurisdication of its lending office if, in the judgment of
such Lender, such change (i) will eliminate or reduce any such
additional payment which may thereafter accrue and (ii) is not
otherwise disadvantageous to such Lender.
Payments, Computations, Etc.
4.7 Unless otherwise expressly provided, all payments pursuant to this
Agreement, the Notes or any other Loan Document shall be made to the Agent for
the pro rata account of the Lenders entitled to receive such payment. All such
payments required to be made to the Agent shall be made, without set off,
deduction or counterclaim, not later than 12:00 noon, New York time, on the date
due, in same day or immediately available funds, to such account as the Agent
shall specify from time to time by notice to the Borrower. Funds received after
that time shall be deemed to have been received by the Agent on the next
succeeding Business Day. The Agent shall promptly remit in same day funds to
each Lender its share, if any, of such payments received by the Agent for the
account of such Lender. All interest and fees shall be computed on the basis of
the actual number of days (including the first day but excluding the last day)
occurring during the period for which such interest or fee is payable over a
year comprised of 360 days (or, in the case of interest on a Base Rate Loan, 365
days or, if appropriate, 366 days). Whenever any payment to be made shall
otherwise be due on a day which is not a Business Day, such payment shall
(except as otherwise required by clause (c) of the definition of the term
Interest Period with respect to LIBO Rate Loans) be made on the next succeeding
Business Day and such extension of time shall be included in computing interest
and fees, if any, in connection with such payment.
Page 34
Sharing of Payments
4.8(a) If any Lender shall obtain any payment or other recovery (whether
voluntary, involuntary, by application of set off or otherwise) on
account of any Loan (other than pursuant to the terms of Sections 4.3,
4.4, 4.5 and 4.6) in excess of its pro rata share of payments then or
therewith obtained by all Lenders, such Lender shall purchase from the
other Lenders such participations in Loans made by them as shall be
necessary to cause such purchasing Lender to share the excess payment
or other recovery ratably with each of them; provided, however, that if
all or any portion of the excess payment or other recovery is
thereafter recovered from such purchasing Lender, the purchase shall be
rescinded and each Lender which has sold a participation to the
purchasing Lender shall repay to the purchasing Lender the purchase
price to the ratable extent of such recovery together with an amount
equal to such selling Lender's ratable share (according to the
proportion of (a) the amount of such selling Lender's required
repayment to the purchasing Lender to (b) the total amount so recovered
from the purchasing Lender) of any interest or other amount paid or
payable by the purchasing Lender in respect of the total amount so
recovered. The Borrower agrees that any Lender so purchasing a
participation from another Lender pursuant to this Section may, to the
fullest extent permitted by law, exercise all its rights of payment
(including pursuant to Section 4.9) with respect to such participation
as fully as if such Lender were the direct creditor of such Borrower in
the amount of such participation. If under any applicable bankruptcy,
insolvency or other similar law, any Lender receives a secured claim in
lieu of a set off to which this Section applies, such Lender shall, to
the extent practicable, exercise its rights in respect of such secured
claim in a manner consistent with the rights of the Lenders entitled
under this Section to share in the benefits of any recovery on such
secured claim.
Set off
4.9 Each Lender shall, upon the occurrence of any Default described in clauses
(a) through (d) of Section 9.1.9 with respect to the Borrower or the Guarantor
or, with the consent of the Majority Lenders, upon the occurrence of any other
Event of Default, have the right to appropriate and apply in set off to the
payment of the Obligations owing to it, and (as security for such Obligations)
any and all balances, credits, deposits, accounts or moneys of the Borrower or
the Guarantor then or thereafter maintained with such Lender; provided, however,
that any such appropriation and application shall be subject to the provisions
of Section 4.8. Each Lender agrees promptly to notify the Borrower or the
Guarantor, as applicable, and the Agent after any such set off and application
made by such Lender; provided, however, that the failure to give such notice
shall not affect the validity of such set off and application. The rights of
each Lender under this Section are in addition to other rights and remedies
(including other rights of set off under applicable law or otherwise) which such
Lender may have.
Page 35
Use of Proceeds
4.10 The Borrower shall apply the proceeds of each Borrowing (a) to repay in
full the Existing Indebtedness; (b) to make an intercompany loan to the
Guarantor for the purpose of consummating the Acquisition; (c) to pay
transaction expenses in connection with the forgoing; and (d) for general
corporate purposes; provided that, no proceeds of any Loan will be used to
acquire any equity security of a class which is registered pursuant to Section
12 of the Securities Exchange Act of 1934 or any "margin stock", as defined in
F.R.S. Board Regulation U and no such proceeds shall be used in violation of any
applicable law or regulation.
Maximum Interest
4.11 It is the intention of the parties hereto to conform strictly to applicable
usury laws and, anything herein to the contrary notwithstanding, the obligations
of the Borrower to each Lender under this Agreement shall be subject to the
limitation that payments of interest shall not be required to the extent that
receipt thereof would be contrary to provisions of law applicable to such Lender
limiting rates of interest which may be charged or collected by such Lender.
Accordingly, if the transactions contemplated hereby would be usurious under
applicable law (including the Federal and state laws of the United States of
America, or of any other jurisdiction whose laws may be mandatorily applicable)
with respect to a Lender then, in that event, notwithstanding anything to the
contrary in this Agreement, it is agreed as follows: (a) the provisions of this
Section 4.11 shall govern and control; (b) the aggregate of all consideration
which constitutes interest under applicable law that is contracted for, charged
or received under this Agreement, or under any of the other aforesaid agreements
or otherwise in connection with this Agreement by such Lender shall under no
circumstances exceed the maximum amount of interest allowed by applicable law
(such maximum lawful interest rate, if any, with respect to such Lender herein
called the Highest Lawful Rate), and any excess shall be credited to the
Borrower by such Lender (or, if such consideration shall have been paid in full,
such excess promptly refunded to the Borrower); (c) all sums paid, or agreed to
be paid, to such Lender for the use, forbearance and detention of the
indebtedness of the Borrower to such Lender hereunder shall, to the extent
permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full term of such indebtedness until payment in full so that the
actual rate of interest is uniform throughout the full term thereof; and (d) if
at any time the interest provided pursuant to Section 3.2 together with any
other fees payable pursuant to this Agreement and deemed interest under
applicable law, exceeds that amount which would have accrued at the Highest
Lawful Rate, the amount of interest and any such fees to accrue to such Lender
pursuant to this Agreement shall be limited, notwithstanding anything to the
contrary in this Agreement to that amount which would have accrued at the
Highest Lawful Rate, but any subsequent reductions, as applicable, shall not
reduce the interest to accrue to such Lender pursuant to this Agreement below
the Highest Lawful Rate until the total amount of interest accrued pursuant to
this Agreement and such fees deemed to be interest equals the amount of interest
which would have accrued to such Lender if a varying rate per annum equal to the
interest provided pursuant to Section 3.2 had at all times been in effect, plus
the amount of fees which would have been received but for the effect of this
Section 4.11.
Page 36
THE GUARANTEE
The Guarantee
5.1 The Guarantor hereby unconditionally, irrevocably guarantees to the Lenders
and the Agent, and to each of them, the due and punctual payment of all
Obligations as and when the same shall become due and payable, whether at
maturity, by declaration or otherwise, according to the terms thereof. In case
of failure by the Borrower punctually to pay any Obligation, the Guarantor
hereby unconditionally agrees to cause such payment to be made punctually as and
when the same shall become due and payable, whether at maturity or by
declaration or otherwise, and as if such payment were made by the Borrower.
Guarantees Unconditional
5.2 The obligations of the Guarantor under this Article V shall be unconditional
and absolute irrespective of the value, genuineness, validity, regularity or
enforceability of the obligations of the Borrower under this Agreement, the
Notes or any other agreement or instrument referred to herein or therein, or any
substitution, release or exchange of any other guarantee of or other security
for any of the obligations of the Guarantor hereunder, and, to the fullest
extent permitted by applicable law, irrespective of any other circumstance
whatsoever that might otherwise constitute a legal or equitable discharge or
defense of a surety or guarantor (other than payment in full of such obligations
of the Guarantor hereunder) and, without limiting the generality of the
foregoing, shall not be released, discharged or otherwise affected by:
Page 37
(a) any extension, renewal, settlement, compromise, waiver or release in
respect of any obligation of any other Obligor under any Loan Document,
by operation of law or otherwise;
(b) any modification or amendment of or supplement to any Loan Document;
(c) any modification, amendment, waiver, release, non-perfection or
invalidity of any direct or indirect security, or of any guarantee or
other liability of any third party, for any obligation of any Obligor
under any Loan Document;
(d) any change in the corporate existence, structure or ownership of the
Borrower or its Subsidiaries, or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting the Borrower or
its Subsidiaries or their assets or any resulting release or discharge
of any obligation of any other Obligor contained in any Loan Document;
(e) the existence of any claim, set-off or other rights which the Guarantor
may have at any time against the Borrower, the Agent or any Lender or
any other Person, whether or not arising in connection with any Loan
Document; provided that nothing herein shall prevent the assertion of
any such claim by separate suit or compulsory counterclaim;
(f) any invalidity or unenforceability relating to or against any other
Obligor for any reason of any Loan Document or any provision of
applicable law or regulation purporting to prohibit the payment by any
other Obligor of any Obligation; or
(g) any other act or omission to act or delay of any kind by any Obligor or
any other Person or any other circumstance whatsoever that might, but
for the provisions of this paragraph, constitute a legal or equitable
discharge of or defense to the obligations of the Guarantor under this
Article V.
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Reinstatement in Certain Circumstances
5.3 The Guarantor's obligations under this Article V shall remain in full force
and effect until the Commitments are terminated and all principal of and
interest on the Notes and all other amounts payable by the Borrower hereunder
and under the other Loan Documents shall have been paid in full. If at any time
any payment of the principal of or interest on any Note or any other amount
payable by the Borrower under any Loan Document is rescinded or must be
otherwise restored or returned upon the insolvency, bankruptcy or reorganization
of the Borrower or otherwise, the Guarantor's obligations under this Article V
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.
Waiver of Notice
5.4 Each Guarantor irrevocably waives acceptance hereof, presentment, demand,
protest and any notice not provided for herein, as well as any requirement that
at any time any action be taken by any Person against any other Obligor or any
other Person.
Subrogation
5.5 The Guarantor hereby waives until the payment and satisfaction in full of
all of the Obligations and the expiration or termination of the Commitments, all
rights of subrogation or contribution, whether arising by contract or operation
of law (including without limitation any such right arising under the Federal
Bankruptcy Code) or otherwise by reason of any payment by the Guarantor pursuant
to the provisions of this Article V and further agrees that until the payment
and satisfaction in full of the Obligations and the expiration or termination of
the Commitments, the Guarantor shall not exercise any right or remedy arising by
reason of any performance by the Guarantor of its guarantee in this Article V,
whether by subrogation or otherwise, against the Borrower or any security for
any of the Obligations.
Stay of Acceleration
5.6 If acceleration of the time for payment of any amount payable by the
Borrower under this Agreement is stayed upon the insolvency, bankruptcy or
reorganization of the Borrower, all such amounts otherwise subject to
acceleration under the terms of this Agreement shall nonetheless be payable by
the Guarantor hereunder forthwith on demand by the Agent made at the request of
the Majority Lenders.
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Deposits in Cash Account
5.7 The Guarantor shall deposit $600,000 into the Cash Collateral Account on the
first day of each calendar month, commencing August 1, 2000. All amounts held in
the Cash Collateral Account shall provide collateral security to the Lenders and
the Agent, as more fully provided in the Pledge Agreement.
CONDITIONS TO BORROWING
Initial Borrowing
6.1 The obligations of the Lenders to fund the initial Borrowing shall be
subject to the prior or concurrent satisfaction of each of the conditions
precedent set forth in this Section 6.1.
Resolutions, Etc.
6.1.1 The Agent shall have received from each of the Borrower and the Guarantor,
a certificate, dated the date of the initial Borrowing, of its Secretary or
Assistant Secretary as to (a) resolutions of its Board of Directors or other
governing body then in full force and effect authorizing the execution, delivery
and performance of this Agreement and each other Loan Document to be executed by
it and (b) the incumbency and signatures of those officers authorized to act
with respect to this Agreement and each other Loan Document executed by it, upon
which certificate the Agent and each Lender may conclusively rely until it shall
have received a further certificate of the Secretary of the Borrower or the
Guarantor (as the case may be) canceling or amending such prior certificate.
Satisfactory Review and Legal Form
6.1.2 All legal matters in connection with this Agreement and the consummation
of the transaction contemplated hereby and by the Loan Documents shall be
approved by the Agent and its legal counsel, and there shall have been furnished
to the Agent by the Borrower and the Guarantor, at the Obligors' expense, such
agreements, opinions of counsel, title opinions and other records and
information, in form and substance, scope and methodology satisfactory to the
Agent or counsel to the Agent in the sole discretion of the Agent or counsel to
the Agent, as the Agent or counsel to the Agent may reasonably have requested
for that purpose, including, without limitation, (a) information pertaining to
the makeup, background (including references), experience and prior associations
of the senior management and board of directors of the Borrower and the
Guarantor and any shareholders holding a beneficial interest in more than 10% of
the voting securities of the Guarantor, (b) information pertaining to the
organization and structure, ownership of material assets and title matters
pertaining to the Guarantor and the Borrower and (c) information relating to the
use of Hazardous Material at, on or in connection with the Mortgaged Properties
or any other real property of the Borrower or GREKA Colombia and compliance with
all applicable Environmental Laws and environmental assessments of such
Mortgaged Properties.
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Financial Statements
6.1.3 The Agent and the Lenders shall have received a certified copy of the
audited consolidated balance sheet of the Guarantor as at December 31, 1999 and
the related consolidated statements of income, retained earnings and cash flow
of the Guarantor and its consolidated Subsidiaries for the fiscal year ended on
said date, with the opinion thereon of an independent, certified public
accountant of nationally recognized standing, which financial statements shall
be in form and substance satisfactory to the Agent and the Lenders.
Delivery of Notes
6.1.4 The Agent shall have received, for the account of each Lender, its Note
duly executed and delivered by the Borrower.
Security Agreement
6.1.5 The Agent shall have received executed counterparts of the Security
Agreement, dated as of the date hereof, duly executed by the Borrower, together
with executed copies of proper Uniform Commercial Code Form UCC-1 statements,
necessary or in the opinion of the Agent, desirable to create in the Agent for
the benefit of the Agent and the Lenders all Liens and other rights of any
Person as a valid, perfected first priority Lien in the Collateral Property
described in the Security Agreement.
Pledge Agreement
6.1.6 The Agent shall have received (i) executed counterparts of the Pledge
Agreement, dated as of the date hereof, duly executed by the Guarantor, together
with executed copies of proper Uniform Commercial Code Form UCC-1 statements,
necessary or in the opinion of the Agent, desirable to create in the Agent for
the benefit of the Agent and the Lenders all Liens and other rights of any
Person as a valid, perfected first priority Lien in the Collateral Property
described in the Pledge Agreement; (ii) the shares of the Borrower required to
be delivered to the Agent on the Effective Date pursuant to the Pledge
Agreement; and (iii) stock powers executed in blank with respect to the shares
specified in clause (ii).
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Mortgage
6.1.7 The Agent shall have received counterparts of a Mortgage covering each
Mortgaged Property, each dated as of the date hereof, duly executed by the
Borrower, together with evidence of the completion (or satisfactory arrangements
for the completion) of all recordings and filings of the Mortgage(s) as be may
be necessary or, in the reasonable opinion of the Agent, desirable to create
effectively a valid, perfected, first priority Lien against the properties
purported to be covered thereby; and (b) such surveys, abstracts and appraisals
as may be required in connection with the Mortgage or as the Majority Lenders
may reasonably request, all in form and substance satisfactory to the Agent and
the Lenders.
Title Opinions
6.1.8 The Agent shall have received title opinions with respect to the Mortgaged
Properties in a form and substance satisfactory and from counsel satisfactory to
the Agent.
Payment of Outstanding Indebtedness
6.1.9 All Existing Indebtedness shall have been paid in full and cancelled
(including, to the extent necessary, from proceeds of the initial Borrowing);
and all Liens securing payment of any such Indebtedness have been terminated and
the Agent shall have received all Uniform Commercial Code form UCC-3 termination
statements or other instruments as may be suitable or appropriate in connection
therewith.
Searches and Releases
6.1.10 The Agent shall have received the following from the Borrower: (a)
executed copies of proper Uniform Commercial Code form UCC-3 termination
statements and other relevant assignments and documents, if any, necessary to
terminate all Liens and other rights of any Person (i) in any Collateral
Property described in the Security Documents previously granted by any Person
and (ii) securing any of the Existing Indebtedness, together with such other
Uniform Commercial Code Form UCC-3 termination statements or releases as the
Agent may reasonably request; and (b) copies of Uniform Commercial Code, tax and
judgment lien searches with respect to the Borrower and the Guarantor in each
jurisdiction deemed appropriate by the Agent.
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Opinions of Counsel
6.1.11 The Agent and the Lenders shall have received opinions, dated the date of
the initial extension of credit or such other date acceptable to the Agent and
addressed to the Agent and all Lenders, from
(a) Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, LLP, special counsel to the Borrower
and the Guarantor, in substantially the form of Exhibit H-1;
(b) Xxxxx Xxxxxx, General Counsel of the Guarantor and the Borrower, in
substantially the form of Exhibit H-2;
(c) Xxxxxx Brand Seymor & Xxxxxx, Xxxxxxxxx Xxxxxx & Xxxxxx LLP, Xxxxxx &
Holloman, P.C. and Xxxxxxx & Xxxxx, special local counsel to the
Borrower in the states of California, Louisiana, New Mexico and Texas,
respectively; and
(d) Freshfields LLP, special New York counsel to the Agent, in
substantially the form of Exhibit H-3.
Consummation of the Acquisition
6.1.12 The Acquisition shall occur subsequent to the initial Borrowing and the
Agent and the Lenders shall have received copies of all Acquisition Documents,
which shall be in form and scope satisfactory to the Agent and the Lenders and
which agreements shall not be amended subsequent to June 15, 2000 and none of
the conditions to the Acquisition shall be waived without, in each case, the
prior consent of the Agent and the Majority Lenders, provided that the closing
date for the Acquisition may be modified without the consent of the Agent or the
Majority Lenders.
No Material Adverse Change
6.1.13 Since December 31, 1999, there shall not have occurred any material
adverse change in the financial condition, operations, properties, assets or
prospects of either (x) GREKA and its Subsidiaries or (y) the Borrower.
Insurance
6.1.14 The Agent and the Lenders shall have received certificates of insurance
evidencing the existence of all insurance required to be maintained by the
Borrower and the Guarantor pursuant to Section 8.1.4, such certificates to be in
such form and contain such information as reasonably requested by the Agent.
Page 43
Reserve Report
6.1.15 The Agent shall have received a reserve report prepared by Netherland,
Xxxxxx & Associates, Inc. covering the Borrower's Hydrocarbon Interests and the
Hydrocarbon Interests to be acquired by GREKA Colombia pursuant to the
Acquisition.
Payment of Fees
6.1.16 The Agent shall have received evidence of the payment by the Borrower of
all fees, expenses and other amounts previously agreed to by the Borrower or the
Guarantor or payable hereunder on or before the date of the initial Borrowing.
Assignment of Account Agreement
6.1.17 The Agent shall have received executed counterparts of the Assignment of
Account Agreement, dated as of the date hereof, duly executed by the Guarantor.
All Borrowings
6.2 The obligation of each Lender to fund any Loan on the occasion of any
Borrowing (including the initial Borrowing) shall be subject to the satisfaction
of each of the conditions precedent set forth in this Section 6.2.
Compliance with Warranties, No Default, Etc.
6.2.1 Both before and after giving effect to any Borrowing (but, if any Default
of the nature referred to in Section 9.1.5 shall have occurred with respect to
any other Indebtedness, without giving effect to the application, directly or
indirectly, of the proceeds thereof) the following statements shall be true and
correct:
(a) the representations and warranties set forth in Article VI and in the
other Security Documents shall be true and correct with the same effect
as if then made (unless stated to relate solely to an earlier date, in
which case such representations and warranties shall be true and
correct as of such earlier date);
(b) no labor controversy, litigation, arbitration or governmental
investigation or proceeding shall be pending or, to the knowledge of
the Borrower or the Guarantor, threatened against the Borrower or the
Guarantor or any of their respective Subsidiaries which would
reasonably be expected to have a Material Adverse Effect; and
Page 44
(c) no Default shall have then occurred and be continuing, and neither the
Borrower nor the Guarantor are not in violation of any law or
governmental regulation or court order or decree except for such
violations as would not reasonably be expected to have a Material
Adverse Effect.
Borrowing Request
6.2.2 The Agent shall have received a Borrowing Request for such Borrowing. Each
of the delivery of a Borrowing Request and the acceptance by the Borrower of the
proceeds of such Borrowing shall constitute a representation and warranty by the
Borrower that, on the date of such Borrowing (both immediately before and after
giving effect to such Borrowing and the application of the proceeds thereof),
the statements made in Section 6.2.1 are true and correct. By delivering the
initial Borrowing Request, the Borrower shall be deemed to have represented and
warranted that on and as of the date of the initial Borrowing each of the
conditions set forth in Article VI has been satisfied.
Satisfactory Legal Form
6.2.3 All documents executed or submitted pursuant hereto by or on behalf of the
Borrower shall be satisfactory in form and substance to the Agent and its
counsel; the Agent and its counsel shall have received all information,
approvals, opinions, documents or instruments as the Agent or its counsel may
reasonably request.
Conditions to Subsequent Borrowings
6.3 The obligation of each Lender to fund Loans in an amount in excess of
$6,700,000 in the aggregate for all Lenders shall be subject to the satisfaction
of each of the conditions precedent set forth in this Section 6.3.
6.3.1 The Agent and the Lenders shall have received the opinion, dated as of the
date of the Acquisition (or such other date as is acceptable to the Agent) and
addressed to the Agent and all Lenders, from Xxxxx Xxxxxx & Associados, special
Colombian counsel to GREKA Colombia, in substantially the form of Exhibit H-4.
6.3.2 The Agent and the Lenders shall have received the opinion, dated as of the
date of the Acquisition (or such other date as is acceptable to the Agent) and
addressed to the Agent and all Lenders, from Dutch counsel to GREKA Colombia,
reasonably acceptable to the Agent, in substantially the form of Exhibit H-5.
6.3.3 The Agent shall have received (i) executed counterparts of the Pledge of
Shares, duly executed by the Guarantor and GREKA Colombia; (ii) the shares of
GREKA Colombia required to be delivered to the Agent pursuant to the Pledge of
Shares; and (iii) stock powers executed in blank with respect to the shares
specified in clause (ii).
Page 45
6.3.4 All approvals, authorizations and consents from Governmental Authorities
and third parties necessary for the consummation of the Acquisition shall have
been obtained.
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders and the Agent to enter into this Agreement and to
make Borrowings hereunder, each of the Borrower and the Guarantor represents and
warrants unto the Agent and each Lender as set forth in this Article VII.
Organization, Etc.
7.1 Each of the Borrower and the Guarantor is a corporation validly organized
and existing and in good standing under the laws of the State of Colorado. Each
of the Borrower and the Guarantor is qualified to do business and is in good
standing as a foreign entity in each jurisdiction where the nature of its
business requires such qualification, except where the failure to so qualify,
would not reasonably be expected to have a Material Adverse Effect. Each of the
Borrower and the Guarantor has full power and authority and holds all requisite
governmental licenses, permits and other approvals (i) to enter into and perform
its Obligations under this Agreement, the Notes and each other Loan Document to
which it is a party and (ii) except where failure to do so would not reasonably
be expected to have a Material Adverse Effect, to own and hold under lease its
property and to conduct its business substantially as currently conducted by it.
Following the Acquisition, GREKA Colombia will have full power and authority and
will hold all requisite governmental licenses, permits and approvals to
consummate the Acquisition and perform its obligations under the Acquisition
Documents.
Due Authorization, Non-Contravention, Etc.
7.2 The execution, delivery and performance by each of the Borrower and the
Guarantor of this Agreement and each other Loan Document executed or to be
executed by it, are within the Borrower's and the Guarantor's powers, have been
duly authorized by all necessary action, and do not (a) violate any Organic
Documents of the Borrower or the Guarantor; (b) violate any other contractual
restriction, law or governmental regulation or court decree or order binding on
or affecting the Borrower or the Guarantor; (c) result in, or require the
creation or imposition of, any Lien on any properties of the Borrower or the
Guarantor except for Liens granted under the Loan Documents; or (d) require the
consent of any person which has not been obtained.
Page 46
The execution, delivery and performance by GREKA Colombia of the Acquisition
Documents executed or to be executed by it, are within GREKA Colombia's powers,
have been duly authorized by all necessary action, and do not (a) violate GREKA
Colombia's Organic Documents; (b) violate any contractual restriction, law or
governmental regulation or court decree or order binding on or affecting GREKA
Colombia; or (c) result in, or require the creation or imposition of, any Lien
on any of GREKA Colombia's properties.
Government Approval, Regulation, Etc.
7.3 No authorization or approval or other action by, and no notice to or filing
with, any Governmental Authority or regulatory body or other Person is required
for the due execution, delivery or performance by the Borrower or the Guarantor
of this Agreement, the Notes or any other Loan Document to which it is a party.
Neither the Borrower nor the Guarantor is an "investment company" within the
meaning of and subject to regulation under the Investment Company Act of 1940,
as amended, or a "holding company", or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", within the meaning of and subject to regulation under
the Public Utility Holding Company Act of 1935, as amended.
Validity, Etc.
7.4 This Agreement, the Notes and each other Loan Document executed by the
Borrower will, on the due execution and delivery thereof, constitute, the legal,
valid and binding obligations of the Borrower enforceable in accordance with
their respective terms. Without limiting the foregoing, each Security Document
executed by the Borrower constitutes the legal, valid and binding obligation of
the Borrower enforceable in accordance with its respective terms, and, upon
recording thereof, shall create a valid and perfected, first priority security
interest in the Assets of the Borrower as provided therein. This Agreement and
each other Loan Document to which the Guarantor is a party constitutes the
legal, valid and binding obligations of the Guarantor enforceable against the
Guarantor in accordance with their respective terms. Without limiting the
forgoing, the Pledge Agreement constitutes the legal, valid and binding
obligation of the Guarantor, enforceable against the Guarantor in accordance
with its respective terms, and creates a valid and perfected, first priority
security interests in the Assets of the Guarantor as provided therein.
Page 47
Financial Information
7.5(a) The financial statements of the Guarantor referred to in Section 6.1.3,
copies of which have been furnished to the Agent and each Lender, have
been prepared in accordance with GAAP and present fairly the
consolidated financial condition of the Guarantor and its consolidated
Subsidiaries, as at the date thereof and the results of its operations
for the period then ended; and
(b) the financial statements of the Borrower referred to in Section 6.1.3,
copies of which have been furnished to the Agent and each Lender, have
been prepared in accordance with GAAP consistently applied, and present
fairly the consolidated financial condition of the Borrower, as at the
dates thereof and the results of its operations for the period then
ended.
No Material Adverse Change
7.6 From the date of the financial statements described in Section 7.5 to the
Effective Date, there has been no event, occurrence or condition that could
reasonably be expected to have a Material Adverse Effect.
Litigation, Labor Controversies, Etc.
7.7 There is no pending or, to the Knowledge of the Borrower and the Guarantor,
threatened litigation, action, proceeding, or labor controversy affecting the
Borrower or the Guarantor (including its Subsidiaries), or any of their
respective properties, businesses, assets or revenues, which could reasonably be
expected to have a Material Adverse Effect or which purports to affect the
legality, validity or enforceability of this Agreement, the Notes or any other
Loan Document, except such as described on the Disclosure Schedule.
Subsidiaries
7.8 As of date hereof, the Borrower has no Subsidiaries other than MV Ventures,
GP, a Texas general partnership.
Ownership of Properties; Reserve Report
7.9 Each of the Borrower and the Guarantor owns good and defensible title to, or
valid leasehold interests in, all of its properties and assets, real and
personal, tangible and intangible, of any nature whatsoever (including patents,
trademarks, trade names, service marks and copyrights), free and clear of all
Liens, charges or claims (including infringement claims with respect to patents,
trademarks, copyrights and the like) and free and clear of all limitations and
restrictions on, and consent requirements for, disposition or transfer, except
for imperfections and burdens that do not in the aggregate materially detract
from the value thereof. The Hydrocarbon Interests disclosed in the reserve
report delivered to the Agent pursuant to Section 6.1.15 constitute all of the
Hydrocarbon Interests owned by the Borrower as of the date of this Agreement. To
the Knowledge of the Borrower and the Guarantor, the estimated reserves set
forth in the reserve report delivered pursuant to Section 6.1.15 are accurate
and the Borrower and the Guarantor have delivered to the reservoir engineer that
prepared such reserve report all the information reasonably required to enable
such Person to prepare such reserve report.
Page 48
Taxes
7.10 Each of the Borrower and the Guarantor has filed all tax returns and
reports required by law to have been filed by it and has paid all taxes and
governmental charges thereby shown to be owing, except any such taxes or charges
which are being diligently contested in good faith by appropriate proceedings
and for which adequate reserves in accordance with GAAP shall have been set
aside on its books.
Pension and Welfare Plans
7.11 During the twelve-consecutive-month period prior to the date of the
execution and delivery of this Agreement and prior to the date of any Borrowing
hereunder, no steps have been taken to terminate any Pension Plan in a distress
termination under Section 4041 (c) of ERISA, and no contribution failure has
occurred with respect to any Pension Plan sufficient to give rise to a Lien
under section 302(f) of ERISA. No condition exists or event or transaction has
occurred with respect to any Pension Plan which might result in the incurrence
by the Borrower or any member of the Controlled Group of any liability, fine or
penalty. Except as disclosed in Item 7.11 (Employee Benefit Plans) of the
Disclosure Schedule, neither the Borrower nor any member of the Controlled Group
has any contingent liability with respect to any post-retirement benefit under a
Welfare Plan, other than liability for continuation coverage described in Part 6
of Title I of ERISA.
Environmental Warranties
7.12 Except as set forth in Item 7.12 (Environmental Matters) of the Disclosure
Schedule:
Page 49
(a) To the Knowledge of the Borrower and the Guarantor, except where the
failure to obtain or comply could not reasonably be expected to have a
Material Adverse Effect, each of the Borrower and the Guarantor and all
of their respective Assets and operations are in compliance in all
material respects with all Environmental Laws. Neither the Borrower nor
the Guarantor is aware of, and neither has received notice of, any
past, present, or future conditions, events, activities, practices, or
incidents which may interfere with or prevent the compliance or
continued compliance of the Borrower and the Guarantor with all
Environmental Laws;
(b) To the Knowledge of the Borrower and the Guarantor, except where the
failure to obtain or comply could not reasonably be expected to have a
Material Adverse Effect, each of the Borrower and the Guarantor has
obtained all permits, licenses, and authorizations that are required
under applicable Environmental Laws, and has received no notice that
all such permits are not in good standing, or that the Borrower or the
Guarantor is not in compliance with all of the terms and conditions of
such permits;
(c) To the Knowledge of the Borrower and the Guarantor, except where the
failure to obtain or comply could not reasonably be expected to have a
Material Adverse Effect, no Hazardous Materials exist on, about, or
within or have been used, generated, stored, transported, disposed of
on, or Released from any of the Assets of the Borrower or the Guarantor
except in amounts that would not violate applicable law. The use which
each Borrower makes and intends to make of its properties and Assets
will not result in the use, generation, storage, transportation,
accumulation, disposal, or Release of any Hazardous Material on, in, or
from any of their properties or assets except in amounts that would not
violate applicable law;
(d) To the Knowledge of the Borrower and the Guarantor, neither Obligor nor
any of its currently or previously owned or leased properties or
operations is subject to any outstanding or threatened order from or
agreement with any Governmental Authority or other Person or subject to
any judicial or docketed administrative proceeding with respect to
failure to comply with Environmental Laws;
(e) To the Knowledge of the Borrower and the Guarantor, except where the
failure to obtain or comply could not reasonably be expected to have a
Material Adverse Effect, there are no conditions or circumstances
associated with the currently or previously owned or leased properties
or operations of the Borrower or the Guarantor that could reasonably be
expected to give rise to any Environmental Liabilities;
Page 50
(f) Neither Obligor has a treatment, storage, or disposal facility
requiring a permit under the Resource Conservation and Recovery Act, 42
X.X.X.xx. 6901 et seq., regulations thereunder or any comparable
provision of state law. To the Knowledge of the Borrower and the
Guarantor, each of the Borrower and the Guarantor is in substantial
compliance with all applicable financial responsibility requirements of
all Environmental Laws;
(g) Neither Obligor has filed, or to the best of the Knowledge of the
Borrower and the Guarantor, failed to file, any notice required under
applicable Environmental Law reporting a Release; and
(h) Neither Obligor has received notice that a Lien arising under any
Environmental Law has attached to any property or revenues of either
Obligor.
Regulations U and X
7.13 Neither the Borrower nor the Guarantor is engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock, and no
proceeds of any Loans will be used for a purpose which violates, or would be
inconsistent with, F.R.S. Board Regulation U or X. Terms for which meanings are
provided in F.R.S. Board Regulation U or X or any regulations substituted
therefor, as from time to time in effect, are used in this Section with such
meanings.
Accuracy of Information
7.14 To the Knowledge of the Borrower and the Guarantor, all factual information
heretofore or contemporaneously furnished by or on behalf of the Borrower or the
Guarantor in writing to the Agent, the Arranger or any Lender for purposes of or
in connection with this Agreement or any transaction contemplated hereby is, and
all other such factual information hereafter furnished by or on behalf of the
Borrower or the Guarantor to the Agent, the Arranger or any Lender will be, true
and accurate in every material respect on the date as of which such information
is dated or certified and as of the date of execution and delivery of this
Agreement by the Agent and such Lender, and such information is not, or shall
not be, as the case may be, incomplete by omitting to state any material fact
necessary to make such information not misleading in any material respect. There
is no fact known to the Borrower or the Guarantor which has a Material Adverse
Effect, or which could reasonably be expected to have a Material Adverse Effect
other than such information that has been disclosed in writing to the Lenders
prior to the date hereof.
Page 51
The Disclosure Schedule contains, as of the date of this Agreement, the
outstanding principal amount of all Indebtedness of the Borrower, any of its
Subsidiaries or GREKA Colombia in excess of $250,000, and specifies for all such
Indebtedness (w) the holder of such Indebtedness, (x) the interest rate/or basis
for determining such interest rate in the case of floating rate Indebtedness),
(y) any Liens granted to secure such Indebtedness and (z) the scheduled maturity
of all payments with respect to such Indebtedness.
No Defaults under Other Agreements
7.15 Except as disclosed in Item 7.15 of the Disclosure Schedule, neither the
Borrower nor the Guarantor is in default in the payment when due (subject to any
applicable grace period), whether by acceleration or otherwise, of any
Indebtedness in excess of the applicable Materiality Threshold, and no defaults
have occurred in the performance or observance of any obligation or condition
with respect to any such Indebtedness if the effect of such default is to
accelerate the maturity of any Indebtedness.
Solvency
7.16 Each of the Borrower and the Guarantor is Solvent.
Compliance with Laws, Etc.
7.17 Each of the Borrower, the Guarantor and GREKA Colombia has complied with
all applicable statutes, rules, regulations, orders and restrictions of any
government or any instrumentality or agency thereof, having jurisdiction over
the conduct of their respective businesses or the ownership of their respective
Hydrocarbon Interests except where the failure to so comply would not reasonably
be expected to have a Material Adverse Effect.
Creation and Perfection of Security Interests
7.18 All Liens and other security interests described in the Security Documents
have been created and perfected as required pursuant to each Security Document,
and copies of Uniform Commercial Code financing statements and other relevant
documentation have been provided to the Agent.
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COVENANTS
Affirmative Covenants
8.1 The Borrower and the Guarantor agree with the Agent and each Lender that,
until all Commitments have terminated and all Obligations have been paid and
performed in full, the Borrower and the Guarantor will perform the obligations
set forth in this Section 8.1.
Financial Information, Reports, Notices, Etc.
8.1.1 The Borrower and the Guarantor, as applicable, will furnish, or will cause
to be furnished, to the Agent for distribution to each Lender copies (in
sufficient number to provide at least one copy to each Lender) of the following
financial statements, reports, notices and information:
(a) as soon as available and in any event not later than the earlier of (x)
the date of filing of the Guarantor's Form 10-Q (or successor form)
with the Securities and Exchange Commission and (y) 60 days after the
end of each Fiscal Quarter commencing with the Fiscal Quarter ending
June 30, 2000, consolidated balance sheets, statements of earnings, and
statements of cash flow of the Guarantor and its consolidated
Subsidiaries, including without limitation, the Borrower, as of the end
of such Fiscal Quarter and consolidating balance sheets, statements of
earnings and statements of cash flows of the Guarantor (including the
Guarantor and its Subsidiaries other than the Borrower and GREKA
Colombia in one column) and of the Borrower and GREKA Colombia for such
Fiscal Quarter and for the period commencing at the end of the previous
Fiscal Year and ending with the end of such Fiscal Quarter, certified
by an Authorized Officer of the Guarantor or the Borrower (as the case
may be), which financial statements shall have been reviewed by
independent certified public accountants of nationally recognized
standing selected by the Guarantor;
(b) as soon as available and in any event not later than the earlier of (x)
the date of filing of the Guarantor's Form 10-K (or successor form)
with the Securities and Exchange Commission and (y) 105 days after the
end of each Fiscal Year of the Guarantor and the Borrower, a copy of
the annual audit report for such Fiscal Year for the Guarantor,
including therein consolidated and consolidating financial statements
of the Guarantor and the Borrower as of the end of such Fiscal Year
prepared in the manner described in clause (a) above and certified
(without any Impermissible Qualification) by independent certified
public accountants of nationally recognized standing selected by the
Guarantor, together with a certificate from an Authorized Officer of
the Guarantor to the effect that such Obligor has not become aware of
any Default or Event of Default that has occurred or is continuing, or,
if such Obligor has become aware of such Default or Event of Default,
describing such Default or Event of Default and the steps, if any being
taken to cure it;
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(c) as soon as available and in any event within 30 days after the end of
each Fiscal Month of each Fiscal Year of the Borrower commencing with
the month ending May 31, 2000, consolidated balance sheets, statements
of earnings, and statements of cash flow of the Borrower as of the end
of such Fiscal Month and consolidating balance sheets, statements of
earnings and statements of cash flows of the Borrower (including its
Subsidiaries) for such Fiscal Month and for the period commencing at
the end of the previous Fiscal Year and ending with the end of such
Fiscal Month, certified by an Authorized Officer of the Borrower;
(d) as soon as available and in any event not later than the earlier of (x)
the date of filing of the Guarantor's Form 10-Q (or successor form)
with the Securities and Exchange Commission and (y) 60 days after the
end of each Fiscal Quarter commencing with the Fiscal Quarter ending
June 30, 2000, a certificate, executed by an Authorized Officer of the
Guarantor, showing (in reasonable detail and with appropriate
calculations and computations in all respects satisfactory to the
Agent) compliance with the financial covenants set forth in Section
8.2.4 and stating (i) the amount of Indebtedness incurred that is
permitted by Section 8.2.2(h) and (ii) the aggregate amount of all
secured Indebtedness incurred that is permitted by Section 8.2.3(b) in
each case rounded upwards to the nearest integral multiple of $50,000
and as of the end of such Fiscal Quarter;
(e) as soon as available, and in any event within 30 days after the end of
each Fiscal Month commencing with the month ending May 31, 2000, a
statement of an Authorized Officer of the Guarantor setting forth
details of (i) the aggregate amount of Capital Expenditures by the
Borrower, and GREKA Colombia during such Fiscal Month and (ii) net-back
price reports by field and commodity price hedging information with
respect to the Borrower;
(f) as soon as available and in any event within 30 days after the end of
each Fiscal Month commencing with the month ending May 31, 2000, a
production statement which identifies the most recent information
available relating to the gross volumes of Hydrocarbons produced in the
aggregate from the Hydrocarbon Interests included in the Borrowing Base
and a statement of revenues and expenses attributable to the
Hydrocarbon Interests included in the Borrowing Base for such Fiscal
Month ended, such production report and statement of revenues and
expenses to be in a form and substance reasonably satisfactory to the
Agent and the Lenders;
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(g) promptly upon the Borrower or the Guarantor learning of the occurrence
of any Default or Borrowing Base Deficiency, a statement of an
Authorized Officer of the Borrower or the Guarantor (as the case may
be) setting forth details of such Default or Borrowing Base Deficiency
and the action which the Borrower has taken and proposes to take with
respect thereto;
(h) promptly upon the Borrower or the Guarantor learning of (x) the
occurrence of any material adverse development with respect to any
litigation, action, proceeding, or labor controversy described in
Section 7.7 or (y) the commencement of any labor controversy,
litigation, action or proceeding of the type described in Section 7.7
or (z) any material adverse development with respect to any litigation,
action, proceeding or controversy affecting the Borrower or the
Guarantor, which in the Borrower's or the Guarantor's opinion, could
reasonably be expected to have a Material Adverse Effect;
(i) promptly after the sending or filing thereof, copies of all reports
which any the Guarantor sends to its stockholders generally, and all
reports on Form 00-X, 00-X, 0-X, all definitive proxy statements, and
effective registration statements (other than registration statements
on Form S-8 or successor forms for sales of securities under Plans)
which the Guarantor files with the Securities and Exchange Commission
or any national securities exchange;
(j) immediately upon becoming aware of the institution of any steps by the
Borrower, the Guarantor or any Affiliate of Guarantor to terminate any
Pension Plan, or the failure to make a required contribution to any
Pension Plan if such failure is sufficient to give rise to a Lien under
section 302(f) of ERISA, or the taking of any action with respect to a
Pension Plan which could result in the requirement that the Borrower or
the Guarantor furnish a bond or other security to the PBGC or such
Pension Plan, or the occurrence of any event with respect to any
Pension Plan which could result in the incurrence by the Borrower or
Guarantor of any liability, fine or penalty, or any material increase
in the contingent liability of the Borrower or the Guarantor with
respect to any post-retirement Welfare Plan benefit, notice thereof and
copies of all documentation relating thereto;
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(k) promptly upon the Borrower or the Guarantor obtaining knowledge of the
occurrence of any Default or Event of Default;
(l) as long as the GREKA Colombia Reduction Date has not occurred, at the
time of the delivery of the information specified in clause (c) above,
the Guarantor shall deliver to the Agent a report concerning the status
of its efforts to sell GREKA Colombia including (x) the number of the
persons that have expressed an interest in purchasing GREKA Colombia or
any interest therein; and (y) a narrative description of the overall
status of Guarantor's efforts to sell GREKA Colombia; and
(m) such other information respecting the condition or operations,
financial or otherwise, of the Borrower, the Guarantor or its
Subsidiaries as any Lender through the Agent may from time to time
reasonably request.
Compliance with Laws, Etc.
8.1.2 Each of the Borrower and the Guarantor will comply, the Borrower shall
cause its Subsidiaries to comply, and the Guarantor shall cause GREKA Colombia
to comply, in all material respects with all applicable laws, rules, regulations
and orders, such compliance to include (without limitation): (a) the maintenance
and preservation of its corporate existence and qualification as a foreign
entity and (b) the payment, before the same become delinquent, of all taxes,
assessments and governmental charges imposed upon it or upon its property except
to the extent being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall have
been set aside on its books.
Maintenance of Properties
8.1.3 Each of the Borrower and the Guarantor will, and the Guarantor shall cause
GREKA Colombia to, maintain, preserve, protect and keep its respective
properties in good repair, working order and condition (ordinary wear and tear
excepted), and make necessary and proper repairs, renewals and replacements so
that its business carried on in connection therewith may be properly conducted
at all times in accordance with standard industry practices. In particular, each
of the Borrower and the Guarantor will operate, to the extent that the Borrower
or the Guarantor operates such Oil and Gas Properties, or, to the extent that
the Borrower or the Guarantor does not operate such Oil and Gas Properties, use
its best efforts to cause to be operated its Oil and Gas Properties as a
reasonable and prudent operator.
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Insurance
8.1.4 Each of the Borrower and the Guarantor will, and the Guarantor shall cause
GREKA Colombia to, maintain or cause to be maintained with responsible insurance
companies insurance with respect to its properties and business against such
casualties and contingencies and of such types and in such amounts as is
customary in the case of similar businesses in similar locales (including, where
appropriate, political risk insurance, business interruption insurance, well
control, operator's extra expense and remediation insurance) and will, upon
request of the Agent, furnish to each Lender at reasonable intervals a
certificate of an Authorized Officer of the Borrower or the Guarantor, as the
case may be, setting forth the nature and extent of all insurance maintained by
the Borrower, the Guarantor or GREKA Colombia, as the case may be, in accordance
with this Section.
Books and Records
8.1.5 Each of the Borrower and the Guarantor will, and the Guarantor will cause
GREKA Colombia to, keep books and records which accurately reflect all of its
business affairs and transactions and permit the Agent and each Lender or any of
their respective representatives, at reasonable times and intervals, to visit
all of its offices, to discuss its financial matters with its officers and
independent public accountant (and each of the Borrower and the Guarantor hereby
authorizes such independent public accountant with prior notice to the Borrower
or the Guarantor (as the case may be) and an opportunity to attend, to discuss
the financial matters of the Borrower or the Guarantor (as the case may be) with
each Lender or its representatives) and to examine (and, at the expense of the
Borrower, photocopy extracts from) any of its books or other records. The
Borrower shall pay any fees of such independent public accountant incurred in
connection with the Agent's or any Lender's exercise of its rights pursuant to
this Section.
Environmental Covenant
8.1.6 Each of the Borrower and the Guarantor will, the Borrower shall cause its
Subsidiaries to, and the Guarantor shall cause GREKA Colombia to, use and
operate all of its facilities and properties in material compliance with all
Environmental Laws, keep all necessary permits, approvals, certificates,
licenses and other authorizations relating to environmental matters in effect
and remain in material compliance therewith, and handle all Hazardous Materials
in material compliance with all applicable Environmental Laws.
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Agreement to Deliver Security Documents
8.1.7 Each of the Borrower and the Guarantor agrees to deliver to further secure
the Obligations whenever requested by the Agent in good faith, Pledge
Agreements, Mortgages, mortgages, deeds, deeds of trust, security agreements,
financing statements, continuation statements, extensions agreements and other
similar agreements or instruments (in addition to those required to be delivered
under Article VI) in form and substance satisfactory to the Agent in good faith
for the purpose of granting, confirming and perfecting first and prior liens or
security interests in any property which is at such time Collateral Property or
which was intended to be Collateral Property pursuant to any Loan Document
previously executed and not then released by the Agent, provided, however, that
the Borrower shall at all times maintain in effect in favor of the Agent such
Mortgages as are necessary to grant, confirm and perfect first and prior liens
or security interests in at least 90% of the present value of the Proved
Reserves (whether developed or undeveloped); and further, provided, however,
that in the event that the Hydrocarbon Interests on which the Agent has a first
priority perfected Lien shall constitute less than 90% of the present value of
the Proved Reserves (whether developed or undeveloped), the Borrower shall
promptly notify the Agent and execute or cause to be executed additional
Mortgages necessary to increase such percentage to at least 90%. The Borrower
also agrees to deliver whenever requested by the Agent in good faith, favorable
opinions (in addition to those required to be delivered under Article VI and
pursuant to the foregoing sentence) from legal counsel acceptable to the Agent
in good faith with respect to any Collateral Property confirming that such
Collateral Property is subject to Security Documents securing Obligations that
constitute and create legal, valid and duly perfected Liens in such properties
and interests and the proceeds thereof, and covering such other matters as the
Agent may request in good faith.
Perfection and Protection of Security Interests and Liens
8.1.8 Each of the Borrower and the Guarantor will from time to time deliver or
cause to be delivered to the Agent any financing statements, continuation
statements, extension agreements and other documents, properly completed and
executed (and acknowledged when required) by the Borrower or the Guarantor, as
the case may be, in form and substance satisfactory to the Agent and the
Lenders, which the Agent requests for the purpose of perfecting, confirming or
protecting any Liens or other rights in (i) any Collateral Property and (ii) the
pledge by the Guarantor of the stock of GREKA Colombia and the Borrower (to the
extent provided in the Pledge of Shares and Pledge Agreement, respectively).
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Compliance with Other Contractual Obligations
8.1.9 (i) Each of the Borrower and the Guarantor shall, and the Guarantor shall
cause GREKA Colombia to, perform and observe in all material respects all of the
covenants and agreements contained in each contract or agreement to which it is
a party (including, but not limited to, any licenses, association agreements and
concession agreements) that are provided to be performed and observed on the
part of the Borrower or GREKA Colombia, as applicable, and which, in the case of
agreements by the Guarantor for the payment of money, provide for payment
obligations of the Guarantor individually, or together with all other such
agreements, in excess of the Materiality Threshold. Each of the Borrower and the
Guarantor shall, and the Guarantor shall cause GREKA Columbia to, diligently and
in good faith enforce, using appropriate procedures and proceedings, all of its
material rights and remedies under (including taking all diligent actions
required to collect amounts owed to such Borrower by any other parties
thereunder) each such contract or agreement.
Negative Covenants
8.2 The Borrower and the Guarantor agree with the Agent and each Lender that,
until all Commitments have terminated and all Obligations have been paid and
performed in full, the Borrower (and the Borrower shall cause its Subsidiaries
to perform) and the Guarantor will perform (and the Guarantor shall cause GREKA
Colombia to perform) the obligations set forth in this Section 8.2.
Business Activities
8.2.1 The Borrower will not, the Borrower will cause its Subsidiaries not to,
and the Guarantor will cause GREKA Colombia not to, engage in any business
activity, except the Oil and Gas Business.
Indebtedness
8.2.2 The Borrower will not, the Borrower will cause its Subsidiaries not to,
and the Guarantor will cause GREKA Colombia not to, create, incur, assume or
suffer to exist or otherwise become or be liable in respect of any Indebtedness,
other than, without duplication, the following:
(a) Indebtedness in respect of the Loans and other Obligations;
(b) until the date of the initial Borrowing, the Existing Indebtedness;
Page 59
(c) unsecured accounts payable incurred in the ordinary course of business
(including open accounts extended by suppliers on normal trade terms in
connection with purchases of goods and services, but excluding
Indebtedness incurred through the borrowing of money or Contingent
Liabilities); and
(d) Inter-Company Notes, which Notes, in the case of GREKA Colombia (prior
to the GREKA Colombia Reduction Date) shall be pledged to the Agent.
Liens
8.2.3 The Borrower will not, the Borrower will cause its Subsidiaries not to,
and the Guarantor will cause GREKA Colombia not to, create, incur, assume or
suffer to exist any Lien upon any of their respective properties, revenues or
assets, whether now owned or hereafter acquired, except:
(a) Liens securing payment of the Obligations and any Hedging Obligations
owed to a Lender (including the Agent) or any Affiliate thereof,
granted pursuant to any Security Document;
(b) Liens for taxes, assessments or other governmental charges or levies
not at the time delinquent or being diligently contested in good faith
by appropriate proceedings and for which adequate reserves in
accordance with GAAP shall have been set aside on its books;
(c) Liens of carriers, warehousemen, mechanics, materialmen, landlords and
other like Liens incurred in the ordinary course of business for sums
not overdue or being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP
shall have been set aside on its books;
(d) Liens incurred in the ordinary course of business in connection with
workmen's compensation, unemployment insurance or other forms of
governmental insurance or benefits;
(e) easements, rights-of-way, servitudes, permits, reservations,
exceptions, covenants and other restrictions as to the use of real
property and other similar encumbrances incurred in the ordinary course
of business which, with respect to all of the foregoing, do not secure
the payment of Indebtedness and which, in the aggregate, are not
substantial in amount and which do not in any case materially detract
from the value of the Hydrocarbon Interest subject thereto or
materially interfere with the ordinary conduct of the business of the
Borrower;
Page 60
(f) defects, irregularities and deficiencies in the title to any rights of
way or any Hydrocarbon Interest of the Borrower which in the aggregate
do not materially impair the use of such rights of way or any
Hydrocarbon Interest for the purposes for which such rights of way and
any other Hydrocarbon Interest are held by the Borrower, and defects,
irregularities and deficiencies in title to any Hydrocarbon Interest of
the Borrower, which defects, irregularities or deficiencies have been
cured by possession under applicable statutes of limitations;
(g) royalties, overriding royalties and revenue interests, provided that
the value of the Hydrocarbon Interests shown on the reserve reports
delivered pursuant to Section 6.1.15 is net of such Liens;
(h) Liens arising out of all presently existing and future division and
transfer orders, advance payment agreements, processing contracts, gas
processing plant agreements, operating agreements, gas balancing or
deferred production agreements, pooling, unitization or communitization
agreements, pipeline, gathering or transportation agreements, platform
agreements, drilling contracts, injection or repressuring agreements,
cycling agreements, construction agreements, salt water or other
disposal agreements, leases or rental agreements, farm-out and farm-in
agreements, exploration and development agreements, and any and all
other contracts or agreements covering, arising out, used or useful in
connection with or pertaining to the exploration, development,
operation, production, sale, use, purchase, exchange, storage,
separation, dehydration, treatment, compression, gathering,
transportation, processing, improvement, marketing, disposal, or
handling of any Hydrocarbon Interest of the Borrower or GREKA Colombia,
provided that such agreements are entered into in the ordinary course
of business and contain terms customary for such agreements in the
industry and provided further that no Liens described in this paragraph
(h) shall be granted or created in connection with the incurrence of
Indebtedness;
(i) Liens securing performance of bids, tenders, trade contracts, statutory
obligations, return of money bonds and other obligations of a like
nature incurred in the ordinary course of business (all of the
foregoing other than for Indebtedness) or to secure obligations on
surety or appeal bonds, not to exceed $250,000 in the aggregate for all
such obligations secured by such Liens at any one time outstanding; and
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(j) Liens identified in item 8.2.3(g) (Existing Liens) of the Disclosure
Schedule.
The Guarantor will not create, incur, assume or suffer to exist, and in the case
of clause (y) below shall cause GREKA Colombia not to create, incur, assume or
suffer to exist any Lien upon (x) the Capital Stock of the Borrower or GREKA
Colombia other than Liens described in clause (a) above and (y) any property or
assets of GREKA Colombia except as provided in clauses (b)-(i) above, in each
case prior to the GREKA Colombia Reduction Date.
Financial Condition
8.2.4 The Guarantor will not permit:
(i) the ratio of EBITDA to Total Interest Expense for the Borrower and
GREKA Colombia (on a pro forma basis excluding any intra-company
amount) for any period of four consecutive Fiscal Quarters of the
Borrower ending on or after the Effective Date to be less than 2.5 to
1.0;
(ii) the ratio of Indebtedness of the Borrower as at the last day of any
period of four consecutive Fiscal Quarters of the Borrower ending on or
after the Effective Date to EBITDA for the Borrower and GREKA Colombia
(on a pro forma basis excluding any intra-company Indebtedness) for
such period to be greater than 3.0 to 1.0; or
(iii) Working Capital to be less than $1.00.
Investments
8.2.5 The Borrower will not, the Borrower shall not permit its Subsidiaries to,
and the Guarantor shall not permit GREKA Colombia to, make, incur, or assume any
Investment in any other Person (including the Guarantor) except:
(a) Investments existing on the Effective Date and identified in Item
8.2.5(a) (Ongoing Investments) of the Disclosure Schedule;
(b) Investments permitted as Indebtedness pursuant to Section 8.2.2;
(c) Investments in Cash Equivalent Investments;
(d) extensions of trade credit in the ordinary course of business;
Page 62
(e) the endorsement of negotiable instruments for collection in the
ordinary course of business;
(f) Investments in additional Hydrocarbon Interests made in the ordinary
course of business;
(g) transactions expressly permitted under Section 8.2.8; and
(h) in the case of the Borrower and GREKA Colombia, loans to the Guarantor,
GREKA Integrated or any Subsidiary of the Guarantor; provided that no
Default exists immediately prior or after giving effect to such
Investment and such loan is made from cash available for distribution
to the shareholders of the Borrower in accordance with the Organic
Documents of the Borrower in any period after giving effect to the
payment of all debt service, capital expenditures and operating and
maintenance expenses of the Borrower (including Taxes) during such
period; and provided, further that any such loans shall be evidenced by
promissory notes, which notes shall be pledged to the Collateral Agent
and which notes shall be on terms and conditions no less favorable to
the Borrower than terms and conditions that could be obtained in an
arms-length transaction with a party that is not an Affiliate.
Restricted Payments, Etc.
8.2.6 On and at all times after the Effective Date: (a) the Borrower will not
declare, pay or make any dividend or distribution (in cash, property or
obligations) on any shares of any class of its capital stock (now or hereafter
outstanding) or on any warrants, options or other rights with respect to any
shares of any class of its capital stock (now or hereafter outstanding) (other
than dividends or distributions payable in its common stock or warrants to
purchase its common stock or split-ups or reclassifications of its stock into
additional or other shares of its common stock) or apply any of its or their
funds, property or Assets to the purchase, redemption, sinking fund or other
retirement of any shares of any class of its capital stock (now or hereafter
outstanding), or warrants, options or other rights with respect to any shares of
any class of capital stock (now or hereafter outstanding) of the Borrower; and
(b) the Borrower will not make any deposit for any of the foregoing purposes.
Commingling of Funds; Separateness
8.2.7 The Borrower will not and will not permit its Subsidiaries to commingle
its funds with those of Guarantor or any Affiliate of Guarantor or any other
Person.
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Consolidation, Merger, Etc.
8.2.8 None of the Borrower or the Guarantor will, the Borrower shall cause its
Subsidiaries not to, and the Guarantor shall cause GREKA Colombia not to,
liquidate or dissolve, consolidate with, or merge into or with, any other
Person, or purchase or otherwise acquire all or substantially all of the assets
of any Person (or of any division thereof) except, so long as no Default has
occurred and is continuing or would occur after giving effect thereto, the
Guarantor may purchase all or substantially all of the assets of any Person, or
acquire such Person by merger, provided that the Borrower, the Guarantor or
GREKA Colombia, as the case may be, is the surviving Person following the
consummation of such acquisition merger and further provided, that the
consideration for such purchase or acquisition or merger shall not constitute
Hydrocarbon Interests except as provided in 8.2.9(b) below and further provided,
that GREKA Colombia may consummate the Acquisition.
Asset Dispositions, Etc.
8.2.9(a) None of the Borrower or the Guarantor will, the Borrower shall cause
its Subsidiaries not to, and the Guarantor shall cause GREKA Colombia
not to, sell, assign, transfer, lease, convey, mortgage, contribute or
otherwise convey, or grant options, warrants or other rights with
respect to (each a Transfer (except that the assignment or termination
of any Hedge Agreements shall not be considered a Transfer)), all or
substantially all of their respective Assets to any Person in any one
transaction or series of transactions, whether or not related.
(b) The Borrower shall not, the Borrower shall cause its Subsidiaries not
to, and the Guarantor shall cause GREKA Colombia not to, Transfer any
Asset, other than (i) sales of inventory and used or surplus equipment
in the ordinary course of business and assignments of interests in oil
and gas leases in connection with customary farmout arrangements
entered into in the ordinary course of business; (ii) in the case of
GREKA Colombia, the sale of the assets acquired in connection with the
Acquisition; provided that the proceeds of such sale after giving
effect to the payment of any reasonable transaction expenses are, at
the election of the Guarantor, either deposited into the Cash
Collateral Account or applied in full to the repayment of the Loans in
accordance with Section 3.1; and (iii) sales of Hydrocarbon Interests
that do not constitute Proved Reserves provided such sales are to
Persons that are not Affiliates of the Guarantor and such sales are for
fair value and pursuant to arms-length transactions. The Guarantor
shall not Transfer any of its Capital Stock of GREKA Colombia or the
Borrower; provided that the Guarantor may sell its Capital Stock in
GREKA Colombia if $7,500,000 of the proceeds of such sale after giving
effect to the payment of any reasonable transaction expenses are, at
the election of the Guarantor, either deposited into the Cash
Collateral Account or applied in full to the repayment of the Loans in
accordance with Section 3.1.
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Negative Pledges, Restrictive Agreements, Etc.
8.2.10 The Borrower will not and will not permit its Subsidiaries to enter into
any agreement (excluding this Agreement, any other Loan Document and any
agreement relating to Existing Indebtedness) prohibiting (a) the creation or
assumption of any Lien upon its properties, revenues or assets, whether now
owned or hereafter acquired; or (b) the ability of the Borrower to amend or
otherwise modify this Agreement or any other Loan Document; or (c) the ability
of any Subsidiary of the Borrower to make any payments, directly or indirectly,
to the Borrower by way of dividends, advances, repayments of loans or advances,
reimbursements of management and other intercompany charges, expenses and
accruals or other returns on investments, or any other agreement or arrangement
which restricts the ability of any such Subsidiary to make any payment, directly
or indirectly, to any other the Borrower.
Transactions with Affiliates
8.2.11 The Borrower will not and will not permit its Subsidiaries to, and the
Guarantor will not and will not permit GREKA Colombia to, enter into or be or
become a party to any transaction or arrangement with any Affiliate (including
without limitation, the purchase from, sale or exchange of property with, or the
rendering of service by or for, any Affiliate), except in the ordinary course of
and pursuant to the reasonable requirements of the Borrower's, such
Subsidiary's, the Guarantor's or GREKA Colombia's business and upon fair and
reasonable terms no less favorable to the Borrower, such Subsidiary, the
Guarantor or GREKA Colombia, as the case may be, than would obtain in a
comparable arm's-length transaction with a Person other than an Affiliate;
provided, however, that the Borrower may make loans to the Guarantor or GREKA
Integrated as provided in Section 8.2.5(h).
Maintenance of Corporate Separateness
8.2.12 (a) The Borrower, its Subsidiaries and the Guarantor will satisfy
customary corporate formalities, including, without limitation, the
holding of regular board of directors' and shareholders' meetings (or
the taking of actions pursuant to written consents in lieu of such
meetings) and the maintenance of separate corporate records and
accounts (except as otherwise provided with respect to financial
statements required to be combined in accordance with GAAP or this
Agreement).
Page 65
(b) None of the Borrower nor the Guarantor, will, or will permit any of
their respective Subsidiaries to, commingle any assets with any other
Person.
EVENTS OF DEFAULT
Listing of Events of Default
9.1 Each of the following events or occurrences described in this Section 9.1
shall constitute an "Event of Default".
Non-Payment of Obligations
9.1.1 The Borrower or the Guarantor shall default in the payment or prepayment
when due of any principal of any Loan including any Required Deficiency Payment,
or the Borrower or the Guarantor shall default in the payment when due of any
interest, fee, expense other obligation or of any other Obligation required to
be paid by such Obligor hereunder and, in the case of fees and expenses, such
default shall have continued unremedied for 15 days.
Breach of Representation or Warranty
9.1.2 Any representation or warranty of the Borrower or the Guarantor made or
deemed to be made hereunder or in any other Loan Document executed by it or any
other writing or certificate furnished by or on behalf of the Borrower or the
Guarantor to the Agent, the Arranger or any Lender for the purposes of or in
connection with this Agreement or any such other Loan Document (including any
certificates delivered pursuant to Article VI) is or shall be false or in any
material respect incorrect or inaccurate when made or deemed made.
Non-Performance of Certain Covenants and Obligations
9.1.3 The Borrower or the Guarantor shall (i) default in the due performance and
observance of any of its obligations under Section 8.2.2, 8.2.5, 8.2.6, 8.2.8,
8.2.9 or 8.2.10; (ii) default in the due performance and observance of its
obligations under Sections 8.1.7, 8.1.8 or 8.2.7, which default shall have
continued unremedied for more than 15 days; (iii) default in the due performance
and observance of any of its obligations under Section 8.2.3 by creating,
incurring, assuming or suffering to exist any Lien not otherwise permitted by
Section 8.2.3 which Lien secures indebtedness or any other obligation in an
outstanding principal amount in excess of the Materiality Threshold; (iv)
default in the due performance and observance of any of its obligations under
Section 8.2.4, which default shall have continued unremedied for more than 45
days; or (v) permit a Borrowing Base Deficiency to remain unremedied for more
than 10 days.
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Non-Performance of Other Covenants and Obligations
9.1.4 The Borrower or the Guarantor shall default in the due performance and
observance of any other agreement contained herein or in any other Loan Document
executed by it, and such default shall continue unremedied for a period of 30
days after notice thereof shall have been given to the Borrower or the Guarantor
by the Agent or any Lender.
Default on Other Indebtedness
9.1.5 A default shall occur in the payment when due (subject to any applicable
grace period), whether by acceleration or otherwise, of any Indebtedness of the
Borrower or the Guarantor, the amount of which, either individually or in the
aggregate, equals or exceeds the Materiality Threshold (other than Indebtedness
described in Section 9.1.1), or a default shall occur in the performance or
observance of any obligation or condition with respect to such Indebtedness, if
the effect of such default is to accelerate the maturity of any such
Indebtedness or such default shall continue unremedied for any applicable period
of time sufficient to permit the holder or holders of such Indebtedness or any
trustee or agent for such holders, to cause such Indebtedness to become due and
payable prior to its expressed maturity.
Judgments
9.1.6 Any judgment or order for the payment of money in excess of, in the case
of the Borrower, $500,000, and in the case of the Guarantor, $1,000,000 above
applicable insurance coverage (provided that the insurer has not denied coverage
or liability for the claim) shall be rendered against the Borrower or the
Guarantor and either (a) enforcement proceedings shall have been commenced by
any creditor upon such judgment or order; or (b) there shall be any period of 30
consecutive days during which a stay of enforcement of such judgment or order,
by reason of a pending appeal or otherwise, shall not be in effect.
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Pension Plans
9.1.7 Any of the following events shall occur with respect to any Pension Plan:
(a) the institution of any steps by the Borrower, any member of its Controlled
Group or any other Person to terminate a Pension Plan if, as a result of such
termination, the Borrower or any such member could be required to make a
contribution to such Pension Plan, or could reasonably expect to incur a
liability or obligation to such Pension Plan, in excess of $500,000; or (b) a
contribution failure occurs with respect to any Pension Plan sufficient to give
rise to a Lien under Section 302(f) of ERISA.
Change of Control
9.1.8 Any Change in Control shall occur.
Bankruptcy, Insolvency, Etc.
9.1.9 The Borrower, the Guarantor or GREKA Colombia shall (a) be liquidated or
become insolvent or generally fail to pay, or admit in writing its inability or
unwillingness to pay, debts as they become due; (b) apply for, consent to, or
acquiesce in, the appointment of a trustee, receiver, sequestrator or other
custodian for the Borrower, the Guarantor or GREKA Colombia or any property of
any thereof, or make a general assignment for the benefit of creditors; (c) in
the absence of such application, consent or acquiescence, permit or suffer to
exist the appointment of a trustee, receiver, sequestrator or other custodian
for the Borrower, the Guarantor or GREKA Colombia or for a substantial part of
the property of any thereof, and such trustee, receiver, sequestrator or other
custodian shall not be discharged within 60 days, provided that the Borrower,
the Guarantor and GREKA Colombia hereby expressly authorizes the Agent and each
Lender to appear in any court conducting any relevant proceeding during such
60-day period to preserve, protect and defend their rights under the Loan
Documents; (d) permit or suffer to exist the commencement of any bankruptcy,
reorganization, liquidation, debt arrangement, "concordato" or other case or
proceeding under any bankruptcy or insolvency law, or any dissolution, winding
up or liquidation proceeding, in respect of the Borrower, the Guarantor or GREKA
Colombia, and, if any such case or proceeding is not commenced by such Borrower,
the Guarantor or GREKA Colombia, such case or proceeding or winding up shall be
consented to or acquiesced in by the Borrower, the Guarantor or GREKA Colombia,
or shall result in the entry of an order for relief or shall remain for 60 days
undismissed, or (e) take any action authorizing, or in furtherance of, any of
the foregoing.
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Impairment of Security, Etc.
9.1.10 Any Loan Document, or any Lien granted thereunder, shall (except in
accordance with its terms), terminate, cease to be effective or cease to be the
legally valid, binding and enforceable obligation of the Obligor party thereto;
the Borrower or any other party, shall, directly or indirectly, contest in any
manner such effectiveness, validity, binding nature or enforceability; or any
Lien securing any Obligation shall cease to be a perfected first priority Lien,
subject only to those exceptions expressly permitted by such Loan Document.
Expropriation
9.1.11 One or more Governmental Authorities of Colombia shall publicly announce
its intention to or shall repudiate, terminate, seize, appropriate, assume the
management of, abrogate or reduce all or any material portion of GREKA Colombia
concession agreements or association agreements with respect to hydrocarbon
reserves with a value in excess of $1,000,000 (each a "Colombian Agreement") or
take any other action or actions (including, without limitation, suspending or
terminating all or any material portion of the production or exportation of
Hydrocarbons the subject of the Colombian Agreements, subjecting GREKA Colombia
to new or additional Taxes that result in an aggregate increase in the
percentage of Taxes paid or payable by GREKA Colombia greater than 25%
subsequent to the date hereof or imposing currency controls that prevent GREKA
Colombia from transferring U.S. Dollars outside of Colombia in each such case
with respect to greater than 25% of its sales of Hydrocarbons);
Action if Bankruptcy
9.2. If any Event of Default described in clauses (a) through (d) of Section
9.1.9 shall occur with respect to the Borrower or the Guarantor, the Commitments
(if not theretofore terminated) shall automatically terminate and the
outstanding principal amount of all outstanding Loans and all other Obligations
shall automatically be and become immediately due and payable, without notice or
demand.
Action if Other Event of Default
9.3 If any Event of Default (other than any Event of Default described in
clauses (a) through (d) of Section 9.1.9 with respect to the Borrower or the
Guarantor) shall occur for any reason, whether voluntary or involuntary, and be
continuing, the Agent, upon the direction of the Majority Lenders, shall by
notice to the Borrower declare all or any portion of the outstanding principal
amount of the Loans and other Obligations to be due and payable without further
notice, demand or presentment, and/or the Commitments (if not theretofore
terminated) to be terminated, whereupon the full unpaid amount of such Loans and
other Obligations which shall be so declared due and payable shall be and become
immediately due and payable, without further notice, demand or presentment,
and/or, as the case may be, the Commitments shall terminate.
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THE AGENT
Actions
10.1 Each Lender hereby appoints CIBC as its Agent under and for purposes of
this Agreement, the Notes and each other Loan Document. Each Lender authorizes
the Agent to act on behalf of such Lender under this Agreement, the Notes and
each other Loan Document and, in the absence of other written instructions from
the Majority Lenders received from time to time by the Agent (with respect to
which the Agent agrees that it will comply, except as otherwise provided in this
Section or as otherwise advised by counsel), to exercise such powers hereunder
and thereunder as are specifically delegated to or required of the Agent by the
terms hereof and thereof, together with such powers as may be reasonably
incidental thereto. Each Lender hereby indemnifies (which indemnity shall
survive any termination of this Agreement) the Agent, pro rata according to such
Lender's Percentage, whether or not related to any singular, joint or concurrent
negligence of the Agent, from and against any and all liabilities, obligations,
losses, damages, claims, costs or expenses of any kind or nature whatsoever
which may at any time be imposed on, incurred by, or asserted against, the Agent
in any way relating to or arising out of this Agreement, the Notes and any other
Loan Document, including reasonable attorneys' fees, and as to which the Agent
is not reimbursed by the Borrower; provided, however, that no Lender shall be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, claims, costs or expenses which are determined by a court of competent
jurisdiction in a final proceeding to have resulted solely from the Agent's
gross negligence or willful misconduct. The Agent shall not be required to take
any action hereunder, under the Notes or under any other Loan Document, or to
prosecute or defend any suit in respect of this Agreement, the Notes or any
other Loan Document, unless it is indemnified hereunder to its satisfaction. If
any indemnity in favor of the Agent shall be or become inadequate, in the
Agent's, determination, as the case may be, the Agent may call for additional
indemnification from the Lenders and cease to do the acts indemnified against
hereunder until such additional indemnity is given. Notwithstanding any
provision to the contrary contained elsewhere in this Agreement or in any other
Loan Document, the Agent shall not have any duties or responsibilities, except
as expressly set forth herein, and the Agent shall not have or be deemed to have
any fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the Agent.
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Funding Reliance, Etc.
10.2 Unless the Agent shall have been notified by telephone, confirmed in
writing, by any Lender by 5:00 p.m., New York time, on the day prior to a
Borrowing that such Lender will not make available the amount which would
constitute its Percentage of such Borrowing on the date specified therefor, the
Agent may assume that such Lender has made such amount available to the Agent
and, in reliance upon such assumption, make available to the relevant Borrower a
corresponding amount. If and to the extent that such Lender shall not have made
such amount available to the Agent, such Lender and such Borrower severally
agree to repay the Agent forthwith on demand such corresponding amount together
with interest thereon, for each day from the date the Agent made such amount
available to such Borrower to the date such amount is repaid to the Agent, at
the interest rate applicable at the time to Loans comprising such Borrowing.
Exculpation
10.3 The Agent and its directors, officers, employees or agents shall not be
liable to any Lender for any action taken or omitted to be taken by it under
this Agreement or any other Loan Document, or in connection herewith or
therewith, except for its own willful misconduct or gross negligence, nor
responsible for any recitals or warranties herein or therein, nor for the
effectiveness, enforceability, validity or due execution of this Agreement or
any other Loan Document, nor for the creation, perfection or priority of any
Liens purported to be created by any of the Loan Documents, or the validity,
genuineness, enforceability, existence, value or sufficiency of any collateral
security, nor to make any inquiry respecting the performance by the Borrower of
its obligations hereunder or under any other Loan Document. Any such inquiry
which may be made by the Agent shall not obligate it to make any further inquiry
or to take any action. The Agent shall be entitled to rely upon advice of
counsel concerning legal matters and upon any notice, consent, certificate,
statement or writing which the Agent believes to be genuine and to have been
presented by a proper Person.
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Successor
10.4 Subject to the appointment of a successor as provided below, the Agent may
resign at any time upon at least 30 days' prior notice to the Borrower and all
Lenders. If the Agent at any time shall resign, the Borrower with the consent of
the Majority Lenders may appoint a successor Agent which shall thereupon become
the Agent hereunder. In the event the successor Agent is not, at the time of its
appointment, a Lender hereunder, the Borrower shall have the right to consent to
the successor Agent, which consent shall not be unreasonably withheld or
delayed. If no successor Agent shall have been so appointed by the Borrower and
the Majority Lenders, and shall have accepted such appointment, within 30 days
after the retiring Agent's giving notice of resignation, then the retiring Agent
may, on behalf of the Lenders, appoint a successor Agent, respectively, which
shall be one of the Lenders or a commercial banking institution organized under
the laws of the U.S. (or any State thereof) or a U.S. branch or agency of a
commercial banking institution, and having a combined capital and surplus of at
least $100,000,000. Upon the acceptance of any appointment as Agent hereunder by
a successor Agent, such successor Agent shall be entitled to receive from the
retiring Agent such documents of transfer and assignment as such successor Agent
may reasonably request, and shall thereupon succeed to and become vested with
all rights, powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations under this
Agreement. After the retiring Agent's resignation hereunder as the Agent, the
provisions of (a) this Article X shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was the Agent under this Agreement
and (b) Section 11.3 and Section 11.4 shall continue to inure to its benefit.
Extensions of Credit by the Agent and the Arranger
10.5 Each of the Agent and the Arranger shall have the same rights and powers
with respect to (x) the Loans made by it or any of its Affiliates and (y) the
Notes held by it or any of its Affiliates and may exercise the same as if it
were not the Agent or the Arranger. Each of the Agent and the Arranger and their
respective Affiliates may accept deposits from, lend money to, and generally
engage in any kind of business with the Borrower or Affiliate of the Borrower as
if it were not an Agent or the Arranger hereunder, as the case may be.
Credit Decisions
10.6 Each Lender acknowledges that it has, independently of the Agent, the
Arranger and each other Lender, and based on such Lender's review of the
financial information of the Borrower, this Agreement, the other Loan Documents
(the terms and provisions of which being satisfactory to such Lender) and such
other documents, information and investigations as such Lender has deemed
appropriate, made its own credit decision to extend its Commitment. Each Lender
also acknowledges that it will, independently of the Agent, the Arranger and
each other Lender, and based on such other documents, information and
investigations as it shall deem appropriate at any time, continue to make its
own credit decisions as to exercising or not exercising from time to time any
rights and privileges available to it under this Agreement or any other Loan
Document.
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Copies, Etc.
10.7 The Agent shall give prompt notice to each Lender of each notice or request
required or permitted to be given to the Agent by the Borrower pursuant to the
terms of this Agreement (unless concurrently delivered to the Lenders by such
Borrower). The Agent will distribute to each Lender each document or instrument
received for its account and copies of all other communications received by the
Agent from the Borrower for distribution to the Lenders by the Agent in
accordance with the terms of this Agreement.
MISCELLANEOUS PROVISIONS
Waivers, Amendments, Etc.
11.1 The provisions of this Agreement and of each other Loan Document may from
time to time be amended, modified or waived, if such amendment, modification or
waiver is in writing and consented to by the Borrower and the Majority Lenders;
provided, however, that no such amendment, modification or waiver which would:
(a) modify any requirement hereunder that any particular action be taken by all
the Lenders or by the Majority Lenders shall be effective unless consented to by
each Lender; (b) modify this Section 11.1 or Section 2.7, change the definition
of "Majority Lenders" or "Borrowing Base", increase the Commitment Amount or the
Percentage of any Lender, reduce any fees described in Article III, release any
collateral security except as otherwise specifically provided in any Loan
Document or extend the Commitment Termination Date shall be made without the
consent of each Lender and each holder of a Note; (c) extend the due date for,
or reduce the amount of, any scheduled repayment or prepayment of principal of
or interest on any Loan or any other obligation (or reduce the principal amount
of or rate of interest on any Loan) shall be made without the consent of the
holder of that Note evidencing such Loan; (d) affect adversely the interests,
rights or obligations of the Agent qua the Agent shall be made without consent
of the Agent, or (e) modify Section 11.4 without the consent of the Agent, the
Arranger and each Lender. No failure or delay on the part of any Agent, any
Lender or the holder of any Note in exercising any power or right under this
Agreement or any other Loan Document shall operate as a waiver thereof, nor
shall any single or partial exercise of any such power or right preclude any
other or further exercise thereof or the exercise of any other power or right.
No notice to or demand on the Borrower in any case shall entitle it to any
notice or demand in similar or other circumstances. No waiver or approval by any
Agent, any Lender or the holder of any Note under this Agreement or any other
Loan Document shall, except as may be otherwise stated in such waiver or
approval, be applicable to subsequent transactions. No waiver or approval
hereunder shall require any similar or dissimilar waiver or approval thereafter
to be granted hereunder.
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Notices
11.2 All notices and other communications provided to any party hereto under
this Agreement or any other Loan Document shall be in writing or by facsimile
and addressed, delivered or transmitted to such party at its address or
facsimile number set forth below its signature hereto or set forth in the Bank
Assignment Agreement or at such other address or facsimile number as may be
designated by such party in a notice to the other parties. Any notice, if mailed
and properly addressed with postage prepaid or if properly addressed and sent by
pre-paid courier service, shall be deemed given when received; any notice, if
transmitted by facsimile, shall be deemed given when transmitted and a receipt,
demonstrating successful transmission, is received by the Sender.
Payment of Costs and Expenses
11.3 Each Borrower and/or the Guarantor, as the case may be, agrees jointly and
severally to pay on demand all reasonable expenses of the Agent and the Arranger
(including the reasonable fees, disbursements, out-of-pocket expenses and other
charges of Freshfields LLP, counsel to the Arranger and the Agent, and of local
counsel, if any, who may be retained by said counsel) in connection with (a) the
negotiation, preparation, execution, delivery, administration and enforcement of
this Agreement and of each other Loan Document, including schedules and
exhibits, and any amendments, waivers, consents, supplements or other
modifications to this Agreement or any other Loan Document as may from time to
time hereafter be required, whether or not the transactions contemplated hereby
are consummated; (b) the filing, recording, refiling or rerecording of each of
the Security Documents and/or any Uniform Commercial Code financing statements
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relating thereto and all amendments, supplements and modifications to any
thereof and any and all other documents or instruments of further assurance
required to be filed or recorded or refiled or rerecorded by the terms hereof or
of the Security Documents; and (c) the preparation and review of the form of any
document or instrument relevant to this Agreement or any other Loan Document.
Each Lender agrees to reimburse the Agent on demand for such Lender's pro rata
share (based upon its respective Percentage) of any such costs or expenses not
paid by the Borrower, but excluding (d) any costs and expenses in connection
with assignment of or sale of participations as provided in Section 11.10 or
Section 11.11 of this Agreement. Each Borrower and the Guarantor further agrees
jointly and severally to pay, and to save the Agent, the Arranger and the
Lenders harmless from all liability for, any stamp or other taxes which may be
payable in connection with the execution or delivery of this Agreement, the
Borrowings hereunder, or the issuance of the Notes or any other Loan Documents.
Each Borrower and the Guarantor also agrees jointly and severally to reimburse
the Agent and each Lender upon demand for all reasonable out-of-pocket expenses
(including reasonable attorneys' fees and legal expenses) incurred by the Agent
or such Lender in connection with (x) the negotiation of any restructuring or
"work-out" whether or not consummated, of any Obligations and (y) the
enforcement of any Obligations. All such requests for payment shall be
accompanied by invoices containing reasonable detail. The Agent and each Lender
agree to the extent feasible, and to the extent a conflict of interest does not
exist in the reasonable opinion of the Agent and any Lender or their counsel, to
use the same single counsel (i.e. one law firm) in connection with any
investigation, litigation or other proceeding under this Section 11.3. For any
expenditures incurred by the Agent or the Lenders under this Section 11.3, other
than in connection with the enforcement of the Agent's or Lenders' rights under
the Loan Documents, the Agent, the Arranger and each Lender agree that the
Guarantor shall have the right to approve any individual expenditure in excess
of $10,000 and legal fees (excluding disbursements) of the Arranger and the
Agent in excess of $100,000.
The obligations of the Borrower and the Guarantor with respect to expenses under
this Section 11.3 shall apply irrespective of whether the Facility is closed.
Indemnification
11.4 In consideration of the execution and delivery of this Agreement by each
Lender and the Agent and the extension of the Commitments, and the arrangement
of the facility represented by this Agreement by the Arranger, the Borrower and
the Guarantor each hereby jointly and severally indemnifies, exonerates and
holds the Agent, the Arranger and each Lender and each of their respective
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officers, directors, employees and agents (collectively, the Indemnified
Parties) free and harmless from and against and shall pay for any and all
actions, causes of action, suits, losses, costs, liabilities and damages, and
expenses incurred in connection with the financing contemplated hereby or the
use or proposed use of the proceeds thereof (irrespective of whether any such
Indemnified Party is a party, to the action for which indemnification hereunder
is sought), including reasonable attorneys' fees and disbursements
(collectively, the Indemnified Liabilities), incurred by the Indemnified Parties
or any of them as a result of, or arising out of, or relating to (a) any
transaction financed or to be financed in whole or in part, directly or
indirectly, with the proceeds of any Borrowing; (b) the entering into and
performance of this Agreement and any other Loan Document by any of the
Indemnified Parties; (c) any investigation, litigation or proceeding related to
any environmental cleanup, audit, compliance or other matter relating to the
protection of the environment or the Release by the Borrower of any Hazardous
Material; (d) the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission, discharging or releases from, any real property
owned or operated by the Borrower of any Hazardous Material (including any
losses, liabilities, damages, injuries, costs, expenses or claims asserted or
arising under any Environmental Law); or (e) any misrepresentation or inaccuracy
or breach of Section 8.1.2 regardless of whether caused by, or within the
control of, the Borrower; in each case except for any such Indemnified
Liabilities arising for the account of a particular Indemnified Party by reason
of the relevant Indemnified Party's gross negligence or willful misconduct or
such Indemnified Party's own unexcused breach of any provision of any Loan
Document (as determined by the final judgment of a court of competent
jurisdiction), provided that it is the intention of the parties hereto that the
indemnified parties shall not be indemnified in the case of their own gross
negligence or willful misconduct, regardless of whether such negligence is sole
or contributory, active or passive, muted, joint or technical. If and to the
extent that the foregoing undertaking may be unenforceable for any reason, the
Borrower and the Guarantor each hereby agrees jointly and severally to make the
maximum contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law. The Agent and each Lender
agree to the extent feasible, and to the extent a conflict of interest does not
exist in the reasonable opinion of the Agent and any Lender or their counsel, to
use the same single counsel (i.e. one law firm) in connection with any
investigation, litigation or other proceeding under this Section 11.4.
The obligations of the Borrower and the Guarantor with respect to
indemnification under this Section 11.4 shall apply irrespective of whether the
Facility is closed.
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Survival
11.5 The obligations of the Borrower under Sections 4.3, 4.4, 4.5, 4.6, 11.3 and
11.4, and the obligations of the Lenders under Section 10.1 shall in each case
survive any termination of this Agreement, the payment in full of all
Obligations and the termination of all Commitments. The representations and
warranties made by the Borrower and the Guarantor in this Agreement and in each
other Loan Document shall survive the execution and delivery of this Agreement
and each such other Loan Document.
Severability
11.6 Any provision of this Agreement or any other Loan Document which is
prohibited or unenforceable in any jurisdiction shall, as to such provision and
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this Agreement
or such Loan Document or affecting the validity or enforceability of such
provision in any other jurisdiction.
Heading
11.7 The various headings of this Agreement and of each other Loan Document are
inserted for convenience only and shall not affect the meaning or interpretation
of this Agreement or such other Loan Document or any provisions hereof or
thereof.
Execution in Counterparts, Effectiveness, Etc.
11.8 This Agreement may be executed by the parties hereto in several
counterparts, each of which shall be executed by the Borrower, the Guarantor and
the Agent and be deemed to be an original and all of which shall constitute
together but one and the same agreement. This Agreement shall become effective
when counterparts hereof executed on behalf of the Borrower, the Guarantor and
each Lender (or notice thereof satisfactory to the Agent) shall have been
received by the Agent and notice thereof shall have been given by the Agent to
the Borrower and each Lender.
Governing Law; Entire Agreement
11.9 THIS AGREEMENT, THE NOTES AND EACH OTHER LOAN DOCUMENT SHALL EACH BE DEEMED
TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
NEW YORK. This Agreement, the Notes and the other Loan Documents constitute the
entire understanding among the parties hereto with respect to the subject matter
hereof and supersede any prior agreements, written or oral, with respect
thereto.
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Successors and Assigns
11.10 This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns; provided, however,
that: (a) neither the Borrower nor the Guarantor may assign or transfer its
rights or obligations hereunder without the prior written consent of the Agent
and all Lenders; provided, however, that for purposes of this Section 11.10 if
the survivor of a merger is obligated in respect of all obligations of the
Borrower or the Guarantor hereunder and under all other Loan Documents, a merger
permitted pursuant to Section 8.2.8 hereof shall not be an assignment or
transfer of such Borrower's rights or obligations hereunder and (b) the rights
of sale, assignment and transfer of the Lenders are subject to Section 11.11.
Sale and Transfer of Loans and Note, Participations in Loans and Note
11.11 Each Lender may assign, or sell participations in, its Loans and
Commitment to one or more other Persons in accordance with this Section 11.11.
Assignments
11.11.1 Any Lender, (a) with the written consent of the Borrower and the Agent
(which consents shall not be unreasonably delayed or withheld) may at any time
assign and delegate to one or more commercial lenders or other financial
institutions and (b) with notice to the Borrower and the Agent but without the
consent of the Borrower or the Agent, may assign and delegate to any of its
Affiliates or to any other Lender already a Lender hereunder (each Person
described in either of the foregoing clauses as being the Person to whom such
assignment and delegation is to be made, being hereinafter referred to as an
Assignee Bank), all or any fraction of such Lender's total Loans and Commitment
(which assignment and delegation shall be of a constant, and not a varying,
percentage of all the assigning Lender's Loans and Commitment) in a minimum
aggregate amount of $2,000,000 except that no assignment to another Lender
already a Lender hereunder need be in such minimum amount so long as after such
assignment the assignor shall hold no interest or a minimum $2,000,000 interest;
provided, however, that any such Assignee Bank will comply as a condition
precedent to the effectiveness of the assignment to it with the provisions
contained in Section 4.6(b) and further, provided, however, that, the Borrower
and the Agent shall be entitled to continue to deal solely and directly with
such Lender in connection with the interests so assigned and delegated to an
Assignee Bank until (c) written notice of such assignment and delegation,
together with payment instructions, addresses and related information with
respect to such Assignee Bank, shall have been given to the Borrower and the
Agent by such Lender and such Assignee Bank; (d) such Assignee Bank shall have
executed and delivered to the Borrower and the Agent a Bank Assignment
Agreement, accepted by the Agent (e) if necessary, Forms 1001, 4224 or
applicable successor forms or other appropriate forms have been delivered by the
prospective Assignee Bank to the Guarantor, as provided in Section 4.6(b); and
(f) the processing fees described below shall have been paid.
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From and after the date that the Agent accepts such Bank Assignment Agreement,
(x) the Assignee Bank thereunder shall be deemed automatically to have become a
party hereto and to the extent that rights and obligations hereunder have been
assigned and delegated to such Assignee Bank in connection with such Lender
Assignment Agreement, shall have the rights and obligations of a Lender
hereunder and under the other Loan Documents and (y) the assignor Lender, to the
extent that rights and obligations hereunder have been assigned and delegated by
it in connection with such Bank Assignment Agreement, shall be released from its
obligations hereunder and under the other Loan Documents. Promptly after its
receipt of notice that the Agent has received an executed Bank Assignment
Agreement, the Borrower shall consent to such assignment, if applicable, and
execute and deliver to the Agent (for delivery to the relevant Assignee Bank) a
new Note evidencing such Assignee Bank's assigned Loans and Commitment and, if
the assignor Lender has retained Loans and a Commitment hereunder, a replacement
Note in the principal amount of the Loans and Commitment retained by the
assignor Lender hereunder (such Note to be in exchange for, but not in payment
of, that Note then held by such assignor Lender). Each such Note shall be dated
the date of the predecessor Note. The assignor Lender shall xxxx the predecessor
Note "exchanged" and deliver it to the Borrower. Accrued interest on that part
of the predecessor Note evidenced by the new Note, and accrued fees, shall be
paid as provided in the Bank Assignment Agreement; provided that neither the
Borrower nor the Guarantor shall be obligated for the expenses of assignment by
any Lender as provided in this Section 11.11. Accrued interest on that part of
the predecessor Note evidenced by the replacement Note shall be paid to the
assignor Bank. Accrued interest and accrued fees shall be paid at the same time
or times provided in the predecessor Note and in this Agreement. Such assignor
Bank or such Assignee Bank must also pay a processing fee to the Agent upon
delivery of any Bank Assignment Agreement in the amount of $3,500, it being
understood that the Borrower shall not be obligated to reimburse such assignor
Lender or Assignee Bank for such processing fee. Any attempted assignment and
delegation not made in accordance with this Section 11.11.1 shall be null and
void. The foregoing provisions shall not apply to, or restrict, or require the
consent of or notice of any Person to effectuate, the pledge or assignment by
any Lender of its rights under this Agreement and its Notes and the other Loan
Documents (i) if an Event of Default has occurred and is continuing, or (b) to
any Federal Reserve Bank.
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Participations
11.11.2 Any Lender may at any time sell to one or more commercial Lenders or
other Persons (each of such commercial Lenders and other Persons being herein
called a "Participant") participating interests in any of the Loans, its
Commitment, or other interests of such Lender hereunder; provided, however, that
(a) no participation contemplated in this Section 11.11 shall relieve such
Lender from its Commitment or its other obligations hereunder or under any other
Loan Document; (b) such Lender shall remain solely responsible for the
performance of its Commitment and such other obligations; (c) each Borrower and
the Agent shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement and
each of the other Loan Documents; (d) no Participant, unless such Participant is
an Affiliate of such Lender, or is itself a Lender, shall be entitled to require
such Lender to take or refrain from taking any action hereunder or under any
other Loan Document, except that such Lender may agree with any Participant that
such Lender will not, without such Participant's consent, take any actions of
the type described in clause (b) or (c) of Section 11.1; and (e) the Borrower
shall not be required to pay any amount under Section 4.6 that is greater than
the amount which it would have been required to pay had no participating
interest been sold.
Other Transactions
11.12 Nothing contained herein shall preclude the Agent the Arranger or any
other Lender from engaging in any transaction, in addition to those contemplated
by this Agreement or any other Loan Document, with the Borrower or any of its
Affiliates in which such Borrower or such Affiliate is not restricted hereby
from engaging with any other Person.
Treatment of Certain Information; Confidentiality
11.14 Each Lender, the Agent, and the Arranger agree (on behalf of itself and
each of its affiliates, directors, officers, employees and representatives) to
keep confidential any non-public information supplied to it by the Borrower, or
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the Guarantor pursuant to this Agreement that the Borrower identifies to such
Lender, Agent, or Arranger (as the case may be) as confidential at the time the
Borrower or the Guarantor so supplies such information, provided, that nothing
herein shall limit the disclosure of any such information (i) to the extent
required by statute, rule, regulation or judicial process; (ii) to counsel for
any of the Lenders, the Agent or the Arranger; (iii) to Lender examiners,
auditors or accountants; (iv) to the Arranger, the Agent or any other Lender;
(v) in connection with any summons or subpoena to which any one or more of the
Lenders, the Arranger or the Agent is a party; (vi) to a subsidiary or affiliate
of such Person, or (vii) to any assignee or participant (or prospective assignee
or participant) so long as such subsidiary, affiliate, assignee or participant
(or prospective assignee or participant), as the case may be, first executes and
delivers to the Borrower, an agreement containing provisions substantially
identical to those contained in this Section 11.14; and provided further, that
in no event shall any Lender, the Arranger or the Agent be obligated or required
to return any materials furnished to it by the Borrower, unless in violation of
this Section 11.14, each Lender agrees that it will use its reasonable efforts
to advise the Borrower as soon as practicable, of any disclosure of information
in connection with (v) above; and provided, further that each Lender, the Agent
and the Arranger agree to provide notice to the Borrower and the Guarantor at
the respective addresses provided in this Agreement in the case of disclosure
(or requested or required disclosure) of any such non-public information.
Forum Selection and Consent to Jurisdiction
11.15 ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION
WITH, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE
AGENT, THE ARRANGER, THE LENDERS, THE BORROWER OR THE GUARANTOR SHALL BE BROUGHT
AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK OR IN THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED,
HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER
PROPERTY MAY BE BROUGHT, AT THE AGENT'S OPTION, IN THE COURTS OF ANY
JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. THE BORROWER
AND THE GUARANTOR EACH HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE
JURISDICTION OF THE COURTS OF THE XXXXX XX XXX XXXX XXX XX XXX XXXXXX XXXXXX
Page 00
XXXXXXXX XXXXX FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH
LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT
RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION. THE BORROWER AND THE
GUARANTOR EACH FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY
REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE
STATE OF NEW YORK. THE BORROWER AND THE GUARANTOR EACH HEREBY EXPRESSLY AND
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH
IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION
BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH
LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT THE
BORROWER OR THE GUARANTOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM
JURISDICTION OF ANY COURT OF FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR
NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR
OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE BORROWER AND THE
GURARANTOR, AS APPLICABLE HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF
ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
Waiver of Jury Trial
11.16 THE AGENT, THE ARRANGER, THE LENDERS, THE BORROWER AND THE GUARANTOR
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF THE AGENT, THE ARRANGER, THE LENDERS, THE BORROWER OR THE GUARANTOR.
THE BORROWER AND THE GUARANTOR EACH ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED
FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION
OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE AGENT AND THE LENDERS ENTERING INTO THIS AGREEMENT
AND EACH SUCH OTHER LOAN DOCUMENT.
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No Oral Agreements
11.17 THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers thereunto duly authorized as of the day and year
first above written.
GREKA AM, INC.,
as Borrower
By____________________________
Name:
Title:
Address: 0000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Facsimile No.: (000) 000-0000
Attention:
GREKA ENERGY CORPORATION,
as Guarantor
By____________________________
Name:
Title:
Address: 000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attention:
CANADIAN IMPERIAL BANK OF COMMERCE,
as Agent
By____________________________
Name:
Title:
Address: 000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.:
Attention:
CIBC WORLD MARKETS CORP., as Arranger
By____________________________
Name:
Title:
Address: 000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.:
Attention:
PERCENTAGE LENDERS
100% CIBC, INC.
By_____________________
Name:
Title:
Domestic
Office: 000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.:
Attention:
LIBOR Office: 000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 100 17
Facsimile No.:
Attention:
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