Document:

Exhibit 10.2

 

INTELLECTUAL
PROPERTY SECURITY AGREEMENT

 

This
Intellectual Property Security Agreement (this “Agreement”)dated as of March 29,
2006 (as defined in the Loan Agreement) is between SILICON
VALLEY BANK (“Bank”) and INTRUSION INC.,
a Delaware corporation (“Grantor”).

 

RECITALS

 

A.                                   Bank has made advances to Grantor (“Loans”)
as described in that certain Loan and Security Agreement dated as of even date
herewith (as the same may from time to time be further amended, modified,
supplemented or restated, the “Loan Agreement”). Capitalized terms not
otherwise defined herein shall the meaning set forth in the Loan Agreement.

 

B.                                     Borrower has requested that Bank amend the
Loan Agreement, and Bank as agreed, subject to, among other things, Grantor’s
granting to Bank a security interest in Grantor’s Copyrights, Trademarks,
Patents, and Mask Works and other intellectual property (the “Intellectual
Property Collateral”). 

 

C.                                     Grantor has granted Bank a security interest
in all of its right, title and interest, presently existing or later acquired
to all the Collateral.

 

AGREEMENT

 

Grantor
grants Bank a security interest in all of its right, title and interest in its
Intellectual Property Collateral (such as the Copyrights, Patents, Trademarks
and Mask Works listed on Schedules A, B, C and D), and all proceeds (such as
license royalties and proceeds of infringement suits), the right to sue for
past, present and future infringements rights throughout the world and all
reissues, divisions, continuations, renewals, extensions and
continuations-in-part.

 

This
security interest is granted in conjunction with the security interest granted
under the Loan Agreement. Bank’s rights and remedies in the security interest
are in addition to those in the Loan Agreement and the other Loan Documents,
and those available in law or equity. Bank’s rights powers and interests are
cumulative with every right, power or remedy provided here. Bank’s exercise of
its rights, powers or remedies in this Agreement, the Loan Agreement or any other
Loan Document, does not preclude the simultaneous or later exercise of any or
all other right, power or remedy.

 

	
  BANK:

  	
  GRANTOR:

  	
   

  
	
   

  	
   

  	
   

  
	
  SILICON VALLEY BANK

  	
  INTRUSION INC.,

  	
   

  
	
   

  	
  a Delaware corporation

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Brian Brown

  	
   

  	
  /s/ Michael L. Paxton

  	
   

  
	
  (Signature)

  	
   

  	
  (Signature)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Deal Team Leader

  	
   

  	
  Vice President &
  CFO

  	
   

  
	
  (Title)

  	
   

  	
  (Title)

  	
   

  

 

1

 

EXHIBIT A

 

Copyrights

 

	
  Description

  	
   

  	
  Registration/Application

  Number

  	
   

  	
  Registration/Application

  Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

EXHIBIT B

 

Patents

 

	
  Description

  	
   

  	
  Patent No./Application

  Number

  	
   

  	
  Issue Date/Filing

  Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SYSTEM AND
  METHOD FOR DETECTING NETWORK EVENTS

  	
   

  	
  10/199893

  	
   

  	
  July 19,
  2002

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EVENT DETECTION

  	
   

  	
  6,347,374

  	
   

  	
  February 12,
  2002

  	
   

  

 

 

EXHIBIT C

 

Trademarks

 

	
  Description

  	
   

  	
  Registration/Application

  Number

  	
   

  	
  Registration/Application

  Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  COMPLIANCE
  COMMANDER (US)

  	
   

  	
  78/772063

  	
   

  	
  December 13,
  2005

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  INTRUSION
  DETECTION (US)

  	
   

  	
  1,824,782

  	
   

  	
  March 1,
  1994

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  INTRUSION.COM
  (US)

  	
   

  	
  2,703,281

  	
   

  	
  April 1,
  2003

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  INTRUSION.COM
  (Australia)

  	
   

  	
  840,513

  	
   

  	
  March 21,
  2002

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  INTRUSION.COM
  (Brazil)

  	
   

  	
  823100510

  	
   

  	
  August 22,
  2000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  INTRUSION.COM
  (Canada)

  	
   

  	
  628544

  	
   

  	
  December 16,
  2004

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  INTRUSION.COM
  (China)

  	
   

  	
  1642288

  	
   

  	
  September 28,
  2001

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  INTRUSION.COM
  (European Community)

  	
   

  	
  1738723

  	
   

  	
  January 23,
  2002

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  INTRUSION.COM
  (Indonesia)

  	
   

  	
  484942

  	
   

  	
  August 1,
  2001

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  INTRUSION.COM
  (Japan)

  	
   

  	
  4455655

  	
   

  	
  February 23,
  2001

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  INTRUSION.COM
  (Korea)

  	
   

  	
  0507685

  	
   

  	
  November 29,
  2001

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  INTRUSION.COM
  (Mexico)

  	
   

  	
  723852

  	
   

  	
  November 27,
  2001

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  INTRUSION.COM
  (New Zealand)

  	
   

  	
  617399

  	
   

  	
  February 8,
  2001

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  INTRUSION.COM
  (Norway)

  	
   

  	
  205811

  	
   

  	
  November 22,
  2000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  INTRUSION.COM
  (Singapore)

  	
   

  	
  T00/11221J

  	
   

  	
  March 6,
  2000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  INTRUSION.COM
  (Taiwan)

  	
   

  	
  960274

  	
   

  	
  September 16,
  2001

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  INTRUSION.COM
  (Design US)

  	
   

  	
  2,810,945

  	
   

  	
  February 3,
  2004

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  INTRUSION.COM IN
  CHINESE CHARACTERS, SERIES (Hong Kong)

  	
   

  	
  6846(A-B/2002)

  	
   

  	
  August 2,
  2000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  KANE SECURITY
  MONITOR (Japan)

  	
   

  	
  4357913

  	
   

  	
  February 4,
  2000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECURENET PRO
  (STYLIZED) (US)

  	
   

  	
  3,043,046

  	
   

  	
  January 17,
  2006

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECURESHIELD
  (US)

  	
   

  	
  78/169526

  	
   

  	
  September 30,
  2002

  	
   

  

 

 

EXHIBIT D

 

Mask Works

 

	
  Description

  	
   

  	
  Registration/Application

  Number

  	
   

  	
  Registration/Application

  DateExhibit
10.1

FIRST
AMENDMENT TO

FIRST
AMENDED AND RESTATED CREDIT AGREEMENT

THIS
FIRST AMENDMENT TO FIRST AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”) is
entered into as of March 23, 2006, among MARKWEST HYDROCARBON, INC., a Delaware
corporation, as borrower (the “Borrower”), the undersigned Guarantors (collectively,
the “Guarantors”),
ROYAL BANK OF CANADA, as Administrative Agent for the Lenders parties to the
hereinafter defined Credit Agreement (in such capacity, the “Administrative Agent”),
and the undersigned L/C Issuer and Lenders.

Reference
is made to the First Amended and Restated Credit Agreement dated as of January
31, 2006 among Borrower, the Administrative Agent, the L/C Issuer and the
Lenders parties thereto (the “Credit Agreement”). 
Unless otherwise defined in this Amendment, capitalized terms used
herein shall have the meanings set forth in the Credit Agreement; all section
and schedule references herein are to sections and schedules in the Credit
Agreement; and all paragraph references herein are to paragraphs in this
Amendment.

RECITALS

A.            The Borrower has requested that the Credit Agreement be
amended in certain respects.

B.            Subject
to the terms and conditions of this Amendment, the Administrative Agent, the
L/C Issuer and the other Lenders are willing to agree to such amendment.

Accordingly,
for adequate and sufficient consideration, the parties hereto agree, as
follows:

Paragraph 1.        Amendments. Effective as of the First
Amendment Effective Date, the Credit Agreement is amended as follows:

1.1          Definitions. Section 1.01 of the Credit
Agreement is amended as follows:

(a)           The following
definition is amended in its entirety to read as follows:

“Agreement means this
First Amended and Restated Credit Agreement as amended by the First Amendment
to Credit Agreement.”

(b)           The following definitions are
inserted alphabetically into Section 1.01 of the Credit Agreement:

“First Amendment Effective Date
means the date the First Amendment to Credit Agreement by its terms becomes
effective among the parties thereto.”

“First Amendment
to Credit Agreement means that certain First Amendment to First
Amended and Restated Credit Agreement dated as of March 

 

1

 

    ,
2006, among the Borrower, the Guarantors, Royal Bank of Canada, as
Administrative Agent, the L/C Issuer and the Lenders.”

(c)           Section 7.08(b) of the Credit
Agreement is amended in its entirety to read as follows:

“(b)
(i) the Borrower (A) may make Restricted Payments in an amount equal to $0.125
per share declared prior to the Restatement Date and payable in February, 2006
and (B) may declare and make Restricted Payments if (y) Borrower maintains
Freely Available Cash Reserves of not less than $18,000,000
as of the date of such declaration and payment after giving pro
forma effect to such Restricted Payment; 
provided, through December 31, 2006, the
$18,000,000 amount shall be reduced
to $10,000,000 if and to the extent (on
a dollar for dollar basis) Borrower pre-purchases natural gas in connection
with Borrower’s third fiscal quarter of 2006 and first fiscal quarter of 2007
monetary obligations under the Columbia/Triana Agreement; provided
further if the Columbia/Triana Agreement is restructured so as to
eliminate the monetary obligation of the Borrower thereunder in a manner
satisfactory to the Administrative Agent (and such is confirmed in writing by
the Administrative Agent), then the Borrower need have Freely Available Cash
Reserves of not less than $5,000,000 or (z) after
giving pro forma effect to such Restricted Payment, such Restricted Payment
together with all prior Restricted Payments made by Borrower on or after
September 30, 2005 do not exceed 50% of Borrower’s Consolidated Net Income
commencing with the fiscal quarter ending September 30, 2005 and (ii) any
Guarantor may make redemptions of, or purchase equity interest in, the Borrower
or any Guarantor from employees of the Borrower or such Guarantor; provided, that at the time each Restricted
Payment is made or any purchase or redemption is made no Default or Event of
Default exists or would result therefrom; provided
further that the aggregate amount expended in any consecutive
12-month period for purchases or redemptions pursuant to clause (ii) above
shall not exceed $100,000.”

(d)           Section 7.15(c) of the Credit
Agreement is amended in its entirety to read as follows:

“(c)         Minimum Freely Available Cash Reserves.  Borrower shall have, as of each fiscal
quarter end beginning with the fiscal quarter ending March 31, 2006, Freely
Available Cash Reserves of not less than $13,000,000;
provided, for all fiscal quarters ending
on or before December 31, 2006, the $13,000,000
amount shall be reduced to $5,000,000
if and to the extent (on a dollar for dollar basis) Borrower pre-purchases
natural gas in connection with Borrower’s third fiscal quarter of 2006 and
first fiscal quarter of 2007 monetary obligations under the Columbia/Triana
Agreement; provided further, if the Columbia/Triana
Agreement is restructured so as to eliminate the monetary obligation of the
Borrower thereunder in a manner satisfactory to the Administrative Agent (and
such is confirmed in writing by the Administrative Agent), then the Borrower
shall no longer have to maintain Freely Available Cash Reserves.”

 

(e)           Schedule 3 to the Compliance
Certificate attached to the Credit Agreement as Exhibit C is amended and
replaced with Schedule 3 attached to this First Amendment.  Any reference in the Credit Agreement after
the First Amendment Effective Date to Schedule 3 shall be deemed to refer to
Schedule 3 as amended hereby.

 

2

 

 Paragraph
2.       Effective Date. This Amendment shall not become
effective until the date (such date, the “First Amendment Effective Date”) the
Administrative Agent receives all of the agreements, documents, certificates,
instruments, and other items described below:

 

(a)           this Amendment, executed by the
Borrower, the Guarantors, and each other Lender and the L/C Issuer; and

(b)           such other assurances, certificates,
documents and consents as the Administrative Agent may require.

Paragraph 3.        Acknowledgment
and Ratification. As a material inducement to the
Administrative Agent and the Lenders to execute and deliver this Amendment,
each of the Borrower and the Guarantors (i) consents to the agreements in this
Amendment, (ii) agrees and acknowledges that the execution, delivery, and
performance of this Amendment shall in no way release, diminish, impair,
reduce, or otherwise affect the respective obligations of the Borrower or any
Guarantor under the Loan Documents to which it is a party, which Loan Documents
shall remain in full force and effect, and all rights thereunder are hereby
ratified and confirmed.

Paragraph 4.        Representations. As a material inducement
to the Administrative Agent and the Lenders to execute and deliver this
Amendment, each of the Borrower and the Guarantors represents and warrants to
the Administrative Agent and the Lenders that as of the First Amendment
Effective Date and as of the date of execution of this Amendment, (a) all
representations and warranties in the Loan Documents are true and correct in
all material respects as though made on the date hereof, except to the extent
that any of them speak to a different specific date, and (b) no Default or
Event of Default exists.

Paragraph 5.        Expenses, Funding Losses.  The Borrower shall pay on demand all
reasonable costs, fees, and expenses paid or incurred by the Administrative
Agent incident to this Amendment, including, without limitation, Attorney Costs
in connection with the negotiation, preparation, delivery, and execution of
this Amendment and any related documents, filing and recording costs, and the
costs of title insurance endorsements.

Paragraph 6.        Miscellaneous. This Amendment is a “Loan
Document” referred to in the Credit Agreement. 
The provisions relating to Loan Documents in Article X of the
Credit Agreement are incorporated in this Amendment by reference.  Unless stated otherwise (a) the singular
number includes the plural and vice versa and words of any gender include each
other gender, in each case, as appropriate, (b) headings and captions may not
be construed in interpreting provisions, (c) this Amendment must be construed,
and its performance enforced, under Texas law and applicable  federal law, (d) if any part of this
Amendment is for any reason found to be unenforceable, all other portions of it
nevertheless remain enforceable, and (e) this Amendment may be executed in any
number of counterparts with the same effect as if all signatories had signed
the same document, and all of those counterparts must be construed together to
constitute the same document.

 

3

 

Paragraph 7.        ENTIRE AGREEMENT. THIS AMENDMENT REPRESENTS
THE FINAL AGREEMENT BETWEEN THE PARTIES ABOUT THE SUBJECT MATTER OF THIS
AMENDMENT AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.

Paragraph 8.        Parties. This Amendment binds and
inures to the benefit of the Borrower, the Guarantors, the Administrative
Agent, the L/C Issuer, the other Lenders, and their respective successors and
assigns.

Paragraph 9.        Further Assurances. The parties hereto each
agree to execute from time to time such further documents as may be necessary
to implement the terms of this Agreement.

The
parties hereto have executed this Amendment in multiple counterparts to be
effective as of the First Amendment Effective Date.

 

4

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.

	
   

  	
  MARKWEST HYDROCARBON, INC.,

  
	
   

  	
  a
  Delaware corporation, as Borrower

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ ANDREW L.
  SCHROEDER

  
	
   

  	
   

  	
  Andrew
  L. Schroeder

  
	
   

  	
   

  	
  Vice
  President, Treasurer and Assistant Secretary

  

 

5

 

	
   

  	
  MARKWEST
  ENERGY GP, L.L.C.,

  
	
   

  	
  a
  Delaware corporation, as a Guarantor

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ ANDREW L.
  SCHROEDER

  
	
   

  	
   

  	
  Andrew
  L. Schroeder

  
	
   

  	
   

  	
  Vice
  President and Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MARKWEST
  MICHIGAN, INC.,

  
	
   

  	
  a
  Colorado corporation, as a Guarantor

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ ANDREW L.
  SCHROEDER

  
	
   

  	
   

  	
  Andrew
  L. Schroeder

  
	
   

  	
   

  	
  Vice
  President and Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MARKWEST
  RESOURCES, INC.,

  
	
   

  	
  a
  Colorado corporation, as a Guarantor

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ ANDREW L.
  SCHROEDER

  
	
   

  	
   

  	
  Andrew
  L. Schroeder

  
	
   

  	
   

  	
  Vice
  President and Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MATREX,
  L.L.C.,

  
	
   

  	
  a
  Michigan limited liability company,

  
	
   

  	
  as
  a Guarantor

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  MARKWEST
  RESOURCES, INC.,

  
	
   

  	
   

  	
  a
  Colorado corporation,

  
	
   

  	
   

  	
  its
  managing member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ ANDREW L.
  SCHROEDER

  
	
   

  	
   

  	
   

  	
  Andrew
  L. Schroeder

  
	
   

  	
   

  	
   

  	
  Vice
  President and Treasurer

  

 

6

 

	
   

  	
  ROYAL BANK OF CANADA,

  
	
   

  	
  as
  Administrative Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  DAVID WHEATLEY

  
	
   

  	
  Name:

  	
  David Wheatley

  
	
   

  	
  Title:

  	
  Manager, Agency

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ROYAL BANK OF CANADA, as a Lender

  
	
   

  	
  and
  L/C Issuer

  
	
   

  	
  By:

  	
  /s/ JASON YORK

  
	
   

  	
  Name:

  	
  Jason York

  
	
   

  	
  Title:

  	
  Attorney-in-Fact

  

 

7

	
   

  	
  US
  BANK NATIONAL ASSOCIATION,

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ MONTE E. DECKERD

  
	
   

  	
  Name:

  	
  Monte E. Deckerd

  
	
   

  	
  Title:

  	
  Vice President

  
				

 

8

 

	
   

  	
  BANK
  OF OKLAHOMA,

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ MICHAEL M. LOGAN

  
	
   

  	
  Name:

  	
  Michael M. Logan

  
	
   

  	
  Title:

  	
  Senior Vice President

  

 

9

ANNEX I

For the Quarter/Year ended                                        
(“Statement Date”)

SCHEDULE 3

to the Compliance Certificate

($ in 000’s)

 

 

	
  I.

  	
  Section
  7.04 — Indebtedness

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  A.

  	
  Obligations existing under any Swap Contract
  permitted by Section 7.04(c)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  B.

  	
  Outstanding Principal Amount of Purchase Money
  Indebtedness for fixed or capital assets permitted by Section 7.04(d) (may not exceed $1,000,000)

  	
   

  	
  

  $      

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  C.

  	
  Outstanding Principal Amount of other Indebtedness
  permitted by Section
  7.04(e) (may not
  exceed $1,000,000)

  	
   

  	
  

  $      

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  II.

  	
  Section 7.08 — Restricted Payments;
  Distributions and Redemptions

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  A.

  	
  Freely Available Cash Reserves as of Statement Date
  (see Credit Agreement definition of “Freely Available Cash Reserves”):

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
  Cash Equivalents.

  	
   

  	
  $      

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
  Government bonds.

  	
   

  	
  $      

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.

  	
  Investments in master limited partnerships (not to
  exceed $10,000,000).

  	
   

  	
  

  $      

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.

  	
  Total of Line II.A.1 + Line II.A.2 + Line II.A.3.

  	
   

  	
  $      

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  5.

  	
  Has the Columbia/Triana Agreement been
  restructured?

  	
   

  	
  Yes/No

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  6.

  	
  Has Borrower pre-purchased natural gas relating to
  its make-whole obligations for the third quarter of 2006 and first quarter of
  2007?

  	
   

  	
  

  Yes/No

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.

  	
  Dollar amount of pre-purchased natural gas
  relating to Borrower’s make-whole obligations for the third quarter of 2006
  and first quarter of 2007

  	
   

  	
  

  $      

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  8(a).

  	
  For periods ending on or before December 31, 2006,
  if the answer to Line II.A.5 is “No”, is Line II.A.4 greater than the greater
  of (i) $18,000,000 minus Line
  II.A.7 and (ii) $10,000,000)? If so, to
  the extent of such excess Borrower may make a Restricted Payment if no
  Default or Event of Default exists

  	
   

  	
  

  Yes/No

  Amount of excess: $      

  

 

10

 

	
   

  	
   

  	
  8(b).

  	
  For periods ending after December 31, 2006, if the
  answer to Line II.A.5 is “No”, is Line II.A.4 greater than $18,000,000? If so, to the extent
  of such excess Borrower may make a Restricted Payment if no Default or Event
  of Default exists

  	
   

  	
  

  

  Yes/No

  Amount of excess: $      

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  9.

  	
  If the answer to Line II.A.5 is “Yes” is Line
  II.A.4 greater than $5,000,000?
  If so, to the extent of such excess Borrower may make a Restricted Payment if
  no Default or Event of Default exists

  	
   

  	
  

  Yes/No

  Amount of excess: $      

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  10.

  	
  As an alternative to Restricted Payments permitted
  under Line II.A.8(a), Line II.A.8(b) or Line II.A.9

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  11.

  	
  Borrower’s Consolidated Net Income commencing with
  the fiscal quarter ending September 30, 2005 through and including the
  Statement Date:

  	
   

  	
  

  $      

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  12.

  	
  50% of Line II.A.11:

  	
   

  	
  $      

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  13.

  	
  Total of Restricted Payments made on or after September
  30, 2005 through and including Statement Date:

  	
   

  	
  

  $      

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  14.

  	
  Excess of Line II.A.12 over Line II.A.13:

  	
   

  	
  $      

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  15.

  	
  Is Line II.A.12 greater than Line II.A.13? Is so,
  to the extent of such excess Borrower make a Restricted Payment if no Default
  or Event of Default exists

  	
   

  	
  

  Yes/No

  Amount of excess: $      

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  III.

  	
  Section 7.15(a) — Leverage Ratio

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  A.

  	
  Consolidated Funded Debt (borrowed money
  indebtedness, Capital Leases, and Synthetic Leases)

  	
   

  	
  

  $      

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  B.

  	
  Consolidated EBITDA for four consecutive fiscal
  quarters ending on the Statement Date (“Subject Period”) (see Credit Agreement definition of “Consolidated EBITDA”):

  	
   

  	
  

  $      

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  C.

  	
  Leverage Ratio (Line III.A. divided by Line III.B)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  D.

  	
  Is Leverage Ratio greater than 3.5 to 1.0

  	
   

  	
  Yes/No

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IV.

  	
  Section 7.15(b) — Minimum Consolidated
  Tangible Net Worth (as calculated pursuant to
  Credit Agreement)

  	
   

  	
   

  

 

11

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  A.

  	
  80% of Consolidated Tangible Net Worth at
  September 30, 2005

  	
   

  	
  $34,000,000

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  B.

  	
  Consolidated Tangible Net Worth at Statement Date

  	
   

  	
  $      

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  C.

  	
  50% of Consolidated Net Income after September 30,
  2005:

  	
   

  	
  $      

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  D.

  	
  100% of proceeds of all equity issued subsequent to
  January 31, 2006:

  	
   

  	
  $      

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  E.

  	
  Sum of Line IV.A + Line IV.C + Line IV.D):

  	
   

  	
  $      

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  F.

  	
  Is Line IV.E equal to or greater than Line IV.B):

  	
   

  	
  Yes/No

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  V.

  	
  Section 7.15(c) — Freely Available Cash
  Reserves (required for fiscal quarters beginning with the fiscal quarter
  ending March 31, 2006)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  A.

  	
  Freely Available Cash Reserves as of Statement
  Date (see Credit Agreement definition of “Freely Available Cash Reserves”)
  for each fiscal quarter ending on or after March 31, 2006:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
  Cash Equivalents.

  	
   

  	
  $      

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
  Government bonds.

  	
   

  	
  $      

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.

  	
  Investments in master limited partnerships (not to
  exceed $10,000,000).

  	
   

  	
  

  $      

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.

  	
  Total of Line V.A.1 + Line V.A.2 + Line V.A.3.

  	
   

  	
  $      

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  5.

  	
  Has Borrower pre-purchased natural gas relating to
  its make-whole obligations for the third quarter of 2006 and first quarter of
  2007?

  	
   

  	
  

  Yes/no

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  6.

  	
  Dollar amount of pre-purchased natural gas
  relating to Borrower’s make-whole obligations for the third quarter of 2006
  and first quarter of 2007

  	
   

  	
  

  $      

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7(a).

  	
  For periods ending on or before December 31, 2006,
  if the answer to Line V.A.5 is “No”, is Line V.A.4 at least $13,000,000?

  	
   

  	
  

  Yes/No

  

 

12

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7(b).

  	
  For periods ending on or before December 31, 2006,
  if the answer to Line V.A.5 is “Yes”, is Line V.A. greater than the greater
  of (i) $13,000,000 minus Line
  V.A.6 and (ii) $5,000,000)?

  	
   

  	
  Yes/No

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7(c).

  	
  For periods ending after December 31, 2006, is
  Line V.A.5 at least $13,000,000?

  	
   

  	
  

  Yes/No

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  8.

  	
  Has the Columbia/Triana Agreement been
  restructured

  	
   

  	
  Yes/No

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  9.

  	
  If the answer to Line V.A.8 is “No”, the answer to
  Line V.A.7(a), Line V.A.7(b) and Line V.A.7(c) must be “Yes”;

  If the answer to Line V.A.8 is “yes” then the
  answer to Line V.A.7(a), Line V.A.7(b) and Line V.A.7(c) can be either “Yes”
  or “No”; there is no required available cash reserve if the Columbia/Triana
  Agreement has been restructured

  	
   

  	
   

  

 

 

13

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