Document:

Capital Increase Agreement

 Exhibit 10.15(c) 

Execution Version 
  

 
  

CAPITAL INCREASE AGREEMENT 
 between 
 WISCO WUHAN JIANGBEI IRON AND STEEL LTD. 

and 
 WRCA HONG
KONG HOLDING COMPANY LIMITED 
 for 
 WISCO WIRECO WIRE ROPE CO., LTD. 
  

 
 Dated as of
May 4, 2011 
  
  

 
  

 

 TABLE OF CONTENTS 

 

							
	 1.
	  	DEFINITIONS	  	 	1	  
	 2.
	  	OTHER DEFINED TERMS	  	 	3	  
	 3.
	  	CAPITAL CONTRIBUTION	  	 	4	  
	 4.
	  	REPRESENTATIONS AND WARRANTIES	  	 	6	  
	 5.
	  	TERMINATION	  	 	7	  
	 6.
	  	GOVERNING LAW	  	 	8	  
	 7.
	  	MISCELLANEOUS	  	 	8	  

 APPENDIX
1         LIST OF LOAN AGREEMENTS 

 Execution Copy 
 THIS CAPITAL INCREASE AGREEMENT (this “Agreement”) is entered into as of May 4, 2011 by and between: 
 WISCO WUHAN JIANGBEI IRON AND STEEL LTD., a limited liability company duly incorporated and existing under the laws of the People’s Republic of China (“China” or the
“PRC”), with its legal address at Te No. 1 Binjiang Avenue, Yangluo Economic Development Zone, Wuhan, Hubei, the PRC (“Party A”); and 
 WRCA HONG KONG HOLDING COMPANY LIMITED, a limited liability company duly incorporated and existing under the laws of Hong Kong, with its registered address at Suite 910B, 9/F, Kinwick Centre, 32
Hollywood Road, Central, Hong Kong (“Party B”). 
 Each of Party A and Party B is referred to hereinafter as a
“Party” and collectively as the “Parties.” 
 WHEREAS: 

 

	(A)	On June 30, 2006, the Parties established WISCO WireCo Wire Rope Co., Ltd., a Chinese-foreign equity joint venture company in Wuhan, Hubei Province, the PRC (the
“Company”). 

  

	(B)	In light of the funding needs of the Company for its future development, the Parties wish to increase the Company’ s registered capital (the “Registered
Capital”) from US$50,000,000 to US$65,000,000 with the additional capital in the amount of US$15,000,000 to be contributed by Party B (the “Capital Increase”). On the basis of the appraisal report in respect of the
enterprise value of the Company prepared and issued by Deloitte Touche Tohmatsu, a duly authorized appraisal firm of the PRC, on January 31, 2011 and through friendly consultation, the Parties agree that the Company’s current equity value
is US$37,500,000. Accordingly, upon the completion of the Capital Increase by Party B, Party A’s Equity Interest in the Company will be reduced to 35% and Party B’s Equity Interest in the Company will be increased to 65%.

 NOW, THEREFORE, The Parties hereby agree as follows: 

 

	1.	Definitions 

  

	1.1.	In this Agreement, unless the context otherwise specifies, the following terms shall have the meanings set forth below: 

 

	 	(a)	“Affiliate” of a Person (the “Relevant Person”) means any other Person directly or indirectly Controlling, Controlled by or under
common Control with the Relevant Person. 

  

	 	(b)	“Amended Business License” means the amended business license of the Company issued by the SAIC after the Approval Date reflecting the Capital
Increase. 

	 	(c)	“Approval Date” means the date of issuance of a document by the Examination and Approval Authority approving the Capital Increase, this Agreement, the
JVC Amendment Agreement and the Articles Amendment Agreement, and without making any substantive amendments thereto. 

  

	 	(d)	“Articles Amendment Agreement” means the Amendment to the Articles of Association, dated the date hereof, by and between the Parties.

  

	 	(e)	“Articles of Association” means the Articles of Association of the Company as agreed by the Parties on June 12, 2006, as amended by the Articles
Amendment Agreement. 

  

	 	(f)	“Business Scope” means the business scope of the Company, being “to primarily engage in the manufacturing, marketing and sale of wire ropes; and
to provide after-sales service to customers of the Company”. 

  

	 	(g)	“Company Approvals” means all rights, licenses, permits, approvals, waivers, consents and authorizations that are necessary for the Company to engage
in the activities specified in the Business Scope and the other business activities contemplated in this Agreement. 

  

	 	(h)	“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise and includes: 

  

	 	(i)	ownership, directly or indirectly, of 50% or more of the shares in issue or other equity interests of such Person; 

 

	 	(ii)	possession, directly or indirectly, of 50% or more of the voting power of such Person; or 

 

	 	(iii)	the power directly or indirectly to appoint a majority of the members of the board of directors or similar governing body of such Person, 

and the terms “Controlling” and “Controlled” shall have meanings correlative to the foregoing.

  

	 	(i)	“Equity Interest” means the equity interest held by each Party in the Registered Capital. 

 

	 	(j)	“Equity Joint Venture Contract” means the Equity Joint Venture Contract, dated June 12, 2006, by and between the Parties, as amended by the JVC
Amendment Agreement. 

  

	 	(k)	“Examination and Approval Authority” means the Ministry of Commerce of the PRC or its relevant local counterpart that is legally authorized to approve
the Capital Increase, this Agreement, the JVC Amendment Agreement and the Articles Amendment Agreement pursuant to Law. 

  
 2 

	 	(l)	“JVC Amendment Agreement” means the Amendment to the Equity Joint Venture Contract, dated the date hereof, by and between the Parties.

  

	 	(m)	“Law” means all applicable laws, regulations, rules and orders of any governmental authority, securities exchange or other self-regulatory body,
including any ordinance, statute or other legislative measure and any regulation, rule, treaty, order, decree or judgment. 

  

	 	(n)	“Loan Agreements” mean, collectively, all loan agreements entered into by the Company which remain in full force and effect as of the date hereof, a
list of which is attached as Appendix 1 hereto. 

  

	 	(o)	“Person” means an individual, corporation, joint venture, enterprise, partnership, trust, unincorporated association, limited liability company,
government or any department thereof, or any other entity. 

  

	 	(p)	“Relevant Contracts” means, collectively, the Land Use Right Transfer Contract, the Technology License and Support Contract, the Trademark License
Contract, the Utilities Supply Contract, the Raw Materials Supply Contract, the Sales Agency Contract and the Exclusive Distribution Agency Contract, each in a form agreed by the Parties. 

 

	 	(q)	“SAIC” means the State Administration of Industry and Commerce of the PRC or its local branches as appropriate to the context.

  

	 	(r)	“US Dollars” or “US$” means United States Dollars, the lawful currency of the United States of America. 

 

	2.	Other Defined Terms 

  

	2.1.	The following terms shall have the meanings defined in the Section indicated: 

 

			
	“Additional Capital Contribution”	  	Section 3.1(a)
	“Additional Contribution Notice”	  	Section 3.3
	“Agreement”	  	Preamble
	“Capital Increase”	  	Recitals
	“China” or the “PRC”	  	Preamble
	“Company”	  	Recitals
	“Initial WireCo Contribution”	  	Section 3.1(b)
	“Jiangbei Additional Contribution”	  	Section 3.3
	“Party” or “Parties”	  	Preamble
	“Party A”	  	Preamble
	“Party B”	  	Preamble
	“Registered Capital”	  	Recitals
	“Remaining WireCo Contribution”	  	Section 3.1(b)

  

	2.2.	The following principles for interpretation shall apply: 

  

	 	(a)	Any reference to a “company” in this Agreement shall be to a company or legal person entity incorporated in any relevant jurisdiction.

  
 3 

	 	(b)	Any reference to a “director” in this Agreement shall include reference to a proxy or proxy director (if relevant). 

 

	 	(c)	Headings set forth in this Agreement shall not affect the interpretation or construction of this Agreement. 

 

	 	(d)	“Include,” “including,” “are inclusive of” and similar expressions are not expressions of limitation and shall be
construed as if followed by the words “without limitation.” 

  

	 	(e)	References to any government ministry, agency, department or authority shall be construed as references to the duly appointed successor ministry, agency, department or
authority of such ministry, agency, department or authority where the context permits. 

  

	 	(f)	Each attachment and appendix hereunder shall constitute an integral part of this Agreement. 

 

	 	(g)	Any reference to the Laws of the PRC shall mean the Laws of the Mainland China. 

 

	3.	Capital Contribution 

  

	3.1.	Party B’s Contribution 

  

	 	(a)	The contribution to the Registered Capital subscribed by Party B shall be increased from US$25,500,000 to US$40,500,000, increasing its Equity Interest from 51% to 65%.
Party B has already contributed US$25,500,000 in cash to the Registered Capital. Subject to Sections 3.1(b) and 3.2, Party B shall make an additional contribution to the Registered Capital, being US$15,000,000 (the “Additional Capital
Contribution”), in cash in US Dollars. 

  

	 	(b)	Subject to Section 3.2, 20% of the Additional Capital Contribution (the “Initial WireCo Contribution”) shall be paid within thirty (30) days
after the Approval Date, and the remaining balance (the “Remaining WireCo Contribution”) shall be paid within ten (10) days after the condition set forth in Section 3.2(b) has been satisfied or waived in writing by Party
B. 

  

	3.2.	Conditions to Party B’s Contributions 

  

	 	(a)	Party B shall not be obligated to make the Initial WireCo Contribution to the Registered Capital until each of the following conditions has been satisfied or waived in
writing by Party B: 

  

	 	(i)	following execution by the Parties, this Agreement, the JVC Amendment Agreement and the Articles Amendment Agreement and other relevant documents have been approved by
the Examination and Approval Authority without substantive amendments thereto; 

  

	 	(ii)	the Company has received all the Company Approvals; 

  
 4 

	 	(iii)	Party A or its Affiliate has executed each of the Relevant Contracts to which it is a party; 

 

	 	(iv)	the Company has secured working capital and equipment financing commitments on terms satisfactory to the Parties; 

 

	 	(v)	there has been no breach of any provision of this Agreement, the JVC Amendment Agreement and the Articles Amendment Agreement by Party A; and 

 

	 	(vi)	Each Loan Agreement has been amended, supplemented or restated to the satisfactory of both Parties. 

 

	 	(b)	Party B shall not be obligated to make the Remaining WireCo Contribution to the Registered Capital until the following condition has been satisfied or waived in writing
by Party B: 

  

	 	(i)	the Amended Business License has been issued without altering in any material respects the Business Scope. 

 

	 	(c)	The Parties shall make all reasonable efforts to ensure the fulfillment of each of the conditions set forth in Section 3.2 as soon as possible after the execution
of this Agreement. Such reasonable efforts shall include taking all measures to be taken by the relevant Party as soon as possible, which are necessary or required for obtaining the Company Approvals (including delivery of notices, registration and
filing). 

  

	3.3.	Party A’s Co-Contribution Right 

 Within twelve (12) months after the date hereof, Party A shall have the right, but not the obligation, to contribute an amount equal to US$14,411,764 to the Registered Capital (the “Jiangbei
Additional Contribution”) on the same basis as Party B such that the total Registered Capital of the Company shall be increased to US$79,411,764 and the Equity Interest in the Company to be held by Party A and Party B, respectively, upon
completion of the Jiangbei Additional Contribution shall return to 49% and 51%. Party A may exercise such right to contribute the Jiangbei Additional Contribution by giving a written notice (the “Additional Contribution Notice”) to
the Company and Party B within such twelve (12) months period. Upon receipt of the Additional Contribution Notice, each of Party A and Party B shall, and shall cause the Company to, amend the Equity Joint Venture Contract and the Articles of
Association to reflect (a) the increase in the Registered Capital, (b) the changes to the Equity Interest and the percentage ownership of Party A and Party B upon completion of the Jiangbei Additional Contribution and (c) the timing
for the Jiangbei Additional Contribution. Party A agrees that it shall pay the Jiangbei Additional Contribution in cash in Renminbi in one lump sum within thirty (30) days after receipt of the approval by the Examination and Approval Authority
of such increase in the Registered Capital and the changes to the percentage ownership of Party A and Party B. No other changes to the Equity Joint Venture Contract or the Articles of Association shall be made unless otherwise agreed by and between
the Parties. 

  
 5 

	4.	Representations and Warranties 

  

	4.1.	Each Party represents, warrants and covenants to the other Party, with respect to itself, as follows: 

 

	 	(a)	Such Party is a company duly organized, validly existing and in good legal standing as an independent legal person under the Laws of the jurisdiction of its
incorporation, and has the corporate power and lawful authority to conduct its business in accordance with its business license, articles of association, company ordinance or other similar corporate constitutional documents;

  

	 	(b)	Such Party has the full right, power and authority to enter into this Agreement and to perform fully its obligations hereunder; 

 

	 	(c)	This Agreement has been duly authorized, executed and delivered by such Party and, assuming the due authorization, execution and delivery by the other Party and
approval by the Examination and Approval Authority, constitutes the valid and binding obligation of such Party enforceable against it in accordance with its terms and pursuant to legal procedures; 

 

	 	(d)	Neither the execution of this Agreement nor the performance of such Party’s obligations hereunder will conflict with, or result in a breach of or constitute a
default under any provisions of the business license, resolutions of the shareholders’ meetings or the board of directors, certificate of incorporation, articles of association, company ordinance or similar constitutional documents of such
Party, as the case may be, or any law, regulation, rule, authorization or approval of any government agency or authority or any contract or agreement to which such Party is a party or by which it is bound; 

 

	 	(e)	As of the date of this Agreement, there is no lawsuit, arbitration or legal, administrative or other proceeding or governmental investigation pending or, to the best
knowledge of such Party, threatened against such Party with respect to the subject matter of this Agreement or that would negatively affect in any way such Party’s ability to enter into or perform this Agreement, and if any such lawsuit,
arbitration or legal, administrative or other proceeding or governmental investigation should come to the knowledge of such Party after the date of this Agreement it shall promptly notify the other Party and provide the other Party with detailed
information with respect to such matter; 

  

	 	(f)	All documents, statements and information of, or derived from, any governmental body in the possession of such Party relating to the transactions contemplated in this
Agreement have been disclosed to the other Party or will be promptly disclosed to the other Party to the extent that they first come to the attention to such Party after the date of this Agreement, and no document previously provided by such Party
to the other Party contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements contained therein not misleading; and 

 

	 	(g)	Such Party has procured all requisite permits and approvals from the relevant governmental departments to cooperate with the Company and the other Party in accordance
with the provisions of this Agreement and that such permits and approvals shall be valid and in full force and effect. 

  
 6 

	5.	Termination 

  

	5.1.	Effective Date; Termination 

This Agreement shall become effective upon execution hereof by the Parties and shall continue in force until terminated in accordance with
Section 5.2. 
  

	5.2.	Termination on or before the Initial WireCo Contribution 

 This Agreement may be terminated on or prior to the injection of the Initial WireCo Contribution into the Registered Capital as follows: 

 

	 	(a)	at the election of Party B, if any one or more of the conditions set forth in Section 3.2(a) has not been fulfilled on or prior to
                    ; or 

  

	 	(b)	by mutual written consent of both Parties. 

  

	5.3.	Termination after the Initial WireCo Contribution 

 This Agreement may be terminated after the injection of the Initial WireCo Contribution into the Registered Capital but prior to the injection of the Remaining WireCo Contribution as follows: 

 

	 	(a)	at the election of Party B, if the condition set forth in Section 3.2(b) has not been satisfied within forty (40) days after the Approval Date; or

  

	 	(b)	by mutual written consent of both Parties. 

  

	5.4.	Effect of Termination 

  

	 	(a)	If this Agreement is terminated pursuant to Section 5.2, this Agreement shall become void and of no further force and effect, and no Party shall have any liability
to another Party in respect of a termination of this Agreement other than any liability resulting from a Party’s breach of this Agreement. 

  

	 	(b)	If this Agreement is terminated pursuant to Section 5.3, then Party B shall have no further obligation to make the Remaining WireCo Contribution, and the Company
shall, and the Parties shall cause the Company to, repay to Party B the Initial WireCo Contribution within ten (10) days after the termination of this Agreement by wire transfer of immediately available funds to the account designated by Party
B in writing. After Party B has been repaid the Initial WireCo Contribution in accordance with this Section 5.4(b), the Parties shall apply to the relevant governmental authorities to withdraw the application for any approvals or registrations
in connection with the Capital Increase and take any and all other actions required to unwind the transactions contemplated hereby. 

  
 7 

	5.5.	Rights of Each Party 

 Any right
of termination convened upon each Party under this Agreement shall be in addition to and without prejudice to all other rights and remedies available to such Party. 
  

	5.6.	Survival 

 If this Agreement is
terminated in accordance with Section 5.2 or 5.3, it shall become void and of no further force and effect, except for the provisions of Sections 6, 7 and this Section 5.6; provided that such termination shall, unless otherwise
agreed upon by the Parties, be without prejudice to the rights of any Party in respect of a breach of this Agreement prior to such termination. 
  

	6.	Governing Law 

 The
formation, validity, interpretation, performance, modification and termination of this Agreement and settlement of disputes under this Agreement shall all be governed by the officially published and publicly available Laws of the PRC. When the
officially published and publicly available Laws of the PRC do not cover a certain matter, international legal principles and practices shall apply. 
  

	7.	Miscellaneous 

  

	7.1.	Amendment 

 Amendments to this
Agreement may only be made by a written agreement signed by each Party in both Chinese and English texts, each of which shall have equal validity and legal effect. 
  

	7.2.	Costs and Expenses 

 The costs
and expenses incurred by each Party in connection with the preparation and negotiation of this Agreement and its performance under this Agreement or the consummation of the transactions contemplated hereby, including all fees and expenses of the
Parties’ agents, representatives, legal advisors and accountants, shall be borne by such Party. 
  

	7.3.	Incorporation by Reference 

Sections 22 (Dispute Resolution), 23.3 (Language), 23.4 (Notices), 23.5 (Address and Fax Number for Notices), 23.6 (Entire Agreement),
23.7 (Waiver), 23.8 (Severability), 23.9 (No-assignment) and 23.10 (Counterparts) of the Equity Joint Venture Contract are hereby incorporated into this Agreement and shall apply mutatis mutandis to this Agreement. 

[The remainder of this page is intentionally left blank.] 

  
 8 

 The Parties hereto have caused this Agreement to be executed as of the date first above written by their
duly authorized representatives. 
  

					
	Party A:	 		 	Party B:
			
	WISCO Wuhan Jiangbei Iron and Steel Ltd.	 		 	WRCA Hong Kong Holding Company Limited
			
	Signature: /s/ Zhao
Changxu                                        
	 		 	Signature: /s/ Ira
Glazer                                        
        
	Name: Zhao Changxu	 		 	Name: Ira Glazer

 Appendix 1 
 List of Loan Agreements 
  

															
	Loan Schedule	  	 	  	 	  	Updated March 31, 2011	  	 	  	 
	 Bank
	  	 Loan Usage
	  	 Amount
	  	 Term (Year)
	  	 Start Date (Y-M-D)
	  	 Expiry Date (Y-M-D)
	  	 Pledged
	  	 Category

	 SPDB
	  	Project	  	40,000,000	  	6	  	2007/6/7	  	2013/6/5	  	Yes	  	Term loan
	 SPDB
	  	Project	  	40,000,000	  	6	  	2007/12/10	  	2013/12/9	  	Yes	  	Term loan
	 SPDB
	  	Project	  	70,000,000	  	5	  	2007/12/29	  	2012/12/28	  	Yes	  	Term loan
	 SPDB
	  	Equipment	  	20,000,000	  	6	  	2008/3/25	  	2013/6/5	  	Yes	  	Term loan
	 SPDB
	  	Equipment	  	30,000,000	  	5	  	2008/3/28	  	2013/3/27	  	Yes	  	Term loan
	 SPDB
	  	Project	  	30,000,000	  	4	  	2008/5/16	  	2012/5/15	  	Yes	  	Term loan
	 SPDB
	  	Project	  	25,000,000	  	5	  	2008/6/24	  	2013/6/4	  	Yes	  	Term loan
	 SPDB
	  	Project	  	20,000,000	  	5	  	2008/6/30	  	2013/6/4	  	Yes	  	Term loan
	 SPDB
	  	Project	  	30,000,000	  	5	  	2008/7/17	  	2013/6/4	  	Yes	  	Term loan
	 SPDB
	  	Project	  	15,000,000	  	5	  	2008/8/4	  	2013/6/4	  	Yes	  	Term loan
	 SPDB
	  	Project	  	20,000,000	  	5	  	2008/8/20	  	2013/6/4	  	Yes	  	Term loan
	 SPDB
	  	Equipment	  	22,000,000	  	5	  	2008/9/12	  	2013/6/4	  	Yes	  	Term loan
	 SPDB
	  	Project	  	9,000,000	  	5	  	2008/10/8	  	2013/6/4	  	Yes	  	Term loan
	 SPDB
	  	Project	  	16,000,000	  	5	  	2008/10/17	  	2013/6/4	  	Yes	  	Term loan
	 SPDB
	  	Project	  	6,000,000	  	5	  	2008/12/1	  	2013/6/4	  	Yes	  	Term loan
	 SPDB
	  	Project	  	12,000,000	  	5	  	2008/12/9	  	2013/6/4	  	Yes	  	Term loan
	 SPDB
	  	Project	  	30,000,000	  	5	  	2009/1/15	  	2013/6/4	  	Yes	  	Term loan
	 SPDB
	  	Project	  	10,000,000	  	5	  	2009/2/27	  	2013/6/4	  	Yes	  	Term loan
	 SPDB
	  	Project	  	40,000,000	  	4	  	2009/3/10	  	2013/6/4	  	Yes	  	Term loan
	 SPDB
	  	Project	  	10,000,000	  	4	  	2009/3/30	  	2013/6/4	  	Yes	  	Term loan
	 SPDB
	  	Project	  	5,000,000	  	4	  	2009/6/29	  	2013/6/4	  	Yes	  	Term loan
	 SPDB
	  	Project	  	5,000,000	  	4	  	2009/8/21	  	2013/6/4	  	Yes	  	Term loan
	 SPDB
	  	Project	  	5,400,000	  	4	  	2009/8/4	  	2013/6/4	  	Yes	  	Term loan
	 SPDB
	  	Project	  	2,000,000	  	4	  	2009/9/17	  	2013/6/4	  	Yes	  	Term loan
	 CITIC
	  	Equipment	  	20,000,000	  	3	  	2008/11/11	  	2011/11/10	  		  	Revolver (term loan due within 1 year)
	 CITIC
	  	Working Capital	  	28,000,000	  	2	  	2011/2/22	  	2013/2/21	  		  	Term loan

													
	 CITIC
	 	Working Capital	 	25,000,000	 	3	 	2011/2/23	 	2014/2/22	 	Term loan
	 CITIC
	 	Working Capital	 	27,000,000	 	3	 	2011/2/24	 	2014/2/23	 	Term loan
	 BOCom
	 	Project	 	20,000,000	 	2	 	2009/6/12	 	2011/5/24	 	Revolver (term loan due within 1 year)
	 BOCom
	 	Project	 	30,000,000	 	2	 	2010/12/14	 	2012/12/14	 	Term loan
	 BOCom
	 	Project	 	10,000,000	 	2	 	2010/1/17	 	2013/1/17	 	Term loan
	 BOCom
	 	Working Capital	 	40,000,000	 	2	 	2011/3/10	 	2013/3/9	 	Term loan
	 Sub-Total
	 		 	712,400,000	 		 		 		 	
	 SPDB
	 	Working Capital	 	5,000,000	 	1	 	2010/12/7	 	2011/12/6	 	Revolver
	 SPDB
	 	Working Capital	 	10,000,000	 	1	 	2010/6/13	 	2011/6/12	 	Revolver
	 SPDB
	 	Working Capital	 	10,000,000	 	1	 	2010/7/27	 	2011/7/26	 	Revolver
	 SPDB
	 	Working Capital	 	5,000,000	 	1	 	2010/8/9	 	2011/8/8	 	Revolver
	 SPDB
	 	Working Capital	 	20,000,000	 	1	 	2010/9/20	 	2011/9/19	 	Revolver
	 SPDB
	 	Working Capital	 	5,000,000	 	1	 	2010/11/11	 	2011/11/10	 	Revolver
	 BOCom
	 	Working Capital	 	10,000,000	 	1	 	2010/6/28	 	2011/5/24	 	Revolver
	 BOCom
	 	Working Capital	 	3,200,000	 	1	 	2010/7/20	 	2011/5/24	 	Revolver
	 BOCom
	 	Working Capital	 	20,000,000	 	1	 	2010/9/8	 	2011/9/8	 	Revolver
	 BOCom
	 	Working Capital	 	19,900,000	 	1	 	2010/9/25	 	2011/9/25	 	Revolver
	 BOCom
	 	Working Capital	 	9,800,000	 	1	 	2010/11/10	 	2011/11/10	 	Revolver
	 BOCom
	 	Working Capital	 	6,000,000	 	1	 	2010/11/24	 	2011/11/24	 	Revolver
	 BOCom
	 	Working Capital	 	15,000,000	 	1	 	2010/7/22	 	2011/5/24	 	Revolver
	 BOCom
	 	Working Capital	 	8,000,000	 	1	 	2011/3/29	 	2012/3/28	 	Revolver

															
	 CIB
	  	Working Capital	  	20,000,000	  	1	  	2010/12/29	  	2011/12/28	  		  	Revolver
	 CIB
	  	Working Capital	  	10,000,000	  	1	  	2011/1/11	  	2012/1/11	  		  	Revolver
	 CIB
	  	Working Capital	  	30,000,000	  	1	  	2011/2/10	  	2012/2/10	  		  	Revolver
	 BOC
	  	Working Capital	  	25,000,000	  	1	  	2010/9/21	  	2011/9/21	  		  	Revolver
	 BOC
	  	Working Capital	  	15,000,000	  	1	  	2010/10/25	  	2011/10/25	  		  	Revolver
	 BOC
	  	Working Capital	  	20,000,000	  	1	  	2010/11/3	  	2011/11/3	  		  	Revolver
	 BOC
	  	Working Capital	  	40,000,000	  	1	  	2011/2/1	  	2012/2/1	  		  	Revolver
	 Sub-Total
	  		  	306,900,000	  		  		  		  		  	
	 Total
	  		  	1,019,300,000	  		  		  		  		  	

  

																													
	 Credit Line Summary
	 	  	 	 	 	 	 	  	 	 	 	 	 	  	 	 	  	 	 
	 Bank
	  	Credit Line	 	  	Loan
Withdrawn	 	 	 	 	  	LOC Issued	 	 	Net Available	 	  	Loan Expiration
Date	 	  	Credit Line
Expires	 
	 BOCom
	  	 	200,000,000	  	  	 	(191,900,000	) 	 				  	 	(7,148,439	) 	 	 	951,561	  	  	 	May 2011-Mar 2013	  	  	 	Sep 1, 2012	  
	 BOC
	  	 	100,000,000	  	  	 	(100,000,000	) 	 				  				 	 	—  	  	  	 	Sep 2011-Feb 2012	  	  	 
 
 	Feb 23, 2011
Under
renewal	  
  
  
	 CIB
	  	 	60,000,000	  	  	 	(60,000,000	) 	 				  				 	 	—  	  	  	 	Dec 2011-Feb 2012	  	  	 	Dec 22, 2011	  
	 CITIC
	  	 	100,000,000	  	  	 	(100,000,000	) 	 				  				 	 	—  	  	  	 	Nov 2011-Feb 2014	  	  	 
 
 
 
 
 	RMB20M-
Nov 2012,
RMB28M-
Feb 2013,
RMB52M-
Feb 2014	 
  
 
  
 
  
	 SDPB
	  	 	575,000,000	  	  	 	(567,400,000	) 	 				  	 	(383,317	) 	 	 	7,216,683	  	  	 	Jun 2011-Dec 2013	  	  	 
 	Under
restructuring	  
  
		  	 	 	 	  	 	 	 	 				  	 	 	 	 	 	 	 	  				  			
	 TOTAL
	  	 	1,035,000,000	  	  	 	(1,019,300,000	) 	 				  	 	(7,531,756	) 	 	 	8,168,244Third Amendment to Amended and Restated Credit Agreement

 Exhibit 10.4 

 
  
 THIRD AMENDMENT 
 TO AMENDED AND RESTATED CREDIT AGREEMENT 

among 
 GASTAR
EXPLORATION USA, INC. 
 THE GUARANTORS SIGNATORY HERETO 
 THE LENDERS SIGNATORY HERETO 
 and 

AMEGY BANK NATIONAL ASSOCIATION, 
 as Administrative Agent 
 Effective 

June 14, 2011 
  

 

 Table of Contents 

 

							
	Article I	  	 DEFINITIONS AND INTERPRETATION
	  	 	1	  
			
	1.1	  	 Terms Defined Above
	  	 	1	  
	1.2	  	 Terms Defined in Credit Agreement
	  	 	2	  
	1.3	  	 References
	  	 	2	  
	1.4	  	 Articles and Sections
	  	 	2	  
	1.5	  	 Number and Gender
	  	 	2	  
			
	Article II	  	 AMENDMENTS
	  	 	2	  
			
	2.1	  	 Amendment to Section 1.2
	  	 	2	  
	2.2	  	 Amendment to Section 6.2
	  	 	3	  
	2.3	  	 Amendment to Section 6.8
	  	 	3	  
	2.4	  	 Amendment to Section 6 9
	  	 	3	  
	2.5	  	 Amendment to Section 6.10
	  	 	4	  
	2.6	  	 Amendment to Section 7.1
	  	 	4	  
			
	Article III	  	 REPRESENTATIONS AND WARRANTIES
	  	 	5	  
			
	Article IV	  	 RATIFICATION AND ACKNOWLEDGMENT
	  	 	5	  
			
	Article V	  	 MISCELLANEOUS
	  	 	5	  
			
	5.1	  	 Successors and Assigns
	  	 	5	  
	5.2	  	 Rights of Third Parties
	  	 	5	  
	5.3	  	 Counterparts
	  	 	5	  
	5.4	  	 Integration
	  	 	5	  
	5.5	  	 Severability
	  	 	5	  
	5.6	  	 Governing Law
	  	 	6	  

  
 - i -

 THIRD AMENDMENT 

TO AMENDED AND RESTATED CREDIT AGREEMENT 
 This THIRD AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”) executed effective as of June 14, 2010 (the “Effective Date”) is by and among GASTAR
EXPLORATION USA, INC., a Delaware corporation (the “Borrower”), GASTAR EXPLORATION, LTD., an Alberta, Canada corporation (the “Parent”), GASTAR EXPLORATION NEW SOUTH WALES, INC., a Michigan corporation
(“Gastar New South Wales”), GASTAR EXPLORATION VICTORIA, INC., a Michigan corporation (“Gastar Victoria”), GASTAR EXPLORATION TEXAS, INC., a Michigan corporation (“Gastar Texas Inc”), GASTAR
EXPLORATION TEXAS, LP, a Delaware limited partnership (“Gastar Texas LP”), and GASTAR EXPLORATION TEXAS LLC, a Delaware limited liability company (“Gastar Texas LLC”, and the Parent, Gastar New South Wales, Gastar
Victoria, Gastar Texas Inc., Gastar Texas LP and Gastar Texas LLC, collectively, the “Initial Guarantors”), the lenders party to that certain Amended and Restated Credit Agreement dated effective October 28, 2009, as amended to
the Effective Date, by and among the Borrower, the Initial Guarantors, the lenders party thereto or bound thereby from time to time (the “Lenders”), and Amegy Bank National Association, a national banking association, as
administrative agent for the Lenders, letter of credit issuer and collateral agent for the Lenders and certain other parties (as so amended, the “Credit Agreement”), and AMEGY BANK NATIONAL ASSOCIATION, a national banking
association, as administrative agent for the Lenders (in such capacity, the “Agent”). 
 W I
T N E S S E T H: 
 WHEREAS, the Borrower, the Initial Guarantors, the
Lenders and the Agent are parties to the Credit Agreement; and 
 WHEREAS, the Borrower, the Initial Guarantors, the Lenders and
the Agent desire to amend the Credit Agreement in the particular hereinafter provided; 
 NOW, THEREFORE, in consideration of
the premises and the mutual covenants and agreements contained in the Credit Agreement and herein, the parties hereto agree as follows: 
 ARTICLE I  
 DEFINITIONS AND INTERPRETATION 

1.1 Terms Defined Above. As used in this Second Amendment to Amended and Restated Credit Agreement, each of the terms
“Agent,” “Amendment,” “Borrower,” “Credit Agreement,” “Effective Date,” “Gastar New South Wales,” “Gastar Texas Inc,”
“Gastar Texas LLC,” “Gastar Texas LP,” “Gastar Victoria,” “Initial Guarantors,” Lenders” and “Parent,” shall have the meaning assigned to such term
hereinabove. 

 1.2 Terms Defined in Credit Agreement. Each term defined in the Credit Agreement and
used herein without definition shall have the meaning assigned to such term in the Credit Agreement, unless herein expressly provided to the contrary. 
 1.3 References. References in this Amendment to Exhibit, Article or Section numbers shall be to Exhibits, Articles or Sections of this Amendment, unless expressly stated to the contrary. References
in this Amendment to “hereby,” “herein,” “hereinafter,” “hereinabove,” “hereinbelow,” “hereof,” “hereunder” and words of similar import shall be to this Amendment in its entirety
and not only to the particular Schedule, Exhibit, Article, or Section in which such reference appears. Specific enumeration herein shall not exclude the general and, in such regard, the terms “includes” and “including” used
herein shall mean “includes, without limitation,” or “including, without limitation,” as the case may be, where appropriate. Except as otherwise indicated, references in this Amendment to statutes, sections, or regulations are to
be construed as including all statutory or regulatory provisions consolidating, amending, replacing, succeeding, or supplementing the statute, section, or regulation referred to. References in this Amendment to “writing” include printing,
typing, lithography, facsimile reproduction, and other means of reproducing words in a tangible visible form. References in this Amendment to amendments and other contractual instruments shall be deemed to include all exhibits and appendices
attached thereto and all subsequent amendments and other modifications to such instruments, but only to the extent such amendments and other modifications are not prohibited by the terms of the Credit Agreement or this Amendment. References in this
Amendment to Persons include their respective successors and permitted assigns. 
 1.4 Articles and Sections. This
Amendment, for convenience only, has been divided into Articles and Sections; and it is understood that the rights and other legal relations of the parties hereto shall be determined from this instrument as an entirety and without regard to the
aforesaid division into Articles and Sections and without regard to headings prefixed to such Articles or Sections. 
 1.5
Number and Gender. Whenever the context requires, reference herein made to the single number shall be understood to include the plural; and likewise, the plural shall be understood to include the singular. Definitions of terms defined in the
singular or plural shall be equally applicable to the plural or singular, as the case may be, unless otherwise indicated. Words denoting sex shall be construed to include the masculine, feminine and neuter, when such construction is appropriate; and
specific enumeration shall not exclude the general but shall be construed as cumulative. 
 ARTICLE II 

AMENDMENTS 
 Effective as of the Effective Date, the Borrower, the Initial Guarantors, the Lenders and the Agent hereby amend the Credit Agreement in the following particulars: 

2.1 Amendment to Section 1.2. Section 1.2 of the Credit Agreement is amended to add thereto, in its proper alphabetical
location, the following definition: 
 “‘Borrower Series A Preferred Shares’ shall mean
shares of Series A Cumulative Preferred Securities of the Borrower.” 

  
 - 2 -

 2.2 Amendment to Section 6.2. Section 6.2 of the Credit Agreement is
amended to read as follows in its entirety: 
 “6.2 Contingent Obligations. Create, incur, assume, or
suffer to exist any Contingent Obligation; provided, however, the foregoing restriction shall not apply to (a) performance guarantees, performance surety or other bonds or endorsements of items deposited for collection, in each case provided in
the ordinary course of business, (b) trade credit incurred or operating leases entered into in the ordinary course of business, (c) the Guaranties or (d) the guarantee by the Parent of the obligations of the Borrower with respect to
the Borrower Series A Preferred Shares.” 
 2.3 Amendment to Section 6.8. Clause (f) of Section 6.8
of the Credit Agreement is amended to read as follows in its entirety: 
 “(f) Investments by the Parent in
the Borrower, by the Borrower or any Domestic Subsidiary of the Parent in a Subsidiary Guarantor, or (in connection with the receipt of common equity interests of the Parent by the Borrower for purposes of paying dividends on the Borrower Series A
Preferred Shares) by the Borrower in the Parent,”. 
 2.4 Amendment to Section 6 9. Section 6.9 of the
Credit Agreement is amended to read as follows in its entirety: 
 “6.9 Dividends, Distributions and
Certain Payments. Declare, pay or make, whether in cash or Property, any dividend or distribution on, or purchase redeem or otherwise acquire for value, any of its equity interests; provided, however, that, (a) so long as no
Default or Event of Default exists or would result therefrom, the foregoing restriction shall not apply to (i) dividends paid in equity interests, (ii) dividends or distributions made to the Borrower or any of its Domestic Subsidiaries by
any of their respective Domestic Subsidiaries or purchases or redemptions by the Borrower or any of its Domestic Subsidiaries of any equity interests of any of its Domestic Subsidiaries, (iii) dividends and distributions made by the Borrower to
the Parent or purchases or redemptions by the Borrower of equity interests in the Borrower held by the Parent; provided, however, that such dividends, distributions, purchases or redemptions made by the Borrower to the Parent shall not
exceed the amount necessary for the payment by the Parent of its cash operating expenses, including general and administrative expenses (including director fees and expenses, premiums for directors and officers insurance, audit fees and expenses,
fees and expenses in connection with the preparation of tax returns and fees and expenses in connection with compliance with securities laws applicable to the Parent, to the extent, as to all of the foregoing, reasonable), Taxes and the Indebtedness
of the Parent under the Term Loan Agreement, (iv) the purchase, redemption or other acquisition for 

  
 - 3 -

 
value of any equity interests of the Parent held by any current or former director or employee of the Parent pursuant to any director or employee equity subscription agreement or plan, stock
option agreement or similar agreement or plan, provided that the aggregate price paid for all such purchased, redeemed or acquired equity interests may not exceed $500,000 in any calendar year, plus the amount of any such allowance not used in any
prior calendar year, (v) the acquisition of equity interests in the Parent by the Parent in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise, (vi) so long as immediately prior to and
after giving effect thereto, the Available Commitment equals at least ten percent (10%) of the then existing Borrowing Base, (A) cash dividends due on the Borrower Series A Preferred Shares of no more than $10,000,000 in the aggregate in
each calendar year or (B) redemptions of Borrower Series A Preferred Shares with retained earnings of the Borrower or the proceeds of a loan or advance to or Investment in the Borrower by the Parent made with retained earnings of the Parent or
(vii) additional cash dividends due on the Borrower Series A Preferred Shares or redemptions of Borrower Series A Preferred Shares paid with the proceeds of a loan or advance to or Investment in the Borrower by the Parent in an amount equal to
the proceeds, net of reasonable and customary expenses, of the issuance of additional common equity interests of the Parent or in an amount equal to the proceeds, net of reasonable and customary expenses, of the issuance of additional common equity
interests of the Borrower or (b) regardless of whether a Default or Event of Default exists or would result therefrom, cash dividends due on or redemptions of outstanding Borrower Series A Preferred Shares paid in additional Borrower
Series A Preferred Shares or common equity interests of the Borrower or the Parent.” 
 2.5 Amendment to
Section 6.10. Section 6.10 of the Credit Agreement is amended to amend the opening clause of such Section 6.10 to read as follows: 
 “Except for issuances of common equity interests by the Parent and/or the Borrower subject to a registration statement and publicly tradeable and the issuance, from time to time, of Borrower Series A
Preferred Shares, so long as such Borrower Series A Preferred Shares are not subject to any mandatory redemption,”. 
 2.6
Amendment to Section 7.1. Clause (l) of Section 7.1 of the Credit Agreement is amended to read as follows in its entirety: 
 “(l) the Borrower or one of the Subsidiary Guarantors shall cease to be the sole shareholder or member or the sole general partner of any Subsidiary Guarantor or, except following an initial public
offering of common equity interests of the Borrower, the Parent ceases to own all of the issued and outstanding equity interests of the Borrower;”. 

  
 - 4 -

 ARTICLE III 
 REPRESENTATIONS AND WARRANTIES 
 Each of the Borrower and the Initial
Guarantors expressly re-makes, in favor of the Agent and the Lenders, each of the representations and warranties set forth in Article IV of the Credit Agreement and in the other Loan Documents and made by it and represents and warrants that all such
representations and warranties remain true and correct. 
 ARTICLE IV 

RATIFICATION AND ACKNOWLEDGMENT 
 Each of the Borrower, the Initial Guarantors, the Lenders and the Agent does hereby adopt, ratify and confirm the Credit Agreement, as amended hereby, and each of the other Loan Documents to which it is a
party and acknowledges and agrees that the Credit Agreement, as amended hereby, and each of the other Loan Documents to which it is a party is and remains in full force and effect. 

ARTICLE V  

MISCELLANEOUS 
 5.1 Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted pursuant to the Credit
Agreement. 
 5.2 Rights of Third Parties. Except as provided in Section 5.1, all provisions herein are
imposed solely and exclusively for the benefit of the parties hereto. 
 5.3 Counterparts. This Amendment may be executed
by one or more of the parties hereto in any number of separate counterparts, and all of such counterparts taken together shall be deemed to constitute one and the same instrument and shall be enforceable as of the Effective Date upon the execution
of one or more counterparts hereof by each of the parties hereto. In this regard, each of the parties hereto acknowledges that a counterpart of this Amendment containing a set of counterpart execution pages reflecting the execution of each party
hereto shall be sufficient to reflect the execution of this Amendment by each necessary party hereto and shall constitute one instrument. 
 5.4 Integration. This Amendment constitutes the entire agreement among the parties hereto with respect to the subject hereof. All prior understandings, statements and agreements, whether written or
oral, relating to the subject hereof are superseded by this Amendment. 
 5.5 Severability. In the event that any one or
more of the provisions contained in this Amendment shall for any reason be held invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Amendment. 

  
 - 5 -

 5.6 Governing Law. THIS AMENDMENT
SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF TEXAS, WITHOUT REGARD TO PRINCIPLES OF SUCH LAWS RELATING TO
CONFLICTS OF LAW. 
 (Signatures appear on following pages) 

  
 - 6 -

 IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to Amended and
Restated Credit Agreement to be duly executed and delivered, as of the Effective Date, by their proper and duly authorized officers. 
  

			
	BORROWER:
	
	GASTAR EXPLORATION USA, INC.
		
	By:	 	 /s/ Michael A. Gerlich

		 	Michael A. Gerlich
		 	Secretary and Treasurer
	
	INITIAL GUARANTORS:
	
	GASTAR EXPLORATION LTD.
		
	By:	 	 /s/ Michael A. Gerlich

		 	Michael A. Gerlich
		 	Vice President and Chief Financial Officer
	
	 GASTAR EXPLORATION NEW SOUTH
 WALES, INC.

		
	By:	 	 /s/ Michael A. Gerlich

		 	Michael A. Gerlich
		 	Secretary and Treasurer
	
	GASTAR EXPLORATION VICTORIA, INC.
		
	By:	 	 /s/ Michael A. Gerlich

		 	Michael A. Gerlich
		 	Secretary and Treasurer

(Signatures continue on following pages) 

  

(Signature page to Third Amendment to 
 Second Amended and Restated Credit Agreement) 

 
			
	GASTAR EXPLORATION TEXAS, INC.
		
	By:	 	 /s/ Michael A. Gerlich

		 	Michael A. Gerlich
		 	Secretary and Treasurer
	
	GASTAR EXPLORATION TEXAS, LP
		
	By:	 	 Gastar Exploration Texas LLC,

its General Partner

		
	By:	 	 /s/ Michael A. Gerlich

		 	Michael A. Gerlich
		 	Secretary and Treasurer
	
	GASTAR EXPLORATION TEXAS LLC
		
	By:	 	 /s/ Michael A. Gerlich

		 	Michael A. Gerlich
		 	Secretary and Treasurer

(Signatures continue on following pages) 

  

(Signature page to Third Amendment to 
 Second Amended and Restated Credit Agreement) 

 
			
	AGENT:
	
	 AMEGY BANK NATIONAL ASSOCIATION
 as Agent

		
	By:	 	 /s/ Mark A. Serice

		 	Mark A. Serice
		 	Senior Vice President
	
	LENDER:
	
	AMEGY BANK NATIONAL ASSOCIATION
		
	By:	 	 /s/ Mark A. Serice

		 	Mark A. Serice
		 	Senior Vice President

 (Signatures
continue on following pages) 

  

(Signature page to Third Amendment to 
 Second Amended and Restated Credit Agreement) 

 
			
	LENDER:
	
	BANK OF MONTREAL
		
	By:	 	 /s/ James Whitmore

		 	James Whitmore
		 	Managing Director

 (Signatures
continue on following page) 

  

(Signature page to Third Amendment to 
 Second Amended and Restated Credit Agreement) 

 
			
	LENDER:
	
	IBERIABANK
		
	By:	 	 /s/ W. Bryan Chapman

		 	W. Bryan Chapman
		 	Executive Vice President

  

(Signature page to Third Amendment to 
 Second Amended and Restated Credit Agreement)

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