Breitburn Energy Partners LP
Breitburn Energy Partners LP (Form: 8-K, Received: 05/26/2016 15:49:39)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 
FORM 8-K

 
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported)
May 26, 2016 (May 23, 2016)
 

BREITBURN ENERGY PARTNERS LP
(Exact name of Registrant as specified in its charter)
 


Delaware
001-33055
74-3169953
(State or other jurisdiction
of incorporation or jurisdiction)
(Commission
File Number)
(IRS Employer
Identification No.)

707 Wilshire Boulevard, Suite 4600
Los Angeles, CA 90017
(Address of Principal Executive Offices)
(213) 225-5900
(Registrant’s telephone number)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))




Item 1.01 Entry into a Material Definitive Agreement.

Debtor-in-Possession Credit Facility

As previously reported, on May 15, 2016, Breitburn Energy Partners LP (the “ Partnership ”) and certain of its affiliates (such affiliates, together with the Partnership, the “ Debtors ”) filed voluntary petitions for relief (and the cases commenced thereby, the “ Chapter 11 Cases ”) under chapter 11 of the United States Bankruptcy Code (the “ Bankruptcy Code ”) in the United States Bankruptcy Court for the Southern District of New York (the “ Bankruptcy Court ”). The Debtors filed a motion with the Bankruptcy Court seeking to jointly administer the Chapter 11 Cases under the caption “In re Breitburn Energy Partners LP, et al.”

On May 23, 2016, in connection with the Chapter 11 Cases, a Debtor-in-Possession Credit Facility (the “ DIP Credit Facility ”) was entered into among Breitburn Operating LP, a wholly owned subsidiary of the Partnership, as borrower (the “ DIP Borrower ”), the lenders party thereto (the “ DIP Lenders ”) and Wells Fargo, National Association, as administrative agent. The other Debtors have guaranteed all obligations under the DIP Credit Facility.

Pursuant to the terms of the DIP Credit Facility, the DIP Lenders will make available a revolving credit facility in an aggregate principal amount of $75 million (and the DIP Lenders have offered to arrange an additional $75 million of financing under the DIP Credit Facility at the DIP Borrower’s request), which includes a letter of credit facility available for the issuance of letters of credit in an aggregate principal amount not to exceed a sublimit of $50 million, and a swing line facility in an aggregate principal amount not to exceed a sublimit of $5 million, in each case, to mature on the earlier to occur of (A) the effective date of a plan of reorganization in the Chapter 11 Cases or (B) the stated maturity of the DIP Credit Facility of January 15, 2017. In addition, the maturity date may be accelerated upon the occurrence of certain events as set forth in the DIP Credit Facility.

The proceeds of the DIP Credit Facility may be used: (i) to pay the costs and expenses of administering the Chapter 11 Cases, (ii) to fund the Debtors’ working capital needs, capital improvements, and other general corporate purposes, in each case, in accordance with an agreed budget and (iii) to provide adequate protection to existing secured creditors.

The foregoing description of the DIP Credit Facility does not purport to be complete and is qualified in its entirety by reference to the Debtor-in-Possession Credit Agreement, which is filed as Exhibit 10.1 hereto, and which is incorporated herein by reference.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement.

The description of the DIP Credit Facility set forth in Item 1.01 is also incorporated into this Item 2.03.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits


10.1
Debtor-in-Possession Credit Agreement, dated as of May 19, 2016, among Breitburn Operating LP, as borrower, Breitburn Energy Partners LP, as parent guarantor, the financial institutions from time to time party thereto and Wells Fargo Bank, National Association, as administrative agent, swing line lender and issuing lender.



1


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



 
BREITBURN ENERGY PARTNERS LP
 
 
 
 
By:
BREITBURN GP LLC,
 
 
its general partner
 
 
 
Date: May 26, 2016
By:
/s/ Gregory C. Brown
 
 
Gregory C. Brown
 
 
Executive Vice President, General Counsel and Chief Administrative Officer





Exhibit Index


Exhibit No.
 
Description
10.1
 
Debtor-in-Possession Credit Agreement, dated as of May 19, 2016, among Breitburn Operating LP, as borrower, Breitburn Energy Partners LP, as parent guarantor, the financial institutions from time to time party thereto and Wells Fargo Bank, National Association, as administrative agent, swing line lender and issuing lender.





Exhibit 10.1

EXECUTION VERSION
DEBTOR-IN-POSSESSION CREDIT AGREEMENT
AMONG
BREITBURN OPERATING LP ,
AS THE BORROWER
AND
BREITBURN ENERGY PARTNERS LP ,
AS PARENT GUARANTOR
WELLS FARGO BANK, NATIONAL ASSOCIATION ,
AS ADMINISTRATIVE AGENT ,
S WING LINE LENDER AND ISSUING LENDER
AND THE FINANCIAL INSTITUTIONS FROM TIME TO TIME PARTY HERETO ,
AS LENDERS
 
WELLS FARGO SECURITIES, LLC
CITIGROUP GLOBAL MARKETS INC.
J.P. MORGAN SECURITIES LLC
J OINT L EAD A RRANGERS AND J OINT B OOKRUNNERS
 
D ATED AS OF MAY 19, 2016





TABLE OF CONTENTS
 
 
Page
ARTICLE I DEFINITIONS
1
1.01
Certain Defined Terms
1
1.02
Other Interpretive Provisions
28
1.03
Accounting Principles
28
ARTICLE II THE CREDIT
29
2.01
Amounts and Terms of the Commitments
29
2.02
Procedure for Borrowings
30
2.03
Conversion and Continuation Elections
31
2.04
Optional Commitment Reductions and Optional Prepayments
31
2.05
Mandatory Prepayments of Loans
32
2.06
Repayment
35
2.07
Fees
35
2.08
Computation of Fees and Interest
37
2.09
Payments by the Company; Borrowings Pro Rata
37
2.10
Issuing the Letters of Credit
38
2.11
Payments to the Administrative Agent; Several Obligations of the Lenders
41
2.12
Sharing of Payments
43
2.13
Swing Line Loans
43
2.15
Defaulting Lenders
46
2.15
Increase in DIP Facility
49
ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY; REPLACEMENT OF LENDERS
50
3.01
Taxes
50
3.02
Illegality
54
3.03
Increased Costs and Reduction of Return
55
3.04
Funding Losses
56
3.05
Inability to Determine Rates
57
3.06
Certificates of Lenders
57
3.07
Mitigation Obligations; Replacement of Lenders
57
3.08
Survival
58
ARTICLE IV SECURITY
58
4.01
Priority and Liens
58
4.02
[Reserved]
58
4.03
Perfection and Protection of Security Interests and Liens
59
4.04
Offset
59

 
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4.05
Subsidiary Guaranty and Security Agreement
59
ARTICLE V CONDITIONS PRECEDENT
60
5.01
Interim Facility Effective Date
60
5.02
Final Facility Effective Date
61
5.03
Conditions to Extensions of Credit
62
ARTICLE VI REPRESENTATIONS AND WARRANTIES
63
6.01
Organization, Existence and Power
63
6.02
Corporate Authorization; No Contravention
63
6.03
Governmental Authorization
63
6.04
Binding Effect
64
6.05
Litigation
64
6.06
No Default
64
6.07
ERISA Compliance
64
6.08
Margin Regulations
65
6.09
Title to Properties
65
6.10
Oil and Gas Reserves
66
6.11
Initial Reserve Report
66
6.12
Gas Imbalances
66
6.13
Taxes
67
6.14
Financial Condition
67
6.15
Environmental Matters
68
6.16
Regulated Entities
68
6.17
No Burdensome Restrictions
69
6.18
Copyrights, Patents, Trademarks and Licenses, Etc
69
6.19
Subsidiaries and Other Equity Interests
69
6.20
Insurance
69
6.21
Derivative Contracts
69
6.22
Full Disclosure
69
6.23
[Reserved]
70
6.24
Improved Real Estate
70
6.25
Anti-Corruption Laws and Sanctions
70
ARTICLE VII AFFIRMATIVE COVENANTS
70
7.01
Financial Statements
70
7.02
Certificates; Other Production and Reserve Information
72
7.03
Notices
74
7.04
Preservation of Company Existence, Etc
75
7.05
Maintenance of Property
75

 
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7.06
Title Information
75
7.07
[Reserved]
76
7.08
Insurance
76
7.09
Payment of Obligations
76
7.10
Compliance with Laws
76
7.11
Compliance with ERISA
77
7.12
Inspection of Property and Books and Record
77
7.13
Environmental Laws
77
7.14
Pledge of Equity in New Subsidiary
78
7.15
New Subsidiary Guarantors
78
7.16
Use of Proceeds
78
7.17
[Reserved]
78
7.18
Phase I Reports
79
7.19
Further Assurances
79
7.20
Keepwell (Commodity Exchange Act)
79
7.21
Post-Closing Requirements
80
7.22
Budget Update
80
7.23
Cash Management
81
ARTICLE VIII NEGATIVE COVENANTS
81
8.01
Limitation on Liens
81
8.02
Disposition of Assets
83
8.03
Consolidations and Mergers
83
8.04
Loans and Investments
84
8.05
Limitation on Indebtedness
84
8.06
Transactions with Affiliates
85
8.07
Margin Stock
86
8.08
Contingent Obligations
86
8.09
Restricted Payments
87
8.10
Derivative Contracts
87
8.11
Change in Business; Amendments to Organization Documents; Corporate Structure; Tax Status
88
8.12
Accounting Changes
88
8.13
ERISA Compliance
89
8.14
[Reserved]
90
8.15
[Reserved]
90
8.16
[Reserved]
90
8.17
Negative Pledge
90


 
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8.18
Unrestricted Entities
90
8.19
Modifications of Certain Agreements
91
8.20
Budget Variance
91
ARTICLE IX EVENTS OF DEFAULT
91
9.01
Event of Default
91
9.02
Remedies
94
9.03
Rights Not Exclusive
96
9.04
Lender and Lender Derivative Provider Action
96
ARTICLE X ADMINISTRATIVE AGENT
97
10.1
Appointment and Authority
97
10.2
Rights as a Lender
98
10.3
Exculpatory Provisions
98
10.4
Reliance by Administrative Agent
99
10.5
Delegation of Duties
99
10.6
Resignation of Administrative Agent
99
10.7
Non-Reliance on Administrative Agent and Other Lenders
100
10.8
Administrative Agent May File Proofs of Claim
101
10.9
Authority of Administrative Agent to Release Collateral and Liens
101
10.10
The Lead Arranger and other Agents
102
10.11
Lender Derivative Providers and Banking Services Lenders
102
ARTICLE XI MISCELLANEOUS
103
11.01
Amendments and Waivers
103
11.02
Notices; Effectiveness; Electronic Communication
104
11.03
No Waiver; Cumulative Remedies
106
11.04
Costs and Expenses; Indemnity
106
11.05
Payments Set Aside
108
11.06
Successors and Assigns
109
11.07
Confidentiality
112
11.08
Right of Set-off
113
11.09
Interest
114
11.10
Indemnity and Subrogation
114
11.11
Collateral Matters; Derivative Contracts; Termination
115
11.12
[Reserved]
116
11.13
USA PATRIOT Act Notice
116
11.14
Automatic Debits of Fees
116
11.15
Counterparts
116
11.16
Severability
116


 
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11.17
No Third Parties Benefited
117
11.18
Entire Agreement
117
11.19
Governing Law, Jurisdiction and Waiver of Jury Trial
117
11.20
California Judicial Reference
118
11.21
No Advisory or Fiduciary Responsibility
119
11.22
NO ORAL AGREEMENTS
119

SCHEDULES
Schedule 2.01
Commitments
Schedule 6.07
ERISA Compliance
Schedule 6.09
Title to Properties
Schedule 6.13
Tax Matters
Schedule 6.15
Environmental Matters
Schedule 6.19
Subsidiaries
Schedule 6.21
Derivative Contracts
Schedule 7.21
Post-Closing Requirements
Schedule 8.01
Liens
Schedule 8.04
Investments
Schedule 8.05
Indebtedness
Schedule 8.08
Contingent Obligations
Schedule 11.02
Lending Offices; Addresses for Notices
EXHIBITS
Exhibit A-1
Form of Notice of Revolving Credit Borrowing
Exhibit A-2
Form of Notice of Swing Line Loan Notice
Exhibit B
Form of Notice of Conversion/Continuation
Exhibit C
Form of Compliance Certificate
Exhibit D
Form of Assignment and Assumption Agreement
Exhibit E
[Reserved]
Exhibit F
[Reserved]
Exhibit G
Form of Continuing Guaranty Agreement
Exhibit H
[Reserved]
Exhibit I-1
Form of U.S. Tax Compliance Certificate (Non-Partnership Foreign Lenders)
Exhibit I-2
Form of U.S. Tax Compliance Certificate (Non-Partnership Foreign Participants)
Exhibit I-3
Form of U.S. Tax Compliance Certificate (Foreign Participant Partnerships)
Exhibit I-4
Form of U.S. Tax Compliance Certificate (Foreign Lender Partnerships)
Exhibit J
Interim Order
Exhibit K
Initial Budget


 
Page v
 



DEBTOR-IN-POSSESSION CREDIT AGREEMENT
THIS DEBTOR-IN-POSSESSION CREDIT AGREEMENT is dated as of May 19, 2016, among BREITBURN OPERATING LP , a Delaware limited partnership (the “ Company ”), BREITBURN ENERGY PARTNERS LP , a Delaware limited partnership (“ Parent ”), each of the financial institutions from time to time party hereto (individually, a “ Lender ” and collectively, the “ Lenders ”), and WELLS FARGO BANK, NATIONAL ASSOCIATION , as administrative agent for the Lenders (in such capacity, together with its successors in such capacity, the “ Administrative Agent ”), as Swing Line Lender (in such capacity, “ Swing Line Lender ”), and as Issuing Lender (defined hereinafter).
RECITALS
WHEREAS, on May 15, 2016 (the “ Petition Date ”), the Loan Parties (defined hereinafter) and certain Subsidiaries (defined hereinafter) of the Loan Parties (in such capacity, each a “ Debtor ” and collectively, the “ Debtors ”) filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (defined hereinafter) in the Bankruptcy Court (defined hereinafter);
WHEREAS, the Company has requested that Lenders provide it with a revolving senior secured credit facility (the “ DIP Facility ”), to be used during the Chapter 11 Cases (defined hereinafter), with an aggregate principal amount of up to $75,000,000 available for borrowings and/or other extensions of credit on the Interim Facility Effective Date (defined hereinafter), subject to the terms set out herein (including the covenant in Section 8.20 in respect of the Budget) and the other Loan Documents (defined hereinafter) and in the DIP Order (defined hereinafter);
WHEREAS, the Guarantors (defined hereinafter) have agreed to guarantee the Obligations (defined hereinafter) of the Company hereunder and the Company and each Guarantor have agreed to secure all of the Obligations hereunder by granting to the Administrative Agent, for the benefit of the Secured Parties (defined hereinafter), a Lien (defined hereinafter) on substantially all of their assets pursuant to and on the terms set forth in the DIP Order; and
WHEREAS, pursuant to the terms of the DIP Order, all Obligations will be secured by valid perfected Liens on substantially all of the Loan Parties’ assets, having the priorities set forth in the DIP Order.
NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, the parties hereto agree as follows:
ARTICLE I

DEFINITIONS

1.01    Certain Defined Terms . The following terms have the following meanings:

Acceptable Derivatives Resolution ” has the meaning specified in Section 5.02(b) .

 
Page 1
 



Acquisition ” means any transaction or series of related transactions for the purpose of or resulting, directly or indirectly, in (a) the acquisition of all or substantially all of the assets of a Person, or of any business unit or division of a Person, (b) the acquisition of in excess of 50% of the capital stock of a corporation (or similar entity), which stock has ordinary voting power for the election of the members of such entity’s board of directors or persons exercising similar functions (other than stock having such power only by reason of the happening of a contingency), or the acquisition of in excess of 50% of the partnership interests or equity of any Person not a corporation which acquisition gives the acquiring Person the power to direct or cause the direction of the management and policies of such Person, or (c) a merger or consolidation or any other combination with another Person (other than a Person that is a Subsidiary) provided that the Company or a Subsidiary of the Company is the surviving entity.
Adequate Protection ” shall have the meaning assigned to such term in the DIP Order.
Administrative Agent ” has the meaning specified in the introductory clause hereto.
Administrative Agent’s Payment Office ” means the address for payments as the Administrative Agent may from time to time specify.
Administrative Questionnaire ” means an Administrative Questionnaire in a form supplied by the Administrative Agent.
Affiliate ” means, as to any Person, any other Person which, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person. A Person shall be deemed to control another Person if the controlling Person possesses the power to direct or cause the direction of the management and policies of the other Person, whether through the ownership of voting securities, by contract, or otherwise.
Agreement ” means this Debtor-in-Possession Credit Agreement.
Anti-Corruption Laws ” means all laws, rules, and regulations of any jurisdiction applicable to the Parent, Company or their Subsidiaries from time to time concerning or relating to bribery or corruption.
Applicable Margin ” means, with respect to (a) Base Rate Loans, 4.75% and (b) LIBOR Loans, 5.75%.
Approved Fund ” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.
Assignment and Assumption ” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 11.06 ), and accepted by the Administrative Agent, in substantially the form of Exhibit D or any other form approved by the Administrative Agent.
Availability Period ” has the meaning specified in Section 2.01(c) .

 
Page 2
 



Banking Services Agreement ” means any agreement that is not prohibited by the terms hereof to provide treasury or cash management services, including deposit accounts, overnight draft, credit cards, debit cards, p-cards (including purchasing cards and commercial cards), funds transfer, automated clearinghouse, zero balance accounts, returned check concentration, controlled disbursement, lockbox, account reconciliation and reporting and trade finance services and other cash management services, between any Loan Party and any of its Subsidiaries and any Banking Services Lender.

Banking Services Lender ” means any Lender or any Affiliate of a Lender that becomes (or, solely in respect of any obligations arising on or after the Petition Date, is) a party to a Banking Services Agreement with any Loan Party or any Subsidiary until such Person ceases to be a Lender or an Affiliate of a Lender.

Bankruptcy Code ” means the Federal Bankruptcy Reform Act of 1978 (11 U.S.C. §101, et seq.), as amended, and regulations promulgated thereunder.
Bankruptcy Court ” means the United States Bankruptcy Court for the Southern District of New York.
Base Rate ” means, for any day, the fluctuating rate of interest in effect for such day which rate per annum shall be equal to the greatest of (a) the rate of interest as publicly announced from time to time by Administrative Agent as its “ reference rate ,” (b) one-half of one percent (0.50%) per annum above the Federal Funds Rate in effect from time to time, and (c) LIBOR for a one month Interest Period on such day (or if such day is not a Business Day, the immediately preceding Business Day) plus one percent (1.00%). (The “ reference rate ” is a rate set by Administrative Agent based upon various factors including costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate.) Any change in the reference rate announced by Administrative Agent, LIBOR or the Federal Funds Rate shall take effect on the effective date of such change in the reference rate announced by Administrative Agent, LIBOR or the Federal Funds Rate.
Base Rate Loan ” means a Loan that bears interest based at the Base Rate plus the Applicable Margin.
Borrowing ” means a Revolving Credit Borrowing or a Swing Line Borrowing, as the context may require.
Borrowing Date ” means any date on which a Borrowing occurs under Section 2.02 .
Budget ” shall have the meaning assigned to such term in Section 7.22(a) .
Business Day ” means any day other than a Saturday, Sunday or other day on which commercial banks in Houston, Texas, New York, New York, or San Francisco, California are authorized or required by law to close and, if the applicable Business Day relates to any LIBOR Loan, means such a day on which dealings are carried on in the applicable offshore dollar interbank market.

 
Page 3
 



Capital Lease ” means, when used with respect to any Person, any lease in respect of which the obligations of such Person constitute Capitalized Lease Obligations and the amount thereof shall be the capitalized amount thereof determined in accordance with GAAP.
Capitalized Lease Obligations ” means, when used with respect to any Person, without duplication, all obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations shall have been or should be, in accordance with GAAP, capitalized on the books of such Person.
Carryforward ” means the amount of any projected Operating Disbursements not expended in a given Testing Period, which shall carry forward into, and be available for use in, future Testing Periods.
Carve-Out ” shall have the meaning assigned to such term in the DIP Order.
Cash Equivalents ” means: (a) securities issued or fully guaranteed or insured by the United States Government or any agency thereof and backed by the full faith and credit of the United States and having maturities of not more than twelve (12) months from the date of acquisition; (b) certificates of deposit, time deposits, eurodollar time deposits, or bankers’ acceptances having in each case a tenor of not more than twelve (12) months from the date of acquisition issued by, and demand deposits with, any U.S. commercial bank or any branch or agency of a non-U.S. commercial bank licensed to conduct business in the U.S. having combined capital and surplus of not less than $500,000,000, whose long term securities are rated at least A (or then equivalent grade) by S&P and A2 (or then equivalent grade) by Moody’s at the time of acquisition; (c) commercial paper of an issuer rated at least A-1 by S&P or P-1 by Moody’s at the time of acquisition, and in either case having a tenor of not more than twelve (12) months; and (d) Investments, classified in accordance with GAAP as current assets of the Loan Parties or any of their Subsidiaries, in money market investment programs registered under the Investment Company Act of 1940, which are administered by financial institutions that have the highest rating obtainable from either Moody’s or S&P, and the portfolios of which are limited solely to Investments of the character, quality and maturity described in clauses (a), (b) and (c) of this definition.

Casualty Event ” means any loss, casualty or other insured damage to, or any nationalization, taking under power of eminent domain or by condemnation or similar proceeding of, any Property of the Company or any of its Subsidiaries.
Change in Law ” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, implementation, interpretation or application thereof by any Governmental Authority or (c) the making or issuance of any request, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any

 
Page 4
 



successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.
Change of Control ” means:
(a)    General Partner shall cease to own, directly or indirectly, all of the general partner interest (including all outstanding securities convertible to general partner interests) of the Company; or Breitburn GP LLC shall cease to own, directly or indirectly, all of the general partner interest (including all outstanding securities convertible to general partner interests) of Parent; or
(b)    Parent shall cease to own, directly or indirectly, all of the limited partnership interests (including all outstanding Equity convertible to limited partner interests) of the Company, or shall cease to own, directly or indirectly, all of the general partnership interest (including all outstanding Equity convertible to general partner interests) of the Company, or shall cease to own, directly or indirectly, at least 51% of the member interest (including all outstanding Equity convertible to limited partner interests) of Breitburn GP LLC; or
(c)    a sale of all or substantially all of the assets of the Loan Parties taken as a whole to any Person or group of Persons; or
(d)    [reserved]; or
(e)    any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a person or group shall be deemed to have “beneficial ownership” of all securities that such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time (such right, an “option right”)), directly or indirectly, of 50% or more of the equity securities of the Parent or of the general partner of the Parent entitled to vote for members of the board of directors or equivalent governing body of the Parent or the general partner of the Parent on a fully-diluted basis (and taking into account all such securities that such “person” or “group” has the right to acquire pursuant to any option right); or
(f)    the first day on which a majority of the Board of Directors of Breitburn GP LLC are not Continuing Directors. “Continuing Directors” means any member of the board of directors (or managers, in the case of a limited liability company) of Breitburn GP LLC, who (A) is a member of such board of directors or managers as of the date of this Agreement or (B) was nominated for election or elected to such board of directors or managers with the affirmative vote of two-thirds of the Continuing Directors who were members of such board of directors or managers at the time of such nomination or election (not including as board nominees any directors which the board is obligated to nominate pursuant to shareholders’ agreements, voting trust arrangements or similar arrangements).

 
Page 5
 



Chapter 11 Cases ” means the voluntary cases of the Debtors filed under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court.
Code ” means the Internal Revenue Code of 1986, as amended, and regulations promulgated thereunder.
Collateral ” means all property of any kind which is subject to a Lien in favor of Administrative Agent to secure the Obligations or which under the terms of any Security Document is purported to be subject to such Lien, which includes, for the avoidance of doubt, all existing and after-acquired, tangible and intangible, personal and real property (including the Mortgaged Property) and assets of the Loan Parties and any proceeds thereof, including, upon entry of the Final Order, any proceeds of, or property and interests recovered in respect of, claims or causes of action of the estates, including those arising under Chapter 5 of, or any other avoidance actions under, the Bankruptcy Code.
Commitment ” means, as to each Lender, such Lender’s obligation to make Revolving Credit Loans and to participate in Letters of Credit and Swing Line Loans up to such Lender’s Pro Rata Share of the Commitment Amount, as such commitment may be terminated, reduced and/or reallocated from time to time in accordance with the provisions hereof.
Commitment Amount ” means the aggregate commitments of all Lenders, as set forth on Schedule 2.01 , as such commitments may be increased, terminated, reduced and/or reallocated from time to time pursuant to the terms hereof. The Commitment Amount on the Interim Facility Effective Date is $75,000,000.
Commitment Fee ” shall have the meaning assigned to such term in Section 2.07(a) .
Committee ” shall have the meaning assigned to such term in the DIP Order.
Commodity Exchange Act ” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute, or any rule, regulation or order of the U.S. Commodity Futures Trading Commission (or the application or official interpretation of any thereof).
Company ” has the meaning specified in the introductory paragraph hereto.
Compliance Certificate ” means a certificate substantially in the form of Exhibit C .
Connection Income Taxes ” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.
Consolidated Subsidiaries ” of Parent means all Restricted Subsidiaries and Unrestricted Entities that are consolidated in accordance with GAAP.
Contingent Obligation ” means, as to any Person without duplication, any direct or indirect liability of that Person with or without recourse, (a) with respect to any Indebtedness, dividend, letter of credit or other similar obligation (the “ primary obligations ”) of another Person (the

 
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primary obligor ”), including any obligation of that Person (i) to purchase, repurchase or otherwise acquire such primary obligations or any security therefor, (ii) to advance or provide funds for the payment or discharge of any such primary obligation, or to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency or any balance sheet item, level of income or financial condition of the primary obligor, (iii) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation, or (iv) otherwise to assure or hold harmless the holder of any such primary obligation against loss in respect thereof (each, a “ Guaranty Obligation ”); (b) with respect to any Surety Instrument issued for the account of that Person or as to which that Person is otherwise liable for reimbursement of drawings or payments; or (c) to purchase any materials, supplies or other property from, or to obtain the services of, another Person, other than in the ordinary course of business, if the relevant contract or other related document or obligation requires that payment for such materials, supplies or other property, or for such services, shall be made regardless of whether delivery of such materials, supplies or other property is ever made or tendered, or such services are ever performed or tendered. The amount of any Contingent Obligation shall, in the case of Guaranty Obligations, be deemed equal to the lesser of (a) the stated maximum amount, if any, of such Contingent Obligation and (b) the maximum stated or determinable amount of the primary obligation in respect of which such Guaranty Obligation is made or, if not stated or if indeterminable, the maximum reasonably anticipated liability in respect thereof, and in the case of other Contingent Obligations, shall be equal to the lesser of (a) the stated maximum amount, if any, of such Contingent Obligation and (b) the maximum reasonably anticipated liability in respect thereof.
Continuing Directors ” has the meaning specified in the definition of “ Change of Control .”
Contractual Obligation ” means, as to any Person, any provision of any security issued by such Person or of any agreement, undertaking, contract, indenture, mortgage, deed of trust or other instrument, document or agreement to which such Person is a party or by which it or any of its property is bound.
Conversion/Continuation Date ” means any date on which, under Section 2.03 , the Company (a) converts Base Rate Loans to LIBOR Loans or (b) continues as LIBOR Loans having Interest Periods expiring on such date as LIBOR Loans, with a new Interest Period.
Credit Extension ” means and includes the making of any Loans or issuance, extension of expiry date or increase in amount of any Letter of Credit hereunder.
Debtor ” shall have the meaning assigned to such term in the recitals hereto.
Default ” means any event or circumstance which, with the giving of notice, the lapse of time, or both, would (if not cured or otherwise remedied during such time) constitute an Event of Default.
Default Rate ” means a rate per annum equal to the lesser of (a) the Highest Lawful Rate and (b)(i) with respect to LIBOR Loans, the interest rate otherwise applicable to such Loans plus 2% per annum, (ii) with respect to Letter of Credit Fees, the rate otherwise applicable plus 2% per

 
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annum, and (iii) with respect to all other Obligations other than (A) those included in the preceding clauses (i) and (ii), and (B) Obligations under Lender Derivative Contracts, the non-default interest rate then applicable to the Base Rate Loans plus 2% per annum.
Defaulting Lender ” means subject to Section 2.14(e) , any Lender that (a) has failed to (i) fund any portion of its Loans within three (3) Business Days of the date required to be funded by it hereunder unless such Lender notifies the Administrative Agent and the Company in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent, the Issuing Lender, the Swing Line Lender or any other Lender any other amount required to be paid by it hereunder (including in respect of its participation in Letters of Credit and Swing Line Loans) within three (3) Business Days of the date when due, (b) has notified the Company, the Administrative Agent, the Issuing Lender, the Swing Line Lender or any Lender in writing that it does not intend to comply with any of its funding obligations under this Agreement or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three (3) Business Days after written request by the Administrative Agent or the Company, to confirm in writing to the Administrative Agent and the Company that it will comply with the terms of this Agreement relating to its obligations to fund prospective Loans ( provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Company), (d) has, or has a direct or indirect parent company that has, (i) become the subject of any Insolvency Proceeding, or (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the FDIC or any other state or federal regulatory authority acting in such capacity; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.14(e) ) upon delivery of written notice of such determination to the Company, the Issuing Lender, the Swing Line Lender and each Lender.
Derivative Contract ” means any agreement with respect to any future, forward, swap, cap or collar, option, hedging, derivative or similar transaction covering oil and gas commodities or prices or financial, monetary or interest rate instruments, including any and all trades and confirmations entered into pursuant thereto.

 
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Derivative Proceeds ” means proceeds of all Derivative Contracts to the extent that any Derivative Contract results in any Loan Party or any of its Subsidiaries having a right to payment (without giving effect to any legally enforceable netting or setoff arrangements).
DIP Agency Fee Letter ” shall have the meaning assigned to such term in Section 2.07(c) .
DIP Facility ” shall have the meaning assigned to such term in the recitals hereto.
DIP Lead Arranger Fee Letter ” shall have the meaning assigned to such term in Section 2.07(c) .
DIP Order ” means the Interim Order and, upon entry thereof, the Final Order.
DIP Superpriority Claims ” shall have the meaning assigned to such term in the DIP Order.
Dispositions ” has the meaning specified in Section 8.02 .
Dollars ”, “ dollars ” and “ $ ” each mean lawful money of the United States.
Domestic Subsidiary ” means any Subsidiary organized under the laws of the United States or any political subdivision thereof.
Effective Amount ” means on any date, the aggregate outstanding principal amount of all Loans after giving effect to any prepayments or repayments of Loans occurring on such date plus the LC Obligation.
Eligible Assignee ” means any Person that meets the requirements to be an assignee under Section 11.06(b)(iii) , (v) and (vi) (subject to such consents, if any, as may be required under Section 11.06(b)(iii) ).
Environmental Claims ” means all material claims by any Governmental Authority or other Person alleging potential liability or responsibility for violation of any Environmental Law, or for release or injury to the environment.
Environmental Laws ” means all material federal, state or local laws, statutes, common law duties, rules, regulations, ordinances and codes, together with all material administrative orders, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authorities, in each case having the force and effect of law and relating to environmental, health, and safety matters.
Environmental Liability ” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Company, any other Loan Party or any of their respective Subsidiaries directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the Release or threatened Release of any Hazardous Materials into the

 
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environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.
Equity ” means all shares, options, warrants, general or limited partnership interests, participations or other equivalents (regardless of how designated) of or in a corporation, limited liability company, partnership or equivalent entity whether voting or nonvoting, including common stock, preferred stock, or any other “ equity security ” (as such term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the Securities and Exchange Commission under the Exchange Act).
ERISA ” means the Employee Retirement Income Security Act of 1974, as amended, and regulations promulgated thereunder.
ERISA Affiliate ” means any trade or business (whether or not incorporated) under common control with the Company within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).
ERISA Event ” means (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by Loan Party or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations which is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Loan Party or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate (other than pursuant to Section 4041(b) of ERISA), the treatment of a Plan amendment as a termination under Section 4041(c) or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or condition which might reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the imposition of any liability under Title IV of ERISA, other than PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Company or any ERISA Affiliate.
Event of Default ” means any of the events or circumstances specified in Section 9.01 .
Excess Cash means, as of any date of determination, cash and Cash Equivalents of the of the Loan Parties other than (a) any cash allocated for, reserved or otherwise set aside to pay royalty obligations of the Loan Parties due and owing as of such date to Persons who are not Affiliates of the Loan Parties and for which obligations the Loan Parties have issued checks or have initiated wires or ACH transfers (or will issue checks or initiate wires or ACH transfers within three Business Days of such date), (b) any cash allocated for, reserved or otherwise set aside to pay, in the ordinary course of business, amounts (other than royalty obligations) of the Loan Parties due and owing as of such date to Persons who are not Affiliates of the Loan Parties and for which obligations the Loan Parties have issued checks or have initiated wires or ACH transfers and (c) any cash of the Loan Parties constituting pledges and/or deposits securing any binding and enforceable purchase and sale agreement with any Persons who are not Affiliates of the Loan Parties.

 
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Exchange Act ” means the Securities Exchange Act of 1934, as amended, and regulations promulgated thereunder.
Excluded Swap Obligation ” means, with respect to any Loan Party, any Swap Obligation if, and to the extent that, all or a portion of the guaranty of such Loan Party of, or the grant by such Loan Party of a security interest or lien to secure, or the provision of other support by such Loan Party of, such Swap Obligation (or any guarantee or provision of support thereof) is or becomes illegal under the Commodity Exchange Act by virtue of such Loan Party’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act at the time such guaranty, grant of security interest or lien or provision of support of, such Swap Obligation (or any guarantee or provision of support thereof) becomes effective. If a Swap Obligation arises under a Master Agreement governing more than one Swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to Swaps for which such guaranty, grant of security interest or lien to secure or provision of other support is or becomes illegal.
Excluded Taxes ” means, with respect to a Recipient of any payment to be made by or on account of any Obligation of any Loan Party, (a) Taxes imposed on or measured by its net income (however denominated), franchise Taxes imposed on it (in lieu of net income Taxes), and branch profits Taxes, in each case, (i) imposed by the jurisdiction (or any political subdivision thereof) under the laws of which such Recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable Lending Office is located, or (ii) that are Other Connection Taxes, (b) in the case of a Lender, any U.S. federal withholding Tax that is imposed on amounts payable to such Lender pursuant to a law in effect at the time such Lender becomes a party hereto (for the avoidance of doubt, whether as an original party hereto or as an Assignee) (or designates a new Lending Office), except to the extent that such Lender (or its assignor, if any) was entitled, at the time of designation of a new Lending Office (or assignment), to receive additional amounts from the Company with respect to such withholding Tax pursuant to Section 3.01(a) , (c) Taxes attributable to a failure of a Recipient to comply with Section 3.01(f) , and (d) any Taxes imposed under FATCA.
FATCA ” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Code, any intergovernmental agreement between a non-U.S. jurisdiction and the United States with respect to the foregoing and any law, regulation or official guidance implementing the foregoing.
FAS 133 ” means Statement No. 133 of the Financial Accounting Standards Board.
FDIC ” means the Federal Deposit Insurance Corporation.
Federal Funds Rate ” means, for any day, the rate set forth in the weekly statistical release designated as H.15(519), or any successor publication, published by the Federal Reserve Bank of New York (including any such successor, “ H.15(519) ”) on the preceding Business Day opposite the caption “ Federal Funds (Effective) ”; or, if for any relevant day such rate is not so published on any such preceding Business Day, the rate for such day will be the arithmetic mean as determined

 
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by the Administrative Agent of the rates for the last transaction in overnight Federal funds arranged prior to 9:00 a.m. (New York, New York time) on that day by each of three leading brokers of Federal funds transactions in New York, New York selected by the Administrative Agent.
Final Facility Effective Date ” has the meaning specified therefor in Section 5.02 .
Final Order ” means the final order of the Bankruptcy Court approving the DIP Facility, substantially in the form of the Interim Order and otherwise in form and substance satisfactory to the Administrative Agent and the Majority Lenders, as the same may be amended, modified or supplemented from time to time with the express written joinder or consent of the Administrative Agent and the Majority Lenders.
Final Period ” means the period commencing on the Final Facility Effective Date and ending on the Termination Date.
Financial Officer ” means the chief financial officer, chief accounting officer, treasurer or controller of the Company as designated from time to time pursuant to written designation by the Company.
Foreign ” means organized under the laws of a jurisdiction other than the United States or a political subdivision thereof.
Foreign Lender ” means any Recipient that is not a U.S. Person.
FRB ” means the Board of Governors of the Federal Reserve System, and any Governmental Authority succeeding to any of its principal functions.
Fronting Exposure ” means, at any time there is a Defaulting Lender, (a) with respect to the Issuing Lender, such Defaulting Lender’s pro rata share of the outstanding LC Obligation other than that portion of the LC Obligation as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders pursuant to Section 2.14 or cash collateralized in accordance with the terms hereof, and (b) with respect to the Swing Line Lender, such Defaulting Lender’s pro rata share of Swing Line Loans other than Swing Line Loans as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders pursuant to Section 2.14 or cash collateralized in accordance with the terms hereof.
Fund ” means any Person (other than a natural person that is (or will be)) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.
GAAP ” means generally accepted accounting principles set forth from time to time in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions of comparable stature and authority within the U.S. accounting profession), which are applicable to the circumstances as of the date of determination.

 
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General Partner ” means Breitburn Operating GP LLC, a Delaware limited liability company.
Governmental Authority ” means any nation or government, any state or other political subdivision thereof, any central bank (or similar monetary or regulatory authority) thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, and any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing and including the European Union and the European Central Bank.
Guaranties ” means the Continuing Guaranty Agreement executed and delivered by the Guarantors as of the date hereof substantially in the form of Exhibit G , and each other guaranty that supports or purports to support the Obligations, including any joinder thereto.
Guaranty ” means, individually, any one of the Guaranties.
Guarantors ” means, collectively, the General Partner, Parent and each Subsidiary of Parent that executes, or has previously executed and delivered, as a party thereto, a Guaranty pursuant to Section 7.15 hereof or who guarantees (or is required to guarantee) the obligations arising under the Prepetition RBL Credit Agreement.
Guarantor ” means, individually, any one of the Guarantors.
Guaranty Obligation ” has the meaning specified in the definition of “ Contingent Obligation .”
Hazardous Materials ” means any substance regulated or as to which liability might arise under any applicable Environmental Law, including as a “hazardous substance,” “hazardous material,” “hazardous waste,” “solid waste,” “toxic waste,” “extremely hazardous substance,” “toxic substance,” “contaminant,” “pollutant,” or words of similar meaning or import, and including: (a) petroleum hydrocarbons, petroleum products, petroleum substances, natural gas, oil, oil and gas waste, crude oil, and any components, fractions, or derivatives thereof; and (b) radioactive materials, asbestos containing materials in a friable condition or polychlorinated biphenyls.
Highest Lawful Rate ” means, as of a particular date, with respect to any Loan, the maximum nonusurious interest rate that under applicable federal and New York law may then be contracted for, charged or received by the Lenders in connection with the Obligations.
Hydrocarbon Interests ” means leasehold and other interests in or under oil, gas and other liquid or gaseous hydrocarbon leases wherever located, mineral fee interests, overriding royalty and royalty interests, net profit interests, production payment interests relating to oil, gas or other liquid or gaseous hydrocarbons wherever located including any reserved or residual interest of whatever nature.
Incremental Facility ” has the meaning assigned to such term in Section 2.15(a) .

 
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Indebtedness ” of any Person means, without duplication, (a) all indebtedness for borrowed money; (b) all obligations issued, undertaken or assumed as the deferred purchase price of property or services (other than trade payables entered into in the ordinary course of business on ordinary terms); (c) all undrawn amounts under letters of credit; (d) all non-contingent reimbursement or payment obligations with respect to Surety Instruments; (e) all obligations evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection with the acquisition of property, assets or businesses; (f) all indebtedness created or arising under any conditional sale or other title retention agreement, or incurred as financing, in either case with respect to property acquired by the Person (even though the rights and remedies of the seller or Lender under such agreement in the event of default are limited to repossession or sale of such property) including production payments, net profit interests and other Hydrocarbon Interests subject to repayment out of future Oil and Gas production; (g) Capital Leases; (h) all net obligations with respect to Derivative Contracts; (i) all indebtedness referred to in this definition secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or in property (including accounts and contracts rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such Indebtedness; and (j) all Guaranty Obligations in respect of indebtedness or obligations of others of the kinds referred to in clauses (a) through (i) above. The Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person.

Indemnified Taxes ” means (a) Taxes imposed on or with respect to any payment made by or on account of any Obligation of any Loan Party under any Loan Document, other than Excluded Taxes, and (b) to the extent not otherwise described in clause (a), Other Taxes.
Indemnitee ” has the meaning specified in Section 11.04 .
Independent Auditor ” has the meaning specified in Section 7.01(a) .
Independent Engineer ” means each of (a) Netherland, Sewell and Associates, Inc., (b) Cawley Gillespie and Associates, Inc., (c) Schlumberger Limited , (d) Miller and Lents, LTD and (e) any other independent oil and natural gas reserve engineers selected by the Company and reasonably acceptable to the Administrative Agent.
Initial Budget ” shall have the meaning assigned to such term in Section 5.01 .
Initial Reserve Report ” has the meaning specified in Section 6.11 .
Insolvency Proceeding ” means (a) any case, action or proceeding relating to bankruptcy, reorganization, insolvency, liquidation, receivership, dissolution, winding-up or relief of debtors, or (b) any general assignment for the benefit of creditors, composition, marshaling of assets for creditors, or other, similar arrangement in respect of its creditors generally or any substantial portion of its creditors; undertaken under U.S. federal, state or foreign law, including the Bankruptcy Code.

 
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Interest Payment Date ” means (a) as to any Base Rate Loan (including a Swing Line Loan), the last Business Day of each calendar month prior to the Termination Date and the Termination Date, and (b) as to any LIBOR Loan, the last day of each Interest Period applicable to such Loan.
Interest Period ” means, as to any LIBOR Loan, the period commencing on the Borrowing Date of such Revolving Credit Loan or on the Conversion/Continuation Date on which the Revolving Credit Loan is converted into or continued as LIBOR Loan, and ending on the date one month thereafter; provided that: (a) if any Interest Period would otherwise end on a day that is not a Business Day, that Interest Period shall be extended to the following Business Day unless the result of such extension would be to carry such Interest Period into another calendar month, in which event such Interest Period shall end on the preceding Business Day; (b) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and (c) no Interest Period shall extend beyond the Termination Date.
Interest Rate Type ” means, with respect to any Revolving Credit Loan, the interest rate, being the Base Rate or LIBOR forming the basis upon which interest is charged against such Revolving Credit Loan hereunder.
Interim Facility Effective Date ” has the meaning specified therefor in Section 5.01 .
Interim Order ” means the interim order of the Bankruptcy Court approving the DIP Facility on an interim basis entered by the Bankruptcy Court in the form of Exhibit J , as the same may be amended, modified or supplemented from time to time with the express written joinder or consent of the Administrative Agent, the Majority Lenders and the Company.
Interim Period ” means the period commencing on the Interim Facility Effective Date and ending on the earlier to occur of (a) the Final Facility Effective Date and (b) the Termination Date.
Investments ” has the meaning set forth in Section 8.04 .
IRS ” means the Internal Revenue Service, and any Governmental Authority succeeding to any of its principal functions under the Code.
Issue ” means with respect to any Letter of Credit, to issue or extend the expiry of, or to renew or increase the amount of, such Letter of Credit; and the terms “ Issued ,” “ Issuing ” and “ Issuance ” have corresponding meanings.
Issuing Lender ” means Wells Fargo Bank, National Association in its capacity as the issuer of the Letters of Credit pursuant to Section 2.10 .
LC Application ” means an application or agreement for a standby Letter of Credit in such form as shall be acceptable to the Issuing Lender in its sole discretion, and duly executed by the Company pursuant to Section 2.10(b) .

 
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LC Collateral Account ” means a blocked deposit account held by the Administrative Agent.
LC Obligation ” means, at the time in question, the sum of the Matured LC Obligations plus the aggregate amount available to be drawn under all Letters of Credit then outstanding.
LC Related Document ” means the Letters of Credit, LC Applications and any other document relating to any Letter of Credit including any of the Issuing Lender’s standard form documents for Letter of Credit issuances.
Lead Arranger ” means, collectively, Wells Fargo Securities, LLC acting alone or through or with affiliates selected by it, Citigroup Global Markets Inc. and J.P. Morgan Securities LLC, in their capacities as joint bookrunners and joint lead arrangers with respect to this Agreement.
Lender ” has the meaning specified in the introductory clause hereto and, unless the context otherwise requires, includes the Swing Line Lender.
Lender Derivative Contracts ” means all Derivative Contracts made or entered into, whether directly or indirectly, and whether as a result of assignment or transfer or otherwise, between any Loan Party or any Subsidiary and a Lender Derivative Provider.
Lender Derivative Provider ” means any Lender or any Affiliate of a Lender that becomes a party to a Derivative Contract on or after the Interim Facility Effective Date with any Loan Party or any Subsidiary until such Person ceases to be a Lender or an Affiliate of a Lender.
Lending Office ” means, as to any Lender, the office or offices of such Lender specified as its “ Lending Office ” or “ Domestic Lending Office ” or “ Offshore Lending Office ”, as the case may be, on Schedule 11.02 , or such other office or offices as such Lender may from time to time notify the Company and the Administrative Agent.
Letter of Credit ” means any stand-by letter of credit issued by the Issuing Lender pursuant to this Agreement and upon an LC Application.
Letter of Credit Fee ” means the fee specified in Section 2.07(b) .
Letter of Credit Sublimit ” means, as of any date of determination, an amount equal to the lesser of (a) $50,000,000 and (b) the Commitment Amount in effect on such date.
LIBOR ” means:
(a)    for any interest rate calculation with respect to a LIBOR Rate Loan, the rate of interest per annum determined on the basis of the rate for deposits in Dollars for a period equal to the applicable Interest Period which appears on Reuters Screen LIBOR01 Page (or any applicable successor page) at approximately 11:00 a.m. (London time) two (2) Business Days prior to the first day of the applicable Interest Period (rounded upward, if necessary, to the nearest 1/100th of 1%), provided that if such rate that appears on such screen or page shall be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement. If, for any reason, such rate does not appear on Reuters Screen LIBOR01 Page (or any applicable successor page), then “LIBOR” shall

 
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be determined by the Administrative Agent to be the arithmetic average of the rate per annum at which deposits in Dollars in minimum amounts of at least $5,000,000 would be offered by first class banks in the London interbank market to the Administrative Agent at approximately 11:00 a.m. (London time) two (2) Business Days prior to the first day of the applicable Interest Period for a period equal to such Interest Period.
(b)    for any interest rate calculation with respect to a Base Rate Loan, the rate of interest per annum determined on the basis of the rate for deposits in Dollars in minimum amounts of at least $5,000,000 for a period equal to one month (commencing on the date of determination of such interest rate) which appears on the Reuters Screen LIBOR01 Page (or any applicable successor page) at approximately 11:00 a.m. (London time) on such date of determination, or, if such date is not a Business Day, then the immediately preceding Business Day (rounded upward, if necessary, to the nearest 1/100th of 1%), provided that if such rate that appears on such screen or page shall be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement. If, for any reason, such rate does not appear on Reuters Screen LIBOR01 Page (or any applicable successor page) then “LIBOR” for such Base Rate Loan shall be determined by the Administrative Agent to be the arithmetic average of the rate per annum at which deposits in Dollars in minimum amounts of at least $5,000,000 would be offered by first class banks in the London interbank market to the Administrative Agent at approximately 11:00 a.m. (London time) on such date of determination for a period equal to one month commencing on such date of determination.
Each calculation by the Administrative Agent of LIBOR shall be conclusive and binding for all purposes, absent manifest error.
LIBOR Loan ” means a Loan that bears interest based on LIBOR plus the Applicable Margin.
Lien ” means any security interest, mortgage, deed of trust, pledge, hypothecation, assignment, charge or deposit arrangement, encumbrance, lien (statutory or other) or preferential arrangement of any kind or nature whatsoever in respect of any property (including those created by, arising under or evidenced by any conditional sale or other title retention agreement and the interest of a lessor under a Capital Lease), any financing lease having substantially the same economic effect as any of the foregoing, or the filing of any financing statement naming the owner of the asset to which such lien relates as debtor, under the Uniform Commercial Code or any comparable law and any contingent or other agreement to provide any of the foregoing, but not including (a) the interest of a lessor under a lease on Oil and Gas Properties and (b) the interest of a lessor under an Operating Lease.
Loan ” means an extension of credit by a Lender to the Company under Article II in the form of a Revolving Credit Loan or a Swing Line Loan.
Loan Documents ” means this Agreement, any notes, each Guaranty, the Security Documents, each LC Application and Letter of Credit, the DIP Agency Fee Letter, the DIP Lead Arranger Fee Letter and each other document executed by a Loan Party in connection herewith that by its terms states that it is a Loan Document.

 
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Loan Parties ” means collectively the Company and each of the Guarantors. “Loan Party” means individually, any of the Company or any Guarantor.
Majority Lenders ” means, at any time the Lenders holding more than fifty percent (50%) of the sum of (i) the Effective Amount (with the aggregate amount of each Lender’s risk participation and funded participation in L/C Obligations and Swing Line Loans being deemed “held” by such Lender for purposes of this definition) and (ii) aggregate unused Commitments, provided that, the Commitment of, and the portion of the Effective Amount held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Majority Lenders.
Margin Stock ” means “ margin stock ” as such term is defined in Regulation U or X of the FRB.
Master Agreement ” means any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master derivatives agreement, and any schedules to any of the foregoing.
Material Adverse Effect ” means (a) a material adverse change in, or a material adverse effect upon, the operations, business, properties or financial condition of the Loan Parties taken as a whole; (b) a material impairment of the ability of any Loan Party to perform its material obligations under the Loan Documents; or (c) a material adverse effect upon the legality, validity, binding effect or enforceability against any Loan Party of this Agreement or any other material Loan Document; provided , however , that Material Adverse Effect shall expressly exclude (i) any matters publicly disclosed prior to the filing of the Chapter 11 Cases, (ii) any matters disclosed on or prior to the date hereof in connection herewith (including the Schedules or Exhibits hereto) or otherwise disclosed in connection with any other Loan Document, (iii) any matters disclosed in any first day pleadings or declarations, and (iv) the effect of filing the Chapter 11 Cases, the events and conditions related to, resulting from and/or leading up thereto and the effects thereon and any action required to be taken under the Loan Documents or the DIP Order.
Matured LC Obligation ” means, at any time, the aggregate amount of payments theretofore made by the Issuing Lender in respect of Letters of Credit and not theretofore reimbursed by or on behalf of the Company to the Issuing Lender.
Monthly Status Report ” for a month means a status report prepared monthly by the Company in form, scope and content substantially consistent with historical quarterly reports provided to the Administrative Agent, setting forth as of the last day of such month (a) detailing production from the Oil and Gas Properties, the volumes of Oil and Gas produced and saved, the volumes of Oil and Gas sold, gross revenue, net income, related leasehold operating expenses, severance taxes, other taxes, capital costs and any production imbalances incurred during such period, (b) information concerning any Derivative Contracts entered into by the Company or its Subsidiaries, and (c) such additional information with respect to any of the Oil and Gas Properties as may be reasonably requested by Administrative Agent.

 
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Mortgaged Properties ” means all real property upon which the Loan Parties grant to the Administrative Agent (or its designee) for the benefit of any Secured Party a Lien pursuant to the Mortgages.
Mortgages ” means each mortgage or deed of trust that creates or purports to create a Lien, in each case, from the Loan Parties in favor of the Administrative Agent (or its designee) for the benefit of any Secured Party.
Multiemployer Plan ” means a “ multiemployer plan ”, within the meaning of Section 4001(a)(3) of ERISA, to which a Loan Party or any ERISA Affiliate makes, is making, or is obligated to make contributions or, during the preceding three calendar years, has made, or been obligated to make, contributions.
Net Cash Proceeds ” means (a) with respect to any Disposition or Casualty Event, the cash proceeds (including cash proceeds subsequently received (as and when received) in respect of noncash consideration initially received), net of (i) selling expenses (including reasonable broker’s fees or commissions, legal fees, transfer and similar taxes and the Company’s good faith estimate of income taxes paid or payable in connection with such sale), (ii) amounts provided as a reserve, in accordance with GAAP, against any liabilities under any indemnification obligations or purchase price adjustment associated with such Disposition or Casualty Event ( provided that, to the extent and at the time any such amounts are released from such reserve, such amounts shall constitute Net Cash Proceeds), (iii) the principal amount, premium or penalty, if any, interest and other amounts on any Indebtedness for borrowed money which is secured by the asset sold in such Disposition or Casualty Event and which is required to be repaid with such proceeds (other than any such Indebtedness assumed by the purchaser of such asset) and (iv) the swap termination value due under any Lender Derivative Contract as a result of such Disposition or Casualty Event that is paid by a Loan Party or any of its Subsidiaries and (b) with respect to any (i) issuance or incurrence of Indebtedness that is not permitted by Section 8.05 or (ii) issuance of Equity, the cash proceeds thereof, net of all taxes and customary fees, commissions, costs and other expenses incurred in connection therewith.
New Lender ” has the meaning assigned to such term in Section 2.15(c) .
Notice of Conversion/Continuation ” means a notice in substantially the form of Exhibit B .
Notice of Revolving Credit Borrowing ” means a notice in substantially the form of Exhibit A-1 .
Obligations ” means all advances, debts, liabilities, obligations, covenants and duties owing or to be owing, whether direct or indirect (including those acquired by assignment), absolute or contingent, due or to become due, now existing or hereafter arising or incurred, by the Company or any other Loan Party: (a) to any Lender, the Issuing Lender, the Administrative Agent, or any Indemnitee under any Loan Document; (b) to any Lender Derivative Provider under any Lender Derivative Contract (but excluding any Excluded Swap Obligation); (c) to any Banking Services Lender under any Banking Services Agreement (but excluding any such advances, debts, liabilities,

 
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obligations, covenants and duties arising or incurred prior to the Petition Date under a Banking Services Agreement) and; and (d) all renewals, extensions and rearrangements of the foregoing; in each case including interest accruing subsequent to the filing of a petition or other proceeding under the Bankruptcy Code or other similar proceeding.
Oil and Gas ” means petroleum, natural gas and other related hydrocarbons or minerals or any of them and all other substances produced or extracted in association therewith.
Oil and Gas Liens ” means Liens reserved under oil and gas leases, overriding royalty agreements, net profits agreements, royalty trust agreements, farm-out agreements, division orders, contracts for the sale, purchase, exchange, transportation, gathering or processing of oil, gas or other hydrocarbons, unitizations and pooling designations, declarations, orders and agreements, development agreements, Operating Agreements, production sales contracts, area of mutual interest agreements, gas balancing or deferred production agreements, injection, repressuring and recycling agreements, salt water or other disposal agreements, seismic or geophysical permits or agreements, and other agreements that are customary in the oil and gas business and are entered into by any Loan Party in the ordinary course of business, provided in all instances that such Liens are limited to the assets that are the subject of the relevant agreement.
Oil and Gas Properties ” means Hydrocarbon Interests now owned by the Loan Parties or any Subsidiary thereof and contracts executed in connection therewith and all tenements, hereditaments, appurtenances, and properties belonging, affixed or incidental to such Hydrocarbon Interests, including any and all property, real or personal, now owned by the Loan Parties and situated upon or to be situated upon, and used, built for use, or useful in connection with the operating, working or developing of such Hydrocarbon Interests, including any and all petroleum and/or natural gas wells, buildings, structures, field separators, liquid extractors, plant compressors, pumps, pumping units, field gathering systems, pipelines, tank and tank batteries, fixtures, valves, fittings, machinery and parts, engines, boilers, liters, apparatus, equipment, appliances, tools, implements, cables, wires, towers, taping, tubing and rods, surface leases, rights-of-way, easements and servitudes, and all additions, substitutions, replacements for, and fixtures and attachments to, any and all of the foregoing owned directly or indirectly by the Loan Parties or any Subsidiary thereof.
Operating Agreements ” mean those agreements now or hereafter executed by any Loan Party and other working interest owners of the Oil and Gas Properties in connection with the operation of the Oil and Gas Properties.
Operating Disbursements ” means disbursements (including, for the avoidance of doubt, capital expenditures), other than disbursements on account of Professional Fees, income Taxes, deposits made to utilities pursuant to an order of the Bankruptcy Court, checks outstanding on the Petition Date that are re-issued in accordance with an order of the Bankruptcy Court, Adequate Protection paid to the Prepetition RBL Lenders and the Prepetition Second Lien Noteholders in accordance with the DIP Order, and interest and fees paid in accordance with this Agreement.
Operating Lease ” means an operating lease determined in accordance with GAAP.

 
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Organization Documents ” means (a) for any corporation: the articles of incorporation, the bylaws, any certificate of determination or instrument relating to the rights of the shareholders of such corporation, any shareholder rights agreement, and all applicable resolutions of the board of directors (or any committee thereof) of such corporation; (b) for any limited liability company: the articles of organization, the regulations or operating agreement, certificate of organization and all applicable resolutions of the members of such company; and (c) for any limited partnership: the limited partnership agreement and all Organization Documents for its general partner, as any of the foregoing have been amended or supplemented from time to time.
Other Connection Taxes ” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).
Other Taxes ” means any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies which arise from any payment made hereunder or from the execution, delivery or registration of, or otherwise with respect to, this Agreement or any other Loan Documents.
Parent has the meaning specified in the introductory clause hereto.
Participant ” has the meaning specified in Section 11.06(d) .
PATRIOT Act ” means the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)).
PBGC ” means the Pension Benefit Guaranty Corporation, or any Governmental Authority succeeding to any of its principal functions under ERISA.
Pension Plan ” means a pension plan (as defined in Section 3(2) of ERISA) subject to Title IV of ERISA, other than a Multiemployer Plan, which a Loan Party or any of its Subsidiaries sponsors, maintains, or to which it makes, is making, or is obligated to make contributions, or in the case of a multiple employer plan (as described in Section 4064(a) of ERISA) has made contributions at any time during the immediately preceding five (5) plan years.
Permitted Liens ” has the meaning specified in Section 8.01 .
Permitted Variances ” shall have the meaning assigned to such term in Section 8.20 .
Person ” means an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture or Governmental Authority.
Petition Date ” shall have the meaning assigned to such term in the recitals hereto.

 
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Phase I Report ” means a report detailing the findings of an environmental site assessment conducted by a qualified third party that satisfies the standards set forth in the current American Standards and Testing Materials designated protocol for Phase I Environmental Site Assessments, E1527-05, or any subsequent edition thereof.
Plan ” means an employee benefit plan (as defined in Section 3(3) of ERISA) which is subject to ERISA, other than a Multiemployer Plan, which any Loan Party sponsors, maintains, or to which it makes, is making, or is obligated to make contributions, or in the case of a multiple employer plan (as described in Section 4064(a) of ERISA) has made contributions at any time during the immediately preceding five (5) plan years.
Plan of Reorganization ” shall mean a plan of reorganization that the Loan Parties believe in good faith is confirmable.
Prepetition ” means the time period prior to the Petition Date.
Prepetition Collateral ” means the assets and Property subject to a valid, perfected and non-avoidable lien as of the Petition Date (including any such liens securing obligations under the Prepetition RBL Loan Documents or the Prepetition Second Lien Debt Documents).
Prepetition Intercreditor Agreement ” means (a) the Intercreditor Agreement among the Company, Parent, Breitburn Finance Corporation, the Subsidiaries of the Parent named therein, the Prepetition RBL Agent and the Prepetition Second Lien Trustee, dated as of April 8, 2015, as may from time to time be amended, modified, supplemented or restated from time to time.
Prepetition RBL Agent ” means Wells Fargo Bank, National Association, as administrative agent under the Prepetition RBL Credit Agreement.
Prepetition RBL Credit Agreement ” means that certain Third Amended and Restated Credit Agreement, dated as of November 19, 2014, among the Company, the Parent, the lenders from time to time party thereto (the “ Prepetition RBL Lenders ”) and the Prepetition RBL Agent (as amended, restated, modified, supplemented, or replaced from time to time).
Prepetition RBL Lenders ” shall have the meaning assigned to such term in the definition of Prepetition RBL Credit Agreement.
Prepetition RBL Loan Documents ” means the “Loan Documents” (as defined in the Prepetition RBL Credit Agreement).
Prepetition RBL Obligations ” means the “Obligations” (as defined in the Prepetition RBL Credit Agreement).
Prepetition Second Lien Debt Documents ” means, collectively, the Prepetition Second Lien Indenture, the Prepetition Second Lien Notes, all guarantees of the Prepetition Second Lien Notes, and all other agreements, documents or instruments executed and delivered by the Company or any Guarantor in connection with, or pursuant to, the issuance of the Prepetition Second Lien Notes, as all of such documents are from time to time amended, supplemented or restated in compliance with this Agreement and the Prepetition RBL Loan Documents.

 
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Prepetition Second Lien Indenture ” means the Indenture among the Prepetition Second Lien Trustee, the Company, the Parent, Breitburn Finance Corporation, and certain subsidiaries (including the Company) of the Parent as guarantors, as amended, supplemented, restated or otherwise modified from time to time in accordance with the Prepetition Intercreditor Agreement (and any successor indenture, note purchase, credit or loan agreement or other debt instrument in connection with any refinancing thereof permitted hereunder and under the Prepetition Intercreditor Agreement).
Prepetition Second Lien Noteholders ” means the holders of the Prepetition Second Lien Notes.
Prepetition Second Lien Notes ” means the $650,000,000 of 9.25% senior secured second lien notes due 2020 issued pursuant to the Prepetition Second Lien Indenture.
Prepetition Second Lien Obligations ” means the “Obligations” (as defined in the Prepetition Second Lien Indenture).
Prepetition Second Lien Trustee ” means Delaware Trust Company (as successor by assignment to U.S. Bank National Association), or such other entity serving in the capacity as the “collateral trustee” under the Prepetition Second Lien Indenture to the extent permitted under the Prepetition Second Lien Indenture and the Prepetition Intercreditor Agreement.
Prepetition Senior Unsecured Noteholders ” means the holders of the Prepetition Senior Unsecured Notes.
Prepetition Senior Unsecured Notes ” means (a) the $305,000,000 of 8.625% senior unsecured notes due 2020 and (b) the $850,000,000 of 7.875% senior unsecured notes due 2022.
Principal Business ” means the business of (a) the exploration for, and development, acquisition, production, processing and upstream marketing and transportation of Oil and Gas; and (b) the business of providing services in connection with the production of Oil and Gas.
Professional Fees ” means fees and expenses of Retained Professionals and Committee Member Expenses (each as defined in and in accordance with the DIP Order).
Property ” means any interest in any kind of property or asset, whether real, personal or mixed, tangible or intangible.
Pro Rata Share ” means, as to any Lender at any time, the percentage set forth opposite its name on Schedule 2.01 hereto, as modified by any Assignment and Assumption, subject to adjustment as provided in Section 2.04(b) and Section 2.14 .
Proved Producing Reserves ” means, with respect to the Oil and Gas Properties covered under the most recent Reserve Report delivered to the Administrative Agent and any Oil and Gas Properties acquired by the Loan Parties after the effective date of such Reserve Report, the reasonably anticipated production for each month for the total Oil and Gas classified as “proved producing” for such Oil and Gas Properties; provided , however , for the avoidance of doubt, “Proved Producing

 
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Reserves” shall exclude the “proved developed non-producing” reserves and “proved undeveloped” reserves.
Qualified ECP Guarantor ” means, in respect of any Swap Obligation, each Loan Party that has total assets exceeding $10,000,000 at the time the relevant guaranty of such Loan Party, or the grant by such party of a security interest or lien to secure, or the provision of other support of, such Swap Obligation becomes effective with respect to such Swap Obligation or such other person as constitutes an “eligible contract participant” under the Commodity Exchange Act and can cause another person to qualify as an “eligible contract participant” at such time by entering into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.
Recipient ” means (a) the Administrative Agent, (b) any Lender (including the Swing Line Lender) and (c) the Issuing Lender, as applicable.
Receipts ” means all cash, or other collections received from operations in the ordinary course of business, other than cash proceeds or collections from Dispositions (other than Dispositions permitted under Section 8.02(b) ), Casualty Events (including insurance proceeds or condemnation awards) or any Loans.
Redemption ” means with respect to any Indebtedness, the repurchase, redemption, prepayment, repayment, defeasance or any other acquisition or retirement for value of such Indebtedness. “ Redeem ” has the correlative meaning thereto.
Regulation U ” and “ Regulation X ” means Regulation U and Regulation X, respectively, of the FRB from time to time in effect and shall include any successor or other regulations or official interpretations of the FRB relating to the subject matter addressed therein.
Related Parties ” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, trustees, shareholders, attorneys, employees, agents and advisors of such Person and of such Person’s Affiliates (and each of their respective heirs, successors and assigns).
Release ” means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, or disposing.
Remedial Work ” has the meaning assigned to such term in Section 7.13 .
Reportable Event ” means, any of the events set forth in Section 4043(b) of ERISA or the regulations thereunder, other than any such event for which the 30-day notice requirement under ERISA has been waived in regulations issued by the PBGC.
Requirement of Law ” means, as to any Person, any law (statutory or common), treaty, rule or regulation or determination of a Governmental Authority, in each case applicable to or binding upon the Person or any of its property or to which the Person or any of its property is subject.
Reserve Report ” means a report, in form, scope and content acceptable to the Administrative Agent, covering proved developed and proved undeveloped Oil and Gas reserves attributable to the

 
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Oil and Gas Properties owned by the Company and its Subsidiaries and setting forth with respect thereto, (a) the total quantity of proved developed and proved undeveloped reserves (separately classified as to producing, shut-in, behind pipe, and undeveloped), (b) the estimated future net revenues and cumulative estimated future net revenues, (c) the present discounted value of future net revenues, and (d) such other information and data with respect to such Oil and Gas Properties as the Administrative Agent may reasonably request.
Responsible Officer ” of a Person means any chief executive officer or co-chief executive officer, president, vice president with responsibility for financial matters, chief financial officer or treasurer of (1) such Person, if such Person is a corporation or limited liability company, or (2) the general partner of such Person, if such Person is a partnership.
Restricted Subsidiary ” means all subsidiaries of the Parent (other than the Company) and all subsidiaries of the Company, other than Unrestricted Entities.
Revolving Credit Borrowing ” means a borrowing hereunder consisting of Revolving Credit Loans of the same Interest Rate Type made to the Company on the same day by the Lenders under Article II , and, other than in the case of Base Rate Loans, having the same Interest Period.
Revolving Credit Loan ” has the meaning specified in Section 2.01(a) .
Sanctioned Country ” means, at any time, a country or territory which itself is the subject or target of any Sanctions.
Sanctioned Person ” means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of State, or by the United Nations Security Council, the European Union or any European Union member state, (b) any Person operating, organized or resident in a Sanctioned Country or (c) any Person owned or controlled by any such Person or the Persons described in the foregoing clauses (a) or (b).
Sanctions ” means economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of Commerce or the U.S. Department of State, or (b) the United Nations Security Council, the European Union, any European Union member state or Her Majesty’s Treasury of the United Kingdom.
Scheduled Maturity Date ” means January 15, 2017.
SEC ” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.
Secured Parties means the Administrative Agent, the Lenders, the Lender Derivative Providers and the Banking Services Lenders.
    

 
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Security Agreements ” means each security agreement made by the Borrower and the Guarantors from time to time, and any pledge agreement referred to therein, including any joinder thereto.

Security Documents ” means the Mortgages, the Security Agreements, the DIP Order, and each other joinder, agreement, instrument or document that creates or purports to create, in favor of the Administrative Agent for the benefit of the Secured Parties, a Lien upon any of the Collateral as security for the payment of the Obligations.
subsidiary ” of a Person means any corporation, limited liability company, association, partnership, joint venture or other business entity of which more than 50% of the voting stock or other Equity (in the case of Persons other than corporations) having ordinary voting power for the election of directors or other governing body are owned, or the management of which is controlled directly or indirectly by such Person, or by one or more of the subsidiaries of such Person, or a combination thereof. All references in this Agreement and in the other Loan Documents to the capitalized terms “ Subsidiary ” or “ Subsidiaries ” shall mean Restricted Subsidiaries and shall not include any Unrestricted Entity.
Surety Instruments ” means all letters of credit (including standby), banker’s acceptances, bank guaranties, shipside bonds, surety bonds and similar instruments.
Swap ” means any “swap” within the meaning of section 1a(47) of the Commodity Exchange Act.
Swap Obligation ” means any obligation to pay or perform under any Swap (whether or not such obligation is an Obligation under a Lender Derivative Contract).
Swing Line Borrowing ” means a borrowing of a Swing Line Loan pursuant to Section 2.13 .
Swing Line Lender ” has the meaning specified in the introductory clause hereto.
Swing Line Loan ” has the meaning specified in Section 2.13(a) .
Swing Line Loan Notice ” means a notice of a Swing Line Borrowing pursuant to Section 2.13 , which, if in writing, shall be substantially in the form of Exhibit A-2 .
Swing Line Settlement Date ” means the 15 th day and the last day of each calendar month, provided , however , that if any such day is not a Business Day, the applicable Swing Line Settlement Date shall be the Business Day immediately preceding such day.
Swing Line Sublimit ” means, as of any date of determination, an amount equal to the lesser of (a) $5,000,000 and (b) the Commitment Amount in effect on such date.
Taxes ” means all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

 
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Termination Date ” means the earliest to occur of (a) the Scheduled Maturity Date, (b) the date upon which the Interim Order expires if the Final Order has not been entered, (c) 60 days after the entry of the Interim Order, if the Final Order has not been entered prior to the expiration of such period, (d) the effective date of a Chapter 11 plan in the Chapter 11 Cases, (e) the consummation of a sale of all or substantially all of the equity or assets of the Loan Parties and their Subsidiaries (unless done pursuant to a confirmed Chapter 11 plan), (f) the date of the payment in full in cash by the Loan Parties of all Obligations and the termination of all Commitments in accordance with the terms hereof or (g) the date of termination of the Commitments and/or the acceleration of all of the Obligations under the DIP Facility following the occurrence and during the continuance of an Event of Default in accordance with Section 9.02 .
Testing Date ” shall mean the last day of every month occurring after the Interim Facility Effective Date, which initial Testing Date shall be on May 31, 2016.
Testing Period ” shall have the meaning assigned to such term in Section 7.22(b) .
Total Proved Reserves ” means, with respect to the Oil and Gas Properties covered under the most recent Reserve Report delivered to the Administrative Agent and any Oil and Gas Properties acquired by the Loan Parties after the effective date of such Reserve Report, the reasonably anticipated production for each month for the total Oil and Gas classified as “total proved” for such Oil and Gas Properties; provided , however , the “proved developed non-producing” reserves and “proved undeveloped” reserves included in such calculation shall not exceed 25% of the “total proved” reserves.
Unfunded Pension Liability ” means the excess of a Plan’s benefit liabilities under Section 4001(a)(16) of ERISA, over the current value of that Plan’s assets, determined in accordance with the assumptions used for funding the Pension Plan pursuant to Section 412 of the Code for the applicable plan year.
United States ” and “ U.S .” each means the United States of America.
Unrestricted Entity ” means the entities listed on Schedule 6.19 under the heading “Unrestricted Entities”; provided , however , in the event that (a) any of the foregoing entities (other than the Unrestricted Utica Shale Subsidiary) becomes a Wholly Owned Subsidiary of Parent, or (b) any of the foregoing entities guarantees, or grants any Lien to secure, any Indebtedness of Parent or any Restricted Subsidiary of Parent, then such entity shall no longer be an Unrestricted Entity and shall be a Restricted Subsidiary, and all of the covenants and other provisions of this Agreement applicable to Restricted Subsidiaries shall apply to such Subsidiary. In addition, Parent or Company may, by notice given to the Administrative Agent, designate an Unrestricted Entity as a Restricted Subsidiary, provided that the requirements of this Agreement pertaining to the granting of Collateral and the giving of a Guaranty by such Subsidiary (including Sections 4.01 , 4.02 , 7.14 and 7.15 ) shall be satisfied as a condition of such designation.
Unrestricted Utica Shale Subsidiary ” means Breitburn Collingwood Utica LLC, a Delaware limited liability company.

 
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Unrestricted Salt Water Disposal Subsidiary ” means East Texas Salt Water Disposal Company, a Texas corporation.
U.S. Person ” means a United States person as defined under Section 7701(a)(30) of the
Code.

Utica Shale Properties ” means the Oil and Gas Properties in Alpina, Antrim, Cheboygan, Crawford, Kalkaska, Montmorency, Otsego, Oscoda, Alcona and Presque Isle Counties, Michigan in the interval defined as being from the top of the Cincinnatian formation down to 100 feet above the top of the Glenwood formation, including the Collingwood Utica Shale.
Variance Report ” shall have the meaning assigned to such term in Section 7.22(b) .
Wholly Owned” means, when used to describe a Subsidiary, that all of the Equity of such Subsidiary is owned, directly or indirectly, by Parent or the Company.
1.02    Other Interpretive Provisions . The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms. Unless otherwise specified or the context clearly requires otherwise, the words “ hereof ,” “ herein ,” “ hereunder ” and similar words refer to this Agreement as a whole and not to any particular provision of this Agreement; and subsection, Section, Schedule and Exhibit references are to this Agreement. The term “ documents ” includes any and all instruments, documents, agreements, certificates, indentures, notices and other writings, however evidenced. The term “ including ” is not limiting and means “ including without limitation .” In the computation of periods of time from a specified date to a later specified date, the word “ from ” means “ from and including ,” the words “ to ” and “ until ” each mean “ to but excluding ,” and the word “ through ” means “ to and including .” Unless otherwise expressly provided herein, (a) references to agreements (including this Agreement) and other contractual instruments shall be deemed to include all subsequent amendments and other modifications thereto, but only to the extent such amendments and other modifications are not prohibited by the terms of any Loan Document, and (b) references to any statute or regulation are to be construed as including all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting the statute or regulation. The captions and headings of this Agreement are for convenience of reference only and shall not affect the interpretation of this Agreement. This Agreement and other Loan Documents may use several different limitations, tests or measurements to regulate the same or similar matters. All such limitations, tests and measurements are cumulative and shall each be performed in accordance with their terms. This Agreement and the other Loan Documents are the result of negotiations among and have been reviewed by counsel to the Administrative Agent, the Company and the other parties, and are the products of all parties. Accordingly, they shall not be construed against the Lenders or the Administrative Agent merely because of the Administrative Agent’s or Lenders’ involvement in their preparation.
1.03    Accounting Principles .
(a)    Unless the context otherwise clearly requires, all accounting terms not expressly defined herein shall be construed, and all financial computations required under this Agreement shall be made, in accordance with GAAP, consistently applied as in effect from time to

 
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time, applied in a manner consistent with that used in preparing the audited financial statements for the fiscal year ended December 31, 2015. Notwithstanding the foregoing, for purposes of determining compliance with any covenant (including the computation of any financial covenant) contained herein, Indebtedness of Parent and its subsidiaries shall be deemed to be carried at 100% of the outstanding principal amount thereof, and the effects of FASB ASC 825 and FASB ASC 470-20 on financial liabilities shall be disregarded. References to “ consolidated ,” when it precedes any accounting term, means such term as it would apply to the Loan Parties on a consolidated basis, determined in accordance with GAAP.
(b)    If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Company or the Majority Lenders shall so request, the Administrative Agent, the Lenders and the Company shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Majority Lenders); provided that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) the Company shall provide to the Administrative Agent and the Lenders financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.
ARTICLE II

THE CREDIT

2.01    Amounts and Terms of the Commitments .
(a)    Each Lender severally agrees, on the terms and conditions set forth herein, to make loans denominated in dollars to the Company (each such loan, a “ Revolving Credit Loan ”) from time to time on any Business Day during the period from the Interim Facility Effective Date to the Termination Date; provided that, after giving effect to any Revolving Credit Borrowing (i) with respect to any Lender, the sum of such Lender’s Pro Rata Share of Revolving Credit Loans plus such Lender’s participations in Swing Line Loans and LC Obligation does not exceed such Lender’s Pro Rata Share of the of the Commitment Amount in effect at such time and (ii) the sum of the aggregate principal amount of all Revolving Credit Loans by all Lenders hereunder plus the aggregate principal amount of all Swing Line Loans plus the LC Obligation outstanding at any time does not exceed the Commitment Amount in effect at such time. Subject to the terms and conditions hereof, until the Termination Date, Company may borrow, repay, and reborrow hereunder;
(b)    [Reserved].
(c)    Subject to the terms and conditions of Section 2.10 below and relying upon the agreements of the Lenders set forth herein, the Issuing Lender agrees to issue Letters of Credit as support for Derivative Contracts covering Oil and Gas commodities as approved by the Administrative Agent and other purposes permitted hereunder, upon the request of the Company at any time and from time to time on and after the Interim Facility Effective Date and up to 10 days prior to the Scheduled Maturity Date (the “ Availability Period ”). The Lenders severally agree to

 
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participate in all Letters of Credit and drawings thereunder. No Letter of Credit will be issued in a face amount which, after giving effect to the issuance of such Letter of Credit, would cause the LC Obligation to exceed the Letter of Credit Sublimit or the Effective Amount to exceed the Commitment Amount then in effect.
2.02    Procedure for Borrowings .
(a)    Each Revolving Credit Borrowing of Revolving Credit Loans shall be made upon the Company’s irrevocable written notice delivered to the Administrative Agent in the form of a Notice of Revolving Credit Borrowing duly completed; which notice must be received by the Administrative Agent (x) prior to 1:00 p.m. (Houston, Texas time) three (3) Business Days prior to the requested Borrowing Date, in the case of LIBOR Loans, and (y) prior to 1:00 p.m. (Houston, Texas time) one (1) Business Day prior to the requested Borrowing Date, in the case of Base Rate Loans.
(b)    Each Notice of Revolving Credit Borrowing shall specify (i) the amount of the Revolving Credit Borrowing, which shall be in an aggregate minimum amount (A) for Base Rate Loans equal to the lesser of (y) $500,000 or any multiple integrals of $100,000 in excess thereof or (z) the unadvanced portion of the Commitment Amount, except that clause (y) shall not apply in the case of Loans to fund reimbursement obligations under drawings under Letters of Credit, and (B) for LIBOR Loans, $1,000,000 or any multiple integrals of $500,000 in excess thereof; (ii) the requested Borrowing Date, which shall be a Business Day; (iii) the Interest Rate Type of Loans comprising the Revolving Credit Borrowing; and (iv) for LIBOR Loans the duration of the Interest Period applicable to such Revolving Credit Loans, which shall be one month.
(c)    The number of tranches outstanding of Base Rate Loans and LIBOR Loans, whether under a Borrowing, conversion or continuation shall not exceed ten (10) at any one time.
(d)    The Administrative Agent will promptly notify each Lender of its receipt of any Notice of Revolving Credit Borrowing and of the amount of such Lender’s Pro Rata Share of that Revolving Credit Borrowing.
(e)    [Reserved].
(f)     Provided the applicable conditions in Article V are met, each Lender will make the amount of its Pro Rata Share of each Revolving Credit Borrowing available to the Administrative Agent for the account of the Company at the Administrative Agent’s Payment Office by 11:00 a.m. (Houston, Texas time) on the Borrowing Date requested by the Company in funds immediately available to the Administrative Agent. The proceeds of all such Loans will then be made available to the Company by the Administrative Agent to the Company’s operating account with the Administrative Agent or by wire transfer in accordance with written instructions provided to the Administrative Agent by the Company of like funds as received by the Administrative Agent.

 
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2.03    Conversion and Continuation Elections .
(a)    During the period from the Interim Facility Effective Date to the Termination Date, the Company may, upon irrevocable written notice to the Administrative Agent in accordance with Section 2.03(b) : (i) elect, as of any Business Day, in the case of Base Rate Loans, or as of the last day of the applicable Interest Period, in the case of LIBOR Loans, to convert any such Revolving Credit Loans into Revolving Credit Loans of any other Interest Rate Type; or (ii) elect as of the last day of the applicable Interest Period, to continue any Revolving Credit Loans having Interest Periods expiring on such day; provided, that if at any time a LIBOR Loan in respect of any Revolving Credit Borrowing is reduced, by payment, prepayment, or conversion of part thereof to less than $1,000,000, such LIBOR Loan shall automatically convert into a Base Rate Loan.
(b)    The Company shall deliver a Notice of Conversion/Continuation to be received by the Administrative Agent not later than 1:00 p.m. (Houston, Texas time) at least (i) three (3) Business Days in advance of the Conversion/Continuation Date, if the Revolving Credit Loans are to be converted into or continued as LIBOR Loans; and (ii) one (1) Business Day in advance of the Conversion/Continuation Date, if the Revolving Credit Loans are to be converted into Base Rate Loans, specifying: (A) the proposed Conversion/Continuation Date; (B) the aggregate amount of Revolving Credit Loans to be converted or continued; (C) the Interest Rate Type of Loans resulting from the proposed conversion or continuation; and (D) other than in the case of conversions into Base Rate Loans, the duration of the requested Interest Period, which shall be one month.
(c)    If upon the expiration of any Interest Period applicable to LIBOR Loans the Company has failed to select timely a new Interest Period, which shall be one month, to be applicable to LIBOR Loans, or if any Default or Event of Default then exists, the Company shall be deemed to have elected to convert such LIBOR Loans into Base Rate Loans effective as of the expiration date of such Interest Period.
(d)    The Administrative Agent will promptly notify each Lender of its receipt of a Notice of Conversion/Continuation, or, if no timely notice is provided by the Company, the Administrative Agent will promptly notify each Lender of the details of any automatic conversion. All conversions and continuations shall be made ratably according to the respective Lender’s Pro Rata Share of outstanding principal amounts of the Revolving Credit Loans with respect to which the notice was given.
2.04    Optional Commitment Reductions and Optional Prepayments .
(a)    The Company shall have the right to terminate or to permanently reduce the amount of the Commitment Amount, the Swing Line Sublimit or the Letter of Credit Sublimit, at any time, or from time to time, upon notice given to the Administrative Agent (which shall promptly notify the Lenders) not less than 12 Noon Houston, Texas time three (3) Business Days prior to the date of termination or reduction, which notice shall specify the effective date thereof and the amount of any such reduction (which shall not be less than (i) $1,000,000 or any whole multiple of $500,000 in excess thereof for any reduction of the Commitment Amount, and (ii) $1,000,000 or any whole multiple of $500,000 in excess thereof for any reduction of the Swing Line Sublimit or the Letter of Credit Sublimit). Any such notice given shall be irrevocable and effective only upon receipt by

 
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the Administrative Agent. The Commitment Amount, the Swing Line Sublimit and the Letter of Credit Sublimit once terminated or reduced may not be reinstated.
(b)     [Reserved] .
(c)    Subject to Section 3.04 , the Company may, at any time or from time to time,
(i)    prepay Revolving Credit Loans that are Base Rate Loans, without premium or penalty, upon notice to the Administrative Agent of not less than one (1) Business Day, ratably as to each Lender, in whole or in part, in aggregate minimum principal amounts of $1,000,000 or multiple integrals thereof (unless the outstanding principal amount of all Revolving Credit Loans that are Base Rate Loans is less than $1,000,000, then such prepayments shall be equal to such outstanding principal amount),
(ii)    prepay Revolving Credit Loans that are LIBOR Loans, without premium or penalty (but subject to Section 3.04 ) upon notice to the Administrative Agent not less than three (3) Business Days, ratably as to each Lender, prepay Revolving Credit Loans, in whole or in part, in aggregate minimum principal amounts of $1,000,000 (or, if less, the remaining outstanding principal amount thereof) or multiple integrals thereof plus all interest and expenses then outstanding on the amount prepaid, and
(iii)    upon notice to the Swing Line Lender (with a copy to the Administrative Agent), voluntarily prepay Swing Line Loans in whole or in part without premium or penalty; provided that (i) such notice must be received by the Swing Line Lender and the Administrative Agent not later than 3:00 p.m. Houston, Texas time on the date of the prepayment, and (ii) any such prepayment shall be in a minimum principal amount of $200,000 (or, if less, the remaining outstanding principal amount thereof). Each such notice shall specify the date and amount of such prepayment. If such notice is given by the Company, the Company shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein.
Any notice of prepayment pursuant to clause (i) or (ii) above shall specify the date and amount of such prepayment and the Interest Rate Type(s) of Revolving Credit Loans to be prepaid and shall be irrevocable. The Administrative Agent will promptly notify each Lender of its receipt of any such notice, and of such Lender’s Pro Rata Share of such prepayment. The payment amount specified in such notice shall be due and payable on the date specified therein, together with, in the case of a prepayment pursuant to clauses (ii) and (iii) above, accrued interest to each such date on the amount prepaid and any amounts required pursuant to Section 3.04.
2.05    Mandatory Prepayments of Loans .
(a)     [Reserved] .
(b)     [Reserved] .

 
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(c)     Mandatory Prepayment of Loans .
(i)    If at any time the Effective Amount exceeds the Commitment Amount then in effect, the Company shall immediately prepay the full amount of such excess for application to the outstanding principal amount of the Loans (or, to the extent no Loans are then outstanding, including after giving effect to this Section 2.05(c)(i) , to cash collateralize Letters of Credit up to an amount equal to 100% of the then outstanding LC Obligations).
(ii)    Subject to the terms of the DIP Order, promptly (but in any event within two Business Days) following receipt by a Loan Party or any Subsidiary of Net Cash Proceeds of any Disposition or a series of related Dispositions (other than Dispositions permitted under Section 8.02(a) (except to the extent such Disposition is permitted under Section 8.03(c) ), (b) , (c) or (d) ) in excess of $1,000,000, the Company shall prepay the Loans in an amount equal to 100% of the Net Cash Proceeds received therefrom; provided that the Company may retain 25% of Net Cash Proceeds in respect of Dispositions permitted under Sections 8.02(e) and (f) up to an aggregate amount not to exceed $2,500,000.
(iii)    Subject to the terms of the DIP Order, promptly (but in any event within two Business Days) following receipt by a Loan Party or any Subsidiary of Net Cash Proceeds from any Casualty Event having a fair market value in excess of $10,000,000, the Company shall prepay the Loans in an amount equal to 100% of the Net Cash Proceeds received therefrom.
(iv)    In the event that a Loan Party or any Subsidiary issues or incurs any Indebtedness after the Petition Date (other than as a result of any incurrence of Indebtedness permitted pursuant to Section 8.05 ) or Equity, the Company shall, subject to the terms of the DIP Order, substantially simultaneously with (and in any event not later than the Business Day following) the receipt of such Net Cash Proceeds by a Loan Party or any Subsidiary, prepay the Loans in an amount equal to 100% of such Net Cash Proceeds received therefrom.
(v)    If the Loan Parties and/or any of their Subsidiaries have Excess Cash for any two consecutive Business Day period in excess of $50,000,000, then the Company shall immediately prepay the Loans in the amount of such excess. To effectuate the payment required hereunder, the Loan Parties hereby authorize any Lender, in its capacity as a depository bank, to, upon written notice from the Administrative Agent, initiate debit entries to any and all accounts held by any Loan Party or any Subsidiary thereof with such bank and to debit the amount set forth in such written notice (which, for the avoidance of doubt, shall be an amount not to exceed the lesser of (i) the outstanding principal amount of the Loans and LC Obligations and (ii) such excess amount) from such accounts. The foregoing authorizations to initiate debit entries shall remain in full force and effect until the Administrative Agent terminates such respective arrangement. The Company represents that such Loan Party or a Subsidiary thereof, or any one or more of them, is and will be the owner(s) of all funds in such accounts. The Company, for itself and the other Loan Parties, acknowledges that (x) such debit entries may cause an overdraft of such accounts which may result in such bank’s refusal to honor items drawn on such accounts until adequate deposits are made to such account, (y) such bank is under no duty or obligation to initiate

 
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any debit entry for any purposes and (z) if a debit is not made, the payment may be late or past due.
(vi)    All prepayments of Borrowings under this Section 2.05(c) shall be accompanied by the concurrent payment of the accrued and unpaid interest on the principal amount to be prepaid to but excluding the date of payment.
(vii)    Mandatory prepayments under Section 2.05(c)(ii) through (iv) of this Agreement shall be applied as follows:
(A)     first , on a pro rata basis, to pay accrued and unpaid interest on, and accrued and unpaid expenses in respect of, the Obligations, to the extent due and payable in accordance with the Loan Documents;
(B)     second , on a pro rata basis, to repay any principal amounts or other obligations which have been advanced and are outstanding under the DIP Facility (including to cash collateralize Letters of Credit up to an amount equal to 100% of the then outstanding LC Obligations) and to permanently reduce the Commitments by the amount of such prepayment (unless otherwise approved by the Majority Lenders), until paid in full in cash and terminated; and
(C)     third , any excess shall be paid to the Company or as otherwise required by law.
(viii)    Mandatory prepayments under Section 2.05(c)(i) and (v) of this Agreement shall be applied as follows:
(A)     ffirst , on a pro rata basis, to pay accrued and unpaid interest on, and accrued and unpaid expenses in respect of, the Obligations, to the extent due and payable in accordance with the Loan Documents;
(B)     second , on a pro rata basis, to repay any principal amounts or other obligations which have been advanced and are outstanding under the DIP Facility (including to cash collateralize Letters of Credit up to an amount equal to 100% of the then outstanding LC Obligations) (without a permanent reduction of the Commitments), until paid in full in cash; and
(C)     third , any excess shall be paid to the Company or as otherwise required by law.
(ix)     [Reserved] .
(x)    The Company shall deliver to the Administrative Agent, (i) at the time of each prepayment required under clauses (ii) through (iv) of this Section 2.05(c) , a certificate signed by a Financial Officer of the Company setting forth in reasonable detail the calculation of the amount of such prepayment and (ii) at least one Business Day prior written notice of such prepayment required under this Section 2.05(c) . Each notice of

 
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prepayment shall specify the prepayment date, the type of each Loan being prepaid, the principal amount of each Loan (or portion thereof) to be prepaid and any other amounts to be paid in connection with such prepayment. All prepayments of Borrowings under this Section 2.05(c) shall be subject to Section 3.04 .
2.06    Repayment .
(a)     Revolving Credit Loans. The Company shall repay to the Administrative Agent (for the account of the Lenders in their respective Pro Rata Shares) the aggregate principal amount of Revolving Credit Loans outstanding on the Termination Date, on which date all principal amounts outstanding, plus all accrued but unpaid interest and other amounts then due hereunder or under the other Loan Documents, if not sooner paid, shall be due and payable in full.
(b)     Swing Line Loans. The Company shall repay each Swing Line Loan on the earlier to occur of (i) the first Swing Line Settlement Date to occur after such Loan is made and (ii) the Termination Date.
(c)     Interest .
(i)    Each LIBOR Loan shall bear interest on the aggregate outstanding principal amount thereof for each Interest Period at a rate per annum equal to the lesser of (A) LIBOR, plus the Applicable Margin, or (B) the Highest Lawful Rate. Each Revolving Credit Loan that is a Base Rate Loan and each Swing Line Loan shall bear interest on the aggregate outstanding principal amount thereof from the applicable Borrowing Date or date of conversion or continuation pursuant to Section 2.03 , as the case may be, at a rate per annum equal to the lesser of (A) the Base Rate plus the Applicable Margin or (B) the Highest Lawful Rate.
(ii)    Interest on each Loan shall be paid in arrears on each Interest Payment Date. Interest shall also be paid on the date of any prepayment of Loans under Section 2.04(c) or 2.05(c) (except in the case of Base Rate Loans) for the portion of the Loans so prepaid and upon payment (including prepayment) in full thereof and, during the existence of any Event of Default, interest shall be paid on demand of the Administrative Agent.
(iii)    Notwithstanding Section 2.06(c)(i) , the Company shall pay interest (after, as well as before, entry of judgment thereon, to the extent permitted by law) on the amount of all outstanding Obligations, at a rate per annum equal to the Default Rate automatically while any Event of Default exists.
2.07    Fees .
(a)     Commitment Fee. The Company shall pay to the Administrative Agent, for the account of the Lenders, an aggregate commitment fee at a per annum rate equal to 1.00% times the actual daily amount by which the total Commitments exceed the sum of (i) the outstanding amount of Revolving Credit Loans and (ii) the outstanding amount of LC Obligations (the “ Commitment Fee ”). For the avoidance of doubt, the outstanding amount of any Swing Line Loans

 
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shall not be counted toward or considered usage of the Commitments solely for purposes of calculating the Commitment Fee. Such Commitment Fee shall accrue from the Interim Facility Effective Date to the Termination Date and shall be due and payable monthly in arrears on the first Business Day of each month commencing on the first such Business Day that occurs after the Interim Facility Effective Date through the Termination Date, with the final payment to be made on the Termination Date. The commitment fee provided in this subsection shall accrue at all times after the Interim Facility Effective Date up to the Termination Date, including at any time during which one or more conditions in Section 5.03 are not met.
(b)     Letter of Credit Fee. The Company agrees to pay (i) to the Administrative Agent (for the ratable account of the Lenders in their respective Pro Rata Shares), a fee for each Letter of Credit, to be paid monthly in arrears following the Issuance of such Letter of Credit (including the initial Issuance and any renewal, extension or increase in the amount thereof) in the amount equal to the Applicable Margin for LIBOR Loans multiplied by the undrawn amount available under such Letter of Credit (such fee shall be deemed to be fully earned and owing upon the Issuance of such Letter of Credit, and no refund shall be due in the event such Letter of Credit is terminated prior to its expiry date), provided , however , if any Letter of Credit exists at the time a Lender becomes a Defaulting Lender (X) if the Company has cash collateralized any portion of such Defaulting Lender’s Fronting Exposure pursuant to Section 2.14(b) , then the Company shall not be required to pay any fees to such Defaulting Lender pursuant to this Section 2.07 with respect to such Defaulting Lender’s Fronting Exposure during the period such Defaulting Lender’s Fronting Exposure is cash collateralized, (Y) if the non-Defaulting Lenders’ exposure to Letters of Credit is reallocated pursuant to Section 2.14(d) , then the fees payable to the Lenders pursuant to this Section 2.07 shall be adjusted in accordance with the non-Defaulting Lenders’ exposure to Letters of Credit as so allocated, or (Z) if such Defaulting Lender’s Fronting Exposure is neither cash collateralized pursuant to Section 2.14(b) nor reallocated pursuant to Section 2.14(d) , then, without prejudice to any rights or remedies of the Issuing Lender or any Lender hereunder, all fees that otherwise would have been payable to such Defaulting Lender pursuant to this Section 2.07 with respect to such Defaulting Lender’s Fronting Exposure shall be payable to the Issuing Lender until such Fronting Exposure is cash collateralized and/or reallocated, (ii) to the Issuing Lender for its account a fee for the issuance of each Letter of Credit (including the initial Issuance and any renewal, extension or increase in the amount thereof), quarterly in arrears on the first Business Day following each fiscal quarter end, commencing with the first such date to occur after the Issuance of such Letter of Credit, on the last day of the Availability Period and thereafter on demand, at the rate per annum specified in the DIP Agency Fee Letter multiplied by the aggregate amount available under each Letter of Credit and (iii) to the Issuing Lender for its account, the Issuing Lender’s usual and customary fees for amendment to transfer of or negotiation of the terms of each Letter of Credit. The Administrative Agent shall pay to each Lender its Pro Rata Share of the Letter of Credit Fee paid pursuant to Section 2.07(b)(i) .
(c)     Agency and Lead Arranger Fees. The Company shall pay the fees as required by that certain (i) letter agreement (“ DIP Agency Fee Letter ”) among the Company, the Administrative Agent and Wells Fargo Securities, LLC dated as of May 19, 2016 and (ii) letter agreement (“ DIP Lead Arranger Fee Letter ”) among the Company, the Lead Arrangers and certain of their Affiliates dated as of May 19, 2016.

 
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2.08    Computation of Fees and Interest .
(a)    All computations of interest for Base Rate Loans shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed. All other computations of fees and interest shall be made on the basis of a 360-day year and actual days elapsed (which results in more interest being paid than if computed on the basis of a 365-day year). Interest and fees shall accrue during each period during which interest or such fees are computed from the first day thereof to the last day thereof.
(b)    Each determination of an interest rate by the Administrative Agent shall be conclusive and binding on the Company and the Lenders in the absence of manifest error.
2.09    Payments by the Company; Borrowings Pro Rata .
(a)    All payments to be made by the Company shall be made without set-off, recoupment or counterclaim. All payments by the Company shall be made in immediately available funds to the Administrative Agent by credit to the Company’s operating account at the Administrative Agent’s Payment Office for the account of the Administrative Agent or the Lender to whom such payment is owed, and shall be made in dollars and in immediately available funds, no later than 12 Noon (Houston, Texas time) on the date specified herein. Except to the extent otherwise provided herein, (i) each payment by the Company of fees shall be made pro rata in accordance with their respective Pro Rata Shares, (ii) each payment of principal of Revolving Credit Loans shall be made for the account of the Lenders pro rata in accordance with their respective outstanding principal amount of Revolving Credit Loans, and (iii) each payment of interest on Revolving Credit Loans shall be made for the account of the Lenders pro rata in accordance with their respective shares of the aggregate amount of interest due and payable to the Lenders. Notwithstanding the foregoing, to the extent money is received by the Administrative Agent pursuant to the exercise of remedies under the Security Documents such money shall be applied to the pro rata payment of the Obligations.
(b)    The Administrative Agent will promptly distribute to each Lender its applicable share of such payment in like funds as received. Any payment received by the Administrative Agent later than 12 Noon (Houston, Texas time) may be deemed by the Administrative Agent to have been received on the following Business Day and any applicable interest or fee shall continue to accrue. When the Administrative Agent collects or receives money on account of the Obligations or otherwise pursuant to the Security Documents if such money is insufficient to pay all such Obligations, such money shall be applied first to any reimbursements due Administrative Agent under Section 11.04 or 11.05 .
(c)    Subject to the provisions set forth in the definition of “ Interest Period ” herein, whenever any payment is due on a day other than a Business Day, such payment shall be made on the following Business Day, and such extension of time shall in such case be included in the computation of interest or fees, as the case may be.
(d)    Unless the Administrative Agent receives notice from the Company prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders or the Issuing Lender hereunder that the Company will not make such payment, the Administrative

 
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Agent may assume that the Company has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the Issuing Lender, as the case may be, the amount due. In such event, if the Company has not in fact made such payment, then each of the Lenders or the Issuing Lender, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or the Issuing Lender, with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.
(e)    Except to the extent otherwise expressly provided herein, each borrowing of Revolving Credit Loans hereunder shall be from the Lenders pro rata in accordance with their respective Pro Rata Shares.
2.10    Issuing the Letters of Credit .
(a)    Subject to the terms and conditions set forth herein, the Company may request the Issuing Lender to issue Letters of Credit for its own account or for any of its Subsidiaries, in a form reasonably acceptable to the Administrative Agent and the Issuing Lender, at any time and from time to time during the Availability Period; provided that the Company may not request the issuance, amendment, renewal or extension of Letters of Credit hereunder if (i) the Effective Amount exceeds the Commitment Amount at such time or would exceed the Commitment Amount as a result thereof, or (ii) the aggregate LC Obligation exceeds the Letter of Credit Sublimit or would exceed the Letter of Credit Sublimit as a result thereof.
(b)    In order to request the issuance of a Letter of Credit, the Company shall submit a Notice of Revolving Credit Borrowing and a LC Application in writing by telecopy (or electronic communication, if arrangements for doing so have been approved by the recipient) to the Administrative Agent (who shall promptly notify the Issuing Lender) not later than 1:00 p.m., Houston, Texas time, three (3) Business Days before the requested date of issuance of such Letter of Credit. Each such Notice of Revolving Credit Borrowing and LC Application shall be (i) signed by the Company, (ii) specify the Business Day on which such Letter of Credit is to be issued, (iii) specify the purpose for the requested Letter of Credit, (iv) specify the availability for Letters of Credit under (A) the Commitment Amount and (B) the Letter of Credit Sublimit, as of the date of issuance of such Letter of Credit, (v) specify the expiry date thereof, which shall not be later than the expiration of the Availability Period, and (vi) specify such other matters as may be reasonably required by the Issuing Lender.
(c)    Unless the Issuing Lender has received written notice from any Lender, the Administrative Agent or any Loan Party, at least one Business Day prior to the requested date of issuance or amendment of the applicable Letter of Credit, that one or more applicable conditions set forth in Article V shall not have been satisfied, then, subject to the terms and conditions hereof, the Issuing Lender shall issue such Letter of Credit or amendment, as the case may be, to the specified beneficiary, in each case in accordance with the Issuing Lender’s usual and customary business practices. The Issuing Lender shall provide the Company with a copy of each Letter of Credit so issued. Each such Letter of Credit shall, unless otherwise expressly agreed by the Issuing Lender

 
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and the Company at the time such Letter of Credit is issued, be subject to the rules of the “ International Standby Practices 1998 ” or such later version as may be published by the Institute of International Banking Law and Practice (the “ ISP 1998 ”), or any successor entity, and shall, as to matters not governed by the ISP 1998, be governed by, and construed and interpreted in accordance with, the laws of the State of New York. The Issuing Lender shall have no obligation to issue any Letter of Credit if any Lender is at such time a Defaulting Lender hereunder (unless the Issuing Lender has entered into satisfactory arrangements with the Company or such Defaulting Lender to eliminate the Issuing Lender’s risk with respect to such Defaulting Lender).
(d)    Upon the issuance date of each Letter of Credit, the Issuing Lender shall be deemed, without further action by any party hereto, to have sold to each other Lender, and each other Lender shall be deemed, without further action by any party hereto, to have purchased from the Issuing Lender, a participation, to the extent of such Lender’s Pro Rata Share, in such Letter of Credit, the obligations thereunder and in the reimbursement obligations of the Company due in respect of drawings made under such Letter of Credit. If requested by the Issuing Lender, the other Lenders will execute any other documents reasonably requested by the Issuing Lender to evidence the purchase of such participation. Each Lender acknowledges and agrees that its obligation to acquire participations pursuant to this Agreement in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Default or Event of Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.
(e)    Upon the presentment of any draft for honor under any Letter of Credit by the beneficiary thereof which the Issuing Lender determines is in compliance with the conditions for payment thereunder, the Issuing Lender shall promptly notify the Company and the Administrative Agent thereof, but failure to so notify the Company shall not in any way affect the Company’s obligations hereunder. The Company hereby promises and agrees, at the Company’s option, to either (i) pay to the Administrative Agent for the account of the Issuing Lender, by 2:00 p.m., Houston, Texas time, on the date payment is due as specified in such notice, the full amount of such draft in immediately available funds or (ii) request a Loan pursuant to the provisions of Section 2.01(a) and Section 2.02 of this Agreement in the full amount of such draft, which request shall specify that the Borrowing Date is to be the date payment is due under the Letter of Credit as specified in the Issuing Lender’s notice. The Company will be deemed to have requested a Borrowing of Base Rate Loans to be disbursed on the intended date of honor in an amount equal to the unreimbursed drawing, but subject to the conditions set forth in Section 5.03 (other than delivery of a Notice of Borrowing). If the Company fails timely to make such payment because a Loan cannot be made pursuant to Section 2.01(a) and/or Section 5.03 , each Lender shall, notwithstanding any other provision of this Agreement (including the occurrence and continuance of a Default or an Event of Default), make available to the Administrative Agent for the benefit of the Issuing Lender an amount equal to its Pro Rata Share of the presented draft on the day the Issuing Lender is required to honor such draft. If such amount is not in fact made available to the Administrative Agent by such Lender on such date, such Lender shall pay to the Administrative Agent for the account of the Issuing Lender, on demand made by the Issuing Lender, in addition to such amount, interest thereon at the Federal Funds Rate for the first two days following demand and thereafter

 
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until paid at the Base Rate. Upon receipt by the Administrative Agent from the Lenders of the full amount of such draft, notwithstanding any other provision of this Agreement (including the occurrence and continuance of a Default or an Event of Default) the full amount of such draft shall automatically and without any action by the Company, be deemed to have been a Base Rate Loan as of the date of payment of such draft. Nothing in this Section 2.10(e) or elsewhere in this Agreement shall diminish the Company’s obligation under this Agreement to provide the funds for the payment of, or on demand to reimburse the Issuing Lender for payment of, any draft presented to, and duly honored by, the Issuing Lender under any Letter of Credit, and the automatic funding of a Loan as provided in this Section 2.10(e) shall not constitute a cure or waiver of the Event of Default for failure to timely provide such funds as required in this Section 2.10(e) .
(f)    The Company’s obligation to reimburse the Issuing Lender for amounts paid on account of drafts honored under Letters of Credit shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of (1) any lack of validity or enforceability of any Letter of Credit, any LC Application, or any term or provision therein, (2) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect, (3) payment by the Issuing Lender under a Letter of Credit issued by the Issuing Lender against presentation of a draft or other document that does not comply with the terms of such Letter of Credit or any LC Application, or (4) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section 2.10(f) , constitute a legal or equitable discharge of, or provide a right of setoff against, the Company’s obligations hereunder. Neither the Administrative Agent, the Lenders nor the Issuing Lender, nor any of their Related Parties shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Lender; provided that the foregoing shall not be construed to excuse the Issuing Lender from liability to the Company to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are hereby waived by the Company to the extent permitted by applicable law) suffered by the Company that are caused by the Issuing Lender’s failure to exercise care when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Lender (as finally determined by a court of competent jurisdiction), such Issuing Lender shall be deemed to have exercised all requisite care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented which appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Lender that issued such Letter of Credit may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. The Company hereby waives presentment for

 
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payment (except the presentment required by the terms of any Letter of Credit) and notice of dishonor, protest and notice of protest with respect to drafts honored under the Letters of Credit.
(g)    In the event that any provision of a LC Application is inconsistent with, or in conflict of, any provision of this Agreement, including provisions for the rate of interest applicable to drawings thereunder or rights of setoff or any representations, warranties, covenants or any events of default set forth therein, the provisions of this Agreement shall govern.
(h)    If the Obligations, or any part thereof, are declared or otherwise become immediately due and payable pursuant to Article IX of this Agreement, then all LC Obligations shall become immediately due and payable without regard for actual drawings or payments on the Letters of Credit, and the Company shall be obligated to pay to the Administrative Agent immediately an amount equal to the LC Obligations. All amounts made due and payable by the Company under this Subsection 2.10(h) may be applied as the Issuing Lender elects to any of the various LC Obligations; provided , however , that such amounts applied to the LC Obligations shall be (i) first, applied to the LC Obligation, and (ii) second, held by the Administrative Agent for the benefit of the Issuing Lender and the Lenders as Collateral in the LC Collateral Account until all remaining LC Obligations have been satisfied. This Subsection 2.10(h) shall not limit or impair any rights which the Administrative Agent, the Issuing Lender or any of the Lenders may have under any other document or agreement relating to any Letter of Credit or LC Obligation, including any LC Application.
(i)    The Company hereby grants a security interest in and lien on all cash and other funds paid to the Administrative Agent to be held as cash collateral pursuant to this Section, the LC Collateral Account and all funds therein, and all proceeds of the foregoing, to the Administrative Agent for and on behalf of the Lenders as security for the Obligations. The Company agrees to execute and deliver from time to time such documentation as the Administrative Agent may reasonably request to further assure such security interest. The Company shall also deposit cash collateral pursuant to this paragraph as and to the extent required by Section 2.05(c) .
(j)    If the Company is required to provide cash collateral hereunder as a result of the occurrence of an Event of Default, such amount (to the extent not applied as provided in Section 2.10(h) ) shall be returned to the Company promptly after all Defaults and Events of Default have been waived or cured. If the Company is required to provide an amount of cash collateral hereunder pursuant to Section 2.05(c) , in the event that there exists excess cash collateral, upon the request of the Company the Administrative Agent shall promptly return such excess amount to the Company provided that no Event of Default shall have occurred and be continuing.
2.11    Payments to the Administrative Agent; Several Obligations of the Lenders .
(a)    Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Revolving Credit Borrowing of LIBOR Loans (or, in the case of any Revolving Credit Borrowing of Base Rate Loans, prior to 10:00 a.m. Houston, Texas time on the date of such Revolving Credit Borrowing) that such Lender will not make available to the Administrative Agent such Lender’s share of such Revolving Credit Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with

 
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Section 2.02 (or, in the case of a Revolving Credit Borrowing of Base Rate Loans, that such Lender has made such share available in accordance with and at the time required by Section 2.02 ) and may, in reliance upon such assumption, make available to the Company a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Revolving Credit Borrowing available to the Administrative Agent, then the applicable Lender and the Company severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Company to but excluding the date of payment to the Administrative Agent, at (i) in the case of a payment to be made by such Lender, the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by the Administrative Agent in connection with the foregoing, and (ii) in the case of a payment to be made by the Company, the interest rate applicable to the other Loans included in such Borrowing. If the Company and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to the Company the amount of such interest paid by the Company for such period. If such Lender pays its share of the applicable Revolving Credit Borrowing to the Administrative Agent, then the amount so paid shall constitute such Lender’s Revolving Credit Loan included in such Revolving Credit Borrowing. Any payment by the Company shall be without prejudice to any claim the Company may have against a Lender that shall have failed to make such payment to the Administrative Agent.
(b)    Unless the Administrative Agent shall have received notice from the Company prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders or the Issuing Lender hereunder that the Company will not make such payment, the Administrative Agent may assume that the Company has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the Issuing Lender, as the case may be, the amount due. In such event, if the Company has not in fact made such payment, then each of the Lenders or the Issuing Lender, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or the Issuing Lender, with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.
(c)    The failure of any Lender to make any Loan on any Borrowing Date, to fund any participation or to make a payment pursuant to Section 11.04(c) shall not relieve any other Lender of its obligation to do so, but no Lender shall be responsible for the failure of any other Lender to make the Loan to be made by such other Lender on any Borrowing Date, to fund any participation to be funded by such other Lender, or to make any payment pursuant to Section 11.04(c) to be made by such Lender.

 
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2.12    Sharing of Payments . If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Revolving Credit Loans or the participations in LC Obligations or in Swing Line Loans held by it resulting in such Lender’s receiving payment of a proportion of the aggregate amount of its Revolving Credit Loans or participations and accrued interest thereon greater than its pro rata share thereof as provided herein, then the Lender receiving such greater proportion shall
(a)    notify the Administrative Agent of such fact, and
(b)    purchase (for cash at face value) participations in the Revolving Credit Loans and participations in LC Obligations and Swing Line Loans of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Revolving Credit Loans and other amounts owing them, provided that:
(i)    if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and
(ii)    the provisions of this Section 2.12 shall not be construed to apply to (x) any payment made by or on behalf of the Company pursuant to and in accordance with the express terms of this Agreement (including the application of funds arising from the existence of a Defaulting Lender), (y) the application of cash collateral provided for in Section 2.14 or (z) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Revolving Credit Loans or participations in LC Obligations or Swing Line Loans to any assignee or participant.
Each Loan Party consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against each Loan Party rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of each Loan Party in the amount of such participation.
2.13    Swing Line Loans .
(a)     The Swing Line . Subject to the terms and conditions set forth herein, the Swing Line Lender, in reliance upon the agreements of the other Lenders set forth in this Section 2.13(a) , may in its sole discretion make loans (each such loan, a “ Swing Line Loan ”), to the Company from time to time on any Business Day during the period from the Interim Facility Effective Date to the Termination Date in an aggregate amount not to exceed at any time outstanding the amount of the Swing Line Sublimit, notwithstanding the fact that such Swing Line Loans, when aggregated with the Pro Rata Share of the outstanding amount of Revolving Credit Loans and LC Obligations of the Swing Line Lender, may exceed the amount of such Lender’s Commitment; provided , however , that after giving effect to any Swing Line Loan, (A) the sum of the aggregate outstanding amount of the Revolving Credit Loans plus the Swing Line Loans plus LC Obligations shall not exceed the aggregate Commitments at such time, (B) the sum of the aggregate outstanding amount

 
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of the Revolving Credit Loans of any Lender at such time, plus such Lender’s Pro Rata Share of the outstanding amount of all LC Obligations at such time, plus such Lender’s Pro Rata Share of the outstanding amount of all Swing Line Loans at such time shall not exceed such Lender’s Commitment, (C) the Company shall not use the proceeds of any Swing Line Loan to refinance any outstanding Swing Line Loan, and (D) the Swing Line Lender shall not be under any obligation to make any Swing Line Loan if it shall determine (which determination shall be conclusive and binding absent manifest error) that it has, or by such Swing Line Loan may have, Fronting Exposure. Within the foregoing limits, and subject to the other terms and conditions hereof, the Company may borrow under this Section 2.13(a) , prepay under Section 2.04(c)(iii) , and reborrow under this Section 2.13(a) . Each Swing Line Loan shall bear interest at a rate based on the Base Rate. Immediately upon the making of a Swing Line Loan, each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Swing Line Lender a risk participation in such Swing Line Loan in an amount equal to the product of such Lender’s Pro Rata Share times the amount of such Swing Line Loan. Notwithstanding anything to the contrary contained herein, the Swing Line Lender shall not at any time be obligated to make any Swing Line Loan hereunder if any Lender is at such time a Defaulting Lender, unless the Company has entered into arrangements satisfactory to the Swing Line Lender to eliminate the Swing Line Lender’s risk with respect to such Lender.
(b)     Borrowing Procedures . Each Swing Line Borrowing shall be made upon the Company’s irrevocable notice to the Swing Line Lender and the Administrative Agent, which may be given by telephone. Each such notice must be received by the Swing Line Lender and the Administrative Agent not later than 3:00 p.m., Houston, Texas time on the requested borrowing date, and shall specify (i) the amount to be borrowed, which shall be a minimum of $100,000 or any whole multiple of $50,000 in excess thereof, and (ii) the requested borrowing date, which shall be a Business Day. Each such telephonic notice must be confirmed promptly by delivery to the Swing Line Lender and the Administrative Agent of a written Swing Line Loan Notice, appropriately completed and signed by a Responsible Officer of the Company. Promptly after receipt by the Swing Line Lender of any telephonic Swing Line Loan Notice, the Swing Line Lender will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has also received such Swing Line Loan Notice and, if not, the Swing Line Lender will notify the Administrative Agent (by telephone or in writing) of the contents thereof. Unless the Swing Line Lender has received notice (by telephone or in writing) from the Administrative Agent (including at the request of any Lender) prior to 4:00 p.m., Houston, Texas time on the date of the proposed Swing Line Borrowing (A) directing the Swing Line Lender not to make such Swing Line Loan as a result of the limitations set forth in the proviso to the first sentence of Section 2.13(a) , (B) that one or more of the applicable conditions specified in Article V is not then satisfied, or (C) any Lender is at such time a Defaulting Lender hereunder (unless the Swing Line Lender has entered into satisfactory arrangements with the Company or such Lender to eliminate the Swing Line Lender’s risk with respect to such Lender),then subject to the terms and conditions hereof, the Swing Line Lender will, not later than 4:00 p.m., Houston, Texas time on the borrowing date specified in such Swing Line Loan Notice, make the amount of its Swing Line Loan available to the Company at its office by crediting the account of the Company on the books of the Swing Line Lender in immediately available funds.
(c)     Refinancing of Swing Line Loans .

 
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(i)    The Swing Line Lender at any time in its sole and absolute discretion, may request, on behalf of the Company (which hereby irrevocably authorizes the Swing Line Lender to so request on its behalf), that each Lender make a Revolving Credit Loan (which shall be a Base Rate Loan) in an amount equal to such Lender’s Pro Rata Share of the amount of Swing Line Loans then outstanding. Such request shall be made in writing (which written request shall be deemed to be a Notice of Revolving Credit Borrowing for purposes hereof) and in accordance with the requirements of Section 2.02 , without regard to the minimum and multiples specified therein for the principal amount of Base Rate Loans, but subject to the unutilized portion of the aggregate Commitments and the conditions set forth in Section 5.03 . The Swing Line Lender shall furnish the Company with a copy of the applicable borrowing notice promptly after delivering such notice to the Administrative Agent. Each Lender shall make an amount equal to its Pro Rata Share of the amount specified in such notice available to the Administrative Agent in immediately available funds for the account of the Swing Line Lender at the Administrative Agent’s Payment Office not later than 2:00 p.m. Houston, Texas time on the day specified in such borrowing notice, whereupon, subject to Section 2.13(c)(ii) , each Lender that so makes funds available shall be deemed to have made a Revolving Credit Loan that is a Base Rate Loan to the Company in such amount. The Administrative Agent shall remit the funds so received to the Swing Line Lender.
(ii)    If for any reason any Swing Line Loan cannot be refinanced by such a Revolving Credit Loan in accordance with Section 2.13(c)(i) , the request for Revolving Credit Loans submitted by the Swing Line Lender as set forth herein shall be deemed to be a request by the Swing Line Lender that each of the Lenders fund its risk participation in the relevant Swing Line Loan and each Lender’s payment to the Administrative Agent for the account of the Swing Line Lender pursuant to Section 2.13(c)(i) shall be deemed payment in respect of such participation.
(iii)    If any Lender fails to make available to the Administrative Agent for the account of the Swing Line Lender any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.13(c) by the time specified in Section 2.13(c)(i) , the Swing Line Lender shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the Swing Line Lender at a rate per annum equal to the greater of the Federal Funds Rate and a rate determined by the Swing Line Lender in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by the Swing Line Lender in connection with the foregoing. If such Lender pays such amount (with interest and fees as aforesaid), the amount so paid shall constitute such Lender’s Revolving Credit Loan included in the relevant borrowing or funded participation in the relevant Swing Line Loan, as the case may be. A certificate of the Swing Line Lender submitted to any Lender (through the Administrative Agent) with respect to any amounts owing under this clause (iii) shall be conclusive absent manifest error.

 
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(iv)    Each Lender’s obligation to make Revolving Credit Loans or to purchase and fund risk participations in Swing Line Loans pursuant to this Section 2.13(c) shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which such Lender may have against the Swing Line Lender, the Company or any other Person for any reason whatsoever, (B) the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing. No such funding of risk participations shall relieve or otherwise impair the obligation of the Company to repay Swing Line Loans, together with interest as provided herein.
(d)     Repayment of Participations .
(i)    At any time after any Lender has purchased and funded a risk participation in a Swing Line Loan, if the Swing Line Lender receives any payment on account of such Swing Line Loan, the Swing Line Lender will distribute to such Lender its Pro Rata Share thereof in the same funds as those received by the Swing Line Lender.
(ii)    If any payment received by the Swing Line Lender in respect of principal or interest on any Swing Line Loan is required to be refunded by the Swing Line Lender under any of the circumstances described in Section 11.05 (including pursuant to any settlement entered into by the Swing Line Lender in its discretion), each Lender shall pay to the Swing Line Lender its Pro Rata Share thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned, at a rate per annum equal to the Federal Funds Rate. The Administrative Agent will make such demand upon the request of the Swing Line Lender. The obligations of the Lenders under this clause shall survive the payment in full of the Obligations and the termination of this Agreement.
(e)     Interest for Account of Swing Line Lender . The Swing Line Lender shall be responsible for invoicing the Company for interest on the Swing Line Loans. Until each Lender funds it Revolving Credit Loan or risk participation pursuant to this Section 2.13(e) to refinance such Lender’s Pro Rata Share of any Swing Line Loan, interest in respect of such Pro Rata Share shall be solely for the account of the Swing Line Lender.
(f)     Payments Directly to Swing Line Lender . The Company shall make all payments of principal and interest in respect of the Swing Line Loans directly to the Swing Line Lender.
2.14    Defaulting Lenders .
(a)    Notwithstanding any provision of this Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply for so long as such Lender is a Defaulting Lender, to the extent permitted by Requirements of Law:
(i)    fees shall cease to accrue on the unfunded portion of the Commitment of such Defaulting Lender pursuant to Section 2.07(a) and the Company shall not be required to pay any such fee that otherwise would have been required to have been paid to that Defaulting Lender; and

 
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(ii)    the Commitment and the sum of the outstanding principal amount of the Loans of such Defaulting Lender shall not be included in determining whether all Lenders or the Majority Lenders have taken or may take any action hereunder (including any consent to any amendment or waiver pursuant to Section 11.01 ), provided that the Commitment of such Defaulting Lender may not be increased or extended without the consent of such Defaulting Lender.
(b)     Cash Collateral .
(i)    At any time that there shall exist a Defaulting Lender, if the reallocation described in Section 2.14(d) cannot, or can only partially, be effected then, within three Business Days of the request of the Administrative Agent, the Issuing Lender or the Swing Line Lender, the Company shall deliver to the Administrative Agent cash collateral in an amount sufficient to cover all Fronting Exposure after taking into account any reallocation pursuant to Section 2.14(d) . Notwithstanding anything to the contrary contained in this Agreement, cash collateral provided under Section 2.05(c)(i), this Section 2.14, or Section 9.02 in respect of Letters of Credit or Swing Line Loans shall be held and applied to the satisfaction of the specific LC Obligation, Swing Line Loans, obligations to fund participations therein and other obligations for which the cash collateral was so provided, prior to any other application of such property as may be provided for herein.
(ii)    Cash collateral (or the appropriate portion thereof) provided to reduce Fronting Exposure shall be released promptly following (i) the elimination of the applicable Fronting Exposure or other obligations giving rise thereto (including by the termination of Defaulting Lender status of the applicable Lender or by replacement of the applicable Defaulting Lender by assignment made in accordance with this Agreement) or (ii) the Administrative Agent’s good faith determination that there exists excess cash collateral; provided , however , that cash collateral furnished by or on behalf of a Loan Party shall not be released during the continuance of a Default or Event of Default (and following application as provided in this Section 2.14 may be otherwise applied in accordance with Section 9.02 during the continuance of a Default or Event of Default).
(c)     Reallocation of Payments . Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of that Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article VIII or otherwise, and including any amounts made available to the Administrative Agent by that Defaulting Lender pursuant to Section 10.08 ), shall be applied at such time or times as may be determined by the Administrative Agent as follows:
first, to the payment of any amounts owing by that Defaulting Lender to the Administrative Agent hereunder;
second , to the payment on a pro rata basis of any amounts owing by that Defaulting Lender to the Issuing Lender or Swing Line Lender hereunder;

 
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third , if so determined by the Administrative Agent or requested by the Issuing Lender or Swing Line Lender, to be held as cash collateral for future funding obligations of that Defaulting Lender of any participation in any Swing Line Loan or Letter of Credit in accordance with Section 2.14(b) , unless the Administrative Agent has previously received cash collateral in an amount sufficient to cover future funding obligations after taking into account any reallocation of the Defaulting Lender’s participation obligation;
fourth , as the Company may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which that Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent;
fifth , if so determined by the Administrative Agent and the Company, to be held in a deposit account and released pro rata in order to (i) satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans and funded participations under this Agreement and (ii) cash collateralize the Issuing Lender’s future Fronting Exposure with respect to such Defaulting Lender with respect to future Letters of Credit and Swing Line Loans issued under this Agreement, in accordance with Section 2.14(b) ;
sixth , to the payment of any amounts owing to the Lenders, the Issuing Lender or the Swing Line Lender as a result of any final and non-appealable judgment of a court of competent jurisdiction obtained by any Lender, the Issuing Lender or the Swing Line Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement;
seventh , so long as no Default or Event of Default exists, to the payment of any amounts owing to the Company as a result of any final and non-appealable judgment of a court of competent jurisdiction obtained by the Company against such Defaulting Lender as a result of such Defaulting Lender's breach of its obligations under this Agreement or against such Defaulting Lender’s Affiliate that is a Lender Derivative Provider under any Derivative Contract as a result of such Affiliate’s breach of its obligations under such Derivative Contract; and
eighth , to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans or Matured LC Obligations in respect of which that Defaulting Lender has not fully funded its appropriate share and (y) such Loans or Matured LC Obligations were made at a time when the conditions set forth in Section 5.03 were satisfied or waived, such payment shall be applied solely to pay the Loans of, and Matured LC Obligations owed to, all non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or Matured LC Obligations owed to, that Defaulting Lender. Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post cash collateral pursuant to this Section 2.14(c) shall be deemed paid to and redirected by that Defaulting Lender, and each Lender irrevocably consents hereto.

 
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(d)     Reallocation of Participations to Reduce Fronting Exposure. During any period in which there is a Defaulting Lender, such Defaulting Lenders’ participation in LC Obligations and Swing Line Loans shall be reallocated among the non-Defaulting Lenders in accordance with the Pro Rata Shares (computed without giving effect to the Commitment of that Defaulting Lender), and for purposes of computing the amount of the obligation of each non-Defaulting Lender to acquire, refinance or fund participations in Letters of Credit or Swing Line Loans pursuant to Sections 2.10 and 2.13 , the “Pro Rata Share” of each non-Defaulting Lender shall be computed without giving effect to the Commitment of that Defaulting Lender; provided , that the aggregate obligation of each non-Defaulting Lender to acquire, refinance or fund participations in Letters of Credit and Swing Line Loans shall not exceed the positive difference, if any, of (1) the Commitment of that non-Defaulting Lender minus (2) the outstanding principal amount of Loans owed to such non-Defaulting Lender and its participations in LC Obligations and Swing Line Loans.
(e)     Defaulting Lender Cure. If the Company, the Administrative Agent, the Issuing Lender and the Swing Line Lender agree in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent shall notify the Lender and on the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any cash collateral), such Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent shall determine to be necessary to cause the Loans and funded and unfunded participations in Letters of Credit and Swing Line Loans to be held pro rata by the Lenders in accordance with their Pro Rata Shares (without giving effect to Section 2.14(d) ), whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Company while that Lender was a Defaulting Lender; and provided further , that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.
2.15    Increase in DIP Facility .
(a)     Request for Increase . The Company may on a one-time basis on the Final Facility Effective Date increase the Commitment Amount by an amount not exceeding $75,000,000 (an “ Incremental Facility ”); provided (i) notice of such request is provided to the Administrative Agent and the Lenders by the Company at least ten (10) Business Days prior to the Final Facility Effective Date, (ii) the Administrative Agent has received commitments for the Incremental Facility from the Lenders or the New Lenders in the amount of the requested increase, (iii) each of the conditions set forth in Article V are satisfied, and (iv) any such request for an Incremental Facility shall be in a minimum amount of $25,000,000 and in $25,000,000 increments.
(b)     Lender Elections to Increase . Each Lender shall notify the Administrative Agent at least three (3) Business Days prior to the Final Facility Effective Date whether or not it agrees to increase its Commitment and, if so, by what amount. Any Lender not responding within such time period shall be deemed to have declined to increase its Commitment.

 
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(c)     Notification by Administrative Agent; Additional Revolving Lenders . To achieve the full amount of a requested increase, and subject to the approval of the Administrative Agent, the Administrative Agent may also invite additional Eligible Assignees to become Lenders pursuant to a joinder agreement (“ New Lenders ”) in form and substance satisfactory to the Administrative Agent and its counsel.
(d)     Effective Date and Allocations . If the DIP Facility is increased in accordance with this Section, the Lead Arrangers shall determine the final allocation of such increase. The Administrative Agent shall promptly notify the Company and the Lenders and the New Lenders of the final allocation of such increase.
(e)     Conditions to Effectiveness of Increase . As a condition precedent to such increase, the Company shall deliver to the Administrative Agent a certificate of each Loan Party dated as of the Final Facility Effective Date (in sufficient copies for each Lender) signed by a Responsible Officer of such Loan Party (i) to the extent not addressed on the Interim Facility Effective Date in form and substance satisfactory to the Administrative Agent, certifying and attaching the resolutions adopted by such Loan Party approving or consenting to such increase, and (ii) in the case of the Company, certifying that, before and after giving effect to such increase, (A) the representations and warranties contained in Article VI and the other Loan Documents are true and correct, on and as of the Final Facility Effective Date, and (B) both before and after giving effect to the Incremental Facility, no Default exists. The Company shall deliver or cause to be delivered any other customary documents as reasonably requested by the Administrative Agent in connection with any Incremental Facility. The Company shall prepay any Loans outstanding on the Final Facility Effective Date (and pay any additional amounts required pursuant to Section 3.04 ) to the extent necessary to keep the outstanding Loans ratable with any revised Pro Rata Share arising from any nonratable increase in the Commitments under this Section.
(f)     Conflicting Provisions . This Section shall supersede any provisions in Section 2.12 or 11.01 to the contrary.
(g)     Incremental Facility . Except as otherwise specifically set forth herein, all of the other terms and conditions applicable to such Incremental Facility shall be identical to the terms and conditions applicable to the DIP Facility.
ARTICLE III

TAXES, YIELD PROTECTION AND ILLEGALITY;
REPLACEMENT OF LENDERS
3.01    Taxes .
(a)     Payments Free of Taxes. Any and all payments by or on account of any Obligation of any Loan Party under any Loan Document shall, except as required by any Requirement of Law, be made free and clear of and without reduction or withholding for any Indemnified Taxes or Other Taxes, provided that if any Loan Party or the Administrative Agent shall be required by a Requirement of Law to deduct any Indemnified Taxes (including any Other Taxes) from such payments, then (i) the sum payable by the applicable Loan Party shall be increased

 
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as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the applicable Recipient, as the case may be, receives an amount equal to the sum it would have received had no such deductions been made, (ii) the applicable Loan Party or Administrative Agent shall make such deductions and (iii) the applicable Loan Party or Administrative Agent shall timely pay the full amount deducted to the relevant Governmental Authority in accordance with Requirements of Law.
(b)     Payment of Other Taxes by the Company. Without limiting the provisions of Section 3.01(a) above, the Company shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with Requirements of Law.
(c)     Indemnification by the Company. The Company shall indemnify each Recipient, within 10 days after demand therefor, for the full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) payable or paid by such Recipient, as the case may be, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Company by a Lender or the Issuing Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender or the Issuing Lender, shall be conclusive absent manifest error.
(d)     Indemnification by the Lenders. Each Lender shall severally indemnify the Administrative Agent, within ten (10) days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that any Loan Party has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Loan Parties to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 11.06(d) relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by the Administrative Agent to the Lender from any other source against any amount due to the Administrative Agent under this paragraph (d).
(e)     Evidence of Payments. As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Company to a Governmental Authority, the Company shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.
(f)     Status of Lenders .

 
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(i)    Any Lender that is entitled to an exemption from or reduction of withholding Tax under the law of the jurisdiction in which the Company is resident for Tax purposes, or any treaty to which such jurisdiction is a party, with respect to payments hereunder or under any other Loan Document shall deliver to the Company (with a copy to the Administrative Agent), at the time or times prescribed by Requirements of Law or reasonably requested by the Company or the Administrative Agent, such properly completed and executed documentation prescribed by Requirements of Law as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if requested by the Company or the Administrative Agent, shall deliver such other documentation prescribed by Requirements of Law or reasonably requested by the Company or the Administrative Agent as will enable the Company or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 3.01(f)(ii) and Section 3.01(f)(iii)(A) through Section 3.01(f)(iii)(E) ) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.
(ii)    Without limiting the generality of the first paragraph of this Section (f), any Lender, Issuing Lender or Administrative Agent that is a U.S. Person shall deliver to the Company and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Person becomes a party to this Agreement (and from time to time thereafter upon the request of the Company or the Administrative Agent), duly completed copies of Internal Revenue Service Form W-9 certifying that such Person is exempt from U.S. federal backup withholding tax.
(iii)    Without limiting the generality of the first paragraph of this Section (f), any Foreign Lender shall deliver to the Company and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a party to this Agreement (and from time to time thereafter upon the request of the Company or the Administrative Agent, but only if such Foreign Lender is legally entitled to do so), whichever one or more of the following is applicable:
(A)    duly completed copies of Internal Revenue Service Form W-8BEN or W-8BEN-E claiming eligibility for benefits of an income tax treaty to which the United States of America is a party,
(B)    duly completed copies of Internal Revenue Service Form W- 8ECI or W-8EXP,
(C)    in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under section 881(c) of the Code, (x) a certificate substantially in the form of Exhibit I-1 to the effect that such Foreign Lender is not (A) a “bank” within the meaning of section 881(c)(3)(A) of the Code, (B) a “10-percent

 
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shareholder” of the Company within the meaning of section 881(c)(3)(B) of the Code, or (C) a “controlled foreign corporation” described in section 881(c)(3)(C) of the Code (a “ U.S. Tax Compliance Certificate”) and (y) duly completed copies of Internal Revenue Service Form W-8BEN or W-8BEN-E, as applicable,
(D)    to the extent a Foreign Lender is not the beneficial owner, executed originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN or W-8BEN-E, a U.S. Tax Compliance Certificate substantially in the form of Exhibit I-2 or Exhibit I-3 , IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit I-4 on behalf of each such direct and indirect partner,
(E)    if a payment made to a Foreign Lender under any Loan Document would be subject to a withholding Tax imposed by FATCA as a result of such Foreign Lender failing to comply with the applicable reporting requirements of FATCA (including those contained in Sections 1471(b) or 1472(b) of the Code, as applicable), such Foreign Lender shall deliver such documentation or certifications as are required to evidence compliance by the Foreign Lender with FATCA for purposes of determining if the Foreign Lender is subject to such withholding Tax and such additional documentation reasonably requested by the Company or the Administrative Agent as may be necessary for the Company and the Administrative Agent to comply with their obligations under FATCA and to determine that such Foreign Lender has complied with such Foreign Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment (solely for purposes of this clause (E), “FATCA” shall include any amendments made to FATCA after the date of this Agreement), or
(F)    any other form prescribed by Requirements of Law as a basis for claiming exemption from or a reduction in United States Federal withholding Tax duly completed together with such supplementary documentation as may be prescribed by Requirements of Law to permit the Company to determine the withholding or deduction required to be made.
Each Lender, Issuing Lender and Administrative Agent agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Company and the Administrative Agent in writing of its legal inability to do so.
(g)     Treatment of Certain Refunds. If the Administrative Agent, a Lender or the Issuing Lender determines, in its sole discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by a Loan Party or with respect to which a Loan Party has paid additional amounts pursuant to this Section, it shall pay to such Loan Party an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts

 
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paid, by the Loan Party under this Section with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent, such Lender or the Issuing Lender, as the case may be, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund), provided that the Loan Party, upon the request of the Administrative Agent, such Lender or the Issuing Lender, agrees to repay the amount paid over to such Loan Party (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent, such Lender or the Issuing Lender in the event the Administrative Agent, such Lender or the Issuing Lender is required to repay such refund to such Governmental Authority. This Section 3.01(g) shall not be construed to require the Administrative Agent, any Lender or the Issuing Lender to make available its tax returns (or any other information relating to its Taxes that it deems confidential) to the Company or any other Person.
(h)     Survival. Each party’s obligations under this Section 3.01 shall survive the resignation or replacement of Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all other Obligations.
(i)     Lender. For purposes of this Section 3.01 , the term Lender shall include the Swing Line Lender.
3.02    Illegality .
(a)    If any Lender determines that the introduction of any Requirement of Law, or any change in any Requirement of Law, or in the interpretation or administration of any Requirement of Law, has, on or after the Interim Facility Effective Date, made it unlawful, or that, on or after the Interim Facility Effective Date, any central bank or other Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending Office to make LIBOR Loans, then, on notice thereof by the Lender to the Company through the Administrative Agent, any obligation of that Lender to make LIBOR Loans shall be suspended until the Lender notifies the Administrative Agent and the Company that the circumstances giving rise to such determination no longer exist; such notice to be promptly given upon the determination that such circumstances no longer exist.
(b)    If a Lender determines that it is unlawful to maintain any LIBOR Loan, the Company shall, upon its receipt of notice of such fact and demand from such Lender (with a copy to the Administrative Agent), convert such LIBOR Loans of that Lender then outstanding into a Base Rate Loan without regard to conditions precedent described in Section 5.03(b) , either on the last day of the Interest Period thereof, if the Lender may lawfully continue to maintain such LIBOR Loans to such day, or immediately, if the Lender may not lawfully continue to maintain such LIBOR Loan. Upon any such conversion, the Company shall pay accrued interest on the amount so converted. In addition, with respect to LIBOR Loans, if any such conversion occurs on a day which is not the last day of the then current Interest Period with respect thereto, the Company shall pay the affected Lender such amounts, if any, as may be required pursuant to Section 3.04 .

 
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(c)    If the obligation of any Lender to make or maintain LIBOR Loans has been so terminated or suspended, all Loans which would otherwise be made or maintained by the Lender as LIBOR Loans shall be instead Base Rate Loans.
(d)    Before giving any notice to the Administrative Agent under this Section, the affected Lender shall designate a different Lending Office with respect to its LIBOR Loans if such designation will avoid the need for giving such notice or making such demand and will not, in the judgment of the Lender, be illegal or otherwise disadvantageous to the Lender.
3.03    Increased Costs and Reduction of Return .
(a)     Increased Costs Generally. If any Change in Law shall:
(i)    impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender or the Issuing Lender; or
(ii)    subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or
(iii)    impose on any Lender or the Issuing Lender or the London interbank market any other condition, cost or expense (other than Taxes) affecting this Agreement or LIBOR Loans made by such Lender or any Letter of Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost to such Lender or other Recipient of making or maintaining any Loan (or of maintaining its obligation to make any such Loan), or to increase the cost to such Lender or the Issuing Lender of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Lender or the Issuing Lender hereunder (whether of principal, interest or any other amount) then, upon request of such Lender or the Issuing Lender, the Company will pay to such Lender or the Issuing Lender, as the case may be, such additional amount or amounts as will compensate such Lender or the Issuing Lender, as the case may be, for such additional costs incurred or reduction suffered.
(b)     Capital Requirements. If any Lender or the Issuing Lender determines that any Change in Law affecting such Lender or the Issuing Lender or any lending office of such Lender or such Lender’s or the Issuing Lender’s holding company, if any, regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender’s or the Issuing Lender’s capital or on the capital of such Lender’s or the Issuing Lender’s holding company, if any, as a consequence of this Agreement, the Commitments of such Lender or the Loans made by, or participations in Letters of Credit or Swing Line Loans held by, such Lender, or the Letters of Credit issued by the Issuing Lender, to a level below that which such Lender or the Issuing Lender or such Lender’s or the Issuing Lender’s holding company could have achieved but for such Change

 
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in Law (taking into consideration such Lender’s or the Issuing Lender’s policies and the policies of such Lender’s or the Issuing Lender’s holding company with respect to capital adequacy and liquidity), then from time to time the Company will pay to such Lender or the Issuing Lender, as the case may be, such additional amount or amounts as will compensate such Lender or the Issuing Lender or such Lender’s or the Issuing Lender’s holding company for any such reduction suffered.
(c)     Certificates for Reimbursement. A certificate of a Lender or the Issuing Lender setting forth the amount or amounts necessary to compensate such Lender or the Issuing Lender or its holding company, as the case may be, as specified in Sections 3.03(a) or (b) and delivered to the Company shall be conclusive absent manifest error. The Company shall pay such Lender or the Issuing Lender, as the case may be, the amount shown as due on any such certificate within 10 days after receipt thereof.
(d)     Delay in Requests. Failure or delay on the part of any Lender or the Issuing Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s or the Issuing Lender’s right to demand such compensation, provided that the Company shall not be required to compensate a Lender or the Issuing Lender pursuant to this Section for any increased costs incurred or reductions suffered more than nine months prior to the date that such Lender or the Issuing Lender, as the case may be, notifies the Company of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or the Issuing Lender’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the nine-month period referred to above shall be extended to include the period of retroactive effect thereof).
3.04    Funding Losses . The Company shall reimburse each Lender and hold each Lender harmless from any loss or expense excluding consequential losses which the Lender may sustain or incur as a consequence of: (a) the failure of the Company to make on a timely basis any payment of principal of any LIBOR Loan; (b) the failure of the Company to borrow, continue or convert a Loan after the Company has given (or is deemed to have given) a Notice of Revolving Credit Borrowing or a Notice of Conversion/Continuation (including by reason of the failure to satisfy any condition precedent thereto); (c) the failure of the Company to make any prepayment in accordance with any notice delivered under Section 2.04 ; (d) the prepayment (including pursuant to Section 2.05 or 2.06 ) or other payment (including after acceleration thereof) of a LIBOR Loan on a day that is not the last day of the relevant Interest Period; (e) the reallocation of any LIBOR Loan pursuant to Section 2.04(b) ; or (f) the automatic conversion under Section 2.03 of any LIBOR Loan to a Base Rate Loan on a day that is not the last day of the relevant Interest Period; including any such loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain its LIBOR Loans or from fees payable to terminate the deposits from which such funds were obtained but excluding any loss of Applicable Margin after the date of such failure, prepayment or conversion. For purposes of calculating amounts payable by the Company to the Lenders under this Section and under Section 3.03(a) , each LIBOR Loan made by a Lender (and each related reserve, special deposit or similar requirement) shall be conclusively deemed to have been funded at LIBOR used in determining the interest rate for such LIBOR Loan by a matching deposit or other borrowing in the interbank eurodollar market for a comparable amount and for a comparable period, whether or not such LIBOR Loan is in fact so funded.

 
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3.05    Inability to Determine Rates . If Administrative Agent determines that for any reason adequate and reasonable means do not exist for determining LIBOR for any requested Interest Period with respect to a proposed LIBOR Loan, or if the Majority Lenders notify the Administrative Agent that the LIBOR applicable pursuant to Section 2.06(c) for any requested Interest Period with respect to a proposed LIBOR Loan does not adequately and fairly reflect the cost to such Lenders of funding such Loan, the Administrative Agent will promptly so notify the Company and each Lender. Thereafter, the obligation of the Lenders to make or maintain LIBOR Loans hereunder shall be suspended until the Administrative Agent upon the instruction of the Majority Lenders revokes such notice in writing; such written revocation to be promptly given upon determination that such circumstances no longer exist. Upon receipt of such notice, the Company may revoke any Notice of Revolving Credit Borrowing or Notice of Conversion/Continuation then submitted by it. If the Company does not revoke such notice, the Lenders shall make, convert or continue the Loans, as proposed by the Company, in the amount specified in the applicable notice submitted by the Company, but such Loans shall be made, converted or continued as Base Rate Loans instead of LIBOR Loans.
3.06    Certificates of Lenders . Any Lender claiming reimbursement or compensation under this Article III shall deliver to the Company (with a copy to the Administrative Agent) a certificate setting forth in reasonable detail the amount payable to the Lender hereunder and such certificate shall be conclusive and binding on the Company in the absence of manifest error provided , however , that such Lender shall only be entitled to collect amounts incurred within 180 days of such notice.
3.07    Mitigation Obligations; Replacement of Lenders .
(a)     Designation of a Different Lending Office. If any Lender requests compensation under Section 3.03 , or requires the Company to pay any Indemnified Taxes or any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01 , then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 3.01 or 3.03 , as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender in its sole discretion. The Company hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.
(b)     Replacement of Lenders. If (i) any Lender requests compensation under Section 3.03 , (ii) the Company is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01 , (iii) the obligation of any Lender to make, continue or convert Base Rate Loans into LIBOR Loans is suspended under Section 3.02 , (iv) any Lender is a Defaulting Lender, or (v) any Lender refuses to consent to any amendment, waiver or other modification of any Loan Document requested by the Company that requires the consent of a greater percentage of the Lenders than the Majority Lenders and such amendment, waiver or other modification is consented to by the Majority Lenders, then the Company

 
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may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 11.06 ), all of its interests, rights (other than its existing rights to payments pursuant to Section 3.03 or Section 3.01 ) and obligations under this Agreement and the related Loan Documents to an Eligible Assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that:
(i)    the Company shall have paid to the Administrative Agent the assignment fee specified in Section 11.06 ;
(ii)    such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and participations in LC Obligations, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 3.04 ) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Company (in the case of all other amounts);
(iii)    in the case of any such assignment resulting from a claim for compensation under Section 3.03 or payments required to be made pursuant to Section 3.01 , such assignment will result in a reduction in such compensation or payments thereafter; and
(iv)    such assignment does not conflict with applicable law.
A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Company to require such assignment and delegation cease to apply. If any Lender required to make an assignment and delegation pursuant to this Section 3.07(b) shall refuse or fail to execute and deliver an Assignment and Assumption, such Lender shall be deemed, effective as of the date upon which such Lender shall have received payment of the amounts required to be paid pursuant to clause (ii) of the proviso to Section 3.07(b) , to have executed and delivered such Assignment and Assumption.
3.08    Survival . The agreements and obligations of the Company in this Article III shall survive the payment of all other Obligations.
ARTICLE IV

SECURITY

4.01    Priority and Liens . The parties hereto acknowledge and agree that, upon entry of the DIP Order and the delivery and execution of this Agreement, the Obligations of the Loan Parties shall at all times be secured and perfected pursuant to, and have the priority as set forth in, the DIP Order.
4.02    [Reserved] .

 
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4.03    Perfection and Protection of Security Interests and Liens . The Loan Parties will from time to time deliver to the Administrative Agent any financing statements, amendment, assignment and continuation statements, extension agreements and other documents, properly completed and executed (and acknowledged when required) by each Loan Party, as applicable, in form and substance reasonably satisfactory to the Administrative Agent, which the Administrative Agent reasonably requests for the purpose of perfecting, confirming, or protecting any Liens or other rights in Collateral securing any Obligations.
4.04    Offset . To secure the repayment of the Obligations the Company hereby grants the Administrative Agent and each Lender a security interest, a lien, and a right of offset, each of which shall be in addition to all other interests, liens, and rights of the Administrative Agent at common law, under the Loan Documents, or otherwise, and each of which shall be upon and against (a) any and all moneys, securities or other property (and the proceeds therefrom) of the Company now or hereafter held or received by or in transit to the Administrative Agent or any Lender from or for the account of the Company, whether for safekeeping, custody, pledge, transmission, collection or otherwise, (b) any and all deposits (general or special, time or demand, provisional or final) of the Company with the Administrative Agent or any Lender, and (c) any other credits and claims of the Company at any time existing against the Administrative Agent or any Lender, including claims under certificates of deposit. During the existence of any Event of Default, the Administrative Agent or any Lender is hereby authorized to foreclose upon, offset, appropriate, and apply, at any time and from time to time, without notice to the Company, any and all items hereinabove referred to against the Obligations then due and payable.
4.05    Subsidiary Guaranty and Security Agreement .
(a)    Each Subsidiary of a Loan Party now existing or created, acquired or coming into existence after the date hereof, including each of the Guarantors, shall pursuant to Section 7.15 , promptly upon request by the Administrative Agent, execute and deliver to the Administrative Agent an absolute and unconditional guaranty of the timely repayment, and the due and punctual performance, of the Obligations of the Company hereunder, which Guaranty (or joinder thereto) shall be substantially in the form and substance of Exhibit G . The Company and its Subsidiaries will cause each of their Subsidiaries to deliver to the Administrative Agent, simultaneously with its delivery of such Guaranty (or joinder), written evidence satisfactory to the Administrative Agent that such Subsidiary has taken all organizational action necessary to duly approve and authorize its execution, delivery and performance of such Guaranty and any other documents which it is required to execute.
(b)    Each Loan Party is mutually dependent on each other in the conduct of their respective businesses, with the credit needed from time to time by each often being provided by another or by means of financing obtained by one such Affiliate with the support of the other for their mutual benefit and the ability of each to obtain such financing is dependent on the successful operations of the other. The board of directors, managers or general partner, where applicable, of each Guarantor has determined that such Guarantor’s execution, delivery and performance of this Agreement may reasonably be expected to directly or indirectly benefit such Guarantor and is in the best interests of such Guarantor.

 
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(c)    The direct or indirect value of the consideration received and to be received by such Guarantor in connection herewith is reasonably worth at least as much as the liability and obligations of each Guarantor hereunder, and the incurrence of such liability and obligations in return for such consideration may reasonably be expected to benefit such Guarantor, directly or indirectly.
ARTICLE V

CONDITIONS PRECEDENT

5.01    Interim Facility Effective Date . The effectiveness of this Agreement and the obligation of each Lender to make its Loans hereunder and the obligation of the Issuing Lender to issue Letters of Credit hereunder during the Interim Period shall commence as of the Business Day (the “ Interim Facility Effective Date ”) when each of the following conditions precedent shall have been satisfied in a manner satisfactory to the Administrative Agent:
(a)    the Petition Date shall have occurred;
(b)    the Administrative Agent shall have received duly executed and delivered counterparts of this Agreement and the other Loan Documents;
(c)    The Administrative Agent will have received a certificate of the Secretary, Assistant Secretary or a Responsible Officer with similar responsibilities of each Loan Party, or in the event that such Loan Party is a limited partnership, of such Person’s general partner, certifying as of the Interim Facility Effective Date: (i) Resolutions of its board of directors or members, authorizing the transactions contemplated hereby; (ii) the names and genuine signatures of the Responsible Officers and Financial Officers of such Person, authorized to execute, deliver and perform, as applicable, this Agreement, any notes, the Guaranties, the Security Documents, and all other Loan Documents to be delivered by such Person; (iii) the Organization Documents of such Person as in effect as of the Interim Facility Effective Date; (iv) the good standing certificate for such Person, from its state of incorporation, formation or organization, as applicable, dated as of a recent date; and (v) as may be reasonably required by the Administrative Agent, certificate(s) of authority for such Person from states wherein such Person is required to be qualified to conduct business, evidencing such Person’s qualification to do business in such state, dated as of a recent date, provided that, if requested by the Company, the certificates described in this clause (v) may be provided within a reasonable period of time after the Interim Facility Effective Date, such period of time to be agreed by the Company and the Administrative Agent;
(d)    the Bankruptcy Court shall have entered the Interim Order within four (4) Business Days following the Petition Date and such order shall be in full force and effect; shall not have been reversed, vacated, or stayed; and shall not have been amended, supplemented, or otherwise modified without the prior written consent of the Administrative Agent and Majority Lenders;
(e)    all first-day motions filed by the Loan Parties and/or their Subsidiaries, as applicable (including any motions related to any critical vendor or supplier motions) and related orders entered by the Bankruptcy Court in the Chapter 11 Cases shall be in form and substance

 
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reasonably satisfactory to the Majority Lenders, the Administrative Agent and its counsel. All motions related to the DIP Facility and cash management shall be in form and substance satisfactory to the Administrative Agent and the Majority Lenders in their sole discretion;
(f)    all governmental and third-party consents and approvals, in each case, necessary in connection with the DIP Facility shall have been obtained and remain in effect;
(g)    the making of the Loans and the issuance of the Letters of Credit shall not violate any requirement or law and shall not have been enjoined, whether temporarily, preliminarily, or permanently;
(h)    all reasonable and documented fees and expenses (including the reasonable and documented fees and expenses of counsel) required to be paid to the Administrative Agent and Lenders on or before the Interim Facility Effective Date shall have been paid;
(i)    the Administrative Agent shall have received a 13-week cash flow forecast, containing line items of sufficient detail to reflect the Loan Parties’ projected Receipts and Operating Disbursements for such thirteen-week period, in form and substance acceptable to the Administrative Agent and the Majority Lenders and attached hereto as Exhibit K (the “ Initial Budget ”), together with a certificate of a Financial Officer of the Company stating that such Initial Budget has been prepared on a reasonable basis and in good faith and is based on assumptions believed by the Company and each other Loan Party to be reasonable at the time made and from the best information then available to the Company and each other Loan Party;
(j)    there shall not exist any action, suit, investigation, litigation or proceeding pending or threatened in any court or before any Governmental Authority or facts or circumstances that, in the reasonable opinion of the Administrative Agent and the Majority Lenders, materially and adversely affects any of the transactions contemplated hereby, or that has or could be reasonably likely to have a Material Adverse Effect; and
(k)    the Administrative Agent and Lenders shall have received all documentation and other information required by bank regulatory authorities under applicable “know your customer” and anti-money-laundering rules and regulations, including the PATRIOT Act.
For purposes of determining compliance with the conditions specified in this Section 5.1, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Interim Facility Effective Date specifying its objection thereto.

5.02    Final Facility Effective Date . The obligation of each Lender to make its Loans hereunder and the obligation of the Issuing Lender to issue Letters of Credit hereunder during the Final Period shall commence as of the Business Day (the “ Final Facility Effective Date ”) when

 
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each of the following conditions precedent shall have been satisfied in a manner satisfactory to the Administrative Agent:
(a)    the Final Order authorizing and approving the DIP Facility and the transactions contemplated hereby, shall have been entered by the Bankruptcy Court not later than 60 days after the entry of the Interim Order and such Final Order shall not have been reversed, vacated or stayed and shall not have been amended, supplemented or otherwise modified without the prior written consent of the Administrative Agent and the Majority Lenders;
(b)    a consensual resolution shall have been reached with respect to all Derivative Proceeds, in form and substance satisfactory to the Administrative Agent and the Majority Lenders, prior to the final hearing, which resolution shall be included in the Final Order or such other order entered by the Bankruptcy Court approving such consensual resolution (“ Acceptable Derivatives Resolution ”); and
(c)    the Administrative Agent shall have received on or before the Final Facility Effective Date an updated Budget.
5.03    Conditions to Extensions of Credit . The obligation of each Lender to make any Loan, and the obligation of the Issuing Lender to issue, amend, renew or extend any Letter of Credit, is subject to the satisfaction of the following conditions precedent:
(a)     Notice. The Administrative Agent shall have received a Notice of Revolving Credit Borrowing, a request for a Letter of Credit pursuant to Section 2.10 or a request for a Swing Line Loan pursuant to Section 2.13 , as applicable;
(b)     Continuation of Representations and Warranties. The representations and warranties of the Company and the Guarantors in Article VI and in the other Loan Documents shall be true and correct in all material respects on and as of the date of such Credit Extension (except to the extent such representations and warranties expressly refer to an earlier date, in which case they shall be true and correct in all material respects as of such earlier date, and except that for purposes of this Section 5.03(b) , the representations and warranties contained in subsections (a) and (b) of Section 6.14 shall be deemed to refer to the most recent statements furnished pursuant to subsections (a) and (b) of Section 7.01 );
(c)     No Existing Default. At the time of and immediately after giving effect to such Borrowing or the issuance, amendment, renewal or extension of such Letter of Credit, as applicable, no Default or Event of Default shall exist; and
(d)     DIP Orders . The Interim Order or Final Order, as applicable, shall be in full force and effect and shall not have been reversed, modified, stayed or amended, unless such reversal, modification, stay or amendment is acceptable to the Administrative Agent and the Majority Lenders in accordance with the terms of the Loan Documents.
Each Notice of Revolving Credit Borrowing and request for issuance, amendment, renewal or extension of a Letter of Credit submitted by the Company hereunder shall constitute a representation and warranty by the Company on the date thereof that the conditions in Section 5.03 are (or will be) satisfied on and as of the date of the applicable Credit Extension.

 
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ARTICLE VI

REPRESENTATIONS AND WARRANTIES

Each of the Loan Parties represents and warrants to the Administrative Agent and each Lender, as of the Interim Facility Effective Date, before and after giving effect to the making of the initial Loans and the issuance of the initial Letters of Credit hereunder on such date, and thereafter as of each date required by Sections 5.02 and 5.03 , that:
6.01    Organization, Existence and Power . Each Loan Party and each of its Subsidiaries: (a) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation except to the extent, in the case of any Subsidiary, that any such failure of such Subsidiary to be in good standing would not reasonably be expected to have a Material Adverse Effect; (b) subject to entry of the DIP Order and subject to any restrictions arising on account of any Loan Party’s status as a “debtor” under the Bankruptcy Code, has the power and authority and all material governmental licenses, authorizations, consents and approvals to execute, deliver, and perform its obligations under the Loan Documents and, except to the extent that any failure to have any thereof could not reasonably be expected to have a Material Adverse Effect, to own its assets and carry on its business; (c) is duly qualified as a foreign corporation and is licensed and in good standing under the laws of each jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification or license, except where failure to do so would not reasonably be expected to have a Material Adverse Effect; and (d) is in compliance in all material respects with all Requirements of Law, except to the extent that the failure to be in compliance could not reasonably be expected to have a Material Adverse Effect.
6.02    Corporate Authorization; No Contravention . Subject to the entry of the DIP Order, the execution, delivery and performance by each Loan Party of this Agreement and each other Loan Document to which such Person is a party, have been duly authorized by all necessary organizational action, and do not and will not: (a) contravene the terms of any of that Person’s Organization Documents; (b) conflict with or result in any breach or contravention of, or the creation of any Lien under, any document evidencing any Contractual Obligation to which such Person is a party that would be prior to the Liens granted to the Administrative Agent for the benefit of the Lenders and the Lender Derivative Providers or otherwise that would constitute a Material Adverse Effect or, except to the extent that any such conflict, breach or contravention would not reasonably be expected to have a Material Adverse Effect, any order, injunction, writ or decree of any Governmental Authority to which such Person or its property is subject; or (c) violate any Requirement of Law, that would constitute a Material Adverse Effect, including any California Requirement of Law promulgated with respect to preparedness and damage prevention associated with earthquakes.
6.03    Governmental Authorization . Subject to the entry of the DIP Order, no approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority (other than the entry of the DIP Order) is necessary or required in connection with the execution, delivery or performance by, or enforcement against, any Loan Party of this Agreement or any other Loan Document to which it is a party, except for filings necessary to obtain and maintain

 
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perfection of Liens; routine filings related to the Loan Parties and the operation of their business; and such filings as may be necessary in connection with Lenders’ exercise of its remedies hereunder.
6.04    Binding Effect . Upon entry of the Interim Order or the Final Order, as the case may be, this Agreement and each other Loan Document to which any Loan Party is a party constitute the legal, valid and binding obligations of such Person to the extent it is a party thereto, enforceable against such Person in accordance with their respective terms, subject to applicable bankruptcy, insolvency, or similar laws affecting creditors’ rights generally and general equitable principles.
6.05    Litigation. Other than the Chapter 11 Cases, there are no actions, suits, proceedings, claims or disputes pending, or to the knowledge of the Loan Parties, threatened or contemplated, at law, in equity, in arbitration or before any Governmental Authority, against any Loan Party or any of its subsidiaries, or any of their respective Properties which: (a) purport to affect or pertain to this Agreement or any other Loan Document, or any of the transactions contemplated hereby or thereby; or (b) either individually or in the aggregate could reasonably be expected to have a Material Adverse Effect or is not otherwise subject to the automatic stay as a result of the Chapter 11 Cases. To the knowledge of each Loan Party, no injunction, writ, temporary restraining order or any order of any nature (other than the entry of the DIP Order) has been issued by any court or other Governmental Authority purporting to enjoin or restrain the execution, delivery or performance of this Agreement or any other Loan Document, or directing that the transactions provided for herein or therein not be consummated as herein or therein provided.
6.06    No Default .
(a)    No Default or Event of Default exists or would be reasonably expected to result from the incurring of any Obligations by the Loan Parties.
(b)    Other than as a result of the Chapter 11 Cases, no Loan Party or any Restricted Subsidiary or any Unrestricted Entity is in default under or with respect to any Contractual Obligation in any respect which, individually or together with all such defaults, would reasonably be expected to have a Material Adverse Effect, or that would create an Event of Default under Section 9.01(f) . Each Loan Party and its subsidiaries is in compliance with all requirements of any Governmental Authority applicable to it or its Property and all agreements and other instruments binding upon it or its Property, and possesses all licenses, permits, franchises, exemptions, approvals and other authorizations granted by Governmental Authorities necessary for the ownership of its Property and the present conduct of its business, except in each case where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.
6.07    ERISA Compliance . Except as specifically disclosed in Schedule 6.07 :
(a)    Except to the extent excused by the Bankruptcy Code or as a result of the filing of the Chapter 11 Cases, each Plan is in compliance in all material respects with the applicable provisions of ERISA, the Code and other federal or state law. Each Plan which is intended to qualify under Section 401(a) of the Code has received a favorable determination letter from the IRS and to the knowledge of the Company, nothing has occurred which would cause the loss of such qualification. Each Loan Party and each ERISA Affiliate has made all required contributions to any

 
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Plan subject to Section 412 of the Code, and no application for a funding waiver or an extension of any amortization period pursuant to Section 412 of the Code has been made with respect to any Plan.
(b)    There are no pending or, to the knowledge of any Loan Party, threatened claims, actions or lawsuits, or action by any Governmental Authority (other than entry of the DIP Order), with respect to any Plan which has resulted or could reasonably be expected to result in a Material Adverse Effect. There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan which has resulted or could reasonably be expected to result in a Material Adverse Effect.
(c)    Other than as a result of the Chapter 11 Cases, (i) no ERISA Event has occurred or is reasonably expected to occur; (ii) no Pension Plan has any Unfunded Pension Liability; (iii) no Loan Party nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability under Title IV of ERISA with respect to any Pension Plan (other than premiums due and not delinquent under Section 4007 of ERISA); (iv) no Loan Party nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability (and no event has occurred which, with the giving of notice under Section 4219 of ERISA, would result in such liability) under Section 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (v) no Loan Party nor any ERISA Affiliate has engaged in a transaction that could be subject to Section 4069 or 4212(c) or ERISA.
6.08    Margin Regulations . The proceeds of the Loans shall be used solely for the purposes set forth in and permitted by Section 7.16 . No Loan Party is generally engaged in the business of purchasing or selling Margin Stock or extending credit for the purpose of purchasing or carrying Margin Stock. No proceeds of any Loan shall be used, whether directly or indirectly, and whether immediately, incidentally or ultimately, to purchase or carry margin stock (within the meaning of Regulation U) or to extend credit to others for the purpose of purchasing or carrying margin stock or to refund indebtedness originally incurred for such purpose.
6.09    Title to Properties . Other than as a result of the Chapter 11 Cases, the Loan Parties and their Subsidiaries shall each have good and defensible title to all of their respective Oil and Gas Properties evaluated in the most recently delivered Reserve Report (other than the interests that have been disposed of in one or more Dispositions permitted hereunder), and except for Permitted Liens and such defects in title as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, and each Loan Party and its Subsidiaries shall have good title to all other Oil and Gas Properties necessary or used in the ordinary conduct of their respective businesses. Other than as a result of the Chapter 11 Cases, any Loan Party or Subsidiary thereof specified as the owner under the most recently delivered Reserve Report owns the net interests in production attributable to the Oil and Gas Properties as reflected in the most recently delivered Reserve Report (other than the interests that have been disposed of in one or more Dispositions permitted hereunder), and the ownership of such Properties shall not in any material respect obligate such Loan Party or Subsidiary thereof to bear the costs and expenses relating to the maintenance, development and operations of each such Property in an amount in excess of the working interest of each Property set forth in the most recently delivered Reserve Report that is not offset by a corresponding proportionate increase in such Loan Party’s or Subsidiary’s net revenue interest in

 
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such Property. Other than as a result of the Chapter 11 Cases and as set forth on Schedule 6.09 , no consents or rights of first refusal exist or remain outstanding with respect to such Loan Party’s or Subsidiary’s interest in the Mortgaged Properties assigned to it pursuant to any Acquisition of Oil and Gas Properties, other than Permitted Liens. Other than as set forth on Schedule 6.09 , as of the Interim Facility Effective Date, the property of the Loan Parties and their Subsidiaries is subject to no Liens, other than Permitted Liens and the Carve-Out.
6.10    Oil and Gas Reserves . Other than as a result of the Chapter 11 Cases, each Loan Party and each of its Subsidiaries is and will hereafter be, in all material respects, the owner of the Oil and Gas that it purports to own from time to time in and under its Oil and Gas Properties, together with the right to produce the same. The Oil and Gas Properties are not subject to any Lien other than as set forth in the financial statements referred to in Section 6.14 , as disclosed to the Lenders in writing prior to the date of this Agreement and Permitted Liens and the Carve-Out. All Oil and Gas have been and will hereafter be produced, sold and delivered in accordance in all material respects with all applicable laws and regulations of any Governmental Authority; each of the Loan Parties and its Subsidiaries has complied in all material respects and will hereafter use commercially reasonable efforts to comply with all material terms of each oil, gas and mineral lease and any other agreement comprising its Oil and Gas Properties; and all such oil, gas and mineral leases and other agreements have been and will hereafter be maintained in full force and effect; provided , however , that nothing in this Section 6.10 shall prevent any Loan Party or its Subsidiaries from (i) abandoning any well or forfeiting, surrendering, releasing or defaulting under any lease in the ordinary course of business which is not disadvantageous in any material respect to the Lenders and which, in the opinion of such Loan Party, is in its best interest, and such Loan Party and its Subsidiaries is and will hereafter be in compliance with all obligations hereunder and (ii) making any Disposition permitted hereunder. All of the Loan Parties’ and their Subsidiaries’ Operating Agreements and Operating Leases with respect to their Oil and Gas Properties are and will hereafter be enforceable in all material respects in accordance with their terms except as such may be modified by applicable bankruptcy law or an order of a court in equity.
6.11    Initial Reserve Report . The Company has heretofore delivered to the Lenders a true and complete copy of (x) reserve reports, each dated effective as of December 31, 2015 prepared by the Company (the “ Initial Reserve Report ”) relating to an evaluation of the Oil and Gas attributable to the Oil and Gas Properties described therein. To the knowledge of the Company, (a) the assumptions stated or used in the preparation of the Initial Reserve Report are reasonable, (b) all information furnished by the Company for use in the preparation of the Initial Reserve Report, was accurate in all material respects, (c) there has been no material adverse change in the amount of the estimated Oil and Gas shown in the Initial Reserve Report since the date thereof, except for changes which have occurred as a result of production in the ordinary course of business, and (d) the Initial Reserve Report does not omit any material statement or information necessary to cause the same not to be misleading to the Lenders.
6.12    Gas Imbalances . There are no gas imbalances, take or pay or other prepayments with respect to any of the Oil and Gas Properties which would require the Loan Parties or their Subsidiaries to deliver Oil and Gas produced from any of the Oil and Gas Properties at some future

 
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time without then or thereafter receiving full payment therefor exceeding 5,000,000 Mcf of gas (on an Mcf equivalent basis) in the aggregate.
6.13    Taxes . Unless specifically disclosed on Schedule 6.13 , the Loan Parties and their Subsidiaries have filed all federal tax returns and reports required to be filed by them, including any filing extensions together with payments for any estimated taxes due thereon on or before the time the extension is due, and have paid all federal taxes, assessments, fees and other governmental charges levied or imposed upon them or their properties, income or assets otherwise due and payable, except those (a) which are being contested in good faith by appropriate proceedings and for which adequate reserves have been provided in accordance with GAAP, (b) where such payment is in violation of the Budget covenant set forth in Section 8.20 , including the Permitted Variance and (c) to the extent otherwise excused or prohibited by the Bankruptcy Code and not otherwise authorized by the Bankruptcy Court. The Loan Parties and their Subsidiaries have filed all material state and other non-federal tax returns and reports required to be filed by them, and have paid all material state and other non-federal taxes, assessments, fees and other governmental charges levied or imposed upon them or their properties, income or assets prior to delinquency thereof, except those (a) which are being contested in good faith by appropriate proceedings and for which adequate reserves have been provided in accordance with GAAP, (b) where such payment is in violation of the Budget covenant set forth in Section 8.20 , including the Permitted Variance and (c) to the extent otherwise excused or prohibited by the Bankruptcy Code and not otherwise authorized by the Bankruptcy Court. To the knowledge of the Loan Parties, there is no proposed tax assessment against any Loan Party or any of its subsidiaries that would, if made, reasonably be expected to have a Material Adverse Effect.
6.14    Financial Condition .
(a)    The audited consolidated balance sheet of the Parent and its Consolidated Subsidiaries as of December 31, 2015, the related consolidated statement of income, partners’ equity and cash flow of the Parent and its Consolidated Subsidiaries for the fiscal year ended on said date, (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein; (ii) fairly present the financial condition of the Parent and its Consolidated Subsidiaries as of the date thereof and their results of operations for the period covered thereby in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein; and (iii) show all material indebtedness and other liabilities, direct or contingent, of the Parent and its Consolidated Subsidiaries as of the date thereof, including liabilities for taxes, material commitments and Indebtedness.
(b)    The unaudited consolidated balance sheets of the Parent and its Consolidated Subsidiaries dated March 31, 2016 and the related consolidated statements of income or operations, partners’ equity and cash flow for the fiscal quarter ended on that date (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein, and (ii) fairly present the financial condition of the Parent and its Consolidated Subsidiaries as of the date thereof and their results of operations for the period covered thereby, subject to the absence of footnotes and to normal year-end audit adjustment.

 
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(c)    Since the Petition Date, (i) there has been no event, development or circumstance that has had or could reasonably be expected to have a Material Adverse Effect, and (ii) subject to the entry of the DIP Order, the business of Parent and the other Loan Parties have been conducted only in the ordinary course consistent with past business practices.
6.15    Environmental Matters . Except as described on Schedule 6.15 hereto or that, either individually or in the aggregate, could not be reasonably expected to have a Material Adverse Effect (or with respect to (c) and (d) below, where the failure, either individually or in the aggregate, to take such actions could not be reasonably expected to have a Material Adverse Effect):
(a)    neither any Property of any Loan Party or any of its Subsidiaries, nor the operations conducted thereon, violate Environmental Laws.
(b)    no Property of any Loan Party or any of its Subsidiaries, nor the operations currently conducted thereon by any Loan Party, or, to the knowledge of such Loan Party, no operations conducted thereon by any prior owner or operator of such Property, are in violation of or subject to any existing, or to the knowledge of such Loan Party, pending or threatened action, suit, investigation, inquiry or proceeding by or before any Governmental Authority under Environmental Laws.
(c)    all notices, permits, licenses, exemptions, and approvals, if any, required to be obtained or filed under any Environmental Law in connection with the operation or use of any and all Property by each Loan Party, including any treatment, storage, disposal or Release of any Hazardous Materials into the environment, have been duly obtained or filed or requested, and each Loan Party and its Subsidiaries is in compliance with the material terms and conditions of all such notices, permits, licenses, exemptions and approvals.
(d)    Hazardous Materials, if any, generated by the Loan Parties or any of their Subsidiaries at any and all Property of any such Subsidiary have in the past been transported, treated and disposed of in compliance with Environmental Laws then in effect, and, to the knowledge of such Loan Party, transport carriers and treatment and disposal facilities known by such Loan Party to have been used by it are not the subject of any existing action, investigation or inquiry by any Governmental Authority under any Environmental Laws.
(e)    no Hazardous Materials have been disposed of or otherwise Released by any Loan Party or any Subsidiary thereof on or to any Property of such Loan Party or Subsidiary except in compliance with Environmental Laws.
(f)    no Loan Party has any known pending assessment, investigation, monitoring, removal or remedial obligations under applicable Environmental Laws in connection with any Release or threatened Release of any Hazardous Materials into the environment by any Loan Party or any Subsidiary thereof.
6.16    Regulated Entities . Neither Parent nor any of its Subsidiaries is an “ investment company ” or is a company “controlled by” an “ investment company” within the meaning of the Investment Company Act of 1940. None of the Loan Parties, or any Person controlling the Company

 
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or the Guarantors, is subject to regulation under the Federal Power Act, the Interstate Commerce Act, any state public utilities code, or any other Federal or state statute or regulation limiting its ability to incur Indebtedness.
6.17    No Burdensome Restrictions . Other than as a result of the Chapter 11 Cases, no Loan Party or any of its Subsidiaries is a party to or bound by any Contractual Obligation, or subject to any restriction in any Organization Document, or any Requirement of Law, which would reasonably be expected to have a Material Adverse Effect.
6.18    Copyrights, Patents, Trademarks and Licenses, Etc . Except to the extent that any failure, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect, each Loan Party and each of its Subsidiaries owns or is licensed or otherwise has the right to use all of the material patents, trademarks, service marks, trade names, copyrights, contractual franchises, authorizations and other rights that are reasonably necessary for the operation of its business, without material conflict with the rights of any other Person. To the knowledge of any Loan Party, no slogan or other advertising device, product, process, method, substance, part or other material now employed, or now contemplated to be employed, by any Loan Party or any Subsidiary thereof infringes in a material respect upon any rights held by any other Person. No claim or litigation regarding any of the foregoing is pending or threatened, and no patent, invention, device, application, principle or any statute, law, rule, regulation, standard or code is pending or, to the knowledge of any Loan Party, proposed, which, in either case, could reasonably be expected to have a Material Adverse Effect.
6.19    Subsidiaries and Other Equity Interests . No Loan Party has any Subsidiary, Unrestricted Entity or other equity investment other than those specifically disclosed in Schedule 6.19 hereto. The Company owns the percentage interest of all issued and outstanding Equity in each Subsidiary, Unrestricted Entity or other material equity investment described on Schedule 6.19 . Parent owns one hundred percent (100%) of the issued and outstanding equity in the Company. The Company may update and replace Schedule 6.19 from time to time to reflect changes resulting from transactions or other events permitted hereunder.
6.20    Insurance . The Properties of each Loan Party and its Subsidiaries are insured with financially sound and reputable insurance companies that are not Affiliates of the Company, in such amounts, with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where the Company or such Loan Party or Subsidiary operates.
6.21    Derivative Contracts . As of the date hereof, Schedule 6.21 sets forth, a true and complete list of all Derivative Contracts of the Loan Parties and their Subsidiaries in effect as of the Interim Facility Effective Date, the material terms thereof (including the type, term, effective date, termination date and notional amounts or volumes), the net mark-to-market value thereof, all credit support agreements relating thereto (including any margin required or supplied) and the counterparty to each such agreement.
6.22    Full Disclosure . None of the representations or warranties made by any Loan Party in the Loan Documents as of the date such representations and warranties are made or deemed

 
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made, and none of the statements contained in any exhibit, report, written statement or certificate (other than any financial projections, forecasts or estimates) furnished by or on behalf of any Loan Party in connection with the Loan Documents, taken as whole, contains any untrue statement of a material fact known to any Loan Party, or omits any material fact known to any Loan Party, required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they are made, not misleading as of the time when made or delivered.
6.23    [Reserved] .
6.24    Improved Real Estate . To the knowledge of each Loan Party, the Oil and Gas Properties that are not Mortgaged Properties do not include any “ buildings ” (as defined under Section 4000 et. Seq. of the National Flood Insurance Reform Act of 1994, as amended) that are critical to operating any Mortgaged Properties for the exploration and production of oil and gas.
6.25    Anti-Corruption Laws and Sanctions . The Parent has implemented and maintains in effect policies and procedures designed to ensure compliance by the Parent, its subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions. The Parent, its subsidiaries and their respective officers and employees and, to the knowledge of the Parent, its directors and agents, are in compliance with Anti-Corruption Laws and applicable Sanctions in all material respects. None of (a) the Parent, any of its subsidiaries or, to the knowledge of the Parent, any of their respective directors, officers or employees, is a Sanctioned Person, or (b) to the knowledge of the Parent, any agent of the Parent or any subsidiary that will act in any capacity in connection with or benefit from the credit facility established hereby, is a Sanctioned Person. No Borrowing or Letter of Credit, use of proceeds or other transaction contemplated by this Agreement will violate any Anti-Corruption Laws or applicable Sanctions.
ARTICLE VII

AFFIRMATIVE COVENANTS

So long as the Issuing Lender or any Lender shall have any Commitment or any obligation to issue or participate in Letters of Credit hereunder, or any Loan, Letter of Credit or other Obligation (other than Obligations in respect of (i) indemnification, expense reimbursement, tax gross-up or yield protection for which no claim has been made or (ii) Lender Derivative Contracts) shall remain unpaid or unsatisfied, or any Letter of Credit remains outstanding:
7.01    Financial Statements . Each of the Loan Parties shall maintain, for itself and each of its Consolidated Subsidiaries, on a consolidated basis, a system of accounting established and administered in accordance with GAAP and deliver, or cause to be delivered, to Administrative Agent:
(a)    as soon as available, but in any event within 90 days after the end of each fiscal year of the Parent:
(i)    the audited consolidated balance sheet and related statements of income, partners equity and cash flows of Parent as of the end of and for such year, setting

 
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forth in each case in comparative form the figures for the previous fiscal year, all (A) reported on by a nationally recognized independent public accounting firm (the “ Independent Auditor ”) to the effect that such consolidated financial statements present fairly in all material respects the financial condition, results of operations and cash flows of Parent and its Consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, and (B) certified by a Financial Officer as fairly presenting in all material respects, the financial condition, results of operations and cash flows of Parent and its Consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied;
(ii)    unaudited annual consolidating balance sheet and consolidating statement of income for Parent and its Consolidated Subsidiaries as of the end of such year, certified by a Financial Officer as fairly presenting in all material respects, the financial condition, results of operations of Parent and its Consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied; and
(iii)    the unaudited consolidated balance sheet and related statements of income, partners equity and cash flows of the Company as of the end of and for such year, setting forth in each case in comparative form the figures for the previous final year, and unaudited consolidating balance sheets and statements of income, all certified by a Financial Officer as fairly presenting in all material respects, the financial condition, results of operations and cash flows of the Company and its Consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to the absence of footnotes.
(b)    as soon as available, but in any event within 45 days after the end of each of the first three fiscal quarters of each fiscal year of the Parent:
(i)    the unaudited consolidated balance sheet and related statements of income, partners equity and cash flows of Parent as of the end of and for such fiscal quarter and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of), the previous fiscal year, all certified by a Financial Officer as fairly presenting in all material respects, the financial condition, results of operations and cash flows of Parent and its Consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to the absence of footnotes; and
(ii)    the unaudited consolidated balance sheet and related statements of income, partners equity and cash flows of the Company as of the end of and for such fiscal quarter and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by a Financial Officer as fairly presenting in all material respects, the financial condition, results of operations and cash flows of the Company and its Consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to the absence of footnotes.

 
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(c)    as soon as available, but in any event within 35 days after the end of each of the first two months in any fiscal quarter of the Parent:
(i)    the unaudited consolidated balance sheet and related statements of income, partners equity and cash flows of Parent as of the end of and for such month and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of), the previous fiscal year, all certified by a Financial Officer as fairly presenting in all material respects, the financial condition, results of operations and cash flows of Parent and its Consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to the absence of footnotes; and
(ii)    the unaudited consolidated balance sheet and related statements of income, partners equity and cash flows of the Company as of the end of and for such month and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by a Financial Officer as fairly presenting in all material respects, the financial condition, results of operations and cash flows of the Company and its Consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to the absence of footnotes.
7.02    Certificates; Other Production and Reserve Information . The Company shall furnish to the Administrative Agent:
(a)    As soon as available, but not later than 35 days after the close of each month (including the last month of each fiscal quarter and fiscal year), a Monthly Status Report covering such month;
(b)    [Reserved];
(c)    [Reserved];
(d)    Concurrently with the delivery of the statements and reports referred to in Sections 7.01(a) , 7.01(b) and 7.01(c) , a Compliance Certificate executed by a Financial Officer of Parent;
(e)    Annually commencing March 1, 2017 dated as of January 1 st of such year, a Reserve Report prepared by the Independent Engineer or other independent petroleum engineer reasonably acceptable to Administrative Agent and the Company, and annually, commencing September 1, 2016, a Reserve Report prepared by personnel of the Company and certified by a Financial Officer of the Company as true and correct in all material respects. Each Reserve Report shall be in form and substance reasonably satisfactory to the Lenders. In addition, the Company shall furnish to the Administrative Agent any other Reserve Report delivered to the Prepetition RBL Agent pursuant to the Prepetition RBL Loan Documents or the Prepetition Second Lien Trustee pursuant to the Prepetition Second Lien Indenture. With the delivery of each Reserve Report, the Company shall provide to the Administrative Agent and the Lenders a certificate from a Financial

 
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Officer certifying that in all material respects: (i) the information contained in the Reserve Report and any other information delivered in connection therewith is true and correct in all material respects, (ii) the Loan Parties own good and defensible title to the Oil and Gas Properties evaluated in such Reserve Report, and such Properties are free of all Liens except for Permitted Liens and the Carve-Out, (iii) except as set forth on an exhibit to the certificate, on a net basis there are no gas imbalances, take or pay or other prepayments in excess of the volume specified in Section 6.12 with respect to their Oil and Gas Properties evaluated in such Reserve Report that would require any Loan Party to deliver Oil and Gas either generally or produced from such Oil and Gas Properties at some future time without then or thereafter receiving full payment therefor, (iv) none of their proved Oil and Gas Properties have been sold since the date of the last Reserve Report except as set forth on an exhibit to the certificate, which certificate shall list all of its proved Oil and Gas Properties sold and in such detail as reasonably required by the Administrative Agent, (v) attached to the certificate is a list of all marketing agreements entered into subsequent to the most recently delivered Reserve Report and (vi) attached thereto is a schedule of the Oil and Gas Properties evaluated by such Reserve Report that are Mortgaged Properties and demonstrating the percentage of the present value that such Mortgaged Properties represent;
(f)    Promptly after the furnishing thereof, copies of any financial statement, report or notice furnished to or by any Person pursuant to the terms of any preferred stock designation, indenture, loan or credit or other similar agreement, other than this Agreement and not otherwise required to be furnished to the Lenders pursuant to any other provision of this Section 7.02 ;
(g)    Concurrently with the delivery of any Reserve Report to the Administrative Agent pursuant to Section 7.02(e) , or after an Event of Default, upon request, a list of all Persons purchasing Oil and Gas from any of the Loan Parties;
(h)    Prompt written notice, and in any event within three (3) Business Days, of the occurrence of any Casualty Event in excess of $5,000,000;
(i)    Prompt written notice (and in any event within thirty (30) days prior thereto (or such shorter period as the Administrative Agent may agree)) of any change (i) in any Loan Party’s organizational name or in any trade name used to identify such Person in the conduct of its business or in the ownership of its Properties, (ii) in the location of any Loan Party’s chief executive office or principal place of business, (iii) in any Loan Party’s identity or organizational structure or in the jurisdiction in which such Person is incorporated or formed, (iv) in any Loan Party’s jurisdiction of organization or such Person’s organizational identification number in such jurisdiction of organization, and (v) in any Loan Party’s federal taxpayer identification number, if any;
(j)    Promptly upon the request of the Administrative Agent, such copies of all geological, engineering and related data contained in any of Loan Parties’ files or readily accessible to the Loan Party relating to the Oil and Gas Properties as may reasonably be requested;
(k)    On request by the Administrative Agent, based upon the Administrative Agent’s or Lenders’ good faith belief that any Loan Party’s title to the Mortgaged Properties or the Administrative Agent’s Lien on the Loan Parties’ properties is subject to claims of third parties, or

 
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if required by regulations to which the Administrative Agent or any of the Lenders is subject, title and mortgage lien evidence reasonably satisfactory to the Administrative Agent covering such Mortgaged Property as may be designated by the Administrative Agent, covering such Loan Party’s title thereto and evidencing that the Obligations are secured by liens and security interests as provided in this Agreement and the Security Documents;
(l)    [Reserved]; and
(m)    Promptly, such additional information regarding the business, financial or corporate affairs of the Loan Parties as the Administrative Agent or any Lender may from time to time reasonably request.
Documents required to be delivered pursuant to Sections 7.01 and 7.02 may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the Company posts such documents, or provides a link thereto on the Company's website on the Internet or (ii) on which such documents are posted on the Company's behalf on an Internet or intranet website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); provided , however , that (x) the Company shall deliver paper copies of such documents to the Administrative Agent upon its request until a written request to cease delivering paper copies is given by the Administrative Agent and (y) the Company shall notify the Administrative Agent and each Lender (by telecopier or electronic mail) of the posting of any such documents and provide to the Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such documents.
7.03    Notices . The Company shall promptly notify the Administrative Agent:
(a)    of the occurrence of any Default or Event of Default;
(b)    of any matter that has resulted or would reasonably be expected to result in a Material Adverse Effect (other than the filing of the Chapter 11 Cases), including (i) breach or non-performance of, or any default under, a Contractual Obligation of Parent, the Company or any subsidiary thereof; (ii) any dispute, litigation, investigation, proceeding or suspension between Parent, the Company or any subsidiary thereof and any Governmental Authority; (iii) the commencement of, or any material development in, any litigation, proposed legislation, ordinance or regulation of a Governmental Authority, or proceeding affecting Parent, the Company or any subsidiary thereof; including pursuant to any applicable Environmental Laws; or (iv) revocation, cancellation or failure to renew any license, permit or franchise, where such breach, non-performance, default, dispute, litigation, investigation, proceeding, suspension, proposed legislation, ordinance or regulation, revocation, failure or loss could reasonably be expected to have a Material Adverse Effect;
(c)    of any material change in accounting policies or financial reporting practices by Parent, the Company or any Consolidated Subsidiary; or
(d)    of the formation or acquisition of any Restricted Subsidiary or Unrestricted Entity.

 
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Each notice under this Section 7.03 shall be accompanied by a written statement by a Responsible Officer or Financial Officer setting forth details of the occurrence referred to therein and stating what action such Loan Party proposes to take with respect thereto. Each notice under Section 7.03(a) shall describe with particularity any and all clauses or provisions of this Agreement or other Loan Document that have been breached or violated.
7.04    Preservation of Company Existence, Etc. Each Loan Party shall, and shall cause its Subsidiaries to:
(a)    preserve and maintain in full force and effect its legal existence, and, except to the extent that the failure to do so would not reasonably be expected to have a Material Adverse Effect, maintain its good standing under the laws of its state or jurisdiction of formation, provided , however , that (i) the liquidation, dissolution or wind-up of any Subsidiary shall be permitted to the extent assets of such Subsidiary are not transferred to any party other than the Company or another Subsidiary, and (ii) the merger or consolidation of any Subsidiary shall be permitted to the extent set forth in Section 8.03 ;
(b)    preserve and maintain in full force and effect all governmental rights, privileges, qualifications, permits, licenses and franchises necessary or desirable in the normal conduct of its business except where the failure to do so would not reasonably be expected to have a Material Adverse Effect;
(c)    use reasonable efforts, in the ordinary course of business, to preserve its business organization and goodwill except where the failure to do so would not reasonably be expected to have a Material Adverse Effect; and
(d)    preserve or renew all of its registered patents, trademarks, trade names and service marks, the non-preservation of which could reasonably be expected to have a Material Adverse Effect.
7.05    Maintenance of Property. Each Loan Party shall, and shall cause its Subsidiaries to, maintain and preserve all its Property which is used or useful in its business in good working order and condition, ordinary wear and tear excepted and to use the standard of care typical in the industry in the operation and maintenance of its facilities except where the failure to do so would not reasonably be expected to have a Material Adverse Effect; provided , however , that nothing in this Section 7.05 shall prevent such Loan Party or its Subsidiaries from (a) abandoning any well or forfeiting, surrendering, releasing or defaulting under any lease in the ordinary course of business which is not materially disadvantageous in any way to the Lenders and which, in its opinion, is in the best interest of such Loan Party and (b) rejecting any contract in connection with the pendency of the Chapter 11 Cases which is permitted pursuant to the DIP Order, any Plan of Reorganization or a motion filed by or after consultation with the Administrative Agent, and each such Loan Party is and will hereafter be in compliance with all obligations hereunder.
7.06    Title Information . On or before the delivery to the Administrative Agent and the Lenders of each Reserve Report required by Section 7.02(e) , the Company will deliver title information in form and substance acceptable to the Administrative Agent covering enough of the

 
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Oil and Gas Properties evaluated by such Reserve Report that were not included in the immediately preceding Reserve Report, so that the Administrative Agent shall have received together with title information previously delivered to the Administrative Agent, satisfactory title information on at least 80% of the total net present value (determined by a discount factor of 10%) of the proved Oil and Gas Properties evaluated by such Reserve Report.
7.07    [Reserved] .
7.08    Insurance . Each Loan Party shall, and shall cause its Subsidiaries to, maintain, with financially sound and reputable independent insurers, insurance with respect to its properties and business against loss or damage of the kinds customarily insured against by Persons engaged in the same or similar business, of such types and in such amounts as are customarily carried under similar circumstances by such other Persons except where the failure to do so would not reasonably be expected to have a Material Adverse Effect. The loss payable clauses or provisions in said insurance policy or policies insuring any of the Collateral for the Loan shall be endorsed in favor of and made payable to the Administrative Agent as its interests may appear and such policies shall name the Administrative Agent and the Lenders as “ additional insured ” and provide that the insurer will give at least 30 days prior notice of any cancellation to the Administrative Agent.
7.09    Payment of Obligations . Each Loan Party shall, and shall cause its Subsidiaries to, pay and discharge prior to delinquency, all their respective obligations and liabilities, including: (a) all tax liabilities, assessments and governmental charges or levies upon it or its properties or assets, unless the same are being contested in good faith by appropriate proceedings and adequate reserves in accordance with GAAP are being maintained by such Loan Party or its Subsidiary; (b) all lawful claims which, if unpaid, would by law become a Lien upon its Property; and (c) all Indebtedness, as and when due and payable, but subject to any subordination provisions contained in any instrument or agreement evidencing such Indebtedness; except in each of (a), (b) and (c), where (i) the failure to do so would not reasonably be expected to have a Material Adverse Effect, (ii) such payment is in violation of the Budget covenant set forth in Section 8.20 , including Permitted Variances or (iii) such payment is excused by, or otherwise prohibited by the provisions of the Bankruptcy Code or as a result of the Chapter 11 Cases.
7.10    Compliance with Laws . Subject to the Budget covenant in Section 8.20 , including Permitted Variances, and any necessary Bankruptcy Court approval, each Loan Party shall, and shall cause its Subsidiaries to, comply in all material respects with all Requirements of Law of any Governmental Authority having jurisdiction over it or its business (including Environmental Laws, the Federal Fair Labor Standards Act and any California Requirement of Law promulgated with respect to earthquakes), except (a) such as may be contested in good faith or as to which a bona fide dispute may exist, (b) where the failure to do so would not reasonably be expected to have a Material Adverse Effect and (c) where payment is excused or otherwise prohibited by the provisions of the Bankruptcy Code or as a result of the Chapter 11 Cases. Parent shall, and shall cause its subsidiaries to, maintain in effect and enforce policies and procedures designed to ensure compliance by Parent and its subsidiaries and their respective directors, officers, employees and agents with applicable Anti-Corruption Laws and applicable Sanctions.

 
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7.11    Compliance with ERISA . Each Loan Party shall, and shall cause each of its ERISA Affiliates to: (a) maintain each Plan in compliance in all material respects with the applicable provisions of ERISA, the Code and other federal or state law; (b) cause each Plan which is qualified under Section 401(a) of the Code to maintain such qualification; and (c) make all required contributions to any Plan subject to Section 412 of the Code, subject to the Budget covenant in Section 8.20 , including Permitted Variances, or as excused by or otherwise prohibited by the Bankruptcy Code or as a result of the Chapter 11 Cases.
7.12    Inspection of Property and Books and Records . Each Loan Party shall, and shall cause its Subsidiaries to, maintain proper books of record and account, in which full, true and correct entries in conformity with GAAP consistently applied shall be made of all financial transactions and matters involving the assets and business of such Loan Party or its Subsidiary, as applicable. Each Loan Party shall, and shall cause its Subsidiaries to, permit representatives and independent contractors of the Administrative Agent or any Lender to visit and inspect any of their respective properties, to examine their respective company, financial and operating records, and make copies thereof or abstracts therefrom, and to discuss their respective affairs, finances and accounts with their respective managers, directors, officers, and independent public accountants, all at the expense of the Loan Parties and at such reasonable times during normal business hours and as often as may be reasonably desired, upon reasonable advance notice to such Loan Party; provided , however , when an Event of Default exists the Administrative Agent or any Lender may do any of the foregoing at the expense of the Company at any time during normal business hours and without advance notice.
7.13    Environmental Laws .
(a)    Each Loan Party shall, and shall cause its Subsidiaries to, comply with all applicable Environmental Laws and maintain all environmental, health and safety permits, licenses and authorizations necessary for its operations and will maintain such in full force and effect except where such noncompliance or the failure to maintain such permits, licenses and authorizations would not reasonably be expected to have a Material Adverse Effect. Each Loan Party shall, and shall cause its Subsidiaries to, promptly commence and diligently prosecute to completion, any assessment, evaluation, investigation, monitoring, containment, cleanup, removal, repair, restoration, remediation or other remedial obligations (collectively, the “ Remedial Work ”) in the event any Remedial Work is required under applicable Environmental Laws because of or in connection with the actual or suspected past, present or future Release of any Hazardous Materials on, under, about or from any of the Loan Parties’ Properties, which failure to commence and diligently prosecute to completion could reasonably be expected to have a Material Adverse Effect.
(b)    Each Loan Party shall, and shall cause its Subsidiaries to, establish and implement, such procedures as may be reasonably necessary to continuously determine and assure that the Loan Party’s obligations under this Section 7.13 are timely and fully satisfied, which failure to establish and implement could reasonably be expected to have a Material Adverse Effect.
(c)    Each Loan Party will, and will cause its Subsidiaries to, promptly furnish to the Administrative Agent all written notices of violation, orders, claims, citations, complaints, penalty assessments, suits or other proceedings received by such Loan Party or Subsidiary, or of

 
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which it has notice, pending or threatened against such Loan Party or any of its Subsidiaries, by any Governmental Authority with respect to any alleged violation of or non-compliance with any Environmental Laws or any permits, licenses or authorizations related to Environmental Laws in connection with its ownership or use of its Properties or the operation of its business, except where any such alleged violations or incidents of non-compliance would not, individually or in the aggregate, result in a penalty, assessment, fine or other cost or liability exceeding $1,000,000.
(d)    Each Loan Party will, and will cause its Subsidiaries to, promptly furnish to the Administrative Agent all requests for information, notices of claim, demand letters, and other notifications, received by such Loan Party or Subsidiary in connection with its ownership or use of its Properties or the conduct of its business, relating to potential responsibility with respect to any investigation or clean-up of Hazardous Materials at any location, except where any such alleged responsibility would not, individually or in the aggregate, result in a penalty, assessment, fine or other cost or liability exceeding $1,000,000.
7.14    Pledge of Equity in New Subsidiary . If, at any time after the date of this Agreement, any new Subsidiary (other than Breitburn GP LLC, for so long as it is the general partner of the Parent) is acquired or created, then the applicable Loan Party shall pledge all of the Equity of such Subsidiary and deliver such documentation as the Administrative Agent reasonably requests in connection with such pledge.
7.15    New Subsidiary Guarantors . If, at any time after the date of this Agreement, there exists any subsidiary of a Loan Party (other than the Unrestricted Entities) that is not a Guarantor hereunder, or if any Unrestricted Entity becomes a Wholly Owned Subsidiary of a Loan Party, then such Loan Party shall cause each such Subsidiary, as applicable, to execute and deliver to the Administrative Agent a Guaranty or supplement to existing Guaranty, and a Security Agreement or supplement to existing Security Agreement, and other documents as required pursuant to Sections 4.02 and 4.05 .
7.16    Use of Proceeds .
(a)    The proceeds of the Revolving Credit Borrowings and Swing Line Borrowings shall be used by the Company to (i) pay certain costs and expenses of administering the Chapter 11 Cases, (ii) fund the working capital needs, capital improvements and other general corporate purposes of the Company and its Subsidiaries and (iii) make the payments in respect of the Adequate Protection.
(b)    The proceeds of the Loans shall be applied by the Company for uses solely to the extent that any such application of proceeds shall be in compliance with the Budget covenant set forth in Section 8.20 , including the Permitted Variances.
(c)    No portion of the proceeds of any Loan shall be used in any manner that causes such Loan or the application of such proceeds to violate Regulation T, Regulation U or Regulation X of the FRB or any other regulation thereof.
7.17    [Reserved] .

 
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7.18    Phase I Reports . In the event such is obtained in connection with the acquisition of Oil and Gas Properties directly or indirectly through a Subsidiary, each Loan Party shall deliver to the Lenders a copy of a Phase I Report covering such Oil and Gas Properties, and in the event such is not obtained, each Loan Party will provide a Phase I Report upon request by Administrative Agent or any Lender and no more than once per year in the absence of any Event of Default (or as otherwise required to be obtained by Administrative Agent or any Lender by any Governmental Authority), in connection with any future acquisition of any Oil and Gas Properties.
7.19    Further Assurances .
(a)    Each Loan Party will promptly cure any defects in the execution and delivery of this Agreement, the Security Documents or any other instruments referred to or mentioned herein or therein. The Company at its expense will promptly do all acts and things, and will execute and file or record, all instruments and Security Documents reasonably requested by the Administrative Agent, to establish, perfect, maintain and continue the perfected security interest of the Administrative Agent in or the Lien of the Administrative Agent on the Mortgaged Properties and other Collateral. Upon request by the Administrative Agent, each Loan Party shall promptly execute such additional Security Documents covering any new Oil and Gas Properties reflected on the Monthly Status Reports or any new Subsidiaries of the Loan Parties. The Company will pay the costs and expenses of all filings and recordings and all searches deemed reasonably necessary by the Administrative Agent to establish and determine the validity and the priority of the Liens created or intended to be created by the Security Documents; and such Loan Party will satisfy all other claims and charges which in the reasonable opinion of the Administrative Agent might prejudice, impair or otherwise affect any of the Mortgaged Properties or any Liens thereon in favor of the Administrative Agent for the benefit of the Issuing Lender and the Lenders.
(b)    Each Loan Party hereby authorizes the Administrative Agent to file one or more financing or continuation statements, and amendments thereto, relative to all or any part of the Mortgaged Property without the signature of such Loan Party where permitted by law. A carbon, photographic or other reproduction of the Security Documents or any financing statement covering the Mortgaged Property or any part thereof shall be sufficient as a financing statement where permitted by law. The Administrative Agent will promptly send such Loan Party any financing or continuation statements it files without the signature of such Loan Party and the Administrative Agent will promptly send the Company the filing or recordation information with respect thereto.
7.20    Keepwell (Commodity Exchange Act) . Each Loan Party that is a Qualified ECP Guarantor shall, and shall cause each of its Subsidiaries which is a Qualified ECP Guarantor to, undertake to provide such funds or other support as may be needed from time to time by each other Loan Party to honor all of its obligations under any Guaranty in respect of Swap Obligations (provided , however , that each Qualified ECP Guarantor shall only be liable under this Section 7.20 for the maximum amount of such liability that can be hereby incurred without rendering its obligations under this Section 7.20 voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount). The obligations of each Qualified ECP Guarantor under this Section 7.20 shall remain in full force and effect until this Agreement is terminated. Each Qualified ECP Guarantor intends that this Section 7.20 shall constitute, and this

 
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Section 7.20 shall be deemed to constitute, a “keepwell, support, or other agreement” for the benefit of each other Loan Party for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.
7.21    Post-Closing Requirements . The Company shall, or shall cause its relevant Subsidiaries to, complete each of the actions described on Schedule 7.21 as soon as commercially reasonable and by no later than the date set forth in Schedule 7.21 with respect to such action or such later date as the Administrative Agent may reasonably agree.
7.22    Budget Update .
(a)    No later than the fifth Business Day after the end of every month after the Interim Facility Effective Date (commencing on June 7, 2016), the Company will provide to the Administrative Agent a new thirteen (13)-week budget covering the 13-week period commencing on the first day of such month and otherwise in form and substance substantially similar to the Initial Budget and containing information reasonably requested by the Administrative Agent or the Majority Lenders (such budget, together with the Initial Budget, the “ Budget ”) (provided that the Administrative Agent and the Majority Lenders shall have the right to dispute any such updates by providing the Company notice thereof within five Business Days after the delivery by the Company of any such update; provided further that (i) to the extent the Administrative Agent or the Majority Lenders do not provide such dispute notice within such five Business Day period, such update shall be deemed approved and consented to by the Administrative Agent and the Lenders and shall be deemed to constitute the Budget upon the expiration of such five Business Day period and (ii) to the extent the Administrative Agent or the Majority Lenders do provide such dispute notice within such five Business Day period, the then-existing Budget shall continue to constitute the applicable Budget until such time as an update is agreed to among the Company, the Administrative Agent and the Majority Lenders); and
(b)    No later than the tenth calendar day (or the first Business Day thereafter if such tenth calendar day is not a Business Day) after the end of every calendar month after the Interim Facility Effective Date (commencing on June 10, 2016), the Company will provide to the Administrative Agent a variance report (the “ Variance Report ”), in form and substance reasonably satisfactory to the Administrative Agent and the Majority Lenders, detailing the following:
(i)    the aggregate Operating Disbursements and other disbursements of the Loan Parties and their Subsidiaries during such month ending on the Testing Date (or in the case of the first Variance Report, for the period from the Petition Date through May 31, 2016) (the “ Testing Period ”); and
(ii)    any variance (whether plus or minus and expressed as a percentage) between the aggregate Operating Disbursements made during such Testing Period by the Loan Parties and their Subsidiaries against the aggregate Operating Disbursements set forth in the Budget for such Testing Period.

 
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7.23    Cash Management . The Loan Parties and their Subsidiaries shall maintain their cash management system as it existed prior to the Petition Date for the benefit of the entire DIP Facility, with such changes as may be required by an order of the Bankruptcy Court and/or as may be made with the consent of the Administrative Agent and the Majority Lenders.
ARTICLE VIII

NEGATIVE COVENANTS

So long as the Issuing Lender or any Lender shall have any Commitment or any obligation to issue or participate in Letters of Credit hereunder, or any Loan, Letter of Credit or other Obligation (other than Obligations in respect of (i) indemnification, expense reimbursement, tax gross-up or yield protection for which no claim has been made or (ii) Lender Derivative Contracts) shall remain unpaid or unsatisfied, or any Letter of Credit remains outstanding:
8.01    Limitation on Liens . Each Loan Party agrees that it shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, make, create, incur, assume or suffer to exist any Lien upon or with respect to any part of its property, whether now owned or hereafter acquired, other than the following (“ Permitted Liens ”):
(a)    any Lien created to secure the Obligations;
(b)    Liens for Taxes, fees, assessments or other governmental charges which are not delinquent or remain payable without penalty, or to the extent that non-payment thereof is permitted by Section 7.09 ;
(c)    carriers’, warehousemen’s, mechanics’, landlords’, materialmen’s, repairmen’s or other similar Liens arising in the ordinary course of business (whether by law or by contract) which are not delinquent or remain payable without penalty or which are being contested in good faith and by appropriate proceedings, which proceedings have the effect of preventing the forfeiture or sale of the property subject thereto;
(d)    Liens consisting of pledges or deposits required in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other social security legislation;
(e)    Liens on the Property of such Loan Party securing (i) the non-delinquent performance of bids, trade contracts (other than for borrowed money), and statutory or regulatory obligations, (ii) contingent obligations on surety, performance and appeal bonds, and (iii) other non-delinquent obligations of a like nature; in each case, incurred in the ordinary course of business;
(f)    easements, rights-of-way, restrictions, defects or other exceptions to title (including, but not limited to, the contractual nature of the Company’s interest in the Brea Oil Field, Orange County, California, and the failure of certain Indian Tribes to act on assignment consents in certain Wyoming properties in connection with the acquisition by the Company of Properties from Nautilus Resources, LLC and Phoenix Production Company) and other similar encumbrances

 
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incurred in the ordinary course of business which, in the aggregate, are not substantial in amount, are not incurred to secure Indebtedness, and which do not in any case materially detract from the value of the Property subject thereto or interfere with the ordinary conduct of the businesses of the Loan Parties;
(g)    Liens arising solely by virtue of any statutory or common law provision relating to bankers’ liens, rights of set-off or similar rights and remedies as to deposit accounts maintained with a depository institution; or under any deposit account agreement entered into in the ordinary course of business; provided that, with respect to each such deposit account and funds held therein: (i) no such deposit account or funds constitute a dedicated cash collateral account or cash collateral or are subject to restrictions against access by the applicable Loan Party, (ii) the Loan Party maintains (subject to such right of set off) dominion and control over such account(s) and funds, (iii) no such deposit account or funds are intended by any Loan Party to provide cash collateral to the depository institution, and (iv) if the balance in a deposit account exceeds $500,000, then the following additional provision shall apply: except during such times as the institution holding such account is a Lender, no such deposit account or any funds contained therein shall at any time secure any obligations under Derivative Contracts, other Indebtedness, or any obligations other than the obligation to pay fees, expenses and other amounts owed to the account-holding depository institution associated with the maintenance of such deposit account;
(h)    Oil and Gas Liens;
(i)    judgment Liens securing judgments that do not constitute Events of Default under Section 9.01(h) ;
(j)    deposits of cash or Cash Equivalents in the ordinary course of business not to exceed the amount of $20,000,000 in the aggregate to secure the performance of leases and contracts entered into in the ordinary course of business, but only to the extent securing performance obligations that do not constitute Indebtedness;
(k)    Liens existing on the Petition Date and, to the extent such Liens secure Indebtedness owing to any Person and its Affiliates in an amount in excess of $10,000,000 in the aggregate, that are described on Schedule 8.01 ;
(l)    Liens granted to secure payment of Capitalized Lease Obligations and purchase money Indebtedness of the Loan Parties, so long as such Indebtedness is permitted under Section 8.05(g) , provided that such Liens (i) attach only to the assets acquired with the proceeds of such Indebtedness and do not cover any Hydrocarbon Interests or equity interests in Persons owning direct or indirect interests in Hydrocarbon Interests);
(m)    Liens securing reimbursement obligations of the Loan Parties permitted to be incurred by the Loan Parties pursuant to the terms of this Agreement, and related expenses, in respect of letters of credit issued for the account of the Loan Parties in connection with the purchase of goods by the Loan Parties in the ordinary course of business and on payment terms of no more than 90 days after the date of delivery of such goods, provided that such Liens (i) attach only to the specific goods so purchased and title documents in respect thereof and (ii) do not cover any

 
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Hydrocarbon Interests; and provided further that the aggregate amount of reimbursement obligations secured by Liens permitted by this Section 8.01(m) at any time outstanding, when added to the aggregate amount of obligations then outstanding that are secured by Liens permitted under Section 8.01(n) , shall not exceed $2,000,000;
(n)    Liens of sellers of goods to the Loan Parties arising by operation of law under Article 2 of the UCC or similar provisions of applicable law in the ordinary course of business, covering only the goods sold and title documents in respect thereof and securing only the unpaid purchase price for such goods and related expenses; provided that such Liens do not cover any Hydrocarbon Interests or equity interests in Persons owning direct or indirect interests in Hydrocarbon Interests; and provided further that the aggregate amount of obligations at any time outstanding that are secured by Liens permitted by this Section 8.01(n) , when added to the aggregate amount of reimbursement obligations then outstanding secured by Liens permitted under Section 8.01(m) , shall not exceed $2,000,000;
(o)    other Liens on property or assets (other than Oil and Gas Properties and equity interests in Persons owning direct or indirect interests in Oil and Gas Properties) securing obligations not exceeding at any time, in the aggregate, $1,000,000;
(p)    [reserved];
(q)    Liens in favor of the Issuing Lender and/or Swing Line Lender, including pursuant to Section 2.14, to cash collateralize or otherwise secure the obligations of a Defaulting Lender to fund risk participations hereunder;
(r)    Liens in respect of Adequate Protection;
(s)    Liens securing the Prepetition RBL Obligations under the Prepetition RBL Loan Documents; provided that such Liens are subject to the terms and conditions of the DIP Order; and
(t)    Liens securing the Prepetition Second Lien Obligations under the Prepetition Second Lien Debt Documents; provided that such Liens are subject to the terms and conditions of the DIP Order.
8.02    Disposition of Assets . Each Loan Party agrees that it shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, sell, assign, lease, convey, transfer or otherwise dispose of (whether in one or a series of transactions) (collectively, “ Dispositions ”) any interests owned by any Loan Party or by any Subsidiary of a Loan Party in Oil and Gas Properties or in other Property used or useful by the Loan Parties or Subsidiaries in connection with such Oil and Gas Properties (including accounts and notes receivable, with or without recourse), except:
(a)    as permitted under Sections 7.05 , 8.03 , 8.04 or 8.09 ;
(b)    Dispositions of inventory, including produced Oil and Gas, in the ordinary course of business;

 
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(c)    Dispositions by the Company or any of its Subsidiaries to the Company or to a Guarantor provided that a Disposition of any Mortgaged Property otherwise permitted under this Section 8.02(c) shall be permitted only if such Mortgaged Property remains subject to a Lien in favor of the Administrative Agent for the benefit of the Lenders and the Lender Derivative Providers pursuant to documentation executed by the transferee reasonably satisfactory to the Administrative Agent, and in the case of a Disposition to a Guarantor that is a Subsidiary, the transferee Subsidiary is engaged in the Principal Business;
(d)    used, worn-out or surplus equipment in the ordinary course of business;
(e)    any other Disposition approved by the Bankruptcy Court pursuant to an order in form and substance satisfactory to the Majority Lenders; and
(f)    Dispositions not otherwise permitted under Sections 8.02(a) - (e) above; provided that, (i) no Event of Default shall exist at the time of such Disposition or result therefrom, and (ii) the aggregate fair market value of all such property disposed of under this clause (f) does not exceed $10,000,000 in the aggregate.

8.03    Consolidations and Mergers . No Loan Party shall, or permit any of its Subsidiaries to, merge, consolidate with or into, or convey, transfer, lease or otherwise dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any Person, except:
(a)    any Subsidiary may merge with any Loan Party, provided that the Company or other Loan Party, as applicable, shall be the continuing or surviving entity;
(b)    any Subsidiary may sell, convey, transfer, lease or otherwise dispose of all or substantially all of its assets (upon voluntary liquidation or otherwise), to the Company or any other Subsidiary that is a Guarantor; and
(c)    Dispositions permitted under Section 8.02(e) .
8.04    Loans and Investments . No Loan Party shall, or permit any of its Subsidiaries to, purchase, acquire, or own, or permit any of its Subsidiaries to purchase, acquire, or own any capital stock, equity interest, or any obligations or other securities of, or any interest in, any Person (including any Unrestricted Entity), or make any Acquisition, or make any advance, loan, extension of credit or capital contribution to or any other investment in (collectively, “ Investments ”) any Person including any Restricted Subsidiary, Unrestricted Entity or Affiliate of the Company, except for:
(a)    (i) Investments made on or prior to the Petition Date in the entities described in Schedule 6.19 and (ii) Investments existing on the Petition Date and, to the extent such Investments in any Person and its Affiliates are in excess of $10,000,000 in the aggregate, that are described in Schedule 8.04 ;
(b)    Investments in Cash Equivalents;

 
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(c)    extensions of credit in the nature of accounts receivable or notes receivable arising from the sale or lease of goods or services in the ordinary course of business;
(d)    Investments (i) by Parent in or to the Company, and (ii) by the Company or any Subsidiary in or to a Domestic Subsidiary that is a Guarantor or that becomes a Guarantor upon the making of such Investments, provided , however , that in the case of this clause (ii), during the continuation of an Event of Default, no such Investments shall be made except to the extent determined by the Company in the exercise of its good faith judgment to be reasonably necessary to preserve the Mortgaged Properties;
(e)    [reserved];
(f)    Investments in Derivative Contracts permitted under Section 8.10 ;
(g)    Investments with third parties that (i) are customary in the oil and gas business, (ii) are made in the ordinary course of such Person’s business, and (iii) are made in the form of or pursuant to Operating Agreements, process agreements, farm-in agreements, farm-out agreements, development agreements, unitization agreements, pooling agreements, joint bidding agreements, service contracts and other similar agreements;
(h)    [reserved];
(i)    [reserved];
(j)    [reserved];
(k)    [reserved];
(l)    (i) Investments received in connection with the bankruptcy or reorganization of suppliers and customers; and (ii) Investments consisting of extensions of credit in the form of notes receivable received in settlement of delinquent obligations of and other disputes with suppliers and customers, to the extent reasonably necessary in order to prevent or limit loss; and in the case of clauses (i) and (ii), arising in the ordinary course of business;
(m)    [reserved];
(n)    Contingent Obligations permitted under Section 8.08 ;
(o)    Investments in the Unrestricted Salt Water Disposal Subsidiary in an amount not exceed $1,000,000 in the aggregate; and
(p)    other Investments made after the Interim Facility Effective Date in an amount not to exceed $1,500,000 in the aggregate.
8.05    Limitation on Indebtedness . No Loan Party shall, or permit any of its Subsidiaries to, create, incur, assume, suffer to exist, or otherwise become or remain directly or indirectly liable with respect to, any Indebtedness, except:

 
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(a)    Indebtedness incurred pursuant to this Agreement or the other Loan Documents;
(b)    Indebtedness consisting of Contingent Obligations permitted pursuant to Section 8.08 ;
(c)    Indebtedness incurred in connection with the issuance of Derivative Contracts permitted under Section 8.10 hereof;
(d)    Indebtedness existing on the Petition Date and, to the extent such Indebtedness is owing to any Person and its Affiliates in an amount in excess of $10,000,000 in the aggregate, that is described on Schedule 8.05 ;
(e)    (i) the Prepetition Senior Unsecured Notes, (ii) the Prepetition Second Lien Obligations and (iii) the Prepetition RBL Obligations;
(f)    Indebtedness constituting Investments that are permitted pursuant to Section 8.04(d) ;
(g)    Capitalized Lease Obligations and purchase money Indebtedness in an aggregate principal amount not to exceed $2,000,000 outstanding at any time;
(h)    [reserved]; and
(i)    Unsecured Indebtedness not otherwise permitted under Sections 8.05(a) - (h) above in an aggregate principal amount not exceeding $1,000,000 at any time outstanding.
8.06    Transactions with Affiliates . Each Loan Party will not, and will not permit any of its Subsidiaries to, enter into any transaction, including, without limitation, any purchase, sale, lease, exchange or other Disposition of Property or the rendering of any service, with any Affiliate other than transactions or arrangements in place as of the Petition Date (including contractual obligations in place at such time) or approved by the Bankruptcy Court pursuant to an order in form and substance satisfactory to the Administrative Agent and the Majority Lenders.
8.07    Margin Stock .
(a)    No Loan Party shall use any portion of the Loan proceeds, directly or indirectly, (i) to purchase or carry Margin Stock, (ii) to repay or otherwise refinance indebtedness of the Company or others incurred to purchase or carry Margin Stock, (iii) to extend credit for the purpose of purchasing or carrying any Margin Stock, or (iv) to acquire any security in any transaction that is subject to Section 13 or 14 of the Exchange Act. If requested by the Administrative Agent, the Company will furnish to the Administrative Agent and each Lender a statement to the foregoing effect in conformity with the requirements of FR Form U-1 or such other form referred to in Regulation U or Regulation X of the FRB, as the case may be.
(b)    The Loan Parties, individually or in the aggregate, shall not at any time own Margin Stock the value of which, for purposes of Regulation U, would exceed 10% of the value of

 
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the Collateral unless (i) such Margin Stock shall have been pledged to the Administrative Agent to secure the Obligations and the relevant Loan Party shall have delivered such documentation as the Administrative Agent requires in connection with such pledge and (ii) the Company shall have furnished to the Administrative Agent and each Lender a statement in conformity with the requirements of FR Form U-1 or such other form referred to in Regulation U or Regulation X of the FRB, as the case may be.
8.08    Contingent Obligations . No Loan Party shall, or permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Contingent Obligations except:
(a)    endorsements for collection or deposit in the ordinary course of business;
(b)    Derivative Contracts permitted under Section 8.10 hereof;
(c)    Contingent Obligations existing on the Petition Date and, to the extent such Contingent Obligations are owing to any Person and its Affiliates in an amount in excess of $10,000,000 in the aggregate, that are described on Schedule 8.08 ;
(d)    plugging bonds, performance bonds and fidelity bonds issued for the account of the Company or its Subsidiaries, obligations to indemnify or make whole any surety and similar agreements incurred in the ordinary course of business, provided that such obligations shall not exceed $50,000,000 in the aggregate;
(e)    this Agreement and the Loan Documents;
(f)    Contingent Obligations of any Loan Party in respect of obligations of any other Loan Party to the extent such obligations are permitted under the Loan Documents;
(g)    Guaranty Obligations in respect of the Prepetition RBL Loan Documents, the Prepetition Second Lien Indenture, the other Prepetition Second Lien Debt Documents and the Prepetition Senior Unsecured Notes; and
(h)    any other Contingent Obligations of the Loan Parties to the extent not described in Sections 8.08(a) - (g) not to exceed an aggregate amount of $5,000,000 outstanding at any time.
8.09    Restricted Payments . No Loan Party shall, or permit any of its Subsidiaries to, purchase, redeem or otherwise acquire for value any membership interests, partnership interests, capital accounts, shares of its capital stock or any warrants, rights or options to acquire such membership interest, partnership interest or shares, now or hereafter outstanding from its members, partners or stockholders or declare or pay any distribution, dividend or return capital to its members, partners or stockholders or make any distribution of assets in cash or in kind to its members, partners or stockholders, or make any prepayments of principal or payment of fees on or in connection with the Prepetition RBL Loan Documents (other than the Adequate Protection), the Prepetition Second Lien Debt Documents or the Prepetition Senior Unsecured Notes (collectively “ Restricted Payments ”), other than Restricted Payments (a) by any Subsidiary of the Company that is a Guarantor to the Company or a Guarantor and (b) by any other Subsidiary of the Company that is not a Loan Party ratably with respect to their Equity.

 
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8.10    Derivative Contracts . No Loan Party shall, or permit any of its Subsidiaries to, enter into or in any manner be liable on any Derivative Contract except:
(a)    Derivative Contracts entered into by the Company with the purpose and effect of limiting or reducing the market price risk of Oil and Gas expected to be produced by the Company and its Subsidiaries provided that at all times: (i) each such Derivative Contract limits or reduces such market price risk for a term of no more than sixty (60) months; (ii) no such contract, at the time it is entered into, when aggregated with all Derivative Contracts permitted under this Section 8.10(a) (but excluding put option contracts or similar “floor” arrangements) requires the Loan Parties, collectively, to deliver volumes in excess of the greater of (x) 80% of Total Proved Reserves or (y) 90% of Proved Producing Reserves; provided , however , that with regard to a "costless collar" that involves the purchase of a put and the sale of a call for the same volumes and dates and commodities, only the volumes associated with the put or the call (but not both) will be included in calculating the applicable percentage threshold, and (iii) each such contract shall be between the Company and a Lender Derivative Provider;
(b)    Derivative Contracts entered into by the Company with the purpose and effect of fixing interest rates on a principal amount of Indebtedness of the Company that is accruing interest at a variable rate, provided that (i) the floating rate index of each such contract generally matches the index used to determine the floating rates of interest on the corresponding Indebtedness of the Company to be hedged by such contract and (ii) each such contract shall be with a Lender Derivative Provider;
(c)    In the event of a Derivative Contract between the Company and any of the Lenders, the Contingent Obligation evidenced under such Derivative Contract shall not be applied against such Lender’s Commitment nor against the Effective Amount. Any obligation of a Loan Party under any Lender Derivative Contract shall be treated as an Obligation pari passu and secured pro rata under the Security Documents with all other Obligations as more particularly provided under Section 9.02 and 11.11 ; and
(d)    The Company shall not modify in any material respect to the extent it adversely affects the then-current Collateral or terminate any Derivative Contracts to which it becomes a party after the Petition Date without the consent of the Administrative Agent.
8.11    Change in Business; Amendments to Organization Documents; Corporate Structure; Tax Status .
(a)    The Loan Parties shall not, and shall not permit any of their Subsidiaries to, (i) own Equity of any Foreign Person, or make any expenditure in or related to Oil and Gas Properties not located within the geographic boundaries of the United States, or (ii) enter into, or allow any Subsidiary to enter into, any joint ventures except as permitted by Section 8.04 .
(b)    The Loan Parties shall not, and shall not permit any subsidiary to, engage in any business or activity other than its Principal Business.
(c)    The Loan Parties shall not alter, amend or modify in any manner materially adverse to the Lenders any of its Organization Documents.

 
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(d)    Parent shall not alter, and shall take such actions as may be required in order to maintain, its status as a partnership for United States federal income tax purposes.
8.12    Accounting Changes . Except as expressly permitted by the Lenders, no Loan Party shall, or permit any Subsidiary to, make any significant change in accounting treatment or reporting practices, except as required by GAAP, or change the fiscal year of any Loan Party.
8.13    ERISA Compliance . Except as would not reasonably be expected to result in a Material Adverse Effect, no Loan Party will, or permit any Subsidiary to, at any time:
(a)    engage in, or permit any ERISA Affiliate to engage in, any transaction in connection with which any Loan Party or any ERISA Affiliate could be subjected to either a civil penalty assessed pursuant to subsections (c), (i) or (l) of section 502 of ERISA or a tax imposed by Chapter 43 of Subtitle D of the Code;
(b)    terminate, or permit any ERISA Affiliate to terminate, any Pension Plan in a manner, or take any other action with respect to any Pension Plan, which could result in any liability of such Loan Party or any ERISA Affiliate to the PBGC;
(c)    fail to make, or permit any ERISA Affiliate to fail to make, full payment when due of all amounts which, under the provisions of any Plan, agreement relating thereto or applicable law, any Loan Party or any ERISA Affiliate is required to pay as contributions thereto;
(d)    permit to exist, or allow any ERISA Affiliate to permit to exist, any accumulated funding deficiency within the meaning of section 302 of ERISA or section 412 of the Code, whether or not waived, with respect to any Plan;
(e)    permit, or allow any ERISA Affiliate to permit, the actuarial present value of the benefit liabilities under any Plan maintained by any Loan Party or any ERISA Affiliate which is regulated under Title IV of ERISA to exceed the current value of the assets (computed on a plan termination basis in accordance with Title IV of ERISA) of such Plan allocable to such benefit liabilities. The term “actuarial present value of the benefit liabilities” shall have the meaning specified in section 4041 of ERISA;
(f)    incur, or permit any ERISA Affiliate to incur, any withdrawal liability pursuant to Section 4201 or 4202 of ERISA;
(g)    acquire, or permit any ERISA Affiliate to acquire, an interest in any Person that causes such Person to become an ERISA Affiliate with respect to such Loan Party or with respect to any ERISA Affiliate of such Loan Party if such Person sponsors, maintains or contributes to, or at any time in the six-year period preceding such acquisition has sponsored, maintained, or contributed to, (i) any Multiemployer Plan with respect to which such Person has an outstanding withdrawal liability under Section 4201 or 4202 of ERISA, or (ii) any other Plan that is subject to Title IV of ERISA under which the actuarial present value of the benefit liabilities under such Plan exceeds the current value of the assets (computed on a plan termination basis in accordance with Title IV of ERISA) of such Plan allocable to such benefit liabilities;

 
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(h)    incur, or permit any ERISA Affiliate to incur, a liability to or on account of a Plan under sections 515, 4062, 4063, 4064, or 4204 of ERISA;
(i)    contribute to or assume an obligation to contribute to, or permit any ERISA Affiliate to contribute to or assume an obligation to contribute to, any employee welfare benefit plan, as defined in section 3(1) of ERISA, that provides retiree benefits to former employees of such entities (other than coverage mandated by applicable law), that may not be terminated by such entities in their sole discretion at any time without any material liability; and
(j)    amend, or permit any ERISA Affiliate to amend, a Plan resulting in an increase in current liability such that such Loan Party or any ERISA Affiliate is required to provide security to such Plan under section 401(a)(29) of the Code.
8.14    [Reserved]
8.15    [Reserved] .
8.16    [Reserved] .
8.17    Negative Pledge . No Loan Party or any of its Subsidiaries shall enter into or permit to exist any contractual obligation (other than this Agreement, any other Loan Document, the Prepetition RBL Loan Documents or the Prepetition Second Lien Debt Documents or, with respect to clause (b) only, the Prepetition Senior Unsecured Notes) that limits the ability (a) of any Subsidiary to make Restricted Payments to or otherwise transfer property to Parent, the Company or any Guarantor, (b) of Parent to guarantee the Indebtedness of the Company, or any Subsidiary to guarantee the Indebtedness of the Company, or (c) of Parent, the Company, or any Subsidiary to create, incur, assume or suffer to exist Liens on property of such Person to secure the Obligations, except restrictions imposed pursuant to an agreement entered into in connection with a Disposition permitted under Section 8.02 .
8.18    Unrestricted Entities .
(a)    No Loan Party or any of its Subsidiaries shall incur, assume, guarantee or otherwise become liable in respect of any Indebtedness or any other obligations, or grant or permit to exist any Lien on any of its Property to secure any Indebtedness of or other obligations of, or provide any other form of credit support to any Unrestricted Entity.
(b)    At all times when the Unrestricted Utica Shale Subsidiary is Wholly Owned directly or indirectly by the Parent, the Parent (and the Company, if the Unrestricted Utica Shale Subsidiary is a subsidiary of the Company) will cause the management, business, operations and affairs of the Unrestricted Utica Shale Subsidiary to be conducted in such a manner so that the Unrestricted Utica Shale Subsidiary will be treated as an entity separate and distinct from the Parent, the Company and each of their Restricted Subsidiaries, including: (i) keeping separate books of account and financial statements, showing the assets and liabilities of the Unrestricted Utica Shale Subsidiary separate and apart from those of the Parent, the Company and the Restricted Subsidiaries, (ii) furnishing separate financial statements of the Unrestricted Utica Shale Subsidiary to creditors

 
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and potential creditors thereof, (iii) not permitting any properties or assets of the Parent, the Company or any Restricted Subsidiary to be commingled with properties of the Unrestricted Utica Shale Subsidiary, and holding assets and properties in proper legal names, (iv) conducting business under separate names, and (v) holding the Unrestricted Utica Shale Subsidiary out to be separate and apart from the Parent, the Company and the Restricted Subsidiaries. Notwithstanding the foregoing, it is understood and agreed that the Unrestricted Utica Shale Subsidiary may be required to be consolidated with the Parent or the Company under GAAP or for reporting purposes by the SEC or other Governmental Authorities, and such consolidation and/or reporting shall not be a violation of this Section 8.18 .
(c)    At all times when the Unrestricted Utica Shale Subsidiary is Wholly Owned directly or indirectly by the Parent, the Parent (and the Company, if the Unrestricted Utica Shale Subsidiary is a subsidiary of the Company) will not, and will not permit any of their Restricted Subsidiaries to, (i) permit the Unrestricted Utica Shale Subsidiary to incur or be liable for any Indebtedness in excess of $1,000,000 principal amount at any time outstanding; or (ii) permit the Unrestricted Utica Shale Subsidiary to own any Property other than (A) Property of the type described in the definition of “Oil and Gas Properties” which is associated with Utica Shale Properties, (B) cash and Cash Equivalents, (C) equity in a joint venture or similar entity that owns a portion of the Utica Shale Properties and (D) equity of the Parent.
8.19    Modifications of Certain Agreements . No Loan Party shall, nor shall any Loan Party permit any of its Subsidiaries to, consent to any amendment, supplement, waiver or other modification of, or enter into any forbearance from exercising any rights with respect to the terms or provisions contained in any of the Prepetition Senior Unsecured Notes and any documents executed in connection therewith or related thereto, the Prepetition Second Lien Debt Documents, the Prepetition RBL Loan Documents or other material Indebtedness if, in any case, the result would have a materially adverse effect on the rights or remedies of the Administrative Agent, any Lender or any Lender Derivative Provider.
8.20    Budget Variance . As of any Testing Date, for the Testing Period ending on such Testing Date, the Company shall not allow the aggregate Operating Disbursements made by the Loan Parties and their Subsidiaries during such Testing Period to be greater than 115% of the aggregate Operating Disbursements for the Loan Parties and their Subsidiaries set forth in the Budget for such Testing Period plus any accrued but unused Carryforwards (the variances described in the foregoing clauses (i) and (ii), the “ Permitted Variances ”).
ARTICLE IX
EVENTS OF DEFAULT
9.01    Event of Default . Any of the following shall constitute an “ Event of Default ”:
(a)    The Company or any other Loan Party fails to pay (i) when and as required to be paid herein, any amount of principal of any Loan, (ii) fails to pay within three (3) days of when due, interest on any Loan, or (ii) fails to pay within five (5) Business Days of when due any fee or other amount payable hereunder or under any other Loan Document; or

 
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(b)    Any representation or warranty by any Loan Party made or deemed made herein, in any other Loan Document, or which is contained in any certificate, document or financial or other statement by the Company, any other Loan Party, or any Responsible Officer or Financial Officer of such Person, furnished at any time under this Agreement, or in or under any other Loan Document, is incorrect in any material respect on or as of the date made or deemed made; or
(c)    Any Loan Party fails to perform or observe any term, covenant or agreement contained in Section 7.03(a) or (b) , 7.04(a) , 7.08 (solely with respect to maintenance of insurance), 7.14 , 7.15 , 7.16 , 7.21 , 7.22 , 7.23 or Article VIII (other than Section 8.20 thereof); or
(d)    Any Loan Party fails to perform or observe any term, covenant or agreement contained in Section 7.01 , 7.02(d) or (e) , 7.05 , 7.10 , 7.11 or 7.12 and such failure shall continue unremedied for a period of 5 days after the earlier of (i) the date upon which a Responsible Officer or Financial Officer knew thereof or (ii) the date upon which written notice thereof is given to the Company by the Administrative Agent or any Lender; or
(e)    An Event of Default as defined in any Security Document shall occur, or any Loan Party fails to perform or observe any other term or covenant contained in this Agreement (other than described in any other clause of this Section 9.01 ) or any other Loan Document, and same shall continue unremedied for a period of 30 days after the earlier of (i) the date upon which a Responsible Officer or Financial Officer knew thereof or (ii) the date upon which written notice thereof is given to the Company by the Administrative Agent or any Lender; or
(f)    (i) any Loan Party, any Subsidiary thereof or any combination thereof fails to make any payment in respect of any Indebtedness or Contingent Obligation, in each case incurred on or after the Petition Date, in an aggregate principal amount (including undrawn committed or available amounts and including amounts owing to all creditors under any combined or syndicated credit arrangement) of more than $2,000,000, when due (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) and such failure continues after the applicable grace period, if any, specified in the relevant document on the date of such failure; or (ii) any Loan Party, any Subsidiary thereof or any combination thereof fails after the applicable grace or notice period, if any, specified in the relevant document on the date of such failure to perform or observe any other condition or covenant, or any other event shall occur or condition exist, under any agreement or instrument relating to any Indebtedness or Contingent Obligation, in each case incurred on or after the Petition Date, in an aggregate principal amount of more than $2,000,000, which results in such Indebtedness or Contingent Obligation being declared due and payable (or becoming subject to mandatory Redemption) prior to its stated maturity; or
(g)    Other than pursuant to a Plan of Reorganization, there shall occur a Change of Control; or
(h)    One or more non-interlocutory judgments, non-interlocutory orders, decrees or arbitration awards is entered against any Loan Party, any Subsidiary thereof, General Partner or any combination thereof involving in the aggregate liability (to the extent not covered by independent third-party insurance as to which the insurer does not dispute coverage) of $2,000,000 or more, and the same shall remain unsatisfied, unvacated and unstayed pending appeal for a period of 60 days

 
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after the entry thereof, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of a Loan Party or any Subsidiary to enforce any such judgment, and, in each such case, such action shall not be effectively stayed (including as a result of the automatic stay under the Chapter 11 Cases); or
(i)    Any Governmental Authority revokes or fails to renew any material license, permit or franchise of any Loan Party, or any Loan Party for any reason loses any material license, permit or franchise, or any Loan Party suffers the imposition of any restraining order, escrow, suspension or impounding of funds in connection with any proceeding (judicial or administrative) with respect to any material license, permit or franchise; and, in each case such revocation, failure or loss could reasonably be expected to have a Material Adverse Effect; and such default remains unremedied for a period of 30 days after the earlier of (i) the date upon which a Responsible Officer or Financial Officer knew or reasonably should have known of such default or (ii) the date upon which written notice thereof is given to the Company by the Administrative Agent or any Lender; or
(j)    A Guaranty or any other Loan Document is for any reason partially (including with respect to future advances) or wholly revoked or invalidated, or otherwise ceases to be in full force and effect other than in accordance with its terms or the terms of this Agreement, or a Guarantor or any other Person contests in any manner the validity or enforceability thereof or any Loan Party denies that it has any further liability or obligation thereunder; or
(k)    Subject to the Budget covenant set forth in Section 8.20 , and other than as a result of the Chapter 11 Cases, the occurrence of any of the following events: (i) the happening of a Reportable Event which has resulted or could reasonably be expected to result in a Material Adverse Effect (if not waived by the PBGC or by the Majority Lenders, or if such event can be avoided by any corrective action of the Loan Party affected thereby, such corrective action is not completed within ninety (90) days after the occurrence of such Reportable Event) with respect to any Pension Plan; (ii) the termination of any Pension Plan in a “distress termination” under the provisions of Section 4041 of ERISA; (iii) the appointment of a trustee by an appropriate United States District Court to administer any Pension Plan; and (iv) the institution of any proceedings by the PBGC to terminate any Pension Plan or to appoint a trustee to administer any such plan; or
(l)    An Environmental Claim shall have been asserted against any Loan Party or any subsidiary thereof which could reasonably be expected to have a Material Adverse Effect; or
(m)    The filing of a motion by the Loan Parties seeking dismissal of any of the Chapter 11 Cases or conversion of any of the Chapter 11 Cases to a case under Chapter 7 of the Bankruptcy Code; or
(n)    The dismissal or conversion of any of the Chapter 11 Cases to a case under Chapter 7 of the Bankruptcy Code; or

 
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(o)    The appointment of a trustee, examiner or other person with expanded powers in any of the Chapter 11 Cases; or
(p)    Other than the DIP Facility to which the Administrative Agent consents, the Bankruptcy Court’s entry of an order granting any lien or claim that is senior to or pari passu with the Administrative Agent’s liens and claims under the DIP Facility without the prior written consent of the Administrative Agent and the Majority Lenders; or
(q)    The payment or granting of adequate protection (other than the Adequate Protection) with respect to Prepetition Indebtedness in an amount in excess of $1,000,000 (other than as described herein or the applicable DIP Order) without the prior written consent of the Prepetition RBL Agent and the Prepetition Second Lien Trustee; or
(r)    (i) Any Liens or DIP Superpriority Claims granted with respect to the DIP Facility shall cease to be valid, perfected and enforceable in all material respects with the priority in the DIP Order, or (ii) the disallowance, expungement, extinguishment or impairment of any portion of the DIP Superpriority Claims; or
(s)    The filing of a motion by the Loan Parties seeking, or the entry of, one or more orders of the Bankruptcy Court (i) reversing, amending, supplementing, vacating, or otherwise modifying the Interim Order or Final Order, as applicable, without the prior written consent of the Administrative Agent and the Majority Lenders, or (ii) avoiding or requiring repayment of any of the payments made to the Administrative Agent or the Lenders in accordance with the terms hereof; or
(t)    The entry of one or more orders of the Bankruptcy Court modifying the automatic stay with respect to assets having a value in excess of $5,000,000 in the aggregate without the prior written consent of the Administrative Agent; or
(u)    Subject to any Permitted Variances, the Loan Parties’ failure to comply with the Budget to the extent such failure is not attributable to amounts disbursed on account of any party’s Professional Fees, unless the Administrative Agent has waived the Loan Parties’ noncompliance with the Budget for such Testing Period within four (4) Business Days after providing the Loan Parties and their counsel with notice of such noncompliance; or
(v)    The Loan Parties failure to comply with any other material term of the Interim Order or Final Order; or
(w)    Entry of an order precluding the Prepetition RBL Agent, the Prepetition RBL Lenders, the Administrative Agent and/or the Lenders from “credit bidding”; or
(x)    Failure to reach the Acceptable Derivatives Resolution by the date that is 60 days from the date of entry of the Interim Order upon the docket of the Bankruptcy Court or as such date may be extended by written agreement of the Administrative Agent and the Company.
9.02    Remedies .

 
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(a)    Upon the occurrence and continuance of any Event of Default, (i) the Administrative Agent, upon the written request of the Majority Lenders, shall (subject to the terms of this Agreement), (A) deliver a notice to the Company of the Event of Default, (B) terminate the Commitment Amount, and thereupon the Commitment Amount shall terminate immediately unless and until the Majority Lenders and the Administrative Agent shall reinstate the same in writing, (C) declare the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of the Company accrued hereunder and under the Loan Documents), shall become due and payable immediately, without presentment, demand, protest, notice of intent to accelerate, notice of acceleration or other notice of any kind, all of which are hereby waived by each Loan Party, (D) terminate the DIP Facility and (E) charge the Default Rate; and (ii) upon seven (7) days written notice to the Company and the Administrative Agent from the Majority Lenders, in their sole and absolute discretion, the automatic stay of section 362 of the Bankruptcy Code shall be terminated without order of the Bankruptcy Court, without the need for filing any motion for relief from the automatic stay or any other pleading, for the purpose of permitting the Lenders to do any of the following: (A) direct the Administrative Agent to foreclose on the Collateral and (B) enforce all of their rights under the Guaranty.
(b)    In addition to the foregoing, upon the occurrence of any Event of Default, the Administrative Agent, with the consent of the Majority Lenders, in accordance with the provisions of this Agreement may exercise any or all of its rights and remedies provided by law and equity and any other rights and remedies pursuant to the Loan Documents.
(c)    All proceeds realized from the liquidation or other disposition of Collateral and any amounts otherwise received on account of the Obligations after the exercise of remedies provided for in Section 9.02 (or after any of the Loans have automatically become immediately due and payable and the Letters of Credit have automatically been required to be cash collateralized in an amount equal to 103% of the then outstanding LC Obligations) shall be applied:
first , to the payment of that portion of the Obligations constituting reimbursement of fees, expenses, indemnities and other amounts (including fees and disbursements of counsel to the Administrative Agent) payable to the Administrative Agent in its capacity as such;
second , to the payment of that portion of the Obligations constituting fees, indemnities and other amounts (other than principal, interest and Letter of Credit Fees) payable to the Lenders and the Issuing Lender (including fees and expenses of counsel), ratably among them in proportion to the respective amounts described in this clause second payable to them;
third , to the payment of that portion of the Obligations constituting accrued and unpaid Letter of Credit Fees and interest on the Obligations, ratably among the Lenders and the Issuing Lender in proportion to the respective amounts described in this clause third payable to them;
fourth , to the Administrative Agent for the account of the Issuing Lender, to cash collateralize Letters of Credit in an amount equal to 103% of the then outstanding LC Obligations (to the extent not otherwise cash collateralized in an amount equal to 103% of the then outstanding LC Obligations)

 
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and to the payment of that portion of the Obligations constituting of unpaid principal of the Loans and unpaid drawings under Letters of Credit, ratably among the Lenders and the Issuing Lenders in proportion to the respective amounts described in this clause fourth;
fifth , to the payment of that portion of the Obligations constituting Indebtedness owed to Lender Derivative Providers under any Lender Derivative Contracts and Obligations then owed to Banking Services Lenders under Banking Services Agreements, ratably among the Lender Derivative Providers and the Banking Services Lenders in proportion to the respective amounts described in this clause fifth; provided that, to the extent that any Excluded Swap Obligation exists, payments or the proceeds of any Collateral provided by a Loan Party that is not a Qualified ECP Guarantor may not be shared with a Lender Derivative Provider to the extent that doing so would violate the Commodity Exchange Act
sixth , to payment of other unpaid Obligations, ratably to the holders thereof in proportion to the respective amounts described in this clause sixth; and
seventh , any excess shall be paid to the Company and held subject to further order of the Bankruptcy Court or as otherwise required by law.
Notwithstanding the foregoing, the Administrative Agent shall have no obligation to distribute funds in respect of Obligations under Lender Derivative Contracts if the Administrative Agent has not received written notice thereof, together with such supporting documentation as the Administrative Agent may request, from the applicable Lender Derivative Provider. Each Lender Derivative Provider that has given the notice contemplated by the preceding sentence shall, by such notice, be deemed to have acknowledged and accepted the appointment of the Administrative Agent pursuant to the terms of Article IX hereof for itself and its Affiliates to the same extent as a “ Lender ” party hereto.
9.03    Rights Not Exclusive . The rights provided for in this Agreement and the other Loan Documents are cumulative and are not exclusive of any other rights, powers, privileges or remedies provided by law or in equity, or under any other instrument, document or agreement now existing or hereafter arising.
9.04    Lender and Lender Derivative Provider Action . Without limiting the provisions of Section 11.03(b) or Section 11.08 , the Issuing Lender and each Lender, in its capacity as a Lender and in its capacity as a Lender Derivative Provider and a Banking Services Lender, and each other Lender Derivative Provider and Banking Services Lender, by its acceptance of the benefits of the Security Documents creating Liens to secure Lender Derivative Obligations, agrees that:
(a)    it will not, without the prior written consent of the Administrative Agent, exercise any right to set off or apply any deposits of any kind, or any other obligations owing by it to or for the order of the Company or any of its Subsidiaries, against any Obligations under Lender Derivative Contracts (“ Lender Derivative Obligations ”) or any other amounts secured by Liens on Collateral; provided that nothing contained in this Section or elsewhere in this Agreement shall impair the right of any Lender Derivative Provider to declare an early termination date in respect

 
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of any Lender Derivative Contracts, or to undertake payment or close-out netting or to otherwise setoff trades or transactions then existing under such Lender Derivative Contracts;
(b)    it will not, without the prior written consent of the Administrative Agent, take any judicial or other action against the Company or any Subsidiary, or against any Collateral or any other collateral pledged to secure any Lender Derivative Obligations, of the type that would invoke the application of the “security first” rule contained in Section 726 of the California Code of Civil Procedure or any subsequent replacement statutory provision;
(c)    it will not, without the prior written consent of the Administrative Agent, (x) pursue or attempt to realize upon any Collateral or any part or portion thereof, (y) do anything or take any action with respect to any Collateral which would constitute an “action” for purposes of California law, or (z) bid on any Collateral at a foreclosure sale, or take possession or operate any portion of the Collateral which constitutes real property;
(d)    it will not transfer any portion of its rights in respect of any Lender Derivative Contract or Lender Derivative Obligations, unless the assignee agrees in writing to be bound by the terms of this Section 9.04 and a copy of such writing is delivered to the Administrative Agent; and
(e)    if it exercises any right of setoff in contravention of this Section 9.04 or in contravention of Section 11.03 , it shall indemnify the Administrative Agent and each other Lender, the Issuing Lender, each Lender Derivative Provider and each Banking Services Lender, from any and all losses, expenses and damages (including attorneys’ fees and costs) it shall suffer or incur by reason of such setoff or other action, including losses, expenses and damages (including attorneys’ fees and costs) caused by or resulting from the release, loss or waiver of any Collateral or any Lien thereon securing Obligations, or the unenforceability of any Security Document or Loan Document or any assertions that any Collateral or Lien securing Obligations thereon was released, lost or waived.
The provisions of this Section 9.04 shall apply to the Issuing Lender, all Lenders, all Lender Derivative Providers and all Banking Services Lenders and their respective successors and assigns. The provisions of this Section 9.04 are solely for the benefit of the Administrative Agent, the Issuing Lender, the Lenders, the Lender Derivative Providers and the Banking Services Lenders, and neither the Company nor any Subsidiary shall have rights as a third party beneficiary of any such provisions.
ARTICLE X
ADMINISTRATIVE AGENT
10.01    Appointment and Authority . Each of the Lenders and the Issuing Lender hereby irrevocably appoints Administrative Agent to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Article are solely for the benefit of the Administrative Agent, the Lenders and the

 
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Issuing Lender, and neither the Company nor any other Loan Party shall have rights as a third party beneficiary of any of such provisions. It is understood and agreed that the use of the term “agent” herein or in any other Loan Documents (or any other similar term) with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any Requirement of Law. Instead such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between contracting parties.
10.02    Rights as a Lender . The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with Parent or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.
10.03    Exculpatory Provisions . The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents. Without limiting the generality of the foregoing, the Administrative Agent:
(a)    shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;
(b)    shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Majority Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents), provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable law; and
(c)    shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Company or any of its Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.
The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Majority Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 9.02 and 11.01 ) or (ii) in the absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction by final and nonappealable judgment. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given to the Administrative Agent in writing by the Company, a Lender or the Issuing Lender.

 
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The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document (v) the existence, priority or perfection of the Administrative Agent’s Lien on any Collateral, or (vi) the satisfaction of any condition set forth in Article V or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent, nor shall the Administrative Agent be responsible or liable to the Lenders for any failure to monitor or maintain any portion of the Collateral.
10.04    Reliance by Administrative Agent . The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan, or the issuance of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or the Issuing Lender, the Administrative Agent may presume that such condition is satisfactory to such Lender or the Issuing Lender unless the Administrative Agent shall have received notice to the contrary from such Lender or the Issuing Lender prior to the making of such Loan or the issuance of such Letter of Credit. The Administrative Agent may consult with legal counsel (who may be counsel for the Company), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.
10.05    Delegation of Duties . The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub agents appointed by the Administrative Agent. The Administrative Agent and any such sub agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub agent and to the Related Parties of the Administrative Agent and any such sub agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.
10.06    Resignation of Administrative Agent . The Administrative Agent may at any time give notice of its resignation to the Lenders, the Issuing Lender and the Company. Upon receipt of any such notice of resignation, the Majority Lenders shall have the right, in consultation with the Company, to appoint a successor, which shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States. If no such successor shall have been so appointed by the Majority Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative

 
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Agent may on behalf of the Lenders and the Issuing Lender, appoint a successor Administrative Agent meeting the qualifications set forth above provided that if the Administrative Agent shall notify the Company and the Lenders that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (1) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral security held by the Administrative Agent on behalf of the Lenders or the Issuing Lender under any of the Loan Documents, the retiring Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent is appointed) and (2) all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender and the Issuing Lender directly, until such time as the Majority Lenders appoint a successor Administrative Agent as provided for above in this Section 10.06 . Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent, and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this Section 10.06 ). The fees payable by the Company to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Company and such successor. After the retiring Administrative Agent’s resignation hereunder and under the other Loan Documents, the provisions of this Article X and Section 11.04 shall continue in effect for the benefit of such retiring Administrative Agent, its sub agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent. Any resignation by, or removal of, Wells Fargo Bank, National Association, as Administrative Agent pursuant to this Section 10.06 shall also constitute its resignation as an Issuing Lender and Swing Line Lender. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, (a) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring Issuing Lender, if in its sole discretion it elects to, and Swing Line Lender, (b) the retiring Issuing Lender and Swing Line Lender shall be discharged from all of their respective duties and obligations hereunder or under the other Loan Documents, and (c) the successor Issuing Lender, if in its sole discretion it elects to, shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or make other arrangement satisfactory to the retiring Issuing Lender to effectively assume the obligations of the retiring Issuing Lender with respect to such Letters of Credit.
10.07    Non-Reliance on Administrative Agent and Other Lenders. Each Lender and the Issuing Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender and the Issuing Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

 
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10.08    Administrative Agent May File Proofs of Claim . In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to any Loan Party or any of its Subsidiaries, the Administrative Agent (irrespective of whether the principal of any Loan shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Company) shall be entitled and empowered, by intervention in such proceeding or otherwise:
(a)    to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, the LC Obligation and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders, the Issuing Lender and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the Issuing Lender and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders, the Issuing Lender and the Administrative Agent under Section 2.07 , Section 2.08 or Section 11.04(a) ) allowed in such judicial proceeding; and
(b)    to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders and the Issuing Lender, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Section 11.04(a) .
Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender or the Issuing Lender any plan of reorganization, arrangement, adjustment or composition affecting the Indebtedness or the rights of any Lender or the Issuing Lender or to authorize the Administrative Agent to vote in respect of the claim of any Lender or the Issuing Lender in any such proceeding.
10.09    Authority of Administrative Agent to Release Collateral and Liens . The Issuing Lender, each Lender (including in its capacity as a Lender Derivative Provider and a Banking Services Lender), and each other Lender Derivative Provider, by its acceptance of the benefits of the Liens created by the Security Documents, hereby authorize and instruct the Administrative Agent to release any Collateral that is permitted to be sold or released pursuant to the terms of the Loan Documents, upon written request of the Company certifying the consummation of such sale or the satisfaction of the conditions to such release, accompanied by such supporting documentation as the Administrative Agent may reasonably request, and each Lender, Issuing Lender, Lender Derivative Provider and Banking Services Lender hereby authorizes the Administrative Agent to execute and deliver to the Company, at the Company’s sole cost and expense, any and all releases of Liens, termination statements, assignments, or other documents reasonably requested by the Company in connection with any sale or other disposition of property to the extent such sale or other disposition is permitted by the terms of Section 8.02 or is otherwise authorized by the terms

 
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of the Loan Documents. The Secured Parties further irrevocably authorize the Administrative Agent, at their option and in their discretion, without the necessity of any notice to or further consent from the Secured Parties, at the direction of the Majority Lenders, to credit bid and purchase (either directly or through one or more acquisition vehicles) or to sell or otherwise dispose of (or to consent to any such sale or other disposition of) all or any portion of the Collateral at any sale thereof conducted by the Administrative Agent under the provisions of the UCC, including pursuant to Sections 9-610 or 9-620 of the UCC, at any sale thereof conducted under the provisions of the Bankruptcy Code, including section 363 of the Bankruptcy Code or pursuant to a plan of reorganization, or at any sale or foreclosure conducted by the Administrative Agent (whether by judicial action or otherwise) in accordance with applicable law.
10.10    The Lead Arranger and other Agents . Anything herein to the contrary notwithstanding, no Person listed as a Lead Arranger or as a Syndication Agent on the cover page of this Agreement shall have any powers, duties or responsibilities in such capacity under this Agreement or any of the other Loan Documents.
10.11    Lender Derivative Providers and Banking Services Lenders . Anything herein to the contrary notwithstanding, the Issuing Lender and each Lender, in its capacity as a Lender and in its capacity as a Lender Derivative Provider and a Banking Services Lender, and each other Lender Derivative Provider and Banking Services Lender, by its acceptance of the benefits of the Security Documents creating Liens to secure Lender Derivative Obligations, agrees that:
(a)    No Lender or Affiliate of a Lender shall constitute, or be entitled to the benefits of constituting, a Lender Derivative Provider or a Banking Services Lender with respect to any Derivative Contract or Banking Services Agreement unless and until it has (i) provided the Administrative Agent a detailed summary of such Derivative Contract or Banking Services Agreement in form and substance satisfactory to the Administrative Agent and (ii) the Administrative Agent provides written consent to such status as a Lender Derivative Provider or a Banking Services Lender. Each Lender, in its capacity as a Lender and in its capacity as a Lender Derivative Provider and a Banking Services Lender, and after complying with clause (a) above, agrees to furnish to the Administrative Agent a written summary of all Obligations due or to become due to such Lender in respect of any Derivative Contract or Banking Services Agreement on a monthly basis (not later than the 10th Business Day of each calendar month) or as more frequently as the Administrative Agent shall request. If the Administrative Agent does not receive such written summary within the time period provided above, the Administrative Agent shall be entitled to assume that the reasonable determination of the Obligations due or to become due to such Lender in respect of such Derivative Contract or Banking Services Agreement is zero.
(b)    Except as otherwise expressly set forth herein, no Lender Derivative Provider or Banking Services Lender shall have any right to notice of any action or to consent to, direct or object to any action hereunder or under any other Loan Document or otherwise in respect of the Collateral (including the release or impairment of any Collateral) (or to notice of or to consent to any amendment, waiver or modification of the provisions of any Loan Document) other than in its capacity as a Lender and, in such case, only to the extent expressly provided in the Loan Documents.  Notwithstanding any other provision of this Article X to the contrary, the Administrative Agent

 
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shall not be required to verify the payment of, or that other satisfactory arrangements have been made with respect to, Obligations arising under Lender Derivate Contracts and Banking Services Agreement except to the extent expressly provided herein and unless the Administrative Agent has received notice of such Obligation in accordance with Section 10.11(a), together with such supporting documentation as the Administrative Agent may request, from the applicable Lender Derivative Provider or Banking Services Lender, as the case may be.  The Administrative Agent shall not be required to verify the payment of, or that other satisfactory arrangements have been made with respect to, Obligations arising under Lender Derivate Contracts or Banking Services Agreement in the case of a Termination Date.
ARTICLE XI
MISCELLANEOUS
11.01    Amendments and Waivers . No amendment, modification, termination or waiver of any provision of this Agreement or any other Loan Document, and no consent with respect to any departure by the Company or any applicable Loan Party therefrom, shall be effective unless the same shall be in writing and signed by the Majority Lenders (or by the Administrative Agent at the written request of the Majority Lenders) and the Company and acknowledged by the Administrative Agent, and then any such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided , however , that no such waiver, amendment, modification, termination or consent shall:
(a)    increase or extend the Commitment of any Lender, without the written consent of such Lender (or reinstate any Commitment terminated pursuant to Section 9.02 );
(b)    postpone the final maturity date of any Loan, or postpone or delay any date fixed by this Agreement or any other Loan Document for any payment of principal, interest, fees or other amounts due to the Lenders (or any of them) hereunder or under any other Loan Document, without the written consent of each Lender directly and adversely affected thereby;
(c)    reduce the principal of, or the rate of interest specified herein on any Loan, or any fees or other amounts payable hereunder or under any other Loan Document (excluding mandatory prepayments), without the written consent of each Lender directly and adversely affected thereby;
(d)    change in any manner the definition of “ Majority Lenders ” or change Section 2.12 or Section 9.02(c) in a manner that would alter the pro rata sharing of payments required thereby, without the written consent of each Lender;
(e)    amend this Section 11.01 or any provision of this Agreement which, by its terms, expressly requires the approval or concurrence of all Lenders, without the written consent of each Lender;
(f)    release all, substantially all, or any material portion of the Collateral (except for releases in connection with dispositions of assets which are permitted hereunder or under any

 
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Loan Document), or release any Subsidiary from any Guaranty, except for releases in connection with sales of Subsidiaries permitted hereunder, without the written consent of each Lender; provided that the Administrative Agent may release Collateral as permitted by Section 10.09 and Section 11.11(c) ;
(g)    [reserved]; or
(h)    amend the definition of “ Banking Services Agreement ”, “ Banking Services Lender ”, “ Lender Derivative Contracts ” or “ Lender Derivative Provider ” or clause (b) or (c) of the definition of “ Obligations ” in a manner materially adverse to any Banking Services Lender or Lender Derivative Provider who is a Lender at such time or who is an Affiliate of a Lender at such time, without the written consent of each such Lender;
and provided further, that (i) no amendment, waiver or consent shall, unless in writing and signed by the Issuing Lender in addition to the Majority Lenders or all the Lenders, as the case may be, affect the rights or duties of the Issuing Lender under this Agreement or any LC Related Document relating to any Letter of Credit Issued or to be Issued by it, (ii) no amendment, waiver or consent shall, unless in writing and signed by the Swing Line Lender in addition to the Majority Lenders or all the Lenders, as the case may be, affect the rights or duties of the Swing Line Lender under this Agreement, (iii) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Majority Lenders or all the Lenders, as the case may be, affect the rights or duties of the Administrative Agent under this Agreement or any other Loan Document, and (iv) the DIP Agency Fee Letter and the DIP Lead Arranger Fee Letter may be amended and terms thereof may be waived by a writing signed by the respective parties thereto. Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder (and any amendment, waiver or consent which by its terms requires the consent of all Lenders or each affected Lender may be effected with the consent of the applicable Lenders other than Defaulting Lenders), except that (x) the Commitment of any Defaulting Lender may not be increased or extended without the consent of such Lender and (y) any waiver, amendment or modification requiring the consent of all Lenders or each affected Lender that by its terms affects any Defaulting Lender disproportionately adversely relative to other affected Lenders shall require the consent of such Defaulting Lender.
If any Lender refuses to consent to any amendment, waiver or other modification of any Loan Document requested by the Company that requires the consent of a greater percentage of the Lenders than the Majority Lenders and such amendment, waiver or other modification is consented to by the Majority Lenders, then the Company may replace such Lender in accordance with the provisions of Section 3.07(b).
11.02    Notices; Effectiveness; Electronic Communication .
(a)     General. Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in subsection (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopier, or delivered by electronic mail to the electronic mail address, specified for notices on Schedule 11.02 (for the

 
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Company, the Guarantors, the Issuing Lender, the Swing Line Lender and the Administrative Agent) or on the Administrative Questionnaire (for the Lenders). Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by telecopier shall be deemed to have been given when sent if the sender receives an acknowledgment of receipt (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next business day for the recipient). Notices delivered through electronic communications to the extent provided in subsection (b) below, shall be effective as provided in said subsection (b) .
(b)     Electronic Communications. Notices and other communications to the Lenders and the Issuing Lender hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent, provided that the foregoing shall not apply to notices to any Lender or the Issuing Lender pursuant to Article II if such Lender or the Issuing Lender, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication. The Administrative Agent or the Company may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to particular notices or communications.
Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), provided that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor.
(c)     Change of Address, Etc. Each of the Company, the Administrative Agent, the Issuing Lender and the Swing Line Lender may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the other parties hereto. Each other Lender may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the Company, Administrative Agent, the Issuing Lender and the Swing Line Lender.
(d)     Notice to Administrative Agent. Each Lender shall notify the Administrative Agent in writing of any changes in the address to which notices to the Lender should be directed, of addresses of any Lending Office, of payment instructions in respect of all payments to be made to it hereunder and of such other administrative information as the Administrative Agent shall reasonably request.
(e)     Effectiveness of Facsimile and PDF Documents and Signatures. Loan Documents may be transmitted and/or signed by facsimile and PDF. The effectiveness of any such

 
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documents and signatures shall, subject to applicable Law, have the same force and effect as manually-signed originals and shall be binding on all Loan Parties, the Administrative Agent and the Lenders. The Administrative Agent may also require that any such documents and signatures be confirmed by a manually-signed original thereof; provided , however , that the failure to request or deliver the same shall not limit the effectiveness of any facsimile or PDF document or signature.
11.03    No Waiver; Cumulative Remedies .
(a)    No failure to exercise and no delay in exercising, on the part of the Administrative Agent or any Lender, any right, remedy, power or privilege hereunder, shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.
(b)    Notwithstanding anything to the contrary contained herein or in any other Loan Document, and without limiting the provisions of Section 9.04 , the authority to enforce rights and remedies hereunder and under the other Loan Documents against the Loan Parties or any of them shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, the Administrative Agent in accordance with Section 9.02 for the benefit of all the Lenders, the Issuing Lender, the Lender Derivative Providers and the Banking Services Lenders; provided , however , that the foregoing shall not prohibit (a) the Administrative Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Administrative Agent) hereunder and under the other Loan Documents, (b) the Issuing Lender or the Swing Line Lender from exercising, with the consent of the Administrative Agent, the rights and remedies that inure to its benefit (solely in its capacity as Issuing Lender or Swing Line Lender, as the case may be) hereunder and under the other Loan Documents, (c) any Lender from exercising, with the consent of the Administrative Agent, setoff rights in accordance with Section 11.08 (subject to the limitations set forth therein and subject to terms of Section 2.12 and Section 9.04 ), or (d) any Lender, Lender Derivative Provider or Banking Services Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to any Loan Party under the Bankruptcy Code or other debtor relief law.
11.04    Costs and Expenses; Indemnity .
(a)     Costs and Expenses. The Company shall pay, on a monthly basis (and in any event as required by the DIP Order), without the requirement of prior Bankruptcy Court approval and whether incurred before or after the Petition Date, (i) all reasonable and documented out-of-pocket expenses incurred by the Administrative Agent and its Affiliates in connection with the syndication of the credit facilities provided for herein, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by the Issuing Lender in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all reasonable out-of-pocket expenses incurred by the Administrative Agent, any Lender or the Issuing Lender in connection

 
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with the enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, including its rights under this Section, or (B) in connection with the Loans made or Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit. The Company shall also pay the reasonable fees and expenses of the attorneys and advisors for the Administrative Agent on the Interim Facility Effective Date and thereafter as provided under the Budget, whether or not incurred prior to, on or after the Petition Date.  Invoices supporting such fees and expenses shall be submitted to counsel for the Loan Parties, with copies to the U.S. Trustee and counsel for any Committee (invoices may be redacted to the extent necessary to delete any information subject to the attorney-client privilege, any information constituting attorney work product, or any other confidential information, and the provision of such invoices shall not constitute any waiver of the attorney-client privilege or of any benefits of the attorney work product doctrine).  No attorney or advisor to the Administrative Agent, any Lender or the Issuing Lender shall be required to file an application seeking compensation for services or reimbursement of expenses with the Bankruptcy Court.  The U.S. Trustee, the Loan Parties, and any Committee shall have ten (10) Business Days in which to raise an objection to the fees and expenses of such attorneys and advisors.  In the event any such payment would be required to be repaid to the Loan Parties as a result of application of section 506(b) of the Bankruptcy Code or otherwise, any such amounts shall not be repaid and instead shall be applied as follows:  first , to the Obligations until such Indebtedness is paid in full, in cash; second , to the Prepetition RBL Obligations until such Indebtedness is paid in full, in cash; and third , to the Company and its estate.
(b)     Indemnification by the Company. The Company shall indemnify the Administrative Agent (and any sub-agent thereof), each Lender and the Issuing Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “ Indemnitee ”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including the fees, charges and disbursements of any counsel for any Indemnitee) incurred by any Indemnitee or asserted against any Indemnitee by any third party or by the Company or any other Loan Party arising out of, in connection with, or as a result of, any actual, threatened or prospective claim, litigation, investigation or proceeding relating to (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, (ii) any Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by the Issuing Lender to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), or (iii) any actual or alleged presence or Release of Hazardous Materials on or from any property owned or operated by the Company or any of its Subsidiaries, or any Environmental Liability related in any way to the Company or any of its Subsidiaries, whether based on contract, tort or any other theory, whether brought by a third party or by the Company or any other Loan Party, and regardless of whether any Indemnitee is a party thereto, provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or (y) result from a claim brought by the Company or any other Loan Party

 
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against an Indemnitee for breach in bad faith of such Indemnitee's obligations hereunder or under any other Loan Document, if the Company or such Loan Party has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction. This Section 11.04(b) shall not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim.
(c)     Reimbursement by Lenders. To the extent that the Company for any reason fails to pay any amount required under paragraph (a) or (b) of this Section to be paid by it to the Administrative Agent (or any sub-agent thereof), the Issuing Lender or any Related Party of any of the foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent), the Issuing Lender or such Related Party, as the case may be, such Lender’s Pro Rata Share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount, provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent) or the Issuing Lender in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent) or Issuing Lender in connection with such capacity. The obligations of the Lenders under this paragraph (c) are several.
(d)     Waiver of Consequential Damages, Etc. To the fullest extent permitted by applicable law, the Company shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or Letter of Credit or the use of the proceeds thereof. No Indemnitee referred to in paragraph (b) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information t