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LOAN AGREEMENT
 
dated as of September 19, 2011
 
between
 
RAVEN DRILLING, LLC
 
as Borrower
 
and
 
RBS ASSET FINANCE, INC.,
 
as Lender
 
 
 
 

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ARTICLE I:  DEFINITIONS AND ACCOUNTING TERMS
Section 1.01.
Defined Terms
1
Section 1.02.
Rules of Construction
3
 
Accounting and Financial Determinations
4
     
ARTICLE II:  THE LOANS
Section 2.01
Loans
4
Section 2.02.
Note
4
Section 2.03.
Scheduled Payments
4
Section 2.03.
Prepayments
5
Section 2.05.
Interest Provisions
5
Section 2.06
Payments Absolute
5
Section 2.07.
Increased Capital Costs
5
Section 2.08.
Taxes
6
     
ARTICLE III
CONDITIONS TO LOANS
 
6
     
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS OF BORROWER
7
     
ARTICLE V
SECURITY INTEREST
 
9
     
ARTICLE VI
Section 6.01.
Affirmative Covenants
9
Section 6.02.
Negative Covenants
11
Section 6.03.
Indemnity
11
Section 6.04.
Performance by Lender
12
     
ARTICLE VII:  EVENTS OF DEFAULT
Section 7.01.
Events of Default
12
Section 7.02
Remedies
13
Section 7.03
Use of Proceeds
13
     
ARTICLE VIII:  MISCELLANEOUS PROVISIONS
Section 8.01.
Waivers, Amendments
13
Section 8.02.
Waivers, Amendments
14
Section 8.03.
Severability
14
Section 8.04.
Execution in Counterparts
14
Section 8.05.
Further Assurance and Corrective Instruments
14
Section 8.06.
Time of the Essence
14
Section 8.07.
Entire Agreement
14
Section 8.08.
Governing Law
14
Section 8.09.
Successors and Assigns; Assignments by Lender
14
Section 8.10.
Assignments, Participations and Securitizations
145
Section 8.11.
Waiver of Jury Trial
15
Section 8.12.
Forum Selection and Consent to Jurisdiction
15
Section 8.13.
Waiver of Certain Claims
15

 
 

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SCHEDULES

SCHEDULE I                                -           Additional Definitions
SCHEDULE II                               -           Additional Conditions
Precedent
SCHEDULE III                              -           Financial Covenants
SCHEDULE IV                              -           Disclosure Statements
SCHEDULE V                                -           List of Subsidiaries

 
 

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LOAN AGREEMENT
 
THIS LOAN AGREEMENT (this “Agreement”) dated as of September 19, 2011 between
Raven Drilling, LLC, a Texas limited liability company (together with its
successors and assigns, “Borrower”), and RBS ASSET FINANCE, INC., a New York
corporation (together with its successors and assigns, “Lender”).
 
W I T N E S S E T H:
 
WHEREAS, Borrower desires to obtain one or more Loans (as defined below) from
Lender in an aggregate principal amount not to exceed the Maximum Principal
Amount (as defined below), secured by the Collateral (as defined below).
 
NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby
acknowledged, and in consideration of the premises contained in this Agreement,
Lender and Borrower agree as follows:
 
ARTICLE I                      :  DEFINITIONS AND ACCOUNTING TERMS
 
Section 1.01. Defined Terms.  The following terms shall have the following
meanings for all purposes of this Agreement:
 
“Affiliate” means any Person that, directly or indirectly, controls, is
controlled by or is under common control with any other Person.  “Controls,”
“controlled by” or “under common control with” means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person whether by ownership of voting securities, contract or
otherwise.  Without limitation, any director, executive officer or beneficial
owner of 20% or more of the equity of a Person shall for purposes of this
Agreement be deemed to control the other Person.  In no event shall Lender be
deemed an “Affiliate” of Borrower.
 
“Agreement” means this Loan Agreement, as amended, supplemented, restated,
replaced, refinanced, increased or otherwise modified from time to time in
accordance with the terms hereof.
 
“Authorizing Entities” has the meaning ascribed to such term in Schedule I
hereto.
 
“Borrower’s State” has the meaning ascribed to such term in Schedule I hereto.
 
“Business Day” means any day on which Lender is open for business and is neither
a Saturday or Sunday nor a legal holiday on which banks are authorized or
required to be closed in New York, New York or Chicago, Illinois.
 
 “Business Loan Agreement” has the meaning set forth in the Revolving Credit
Facility.
 
“Change of Control” means a change in control of Borrower, any Subsidiary or any
Guarantor, including, without limitation, a change in control resulting from
direct or indirect transfers of voting stock or partnership, membership or other
ownership interests, whether in one or a series of transactions.  “Control”
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of Borrower, any Subsidiary or any
Guarantor, and a Change of Control shall occur if any of the following occurs:
(a) any Person or group (as such term is used in Section 13(d)(3) of the
Exchange Act) acquires, after the date of this Agreement, the beneficial
ownership directly or indirectly, of 50% or more of the voting power of the
total outstanding stock or other ownership interests of Borrower, any Subsidiary
or any Guarantor or (b) the occurrence of an Owner Change.
 
“Closing Date” means with respect to the initial Loan, the Initial Closing Date,
and with respect to any Loan funded after the Initial Closing Date, the date
that the proceeds of such Loan are disbursed to, or on behalf of, Borrower.
 
“Closing Fee” has the meaning ascribed to such term in Schedule I hereto.
 
“Code” means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
 
“Collateral” means the property described on each Collateral Schedule, which
property shall be acceptable to Lender, in its sole discretion, and any other
assets of Borrower, any Guarantor or any other Person that are subject to a Lien
in favor of Lender pursuant to any Loan Document.
 
“Collateral Schedule” means each schedule describing Collateral attached to and
referencing a Note or Notes and executed by Borrower and Lender.
 
“Commitment” means Lender’s obligation to make Loans to Borrower pursuant to
Section 2.01 in an amount not to exceed the Maximum Principal Amount.
 
“Commitment Termination Date” means the earliest of (a) the date on which the
aggregate Original Principal Amount of all Loans equals the Maximum Principal
Amount, (b) the Scheduled Commitment Termination Date, (c) the date that an
Event of Default described in subsection (i) of Section 7.01 occurs or (d) the
date on which Lender elects to terminate the Commitment following an Event of
Default.
 

 
 

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“Corporate Guarantor” means any Guarantor that is not an Individual Guarantor.
 
“Default” means any Event of Default or any condition, occurrence or event that,
after notice or lapse of time or both, would constitute an Event of Default.
 
“Default Rate” has the meaning ascribed to such term in Section 2.05(c).
 
“Environmental Laws” means (a) all Federal Toxic Waste Laws, (b) all local,
state or foreign law, statute, regulation, or ordinance analogous to any of the
Federal Toxic Waste Laws and (c) all other federal, state, local, or foreign law
(including any common law, consent decrees and administrative orders), statute,
regulation, or ordinance regulating, permitting, prohibiting or otherwise
restricting the placement, discharge, release, generation, treatment or disposal
upon or into any environmental media of any substance, pollutant, contaminant or
waste that is now or hereafter classified or considered to be hazardous or
toxic; “Environmental Laws” shall also include any and all amendments to any of
(a), (b) or (c).
 
“Equipment” has the meaning ascribed to such term in Schedule I hereto.
 
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and any successor statute of similar import, together with the regulations
thereunder, in each case as in effect from time to time.
 
“ERISA Affiliate” means any trade or business (whether or not incorporated)
that, together with Borrower or any Guarantor, as applicable, is treated as a
single employer under Section 414(b) or (c) of the Code or, solely for purposes
of Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.
 
“ERISA Event” means (a) any “reportable event,” as defined in Section 4043 of
ERISA or the regulations issued thereunder with respect to a Plan (other than an
event for which the 30-day notice period is waived by the Pension Benefit
Guaranty Corporation), (b) the existence with respect to any Plan of an
“accumulated funding deficiency” (as defined in Section 412 of the Code or
Section 302 of ERISA), whether or not waived, (c) the filing pursuant to Section
412 (d) of the Code or Section 303(d) of ERISA of an application for a waiver of
the minimum funding standard with respect to any Plan, (d) the incurrence by
Borrower, any Guarantor or any of its or their ERISA Affiliates of any liability
under Title IV of ERISA with respect to the termination of any Plan, (e) the
receipt by Borrower, any Guarantor or any of its or their ERISA Affiliates from
the Pension Benefit Guaranty Corporation or a plan administrator of any notice
relating to an intention to terminate any Plan or Plans or to appoint a trustee
to administer any Plan, (f) the incurrence by the Borrower, any Guarantor or any
of its or their ERISA Affiliates of any liability with respect to the withdrawal
or partial withdrawal from any Plan or Multiemployer Plan or (g) the receipt by
Borrower, any Guarantor or any of its or their ERISA Affiliates of any notice,
or the receipt by any Multiemployer Plan from Borrower, any Guarantor or any
ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability
or a determination that a Multiemployer Plan is, or is expected to be, insolvent
or in reorganization, within the meaning of Title IV of ERISA.
 
“Event of Default” has the meaning assigned to such term in Section 7.01.
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.
 
 “Existing Mortgage” has the meaning set forth in the Revolving Credit Facility.
 
“Federal Toxic Waste Laws” means any federal law or implementing regulation
regulating any substance, matter, material, waste, contaminant or pollutant, the
generation, storage, disposal, handling, release, treatment, discharge or
emission of which is regulated, prohibited or limited, including, without
limitation: (i) the Resource Conservation and Recovery Act, as amended by the
Hazardous and Solid Waste Amendments of 1984, as now or hereafter amended (42
U.S.C. Section 6901 et seq.), (ii) the Comprehensive Environmental Response,
Compensation and Liability Act, as amended by the Superfund Amendments and
Reauthorization Act of 1986, as now or hereafter amended (42 U.S.C. Section 9601
et seq.), (iii) the Clean Water Act, as now or hereafter amended (33 U.S.C.
Section 1251 et seq.), (iv) the Toxic Substances and Control Act, as now or
hereafter amended (15 U.S.C. Section 2601 et seq.) and (v) the Clean Air Act, as
now or hereafter amended (42 U.S.C. Section 7401 et seq.).
 
“Financial Statements” has the meaning ascribed to such term in Schedule I
hereto.
 
“Fixed Rate” has the meaning ascribed to such term in Schedule I hereto.
 
“GAAP” means generally accepted accounting principles in the United States.
 
“Guarantor” means the guarantor of the Obligations.
 
“Guaranty” means one or more instruments by which a Guarantor guarantees the
Obligations, in form and substance acceptable to Lender.
 
 “Headquarters” has the meaning set forth in the Revolving Credit Facility.
 
 
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“Indebtedness” means (a) all items of indebtedness or liability which in
accordance with GAAP or federal tax law would be included in determining total
liabilities as shown on the liabilities side of a balance sheet other than
accounts payable, (b) indebtedness secured by any Lien existing on property
owned by Borrower, whether or not the indebtedness secured thereby shall have
been assumed and (c) guaranties and endorsements (other than for purposes of
collection in the ordinary course of business) by Borrower and other contingent
obligations of Borrower in respect of, or to purchase or otherwise acquire,
indebtedness of others.
 
“Individual Guarantor” means a Guarantor that is a natural person.
 
“Initial Closing Date” has the meaning ascribed to such term in Schedule I
hereto.
 
“Interim Interest Date” has the meaning ascribed to such term in Schedule I
hereto.
 
“Interim Interest Payment Date” has the meaning ascribed to such term in
Schedule I hereto.
 
 “Lien” means any security interest, mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),
charge against or interest in property to secure payment of a debt or
performance of an obligation or other priority or preferential arrangement of
any kind or nature whatsoever.
 
“Loan” means a loan from Lender to Borrower pursuant to this Agreement.
 
“Loan Documents” means, collectively, this Agreement, each Note, each Loan
Request, any Guaranty and each other instrument or document executed or
delivered pursuant to or in connection with this Agreement and the other Loan
Documents, including, without limitation, any instrument or agreement given to
evidence or further secure the Obligations.
 
“Loan Request” means a Loan Request, duly executed by an authorized officer of
Borrower, in form and substance acceptable to Lender.
 
“Material Adverse Effect” means a material adverse effect on (a) the business,
assets, operations, properties or condition (financial or otherwise) of
Borrower, any Guarantor or any of their Subsidiaries, (b) the ability of
Borrower to perform or pay its Obligations or any material Indebtedness in
accordance with the terms thereof, (c) the ability of any Guarantor to perform
its, his or her obligations under a Guaranty, (d) Lender’s Lien on the
Collateral or the priority of such Lien, or (e) the validity or enforceability
of any Loan Document or the rights and remedies available to Lender under any
Loan Document.
 
“Maximum Principal Amount” has the meaning ascribed to such term in Schedule I
hereto.
 
“Multiemployer Plan” means a Plan that is a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
 
“Note” has the meaning ascribed to such term in Section 2.02.
 
“Notice Address” has the meaning ascribed to such term in Schedule I hereto.
 
 “Obligations” means, subject to Section 8.10(c), the obligations to make the
payment of all indebtedness evidenced by the Notes, together with all
extensions, renewals, amendments and modifications thereof and the payment of
all other Indebtedness and other sums owed under, and the payment and the
performance of all obligations and covenants contained in the Loan Documents, in
each case whether now existing or hereafter incurred, direct or indirect,
absolute or contingent, and due or to become due, together with all fees and
expenses (including, without limitation, all attorneys’ fees and expenses)
incurred by Lender in connection with the collection or enforcement of any of
the Obligations.
 
“Organizational Documents” has the meaning ascribed to such term in Schedule I
hereto.
 
“Original Principal Amount” means the aggregate principal balance of each Loan
as of the Closing Date for such Loan.
 
“Owner Change” has the meaning ascribed to such term in Schedule I hereto.
 
“Payment Date” has the meaning ascribed to such term in Schedule I hereto.
 
 “Permitted Indebtedness” means the:
 
(a) Indebtedness of the Borrower under the Loan Documents and the Revolving
Credit Facility;
 
(b) Indebtedness in the form of obligations for the deferred purchase price of
property or services incurred in the ordinary course of business which are not
yet due and payable or are being contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP have been
established;
 
(c) Indebtedness secured by Permitted Liens;
 
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             (d) Indebtedness consisting of sureties or bonds provided to any
governmental authority or other Person and assuring payment of contingent
liabilities of the Borrower or Guarantor in connection with the operation of oil
and gas properties, including with respect to plugging, facility removal and
abandonment of oil and gas properties; Indebtedness consisting of sureties or
bonds provided to any governmental authority or other Person and assuring
payment of contingent liabilities of the Borrower or Guarantor in connection
with the operation of oil and gas properties, including with respect to
plugging, facility removal and abandonment of oil and gas properties;
 
(e) Intercompany Indebtedness;
 
(f) Indebtedness under any Hydrocarbon Hedge Agreement or Interest Hedge
Agreement (each as defined in the Revolving Credit Facility) permitted under the
Revolving Credit Facility;
 
(g) Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument drawn against insufficient
funds in the ordinary course of business if such Indebtedness is extinguished
within two (2) Business Days of incurrence and does not exceed $50,000; and
 
                (h) Indebtedness under the Business Loan Agreement secured by
the Existing Mortgage and not to exceed $5,350,000, for so long as Borrower owns
the Headquarters.
 
“Permitted Liens” means any of the following:  (a) Liens (other than Liens
relating to Environmental Laws) for taxes, assessments or other governmental
charges not yet due and payable, (b) statutory Liens of landlords, carriers,
warehousemen, mechanics, materialmen and other similar Liens imposed by law,
which are incurred in the ordinary course of business for sums  that are not
delinquent, (c) Liens in favor of Lender, (d) Liens explicitly identified in any
Loan Document as “permitted liens.” and (e) Permitted Liens under the Revolving
Credit Facility.
 
“Person” means any natural person, corporation, partnership, limited liability
company, firm, association, trust, government, governmental agency or any other
entity, whether acting in an individual, fiduciary or other capacity.
 
“Plan” means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or
Section 302 of ERISA, and in respect of which Borrower, any Guarantor or any of
its or their ERISA Affiliates is (or, if such plan were terminated, would under
Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5)
of ERISA.
 
“Prepayment Fee” means with respect to each Loan, the prepayment fee described
in the related Note.
 
“Revolving Credit Facility” means the Second Amended and Restated Credit
Agreement among Abraxas Petroleum Corporation, the lenders party thereto from
time to time, and Société Générale dated June 30, 2011, as amended,
supplemented, restated, replaced, refinanced, increased or otherwise modified
from time to time.
 
“Scheduled Commitment Termination Date” has the meaning ascribed to such term in
Schedule I hereto.
 
“Stated Maturity Date” means, with respect to each Loan, the scheduled maturity
date described in the related Note.
 
“Subsidiary” means, with respect to any Person (the “Parent”) at any date, (a)
any corporation, limited liability company, partnership, association or other
entity the accounts of which would be consolidated with those of the Parent in
the Parent’s consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, (b) any corporation of which
more than 50% of the outstanding capital stock having ordinary voting power to
elect a majority of the board of directors or other governing body of such
corporation (irrespective of whether at the time capital stock of any other
class or classes of such corporation shall or might have voting power upon the
occurrence of any contingency) is at the time directly or indirectly owned by
the Parent, or by one or more Subsidiaries of such Parent or (c) any
partnership, joint venture, limited liability company, or other entity as to
which the Parent, or one or more Subsidiaries of such Parent, owns more than a
50% ownership, equity or similar interest or has power to direct or cause the
direction of management and policies, or the power to elect the managing partner
(or the equivalent), of such partnership, joint venture or other entity, as the
case may be.
 
“UCC” means the Uniform Commercial Code as from time to time in effect in the
State of New York.
 
“Voluntary Prepayment Date” has the meaning ascribed to such term in Schedule I
hereto.
 
“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.
 
Section 1.02. Rules of Construction.
 
(a) The singular form of any word used herein, including the terms defined in
Section 1.01 hereof, shall include the plural, and vice versa.  The use herein
of a word of any gender shall include correlative words of all genders.
 
(b) Unless otherwise specified, references to Articles, Sections and other
subdivisions of this Agreement are to the designated Articles, Sections and
other subdivision of this Agreement as originally executed.  The words “hereof,”
“herein,” “hereunder” and words of similar import refer to this Agreement as a
whole.
 

 
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The headings or titles of the several articles and sections shall be solely for
convenience of reference and shall not affect the meaning, construction or
effect of the provisions hereof.
 
Section 1.03. Accounting and Financial Determinations.  Unless otherwise
specified, all accounting terms used herein or in any other Loan Document shall
be interpreted, all accounting determinations and computations hereunder or
thereunder shall be made, and all financial statements required to be delivered
hereunder or thereunder shall be prepared in accordance with GAAP consistently
applied.  In the event that GAAP changes during the term of this Agreement such
that the financial covenants contained herein would then be calculated in a
different manner or with different components, Borrower and Lender shall amend
such provisions of this Agreement in such respects as necessary to conform the
financial covenants as criteria for evaluating the financial condition of
Borrower or a Guarantor, as applicable, to substantially the same criteria as
were effective prior to such change in GAAP.
 
ARTICLE II :  THE LOANS
 
Section 2.01. Loans.
 
(a) Commitment.  Lender hereby agrees, subject to the terms and conditions of
this Agreement (including, without limitation, the fulfillment of the conditions
set forth in Article III or Lender’s written waiver thereof), to make one or
more Loans to Borrower from time to time during the period from the Initial
Closing Date to the Commitment Termination Date in the aggregate Original
Principal Amount not to exceed the Maximum Principal Amount  (the
“Commitment”).  Not more than one Loan shall be funded in any calendar month,
and each Loan shall be in an Original Principal Amount of at least
$100,000.  The Original Principal Amount of each Loan shall reduce, dollar for
dollar, the remaining available amount under the Commitment, and any amount
funded may not be reborrowed after being repaid.  The Commitment shall terminate
automatically and without any further action on the Commitment Termination
Date.  Borrower’s obligation to repay a Loan shall commence, and interest shall
begin to accrue, on the Closing Date of such Loan.
 
(b) Loan Request.  By delivering a duly completed and executed Loan Request to
Lender, on a Business Day, Borrower may irrevocably request that a Loan be made
on the Closing Date specified in such Loan Request (which date shall be at least
two Business Days but no more than 10 Business Days after the date of delivery
to Lender of such Loan Request).  On such Closing Date, subject to the terms and
conditions contained herein (including, without limitation, the fulfillment of
the conditions set forth in Article III or Lender’s written waiver thereof),
Lender shall disburse the Original Principal Amount specified in such Loan
Request to, or on behalf of, Borrower to the accounts or entities specified in
such Loan Request.  Such Loan Request shall specify the applicable Closing Date,
the Original Principal Amount of such Loan and the applicable disbursement
instructions.  Borrower agrees that the proceeds of all Loans shall be used
solely for the purposes described in such Loan Request.
 
Section 2.02. Note.  Each Loan made by Lender under this Agreement shall be
evidenced by, and repaid with interest in accordance with, a single promissory
note of Borrower in form and substance acceptable to Lender, duly completed, in
the principal amount of the Original Principal Amount of such Loan, dated as of
the Closing Date for such Loan, made payable to Lender or order, and maturing on
the Stated Maturity Date of such Loan or such earlier date pursuant to an
acceleration hereunder (the “Note”).
 
Section 2.03. Scheduled Payments.  On each Payment Date, Borrower shall pay the
aggregate scheduled principal and interest payments owed with respect to each
Loan as set forth in the Notes and any prepayment as provided in Section 2.04;
provided, however, on the Stated Maturity Date or date of acceleration of a
Loan, Borrower shall repay in full the aggregate then outstanding principal
amount of such Loan plus all accrued and unpaid interest thereon and all other
amounts owed hereunder or under any other Loan Document related to such Loan.
 
All amounts required to be paid by Borrower hereunder shall be paid in lawful
money of the United States of America in immediately available funds to the
following account, or to such other account as designated by Lender to Borrower
in writing:
 
Account Name:           RBS Asset Finance Customer Payments
Account Number:       450000-149-1
ABA Number:             241070417
Bank:                            RBS Citizens, National Association
                                      One Citizens Drive
                                      Riverside, RI 02915
Reference:                   Raven Drilling, LLC
 
Any payment received after 12:00 p.m. New York time will be deemed to be
received on the next succeeding Business Day.  Whenever any payment to be made
hereunder shall be stated to be due on a day which is not a Business Day, such
payment
 

 
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may be made on the next succeeding Business Day, and such extension of time
shall in such case be included in the computation of interest or the fees
hereunder, as the case may be.  All payments shall be applied first to accrued
interest and then to principal.
 
Section 2.04. Prepayments.
 
(a) Voluntary Prepayments.  Prior to the Stated Maturity Date, Borrower may,
from time to time on any Payment Date occurring after the Voluntary Prepayment
Date, make a voluntary prepayment, in whole but not in part, of the outstanding
principal amount of the Loans; provided, however, that (a) any such voluntary
partial prepayment shall be made only of a Loan in full; (b) all such voluntary
prepayments shall require notice on or before the date that is 30 calendar days
in advance of any prepayment of the Loan or Loans (which Borrower may revoke not
less than 5 Business Days prior to the scheduled prepayment); and (c) in
connection with each such voluntary prepayment, Borrower shall pay all accrued
interest on the outstanding principal amount of the Loan or Loans prepaid, all
other amounts owed under any Loan Document and, except as otherwise provided in
any Loan Document, the aggregate Prepayment Fee for the Loan or Loans prepaid,
which shall not be refundable.
 
(b) Mandatory Prepayment Upon Acceleration.  Upon any acceleration of any Loan
pursuant to Section 7.02, Borrower shall immediately repay all (or if only a
portion is accelerated thereunder, such portion of) the Loans then outstanding,
including accrued and unpaid interest thereon, plus the aggregate Prepayment
Fee, if any,  for all such Loans and all other amounts owed under the Loan
Documents.
 
Section 2.05. Interest Provisions.
 
(a) Interest on the outstanding principal amount of each Loan shall accrue at a
rate per annum equal to the Fixed Rate for such Loan.  Interest shall be
computed on the basis of a 360-day year consisting of 12 30-day months. On the
Interim Interest Payment Date for a Loan, Borrower shall pay interest accruing
on such Loan from the applicable Closing Date through and including the last day
of the calendar month immediately preceding the applicable Interim Interest
Date.  Interest accruing on each Loan on and after the Interim Interest Date for
such Loan shall be payable on each Payment Date or the date of prepayment, as
applicable.
 
(b) Any payment under a Loan Document that is not paid by Borrower on the due
date thereof shall, to the extent permissible by law, bear a late charge equal
to the lesser of three cents ($.03) per dollar of the delinquent amount or the
lawful maximum, and Borrower shall be obligated to pay the same immediately upon
receipt of Lender’s written invoice therefor.
 
(c) Upon the occurrence and during the continuation of any Event of Default or
after acceleration, Borrower shall pay interest (i) with respect to all Loans at
a rate per annum equal to the rate otherwise in effect plus an additional 3% per
annum and (ii) with respect to all other Obligations of Borrower to Lender at a
rate per annum equal to the highest Fixed Rate then in effect plus an additional
3% per annum (each such rate, a “Default Rate”).
 
(d) The obligations of Borrower hereunder and under the Notes and the other Loan
Documents shall be subject to the limitation that payments of interest to
Lender, plus any other amounts paid to Lender in connection herewith and
therewith, shall not be required to the extent (but only to the extent) that
contracting for and receiving such payment by Lender would be contrary to the
provisions of any law applicable to Lender limiting the highest rate of interest
which may be contracted for, charged or received by Lender, and in such event
Borrower shall pay such Lender interest and other amounts at the highest rate
permitted by applicable law.
 
Section 2.06. Payments Absolute.  The obligations of Borrower to pay interest
and principal required under this Article II and to make other payments under
the Loan Documents and to perform and observe the covenants and agreements
contained herein and therein shall be absolute and unconditional in all events,
without abatement, diminution, deduction, setoff or defense for any reason,
including, without limitation, any failure of the Collateral to be delivered,
installed or constructed, as applicable, any defects, malfunctions, breakdowns
or infirmities in the Collateral or any accident, condemnation, destruction or
unforeseen circumstances.  Notwithstanding any dispute between Borrower and
Lender or any other person, Borrower shall make all payments under the Loan
Documents when due and shall not withhold any payments pending final resolution
of such dispute, nor shall Borrower assert any right of set-off or counterclaim
against its obligation to make such payments required under the Loan Documents.
 
Section 2.07. Increased Capital Costs.  If any change in, or the introduction,
adoption, effectiveness, interpretation, reinterpretation or phase-in of, any
law or regulation, directive, guideline, decision or request (whether or not
having the force of law) of any court, central bank, regulator or other
governmental authority affects or would affect the amount of capital required or
expected to be maintained by Lender or any Person controlling Lender, and Lender
determines that the rate of return on its or such controlling Person’s capital
as a consequence of its Commitment or the Loans made by Lender is reduced to a
level below that which Lender or such controlling Person could have achieved but
for the occurrence of any such circumstance, then, in any such case upon notice
from time to time by Lender to Borrower, Borrower shall immediately pay directly
to Lender additional amounts
 

 
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sufficient to compensate Lender or such controlling Person for such reduction in
rate of return.  A statement of Lender as to any such additional amount or
amounts (including calculations thereof in reasonable detail) shall, in the
absence of manifest error, be conclusive and binding on Borrower.  In
determining such amount, Lender may use any method of averaging and attribution
that it shall deem applicable.
 
Section 2.08. Taxes.
 
(a) Withholding Taxes.  Any and all payments by Borrower of principal of, and
interest on, the Loans and all other amounts payable hereunder and under the
Loan Documents shall be made free and clear of and without deduction for any
present or future taxes, levies, imposts, deductions, fees, duties, withholdings
or other charges of any nature whatsoever imposed by any taxing authority, but
excluding franchise taxes and taxes imposed on or measured by Lender’s gross or
net income or receipts by the jurisdiction under the laws of which Lender is
organized or any political subdivision thereof or in which Lender is maintaining
a lending office (such non-excluded items are referred to herein as
“Taxes”).  In the event that any withholding or deduction from any payment to be
made by Borrower hereunder is required in respect of any Taxes pursuant to any
applicable law, rule or regulation, then Borrower will (i) pay directly to the
relevant authority the full amount required to be so withheld or deducted; (ii)
promptly forward to Lender an official receipt or other documentation
satisfactory to Lender evidencing such payment to such authority; and (iii) pay
to Lender such additional amount or amounts as is necessary to ensure that the
net amount actually received by Lender will equal the full amount Lender would
have received had no such withholding or deduction been required (including
penalties, interest, additional taxes and expenses (including reasonable
attorney’s fees and expenses) arising therefrom or with respect thereto).
 
(b) Other Taxes.  In addition, Borrower shall pay any present or future stamp,
documentary, excise, property or similar taxes, charges or levies that arise
from any payment made hereunder or under the Note or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement or any
other Loan Document (collectively, “Other Taxes”).
 
(c) Tax Indemnity.  Borrower shall indemnify Lender for the full amount of Taxes
and Other Taxes (including, without limitation, any amounts paid by Lender) and
any liability (including, without limitation, penalties, additions to tax,
interest and expenses) arising therefrom or with respect thereto.  This
indemnification shall be made within 30 days from the date Lender makes written
demand therefor and shall survive the termination of this Agreement.
 
ARTICLE III:  CONDITIONS TO LOANS
 
Lender’s agreement to make the Loans to Borrower hereunder and to disburse the
proceeds thereof shall be subject to the condition precedent that Lender shall
have received, on or prior to the applicable Closing Date (or by such other time
as may be specified herein with respect thereto), all of the following, each in
form and substance satisfactory to Lender:
 
(a) This Agreement and all other Loan Documents, properly executed on behalf of
Borrower, and each of the exhibits and schedules hereto and thereto properly
completed.
 
(b) The respective Note, properly executed on behalf of Borrower.
 
(c) A Loan Request for each Loan to be funded, duly completed and properly
executed on behalf of Borrower.
 
(d) With respect to the Initial Closing Date only, a certificate of the
Secretary or an Assistant Secretary of Borrower, certifying as to (i) the
resolutions of the Authorizing Entities of Borrower, authorizing the execution,
delivery and performance of this Agreement, the Note, the other Loan Documents
and any related documents, (ii) the Organizational Documents of Borrower, and
(iii) the signatures of the officers or agents of Borrower authorized to execute
and deliver this Agreement, the Note, the other Loan Documents and other
instruments, agreements and certificates on behalf of Borrower.
 
(e) With respect to the Initial Closing Date only, current certified copies of
the Organizational Documents of Borrower.
 
(f) With respect to the Initial Closing Date only, a Certificate of Good
Standing issued as to Borrower by the Comptroller of Public Accounts of the
state of Borrower’s organization not more than 30 days prior to the Closing
Date.
 
(g) With respect to the Initial Closing Date only, a Certificate of
Qualification issued as to Borrower by the Secretary of the State of the state
where the Collateral is or will be located if different than the Borrower’s
state of organization, not more than 30 days prior to the Initial Closing Date.
 
(h) The Guaranties, if any, properly executed by or on behalf of Guarantors.
 

 
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With respect to the Initial Closing Date only, a certificate of the Secretary or
an Assistant Secretary of any Corporate Guarantor certifying as to (i) the
resolutions of the Authorizing Entities of such Guarantor, authorizing the
execution, delivery and performance of the Guaranty and any related documents,
(ii) the Organizational Documents of Guarantor, and (iii) the signatures of the
officers or agents of Guarantor authorized to execute and deliver the Guaranty
and other instruments, agreements and certificates on behalf of Guarantor.
 
(i) Current certified copies of the Organizational Documents of any Corporate
Guarantor.
 
(j) A Certificate of Good Standing issued as to all Corporate Guarantors by the
Secretary of the State of the state of such Guarantor’s organization not more
than 30 days prior to the Closing Date.
 
(k) Intentionally Omitted.
 
(l) Intentionally Omitted.
 
(m) Certificates of the insurance required hereunder, containing a lender’s loss
payable clause or endorsement in favor of Lender.
 
(n) Intentionally Omitted.
 
(o) Intentionally Omitted.
 
(p) Intentionally Omitted.
 
(q) Current searches of appropriate filing offices showing that (i) no state or
federal tax liens have been filed and remain in effect against Borrower, and
(ii) no financing statements have been filed and remain in effect against
Borrower relating to the Collateral except those financing statements filed by
Lender and pursuant to the Revolving Credit Facility.
 
(r) Payment of the Closing Fee and, if any, all of Lender’s other fees,
commissions and expenses in connection with the funding of each Loan.  In
addition to the foregoing, each time Borrower submits a Loan Request, Borrower
shall pay to Lender a fee (in each case, the “Documentation Fee”) in the amount
of (i) $500 if the Loan Request is $2,500,000 or more, or (ii) $250 if the Loan
Request is less than $2,500,000.
 
(s) If requested, evidence that no Default or event or circumstance that could
reasonably be likely to have a Material Adverse Effect has occurred.
 
(t) Any other documents or items required by Lender.
 
(u) Any other documents or items listed on Schedule II hereto.
 
ARTICLE IV:  REPRESENTATIONS, WARRANTIES AND COVENANTS OF BORROWER
 
Borrower represents, warrants and covenants for the benefit of Lender, as
follows:
 
(a) Borrower is a limited liability company duly formed, validly existing and in
good standing under the laws of the jurisdiction of its organization.  Borrower
is in good standing and is duly licensed or qualified to transact business in
each jurisdiction where the nature of its business requires such qualification,
except for those jurisdictions in which the failure to qualify could not
reasonably be expected to have a Material Adverse Effect.  Borrower’s exact
legal name is as set forth on the execution page hereof.
 
(b) Borrower has the requisite power and authority and holds all requisite
governmental licenses, permits and other approvals to (i) enter into and perform
its obligations under this Agreement, the Note and each other Loan Document to
which it is a party and to own its property, (ii) use the Collateral and
(iii) conduct its business substantially as currently conducted by it, except as
to clause (iii) where the failure to hold such licenses, permits and approvals
could not reasonably be expected to have a Material Adverse Effect.
 
(c) This Agreement, the Note and the other Loan Documents to which it is a party
have been duly authorized, executed and delivered by Borrower and constitute
legal, valid and binding obligations of Borrower, enforceable against Borrower
in accordance with their respective terms, except to the extent limited by
bankruptcy, insolvency, reorganization, conservatorship, receivership,
liquidation or other laws of general application relating to or effecting the
enforcement of creditors’ rights and by general equitable remedies.
 

 
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              (d)  The execution and delivery of this Agreement, the Note and
the other Loan Documents, the consummation of the transactions contemplated
hereby and thereby and the fulfillment of the terms and conditions hereof and
thereof do not and will not violate any applicable law, rule, regulation or
order, conflict with or result in a breach of any of the terms or conditions of
any Organizational Document of Borrower or of any corporate restriction or of
any agreement or instrument to which Borrower is now a party except where such
violation would not have a Material Adverse Effect and do not and will not
constitute a material default under any of the foregoing or result in the
creation or imposition of any Liens, of any nature upon any of the property or
assets of Borrower other than Liens in favor of Lender and Permitted Liens.
 
(e) The authorization, execution, delivery and performance of this Agreement,
the Note and the other Loan Documents by Borrower do not require submission to,
approval of, or other action by any governmental authority or agency, except for
such action that has been duly obtained or taken and is in full force and
effect.
 
(f) Each of the Loan Documents that purports to create a security interest
creates a valid first priority Lien on the Collateral subject only to Permitted
Liens, securing the payment and performance of the Obligations.
 
(g) Except as disclosed on Schedule IV (which may be updated as of each Closing
Date), there is no action, suit, proceeding, claim, inquiry or investigation, at
law or in equity, before or by any court, regulatory agency, public board or
body pending or, to the best of Borrower’s knowledge, threatened in writing
against or affecting Borrower, any Guarantor or any of their Subsidiaries,
challenging Borrower’s or any Guarantor’s authority to enter into this
Agreement, the Note or any of the other Loan Documents or any other action
wherein an unfavorable ruling or finding would adversely affect the
enforceability of this Agreement, the Note or any of the other Loan Documents,
or could reasonably be expected to have a Material Adverse Effect.
 
(h) Borrower has good title to all Collateral free and clear of all Liens except
for Permitted Liens
 
(i) Borrower is in compliance with all laws, rules, regulations and orders of
governmental authorities applicable to it and its properties except to the
extent the non-compliance with which could not reasonably be expected to have a
Material Adverse Effect.
 
(j) Borrower has heretofore furnished to Lender the Financial Statements and
those statements fairly present the financial condition of Borrower and such
Guarantor, if any, on the dates thereof and the results of its operations and
cash flows for the periods then ended and were prepared in accordance with
GAAP.  Since the date of the most recent financial statements, there has been no
material adverse change in the business, properties or condition (financial or
otherwise) of Borrower or any Guarantor except changes in the oil and gas
industry and the United States and world economy generally.   Except as
disclosed in the Financial Statements or the notes thereto and for the items
disclosed on Schedule IV (which may be updated as of each Closing Date), neither
Borrower nor any Guarantor, as of each Closing Date, has or will have any
liabilities, contingent or otherwise, that could reasonably be expected to have
a Material Adverse Effect.
 
(k) Borrower has paid or caused to be paid, and will pay, to the proper
authorities when due all federal, state and local taxes required to be withheld
by it, except any such taxes or charges which are being diligently contested in
good faith by appropriate proceedings and for which adequate reserves in
accordance with GAAP have been set aside on its books.  Borrower has filed, and
will pay, all federal, state and local tax returns which are required to be
filed, and Borrower has paid or caused to be paid to the respective taxing
authorities all taxes as shown on said returns or on any assessment received by
it to the extent such taxes have become due, except any such taxes or charges
which are being diligently contested in good faith by appropriate proceedings
and for which adequate reserves in accordance with GAAP have been set aside on
its books.
 
(l) For purposes of Section 9-307 of the UCC, Borrower is and will remain
located in the Borrower’s State. Borrower’s residence for federal income tax
purposes is located at its Notice Address specified in Schedule I.  Borrower has
authorized Lender to file financing statements that are sufficient when filed to
perfect the security interests created pursuant to this Agreement and the other
Loan Documents.  When such financing statements are filed in the offices noted
therein, Lender will have a valid and perfected security interest in the
Collateral that constitutes personal property, subject to no other Lien other
than Permitted Liens.
 
(m) None of the Collateral constitutes a replacement of, substitution for or
accessory to any property of Borrower subject to a Lien of any kind except for
Permitted Liens.
 
(n) No ERISA Event has occurred or is reasonably likely to occur with respect to
any Plan, and each Plan is in compliance in all material respects with the
applicable provisions of ERISA.
 
(o) Borrower has obtained all permits, licenses and other authorizations which
are required under all applicable Environmental Laws at Borrower’s facilities or
in connection with the operation of its business except those the failure of
which to obtain would not be reasonably likely to cause a Material Adverse
Effect.  Except as disclosed on
 

 
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Schedule IV, to the knowledge of Borrower, Borrower and all activities of
Borrower at its facilities comply with all applicable Environmental Laws and
with all terms and conditions of any required permits, licenses and
authorizations applicable to Borrower with respect thereto except where the
failure to be in compliance would not be reasonably likely to cause a Material
Adverse Effect.  Except as disclosed on Schedule IV, Borrower is also in
compliance with all limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and timetables contained in
applicable Environmental Laws or contained in any applicable plan, order,
decree, judgment or notice of which Borrower is aware except where the failure
to be in compliance would not be reasonably likely to cause a Material Adverse
Effect.  Except as disclosed on Schedule IV (which may be updated as of each
Closing Date), Borrower has no knowledge of, nor has Borrower received written
notice of, any events, conditions, circumstances, activities, practices,
incidents, actions or plans which may interfere with or prevent continued
compliance with, or which may give rise to any liability under, any applicable
Environmental Laws.
 
(p) All factual information (other than the Financial Statements, as to which
Section IV(k) shall apply) heretofor or contemporaneously furnished by or on
behalf of Borrower or any Guarantor in writing to Lender for purposes of or in
connection with this Agreement or any transaction contemplated hereby is, and
all other such factual information (other than the Financial Statements, as to
which Section IV(k) shall apply) hereafter furnished by or on behalf of Borrower
or any Guarantor to Lender will be, true and correct in every material respect
on the date as of which such information is dated or certified, and such
information is not, or shall not be, as the case may be, incomplete by omitting
to state any material fact necessary to make such information not misleading.
 
(q) None of Borrower, any Guarantor or any of their Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying “margin stock.”  None of the
proceeds of any Loan will be used for the purpose of, or be made available by
Borrower, any Guarantor or any of their Subsidiaries in any manner to any other
Person to enable or assist such Person in, directly or indirectly purchasing or
carrying “margin stock”.  Terms for which meanings are provided in F.R.S. Board
Regulation T, U or X or any regulations substituted therefor, as from time to
time in effect, are used in this Section with such meanings.
 
(r) None of Borrower, any Guarantor or any of their Subsidiaries is an
“investment company” nor a “company controlled by an investment company” within
the meaning of the Investment Company Act of 1940, as amended, or a “holding
company,” or a “subsidiary company” of a “holding company,” or an “affiliate” of
a “holding company” or of a “subsidiary company” of a “holding company,” within
the meaning of the Public Utility Holding Company Act of 1935, as amended.
 
(s) Schedule V is an accurate and complete list of all Subsidiaries of Borrower
and each Corporate Guarantor and the respective ownership interests therein.
 
(t) Borrower and the Guarantor are solvent and will not be rendered insolvent by
the Loan Documents or the transactions contemplated thereby and, after giving
effect to such transactions, neither Borrower nor any Guarantor will be left
with an unreasonably small amount of capital with which to engage in its
business, nor does Borrower or any Guarantor intend to incur, or believe that it
has incurred, debts beyond its ability to pay as they mature.  Neither Borrower
nor any Guarantor contemplates the commencement of insolvency, bankruptcy,
liquidation or consolidation proceedings or the appointment of a receiver,
liquidator, conservator, trustee or similar official in respect of Borrower or
any Guarantor or any of their assets.  Neither Borrower nor any Guarantor is
entering into the transactions contemplated by the Loan Documents with any
intent to hinder, delay or defraud any of Borrower’s or any Guarantor’s
creditors.
 

 
ARTICLE V:  SECURITY INTEREST
 
This Agreement is intended to constitute a security agreement within the meaning
of the UCC.  To secure the payment and performance of the Obligations, Borrower
hereby grants to Lender a security interest constituting a first Lien on the
Collateral.  Borrower hereby authorizes, and ratifies any previous authorization
for, Lender to file UCC financing statements and any amendments thereto
describing the Collateral and containing any other information required by the
applicable UCC.  Borrower authorizes Lender, to file financing statements and
amendments thereto describing the Collateral and containing any other
information required by the applicable UCC and all proper terminations of the
filings of other secured parties with respect to the Collateral, in such form
and substance as Lender, in its sole discretion, may determine.
 
ARTICLE VI:  COVENANTS
 
Section 6.01. Affirmative Covenants.  So long as any Loan shall remain unpaid,
Borrower will comply, and shall cause the Guarantor to comply, with the
following requirements unless waived by Lender in writing:
 
(a) Financial Statements.  Borrower shall cause Corporate Guarantor to deliver
to Lender : (i) as soon as practicable, and in any event within 45 days after
the end of each fiscal quarter (other than the last fiscal quarter), unaudited
financial statements including in each instance, balance sheets, income
statements, and statements of cash flow,
 

 
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 on a consolidated and consolidating basis, as appropriate, and separate profit
and loss statements as of and for the quarterly period then ended and for the
fiscal year to date, prepared in accordance  with GAAP (ii) as soon as
practicable, and in any event within 90 days after the end of each fiscal year,
annual audited financial statements, including balance sheets, income statements
and statements of cash flow for the fiscal year then ended, on a consolidated
and consolidating basis, as appropriate, which have been prepared by the
independent accountants of the Corporate Guarantor in accordance with GAAP and
(iii) as soon as practicable, any certifications required by the Securities and
Exchange Commission of the United States (the “SEC”) or by securities laws
applicable to the Corporate Guarantor concerning financial statements of the
Corporate Guarantor, as applicable.  Such audited financial statements shall be
accompanied by the independent accountant's opinion, which opinion shall be in
form generally recognized as “unqualified.”   Borrower shall be deemed to have
complied with the foregoing requirements upon the filing by Corporate Guarantor
of Forms 10-K and 10-Q with the SEC that are publicly available within the time
frames set forth above.
 
(b) Compliance Certificate.  If any financial covenants are set forth on
Schedule III, concurrently with the delivery of the financial statements
pursuant to subsection (a), Borrower     shall deliver to Lender a certificate
from an officer of the Borrower or Corporate Guarantor, as applicable,
containing information (in reasonable detail and with appropriate calculations
and computations in all respects reasonably satisfactory to Lender) that
demonstrates compliance with the financial covenants set forth on Schedule III.
 
(c) Notices.  Borrower shall deliver to Lender each of the following:
 
(i) as soon as possible and in any event within three Business Days after the
occurrence of a Default, an Event of Default or an event which could reasonably
be expected to result in a Material Adverse Effect other than a Material Adverse
Effect relating to a change in the oil and gas business or United States or
world economy generally, a statement of Borrower setting forth reasonably
detailed information regarding such Default, Event of Default or event and the
action that Borrower has taken and proposes to take with respect thereto;
 
(ii) promptly after the commencement thereof, notice in writing of all
litigation and of all proceedings before any governmental or regulatory agency
affecting Borrower, any Guarantor or any of their Subsidiaries of the type
described in Article IV hereof or which seek a monetary recovery against
Borrower, any Guarantor or any of their Subsidiaries in excess of $3,000,000;
 
(iii) promptly upon knowledge thereof, notice of any loss, theft or destruction
of or material damage to, any accident involving any, and any action, suit or
proceeding relating to, Collateral having a value in excess of $250,000;
 
(iv) promptly after the amending thereof, copies of any and all amendments to
any of its Organizational Documents;
 
(v) promptly upon knowledge thereof, notice of the violation by Borrower of any
applicable law, rule or regulation applicable to Borrower, which violation could
reasonably be expected to have a Material Adverse Effect.
 
(d) Compliance with Laws.  Borrower and each of its Subsidiaries shall comply in
all material respects with all applicable governmental rules and regulations and
all other applicable laws, rules, regulations and orders, including, without
limitation, all applicable Environmental Laws.
 
(e) Maintenance of Properties.  Borrower shall, at its own expense, maintain,
preserve, protect and keep the Collateral in good repair, working order and
condition, ordinary wear and tear excepted, in material compliance with all
applicable laws, rules, regulations, prudent industry practice and the
requirements of all applicable insurance policies, and make necessary and proper
repairs and replacements so that its business carried on in connection therewith
may be properly conducted at all times and shall maintain in full force and
effect all rights, franchises, permits, licenses, trademarks, tradenames,
approvals, authorizations, leases and contracts necessary to carry on its
business as presently or proposed to be conducted where the failure to so
maintain the same could reasonably be expected to have a Material Adverse
Effect.  Borrower will not make any material alterations, modifications or
additions to the Collateral which cannot be removed without materially damaging
the functional capabilities or economic value of the Collateral unless Lender
has provided its prior written consent.
 
(f) Insurance.  Borrower shall, at its own expense, procure and maintain
continuously in effect: (i) public liability insurance for personal injuries,
death or damage to or loss of property arising out of or in any way relating to
the Collateral sufficient to protect Lender from liability in all events, and
(ii) insurance against such hazards as Lender may reasonably require, including,
without limitation, all-risk property and casualty insurance, in each case in
amounts acceptable to Lender.  All insurance policies required by this Section
shall be taken out and maintained with insurance companies acceptable to Lender;
and shall contain a provision that the insurer shall not cancel or revise
coverage
 

 
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thereunder without giving written notice to the insured parties at least 30 days
before the cancellation or revision becomes effective.  No insurance shall be
subject to any co-insurance clause.  Borrower shall cause Lender to be named as
loss payee on all insurance policies relating to any Collateral and shall cause
Lender to be named as additional insured under all liability policies, in each
case pursuant to appropriate endorsements in form and substance satisfactory to
Lender.  Such insurance shall not be affected by any unintentional act or
negligence or representation or warranty on the part of Borrower or other owner
of the policy or the property described in such policy.  Prior to each Closing
Date, Borrower shall deposit with Lender evidence satisfactory to Lender of such
insurance and, at least 10 days prior to the expiration thereof, shall provide
Lender evidence of all renewals or replacements thereof.  Borrower shall provide
or cause to be provided to Lender and to its insurance consultant (or any agent,
officer or employee of Lender) such other information relating to its insurance
coverage as may be reasonably requested by Lender.
 
(g) Books and Records; Inspections.  Borrower will cause Corporate Guarantor to
keep books and records that accurately reflect all of its business affairs and
transactions in accordance with the Exchange Act.  Borrower will, and will cause
the Guarantor to, permit Lender or any of its representatives (including outside
auditors), at reasonable times and intervals, to visit all of its offices, to
discuss its financial matters with its officers and independent public
accountant (and Borrower hereby authorizes such independent accountant to
discuss Borrower’s financial matters with Lender or its representatives whether
or not any representative of Borrower is present) and to examine (and, at the
expense of Borrower, copy extracts from) books or other corporate records
(including computer records).  If Lender exercises its rights under this Section
following the occurrence of a Default, Borrower shall pay any fees of such
independent accountant incurred in connection therewith.
 
(h) Perfection of Liens.  Borrower shall take such action as may be necessary or
as Lender may request in order to perfect and protect Lender’s Lien on the
Collateral.  If requested by Lender, Borrower shall obtain a landlord and/or
mortgagee’s consent and waiver with respect to the property where the Collateral
is located.  If requested by Lender, Borrower shall conspicuously mark the
Collateral with appropriate lettering, labels or tags, and maintain such
markings, so as clearly to disclose Lender’s security interest in the
Collateral.
 
(i) Title.  Borrower will at all times protect and defend, at its own cost and
expense, its title from and against all claims, Liens and legal processes of
creditors of Borrower (other than Lender), and keep all Collateral free and
clear of all such claims, Liens and processes other than Permitted Liens.
 
(j) Financial Covenants.  Borrower agrees to comply with, and to cause the
Guarantor to comply with, the financial covenants set forth on Schedule III, if
any.
 
Section 6.02. Negative Covenants.  So long as the Loan shall remain unpaid,
Borrower agrees that unless waived by Lender in writing:
 
(a) Liens.  Borrower will not create, incur or suffer to exist any Lien,
assignment or transfer in, on or of any of the Collateral except for Permitted
Liens.
 
(b) Fundamental Changes.  Borrower will not, and will not permit any of its
Subsidiaries to, form or acquire any Subsidiary, enter into any merger,
consolidation, reorganization, or recapitalization, or reclassify its capital
stock, or liquidate, wind up, or dissolve itself (or suffer any liquidation or
dissolution), or, other than in the ordinary course of its business, convey,
sell assign, lease, transfer, or otherwise dispose of, in one transaction or
series of transactions, all or any substantial part of its property or assets.
 
(c) Sale of Collateral.  Borrower will not, and will not permit any of its
Subsidiaries to, sell, transfer, lease, contribute or otherwise convey or
dispose of (in each case in one transaction or series of transactions), or grant
options, warrants or other rights with respect to (in each case in one
transaction or series of related transactions), or agree to do any of the
foregoing with respect to, all or any part of the Collateral, other than the
sale of worn out or obsolete equipment in the ordinary course of business.
 
(d) Location or Name Changes.  Borrower will not change its location for
purposes of Section 9-307 of the UCC or its name in any manner that could make
any financing statement filed in connection with any Loan Document seriously
misleading within the meaning of Section 9-506 of the UCC or any similar
statute, unless it shall have given Lender at least 30 days’ prior written
notice thereof.
 
Section 6.03. Indemnity.
 
(a) Whether or not covered by insurance, Borrower hereby assumes responsibility
for and agrees to reimburse Lender, its affiliates and its and their respective
officers, directors, employees and agents (individually and collectively, the
“Indemnified Parties”) for and will indemnify, defend and hold the Indemnified
Parties harmless from and against all liabilities, obligations, losses, damages,
penalties, claims, suits, actions, proceedings, judgments, awards, amounts paid
in settlements, obligations, debts, diminutions in value, fines, penalties,
charges, fees, costs and expenses
 

 
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(including reasonable attorneys’ fees and expenses) of whatsoever kind and
nature, imposed on, incurred by or asserted against any Indemnified Party that
in any way relate to or arise out of any of the Loan Documents, the transactions
contemplated thereby or the Collateral, including, without limitation
(collectively, the “Losses”), (i) the selection, manufacture, construction,
acquisition, acceptance or rejection of the Collateral, (ii) the ownership of
the Collateral, (iii) the delivery, installation, lease, possession,
maintenance, use, condition, return or operation of the Collateral, (iv) the
condition of the Collateral sold or otherwise disposed of after possession by
Borrower, (v) any patent or copyright infringement, (vi) any act or omission on
the part of Borrower, Guarantor or any of its or their officers, employees,
agents, contractors, lessees, licensees or invitees, (vii) any misrepresentation
or inaccuracy in any representation or warranty of Borrower or any Guarantor, or
a breach of Borrower or any Guarantor of any of its covenants or obligations
under any of the Loan Documents, (viii) any claim, loss, cost or expense
involving alleged damage to the environment relating to the Collateral ,
including, without limitation, investigation, removal, cleanup and remedial
costs, (ix) any personal injury, wrongful death or property damage arising under
any statutory or common law or tort law theory, including, without limitation,
damages assess for the maintenance of a private or public nuisance or for the
conducting of an abnormally dangerous activity on or near the Collateral, (x)
any past, present or threatened, in writing, injury to, or destruction of, the
Collateral, including, without limitation, costs to investigate and assess such
injury or damage and (xi) any administrative process or proceeding or judicial
or other similar proceeding (including, without limitation, any alternative
dispute resolution process and any bankruptcy proceeding) in any way connected
with any matter addressed in any of the Loan Documents; provided, however, that
in no event shall Borrower be required to indemnify any of the Indemnified
Parties for any Losses caused by an Indemnified Party’s willful misconduct,
fraud or gross negligence.
 
(b) If any action or proceeding be commenced by a Person other than a
Indemnified Party, to which action or proceeding the Indemnified Parties are
made a party by reason of the execution or performance of this Agreement or any
other Loan Document, or by an Indemnified Party in an action or proceeding to
defend or uphold the Lien of this Agreement, all sums paid by the Indemnified
Parties, for the expense of any litigation to prosecute or defend the rights and
Lien created hereby or otherwise, shall be paid by Borrower to such Indemnified
Parties, as the case may be, as hereinafter provided.  Borrower will pay and
save the Indemnified Parties harmless against any and all liability with respect
to any intangible personal property tax or similar imposition of any state or
any subdivision or authority thereof now or hereafter in effect, to the extent
that the same may be payable by the Indemnified Parties in respect of this
Agreement or any Obligation.
 
(c) All amounts payable to the Indemnified Parties under this Section shall be
deemed Obligations secured by this Agreement and shall be payable immediately
upon demand.  In case any action, suit or proceeding is brought against the
Indemnified Parties by reason of any such occurrence, Borrower, upon request of
such Indemnified Parties, will, at Borrower’s expense, resist and defend such
action, suit or proceeding or cause the same to be resisted or defended by
counsel designated by Lender.  The obligations of Borrower under this Section
shall survive the termination of this Agreement and not be merged with any
applicable judgment.  If and to the extent that the foregoing undertaking may be
unenforceable for any reason, Borrower hereby agrees to make the maximum
contribution to the payment and satisfaction of each of the Losses that is
permissible under applicable law.
 
Section 6.04. Performance by Lender.  If Borrower at any time fails to perform
or observe any of the covenants or agreements contained in this Agreement,
Lender may, but need not, perform or observe such covenant on behalf and in the
name, place and stead of Borrower (or, at Lender’s option, in Lender’s name) and
may, but need not, take any and all other actions which Lender may reasonably
deem necessary to cure or correct such failure (including, without limitation,
the payment of taxes, the satisfaction of Liens, the performance of obligations
owed to account debtors or other obligors, the procurement and maintenance of
insurance, the execution of assignments, security agreements and financing
statements, and the endorsement of instruments), and Borrower shall thereupon
pay to Lender on demand the amount of all moneys expended and all costs and
expenses (including reasonable attorneys’ fees and legal expenses) incurred by
Lender in connection with or as a result of the performance or observance of
such agreements or the taking of such action by Lender, together with interest
thereon from the date expended or incurred at the lesser of the highest Default
Rate then in effect or the highest rate permitted by law.  To facilitate the
performance or observance by Lender of such covenants of Borrower, Borrower
hereby irrevocably appoints Lender, or the delegate of Lender, acting alone, as
the attorney in fact of Borrower with the right (but not the duty) from time to
time to create, prepare, complete, execute, deliver, endorse or file in the name
and on behalf of Borrower any and all instruments, documents, assignments,
security agreements, financing statements, applications for insurance and other
agreements and writings required to be obtained, executed, delivered or endorsed
by Borrower under this Agreement.
 
ARTICLE VII:  EVENTS OF DEFAULT
 
Section 7.01. Events of Default.  Each of the following events or occurrences
shall constitute an “Event of Default”:
 
(a) Borrower shall default in the payment of any Obligation when due and such
failure continues for 10 calendar days;
 

 
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(b) Any representation or warranty of Borrower made in any Loan Document or any
other writing or certificate furnished by or on behalf of Borrower pursuant to
any Loan Document is or shall be incorrect when made in any material respect;
 
(c) Borrower shall fail to perform any of its obligations under Section 6.01(c),
6.01(f), 6.01(i), 6.01(j) or 6.02(a);
 
(d) Borrower shall default in the due performance and observance of any other
agreement contained herein or in any other Loan Document (other than items set
forth elsewhere in this Section 7.01), and such default shall continue
unremedied for a period of 30 calendar days after Borrower has actual knowledge
thereof or has received notice by Lender thereof, unless the cure for such
default takes longer than 30 calendar days and Borrower institutes and
diligently pursues such cure within the initial 30 calendar day period, in which
such event Borrower shall have such reasonable period of time as is necessary to
cure such default but not to exceed 120 days without the consent of Lessor;
 
(e) The occurrence of an event of default or a breach or default, after the
passage of all applicable notice and cure or grace periods provided therefor,
under any other Loan Document or any other agreement between or among Borrower,
any Guarantor or any of their Subsidiaries and Lender or any of its Affiliates;
 
(f) The occurrence of a default (however defined) under any instrument,
agreement or other document evidencing or relating to, and the acceleration of,
any indebtedness or other monetary obligation of Borrower, any Guarantor or any
of their Subsidiaries having a principal amount (including, without limitation,
the amount of any outstanding letters of credit), individually or in the
aggregate, in excess of $5,000,000;
 
(g) Any judgment or order for the payment of money (not paid or fully covered by
insurance maintained in accordance with the requirements of this Agreement and
as to which the relevant insurance company has acknowledged coverage) in excess
of $5,000,000 shall be rendered against Borrower, any Guarantor or any of their
Subsidiaries;
 
(h) The occurrence of any Change in Control;
 
(i) Borrower, any Guarantor or any of their Subsidiaries shall be or become
insolvent, or admit in writing its inability to pay its debts as they mature, or
make an assignment for the benefit of creditors; or Borrower, any Guarantor or
any of their Subsidiaries shall apply for or consent to the appointment of any
receiver, trustee or similar officer for it or for all or any substantial part
of its property; or such receiver, trustee or similar officer shall be appointed
without the application or consent of Borrower, any Guarantor or any of their
Subsidiaries; or Borrower, any Guarantor or any of their Subsidiaries shall
institute (by petition, application, answer, consent or otherwise) any
bankruptcy, insolvency, reorganization, arrangement, readjustment of debt,
dissolution, liquidation or similar proceeding relating to it under the laws of
any jurisdiction; or any such proceeding shall be instituted (by petition,
application or otherwise) against Borrower, any Guarantor or any of their
Subsidiaries; or any Individual Guarantor shall become disabled or die;
 
(j) Any Loan Document or any Lien granted thereunder shall (except in accordance
with its terms), in whole or in part, terminate, cease to be effective or cease
to be the legally valid, binding and enforceable obligation of Borrower;
Borrower, any Guarantor, any of their Subsidiaries or any other party shall,
directly or indirectly, contest in any manner the effectiveness, validity,
binding nature or enforceability of any Loan Document or any Lien granted
thereunder; or any Lien securing (or required to secure) any Obligation shall,
in whole or in part, cease to be a first priority perfected Lien subject only to
Permitted Liens;
 
(k) The occurrence of an ERISA Event that, when taken together with all other
ERISA Events that have occurred, could reasonably be expected to result in
liability under Title IV of ERISA of Borrower or any Guarantor or any of their
Subsidiaries in an aggregate amount exceeding $5,000,000;
 
(l) Intentionally Omitted.
 
(m) Intentionally Omitted.
 
(n)           With respect to Borrower and the Guarantor, any default or an
event of default (however defined) shall have occurred under (1) any loan or
lease from, or guaranty or other financing obligation to, Lender or any of its
affiliates, or (2) any other loan or lease from, or guaranty or other financing
obligation to, any person not affiliated with Lender which in the case of this
clause, either individually or in the aggregate are in excess of $5,000,000, and
in each such case the applicable grace period for curing such default or event
of default shall have expired;

 
Section 7.02. Remedies.  (a)  Following the occurrence of an Event of Default
described in subsection (i) of Section 7.01, all of the outstanding principal
amount of the Loans and other Obligations shall be due and payable and the
Commitment (if
 

 
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not theretofore terminated) shall terminate, whereupon the full unpaid amount of
such Loans and other Obligations which shall be so declared due and payable
shall be and become immediately due and payable, without presentment, notice of
dishonor, protest or further notice of any kind, all of which are hereby
expressly waived by Borrower, and, as the case may be, the Commitment shall
terminate.
 
(b)  Following the occurrence of any Event of Default and subject to subsection
(a) of this Section, Lender may exercise, at its option, concurrently,
successively or in any combination, all rights and remedies of a secured party
in, to and against the Collateral granted by the UCC or otherwise available at
law or in equity, including, without limitation:
 
(i) by notice to Borrower, declare all or any portion of the outstanding
principal amount of the Loans and other Obligations to be due and payable and/or
the Commitment (if not theretofore terminated) to be terminated, whereupon the
full unpaid amount of such Loans and other Obligations which shall be so
declared due and payable shall be and become immediately due and payable,
without presentment, notice of dishonor, protest or further notice of any kind,
all of which are hereby expressly waived by Borrower, and/or, as the case may
be, the Commitment shall terminate;
 
(ii) recover all fees and expenses (including, without limitation, reasonable
attorneys’ fees) in connection with the collection or enforcement of the
Obligations, which fees and expenses shall constitute additional Obligations of
Borrower hereunder;
 
(iii) take immediate and exclusive possession of the Collateral, which
constitutes personal property, or any part thereof, with or without any court
order or other process of law and enter the premises where such Collateral is
located and remove the same therefrom, or require Borrower to assemble and
package such Collateral and make it available to Lender for its possession at a
place designated by Lender;
 
(iv) sell, lease, sublease, hold or otherwise dispose of all or any part of the
Collateral and hold, maintain, preserve and prepare the Collateral for sale
until disposed of;
 
(v) act as, and Borrower hereby constitutes and appoints Lender, Borrower’s
true, lawful and irrevocable attorney-in-fact (which appointment is coupled with
an interest) to demand, receive and enforce payments and to give receipts,
releases, satisfaction for and to sue for moneys payable to Borrower under or
with respect to any of the Collateral, and actions taken pursuant to this
appointment may be taken either in the name of Borrower or in the name of Lender
with the same force and effect as if this appointment had not been made;
 
(vi) sue for specific performance of any Obligation or recover damages for
breach thereof; and
 
(vii) exercise any one or more of the remedies available under any Loan
Document.
 
Section 7.03. Use of Proceeds.  Any proceeds received by Lender in exercising
the rights and remedies specified in Section 7.02 shall be first applied to pay
the costs and expenses, including, without limitation, reasonable attorneys’
fees and expenses, incurred by Lender as a result of an Event of Default.  Any
proceeds remaining after payment of such costs and expenses shall be applied to
the satisfaction of the Obligations as determined by Lender in its sole
discretion and, unless Lender accepts the Collateral in full or partial
satisfaction of the Obligations, any excess proceeds after satisfaction of all
Obligations shall be paid to Borrower.
 
ARTICLE VIII:  MISCELLANEOUS PROVISIONS
 
Section 8.01. Waivers, Amendments.  No provision of this Agreement or any of the
other Loan Documents shall be deemed waived or amended except by a written
instrument setting forth the matter waived or amended and signed by the party
against which enforcement of such waiver or amendment is sought.  Waiver of any
matter shall not be deemed a waiver of the same or any other matter on any
future occasion.  No notice to or demand on Borrower in any case shall entitle
it to any notice or demand in similar or other circumstances.
 
Section 8.02. Notices.  All notices, certificates, requests, demands and other
communications provided for hereunder or under any Loan Document shall be in
writing and shall be (a) personally delivered or (b) sent by overnight courier
of national reputation, and shall be deemed to have been given on (i) the date
received if personally delivered and (ii) the next Business Day if sent by
overnight courier.   All communications shall be addressed to the party to whom
notice is being given at its Notice Address.
 
If notice to Borrower of any intended disposition of the Collateral or any other
intended action is required by law in a particular instance, such notice shall
be deemed commercially reasonable if given (in the manner specified in this
Section) at least 10 calendar days prior to the date of intended disposition or
other action.
 
Section 8.03. Severability.  Any provision of this Agreement or any other Loan
Document which is invalid, illegal or unenforceable in any jurisdiction shall,
as to such provision and such jurisdiction, be ineffective to the extent of such
invalidity,
 

 
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illegality or unenforceability without invalidating the remaining provisions of
this Agreement or such Loan Document or affecting the validity, legality or
enforceability of such provision in any other jurisdiction.
 
Section 8.04. Execution in Counterparts.  This Agreement may be executed in
several counterparts, each of which shall be an original and all of which shall
constitute one and the same document, and any of the parties hereto may execute
this Agreement by signing any such counterpart, provided that only the original
marked “ORIGINAL: 1 of 4” on the execution page thereof shall constitute chattel
paper under the UCC.
 
Section 8.05. Further Assurance and Corrective Instruments.  Borrower hereby
agrees that it will, from time to time, execute, acknowledge and deliver or
authorize, as applicable, or cause to be executed, acknowledged and delivered or
authorized, such further acts, instruments, conveyances, transfers and
assurances and take such other actions, as Lender reasonably deems necessary or
advisable for the implementation, correction, confirmation or perfection of this
Agreement or the other Loan Documents and any rights of Lender hereunder or
thereunder.  Borrower hereby designates and appoints Lender as its agent, and
grants to Lender a power of attorney (which is coupled with an interest), to
execute on behalf of Borrower such additional documents and to take such other
action.
 
Section 8.06. Time of the Essence.  Time is of the essence with respect to the
performance by Borrower of the Obligations.
 
Section 8.07. Entire Agreement.  This Agreement and the other Loan Documents
constitute the entire agreement between Lender and Borrower.  There are no other
understandings, agreements, representations or warranties, written or oral,
between Lender and Borrower with respect to the subject matter of this Agreement
and the other Loan Documents.  Upon the execution and delivery of this Agreement
and the other Loan Documents, any proposal or loan commitment with respect to
the transactions contemplated by this Agreement shall be deemed null and void
and of no further force and effect (except to the extent of the provisions
therein concerning any Closing Fee), and the terms and conditions of this
Agreement and the other Loan Documents shall control notwithstanding that such
terms and conditions may be inconsistent with or vary from those set forth in
such bid proposal or loan commitment.
 
Section 8.08. Governing Law.  THIS AGREEMENT AND THE NOTES SHALL EACH BE DEEMED
TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.
 
Section 8.09. Successors and Assigns; Assignments by Lender.  This Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors and assigns; provided, however, that Borrower may
not assign or transfer its rights or obligations hereunder without the prior
written consent of Lender.  Lender may assign, in whole or in part, its rights
under this Agreement, including, without limitation, in connection with any
assignment, participation and/or securitization.  Upon any assignment by Lender
of its entire right and interest under the Loan Documents, Lender shall
automatically be relieved, from and after the date of such assignment, of any
liability for the performance of any obligation of Lender therein.
 
Section 8.10. Assignments, Participations and Securitizations.  Borrower
acknowledges and agrees that a material inducement to Lender’s willingness to
complete the transactions contemplated by the Loan Documents is that Lender may,
at any time, complete an assignment, participation or securitization with
respect to any Loan Document or any or all of the servicing rights with respect
thereto.  In connection with any such assignment, participation or
securitization:
 
(a) Borrower agrees to cooperate in good faith with Lender, including, without
limitation, providing such documents, financial information and other
information (“Information”) reasonably requested by Lender or any entity
involved with respect to such assignment, participation or securitization;
provided, however that the Information shall be subject to a confidentiality
agreement reasonably satisfactory to Borrower;
 
(b) Borrower consents to Lender’s providing the Information, including any other
information that Lender may now have or hereafter acquire with respect to
Borrower or the Collateral to any entity involved with respect to such
assignment, participation or securitization;  provided, however that the
Information shall be subject to a confidentiality agreement reasonably
satisfactory to Borrower;
 
(c) Notwithstanding anything to the contrary in any Loan Document, in the event
that Lender assigns a Note, (i) the related Loan shall be deemed a separate loan
that includes and incorporates each term and condition in this Agreement and the
other Loan Documents related thereto, (ii) the term “Obligations” as used herein
and in the Loan Documents with respect to any assignee shall mean only the
Indebtedness and obligations evidenced by or related to the Notes held by the
assignee and (iii) the term Collateral as used herein and in the Loan Documents
with respect to such assignee shall mean only the Collateral described on the
Collateral Schedules that specifically refer to the Notes held by such assignee;
and
 
(d) If at least one, but not all, of the Loans is subject to an assignment,
participation or securitization, Borrower, at Lender’s request, shall promptly
execute (i) a separate loan agreement with respect to the Loans subject to
 

 
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assignment, participation or securitization which shall be in substantially the
same form and substance as this Agreement but shall only apply with respect to
Collateral corresponding to such Loans subject to an assignment, participation
or securitization and (ii) an amendment to the Loan Documents to delete the
Collateral corresponding to the Loans that are subject to assignment,
participation or securitization.
 
Section 8.11. Waiver of Jury Trial.  LENDER AND BORROWER HEREBY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF, DIRECTLY OR INDIRECTLY, THIS AGREEMENT, ANY OF THE LOAN
DOCUMENTS, ANY DEALINGS BETWEEN LENDER AND BORROWER RELATING TO THE SUBJECT
MATTER OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY LOAN DOCUMENT,
AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN LENDER AND
BORROWER.  BORROWER ACKNOWLEDGES AND AGREES THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR LENDER ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS.  THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY
AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT (INCLUDING, WITHOUT LIMITATION,
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND
STATUTORY CLAIMS).  THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT,
ANY LOAN DOCUMENT, OR TO ANY OTHER DOCUMENT OR AGREEMENT RELATING TO THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY RELATED TRANSACTION.  IN THE
EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL
BY THE COURT.
 
Section 8.12. Forum Selection and Consent to Jurisdiction.  BORROWER AND LENDER
HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND ANY COURT IN THE STATE OF NEW
YORK LOCATED IN THE CITY AND COUNTY OF NEW YORK, AND ANY APPELLATE COURT FROM
ANY THEREOF, IN ANY ACTION, SUIT OR PROCEEDING BROUGHT AGAINST IT AND TO OR IN
CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREUNDER OR FOR
RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT; PROVIDED, HOWEVER, THAT ANY SUIT
SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT
LENDER’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL MAY BE
FOUND.  BORROWER HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF
SUCH COURTS FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND
IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION
WITH SUCH LITIGATION.  BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR
WITHOUT THE STATE OF NEW YORK.  BORROWER HEREBY EXPRESSLY AND IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE
OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN
ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.  TO THE EXTENT THAT BORROWER HAS OR HEREAFTER
MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT FROM ANY LEGAL PROCESS
(WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN
AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, BORROWER
HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS.
 
Section 8.13. Waiver of Certain Claims.  TO THE EXTENT PERMITTED BY APPLICABLE
LAW, BORROWER AND THE GUARANTOR SHALL NOT ASSERT, AND HEREBY WAIVES, ANY CLAIM
AGAINST LENDER ON ANY THEORY OF LIABILITY FOR SPECIAL, INDIRECT, CONSEQUENTIAL
OR PUNITIVE DAMAGES (AS OPPOSED TO DIRECT OR ACTUAL DAMAGES) ARISING OUT OF, IN
CONNECTION WITH, OR AS A RESULT OF, ANY LOAN DOCUMENT OR ANY AGREEMENT OR
INSTRUMENT CONTEMPLATED THEREBY, ANY LOAN OR THE USE OF THE PROCEEDS THEREOF.
 

 
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TO THE EXTENT PERMITTED BY APPLICABLE LAW, LENDER SHALL NOT ASSERT, AND HEREBY
WAIVES, ANY CLAIM AGAINST BORROWER AND THE GUARANTORS ON ANY THEORY OF LIABILITY
FOR SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMANGES (AS OPPOSED TO DIRECT
OR ACTUAL DAMAGES) ARISING OUT OF, IN CONNECTION WITH, OR AS A RESULT OF, ANY
LOAN DOCUMENT OR ANY AGREEMENT OR INSTRUMENT CONTEMPLATED THEREBY, ANY LOAN OR
THE USE OF THE PROCEEDS THEREOF.
 
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