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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): OCTOBER 28, 1998
--------------------
AVIVA PETROLEUM INC.
(Exact name of Registrant as specified in its charter)
TEXAS 0-22258 75-1432205
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of incorporation) Identification Number)
8235 DOUGLAS AVENUE
SUITE 400 75225
DALLAS, TEXAS (Zip code)
(Address of principal
executive offices)
Registrant's telephone number, including area code: (214) 691-3464
NOT APPLICABLE
(former address if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On October 28, 1998, Aviva Petroleum Inc., a Texas corporation (the
"Company"), acquired Garnet Resources Corporation, a Delaware corporation
("Garnet"). The acquisition was effected through the merger (the "Merger") of
Aviva Merger, Inc., a Delaware corporation and an indirect wholly-owned
subsidiary of the Company ("Merger Sub"), with and into Garnet, with Garnet as
the surviving corporation. The acquisition was accomplished by an exchange
whereby each issued and outstanding share of Garnet common stock, par value $.01
per share ("Garnet Common Stock"), was converted into 0.10 of one share of the
Company's common stock, without par value ("Aviva Common Stock"). The shares of
Garnet Common Stock held by holders who would receive less than 100 shares of
Aviva Common Stock pursuant to the Merger were converted into the right to
receive cash at the rate of $0.02 per share of Garnet Common Stock.
Furthermore, holders of Garnet's outstanding 9 1/2% Convertible Subordinated
Debentures due December 21, 1998 (the "Debentures") exchanged their Debentures
for Aviva Common Stock pursuant to the Debenture Purchase Agreement dated as of
June 24, 1998 between the Company and the holders of the Debentures (the
"Debenture Purchase Agreement"). In consideration of the Merger and the
Debenture Purchase Agreement, Aviva is issuing up to 14,036,987 shares of Aviva
Common Stock to former holders of Garnet Common Stock and former holders of
Debentures. Such shares of Aviva Common Stock will be represented by Aviva
Depositary Shares, each of which equals five shares of Aviva Common Stock. As
of the close of business on October 28, 1998, the latest closing price of Aviva
Depositary Shares traded on the American Stock Exchange was $0.125 per share.
The assets of Garnet included, among other things, real property and
equipment. Such real property was used by Garnet in connection with its oil and
gas business. The Company intends to continue to use such assets in the oil and
gas business.
ITEM 5. OTHER EVENTS
On October 28, 1998, concurrently with the consummation of the Merger, Neo
Energy, Inc., an indirect Subsidiary of the Company, and the Company entered
into a Restated Credit Agreement with ING (U.S.) Capital Corporation ("ING
Capital"). ING Capital, Chase Bank of Texas, N.A. ("Chase") and the Overseas
Private Investment Corporation ("OPIC") also entered into a Joint Finance and
Intercreditor Agreement (the "Intercreditor Agreement") with the Company. ING
Capital agreed to loan Neo Energy, Inc. an additional $800,000, bringing the
total outstanding balance due ING Capital to $9,000,000. The outstanding balance
due to Chase was paid down to $6,000,000 from the $6,350,000 balance owed by
Garnet prior to the Merger. ING Capital and Chase will share on a 60/40 basis,
respectively, all collateral.
The ING Capital loan and the Chase loan are guaranteed by the Company and
its material domestic subsidiaries. Both loans are also secured by the Company's
consolidated interest in the Santana contract and related assets in Colombia, a
first mortgage on the United States oil and gas properties of the Company and
its subsidiaries, a lien on accounts receivable of the Company and its
subsidiaries, and a pledge of the capital stock of the Company's subsidiaries.
The Chase loan is unconditionally guaranteed by OPIC.
Borrowings under the ING Capital loan bear interest at the London Interbank
Offered Rate ("LIBOR") plus 3.0% per annum. Borrowings under the Chase loan
bear interest at the LIBOR rate
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plus 0.6% per annum. In addition, a guarantee fee of 2.4% per annum on the
borrowings under the Chase loan guaranteed by OPIC will be payable to OPIC.
The Company has issued to ING Capital 800,000 shares of Aviva Common Stock
and warrants to purchase 1,500,000 shares of Aviva Common Stock at an exercise
price of $0.50 per share in payment of financial advisory fees.
Borrowings under the combined loans are payable as follows: $50,000 per
month through March 1999, $5,700,000 in April 1999, and thereafter $281,250 per
month until final maturity on December 31, 2001.
The Company is also required to maintain an escrow account of $250,000
until March 31, 1999. On March 31, 1999 and thereafter, the escrow account must
contain the total of the following for the next succeeding three-month period:
(i) the amount of the minimum monthly principal payments (as defined in the loan
documents), plus (ii) the interest payments due on the combined loans, plus
(iii) the amount of all fees due under the loan documents and under the
Intercreditor Agreement.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED
The following information was previously reported in the Company's
definitive joint proxy statement/prospectus filed with the Securities and
Exchange Commission on September 8, 1998.
-- Consolidated Balance Sheets of Garnet Resources Corporation at June
30, 1998 (unaudited) and December 31, 1997
-- Consolidated Statements of Operations (unaudited) of Garnet Resources
Corporation for the Three and Six Months Ended June 30, 1998 and June
30, 1997
-- Condensed Consolidated Statements of Cash Flows (unaudited) of Garnet
Resources Corporation for the Six Months Ended June 30, 1998 and June
30, 1997
-- Notes to Condensed Consolidated Financial Statements of Garnet
Resources Corporation (unaudited)
-- Report of Independent Public Accountants of Garnet Resources
Corporation
-- Consolidated Balance Sheets at December 31, 1997
and 1996 of Garnet Resources Corporation
-- Consolidated Statements of Operations of Garnet Resources Corporation
for the Years Ended December 31, 1997, 1996 and 1995
-- Consolidated Statements of Stockholders' Equity of Garnet Resources
Corporation for the Years Ended December 31, 1997, 1996 and 1995
-- Consolidated Statements of Cash Flows of Garnet Resources Corporation
for the Years Ended December 31, 1997, 1996 and 1995
-- Notes to Consolidated Financial Statements of Garnet Resources
Corporation
-- Supplemental Oil and Gas Information (unaudited) of Garnet Resources
Corporation
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(b) PRO FORMA FINANCIAL INFORMATION
The following information was previously reported in the Company's
definitive joint proxy statement/prospectus filed with the Securities and
Exchange Commission on September 8, 1998.
-- Unaudited Pro Forma Condensed Statement of Operations of Aviva
Petroleum Inc. for the year ended December 31, 1997
-- Unaudited Pro Forma Condensed Statement of Operations of Aviva
Petroleum Inc. for the six months ended June 30, 1998
-- Unaudited Pro Forma Condensed Balance Sheet of Aviva Petroleum Inc. as
of June 30, 1998
-- Notes to Unaudited Pro Forma Condensed Consolidated Financial
Statements
(c) EXHIBITS
2.1 Agreement and Plan of Merger dated as of June 24, 1998, among Aviva
Petroleum Inc., Aviva Merger, Inc. and Garnet Resources Corporation
(filed as Exhibit 2.1 to the Company's Registration Statement on Form
S-4, file no. 333-58061, and incorporated herein by reference)
2.2 Debenture Purchase Agreement dated as of June 24, 1998, between Aviva
Petroleum Inc. and holders of the Debentures (filed as Exhibit 2.2 to
the Company's Registration Statement on Form S-4, file no. 333-58061,
and incorporated herein by reference)
*20.1 Press Release of Aviva Petroleum Inc. dated October 29, 1998
*99.1 Restated Credit Agreement dated as of October 28, 1998 between Neo
Energy, Inc., Aviva Petroleum Inc. and ING (U.S.) Capital Corporation
*99.2 Joint Finance and Intercreditor Agreement dated as of October 28, 1998
between Neo Energy, Inc., Aviva Petroleum Inc., ING (U.S.) Capital
Corporation, Aviva America, Inc., Aviva Operating Company, Aviva
Delaware Inc., Garnet Resources Corporation, Argosy Energy
Incorporated, Argosy Energy International, Garnet PNG Corporation, the
Overseas Private Investment Corporation, Chase Bank of Texas, N.A. and
ING (U.S.) Capital Corporation as Collateral Agent for the Creditors
- --------------------
*Filed herewith
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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.
AVIVA PETROLEUM INC.
By: /s/ Ronald Suttill
-------------------------------------------
Name: Ronald Suttill
Title: President and Chief Executive Officer
Date: November 9, 1998
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INDEX TO EXHIBITS
EXHIBIT
NUMBER
- -------
2.1 Agreement and Plan of Merger dated as of June 24, 1998, among Aviva
Petroleum Inc., Aviva Merger, Inc. and Garnet Resources Corporation
(filed as Exhibit 2.1 to the Company's Registration Statement on Form
S-4, file no. 333-58061, and incorporated herein by reference)
2.2 Debenture Purchase Agreement dated as of June 24, 1998, between Aviva
Petroleum Inc. and holders of the Debentures (filed as Exhibit 2.2 to
the Company's Registration Statement on Form S-4, file no. 333-58061,
and incorporated herein by reference)
*20.1 Press Release of Aviva Petroleum Inc. dated October 29, 1998
*99.1 Restated Credit Agreement dated as of October 28, 1998 between Neo
Energy, Inc., Aviva Petroleum Inc. and ING (U.S.) Capital Corporation
*99.2 Joint Finance and Intercreditor Agreement dated as of October 28, 1998
between Neo Energy, Inc., Aviva Petroleum Inc., ING (U.S.) Capital
Corporation, Aviva America, Inc., Aviva Operating Company, Aviva
Delaware Inc., Garnet Resources Corporation, Argosy Energy
Incorporated, Argosy Energy International, Garnet PNG Corporation, the
Overseas Private Investment Corporation, Chase Bank of Texas, N.A. and
ING (U.S.) Capital Corporation as Collateral Agent for the Creditors
- --------------------
*Filed herewith
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EXHIBIT 20.1
PRESS RELEASE
AVIVA PETROLEUM REPORTS SUCCESSFUL COMPLETION
OF MERGER WITH GARNET RESOURCES
DALLAS, TEXAS, October 29, 1998 . . . .Aviva Petroleum Inc. (AMEX: "AVV")
reports that following shareholder meetings held on October 20, 1998, the merger
between the Company and Garnet Resources Corporation has been successfully
completed. New financing arrangements for the merged entity have also been
concluded.
Ron Suttill, Chief Executive Officer, commented: "Shareholders in both companies
decisively approved the merger, which also has the full support of our bankers.
We can now take advantage of cost savings and current industry opportunities to
build on our existing asset base in Colombia and the Gulf of Mexico."
The merged company will continue its listings under the Aviva Petroleum Inc.
name and symbols. Following the merger there are 46.7 million common shares
outstanding. Depositary Shares (each representing five common shares) have been
accepted for listing on the American Stock Exchange. An application for the
listing of the new common shares on the London Stock Exchange is currently in
progress.
The Company was informed by the American Stock Exchange on October 27, 1998 of
its intention to delist Aviva's Depositary Shares. The Company is appealing
this decision and has been informed that the Depositary Shares will continue to
trade during the appeal process.
Aviva Petroleum is engaged in the exploration for and the development and
production of oil and gas in Colombia and offshore in the United States.
Aviva's common stock is also quoted on the London Stock Exchange (symbol "AVP").
Safe Harbor for Forward-Looking Statements: Except for historical information
contained herein, the statements in this press release are forward-looking
statements that are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Forward-looking statements involve
known and unknown risks and uncertainties which may cause the Company's actual
results in future periods to differ materially from forecasted results. These
risks and uncertainties include, among other things, general economic
conditions, volatility of oil and gas prices, the impact of possible
geopolitical occurrences world-wide, imprecision of reserve estimates, changes
in laws and regulations, unforeseen engineering and mechanical or technological
difficulties in drilling or working-over wells, and other risks described in the
Company's Annual Report on Form 10-K and other filings with the Securities and
Exchange Commission.
Further Information:
Ron Suttill
Aviva Petroleum Inc.
Dallas, Texas
214 691 3464
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EXHIBIT 99.1
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RESTATED CREDIT AGREEMENT
-------------------------------------
NEO ENERGY, INC.,
as Borrower
AVIVA PETROLEUM INC.,
and
ING (U.S.) CAPITAL CORPORATION
as initial Lender
and
ING (U.S.) CAPITAL CORPORATION
as Administrative Agent
-------------------------------------
October 28, 1998,
amending and restating the Credit Agreement dated August 6, 1993
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<PAGE>
TABLE OF CONTENTS
Page
----
RESTATED CREDIT AGREEMENT..................................................... 1
ARTICLE I - Definitions and References........................................ 3
Section 1.1. Defined Terms............................................. 3
Section 1.2. Annexes, Exhibits and Schedules; Additional Definitions... 6
Section 1.3. Amendment of Defined Instruments.......................... 7
Section 1.4. References and Titles..................................... 7
Section 1.5. Calculations and Determinations........................... 7
ARTICLE II - The Loan......................................................... 7
Section 2.1. Commitment to Lend; Notes................................. 7
Section 2.2. Requests for New Loan..................................... 8
Section 2.3. Continuations and Conversions of Existing Loans........... 8
Section 2.4. Use of Proceeds........................................... 9
Section 2.5. Interest Rates and Fees................................... 9
Section 2.6. Optional Prepayments......................................10
Section 2.7. Mandatory Prepayments.....................................10
Section 2.8. Payments to Lenders.......................................10
Section 2.9. Initial Borrowing Base....................................11
Section 2.10. Subsequent Determinations of Borrowing Base...............12
Section 2.11. Capital Reimbursement.....................................12
Section 2.12. Increased Cost of Eurodollar Loans........................12
Section 2.13. Availability..............................................13
Section 2.14. Funding Losses............................................14
Section 2.15. Reimbursable Taxes........................................14
ARTICLE III - Conditions Precedent to Lending.................................15
Section 3.1. Documents to be Delivered.................................15
Section 3.2. Additional Conditions Precedent to the First Advance......16
ARTICLE IV - Representations and Warranties...................................17
Section 4.1. Related Persons' Representations and Warranties...........17
Section 4.2. Representation by Lenders.................................18
ARTICLE V - Covenants of Borrower.............................................18
Section 5.1. Covenants.................................................18
ARTICLE VI - Security.........................................................19
Section 6.1. The Security..............................................19
Section 6.2 Security Covenants........................................19
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ARTICLE VII - Events of Default and Remedies.................................19
Section 7.1. Events of Default.........................................19
Section 7.2. Acceleration..............................................20
Section 7.3. Remedies..................................................20
Section 7.4. INDEMNITY.................................................20
ARTICLE VIII - Administrative Agent...........................................22
Section 8.1. Appointment and Authority.................................22
Section 8.2. Exculpation, Administrative Agent's Reliance, Etc.........22
Section 8.3. Credit Decisions..........................................23
Section 8.4. Indemnification...........................................23
Section 8.5. Rights as Lender..........................................24
Section 8.6. Sharing of Set-Offs and Other Payments....................24
Section 8.7. Investments...............................................25
Section 8.8. Benefit of Article VIII...................................25
Section 8.9. Resignation...............................................25
ARTICLE IX - Miscellaneous..................................................26
Section 9.1. Waivers and Amendments; Acknowledgments...................26
Section 9.2. Survival of Agreements; Cumulative Nature.................27
Section 9.3. Notices...................................................28
Section 9.4. Joint and Several Liability; Parties in Interest;
Assignments...............................................28
Section 9.5. Governing Law; Submission to Process......................29
Section 9.6. Limitation on Interest....................................30
Section 9.7. Termination; Limited Survival.............................30
Section 9.8. Severability..............................................31
Section 9.9. Counterparts..............................................31
Section 9.10. Waiver of Jury Trial, Punitive Damages, etc...............31
Section 9.11. Renewal and Extension.....................................31
*EXHIBIT A - Promissory Note
*EXHIBIT B - Borrowing Notice
*EXHIBIT C - Continuation/Conversion Notice
*EXHIBIT D - Opinion of Obligors' Counsel
*EXHIBIT E - Certificate Accompanying Financial Statements
*EXHIBIT F - Environmental Compliance Certificate
EXHIBIT G - Intercreditor Agreement
* The above exhibits have been omitted. The Company will provide them to the
Securities and Exchange Commission Supplementally upon request.
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RESTATED CREDIT AGREEMENT
THIS RESTATED CREDIT AGREEMENT is made as of October 28, 1998, by and
among:
. Neo Energy, Inc., a Texas corporation (herein called "Borrower"), as
borrower,
. Aviva Petroleum Inc., a Texas corporation (herein called "Parent"),
. ING (U.S.) Capital Corporation, a Delaware corporation (herein called
"ING"), as the initial lender, and
. ING (U.S.) Capital Corporation, as agent for the Lenders (herein, in
such capacity, called "Administrative Agent");
and amends and restates the Credit Agreement dated August 26, 1993 among
Borrower, Parent, Aviva America, Inc., a Delaware corporation (herein called
"Aviva America") and Internationale Nederlanden Bank N.V., New York Branch
(predecessor in interest to ING)(as heretofore amended, herein called the
"Original Credit Agreement")
RECITALS:
1. Pursuant to the Original Credit Agreement, Borrower executed and
delivered that certain promissory note in the original principal amount of
$25,000,000 (herein called the "Original ING Note"), of which ING is now the
holder.
2. Parent is the owner of 100% of the stock of Aviva America, and Aviva
America is the owner of 100% of the stock of Borrower.
3. Argosy Energy International, a Utah limited partnership (herein called
"Argosy International") and Texas Commerce Bank National Association,
predecessor in interest to Chase Bank of Texas, National Association (herein
called "Chase"), have heretofore entered into that certain Loan Agreement dated
as of August 3, 1994 (as heretofore amended, herein called the "Chase Loan
Agreement"), pursuant to which Argosy International executed and delivered that
certain promissory note in the original principal amount of $4,400,000 and that
certain promissory note in the original principal amount of $4,800,000 (herein
collectively called the "Chase Notes"), of which Chase is now the holder.
4. Argosy International and the Overseas Private Investment Corporation,
an agency of the United States of America (herein called "OPIC"), entered into
that certain Finance Agreement dated as of May 5, 1994 (as heretofore amended,
herein called the "OPIC Finance Agreement"), pursuant to which OPIC executed and
delivered its Guaranty dated July 26, 1994
<PAGE>
(as heretofore amended, herein called the "OPIC Guaranty") under which OPIC
guaranteed the payment when due of the Chase Notes.
5. Garnet Resources Corporation, a Delaware corporation (herein called
"Garnet"), has entered into an Agreement and Plan of Merger (the "Merger
Agreement") dated June 24, 1998 with Parent and Aviva Merger Inc., a Delaware
corporation ("Aviva Merger") pursuant to which Garnet will be merged with and
into Aviva Merger, an indirect wholly owned subsidiary of Parent, with Garnet
being the surviving corporation and thereby becoming an indirect wholly owned
subsidiary of Parent.
6. Garnet is the owner of 100% of the stock of Argosy Energy Incorporated
(herein called "AEI"), and is the owner of a limited partnership interest in
Argosy International representing an approximately 10.13% interest in Argosy
International, and AEI owns a general partnership interest in Argosy
International representing an approximately 89.11% interest in Argosy
International. The remaining interests in Argosy International are limited
partnership interests owned by two individuals.
7. The principal asset of both Borrower and Argosy International is a
Joint Operating Agreement (the "Santana Contract") among Borrower, Argosy
International and Empresa Colombiana de Petroleos, the Colombian National Oil
Company ("ECOPETROL"). The Related Persons (defined herein) have determined
that the operation of the Santana Contract and the other assets of Borrower and
Argosy International in a single company will be advantageous to Borrower,
Argosy International and each of the other Related Persons. Accordingly,
Borrower and Argosy International have entered into a Purchase and Sale
Agreement, pursuant to which, Borrower will transfer to Argosy International
substantially all of Borrower's assets in consideration of (i) the assumption by
Argosy International of all of Borrower's indebtedness, obligations and
liabilities, including the indebtedness, obligations and liabilities under this
Agreement and (ii) the issuance to Borrower of limited partnership interests in
Argosy International (the "Purchase and Sale"), subject to the consent of
ECOPETROL and to the consent of the Lenders (defined herein).
8. The parties hereto desire to enter into this Agreement in order to
renew and extend the indebtedness outstanding under the Original ING Note by
means of the Notes to be issued hereunder, to amend and restate the Original
Credit Agreement to provide for additional credit to Neo, to provide for the
execution and delivery of the Joint Finance and Intercreditor Agreement among
the Related Persons, ING, Chase, OPIC and ING as Collateral Agent, and to
provide for the assumption of the Obligations hereunder by Argosy International
upon consummation of the transactions under the Purchase and Sale Agreement, in
each case on the terms and conditions set forth herein.
In consideration of the mutual covenants and agreements contained herein
the parties hereto agree as follows:
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AGREEMENT:
ARTICLE I - Definitions and References
Section 1.1. Defined Terms. Certain terms used in this Agreement are
defined in Annex A to the Intercreditor Agreement. Certain other terms used in
this Agreement (including use in Annexes A, B, C, D, or E to the Intercreditor
Agreement as incorporated herein) are defined below in this Section 1.1 or in
the sections and subsections referred to below:
"Adjusted Base Rate" means the Base Rate plus one and one-half percent
(1.5%) per annum. The Adjusted Eurodollar Rate shall in no event, however,
exceed the Highest Lawful Rate.
"Adjusted Eurodollar Rate" means, for any Eurodollar Loan for any Interest
Period therefor, the rate per annum calculated by Administrative Agent (rounded
upwards, if necessary, to the next higher 0.01%) determined on a daily basis
pursuant to the following formula:
Adjusted Eurodollar Rate =
Eurodollar Rate + A
---------------------------
100.0% - Reserve Percentage
where A means three percent (3%). If the Reserve Percentage changes during the
Interest Period for a Eurodollar Loan, the Adjusted Eurodollar Rate for such
Eurodollar Loan will be deemed automatically recalculated at the same time.
"Administrative Agent" means ING, as administrative agent hereunder, and
its successors in such capacity.
"Agreement" means this Restated Credit Agreement.
"Base Rate" means the higher of (a) the Reference Rate and (b) the Federal
Funds Rate plus one-half percent (0.5%) per annum. For purposes of this
definition, "Reference Rate" means the arithmetic average of the rates of
interest publicly announced by The Chase Manhattan Bank, Citibank, N.A. and
Morgan Guaranty Trust Company of New York (or their respective successors) as
their respective prime commercial lending rates (or, as to any such bank that
does not announce such a rate, such bank's 'base' or other rate determined by
Administrative Agent to be the equivalent rate announced by such bank), except
that, if any such bank shall, for any period, cease to announce publicly its
prime commercial lending (or equivalent) rate, Administrative Agent shall,
during such period, determine the "Reference
3
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Rate" based upon the prime commercial lending (or equivalent) rates announced
publicly by the other such banks.
"Base Rate Loan" means a Loan which does not bear interest at the
Eurodollar Rate.
"Borrower" means Neo and its successors and assigns hereunder. Upon the
assumption of the Obligations hereunder by Argosy International, "Borrower"
shall mean Argosy International and its successors and assigns hereunder.
"Borrowing" means a continuation or conversion of existing Loans into a
single Type (and, in the case of Eurodollar Loans, with the same Interest
Period) pursuant to Section 2.3.
"Borrowing Base" means, at the particular time in question, either the
amount provided for in Section 2.9 or the amount determined by Administrative
Agent and Majority Lenders in accordance with the provisions of Section 2.10.
"Borrowing Notice" means a written or telephone request, or a written
confirmation, made by Borrower which meets the requirements of Section 2.2.
"Business Day" has the meaning given to such term in Annex A, provided that
any Business Day in any way relating to Eurodollar Loans (such as the day on
which an Interest Period begins or ends) must also be a day on which, in the
judgment of Administrative Agent, significant transactions in dollars are
carried out in the interbank eurocurrency market.
"Continuation" shall refer to a continuation pursuant to Section 2.3 hereof
of a Eurodollar Loan as a Eurodollar Loan from one Interest Period to the next
Interest Period.
"Continuation/Conversion Notice" means a written or telephone request, or a
written confirmation, made by Borrower, which meets the requirements of Section
2.3.
"Conversion" shall refer to a conversion pursuant to Section 2.3 of one
Type of Loan into another Type of Loan.
"Default Rate" means, at the time in question, three percent (3.0%) per
annum plus the Base Rate then in effect; provided that, with respect to any
Eurodollar Loan with an Interest Period extending beyond the date such
Eurodollar Loan becomes due and payable, the Default Rate shall mean one and
one-half percent (1.5%) per annum plus the related Adjusted Eurodollar Rate.
The Default Rate shall in no event, however, exceed the Highest Lawful Rate.
"Determination Date" has the meaning given it in Section 2.10.
4
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"Eurodollar Loan" means a Loan that bears interest at a rate based upon the
Adjusted Eurodollar Rate.
"Eurodollar Rate" means, with respect to each particular Eurodollar Loan
and the related Interest Period, the rate per annum (rounded upwards, if
necessary, to the nearest 1/16 of 1%) reported, on the date two Business Days
prior to the first day of such Interest Period, on Telerate Access Service Page
3750 (British Bankers Association Settlement Rate) as the London Interbank
Offered Rate for dollar deposits having a term comparable to such Interest
Period and in an amount of $1,000,000 or more (or, if such Page shall cease to
be publicly available or if the information contained on such Page, in
Administrative Agent's sole judgment, shall cease to accurately reflect such
London Interbank Offered Rate, as reported by any publicly available source of
similar market data selected by Administrative Agent that, in Administrative
Agent's sole judgment, accurately reflects such London Interbank Offered Rate).
"Highest Lawful Rate" means, with respect to each Lender, the maximum
nonusurious rate of interest that such Lender is permitted under applicable law
to contract for, take, charge, or receive with respect to its Loan. All
determinations herein of the Highest Lawful Rate, or of any interest rate
determined by reference to the Highest Lawful Rate, shall be made separately for
each Lender as appropriate to assure that the Loan Documents are not construed
to obligate any Person to pay interest to any Lender at a rate in excess of the
Highest Lawful Rate applicable to such Lender.
"Intercreditor Agreement" means that certain Joint Finance and
Intercreditor Agreement dated of even date herewith among the Related Persons,
ING, Chase, OPIC and ING, as Collateral Agent for the Creditors, in the form
attached hereto as Exhibit G.
"Interest Period" means, with respect to each particular Eurodollar Loan in
a Borrowing, the period specified in the Borrowing Notice or
Continuation/Conversion Notice applicable thereto, beginning on and including
the date specified in such Borrowing Notice or Continuation/Conversion Notice
(which must be a Business Day), and ending one month thereafter; provided that:
(a) any Interest Period which would otherwise end on a day which is not a
Business Day shall be extended to the next succeeding Business Day unless such
Business Day falls in another calendar month, in which case such Interest Period
shall end on the next preceding Business Day; (b) any Interest Period which
begins on the last Business Day in a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day in a calendar month; and (c)
notwithstanding the foregoing, no Interest Period may be selected which would
reasonably be expected to require the prepayment of the particular Eurodollar
Loan prior to the end of such Interest Period in order for Borrower to make any
prepayment required under Section 2.7.
"Lenders" means ING and its successors and assigns hereunder.
5
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"Loans" has the meaning given it in Section 2.1.
"Majority Lenders" means ING, so long as it is the sole Lender under this
Agreement, and otherwise means Lenders whose aggregate Percentage Shares equal
or exceed sixty-six and two thirds percent (66 2/3%).
"Note" has the meaning given it in Section 2.1.
"Original Credit Agreement" has the meaning given to such term in the
recitals to this Agreement.
"Original ING Note" has the meaning given to such term in the recitals to
this Agreement.
"Percentage Share" means, with respect to any Lender (a) when used in
Sections 2.1 or in the Borrowing Notice or when no Loans are outstanding
hereunder, the percentage set forth opposite such Lender's name on its signature
page hereto, and (b) when used otherwise, the percentage obtained by dividing
(i) the unpaid principal balance of such Lender's Loans at the time in question,
by (ii) the sum of the aggregate unpaid principal balance of all Loans at such
time.
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect.
"Reserve Percentage" means, on any day with respect to each particular
Eurodollar Loan, the maximum reserve requirement, as determined by
Administrative Agent (including without limitation any basic, supplemental,
marginal, emergency or similar reserves), expressed as a percentage and rounded
to the next higher 0.01%, which would then apply to any Lender under Regulation
D with respect to "Eurocurrency liabilities" (as such term is defined in
Regulation D) equal in amount to such Eurodollar Loan, were such Lender to have
any such "Eurocurrency liabilities". If such reserve requirement shall change
after the date hereof, the Reserve Percentage shall be automatically increased
or decreased, as the case may be, from time to time as of the effective time of
each such change in such reserve requirement.
"Type" means, with respect to any Loans, the characterization of such Loans
as either Base Rate Loans or Eurodollar Loans.
Section 1.2. Annexes, Exhibits and Schedules; Additional Definitions.
All Annexes, Exhibits and Schedules attached to this Agreement are a part hereof
for all purposes, and terms defined in this Agreement have the same meanings
when used in the Annexes and Schedules hereto. Reference is hereby made to the
Security Schedule for the meaning of certain terms defined therein and used but
not defined herein, which definitions are incorporated herein by reference.
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Section 1.3. Amendment of Defined Instruments. Unless the context
otherwise requires or unless otherwise provided herein the terms defined in this
Agreement which refer to a particular agreement, instrument or document also
refer to and include all renewals, extensions, modifications, amendments and
restatements of such agreement, instrument or document, provided that nothing
contained in this section shall be construed to authorize any such renewal,
extension, modification, amendment or restatement.
Section 1.4. References and Titles. All references in this Agreement to
Annexes, Exhibits, Schedules, Recitals, articles, sections, subsections and
other subdivisions refer to the Annexes, Exhibits, Schedules, Recitals,
articles, sections, subsections and other subdivisions of this Agreement unless
expressly provided otherwise. Titles appearing at the beginning of any
subdivisions are for convenience only and do not constitute any part of such
subdivisions and shall be disregarded in construing the language contained in
such subdivisions. The words "this Agreement", "this instrument", "herein",
"hereof", "hereby", "hereunder" and words of similar import refer to this
Agreement as a whole and not to any particular subdivision unless expressly so
limited. The phrases "this section" and "this subsection" and similar phrases
refer only to the sections or subsections hereof in which such phrases occur.
The word "or" is not exclusive, and the word "including" (in its various forms)
means "including without limitation". Pronouns in masculine, feminine and
neuter genders shall be construed to include any other gender, and words in the
singular form shall be construed to include the plural and vice versa, unless
the context otherwise requires.
Section 1.5. Calculations and Determinations. All fees and interest
accruing under the Loan Documents shall be calculated on the basis of actual
days elapsed (including the first day but excluding the last) and a year of 360
days. Each determination by any Lender of amounts to be paid under Sections
2.11 through 2.15 or any other matters which are to be determined hereunder by a
Lender (such as any Eurodollar Rate, Adjusted Eurodollar Rate, Business Day,
Interest Period, or Reserve Percentage) shall, in the absence of manifest error,
be conclusive and binding. Unless otherwise expressly provided herein or unless
Majority Lenders otherwise consent all financial statements and reports
furnished to any Lender hereunder shall be prepared and all financial
computations and determinations pursuant hereto shall be made in accordance with
GAAP.
ARTICLE II - The Loan
Section 2.1. Commitment to Lend; Notes. Upon satisfaction by Borrower of
the conditions set forth in Article III, the unpaid principal and accrued unpaid
interest on the loans under the Original Credit Agreement and Original ING Note
will be evidenced and governed by the Note and this Agreement. Subject to the
terms and conditions hereof, ING, as initial Lender, agrees to make a single
advance to Borrower (such advance together with the outstanding principal
balance owing on the Original Note herein called such Lender's "Loan"), upon
Borrower's written request on or before October 31, 1998 in an amount equal to
the
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remainder of (i) $9,000,000 minus (ii) the outstanding principal balance of
the Original Note. The obligation of Borrower to repay to each Lender the Loan
made by such Lender, together with interest accruing in connection therewith,
shall be evidenced by a single promissory note (herein called such Lender's
"Note") made by Borrower payable to the order of such Lender in the form of
Exhibit A with appropriate insertions. The amount of principal owing on any
Lender's Note at any given time shall be the amount of the Loan by such Lender
minus all payments of principal theretofore received by such Lender on such
Lender's Note. Interest on each Note shall accrue and be due and payable as
provided herein and therein. Borrower may not reborrow amounts repaid
hereunder.
Section 2.2. Requests for New Loan. Borrower must give to Administrative
Agent written notice of the requested advance under Section 2.1 in writing in
the form and substance of the "Borrowing Notice" attached hereto as Exhibit B,
duly completed. Such Borrowing Notice must specify the amount of any Eurodollar
Loan (which amount must be greater than or equal to $500,000), the date the
requested advance is to be made, and must be received by Administrative Agent
not later than 11:00 a.m. Eastern time on (i) the first day preceding the
advance in the case of a Base Rate Loan or (ii) the third day preceding the
advance in the case of a Eurodollar Loan.
Section 2.3. Continuations and Conversions of Existing Loans. Borrower
may make the following elections with respect to Eurodollar Rate Loans or Base
Rate Loans outstanding: to convert Base Rate Loans to Eurodollar Loans, to
convert Eurodollar Loans to Base Rate Loans on the last day of the Interest
Period applicable thereto, and to Continue Eurodollar Loans beyond the
expiration of such Interest Period by designating a new Interest Period to take
effect at the time of such expiration. In making such elections, Borrower may
combine or divide existing Eurodollar Rate Loans or Base Rate Loans, provided
that Borrower may have no more than five (5) Borrowings of Eurodollar Loans
outstanding at any time and that each Borrowing of Eurodollar Loans must be
greater than or equal to $500,000. To make any such election, Borrower must
give to Administrative Agent written notice (or telephonic notice promptly
confirmed in writing) of any such Conversion or continuation of existing Loans,
with a separate notice given for each new Borrowing. Each such notice
constitutes a "Continuation/Conversion Notice" hereunder and must:
(a) specify the Loans which are to be Continued or Converted;
(b) specify (i) the aggregate amount of any Borrowing of Base Rate
Loans into which such Loans are to be Continued or Converted and the date
on which such Continuation or Conversion is to occur, or (ii) the aggregate
amount of any Borrowing of Eurodollar Loans into which such Loans are to be
Continued or Converted, the date on which such Continuation or Conversion
is to occur (which shall be the first day of the Interest Period which is
to apply to such Eurodollar Loans), and the length of the applicable
Interest Period; and
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(c) be received by Administrative Agent not later than 11:00 a.m.,
Eastern time, on (i) the day on which any such Continuation or Conversion
to Base Rate Loans is to occur, or (ii) the third Business Day preceding
the day on which any such Continuation or Conversion to Eurodollar Loans is
to occur.
Each such written request or confirmation must be made in the form and substance
of the "Continuation/Conversion Notice" attached hereto as Exhibit C, duly
completed. Each such telephonic request shall be deemed a representation,
warranty, acknowledgment and agreement by Borrower as to the matters which are
required to be set out in such written confirmation. Upon receipt of any such
Continuation/Conversion Notice, Administrative Agent shall give each Lender
prompt notice of the terms thereof. Each Continuation/Conversion Notice shall
be irrevocable and binding on Borrower. During the continuance of any Default,
Borrower may not make any election to convert existing Loans into Eurodollar
Loans or Continue existing Loans as Eurodollar Loans. If (due to the existence
of a Default or for any other reason) Borrower fails to timely and properly give
any notice of Continuation or Conversion with respect to a Borrowing of existing
Eurodollar Loans at least three days prior to the end of the Interest Period
applicable thereto, such Eurodollar Loans shall automatically be converted into
Base Rate Loans at the end of such Interest Period. No new funds shall be
repaid by Borrower or advanced by any Lender in connection with any Continuation
or Conversion of existing Loans pursuant to this section, and no such
Continuation or Conversion shall be deemed to be a new advance of funds for any
purpose; such Continuations and Conversions merely constitute a change in the
interest rate applicable to already outstanding Loans.
Section 2.4. Use of Proceeds. Borrower shall use all proceeds of the
advance of new funds for working capital purposes. In no event shall the funds
from any Loan be used directly or indirectly by any Person for personal, family,
household or agricultural purposes or for the purpose, whether immediate,
incidental or ultimate, of purchasing, acquiring or carrying any "margin stock"
or any "margin securities" (as such terms are defined in Regulation U
promulgated by the Board of Governors of the Federal Reserve System) or to
extend credit to others directly or indirectly for the purpose of purchasing or
carrying any such margin stock or margin securities. Borrower and Parent
represent and warrant to Administrative Agent and each Lender that none of them,
and none of the other Related Persons, is engaged principally, or as one of its
important activities, in the business of extending credit to others for the
purpose of purchasing or carrying such margin stock or margin securities.
Section 2.5. Interest Rates and Fees.
(a) Interest Rates. Each Base Rate Loan shall bear interest on each
day (unless the Default Rate shall apply) outstanding at the Adjusted Base
Rate in effect on such day. Each Eurodollar Loan shall bear interest on
each day (unless the Default Rate shall apply) during the related Interest
Period at the related Adjusted Eurodollar Rate in effect on such day. Upon
the occurrence and during the continuance of an Event of Default, each Loan
shall bear interest at the Default Rate.
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(b) Fees. Any one or more of the Related Persons shall pay to
Administrative Agent, for the account of Lenders, an arrangement fee
specified in a separate letter agreement of even date herewith among
Parent, Neo and Administrative Agent.
Section 2.6. Optional Prepayments. Borrower may, upon one Business Day's
notice to each Lender, from time to time and without premium or penalty prepay
the Notes, in whole or in part, so long as each partial prepayment of principal
on the Notes is greater than or equal to $100,000, and so long as Borrower does
not prepay any Eurodollar Loan other than on the last day of an Interest Period.
Each partial prepayment of principal shall be applied to the regular
installments of principal due under the Notes in the inverse order of their
maturities. Each prepayment of principal under this section shall be
accompanied by all interest then accrued and unpaid on the principal so prepaid.
Any principal or interest prepaid pursuant to this section shall be in addition
to, and not in lieu of, all payments otherwise required to be paid under the
Loan Documents at the time of such prepayment.
Section 2.7. Mandatory Prepayments.
(a) By the last Business Day of each month, beginning with October 31,
1998 and continuing until all Obligations under the Loan Documents are paid
in full, Borrower shall make payments of principal on the Loans equal to
60% of the greater of (i) the Minimum Monthly Payment or (ii) 100% of the
ANCF for the immediately preceding month. Together with each payment made
pursuant to this Section 2.7(a), Borrower shall deliver to Collateral Agent
and each other Creditor a report in detail acceptable to Collateral Agent
setting out a detailed calculation of the ANCF for such month.
(b) If the unpaid principal balance of the Combined Loans ever exceeds
the Borrowing Base, Borrower shall, within thirty (30) days after
Administrative Agent gives notice of such fact to Borrower, prepay the
principal of the Loans under this Agreement in an amount at least equal to
60% of such excess. Each prepayment of principal under this section shall
be accompanied by all interest then accrued and unpaid on the principal so
prepaid.
(c) Any principal or interest prepaid pursuant to any section of this
Agreement shall be in addition to, and not in lieu of, all payments
otherwise required to be paid under the Loan Documents at the time of such
prepayment. Each prepayment of principal under this section shall be
accompanied by all interest then accrued and unpaid on the principal so
prepaid.
Section 2.8. Payments to Lenders. Borrower will make each payment which
it owes to the Lenders under the Loan Documents not later than noon, New York,
New York time, on the date such payment becomes due and payable, in lawful money
of the United States of
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America, without set-off, deduction or counterclaim, and in immediately
available funds, such payments to be made to Administrative Agent for the
account of the Lender to whom such payment is owed. Any payment received by
Administrative Agent after such time will be deemed to have been made on the
next following Business Day. Except as provided in clause (a) of the definition
of "Interest Period", should any such payment become due and payable on a day
other than a Business Day, the maturity of such payment shall be extended to the
next succeeding Business Day, and, in the case of a payment of principal or past
due interest, interest shall accrue and be payable thereon for the period of
such extension as provided in the Loan Document under which such payment is due.
Each payment to a Lender or the Administrative Agent under a Loan Document shall
be due and payable at the place provided therein and, if no specific place of
payment is provided, shall be due and payable at the place of payment of
Administrative Agent's Note. When Administrative Agent collects or receives
money on account of the Obligations owed to the Lenders that is insufficient to
pay all Obligations owed to the Lenders then due and payable, Administrative
Agent shall distribute all money so collected or received, and each Lender shall
apply all such money so distributed, as follows:
(a) first, for the payment of all Obligations owed to the Lenders
which are then due (and if such money is insufficient to pay all such
Obligations, first to any reimbursements due Administrative Agent under
Section 5.1(c) or 5.1(d) and then to the partial payment of all other
Obligations then due in proportion to the amounts thereof, or as Lenders
shall otherwise agree);
(b) then for the prepayment of amounts owing under the Loan Documents
(other than principal on the Notes) if so specified by Borrower;
(c) then for the prepayment of principal on the Notes, together with
accrued and unpaid interest on the principal so prepaid; and
(d) last, for the payment or prepayment of any other Obligations owed
to the Lenders.
All payments applied to principal or interest on any Note shall be applied first
to any interest then due and payable, then to principal then due and payable,
and last to any prepayment of principal and interest in compliance with Sections
2.6 and 2.7. All distributions of amounts described in any of subsections (b),
(c) or (d) above shall be made by Administrative Agent pro rata to each Lender
then owed Obligations described in such subsection in proportion to all amounts
owed to all Lenders which are described in such subsection.
Section 2.9. Initial Borrowing Base. During the period from the date
hereof to the first Determination Date the Borrowing Base shall be $15,000,000.
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Section 2.10. Subsequent Determinations of Borrowing Base. By April 1
and October 1 of each year, Parent shall furnish to each Lender all information,
reports and data which Administrative Agent has then reasonably requested
concerning the Related Persons' businesses and properties (including their oil
and gas properties and interests and the reserves and production relating
thereto), together with the Engineering Report described in Section C.1(e) or
C.1(f) of Annex C to the Intercreditor Agreement, as applicable. Within thirty
days after receiving such information, reports and data, or as promptly
thereafter as practicable, Majority Lenders shall agree upon an amount for the
Borrowing Base and Administrative Agent shall by notice to Borrower, Collateral
Agent and the other Lenders designate such amount as the new Borrowing Base for
the period beginning on and including the date such notice is sent (herein
called a "Determination Date") and continuing until but not including the next
date as of which the Borrowing Base is redetermined. If Parent does not furnish
all such information, reports and data by the date specified in the first
sentence of this section Administrative Agent may nonetheless designate the
Borrowing Base at any amount which Majority Lenders determine and may
redesignate the Borrowing Base from time to time thereafter until each Lender
receives all such information, reports and data, whereupon Majority Lenders
shall designate a new Borrowing Base as described above. Majority Lenders shall
determine the amount of the Borrowing Base based upon the loan collateral value
which they in their discretion assign to the various Oil and Gas Properties of
the Related Persons at the time in question and based upon such other credit
factors (including, without limitation, the Collateral and the assets,
liabilities, cash flow, business, properties, prospects, management and
ownership of Related Persons and applicable country risks and political risks)
as they in their discretion deem significant. It is expressly understood that
Lenders and Administrative Agent have no obligation to designate the Borrowing
Base at any particular amount.
Section 2.11. Capital Reimbursement. If, after the date of this
Agreement, either (a) the introduction or implementation of or the compliance
with or any change in or in the interpretation of any law, rule or regulation,
or (b) the introduction or implementation of or the compliance with any request,
directive or guideline from any central bank or other governmental authority
(whether or not having the force of law) affects or would affect the amount of
capital required or expected to be maintained by any Lender or any corporation
controlling any Lender, then, upon demand by such Lender, Borrower will pay to
Administrative Agent for the benefit of such Lender, from time to time as
specified by such Lender, such additional amount or amounts which such Lender
shall determine to be appropriate to compensate such Lender or any corporation
controlling such Lender in light of such circumstances, to the extent that such
Lender reasonably determines that the amount of any such capital would be
increased, or the rate of return on any such capital would be reduced by, or in
whole or in part based on, the existence of the face amount of such Lender's
Loans or commitments under this Agreement.
Section 2.12. Increased Cost of Eurodollar Loans. If any applicable
domestic or foreign law, treaty, rule or regulation (whether now in effect or
hereinafter enacted or promulgated, including Regulation D) or any
interpretation or administration thereof by any
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governmental authority charged with the interpretation or administration thereof
(whether or not having the force of law):
(a) shall change the basis of taxation of payments to any Lender of
any principal, interest, or other amounts attributable to any Eurodollar
Loan or otherwise due under this Agreement in respect of any Eurodollar
Loan (other than taxes imposed on the overall net income of such Lender or
any lending office of such Lender by any jurisdiction in which such Lender
or any such lending office is located); or
(b) shall change, impose, modify, apply or deem applicable any
reserve, special deposit or similar requirements in respect of any
Eurodollar Loan (excluding those for which such Lender is fully compensated
pursuant to adjustments made in the definition of Eurodollar Rate) or
against assets of, deposits with or for the account of, or credit extended
by, such Lender; or
(c) shall impose on any Lender or the interbank eurocurrency deposit
market any other condition affecting any Eurodollar Loan, the result of
which is to increase the cost to any Lender of funding or maintaining any
Eurodollar Loan or to reduce the amount of any sum receivable by any Lender
in respect of any Eurodollar Loan by an amount deemed by such Lender to be
material,
then such Lender shall promptly notify Administrative Agent and Borrower in
writing of the happening of such event and (1) Borrower shall upon demand pay to
Administrative Agent for the account of such Lender such additional amount or
amounts as will compensate such Lender for such event (on an after-tax basis)
and (2) Borrower may elect, by giving to Administrative Agent and such Lender
not less than three Business Days' notice, to convert all (but not less than
all) of any such Eurodollar Loan into Base Rate Loans.
Section 2.13. Availability. If (a) any change in applicable laws,
treaties, rules or regulations or in the interpretation or administration
thereof of or in any jurisdiction whatsoever, domestic or foreign, shall make it
unlawful or impracticable for any Lender to fund or maintain Eurodollar Loans,
or shall materially restrict the authority of any Lender to purchase or take
offshore deposits of dollars (i.e., "eurodollars"), or (b) any Lender determines
that matching deposits appropriate to fund or maintain any Eurodollar Loan are
not available to it, or (c) any Lender determines that the formula for
calculating the Eurodollar Rate does not fairly reflect the cost to such Lender
of making or maintaining loans based on such rate, then Borrower's right to
elect Eurodollar Loans shall be suspended to the extent and for the duration of
such illegality, impracticability or restriction and all Eurodollar Loans (or
portions thereof) which are then outstanding or are then the subject of any
Borrowing Notice or any Continuation/Conversion Notice and which cannot lawfully
or practicably be maintained or funded shall immediately become or remain as
Base Rate Loans of such Lender. Borrower agrees to indemnify Administrative
Agent and each Lender and hold it harmless against all costs, expenses, claims,
penalties, liabilities and damages which may result from any such
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change in law, treaty, rule, regulation, interpretation or administration. Such
indemnification shall be on an after-tax basis, taking into account any taxes
imposed on the amounts paid as indemnity.
Section 2.14. Funding Losses. In addition to its other obligations
hereunder, Borrower will indemnify each Lender against, and reimburse each
Lender on demand for, any loss or expense incurred or sustained by any Lender
(including without limitation any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by any Lender to
fund or maintain Eurodollar Loans), as a result of (a) any payment or prepayment
(whether authorized or required hereunder or otherwise) of all or a portion of a
Eurodollar Loan on a day other than the day on which the applicable Interest
Period ends, (b) any payment or prepayment, whether required hereunder or
otherwise, of a Loan made after the delivery, but before the effective date, of
a Continuation/Conversion Notice, if such payment or prepayment prevents such
Continuation/Conversion Notice from becoming fully effective, (c) the failure of
any Loan to be made or of any Continuation/Conversion Notice to become effective
due to any condition precedent not being satisfied or due to any other action or
inaction of any Related Person, or (d) any conversion (whether authorized or
required hereunder or otherwise) of all or any portion of any Eurodollar Loan
into a Base Rate Loan or into a different Eurodollar Loan on a day other than
the day on which the applicable Interest Period ends.
Section 2.15. Reimbursable Taxes. Borrower covenants and agrees that:
(a) Borrower will indemnify each Lender against and reimburse each
Lender for all present and future income, stamp and other taxes, levies,
costs and charges whatsoever imposed, assessed, levied or collected on or
in respect of this Agreement or any Eurodollar Loans (whether or not
legally or correctly imposed, assessed, levied or collected), excluding,
however, any taxes imposed on or measured by the overall net income of
Administrative Agent or such Lender or any lending office of such Lender by
any jurisdiction in which such Lender or any such lending office is located
(all such non-excluded taxes, levies, costs and charges being collectively
called "Reimbursable Taxes" in this section). Such indemnification shall
be on an after-tax basis, taking into account any income taxes imposed on
the amounts paid as indemnity.
(b) All payments on account of the principal of, and interest on, each
Lender's Loans and Note, and all other amounts payable by Borrower to any
Lender hereunder, shall be made in full without set-off or counterclaim and
shall be made free and clear of and without deductions or withholdings of
any nature by reason of any Reimbursable Taxes, all of which will be for
the account of Borrower. In the event of Borrower being compelled by law
or other regulations to make any such deduction or withholding from any
payment to any Lender, Borrower shall pay on the due date of such payment,
by way of additional interest, such additional amounts as are needed to
cause the amount receivable by such Lender after such deduction or
withholding to
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equal the amount which would have been receivable in the absence of such
deduction or withholding. If Borrower should make any deduction or
withholding as aforesaid, Borrower shall within 60 days thereafter forward
to such Lender an official receipt or other official document evidencing
payment of such deduction or withholding.
(c) If Borrower is ever required to pay any Reimbursable Tax with
respect to any Eurodollar Loan Borrower may elect, by giving to
Administrative Agent and such Lender not less than three Business Days'
notice, to convert all (but not less than all) of any such Eurodollar Loan
into a Base Rate Loan, but such election shall not diminish Borrower's
obligation to pay all Reimbursable Taxes.
ARTICLE III - Conditions Precedent to Lending
Section 3.1. Documents to be Delivered. No Lender has any obligation to
make the Loan, and this Agreement shall not be effective, unless Administrative
Agent shall have received all of the following, duly executed and delivered and
in form, substance and date satisfactory to Administrative Agent:
(a) This Agreement.
(b) Each Note.
(c) An "Omnibus Certificate" of the Secretary and of the Chairman of
the Board or President of each Related Person, which shall contain the
names and signatures of the officers of such Related Person authorized to
execute Loan Documents and which shall certify to the truth, correctness
and completeness of the following exhibits attached thereto: (i) a copy of
resolutions duly adopted by the Board of Directors of such Related Person
and in full force and effect at the time this Agreement is entered into,
authorizing the execution of this Agreement and the other Loan Documents
delivered or to be delivered in connection herewith and the consummation of
the transactions contemplated herein and therein, (ii a copy of the charter
documents of such Related Person and all amendments thereto, certified by
the appropriate official of such Related Person's state of organization,
and (ii a copy of any bylaws of such Related Person.
(d) A certificate (or certificates) of the due formation, valid
existence and good standing of each Related Person in its state of
organization, issued by the appropriate authorities of such jurisdiction.
(e) A "Compliance Certificate" of the Chairman of the Board or
President and of the chief financial officer of Borrower, of even date with
such Loan, in which such officers certify to the best of their knowledge,
after reasonable inquiry, to the
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satisfaction of the conditions set out in subsections (a), (d), (e), (f),
(g) and (h) of Section 3.3.
(f) A favorable opinion of Vinson & Elkins, L.L.P., counsel for each
Related Person, substantially in the form set forth in Exhibit D.
(g) The Intercreditor Agreement and all documents required to be
delivered thereunder.
(h) Each Security Document listed in the Security Schedule to the
Intercreditor Agreement.
(i) Certificates of Aviva America's good standing and due
qualification to do business, issued by appropriate officials in any states
in which Aviva America owns property subject to Security Documents.
(j) A report from Parent's independent insurance consultant or by an
insurance broker or consultant acceptable to Administrative Agent in form
and detail acceptable to Administrative Agent confirming the insurance that
is in effect as of the date hereof and that such insurance is adequate and
customary for the businesses conducted by the Related Persons.
(k) Documents confirming the assignment of all Liens securing the Debt
evidenced by the Chase Loan Agreement to Collateral Agent for the benefit
of Lenders.
Section 3.2. Additional Conditions Precedent to the First Advance. No
Lender has any obligation to make the Loan, and this Agreement shall not be
effective, unless the following additional conditions precedent have been
satisfied:
(a) The mergers and consolidations described in Recital 5 shall have
taken place, and Parent's Board of Directors shall consist of Ron Suttill,
Eugene Fiedorek and Robert Cresci.
(b) All outstanding Restricted Debt of the Related Persons to any
Person shall have been paid in full, except for the Obligations and other
Restricted Debt permitted under Section C.11 of Annex C to the
Intercreditor Agreement.
(c) Administrative Agent shall have received payment in full of the
balance of the arrangement fee pursuant to the provisions of Section
2.5(b).
(d) All representations and warranties made by any Related Person in
any Loan Document shall be true in all material respects on and as of the
date of such Loan (except to the extent that the facts upon which such
representations are based have been
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changed by the extension of credit hereunder or are limited to an earlier
date) as if such representations and warranties had been made as of the
date of such Loan.
(e) No Default shall exist at the date of such Loan.
(f) No material adverse change shall have occurred to Parent's
Consolidated financial condition or the businesses or assets of any Related
Person since the date of the Initial Financial Statements.
(g) Each Related Person shall have performed and complied with all
agreements and conditions required in the Loan Documents to be performed or
complied with by it on or prior to the date of such Loan.
(h) The making of such Loan shall not be prohibited by any law or any
regulation or order of any court or governmental agency or authority and
shall not subject any Lender to any penalty or other onerous condition
under or pursuant to any such law, regulation or order.
(i) Administrative Agent shall have received all documents and
instruments which Administrative Agent has then requested, in addition to
those described in Section 3.1 (including opinions of legal counsel for the
Related Persons and Lenders; corporate documents and records; documents
evidencing governmental authorizations, consents, approvals, licenses and
exemptions; and certificates of public officials and of officers and
representatives of the Related Persons and other Persons, such certificates
being based on such officers' and representatives' knowledge after
reasonable inquiry), as to (i) the accuracy and validity of or compliance
with all representations, warranties and covenants made by any of the
Related Persons in this Agreement and the other Loan Documents, (ii the
satisfaction of all conditions contained herein or therein, and (ii all
other matters pertaining hereto and thereto. All such additional documents
and instruments shall be satisfactory to Administrative Agent in form,
substance and date.
(j) All legal matters relating to the Loan Documents and the
consummation of the transactions contemplated thereby shall be reasonably
satisfactory to Thompson & Knight, P.C., counsel to Administrative Agent.
ARTICLE IV - Representations and Warranties
Section 4.1. Related Persons' Representations and Warranties. To confirm
each Lender's understanding concerning the Related Persons and their businesses,
properties and obligations and to induce each Lender to enter into this
Agreement and to make its Loans, each of Parent and Borrower represents and
warrants to each Lender that each of the statements set forth in Annex B to the
Intercreditor Agreement is true and correct.
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Section 4.2. Representation by Lenders. Each Lender hereby represents
that it will acquire its Note for its own account in the ordinary course of its
commercial lending business; however, the disposition of any Lender's property
shall at all times be and remain within its control and, in particular and
without limitation, each Lender may sell or otherwise transfer its Note, any
participation interest or other interest in such Note, or any of its other
rights and obligations under the Loan Documents.
ARTICLE V - Covenants of Borrower
Section 5.1. Covenants. To conform with the terms and conditions under
which each Lender is willing to have credit outstanding hereunder, and to induce
each Lender to enter into this Agreement and extend credit hereunder, each of
Parent and Borrower warrants, covenants and agrees that until the full and final
payment of the Obligations owed to the Administrative Agent and the Lenders and
the termination of this Agreement, unless Majority Lenders have previously
agreed otherwise:
(a) Payment of Obligations. Parent and Borrower will, and Parent will
cause each other Related Person to, pay all amounts due under the Loan
Documents in accordance with the terms thereof.
(b) Common Covenants. Parent and Borrower will, and Parent will cause
each other Related Person to, observe, perform and comply with every
covenant, term and condition expressed in Annex C to the Intercreditor
Agreement and every other covenant, term and condition expressed in any of
the other Loan Documents.
(c) Payment of Expenses. Whether or not the transactions contemplated
by this Agreement are consummated, Borrower will promptly (and in any
event, within 30 days after any invoice or other statement or notice) pay:
(i) all transfer, stamp, mortgage, documentary or other similar taxes,
assessments or charges levied by any governmental or revenue authority in
respect of this Agreement or any of the other Loan Documents or any other
document referred to herein or therein, (ii) all reasonable costs and
expenses incurred by or on behalf of Administrative Agent (including
attorneys' fees, consultants' fees and engineering fees, travel costs and
miscellaneous expenses) in connection with (1) the negotiation,
preparation, execution and delivery of the Loan Documents, and any and all
consents, waivers or other documents or instruments relating thereto, (2)
the filing, recording, refiling and re-recording of any Loan Documents and
any other documents or instruments or further assurances required to be
filed or recorded or refiled or re-recorded by the terms of any Loan
Document, (3) the borrowings hereunder and other action reasonably required
in the course of administration hereof, (4) monitoring or confirming (or
preparation or negotiation of any document related to) the Related Persons'
compliance with any covenants or conditions contained in this Agreement or
in any Loan Document, and (iii)
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all reasonable costs and expenses incurred by or on behalf of any Lender
(including attorneys' fees, consultants' fees and accounting fees) in
connection with the defense or enforcement of any of the Loan Documents
(including this section) or the defense of any Lender's exercise of its
rights thereunder. In addition to the foregoing, until all Obligations have
been paid in full, Borrower will also pay or reimburse Administrative Agent
for all reasonable out-of-pocket costs and expenses of Administrative Agent
or its agents or employees in connection with the continuing administration
of the Loans and the related due diligence of Administrative Agent,
including travel and miscellaneous expenses and fees and expenses of
Administrative Agent's outside counsel, reserve engineers and consultants
engaged in connection with the Loan Documents.
(d) Performance on Borrower's Behalf. If any Related Person fails to
pay any taxes, insurance premiums, expenses, attorneys' fees or other
amounts it is required to pay under any Loan Document, Administrative Agent
may pay the same. Borrower shall immediately reimburse Administrative Agent
for any such payments and each such amount paid by Administrative Agent
shall constitute an Obligation owed hereunder which is due and payable on
the date such amount is paid by Administrative Agent.
(e) Interest. Borrower hereby promises to pay interest to each Lender
at the Late Payment Rate on all Obligations which Borrower has in this
Agreement promised to pay to such Lender (including Obligations to pay fees
or to reimburse or indemnify such Lender) and which are not paid when due.
Such interest shall accrue from the date such Obligations become due until
they are paid.
ARTICLE VI - Security
Section 6.1. The Security. The Obligations will be secured by the
Security Documents listed in the Security Schedule to the Intercreditor
Agreement and any additional Security Documents hereafter delivered by any
Related Person and accepted by Collateral Agent.
Section 6.2. Security Covenants. Parent and Borrower will, and Parent
will cause each other Related Person to, observe, perform and comply with every
covenant, term and condition expressed in Annex D to the Intercreditor Agreement
and every other covenant, term and condition expressed in any of the other Loan
Documents.
ARTICLE VII - Events of Default and Remedies
Section 7.1. Events of Default. Each of the events described in Annex E
of the Intercreditor Agreement constitutes an Event of Default under this
Agreement.
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Section 7.2. Acceleration. Upon the occurrence of an Event of Default
described in subsection E.8(a), (b) or (c) of Annex E of the Intercreditor
Agreement with respect to any Related Person, all of the Obligations shall
thereupon be immediately due and payable, without demand, presentment, notice of
demand or of dishonor and nonpayment, protest, notice of protest, notice of
intention to accelerate, declaration or notice of acceleration, or any other
notice or declaration of any kind, all of which are hereby expressly waived by
Parent and Borrower and each other Related Person who at any time ratifies or
approves this Agreement. Upon any such acceleration, any obligation of any
Lender to make any further Loans shall each be permanently terminated. During
the continuance of any other Event of Default, Administrative Agent at any time
and from time to time may (and upon written instructions from Majority Lenders,
Administrative Agent shall) without notice to Parent, Borrower or any other
Related Person do either or both of the following: (1) terminate any obligation
of Lenders to make Loans hereunder and (2) declare any or all of the Obligations
immediately due and payable, and all such Obligations shall thereupon be
immediately due and payable, without demand, presentment, notice of demand or of
dishonor and nonpayment, protest, notice of protest, notice of intention to
accelerate, declaration or notice of acceleration, or any other notice or
declaration of any kind, all of which are hereby expressly waived by Parent and
Borrower and each other Related Person who at any time ratifies or approves this
Agreement.
Section 7.3. Remedies. If any Event of Default shall occur and be
continuing, each Lender may protect and enforce its rights under the Loan
Documents by any appropriate proceedings, including proceedings for specific
performance of any covenant or agreement contained in any Loan Document, and
each Lender may enforce the payment of any Obligations due or enforce any other
legal or equitable right. All rights, remedies and powers conferred upon
Administrative Agent and each Lender under the Loan Documents shall be deemed
cumulative and not exclusive of any other rights, remedies or powers available
under the Loan Documents or at law or in equity.
SECTION 7.4. INDEMNITY.
(a) EACH OF PARENT AND BORROWER AGREES TO INDEMNIFY AND HOLD HARMLESS
EACH LENDER, UPON DEMAND, FROM AND AGAINST, AND WILL REIMBURSE EACH LENDER
FOR, ANY AND ALL LIABILITIES, OBLIGATIONS, CLAIMS, LOSSES, DAMAGES,
PENALTIES, FINES, ACTIONS, JUDGMENTS, SUITS, SETTLEMENTS, COSTS, EXPENSES
OR DISBURSEMENTS (INCLUDING REASONABLE FEES OF ATTORNEYS, ACCOUNTANTS,
EXPERTS AND ADVISORS) OF ANY KIND OR NATURE WHATSOEVER (IN THIS SECTION
COLLECTIVELY CALLED "LIABILITIES AND COSTS") WHICH TO ANY EXTENT (IN WHOLE
OR IN PART) MAY BE IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST ANY LENDER
GROWING OUT OF, RESULTING FROM OR IN ANY OTHER WAY ASSOCIATED WITH ANY OF
THE COLLATERAL, THE LOAN DOCUMENTS, OR THE TRANSACTIONS AND EVENTS
(INCLUDING THE ENFORCEMENT OR DEFENSE THEREOF) AT ANY TIME ASSOCIATED
THEREWITH OR CONTEMPLATED THEREIN, WHICH LIABILITIES AND COSTS SHALL
INCLUDE WITHOUT LIMITATION THOSE RELATING TO OR ARISING OUT OF (A) ANY
BODILY INJURY OR DEATH OR PROPERTY DAMAGE OCCURRING IN OR UPON OR IN THE
VICINITY OF THE COLLATERAL THROUGH ANY CAUSE
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WHATSOEVER, (B) ANY ACT PERFORMED OR OMITTED TO BE PERFORMED HEREUNDER OR
UNDER ANY SECURITY DOCUMENT OR THE BREACH OF ANY REPRESENTATION OR WARRANTY
CONTAINED HEREIN OR IN ANY SECURITY DOCUMENT, (C) THE EXERCISE OF ANY
RIGHTS AND REMEDIES HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT, (D) ANY
TRANSACTION, ACT, OMISSION, EVENT OR CIRCUMSTANCE ARISING OUT OF OR IN ANY
WAY CONNECTED WITH THE COLLATERAL OR WITH ANY LOAN DOCUMENT, (E) ANY
VIOLATION OF OR NONCOMPLIANCE WITH ANY ENVIRONMENTAL LAW, (F) ANY ACT,
OMISSION, EVENT OR CIRCUMSTANCE RESULTING FROM OR IN CONNECTION WITH THE
OWNERSHIP, CONSTRUCTION, OCCUPANCY, OPERATION, USE AND/OR MAINTENANCE OF
THE COLLATERAL OR THE ASSOCIATED PROPERTY (AS SUCH TERM IS DEFINED IN THE
MORTGAGE) REGARDLESS OF WHETHER THE ACT, OMISSION, EVENT OR CIRCUMSTANCE
CONSTITUTED A VIOLATION OF ANY ENVIRONMENTAL LAW AT THE TIME OF ITS
EXISTENCE OR OCCURRENCE, INCLUDING THE PRESENCE ON OR IN THE COLLATERAL OR
THE "ASSOCIATED PROPERTY" OR ANY DISPOSAL OR RELEASE FROM, ON OR INTO THE
COLLATERAL OR THE ASSOCIATED PROPERTY OF "HAZARDOUS SUBSTANCES" OR "SOLID
WASTES" (AS SUCH TERMS ARE DEFINED IN THE MORTGAGE), AND (G) ANY AND ALL
CLAIMS OR PROCEEDINGS (WHETHER BROUGHT BY PRIVATE PARTY OR GOVERNMENTAL
AGENCIES) FOR BODILY INJURY, PROPERTY DAMAGE, ABATEMENT OR REMEDIATION,
ENVIRONMENTAL DAMAGE OR IMPAIRMENT OR ANY OTHER INJURY OR DAMAGE RESULTING
FROM OR RELATING TO ANY HAZARDOUS SUBSTANCE, SOLID WASTE OR CONTAMINATED
MATERIALS LOCATED UPON OR MIGRATING INTO, FROM OR THROUGH THE COLLATERAL OR
THE ASSOCIATED PROPERTY (WHETHER OR NOT THE RELEASE OF SUCH MATERIALS WAS
CAUSED BY A RELATED PERSON, A TENANT OR SUBTENANT OR A PRIOR OWNER OR
TENANT OR SUBTENANT ON THE COLLATERAL OR THE ASSOCIATED PROPERTY AND
WHETHER OR NOT THE ALLEGED LIABILITY IS ATTRIBUTABLE TO THE HANDLING,
STORAGE, GENERATION, TRANSPORTATION, REMOVAL OR DISPOSAL OF SUCH SUBSTANCE,
WASTE OR MATERIAL OR THE MERE PRESENCE OF SUCH SUBSTANCE, WASTE OR MATERIAL
ON THE COLLATERAL OR THE ASSOCIATED PROPERTY), WHICH SUCH LENDER MAY HAVE
LIABILITY WITH RESPECT TO DUE TO THE MAKING OF THE LOAN OR LOANS EVIDENCED
BY THE NOTES, THE EXECUTION OF THE MORTGAGE, THE EXERCISE OF ANY RIGHTS
UNDER THE LOAN DOCUMENTS, OR OTHERWISE. THE FOREGOING INDEMNIFICATION SHALL
APPLY WHETHER OR NOT SUCH LIABILITIES AND COSTS ARE IN ANY WAY OR TO ANY
EXTENT OWED, IN WHOLE OR IN PART, UNDER ANY CLAIM OR THEORY OF STRICT
LIABILITY, OR ARE CAUSED, IN WHOLE OR IN PART, BY ANY NEGLIGENT ACT OR
OMISSION OF ANY KIND BY ANY LENDER, PROVIDED ONLY THAT A LENDER SHALL BE
NOT ENTITLED UNDER THIS SECTION TO RECEIVE INDEMNIFICATION FOR THAT
PORTION, IF ANY, OF ANY LIABILITIES AND COSTS WHICH IS PROXIMATELY CAUSED
BY ITS OWN INDIVIDUAL GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, AS DETERMINED
IN A FINAL JUDGMENT. IF ANY PERSON (INCLUDING ANY RELATED PERSON) EVER
ALLEGES SUCH GROSS NEGLIGENCE OR WILLFUL MISCONDUCT BY ANY LENDER, THE
INDEMNIFICATION PROVIDED FOR IN THIS SECTION SHALL NONETHELESS BE PAID UPON
DEMAND, SUBJECT TO LATER ADJUSTMENT OR REIMBURSEMENT, UNTIL SUCH TIME AS A
COURT OF COMPETENT JURISDICTION ENTERS A FINAL JUDGMENT AS TO THE
EXISTENCE, EXTENT AND EFFECT OF THE ALLEGED GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT. AS USED IN THIS SECTION THE TERM "LENDER" SHALL REFER NOT ONLY
TO THE PERSON DESIGNATED AS SUCH IN ANNEX A,
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BUT ALSO TO (I) EACH DIRECTOR, OFFICER, AGENT, ATTORNEY, EMPLOYEE,
REPRESENTATIVE AND AFFILIATE OF SUCH PERSON, AND (II) THE PERSON OR PERSONS
WHO, AT ANY TIME OR FROM TIME TO TIME, SERVE AS THE TRUSTEE ON BEHALF OF
LENDERS UNDER THE MORTGAGE.
(b) If any Lender proposes to settle or compromise any claim for
liabilities or costs (in this section, a "Litigated Liability") for which
Parent or Borrower may be liable for payment hereunder, such Lender shall
give such Parent and Borrower written notice of the terms of such proposed
settlement or compromise reasonably in advance of settling or compromising
such Litigated Liability, but shall have no obligation to obtain the
concurrence or approval of Parent or Borrower, and Parent and Borrower
shall remain liable for the payment of such claim. Any obligation or
liability of Borrower or Parent to any Lender under this section shall
survive the expiration or termination of this Agreement and the repayment
of the Obligations.
ARTICLE VIII - Administrative Agent
Section 8.1. Appointment and Authority. Each Lender hereby irrevocably
authorizes Administrative Agent, and Administrative Agent hereby undertakes, to
receive payments of principal, interest and other amounts due hereunder as
specified herein and to take all other actions and to exercise such powers under
this Agreement as are specifically delegated to Administrative Agent by the
terms hereof or thereof, together with all other powers reasonably incidental
thereto. The relationship of Administrative Agent to the other Lenders is only
that of one commercial lender acting as administrative agent for others, and
nothing in the Loan Documents shall be construed to constitute Administrative
Agent a trustee or other fiduciary for any Lender or any holder of any
participation in a Note nor to impose on Administrative Agent duties and
obligations other than those expressly provided for in the Loan Documents. With
respect to any matters not expressly provided for in the Loan Documents and any
matters which the Loan Documents place within the discretion of Administrative
Agent, Administrative Agent shall not be required to exercise any discretion or
take any action, and it may request instructions from the other Lenders with
respect to any such matter, in which case it shall be required to act or to
refrain from acting (and shall be fully protected and free from liability to all
Lenders in so acting or refraining from acting) upon the instructions of
Majority Lenders (including itself), provided, however, that Administrative
Agent shall not be required to take any action which exposes it to a risk of
personal liability that it considers unreasonable or which is contrary to the
Loan Documents or to applicable Law. Upon receipt by Administrative Agent from
Borrower of any communication calling for action on the part of Lenders or upon
notice from any other Lender to Administrative Agent of any Default or Event of
Default, Administrative Agent shall promptly notify each other Lender thereof.
Section 8.2. Exculpation, Administrative Agent's Reliance, Etc. Neither
Administrative Agent nor any of its directors, officers, agents, attorneys, or
employees shall be liable for any action taken or omitted to be taken by any of
them under or in connection
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with the Loan Documents, INCLUDING THEIR NEGLIGENCE OF ANY KIND, except that
each shall be liable for its own gross negligence or willful misconduct. Without
limiting the generality of the foregoing, Administrative Agent (a) may treat the
payee of any Note as the holder thereof until Administrative Agent receives
written notice of the assignment or transfer thereof in accordance with this
Agreement, signed by such payee and in form satisfactory to Administrative
Agent; (b) may consult with legal counsel (including counsel for Borrower),
independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (c) makes no
warranty or representation to any other Lender and shall not be responsible to
any other Lender for any statements, warranties or representations made in or in
connection with the Loan Documents; (d) shall not have any duty to ascertain or
to inquire as to the performance or observance of any of the terms, covenants or
conditions of the Loan Documents on the part of any Related Person or to inspect
the property (including the books and records) of any Related Person; (e) shall
not be responsible to any other Lender for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of any Loan Document
or any instrument or document furnished in connection therewith; (f) may rely
upon the representations and warranties of each Related Person or Lender in
exercising its powers hereunder; and (g) shall incur no liability under or in
respect of the Loan Documents by acting upon any notice, consent, certificate or
other instrument or writing (including any facsimile, telegram, cable or telex)
believed by it to be genuine and signed or sent by the proper Person or Persons.
Section 8.3. Credit Decisions. Each Lender acknowledges that it has,
independently and without reliance upon any other Lender, made its own analysis
of Borrower and the transactions contemplated hereby and its own independent
decision to enter into this Agreement and the other Loan Documents. Each Lender
also acknowledges that it will, independently and without reliance upon any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Loan Documents.
Section 8.4. Indemnification. Each Lender agrees to indemnify
Administrative Agent (to the extent not reimbursed by Borrower within ten (10)
days after demand) from and against such Lender's Percentage Share of any and
all liabilities, obligations, claims, losses, damages, penalties, fines,
actions, judgments, suits, settlements, costs, expenses or disbursements
(including reasonable fees of attorneys, accountants, experts and advisors) of
any kind or nature whatsoever (in this section collectively called "liabilities
and costs") which to any extent (in whole or in part) may be imposed on,
incurred by, or asserted against Administrative Agent growing out of, resulting
from or in any other way associated with any of the Collateral, the Loan
Documents and the transactions and events (including the enforcement thereof) at
any time associated therewith or contemplated therein (whether arising in
contract or in tort and otherwise and including any violation or noncompliance
with any Environmental Laws by any
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Person or any liabilities or duties of any Person with respect to Hazardous
Materials found in or released into the environment).
THE FOREGOING INDEMNIFICATION SHALL APPLY WHETHER OR NOT SUCH LIABILITIES AND
COSTS ARE IN ANY WAY OR TO ANY EXTENT OWED, IN WHOLE OR IN PART, UNDER ANY CLAIM
OR THEORY OF STRICT LIABILITY, OR ARE CAUSED, IN WHOLE OR IN PART, BY ANY
NEGLIGENT ACT OR OMISSION OF ANY KIND BY ADMINISTRATIVE AGENT,
provided only that no Lender shall be obligated under this section to indemnify
Administrative Agent for that portion, if any, of any liabilities and costs
which is proximately caused by Administrative Agent's own individual gross
negligence or willful misconduct, as determined in a final judgment. Cumulative
of the foregoing, each Lender agrees to reimburse Administrative Agent promptly
upon demand for such Lender's Percentage Share of any costs and expenses to be
paid to Administrative Agent by Borrower under Section 5.1(c) to the extent that
Administrative Agent is not timely reimbursed for such expenses by Borrower as
provided in such section. As used in this section the term "Administrative
Agent" shall refer not only to the Person designated as such in Section 1.1 but
also to each director, officer, agent, attorney, employee, representative and
Affiliate of such Person.
Section 8.5. Rights as Lender. In its capacity as a Lender,
Administrative Agent shall have the same rights and obligations as any Lender
and may exercise such rights as though it were not Administrative Agent.
Administrative Agent may accept deposits from, lend money to, act as trustee
under indentures of, and generally engage in any kind of business with any
Related Person or their Affiliates, all as if it were not Administrative Agent
hereunder and without any duty to account therefor to any other Lender.
Section 8.6. Sharing of Set-Offs and Other Payments. Each Lender agrees
that if it shall, whether through the exercise of rights under Security
Documents or rights of banker's lien, set off, or counterclaim against Borrower
or otherwise, obtain payment of a portion of the aggregate Obligations owed to
it which, taking into account all distributions made by Administrative Agent
under Section 2.8, causes such Lender to have received more than it would have
received had such payment been received by Administrative Agent and distributed
pursuant to Section 2.8, then (a) it shall be deemed to have simultaneously
purchased and shall be obligated to purchase interests in the Obligations owed
to the Lenders as necessary to cause all Lenders to share all payments as
provided for in Section 2.8, and (b) such other adjustments shall be made from
time to time as shall be equitable to ensure that Administrative Agent and all
Lenders share all payments of Obligations as provided in Section 2.8; provided,
however, that nothing herein contained shall in any way affect the right of any
Lender to obtain payment (whether by exercise of rights of banker's lien, set-
off or counterclaim or otherwise) of indebtedness other than the Obligations.
Borrower expressly consents to the foregoing
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arrangements and agrees that any holder of any such interest or other
participation in the Obligations, whether or not acquired pursuant to the
foregoing arrangements, may to the fullest extent permitted by law exercise any
and all rights of banker's lien, set-off, or counterclaim as fully as if such
holder were a holder of the Obligations in the amount of such interest or other
participation. If all or any part of any funds transferred pursuant to this
section is thereafter recovered from the seller under this section which
received the same, the purchase provided for in this section shall be deemed to
have been rescinded to the extent of such recovery, together with interest, if
any, if interest is required pursuant to the order of a court order to be paid
on account of the possession of such funds prior to such recovery.
Section 8.7. Investments. Whenever Administrative Agent in good faith
determines that it is uncertain about how to distribute to Lenders any funds
which it has received, or whenever Administrative Agent in good faith determines
that there is any dispute among Lenders about how such funds should be
distributed, Administrative Agent may choose to defer distribution of the funds
which are the subject of such uncertainty or dispute. If Administrative Agent
in good faith believes that the uncertainty or dispute will not be promptly
resolved, or if Administrative Agent is otherwise required to invest funds
pending distribution to Lenders, Administrative Agent shall invest such funds
pending distribution; all interest on any such Investment shall be distributed
upon the distribution of such Investment and in the same proportion and to the
same Persons as such Investment. All moneys received by Administrative Agent
for distribution to Lenders (other than to the Person who is Administrative
Agent in its separate capacity as a Lender) shall be held by Administrative
Agent pending such distribution solely as Administrative Agent for such Lenders,
and Administrative Agent shall have no equitable title to any portion thereof.
Section 8.8. Benefit of Article VIII. The provisions of this Article
(other than the following Section 8.9) are intended solely for the benefit of
Lenders, and no other Creditor or Related Person shall be entitled to rely on
any such provision or assert any such provision in a claim or defense against
any Lender. Lenders may waive or amend such provisions as they desire without
any notice to or consent of Borrower or any Related Person.
Section 8.9. Resignation. Administrative Agent may resign at any time by
giving written notice thereof to Lenders and Borrower. Each such notice shall
set forth the date of such resignation. Upon any such resignation, Majority
Lenders shall have the right to appoint a successor Administrative Agent. A
successor must be appointed for any retiring Administrative Agent, and such
Administrative Agent's resignation shall become effective when such successor
accepts such appointment. If, within thirty days after the date of the retiring
Administrative Agent's resignation, no successor Administrative Agent has been
appointed and has accepted such appointment, then the retiring Administrative
Agent may appoint a successor Administrative Agent, which shall be a commercial
bank organized or licensed to conduct a banking or trust business under the laws
of the United States of America or of any state thereof. Upon the acceptance of
any appointment as Administrative Agent hereunder by a successor Administrative
Agent, the retiring Administrative Agent shall be
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discharged from its duties and obligations under this Agreement and the other
Loan Documents. After any retiring Administrative Agent's resignation hereunder
the provisions of this Article VIII shall continue to inure to its benefit as to
any actions taken or omitted to be taken by it while it was Administrative Agent
under the Loan Documents.
ARTICLE IX - Miscellaneous
Section 9.1. Waivers and Amendments; Acknowledgments.
(a) Waivers and Amendments. No failure or delay (whether by course of
conduct or otherwise) by any Lender in exercising any right, power or
remedy which any Lender may have under any of the Loan Documents shall
operate as a waiver thereof or of any other right, power or remedy, nor
shall any single or partial exercise by any Lender of any such right, power
or remedy preclude any other or further exercise thereof or of any other
right, power or remedy. No waiver of any provision of any Loan Document
and no consent to any departure therefrom shall ever be effective unless it
is in writing and signed as provided below in this section, and then such
waiver or consent shall be effective only in the specific instances and for
the purposes for which given and to the extent specified in such writing.
No notice to or demand on any Related Person shall in any case of itself
entitle any Related Person to any other or further notice or demand in
similar or other circumstances. This written agreement and the other loan
documents represent the final agreement between the parties and may not be
contradicted by evidence of prior, contemporaneous, or subsequent oral
agreements of the parties, and no modification or amendment of or
supplement to this Agreement or the other Loan Documents shall be valid or
effective unless the same is in writing and signed by (i) if such party is
Borrower, by Borrower, (ii if such party is Administrative Agent, by such
party, and (ii if such party is a Lender, by such Lender or by
Administrative Agent on behalf of Lenders with the written consent of
Majority Lenders (which consent has already been given as to the
termination of the Loan Documents as provided in Section 9.7).
Notwithstanding the foregoing or anything to the contrary herein,
Administrative Agent shall not, without the prior consent of each
individual Lender, execute and deliver on behalf of such Lender any waiver
or amendment which would: (1) waive any of the conditions specified in
Article III (provided that Administrative Agent may in its discretion
withdraw any request it has made under Section 3.2(i)), (2) increase the
Percentage Share of such Lender or subject such Lender to any additional
obligations, (3) reduce any fees payable to such Lender hereunder, or the
principal of, or interest on, such Lender's Note, (4) postpone any date
fixed for any payment of any such fees, principal or interest, (5) amend
the definition herein of "Majority Lenders" or otherwise change the
aggregate amount of Percentage Shares which is required for Administrative
Agent, Collateral Agent, Lenders or any of them to take any particular
action under the Loan Documents, (6)
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amend this Section 9.1, or (7) release Borrower from its obligation to pay
such Lender's Note or any Guarantor from its guaranty of such payment.
(b) Acknowledgments and Admissions. Each of Borrower and Parent
hereby represents, warrants, acknowledges and admits that (i) it has been
advised by counsel in the negotiation, execution and delivery of the Loan
Documents to which it is a party, (ii it has made an independent decision
to enter into this Agreement and the other Loan Documents to which it is a
party, without reliance on any representation, warranty, covenant or
undertaking by any Lender, whether written, oral or implicit, other than as
expressly set out in this Agreement or in another Loan Document delivered
on or after the date hereof, (ii there are no representations, warranties,
covenants, undertakings or agreements by any Creditor as to the Loan
Documents except as expressly set out in this Agreement or in another Loan
Document delivered on or after the date hereof, (iv no Creditor owes no
fiduciary duty to any Related Person with respect to any Loan Document or
the transactions contemplated thereby, (v) the relationship pursuant to
the Loan Documents between each Related Person, on one hand, and each
Creditor, on the other hand, is and shall be solely that of debtor and
creditor, respectively, (vi no partnership or joint venture exists with
respect to the Loan Documents between Borrower and any Creditor, (vi should
an Event of Default or Default occur or exist each Creditor will determine
in its sole discretion and for its own reasons what remedies and actions it
will or will not exercise or take at that time, (vi without limiting any of
the foregoing, no Related Person is relying upon any representation or
covenant by any Creditor, or any representative thereof, and no such
representation or covenant has been made, that any Creditor will, at the
time of an Event of Default or Default, or at any other time, waive,
negotiate, discuss, or take or refrain from taking any action permitted
under the Loan Documents with respect to any such Event of Default or
Default or any other provision of the Loan Documents, and (ix each Lender
has relied upon the truthfulness of the acknowledgments in this section in
deciding to execute and deliver this Agreement and to make its Loan.
THIS WRITTEN AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
Section 9.2. Survival of Agreements; Cumulative Nature. All of the
Related Persons' various representations, warranties, covenants and agreements
in the Loan Documents shall survive the execution and delivery of this Agreement
and the other Loan Documents and the performance hereof and thereof, including
the making or granting of the Loans and the delivery of the Notes and the other
Loan Documents, and shall further survive until all of the
27
<PAGE>
Obligations owed to the Administrative Agent and the Lenders are paid in full
and all of Lenders' obligations to any Related Person are terminated. All
statements and agreements contained in any certificate or other instrument
delivered by any Related Person to any Creditor under any Loan Document shall be
deemed representations and warranties by the Related Persons or agreements and
covenants of the Related Persons under this Agreement. The representations,
warranties, and covenants made by the Related Persons in the Loan Documents, and
the rights, powers, and privileges granted to each Creditor in the Loan
Documents, are cumulative, and, except for expressly specified waivers and
consents and Section 9.6, no Loan Document shall be construed in the context of
another to diminish, nullify, or otherwise reduce the benefit to any Creditor of
any such representation, warranty, covenant, right, power or privilege. In
particular and without limitation, no exception set out in this Agreement to any
representation, warranty or covenant herein contained shall apply to any similar
representation, warranty or covenant contained in any other Loan Document, and
each such similar representation, warranty or covenant shall be subject only to
those exceptions which are expressly made applicable to it by the terms of the
various Loan Documents.
Section 9.3. Notices. All notices, requests, consents, demands and other
communications to any Related Person or to any Lender which are required or
permitted under any Loan Document shall be in writing, unless otherwise
specifically provided in such Loan Document (provided that Administrative Agent
may give telephonic notices to the other Lenders), and shall be deemed
sufficiently given or furnished if delivered by personal delivery, by telecopy,
by delivery service with proof of delivery, or by registered or certified United
States mail, postage prepaid, to any such Related Person at the address of
Parent specified on the signature pages hereto and to each Lender at its address
specified on the signature pages hereto (unless changed by similar notice in
writing given by the particular Person whose address is to be changed). Any
such notice or communication shall be deemed to have been given (a) in the case
of personal delivery or delivery service, as of the date of first attempted
delivery at the address and in the manner provided herein, (b) in the case of
telecopy, upon receipt, or (c) in the case of registered or certified United
States mail, three days after deposit in the mail; provided, however, that no
Borrowing Notice shall become effective until actually received by
Administrative Agent.
Section 9.4. Joint and Several Liability; Parties in Interest;
Assignments.
(a) All Obligations which are incurred by two or more Related Persons
shall be their joint and several obligations and liabilities. All grants,
covenants and agreements contained in the Loan Documents shall bind and
inure to the benefit of the parties thereto and their respective successors
and assigns; provided, however, that no Related Person may assign or
transfer any of its rights or delegate any of its duties or obligations
under any Loan Document without the prior consent of Majority Lenders.
28
<PAGE>
(b) Lenders may sell a participation interest in and may assign in
whole or in part its rights under its Loan or under the Loan Documents to
any Person with the consent of the Administrative Agent which consent shall
not be unreasonably withheld.
(c) Administrative Agent shall maintain a register for the recordation
of the names and addresses of Lenders and the Percentage Shares of, and
principal amount of the Loans owing to, each Lender from time to time (in
this section called the "Register"). The entries in the Register shall be
conclusive, in the absence of manifest error, and Borrower and each Lender
may treat each Person whose name is recorded in the Register as a Lender
hereunder for all purposes. The Register shall be available for inspection
by Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
SECTION 9.5. GOVERNING LAW; SUBMISSION TO PROCESS. EXCEPT TO THE EXTENT
THAT THE LAW OF ANOTHER JURISDICTION IS EXPRESSLY ELECTED IN A LOAN DOCUMENT,
THE LOAN DOCUMENTS SHALL BE DEEMED CONTRACTS AND INSTRUMENTS MADE UNDER THE LAWS
OF THE STATE OF NEW YORK AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK AND THE LAWS OF THE UNITED
STATES OF AMERICA, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. EACH
RELATED PERSON HEREBY AGREES THAT ANY LEGAL ACTION OR PROCEEDING AGAINST ANY
RELATED PERSON WITH RESPECT TO THIS AGREEMENT, THE NOTES OR ANY OF THE LOAN
DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR (TO THE
EXTENT THEY HAVE SUBJECT MATTER JURISDICTION) OF THE UNITED STATES OF AMERICA
FOR THE SOUTHERN DISTRICT OF NEW YORK AS LENDERS MAY ELECT, AND, BY EXECUTION
AND DELIVERY HEREOF, EACH RELATED PERSON ACCEPTS AND CONSENTS FOR ITSELF AND IN
RESPECT TO ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, TO THE JURISDICTION OF
THE AFORESAID COURTS AND AGREES THAT SUCH JURISDICTION SHALL BE EXCLUSIVE,
UNLESS WAIVED BY LENDERS IN WRITING, WITH RESPECT TO ANY ACTION OR PROCEEDING
BROUGHT BY IT AGAINST ANY LENDER AND ANY QUESTIONS RELATING TO USURY. EACH
RELATED PERSON AGREES THAT SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS
LAW OF THE STATE OF NEW YORK SHALL APPLY TO THE LOAN DOCUMENTS AND WAIVES ANY
RIGHT TO STAY OR TO DISMISS ANY ACTION OR PROCEEDING BROUGHT BEFORE SAID COURTS
ON THE BASIS OF FORUM NON CONVENIENS. IN FURTHERANCE OF THE FOREGOING, EACH
RELATED PERSON HEREBY IRREVOCABLY DESIGNATES AND APPOINTS CT CORPORATION SYSTEM,
1633 BROADWAY, NEW YORK, NEW YORK, AS ITS ADMINISTRATIVE AGENT TO RECEIVE
SERVICE OF ALL PROCESS BROUGHT AGAINST IT WITH RESPECT TO ANY SUCH PROCEEDING IN
ANY SUCH COURT IN NEW YORK, SUCH SERVICE
29
<PAGE>
BEING HEREBY ACKNOWLEDGED TO BE EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT.
COPIES OF ANY SUCH PROCESS SO SERVED SHALL ALSO, IF PERMITTED BY LAW, BE SENT BY
REGISTERED MAIL TO SUCH RELATED PERSON AT THE ADDRESS OF PARENT SET FORTH BELOW,
BUT THE FAILURE OF SUCH RELATED PERSON TO RECEIVE SUCH COPIES SHALL NOT AFFECT
IN ANY WAY THE SERVICE OF SUCH PROCESS AS AFORESAID. EACH RELATED PERSON SHALL
FURNISH TO THE ADMINISTRATIVE AGENT A CONSENT OF CT CORPORATION SYSTEM AGREEING
TO ACT HEREUNDER PRIOR TO THE EFFECTIVE DATE OF THIS AGREEMENT. NOTHING HEREIN
SHALL AFFECT THE RIGHT OF ANY LENDER TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF ANY LENDER TO BRING PROCEEDINGS
AGAINST ANY RELATED PERSON IN THE COURTS OF ANY OTHER JURISDICTION. IF FOR ANY
REASON CT CORPORATION SYSTEM SHALL RESIGN OR OTHERWISE CEASE TO ACT AS AGENT,
EACH RELATED PERSON HEREBY IRREVOCABLY AGREES TO (A) IMMEDIATELY DESIGNATE AND
APPOINT A NEW AGENT ACCEPTABLE TO LENDERS TO SERVE IN SUCH CAPACITY AND, IN SUCH
EVENT, SUCH NEW AGENT SHALL BE DEEMED TO BE SUBSTITUTED FOR CT CORPORATION
SYSTEM FOR ALL PURPOSES HEREOF AND (B) PROMPTLY DELIVER TO LENDERS THE WRITTEN
CONSENT (IN FORM AND SUBSTANCE SATISFACTORY TO LENDER) OF SUCH NEW AGENT
AGREEING TO SERVE IN SUCH CAPACITY.
Section 9.6. Limitation on Interest. Each Lender, the Related Persons
and the other parties to the Loan Documents intend to contract in strict
compliance with applicable usury law from time to time in effect. In
furtherance thereof such Persons stipulate and agree that none of the terms and
provisions contained in the Loan Documents shall ever be construed to provide
for interest in excess of the maximum amount of interest permitted to be charged
by applicable law from time to time in effect. Neither any Related Person nor
any present or future guarantors, endorsers, or other Persons hereafter becoming
liable for payment of any Obligation shall ever be liable for unearned interest
thereon or shall ever be required to pay interest thereon in excess of the
maximum amount that may be lawfully charged under applicable law from time to
time in effect, and the provisions of this section shall control over all other
provisions of the Loan Documents which may be in conflict or apparent conflict
herewith.
Section 9.7. Termination; Limited Survival. In their sole and absolute
discretion, Related Persons may at any time that no Obligations are owing elect
in a notice delivered to Administrative Agent to terminate this Agreement. Upon
receipt by Administrative Agent of such a notice, if no Obligations are then
owing this Agreement and all other Loan Documents shall thereupon be terminated
and the parties thereto released from all prospective obligations thereunder.
Notwithstanding the foregoing or anything herein to the contrary, any waivers or
admissions made by any Related Person in any Loan Documents, any Obligations
under
30
<PAGE>
Sections 2.11 through 2.15, and any obligations which any Person may have
to indemnify or compensate any Lender shall survive any termination of this
Agreement or any other Loan Document. At the request and expense of Related
Persons, Administrative Agent shall prepare and execute all necessary
instruments to reflect and effect such termination of the Loan Documents.
Administrative Agent is hereby authorized to execute all such instruments on
behalf of all Lenders, without the joinder of or further action by any Lender.
Section 9.8. Severability. If any term or provision of any Loan Document
shall be determined to be illegal or unenforceable all other terms and
provisions of the Loan Documents shall nevertheless remain effective and shall
be enforced to the fullest extent permitted by applicable law.
Section 9.9. Counterparts. This Agreement may be separately executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to constitute one
and the same Agreement.
SECTION 9.10. WAIVER OF JURY TRIAL, PUNITIVE DAMAGES, ETC. TO THE EXTENT
PERMITTED BY LAW, LENDERS AND EACH RELATED PERSON HEREBY KNOWINGLY, VOLUNTARILY,
AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION BASED HEREON, OR DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER,
OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE
OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS
OF ANY LENDER OR ANY RELATED PERSON. THIS PROVISION IS A MATERIAL INDUCEMENT
FOR LENDERS ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS. EACH OF
RELATED PERSONS AND LENDERS HEREBY FURTHER (A) IRREVOCABLY WAIVES, TO THE
MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER
IN ANY SUCH LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL
DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; (B) CERTIFIES
THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR ADMINISTRATIVE AGENT OR COUNSEL
FOR ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT
SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVERS, AND (C) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT, THE OTHER LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND
THEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED
IN THIS SECTION.
Section 9.11. Renewal and Extension. This Agreement is an amendment and
restatement and not a novation of the Original Credit Agreement, as amended,
restated, or
31
<PAGE>
supplemented to the date hereof. Neo and Parent hereby represent and warrant
that as of the date hereof all conditions under Section 3.1 of this Agreement
have been met. Neo and Parent hereby agree that (i) the Loans outstanding under
the Original Credit Agreement and all accrued and unpaid interest thereon, and
(ii) all accrued and unpaid fees under the Original Credit Agreement shall be
deemed to be outstanding under and governed by this Agreement. Neither this
Agreement nor any other Loan Document shall limit or impair the validity,
priority or enforceability of any of the indebtedness or liabilities of Parent,
Aviva America or Neo under the Original Credit Agreement, the Original Note or
any Liens securing such indebtedness or liabilities.
32
<PAGE>
IN WITNESS WHEREOF, this Agreement is executed as of the date first written
above.
AVIVA PETROLEUM INC.
By: /s/ R. SUTTILL
--------------------------------------
Name: Ronald Suttill
Title: President
Address:
8235 Douglas Avenue, Suite 400
Dallas, Texas 75225
Attention: Ronald Suttill, President
Telephone: 214-691-3464
Telecopy: 214-361-0010
NEO ENERGY, INC.
By: /s/ R. SUTTILL
--------------------------------------
Name: Ronald Suttill
Title: President
Address:
8235 Douglas Avenue, Suite 400
Dallas, Texas 75225
Attention: Ronald Suttill, President
Telephone: 214-691-3464
Telecopy: 214-361-0010
<PAGE>
Percentage Share ING (U.S.) CAPITAL CORPORATION,
- ----------------
100% as Administrative Agent and a Lender
By: /s/ CHRISTOPHER R. WAGNER
--------------------------------------
Christopher R. Wagner
Senior Vice President
Address:
135 East 57th Street
New York, New York 10022-2101
Attention: Christopher R. Wagner
Telephone: 212-409-1717
Telecopy: 212-832-3616
<PAGE>
EXHIBIT 99.2
================================================================================
JOINT FINANCE AND INTERCREDITOR AGREEMENT
--------------------------------
AVIVA PETROLEUM INC.,
AVIVA AMERICA, INC.,
AVIVA DELAWARE INC., AVIVA OPERATING COMPANY,
GARNET RESOURCES CORPORATION,
ARGOSY ENERGY INCORPORATED,
ARGOSY ENERGY INTERNATIONAL,
NEO ENERGY, INC.
GARNET PNG CORPORATION
AND
ING (U.S.) CAPITAL CORPORATION,
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
OVERSEAS PRIVATE INVESTMENT CORPORATION,
AS CREDITORS
AND
ING (U.S.) CAPITAL CORPORATION
AS COLLATERAL AGENT
--------------------------------
October 28, 1998
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I - Definitions.................................................................. -3-
Section 1.1. Definitions........................................................... -3-
Section 1.2. Annexes, Exhibits and Schedules; Additional Definitions............... -4-
Section 1.3. Amendment of Defined Instruments...................................... -4-
Section 1.4. References and Titles................................................. -4-
Section 1.5. Calculations and Determinations....................................... -4-
ARTICLE II - Revenues and Payments....................................................... -4-
Section 2.1. Restated Escrow Agreement............................................. -4-
Section 2.2. Revenues.............................................................. -5-
Section 2.3. Application of Released Revenue....................................... -5-
Section 2.4. Required Payments.................................................... -6-
Section 2.5. Payments to Creditors................................................. -7-
Section 2.6. Chase/OPIC Payments................................................... -8-
ARTICLE III - Representations, Warranties and Covenants of Related Persons............... -8-
Section 3.1. Representations and Warranties........................................ -8-
Section 3.2. Covenants............................................................. -8-
Section 3.3. OPIC Finance Agreement Covenants...................................... -9-
Section 3.4. Purchase and Sale..................................................... -9-
Section 3.5. Consent to Merger..................................................... -10-
ARTICLE IV - Events of Default and Remedies.............................................. -10-
Section 4.1. Events of Default..................................................... -10-
Section 4.2. OPIC Finance Agreement Events of Defaults............................. -10-
Section 4.3. Acceleration.......................................................... -10-
Section 4.4. Remedies.............................................................. -10-
Section 4.5. Indemnity............................................................. -11-
ARTICLE V - Intercreditor Provisions..................................................... -12-
Section 5.1. Appointment and Authority of Collateral Agent......................... -12-
Section 5.2. Enforcement Action.................................................... -14-
Section 5.3. Notices of Default, Acceleration, and Enforcement Action.............. -14-
Section 5.4. Payments, Proceeds and Additional Collateral.......................... -14-
Section 5.5. Limited Liability of Collateral Agent; Indemnity...................... -16-
Section 5.6. Collateral Agent's Employees.......................................... -17-
Section 5.7. Collateral Agent's Reliance........................................... -17-
Section 5.8. Certain Actions Requiring Consent of Majority Creditors............... -17-
Section 5.9. Non-Reliance on Collateral Agent and Other Creditors.................. -18-
Section 5.10. Liability Among Creditors............................................. -18-
Section 5.11. Resignation or Removal of Collateral Agent............................ -18-
Section 5.12. No Partnership........................................................ -19-
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
Section 5.13. Liens are Pari Passu.................................................. -19-
Section 5.14. All Loan Documents.................................................... -19-
Section 5.15. Benefit of Article V.................................................. -19-
ARTICLE VI - Miscellaneous............................................................... -20-
Section 6.1. Waivers and Amendments; Acknowledgments............................... -20-
Section 6.2. Ratification and Confirmation of the Loan Documents................... -21-
Section 6.3. Release and Discharge of Creditors.................................... -21-
Section 6.4. Fraudulent Conveyance................................................. -22-
Section 6.5. Survival of Agreements; Cumulative Nature............................. -22-
Section 6.6. Notices............................................................... -22-
Section 6.7. Joint and Several Liability; Parties in Interest; Assignments......... -23-
Section 6.8. Governing Law; Submission to Process.................................. -23-
Section 6.9. Limitation on Interest................................................ -24-
Section 6.10. Termination; Limited Survival......................................... -25-
Section 6.11. Severability.......................................................... -25-
Section 6.12. Counterparts.......................................................... -25-
Section 6.13. Waiver of Jury Trial, Punitive Damages, etc........................... -25-
Section 6.14. Judgment Currency..................................................... -26-
Section 6.15. Immunity.............................................................. -26-
</TABLE>
INDEX OF SCHEDULES, ANNEXES AND EXHIBITS
*ANCF Report and Payment Instruction Form
*Schedule 1 - Adjusted Net Cash Flow Form
*Schedule 2 - Approved Expenditure Limitation Form
*Schedule 3 - Payment Instructions Form
*Schedule 1 - Disclosure Schedule
*Schedule 2 - Security Schedule
*Schedule 3 - J&H Marsh & McLennan Insurance Letter
*Schedule 4 - Chase Bank/OPIC Security Documents
*Schedule 5 - ING Security Documents
*Annex A - Common Definitions
*Annex B - Common Representations and Warranties
*Annex C - Common Covenants
*Annex D - Common Collateral Covenants
*Annex E - Common Events of Default
*Annex F - Amended and Restated Escrow Agreement
* The above schedules, annexes and exhibits have been omitted. The Company will
provide them to the Securities and Exchange Commission supplementally upon
request.
-ii-
<PAGE>
JOINT FINANCE AND INTERCREDITOR AGREEMENT
-----------------------------------------
THIS JOINT FINANCE AND INTERCREDITOR AGREEMENT (this "Agreement") is made
as of October 28, 1998, by and among:
Aviva Petroleum Inc., a Texas corporation (herein called "Parent"),
Aviva America, Inc., a Delaware corporation (herein called "Aviva
America"),
Aviva Delaware Inc., a Delaware corporation (herein called "Aviva
Delaware"),
Aviva Operating Company, a Delaware corporation (herein called "Aviva
Operating"),
Garnet Resources Corporation, a Delaware corporation (herein called
"Garnet"),
Garnet PNG Corporation, a Delaware corporation (herein called "Garnet
PNG"),
Argosy Energy Incorporated, a Delaware corporation (herein called
"Argosy"),
Argosy Energy International (herein called "Argosy International"), a
limited partnership organized and existing under the laws of the State of
Utah,
Neo Energy, Inc., a Texas corporation (herein called "Neo"),
ING (U.S.) Capital Corporation, a Delaware corporation (herein called
"ING"),
Chase Bank of Texas, National Association, a national banking association
(herein called "Chase"), and
Overseas Private Investment Corporation, an agency of the United States of
America (herein called "OPIC").
WITNESSETH:
A. Neo, Parent, Aviva America, and Internationale Nederlanden Bank, N.V.,
New York Branch (predecessor in interest to ING), entered into a certain Credit
Agreement dated as of August 6, 1993 (as heretofore amended, herein called the
"Original Neo Credit Agreement"), pursuant to which Borrower executed and
delivered a certain promissory note in the original principal amount of
$25,000,000, of which ING is now the holder. As of the date hereof, the unpaid
principal balance thereon is approximately $8,200,000. The indebtedness under
the Original Neo Credit Agreement is guaranteed by Parent and Aviva America and
is secured by the collateral under various Security Documents described in the
Original Neo Credit Agreement.
B. Parent is the owner of 100% of the stock of Aviva America, and Aviva
America is the owner of 100% of the stock of Neo.
<PAGE>
C. Argosy International and Texas Commerce Bank National Association
(now known as Chase Bank of Texas, National Association) have heretofore entered
into that certain Loan Agreement dated as of August 3, 1994 (as heretofore
amended, herein called the "Chase Loan Agreement"), pursuant to which Argosy
International executed and delivered that certain promissory note in the
principal amount of $4,400,000 and that certain promissory note in the original
principal amount of $4,800,000 (together, the "Chase Notes"). As of the date
hereof, the aggregate unpaid principal balance of the Chase Notes is
approximately $6,350,000.
D. Argosy International and OPIC entered into that certain Finance
Agreement dated as of May 5, 1994 (as heretofore amended, herein called the
"OPIC Finance Agreement"), pursuant to which OPIC guaranteed the payment when
due of the Chase Notes and pursuant to which Argosy International agreed to
reimburse OPIC for any amount paid by OPIC under the OPIC Guaranty of the Chase
Notes. The indebtedness under the Finance Agreement and the Credit Agreement
is secured by the Collateral under, and receives the benefit of the other
agreements contained in, the Financing Documents (as defined in the Financing
Agreement).
E. Garnet is the owner of 100% of the stock of Argosy and is the owner of
a limited partnership interest in Argosy International representing an
approximately 10.13% interest in Argosy International, and Argosy owns a general
partnership interest in Argosy International representing an approximately
89.11% interest in Argosy International. The remaining approximate .76%
interest in Argosy International is a limited partnership interest owned by two
individuals.
F. On October 20, 1998, the shareholders of Aviva and Garnet approved a
Merger Agreement pursuant to which Garnet will be merged with and into Aviva
Merger Inc., a newly formed Delaware corporation that is an indirect wholly
owned subsidiary of Parent, with Garnet being the surviving corporation and
thereby becoming an indirect wholly owned subsidiary of Parent (the "Merger").
G. The principal asset of both Neo and Argosy International is a Joint
Operating Agreement (the "Santana Contract") among Neo, Argosy and Empresa
Colombiana de Petroleos, the Colombian National Oil Company ("ECOPETROL"). The
Related Persons (as defined herein) have determined that the operation of the
Santana Contract and the other assets of Neo and Argosy in a single company will
be advantageous to Neo, Argosy International and each of the other Related
Persons. Accordingly, Neo and Argosy International intend to enter into a
Purchase and Sale Agreement, pursuant to which Neo will transfer to Argosy
International substantially all of Neo's assets in consideration of (i) the
assumption by Argosy International of all of Neo's indebtedness, obligations and
liabilities, including the indebtedness, obligations and liabilities under the
Original Neo Agreement and (ii) the issuance to Neo of limited partnership
interests in Argosy International (the "Purchase and Sale"), subject to the
consent of ECOPETROL and to the consent of the Creditors (as defined herein).
H. The Related Persons have requested the consent of the Creditors to the
Merger and to the Purchase and Sale, and the Creditors are willing to consent to
the Merger and Purchase and Sale, subject to the terms and conditions contained
herein.
-2-
<PAGE>
I. The Related Persons desire to enter into this Agreement in order to
(i) induce ING to execute and deliver a Restated Credit Agreement with Neo and
advance additional funds as provided therein; (ii) provide for the consent of
Creditors to the Merger and the Purchase and Sale; (iii) evidence certain
covenants which the Related Persons will make to all of Creditors; (iv) provide
for certain agreements among Creditors; and (v) provide for the appointment of
ING as Collateral Agent for Creditors.
J. Without regard to the Purchase and Sale, each of the Related Persons
will directly and indirectly benefit from the consummation of the Merger, and in
consideration of such benefit and in order to induce Creditors to enter into
this Agreement, each Related Person is willing to guarantee and to pledge its
assets to secure the indebtedness, obligations and liabilities owed by Neo and
by Argosy International.
K. Creditors are willing to agree that their claims against the Related
Persons will rank pari passu, that all liens and recovery shall be shared on a
pro rata basis, all is provided in this Agreement.
In consideration of the mutual covenants and agreements contained herein,
the parties hereto agree as follows:
ARTICLE I - Definitions
Section 1.1. Definitions. Certain terms used in this Agreement are
defined in Annex A. As used herein the terms defined in the recitals shall have
the meanings given them above and the following additional terms have the
following meanings:
"Agreement" means this Joint Finance and Intercreditor Agreement.
"ANCF Report" has the meaning given in Section 2.3.
"Borrower" means collectively Argosy International and Neo. Upon the
Assumption of the Debt of Neo under the ING Credit Agreement by Argosy
International in accordance with Section 3.4 hereof, "Borrower" shall mean
Argosy International.
"Creditor Agreements" means the ING Credit Agreement and the
Chase/OPIC Agreements, and "Creditor's Agreement" means the ING Credit
Agreement with respect to ING and its successors and assigns, and the
Chase/OPIC Credit Agreements with respect to Chase and OPIC and their
respective successors and assigns.
"Enforcement Action" means any exercise by Collateral Agent or any
Creditor of any rights or remedies against any Related Person or against or
with respect to any Collateral, whether under any Security Documents or
otherwise, including without limitation in order to foreclose upon,
collect, take possession of, sell, lease, dispose of, or
-3-
<PAGE>
otherwise realize upon Collateral or any property of a Related Person or
to settle or compromise claims against Collateral.
Section 1.2. Annexes, Exhibits and Schedules; Additional Definitions.
All Annexes, Exhibits and Schedules attached to this Agreement are a part hereof
for all purposes, and terms defined in this Agreement have the same meanings
when used in the Annexes and Schedules hereto. Reference is hereby made to the
Security Schedule for the meaning of certain terms defined therein and used but
not defined herein, which definitions are incorporated herein by reference.
Section 1.3. Amendment of Defined Instruments. Unless the context
otherwise requires or unless otherwise provided herein the terms defined in this
Agreement which refer to a particular agreement, instrument or document also
refer to and include all renewals, extensions, modifications, amendments and
restatements of such agreement, instrument or document, provided that nothing
contained in this section shall be construed to authorize any such renewal,
extension, modification, amendment or restatement.
Section 1.4. References and Titles. All references in this Agreement to
Annexes, Exhibits, Schedules, Recitals, articles, sections, subsections and
other subdivisions refer to the Annexes, Exhibits, Schedules, Recitals,
articles, sections, subsections and other subdivisions of this Agreement unless
expressly provided otherwise. Titles appearing at the beginning of any
subdivisions are for convenience only and do not constitute any part of such
subdivisions and shall be disregarded in construing the language contained in
such subdivisions. The words "this Agreement", "this instrument", "herein",
"hereof", "hereby", "hereunder" and words of similar import refer to this
Agreement as a whole and not to any particular subdivision unless expressly so
limited. The phrases "this section" and "this subsection" and similar phrases
refer only to the sections or subsections hereof in which such phrases occur.
The word "or" is not exclusive, and the word "including" (in its various forms)
means "including without limitation". Pronouns in masculine, feminine and
neuter genders shall be construed to include any other gender, and words in the
singular form shall be construed to include the plural and vice versa, unless
the context otherwise requires.
Section 1.5. Calculations and Determinations. Unless otherwise expressly
provided herein or unless Majority Creditors otherwise consent, all financial
statements and reports furnished to any Creditor hereunder shall be prepared and
all financial computations and determinations pursuant hereto shall be made in
accordance with GAAP.
ARTICLE II - Revenues and Payments
Section 2.1. Restated Escrow Agreement. Borrower and Creditors have or
will enter into a certain Amended and Restated Escrow Agreement in the form of
Annex F attached hereto, pursuant to which Collateral Agent will be designated
as Escrow Agent for the Creditors pursuant to the terms thereof. Upon delivery
of notice of the establishment of the escrow account pursuant to such Amended
and Restated Escrow Agreement by Collateral Agent to
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Chase, as Escrow Agent under that certain Escrow Agreement dated August 3, 1994
(the "Existing Escrow Agreement"), the Existing Escrow Agreement shall thereupon
terminate and Chase shall thereupon cease to act as Escrow Agent thereunder;
provided, however, that (i) Chase shall keep the escrow account open and accept
wire transfers of Revenues into the escrow account until such time as Collateral
Agent notifies Chase that all payors of Revenues have agreed to make payments to
the escrow account under such Amended and Restated Escrow Agreement, (ii) Chase
shall remain entitled to the protections set forth in the Existing Escrow
Agreement, including without limitation, Sections 8, 9, 10, 11, 12 and 13
thereof until such escrow account under the Existing Escrow Agreement shall be
closed; (iii) in the event all such amounts required to be paid to Chase as the
Escrow Agent thereunder are not fully and finally paid prior to termination, the
provisions of Section 13 thereof shall survive the termination thereof and (iv)
that the last sentence of Section 11 thereof and the provisions of Section 12
thereof shall, in any event, survive the termination thereof. If Chase receives
funds from time to time pursuant to the Existing Escrow Agreement, Chase shall
receive such funds on behalf of the replacement Escrow Agent under such Amended
and Restated Escrow Agreement and promptly turn over such funds to such
replacement Escrow Agent.
Section 2.2. Revenues. Borrower shall cause ECOPETROL to pay directly to
Escrow Agent in United States dollars all Revenues payable by ECOPETROL.
Borrower shall cause all other proceeds which are owed to it from the sale of
hydrocarbons produced from the Project to be irrevocably paid in full directly
to Escrow Agent. Each other Related Person shall cause purchasers of production
in respect of its Oil and Gas Properties to pay directly to Escrow Agent in
United States dollars all Revenues payable by such purchaser of production. All
Revenues which any Related Person receives shall be held by the Related Person
in trust for Escrow Agent, shall be segregated from other funds of the Related
Persons and shall be turned over to Escrow Agent in the form in which it was
received (duly endorsed to Escrow Agent, if required). At all times Borrower
shall have on deposit in the Escrow Account (as defined in the Escrow Agreement)
the Minimum Escrow Amount. "Minimum Escrow Amount" means an amount at least
equal to (a) from the date hereof to but not including March 31, 1999, $250,000,
and (b) on and after March 31, 1999, the total of: (i) the amount of the
Minimum Monthly Payments during the next succeeding three-month period, plus
(ii) the interest payments due on the Combined Loans during the next succeeding
three-month period based on rates of interest for each Loan equal to the sum of
0.25 plus the rate of interest applicable to such Loan on the immediately
preceding Quarterly Payment Date, plus (iii) the amount of all Guaranty Fees
under the OPIC Finance Agreement and other fees due under the Loan Documents
during the next succeeding three-month period, including all fees due to the
Escrow Agent in accordance with the Escrow Agreement. Amounts in the Escrow
Account shall be released in accordance with the terms and conditions of the
Escrow Agreement. In no event shall Escrow Agent or Creditors be required to
release the Minimum Escrow Amount from the Escrow Account in order to meet the
payments required to be made under Section 2.4.
Section 2.3. Application of Released Revenue. Not less than ten days
prior to the end of each calendar month, Borrower shall provide to each Creditor
an ANCF Report and Payment Instruction in the form of Exhibit A hereto (the
"ANCF Report"). Contemporaneously with the release of amounts from the Escrow
Account in accordance with the Escrow Agreement on or
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about the last Business Day of each calendar month, Escrow Agent shall apply
such amounts released from the Escrow Account in accordance with such ANCF
Report and Payment Instruction. If any Creditor notifies Borrower and Escrow
Agent of any correction to the ANCF Report and Payment Instruction and Escrow
Agent determines that it received such correction notice at a time which will
allow it to make such correction, Escrow Agent shall make payments hereunder
pursuant to the ANCF Report and Payment Instruction as modified by such
correction notice, absent manifest error in such correction notice by such
Creditor.
Section 2.4. Required Payments. Borrower shall be obligated to make or
cause to be made the following payments to Creditors, whether or not the amounts
released from the Escrow Account are sufficient to make such payments:
(a) Upon notice by Collateral Agent that this Agreement has been
executed, funds in the Existing Escrow Agreement shall be applied to reduce
the principal balance under the Chase Loan Agreement to $6,000,000. The
balance of funds in the Existing Escrow Account shall be delivered to the
Escrow Agent under the Amended and Restated Escrow Agreement referred to in
Section 2.1. Prior to October 31, 1998, Borrower shall deliver additional
funds to the Escrow Agent under such Amended and Restated Escrow Agreement
such that the balance in such Escrow Account is equal to the Minimum Escrow
Amount.
(b) On or before the last Business Day of each month, beginning with
October 31, 1998 and continuing until all Obligations under the Loan
Documents are paid in full, Borrower shall make payments of principal on
the Combined Loans equal to the greater of (i) the Minimum Monthly Payment
and (ii) 100% of the ANCF for the immediately preceding month.
(c) If the unpaid principal balance of the Combined Loans ever exceeds
the Borrowing Base, Borrower shall, within thirty (30) days after the
Administrative Agent under the ING Credit Agreement gives notice of such
fact to Borrower, prepay the principal of the Combined Loans in an amount
equal to or greater than such excess.
(d) Each payment of principal under paragraph (b) or (c) of this
Section 2.4 shall be applied to (i) 60% to the principal under the ING
Credit Agreement and (ii) 40% to the principal under the Chase/OPIC
Agreements.
(e) Borrower will pay all interest, fees and expenses accrued and
unpaid under the Creditor Agreements (including, without limitation,
amounts due under Section 4 of the Chase Loan Agreement and Sections 2.11,
2.12, 2.14 and 2.15 of the ING Credit Agreement) on the dates provided for
in the respective Creditor Agreements.
(f) Any payment of principal which is made other than on a day when
all accrued interest is due and payable shall be accompanied by all
interest then accrued and unpaid on the principal so paid.
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To the extent that amounts are applied from the Escrow Account as a result of an
Application for Payment by a Creditor (as defined in the Escrow Agreement) to
make any payment which Borrower has failed to make under this Section 2.4, such
payment shall not be deemed to satisfy or cure such failure by Borrower.
Section 2.5. Payments to Creditors. Borrower will make each payment
which it owes under the Loan Documents not later than noon, Eastern time, on the
date such payment becomes due and payable, in lawful money of the United States
of America, without set-off, deduction or counterclaim, and in immediately
available funds. Any payment received after such time shall be deemed to have
been made on the next following Business Day. Should any such payment become
due and payable on a day other than a Business Day, the maturity of such payment
shall be extended to the next succeeding Business Day, and, in the case of a
payment of principal or past due interest, interest shall accrue and be payable
thereon for the period of such extension as provided in the Loan Document under
which such payment is due. Each payment under a Loan Document shall be due and
payable at the place provided therein and, if no specific place of payment is
provided, shall be due and payable at the place of payment of the respective
Creditor's Note. So long as the Obligations have not been declared due and
payable pursuant to Section 4.2, when Collateral Agent collects or receives
money on account of the Obligations, Collateral Agent shall distribute all money
so collected or received, after deduction of amounts then due and owing to
Collateral Agent, and each Creditor shall apply all such money so distributed,
as follows:
(a) first, for the payment of interest, fees and expenses then due and
payable (including, without limitation, amounts due under Section 4 of the
Chase Loan Agreement and Sections 2.11, 2.12, 2.14 and 2.15 of the ING
Credit Agreement);
(b) then, for the payment of principal then due, which payment shall
be made ratably to each Creditor in the amount of its Percentage Share;
(c) then, for the prepayment of principal on the Notes, which payment
shall be made ratably to each Creditor in the amount of its Percentage
Share; and
(d) last, for the payment or prepayment of any other Obligations.
All distributions of amounts described in subsections (a) or (d) above shall be
made by Collateral Agent pro rata to each Creditor then owed Obligations
described in such subsection in proportion to all amounts owed to all Creditors
which are described in such subsection. If any Obligations have been declared
due and payable pursuant to Section 4.2, all money collected or received by
Collateral Agent on account of the Obligations, after deduction of amounts then
due and owing to the Collateral Agent, shall be distributed to each Creditor in
proportion to its Percentage Share.
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Section 2.6. Chase/OPIC Payments.
(a) OPIC Guaranty Fees. Notwithstanding the provisions of this Article
II providing for monthly payments, the Guaranty Fees payable to OPIC under
the OPIC Finance Agreement shall continue to be payable semi-annually in
arrears on each Payment Date provided in the OPIC Finance Agreement. A
monthly amount shall be allocated by Borrower and Collateral Agent to such
Guaranty Fees equal to 1/6 of such semi-annual Guaranty Fee (4/6 in the
case of the October 30, 1998 payment). Such amount shall be paid to
Collateral Agent for the account of OPIC. Such monthly amount shall be
held by Collateral Agent and applied to the Guaranty Fee on the Payment
Date as provided in the OPIC Finance Agreement.
(b) Suspension of Other Payment Terms. Chase and OPIC agree, for the
benefit of each Creditor under the ING Credit Agreement and each Related
Person, that they hereby suspend the obligations of Argosy International
and each other Related Person with respect to payments of principal under
the Chase/OPIC Agreements to the extent the amounts or dates of such
payments are inconsistent with the provisions of this Intercreditor
Agreement. Such suspension shall be effective from and after the date
hereof and continue until the termination of this Intercreditor Agreement.
(c) Each reference herein to payments of principal and interest under
the Combined Loans or under the Chase/OPIC Agreements shall include any
reimbursement due to OPIC pursuant to Section 3.5 of the OPIC Finance
Agreement.
ARTICLE III - Representations, Warranties and Covenants of Related Persons
Section 3.1. Representations and Warranties of Related Persons. To
confirm each Creditor's understanding concerning the Related Persons and their
businesses, properties and obligations and to induce each Creditor to enter into
this Agreement, each Related Person represents and warrants to each Creditor
that each of the representations and warranties set forth in Annex B is true and
correct.
Section 3.2. Covenants. To conform with the terms and conditions under
which each Creditor is willing to have credit outstanding to Borrower under its
respective Creditor Agreement, and to induce each Creditor to enter into this
Agreement, each Related Person warrants, covenants and agrees that until the
full and final payment of the Obligations and the termination of this Agreement:
(a) Payment of Obligations. Each Related Person shall pay all amounts
due under the Loan Documents in accordance with the terms thereof, as
modified by this Intercreditor Agreement.
(b) Common Covenants. Each Related Person shall observe, perform and
comply with every covenant, term and condition expressed in Annex C and
shall observe,
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perform and comply with every other covenant, term and condition expressed
in any of the Loan Documents.
(c) The Security. Each Related Person shall at all times cause the
Obligations to be secured by the Security Documents listed in the Security
Schedule and any additional Security Documents hereafter delivered by any
Related Person and accepted by Collateral Agent.
(d) Security Covenants. Each Related Person shall observe, perform
and comply with every covenant, term and condition expressed in Annex D and
shall observe, perform and comply with every other covenant, term and
condition expressed in any of the Loan Documents.
Section 3.3. OPIC Finance Agreement Covenants. OPIC and Chase hereby
agree, for the benefit of each Creditor under the ING Credit Agreement and each
Related Person, that each of the covenants contained in Article VIII or Article
IX of the OPIC Finance Agreement are suspended and replaced by the covenants
described in Section 3.2. Such suspension shall be effective from and after the
date hereof and continue until the termination of this Intercreditor Agreement.
Section 3.4. Purchase and Sale. Notwithstanding anything to the contrary
contained in any Annex to this Agreement or in any other Loan Document,
Creditors consent to the Purchase and Sale subject to the condition precedent
that Collateral Agent shall have received the following, duly executed and
delivered and in form, substance and date satisfactory to each Creditor:
(a) purchase and sale agreement, assignments, deeds and bills of sale,
amendments to the partnership agreement of Argosy International admitting
Neo as a limited partner and other documents necessary or appropriate to
consummate the purchase and sale;
(b) an assignment and assumption agreement pursuant to which Argosy
International has assumed, confirmed and ratified all Debts,
representations, warranties, covenants and Liens owed, made or granted by
Neo;
(c) a guaranty by Neo of the Debt so assumed by Argosy International;
(d) such legal opinions, certificates, corporate resolutions,
supplements to Security Documents and other documents or instruments as
Creditors may specify; and
(e) the written consent of ECOPETROL to the transactions under the
Purchase and Sale.
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Neo, Argosy International and each other Related Persons agree to cause each of
the conditions precedent set forth in this Section 3.4 to be satisfied, and to
cause the Purchase and Sale to be consummated, in each case on or before
November 30, 1998.
Section 3.5. Consent to Merger. Creditors hereby consent to the
consummation of the Merger in accordance with the terms of the Agreement and
Plan of Merger dated June 24, 1998.
ARTICLE IV - Events of Default and Remedies
Section 4.1. Events of Default. Each of the events described in Annex E
constitutes an Event of Default under each of the Creditor Agreements.
Section 4.2. OPIC Finance Agreement Events of Defaults. OPIC and Chase
hereby agree, for the benefit of each Creditor under the ING Credit Agreement
and each Related Person, that each of the Defaults and Events of Default
contained in Article X of the OPIC Finance Agreement are suspended and replaced
by the Events of Default described in Section 4.1. Such suspension shall be
effective from and after the date hereof and continue until the termination of
this Intercreditor Agreement.
Section 4.3. Acceleration. Upon the occurrence of an Event of Default
described in subsection E.8(a), (b) or (c) of Annex E with respect to any
Related Person, all of the Obligations shall thereupon be immediately due and
payable, without demand, presentment, notice of demand or of dishonor and
nonpayment, protest, notice of protest, notice of intention to accelerate,
declaration or notice of acceleration, or any other notice or declaration of any
kind, all of which are hereby expressly waived by each Related Person. Upon any
such acceleration, the obligation, if any, of any Creditor to make any further
Loans shall each be permanently terminated. During the continuance of any other
Event of Default, Collateral Agent at any time and from time to time shall upon
written instructions from either OPIC or from Administrative Agent under the ING
Credit Agreement without notice to any Related Person do either or both of the
following: (a) terminate the obligation, if any, of any Creditor to make
additional advances under its Creditor Agreement and (b) declare any or all of
the Obligations immediately due and payable, and all such Obligations shall
thereupon be immediately due and payable, without demand, presentment, notice of
demand or of dishonor and nonpayment, protest, notice of protest, notice of
intention to accelerate, declaration or notice of acceleration, or any other
notice or declaration of any kind, all of which are hereby expressly waived by
each Related Person.
Section 4.4. Remedies. If any Event of Default shall occur and be
continuing, each Creditor may protect and enforce its rights under its Creditor
Agreement by any appropriate proceedings, including proceedings for specific
performance of any covenant or agreement contained in any Loan Document, and
each Creditor may enforce the payment of any Obligations due or enforce any
other legal or equitable right in each case, subject to the provisions of
Article V. All rights, remedies and powers conferred upon Collateral Agent and
each Creditor under the Loan Documents shall be deemed cumulative and not
exclusive of any other rights, remedies or powers available under the Loan
Documents or at law or in equity. Except to the extent
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otherwise expressly provided herein, each Creditor shall be entitled to manage
and supervise the obligations of the Related Persons to it in accordance with
applicable law and such Creditor's practices in effect from time to time without
regard to the existence of any other Creditor. Nothing contained in this
Agreement shall prevent any Creditor from imposing a default rate of interest in
accordance with any Loan Document, or prevent a Creditor from raising any
defenses in any action in which it has been made a party defendant or has been
joined as a third party. This Agreement shall survive the commencement of any
such bankruptcy, reorganization, compromise, arrangement, insolvency,
readjustment of debt, dissolution or liquidation or similar proceeding.
Section 4.5. Indemnity.
(a) Each Related Person shall indemnify and hold harmless each Creditor
from and against, and will reimburse each Creditor for, any and all liabilities,
obligations, claims, losses, damages, penalties, fines, actions, judgments,
suits, settlements, costs, expenses or disbursements (including reasonable fees
of attorneys, accountants, experts and advisors) of any kind or nature
whatsoever (in this section collectively called "liabilities and costs") which
to any extent (in whole or in part) may be imposed on, incurred by, or asserted
against any Creditor growing out of, resulting from or in any other way
associated with any of the Collateral, the Loan Documents, or the transactions
and events (including the enforcement or defense thereof) at any time associated
therewith or contemplated therein, which liabilities and costs shall include
without limitation those relating to or arising out of (i) any bodily injury or
death or property damage occurring in or upon or in the vicinity of the
Collateral through any cause whatsoever, (ii) any act performed or omitted to be
performed hereunder or under any other Loan Document or the breach of any
representation or warranty contained herein or in any other Loan Document, (iii)
the exercise of any rights and remedies hereunder or under any other Loan
Document, (iv) any transaction, act, omission, event or circumstance arising out
of or in any way connected with the Collateral or with any Loan Document, (v)
any violation of or noncompliance with any Environmental Law, (vi) any act,
omission, event or circumstance resulting from or in connection with the
ownership, construction, occupancy, operation, use and/or maintenance of the
Collateral or the Associated Property (as such term is defined in the Mortgage)
regardless of whether the act, omission, event or circumstance constituted a
violation of any Environmental Law at the time of its existence or occurrence,
including the presence on or in the Collateral or the "Associated Property" or
any disposal or release from, on or into the Collateral or the Associated
Property of "hazardous substances" or "solid wastes" (as such terms are defined
in the Mortgage), and (viii) any and all claims or proceedings (whether brought
by private party or governmental agencies) for bodily injury, property damage,
abatement or remediation, environmental damage or impairment or any other injury
or damage resulting from or relating to any hazardous substance, solid waste or
contaminated materials located upon or migrating into, from or through the
Collateral or the Associated Property (whether or not the release of such
materials was caused by a Related Person, a tenant or subtenant or a prior owner
or tenant or subtenant on the Collateral or the Associated Property and whether
or not the alleged liability is attributable to the handling, storage,
generation, transportation, removal or disposal of such substance, waste or
material or the mere presence of such substance, waste or material on the
Collateral or the Associated Property), which such Creditor may have liability
with respect to
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due to the making of the loan or loans evidenced by the Notes, the execution of
the Mortgage, the exercise of any rights under the Loan Documents, or otherwise.
THE FOREGOING INDEMNIFICATION SHALL APPLY WHETHER OR NOT SUCH LIABILITIES AND
COSTS ARE IN ANY WAY OR TO ANY EXTENT OWED, IN WHOLE OR IN PART, UNDER ANY CLAIM
OR THEORY OF STRICT LIABILITY, OR ARE CAUSED, IN WHOLE OR IN PART, BY ANY
NEGLIGENT ACT OR OMISSION OF ANY KIND BY ANY CREDITOR, provided only that a
Creditor shall be not entitled under this section to receive indemnification for
that portion, if any, of any liabilities and costs which is proximately caused
by its own individual gross negligence or willful misconduct, as determined in a
final judgment. If any Person (including any Related Person or any Related
Person's Affiliates) ever alleges such gross negligence or willful misconduct by
any Creditor, the indemnification provided for in this section shall nonetheless
be paid upon demand, subject to later adjustment or reimbursement, until such
time as a court of competent jurisdiction enters a final judgment as to the
existence, extent and effect of the alleged gross negligence or willful
misconduct. As used in this section the term "Creditor" shall refer not only to
the Person designated as such in Annex A, but also to (1) each director,
officer, agent, attorney, employee, representative and Affiliate of such Person,
and (2) the Person or Persons who, at any time or from time to time, serve as
the Trustee on behalf of Creditors under the Mortgage.
(b) If any Creditor proposes to settle or compromise any claim for
liabilities or costs (in this section, a "Litigated Liability") for which any
Related Person may be liable for payment hereunder, such Creditor shall give
such Related Person written notice of the terms of such proposed settlement or
compromise reasonably in advance of settling or compromising such Litigated
Liability, but shall have no obligation to obtain the concurrence or approval of
any Related Person, and such Related Person shall remain liable for the payment
of such claim. Any obligation or liability of any Related Person to any
Creditor under this section shall survive the expiration or termination of this
Agreement and the repayment of the Obligations.
ARTICLE V - Intercreditor Provisions
Section 5.1. Appointment and Authority of Collateral Agent. In order to
expedite the enforcement of the rights and remedies set forth in the Security
Documents, Creditors hereby appoint ING to act as their Collateral Agent under
the Security Documents on the terms and conditions set forth herein and therein.
Creditors hereby authorize and direct Collateral Agent to take such action on
their behalf under the terms and provisions of the Security Documents and to
exercise such rights and remedies thereunder as are specifically delegated to or
required of Collateral Agent under the terms and provisions of this Agreement.
In connection therewith, Chase hereby resigns as agent for OPIC under the
Security Documents heretofore executed in connection with the Chase/OPIC Credit
Agreement. Collateral Agent shall have no independent duty to enforce
provisions of the Security Documents absent direction. Collateral Agent is
hereby expressly authorized, as agent on behalf of Creditors, and Collateral
Agent hereby agrees, to do the following in accordance with the terms and
conditions of this Agreement:
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(a) To hold in safekeeping original counterparts of the Security
Documents and the evidence of the filing or recording thereof;
(b) To maintain physical possession of any of the Collateral delivered
to Collateral Agent as contemplated in any of the Security Documents;
(c) To receive all other documents and items to be furnished to
Collateral Agent under the Security Documents;
(d) To promptly distribute to the Creditors information, requests,
documents, and other items received from any Related Person and others
under the Security Documents;
(e) To execute and deliver to any Related Person and others all
requests, demands, notices, approvals, consents and other communications
which Creditors request to be so delivered in connection with the Security
Documents (subject to the terms and conditions set forth herein);
(f) To receive on behalf of Creditors any payment of monies paid to
Collateral Agent in accordance with the Security Documents and to
distribute to each Creditor in accordance with the terms of this Agreement
such Creditor's share of all payments so received as provided in Section
2.5; provided, however, that in making such distribution, Collateral Agent
may rely without independent investigation upon a certificate from the
Majority Creditors;
(g) To act on behalf of Creditors at the written direction of any
Creditor to maintain the perfection and priority of the Liens under the
Security Documents;
(h) To the extent permitted by this Agreement and the Security
Documents and as directed by Majority Creditors in writing, to exercise on
behalf of each Creditor all remedies of Collateral Agent and Creditors
under the Security Documents upon the occurrence of any Event of Default;
(i) To release Collateral as and when directed by Majority Creditors
in writing;
(j) To purchase Collateral at any foreclosure sale or pursuant to any
other Enforcement Action bidding in all or such other portion of the
Obligations due and owing as of the date of such sale as directed by the
Majority Creditors in writing, such amount of such bid to be credited on
the amount of such Obligations.
(k) To hold and/or dispose of Collateral of which it is the purchaser
at any foreclosure sale or pursuant to any other Enforcement Action as
directed by Majority Creditors in writing; and
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(l) Except as otherwise expressly provided herein, to take such other
actions as may be directed by Majority Creditors in writing which are
reasonably incident to any powers granted to Collateral Agent hereunder.
Section 5.2. Enforcement Action.
(a) Pursuant to Section 4.3 either OPIC or the Administrative Agent
may require Collateral Agent to declare any or all of the Obligations
immediately due and owing and make demand for payment (an "Acceleration")
and/or declare a termination of such Creditor's Commitment to make for the
advance and in the event of such authorized action each Creditor hereby
authorizes the Collateral Agent to do so without the written consent of
such Creditor or of Majority Creditors.
(b) Except as provided in Section 4.3 and Section 5.2(a),
notwithstanding anything herein to the contrary, (i) neither Collateral
Agent nor any Creditor shall take any Enforcement Action without the prior
written consent of Majority Creditors and (ii) the Collateral Agent agrees
that it shall not declare any Acceleration or termination of any commitment
to lend without the required documentation.
Section 5.3. Notices of Default, Acceleration, and Enforcement Action.
(a) Each Creditor hereby agrees to give each other Creditor written
notice of its intent to require Collateral Agent to declare an Acceleration
not less than three (3) Business Days nor more than thirty (30) days prior
to the date such Acceleration is so declared. No such notice of intent to
declare an Acceleration shall be required to be given to any Related
Person, and no Related Person shall be entitled to challenge or seek a
recission of an Acceleration as a result of the failure of any Creditor to
receive such a notice of such intent to declare an Acceleration.
(b) Whenever an Event of Default shall occur and be continuing
hereunder or under a Creditor Agreement and such Creditor shall have actual
knowledge thereof, such Creditor shall use its best efforts to promptly
notify Collateral Agent and the other Creditors of such Event of Default.
Collateral Agent shall not be deemed to have notice of any Default or Event
of Default unless specifically notified thereof in writing. Whenever any
Creditor requests or directs Collateral Agent to take any Enforcement
Action or to exercise any other right or remedy under any Security Document
with respect to any Event of Default, such Creditor shall within 3 days
notify the other Creditors of such request or direction.
(c) Notwithstanding anything herein to the contrary, nothing herein
shall restrict the rights of Chase under the OPIC Guaranty Agreement dated
July 26, 1994.
Section 5.4. Payments, Proceeds and Additional Collateral.
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(a) Each Creditor agrees that if it shall, whether through direct payments
from a Related Person, the exercise of rights under Loan Documents, rights of
banker's lien, set off, or counterclaim against a Related Person or otherwise,
obtain payment of a portion of the aggregate Obligations owed to it (less any
reasonable unreimbursed costs and expenses, including, without limitation,
attorneys' fees and expenses, actually incurred by such Creditor in recovering
such payment) which, taking into account all distributions made by Collateral
Agent hereunder, causes such Creditor to have received more than it would have
received had such payment been received by Collateral Agent and distributed
pursuant to Section 2.5, then (i) it shall be deemed to have simultaneously
purchased and shall be obligated to purchase interests in the Obligations as
necessary to cause all Creditors to share all payments as provided for in
Section 2.5, and (ii) such other adjustments shall be made from time to time as
shall be equitable to ensure that Collateral Agent and all Creditors share all
payments of Obligations as provided in Section 2.5; provided, however, that
nothing herein contained shall in any way affect the right of any Creditor to
obtain payment (whether by exercise of rights of banker's lien, set-off or
counterclaim or otherwise) of indebtedness other than the Obligations. Each
Related Person expressly consents to the foregoing arrangements and agrees that
any holder of any such interest or other participation in the Obligations,
whether or not acquired pursuant to the foregoing arrangements, may to the
fullest extent permitted by law exercise any and all rights of banker's lien,
set-off, or counterclaim as fully as if such holder were a holder of the
Obligations in the amount of such interest or other participation. If all or
any part of any funds transferred pursuant to this section are thereafter
recovered from the seller under this section which received the same, the
purchase provided for in this section shall be deemed to have been rescinded to
the extent of such recovery, together with interest, if any, if interest is
required pursuant to the order of a court order to be paid on account of the
possession of such funds prior to such recovery.
(b) Should Collateral Agent ever receive any amounts from an Enforcement
Action, Collateral Agent shall -- notwithstanding any instructions to the
contrary by any Related Person and unless otherwise directed by all Creditors --
promptly distribute to each Creditor by wire transfer such Creditor's Percentage
Share of any such amounts; provided that if Collateral Agent is then taking
action to collect against any of the Collateral in compliance with the
directions of Majority Creditors, such amounts shall first be applied to the
reasonable costs and expenses, including attorneys' fees, incurred by Collateral
Agent in taking such action. Prior to any such distribution, Collateral Agent
shall be entitled to request a certificate from each Creditor setting forth the
respective Percentage Shares of each Creditor at that time. All such
distributions to a Creditor shall be applied by such Creditor in such order and
manner as such Creditor, in its sole discretion, may deem appropriate, but
consistent with the terms of such Creditor's Creditor Agreement; provided that
in the event that Debt owed to a Creditor is satisfied in full, such Creditor
shall distribute to the other Creditors the portion of any payments received
that has not been applied to such Creditor's Debt.
(d) Whenever Collateral Agent in good faith determines that it is uncertain
about how to distribute to Creditors any funds which it has received, or
whenever Collateral Agent in good faith determines that there is any dispute
among Creditors about how such funds should be distributed, Collateral Agent may
choose to defer distribution of the funds which are the subject of such
uncertainty or dispute. If Collateral Agent in good faith believes that the
uncertainty or dispute will not be promptly resolved, or if Collateral Agent is
otherwise required to invest funds
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pending distribution to Creditors, Collateral Agent shall invest such funds
pending distribution in U.S. Treasury Securities maturing within one year or
less which are backed by the full faith and credit of the United States; all
interest on any such investment shall be distributed upon the distribution of
such investment and in the same proportion and to the same Persons as such
investment. All moneys received by Collateral Agent for distribution to
Creditors shall be held by Collateral Agent pending such distribution solely as
Collateral Agent for such Creditors, and Collateral Agent shall have no
equitable title to any portion thereof. Creditors hereby acknowledge that
Collateral Agent shall not be liable for any diminution of funds due to losses
resulting from investments made by Collateral Agent in accordance with the terms
hereof.
(e) No Creditor or Collateral Agent shall hereafter accept any collateral
for any Debt of any Related Person now or hereafter owing to any Creditor except
by means of a Lien granted in such collateral to Collateral Agent for the
benefit of all Creditors (which Lien shall be subject to and governed by the
terms of this Agreement), and only after all Creditors have consented thereto in
writing prior to the granting of such Lien.
(f) No Related Person shall make a payment to any Creditor which such
Creditor is prohibited from receiving pursuant to the terms of this Agreement.
The Related Persons shall provide each Creditor with the amount of interest it
loses, if any, as a result of the purchase and/or sale of any participation
interest pursuant to the terms of this Agreement; provided that no Creditor
shall be liable to another Creditor for the amount of any such loss.
Section 5.5. Limited Liability of Collateral Agent; Indemnity.
(a) Neither Collateral Agent nor any of its officers, directors, employees,
attorneys or agents shall be liable to Creditors for any action taken or omitted
to be taken by Collateral Agent or any of its officers, directors, employees or
agents pursuant to and within the scope of the authority granted Collateral
Agent under this Agreement, except for its or their own gross negligence or
willful misconduct. Collateral Agent shall have no duties or obligations other
than those specifically set forth herein or in the Security Documents, or as may
subsequently be agreed to in writing by Collateral Agent and all Creditors, and
no implied duties or obligations whatsoever on Collateral Agent's part shall be
read into this Agreement or any of the Security Documents.
(b) Each Creditor hereby shall indemnify Collateral Agent, its officers,
directors, employees, agents and attorneys against all loss, liability and
reasonable cost and expense (to the extent not paid by the Related Persons and
not arising out of or as a result of gross negligence or willful misconduct on
the part of Collateral Agent), including reasonable attorneys' fees, resulting
from any action taken or to be taken by it as Collateral Agent on behalf of the
Creditors within the scope of Collateral Agent's authority under this Agreement,
to the extent of such Creditor's Percentage Share of any such loss, liability,
cost, and expense, except for its or their own gross negligence or willful
misconduct. THE FOREGOING INDEMNIFICATION SHALL APPLY WHETHER OR NOT SUCH LOSS,
LIABILITY, COST OR EXPENSE IS IN ANY WAY OR TO ANY EXTENT CAUSED, IN WHOLE OR IN
PART BY ANY ACT OR OMISSION ARISING OUT OF THE ORDINARY NEGLIGENCE (BUT NOT
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GROSS NEGLIGENCE) OF ANY PERSON INDEMNIFIED PURSUANT TO THIS SECTION 5.5.
(c) Collateral Agent shall promptly notify each Creditor of the written
assertion of, or the commencement of, any claim, suit, action or proceeding
filed against Collateral Agent arising out of, or in connection with, this
Agreement or any of the Security Documents or the rights, duties or powers
conferred upon Collateral Agent hereunder or thereunder, giving with such notice
information as to the nature and basis of the lawsuit, a statement of whether
Collateral Agent believes it is entitled under this Agreement to any indemnity
therefor, and, if so, a statement of Collateral Agent's reasons for so
believing. Collateral Agent's failure to so notify each Creditor will not
result in the loss of its right to indemnity from the Creditors hereunder unless
such failure prevented any Creditor from fully participating in any such claim,
suit, action or proceeding. Any Creditor shall be entitled to participate in,
at its own expense, the defense of any such claim, suit, action or proceeding.
Neither the Creditors nor Collateral Agent shall be bound by any settlement
entered into by any of the other parties hereto without such party's consent.
Section 5.6. Collateral Agent's Employees. Collateral Agent may perform
any and all duties under the Security Documents and this Agreement by or
through agents or employees and shall be entitled to advice of counsel
pertaining to all such matters.
Section 5.7. Collateral Agent's Reliance. Collateral Agent shall be
entitled to rely on any notice, consent, certificate, or other document believed
by it to be genuine and correct and to have been signed or sent by the proper
Person or Persons and, in respect of legal matters, upon the opinion of counsel
selected by Collateral Agent. Collateral Agent may deem and treat the original
Creditors hereunder as the owners of their respective promissory notes issued in
connection with the Credit Agreements and of their respective Percentage Shares,
until receipt by Collateral Agent of notice of assignment or transfer of any
interest therein by any Creditor; provided, that any such assignment shall be
subject to all of the rights and obligations set forth herein. Any request,
authority or consent of any Creditor pursuant hereto shall be conclusive and
binding on any successor or assignee of such Creditor.
Section 5.8. Certain Actions Requiring Consent of Majority Creditors.
Except as expressly provided herein, Collateral Agent shall not (a) amend or
supplement this Agreement or any of the Security Documents or grant any
consents or waivers with respect thereto without the prior written consent of
Majority Creditors, or (b) release or substitute any Collateral, without the
prior written consent of Majority Creditors. Without the prior written consent
of Majority Creditors, except for the making of the Loan under the ING Credit
Agreement (as such term is defined therein), no Creditor will make loans or
extensions of credit to any Related Person or otherwise increase the principal
amount of Debt owing to it by any Related Person or change the interest rate or
fees accruing in respect of such Debt. No Creditor will restate, amend or
supplement its Creditor Agreement without the prior written consent of Majority
Creditors except to correct a technical defect, inconsistency or ambiguity in
its Creditor Agreement.
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Section 5.9. Non-Reliance on Collateral Agent and Other Creditors. Each
Creditor agrees that it has, independently and without reliance on Collateral
Agent or any other Creditor, and based upon such documents and information as it
has deemed appropriate, made its own credit analysis of the Related Persons and
the Collateral, and its independent decision to enter into this Agreement and
the other Loan Documents, and that it will, independently and without reliance
upon Collateral Agent or any other Creditor, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
analysis and decisions in taking or not taking action under this Agreement and
the other Loan Documents. Neither Collateral Agent nor any other Creditor shall
have any duty, responsibility or liability to provide any Creditor with any
credit or other information concerning the affairs, financial condition or
business of any Related Person which may come into the possession of Collateral
Agent or such Creditor; provided, however, Collateral Agent shall send to
Creditors copies of all written materials received by Collateral Agent in its
capacity as Collateral Agent under or in connection with this Agreement or the
other Loan Documents.
Section 5.10. Liability Among Creditors. No Creditor nor any of its
respective directors, officers, agents or employees shall incur any implied duty
to any other Creditor under this Agreement or any other Loan Document, and each
Creditor shall have absolute and complete discretion to exercise (or refrain
from exercising) its rights hereunder and under its Creditor Agreement as it
deems appropriate in its sole discretion. IT IS EXPRESSLY UNDERSTOOD AND AGREED
THAT NO CREDITOR ASSUMES, AND EACH CREDITOR HEREBY RELEASES AND EXONERATES EACH
OTHER CREDITOR FROM, ANY AND ALL RESPONSIBILITIES OR LIABILITIES (WHETHER
EXPRESS OR IMPLIED) IN CONNECTION WITH THE REALIZATION OF THE COLLATERAL, OR ANY
LOSS OR DEPRECIATION OF, OR FAILURE TO REALIZE UPON, ANY COLLATERAL, OR THE
FAILURE OR DELAY TO COLLECT OR RECEIVE PAYMENT OF ANY SUMS OWING FROM ANY
RELATED PERSON, OR ANY MISTAKE, OMISSION OR ERROR OF JUDGMENT IN PASSING UPON OR
ACCEPTING ANY COLLATERAL. No Creditor, nor any of its respective directors,
officers, agents or employees, shall be responsible to any of the others for the
solvency or financial condition of any Related Person or the ability of any
Related Person to repay any of the Obligations or perform its obligations under
any Loan Document, or the statements of any Related Person, oral or written, or
for the validity, sufficiency or enforceability of any of the Loan Documents,
any document or agreement executed or delivered in connection with or pursuant
to any of the foregoing, or any liens or security interests granted by any
Related Person in connection therewith.
Section 5.11. Resignation or Removal of Collateral Agent.
(a) Subject to the appointment and acceptance of a successor Collateral
Agent as provided below, Collateral Agent may resign at any time by giving
notice thereof to each Creditor, and Majority Creditors may remove Collateral
Agent at any time by giving notice thereof to each other Creditor and Collateral
Agent. Upon any such resignation or removal, a successor Collateral Agent may
be appointed by Majority Creditors. If no successor Collateral Agent shall have
been appointed by Majority Creditors and shall have accepted such appointment
within thirty (30) days after the retiring Collateral Agent's giving of notice
of resignation, then the retiring Collateral Agent may, on behalf of the
Creditors, appoint as
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successor Collateral Agent any national or state bank or trust company (other
than a Creditor) having capital, surplus, and undivided profits of at least
$250,000,000.
(b) Upon the acceptance of any appointment as Collateral Agent hereunder by
a successor Collateral Agent, such successor Collateral Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Collateral Agent, and the retiring Collateral Agent shall be
discharged from its duties and obligations hereunder, except to the extent
provided above for acts or omissions prior to the resignation or termination.
After any retiring Collateral Agent's resignation or removal hereunder as
Collateral Agent, (i) the provisions of Section 5.5 shall continue in effect for
its benefit in respect of any actions taken or omitted to be taken by it while
it was acting as Collateral Agent, (ii) any Collateral held in possession of the
retiring Collateral Agent shall be delivered to the successor Collateral Agent,
and (iii) the retiring Collateral Agent shall assign all of its rights as
secured party, mortgagee, assignee, deed of trust beneficiary or other similar
position with respect to all of the Collateral to the successor Collateral Agent
for the pro rata benefit of the Creditors.
Section 5.12. No Partnership. Nothing contained in this Agreement, and no
action taken by Collateral Agent or any Creditor pursuant hereto, is intended to
constitute or shall be deemed to constitute a partnership, association, joint
venture or other entity among Collateral Agent, the Creditors or any of them.
Section 5.13. Liens are Pari Passu. It is the intent of the Creditors
that they share an equal priority Lien in all of the Collateral, regardless of
any previous recordations or filings and regardless of the timing of any
additional recordations or filings, and that the enforcement of all of their
respective rights and remedies under the Security Documents is subject to the
terms and provisions of this Agreement. ALL LIENS OF ANY CREDITOR IN ANY OF THE
COLLATERAL SHALL BE PARI PASSU WITH ALL LIENS OF THE OTHER CREDITORS IN SUCH
COLLATERAL AND AS BETWEEN THE CREDITORS ALL SUCH LIENS SHALL HAVE EQUAL
PRIORITY.
Section 5.14. All Loan Documents. OPIC and Chase hereby represent and
warrant to ING that the documents and instruments described on Schedule 4 hereto
are all of the documents and instruments now or previously executed or required
to be executed in connection with the Debt of any Related Person owing to OPIC
and Chase (other than those which have prior to the date hereof been fully and
finally terminated or restated in full). ING hereby represents and warrants to
OPIC and Chase that the documents and instruments described on Schedule 5 hereto
are all of the documents and instruments now or previously executed or required
to be executed in connection with the Debt of any Related Person owing to ING
(other than those which have prior to the date hereof been fully and finally
terminated or restated in full).
Section 5.15. Benefit of Article V. The provisions of this Article V are
solely for the benefit of the Creditors and may be amended or modified by the
Creditors without the consent or agreement of any Related Person. Each Creditor
hereby agrees to give to Collateral Agent, to hold for the benefit of all
Creditors, any Collateral which now is or hereafter comes into its
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possession, and each Creditor agrees to take all necessary action to at all
times maintain the existence and first priority of its Liens in and to the
Collateral.
ARTICLE VI - Miscellaneous
Section 6.1. Waivers and Amendments; Acknowledgments.
(a) Waivers and Amendments. No failure or delay (whether by course of
conduct or otherwise) by any Creditor in exercising any right, power or
remedy which any Creditor may have under any of the Loan Documents shall
operate as a waiver thereof or of any other right, power or remedy, nor
shall any single or partial exercise by any Creditor of any such right,
power or remedy preclude any other or further exercise thereof or of any
other right, power or remedy. No waiver of any provision of any Loan
Document and no consent to any departure therefrom shall ever be effective
unless it is in writing and signed as provided below in this section, and
then such waiver or consent shall be effective only in the specific
instances and for the purposes for which given and to the extent specified
in such writing. No notice to or demand on any Related Person shall in any
case of itself entitle any Related Person to any other or further notice or
demand in similar or other circumstances. No modification or amendment of
or supplement to this Agreement or the other Loan Documents shall be valid
or effective unless the same is in writing and signed by (i) if such party
is a Related Person, by such Related Person, (ii) if such party is
Collateral Agent, by such party, and (iii) if such party is a Creditor, by
such Creditor or by Collateral Agent on behalf of Creditors with the
written consent of Majority Creditors (which consent has already been given
as to the termination of the Loan Documents as provided in Section 6.7).
Notwithstanding the foregoing or anything to the contrary herein, without
the prior written consent of each individual Creditor, neither this
Agreement nor any other provisions hereof may be waived, amended or
modified which would: (1) subject such Creditor to any additional
obligations, (2) reduce any fees payable to such Creditor hereunder, or the
principal of, or interest on, such Creditor's Note or amend the order of
distribution provided by Section 2.5, (3) postpone any date fixed for any
payment of any such fees, principal or interest or waive or excuse any such
payment or postpone the scheduled maturity date of such Creditor's Note,
(4) amend the definition herein of "Majority Creditors" or otherwise change
the aggregate amount of Percentage Shares which is required for Collateral
Agent, Creditors or any of them to take any particular action under the
Loan Documents, (5) amend Section 4.5, 6.1, 6.2 or 6.3, (6) release
Borrower from its obligation to pay such Creditor's Note or any Guarantor
from its guaranty of such payment or (7) permit any subordination of the
Obligations owed to such Creditor.
(b) Acknowledgments and Admissions. Each Related Person hereby
represents, warrants, acknowledges and admits that (i) it has been advised
by counsel in the negotiation, execution and delivery of the Loan Documents
to which it is a party, (ii) it has made an independent decision to enter
into this Agreement and the other Loan Documents to which it is a party,
without reliance on any representation, warranty,
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covenant or undertaking by any Creditor, whether written, oral or implicit,
other than as expressly set out in this Agreement or in another Loan
Document delivered on or after the date hereof, (iii) there are no
representations, warranties, covenants, undertakings or agreements by any
Creditor as to the Loan Documents except as expressly set out in this
Agreement or in another Loan Document delivered on or after the date
hereof, (iv) no Creditor owes any fiduciary duty to any Related Person with
respect to any Loan Document or the transactions contemplated thereby, (v)
the relationship pursuant to the Loan Documents between each Related
Person, on one hand, and each Creditor, on the other hand, is and shall be
solely that of debtor and creditor, respectively, (vi) no partnership or
joint venture exists with respect to the Loan Documents between any Related
Person and any Creditor, (vii) should an Event of Default or Default occur
or exist, Creditors shall determine in their sole discretion and for their
own reasons what remedies and actions they will or will not exercise or
take at that time, (viii) without limiting any of the foregoing, no Related
Person is relying upon any representation or covenant by any Creditor, or
any representative thereof, and no such representation or covenant has been
made, that any Creditor will, at the time of an Event of Default or
Default, or at any other time, waive, negotiate, discuss, or take or
refrain from taking any action permitted under the Loan Documents with
respect to any such Event of Default or Default or any other provision of
the Loan Documents, and (ix) each Creditor has relied upon the truthfulness
of the acknowledgments in this section in deciding to execute and deliver
this Agreement and to make its Loan.
THIS WRITTEN AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
Section 6.2. Ratification and Confirmation of the Loan Documents. Each
Related Person hereby ratifies and confirms the Loan Documents in all respects
and all liens and security interests with respect to the Collateral heretofore
given to each Related Person to or for the benefit of each Creditor. Each
Related Person hereby waives any defenses, set-offs, claims, counterclaims,
offsets or deductions with respect to the Loan Documents or the indebtedness
thereunder, or with respect to the validity, priority or enforceability of the
Loan Documents or of such liens and security interests with respect to the
Collateral and agrees not to oppose any attempts by any Creditor to foreclose or
otherwise enforce its liens and security interests against the Collateral.
Section 6.3. Release and Discharge of Creditors. Each Related Person
hereby generally releases and forever discharges each Creditor from any and all
Released Claims. This release is to be construed as the broadest type of
general release and covers and releases any and all Released Claims, whether
known or unknown and however or whenever arising, whether by contract or
agreement, at law or under any statute (including without limitation any law or
statute
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pertaining to negligence, fraud, deceptive trade practices, negligent
misrepresentation, securities violations, breach of fiduciary duty, breach of
contract, trade regulation, regulation of business or competition, conspiracy or
racketeering), or otherwise arising, expressly including any claims for punitive
or exemplary damages, attorneys' fees, or penalties. To the extent that any
Released Claims have not been released by this Agreement, each Related Person
assigns such Released Claims to Collateral Agent.
Section 6.4. Fraudulent Conveyance. The liability of each Related
Person, with the exception of Parent and Aviva America, on the Guaranty and
Security Documents of such Related Person, shall be limited to the maximum
amount of liability that can be incurred without rendering any Guarantor's
Guaranty and Security Documents voidable under applicable law relating to
fraudulent conveyance or fraudulent transfer, and not for any greater amount.
Section 6.5. Survival of Agreements; Cumulative Nature. All of the
Related Persons' various representations, warranties, covenants and agreements
in the Loan Documents shall survive the execution and delivery of this Agreement
and the other Loan Documents and the performance hereof and thereof, including
the making or granting of the Loans and the delivery of the Notes and the other
Loan Documents, and shall further survive until all of the Obligations are paid
in full to each Creditor and all of Creditors' obligations to the Related
Persons are terminated. All statements and agreements contained in any
certificate or other instrument delivered by any Related Person to any Creditor
under any Loan Document shall be deemed representations and warranties by the
Related Persons or agreements and covenants of the Related Persons under this
Agreement. The representations, warranties, and covenants made by the Related
Persons in the Loan Documents, and the rights, powers, and privileges granted to
each Creditor in the Loan Documents, are cumulative, and, except for expressly
specified waivers and consents and Section 6.6, no Loan Document shall be
construed in the context of another to diminish, nullify, or otherwise reduce
the benefit to any Creditor of any such representation, warranty, covenant,
right, power or privilege. In particular and without limitation, no exception
set out in this Agreement to any representation, warranty or covenant herein
contained shall apply to any similar representation, warranty or covenant
contained in any other Loan Document, and each such similar representation,
warranty or covenant shall be subject only to those exceptions which are
expressly made applicable to it by the terms of the various Loan Documents.
Section 6.6. Notices. All notices, requests, consents, demands and other
communications to any Related Person or to any Creditor which are required or
permitted under any Loan Document shall be in writing, unless otherwise
specifically provided in such Loan Document (provided that Collateral Agent may
give telephonic notices to the other Creditors) and shall be deemed sufficiently
given or furnished if delivered by personal delivery, by telecopy, by delivery
service with proof of delivery, or by registered or certified United States
mail, postage prepaid, to any such Related Person at the address of Parent
specified on the signature pages hereto and to each Creditor at its address
specified on the signature pages hereto (unless changed by similar notice in
writing given by the particular Person whose address is to be changed). Any
such notice or communication shall be deemed to have been given (a) in the case
of personal delivery or delivery service, as of the date of first attempted
delivery at the address
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and in the manner provided herein, (b) in the case of telecopy, upon receipt, or
(c) in the case of registered or certified United States mail, three days after
deposit in the mail.
Section 6.7. Joint and Several Liability; Parties in Interest;
Assignments.
(a) All Obligations which are incurred by two or more Related Persons
shall be their joint and several obligations and liabilities. All grants,
covenants and agreements contained in the Loan Documents shall bind and
inure to the benefit of the parties thereto and their respective successors
and assigns; provided, however, that no Related Person may assign or
transfer any of its rights or delegate any of its duties or obligations
under any Loan Document without the prior consent of all of the Creditors.
(b) Any Creditor may assign or otherwise transfer (in whole or in
part) to any other Person the obligations of the Related Persons to such
Creditor (subject to the provisions of the Chase/OPIC Agreements and the
ING Credit Agreement, as the case may be), provided that such other Person
shall at the time of such assignment or transfer become a party to this
Agreement, vested with the same rights and benefits, and subject to the
same obligations, as the selling Creditor had. In the event (i) all the
Loan Documents are terminated, all Notes and other Obligations are paid in
full, and (ii) the Creditors have no outstanding obligations hereunder with
respect to amounts to be shared previously received and distributed
hereunder, this Agreement shall terminate 366 days after the last to occur
of any event referred to in the preceding clauses (i) and (ii) so long as
no proceeding under any bankruptcy, reorganization, compromise,
arrangement, insolvency, readjustment of debt, dissolution or liquidation
or similar law or for the appointment of a receiver for any Related Person
or its assets is commenced prior to such 366th day.
SECTION 6.8. GOVERNING LAW; SUBMISSION TO PROCESS. EXCEPT TO THE EXTENT
THAT THE LAW OF ANOTHER JURISDICTION IS EXPRESSLY ELECTED IN A LOAN DOCUMENT,
THE LOAN DOCUMENTS SHALL BE DEEMED CONTRACTS AND INSTRUMENTS MADE UNDER THE LAWS
OF THE STATE OF NEW YORK AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK AND THE LAWS OF THE UNITED
STATES OF AMERICA, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. EACH
RELATED PERSON HEREBY AGREES THAT ANY LEGAL ACTION OR PROCEEDING AGAINST ANY
RELATED PERSON WITH RESPECT TO THIS AGREEMENT, THE NOTES OR ANY OF THE LOAN
DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR (TO THE
EXTENT THEY HAVE SUBJECT MATTER JURISDICTION) OF THE UNITED STATES OF AMERICA
FOR THE SOUTHERN DISTRICT OF NEW YORK AS CREDITORS MAY ELECT, AND, BY EXECUTION
AND DELIVERY HEREOF, EACH RELATED PERSON ACCEPTS AND CONSENTS FOR ITSELF AND IN
RESPECT TO ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, TO THE JURISDICTION OF
THE AFORESAID COURTS AND AGREES THAT SUCH JURISDICTION SHALL BE EXCLUSIVE,
UNLESS WAIVED
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BY CREDITORS IN WRITING, WITH RESPECT TO ANY ACTION OR PROCEEDING BROUGHT BY IT
AGAINST ANY CREDITOR AND ANY QUESTIONS RELATING TO USURY. EACH RELATED PERSON
AGREES THAT SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE
STATE OF NEW YORK SHALL APPLY TO THE LOAN DOCUMENTS AND WAIVES ANY RIGHT TO STAY
OR TO DISMISS ANY ACTION OR PROCEEDING BROUGHT BEFORE SAID COURTS ON THE BASIS
OF FORUM NON CONVENIENS. IN FURTHERANCE OF THE FOREGOING, EACH RELATED PERSON
HEREBY IRREVOCABLY DESIGNATES AND APPOINTS CT CORPORATION SYSTEM, 1633 BROADWAY,
NEW YORK, NEW YORK, AS ITS ADMINISTRATIVE AGENT TO RECEIVE SERVICE OF ALL
PROCESS BROUGHT AGAINST IT WITH RESPECT TO ANY SUCH PROCEEDING IN ANY SUCH COURT
IN NEW YORK, SUCH SERVICE BEING HEREBY ACKNOWLEDGED TO BE EFFECTIVE AND BINDING
SERVICE IN EVERY RESPECT. COPIES OF ANY SUCH PROCESS SO SERVED SHALL ALSO, IF
PERMITTED BY LAW, BE SENT BY REGISTERED MAIL TO SUCH RELATED PERSON AT THE
ADDRESS OF PARENT SET FORTH BELOW, BUT THE FAILURE OF SUCH RELATED PERSON TO
RECEIVE SUCH COPIES SHALL NOT AFFECT IN ANY WAY THE SERVICE OF SUCH PROCESS AS
AFORESAID. EACH RELATED PERSON SHALL FURNISH TO COLLATERAL AGENT A CONSENT OF CT
CORPORATION SYSTEM AGREEING TO ACT HEREUNDER PRIOR TO THE EFFECTIVE DATE OF THIS
AGREEMENT. NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY CREDITOR TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF ANY
CREDITOR TO BRING PROCEEDINGS AGAINST ANY RELATED PERSON IN THE COURTS OF ANY
OTHER JURISDICTION. IF FOR ANY REASON CT CORPORATION SYSTEM SHALL RESIGN OR
OTHERWISE CEASE TO ACT AS AGENT, EACH RELATED PERSON HEREBY IRREVOCABLY AGREES
TO (A) IMMEDIATELY DESIGNATE AND APPOINT A NEW AGENT ACCEPTABLE TO CREDITORS TO
SERVE IN SUCH CAPACITY AND, IN SUCH EVENT, SUCH NEW AGENT SHALL BE DEEMED TO BE
SUBSTITUTED FOR CT CORPORATION SYSTEM FOR ALL PURPOSES HEREOF AND (C) PROMPTLY
DELIVER TO CREDITORS THE WRITTEN CONSENT (IN FORM AND SUBSTANCE SATISFACTORY TO
CREDITORS) OF SUCH NEW AGENT AGREEING TO SERVE IN SUCH CAPACITY.
Section 6.9. Limitation on Interest. Each Creditor, the Related Persons
and the other parties to the Loan Documents intend to contract in strict
compliance with applicable usury law from time to time in effect. In
furtherance thereof such Persons stipulate and agree that none of the terms and
provisions contained in the Loan Documents shall ever be construed to provide
for interest in excess of the maximum amount of interest permitted to be charged
by applicable law from time to time in effect. Neither any Related Person nor
any present or future guarantors, endorsers, or other Persons hereafter becoming
liable for payment of any Obligation shall ever be liable for unearned interest
thereon or shall ever be required to pay interest thereon in excess of the
maximum amount that may be lawfully charged under applicable law from time to
time in effect, and the provisions of this section shall control over all other
provisions of the Loan Documents which may be in conflict or apparent conflict
herewith.
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Section 6.10. Termination; Limited Survival. In the event (i) all the
Loan Documents are terminated, all Notes and other Obligations are paid in full,
and (ii) the Creditors have no outstanding obligations hereunder with respect to
amounts to be shared previously received and distributed hereunder, this
Agreement shall terminate 366 days after the last to occur of any event referred
to in the preceding clauses (i) and (ii) so long as no proceeding under any
bankruptcy, reorganization, compromise, arrangement, insolvency, readjustment of
debt, dissolution or liquidation or similar law or for the appointment of a
receiver of any Related Person or its assets is commenced prior to such 366th
day. Notwithstanding the foregoing or anything herein to the contrary, any
waivers or admissions made by any Related Person in this Agreement (including
Section 6.3) or any Loan Documents and any obligations which any Person may have
to indemnify or compensate any Creditor or Collateral Agent shall survive any
termination of this Agreement or any other Loan Document. At the request and
expense of Related Persons, Collateral Agent shall prepare and execute all
necessary instruments to reflect and effect such termination of the Loan
Documents. Collateral Agent is hereby authorized to execute all such
instruments on behalf of all Creditors, without the joinder of or further action
by any Creditor.
Section 6.11. Severability. If any term or provision of any Loan Document
shall be determined to be illegal or unenforceable all other terms and
provisions of the Loan Documents shall nevertheless remain effective and shall
be enforced to the fullest extent permitted by applicable law.
Section 6.12. Counterparts. This Agreement may be separately executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to constitute one
and the same Agreement.
SECTION 6.13. WAIVER OF JURY TRIAL, PUNITIVE DAMAGES, ETC. TO THE EXTENT
PERMITTED BY LAW, CREDITORS AND EACH RELATED PERSON HEREBY KNOWINGLY,
VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR DIRECTLY OR INDIRECTLY ARISING OUT
OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR
ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN)
OR ACTIONS OF ANY CREDITOR OR ANY RELATED PERSON. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR CREDITORS ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS. EACH OF RELATED PERSONS AND CREDITORS HEREBY FURTHER (d) IRREVOCABLY
WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO
CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES;
(e) CERTIFIES THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT OR COUNSEL
FOR ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT
SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVERS, AND (F) ACKNOWLEDGES THAT IT HAS BEEN INDUCED
-25-
<PAGE>
TO ENTER INTO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND THE TRANSACTIONS
CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS CONTAINED IN THIS SECTION.
Section 6.14. Judgment Currency. The specification of United States
dollars is of the essence, and such currency shall be the currency of account in
all events. The Obligations shall not be discharged by an amount paid in
another currency, whether pursuant to a judgment or otherwise, to the extent
that the amount so paid on prompt conversion to such currency or transfer to the
place specified in each Note or, as to OPIC, the District of Columbia, under
normal banking procedures does not yield the amount of United States dollars
then due. In the event that any payment by any Related Person, whether pursuant
to a judgment or otherwise, upon conversion and transfer, does not result in the
payment of such amount of United States dollars at the place such amount is due,
the applicable Creditors shall be entitled to demand immediate payment of, and
shall have a separate cause of action against such Related Person for, the
additional amount necessary to yield the amount then due. In the event any
Creditor, upon the conversion of such judgment into United States dollars, shall
receive (as a result of currency exchange rate fluctuations or otherwise) an
amount greater than that to which it was entitled, the applicable Related
Persons shall be entitled to immediate reimbursement of the excess amount.
Section 6.15. Immunity. Each Related Person represents and warrants that
it is subject to civil and commercial law with respect to its obligations under
this Agreement, the Notes and the other Loan Documents to which it is a party,
that the making and performance of this Agreement, the Notes and such other Loan
Documents and borrowings by the Borrower pursuant hereto constitute private and
commercial acts rather than governmental or public acts and that neither any
Related Person nor any of its properties or revenues has any right of immunity
from suit, court jurisdiction, attachment prior to judgment, attachment in aid
of execution of a judgment, set-off, execution of a judgment or from any other
legal process with respect to its obligations under this Agreement, the Notes
and the other Loan Documents. To the extent that any Related Person may
hereafter be entitled, in any jurisdiction in which a judicial proceeding may at
any time be commenced with respect to this Agreement, any Note or any other Loan
Document to which it is a party, to claim for itself or its revenues or assets
any such immunity, and to the extent that in any such jurisdiction there may be
attributed to any Related Person such an immunity (whether or not claimed), each
Related Person hereby irrevocably agrees not to claim and hereby irrevocably
waives such immunity. The foregoing waiver of immunity shall have effect under
the United States Sovereign Immunities Act of 1976, as amended.
-26-
<PAGE>
IN WITNESS WHEREOF, this Agreement is executed as of the date first written
above.
AVIVA PETROLEUM INC.
By: /s/ R. Suttill
------------------------------------
Name: Ronald Suttill
Title: President
AVIVA AMERICA, INC.
By: /s/ R. Suttill
------------------------------------
Name: Ronald Suttill
Title: President
AVIVA DELAWARE, INC.
By: /s/ R. Suttill
------------------------------------
Name: Ronald Suttill
Title: President
AVIVA OPERATING COMPANY
By: /s/ R. Suttill
------------------------------------
Name: Ronald Suttill
Title: President
<PAGE>
GARNET RESOURCES CORPORATION
By: /s/ R. Suttill
------------------------------------
Name: Ronald Suttill
Title: President
ARGOSY ENERGY INCORPORATED
By: /s/ R. Suttill
------------------------------------
Name: Ronald Suttill
Title: President
ARGOSY ENERGY INTERNATIONAL
By: Argosy Energy Incorporated, its General
Partner
By: /s/ R. Suttill
------------------------------------
Name: Ronald Suttill
Title: President
<PAGE>
NEO ENERGY, INC.
By: /s/ R. Suttill
------------------------------------
Name: Ronald Suttill
Title: President
GARNET PNG CORPORATION
By: /s/ R. Suttill
------------------------------------
Name: Ronald Suttill
Title: President
Address for all Related Persons:
8235 Douglas Avenue, Suite 400
Dallas, Texas 75225
Attention: President
Telephone: 214-691-3464
Telecopy: 214-361-0010
<PAGE>
ING (U.S.) CAPITAL CORPORATION,
as Administrative Agent and a Creditor
By:/s/ Christopher R. Wagner
------------------------------------
Christopher R. Wagner
Senior Vice President
Address:
135 East 57th Street
New York, New York 10022-2101
Attention: Christopher R. Wagner
Telephone: 212-409-1717
Telecopy: 212-832-3616
<PAGE>
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, as a Creditor
By: /s/ Edward E. Stringer
------------------------------------
Name: Edward E. Stringer
Title: Vice President
Address:
712 Main Street, 24th Floor East
Houston, Texas 77002
Attention: Ed Stringer
Telephone: 713-216-5642
Telecopy: 713-216-4566
<PAGE>
OVERSEAS PRIVATE INVESTMENT
CORPORATION, as a Creditor
By: /s/ David C. Schmitzer
------------------------------------
Name: David C. Schmitzer
Title: Manager, Project Finance
Address:
1100 New York Avenue, N.W.
Washington, D.C. 20527
Attention: Vice President - Finance
Telephone: (202) 336-8480
Telecopy: (202) 408-9866
