Document:

Exhibit 10.1

 

Execution Version

 

	
 
    

 

INTREPID POTASH, INC.

 

Senior Secured Notes

 

Senior Secured Notes, Series A, due April 16, 2020

Senior Secured Notes, Series B, due April 14, 2023

Senior Secured Notes, Series C, due April 16, 2025

 

 

AMENDED AND RESTATED NOTE PURCHASE AGREEMENT

 

 

Dated as of October 31, 2016

 

	
 
    

 

	
 
    	
SERIES   A PPN: 46121Y B*2
    
	
 
    	
SERIES   B PPN: 46121Y B@0
    
	
 
    	
SERIES   C PPN: 46121Y B#8
    

 

 

TABLE OF CONTENTS

 

	
Section
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
1.
    	
BACKGROUND
    	
1
    
	
 
    	
 
    	
 
    
	
2.
    	
AMENDMENT AND   RESTATEMENT OF EXISTING NOTE PURCHASE AGREEMENT AND EXISTING NOTES; WAIVER
    	
3
    
	
 
    	
 
    	
 
    
	
 
    	
2.1.
    	
Amendment and   Restatement of Existing Note Purchase Agreement
    	
3
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
2.2.
    	
Amendment and Restatement   of Existing Notes
    	
3
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
2.3.
    	
Waiver
    	
4
    
	
 
    	
 
    	
 
    	
 
    
	
3.
    	
CLOSING
    	
4
    
	
 
    	
 
    	
 
    
	
4.
    	
CONDITIONS TO   EFFECTIVENESS
    	
5
    
	
 
    	
 
    	
 
    
	
 
    	
4.1.
    	
Representations and   Warranties
    	
5
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.2.
    	
Performance; No Default
    	
5
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.3.
    	
Compliance Certificates
    	
5
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.4.
    	
Opinions of Counsel
    	
6
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.5.
    	
Amendment and   Restatement Permitted By Applicable Law, etc.
    	
6
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.6.
    	
Consents and Approvals
    	
6
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.7.
    	
Private Placement   Numbers
    	
6
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.8.
    	
Changes in Corporate   Structure
    	
6
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.9.
    	
Notes
    	
6
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.10.
    	
Subsidiary Guaranty
    	
7
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.11.
    	
Revolving Loan   Documents
    	
7
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.12.
    	
Intercreditor Agreement
    	
7
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.13.
    	
Collateral Agency   Agreement
    	
8
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.14.
    	
Collateral Documents
    	
8
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.15.
    	
Other Documents and   Actions Relating to Collateral
    	
10
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.16.
    	
FTI Engagement   Agreement
    	
12
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.17.
    	
Amendment Fee
    	
12
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.18.
    	
Payment of Fees and   Expenses
    	
12
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.19.
    	
Proceedings and   Documents
    	
12
    
	
 
    	
 
    	
 
    	
 
    
	
5.
    	
REPRESENTATIONS AND   WARRANTIES OF THE COMPANY
    	
12
    
	
 
    	
 
    	
 
    
	
 
    	
5.1.
    	
Organization; Power and   Authority
    	
13
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.2.
    	
Authorization, etc.
    	
13
    
					

 

 

	
 
    	
5.3.
    	
Disclosure
    	
13
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.4.
    	
Organization and   Ownership of Shares of Subsidiaries
    	
14
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.5.
    	
Financial Statements
    	
15
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.6.
    	
Compliance with Laws,   Other Instruments, etc.
    	
15
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.7.
    	
Governmental   Authorizations, etc.
    	
15
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.8.
    	
Litigation; Observance   of Agreements, Statutes and Orders
    	
16
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.9.
    	
Taxes
    	
16
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.10.
    	
Title to property;   Leases
    	
16
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.11.
    	
Licenses, Permits, etc.
    	
17
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.12.
    	
Compliance with ERISA
    	
17
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.13.
    	
Existing Indebtedness;   Future Liens
    	
18
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.14.
    	
Foreign Assets Control   Regulations, etc.
    	
19
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.15.
    	
Status under Certain   Statutes
    	
20
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.16.
    	
Environmental Matters
    	
20
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.17.
    	
Collateral   Representations
    	
20
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.18.
    	
No Defaults
    	
22
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.19.
    	
Solvency
    	
22
    
	
 
    	
 
    	
 
    	
 
    
	
6.
    	
REPRESENTATIONS OF THE   EXISTING NOTEHOLDERS
    	
23
    
	
 
    	
 
    	
 
    
	
 
    	
6.1.
    	
Purchase for Investment
    	
23
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.2.
    	
Source of Funds
    	
23
    
	
 
    	
 
    	
 
    	
 
    
	
7.
    	
INFORMATION AS TO   COMPANY
    	
25
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
7.1.
    	
Financial and Business   Information
    	
25
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
7.2.
    	
Officer’s Certificate
    	
28
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
7.3.
    	
Electronic Delivery
    	
29
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
7.4.
    	
Inspection; Appraisals
    	
29
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
7.5.
    	
Quarterly Telephonic   Meetings
    	
30
    
	
 
    	
 
    	
 
    	
 
    
	
8.
    	
PREPAYMENT OF THE NOTES
    	
30
    
	
 
    	
 
    	
 
    
	
 
    	
8.1.
    	
Maturity
    	
30
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
8.2.
    	
Optional Prepayments
    	
30
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
8.3.
    	
Mandatory Offer to   Prepay Upon Change of Control
    	
30
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
8.4.
    	
Allocation of Partial   Prepayments
    	
32
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
8.5.
    	
Maturity; Surrender,   etc.
    	
32
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
8.6.
    	
Purchase of Notes
    	
32
    

 

iii

 

	
 
    	
8.7.
    	
Make-Whole Amount
    	
33
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
8.8.
    	
Mandatory Offer to   Prepay from Proceeds of Specified Property Dispositions
    	
34
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
8.9.
    	
Offer to Prepay from   Proceeds of Other Dispositions and Extraordinary Insurance Receipts
    	
37
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
8.10.
    	
Mandatory Offer to   Prepay from Equity Issuances
    	
39
    
	
 
    	
 
    	
 
    	
 
    
	
9.
    	
AFFIRMATIVE COVENANTS
    	
42
    
	
 
    	
 
    	
 
    
	
 
    	
9.1.
    	
Compliance with Law
    	
42
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
9.2.
    	
Insurance
    	
42
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
9.3.
    	
Maintenance of   Properties
    	
43
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
9.4.
    	
Payment of Taxes and   Claims
    	
44
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
9.5.
    	
Corporate Existence,   etc.
    	
44
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
9.6.
    	
Additional Subsidiary   Guarantors and Grantors
    	
44
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
9.7.
    	
Books and Records
    	
45
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
9.8.
    	
Maintenance of Ratings
    	
45
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
9.9.
    	
Covenant to Give   Security
    	
45
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
9.10.
    	
Financial Advisor
    	
48
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
9.11.
    	
Further Assurances
    	
49
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
9.12.
    	
Most Favored Lender
    	
49
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
9.13.
    	
Post-Closing   Undertaking
    	
50
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
9.14.
    	
Investment Bank
    	
51
    
	
 
    	
 
    	
 
    	
 
    
	
10.
    	
NEGATIVE COVENANTS
    	
51
    
	
 
    	
 
    	
 
    
	
 
    	
10.1.
    	
Financial Covenants
    	
51
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
10.2.
    	
Capital Expenditures
    	
53
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
10.3.
    	
Indebtedness
    	
53
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
10.4.
    	
Liens
    	
55
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
10.5.
    	
Mergers,   Consolidations, etc.
    	
57
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
10.6.
    	
Sale of Assets
    	
58
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
10.7.
    	
Transactions with   Affiliates
    	
59
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
10.8.
    	
Economic Sanctions, Etc.
    	
60
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
10.9.
    	
Line of Business
    	
60
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
10.10.
    	
Restricted Payments
    	
60
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
10.11.
    	
Investments
    	
61
    

 

iv

 

	
 
    	
10.12.
    	
Sale and Leaseback
    	
62
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
10.13.
    	
Intrepid Aviation
    	
62
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
10.14.
    	
Revolving Loan   Documents
    	
62
    
	
 
    	
 
    	
 
    	
 
    
	
11.
    	
EVENTS OF DEFAULT
    	
62
    
	
 
    	
 
    	
 
    
	
12.
    	
REMEDIES ON   DEFAULT, ETC.; EQUITY CURE
    	
65
    
	
 
    	
 
    	
 
    
	
 
    	
12.1.
    	
Acceleration
    	
65
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
12.2.
    	
Other Remedies
    	
66
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
12.3.
    	
Rescission
    	
66
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
12.4.
    	
No Waivers or Election   of Remedies, Expenses, etc.
    	
67
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
12.5.
    	
Default Rate
    	
67
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
12.6.
    	
Equity Cure
    	
67
    
	
 
    	
 
    	
 
    	
 
    
	
13.
    	
REGISTRATION; EXCHANGE;   SUBSTITUTION OF NOTES
    	
68
    
	
 
    	
 
    	
 
    
	
 
    	
13.1.
    	
Registration of Notes
    	
68
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
13.2.
    	
Transfer and Exchange   of Notes
    	
69
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
13.3.
    	
Replacement of Notes
    	
69
    
	
 
    	
 
    	
 
    	
 
    
	
14.
    	
PAYMENTS ON NOTES
    	
70
    
	
 
    	
 
    	
 
    
	
 
    	
14.1.
    	
Place of Payment
    	
70
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
14.2.
    	
Home Office Payment
    	
70
    
	
 
    	
 
    	
 
    	
 
    
	
15.
    	
EXPENSES, ETC.
    	
70
    
	
 
    	
 
    	
 
    
	
 
    	
15.1.
    	
Transaction Expenses
    	
70
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
15.2.
    	
Survival
    	
71
    
	
 
    	
 
    	
 
    	
 
    
	
16.
    	
SURVIVAL OF   REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT
    	
71
    
	
 
    	
 
    	
 
    
	
17.
    	
AMENDMENT AND WAIVER
    	
71
    
	
 
    	
 
    	
 
    
	
 
    	
17.1.
    	
Requirements
    	
71
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
17.2.
    	
Solicitation of Holders   of Notes
    	
72
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
17.3.
    	
Binding Effect, etc.
    	
72
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
17.4.
    	
Notes held by the   Company, etc.
    	
73
    
	
 
    	
 
    	
 
    	
 
    
	
18.
    	
NOTICES
    	
73
    
	
 
    	
 
    	
 
    
	
19.
    	
REPRODUCTION OF   DOCUMENTS
    	
73
    
	
 
    	
 
    	
 
    
	
20.
    	
CONFIDENTIAL   INFORMATION
    	
74
    
	
 
    	
 
    	
 
    
	
21.
    	
MISCELLANEOUS
    	
75
    
	
 
    	
 
    	
 
    
	
 
    	
21.1.
    	
Successors and Assigns
    	
75
    

 

v

 

	
 
    	
21.2.
    	
Payments Due on   Non-Business Days
    	
75
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
21.3.
    	
Accounting Terms
    	
75
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
21.4.
    	
Severability
    	
76
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
21.5.
    	
Construction
    	
76
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
21.6.
    	
Counterparts
    	
76
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
21.7.
    	
Governing Law
    	
77
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
21.8.
    	
Jurisdiction and   Process; Waiver of Jury Trial
    	
77
    
	
 
    	
 
    	
 
    	
 
    
	
22.
    	
RELEASE
    	
78
    
	
 
    	
 
    	
 
    
	
23.
    	
TREASURY REGULATIONS   SECTIONS 1.1275-4(c) AND 1.1274-3(a)
    	
79
    

 

vi

 

	
SCHEDULE A
    	
—
    	
Information Relating to   Existing Noteholders
    
	
SCHEDULE B
    	
—
    	
Defined Terms
    
	
SCHEDULE C
    	
—
    	
Mortgaged Property   Support Documents
    
	
SCHEDULE 1
    	
—
    	
Specified Events of   Default
    
	
SCHEDULE 5.4
    	
—
    	
Subsidiaries
    
	
SCHEDULE 5.5
    	
—
    	
Financial Statements
    
	
SCHEDULE 5.13
    	
—
    	
Existing Indebtedness
    
	
SCHEDULE 5.17(b)
    	
—
    	
Intellectual Property
    
	
SCHEDULE 5.17(c)
    	
—
    	
Deposit Accounts and   Securities Accounts
    
	
SCHEDULE 5.17(d)
    	
—
    	
Commercial Tort Claims
    
	
SCHEDULE 5.17(e)
    	
—
    	
Pledged Equity   Interests
    
	
SCHEDULE 5.17(f)(i)
    	
—
    	
Owned and Leased Real   Properties
    
	
SCHEDULE 5.17(f)(ii)
    	
—
    	
Other Locations
    
	
SCHEDULE 5.17(g)
    	
—
    	
Water Rights
    
	
SCHEDULE 9.9(c)
    	
—
    	
Specified Leased Real   Property
    
	
SCHEDULE 9.13
    	
—
    	
Post-Closing   Obligations
    
	
SCHEDULE 10.3
    	
—
    	
Section 10.3   Indebtedness
    
	
SCHEDULE 10.4
    	
—
    	
Liens
    
	
SCHEDULE 10.7
    	
—
    	
Affiliate Transactions
    
	
SCHEDULE 10.9
    	
—
    	
Line of Business
    
	
SCHEDULE 10.11
    	
—
    	
Existing Investments
    
	
SCHEDULE 10.13
    	
—
    	
Intrepid Aviation   Activities
    
	
EXHIBIT 2.2(a)
    	
—
    	
Form of   Series A Senior Secured Note
    
	
EXHIBIT 2.2(b)
    	
—
    	
Form of   Series B Senior Secured Note
    
	
EXHIBIT 2.2(c)
    	
—
    	
Form of   Series C Senior Secured Note
    

 

vii

 

Intrepid Potash, Inc.

707 17th Street, Suite 4200

Denver, CO 80202

(303) 296-3006

 

Senior Secured Notes

 

Senior Secured Notes, Series A, due April 16, 2020

Senior Secured Notes, Series B, due April 14, 2023

Senior Secured Notes, Series C, due April 16, 2025

 

Dated as of October 31, 2016

 

TO EACH OF THE EXISTING NOTEHOLDERS

LISTED IN THE ATTACHED SCHEDULE A:

 

Ladies and Gentlemen:

 

INTREPID POTASH, INC., a Delaware corporation (the “Company”), agrees with each of the holders of Existing Notes (as defined below) whose names appear in Schedule A attached hereto (each, an “Existing Noteholder” and, collectively, the “Existing Noteholders”), as follows:

 

1.                                      BACKGROUND.

 

The Company and the Existing Noteholders currently are party to that certain Note Purchase Agreement dated as of August 28, 2012 among the Company and the Existing Noteholders, as amended by that certain First Amendment to Note Purchase Agreement dated as of January 15, 2016 (the “First Amendment”) and that certain Second Amendment and Sixth Waiver to Note Purchase Agreement dated as of September 30, 2016 (the “Second Amendment and Sixth Waiver”) (as amended by the First Amendment and as in effect prior to the effectiveness of the Second Amendment and Sixth Waiver, the “Original Note Purchase Agreement”; as amended by the First Amendment and the Second Amendment and Sixth Waiver and as in effect on the Restructuring Closing Date prior to the effectiveness of this Agreement, the “Existing Note Purchase Agreement”).  Pursuant to the Original Note Purchase Agreement, among other things, the Company issued (i) $60,000,000 aggregate original principal amount of its 3.23% Senior Notes, Series A, due April 16, 2020 (as in effect prior to the effectiveness of the Second Amendment and Sixth Waiver, collectively, the “Original Series A Notes”; as in effect on the Restructuring Closing Date prior to the effectiveness of this Agreement, collectively, the “Existing Series A Notes”), (ii) $45,000,000 aggregate original principal amount of its 4.13% Senior Notes, Series B, due April 14, 2023 (as in effect prior to the effectiveness of the Second Amendment and Sixth Waiver, collectively, the “Original Series B Notes”; as in effect on the Restructuring Closing Date prior to the effectiveness of this Agreement, collectively, the “Existing Series B Notes”), and (iii) $45,000,000 aggregate original principal amount of its 4.28% Senior Notes, Series C, due April 16, 2025 (as in effect

 

 

prior to the effectiveness of the Second Amendment and Sixth Waiver, collectively, the “Original Series C Notes”; as in effect on the Restructuring Closing Date prior to the effectiveness of this Agreement, collectively, the “Existing Series C Notes”) (the Original Series A Notes, the Original Series B Notes and the Original Series C Notes, collectively, the “Original Notes”; the Existing Series A Notes, the Existing Series B Notes and the Existing Series C Notes, collectively, the “Existing Notes”).  The Existing Noteholders hold 100% of the Existing Notes.

 

The payment by the Company of all amounts due under the Existing Notes and the Existing Note Purchase Agreement are jointly and severally guaranteed by each of Intrepid Potash — Moab, LLC, a Delaware limited liability company (“Intrepid Moab”), Intrepid Potash — Wendover, LLC, a Colorado limited liability company (“Intrepid Wendover”), and Intrepid Potash-New Mexico, LLC, a New Mexico limited liability company (“Intrepid New Mexico”) pursuant to that certain Subsidiary Guaranty, dated as of April 16, 2013, made by Intrepid Moab, Intrepid Wendover and Intrepid New Mexico (the “Existing Subsidiary Guaranty”).

 

Pursuant to that certain Waiver to Note Purchase Agreement dated as of March 23, 2016 by and among the Company and the Existing Noteholders, the Existing Noteholders waived compliance by the Company with Sections 10.1 and 10.2 of the Original Note Purchase Agreement for the fiscal quarter ended March 31, 2016 until May 13, 2016.

 

Pursuant to that certain Second Waiver to Note Purchase Agreement dated as of May 6, 2016 by and among the Company and the Existing Noteholders, the Existing Noteholders further waived compliance by the Company with Sections 10.1 and 10.2 of the Original Note Purchase Agreement for the fiscal quarter ended March 31, 2016 until June 30, 2016 in accordance with the terms thereof.

 

Pursuant to that certain Third Waiver to Note Purchase Agreement dated as of June 30, 2016 by and among the Company and the Existing Noteholders, the Existing Noteholders further waived compliance by the Company with Sections 10.1 and 10.2 of the Original Note Purchase Agreement for the fiscal quarter ended March 31, 2016 from June 30, 2016 until July 15, 2016 in accordance with the terms thereof.

 

Pursuant to that certain Fourth Waiver to Note Purchase Agreement dated as of July 15, 2016 by and among the Company and the Existing Noteholders, the Existing Noteholders further waived compliance by the Company with Sections 10.1 and 10.2 of the Original Note Purchase Agreement for the fiscal quarter ended March 31, 2016 from July 15, 2016 until July 29, 2016 in accordance with the terms thereof.

 

Pursuant to that certain Fifth Waiver to Note Purchase Agreement dated as of July 29, 2016 by and among the Company and the Existing Noteholders, the Existing Noteholders further waived compliance by the Company with Sections 10.1 and 10.2 of the Original Note Purchase Agreement for the fiscal quarters ended March 31, 2016 and June 30, 2016 from July 29, 2016 until September 30, 2016 in accordance with the terms thereof.

 

Pursuant to the Second Amendment and Sixth Waiver, (i) the Existing Noteholders further waived compliance by the Company with Sections 10.1 and 10.2 of the

 

2

 

Original Note Purchase Agreement for the fiscal quarters ended March 31, 2016 and June 30, 2016 from September 30, 2016 until October 31, 2016 in accordance with the terms thereof, and (ii) the Existing Noteholders and the Company amended the Original Note Purchase Agreement and the Original Notes in certain respects.  Pursuant to such amendments, on October 3, 2016, the Company prepaid a portion of the outstanding principal amount of each Note equal to the Sixth Waiver Prepayment Amount with respect to such Note (the aggregate Sixth Waiver Prepayment Amounts in respect of the Original Series A Notes, the Original Series B Notes and the Original Series C Notes being $6,000,000, $4,500,000 and $4,500,000, respectively).

 

The Company has requested that the Existing Noteholders agree to (i) waive the Events of Default (as such term is defined in the Existing Note Purchase Agreement) set forth in Schedule 1 (the “Specified Events of Default”) and (ii) amend and restate the provisions of the Existing Note Purchase Agreement and the Existing Notes as set forth herein.  The Existing Noteholders have, subject to the satisfaction of the conditions set forth in Section 4 of this Agreement, consented to such request.  The mutual agreement of the parties as to such matters is set forth in the amendment and restatement of the Existing Note Purchase Agreement and the Existing Notes provided for in this Agreement.

 

Certain capitalized and other terms used in this Agreement are defined in Schedule B; references to a “Schedule” or an “Exhibit” are, unless otherwise specified, to a Schedule or an Exhibit attached to this Agreement.

 

2.                                      AMENDMENT AND RESTATEMENT OF EXISTING NOTE PURCHASE AGREEMENT AND EXISTING NOTES; WAIVER.

 

2.1.                            Amendment and Restatement of Existing Note Purchase Agreement.

 

The Company agrees and, subject to the satisfaction of the conditions precedent set forth in Section 4, each Existing Noteholder, by its execution of this Agreement, hereby agrees and consents to the amendment and restatement in its entirety of the Existing Note Purchase Agreement, and upon the satisfaction of such conditions precedent, the Existing Note Purchase Agreement shall be deemed to be so amended, restated, superseded and replaced in its entirety by this Agreement effective as of the Restructuring Closing Date.  It is the intention of each of the parties hereto that this Agreement does not constitute a novation of the obligations and liabilities under the Existing Note Purchase Agreement.  The parties hereto further acknowledge and agree that this Agreement constitutes an amendment of the Existing Note Purchase Agreement made under and in accordance with the terms of Section 17.1 of the Existing Note Purchase Agreement.

 

2.2.                            Amendment and Restatement of Existing Notes.

 

Subject to the satisfaction of the conditions precedent set forth in Section 4, the Company and each Existing Noteholder, each by its execution of this Agreement, hereby agrees and consents to the amendment and restatement in their entirety of the Existing Notes, on the terms set forth in this Section 2.2.  Each Existing Series A Note, Existing Series B Note and Existing Series C Note shall, on the Restructuring Closing Date, without any further action required on the part of any Person, be deemed to be automatically amended and restated to 

 

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conform to and have the terms provided in Exhibit 2.2(a), Exhibit 2.2(b) and Exhibit 2.2(c), respectively (except that the payee, principal amount and registration number of each such amended and restated note shall be as set forth in the applicable Existing Note, and the date of each such amended and restated note shall be October 16, 2016).  The Existing Series A Notes, the Existing Series B Notes and the Existing Series C Notes, in each case as amended and restated pursuant to this Agreement and as may be further amended, restated, supplemented or otherwise modified from time to time, shall be hereinafter referred to as the “Series A Notes”, the “Series B Notes” and the “Series C Notes”, respectively, such terms to include any such notes issued in substitution or exchange therefor pursuant to Section 13 of this Agreement (the Series A Notes, the Series B Notes and the Series C Notes, collectively, the “Notes”).  Any Series A Note, Series B Note or Series C Note issued on or after the Restructuring Closing Date shall be in the form of Exhibit 2.2(a), Exhibit 2.2(b) or Exhibit 2.2(c), respectively.

 

On the Restructuring Closing Date, each Existing Noteholder shall deliver to the Company for cancellation each Existing Series A Note, Existing Series B Note and Existing Series C Note held by it or a lost note affidavit therefor, and, subject to the receipt thereof, the Company will issue and deliver a Series A Note, Series B Note or Series C Note, respectively, in the form of Exhibit 2.2(a), Exhibit 2.2(b) or Exhibit 2.2(c), respectively, in favor of such holder in replacement of such holder’s Existing Note or Existing Notes.

 

2.3.                            Waiver.

 

Subject to the satisfaction of the conditions precedent set forth in Section 4, effective as of the Restructuring Closing Date, each Existing Noteholder hereby waives the Specified Events of Default.  Except as expressly provided herein, nothing contained in this Section 2.3 and no action by, or inaction on the part of, any Existing Noteholder or holder of any Note shall, or shall be deemed to, directly or indirectly (i) constitute a consent to or waiver of any violation of the Loan Documents, (ii) amend, modify or operate as a waiver of any provision of the Existing Note Purchase Agreement or the other Loan Documents, or (iii) constitute a course of dealing or other basis for altering any obligations of any Loan Party under the Loan Documents or any other contract or instrument.  The waivers contained herein shall not extend beyond the terms expressly set forth herein, nor shall such waivers impair any right or power accruing to any holder of a Note with respect to any other Default or Event of Default that may occur after the date hereof.  Nothing contained herein shall be deemed to imply any willingness of any holder of a Note to agree to, or otherwise prejudice any rights of such holder with respect to, any similar waiver that may be requested by the Company.

 

3.                                      CLOSING.

 

The closing (the “Restructuring Closing”) of the transactions contemplated by this Agreement will be held on October 31, 2016 at the offices of Morgan, Lewis & Bockius LLP, at 101 Park Avenue, New York, New York 10178-0060, provided that all of the conditions set forth in Section 4 hereof are fulfilled to the satisfaction of the Existing Noteholders on or prior to such date (such date, provided that such conditions are so satisfied on or prior thereto, being referred to herein as the “Restructuring Closing Date”).

 

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4.                                      CONDITIONS TO EFFECTIVENESS.

 

This Agreement shall become effective upon the fulfillment to each Existing Noteholder’s satisfaction, prior to or at the time of the Restructuring Closing, of each of the following conditions (with each of the documents referred to below being in form, scope and substance satisfactory to the Existing Noteholders):

 

4.1.                            Representations and Warranties.

 

The representations and warranties of (i) the Company in this Agreement shall be correct on the date hereof and at the time of the Restructuring Closing, (ii) the Company in the other Loan Documents shall be correct at the time of the Restructuring Closing, and (iii) each Subsidiary Guarantor in each of the Loan Documents to which it is a party shall be correct at the time of the Restructuring Closing.

 

4.2.                            Performance; No Default.

 

Each Loan Party shall have performed and complied with all agreements and conditions contained in the Loan Documents to which it is a party that are required to be performed or complied with by such Loan Party prior to or at the Restructuring Closing.  After giving effect to the amendment and restatement of the Existing Note Purchase Agreement and the Existing Notes and the waiver of the Specified Events of Default as contemplated by Section 2, no Default or Event of Default shall have occurred and be continuing.

 

4.3.                            Compliance Certificates.

 

(a)                                 Officer’s Certificate.  The Company shall have delivered to the Existing Noteholders an Officer’s Certificate, dated the Restructuring Closing Date, certifying that the conditions specified in Sections 4.1, 4.2, and 4.8 have been fulfilled.

 

(b)                                 Secretary’s Certificates.  Each Loan Party shall have delivered to the Existing Noteholders a certificate of its Secretary or Assistant Secretary, dated the Restructuring Closing Date, certifying as to (i) the resolutions attached thereto and other corporate proceedings relating to the authorization, execution and delivery by such Loan Party of the Loan Documents to which it is a party, (ii) its organizational documents as then in effect, and (iii) specimen signatures of the persons authorized to execute such Loan Documents on such Loan Party’s behalf.

 

(c)                                  Solvency Certificate.  The Company shall have delivered to the Existing Noteholders an Officer’s Certificate of the principal financial officer of the Company, dated the Restructuring Closing Date, certifying that, after giving effect to the entering into by the Loan Parties of the Loan Documents and the Revolving Loan Documents to which they are a party and the funding of the facilities provided for in the Revolving Credit Agreement, (i) each Loan Party is Solvent and (ii) the Loan Parties, taken as a whole, are Solvent.

 

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4.4.                            Opinions of Counsel.

 

The Existing Noteholders and the Collateral Agent shall have received opinions, dated the Restructuring Closing Date, from (i) Latham & Watkins LLP, special counsel for the Loan Parties, (ii) Bryan Cave LLP, special Colorado and Missouri counsel for certain of the Loan Parties, (iii) Modrall, Sperling, Roehl, Harris and Fisk, P.A., special New Mexico counsel for certain of the Loan Parties, and (iv) Ray Quinney & Nebeker P.C., special Utah counsel for certain of the Loan Parties, in each case covering such matters incident to the transactions contemplated by the Loan Documents as the Existing Noteholders or their counsel may reasonably request (and the Company hereby instructs such counsel to deliver such opinions to the Existing Noteholders).

 

4.5.                            Amendment and Restatement Permitted By Applicable Law, etc.

 

On the Restructuring Closing Date, the amendment and restatement of the Existing Note Purchase Agreement and the Existing Notes as contemplated hereby shall not (i) violate any applicable law or regulation (including, without limitation, Regulation T, U or X of the Board of Governors of the Federal Reserve System) or (ii) subject any Existing Noteholder to any tax, penalty or liability under or pursuant to any applicable law or regulation, which law or regulation was not in effect on the date hereof.

 

4.6.                            Consents and Approvals.

 

All member, board of directors, governmental, shareholder and third party consents and approvals necessary in connection with the entering into of, and the transactions contemplated by, this Agreement and the other Loan Documents shall have been obtained.

 

4.7.                            Private Placement Numbers.

 

A Private Placement Number issued by Standard & Poor’s CUSIP Service Bureau (in cooperation with the SVO) shall have been obtained by Morgan, Lewis & Bockius LLP for each series of the Notes (and each Existing Noteholder hereby instructs Morgan, Lewis & Bockius LLP to obtain such Private Placement Numbers).

 

4.8.                            Changes in Corporate Structure.

 

No Loan Party shall have changed its jurisdiction of incorporation or been a party to any merger or consolidation or succeeded to all or any substantial part of the liabilities of any other entity, at any time following the date of the most recent financial statements referred to in Schedule 5.5.

 

4.9.                            Notes.

 

Upon delivery to the Company of the Existing Notes (or lost note affidavits therefor) pursuant to Section 2.2, each Existing Noteholder shall have received an original Note or Notes executed by the Company in favor of such Existing Noteholder (as more particularly set forth in Schedule A) in replacement of each of such Existing Noteholder’s Existing Notes (for

 

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avoidance of doubt, the Company may cancel such Existing Notes upon the satisfaction of the foregoing condition and the effectiveness of this Agreement in accordance with its terms).

 

4.10.                     Subsidiary Guaranty.

 

The Existing Noteholders shall have received a fully executed copy of an amendment and restatement of the Existing Subsidiary Guaranty (as so amended and restated, and as may be further amended, restated, supplemented or otherwise modified from time to time, the “Subsidiary Guaranty”), which shall have been duly executed and delivered by Intrepid Moab, Intrepid New Mexico, Intrepid Wendover, 203 E. Florence, LLC, a Delaware limited liability company (“203 E. Florence”), Moab Gas Pipeline, LLC, a Colorado limited liability company (“Moab Gas Pipeline”), the Company and each of the Existing Noteholders and shall be in full force and effect.

 

4.11.                     Revolving Loan Documents.

 

The Existing Noteholders shall have received a fully executed copy, certified by a Responsible Officer of the Company as true and complete, of the Credit Agreement, dated as of the date hereof, by and among Bank of Montreal, as administrative agent (together with its successors and assigns in such capacity and any agent under any replacement Revolving Credit Agreement entered into in accordance with the Intercreditor Agreement, the “Revolving Agent”), the lenders party thereto (the “Revolving Lenders”), the Company, Intrepid Moab, Intrepid New Mexico, Intrepid Wendover, 203 E. Florence and Moab Gas Pipeline (as amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof and of the Intercreditor Agreement, and including any agreement governing indebtedness incurred to refinance, replace, extend, renew, refund, repay, prepay, redeem, purchase, defease or retire, or issued in exchange or replacement for, the indebtedness and other obligations thereunder, in each case in accordance with the terms thereof and of the Intercreditor Agreement, the “Revolving Credit Agreement”), and of each of the other Revolving Loan Documents, which Revolving Loan Documents shall be in full force and effect.  The Revolving Credit Agreement shall provide for aggregate commitments to lend thereunder of not less than $30,000,000 and not more than $60,000,000.  The Existing Noteholders shall have received evidence reasonably satisfactory to them that the conditions precedent to the effectiveness of the Revolving Credit Agreement have been satisfied and/or waived and that the Revolving Credit Agreement is in full force and effect.

 

4.12.                     Intercreditor Agreement.

 

The Existing Noteholders shall have received a fully executed copy of the Intercreditor Agreement, dated as of the Restructuring Closing Date, by and among the Collateral Agent and the Revolving Agent, and acknowledged by the Company, Intrepid Moab, Intrepid New Mexico, Intrepid Wendover, 203 E. Florence and Moab Gas Pipeline (as amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof, and including any successor agreement entered into by the Collateral Agent and the Revolving Agent, the “Intercreditor Agreement”), and the Intercreditor Agreement shall be in full force and effect.

 

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4.13.                     Collateral Agency Agreement.

 

The Existing Noteholders shall have received a fully executed copy of the Collateral Agency Agreement, dated as of the Restructuring Closing Date, by and among the Collateral Agent and the Existing Noteholders, and acknowledged by the Company, Intrepid Moab, Intrepid New Mexico, Intrepid Wendover, 203 E. Florence and Moab Gas Pipeline (as amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof, the “Collateral Agency Agreement”), and the Collateral Agency Agreement shall be in full force and effect.

 

4.14.                     Collateral Documents.

 

(a)                                 The Existing Noteholders shall have received a fully executed copy of the Security and Pledge Agreement, dated as of the Restructuring Closing Date, among the Company, Intrepid Moab, Intrepid New Mexico, Intrepid Wendover, 203 E. Florence, Moab Gas Pipeline and the Collateral Agent (as amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof, the “Security Agreement”), and the Security Agreement shall be in full force and effect.

 

(b)                                 The Existing Noteholders shall have received a fully executed and notarized copy of the Fee and Leasehold Mortgage, Line of Credit Mortgage, Security Agreement, Assignment, Financing Statement, Fixture Filing and As-Extracted Collateral Filing, dated as of the Restructuring Closing Date, from Intrepid New Mexico to the Collateral Agent, relating to the real property of Intrepid New Mexico located in Eddy County, New Mexico (as amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof, the “Mortgage (Eddy County, New Mexico)”), and the Mortgage (Eddy County, New Mexico) shall be in full force and effect.

 

(c)                                  The Existing Noteholders shall have received a fully executed and notarized copy of the Fee and Leasehold Mortgage, Line of Credit Mortgage, Security Agreement, Assignment, Financing Statement, Fixture Filing and As-Extracted Collateral Filing, dated as of the Restructuring Closing Date, from Intrepid New Mexico to the Collateral Agent, relating to the real property of Intrepid New Mexico located in Lea County, New Mexico (as amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof, the “Mortgage (Lea County, New Mexico)”), and the Mortgage (Lea County, New Mexico) shall be in full force and effect.

 

(d)                                 The Existing Noteholders shall have received a fully executed and notarized copy of the Fee and Leasehold Deed of Trust, Mortgage, Security Agreement, Assignment, Financing Statement, Fixture Filing and As-Extracted Collateral Filing, dated as of the Restructuring Closing Date, from Intrepid Moab to U.S. Bank National Association, as trustee, relating to the real property of Intrepid Moab located in Grand County, Utah (as amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof, the “Mortgage (Intrepid Moab/Grand County, Utah)”), and the Mortgage (Intrepid Moab/Grand County, Utah) shall be in full force and effect.

 

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(e)                                  The Existing Noteholders shall have received a fully executed and notarized copy of the Fee and Leasehold Deed of Trust, Mortgage, Security Agreement, Assignment, Financing Statement, Fixture Filing and As-Extracted Collateral Filing, dated as of the Restructuring Closing Date, from Intrepid Moab to U.S. Bank National Association, as trustee, relating to the real property of Intrepid Moab located in San Juan County, Utah (as amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof, the “Mortgage (San Juan County, Utah)”), and the Mortgage (San Juan County, Utah) shall be in full force and effect.

 

(f)                                   The Existing Noteholders shall have received a fully executed and notarized copy of the Fee and Leasehold Deed of Trust, Mortgage, Security Agreement, Assignment, Financing Statement, Fixture Filing and As-Extracted Collateral Filing, dated as of the Restructuring Closing Date, from Intrepid Wendover to U.S. Bank National Association, as trustee, relating to the real property of Intrepid Wendover located in Tooele County, Utah (as amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof, the “Mortgage (Tooele County, Utah)”), and the Mortgage (Tooele County, Utah) shall be in full force and effect.

 

(g)                                  The Existing Noteholders shall have received a fully executed and notarized copy of the Fee and Leasehold Deed of Trust, Mortgage, Security Agreement, Assignment, Financing Statement, Fixture Filing and As-Extracted Collateral Filing, dated as of the Restructuring Closing Date, from Moab Gas Pipeline to U.S. Bank National Association, as trustee, relating to the real property of Moab Gas Pipeline located in Grand County, Utah (as amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof, the “Mortgage (Moab Gas Pipeline/Grand County, Utah)”), and the Mortgage (Moab Gas Pipeline/Grand County, Utah) shall be in full force and effect.

 

(h)                                 The Existing Noteholders shall have received a fully executed and notarized copy of the Deed of Trust, Assignment of Leases and Rents, Assignment of Contracts, Security Agreement and Fixture Filing, dated as of the Restructuring Closing Date, from 203 E. Florence to Trustee Services, Inc., as trustee, for the benefit of the Collateral Agent, relating to the real property of 203 E. Florence located in Buchanan County, Missouri (as amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof, the “Mortgage (Missouri)”), and the Mortgage (Missouri) shall be in full force and effect.

 

(i)                                     The Existing Noteholders shall have received all Mortgaged Property Support Documents with respect to each Mortgaged Property (other than those Mortgaged Property Support Documents described in Schedule 9.13 hereto).

 

(j)                                    The Existing Noteholders shall have received a fully executed copy of the Assigned Account Agreement, dated as of the Restructuring Closing Date, among BMO Harris Bank N.A., as depository bank, the Revolving Agent, the Collateral Agent and the Company (as amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof, the “Deposit Account Control Agreement

 

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(BMO)”), and the Deposit Account Control Agreement (BMO) shall be in full force and effect.

 

(k)                                 [Reserved]

 

(l)                                     The Existing Noteholders shall have received a fully executed copy of the Notice of Grant of Security Interest in Patents, dated as of the Restructuring Closing Date, between the Company and the Collateral Agent (as amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof, the “Notice of Grant of Security Interest in Patents”), and the Notice of Grant of Security Interest in Patents shall be in full force and effect.

 

(m)                             The Existing Noteholders shall have received a fully executed copy of the Notice of Grant of Security Interest in Trademarks, dated as of the Restructuring Closing Date, between the Company and the Collateral Agent (as amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof, the “Notice of Grant of Security Interest in Trademarks”), and the Notice of Grant of Security Interest in Trademarks shall be in full force and effect.

 

4.15.                     Other Documents and Actions Relating to Collateral.

 

(a)                                 The Existing Noteholders shall have received a fully executed copy of a perfection certificate, dated as of the Restructuring Closing Date, delivered by each of the Loan Parties to the Collateral Agent and the Existing Noteholders.

 

(b)                                 The Existing Noteholders shall have received (i) searches of UCC filings in the jurisdiction of incorporation or formation, as applicable, of each Loan Party and each jurisdiction where a filing would need to be made in order to perfect the Collateral Agent’s security interest in the Collateral, copies of the financing statements on file in such jurisdictions and evidence that no Liens exist other than Liens permitted in accordance with Section 10.4 and (ii) tax lien, judgment and bankruptcy searches.

 

(c)                                  The Existing Noteholders shall have received searches of ownership of Intellectual Property in the appropriate governmental offices and such patent/trademark/copyright filings as requested by any Existing Noteholder in order to perfect the Collateral Agent’s security interest in the Collateral.

 

(d)                                 The Existing Noteholders shall have received completed UCC financing statements for each appropriate jurisdiction as is necessary to perfect the Collateral Agent’s security interest in the Collateral.

 

(e)                                  In the case of any Pledged Equity evidenced by stock or membership certificates, the Collateral Agent shall have received such certificates and undated stock or transfer powers duly executed in blank.

 

(f)                                   To the extent required to be delivered, filed, registered or recorded pursuant to the terms and conditions of the Collateral Documents, the Collateral Agent shall have received all instruments, documents and chattel paper in the possession of any

 

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of the Loan Parties, together with allonges or assignments as may be necessary or appropriate to create and perfect the Collateral Agent’s security interest in the Collateral.

 

(g)                                  The Collateral Agent shall have received a completed “Life-of-Loan” Federal Emergency Management Agency Standard Flood Hazard Determination with respect to each Mortgaged Property (together with a notice about special flood hazard area status and flood disaster assistance duly executed by the relevant Loan Party relating thereto).

 

(h)                                 The Collateral Agent shall have received copies of insurance policies, declaration pages, certificates, and endorsements of insurance or insurance binders evidencing liability, casualty, property, terrorism and business interruption insurance meeting the requirements set forth herein or in the Collateral Documents.

 

(i)                                     The Existing Noteholders shall have received each of the following with respect to the real property of 203 E. Florence located in Buchanan County, Missouri:

 

(i)                                     Fully paid American Land Title Association Lender’s Extended Coverage mortgagee title insurance policy, with endorsements and in amounts acceptable to the Existing Noteholders, issued by First American Title Insurance Company, insuring the Mortgage (Missouri) to be a valid first and subsisting Lien on the property described therein, free and clear of all defects (including, but not limited to, mechanics’ and materialmen’s Liens) and encumbrances, excepting only Liens permitted in accordance with Section 10.4, and providing for such other affirmative insurance (including endorsements for any future advances under the Loan Documents and for zoning of the applicable property) as the Existing Noteholders may deem necessary or desirable, together with any customary affidavits and indemnities as may be required or necessary to obtain such title insurance satisfactory to the Existing Noteholders.

 

(ii)                                  American Land Title Association/American Congress on Surveying and Mapping form as-built survey, for which all necessary fees (where applicable) have been paid, and dated no more than thirty (30) days before the Restructuring Closing Date, certified to the Collateral Agent and First American Title Insurance Company in a manner satisfactory to each of the Existing Noteholders and First American Title Insurance Company by a land surveyor duly registered and licensed in the State of Missouri and acceptable to each of the Existing Noteholders and First American Title Insurance Company, showing all buildings and other improvements, any off-site improvements, the location of any easements, parking spaces, rights of way, building set-back lines and other dimensional regulations and the absence of encroachments, either by such improvements or on such property, and other defects, other than encroachments and other defects acceptable to the Existing Noteholders.

 

(iii)                               Permanent certificate of occupancy.

 

(iv)                              Zoning no violation letter.

 

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(v)                                 PZR Report issued by Planning and Zoning Resource Company.

 

(vi)                              Phase I Environmental Site Assessment Report (either addressed to the Existing Noteholders or accompanied by a reliance letter from the company preparing the report on a form reasonably satisfactory to counsel for the Existing Noteholders).

 

4.16.                     FTI Engagement Agreement.

 

The Existing Noteholders shall have received a fully executed copy of the engagement agreement dated October 31, 2016 by and among the Financial Advisor, Morgan, Lewis & Bockius LLP and the Company (including the Standard Terms and Conditions related thereto) (as amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof, the “FTI Engagement Agreement”), and the FTI Engagement Agreement shall be in full force and effect.

 

4.17.                     Amendment Fee.

 

The Company shall have paid to each Existing Noteholder an amendment fee in an amount equal to the sum of (a) twenty-five basis points (0.25%) of the aggregate principal amount of the Existing Notes of such Existing Noteholder outstanding on the date hereof, plus (b) the Supplemental Amendment Fee with respect to each Note of such Existing Noteholder, by wire transfer of immediately available funds to such Existing Noteholder in accordance with the payment instructions set forth in Schedule A.

 

4.18.                     Payment of Fees and Expenses.

 

Without limiting the provisions of Section 15.1, the Company shall have paid at or before the time of the Restructuring Closing each of the fees, charges and disbursements set forth in the Funds Flow Statement including, without limitation, the reasonable fees, charges and disbursements of (i) Morgan, Lewis & Bockius LLP, special counsel to the Existing Noteholders, (ii) Hinkle Shanor LLP, special New Mexico counsel to the Existing Noteholders, (iii) Polsinelli PC, special Missouri counsel to the Existing Noteholders, (iv) Dorsey & Whitney LLP, special Utah counsel to the Existing Noteholders, (v) the Financial Advisor, (vi) the Collateral Agent, and (vii) McGuire, Craddock & Strother, P.C., counsel to the Collateral Agent, in each case under clauses (i) through (vii) to the extent reflected in a statement of such counsel, advisor or agent rendered to the Company at least one Business Day prior to the Restructuring Closing.

 

4.19.                     Proceedings and Documents.

 

All corporate and other proceedings in connection with the transactions contemplated by this Agreement and all documents and instruments reasonably related to such transactions shall be satisfactory to the Existing Noteholders and their special counsel, and the Existing Noteholders and their special counsel shall have received all such counterpart originals or certified or other copies of such documents as they may reasonably request.

 

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5.                                      REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

 

To induce the Existing Noteholders to enter into this Agreement, the Company represents and warrants to each Existing Noteholder that as of date hereof and as of the Restructuring Closing Date:

 

5.1.                            Organization; Power and Authority.

 

The Company is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation, and is duly qualified as a foreign corporation and is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  The Company has the corporate power and authority to own or hold under lease the properties it purports to own or hold under lease, to transact the business it transacts and proposes to transact, to execute and deliver this Agreement, the Notes and the other Loan Documents to which it is a party and to perform the provisions hereof and thereof.

 

5.2.                            Authorization, etc.

 

(a)                                 This Agreement, the Notes and the other Loan Documents to which the Company is a party have been duly authorized by all necessary corporate action on the part of the Company, and this Agreement constitutes, and upon execution and delivery thereof each other Loan Document will constitute, a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

 

(b)                                 Each Loan Document to which any Subsidiary is a party has been duly authorized by all necessary corporate or other action on the part of such Subsidiary, and upon execution and delivery thereof, each Loan Document to which any Subsidiary is a party will constitute, a legal, valid and binding obligation of such Subsidiary enforceable against such Subsidiary in accordance with its terms, except as such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally, and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

 

5.3.                            Disclosure.

 

This Agreement and all other documents, certificates, financial statements and other writings delivered to or made available to the Existing Noteholders by or on behalf of the Company in connection with the transactions contemplated hereby (this Agreement and such other documents, certificates, financial statements and other writings delivered to or made available to each Existing Noteholder being referred to, collectively, as the “Disclosure Documents”), taken as a whole, do not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading in light of the 

 

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circumstances under which they were made.  Except as disclosed in the Disclosure Documents, since December 31, 2015, there has been no change in the financial condition, operations, business or properties of the Company or any Subsidiary, except changes that individually or in the aggregate would not reasonably be expected to have a Material Adverse Effect.  There is no fact known to the Company that would reasonably be expected to have a Material Adverse Effect that has not been set forth herein or in the Disclosure Documents.

 

The projected financial information delivered to the Existing Noteholders and/or the Financial Advisor prior to the date hereof was prepared in good faith based upon assumptions believed by the Company to have been reasonable at the time of the preparation thereof, and does not contain any statements or conclusions which are based upon or include information known to the Company or any of its Subsidiaries to be misleading in any material respect or which fail to take into account material information known to the Company or any of its Subsidiaries regarding the matters reported therein.  The Company believes that such projected financial information is reasonable, it being recognized by the Existing Noteholders, however, that projections as to future events are not to be viewed as facts and that the actual results during the period or periods covered by projections may differ from the projected results included in such projections and the differences may be material.

 

5.4.                            Organization and Ownership of Shares of Subsidiaries.

 

(a)                                 Schedule 5.4 contains (except as noted therein) complete and correct lists as of the date hereof of:  (i) the Company’s Subsidiaries, showing, as to each Subsidiary, (w) the correct name thereof, (x) the jurisdiction of its organization, (y) the percentage of shares of each class of its capital stock or similar equity interests outstanding owned by the Company and each other Subsidiary, (z) whether such Subsidiary is (1) a Subsidiary Guarantor, or (2) a Grantor and (ii) the Company’s directors and Responsible Officers.

 

(b)                                 All of the outstanding shares of capital stock or similar equity interests of each Subsidiary shown in Schedule 5.4 as being owned by the Company and its Subsidiaries have been validly issued, are fully paid and nonassessable and are owned by the Company or another Subsidiary free and clear of any Lien (except as otherwise disclosed in Schedule 5.4).

 

(c)                                  Each Subsidiary is a corporation or other legal entity duly organized, validly existing and, where applicable, in good standing under the laws of its jurisdiction of organization, and is duly qualified as a foreign corporation or other legal entity and, where applicable, is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  Each such Subsidiary has the corporate or other power and authority to own or hold under lease the properties it purports to own or hold under lease and to transact the business it transacts and proposes to transact, and to execute and deliver the Loan Documents that are being executed and delivered in connection with this Agreement to which it is a party and to perform the provisions hereof and thereof.

 

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(d)                                 No Subsidiary is a party to, or otherwise subject to, any legal, regulatory, contractual or other restriction (other than this Agreement, the agreements listed on Schedule 5.4 and customary limitations imposed by corporate law or similar statutes) restricting the ability of such Subsidiary to pay dividends out of profits or make any other similar distributions of profits to the Company or any of its Subsidiaries that owns outstanding shares of capital stock or similar equity interests of such Subsidiary.

 

5.5.                            Financial Statements.

 

The Company has delivered to each Existing Noteholder copies of the financial statements of the Company and its Subsidiaries listed on Schedule 5.5.  All of said financial statements (including in each case the related schedules and notes) fairly present in all material respects the consolidated financial condition of the Company and its Subsidiaries as of the respective dates specified in such Schedule and the consolidated results of their operations and cash flows for the respective periods so specified and have been prepared in accordance with GAAP consistently applied throughout the periods involved except as set forth in the notes thereto (subject, in the case of any interim financial statements, to normal year-end adjustments and absence of footnotes).  The Company and its Subsidiaries do not have any Material liabilities that are not disclosed on such financial statements or otherwise disclosed in the Disclosure Documents.

 

5.6.                            Compliance with Laws, Other Instruments, etc.

 

The execution, delivery and performance by the Company and each Subsidiary of each of the Loan Documents to which it is a party will not (i) contravene, result in any breach of, or constitute a default under, or result in the creation of any Lien (other than Liens created pursuant to the Collateral Documents) in respect of any property of the Company or any Subsidiary under, any indenture, mortgage, deed of trust, loan, purchase or credit agreement, corporate charter or by-laws, or any other Material agreement, lease, or instrument to which the Company or any Subsidiary is bound or by which the Company or any Subsidiary or any of their respective properties may be bound or affected, (ii) conflict with or result in a breach of any of the terms, conditions or provisions of any order, judgment, decree, or ruling of any court, arbitrator or Governmental Authority applicable to the Company or any Subsidiary or (iii) violate any provision of any statute or other rule or regulation of any Governmental Authority applicable to the Company or any Subsidiary.

 

5.7.                            Governmental Authorizations, etc.

 

No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with:

 

(a)                                 the execution, delivery or performance of any Loan Document by the Company or any Subsidiary party thereto,

 

(b)                                 the grant by the Loan Parties of the Liens granted by them pursuant to the Collateral Documents,

 

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(c)                                  the perfection or maintenance of the Liens created under the Collateral Documents, or

 

(d)                                 the exercise by the Collateral Agent or any holder of a Note of its rights under the Loan Documents or the remedies in respect of the Collateral pursuant to the Collateral Documents,

 

other than (i) authorizations, approvals, actions, notices and filings which have been duly obtained and are in full force and effect and (ii) filings to perfect the Liens created by the Collateral Documents.

 

5.8.                            Litigation; Observance of Agreements, Statutes and Orders.

 

(a)                                 There are no actions, suits, investigations or proceedings pending or, to the knowledge of the Company, threatened against or affecting the Company or any Subsidiary or any property of the Company or any Subsidiary in any court or before any arbitrator of any kind or before or by any Governmental Authority that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.

 

(b)                                 Neither the Company nor any Subsidiary is (i) in default under any term of any agreement or instrument to which it is a party or by which it is bound, (ii) in violation of any order, judgment, decree or ruling of any court, arbitrator or Governmental Authority or (iii) in violation of any applicable law, ordinance, rule or regulation of any Governmental Authority (including Environmental Laws, the USA PATRIOT Act or any of the other laws and regulations that are referred to in Section 5.14), in each case which default or violation, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.

 

5.9.                            Taxes.

 

The Company and its Subsidiaries have filed all tax returns that are required to have been filed in any jurisdiction, and have paid all taxes shown to be due and payable on such returns and all other taxes and assessments levied upon them or their properties, assets, income or franchises, to the extent such taxes and assessments have become due and payable and before they have become delinquent, except for any taxes and assessments (i) the amount of which is not individually or in the aggregate Material or (ii) the amount, applicability or validity of which is currently being contested in good faith by appropriate proceedings and with respect to which the Company or a Subsidiary, as the case may be, has established adequate reserves in accordance with GAAP.  The Company knows of no basis for any other tax or assessment that would reasonably be expected to have a Material Adverse Effect.  The charges, accruals and reserves on the books of the Company and its Subsidiaries in respect of Federal, state or other taxes for all fiscal periods are adequate.

 

5.10.                     Title to property; Leases.

 

The Company and its Subsidiaries have good and sufficient title to, or leaseholds or other rights to use, their respective properties that individually or in the aggregate are Material, including all such properties reflected in the most recent audited balance sheet referred

 

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to in Section 5.5 or purported to have been acquired by the Company or any Subsidiary after said date (except as sold or otherwise disposed of in a transaction not prohibited hereby), in each case free and clear of Liens prohibited by this Agreement.  All leases that individually or in the aggregate are Material are valid and subsisting and are in full force and effect in all material respects, in each case free and clear of Liens prohibited by this Agreement.

 

5.11.                     Licenses, Permits, etc.

 

(a)                                 The Company and its Subsidiaries own or possess rights to use all licenses, permits, franchises, authorizations, patents, copyrights, proprietary software, service marks, trademarks and trade names, or rights thereto, that individually or in the aggregate are Material, without any conflict with the rights of others known to the Responsible Officers, except for any such conflict that would not reasonably be expected to result in a Material Adverse Effect.

 

(b)                                 To the knowledge of the Responsible Officers, no product or service of the Company or any Subsidiary infringes in any material respect any license, permit, franchise, authorization, patent, copyright, proprietary software, service mark, trademark, trade name or other right owned by any other Person, other than any infringement that would not reasonably be expected to result in a Material Adverse Effect.

 

(c)                                  To the knowledge of the Responsible Officers, there is no Material violation by any Person of any right of the Company or any Subsidiary with respect to any license, permit, franchise, authorization, patent, copyright, proprietary software, service mark, trademark, trade name or other right owned or used by the Company or any Subsidiary, other than any violation that would not reasonably be expected to result in a Material Adverse Effect.

 

5.12.                     Compliance with ERISA.

 

(a)                                 The Company and each ERISA Affiliate have operated and administered each Plan in compliance with all applicable laws except for such instances of noncompliance as have not resulted in and would not reasonably be expected to result in a Material Adverse Effect.  Neither the Company nor any ERISA Affiliate has incurred any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans (as defined in section 3 of ERISA), and no event, transaction or condition has occurred or exists that would reasonably be expected to result in the incurrence of any such liability by the Company or any ERISA Affiliate, or in the imposition of any Lien on any of the rights, properties or assets of the Company or any ERISA Affiliate, in either case pursuant to Title I or IV of ERISA or to section 430(k) of the Code or to any such penalty or excise tax provisions under the Code or Federal law or section 4068 of ERISA or by the granting of a security interest in connection with the amendment of a Plan, in each case other than such liabilities or Liens as would not be individually or in the aggregate Material.

 

(b)                                 The present value of the aggregate benefit liabilities under each of the Plans (other than Multiemployer Plans), determined as of the end of such Plan’s most

 

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recently ended plan year on the basis of the actuarial assumptions specified for funding purposes in such Plan’s most recent actuarial valuation report, did not exceed the aggregate current value of the assets of such Plan allocable to such benefit liabilities by more than $5,000,000 in the aggregate for all Plans.  The term “benefit liabilities” has the meaning specified in section 4001 of ERISA and the terms “current value” and “present value” have the meaning specified in section 3 of ERISA.

 

(c)                                  The Company and its ERISA Affiliates have not incurred withdrawal liabilities (and are not subject to contingent withdrawal liabilities) under section 4201 or 4204 of ERISA in respect of Multiemployer Plans that individually or in the aggregate are Material.

 

(d)                                 The expected postretirement benefit obligation (determined as of the last day of the Company’s most recently ended fiscal year in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 715-60, without regard to liabilities attributable to continuation coverage mandated by section 4980B of the Code) of the Company and its Subsidiaries is not Material or has been disclosed in the most recent audited consolidated financial statements of the Company.

 

(e)                                  The execution and delivery of this Agreement will not involve any transaction that is subject to the prohibitions of section 406 of ERISA or in connection with which a tax could be imposed pursuant to section 4975(c)(1)(A)-(D) of the Code.  The representation by the Company in the first sentence of this Section 5.12(e) is made in reliance upon and subject to the accuracy of each Existing Noteholder’s representation in Section 6.2 as to the sources of the funds used to pay the purchase price of the Notes purchased by such Existing Noteholder.

 

5.13.                     Existing Indebtedness; Future Liens.

 

(a)                                 Except as described therein, Schedule 5.13 sets forth a complete and correct list of all outstanding Indebtedness of the Company and its Subsidiaries (other than the Indebtedness evidenced by the Notes) as of October 31, 2016 (including a description of the obligors and obligees, principal amount outstanding and collateral therefor, if any, and Guaranty thereof, if any) since which date there has been no Material change in the amounts, interest rates, sinking funds, installment payments or maturities of the Indebtedness of the Company or its Subsidiaries.  After giving effect to this Agreement, neither the Company nor any Subsidiary is in default and no waiver of default is currently in effect, in the payment of any principal or interest on any Indebtedness of the Company or such Subsidiary and no event or condition exists with respect to any Indebtedness of the Company or any Subsidiary that would permit (or that with notice or the lapse of time, or both, would permit) one or more Persons to cause such Indebtedness to become due and payable before its stated maturity or before its regularly scheduled dates of payment.

 

(b)                                 Except as disclosed in Schedule 5.13, neither the Company nor any Subsidiary has agreed or consented to cause or permit in the future (upon the happening

 

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of a contingency or otherwise) any of its property, whether now owned or hereafter acquired, to be subject to a Lien not permitted by Section 10.4.

 

(c)                                  Neither the Company nor any Subsidiary is a party to, or otherwise subject to any provision contained in, any instrument evidencing Indebtedness of the Company or such Subsidiary, any agreement relating thereto or any other agreement (including, but not limited to, its charter or other organizational document) which limits the amount of, or otherwise imposes restrictions on the incurring of, Indebtedness of the Company, except as specifically indicated in Schedule 5.13.

 

5.14.                     Foreign Assets Control Regulations, etc.

 

(a)                                 None of the Company, any Subsidiary or, to the knowledge of the Company, any director, officer, agent, employee or other Person acting on behalf of the Company or any Subsidiary (i) is a Blocked Person, (ii) has been notified that its name appears or may in the future appear on a State Sanctions List or (iii) is a target of sanctions that have been imposed by the United Nations or the European Union.

 

(b)                                 None of the Company, any Subsidiary or, to the knowledge of the Company, any director, officer, agent, employee or other Person acting on behalf of the Company or any Subsidiary (i) has violated, been found in violation of, or been charged or convicted under, any applicable U.S. Economic Sanctions Laws, Anti-Money Laundering Laws or Anti-Corruption Laws or (ii) to the Company’s knowledge, is under investigation by any Governmental Authority for possible violation of any U.S. Economic Sanctions Laws, Anti-Money Laundering Laws or Anti-Corruption Laws.

 

(c)                                  No part of the proceeds from the sale of the Existing Notes under the Existing Note Agreement:

 

(i)                                     constituted, constitutes or will constitute funds obtained on behalf of any Blocked Person or will otherwise be used by the Company, any Subsidiary or, to the knowledge of the Company, any director, officer, agent, employee or other person acting on behalf of the Company or any Subsidiary, directly or indirectly, (A) in connection with any investment in, or any transactions or dealings with, any Blocked Person, (B) for any purpose that would cause any holder of a Note to be in violation of any U.S. Economic Sanctions Laws or (C) otherwise in violation of any U.S. Economic Sanctions Laws;

 

(ii)                                  has been used or will be used, directly or indirectly, in violation of, or cause any holder of a Note to be in violation of, any applicable Anti-Money Laundering Laws; or

 

(iii)                               has been used or will be used, directly or indirectly, for the purpose of making any improper payments, including bribes, to any Governmental Official or commercial counterparty in order to obtain, retain or direct business or obtain any improper advantage, in each case which would be in violation of, or cause any holder of a Note to be in violation of, any applicable Anti-Corruption Laws.

 

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(d)                                 The Company has taken measures as required by applicable law to ensure that the Company, each Subsidiary and each director, officer, agent, employee and other person acting on behalf of the Company or any Subsidiary is and will continue to be in compliance with all applicable U.S. Economic Sanctions Laws, Anti-Money Laundering Laws and Anti-Corruption Laws.

 

5.15.                     Status under Certain Statutes.

 

Neither the Company nor any Subsidiary is subject to regulation under the Investment Company Act of 1940, as amended, or the Federal Power Act, as amended.

 

5.16.                     Environmental Matters.

 

Neither the Company nor any Subsidiary has knowledge of any claim or has received any notice of any claim, and no proceeding has been instituted raising any claim against the Company or any Subsidiary or any of their respective real properties now or formerly owned, leased or operated by any of them or other assets, alleging any damage to the environment or violation of any Environmental Laws, except, in each case, such as would not reasonably be expected to result in a Material Adverse Effect.

 

(a)                                 Neither the Company nor any Subsidiary has knowledge of any facts which would give rise to any claim, public or private, of violation of Environmental Laws or damage to the environment emanating from, occurring on or in any way related to real properties now or formerly owned, leased or operated by any of them or to other assets or their use, except, in each case, such as would not reasonably be expected to result in a Material Adverse Effect.

 

(b)                                 Neither the Company nor any Subsidiary has stored any Hazardous Materials on real properties now or formerly owned, leased or operated by any of them and has not disposed of any Hazardous Materials in a manner contrary to any Environmental Laws in each case in any manner that would reasonably be expected to result in a Material Adverse Effect.

 

(c)                                  All buildings on all real properties now owned, leased or operated by the Company or any Subsidiary are in compliance with applicable Environmental Laws, except where failure to comply would not reasonably be expected to result in a Material Adverse Effect.

 

5.17.                     Collateral Representations.

 

(a)                                 Collateral Documents.  On the Restructuring Closing Date, the provisions of the Collateral Documents will be effective to create, in favor of the Collateral Agent, for the benefit of the Secured Parties, (i) a legal, valid and enforceable first priority Lien (subject to Liens permitted in accordance with Section 10.4) on all right, title and interest of the respective Loan Parties in the Noteholder Priority Collateral and (ii) a legal, valid and enforceable second priority Lien (subject to Liens permitted in accordance with Section 10.4) on all right, title and interest of the respective Loan Parties in the Revolving Credit Priority Collateral.  Except for filings completed prior to the Restructuring Closing

 

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Date and as contemplated hereby and by the Collateral Documents, no filing or other action will be necessary to perfect or protect such Liens.

 

(b)                                 Intellectual Property.  Set forth on Schedule 5.17(b) is a list of all registered or issued Intellectual Property (including all applications for registration and issuance) owned by each of the Loan Parties or that each of the Loan Parties has the right to (including the name/title, current owner, registration or application number, and registration or application date).

 

(c)                                  Deposit Accounts and Securities Accounts.  Set forth on Schedule 5.17(c) is a description of all Deposit Accounts and Securities Accounts of the Loan Parties, including (A) the name of the applicable Loan Party, (B) in the case of a Deposit Account, the depository institution and whether such account is (x) exclusively used for payroll, payroll taxes or employee benefits, (y) an Excluded Escrow/Cash Collateral Account, or (z) an account containing not more than $10,000 at any time, (C) in the case of a Securities Account, the Securities Intermediary or issuer, as applicable, and (D) the account number.

 

(d)                                 Commercial Tort Claims.  Set forth on Schedule 5.17(d) is a description of all Commercial Tort Claims of the Loan Parties.

 

(e)                                  Pledged Equity Interests.  Set forth on Schedule 5.17(e) is a list of (i) all Pledged Equity and (ii) all other Equity Interests required to be pledged to the Collateral Agent pursuant to the Collateral Documents (in each case, detailing the Grantor, the Person whose Equity Interests are pledged, the number of shares of each class of Equity Interests, whether such Equity Interests are certificated and the certificate number (if any), and percentage ownership of outstanding shares of each class of Equity Interests and the class or nature of such Equity Interests (i.e. voting, non-voting, preferred, etc.)).

 

(f)                                   Real Properties.

 

(i)                                     Set forth on Schedule 5.17(f)(i) is a list of all owned or leased real properties of the Loan Parties including (A) the name of the Loan Party owning (or leasing) such real property, (B) the legal description of the real property (and, where available, the address of the real property, including the city, county, state and zip code in which such real property is located), (C) an indication as to whether such real property is leased or owned, and if leased, the name of the owner and, if available, lease identification number, and (D) an indication as to whether such real property is part of the current or planned mining and related operations of the Company or any Subsidiary.

 

(ii)                                  Set forth on Schedule 5.17(f)(ii) is a list of (A) each headquarter location of the Loan Parties, (B) each other location where any significant administrative functions of the Loan Parties are performed, (C) each other location where the Loan Parties maintain any books or records (electronic or otherwise) and (D) each location where any personal property Collateral with a

 

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Fair Market Value in excess of $10,000 (or its equivalent in other currencies) is maintained.

 

(iii)                               Unless as otherwise indicated on Schedule 5.17(f)(i) or Schedule 5.17(f)(ii), no real property listed in Schedule 5.17(f)(i) or Schedule 5.17(f)(ii) is in an area designated by the Federal Emergency Management Agency as having special flood or mudslide hazards.

 

(g)                                  Water Rights.

 

(i)                                     Set forth on Schedule 5.17(g) is a list of all Water Rights held by each Loan Party including (A) the name of the Loan Party holding such Water Right, (B) the legal description of the real property (and, where available, the address of the real property, including the city, county, state and zip code in which such real property is located) to which such Water Right is appurtenant or in connection with which such Water Right is or is planned to be used, and (C) the issuer of such Water Right and any application, claim, certificate or other number or other information identifying such Water Right.

 

(ii)                                  The Water Rights set forth on Schedule 5.17(g) provide the Company and its Subsidiaries with the necessary rights to withdraw and use the water necessary for the operation of the mines and operating facilities of the Company and its Subsidiaries as presently operated or planned to be operated (or otherwise necessary for the conduct of their businesses as presently conducted or planned to be conducted).  The Loan Parties have good and sufficient title to or other rights to use the Water Rights set forth on Schedule 5.17(g), in each case free and clear of Liens other than Liens permitted in accordance with Section 10.4.  To the knowledge of the Company, none of the Water Rights set forth on Schedule 5.17(g) have been lost as a result of nonuse, abandonment, forfeiture, passage of time, failure to comply with any applicable laws or any sale or transfer thereof.  All charges, filings, registrations and assessments that are required with respect to the Water Rights set forth on Schedule 5.17(g) have been properly made or paid, as applicable.

 

5.18.                     No Defaults.

 

After giving effect to this Agreement, no Default or Event of Default has occurred and is continuing.

 

5.19.                     Solvency.

 

Each Loan Party is Solvent and the Loan Parties, on a consolidated basis, are Solvent.  No transfer of property has been or will be made by any Loan Party and no obligation has been or will be incurred by any Loan Party in connection with the transactions contemplated by this Agreement or the other Loan Documents with the intent to hinder, delay, or defraud either present or future creditors of any Loan Party.

 

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6.                                      REPRESENTATIONS OF THE EXISTING NOTEHOLDERS.

 

6.1.                            Purchase for Investment.

 

Each Existing Noteholder severally represents that it acquired its Existing Notes and is acquiring the Notes in replacement of its Existing Notes for its own account or for one or more separate accounts maintained by such Existing Noteholder or for the account of one or more pension or trust funds and not with a view to the distribution thereof, provided that the disposition of such Existing Noteholder’s or their property shall at all times be within such Existing Noteholder’s or their control.  Each Existing Noteholder understands that the Notes have not been registered under the Securities Act and may be resold only if registered pursuant to the provisions of the Securities Act or if an exemption from registration is available, except under circumstances where neither such registration nor such an exemption is required by law, and that the Company is not required to register the Notes.

 

6.2.                            Source of Funds.

 

To the extent provided in the Notes, each holder of a Note will be deemed, by its acceptance of such Note, to have severally represented that at least one of the following statements is an accurate representation as to each source of funds (a “Source”) used by such holder to acquire such Note, in each case as of the time such Note was acquired:

 

(a)                                 the Source is an “insurance company general account” (as the term is defined in the United States Department of Labor’s Prohibited Transaction Exemption (“PTE”) 95-60) in respect of which the reserves and liabilities (as defined by the annual statement for life insurance companies approved by the NAIC (the “NAIC Annual Statement”) for the general account contract(s) held by or on behalf of any employee benefit plan together with the amount of the reserves and liabilities for the general account contract(s) held by or on behalf of any other employee benefit plans maintained by the same employer (or affiliate thereof as defined in PTE 95-60) or by the same employee organization in the general account do not exceed 10% of the total reserves and liabilities of the general account (exclusive of separate account liabilities) plus surplus as set forth in the NAIC Annual Statement filed with such holder’s state of domicile; or

 

(b)                                 the Source is a separate account that is maintained solely in connection with such holder’s fixed contractual obligations under which the amounts payable, or credited, to any employee benefit plan (or its related trust) that has any interest in such separate account (or to any participant or beneficiary of such plan (including any annuitant)) are not affected in any manner by the investment performance of the separate account; or

 

(c)                                  the Source is either (i) an insurance company pooled separate account, within the meaning of PTE 90-1, or (ii) a bank collective investment fund, within the meaning of PTE 91-38 and, except as the holder has disclosed to the Company in writing pursuant to this clause (c) (or previously disclosed to the Company in writing pursuant to Section 6.2(c) of the Existing Note Purchase Agreement), no employee benefit plan or group of plans maintained by the same employer or employee organization beneficially

 

23

 

owns more than 10% of all assets allocated to such pooled separate account or collective investment fund; or

 

(d)                                 the Source constitutes assets of an “investment fund” (within the meaning of Part VI of PTE 84-14 (the “QPAM Exemption”)) managed by a “qualified professional asset manager” or “QPAM” (within the meaning of Part VI of the QPAM Exemption), no employee benefit plan’s assets that are managed by the QPAM in such investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of Part VI(c)(1) of the QPAM Exemption) of such employer or by the same employee organization and managed by such QPAM, represent more than 20% of the total client assets managed by such QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a person controlling or controlled by the QPAM maintains an ownership interest in the Company that would cause the QPAM and the Company to be “related” within the meaning of Part VI(h) of the QPAM Exemption and (i) the identity of such QPAM and (ii) the names of any employee benefit plans whose assets in the investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of Part VI(c)(1) of the QPAM Exemption) of such employer or by the same employee organization, represent 10% or more of the assets of such investment fund, have been disclosed to the Company in writing pursuant to this clause (d) (or were previously disclosed to the Company in writing pursuant to Section 6.2(d) of the Existing Note Purchase Agreement); or

 

(e)                                  the Source constitutes assets of a “plan(s)” (within the meaning of Part IV(h) of PTE 96-23 (the “INHAM Exemption”)) managed by an “in-house asset manager” or “INHAM” (within the meaning of Part IV(a) of the INHAM Exemption), the conditions of Part I(a), (g) and (h) of the INHAM Exemption are satisfied, neither the INHAM nor a person controlling or controlled by the INHAM (applying the definition of “control” in Part IV(d)(3) of the INHAM Exemption) owns a 10% or more interest in the Company and (i) the identity of such INHAM and (ii) the name(s) of the employee benefit plan(s) whose assets constitute the Source have been disclosed to the Company in writing pursuant to this clause (e) (or were previously disclosed to the Company in writing pursuant to Section 6.2(e) of the Existing Note Purchase Agreement); or

 

(f)                                   the Source is a governmental plan; or

 

(g)                                  the Source is one or more employee benefit plans, or a separate account or trust fund comprised of one or more employee benefit plans, each of which has been identified to the Company in writing pursuant to this clause (g) (or were previously identified to the Company in writing pursuant to Section 6.2(g) of the Existing Note Purchase Agreement); or

 

(h)                                 the Source does not include assets of any employee benefit plan, other than a plan exempt from the coverage of ERISA.

 

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As used in this Section 6.2, the terms “employee benefit plan”, “governmental plan” and “separate account” shall have the respective meanings assigned to such terms in section 3 of ERISA.

 

7.                                      INFORMATION AS TO COMPANY.

 

7.1.                            Financial and Business Information

 

The Company will deliver to each holder of Notes that is an Institutional Investor:

 

(a)                                 Quarterly Statements — within 45 days after the end of each quarterly fiscal period in each fiscal year of the Company (other than the last quarterly fiscal period of each such fiscal year), duplicate copies of,

 

(i)                                     a consolidated balance sheet of the Company and its Subsidiaries as at the end of such quarter,

 

(ii)                                  consolidated statements of operations or income of the Company and its Subsidiaries for such quarter and (in the case of the second and third quarters) for the portion of the fiscal year ending with such quarter, and

 

(iii)                               consolidated statements of cash flows of the Company and its Subsidiaries for such quarter or (in the case of the second and third quarters) for the portion of the fiscal year ending with such quarter,

 

setting forth in each case in comparative form the figures for the corresponding periods in the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP applicable to quarterly financial statements generally, and certified by a Senior Financial Officer as fairly presenting, in all material respects, the financial condition of the companies being reported on and their results of operations and cash flows, subject to changes resulting from year-end adjustments and absence of footnotes, provided that delivery within the time period specified above of copies of the Company’s Quarterly Report on Form 10-Q prepared in compliance with the requirements therefor and filed with the Securities and Exchange Commission shall be deemed to satisfy the requirements of this Section 7.1(a); provided, further, that the Company shall be deemed to have made such delivery of such Form 10-Q if it shall have timely made such Form 10-Q available on “EDGAR” and on its home page on the worldwide web (at the date of this Agreement located at:  http//www.intrepidpotash.com); provided, however, the Company shall use commercially reasonable efforts to ensure that each holder that (A) is an Institutional Investor and (B) has provided the Company with a valid e-mail address receives automatically generated electronic mail from the Company’s website providing notice of the filing of such Form 10-Q (such availability and electronic notice thereof being referred to as “Electronic Delivery”);

 

(b)                                 Annual Statements — within 90 days after the end of each fiscal year of the Company, duplicate copies of,

 

(i)                                     a consolidated balance sheet of the Company and its Subsidiaries, as at the end of such year, and

 

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(ii)                                  consolidated statements of operations or income, changes in stockholders’ equity and cash flows of the Company and its Subsidiaries, for such year,

 

setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP, and accompanied by an opinion thereon (without a “going concern” or similar qualification or exception and without any qualification or exception as to the scope of the audit on which such opinion is based (other than a “going concern” qualification resulting solely from an upcoming maturity of any series of the Notes occurring within one year from the time such opinion is delivered)) of independent certified public accountants of recognized national standing, which opinion shall state that such financial statements present fairly, in all material respects, the financial condition of the Company and its Subsidiaries being reported upon and their results of operations and cash flows and have been prepared in conformity with GAAP, and that the examination of such accountants in connection with such financial statements has been made in accordance with generally accepted auditing standards, and that such audit provides a reasonable basis for such opinion in the circumstances, provided that the delivery within the time period specified above of the Company’s Annual Report on Form 10-K for such fiscal year prepared in accordance with the requirements therefor (and in accordance with the audit opinion requirements described above) and filed with the Securities and Exchange Commission shall be deemed to satisfy the requirements of this Section 7.1(b); provided, further, that the Company shall be deemed to have made such delivery of such Form 10-K if it shall have timely made Electronic Delivery thereof;

 

(c)                                  Monthly Reporting — within 25 Business Days after the end of each month for which Tier I, Tier II or Tier III applies in the determination of the Incremental Interest Rate, duplicate copies of,

 

(i)                                     a report of management of the Company in a form consistent with past practice (which shall include, without limitation (A) “Key Production Drivers” reports for the facilities of the Company and its Subsidiaries located in New Mexico and (B) “Daily Plant Reports” as of the last day of such month for the facilities of the Company and its Subsidiaries located in Utah), and

 

(ii)                                  a financial update prepared by management of the Company in substantially the same form as the “Intrepid Potash - January Forecast Update” that was provided by the Company to the Existing Noteholders, including updates to the Company’s approved budget and previous forecasts, an actual-to-forecast reconciliation, and qualitative and quantitative reports regarding: net sales; cost of goods sold; gross margin; selling, general and administrative expenses; EBITDA; and capital expenditures (broken down by sustaining capital and opportunity capital);

 

(d)                                 Liquidity Statements — within 25 Business Days after the end of each month for which the Minimum Liquidity covenant set forth in Section 10.1(c) is tested, a statement of Unencumbered Cash on Hand and unused availability under the Revolving

 

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Credit Agreement as of the last day of such month, prepared by management of the Company and certified by a Senior Financial Officer;

 

(e)                                  Projections — as soon as available but within 30 days after the beginning of each fiscal year, annual financial projections of the Company and its Subsidiaries for such fiscal year on a consolidated basis, consistent with past practice or otherwise in form reasonably satisfactory to the Required Holders, consisting of consolidated balance sheets and statements of income or operations and cash flows;

 

(f)                                   SEC and Other Reports — within a reasonable time after they become available, one copy of (i) each financial statement, report, notice, proxy statement or similar document sent by the Company or any Subsidiary (x) to its creditors under any Material Credit Facility (excluding notices, reports or similar documents that are immaterial or that are sent to such creditors in the ordinary course of administration of a credit facility, such as notices or reports relating to pricing and borrowing availability) or (y) to its public securities holders generally, and (ii) each regular or periodic report, each registration statement (without exhibits except as expressly requested by such holder), and each prospectus and all amendments thereto filed by the Company or any Subsidiary with the Securities and Exchange Commission; provided, that the Company shall be deemed to have complied with this Section 7.1(f) if it shall have timely made Electronic Delivery of any such required financial statement, report, notice, proxy statement, report, registration statement, prospectus or amendment;

 

(g)                                  Notice of Default or Event of Default — promptly, and in any event within five Business Days after a Responsible Officer obtaining actual knowledge of the existence of any Default or Event of Default, a written notice specifying the nature and period of existence thereof and what action the Company is taking or proposes to take with respect thereto;

 

(h)                                 ERISA Matters — promptly, and in any event within five Business Days after a Responsible Officer becoming aware of any of the following, a written notice setting forth the nature thereof and the action, if any, that the Company or an ERISA Affiliate proposes to take with respect thereto:

 

(i)                                     with respect to any Plan, any reportable event, as defined in section 4043(c) of ERISA and the regulations thereunder, for which notice thereof has not been waived pursuant to such regulations as in effect on the date hereof if such reportable event would reasonably be expected to have a Material Adverse Effect; or

 

(ii)                                  the taking by the PBGC of steps to institute, or the threatening by the PBGC of the institution of, proceedings under section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan, or the receipt by the Company or any ERISA Affiliate of a notice from a Multiemployer Plan that such action has been taken by the PBGC with respect to such Multiemployer Plan, in each case if such steps, threat, proceeding, appointment or action would reasonably be expected to have a Material Adverse Effect; or

 

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(iii)                               any event, transaction or condition that could result in the incurrence of any liability by the Company or any ERISA Affiliate pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans, or in the imposition of any Lien on any of the rights, properties or assets of the Company or any ERISA Affiliate pursuant to Title I or IV of ERISA or such penalty or excise tax provisions, if such liability or Lien, taken together with any other such liabilities or Liens then existing, would reasonably be expected to have a Material Adverse Effect;

 

(i)                                     Notices from Governmental Authority — promptly, and in any event within 30 days of receipt thereof, copies of any notice to the Company or any Subsidiary from any Federal or state Governmental Authority relating to any order, ruling, statute or other law or regulation that would reasonably be expected to have a Material Adverse Effect;

 

(j)                                    Requested Information — with reasonable promptness, such other data and information relating to the business, operations, affairs, financial condition, assets or properties of the Company or any Subsidiary as from time to time may be reasonably requested by any such holder of Notes; and

 

(k)                                 Ratings Information — promptly, and in any event within thirty (30) days of receipt thereof, copies of the then-current rating for such calendar year obtained pursuant to Section 9.8.

 

7.2.                            Officer’s Certificate.

 

Each set of financial statements delivered to a holder of Notes pursuant to Section 7.1(a) or (b) shall be accompanied by a certificate of a Senior Financial Officer:

 

(a)                                 Covenant Compliance; Incremental Interest Rate — (i) stating whether it is in compliance with all of the covenants in Sections 10.1 through 10.11 and any Additional Provision incorporated into this Agreement pursuant to Section 9.12 that is a covenant or undertaking, (ii) setting forth the information (including detailed calculations) required in order to establish whether the Company was in compliance with the requirements of Sections 10.1, 10.2, 10.3, 10.4, 10.6, 10.10 and 10.11 and any Additional Provision incorporated into this Agreement pursuant to Section 9.12 that is a Financial Covenant during the quarterly or annual period covered by the statements then being furnished (including with respect to each such Section, where applicable, the calculations of the maximum or minimum amount, ratio or percentage, as the case may be, permissible under the terms of such Sections, and the calculation of the amount, ratio or percentage then in existence), and (iii) setting forth the information (including detailed calculations) required in order to determine the Incremental Interest Rate; and

 

(b)                                 Event of Default — certifying that such Senior Financial Officer has reviewed the relevant terms hereof and has made, or caused to be made, under his or her supervision, a review of the transactions and conditions of the Company and its Subsidiaries from the beginning of the quarterly or annual period covered by the

 

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statements then being furnished to the date of the certificate and that such review shall not have disclosed the existence during such period of any condition or event that constitutes a Default or an Event of Default or, if any such condition or event existed or exists (including any such event or condition resulting from the failure of the Company or any Subsidiary to comply with any Environmental Law), specifying the nature and period of existence thereof and what action the Company shall have taken or proposes to take with respect thereto.

 

7.3.                            Electronic Delivery.

 

Without limiting the right to deliver information by Electronic Delivery in accordance with Section 7.1, any information required to be delivered by the Company pursuant to Sections 7.1 or 7.2 shall be deemed to have been delivered if the information is (i) delivered to each holder of Notes that is an Institutional Investor by e-mail or (ii) is timely posted by or on behalf of the Company on IntraLinks or on any other similar website to which each holder of Notes that is an Institutional Investor has free access; provided however, that upon reasonable request of any holder that is an Institutional Investor, the Company will thereafter deliver written copies of such information to such holder.

 

7.4.                            Inspection; Appraisals.

 

(a)                                 Inspection.  The Company will permit the representatives of each holder of Notes that is an Institutional Investor:

 

(i)                                     No Default — if no Default or Event of Default then exists, at the expense of the relevant holders and upon reasonable prior notice to the Company, to visit the principal executive office of the Company, to discuss the affairs, finances and accounts of the Company and its Subsidiaries with the Company’s officers, and (with the consent of the Company, which consent will not be unreasonably withheld) its independent public accountants, and (with the consent of the Company, which consent will not be unreasonably withheld) to visit the other offices and properties of the Company and each Subsidiary, all at such reasonable times and as often as may be reasonably requested in writing and, in each case, up to a maximum of two times per fiscal year for all holders taken together; and

 

(ii)                                  Default — if a Default or Event of Default then exists, at the expense of the Company, to visit and inspect any of the offices or properties of the Company or any Subsidiary, to examine all their respective books of account, records, reports and other papers, to make copies and extracts therefrom, and to discuss their respective affairs, finances, and accounts with their respective officers and independent public accountants (and by this provision the Company authorizes said accountants to discuss the affairs, finances and accounts of the Company and its Subsidiaries), all at such times and as often as may be requested.

 

(b)                                 Appraisals.  The Company will, and will cause each of its Subsidiaries to, if requested by the Required Holders in their sole discretion, permit the Collateral Agent 

 

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and its representatives, upon reasonable advance notice to the Company, to conduct, at the expense of the Company, appraisals on real estate, equipment and other material Collateral; provided, however, that if no Default or Event of Default then exists, the Collateral Agent and its representatives may not conduct more than one appraisal per property per fiscal year.

 

7.5.                            Quarterly Telephonic Meetings.

 

Within ten Business Days after the date of delivery of any financial statements pursuant to Sections 7.1(a) or 7.1(b) indicating the start of a period for which Tier I, Tier II or Tier III applies in the determination of the Incremental Interest Rate (or, if the Company fails to deliver the financial statements by the date specified in Section 7.1(a) or 7.1(b), within ten Business Days after such specified date), the Company will hold a telephonic conference open to attendance by all of the holders of the Notes at which a Senior Financial Officer will report on such financial statements and any material changes in the business, operations, financial condition and assets of the Company and its Subsidiaries.

 

8.                                      PREPAYMENT OF THE NOTES.

 

8.1.                            Maturity.

 

As provided therein, the entire unpaid principal balance of each Note will be due and payable on the stated maturity date thereof.

 

8.2.                            Optional Prepayments.

 

The Company may, at its option, upon notice as provided below, prepay at any time all, or from time to time any part of, the Notes (without regard to series) in an amount not less than $1,000,000 in the aggregate in the case of a partial prepayment, at 100% of the principal amount so prepaid, plus the Make-Whole Amount determined for the prepayment date with respect to such principal amount.  The Company will give each holder of Notes written notice of each optional prepayment under this Section 8.2 not less than 30 days and not more than 60 days prior to the date fixed for such prepayment.  Each such notice shall specify such date (which shall be a Business Day), the aggregate principal amount of the Notes to be prepaid on such date, the principal amount of each Note held by such holder to be prepaid (determined in accordance with Section 8.4), and the interest to be paid on the prepayment date with respect to such principal amount being prepaid, and shall be accompanied by a certificate of a Senior Financial Officer as to the estimated Make-Whole Amount due in connection with such prepayment (calculated as if the date of such notice were the date of the prepayment), setting forth the details of such computation.  Two Business Days prior to such prepayment, the Company shall deliver to each holder of Notes a certificate of a Senior Financial Officer specifying the calculation of such Make-Whole Amount as of the specified prepayment date.

 

8.3.                            Mandatory Offer to Prepay Upon Change of Control.

 

(a)                                 Notice of Change of Control or Control Event — The Company will, within five Business Days after any Responsible Officer has knowledge of the occurrence of any Change of Control or Control Event, give notice of such Change of Control or 

 

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Control Event to each holder of Notes; provided that, notwithstanding anything to the contrary in this Section 8.3, the Company shall not be required to give any notice of any Control Event unless and until it provides notice of such Control Event to the public (and public notice of such Control Event by filing of a Current Report on Form 8-K shall be deemed to constitute notice of such Control Event hereunder).  If a Change of Control has occurred, such notice shall contain and constitute an offer to prepay Notes as described in paragraph (b) of this Section 8.3 and shall be accompanied by the certificate described in paragraph (e) of this Section 8.3.

 

(b)                                 Offer to Prepay Notes — The offer to prepay Notes contemplated by paragraph (a) of this Section 8.3 shall be an offer to prepay, in accordance with and subject to this Section 8.3, all, but not less than all, of the Notes held by each holder (in this case only, “holder” in respect of any Note registered in the name of a nominee for a disclosed beneficial owner shall mean such beneficial owner) on a date specified in such offer (the “Proposed Prepayment Date”).  Such Proposed Prepayment Date shall be not less than 30 days and not more than 60 days after the date of such offer.

 

(c)                                  Acceptance; Rejection — A holder of Notes may accept or reject the offer to prepay made pursuant to this Section 8.3 by causing a notice of such acceptance or rejection to be delivered to the Company on or before the date specified in the certificate described in paragraph (e) of this Section 8.3.  If a holder does not notify the Company within such time period of such holder’s acceptance or rejection of such offer, then the holder shall be deemed to have (i) accepted such offer with respect to any Excess Change of Control Principal Amount (defined below) and (ii) rejected such offer with respect to any principal that is not Excess Change of Control Principal Amount.

 

(d)                                 Prepayment — Prepayment of the Notes to be prepaid pursuant to this Section 8.3 shall be at 100% of the outstanding principal amount of such Notes, together with interest on such Notes accrued and unpaid to the date of prepayment, plus, with respect to any portion of such principal amount offered to be prepaid from Excess Prepayment Proceeds (such portion, the “Excess Change of Control Principal Amount”), the Make-Whole Amount determined for such date of prepayment with respect to such Excess Change of Control Principal Amount.  The prepayment shall be made on the Proposed Prepayment Date.

 

(e)                                  Officer’s Certificate — Each offer to prepay the Notes pursuant to this Section 8.3 shall be accompanied by a certificate, executed by a Senior Financial Officer of the Company and dated the date of such offer, specifying: (i) the Proposed Prepayment Date, (ii) that such offer is made pursuant to this Section 8.3, (iii) the principal amount of each Note offered to be prepaid and any portion thereof that constitutes Excess Change of Control Principal Amount, (iv) the interest that would be due on each Note offered to be prepaid, accrued to the Proposed Prepayment Date, (v) if applicable, set forth the estimated Make-Whole Amount that would be due on each Note offered to be prepaid (calculated as if the date of such offer were the date of the prepayment) and the details of such calculation, (vi) that the conditions of this Section 8.3 have been fulfilled, (vii) in reasonable detail, the nature and date or proposed date of the Change of Control and (viii) the date by which any holder of a Note may deliver notice of its acceptance or rejection 

 

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thereof to the Company, which date shall not be earlier than seven Business Days prior to the Proposed Prepayment Date.

 

(f)                                   Make-Whole Amount Certificate — In the case of any offer of Excess Change of Control Principal Amount pursuant to this Section 8.3, two Business Days prior to the Proposed Prepayment Date, the Company will deliver to each holder of Notes (other than any holder who rejected the offer) a certificate, executed by a Senior Financial Officer of the Company, specifying the calculation of the Make-Whole Amount to be paid in respect of each Note as of the Proposed Prepayment Date.  In the event the Company incorrectly calculates the Make-Whole Amount payable with respect to any Note, the holder of such Note will not be bound by such incorrect calculation, but instead will be entitled to receive an amount equal to the correct Make-Whole Amount, calculated in compliance with the terms of this Agreement.

 

8.4.                            Allocation of Partial Prepayments.

 

In the case of each partial prepayment of the Notes pursuant to Section 8.2, the principal amount of the Notes to be prepaid shall be allocated among all of the Notes at the time outstanding (without regard to series) in proportion, as nearly as practicable, to the respective unpaid principal amounts thereof not theretofore called for prepayment.

 

8.5.                            Maturity; Surrender, etc.

 

In the case of each prepayment of Notes pursuant to this Section 8, the principal amount of each Note to be prepaid shall mature and become due and payable on the date fixed for such prepayment, together with interest on such principal amount accrued to such date and the applicable Make-Whole Amount, if any.  From and after such date, unless the Company shall fail to pay such principal amount when so due and payable, together with the interest and Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall cease to accrue.  Any Note paid or prepaid in full shall be surrendered to the Company and canceled and shall not be reissued, and no Note shall be issued in lieu of any prepaid principal amount of any Note.

 

8.6.                            Purchase of Notes.

 

The Company will not and will not permit any Affiliate to purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of the outstanding Notes except (a) upon the payment or prepayment of the Notes in accordance with the terms of this Agreement and the Notes or (b) pursuant to an offer to purchase made by the Company or an Affiliate pro rata to the holders of all Notes at the time outstanding upon the same terms and conditions, provided that any such offer made pursuant to this clause (b) that is greater than par plus accrued interest will be an offer of par, plus accrued interest, plus a percentage of the Make-Whole Amount that each holder would have received had the Company made an optional prepayment with Make-Whole Amount pursuant to Section 8.2.  Any such offer shall provide each holder with sufficient information to enable it to make an informed decision with respect to such offer, and shall remain open for at least 10 Business Days.  If the holders of more than 10% of the principal amount of the Notes then outstanding accept such offer, the Company shall promptly notify the remaining holders of such fact and the expiration date for the acceptance by holders of Notes of 

 

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such offer shall be extended by the number of days necessary to give each such remaining holder at least 10 Business Days from its receipt of such notice to accept such offer.  The Company will promptly cancel all Notes acquired by it or any Affiliate pursuant to any payment, prepayment or purchase of Notes pursuant to any provision of this Agreement and no Notes may be issued in substitution or exchange for any such Notes.

 

8.7.                            Make-Whole Amount.

 

“Make-Whole Amount” means, with respect to any Note, an amount equal to the excess, if any, of the Discounted Value of the Remaining Scheduled Payments with respect to the Called Principal of such Note over the amount of such Called Principal, provided that the Make-Whole Amount may in no event be less than zero.  For the purposes of determining the Make-Whole Amount, the following terms have the following meanings:

 

“Called Principal” means, with respect to any Note, the principal of such Note that is to be prepaid pursuant to Section 8.2, 8.3, 8.8, 8.9 or 8.10 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires.

 

“Discounted Value” means, with respect to the Called Principal of any Note, the amount obtained by discounting all Remaining Scheduled Payments with respect to such Called Principal from their respective scheduled due dates to the Settlement Date with respect to such Called Principal, in accordance with accepted financial practice and at a discount factor (applied on the same periodic basis as that on which interest on such Note is payable) equal to the Reinvestment Yield with respect to such Called Principal.

 

“Reinvestment Yield” means, with respect to the Called Principal of any Note, 0.50% over the yield to maturity implied by the yield(s) reported as of 10:00 a.m. (New York City time) on the second Business Day preceding the Settlement Date with respect to such Called Principal, on the display designated as “Page PX1” (or such other display as may replace Page PX1) on Bloomberg Financial Markets for the most recently issued actively traded on-the-run U.S. Treasury securities (“Reported”) having a maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date.  If there are no such U.S. Treasury securities Reported having a maturity equal to such Remaining Average Life, then such implied yield to maturity will be determined by (a) converting U.S. Treasury bill quotations to bond equivalent yields in accordance with accepted financial practice and (b) interpolating linearly between the yield(s) Reported for the applicable most recently issued actively traded on-the-run U.S. Treasury securities with the maturities (1) closest to and greater than such Remaining Average Life and (2) closest to and less than such Remaining Average Life.  The Reinvestment Yield shall be rounded to the number of decimal places as appears in the interest rate of the applicable Note.

 

If such yields are not Reported or the yields Reported as of such time are not ascertainable (including by way of interpolation), then “Reinvestment Yield” means, with respect to the Called Principal of any Note, 0.50% over the yield to maturity implied by the U.S. Treasury constant maturity yields reported, for the latest day for which such 

 

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yields have been so reported as of the second Business Day preceding the Settlement Date with respect to such Called Principal, in Federal Reserve Statistical Release H.15 (or any comparable successor publication) for the U.S. Treasury constant maturity having a term equal to the Remaining Average Life of such Called Principal as of such Settlement Date.  If there is no such U.S. Treasury constant maturity having a term equal to such Remaining Average Life, such implied yield to maturity will be determined by interpolating linearly between (1) the U.S. Treasury constant maturity so reported with the term closest to and greater than such Remaining Average Life and (2) the U.S. Treasury constant maturity so reported with the term closest to and less than such Remaining Average Life.  The Reinvestment Yield shall be rounded to the number of decimal places as appears in the interest rate of the applicable Note.

 

“Remaining Average Life” means, with respect to any Called Principal, the number of years obtained by dividing (i) such Called Principal into (ii) the sum of the products obtained by multiplying (a) the principal component of each Remaining Scheduled Payment with respect to such Called Principal by (b) the number of years, computed on the basis of a 360-day year composed of twelve 30-day months and calculated to two decimal places, that will elapse between the Settlement Date with respect to such Called Principal and the scheduled due date of such Remaining Scheduled Payment.

 

“Remaining Scheduled Payments” means, with respect to the Called Principal of any Note, all payments of such Called Principal and interest thereon, calculated by reference to the Original Coupon of such Note, that would be due after the Settlement Date with respect to such Called Principal if no payment of such Called Principal were made prior to its scheduled due date, provided that if such Settlement Date is not a date on which interest payments are due to be made under the terms of the Notes, then the amount of the next succeeding scheduled interest payment will be reduced by the amount of interest accrued to such Settlement Date and required to be paid on such Settlement Date pursuant to Section 8.2, 8.3, 8.8, 8.9, 8.10 or 12.1.  For purposes of this definition, “Original Coupon” means (a) with respect to the Series A Notes, 3.23% per annum, (b) with respect to the Series B Notes, 4.13% per annum and (c) with respect to the Series C Notes, 4.28% per annum.

 

“Settlement Date” means, with respect to the Called Principal of any Note, the date on which such Called Principal is to be prepaid pursuant to Section 8.2, 8.3, 8.8, 8.9 or 8.10 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires.

 

8.8.                            Mandatory Offer to Prepay from Proceeds of Specified Property Dispositions.

 

(a)                                 In the event the Company makes an offer of prepayment of the Notes pursuant to Section 10.6(i), the Company shall, within five Business Days of the relevant Disposition, give written notice thereof (a “Specified Property First Offer Notice”) to each holder of a Note, which notice shall contain and constitute an offer to prepay (a “Specified Property First Offer”) a stated portion of the outstanding principal amount of each Note held by such holder in an amount equal to such Note’s Pro Rata Amount of 

 

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the net cash proceeds of such Disposition being applied in accordance with Section 10.6(i), together with any accrued and unpaid interest thereon, plus, with respect to any portion of such principal amount offered to be prepaid from Excess Prepayment Proceeds (such portion, the “Excess Specified Property Principal Amount”), the Make-Whole Amount determined for the Specified Property Prepayment Date (defined below) with respect to such Excess Specified Property Principal Amount, on a date specified in such Specified Property First Offer Notice, which date shall be a Business Day not less than 20 and not more than 30 days after the date of such Disposition (the “Specified Property Prepayment Date”) (if such date shall not be specified in such Specified Property First Offer Notice, the Specified Property Prepayment Date shall be the last Business Day occurring within the 30-day period following the date of the Disposition).  If the holder of a Note has provided the Company with a current valid e-mail address, the Company may deliver the Specified Property First Offer Notice to such holder by e-mail at such e-mail address.  The Specified Property First Offer Notice shall (i) describe the nature of the relevant Disposition in reasonable detail, (ii) refer to this Section 8.8 and the rights of the holders hereunder, (iii) state the amount of the net cash proceeds of such Disposition, any portion thereof that constitutes Excess Prepayment Proceeds, and the aggregate principal amount of the Notes being offered to be prepaid pursuant to Section 10.6(i), (iv) set forth the Specified Property First Offer, (v) state the amount of interest that would be paid on such Specified Property Prepayment Date with respect to each of such holder’s Notes, (vi) if applicable, set forth the estimated Make-Whole Amount that would be due with respect to each of such holder’s Notes (calculated as if the date of the Specified Property First Offer Notice were the date of the prepayment) and the details of such calculation, (vii) with respect to any Excess Specified Property Principal Amount offered to be prepaid, request that such holder notify the Company in writing by a stated date (the “Specified Property  First Offer Acceptance Date”), which date shall be not less than ten days after the date of such Specified Property First Offer Notice, if such holder wishes the Excess Specified Property Principal Amount of any of its Notes to be so prepaid, and (viii) set forth a current e-mail address of the Company.  For avoidance of doubt, with respect to any Excess Specified Property Principal Amount offered to be prepaid, a holder may elect to accept or reject the amount offered to it pursuant to the Specified Property First Offer in full or in part, and may elect to apply any accepted amount to any of its other Notes of the same series.

 

(b)

 

(i)                                     Each holder of a Note shall be deemed to have accepted any Specified Property First Offer with respect to any principal that is not Excess Specified Property Principal Amount.

 

(ii)                                  In the case of a Specified Property First Offer of any Excess Specified Property Principal Amount, to accept or reject such offer, a holder of a Note may cause a written notice of such acceptance or rejection to be delivered to the Company on or before the Specified Property First Offer Acceptance Date.  Such notice may be delivered to the Company by e-mail at the e-mail address of the Company set forth in the Specified Property First Offer Notice.  If a holder does not notify the Company on or before the Specified Property First Offer 

 

35

 

Acceptance Date of such holder’s acceptance or rejection, then the holder shall be deemed to have accepted the Specified Property First Offer with respect to such Excess Specified Property Principal Amount.

 

(c)                                  If the holder of any Note rejects the Specified Property First Offer with respect to any Excess Specified Property Principal Amount of such Note (the aggregate amount rejected by all such holders, the “Specified Property Second Offer Amount”), the Company shall, within three Business Days after the Specified Property First Offer Acceptance Date, give written notice thereof (a “Specified Property Second Offer Notice”) to each holder of a Note that accepted in full the Specified Property First Offer with respect to the Excess Specified Property Principal Amount of such Note, which notice shall contain and constitute an offer to prepay (the “Specified Property Second Offer”) a stated portion of the outstanding principal amount of such Note held by such holder in an amount equal to such Note’s Pro Rata Amount of the Specified Property Second Offer Amount, together with any accrued and unpaid interest thereon (without any Make-Whole Amount or other premium) on the Specified Property Prepayment Date.  If the holder of a Note has provided the Company with a current valid e-mail address, the Company may deliver the Specified Property Second Offer Notice to such holder by e-mail at such e-mail address.  The Specified Property Second Offer Notice shall (i) refer to this Section 8.8 and the rights of the holders hereunder, (ii) state the Specified Property Second Offer Amount and the aggregate principal amount of the Notes being offered to be prepaid in connection with the Specified Property Second Offer, (iii) set forth the Specified Property Second Offer, (iv) state the amount of interest that would be paid on such Specified Property Prepayment Date with respect to such relevant Note of such holder, (v) request that such holder notify the Company in writing by a stated date (the “Specified Property Second  Offer Acceptance Date”), which date shall be not less than seven days after the date of such Specified Property Second Offer Notice, if such holder wishes such Note to be so prepaid, and (vi) set forth a current e-mail address of the Company.  For avoidance of doubt, a holder may elect to accept or reject the amount offered to it with respect to any Note pursuant to the Specified Property Second Offer in full or in part, and may elect to apply any accepted amount to any of its other Notes of the same series that are offered prepayment in connection with the Specified Property Second Offer.

 

(d)                                 To accept or reject a Specified Property Second Offer with respect to any Note, the holder of such Note may cause a written notice of such acceptance or rejection to be delivered to the Company on or before the Specified Property Second Offer Acceptance Date.  Such notice may be delivered to the Company by e-mail at the e-mail address of the Company set forth in the Specified Property Second Offer Notice.  If a holder does not notify the Company on or before the Specified Property Second Offer Acceptance Date of such holder’s acceptance or rejection of the Specified Property Second Offer, then the holder shall be deemed to have rejected the Specified Property Second Offer in full.

 

(e)                                  In the event that the Specified Property First Offer includes an offer of any Excess Prepayment Proceeds, two Business Days prior to the Specified Property Prepayment Date, the Company will deliver to each holder of Notes (other than any 

 

36

 

holder who rejected the Specified Property First Offer) a certificate, executed by a Senior Financial Officer of the Company, specifying the calculation of the Make-Whole Amount to be paid in respect of each Note as of the Specified Property Prepayment Date.  In the event the Company incorrectly calculates the Make-Whole Amount payable with respect to any Note, the holder of such Note will not be bound by such incorrect calculation, but instead will be entitled to receive an amount equal to the correct Make-Whole Amount, calculated in compliance with the terms of this Agreement.

 

(f)                                   On the Specified Property Prepayment Date, the appropriate outstanding principal amount of the Notes held by each holder of Notes that has accepted (or is deemed to have accepted) the Specified Property First Offer and/or the Specified Property Second Offer in full or in part, together with any interest accrued thereon to the Specified Property Prepayment Date, plus any Make-Whole Amount determined for the Specified Property Prepayment Date with respect to Excess Specified Property Principal Amount, shall become due and payable.

 

8.9.                            Offer to Prepay from Proceeds of Other Dispositions and Extraordinary Insurance Receipts.

 

(a)                                 In the event (i) the Company makes an offer of prepayment of the Notes pursuant to Section 10.6(j)(ii) or (ii) any Loan Party is in receipt of any Extraordinary Insurance Receipts, the Company shall, (A) in the case of a Disposition (x) within 120 days after the date of the relevant Disposition (in the case of an offer made pursuant to clause (x) of Section 10.6(j)(ii)) or (y) on the date of the relevant Disposition (in the case of an offer made pursuant to the second proviso to Section 10.6(j)(ii)) and (B) in the case of a Loan Party’s receipt of Extraordinary Insurance Receipts, within 120 days of receipt of such Extraordinary Insurance Receipts, give written notice thereof (a “Section 8.9 First  Offer Notice”) to each holder of a Note, which notice shall contain and constitute an offer to prepay (a “Section 8.9 First Offer”) a stated portion of the outstanding principal amount of each Note held by such holder in an amount equal to such Note’s Pro Rata Amount of the net cash proceeds of either such Disposition being applied in accordance with Section 10.6(j)(ii) or the amount of such Extraordinary Insurance Receipts, as applicable, together with any accrued and unpaid interest thereon, plus, with respect to any portion of such principal amount offered to be prepaid from Excess Prepayment Proceeds (such portion, the “Excess Section 8.9 Principal Amount”), the Make-Whole Amount determined for the Section 8.9 Prepayment Date (defined below) with respect to such Excess Section 8.9 Principal Amount, on a date specified in such Section 8.9 First Offer Notice, which date shall be a Business Day not less than 20 and not more than 30 days after the date of such Section 8.9 First Offer Notice (the “Section 8.9 Prepayment Date”) (if such date shall not be specified in such Section 8.9 First Offer Notice, the Section 8.9 Prepayment Date shall be the last Business Day occurring within the 30-day period following the date of the Section 8.9 First Offer Notice).  If the holder of a Note has provided the Company with a current valid e-mail address, the Company may deliver the Section 8.9 First Offer Notice to such holder by e-mail at such e-mail address.  The Section 8.9 First Offer Notice shall (i) describe the nature of the relevant Disposition or Extraordinary Insurance Receipts in reasonable detail, (ii) refer to this Section 8.9 and the rights of the holders hereunder, (iii) state the amount of the net 

 

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cash proceeds of such Disposition and/or Extraordinary Insurance Receipts, any portion thereof that constitutes Excess Prepayment Proceeds, and the aggregate principal amount of the Notes being offered to be prepaid pursuant to Section 10.6(j)(ii) or the terms hereof, (iv) set forth the Section 8.9 Offer, (v) state the amount of interest that would be paid on such Section 8.9 Prepayment Date with respect to each of such holder’s Notes, (vi) if applicable, set forth the estimated Make-Whole Amount that would be due with respect to each of such holder’s Notes (calculated as if the date of the Section 8.9 First Offer were the date of the prepayment) and the details of such calculation, (vii) with respect to any Excess Section 8.9 Principal Amount offered to be prepaid, request that such holder notify the Company in writing by a stated date (the “Section 8.9 First Offer Acceptance Date”), which date shall be not less than ten days after the date of such Section 8.9 First Offer Notice, if such holder wishes the Excess Section 8.9 Principal Amount of any of its Notes to be so prepaid, and (viii) set forth a current e-mail address of the Company.  For avoidance of doubt, with respect to any Excess Section 8.9 Principal Amount offered to be prepaid, a holder may elect to accept or reject the amount offered to it pursuant to the Section 8.9 First Offer in full or in part, and may elect to apply any accepted amount to any of its other Notes of the same series.

 

(b)

 

(i)                                     Each holder of a Note shall be deemed to have accepted any Section 8.9 First Offer with respect to any principal that is not Excess Section 8.9 Principal Amount.

 

(ii)                                  In the case of a Section 8.9 First Offer of any Excess Section 8.9 Principal Amount, to accept or reject such offer, a holder of a Note may cause a written notice of such acceptance or rejection to be delivered to the Company on or before the Section 8.9 First Offer Acceptance Date.  Such notice may be delivered to the Company by e-mail at the e-mail address of the Company set forth in the Section 8.9 First Offer Notice.  If a holder does not notify the Company on or before the Section 8.9 First Offer Acceptance Date of such holder’s acceptance or rejection, then the holder shall be deemed to have accepted the Section 8.9 First Offer with respect to such Excess Section 8.9 Principal Amount.

 

(c)                                  If the holder of any Note rejects the Section 8.9 First Offer with respect to any Excess Section 8.9 Principal Amount of such Note (the aggregate amount rejected by all such holders, the “Section 8.9 Second Offer Amount”), the Company shall, within three Business Days after the Section 8.9 First Offer Acceptance Date, give written notice thereof (a “Section 8.9 Second Offer Notice”) to each holder of a Note that accepted in full the Section 8.9 First Offer with respect to the Excess Section 8.9 Principal Amount of such Note, which notice shall contain and constitute an offer to prepay (the “Section 8.9 Second Offer”) a stated portion of the outstanding principal amount of such Note held by such holder in an amount equal to such Note’s Pro Rata Amount of the Section 8.9 Second Offer Amount, together with any accrued and unpaid interest thereon (without any Make-Whole Amount or other premium) on the Section 8.9 Prepayment Date.  If the holder of a Note has provided the Company with a current valid e-mail address, the

 

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Company may deliver the Section 8.9 Second Offer Notice to such holder by e-mail at such e-mail address.  The Section 8.9 Second Offer Notice shall (i) refer to this Section 8.9 and the rights of the holders hereunder, (ii) state the Section 8.9 Second Offer Amount and the aggregate principal amount of the Notes being offered to be prepaid in connection with the Section 8.9 Second Offer, (iii) set forth the Section 8.9 Second Offer, (iv) state the amount of interest that would be paid on such Section 8.9 Prepayment Date with respect to such relevant Note of such holder, (v) request that such holder notify the Company in writing by a stated date (the “Section 8.9 Second Offer Acceptance Date”), which date shall be not less than seven days after the date of such Section 8.9 Second Offer Notice, if such holder wishes such Note to be so prepaid, and (vi) set forth a current e-mail address of the Company.  For avoidance of doubt, a holder may elect to accept or reject the amount offered to it with respect to any Note pursuant to the Section 8.9 Second Offer in full or in part, and may elect to apply any accepted amount to any of its other Notes of the same series that are offered prepayment in connection with the Section 8.9 Second Offer.

 

(d)                                 To accept or reject a Section 8.9 Second Offer with respect to any Note, the holder of such Note may cause a written notice of such acceptance or rejection to be delivered to the Company on or before the Section 8.9 Second Offer Acceptance Date.  Such notice may be delivered to the Company by e-mail at the e-mail address of the Company set forth in the Section 8.9 Second Offer Notice.  If a holder does not notify the Company on or before the Section 8.9 Second Offer Acceptance Date of such holder’s acceptance or rejection of the Section 8.9 Second Offer, then the holder shall be deemed to have rejected the Section 8.9 Second Offer in full.

 

(e)                                  In the event that the Section 8.9 Offer includes an offer of any Excess Prepayment Proceeds, two Business Days prior to the Section 8.9 Prepayment Date, the Company will deliver to each holder of Notes (other than any holder who rejected the Section 8.9 First Offer) a certificate, executed by a Senior Financial Officer of the Company, specifying the calculation of the Make-Whole Amount to be paid in respect of each Note as of the Section 8.9 Prepayment Date.  In the event the Company incorrectly calculates the Make-Whole Amount payable with respect to any Note, the holder of such Note will not be bound by such incorrect calculation, but instead will be entitled to receive an amount equal to the correct Make-Whole Amount, calculated in compliance with the terms of this Agreement.

 

(f)                                   On the Section 8.9 Prepayment Date, the appropriate outstanding principal amount of the Notes held by each holder of Notes that has accepted (or is deemed to have accepted) the Section 8.9 First Offer and/or the Section 8.9 Second Offer in full or in part, together with any interest accrued thereon to the Section 8.9 Prepayment Date, plus any Make-Whole Amount determined for the Section 8.9 Prepayment Date with respect to Excess Section 8.9 Principal Amount, shall become due and payable.

 

8.10.                     Mandatory Offer to Prepay from Equity Issuances.

 

(a)                                 In the event the Company issues any Equity Interests pursuant to a Specified Equity Contribution or otherwise (the proceeds of such issuance, the “Equity 

 

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Issuance Proceeds”), the Company shall, within seven days after its receipt of such Equity Issuance Proceeds, give written notice thereof (an “Equity Issuance First Offer Notice”) to each holder of a Note, which notice shall contain and constitute an offer to prepay (an “Equity Issuance First Offer”) a stated portion of the outstanding principal amount of each Note held by such holder in an amount equal to such Note’s Pro Rata Amount of an amount constituting not less than 35% of such Equity Issuance Proceeds (the “Offered Equity Issuance Proceeds”), together with any accrued and unpaid interest thereon, plus, with respect to any portion of such principal amount offered to be prepaid from Excess Prepayment Proceeds (such portion, the “Excess Equity Issuance Principal Amount”), the Make-Whole Amount determined for the Equity Issuance Prepayment Date (defined below) with respect to such Excess Equity Issuance Principal Amount, on a date specified in such Equity Issuance First Offer Notice, which date shall be a Business Day not less than 20 and not more than 30 days after the date of such Equity Issuance First Offer Notice (the “Equity Issuance Prepayment Date”) (if such date shall not be specified in such Equity Issuance First Offer Notice, the Equity Issuance Prepayment Date shall be the last Business Day occurring within the 30-day period following the date of the Equity Issuance First Offer Notice).  If the holder of a Note has provided the Company with a current valid e-mail address, the Company may deliver the Equity Issuance First Offer Notice to such holder by e-mail at such e-mail address.  The Equity Issuance First Offer Notice shall (i) if any portion of the Offered Equity Issuance Proceeds constitute proceeds of a Specified Equity Contribution, refer to the relevant Cure Notice, (ii) refer to this Section 8.10 and the rights of the holders hereunder, (iii) state the amount of the Equity Issuance Proceeds and the amount of the Offered Equity Issuance Proceeds (and, if applicable, the amount of the Specified Equity Contribution), any portion thereof that constitutes Excess Prepayment Proceeds, and the aggregate principal amount of the Notes being offered to be prepaid, (iv) set forth the Equity Issuance First Offer, (v) state the amount of interest that would be paid on such Equity Issuance Prepayment Date with respect to each of such holder’s Notes, (vi) if applicable, set forth the estimated Make-Whole Amount that would be due with respect to each of such holder’s Notes (calculated as if the date of the Equity Issuance First Offer Notice were the date of the prepayment) and the details of such calculation, (vii) with respect to any Excess Equity Issuance Principal Amount offered to be prepaid, request that such holder notify the Company in writing by a stated date (the “Equity Issuance First Offer Acceptance Date”), which date shall be not less than ten days after the date of such Equity Issuance First Offer Notice, if such holder wishes the Excess Equity Issuance Principal Amount of any of its Notes to be so prepaid, and (viii) set forth a current e-mail address of the Company.  For avoidance of doubt, with respect to any Excess Equity Issuance Principal Amount offered to be prepaid, a holder may elect to accept or reject the amount offered to it pursuant to the Equity Issuance First Offer in full or in part, and may elect to apply any accepted amount to any of its other Notes of the same series.

 

(b)

 

(i)                                     Each holder of a Note shall be deemed to have accepted any Equity Issuance First Offer with respect to any principal that is not Excess Equity Issuance Principal Amount.

 

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(ii)                                  In the case of an Equity Issuance First Offer of any Excess Equity Issuance Principal Amount, to accept or reject such offer, a holder of a Note may cause a written notice of such acceptance or rejection to be delivered to the Company on or before the Equity Issuance First Offer Acceptance Date.  Such notice may be delivered to the Company by e-mail at the e-mail address of the Company set forth in the Equity Issuance First Offer Notice.  If a holder does not notify the Company on or before the Equity Issuance First Offer Acceptance Date of such holder’s acceptance or rejection, then the holder shall be deemed to have accepted the Equity Issuance First Offer with respect to such Excess Equity Issuance Principal Amount.

 

(c)                                  If the holder of any Note rejects the Equity Issuance First Offer with respect to any Excess Equity Issuance Principal Amount of such Note (the aggregate amount rejected by all such holders, the “Equity Issuance Second Offer Amount”), the Company shall, within three Business Days after the Equity Issuance First Offer Acceptance Date, give written notice thereof (an “Equity Issuance Second Offer Notice”) to each holder of a Note that accepted in full the Equity Issuance First Offer with respect to the Excess Equity Issuance Principal Amount of such Note, which notice shall contain and constitute an offer to prepay (the “Equity Issuance Second Offer”) a stated portion of the outstanding principal amount of such Note held by such holder in an amount equal to such Note’s Pro Rata Amount of the Equity Issuance Second Offer Amount, together with any accrued and unpaid interest thereon (without any Make-Whole Amount or other premium) on the Equity Issuance Prepayment Date.  If the holder of a Note has provided the Company with a current valid e-mail address, the Company may deliver the Equity Issuance Second Offer Notice to such holder by e-mail at such e-mail address.  The Equity Issuance Second Offer Notice shall (i) refer to this Section 8.10 and the rights of the holders hereunder, (ii) state the Equity Issuance Second Offer Amount and the aggregate principal amount of the Notes being offered to be prepaid in connection with the Equity Issuance Second Offer, (iii) set forth the Equity Issuance Second Offer, (iv) state the amount of interest that would be paid on such Equity Issuance Prepayment Date with respect to such relevant Note of such holder, (v) request that such holder notify the Company in writing by a stated date (the “Equity Issuance Second Offer Acceptance Date”), which date shall be not less than seven days after the date of such Equity Issuance Second Offer Notice, if such holder wishes to reject the Equity Issuance Second Offer with respect to such Note, and (vi) set forth a current e-mail address of the Company.  For avoidance of doubt, a holder may elect to accept or reject the amount offered to it with respect to any Note pursuant to the Equity Issuance Second Offer in full or in part, and may elect to apply any accepted amount to any of its other Notes of the same series that are offered prepayment in connection with the Equity Issuance Second Offer.

 

(d)                                 To accept or reject an Equity Issuance Second Offer with respect to any Note, the holder of such Note may cause a written notice of such acceptance or rejection to be delivered to the Company on or before the Equity Issuance Second Offer Acceptance Date.  Such notice may be delivered to the Company by e-mail at the e-mail address of the Company set forth in the Equity Issuance Second Offer Notice.  If a holder does not notify the Company on or before the Equity Issuance Second Offer Acceptance 

 

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Date of such holder’s acceptance or rejection of the Equity Issuance Second Offer, then the holder shall be deemed to have rejected the Equity Issuance Second Offer in full.

 

(e)                                  In the event that the Equity Issuance First Offer includes an offer of any Excess Prepayment Proceeds, two Business Days prior to the Equity Issuance Prepayment Date, the Company will deliver to each holder of Notes (other than any holder who rejected the Equity Issuance First Offer) a certificate, executed by a Senior Financial Officer of the Company, specifying the calculation of the Make-Whole Amount to be paid in respect of each Note as of the Equity Issuance Prepayment Date.  In the event the Company incorrectly calculates the Make-Whole Amount payable with respect to any Note, the holder of such Note will not be bound by such incorrect calculation, but instead will be entitled to receive an amount equal to the correct Make-Whole Amount, calculated in compliance with the terms of this Agreement.

 

(f)                                   On the Equity Issuance Prepayment Date, the appropriate outstanding principal amount of the Notes held by each holder of Notes that has accepted (or is deemed to have accepted) the Equity Issuance First Offer and/or the Equity Issuance Second Offer in full or in part, together with any interest accrued thereon to the Equity Issuance Prepayment Date, plus any Make-Whole Amount determined for the Equity Issuance Prepayment Date with respect to Excess Equity Issuance Principal Amount, shall become due and payable.

 

9.                                      AFFIRMATIVE COVENANTS.

 

The Company covenants that until the Obligations have been Paid In Full:

 

9.1.                            Compliance with Law.

 

Without limiting Section 10.8, the Company will, and will cause each Subsidiary to, comply with all laws, ordinances or governmental rules or regulations to which each of them is subject, including, ERISA, Environmental Laws, the USA PATRIOT Act and the other laws and regulations that are referred to in Section 5.14, and will obtain and maintain in effect all licenses, certificates, permits, franchises and other governmental authorizations necessary to the ownership of their respective properties or to the conduct of their respective businesses, in each case to the extent necessary to ensure that non-compliance with such laws, ordinances or governmental rules or regulations or failures to obtain or maintain in effect such licenses, certificates, permits, franchises and other governmental authorizations would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

9.2.                            Insurance.

 

(a)                                 The Company will, and will cause each Subsidiary to, maintain, with financially sound and reputable insurers, insurance with respect to their respective properties and businesses against such casualties and contingencies, of such types, on such terms and in such amounts (including deductibles, co-insurance and self-insurance, if adequate reserves are maintained with respect thereto) as is customary in the case of entities of established reputations engaged in the same or a similar business and similarly situated including, without limitation, flood hazard insurance on all Mortgaged Properties 

 

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that are in an area designated by the Federal Emergency Management Agency as having special flood or mudslide hazards, on such terms and in such amounts as required by the National Flood Insurance Reform Act of 1994 or as otherwise required by the Required Holders.

 

(b)                                 The Company will (i) subject to the terms of the Intercreditor Agreement (so long as the Intercreditor Agreement is in effect), cause the Collateral Agent to be named as lenders’ loss payable, loss payee or mortgagee, as its interest may appear, and/or additional insured with respect to any such insurance providing liability coverage or coverage in respect of any Collateral, and (ii) cause, unless otherwise agreed to by the Collateral Agent, each provider of any such insurance to agree, by endorsement upon the policy or policies issued by it or by independent instruments furnished to the Collateral Agent that it will give the Collateral Agent thirty (30) days prior written notice before any such policy or policies shall be altered or cancelled (or ten (10) days prior notice in the case of cancellation due to the nonpayment of premiums).  Annually, upon expiration of current insurance coverage, the Company shall provide, or cause to be provided, to the Collateral Agent, such evidence of insurance as required by the Collateral Agent, including, but not limited to: (A) certified copies of such insurance policies, (B) evidence of such insurance policies (including, without limitation and as applicable, ACORD Form 28 certificates (or similar form of insurance certificate), and ACORD Form 25 certificates (or similar form of insurance certificate)), (C) declaration pages for each insurance policy and (D) subject to the terms of the Intercreditor Agreement (so long as the Intercreditor Agreement is in effect), lender’s loss payable endorsement if the Collateral Agent for the benefit of the Secured Parties is not on the declarations page for such policy.

 

(c)                                  The Company will promptly notify the holders of the Notes if any Mortgaged Property is or becomes located in an area designated by the Federal Emergency Management Agency as having special flood or mudslide hazards.

 

9.3.                            Maintenance of Properties.

 

The Company will, and will cause each Subsidiary to, maintain and keep, or cause to be maintained and kept, their respective properties (other than properties immaterial to the Loan Parties) in good repair, working order and condition (other than ordinary wear and tear), so that the business carried on in connection therewith may be properly conducted at all times, provided that this Section shall not prevent the Company or any Subsidiary from discontinuing the operation and the maintenance of any of its properties if such discontinuance is desirable in the conduct of its business and the Company has concluded that such discontinuance would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

9.4.                            Payment of Taxes and Claims.

 

The Company will, and will cause each of its Subsidiaries to, file all tax returns required to be filed in any jurisdiction and to pay and discharge all taxes shown to be due and payable on such returns and all other taxes, assessments, governmental charges, or levies imposed on them or any of their properties, assets, income or franchises, to the extent the same 

 

43

 

have become due and payable and before they have become delinquent and all claims for which sums have become due and payable that have or might become a Lien on properties or assets of the Company or any Subsidiary, provided that neither the Company nor any Subsidiary need pay any such tax, assessment, charge, levy or claim if (i) the amount, applicability or validity thereof is contested by the Company or such Subsidiary on a timely basis in good faith and in appropriate proceedings, and the Company or a Subsidiary has established adequate reserves therefor in accordance with GAAP on the books of the Company or such Subsidiary or (ii) the nonpayment of all such taxes, assessments, charges, levies and claims in the aggregate would not reasonably be expected to have a Material Adverse Effect.

 

9.5.                            Corporate Existence, etc.

 

Subject to Sections 10.5 and 10.6, the Company will at all times preserve and keep its corporate existence in full force and effect.  Subject to Sections 10.5 and 10.6, the Company will at all times preserve and keep in full force and effect the corporate existence of each of its Subsidiaries (unless merged into the Company or a Wholly-Owned Subsidiary) and all rights and franchises of the Company and its Subsidiaries unless, in the good faith judgment of the Company, the termination of or failure to preserve and keep in full force and effect such corporate existence, right or franchise would not, individually or in the aggregate, have a Material Adverse Effect.

 

9.6.                            Additional Subsidiary Guarantors and Grantors.

 

The Company will cause each of its Subsidiaries (other than Intrepid Aviation, but only so long as Intrepid Aviation is not a guarantor of or otherwise liable, whether as a borrower or an additional or co-borrower or otherwise, for or in respect of any Indebtedness under any Material Credit Facility), whether newly formed, after acquired or otherwise existing, to, in the case of any Subsidiary other than Intrepid Aviation, promptly (and in any event within fifteen (15) days after such Subsidiary is formed or acquired (or such longer period of time as agreed to by the Required Holders in their reasonable discretion)), and in the case of Intrepid Aviation, concurrently with Intrepid Aviation becoming a guarantor of or otherwise liable for or in respect of any Indebtedness under any Material Credit Facility, become a Subsidiary Guarantor and a Grantor by way of execution of a Subsidiary Guaranty Joinder and a Security Agreement Joinder.  In connection therewith, the Company will give notice to the holders of the Notes not less than ten (10) days (or such shorter period of time as agreed to by the Required Holders in their reasonable discretion) prior to creating a Subsidiary, acquiring the Equity Interests of any other Person, or causing Intrepid Aviation to guarantee or otherwise become liable for or in respect of any Indebtedness under any Material Credit Facility.  In connection with the foregoing, the Company will cause such Subsidiary to deliver to each holder:

 

(a)                                 a counterpart of a Subsidiary Guaranty Joinder, duly executed by such Subsidiary;

 

(b)                                 a counterpart of a Security Agreement Joinder, duly executed by such Subsidiary;

 

44

 

(c)                                  a counterpart of a joinder agreement to the Intercreditor Agreement in substantially the form of Exhibit B attached thereto (so long as the Intercreditor Agreement is in effect), duly executed by such Subsidiary;

 

(d)                                 copies of such directors’ or other authorizing resolutions, charter, bylaws and other constitutive documents of such Subsidiary as the Required Holders may reasonably request;

 

(e)                                  an opinion of independent counsel reasonably satisfactory to the Required Holders covering the authorization, execution, delivery, no conflict with laws or other documents, no consents and enforceability of each of the Subsidiary Guaranty, the Subsidiary Guaranty Joinder, the Security Agreement and the Security Agreement Joinder against such Subsidiary and such other matters relating to such Subsidiary, the Subsidiary Guaranty, the Subsidiary Guaranty Joinder, the Security Agreement and the Security Agreement Joinder as the Required Holders may reasonably request, in form and substance reasonably satisfactory to the Required Holders; and

 

(f)                                   with respect to such Subsidiary to the extent applicable, substantially the same documentation required pursuant to Sections 4.14, 4.15, 9.9 and 9.13 and such other documents or agreements as the Required Holders may reasonably request.

 

9.7.                            Books and Records.

 

The Company will, and will cause each of its Subsidiaries to, maintain proper books of record and account in conformity with GAAP and all applicable requirements of any Governmental Authority having legal or regulatory jurisdiction over the Company or such Subsidiary, as the case may be.

 

9.8.                            Maintenance of Ratings.

 

The Company shall obtain a rating each calendar year for the Notes from any nationally recognized rating agency selected by the Company and accepted by the SVO for rating corporate debt, and the Company shall maintain such rating.

 

45

 

9.9.                            Covenant to Give Security.

 

(a)                                 Equity Interests and Personal Property.  The Company will, and will cause each other Loan Party to, subject to the terms of the Intercreditor Agreement (so long as the Intercreditor Agreement is in effect), cause the Pledged Equity and all of its tangible and intangible personal property now owned or hereafter acquired by it (other than Exempt Specified Property) to be subject at all times to a first priority, perfected Lien (subject to Liens permitted in accordance with Section 10.4) in favor of the Collateral Agent for the benefit of the Secured Parties to secure the Obligations pursuant to the terms and conditions of the Collateral Documents.  The Company will, and will cause each other Loan Party to, provide reasonably requested opinions of counsel and any filings and deliveries reasonably necessary in connection therewith to perfect the security interests therein, all in form and substance reasonably satisfactory to the Required Holders.

 

(b)                                 Real Property; Water Rights.  If the Company or any other Loan Party acquires a fee ownership, leasehold, license, easement or other interest in any real property or any Water Rights after the Restructuring Closing Date (other than Exempt Specified Property) and such real property or Water Right has a Fair Market Value equal to or in excess of $500,000 or is necessary for the operation of the mines and operating facilities of the Company and its Subsidiaries or otherwise necessary or desirable for the conduct of their businesses, the Company will promptly (and, in any event, within 10 days) provide written notice thereof to the holders of the Notes and will, or will cause the relevant Loan Party to, provide to the Collateral Agent within thirty (30) days (or such extended period of time as agreed to by the Required Holders) a Mortgage and such other Mortgaged Property Support Documents as the Required Holders may request to cause such real property interest or Water Rights to be subject at all times to a first priority, perfected Lien (subject to Liens permitted in accordance with Section 10.4) in favor of the Collateral Agent for the benefit of the Secured Parties to secure the Obligations pursuant to the terms and conditions of the Collateral Documents, in each case subject to the terms of the Intercreditor Agreement (so long as the Intercreditor Agreement is in effect).

 

(c)                                  Landlord Waivers.  In the case of (i) each headquarter location of the Company or any other Loan Party that is leased, each other leased location where any significant administrative functions are performed and each other leased location where the Company or any Loan Party maintains any significant books or records (electronic or otherwise) and (ii) any personal property Collateral located at any other premises leased by the Company or any other Loan Party containing personal property Collateral with a value equal to or in excess of $1,000,000 (“Material Leased Properties”), the Company will, and will cause the relevant Loan Party to, use commercially reasonable efforts to provide the Collateral Agent with such estoppel letters, consents and waivers from the landlords on such real property to the extent requested by the Required Holders within thirty days following such request (such letters, consents and waivers shall be in form and substance reasonably satisfactory to the Required Holders); provided that, the Company will, and will cause the relevant Loan Party to, contemporaneously provide the Collateral Agent with corresponding estoppel letters, consents and waivers from each landlord that 

 

46

 

delivers an estoppel letter, consent or waiver to the Revolving Agent or the Revolving Lenders; provided further that, without limiting the foregoing proviso, in the case of those certain Material Leased Properties described in paragraph 2 of Schedule 9.13, such letters, consents and waivers shall not be required under this clause (c) until the dates specified in Schedule 9.13 with respect thereto.  Notwithstanding the foregoing, no such estoppel letter, consent or waiver shall be required under this clause (c) with respect to that certain real property described in Schedule 9.9(c) so long as (x) such real property is leased from the Current Landlord (as defined in Schedule 9.9(c)) or an Affiliate thereof, (y) no estoppel letter, consent or waiver has been provided to the Revolving Agent or the Revolving Lenders with respect to such real property, and (z) no Event of Default has occurred and is continuing.

 

(d)                                 Bailee, Warehouseman and Consignee Waivers.  In the case of any personal property Collateral held by a bailee, warehouseman or consignee which, when taken together with all personal property Collateral held by such bailee, warehouseman or consignee has an aggregate value in excess of $1,000,000, the Company will, and will cause the relevant Loan Party to, use commercially reasonable efforts to provide the Collateral Agent with such estoppel letters, consents and waivers from such bailees, warehousemen and consignees to the extent requested by the Required Holders within thirty days following such request (such letters, consents and waivers shall be in form and substance reasonably satisfactory to the Required Holders); provided that, the Company will, and will cause the relevant Loan Party to, contemporaneously provide the Collateral Agent with corresponding estoppel letters, consents and waivers from each bailee, warehouseman and consignee that delivers an estoppel letter, consent or waiver to the Revolving Agent or the Revolving Lenders; provided further that, without limiting the foregoing proviso, in the case of those certain bailees, warehousemen or consignees described in paragraph 3 of Schedule 9.13, such letters, consents and waivers shall not be required under this clause (d) until the dates specified in Schedule 9.13 with respect thereto.

 

(e)                                  Account Control Agreements.  The Company will, and will cause each of the other Loan Parties to, take all actions necessary to establish, subject to the terms of the Intercreditor Agreement (so long as the Intercreditor Agreement is in effect), a perfected Lien in favor of the Collateral Agent for the benefit of the Secured Parties on each Deposit Account (except (w) accounts used exclusively for payroll, payroll taxes or employee benefits, (x) Excluded Escrow/Cash Collateral Accounts, and (y) any other account maintained in the Ordinary Course of Business containing not more than $10,000 at any time, in each case provided that a perfected Lien has not been established in favor of the Revolving Agent or the Revolving Lenders) and each Securities Account of the Company or any other Loan Party (except any Securities Account maintained in the Ordinary Course of Business which contains assets, including securities entitlements, financial assets or other amounts, with an aggregate fair market value that does not exceed $10,000 at any time for any such account, provided that a perfected Lien has not been established in favor of the Revolving Agent or the Revolving Lenders); provided that, in the case of those certain Deposit Accounts described in paragraph 6 of Schedule 9.13, such perfected Liens in favor of the Collateral Agent for the benefit of the Secured Parties shall not be required under this clause (e) until the date specified in Schedule 9.13 

 

47

 

with respect thereto.  The Company or a Subsidiary will be the sole account holder(s) of each Deposit Account and each Securities Account of the Company or a Subsidiary and will not allow any Person (other than the Collateral Agent, the Revolving Agent (subject to the terms of the Intercreditor Agreement (so long as the Intercreditor Agreement is in effect)) and the depository bank or Securities Intermediary, as applicable) to have control over any such Deposit Account or Securities Account or any property deposited therein.  The Company will promptly provide written notice to the holders of the Notes of any opening or closing of a Deposit Account or Securities Account.  If at any time the Revolving Obligations have been Paid In Full (as defined in the Intercreditor Agreement), contemporaneously therewith, the Company will, and will cause each Subsidiary to, enter into Qualifying Control Agreements and take all other actions necessary to establish a first priority, perfected Lien in favor of the Collateral Agent for the benefit of the Secured Parties on each such Deposit Account and Securities Account, in each case to the extent Qualifying Control Agreements are not then in effect or such first priority, perfected Liens do not then exist.

 

(f)                                   Vehicles.  The Company will, and will cause each of the other Loan Parties to, within thirty days of the acquisition thereof (subject to the below proviso), file or cause to be filed in each office in each jurisdiction which the Required Holders may deem reasonably advisable to perfect their Liens on each Vehicle of the Company or any other Loan Party that is covered by a certificate of title or ownership (a “Titled Vehicle”) (other than any such Vehicle that is road-certifiable and has a Fair Market Value of $50,000 or less), all applications for certificates of title or ownership (and any other necessary documentation) indicating the Collateral Agent’s first priority Lien on such Titled Vehicle (subject to any Liens permitted in accordance with Section 10.4) covered by such certificate; provided that, in the case of those Titled Vehicles described in Annex A of Schedule 9.13, such filings shall be required under this clause (f) by the dates specified in Schedule 9.13 with respect thereto (it being understood that, with respect to the Titled Vehicles owned by the Loan Parties on the date hereof, the Loan Parties shall not be required to make any such filings for any Titled Vehicles other than those described in Annex A of Schedule 9.13).

 

(g)                                  Further Assurances.  At any time upon the reasonable request of the Required Holders, promptly execute and deliver any and all further instruments and documents and take all such other action (including promptly completing any registration or stamping of documents as may be applicable) as the Required Holders may deem necessary or desirable to maintain in favor of the Collateral Agent, for the benefit of the Secured Parties, Liens and insurance rights on the Collateral that are duly perfected in accordance with the requirements of, or the obligations of the Company and its Subsidiaries under, the Loan Documents and all applicable laws and regulations.

 

(h)                                 Revolving Credit Agreement.  Without limiting the foregoing, in no event may the Revolving Obligations be secured by any property of the Company or any Subsidiary that does not constitute Collateral.

 

48

 

9.10.                     Financial Advisor.

 

The Company will, and will cause each of its Subsidiaries to, cooperate in a reasonable manner with, and provide good faith assistance to, the Financial Advisor in connection with the services to be rendered by the Financial Advisor pursuant to the FTI Engagement Agreement, including, without limitation, (i) providing the Financial Advisor with such financial information as would be reasonably necessary for the Financial Advisor to verify the statements, calculations and determinations contained in any certificate delivered by the Company pursuant to Section 7.2 and (ii) notwithstanding the limitations set forth in Section 7.4, permitting the Financial Advisor to visit the offices and properties of the Company and its Subsidiaries and discuss the affairs, finances and accounts of the Company and its Subsidiaries with the Company’s and its Subsidiaries’ officers and the independent public accountants of the Company and its Subsidiaries, all upon reasonable prior notice to the Company, provided that visits to the offices and properties of the Company and its Subsidiaries shall not exceed one per fiscal quarter in the case of any corporate office and one per fiscal year in the case of any other office or property.  The Company will pay all of the reasonable and documented fees and out of pocket expenses of the Financial Advisor in accordance with the terms of the FTI Engagement Agreement.

 

9.11.                     Further Assurances.

 

At the Company’s cost and expense, the Company will, and will cause each of its Subsidiaries to, promptly upon request by the Collateral Agent or any holder of a Note: (i) correct any material defect or error that may be discovered in any Loan Document or in the execution, acknowledgment, filing or recordation thereof and (ii) do, execute, acknowledge, deliver, record, re-record, file, re-file, register and re-register any and all such further acts, deeds, certificates, assurances and other instruments (including promptly completing any registration or stamping of documents as may be applicable) as the Collateral Agent or any holder of a Note may reasonably require from time to time in order to (A) carry out more effectively the purposes of the Loan Documents, (B) to the fullest extent permitted by applicable law, subject the Company’s or any of its Subsidiaries’ properties, assets, rights or interests to the Liens now or hereafter intended to be covered by any of the Collateral Documents, (C) perfect and maintain the validity, effectiveness and priority of any of the Collateral Documents and any of the Liens intended to be created thereunder and (D) assure, convey, grant, assign, transfer, preserve, protect and confirm more effectively unto the Secured Parties the rights granted or now or hereafter intended to be granted to the Secured Parties under any Loan Document or under any other instrument executed in connection with any Loan Document to which the Company or any of its Subsidiaries is or is to be a party, and cause each of its Subsidiaries to do so.

 

9.12.                     Most Favored Lender.

 

(a)                                 If at any time any Material Credit Facility includes any Financial Covenant or any event of default (whether set forth as a covenant, undertaking, event of default, restriction or other provision, and whether included as a new provision in a new or existing Material Credit Facility or by way of amendment or other modification of an existing provision or any defined term used therein) not included in this Agreement or that would be more beneficial to the holders of the Notes than any analogous provision included in this Agreement (any such Financial Covenant or event of default, an “Additional Provision”), then the Company shall, within three Business Days after the 

 

49

 

inclusion of such Additional Provision in such Material Credit Facility, deliver written notice thereof to each holder of a Note.  Such notice shall be signed by a Responsible Officer and shall refer to the provisions of this Section 9.12 and shall set forth a verbatim statement of such Additional Provision and any defined term used therein, and related explanatory calculations, as applicable.  Thereupon, unless waived in writing by the Required Holders within ten Business Days of receipt of such notice by the holders of the Notes, such Additional Provision (and any related definitions) will be deemed automatically incorporated by reference into this Agreement, mutatis mutandis, as if set forth fully herein, without any further action required on the part of any Person, effective as of the date that such Additional Provision became effective under such Material Credit Facility.  Thereafter, upon the request of any holder of a Note, the Company will, at its expense, enter into any additional agreement or amendment to this Agreement reasonably requested by such holder evidencing any of the foregoing.

 

(b)                                 So long as no Default or Event of Default has occurred and is continuing:

 

(i)                                     if any Additional Provision incorporated into this Agreement pursuant to this Section 9.12 is amended or otherwise modified in each relevant Material Credit Facility with the effect that such Additional Provision is made less restrictive or otherwise less onerous on the Company and its Subsidiaries, then such Additional Provision will be deemed so amended in this Agreement, without any further action required on the part of any Person, effective as of the date of such amendment or modification in each relevant Material Credit Facility,

 

(ii)                                  if any Additional Provision incorporated into this Agreement pursuant to this Section 9.12 is removed from each relevant Material Credit Facility, then such Additional Provision will be deemed removed from this Agreement, without any further action required on the part of any Person, effective as of the date of such removal from each relevant Material Credit Facility, and

 

(iii)                               if each Material Credit Facility including an Additional Provision incorporated into this Agreement pursuant to this Section 9.12 is terminated and no amounts are outstanding thereunder, then such Additional Provision will automatically be deemed removed from this Agreement, without any further action required on the part of any Person, effective as of the date of such termination,

 

provided that (x) except as provided in Section 17, this Agreement shall not be amended to remove any covenant, undertaking, event of default, restriction or other provision included in this Agreement other than by operation of this Section 9.12 or to make any such provision less restrictive on the Company and its Subsidiaries, and (y) if any creditor or agent under any Material Credit Facility is provided any consideration for the amendment or other modification or the removal of such Additional Provision under or from such Material Credit Facility, then the holders of Notes will (concurrently with the provision of such consideration to such creditor or agent) be provided with equivalent consideration on a pro rata basis, and no such amendment, modification or removal of 

 

50

 

such Additional Provision in or from this Agreement will be effective unless and until such equivalent consideration is provided to the holders of Notes.

 

9.13.                     Post-Closing Undertaking.

 

The Company will, and will cause each of its Subsidiaries to, execute and deliver to the holders of the Notes and the Collateral Agent the documents and complete the actions (and deliver to the holders of the Notes evidence thereof) set forth in Schedule 9.13 hereto, in each case promptly after the Restructuring Closing Date, but in any event within the respective period of time specified in Schedule 9.13 with respect to such document or action (or such longer period of time as may be agreed to by the Required Holders in their sole discretion), with each such document or evidence, as applicable, being in form, scope and substance reasonably satisfactory to the Required Holders.

 

9.14.                     Investment Bank.

 

On or prior to November 30, 2016, the Company will engage a nationally recognized investment bank for the purpose of assessing and evaluating and, if determined appropriate by the Company in its business judgment, pursuing potential strategic alternative transactions.  The Company will cause such investment bank, during the term of its engagement, to provide to the Financial Advisor, by teleconference, not less than frequently than once every two weeks at any time the Company is assessing, evaluating or pursuing any such transaction, detailed confidential reports regarding any such transaction including information as to the overall process, level of market interest, indicative value ranges, expected timelines and the identity of any relevant parties; it being acknowledged and agreed that such information (other than the identity of relevant parties) may be provided by the Financial Advisor to the holders of Notes.

 

10.                               NEGATIVE COVENANTS.

 

The Company covenants that until the Obligations have been Paid In Full:

 

10.1.                     Financial Covenants.

 

(a)                                 FCC; Fixed Charge Coverage Ratio.

 

(i)                                     The Company will not permit FCC, as of the last day of its fiscal quarters ending on June 30, 2018 and September 30, 2018, to be less than (or more negative than) the amount set forth below with respect to such date:

 

	
Fiscal Quarter Ending
    	
 
    	
Minimum Amount
    	
 
    
	
June 30,   2018
    	
 
    	
$
    	
(15,000,000
    	
)
    
	
September 30,   2018
    	
 
    	
$
    	
(10,000,000
    	
)
    

 

51

 

(ii)                                  The Company will not permit the Fixed Charge Coverage Ratio, as of the last day of each of its fiscal quarters ending on or after December 31, 2018, to be less than the ratio set forth below with respect to such date:

 

	
Fiscal Quarter Ending
    	
 
    	
Minimum Ratio
    	
 
    
	
December 31,   2018
    	
 
    	
0.25 to 1.00
    	
 
    
	
March 31,   2019
    	
 
    	
0.75 to 1.00
    	
 
    
	
June 30,   2019
    	
 
    	
1.00 to 1.00
    	
 
    
	
September 30,   2019 and the last day of each fiscal quarter ending thereafter
    	
 
    	
1.30 to 1.00
    	
 
    

 

(b)                                 Leverage Ratio.  The Company will not permit the Leverage Ratio, as of the last day of each of its fiscal quarters ending on or after June 30, 2018, to be greater than the ratio set forth below with respect to such date:

 

	
Fiscal Quarter Ending
    	
 
    	
Maximum Ratio
    	
 
    
	
June 30,   2018
    	
 
    	
11.50 to 1.00
    	
 
    
	
September 30,   2018
    	
 
    	
9.50 to 1.00
    	
 
    
	
December 31,   2018
    	
 
    	
7.00 to 1.00
    	
 
    
	
March 31,   2019
    	
 
    	
5.50 to 1.00
    	
 
    
	
June 30,   2019
    	
 
    	
4.50 to 1.00
    	
 
    
	
September 30,   2019 and the last day of each fiscal quarter ending thereafter
    	
 
    	
3.50 to 1.00
    	
 
    

 

(c)                                  Minimum Liquidity.  The Company will not permit the sum of Unencumbered Cash on Hand and unused availability under the Revolving Credit Agreement to be less than $15,000,000 (or its equivalent in other currencies) as of the last day of any month (i) ending on or prior to March 31, 2018 or (ii) for which Tier I, Tier II or Tier III applies in the determination of the Incremental Interest Rate.

 

(d)                                 Minimum EBITDA.  The Company will not permit Consolidated EBITDA, for any period of four consecutive fiscal quarters ending on or prior to March 31, 2018, to be less than (or more negative than) the amount (or its equivalent in other currencies) set forth below with respect to such period:

 

	
Four Fiscal Quarter Period Ending
    	
 
    	
Minimum Amount
    	
 
    
	
September 30,   2016
    	
 
    	
$
    	
(20,000,000
    	
)
    
	
December 31,   2016
    	
 
    	
$
    	
(15,000,000
    	
)
    
	
March 31,   2017
    	
 
    	
$
    	
(15,000,000
    	
)
    
	
June 30,   2017
    	
 
    	
$
    	
(10,000,000
    	
)
    
	
September 30,   2017
    	
 
    	
$
    	
(10,000,000
    	
)
    
	
December 31,   2017
    	
 
    	
$
    	
(7,500,000
    	
)
    
	
March 31,   2018
    	
 
    	
$
    	
(7,500,000
    	
)
    

 

52

 

10.2.                     Capital Expenditures.

 

The Company will not, and will not permit any Subsidiary to, make any Capital Expenditure during the fiscal years ending December 31, 2016 or December 31, 2017 unless, immediately after giving effect to such Capital Expenditure, the aggregate amount of all Capital Expenditures of the Company and its Subsidiaries made in such fiscal year would not exceed $30,000,000 (or its equivalent in other currencies).

 

10.3.                     Indebtedness.

 

The Company will not, and will not permit any Subsidiary to, create, incur, assume or suffer to exist any Indebtedness or issue any Disqualified Equity Interest, except:

 

(a)                                 Indebtedness under the Loan Documents;

 

(b)                                 Indebtedness outstanding on the date hereof and listed on Schedule 10.3;

 

(c)                                  Guaranties of any Loan Party in respect of Indebtedness otherwise permitted hereunder of any other Loan Party; provided that any Guaranty of Indebtedness permitted hereunder that is subordinated to the Obligations shall be subordinated to the Obligations on substantially the same terms as such guaranteed Indebtedness;

 

(d)                                 obligations (contingent or otherwise) existing or arising under any Swap Contract, provided that (i) such obligations are (or were) entered into by such Person in the Ordinary Course of Business for the purpose of directly mitigating risks reasonably anticipated by such Person associated with liabilities, commitments, investments, assets, cash flows of or property held by, or changes in the value of securities issued by, such Person, and not for purposes of speculation or taking a “market view” and (ii) such Swap Contract does not contain any provision exonerating the non-defaulting party from its obligation to make payments on outstanding transactions to the defaulting party;

 

(e)                                  Indebtedness arising in the Ordinary Course of Business in connection with treasury management and commercial credit card, merchant card and purchase or procurement card services;

 

(f)                                   Indebtedness in respect of Capitalized Leases, Synthetic Lease Obligations and purchase money obligations for real property and fixed or capital assets within the limitations set forth in Section 10.4(r); provided, however, that the aggregate amount of all such Indebtedness at any one time outstanding, together with the Swap Termination Value of all Swap Contracts permitted under clause (d) above, shall not exceed $5,000,000 (or its equivalent in other currencies);

 

(g)                                  Assumed Indebtedness in an aggregate principal amount not to exceed $3,000,000 (or its equivalent in other currencies) at any time outstanding;

 

53

 

(h)                                 Indebtedness incurred to finance or as part of the consideration for any Permitted Acquisition in an aggregate principal amount not to exceed $1,000,000 (or its equivalent in other currencies); provided, that, (i) no Event of Default exists at the time of or would be caused by the incurrence of such Indebtedness and (ii) such Indebtedness (A) is unsecured, (B) bears interest (and provided for fees) at a rate (or amount) no greater than the then current arm’s length market rate (or amount) for similar Indebtedness, (C) does not require the payment in cash of principal (other than in respect of working capital adjustments) prior to ninety-one (91) days following the latest final maturity date of any of the Notes stated therein, (D) has a maturity at least 91 days after the latest final maturity date of any of the Notes stated therein, and (E) is subordinated to the Obligations on terms reasonably acceptable to the Required Holders;

 

(i)                                     the endorsement of negotiable instruments for deposit or collection or similar transactions in the Ordinary Course of Business;

 

(j)                                    Indebtedness incurred or arising in the Ordinary Course of Business and not in connection with the borrowing of money in respect of (i) obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms; (ii) performance bonds, bid bonds, appeal bonds, surety bonds, performance and completion guarantees and similar instruments or obligations; and (iii) obligations to pay insurance premiums;

 

(k)                                 Indebtedness representing deferred compensation to employees, consultants or independent contractors incurred in the ordinary course of business;

 

(l)                                     surety bonds, deposits and similar obligations permitted under Section 10.4(e) or (f);

 

(m)                             unsecured Indebtedness of any Loan Party owing to any other Loan Party;

 

(n)                                 Indebtedness under the Revolving Loan Documents in an aggregate principal amount outstanding at any time not to exceed the Revolving Maximum Amount (as defined in the Intercreditor Agreement);

 

(o)                                 other unsecured Indebtedness (i) that bears interest (and provided for fees) at a rate (or amount) no greater than the then current arm’s length market rate (or amount) for similar Indebtedness, (ii) has a stated maturity date no earlier than 91 days following the latest final maturity date of any of the Notes stated therein, (iii) as to which at the time of incurrence thereof no Default or Event of Default has occurred and is continuing or would result therefrom, (iv) the aggregate outstanding principal amount of which does not exceed $500,000 (or its equivalent in other currencies) at any time, and (v) with respect to which at least ten (10) Business Days prior to each such incurrence, the Company has delivered a certificate to the holders of the Notes demonstrating compliance with each of clauses (i) through (iv) above; and

 

(p)                                 Refinancing Indebtedness.

 

54

 

10.4.                     Liens.

 

The Company will not, and will not permit any Subsidiary to, directly or indirectly create, incur, assume or permit to exist (upon the happening of a contingency or otherwise) any Lien on or with respect to any property or asset (including, without limitation, any document or instrument in respect of goods or accounts receivable) of the Company or any such Subsidiary, whether now owned or held or hereafter acquired, or any income or profits therefrom, or assign or otherwise convey any right to receive income or profits, except:

 

(a)                                 Liens which secure the Obligations pursuant to any Loan Document;

 

(b)                                 Liens on the Collateral created by or pursuant to the Revolving Loan Documents which secure the Revolving Obligations, in each case in accordance with the Intercreditor Agreement;

 

(c)                                  Liens for taxes, assessments or governmental charges or levies on its property if the same shall not at the time be delinquent or thereafter can be paid without penalty, or are being contested in good faith and by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books;

 

(d)                                 Liens imposed by law, such as carriers’, warehousemen’s and mechanics’ liens and other similar liens arising in the Ordinary Course of Business which secure payment of obligations not more than 60 days past due or which are being contested in good faith by appropriate proceedings and for which adequate reserves shall have been set aside on its books;

 

(e)                                  Liens arising out of pledges or deposits under worker’s compensation laws, unemployment insurance, old age pensions, or other social security or retirement benefits, or similar legislation;

 

(f)                                   utility easements, building restrictions and such other encumbrances or charges against real property as are of a nature generally existing with respect to properties of a similar character and which do not in any material way affect the marketability of the same or interfere with the use thereof in the business of the Company or its Subsidiaries;

 

(g)                                  Liens arising solely by virtue of any statutory or common law provision relating to bankers’ liens, rights of set-off or similar rights and remedies as to deposit accounts, securities accounts or other funds maintained with a creditor depository institution; provided that (i) such account is not a dedicated cash collateral account and is not subject to restriction against access by the Company or a Subsidiary in excess of those set forth by regulations promulgated by the Board of Governors of the Federal Reserve, and (ii) such account is not intended by the Company or any Subsidiary to provide collateral to the depository institution;

 

(h)                                 Liens existing on the date hereof and described in Schedule 10.4 and Liens resulting from extensions, renewals or replacements of Liens permitted by this paragraph (i), provided that (i) there is no increase in the principal amount or decrease in maturity of 

 

55

 

the Indebtedness secured thereby at the time of such extension, renewal or replacement, (ii) any new Lien attaches only to the same property theretofore subject to such earlier Lien and (iii) immediately after such extension, renewal or replacement no Default or Event of Default would exist;

 

(i)                                     cash collateralization of Rate Management Transactions (i) as required by the relevant counterparty pursuant to the applicable ISDA documentation, provided that the aggregate amount of such cash collateralization does not exceed $5,000,000 at any time outstanding, or (ii) to the extent and in the amounts required by the Dodd-Frank Wall Street Reform and Consumer Protection Act;

 

(j)                                    any deposit required to secure the performance of bids, trade contracts, or leases (other than Indebtedness), statutory or reclamation bonds, statutory obligations, surety bonds (other than bonds related to judgments or litigation), performance bonds and other obligations of a like nature, in each case incurred in the Ordinary Course of Business;

 

(k)                                 Liens securing any interest or title of a lessor or sublessor under an operating lease;

 

(l)                                     Liens securing a judgment for the payment of money not constituting an Event of Default under Section 11(i) or securing an appeal or other surety bond related to any such judgment;

 

(m)                             any right of a licensee under any license agreement for the use of intellectual property or other intangible assets of Company or any Subsidiary thereof as to which Company or Subsidiary is the licensor;

 

(n)                                 any leases granted to others permitted under Section 10.6;

 

(o)                                 real estate security deposits with respect to leaseholds in the Ordinary Course of Business;

 

(p)                                 Liens associated with project financing the sole recourse for nonpayment of which is limited to the assets that are being financed or constructed with such project financing;

 

(q)                                 royalties payable in connection with leasehold interests;

 

(r)                                    any Lien created to secure all or any part of the purchase price, or to secure Indebtedness incurred or assumed to pay all or any part of the purchase price or cost of construction, of fixed or capital assets (or any improvement thereon) acquired or constructed by the Company or a Subsidiary after the date of this Agreement, provided that:

 

(i)                                     any such Lien shall extend solely to the item or items of such fixed or capital assets (or improvement thereon) so acquired or constructed and, if required by the terms of the instrument originally creating such Lien, other 

 

56

 

property (or improvement thereon) which is an improvement to or is acquired for specific use in connection with such acquired or constructed fixed or capital assets (or improvement thereon) or which is real property being improved by such acquired or constructed fixed or capital assets (or improvement thereon),

 

(ii)                                  the principal amount of the Indebtedness secured by any such Lien shall at no time exceed an amount equal to 100% of the Fair Market Value (as determined in good faith by the board of directors of the Company) of such fixed or capital assets (or improvement thereon) at the time of such acquisition or construction, and

 

(iii)                               any such Lien shall be created contemporaneously with or within the period ending 180 days after, the acquisition or construction of such fixed or capital assets;

 

(s)                                   any Lien arising from the Company’s provision of cash collateral, in an amount not to exceed $550,000 at any time, securing a letter of credit in the face amount of $500,000 issued by U.S. Bank National Association to the landlord under a real estate lease of the Company; and

 

(t)                                    other Liens securing Indebtedness of the Company or any Subsidiary not otherwise permitted by clauses (a) through (s) above; provided that (i) the aggregate outstanding principal amount of such Indebtedness shall not at any time exceed $5,000,000 (or its equivalent in other currencies), (ii) no such Lien shall extend to or cover any Collateral, and (iii) no such Lien shall secure any Indebtedness outstanding under or pursuant to any Material Credit Facility.

 

10.5.                     Mergers, Consolidations, etc.

 

The Company will not, and will not permit any Subsidiary to, consolidate with or merge with any other Person or convey, transfer or lease all or substantially all of its assets in a single transaction or series of transactions to any Person, except that:

 

(a)                                 any Subsidiary Guarantor may consolidate or merge with, or convey, transfer or lease all or substantially all of its assets to, any other Person, in each case so long as the successor formed by such consolidation or the survivor of such merger or the Person that acquires by conveyance, transfer or lease all or substantially all of the assets of such Subsidiary Guarantor as an entirety, as the case may be, shall be the Company, such Subsidiary Guarantor or another Subsidiary Guarantor;

 

(b)                                 any Subsidiary (other than a Subsidiary Guarantor) may consolidate or merge with, or convey, transfer or lease all or substantially all of its assets to, any other Person, so long as (i) the successor formed by such consolidation or the survivor of such merger or the Person that acquires by conveyance, transfer or lease all or substantially all of the assets of such Subsidiary as an entirety, as the case may be, shall be such Subsidiary, the Company, any Subsidiary Guarantor or any other Wholly-Owned Subsidiary, or (ii) the transaction is treated as a Disposition of all or substantially all of the assets of such Subsidiary for purposes of Section 10.6 and, based on such 

 

57

 

characterization, would be permitted pursuant to Section 10.6 (other than clause (d) of Section 10.6); 

 

provided that, in each case, (x) immediately before and immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing and (y) in the case of any such transaction involving the Company or a Subsidiary Guarantor, each Subsidiary Guarantor under the Subsidiary Guaranty at the time such transaction occurs reaffirms its obligations under the Subsidiary Guaranty in writing at such time pursuant to documentation that is reasonably acceptable to the Required Holders.

 

Notwithstanding the foregoing, any Subsidiary may liquidate or dissolve if the Company determines in good faith that such liquidation or dissolution is in the best interests of the Company and is not materially disadvantageous to the holders of Notes; provided, that to the extent any Subsidiary Guarantor is dissolved or liquidated, its assets must be transferred to the Company or another Subsidiary Guarantor upon such dissolution or liquidation.

 

No such conveyance, transfer or lease of substantially all of the assets of any Subsidiary Guarantor shall have the effect of releasing such Subsidiary Guarantor or any successor corporation or limited liability company that shall theretofore have become such in the manner prescribed in this Section 10.5 from its liability under the Loan Documents to which it is a party.

 

10.6.                     Sale of Assets.

 

The Company will not, and will not permit any Subsidiary to, lease, sell or otherwise dispose of its property to any other Person (collectively a “Disposition”), except:

 

(a)                                 Dispositions of inventory (other than Specified Property) in the Ordinary Course of Business;

 

(b)                                 Dispositions of obsolete or worn-out property (other than Specified Property) in the Ordinary Course of Business;

 

(c)                                  Dispositions by the Company to a Subsidiary Guarantor, or by a Subsidiary Guarantor to the Company or another Subsidiary Guarantor;

 

(d)                                 Dispositions permitted by Section 10.5;

 

(e)                                  Licenses for the use of intellectual property or other intangible assets;

 

(f)                                   Dispositions of accounts receivable (other than Specified Property) in connection with the compromise, settlement or collection thereof;

 

(g)                                  Dispositions of Cash Equivalents;

 

(h)                                 Dispositions of property as required by law, regulation or ordinance;

 

(i)                                     Dispositions of Specified Property to a Person that is not an Affiliate of the Company or a Subsidiary in an arm’s-length transaction, provided that the net cash

 

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proceeds thereof (if any) received by the Company or a Subsidiary are offered to prepay the outstanding Notes held by each holder in accordance with Section 8.8 within 30 days of such Disposition, and

 

(j)            Dispositions of property (other than Specified Property) not otherwise permitted by clauses (a) through (i) of this Section 10.6, provided that:

 

(i)                                     each such Disposition is made in an arm’s-length transaction that in the good faith opinion of the Company is for a consideration at least equal to the Fair Market Value of the property subject thereto and is in the best interest of the Company or such Subsidiary,

 

(ii)                                  subject to the terms of the Intercreditor Agreement (so long as the Intercreditor Agreement is in effect), the higher of the net cash proceeds from such Disposition and the net book value of the property disposed of in such Disposition, when aggregated with the higher of the net cash proceeds and the net book value with respect to all other Dispositions made by the Company and its Subsidiaries pursuant to this clause (j) during the period of 365 consecutive days ending on the date of such Disposition, does not exceed an amount equal to the Disposition Basket Amount; provided that, subject to the immediately succeeding proviso, to the extent all or any portion of the net cash proceeds from any Disposition made pursuant to this clause (j) (or an equal amount) are, within 120 days after the date of such Disposition (x) offered to prepay the outstanding Notes held by each holder in accordance with Section 8.9 and/or (y) reinvested in productive assets to be used in the business of the Company or a Subsidiary, such amount (or, if higher, a proportionate amount of the net book value of the property disposed of in such Disposition) shall not be included in the computation of the applicable Disposition Basket Amount; provided further that, at any time Tier I, Tier II, Tier III or Tier IV applies in the determination of the Incremental Interest Rate, to the extent the aggregate net cash proceeds of any Disposition (or related series of Dispositions) that would not be permitted under this clause (j) but for the foregoing proviso exceeds $2,500,000 (or its equivalent in other currencies) (a “Material Disposition”), the Company will contemporaneously offer all of the net cash proceeds of each such Material Disposition to prepay the outstanding Notes held by each holder in accordance with Section 8.9, and

 

(iii)                               at the time of such Disposition and after giving effect thereto no Default or Event of Default shall have occurred and be continuing.

 

Notwithstanding the foregoing, in no event may the Company or any Subsidiary lease, sell or otherwise dispose of all or substantially all of the Noteholder Priority Collateral without the prior written consent of all holders of Notes.

 

10.7.                     Transactions with Affiliates.

 

The Company will not and will not permit any Subsidiary to enter into directly or indirectly any Material transaction or Material group of related transactions (including without

 

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limitation the Material purchase, lease, sale or exchange of properties of any kind or the rendering of any Material service) with any Affiliate (other than the Company or another Subsidiary), except (i)  upon fair and reasonable terms no less favorable to the Company or such Subsidiary than would be obtainable in a comparable arm’s-length transaction with a Person not an Affiliate (as determined by the Company in good faith), (ii) dividends permitted under applicable law that are paid to all shareholders of the relevant series of Equity Interests on the same terms and conditions, or (iii) as set forth in Schedule 10.7.

 

10.8.                     Economic Sanctions, Etc.

 

The Company will not, and will not permit any Subsidiary or, to the knowledge of the Company, any director, officer, agent, employee or other Person acting on behalf of the Company or any Subsidiary to (a) become (including by virtue of being owned or controlled by a Blocked Person), own or control a Blocked Person or (b) directly or indirectly have any investment in or engage in any dealing or transaction (including any investment, dealing or transaction involving the proceeds of the Notes) with any Person if such investment, dealing or transaction (i) would cause any holder or any affiliate of such holder to be in violation of, or subject to sanctions under, any law or regulation applicable to such holder, or (ii) is prohibited by or subject to sanctions under any U.S. Economic Sanctions Laws.

 

10.9.                     Line of Business.

 

The Company will not and will not permit any Subsidiary to engage in any business if, as a result, the general nature of the business in which the Company and its Subsidiaries, taken as a whole, would then be engaged would be substantially changed from the general nature of the business in which the Company and its Subsidiaries, taken as a whole, are engaged on the date hereof as described in Schedule 10.9 (and other business that are reasonably related, complementary or incidental to such businesses); provided, this Section 10.9 shall not be deemed to prohibit acquisitions by the Company or any Subsidiary as long as the acquired companies or assets are operating in or relating or complementary to a business that is similar to or reasonably related to the current and future businesses conducted by the Company or any Subsidiary, as well as suppliers to or distributors of products similar to products purchased, produced, consumed or sold by the Company or any Subsidiary.

 

10.10.              Restricted Payments.

 

The Company will not, and will not permit any Subsidiary to, declare or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, unless:

 

(a)                                 the Leverage Ratio, as of the last day of the most recently ended fiscal quarter, is less than 3.50 to 1.00,

 

(b)                                 the Fixed Charge Coverage Ratio, as of the last day of the most recently ended fiscal quarter, determined on a pro forma basis before and after giving effect to such Restricted Payment, is greater than 1.30 to 1.00,

 

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(c)                                  the sum of Unencumbered Cash on Hand and unused availability under the Revolving Credit Agreement, both before and after giving effect to such Restricted Payment, is not less than $15,000,000, and

 

(d)                                 no Default or Event of Default has occurred and is continuing at the time of such Restricted Payment or would result therefrom,

 

provided that (x) the Company may make Restricted Payments in connection with the withholding of Equity Interests to cover withholding taxes due upon the vesting of equity compensation paid to employees, directors or consultants and (y) any Subsidiary may make Restricted Payments to the Company or to any Wholly-Owned Subsidiary that owns Equity Interests in such Subsidiary, ratably according to their respective holdings of the type of Equity Interest in respect of which such Restricted Payment is being made.

 

10.11.              Investments.

 

At any time Tier I, Tier II, Tier III or Tier IV applies in the determination of the Incremental Interest Rate, the Company will not, and will not permit any Subsidiary to, make or maintain any Investments, except (subject, in each case, to the proviso immediately following clause (g) below):

 

(a)                                 Investments held by the Loan Parties in the form of Cash Equivalents or other Investment Property that are held in a securities account or deposit account subject to a Qualifying Control Agreement (to the extent otherwise required hereunder), pursuant to documentation in form and substance satisfactory to the Required Holders;

 

(b)                                 loans and advances to officers, directors and employees of the Company and its Subsidiaries, made in the Ordinary Course of Business and approved by the board of directors of the Company, in an aggregate amount at any one time outstanding not to exceed $2,500,000 (or its equivalent in other currencies);

 

(c)                                  Investments in Loan Parties;

 

(d)                                 Investments consisting of extensions of credit in the nature of Accounts or notes receivable arising from the grant of trade credit in the Ordinary Course of Business, and Investments received in satisfaction or partial satisfaction thereof from financially troubled Account Debtors to the extent reasonably necessary in order to prevent or limit loss;

 

(e)                                  Guaranties permitted by Section 10.3;

 

(f)                                   Investments existing as of the date hereof as described in Schedule 10.11 (setting forth, as of the Restructuring Closing Date, the amount, obligor or issuer and maturity, if any, thereof) and extensions or renewals thereof, provided that no such extension or renewal shall be permitted if it would (i) increase the amount of such Investment at the time of such extension or renewal or (ii) result in a Default hereunder; and

 

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(g)                                  Investments constituting a Permitted Acquisition;

 

provided that, notwithstanding anything herein to the contrary, no Loan Party shall, nor shall it permit any Subsidiary to, directly or indirectly, acquire any Equity Interests of any Person that will not, after giving effect to such acquisition, constitute a Subsidiary.

 

10.12.              Sale and Leaseback.

 

At any time Tier I, Tier II, Tier III or Tier IV applies in the determination of the Incremental Interest Rate, the Company will not, and will not permit any Subsidiary to, enter into any agreement or arrangement with any other Person providing for the leasing by the Company or any Subsidiary of real or personal property which has been or is to be sold or transferred by the Company or any Subsidiary to such other Person or to any other Person to whom funds have been or are to be advanced by such Person on the security of such property or rental obligations of the Company or any Subsidiary.

 

10.13.              Intrepid Aviation.

 

So long as Intrepid Aviation is not required to become a Subsidiary Guarantor and a Grantor pursuant to Section 9.6, the Company will not permit Intrepid Aviation to engage in any operations or business (other than activities as described in Schedule 10.13); provided, however, that notwithstanding anything to the contrary in this Agreement, Intrepid Aviation shall not (i) consolidate or merge with, or liquidate or dissolve into, or convey, transfer or lease all or substantially all of its assets to, any Person other than a Loan Party (in which case, the Loan Party shall be the continuing or surviving Person), (ii) directly or indirectly sell or otherwise dispose of any Equity Interests of any Loan Party, or (iii) fail to hold itself out to the public as a legal entity separate and distinct from all other Persons.

 

10.14.              Revolving Loan Documents.

 

The Company will not, and will not permit any Subsidiary to, amend, modify or change in any manner any term or condition of any Revolving Loan Document to the extent prohibited by the terms of the Intercreditor Agreement.

 

11.                               EVENTS OF DEFAULT.

 

An “Event of Default” shall exist if any of the following conditions or events shall occur and be continuing:

 

(a)                                 the Company defaults in the payment of any principal or Make-Whole Amount, if any, on any Note when the same becomes due and payable, whether at maturity or at a date fixed for prepayment or by declaration or otherwise; or

 

(b)                                 the Company defaults in the payment of any interest on any Note for more than five Business Days after the same becomes due and payable; or

 

(c)                                  the Company defaults in the performance of or compliance with any term contained in Sections 7.1(g), 9.6, 9.9, 9.12, 9.13 or 9.14, Sections 10.1 through 10.12, or

 

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any Additional Provision incorporated into this Agreement pursuant to Section 9.12 that is a covenant or undertaking; or

 

(d)                                 any Loan Party defaults in the performance of or compliance with any term contained in any Loan Document (other than those referred to in Sections 11(a), (b), (c), (k),(m), (n) and (o)) and such default is not remedied within 30 days after the earlier of (i) a Responsible Officer obtaining actual knowledge of such default and (ii) the Company receiving written notice of such default from any holder of a Note (any such written notice to be identified as a “notice of default” and to refer specifically to this Section 11(d)); or

 

(e)                                  any representation or warranty made in writing by or on behalf of the Company or any other Loan Party in this Agreement, in any other Loan Document or in any writing furnished in connection with the transactions contemplated hereby or thereby proves to have been, with respect to any representations or warranties that contain a materiality qualifier, false or incorrect, and with respect to any representations or warranties that do not contain a materiality qualifier, false or incorrect in any material respect, in each case on the date as of which made or confirmed; or

 

(f)                                   (i) the Company or any Subsidiary is in default (as principal or as guarantor or other surety) in the payment of any principal of or premium or make-whole amount or interest on any Indebtedness that is outstanding under any Material Credit Facility, in each case beyond any period of grace provided with respect thereto, or (ii) the Company or any Subsidiary is in default in the performance of or compliance with any term of any Material Credit Facility or of any mortgage, indenture or other agreement relating thereto or any other condition exists, and as a consequence of such default or condition such Indebtedness has become, or has been declared (or one or more Persons are entitled to declare such Indebtedness to be), due and payable before its stated maturity or before its regularly scheduled dates of payment, or (iii) as a consequence of the occurrence or continuation of any event or condition (other than the passage of time or the right of the holder of Indebtedness to convert such Indebtedness into equity interests), (x) the Company or any Subsidiary has become obligated to purchase or repay any Indebtedness under any Material Credit Facility before its regular maturity or before its regularly scheduled dates of payment, or (y) one or more Persons have the right to require the Company or any Subsidiary so to purchase or repay any such Indebtedness, or (iv) without limitation of the preceding clauses, any “Event of Default” under and as such term is defined in the Revolving Loan Documents at any time that, and for so long as, there are outstanding Loans or any Letter of Credit (each as defined in the Revolving Credit Agreement) under the Revolving Credit Agreement shall have occurred and be continuing; or

 

(g)                                  the Company or any other Loan Party (i) is not paying, or admits in writing its inability to pay, its debts generally as they become due, (ii) files, or consents by answer or otherwise to the filing against it of, a petition for relief or reorganization or arrangement or any other petition in bankruptcy, for liquidation or to take advantage of any bankruptcy, insolvency, reorganization, moratorium or other similar law of any jurisdiction, (iii) makes an assignment for the benefit of its creditors, (iv) consents to the

 

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appointment of a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, (v) is adjudicated as insolvent or to be liquidated, or (vi) takes corporate action for the purpose of any of the foregoing; or

 

(h)                                 a court or other Governmental Authority of competent jurisdiction enters an order appointing, without consent by the Company or any other Loan Party, a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, or constituting an order for relief or approving a petition for relief or reorganization or any other petition in bankruptcy or for liquidation or to take advantage of any bankruptcy or insolvency law of any jurisdiction, or ordering the dissolution, winding-up or liquidation of the Company or any other Loan Party, or any such petition shall be filed against the Company or any other Loan Party and such petition shall not be dismissed within 60 days; or

 

(i)                                     the Company or any other Loan Party shall fail within 30 days to pay, bond or otherwise discharge one or more (i) judgments or orders for the payment of money in excess of the lesser of (A) $25,000,000 (or the equivalent thereof in currencies other than U.S. Dollars) in the aggregate and (B) such other event of default judgment threshold set forth in any Material Credit Facility from time to time; provided, however, that such judgment shall not be an Event of Default under this Section 11(i) if and for so long as (1) the amount of such judgment is covered by a valid and binding policy of insurance between the Company or the applicable Loan Party and the insurer covering payment thereof, (2) the out-of-pocket amount payable (including any deductibles) by the Company, any other Loan Party or any combination thereof in connection with any such judgment is in an aggregate amount of no more than $15,000,000 and (3) such insurer has been notified of, and has not disputed, in writing, the claim made for payment of, the amount of such judgment; or (ii) nonmonetary judgments or orders which, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect, which judgment(s), in any such case, is/are not stayed on appeal or otherwise being appropriately contested in good faith; or

 

(j)                                    if (i) any Plan shall fail to satisfy the minimum funding standards of ERISA or the Code for any plan year or part thereof or a waiver of such standards or extension of any amortization period is sought or granted under section 412 of the Code, (ii) a notice of intent to terminate any Plan shall have been or is reasonably expected to be filed with the PBGC or the PBGC shall have instituted proceedings under ERISA section 4042 to terminate or appoint a trustee to administer any Plan or the PBGC shall have notified the Company or any ERISA Affiliate that a Plan may become a subject of any such proceedings, (iii) the aggregate “amount of unfunded benefit liabilities” (within the meaning of section 4001(a)(18) of ERISA) under all Plans determined in accordance with Title IV of ERISA, shall exceed $25,000,000, (iv) the Company or any ERISA Affiliate shall have incurred or is reasonably expected to incur any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans, (v) the Company or any ERISA Affiliate withdraws from any Multiemployer Plan, or (vi) the Company or any Subsidiary establishes or amends any employee welfare benefit plan that provides post-employment welfare benefits in a

 

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manner that would increase the liability of the Company or any Subsidiary thereunder; and any such event or events described in clauses (i) through (vi) above, either individually or together with any other such event or events, would reasonably be expected to have a Material Adverse Effect; or

 

(k)                                 any Subsidiary Guarantor defaults in the performance of or compliance with any term contained in the Subsidiary Guaranty; or

 

(l)                                     any Loan Document ceases to be in full force and effect for any reason whatsoever other than as expressly permitted hereunder or thereunder, or is declared to be null and void in whole or in material party by a court or other governmental or regulatory authority having jurisdiction, or the validity or enforceability thereof shall be contested by any Loan Party or any of them renounces any of the same or denies that it has any or further liability thereunder; or

 

(m)                             any Collateral Document shall for any reason (other than as permitted pursuant to the terms of this Agreement and such Collateral Document) cease to create a valid and perfected Lien on the Collateral purported to be covered thereby with the priority required by this Agreement and such Collateral Document (subject to Liens in the priority and to the extent permitted under this Agreement), or any Loan Party shall assert the invalidity of such Liens; or

 

(n)                                 so long as the Intercreditor Agreement is in effect, any breach of Section 4.2 of the Intercreditor Agreement shall occur; or

 

(o)                                 an event of default shall occur under any Additional Provision that is an “event of default” under any Material Credit Facility that is incorporated into this Agreement pursuant to Section 9.12, subject to any applicable grace period provided in each relevant Material Credit Facility from which the Additional Provision was incorporated.

 

As used in Section 11(j), the terms “employee benefit plan” and “employee welfare benefit plan” shall have the respective meanings assigned to such terms in section 3 of ERISA.

 

12.                               REMEDIES ON DEFAULT, ETC.; EQUITY CURE

 

12.1.                     Acceleration.

 

(a)                                 If an Event of Default with respect to the Company described in Section 11(g) or (h) (other than an Event of Default described in clause (i) of Section 11(g) or described in clause (vi) of Section 11(g) by virtue of the fact that such clause encompasses clause (i) of Section 11(g)) has occurred, all of the Obligations shall automatically become immediately due and payable.

 

(b)                                 If any other Event of Default has occurred and is continuing, any holder or holders of more than 51% in principal amount of the Notes at the time outstanding (exclusive of Notes then owned by the Company or any of its Affiliates) may at any time

 

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at its or their option, by notice or notices to the Company, declare all of the Obligations to be immediately due and payable.

 

(c)                                  If any Event of Default described in Section 11(a) or (b) has occurred and is continuing, any holder or holders of Notes at the time outstanding affected by such Event of Default may at any time, at its or their option, by notice or notices to the Company, declare all of the Obligations payable to it or them to be immediately due and payable.

 

Upon any Notes becoming due and payable under this Section 12.1, whether automatically or by declaration, such Notes will forthwith mature and the entire unpaid principal amount of such Notes, plus (x) all accrued and unpaid interest thereon (including, but not limited to, interest accrued thereon at the Default Rate) and (y) any applicable Make-Whole Amount determined in respect of such principal amount (to the full extent permitted by applicable law), shall all be immediately due and payable, in each and every case without presentment, demand, protest or further notice, all of which are hereby waived. The Company acknowledges, and the parties hereto agree, that each holder of a Note has the right to maintain its investment in the Notes free from repayment by the Company (except as herein specifically provided for) and that the provision for payment of a Make-Whole Amount by the Company in the event that the Notes are prepaid or are accelerated as a result of an Event of Default, is intended to provide compensation for the deprivation of such right under such circumstances.

 

12.2.                     Other Remedies.

 

If any Event of Default has occurred and is continuing, and irrespective of whether any Notes have become or have been declared immediately due and payable under Section 12.1, the holder of any Note at the time outstanding may, subject to the terms of the Intercreditor Agreement (so long as the Intercreditor Agreement is in effect), proceed to protect and enforce the rights of such holder by an action at law, suit in equity or other appropriate proceeding, whether for the specific performance of any agreement contained herein or in any other Loan Document, or for an injunction against a violation of any of the terms hereof or thereof, or in aid of the exercise of any power granted hereby or thereby or by law or otherwise.

 

12.3.                     Rescission.

 

At any time after any Notes have been declared due and payable pursuant to Section 12.1(b) or (c), the holders of not less than 51% in principal amount of the Notes then outstanding, by written notice to the Company, may rescind and annul any such declaration and its consequences if (a) the Company has paid all overdue interest on the Notes, all principal of and Make-Whole Amount, if any, on any Notes that are due and payable and are unpaid other than by reason of such declaration, and all interest on such overdue principal and Make-Whole Amount, if any, and (to the extent permitted by applicable law) any overdue interest in respect of the Notes, at the Default Rate, (b) neither the Company nor any other Person shall have paid any amounts which have become due solely by reason of such declaration, (c) all Events of Default and Defaults, other than non-payment of amounts that have become due solely by reason of such declaration, have been cured or have been waived pursuant to Section 17, and (d) no judgment or decree has been entered for the payment of any monies due pursuant hereto or to the Notes. No

 

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rescission and annulment under this Section 12.3 will extend to or affect any subsequent Event of Default or Default or impair any right consequent thereon.

 

12.4.                     No Waivers or Election of Remedies, Expenses, etc.

 

No course of dealing and no delay on the part of any holder of any Note in exercising any right, power or remedy shall operate as a waiver thereof or otherwise prejudice such holder’s rights, powers or remedies. No right, power or remedy conferred by this Agreement or any other Loan Document upon any holder thereof shall be exclusive of any other right, power or remedy referred to herein or therein or now or hereafter available at law, in equity, by statute or otherwise. Without limiting the obligations of the Company under Section 15, the Company will pay to the holder of each Note on demand such further amount as shall be sufficient to cover all costs and expenses of such holder incurred in any enforcement or collection under this Section 12, including, without limitation, reasonable attorneys’ fees, expenses and disbursements.

 

12.5.                     Default Rate.

 

In the case of an Event of Default arising under Section 11(c) through (f) or Section 11(i) through (o), the Required Holders may, at their option, by notice to the Company (which notice may be revoked at the option of the Required Holders notwithstanding any provision of Section 17.1 requiring unanimous consent of the holders to changes in interest rates), declare that the Notes shall bear interest at the Default Rate. For the avoidance of doubt, in the case of any Event of Default arising under Sections 11(a), (b), (g) or (h), the Notes shall bear interest at the Default Rate automatically, without any declaration, notice or other action required on the part of any Person. After an Event of Default has been cured or waived, the interest rate applicable to the Notes shall revert to the rates applicable prior to the occurrence of an Event of Default.

 

12.6.                     Equity Cure.

 

In the event the Company fails to comply with either or both of the financial covenants set forth in clauses (a) or (b) of Section 10.1 as of the last day of any fiscal quarter, any cash equity contribution to the Company (funded with proceeds of either (x) common shares issued by the Company or (y) other equity issued by the Company having terms reasonably acceptable to the Required Holders and in any case, not constituting Disqualified Equity Interests) received after the last day of such fiscal quarter and on or prior to the day that is thirty (30) days after the day on which financial statements are required to be delivered with respect to such fiscal quarter pursuant to Section 7.1(a) or 7.1(b) will, at the irrevocable election of the Company, be included in the calculation of Consolidated EBITDA solely for the purposes of determining compliance with such covenants set forth in clauses (a) or (b) of Section 10.1 as of the last day of such fiscal quarter (each, a “Cure Quarter”) and any subsequent period that includes such Cure Quarter (any such equity contribution so included in the calculation of Consolidated EBITDA, a “Specified Equity Contribution”); provided that (i) the amount of any Specified Equity Contribution will be no greater than the amount required to cause the Company to be in compliance with such financial covenants (the “Cure Amount”), (ii) there shall be no more than two (2) Specified Equity Contributions made in the aggregate after the

 

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Restructuring Closing Date, (iii) all Specified Equity Contributions will be disregarded for purposes of the calculation of Consolidated EBITDA for all other purposes, including calculating basket levels, pricing, determining compliance with incurrence-based or pro forma calculations or conditions, and any other items governed by reference to Consolidated EBITDA, (iv) notice of the Company’s intent to accept a Specified Equity Contribution (a “Cure Notice”) shall be delivered by the Company to the holders no later than the day on which financial statements are required to be delivered with respect to the applicable fiscal quarter pursuant to Section 7.1(a) or 7.1(b), (v) the Company shall have offered the full amount of the Specified Equity Contribution to prepay the outstanding Notes held by each holder in accordance with Section 8.10, and (vi) there shall be no reduction in Consolidated Funded Indebtedness (through either netting of cash or prepayment of indebtedness) in connection with any Specified Equity Contribution (or the application of the proceeds thereof) for determining compliance with any financial covenant set forth in Section 10.1 as of the last day of any Cure Quarter or for the period ending on such day, provided that to the extent any Notes are prepaid from a Specified Equity Contribution in accordance with clause (v) above and Section 8.10, there shall be a reduction in Consolidated Funded Indebtedness for determining compliance with Section 10.1 in future fiscal quarters where such Cure Quarter is included in the applicable test period (but, for the avoidance of doubt, there shall be no de-leveraging credit for the period ending on the last day of the Cure Quarter in respect of which the equity cure is exercised).

 

Upon the holders’ receipt of a Cure Notice no later than the day on which financial statements are required to be delivered with respect to the applicable fiscal quarter pursuant to Section 7.1(a) or 7.1(b), then, until the day that is thirty (30) days after such date, no holder shall exercise the right to accelerate the Obligations or declare any Note held by it to be immediately due and payable, and no holder shall exercise any right (or direct or authorize the Collateral Agent to exercise any right) to foreclose on or take possession of the Collateral solely on the basis of an Event of Default having occurred and being continuing under Section 11(c) caused by the Company’s failure to comply with clauses (a) or (b) of Section 10.1 as of the last day of such fiscal quarter.

 

13.                               REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.

 

13.1.                     Registration of Notes.

 

The Company shall keep at its principal executive office a register for the registration and registration of transfers of Notes. The name and address of each holder of one or more Notes, each transfer thereof and the name and address of each transferee of one or more Notes shall be registered in such register.  If any holder of one or more Notes is a nominee, then the name and address of the beneficial owner of such Note or Notes shall also be registered in such register as an owner and holder thereof.  Prior to due presentment for registration of transfer, the Person(s) in whose name any Note(s) shall be registered shall be deemed and treated as the owner and holder thereof for all purposes hereof, and the Company shall not be affected by any notice or knowledge to the contrary.  The Company shall give to any holder of a Note that is an Institutional Investor promptly upon request therefor, a complete and correct copy of the names and addresses of all registered holders of Notes.

 

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13.2.       Transfer and Exchange of Notes.

 

Upon surrender of any Note to the Company at the address and to the attention of the designated officer (all as specified in Section 18(iii)), for registration of transfer or exchange (and in the case of a surrender for registration of transfer accompanied by a written instrument of transfer duly executed by the registered holder of such Note or such holder’s attorney duly authorized in writing and accompanied by the relevant name, address and other information for notices of each transferee of such Note or part thereof), within ten Business Days thereafter, the Company shall execute and deliver, at the Company’s expense (except as provided below), one or more new Notes (as requested by the holder thereof) of the same series in exchange therefor, in an aggregate principal amount equal to the unpaid principal amount of the surrendered Note.  Each such new Note shall be payable to such Person as such holder may request and shall be substantially in the form of Exhibit 2.2(a), (b) or (c) as appropriate.  Each such new Note shall be dated and bear interest from the date to which interest shall have been paid on the surrendered Note or dated the date of the surrendered Note if no interest shall have been paid thereon.  The Company may require payment of a sum sufficient to cover any stamp tax or governmental charge imposed in respect of any such transfer of Notes.  Notes shall not be transferred in denominations of less than $100,000, provided that if necessary to enable the registration of transfer by a holder of its entire holding of Notes of a series, one Note of such series may be in a denomination of less than $100,000.  Any transferee, by its acceptance of a Note registered in its name (or the name of its nominee), (i) shall be deemed to have made the representation set forth in Section 6.2 and (ii) shall promptly execute and deliver to the Collateral Agent a joinder agreement to the Collateral Agency Agreement in substantially the form of Exhibit B attached thereto.

 

13.3.       Replacement of Notes.

 

Upon receipt by the Company at the address and to the attention of the designated officer (all as specified in Section 18(iii)) of evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of any Note (which evidence shall be, in the case of an Institutional Investor, notice from such Institutional Investor of such ownership and such loss, theft, destruction or mutilation), and

 

(a)           in the case of loss, theft or destruction, of indemnity reasonably satisfactory to it (provided that if the holder of such Note is, or is a nominee for, an Existing Noteholder or another Institutional Investor holder of a Note with a minimum net worth of at least $50,000,000, such Person’s own unsecured agreement of indemnity shall be deemed to be satisfactory), or

 

(b)           in the case of mutilation, upon surrender and cancellation thereof,

 

within ten Business Days thereafter, the Company at its own expense shall execute and deliver, in lieu thereof, a new Note, dated and bearing interest from the date to which interest shall have been paid on such lost, stolen, destroyed or mutilated Note or dated the date of such lost, stolen, destroyed or mutilated Note if no interest shall have been paid thereon.

 

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14.          PAYMENTS ON NOTES.

 

14.1.       Place of Payment.

 

Subject to Section 14.2, payments of principal, Make-Whole Amount, if any, and interest becoming due and payable on the Notes shall be made in New York City at the principal office of U.S. Bank National Association in such jurisdiction.  The Company may at any time, by notice to each holder of a Note, change the place of payment of the Notes so long as such place of payment shall be either the principal office of the Company in such jurisdiction or the principal office of a bank or trust company in such jurisdiction.

 

14.2.       Home Office Payment.

 

So long as you or your nominee shall be the holder of any Note, and notwithstanding anything contained in Section 14.1 or in such Note to the contrary, the Company will pay all sums becoming due on such Note for principal, Make-Whole Amount, if any, interest and all other amounts becoming due hereunder by the method and at the address specified for such purpose below your name in Schedule A, or by such other method or at such other address as you shall have from time to time specified to the Company in writing for such purpose, without the presentation or surrender of such Note or the making of any notation thereon, except that upon written request of the Company made concurrently with or reasonably promptly after payment or prepayment in full of any Note, you shall surrender such Note for cancellation, reasonably promptly after any such request, to the Company at its principal executive office or at the place of payment most recently designated by the Company pursuant to Section 14.1.  Prior to any sale or other disposition of any Note held by you or your nominee you will, at your election, either endorse thereon the amount of principal paid thereon and the last date to which interest has been paid thereon or surrender such Note to the Company in exchange for a new Note or Notes pursuant to Section 13.2.  The Company will afford the benefits of this Section 14.2 to any Institutional Investor that is the direct or indirect transferee of any Note acquired by you under the Existing Note Purchase Agreement or this Agreement and that has made the same agreement relating to such Note as you have made in this Section 14.2.

 

15.          EXPENSES, ETC.

 

15.1.       Transaction Expenses.

 

Whether or not the transactions contemplated hereby are consummated, the Company will pay all reasonable out-of-pocket costs and expenses (including reasonable attorneys’ fees of a special counsel for the holders and, if reasonably required by the Required Holders, local or other special subject matter counsel for all holders collectively) incurred by any holder of a Note in connection with such transactions and in connection with the performance of the Loan Documents and any amendments, waivers or consents under or in respect of this Agreement or any other Loan Document (whether or not such amendment, waiver or consent becomes effective), including:  (i) the costs and expenses incurred in enforcing or defending (or determining whether or how to enforce or defend) any rights under the Loan Documents, or in responding to any subpoena or other legal process or informal investigative demand issued in connection with any Loan Document, or by reason of being a holder of any Note, (ii) the costs

 

70

 

and expenses, including financial advisors’ fees, incurred in connection with the insolvency or bankruptcy of the Company or any Subsidiary or in connection with any work-out or restructuring of the transactions contemplated hereby and by the other Loan Documents, and (iii) the costs and expenses of indemnifying the Collateral Agent pursuant to the Collateral Agency Agreement and the other Loan Documents.  The Company will pay, and will save you and each other holder of a Note harmless from, all claims in respect of any fees, costs or expenses if any, of brokers and finders retained by the Company or any Subsidiary.

 

15.2.       Survival.

 

The obligations of the Company under this Section 15 will survive the payment or transfer of any Note, the enforcement, amendment or waiver of any provision of this Agreement or any other Loan Document, and the termination of this Agreement.

 

16.                               SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.

 

All representations and warranties contained herein shall survive the execution and delivery of this Agreement and any other Loan Document, the purchase or transfer by you of any Note or portion thereof or interest therein and the payment of any Note, and may be relied upon by any subsequent holder of a Note, regardless of any investigation made at any time by or on behalf of you or any other holder of a Note.  All statements contained in any certificate or other instrument delivered by or on behalf of the Company pursuant to this Agreement shall be deemed representations and warranties of the Company under this Agreement.  Subject to the preceding sentence, this Agreement and the other Loan Documents embody the entire agreement and understanding between you and the Company and supersede all prior agreements and understandings relating to the subject matter hereof.

 

17.          AMENDMENT AND WAIVER.

 

17.1.       Requirements.

 

This Agreement and the Notes may be amended, and the observance of any term hereof or of the Notes may be waived (either retroactively or prospectively), with (and only with) the written consent of the Company and the Required Holders, except that (a) at any time prior to the Restructuring Closing, no amendment or waiver of any of the provisions of Section 1, 2, 3, 4 or 5 hereof, or any defined term (as it is used therein), will be effective as to any Existing Noteholders unless consented to by such Existing Noteholder in writing, (b) no amendment or waiver of any of the provisions of Section 6 hereof, or any defined term (as it is used therein), will be effective as to any holder of a Note unless consented to by such holder in writing, and (c) no such amendment or waiver may, without the written consent of the holder of each Note at the time outstanding, (i) subject to the provisions of Section 12 relating to acceleration or rescission, change the amount or time of any prepayment or payment of principal of, or reduce the rate or change the time of payment or method of computation of (A) interest (including interest accruing at the Incremental Interest Rate) on the Notes or (B) the Make-Whole Amount, (ii) change the percentage of the principal amount of the Notes the holders of which are required to consent to

 

71

 

any such amendment or waiver, or (iii) amend any of Section 8, the last sentence of Section 10.6, Section 11(a), Section 11(b), Section 12, Section 17 or Section 20.

 

Notwithstanding anything herein or in any other Loan Document to the contrary, (x) in no event shall any Subsidiary Guarantor be released from its obligations under the Subsidiary Guaranty without the prior written consent of the holder of each Note at the time outstanding, (y) the Subsidiary Guaranty shall not be amended except as provided therein, and (z) in no event shall all or substantially all of the Liens on the Collateral in favor of the Collateral Agent for the benefit of the Secured Parties be released or otherwise terminated without the prior written consent of the holder of each Note at the time outstanding.

 

17.2.       Solicitation of Holders of Notes.

 

(a)           Solicitation.  The Company will provide each holder of the Notes with sufficient information, sufficiently far in advance of the date a decision is required, to enable such holder to make an informed and considered decision with respect to any proposed amendment, waiver or consent in respect of any of the provisions hereof or of any other Loan Document.  The Company will deliver executed or true and correct copies of each amendment, waiver or consent effected pursuant to the provisions of this Section 17 to each holder of outstanding Notes promptly following the date on which it is executed and delivered by, or receives the consent or approval of, the requisite holders of Notes.

 

(b)           Payment.  The Company will not directly or indirectly pay or cause to be paid any remuneration, whether by way of supplemental or additional interest, fee or otherwise, or grant any security or provide other credit support, to any holder of a Note as consideration for or as an inducement to the entering into by such holder of any waiver or amendment of any of the terms and provisions hereof or of any other Loan Document unless such remuneration is concurrently paid, or security is concurrently granted, or other credit support is concurrently provided, on the same terms, ratably to each holder of a Note even if such holder did not consent to such waiver or amendment.

 

(c)           Consent in Contemplation of Transfer.  Any consent made pursuant to this Section 17 by a holder of Notes that has transferred or has agreed to transfer its Notes to the Company, any Subsidiary or any Affiliate of the Company and has provided or has agreed to provide such written consent as a condition to such transfer shall be void and of no force or effect except solely as to such holder, and any amendments effected or waivers granted or to be effected or granted that would not have been or would not be so effected or granted but for such consent (and the consents of other holders of Notes that were acquired under the same or similar conditions) shall be void and of no force or effect except solely as to such holder.

 

17.3.       Binding Effect, etc.

 

Any amendment or waiver consented to as provided in this Section 17 applies equally to all holders of Notes and is binding upon them and upon each future holder of any Note and upon the Company without regard to whether such Note has been marked to indicate such

 

72

 

amendment or waiver.  No such amendment or waiver will extend to or affect any obligation, covenant, agreement, Default or Event of Default not expressly amended or waived or impair any right consequent thereon.  No course of dealing between the Company and any holder of a Note nor any delay in exercising any rights hereunder or under any Note shall operate as a waiver of any rights of any holder of such Note.

 

17.4.       Notes held by the Company, etc.

 

Solely for the purpose of determining whether the holders of the requisite percentage of the aggregate principal amount of Notes then outstanding approved or consented to any amendment, waiver or consent to be given under this Agreement or any other Loan Document, or have directed the taking of any action provided herein or in any other Loan Document to be taken upon the direction of the holders of a specified percentage of the aggregate principal amount of Notes then outstanding, Notes directly or indirectly owned by the Company or any of its Affiliates shall be deemed not to be outstanding.

 

18.          NOTICES.

 

Except as expressly provided herein, all notices and communications provided for hereunder shall be in writing and sent (a) by registered or certified mail with return receipt requested (postage prepaid), or (b) by an internationally recognized overnight delivery service (with charges prepaid).  Any such notice must be sent:

 

(i)            if to you or your nominee, to you or it at the address specified for such communications in Schedule A, or at such other address as you or it shall have specified to the Company in writing,

 

(ii)           if to any other holder of any Note, to such holder at such address as such other holder shall have specified to the Company in writing, or

 

(iii)          if to any Loan Party, to the Company at its address set forth at the beginning hereof to the attention of President, General Counsel and Treasurer, or at such other address as the Company shall have specified to the holder of each Note in writing.

 

Notices under this Section 18 will be deemed given only when actually received.

 

19.          REPRODUCTION OF DOCUMENTS.

 

This Agreement and all documents relating thereto, including, without limitation, (a) consents, waivers and modifications that may hereafter be executed, (b) documents received by you on the date hereof or on the Restructuring Closing Date (except the Notes themselves), and (c) financial statements, certificates and other information previously or hereafter furnished to you, may be reproduced by you by any photographic, photostatic, electronic, digital, or other similar process and you may destroy any original document so reproduced.  The Company agrees and stipulates that, to the extent permitted by applicable law, any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding (whether or not the original is in existence and whether or not such reproduction was made by

 

73

 

you in the regular course of business) and any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence.  This Section 19 shall not prohibit the Company or any other holder of Notes from contesting any such reproduction to the same extent that it could contest the original, or from introducing evidence to demonstrate the inaccuracy of any such reproduction.

 

20.          CONFIDENTIAL INFORMATION.

 

For the purposes of this Section 20, “Confidential Information” means information delivered to you by or on behalf of the Company or any Subsidiary in connection with the transactions contemplated by or otherwise pursuant to this Agreement that is proprietary in nature and that was clearly marked or labeled or otherwise adequately identified when received by you as being confidential information of the Company or such Subsidiary, provided that such term does not include information that (a) was publicly known or otherwise known to you prior to the time of such disclosure, (b) subsequently becomes publicly known through no act or omission by you or any Person acting on your behalf, (c) otherwise becomes known to you other than through disclosure by the Company or any Subsidiary or (d) constitutes financial statements delivered to you under Section 7.1 that are otherwise publicly available.  You will maintain the confidentiality of such Confidential Information in accordance with procedures adopted by you in good faith to protect confidential information of third parties delivered to you, provided that you may deliver or disclose Confidential Information to (i) your directors, officers, employees, agents, attorneys, trustees and affiliates (to the extent such disclosure reasonably relates to the administration of the investment represented by its Notes) (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such information and instructed to keep such information confidential or shall otherwise have a duty to keep such information confidential), (ii) your auditors, financial advisors and other professional advisors who agree to hold confidential the Confidential Information substantially in accordance with the terms of this Section 20, (iii) any other holder of any Note, (iv) any Institutional Investor to which you sell or offer to sell such Note or any part thereof or any participation therein (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by the provisions of this Section 20), (v) any Person from which it offers to purchase any Security of the Company (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by the provisions of this Section 20), (vi) any federal or state regulatory authority having jurisdiction over you, (vii) the NAIC or the SVO or, in each case, any similar organization, or any nationally recognized rating agency that requires access to information about your investment portfolio, (viii) the Collateral Agent, or (ix) any other Person to which such delivery or disclosure may be necessary or appropriate (w) to effect compliance with any law, rule, regulation or order applicable to you, (x) in response to any subpoena or other legal process, (y) in connection with any litigation to which you are a party or (z) if an Event of Default has occurred and is continuing, to the extent you may reasonably determine such delivery and disclosure to be necessary or appropriate in the enforcement or for the protection of the rights and remedies under your Notes, this Agreement and any other Loan Document.  In the event that any holder of a Note is required to disclose information pursuant to clause (ix)(x) or (y) above, such holder agrees, to the extent reasonably practicable and not in violation of applicable law, to provide the Company with prior notice of such required disclosures.  Except for the sale and purchase of the Notes as contemplated by this Agreement, you agree not to use any Confidential Information in connection with purchases or sales of, or

 

74

 

trading in, the Company’s Securities.  Each holder of a Note will be liable for each breach of this Section 20 by any of their respective affiliates.  Each holder of a Note, by its acceptance of a Note, will be deemed to have agreed to be bound by and to be entitled to the benefits of this Section 20 as though it were a party to this Agreement.  On reasonable request by the Company in connection with the delivery to any holder of a Note of information required to be delivered to such holder under this Agreement or requested by such holder (other than a holder that is a party to this Agreement or its nominee), such holder will enter into an agreement with the Company embodying the provisions of this Section 20.

 

In the event that as a condition to receiving access to information relating to the Company or its Subsidiaries in connection with the transactions contemplated by or otherwise pursuant to this Agreement, you are required to agree to a confidentiality undertaking (whether through Intralinks or otherwise) which is different from the terms of this Section 20, the terms of this Section 20 shall, as between you and the Company, supersede the terms of any such other confidentiality undertaking.

 

21.          MISCELLANEOUS.

 

21.1.       Successors and Assigns.

 

All covenants and other agreements contained in this Agreement by or on behalf of any of the parties hereto bind and inure to the benefit of their respective successors and assigns (including, without limitation, any subsequent holder of a Note) whether so expressed or not, except that the Company may not assign or otherwise transfer any of its rights or obligations hereunder or under the Notes without the prior written consent of each holder.

 

21.2.       Payments Due on Non-Business Days.

 

Anything in this Agreement or the Notes to the contrary notwithstanding, any payment of principal of or Make-Whole Amount or interest on any Note that is due on a date other than a Business Day shall be made on the next succeeding Business Day without including the additional days elapsed in the computation of the interest payable on such next succeeding Business Day; provided that if the maturity date of any Note is a date other than a Business Day, the payment otherwise due on such maturity date shall be made on the next succeeding Business Day and shall include the additional days elapsed in the computation of interest payable on such next succeeding Business Day.

 

21.3.       Accounting Terms.

 

(a)           All accounting terms used herein that are not expressly defined in this Agreement have the meanings respectively given to them in accordance with GAAP.  Except as otherwise specifically provided herein, (i) all computations made pursuant to this Agreement shall be made in accordance with GAAP and (ii) all financial statements shall be prepared in accordance with GAAP.  For purposes of determining compliance with this Agreement (including Section 9, Section 10, any Additional Provision incorporated into this Agreement pursuant to Section 9.12 that is a Financial Covenant, and the definition of “Indebtedness”), any election by the Company to measure any financial liability using fair value (as permitted by Financial Accounting Standards Board

 

75

 

Accounting Standards Codification Topic No. 825-10-25 — Fair Value Option or any similar accounting standard) shall be disregarded and such determination shall be made as if such election had not been made.

 

(b)           Notwithstanding the foregoing (but subject to clause (b) of the definition of Indebtedness), if the Company notifies the holders of Notes that, in the Company’s reasonable opinion, or if the Required Holders notify the Company that, in the Required Holders’ reasonable opinion, as a result of a change in GAAP after the date of this Agreement, any covenant contained in Sections 9 or 10, or any of the defined terms used therein no longer apply as intended such that such covenants are materially more or less restrictive to the Company than as at the date of this Agreement, the Company shall negotiate in good faith with the holders of Notes to make any necessary adjustments to such covenant or defined term to provide the holders of the Notes with substantially the same protection as such covenant provided prior to the relevant change in GAAP.  Until the Company and the Required Holders so agree to reset, amend or establish alternative covenants or defined terms, (i) the covenants contained in Sections 9 and 10, together with the relevant defined terms, shall continue to apply and compliance therewith shall be determined on the basis of GAAP in effect at the date of this Agreement and (ii) each set of financial statements delivered to holders of Notes pursuant to Section 7.1(a) or (b) during such time shall include detailed reconciliations reasonably satisfactory to the Required Holders as to the effect of such change in GAAP.

 

21.4.       Severability.

 

Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall (to the full extent permitted by law) not invalidate or render unenforceable such provision in any other jurisdiction.

 

21.5.       Construction.

 

Each covenant contained herein shall be construed (absent express provision to the contrary) as being independent of each other covenant contained herein, so that compliance with any one covenant shall not (absent such an express contrary provision) be deemed to excuse compliance with any other covenant.  Where any provision herein refers to action to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person.

 

For the avoidance of doubt, all Schedules and Exhibits attached to this Agreement shall be deemed to be a part hereof.

 

21.6.       Counterparts.

 

This Agreement may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one instrument.  Each counterpart may consist of a number of copies hereof, each signed by less than all, but together signed by all, of the parties hereto.

 

76

 

21.7.       Governing Law.

 

This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of New York excluding choice-of-law principles of the law of such State that would permit the application of the laws of a jurisdiction other than such State.

 

21.8.       Jurisdiction and Process; Waiver of Jury Trial.

 

(a)           The Company irrevocably submits to the non-exclusive jurisdiction of any New York State or federal court sitting in the Borough of Manhattan, The City of New York, over any suit, action or proceeding arising out of or relating to this Agreement or the Notes.  To the fullest extent permitted by applicable law, the Company irrevocably waives and agrees not to assert, by way of motion, as a defense or otherwise, any claim that it is not subject to the jurisdiction of any such court, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.

 

(b)           The Company agrees, to the fullest extent permitted by applicable law, that a final judgment in any suit, action or proceeding of the nature referred to in Section 21.8(a) brought in any such court shall be conclusive and binding upon it subject to rights of appeal, as the case may be, and may be enforced in the courts of the United States of America or the State of New York (or any other courts to the jurisdiction of which it or any of its assets is or may be subject) by a suit upon such judgment.

 

(c)           The Company consents to process being served by or on behalf of any holder of Notes in any suit, action or proceeding of the nature referred to in Section 21.8(a) by mailing a copy thereof by registered, certified, priority or express mail (or any substantially similar form of mail), postage prepaid, return receipt or delivery confirmation requested, to it at its address specified in Section 18 or at such other address of which such holder shall then have been notified pursuant to said Section.  The Company agrees that such service upon receipt (i) shall be deemed in every respect effective service of process upon it in any such suit, action or proceeding and (ii) shall, to the fullest extent permitted by applicable law, be taken and held to be valid personal service upon and personal delivery to it.  Notices hereunder shall be conclusively presumed received as evidenced by a delivery receipt furnished by the United States Postal Service or any reputable commercial delivery service.

 

(d)           Nothing in this Section 21.8 shall affect the right of any holder of a Note to serve process in any manner permitted by law, or limit any right that the holders of any of the Notes may have to bring proceedings against the Company in the courts of any appropriate jurisdiction or to enforce in any lawful manner a judgment obtained in one jurisdiction in any other jurisdiction.

 

77

 

(e)           THE PARTIES HERETO HEREBY WAIVE TRIAL BY JURY IN ANY ACTION BROUGHT ON OR WITH RESPECT TO THIS AGREEMENT, THE NOTES OR ANY OTHER DOCUMENT EXECUTED IN CONNECTION HEREWITH OR THEREWITH.

 

22.          RELEASE.

 

(a)           For and in consideration of the agreements contained in this Agreement and other good and valuable consideration, the Company hereby absolutely and unconditionally waives, releases, remises and forever discharges the holders of the Notes, and any and all of their respective participants, parent corporations, subsidiary corporations, affiliates, insurers, indemnitors, successors and assigns thereof, together with all of the present and former directors, trustees, officers, agents, advisors, attorneys and employees of any of the foregoing (each a “Released Party”), from any and all claims, suits, investigations, proceedings, demands, obligations, liabilities, damages, losses, costs, expenses, or causes of action of any kind, nature or description, whether based in law, equity, contract, tort, implied or express warranty, strict liability, criminal or civil statute, common law, or under any state or federal law or otherwise, of any kind or character, known or unknown, past, present or future, liquidated or unliquidated, suspected or unsuspected, which the Company has had, now has, hereafter may have, or has made claim to have against any such person or entity for or by reason of any act, omission, matter, cause or thing whatsoever arising at any time prior to the effectiveness hereof that arise out of or relate to the Existing Notes, the Existing Note Purchase Agreement, the Notes, this Agreement, the other Loan Documents and/or the transactions arising thereunder, related thereto, contemplated thereby or in furtherance thereof, whether such claims, demands and causes of action are matured or unmatured or known or unknown.  It is the intention of the Company in providing this release that the same shall be effective as a bar to each and every claim, demand and cause of action specified.  The Company acknowledges that it may hereafter discover facts different from or in addition to those now known or believed to be true with respect to such claims, demands, or causes of action and agrees that this release shall be and remain effective in all respects notwithstanding any such differences or additional facts.

 

(b)           The Company, on behalf of itself and its successors, assigns, and other legal representatives, hereby absolutely, unconditionally and irrevocably, covenants and agrees with and in favor of each Released Party above that it will not sue (at law, in equity, in any regulatory proceeding or otherwise) any Released Party on the basis of any claim released, remised and discharged by such Person pursuant to the above release and, for the avoidance of doubt, agrees not to sue any Released Party for (and that no Released Party shall be liable for), any special, indirect or consequential damages.  The Company further agrees that it shall not dispute the validity or enforceability of this Agreement or any of the other Loan Documents or any of its obligations thereunder.  If the Company, or any of its successors, assigns or other legal representatives violates the foregoing covenant, such Person, for itself and its successors, assigns and legal representatives, agrees to pay, in addition to such other damages as any Released Party may sustain as a result of such violation, all attorneys’ fees and costs incurred by such Released Party as a result of such violation.

 

78

 

(c)                                  The obligations of the Company under this Section 22 will survive the payment or transfer of any Note, the enforcement, amendment or waiver of any provision of this Agreement, the Notes or any other Loan Document, and the termination of this Agreement and the other Loan Documents.

 

23.                               TREASURY REGULATIONS SECTIONS 1.1275-4(c) AND 1.1274-3(a).

 

The parties hereto agree and acknowledge that principal and interest on the Notes will be taken into account for federal income tax purposes in accordance with Treasury Regulations Section 1.1275-4(c), and that the Notes were not issued in a situation described in Treasury Regulations Section 1.1274-3(a).  The parties hereto agree that they will not file any original or amended tax return or otherwise take any position for federal income tax purposes inconsistent with the preceding sentence, except to the extent required by a determination within the meaning of Code Section 1313(a).

 

Remainder of page intentionally left blank.

 

79

 

If you are in agreement with the foregoing, please sign the form of agreement on the accompanying counterpart of this Agreement and return it to the Company, whereupon the foregoing shall become a binding agreement between you and the Company.

 

	
 
    	
Very truly yours,
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
INTREPID   POTASH, INC.
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Brian D. Frantz
    
	
 
    	
Name:     Brian D. Frantz
    
	
 
    	
Title:   Senior Vice President and Chief Accounting Officer
    
				

 

S-1

 

This Agreement is hereby accepted and agreed to as of the date thereof.

 

	
TEACHERS   INSURANCE AND ANNUITY
    	
 
    
	
ASSOCIATION   OF AMERICA
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Ji Min Shin
    	
 
    
	
Name:
    	
Ji   Min Shin
    	
 
    
	
Title:   Director
    	
 
    

 

S-2

 

	
THE GUARDIAN LIFE   INSURANCE COMPANY
    	
 
    
	
OF AMERICA
    	
 
    
	
 
    
	
By:
    	
/s/   Thomas M. Donohue
    	
 
    
	
Name:
    	
Thomas   M. Donohue
    	
 
    
	
Title:
    	
Managing Director
    	
 
    

 

S-3

 

	
COBANK, ACB
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ Justin Barr
    	
 
    
	
Name:
    	
Justin Barr
    	
 
    
	
Title:
    	
Lead Special Assets   Officer
    	
 
    

 

S-4

 

	
AGFIRST FARM CREDIT   BANK
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ Christopher   R. Reynolds
    	
 
    
	
Name:
    	
Christopher R.   Reynolds
    	
 
    
	
Title:
    	
AVP
    	
 
    

 

S-5

 

	
FARM   CREDIT BANK OF TEXAS
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Luis M. H. Requejo
    	
 
    
	
Name:
    	
Luis   M. H. Requeio
    	
 
    
	
Title:
    	
Director Capital   Markets
    	
 
    

 

S-6

 

	
GREENSTONE FARM CREDIT   SERVICES, ACA/FLCA
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ Jeff Pavlik
    	
 
    
	
Name:
    	
Jeff Pavlik
    	
 
    
	
Title:
    	
Sr. Vice President
    	
 
    

 

S-7

 

	
1ST FARM CREDIT SERVICES, PCA
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ Corey J.   Waldinger
    	
 
    
	
Name:
    	
Corey J. Waldinger
    	
 
    
	
Title:
    	
Vice President, Capital Markets Group
    	
 
    

 

S-8

 

	
FARM CREDIT SERVICES OF   AMERICA, PCA
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Scott Hoffschneider
    	
 
    
	
Name:
    	
Scott   Hoffschneider
    	
 
    
	
Title:
    	
VP Account Resolution -   ABF
    	
 
    

 

S-9

 

SCHEDULE A

 

INFORMATION RELATING TO EXISTING NOTEHOLDERS

 

	
Name of   Existing Noteholder:
    	
 
    	
TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF   AMERICA
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Series, Note Registration Number,
   Principal Amount of Existing Notes
   and Prepayment Amounts
    
	
 
    	
 
    	
Series A
    	
 
    	
Series B
    	
 
    	
Series C
    
	
Series, Note   Registration Number and Principal Amount:
    	
 
    	
—
    	
 
    	
—
    	
 
    	
CR-1;
    
	
 
    	
 
    	
 
    	
 
    	
$33,750,000
    
	
Supplemental   Amendment Fee:
    	
 
    	
—
    	
 
    	
—
    	
 
    	
$201,185
    

 

	
(1)
    	
 
    	
All payments on or in respect of the Notes shall be   made in immediately available funds on the due date by electronic funds   transfer, through the Automated Clearing House System, to:

JPMorgan Chase Bank,   N.A.
   ABA # 021-000-021
   Account Number: 900-9-000200
   Account Name: TIAA
   For Further Credit to the Account Number: G07040
   Reference: PPN: 46121Y B#8/ Intrepid Potash, Inc.
   Maturity Date: April 16, 2025/P&I Breakdown

with sufficient   information to identify the source and application of such funds, including   issuer, PPN#, interest rate, maturity and whether payment is of principal,   interest, Make-Whole Amount or otherwise.
    
	
 
    	
 
    	
 
    
	
(2)
    	
 
    	
Address for all notices relating to payments:

Teachers Insurance and   Annuity Association of America
   730 Third Avenue
   New York, New York 10017
   Attention: Securities Accounting Division
   Phone: (212) 916-5504
   Email: jpiperato@tiaa.org or mwolfe@tiaa.org
    
   With a copy to:
    
   JPMorgan Chase Bank, N.A.
   P.O. Box 35308
   Newark, New Jersey 07101
    
   And to:
    

 

Schedule A-1

 

	
 
    	
 
    	
Teachers Insurance and   Annuity Association of America
   730 Third Avenue
   New York, New York 10017
   Attention: Distressed Investments Team

Telephone:                                   (212)   916-4878 (Ji Min Shin)

Facsimile:                                         (212)   916-6140

Email:                                                            dl_amgpmdiworkout@tiaa.org

 

Contemporaneous written   confirmation of any electronic funds transfer shall be sent to the above   addresses setting forth (1) the full name, private placement number,   interest rate and maturity date of the Notes, (2) allocation of payment   between principal, interest, Make-Whole Amount, other premium or any special   payment and (3) the name and address of the bank from which such   electronic funds transfer was sent.
    
	
 
    	
 
    	
 
    
	
(3)
    	
 
    	
Address for all other communications and notices:

Teachers Insurance and   Annuity Association of America
   730 Third Avenue
   New York, New York 10017
   Attention: Distressed Investments Team

Telephone:                                 (212)   916-4878 (Ji Min Shin)
   Facsimile:                                         (212)   916-6140

Email:                                                            dl_amgpmdiworkout@tiaa.org
    
	
 
    	
 
    	
 
    
	
(4)
    	
 
    	
Address for delivery of Notes:

JPMorgan Chase Bank,   N.A.
   4 Chase Metrotech Center
   3rd Floor
   Brooklyn, New York 11245-0001
   Attention: Physical Receive Department
   For TIAA A/C #G07040
    
	
 
    	
 
    	
 
    
	
(5)
    	
 
    	
E-mail Address for Electronic Delivery: dl_amgpmdiworkout@tiaa.org
    
	
 
    	
 
    	
 
    
	
(6)
    	
 
    	
Tax ID: 13-1624203
    

 

Schedule A-2

 

	
Name of   Existing Noteholder:
    	
 
    	
THE GUARDIAN LIFE INSURANCE   COMPANY OF AMERICA
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Series, Note Registration Number,

Principal Amount of Existing Notes

and Prepayment Amounts
    
	
 
    	
 
    	
Series A
    	
 
    	
Series B
    	
 
    	
Series C
    
	
Series,   Note Registration Number and Principal Amount:
    	
 
    	
—
    	
 
    	
BR-1;

$21,150,000
    	
 
    	
CR-2;

$6,750,000
    
	
Supplemental Amendment   Fee:
    	
 
    	
—
    	
 
    	
$98,809
    	
 
    	
$40,237
    

 

	
(1)
    	
 
    	
All scheduled payments of principal and interest by   wire transfer of immediately available funds to:

JP Morgan Chase
   FED ABA #021000021
   Chase/NYC/CTR/BNF
   A/C 900-9-000200
   Reference A/C #G05978, Guardian Life
   PPN #, Intrepid Potash Inc.

with sufficient   information to identify the source and application of such funds, including   issuer, PPN#, interest rate, maturity and whether payment is of principal,   interest, make whole amount or otherwise.
    
	
 
    	
 
    	
 
    
	
(2)
    	
 
    	
Address for all notices relating to payments:

The Guardian Life   Insurance Company of America
   7 Hanover Square
   New York, NY 10004-2616
   Attn: Brian Keating
   Investment Department 9-A
   FAX # (212) 919-2658
   Brian_keating@glic.com
    
	
 
    	
 
    	
 
    
	
(3)
    	
 
    	
Address for all other communications and notices:

The Guardian Life   Insurance Company of America
   7 Hanover Square
   New York, NY 10004-2616
   Attn: Brian Keating
   Investment Department 9-A
   FAX # (212) 919-2658
   Brian_keating@glic.com
    

 

Schedule A-3

 

	
(4)
    	
 
    	
Address for delivery of Notes:

JP Morgan Chase Bank,   N.A.
   4 Chase Metrotech Center
   3rd Floor
   Brooklyn, N.Y. 11245-0001
   Attention: Physical Receive Dept.
   Reference A/C #G05978, Guardian Life
    
	
 
    	
 
    	
 
    
	
(5)
    	
 
    	
E-mail Address for Electronic Delivery:   Brian_keating@glic.com
    
	
 
    	
 
    	
 
    
	
(6)
    	
 
    	
Tax ID: 13-5123390
    

 

Schedule A-4

 

	
Name of   Existing Noteholder:
    	
 
    	
COBANK, ACB
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Series, Note Registration Number,

Principal Amount of Existing Notes

and Prepayment Amounts
    
	
 
    	
 
    	
Series A
    	
 
    	
Series B
    	
 
    	
Series C
    
	
Series, Note   Registration Number and Principal Amount:
    	
 
    	
AR-1; 

$22,500,000
    	
 
    	
—
    	
 
    	
—
    
	
Supplemental Amendment   Fee:
    	
 
    	
$47,236
    	
 
    	
—
    	
 
    	
—
    

 

	
(1)
    	
 
    	
All scheduled payments of principal and interest by   wire transfer of immediately available funds to:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Bank:
    	
CoBank, ACB
    
	
 
    	
 
    	
Location of Bank:
    	
Greenwood Village, Colorado
    
	
 
    	
 
    	
ABA Routing No:
    	
307088754
    
	
 
    	
 
    	
Account Name:
    	
Intrepid Potash, Inc.
    
	
 
    	
 
    	
Account Number:
    	
00079992
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
with sufficient   information to identify the source and application of such funds, including   issuer, PPN# 46121Y B*2, interest rate, maturity and whether payment is of   principal, interest, make whole amount or otherwise.
    
	
 
    	
 
    	
 
    
	
(2)
    	
 
    	
Address for all notices relating to payments:

CoBank, ACB
   Attention: Syndications/Participations
   6340 S. Fiddlers Green Circle
   Greenwood Village, CO 80111
   Fax (303) 740-4021
    
	
 
    	
 
    	
 
    
	
(3)
    	
 
    	
Address for all other communications and notices:

CoBank, ACB
   Attention: Syndications/Participations
   6340 S. Fiddlers Green Circle
   Greenwood Village, CO 80111
   Fax (303) 740-4021
    

 

Schedule A-5

 

	
(4)
    	
 
    	
Address for delivery of Notes:

CoBank, ACB
   Attention: Closing
   6340 S. Fiddlers Green Circle
   Greenwood Village, CO 80111
    
	
 
    	
 
    	
 
    
	
(5)
    	
 
    	
E-mail Address for Electronic Delivery:   cobankloanaccounting@cobank.com
    
	
 
    	
 
    	
 
    
	
(6)
    	
 
    	
Tax ID: 84-1286705
    

 

Schedule A-6

 

	
Name of   Existing Noteholder:
    	
 
    	
AGFIRST FARM CREDIT BANK
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Series, Note Registration Number,

Principal Amount of Existing Notes

and Prepayment Amounts
    
	
 
    	
 
    	
Series A
    	
 
    	
Series B
    	
 
    	
Series C
    
	
Series, Note   Registration Number and Principal Amount:
    	
 
    	
AR-2;

$13,500,000
    	
 
    	
—
    	
 
    	
—
    
	
Supplemental Amendment   Fee:
    	
 
    	
$28,342
    	
 
    	
—
    	
 
    	
—
    

 

	
(1)
    	
 
    	
All scheduled payments of principal and interest by   wire transfer of immediately available funds to:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
AgFirst Farm Credit Bank
    
	
 
    	
 
    	
City, State:
    	
Columbia, SC
    
	
 
    	
 
    	
ABA No:
    	
053905974
    
	
 
    	
 
    	
Short Name:
    	
AgFirst FCB
    
	
 
    	
 
    	
Acct. Number:
    	
2993260000000
    
	
 
    	
 
    	
Acct. Name:
    	
Intrepid Potash, Inc.
    
	
 
    	
 
    	
OBI:
    	
Intrepid Potash, Inc.
    
	
 
    	
 
    	
Email:
    	
capmarkets@agfirst.com
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
with sufficient   information to identify the source and application of such funds, including   issuer, PPN#: 46121Y B*2, interest rate, maturity and whether payment is of   principal, interest, make whole amount or otherwise.
    
	
 
    	
 
    	
 
    
	
(2)
    	
 
    	
Address for all notices relating to payments:

AgFirst Farm Credit   Bank
   PO Box 1499
   Columbia, SC 29202
   Email: creynolds-servicing@agfirst.com and capmarkets@agfirst.com
    
	
 
    	
 
    	
 
    
	
(3)
    	
 
    	
Address for all other communications and notices:

AgFirst Farm Credit   Bank
   PO Box 1499
   Columbia, SC 29202
   Email: creynolds-servicing@agfirst.com and bfortner-servicing@afirst.com
    
	
 
    	
 
    	
 
    
	
(4)
    	
 
    	
Address for delivery of Notes:

1401 Hampton Street
   Columbia, SC 29201
   Attn: Hannah Engroos
    

 

Schedule A-7

 

	
(5)
    	
 
    	
E-mail Address for Electronic Delivery: bfortner-servicing@afirst.com
    
	
 
    	
 
    	
 
    
	
(6)
    	
 
    	
Tax ID: 57-1016947
    

 

Schedule A-8

 

	
Name of   Existing Noteholder:
    	
 
    	
FARM CREDIT BANK OF TEXAS
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Series, Note Registration Number,

Principal Amount of Existing Notes

and Prepayment Amounts
    
	
 
    	
 
    	
Series A
    	
 
    	
Series B
    	
 
    	
Series C
    
	
Series, Note   Registration Number and Principal Amount:
    	
 
    	
AR-3;

$9,000,000
    	
 
    	
—
    	
 
    	
—
    
	
Supplemental Amendment   Fee:
    	
 
    	
$18,895
    	
 
    	
—
    	
 
    	
—
    

 

	
(1)
    	
 
    	
All scheduled payments of principal and interest by   wire transfer of immediately available funds to:

Farm Credit Bank of   Texas
   4801 Plaza on the Lake Drive, Austin, TX 78746
   ABA NO: 1149-2470-0
   Short Name: Farm Credit Bk Aus
   Account Number: 150499
   Acct. Name: Capital Markets-Clearing Acct.

DLPartOps@FarmCreditBank.com

with sufficient   information to identify the source and application of such funds, including   issuer, PPN# 46121Y B*2, interest rate, maturity and whether payment is of   principal, interest, make whole amount or otherwise.
    
	
 
    	
 
    	
 
    
	
(2)
    	
 
    	
Address for all notices relating to payments:

Farm Credit Bank of Texas
   4801 Plaza on the Lake Drive
   Austin, TX 78746
   Attn: Capital Markets Operations
   Email: DLPartOps@FarmCreditBank.com
    
	
 
    	
 
    	
 
    
	
(3)
    	
 
    	
Address for all other communications and notices:

Farm Credit Bank of   Texas
   4801 Plaza on the Lake Drive
   Austin, TX 78746
   Attn: Luis Requejo
   Email: Luis.Requejo@FarmCreditBank.com
    

 

Schedule A-9

 

	
(4)
    	
 
    	
Address for delivery of Notes:

Farm Credit Bank of   Texas
   4801 Plaza on the Lake Drive
   Austin, TX 78746
   Attn: Luis Requejo
   Luis.Requejo@FarmCreditBank.com
    
	
 
    	
 
    	
 
    
	
(5)
    	
 
    	
E-mail Address for Electronic Delivery:

 

Luis.Requejo@FarmCreditBank.com

DLPartOps@FarmCreditBank.com

DLCapMarketsOperations@FarmCreditBank.com
    
	
 
    	
 
    	
 
    
	
(6)
    	
 
    	
Tax ID: 74-1110170
    

 

Schedule A-10

 

	
Name of   Existing Noteholder:
    	
 
    	
GREENSTONE FARM CREDIT SERVICES, ACA/FLCA
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Series, Note Registration Number,

Principal Amount of Existing Notes

and Prepayment Amounts
    
	
 
    	
 
    	
Series A
    	
 
    	
Series B
    	
 
    	
Series C
    
	
Series, Note   Registration Number and Principal Amount:
    	
 
    	
AR-4;

$9,000,000
    	
 
    	
BR-2;

$6,300,000
    	
 
    	
—
    
	
Supplemental Amendment   Fee:
    	
 
    	
$18,895
    	
 
    	
$29,433
    	
 
    	
—
    

 

	
(1)
    	
 
    	
All scheduled payments of principal and interest by   wire transfer of immediately available funds to:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
AgriBank FCB
    
	
 
    	
 
    	
ABA:
    	
096016972
    
	
 
    	
 
    	
Acct:
    	
GreenStone
    
	
 
    	
 
    	
Acct No:
    	
362406788
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
with sufficient   information to identify the source and application of such funds, including   issuer, PPN#, interest rate, maturity and whether payment is of principal,   interest, make whole amount or otherwise.
    
	
 
    	
 
    	
 
    
	
(2)
    	
 
    	
Address for all notices relating to payments:

GS-Fund@greenstonefcs.com

Greenstone Farm Credit   Services, ACA/FLCA
   3515 West Road
   East Lansing, MI 48823
   Attention: Capital Markets
    
	
 
    	
 
    	
 
    
	
(3)
    	
 
    	
Address for all other communications and notices:

Greenstone Farm Credit   Services, ACA/FLCA
   Credit Contacts
   3515 West Road
   East Lansing, MI 48823
   Jeff Pavlik, SVP/Managing Director
   jeff.pavlik@greenstonefcs.com
   517-318-4130 direct
   517-318-4148 fax

and

Curt Flammini, VP
   Curt.flammini@greenstonefcs.com
   517-332-9527 direct
    

 

Schedule A-11

 

	
 
    	
 
    	
517-318-4148 fax
    
	
 
    	
 
    	
 
    
	
(4)
    	
 
    	
Address for delivery of Notes:

Greenstone Farm Credit Services,   ACA/FLCA
   3515 West Road
   East Lansing, MI 48823
   Attention: Capital Markets
    
	
 
    	
 
    	
 
    
	
(5)
    	
 
    	
E-mail Address for Electronic Delivery:

   Curt.flammini@greenstonefcs.com
    
	
 
    	
 
    	
 
    
	
(6)
    	
 
    	
Tax ID: 38-1358859
    

 

Schedule A-12

 

	
Name of   Existing Noteholder:
    	
 
    	
1ST FARM CREDIT SERVICES, PCA

 
    
	
 
    	
 
    	
Series, Note Registration Number,

Principal Amount of Existing Notes

and Prepayment Amounts
    
	
 
    	
 
    	
Series A
    	
 
    	
Series B
    	
 
    	
Series C
    
	
Series, Note   Registration Number and Principal Amount:
    	
 
    	
—
    	
 
    	
BR-3;

$6,750,000
    	
 
    	
—
    
	
Supplemental Amendment   Fee:
    	
 
    	
—
    	
 
    	
$31,535
    	
 
    	
—
    

 

	
(1)
    	
 
    	
All scheduled payments of principal and interest by   wire transfer of immediately available funds to:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Bank:
    	
AgriBank, FCB
    
	
 
    	
 
    	
Address:
    	
St. Paul, MN
    
	
 
    	
 
    	
ABA #:
    	
096016972
    
	
 
    	
 
    	
Account Name:
    	
1st Farm Credit Services
    
	
 
    	
 
    	
Acct #:
    	
362402288
    
	
 
    	
 
    	
Attn:
    	
Intrepid Potash, Inc. - Brenda Croxton
    
	
 
    	
 
    	
 
    
	
(2)
    	
 
    	
Address for all notices relating to payments:

1st Farm Credit Services
   ATTN: Corey Waldinger
   1560 Wall Street, Suite 221
   Naperville, IL 60563
   Email: cmg@1stfarmcredit.com
    
	
 
    	
 
    	
 
    
	
(3)
    	
 
    	
Address for all other communications and notices:

1st Farm Credit Services
   ATTN: Corey Waldinger
   1560 Wall Street, Suite 221
   Naperville, IL 60563
   Email: cmg@1stfarmcredit.com
    
	
 
    	
 
    	
 
    
	
(4)
    	
 
    	
Address for delivery of Notes:

1st Farm Credit Services
   ATTN: Corey Waldinger
   1560 Wall Street, Suite 221
   Naperville, IL 60563
    
	
 
    	
 
    	
 
    
	
(5)
    	
 
    	
E-mail Address for Electronic Delivery:   cmg@1stfarmcredit.com
    

 

Schedule A-13

 

	
(6)
    	
 
    	
Tax ID: 37-1270649
    

 

Schedule A-14

 

	
Name of   Existing Noteholder:
    	
 
    	
FARM CREDIT SERVICES OF AMERICA, PCA
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Series, Note Registration Number,

Principal Amount of Existing Notes

and Prepayment Amounts
    
	
 
    	
 
    	
Series A
    	
 
    	
Series B
    	
 
    	
Series C
    
	
Series, Note   Registration Number and Principal Amount:
    	
 
    	
—
    	
 
    	
BR-4;

$6,300,000
    	
 
    	
—
    
	
Supplemental Amendment   Fee:
    	
 
    	
—
    	
 
    	
$29,433
    	
 
    	
—
    

 

	
(1)
    	
 
    	
All scheduled payments of principal and interest by   wire transfer of immediately available funds to:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Bank Name:
    	
AgriBank, FCB
    
	
 
    	
 
    	
ABA Routing #:
    	
096016972
    
	
 
    	
 
    	
Beneficiary Account   Name: 
    	
Farm Credit Services of America
    
	
 
    	
 
    	
Beneficiary Account   Number:
    	
362021040
    
	
 
    	
 
    	
Reference:
    	
Intrepid Potash
    
	
 
    	
 
    	
Attn:
    	
Participation Operations
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
with sufficient   information to identify the source and application of such funds, including   issuer, PPN# 46121Y B@0, interest rate, maturity and whether payment is of   principal, interest, make whole amount or otherwise.
    
	
 
    	
 
    	
 
    
	
(2)
    	
 
    	
Address for all notices relating to payments:

Funding &   Payment Wire Activity:
   Brianne Hein, ABF Participation Operations
   Telephone: (402) 348-3336
   Facsimile: (402) 661-3324
   Email: wires@fcsamerica.com
    
	
 
    	
 
    	
 
    
	
(3)
    	
 
    	
Address for all other communications and notices:

Primary Contact:
   Farm Credit Services of America, PCA
   5015 South 118th Street
   Omaha, Nebraska 68137
   Attn: Steve Moore, Vice President
   Telephone: (402) 348-3246
   Facsimile (402) 661-3246
   Email: Steve.moore@fcsamerica.com
    

 

Schedule A-15

 

	
(4)
    	
 
    	
Address for delivery of Notes:

 

Farm Credit Services of   America
   5015 South 118th Street
   Omaha, Nebraska 68137
   Attn: Sue Brownlee
    
	
 
    	
 
    	
 
    
	
(5)
    	
 
    	
E-mail Address for Electronic Delivery:   capitalmarkets@fcsamerica.com
    
	
 
    	
 
    	
 
    
	
(6)
    	
 
    	
Tax ID: 47-0373522
    

 

Schedule A-16

 

SCHEDULE B

 

DEFINED TERMS

 

Capitalized terms defined in the UCC in effect on the Restructuring Closing Date and not otherwise defined herein shall, unless the context otherwise indicates, have the meanings provided by those definitions.

 

As used herein, the following terms have the respective meanings set forth below or set forth in the Section hereof following such term:

 

“203 E. Florence” is defined in Section 4.10.

 

“Account Debtor” means any Person who is or may become obligated under or on account of any Account, Contractual Obligation, Chattel Paper or General Intangible.

 

“Acquisition” means any transaction, or any series of related transactions, consummated on or after the date of this Agreement, by which the Company or any of its Subsidiaries, directly or indirectly, acquires (i) any business or assets of another Person which constitute all or substantially all of the assets of such Person or of a division, line of business or other business unit of such Person, whether through purchase of assets, merger or otherwise or (ii) a majority of the Voting Stock or other controlling ownership interest in another Person (including the purchase of an option, warrant or convertible or similar type security to acquire such a controlling interest at the time it becomes exercisable by the holder thereof), whether by purchase of such equity or other ownership interest or upon the exercise of an option or warrant for, or conversion of securities into, such equity or other ownership interest.  As used herein, “Voting Stock” means, with respect to any Person, Equity Interests issued by such Person the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person, even though the right to so vote has been suspended by the happening of such contingency.

 

“Additional Provision” is defined in Section 9.12 (a).

 

“Affiliate” means, at any time, and with respect to any Person, any other Person that at such time directly or indirectly through one or more intermediaries Controls, or is Controlled by, or is under common Control with, such first Person, and, with respect to the Company, shall include any Person (or group of natural persons related by blood or marriage) beneficially owning or holding, directly or indirectly, 10% or more of any class of voting or equity interests of the Company or any Subsidiary or any Person of which the Company and its Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly, 10% or more of any class of voting or equity interests, provided, that in no event shall (i) any institutional investor be deemed an Affiliate of the Company unless such institutional investor has placed at least one of its representatives on the Company’s board of directors and (ii) any trustee under, or any committee with responsibility for administering, any Plan be deemed an Affiliate of the Company.  As used in this definition, “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 the terms “Controlled” and “Controlling” shall have meanings  correlative to the foregoing.  Unless the context

 

Schedule B-1

 

otherwise clearly requires, any reference to an “Affiliate” is a reference to an Affiliate of the Company.

 

“Agreement” means this Amended and Restated Note Purchase Agreement dated as of October 31, 2016, as it may be amended or supplemented from time to time.

 

“Anti-Corruption Laws” means any law or regulation in a U.S. or any non-U.S. jurisdiction regarding bribery or any other corrupt activity, including the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act 2010.

 

“Anti-Money Laundering Laws” means any law or regulation in a U.S. or any non-U.S. jurisdiction regarding money laundering, drug trafficking, terrorist-related activities or other money laundering predicate crimes, including the Currency and Foreign Transactions Reporting Act of 1970 (otherwise known as the Bank Secrecy Act) and the USA PATRIOT Act.

 

“Assumed Indebtedness” means Indebtedness of a Person which is (i) in existence at the time such Person becomes a Subsidiary or (ii) assumed in connection with an Investment in or Acquisition of such Person, and which, in each case, (A) has not been incurred or created in connection with, or in anticipation or contemplation of, such Person becoming a Subsidiary, (B) only such Person (or its Subsidiaries so acquired) are obligors with respect to such Indebtedness, (C) such Indebtedness is not a revolving loan facility; and (D) such Indebtedness is not secured by any Liens on working capital assets.

 

“Blocked Person” means (i) a Person whose name appears on the list of Specially Designated Nationals and Blocked Persons published by OFAC, (ii) a Person, entity, organization, country or regime that is blocked or a target of sanctions that have been imposed under U.S. Economic Sanctions Laws or (iii) a Person that is an agent, department or instrumentality of, or is otherwise beneficially owned by, controlled by or acting on behalf of, directly or indirectly, any Person, entity, organization, country or regime described in clause (i) or (ii).

 

“Business Day” means any day other than a Saturday, a Sunday or a day on which commercial banks in New York City are required or authorized to be closed.

 

“Capital Expenditure Amount” means (i) with respect to any consecutive four fiscal quarter period ending on or prior to December 31, 2017, $20,000,000, (ii) with respect to any consecutive four fiscal quarter period ending after December 31, 2017 and on or prior to December 31, 2018, $15,000,000, and (iii) with respect to any consecutive four fiscal quarter period ending after December 31, 2018, $10,000,000.

 

“Capital Expenditures” means, without duplication, any expenditures for any purchase or other acquisition of any asset which would be classified as a fixed or capital asset on a consolidated balance sheet of the Company and its Subsidiaries prepared in accordance with GAAP; provided, that “Capital Expenditures” shall not include (w) capitalized interest under GAAP, (x) expenditures funded with net cash proceeds received by a Loan Party with respect to any insurance or condemnation proceeds for assets being replaced, in each case, received or paid to the account of any Loan Party, (y) any like kind or non-monetary exchange of assets or (z) at

 

Schedule B-2

 

any time Tier IV or Tier V applies in the determination of the Incremental Interest Rate, Permitted Acquisitions.

 

“Capitalized Lease” of a Person means any lease of property by such Person as lessee which would be capitalized on a balance sheet of such Person prepared in accordance with GAAP.

 

“Capitalized Lease Obligations” of a Person means the amount of the obligations of such Person under Capitalized Leases which would be shown as a liability on a balance sheet of such Person prepared in accordance with GAAP.

 

“Carlsbad West” means the underground mine and operating facility of the Company and its Subsidiaries located near Carlsbad, New Mexico that are commonly referred to as “Carlsbad West” or “West”.

 

“Carlsbad West Mine” means the mine that constitutes a part of Carlsbad West.

 

“Cash Equivalents” means any of the following types of property, to the extent owned by the Company or any of its Subsidiaries free and clear of all Liens (other than (x) Liens created under the Collateral Documents and (y) Liens in favor of the Revolving Agent so long as those Liens are at all times subject to the terms of the Intercreditor Agreement):

 

(a)           cash, denominated in U.S. Dollars;

 

(b)           readily marketable direct obligations of the government of the United States or any agency or instrumentality thereof, or obligations the timely payment of principal and interest on which are fully and unconditionally guaranteed by the government of the United States or any state or municipality thereof (including, without limitation, variable rate demand notes), in each case so long as such obligation is Ratings Compliant;

 

(c)           Ratings Compliant commercial paper;

 

(d)           insured certificates of deposit or bankers’ acceptances of, or time deposits with any Lender or with any commercial bank;

 

(e)           Ratings Compliant readily marketable general obligations of any corporation organized under the laws of any state of the United States of America, payable in the United States of America, expressed to mature not later than twenty-four months following the date of issuance thereof;

 

(f)            Ratings Compliant money market sweep vehicles; and

 

(g)           readily marketable shares of investment companies or money market funds that, in each case, invest solely in the foregoing Investments described in clauses (a) through (e) above.

 

Schedule B-3

 

“Cash Pay Interest Rate” means, with respect to Tier I, Tier II, Tier III, Tier IV or Tier V, the rate per annum specified for such Tier in the table set forth in the definition of “Incremental Interest Rate” in the column titled “Cash Pay Interest Rate”.

 

“Change of Control” means (i) the acquisition by any Person, or two or more Persons acting in concert, in each case, other than the Permitted Holders, of beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Exchange Act) of 30% or more of the outstanding shares of voting stock of the Company; or (ii) within any twelve-month period, occupation of a majority of the seats (other than vacant seats) on the board of directors of the Company by Persons who were neither (x) nominated by the board of directors of the Company nor (y) appointed by directors so nominated.

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time, and the rules and regulations promulgated thereunder from time to time.

 

“Collateral” means all of the “Collateral” referred to in the Collateral Documents and all of the other property that is or is intended under the terms of the Collateral Documents to be subject to Liens in favor of the Collateral Agent for the benefit of the Secured Parties.

 

“Collateral Agency Agreement” is defined in Section 4.13.

 

“Collateral Agent” means U.S. Bank National Association in its capacity as collateral agent under and pursuant to the Collateral Agency Agreement, or any successor collateral agent appointed in accordance with the Collateral Agency Agreement.

 

“Collateral Documents” means, collectively, the Security Agreement and each Security Agreement Joinder, the Mortgages and any other related Mortgaged Property Support Documents, the Deposit Account Control Agreement (BMO), the Deposit Account Control Agreement (Wells Fargo), the Notice of Grant of Security Interest in Patents, the Notice of Grant of Security Interest in Trademarks, each of the mortgages, collateral assignments, security agreements, pledge agreements or other similar agreements delivered to the Collateral Agent or the holders of the Notes pursuant to Section 9.9 of this Agreement, and each of the other agreements, instruments or documents that creates or purports to create a Lien in favor of the Collateral Agent for the benefit of the Secured Parties.

 

“Company” is defined in the first paragraph of this Agreement.

 

“Confidential Information” is defined in Section 20.

 

“Consolidated EBITDA” means, for any period, Consolidated Net Income plus, to the extent deducted from revenues in determining Consolidated Net Income and without duplication, (i) Consolidated Interest Expense, (ii) expense for income, franchise or similar taxes paid in cash or accrued, (iii) depreciation expense, (iv) amortization expense, (v) impairment expense, (vi) all non-cash expenses related to stock based compensation, (vii) non-cash expenses (other than related to stock based compensation) in an aggregate amount not to exceed $2,000,000 for any fiscal quarter, (viii) extraordinary expenses as defined by GAAP, (ix) depletion expense, (x) accretion expense, (xi) costs qualifying as abnormal production costs

 

Schedule B-4

 

under GAAP, (xii) any deferred financing costs related to prepayments of the Notes, (xiii) any payments of Make-Whole Amount or Required Prepayment Premium on the Notes, (xiv) any deferred financing costs related to a permanent reduction of commitments to lend under the Existing Credit Agreement and the Revolving Credit Agreement and (xv) any restructuring costs, fees and expenses, including without limitation, the costs, fees and expenses of the Financial Advisor paid by the Company and closing and related fees paid by the Company in connection with and contemplated by this Agreement, the Revolving Credit Agreement and the termination of the Existing Credit Agreement (A) in an unlimited amount prior to the Restructuring Closing Date and (B) in an aggregate amount for this clause (xv) after the Restructuring Closing Date not to exceed $2,000,000, provided that any expenses or costs added pursuant to clauses (v), (vi), (viii) and/or (xi) above that are associated with the conversion of the Carlsbad East facility to Trio-only production shall not exceed $2,000,000 in the aggregate, minus, to the extent included in Consolidated Net Income, (1) extraordinary income or extraordinary gains, in each case as defined by GAAP, (2) all non-cash income or gains, (3) non-recurring or unusual cash income or gains, (4) income tax credits and refunds (to the extent not netted from tax expense), and (5) any cash payments made during such period in respect of non-cash items described in clause (vi) above subsequent to the fiscal quarter in which the relevant non-cash expenses, charges or losses were incurred, all calculated for the Company and its Subsidiaries on a consolidated basis for such period.  Any determination of Consolidated EBITDA shall exclude (I) unrealized gains or losses in respect of Rate Management Transactions and (II) any gross potash sales revenue, freight costs, discounts related to sales, warehouse and handling relating expenses, costs of goods sold, lower-of-cost-or-market charges, royalties, by-product credits, environmental remediation expenses, geology expenses (other than those incurred in performing care and maintenance activities), charitable contributions and other income and expenses (other than care and maintenance expenses) related to Carlsbad West.  For purposes of any determination of Consolidated EBITDA for any period, Consolidated Net Income shall exclude, solely to the extent not otherwise added or subtracted (as the case may be) in determining Consolidated EBITDA for such period, net losses or gains realized in connection with (i) any sale, lease, conveyance or other disposition of any asset (other than in the Ordinary Course of Business) or (ii) repayment, repurchase or redemption of Indebtedness.

 

“Consolidated Funded Indebtedness” means, at any time, the aggregate amount of Consolidated Indebtedness, excluding (without duplication) (i) obligations of the Company or a Subsidiary representing the deferred purchase price of property or services (other than accounts payable arising in the Ordinary Course of Business), (ii) obligations of the Company or a Subsidiary, whether or not assumed, secured by Liens or payable out of the proceeds or production from property now or hereafter owned or acquired by such Person (other than obligations for borrowed money and obligations which are evidenced by notes, bonds or other similar instruments), (iii) obligations of the Company or a Subsidiary to purchase securities or other property arising out of or in connection with the sale of the same or substantially similar securities or property, but only if such obligation to purchase can be enforced prior to the stated maturity of any Note, (iv) obligations of the Company or a Subsidiary as an account party with respect to commercial Letters of Credit, (v) Contingent Obligations of the Company or a Subsidiary relating to Indebtedness of a type described in clauses (i) through (iv) of this definition (other than Indebtedness of the Company or a Subsidiary), and (vi) Net Mark-to-Market Exposure of the Company or a Subsidiary under Rate Management Transactions; provided that Consolidated Funded Indebtedness shall not include Synthetic Lease Obligations.

 

Schedule B-5

 

“Consolidated Indebtedness” means at any time the Indebtedness of the Company and its Subsidiaries calculated on a consolidated basis as of such time.

 

“Consolidated Interest Expense” means, with reference to any period, the interest expense of the Company and its Subsidiaries calculated in accordance with GAAP on a consolidated basis for such period plus (without duplication), to the extent treated as interest in accordance with GAAP, premium payments, debt discount, fees (excluding (x) accelerated amortization of fees paid in respect of permanent reductions of commitments to lend under the Existing Credit Agreement and the Revolving Credit Agreement, (y) accelerated amortization of fees paid in respect of prepayments of the Notes, and (z) payments of Make-Whole Amount or Required Prepayment Premium on the Notes, in each case in accordance with GAAP) charges and related expenses of the Company and its Subsidiaries in connection with borrowed money (including capitalized interest) or in connection with the deferred purchase price of assets, in each case calculated in accordance with GAAP on a consolidated basis for such period.

 

“Consolidated Net Income” means, with reference to any period, the net income (or loss) of the Company and its Subsidiaries calculated in accordance with GAAP on a consolidated basis for such period.

 

“Consolidated Total Assets” means, as of the date of any determination thereof, total assets of the Company and its Subsidiaries calculated in accordance with GAAP on a consolidated basis as of such date.

 

“Contingent Obligation” of a Person means any agreement, undertaking or arrangement by which such Person assumes, guarantees, endorses, contingently agrees to purchase or provide funds for the payment of, or otherwise becomes or is contingently liable upon, the obligation or liability of any other Person, or agrees to maintain the net worth or working capital or other financial condition of any other Person, or otherwise assures any creditor of such other Person against loss relating to the obligation or liability of any other Person, including, without limitation, any comfort letter tantamount to a guaranty, any operating agreement tantamount to a guaranty, any take-or-pay contract, or the obligations of any such Person as general partner of a partnership with respect to the liabilities of the partnership (other than such obligations of such partnership (or portion thereof) that are made non-recourse to such general partner); provided, that “Contingent Obligation” shall not include warranties or indemnities for goods or services sold in the Ordinary Course of Business or endorsements of instruments for deposit or collection in the Ordinary Course of Business, and unless otherwise expressly limited by the terms of a guarantee, the amount of any guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith.

 

“Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.

 

Schedule B-6

 

“Control Event” means the execution of any definitive and legally binding written agreement that, when fully performed by the parties thereto, will result in a Change of Control.

 

“Cure Amount” is defined in Section 12.6.

 

“Cure Notice” is defined in Section 12.6.

 

“Cure Quarter” is defined in Section 12.6.

 

“Default” means an event or condition the occurrence or existence of which would, with the lapse of time or the giving of notice or both, become an Event of Default.

 

“Default Rate” means, for each series of Notes, that rate of interest per annum that is the greater of (i) 2% above the then-effective rate of interest of the Notes of such series (such effective rate of interest to include the Incremental Interest Rate) or (ii) 2% over the rate of interest publicly announced by U.S. Bank National Association in New York City as its “base” or “prime” rate.

 

“Deposit Account Control Agreement (BMO)” is defined in Section 4.14(j).

 

“Deposit Account Control Agreement (Wells Fargo)” means a certain deposit account control agreement among Wells Fargo Bank, National Association, as depository bank, the Revolving Agent, the Collateral Agent and the Company, as amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof.

 

“Disclosure Documents” is defined in Section 5.3.

 

“Disposition” is defined in Section 10.6.

 

“Disposition Basket Amount” means:

 

(a)           at any time Tier I, Tier II or Tier III applies in the determination of the Incremental Interest Rate, $1,000,000 (or its equivalent in other currencies),

 

(b)           at any time Tier IV applies in the determination of the Incremental Interest Rate, $20,000,000 (or its equivalent in other currencies), and

 

(c)           at any time Tier V applies in the determination of the Incremental Interest Rate, an amount equal to 15% of Consolidated Total Assets (as of the last day of the then most recently ended fiscal year).

 

“Disqualified Equity Interest” means any Equity Interest which, by its terms (or by the terms of any security or other Equity Interest into which it is convertible or for which it is exchangeable), or upon the happening of any event or condition, (i) matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, in whole or in part, on or prior to the date that is 180 days following the latest final maturity date of any of the Notes stated therein, (ii) is convertible into or exchangeable for

 

Schedule B-7

 

(A) debt securities or (B) any Equity Interest referred to in clause (i) above, in each case, at any time on or prior to the date that is 180 days following the latest final maturity date of any of the Notes stated therein at the time such Equity Interest was issued, or (iii) (x) contains any repurchase obligation that may come into effect prior to, (y) is entitled to receive scheduled dividends or distributions in cash prior to or (z) provides the holders thereof with any rights to receive any cash upon the occurrence of a change of control or sale of assets prior to, in each case, the date that is 180 days following the latest final maturity date of any of the Notes stated therein.

 

“Dollar” and “U.S. Dollar” and “$” means the lawful currency of the United States of America.

 

“Electronic Delivery” is defined in Section 7.1(a).

 

“Environmental Laws” means any and all Federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including but not limited to those related to Hazardous Materials.

 

“Equity Issuance First Offer” is defined in Section 8.10(a).

 

“Equity Issuance First Offer Acceptance Date” is defined in Section 8.10(a).

 

“Equity Issuance First Offer Notice” is defined in Section 8.10(a).

 

“Equity Issuance Prepayment Date” is defined in Section 8.10(a).

 

“Equity Issuance Second Offer” is defined in Section 8.10(c).

 

“Equity Issuance Second Offer Acceptance Date” is defined in Section 8.10(c).

 

“Equity Issuance Second Offer Amount” is defined in Section 8.10(c).

 

“Equity Issuance Second Offer Notice” is defined in Section 8.10(c).

 

“Equity Issuance Proceeds” is defined in Section 8.10(a).

 

“Equity Interests” means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.

 

Schedule B-8

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect.

 

“ERISA Affiliate” means any trade or business (whether or not incorporated) that is treated as a single employer together with the Company under section 414 of the Code.

 

“Event of Default” is defined in Section 11.

 

“Excess Change of Control Principal Amount” is defined in Section 8.3(d).

 

“Excess Equity Issuance Principal Amount” is defined in Section 8.10(a).

 

“Excess Prepayment Proceeds” means, with respect to any offer of prepayment made pursuant to Section 8.3, 8.8, 8.9 or 8.10, the portion of the amount offered to prepay principal of the Notes which, when taken together with the sum of all prepayments of principal of the Notes made pursuant to Sections 8.3, 8.8, 8.9 or 8.10 after the date hereof and prior to such offer, exceeds $35,000,000 (or its equivalent in other currencies) in the aggregate.

 

“Excess Section 8.9 Principal Amount” is defined in Section 8.9(a).

 

“Excess Specified Property Principal Amount” is defined in Section 8.8(a).

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Excluded Escrow/Cash Collateral Account” means:

 

(a)           any Deposit Account containing only escrowed amounts or cash collateral, in each case in favor of or securing obligations owed to Governmental Authorities, provided that any Lien on such Deposit Account is permitted in accordance with Section 10.4, or

 

(b)           that certain Deposit Account of the Company located at U.S. Bank National Association with account number 433001391, provided that such Deposit Account contains exclusively cash collateral, in an amount not to exceed $550,000 at any time, which secures a letter of credit in the face amount of $500,000 issued by U.S. Bank National Association to the landlord under a real estate lease of the Company.

 

“Exempt Specified Property” means property (other than cash) received by the Company or a Subsidiary as consideration for the Disposition of Specified Property and in which the Company or such Subsidiary is not permitted, pursuant to applicable law or the terms of the agreement effecting such Disposition (so long as any such term in any such agreement is commercially reasonable), to grant a Lien in favor of the Collateral Agent for the benefit of the Secured Parties.

 

“Existing Credit Agreement” means the Credit Agreement dated as of August 3, 2011 among the Company, the lenders from time to time party thereto, and U.S. Bank National

 

Schedule B-9

 

Association, as administrative agent, as amended, the indebtedness and obligations under which were repaid and discharged in full on or about September 30, 2016.

 

“Existing Note Purchase Agreement” is defined in Section 1.

 

“Existing Notes” is defined in Section 1.

 

“Existing Noteholder” is defined in the first paragraph of this Agreement.

 

“Existing Series A Notes” is defined in Section 1.

 

“Existing Series B Notes” is defined in Section 1.

 

“Existing Series C Notes” is defined in Section 1.

 

“Existing Subsidiary Guaranty” is defined in Section 1.

 

“Extraordinary Insurance Receipts” means any cash received by or paid to or for the account of any Person not in the ordinary course of business in respect of proceeds of insurance in an aggregate amount in excess of $2,500,000 (or its equivalent in other currencies), in each case subject to the terms of the Intercreditor Agreement (so long as the Intercreditor Agreement is in effect); provided that, so long as no Default or Event of Default has occurred or is continuing, Extraordinary Insurance Receipts shall not include any such cash that is, within 365 days after the date of receipt, reinvested or committed to be reinvested in productive assets to be used in the business of the Company or a Subsidiary.

 

“Fair Market Value” means, with respect to any asset or any group of assets, as of any date of determination, the value of the consideration obtainable in a sale of such assets at such date of determination assuming a sale by a willing seller to a willing purchaser dealing at arm’s length and arranged in an orderly manner over a reasonable period of time giving regard to the nature and characteristics of such asset.

 

“FCC” means, as of any date of calculation, the result of Consolidated EBITDA for the Company’s then most recently ended consecutive four fiscal quarters minus (i) the greater of (x) the Capital Expenditure Amount for such period and (y) the aggregate amount of Capital Expenditures made during such period minus (ii) cash income taxes paid during such period minus (iii) Consolidated Interest Expense for such period (excluding any interest that is paid in kind in respect of the Notes), plus scheduled principal amortization of long term Consolidated Funded Indebtedness paid or payable during such period, plus dividends or other distributions made by the Company during such period and purchases by the Company of its equity interests made during such period, all calculated for the Company and its Subsidiaries on a consolidated basis in accordance with GAAP.

 

“Financial Advisor” means FTI Consulting, Inc. in its capacity as financial advisor to the holders of the Notes pursuant to the FTI Engagement Agreement, or any successor in such capacity.

 

Schedule B-10

 

“Financial Covenant” means any covenant (whether set forth as a covenant, undertaking, event of default, restriction or other provision) that requires the Company, or the Company and its Subsidiaries, to achieve or maintain a stated level of financial condition or performance and includes, without limitation, any requirement that the Company or any Subsidiary:

 

(a)           maintain a specified level of net worth, shareholders’ equity, total assets, cash flow or net income;

 

(b)           maintain any relationship of any component of its capital structure to any other component thereof (including, without limitation, the relationship of indebtedness, senior indebtedness or subordinated indebtedness to total capitalization or to net worth); or

 

(c)           maintain any measure of its ability to service its indebtedness (including, without limitation, exceeding any specified ratio of revenues, cash flow or net income to indebtedness, interest expense, rental expense, capital expenditures and/or scheduled payments of indebtedness).

 

For the avoidance of doubt, the covenants set forth in Section 10.1 constitute Financial Covenants.

 

“First Amendment” is defined in Section 1.

 

“Fixed Charge Coverage Ratio” means, as of any date of calculation, the ratio of (i) Consolidated EBITDA for the Company’s then most recently ended consecutive four fiscal quarters minus (x) the greater of (1) the Capital Expenditure Amount for such period and (2) the aggregate amount of Capital Expenditures made during such period minus (y) cash income taxes paid during such period to (ii) Consolidated Interest Expense for such period (excluding any interest that is paid in kind in respect of the Notes), plus scheduled principal amortization of long term Consolidated Funded Indebtedness paid or payable during such period, plus all Restricted Payments made in cash during such period, all calculated for the Company and its Subsidiaries on a consolidated basis in accordance with GAAP.

 

“FTI Engagement Agreement” is defined in Section 4.16.

 

“Funds Flow Statement” means a statement detailing the proposed movement of funds on or before the Restructuring Closing Date in a form agreed among the Company and the Existing Noteholders.

 

“GAAP” means generally accepted accounting principles as in effect from time to time in the United States of America.

 

“Governmental Authority” means:

 

(a)           the government of

 

Schedule B-11

 

(i)            the United States of America or any State or other political subdivision thereof, or

 

(ii)           any jurisdiction in which the Company or any Subsidiary conducts all or any part of its business, or which asserts jurisdiction over any properties of the Company or any Subsidiary, or

 

(b)           any entity exercising executive, legislative, judicial, regulatory or administrative functions of, or pertaining to, any such government.

 

“Governmental Official” means any governmental official or employee, employee of any government-owned or government-controlled entity, political party, any official of a political party, candidate for political office, official of any public international organization or anyone else acting in an official capacity.

 

“Grantor” means the Company and each Subsidiary of the Company that has executed and delivered the Security Agreement or a Security Agreement Joinder, in each case so long as the Security Agreement and such Subsidiary’s Security Agreement Joinder (if any) are in full force and effect, and such Person is a party to the Security Agreement as a “Grantor”.

 

“Guaranty” means, with respect to any Person, any obligation (except the endorsement in the Ordinary Course of Business of negotiable instruments for deposit or collection) of such Person guaranteeing or in effect guaranteeing any Indebtedness of any other Person in any manner, whether directly or indirectly, including (without limitation) obligations incurred through an agreement, contingent or otherwise, by such Person:

 

(a)           to purchase such indebtedness or any property constituting security therefor;

 

(b)           to advance or supply funds (i) for the purchase or payment of such Indebtedness, or (ii) to maintain any working capital or other balance sheet condition or any income statement condition of any other Person or otherwise to advance or make available funds for the purchase or payment of such Indebtedness;

 

(c)           to lease properties or to purchase properties or services primarily for the purpose of assuring the owner of such Indebtedness of the ability of any other Person to make payment of the Indebtedness; or

 

(d)           otherwise to assure the owner of such Indebtedness against loss in respect thereof.

 

In any computation of the Indebtedness of the obligor under any Guaranty, the Indebtedness that are the subject of such Guaranty shall be assumed to be direct obligations of such obligor.  The term “Guaranty” as a verb has a corresponding meaning.

 

“Hazardous Material” means any and all pollutants, toxic or hazardous wastes or other substances that might pose a hazard to health and safety, the removal of which may be required or the generation, manufacture, refining, production, processing, treatment, storage,

 

Schedule B-12

 

handling, transportation, transfer, use, disposal, release, discharge, spillage, seepage or filtration of which is or shall be restricted, prohibited or penalized by any applicable law including, but not limited to, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, petroleum, petroleum products, lead based paint, radon gas or similar restricted, prohibited or penalized substances.

 

“holder” means, with respect to any Note, the Person in whose name such Note is registered in the register maintained by the Company pursuant to Section 13.1, provided, however, that if such Person is a nominee, then for the purposes of Sections 7, 12, 17.2 and 18 and any related definitions in this Schedule B, “holder” shall mean the beneficial owner of such Note whose name and address appears in such register.

 

“Incremental Interest Rate” means, (i) for any day occurring on or after October 16, 2016 and before the Restructuring Closing Date, 3.50% per annum, and (ii) for any day occurring on or after the Restructuring Closing Date, the rate per annum set forth below in the column titled “Incremental Interest Rate” opposite the applicable Tier then in effect:

 

	
Tier
    	
 
    	
Leverage Ratio
    	
 
    	
Fixed Charge Coverage
   Ratio
    	
 
    	
Incremental Interest
   Rate
    	
 
    	
Cash Pay
   Interest Rate
    
	
Tier I
    	
 
    	
>   7.50 to 1.00
    	
 
    	
Fixed Charge Coverage   Ratio is < 1.30 to 1.00
    	
 
    	
Restructuring Closing   Date through and including March 31, 2018: 4.50%

 

On and after   April 1, 2018: 6.50%
    	
 
    	
4.50%
    
	
Tier II
    	
 
    	
>   6.00 to 1.00 and < 7.50 to 1.00
    	
 
    	
Fixed Charge Coverage   Ratio is < 1.30 to 1.00
    	
 
    	
Restructuring Closing   Date through and including March 31, 2018: 4.00%

 

On and after   April 1, 2018: 6.00%
    	
 
    	
4.00%
    
	
Tier III
    	
 
    	
>   5.00 to 1.00 and < 6.00 to 1.00
    	
 
    	
Fixed Charge Coverage   Ratio is < 1.30 to 1.00
    	
 
    	
Restructuring Closing   Date through and including March 31, 2018: 3.75%

 

On and after   April 1, 2018: 5.75%
    	
 
    	
3.75%
    
	
Tier IV
    	
 
    	
>   3.50 to 1.00 and < 5.00 to 1.00
    	
 
    	
> 1.30 to 1.00
    	
 
    	
Restructuring Closing   Date through and including March 31,
    	
 
    	
2.50%
    

 

Schedule B-13

 

	
Tier
    	
 
    	
Leverage Ratio
    	
 
    	
Fixed Charge Coverage
   Ratio
    	
 
    	
Incremental Interest
   Rate
    	
 
    	
Cash Pay
   Interest Rate
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
2018: 2.50%

 

On and after   April 1, 2018: 4.50%
    	
 
    	
 
    
	
Tier V
    	
 
    	
< 3.50 to 1.00
    	
 
    	
> 1.30 to 1.00
    	
 
    	
0.50%
    	
 
    	
0.50%
    

 

For purposes of determining the applicable Tier of Incremental Interest Rate, each of the Leverage Ratio and the Fixed Charge Coverage Ratio shall be determined as of the last day of the most recently ended fiscal quarter for which financial statements and the corresponding Officer’s Certificate have been delivered pursuant to Section 7.1(a) or 7.1(b) and Section 7.2.  At any time the Leverage Ratio and the Fixed Charge Coverage Ratio fall in different Tiers, the Tier providing for the higher Incremental Interest Rate shall always apply.

 

Until receipt by the Noteholders of the financial statements and corresponding Officer’s Certificate for the fiscal quarter ending September 30, 2016 pursuant to Sections 7.1(a) and 7.2, the Incremental Interest Rate shall be determined as if Tier I were applicable.  Thereafter, the Incremental Interest Rate shall be subject to increase or decrease upon receipt by the Noteholders of the financial statements and corresponding Officer’s Certificates pursuant to Sections 7.1(a) or 7.1(b) and Section 7.2 for the fiscal period covered thereby, which change shall be effective on the first day of the calendar month following receipt; provided, that if any financial statements and Officer’s Certificate are not delivered on the day they are due in accordance with such Sections, then the Incremental Interest Rate shall be determined as if Tier I were applicable from and including such day until the first day of the calendar month following actual receipt.  Notwithstanding the foregoing, if the financial statements and/or Officer’s Certificate for any period are determined to have been inaccurate or are restated, and the Leverage Ratio would have been higher and/or the Fixed Charge Coverage Ratio would have been lower for such period, and the applicable Incremental Interest Rate would have been higher based on the accurate or restated financial statements and/or Officer’s Certificate, then the Incremental Interest Rate for periods affected thereby shall be retroactively re-determined based on such accurate or restated financial statements and/or Officer’s Certificate, and the Company shall pay on demand any additional interest that results from re-determination.

 

“Indebtedness” of a Person means such Person’s (i) obligations for borrowed money, (ii) obligations representing the deferred purchase price of property or services (other than accounts payable arising in the ordinary course of such Person’s business), (iii) obligations, whether or not assumed, secured by Liens or payable out of the proceeds or production from property now or hereafter owned or acquired by such Person, (iv) obligations which are evidenced by notes, bonds or other similar instruments, (v) obligations of such Person to purchase securities or other property arising out of or in connection with the sale of the same or substantially similar securities or property, but only if such obligation to purchase can be enforced prior to the stated maturity of any Note, (vi) Capitalized Lease Obligations and Synthetic Lease Obligations of such Person, (vii) obligations of such Person as an account party

 

Schedule B-14

 

with respect to standby and commercial Letters of Credit or banker’s acceptances, (viii) Contingent Obligations of such Person relating to Indebtedness of a type described in clauses (i) through (vii) or (ix) through (xi) of this definition, (ix) Net Mark-to-Market Exposure under Rate Management Transactions, (x) obligations under any transaction pursuant to which such Person has sold, conveyed or otherwise transferred any accounts or notes receivable and rights related thereto (other than any sale or transfer in connection with enforcement or collection thereof), and (xi) any other obligation for borrowed money which in accordance with GAAP would be shown as a liability on the consolidated balance sheet of such Person.  Notwithstanding the foregoing, for all purposes hereof, no effect shall be given hereunder to any change under GAAP that results in any operating lease being treated as indebtedness or a capital lease.  For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, to the extent such Indebtedness is recourse to such Person.

 

“INHAM Exemption” is defined in Section 6.2(e).

 

“Insolvency Proceeding” means any voluntary or involuntary insolvency, bankruptcy, receivership, custodianship, liquidation, dissolution, arrangement, reorganization, assignment for the benefit of creditors, appointment of a custodian, receiver, trustee or other officer with similar powers or any other proceeding for the liquidation, dissolution or other winding up of any Loan Party.

 

“Institutional Investor” means (a) any original purchaser of a Note and (b) any bank, trust company, savings and loan association or other financial institution, any pension plan, any investment company, any insurance company, any broker or dealer, or any other similar financial institution or entity, regardless of legal form.

 

“Intellectual Property” has the meaning set forth in the Security Agreement.

 

“Intercreditor Agreement” is defined in Section 4.12.

 

“Intrepid Aviation” means Intrepid Aviation LLC, a Colorado limited liability company.

 

“Intrepid Moab” is defined in Section 1.

 

“Intrepid New Mexico” is defined in Section 1.

 

“Intrepid Wendover” is defined in Section 1.

 

“Investment” means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (i) the purchase or other acquisition of Equity Interests of another Person (including through the purchase of an option, warrant or convertible or similar type of security), (ii) a loan, advance or capital contribution to, Guaranty or assumption of debt of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person and any arrangement pursuant to which the investor Guaranties Indebtedness of such

 

Schedule B-15

 

other Person, or (iii) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute a business unit.  For purposes of compliance with Section 10.11, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment, less all returns of principal or equity thereon (and without adjustment by reason of the financial condition of such other Person) and shall, if made by the transfer or exchange of property other than cash, be deemed to have been made in an original principal or capital amount equal to the Fair Market Value of such property at the time of such transfer or exchange.

 

“Letter of Credit” of a Person means a letter of credit or similar instrument which is issued upon the application of such Person or upon which such Person is an account party or for which such Person is in any way liable.

 

“Leverage Ratio” means, as of any date of calculation, the ratio of (i) Consolidated Funded Indebtedness outstanding on the last day of the Company’s then most recently ended fiscal quarter to (ii) Consolidated EBITDA for the Company’s then most recently ended consecutive four fiscal quarters.

 

“Lien” means any lien (statutory or other), mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, the interest of a vendor or lessor under any conditional sale, Capitalized Lease or other title retention agreement, and any easement, right of way or other encumbrance on title to real property).

 

“Loan Documents” means this Agreement, the Notes, the Collateral Documents, the Subsidiary Guaranty and each Subsidiary Guaranty Joinder, the Collateral Agency Agreement, the Intercreditor Agreement, and any other agreement from time to time entered into between or among any one or more of the Company, any Subsidiary, the holders of the Notes, and the Collateral Agent, each as from time to time amended or modified, and all statements, reports and certificates delivered by the Company to the holders in connection therewith.

 

“Loan Party” or “Loan Parties” means, individually or collectively, the Company, the Subsidiary Guarantors, the Grantors and any other Person who grants a Lien on any Collateral to the Collateral Agent, for the benefit of the Secured Parties, under the Collateral Documents.

 

“Make-Whole Amount” is defined in Section 8.7.

 

“Material” means material in relation to the business, operations, affairs, financial condition, assets or properties of the Company and its Subsidiaries taken as a whole.

 

“Material Adverse Effect” means a material adverse effect on (i) the business, operations, financial condition, assets or properties of the Company and its Subsidiaries taken as a whole, (ii) the ability of any Loan Party to perform its obligations under any Loan Document, (iii) the rights and remedies of any holder of a Note and/or the Collateral Agent under any Loan Document, (iv) the validity or enforceability of any Loan Document, or (v) the validity,

 

Schedule B-16

 

perfection, priority or enforceability of any Lien on the Collateral in favor of the Collateral Agent for the benefit of the Secured Parties.

 

“Material Credit Facility” means, as to the Company and its Subsidiaries:

 

(a)           the Revolving Credit Agreement, including any renewals, extensions, amendments, supplements, restatements, replacements or refinancing thereof; and

 

(b)           any other agreement(s) creating or evidencing indebtedness for borrowed money entered into on or after the date of this Agreement by the Company or any Subsidiary, or in respect of which the Company or any Subsidiary is an obligor or otherwise provides a guarantee or other credit support (“Credit Facility”), in a principal amount outstanding or available for borrowing equal to or greater than $25,000,000 (or the equivalent of such amount in the relevant currency of payment, determined as of the date of the closing of such facility based on the exchange rate of such other currency); and if no Credit Facility or Credit Facilities equal or exceed such amounts, then the largest Credit Facility shall be deemed to be a Material Credit Facility.

 

“Material Leased Properties” is defined in Section 9.9.

 

“Moab Gas Pipeline” is defined in Section 4.10.

 

“Moody’s” means Moody’s Investors Service, Inc.

 

“Mortgage” or “Mortgages” means, individually and collectively, as the context requires, the Mortgage (Eddy County, New Mexico), the Mortgage (Lea County, New Mexico), the Mortgage (Intrepid Moab/Grand County, Utah), the Mortgage (Moab Gas Pipeline/Grand County, Utah), the Mortgage (San Juan County, Utah), the Mortgage (Tooele County, Utah), the Mortgage (Missouri), and each of the other fee or leasehold mortgages, deeds of trust and deeds executed by a Loan Party that purport to grant a Lien to the Collateral Agent (or a trustee for the benefit of the Collateral Agent) for the benefit of the Secured Parties in any Mortgaged Properties, in form and substance satisfactory to the Required Holders.

 

“Mortgage (Eddy County, New Mexico)” is defined in Section 4.14(b).

 

“Mortgage (Intrepid Moab/Grand County, Utah)” is defined in Section 4.14(d).

 

“Mortgage (Lea County, New Mexico)” is defined in Section 4.14(c).

 

“Mortgage (Missouri)” is defined in Section 4.14(h).

 

“Mortgage (Moab Gas Pipeline/Grand County, Utah)” is defined in Section 4.14(g).

 

“Mortgage (San Juan County, Utah)” is defined in Section 4.14(e).

 

“Mortgage (Tooele County, Utah)” is defined in Section 4.14(f).

 

Schedule B-17

 

“Mortgaged Property” means any owned or leased real property of a Loan Party listed on Schedule 5.17(f)(i) and any other owned or leased real property or other interest in real property of a Loan Party that is or will become encumbered by a Mortgage in favor of the Collateral Agent in accordance with the terms of this Agreement.

 

“Mortgaged Property Support Documents” means with respect to any real property subject to a Mortgage, the deliveries and documents described on Schedule C.

 

“Multiemployer Plan” means any Plan that is a “multiemployer plan” (as such term is defined in section 4001(a)(3) of ERISA).

 

“NAIC” means the National Association of Insurance Commissioners or any successor thereto.

 

“NAIC Annual Statement” is defined in Section 6.2(a).

 

“Net Mark-to-Market Exposure” of a Person means, as of any date of determination, the excess (if any) of all unrealized losses over all unrealized profits of such Person arising from Rate Management Transactions.  “Unrealized losses” means the Fair Market Value of the cost to such Person of replacing such Rate Management Transaction as of the date of determination (assuming the Rate Management Transaction were to be terminated as of that date), and “unrealized profits” means the Fair Market Value of the gain to such Person of replacing such Rate Management Transaction as of the date of determination (assuming such Rate Management Transaction were to be terminated as of that date).

 

“Noteholder Priority Collateral” means (i) prior to the Payment In Full (as defined in the Intercreditor Agreement) of the Revolving Obligations, the Collateral other than the Revolving Credit Priority Collateral and (ii) from and after the Payment In Full (as defined in the Intercreditor Agreement) of the Revolving Obligations, the Collateral.

 

“Notes” is defined in Section 2.2.

 

“Notice of Grant of Security Interest in Patents” is defined in Section 4.14(l).

 

“Notice of Grant of Security Interest in Trademarks” is defined in Section 4.14(m).

 

“Obligations” means all indebtedness, obligations and other liabilities (contingent or otherwise) payable directly or indirectly by the Company to the Collateral Agent, the holders of the Notes, or any Affiliate of any holder of a Note under this Agreement or any other Loan Document.  “Obligations” shall include, without limitation, (i) all interest and fees accrued or accruing (or which would, absent commencement of an Insolvency Proceeding, accrue) in accordance with the rate specified in the relevant Loan Document and (ii) any Make-Whole Amount, Required Prepayment Premium or other breakage or prepayment premium, and all fees, costs and charges charged or incurred pursuant to the provisions of the Loan Documents, including, without limitation, reasonable and documented legal fees and expenses, in the case of each of clauses (i) and (ii) above, whether before or after commencement of an Insolvency

 

Schedule B-18

 

Proceeding and irrespective of whether any claim for such interest, fees, costs or charges is allowed as a claim in such Insolvency Proceeding.  To the extent any payment with respect to the Obligations (whether by or on behalf of any Loan Party or any other Person as proceeds of security, enforcement of any right of setoff or otherwise) is declared to be fraudulent or preferential in any respect, set aside or required to be paid to a debtor in possession, trustee, receiver or similar Person, then the obligation or part thereof originally intended to be satisfied shall be deemed to be reinstated and outstanding as if such payment had not occurred.

 

“OFAC” means the Office of Foreign Assets Control of the United States Department of the Treasury.

 

“OFAC Sanctions Program” means any economic or trade sanction that OFAC is responsible for administering and enforcing.  A list of OFAC Sanctions Programs may be found at http://www.treasury.gov/resource-center/sanctions/Programs/Pages/Programs.aspx.

 

“Offered Equity Issuance Proceeds” is defined in Section 8.10(a).

 

“Officer’s Certificate” means a certificate of a Senior Financial Officer or of any other officer of the Company whose responsibilities extend to the subject matter of such certificate.

 

“Ordinary Course of Business” means the ordinary course of business of the Company and its Subsidiaries, consistent with past practices and undertaken in good faith.

 

“Original Note Purchase Agreement” is defined in Section 1.

 

“Original Notes” is defined in Section 1.

 

“Original Series A Notes” is defined in Section 1.

 

“Original Series B Notes” is defined in Section 1.

 

“Original Series C Notes” is defined in Section 1.

 

“Paid In Full” and “Payment In Full” means payment in full in cash of all of the Obligations (other than contingent Obligations for which no claim has been made at such time).

 

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA or any successor thereto.

 

“Permitted Acquisition” means any Acquisition made by a Loan Party, provided that:

 

(a)           the total cash and noncash consideration (including the fair market value of all Equity Interests issued or transferred to the sellers thereof, all indemnities, earnouts and other contingent payment obligations to, and the aggregate amounts paid or to be paid under noncompete, consulting and other affiliated agreements with, the sellers thereof, all write-downs of property and reserves for liabilities with respect thereto and all

 

Schedule B-19

 

assumptions of debt, liabilities and other obligations in connection therewith) paid by or on behalf of the Company and its Subsidiaries for any such Acquisition, when aggregated with the total cash and noncash consideration paid by or on behalf of the Company and its Subsidiaries for all other Acquisitions made by the Company and its Subsidiaries during the twelve (12) month period ending on the date of consummation of such Acquisition, shall not exceed $5,000,000 (or its equivalent in other currencies);

 

(b)           as of the date of the consummation of such Acquisition, no Default or Event of Default shall have occurred and be continuing either immediately prior to or immediately after giving effect to such Acquisition;

 

(c)           as of the date of the consummation of such Acquisition, margin stock (as defined in Regulation U of the Board of Governors of the Federal Reserve System (12 CFR 221) and any successor thereto) constitutes less than 25% of the value of the consolidated assets of the Company and its Subsidiaries, both before and after giving effect to such Acquisition;

 

(d)           such Acquisition is consummated on a non-hostile basis pursuant to a negotiated acquisition agreement that has been (if required by the governing documents of the seller or entity to be acquired) approved by the board of directors or other applicable governing body of the seller or entity to be acquired, and no material challenge to such Acquisition (excluding the exercise of appraisal rights) shall be pending or threatened by any shareholder or director of the seller or entity to be acquired;

 

(e)           the business to be acquired in such Acquisition is in the same line of business as the Company’s or a line of business incidental, reasonably related or complementary thereto;

 

(f)            as of the date of the consummation of such Acquisition, all material approvals required in connection therewith shall have been obtained;

 

(g)           the Collateral Agent, on behalf of the Secured Parties, shall have received (or shall receive in connection with the closing of such Acquisition) a perfected security interest in all property (including, without limitation, Equity Interests) acquired in such Acquisition in accordance with the terms of Section 9.9 (and the terms of the Intercreditor Agreement if then in effect) and the Company shall have complied with the terms of Section 9.6 with respect to any Person to be acquired in such Acquisition;

 

(h)           the Company shall have furnished to the holders of the Notes a certificate certifying that all of the requirements set forth above will be satisfied on or prior to the consummation of such Acquisition and demonstrating in reasonable detail (A) a pro forma Leverage Ratio that is (x) in the case of any Acquisition consummated prior to June 30, 2018, less than 8.45 to 1.00 as of the last day of the fiscal quarter most recently ended prior to the date of such Acquisition for which financial statements have been delivered pursuant to Section 7.1(a) or 7.1(b), and (y) in the case of any Acquisition consummated on or after June 30, 2018, at least (and including) 0.25x less than the maximum Leverage Ratio then in effect for the last day of the fiscal quarter most recently 

 

Schedule B-20

 

ended prior to the date of such Acquisition for which financial statements have been delivered pursuant to Section 7.1(a) or 7.1(b), and (B) for any Acquisition that involves the payment of consideration by the Company and its Subsidiaries in excess of $25,000,000, pro forma compliance with the financial covenants contained in clauses (a), (c) and (d) of Section 10.1 for the period most recently ended prior to the date of such Acquisition for which financial statements have been delivered pursuant to Section 7.1(a) or 7.1(b), calculated, in each case, as if such Acquisition, including the consideration therefor, had been consummated on the first day of such period; and

 

(i)            the Company shall have furnished to the holders of the Notes with ten (10) days’ (or such shorter time as the Required Holders may agree) prior written notice of such intended Acquisition and shall have furnished the holders of the Notes with a current draft of the applicable acquisition documents (and final copies thereof as and when executed), and to the extent available, appropriate financial statements of the Person which is the subject of such Acquisition, pro forma projected financial statements for the twelve (12) month period following such Acquisition after giving effect to such Acquisition (including, to the extent available, balance sheets, cash flows and income statements by month for the acquired Person, individually, and on a consolidated basis with the Company and its Subsidiaries), and, to the extent available, such other information as the Required Holders may reasonably request.

 

“Permitted Holder” means each of (i) Robert P. Jornayvaz III and Hugh E. Harvey, Jr., (ii) Intrepid Production Corporation and Harvey Operating and Production Company to the extent such entities are controlled by Robert P. Jornayvaz III and/or Hugh E. Harvey, Jr. and (iii) to the extent controlled solely by Robert P. Jornayvaz III or Hugh E. Harvey, Jr., any partnership, trust or other entity created for the benefit of any one or more of Robert P. Jornayvaz III or Hugh E. Harvey, Jr., the spouse of Robert P. Jornayvaz III or Hugh E. Harvey, Jr., or any lineal descendants of Robert P. Jornayvaz III or Hugh E. Harvey, Jr.

 

“Person” means an individual, partnership, corporation, limited liability company, association, trust, unincorporated organization, or a government or agency or political subdivision thereof.

 

“Plan” means an “employee benefit plan” (as defined in section 3(3) of ERISA) that is or, within the preceding five years, has been established or maintained, or to which contributions are or, within the preceding five years, have been made or required to be made, by the Company or any ERISA Affiliate or with respect to which the Company or any ERISA Affiliate may have any liability.

 

“Pledged Equity” has the meaning set forth in the Security Agreement.

 

“Pro Rata Amount” means, in respect of any Note and any Disposition, any Extraordinary Insurance Receipt or any Equity Issuance Proceeds, an amount equal to the product of:

 

(a)           the amount of the proceeds of such Disposition (or an equal amount), Extraordinary Insurance Receipt (or an equal amount) or Equity Issuance Proceeds (or an

 

Schedule B-21

 

equal amount), as applicable, offered to be applied to the prepayment of the Notes pursuant to the relevant clause of Section 8.8, Section 8.9 or Section 8.10, as applicable, multiplied by

 

(b)           a fraction, the numerator of which is the outstanding principal amount of such Note, and the denominator of which is the aggregate outstanding principal amount of all Notes offered to be prepaid pursuant to such relevant clause of Section 8.8, Section 8.9 or Section 8.10, as applicable.

 

“property” of a Person means any and all property, whether real, personal, tangible, intangible, or mixed, of such Person, or other assets owned, leased or operated by such Person.

 

“QPAM Exemption” is defined in Section 6.2(d).

 

“Qualifying Control Agreement” means an agreement, among a Loan Party, a depository institution or securities intermediary and the Collateral Agent, which agreement is in form and substance reasonably acceptable to the Required Holders and which provides the Collateral Agent with “control” (as such term is used in Article 9 of the UCC) over the Deposit Account(s) or Securities Account(s) described therein.

 

“Rate Management Transaction” means any transaction (including an agreement with respect thereto) now existing or hereafter entered by the Company or any Subsidiary which is a rate swap, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap, equity or equity index option, bond option, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction, forward transaction, currency swap transaction, cross-currency rate swap transaction, currency option or any other similar transaction (including any option with respect to any of these transactions) or any combination thereof, whether linked to one or more interest rates, foreign currencies, commodity prices, equity prices or other financial measures.

 

Schedule B-22

 

“Ratings Compliant” means, with respect to any type of property rated by nationally recognized ratings agencies, that such property is rated at or above either (i) one of the ratings set forth below or (ii) an equivalent rating by a nationally recognized rating agency not listed below.

 

	
Agency
    	
 
    	
Long-Term
   Rating
    	
 
    	
Short-Term
   Rating
    
	
Moody’s
    	
 
    	
A3
    	
 
    	
P1
    
	
S&P
    	
 
    	
A-
    	
 
    	
A1
    
	
Fitch
    	
 
    	
A-
    	
 
    	
F1
    
	
Egan-Jones
    	
 
    	
A-
    	
 
    	
A1
    

 

“Refinancing Conditions” means the following conditions for Refinancing Indebtedness:  (i) it is in an aggregate principal amount that does not exceed the principal amount of the Indebtedness being extended, renewed or refinanced plus accrued interest and reasonable fees and expenses incurred in connection with such refinancing, refunding, renewal or extension; (ii) the interest rate applicable to any such refinancing, refunding, renewing or extending Indebtedness does not exceed the greater of the (A) interest rate for the Indebtedness being refinanced, refunded, renewed, or extended and (B) the otherwise market rate of interest for such Indebtedness; (iii) it has a final maturity no sooner than and, if applicable, a weighted average life no less than the Indebtedness being extended, renewed or refinanced; (iv) it is subordinated to the Obligations at least to the same extent as the Indebtedness being extended, renewed or refinanced; (v) such Refinancing Indebtedness continues to be subject to substantially the same subordination agreements or subordination terms applicable to the Indebtedness being extended, renewed or refinanced; (vi) no additional Liens, if any, are granted with respect to such Refinancing Indebtedness; (vii) no additional Person is obligated, primarily or contingently, on such Refinancing Indebtedness; and (viii) such Refinancing Indebtedness shall be on terms no less favorable to the holders of the Notes, and no more restrictive to the Loan Parties, than the Indebtedness being extended, renewed or refinanced, in each case, except for terms applicable only to periods after the latest final maturity date of any of the Notes stated therein at the time of incurrence of such Indebtedness.

 

“Refinancing Indebtedness” means the Indebtedness that is the result of an extension, renewal or refinancing of Indebtedness permitted under Section 10.3(b), (f), (g), (h), (m), (n) and (o) as to which the Refinancing Conditions are satisfied; provided that the incurrence of any such Refinancing Indebtedness will be deemed to utilize permitted amounts of Indebtedness, if any, under each clause thereof.

 

“Required Holders” means, at any time, the holders of at least 51% in principal amount of the Notes at the time outstanding (exclusive of Notes then owned by the Company or any of its Affiliates).

 

Schedule B-23

 

“Required Prepayment Premium” means the Sixth Waiver Prepayment Premium.

 

“Responsible Officer” means any of the Executive Chairman of the Board, President, Chief Financial Officer, Treasurer, Vice President of Finance, Controller and Chief Accounting Officer or any Executive Vice President of the Company, acting singly.

 

“Restricted Payment” means (i) any dividend or other distribution, direct or indirect, on account of any shares (or equivalent) of any class of Equity Interests of the Company or any of its Subsidiaries, now or hereafter outstanding, (ii) any redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any shares (or equivalent) of any class of Equity Interests of the Company or any of its Subsidiaries, now or hereafter outstanding, and (iii) any payment made to retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire shares of any class of Equity Interests of the Company or any of its Subsidiaries, now or hereafter outstanding.

 

“Restructuring Closing” is defined in Section 3.

 

“Restructuring Closing Date” is defined in Section 3.

 

“Revolving Agent” is defined in Section 4.11.

 

“Revolving Credit Agreement” is defined in Section 4.11.

 

“Revolving Credit Priority Collateral” means the “Revolving Credit Priority Collateral” as defined in the Intercreditor Agreement.

 

“Revolving Lenders” is defined in Section 4.11.

 

“Revolving Loan Documents” means the Revolving Credit Agreement and each other Loan Document (as defined in the Revolving Credit Agreement), as each may be amended, restated, supplemented or otherwise modified from time to time in accordance with the terms of the Intercreditor Agreement, including any agreements and documents governing indebtedness incurred to refinance, replace, extend, renew, refund, repay, prepay, redeem, purchase, defease or retire, or issued in exchange or replacement for, all or any of the Revolving Obligations.

 

“Revolving Obligations” means all “Revolving Obligations” as defined in the Intercreditor Agreement.

 

“S&P” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business.

 

“Second Amendment and Sixth Waiver” is defined in Section 1.

 

“Section 8.9 First Offer” is defined in Section 8.9(a).

 

“Section 8.9 First Offer Acceptance Date” is defined in Section 8.9(a).

 

Schedule B-24

 

“Section 8.9 First Offer Notice” is defined in Section 8.9(a).

 

“Section 8.9 Prepayment Date” is defined in Section 8.9(a).

 

“Section 8.9 Second Offer” is defined in Section 8.9(c).

 

“Section 8.9 Second Offer Acceptance Date” is defined in Section 8.9(c).

 

“Section 8.9 Second Offer Amount” is defined in Section 8.9(c).

 

“Section 8.9 Second Offer Notice” is defined in Section 8.9(c).

 

“Secured Parties” means each holder of a Note and the Collateral Agent.

 

“Securities” or “Security” shall have the meaning specified in section 2(a)(1) of the Securities Act.

 

“Securities Act” means the Securities Act of 1933, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect.

 

“Security Agreement” is defined in Section 4.14(a).

 

“Security Agreement Joinder” means a joinder agreement substantially in the form attached to the Security Agreement.

 

“Senior Financial Officer” means the chief financial officer, chief accounting officer, treasurer or controller of the Company.

 

“Series A Notes” is defined in Section 2.2.

 

“Series B Notes” is defined in Section 2.2.

 

“Series C Notes” is defined in Section 2.2.

 

“Sixth Waiver Prepayment Amount” means, with respect to any Note, the “Sixth Waiver Prepayment Amount” set forth for such Note in Schedule I to the Second Amendment and Sixth Waiver, such that the sum of the Sixth Waiver Prepayment Amounts for all Notes was $15,000,000.

 

“Sixth Waiver Prepayment Premium” means, with respect to any Note, the “Sixth Waiver Prepayment Premium” set forth for such Note in Schedule I to the Second Amendment and Sixth Waiver, such that the aggregate amount of the Sixth Waiver Prepayment Premium for all Notes is $806,000.

 

“Solvent” means, as to any Person, such Person (i) owns property or assets whose fair salable value is greater than the amount required to pay all of its debts (including contingent, subordinated, unmatured and unliquidated liabilities); (ii) owns property or assets whose present fair salable value (as defined below) is greater than the probable total liabilities (including contingent, subordinated, unmatured and unliquidated liabilities) of such Person as they become

 

Schedule B-25

 

absolute and matured; (iii) is able to pay all of its debts as they mature; (iv) has capital that is not unreasonably small for its business and is sufficient to carry on its business and transactions and all business and transactions in which it is about to engage; (v) is not “insolvent” within the meaning of Section 101(32) of Title 11 of the United States Code; and (vi) has not incurred (by way of assumption or otherwise) any obligations or liabilities (contingent or otherwise) under any Loan Documents, or made any conveyance in connection therewith, with actual intent to hinder, delay or defraud either present or future creditors of such Person or any of its Affiliates.  “Fair salable value” means the amount that could be obtained for assets within a reasonable time, either through collection or through sale under ordinary selling conditions by a capable and diligent seller to an interested buyer who is willing (but under no compulsion) to purchase.  For purposes hereof, the amount of all contingent liabilities at any time shall be computed as the amount that, in light of all the facts and circumstances existing at the time, can reasonably be expected to become an actual or matured liability.

 

“Source” is defined in Section 6.2.

 

“Specified Equity Contribution” is defined in Section 12.6.

 

“Specified Events of Default” is defined in Section 1.

 

“Specified Property” means:

 

(a)           Excess Water Rights held by Intrepid New Mexico located in New Mexico and represented by the Office of the New Mexico State Engineer File Numbers L-1880 thru L-1884, and associated real property surface rights owned by Intrepid New Mexico with the following legal description:

 

T. 17 S., R. 33 E., N.M.P.M.

Sec. 1: SW4

Sec. 12: W/2

Sec. 13: W/2, SE/4

Sec. 24: N/2

Lea County, New Mexico;

 

(b)           Excess Water Rights held by Intrepid Moab in respect of the Colorado River located in Utah and represented by (i) the State of Utah Division of Water Right Users’ Claim No. 01-34, Certificate No. 11406, (ii) the State of Utah Division of Water Right Users’ Claim No. 01-37, Certificate No. 9161, (iii) the State of Utah Division of Water Right Users’ Claim No. 01-43, Certificate No. 9162, (iv) the State of Utah Division of Water Right Users’ Claim No. 01-44, Certificate No. 9160, and (v) the State of Utah Division of Water Right Users’ Claim No. 01-47, Certificate No. 11405;

 

(c)           Excess Water Rights held by Intrepid New Mexico in respect of the Pecos River located in New Mexico and represented by the Office of New Mexico State Engineer File Numbers 302, 1856, 1955, 1942, 2045, C-791 and C-1217 through C-1217-S, and associated real property surface rights owned by Intrepid New Mexico with the following legal description:

 

Schedule B-26

 

T. 23 S., R. 28 E., N.M.P.M.

Sec. 11: NWSE

Sec. 12: S/2SE

Sec. 13: W/2NE

Eddy County, New Mexico;

 

(d)           that certain parcel of land owned by Intrepid Moab located in Moab, Utah, with the following legal description:

 

T. 25 S., R. 20 E., S.L.B & M.

Sec. 2;  S/2SW, NWSW, SWSE;

Sec. 3:  Lots 1, 8, 9, 10, 14, 15, 16, S/2;

Sec. 10:  NE, N/2NW;

Sec. 11:  NW;

Grand County, Utah;

 

(e)           that certain warehouse located at 203 E. Florence, St. Joseph, Missouri, owned by 203 E. Florence; and

 

(f)            any property (other than cash) received by the Company or a Subsidiary as consideration for the Disposition of any property described in clauses (a) through (e) above.

 

As used herein, “Excess Water Rights” means Water Rights held by the Company or a Subsidiary which are not necessary or desirable for the conduct of the businesses of the Company and its Subsidiaries as presently conducted or planned to be conducted.

 

“Specified Property First Offer” is defined in Section 8.8(a).

 

“Specified Property First Offer Acceptance Date” is defined in Section 8.8(a).

 

“Specified Property First Offer Notice” is defined in Section 8.8(a).

 

“Specified Property Prepayment Date” is defined in Section 8.8(a).

 

“Specified Property Second Offer” is defined in Section 8.8(c).

 

“Specified Property Second Offer Acceptance Date” is defined in Section 8.8(c).

 

“Specified Property Second Offer Amount” is defined in Section 8.8(c).

 

“Specified Property Second Offer Notice” is defined in Section 8.8(c).

 

“State Sanctions List” means a list that is adopted by any state Governmental Authority within the United States of America pertaining to Persons that engage in investment or other commercial activities in Iran or any other country that is a target of economic sanctions imposed under U.S. Economic Sanctions Laws.

 

Schedule B-27

 

“Subsidiary” means, as to any Person, any other Person in which such first Person or one or more of its Subsidiaries or such first Person and one or more of its Subsidiaries owns sufficient equity or voting interests to enable it or them (as a group) ordinarily, in the absence of contingencies, to elect a majority of the directors (or Persons performing similar functions) of such second Person, and any partnership or joint venture if more than a 50% interest in the profits or capital thereof is owned by such first Person or one or more of its Subsidiaries or such first Person and one or more of its Subsidiaries (unless such partnership or joint venture can and does ordinarily take major business actions without the prior approval of such Person or one or more of its Subsidiaries).  Unless the context otherwise clearly requires, any reference to a “Subsidiary” is a reference to a Subsidiary of the Company.

 

“Subsidiary Guarantor” means (i) Intrepid Moab, (ii) Intrepid New Mexico, (iii) Intrepid Wendover, (iv) 203 E. Florence, (v) Moab Gas Pipeline, and (vi) each other Subsidiary of the Company that has executed and delivered the Subsidiary Guaranty or a Subsidiary Guaranty Joinder and with respect to which the Company shall have complied with the provisions of Section 9.6, in each case so long as the Subsidiary Guaranty, such Subsidiary’s Subsidiary Guaranty Joinder (if any), and such Subsidiary’s guaranty made thereunder are in full force and effect.

 

“Subsidiary Guaranty” is defined in Section 4.10.

 

“Subsidiary Guaranty Joinder” means a joinder agreement substantially in the form attached to the Subsidiary Guaranty.

 

“Supplemental Amendment Fee” means, with respect to any Note, the “Supplemental Amendment Fee” set forth for such Note in Schedule A, such that the aggregate amount of the Supplemental Amendment Fee for all Notes is $544,000.

 

“SVO” means the Securities Valuation Office of the NAIC or any successor to such Office.

 

“Swap Contract” means (i) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (ii) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement, together with any related schedules.

 

“Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement

 

Schedule B-28

 

relating to such Swap Contracts, (i) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (ii) for any date prior to the date referenced in clause (i), the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include a holder or any Affiliate of a holder).

 

“Synthetic Lease Obligation” means the monetary obligation of a Person under (i) a so-called synthetic, off-balance sheet or tax retention lease, or (ii) an agreement for the use or possession of property creating obligations that do not appear on the balance sheet of such Person but which, upon the insolvency or bankruptcy of such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment).

 

“Tier I” means “Tier I” as such term is used in the definition of “Incremental Interest Rate”.

 

“Tier II” means “Tier II” as such term is used in the definition of “Incremental Interest Rate”.

 

“Tier III” means “Tier III” as such term is used in the definition of “Incremental Interest Rate”.

 

“Tier IV” means “Tier IV” as such term is used in the definition of “Incremental Interest Rate”.

 

“Tier V” means “Tier V” as such term is used in the definition of “Incremental Interest Rate”.

 

“UCC” means the Uniform Commercial Code as in effect in the State of New York; provided that, if perfection or the effect of perfection or non-perfection or the priority of any security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, “UCC” means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority.

 

“Unencumbered Cash on Hand” means cash on hand of the Company and Subsidiary Guarantors (other than cash held in Excluded Escrow/Cash Collateral Accounts) that is unencumbered by any Lien (other than the Liens securing the Obligations, the Liens securing the Revolving Obligations, in each case to the extent permitted under the Intercreditor Agreement).

 

“U.S. Economic Sanctions Laws” means those laws, executive orders, enabling legislation or regulations administered and enforced by the United States pursuant to which economic sanctions have been imposed on any Person, entity, organization, country or regime, including the Trading with the Enemy Act, the International Emergency Economic Powers Act, the Iran Sanctions Act, the Sudan Accountability and Divestment Act and any other OFAC Sanctions Program.

 

Schedule B-29

 

“USA PATRIOT Act” means United States Public Law 107-56, Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001 and the rules and regulations promulgated thereunder from time to time in effect.

 

“Vehicles” has the meaning set forth in the Security Agreement.

 

“Water Rights” means all water and water rights, ditches and ditch rights, reservoirs and storage rights, wells and groundwater rights (whether tributary or nontributary), water shares, water contracts, water allotments, and other rights in and to the use of water of any kind or nature, whether like or unlike the foregoing, decreed or undecreed.

 

“Wholly-Owned Subsidiary” means, at any time, any Subsidiary 100% of all of the equity interests (except directors’ qualifying shares) and voting interests of which are owned by any one or more of the Company and the Company’s other Wholly-Owned Subsidiaries at such time.

 

Schedule B-30

 

SCHEDULE C

 

MORTGAGED PROPERTY SUPPORT DOCUMENTS

 

“Mortgaged Property Support Documents” means the following, all in form and substance reasonably satisfactory to the Existing Noteholders (prior to the Restructuring Closing) or the Required Holders (from and after the Restructuring Closing):

 

(a)                                 Mortgages.  Fully executed and notarized Mortgages for each real property required to become a Mortgaged Property pursuant to the terms of the Loan Documents.

 

(b)                                 Mortgage Policies.  To the extent requested by the Existing Noteholders (prior to the Restructuring Closing) or the Required Holders (from and after the Restructuring Closing), fully paid American Land Title Association Lender’s Extended Coverage title insurance policies (the “Mortgage Policies”), with endorsements and in amounts acceptable to the Existing Noteholders (prior to the Restructuring Closing) or the Required Holders (from and after the Restructuring Closing), issued by title insurers acceptable to the Existing Noteholders (prior to the Restructuring Closing) or the Required Holders (from and after the Restructuring Closing), insuring the Mortgages to be valid first and subsisting Liens on the property described therein, free and clear of all defects (including, but not limited to, mechanics’ and materialmen’s Liens) and encumbrances, excepting only Liens permitted in accordance with Section 10.4, and providing for such other affirmative insurance (including endorsements for any future advances under the Loan Documents and for zoning of the applicable property) as the Existing Noteholders (prior to the Restructuring Closing) or the Required Holders (from and after the Restructuring Closing) may deem necessary or desirable.  Further, each Loan Party agrees to provide or obtain any customary affidavits and indemnities as may be required or necessary to obtain title insurance satisfactory to the Existing Noteholders (prior to the Restructuring Closing) or the Required Holders (from and after the Restructuring Closing).

 

(c)                                  Title Opinions.  To the extent requested by the Existing Noteholders (prior to the Restructuring Closing) or the Required Holders (from and after the Restructuring Closing), favorable title opinions of counsel to the Loan Parties acceptable to the Existing Noteholders (prior to the Restructuring Closing) or the Required Holders (from and after the Restructuring Closing) confirming good and marketable title of each real property or interest in real property in the name of the Loan Party executing and delivering a Mortgage covering such real property or interest in real property and confirming such Mortgage to be a valid first and subsisting Lien on such real property or interest in real property, free and clear of all defects and encumbrances, excepting only Liens permitted in accordance with Section 10.4, and otherwise in form and substance satisfactory to the Existing Noteholders (prior to the Restructuring Closing) or the Required Holders (from and after the Restructuring Closing).

 

Schedule C-1

 

(d)                                 Title Status Reports.  To the extent requested by the Existing Noteholders (prior to the Restructuring Closing) or the Required Holders (from and after the Restructuring Closing), favorable status reports prepared by land consultants acceptable to the Existing Noteholders (prior to the Restructuring Closing) or the Required Holders (from and after the Restructuring Closing) confirming good and marketable title of each real property or interest in real property in the name of the Loan Party executing and delivering a Mortgage covering such real property or interest in real property and confirming such Mortgage to be a valid first and subsisting Lien on such real property or interest in real property, free and clear of all defects and encumbrances, excepting only Liens permitted in accordance with Section 10.4, and otherwise in form and substance satisfactory to the Existing Noteholders (prior to the Restructuring Closing) or the Required Holders (from and after the Restructuring Closing).

 

(d)                                 Survey.  To the extent requested by the Existing Noteholders (prior to the Restructuring Closing) or the Required Holders (from and after the Restructuring Closing), American Land Title Association/American Congress on Surveying and Mapping form as-built surveys, for which all necessary fees (where applicable) have been paid, and dated no more than thirty (30) days before the Restructuring Closing Date or after such real property becomes a Mortgaged Property, certified to the Collateral Agent and the issuer of the Mortgage Policies (the “Title Insurance Company”) in a manner satisfactory to each of the Existing Noteholders (prior to the Restructuring Closing) or the Required Holders (from and after the Restructuring Closing) and the Title Insurance Company by a land surveyor duly registered and licensed in the States in which the property described in such surveys is located and acceptable to each of the Existing Noteholders (prior to the Restructuring Closing) or the Required Holders (from and after the Restructuring Closing) and the Title Insurance Company, showing all buildings and other improvements, any off-site improvements, the location of any easements, parking spaces, rights of way, building set-back lines and other dimensional regulations and the absence of encroachments, either by such improvements or on such property, and other defects, other than encroachments and other defects acceptable to the Existing Noteholders (prior to the Restructuring Closing) or the Required Holders (from and after the Restructuring Closing).

 

The certification for the property description and the map or plat shall be addressed to the Collateral Agent, the Company and the Title Insurance Company, signed by the surveyor (a registered professional land surveyor or registered professional engineer), bearing current date, registration number, and seal, and shall be in the following form or its substantial equivalent:

 

To [      ], as Collateral Agent for the Secured Parties, Intrepid Potash, Inc., and [      ], as Title Company:

 

This is to certify that this map or plat and the survey on which it is based were made in accordance with the 2011 Minimum Standard Detail Requirements for ALTA/ACSM Land Title Surveys, jointly established and adopted by ALTA and NSPS, and includes Items 1, 2, 3, 4 (in square feet or acres), 6(b), 8, 11(b), 14, 16, 17, 18, 19, 20(a), and if buildings are 

 

Schedule C-2

 

located on the land, optional items 7(a), 7(b)(1), 7(c), and 9 of Table A thereof.  The field work was completed on                      .

 

Date of Plat or Map:                                                               

 

(Surveyor’s signature, printed name and seal with Registration/License Number)

 

(e)                                  Flood Hazard Information.

 

(i)                                     Flood hazard certificates and evidence of flood insurance, both as required by The National Flood Insurance Reform Act of 1994, as amended, and as required by the Existing Noteholders (prior to the Restructuring Closing) or the Required Holders (from and after the Restructuring Closing).

 

(ii)                                  With respect to any real property that becomes a Mortgaged Property after the Restructuring Closing Date, an Officer’s Certificate certifying as to: (A) the name of the Loan Party owning (or leasing) such real property, (B) the number of buildings located on such real property, (C) the address of the real property, including the city, county, state and zip code in which such real property is located, (D) whether such location is leased or owned, and if leased, the name of the owner, and (E) whether such real property is in an area designated by the Federal Emergency Management Agency as having special flood or mudslide hazards.

 

(f)                                   Insurance.  Evidence of the insurance required by the terms of the Mortgages and the other Loan Documents.

 

(g)                                  Legal Opinions.  To the extent requested by the Existing Noteholders (prior to the Restructuring Closing) or the Required Holders (from and after the Restructuring Closing), favorable opinions of counsel to the Loan Parties acceptable to the Existing Noteholders (prior to the Restructuring Closing) or the Required Holders (from and after the Restructuring Closing) for each jurisdiction in which such Mortgaged Property is located relating to, among other things, the subsistence of the Loan Parties, the due authorization, execution, delivery and enforceability of the Loan Documents and the creation and perfection of the liens under the Collateral Documents.

 

(h)                                 Property Reports.  To the extent requested by the Existing Noteholders (prior to the Restructuring Closing) or the Required Holders (from and after the Restructuring Closing), satisfactory third-party engineering, soils, environmental reports/reviews and other reports of all owned and leased Mortgaged Properties from professional firms acceptable to the Existing Noteholders (prior to the Restructuring Closing) or the Required Holders (from and after the Restructuring Closing), including, but not limited to Phase I environmental assessments, together with reliance letters in favor of the holders of the Notes.

 

(i)                                     Leased Real Property Documents.  To the extent requested by the Existing Noteholders (prior to the Restructuring Closing) or the Required Holders (from and after 

 

Schedule C-3

 

the Restructuring Closing), with respect to each Mortgaged Property that is leased by a Loan Party (as lessee) and each other Material Leased Property, all lease agreements between the applicable Loan Party and each of the lessors of such real property, and estoppel and consent agreements executed by each of the lessors of such leased real properties, along with (i) a memorandum of lease in recordable form with respect to such leasehold interest, executed and acknowledged by the owner of the affected real property, as lessor, or (ii) evidence that the applicable lease with respect to such leasehold interest (and any assignment or sublease thereof, if applicable) or a memorandum (or memoranda) thereof has been recorded in all places necessary or desirable, in the reasonable judgment of the Existing Noteholders (prior to the Restructuring Closing) or the Required Holders (from and after the Restructuring Closing), to give constructive notice to third-party purchasers of such leasehold interest.

 

(j)                                    Leases, Estoppels and SNDA.  To the extent requested by the Existing Noteholders (prior to the Restructuring Closing) or the Required Holders (from and after the Restructuring Closing), as to Mortgaged Properties that are owned by a Loan Party, copies of any lease agreements to which such Mortgaged Property is subject, along with (i) estoppel certificates from the lessees for such real properties and (ii) subordination, non-disturbance and attornment agreements in form and substance reasonably satisfactory to the Existing Noteholders (prior to the Restructuring Closing) or the Required Holders (from and after the Restructuring Closing) from the tenants of such real properties.

 

(k)                                 Water Rights.  To the extent requested by the Existing Noteholders (prior to the Restructuring Closing) or the Required Holders (from and after the Restructuring Closing), the holders of the Notes and the Collateral Agent shall have received such water share certificates and other certificates, documents and information concerning Water Rights of the Company and its Subsidiaries as are reasonably requested by the Existing Noteholders (prior to the Restructuring Closing) or the Required Holders (from and after the Restructuring Closing).

 

(l)                                     Other Real Property Information.  The holders of the Notes and the Collateral Agent shall have received such other certificates, documents and information as are reasonably requested by the Existing Noteholders (prior to the Restructuring Closing) or the Required Holders (from and after the Restructuring Closing), including, without limitation, landlord agreements/waivers, engineering and structural reports, permanent certificates of occupancy and evidence of zoning compliance.

 

(m)                             Collateral / Further Assurances / Additional Evidence.  At any time, and from time to time, upon reasonable request by any holder of a Note, each Loan Party will, at the Company’s or such Loan Party’s expense, (i) correct any defect, error or omission which may be discovered in the form or content of any of the Loan Documents, and (ii) make, execute, deliver and record, or cause to be made, executed, delivered and recorded, any and all further instruments, certificates and other documents as may, in the reasonable opinion of any holder of a Note, be necessary or desirable in order to complete, perfect or continue and preserve the Liens and security interests of the Mortgages.  Upon any failure by such Loan Party to do so, the holders of the Notes and 

 

Schedule C-4

 

the Collateral Agent may make, execute and record any and all such instruments, certificates and other documents for and in the name of such Loan Party, all at the sole expense of the Company or such Loan Party, and such Loan Party hereby appoints the Collateral Agent the agent and attorney-in-fact of such Loan Party to do so, this appointment being coupled with an interest and being irrevocable.  Without limitation of the foregoing, each Loan Party irrevocably authorizes the holders of the Notes and the Collateral Agent at any time and from time to time to file any financing statements, amendments thereto and continuation statements deemed necessary or desirable by the Required Holders or the Collateral Agent to establish or maintain the validity, perfection and priority of the Liens and security interests granted in the Mortgages, and each Loan Party ratifies any such filings made by any holder of a Note or the Collateral Agent prior to the date hereof.  From and after the time any Mortgage is recorded and encumbers a Mortgaged Property pursuant to the terms hereof, such Loan Party shall promptly deliver to the holders of the Notes a copy of each such instrument and evidence of its proper filing or recording, as necessary.  From and after the time any Mortgage is recorded and encumbers a Mortgaged Property pursuant to the terms hereof, such Loan Party will cause all of the applicable Collateral to be subject at all times to first priority, perfected Liens in favor of the Collateral Agent for the benefit of the Secured Parties to secure the Obligations pursuant to the terms and conditions of the Loan Documents.  Further, the Company shall provide such other assurances, certificates, documents, consents or opinions as the Collateral Agent or any holder of a Note may reasonably require.

 

Schedule C-5

 

SCHEDULE 1

 

SPECIFIED EVENTS OF DEFAULT

 

1.                                      The Events of Default (as defined in the Existing Note Purchase Agreement) arising under Section 11(c) of the Existing Note Purchase Agreement caused by the Company’s failure to comply with Section 10.1 of the Existing Note Purchase Agreement for the fiscal quarters ended March 31, 2016, June 30, 2016 and September 30, 2016.

 

2.                                      The Events of Default (as defined in the Existing Note Purchase Agreement) arising under Section 11(c) of the Existing Note Purchase Agreement caused by the Company’s failure to comply with Section 10.2 of the Existing Note Purchase Agreement for the fiscal quarters ended March 31, 2016, June 30, 2016 and September 30, 2016.

 

Schedule 1-1

 

EXHIBIT 2.2(a)

 

[FORM OF SERIES A SENIOR SECURED NOTE]

 

THIS NOTE IS ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”) AS DEFINED BY SECTION 1273(A)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.  THE ISSUER AND HOLDER OF THE NOTE HAVE AGREED TO TREAT THE NOTE AS A CONTINGENT PAYMENT DEBT INSTRUMENT SUBJECT TO TREASURY REGULATIONS SECTION 1.1275-4(c).  A HOLDER OF THIS NOTE MAY CONTACT THE CHIEF FINANCIAL OFFICER OF THE COMPANY AT INTREPID POTASH, INC., 707 17TH STREET, SUITE 4200, DENVER, CO 80202 FOR INFORMATION CONCERNING THE NONCONTINGENT PAYMENT AMOUNTS, CONTINGENT PAYMENT AMOUNTS, AND THE ISSUE PRICE, AMOUNT OF OID AND YIELD TO MATURITY OF THE NONCONTINGENT PAYMENT AMOUNTS UNDER THIS NOTE, AND THE PRINCIPAL AND INTEREST COMPONENTS OF ANY CONTINGENT PAYMENTS AMOUNT UNDER THIS NOTE.

 

INTREPID POTASH, INC.

 

SENIOR SECURED NOTE, SERIES A
 DUE APRIL 16, 2020

 

	
No. AR-[     ]
    	
[Date]
    
	
$[       ]
    	
PPN: 46121Y B*2
    

 

FOR VALUE RECEIVED, the undersigned, INTREPID POTASH, INC., a Delaware corporation (the “Company”), promises to pay to [         ], or registered assigns, the principal sum of $[              ] (or so much thereof as shall not have been prepaid) on April 16, 2020 (the “Maturity Date”), with interest (computed on the basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance thereof at the rate equal to the sum of 3.23% per annum plus the Incremental Interest Rate from the date hereof, payable semiannually, on April 16 and October 16, in each year (each, an “Interest Payment Date”), commencing with the first of such dates to follow the date hereof, and on the Maturity Date, until the principal hereof shall have become due and payable, and (b) to the extent permitted by law and subject to Section 12.5 of the Note Purchase Agreement (as defined below), on any overdue payment of interest and, during the continuance of an Event of Default, on such unpaid balance and on any overdue payment of any Make-Whole Amount or Required Prepayment Premium, at a rate per annum from time to time equal to the Default Rate (or, at the option of the registered holder hereof, on demand).

 

Notwithstanding the foregoing, in lieu of making the interest payment on this Note in cash on any Interest Payment Date, the Company may, at its option, with prior written notice to the holder of this Note at least two (2) Business Days prior to such Interest Payment Date, elect to add to the outstanding principal amount of this Note on such Interest Payment Date the portion of the interest that would have accrued on this Note at the rate of interest in excess of the sum of (i) 3.23% per annum plus (ii) the Cash Pay Interest Rate (each such addition with respect to this Note, a “PIK Interest Amount”).

 

Exhibit 2.2(a)-1

 

Interest shall begin to accrue on each PIK Interest Amount beginning on and including the Interest Payment Date on which such PIK Interest Amount is added to the principal amount of this Note, and such interest shall accrue and be paid, together with the interest on the remaining principal amount of this Note, in accordance with this Note.  Notwithstanding anything herein to the contrary, all interest due and payable on the date that the entire then outstanding principal amount of this Note becomes due and payable, whether on the Maturity Date, by acceleration or otherwise, shall be due and payable in full in cash on such date.  All PIK Interest Amounts will for all purposes of this Note and the Note Purchase Agreement (as defined below) constitute outstanding principal on this Note.

 

Payments of principal of, interest on and any Make-Whole Amount and Required Prepayment Premium with respect to this Note are to be made in lawful money of the United States of America at the principal office of U.S. Bank National Association in New York City or at such other place as the Company shall have designated by written notice to the holder of this Note as provided in the Note Purchase Agreement referred to below.

 

This Note is one of a series of Senior Secured Notes (herein called the “Notes”) issued pursuant to a Note Purchase Agreement dated as of August 28, 2012 between the Company and the respective purchasers named therein, as amended and restated as of October 31, 2016 and as otherwise amended, restated, supplemented and modified and in effect from time to time (the “Note Purchase Agreement”) and is entitled to the benefits thereof.  Each holder of this Note will be deemed, by its acceptance hereof, (i) to have agreed to the confidentiality provisions set forth in Section 20 of the Note Purchase Agreement and (ii) to have made the representations set forth in Section 6.2 of the Note Purchase Agreement.  Unless otherwise indicated, capitalized terms used in this Note shall have the respective meanings ascribed to such terms in the Note Purchase Agreement.

 

This Note is a registered Note and, as provided in the Note Purchase Agreement, upon surrender of this Note for registration of transfer, duly endorsed, or accompanied by a written instrument of transfer duly executed, by the registered holder hereof or such holder’s attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the transferee.  Prior to due presentment for registration of transfer, the Company may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Company will not be affected by any notice to the contrary.

 

[This Note amends and restates that certain 3.23% Senior Note, Series A, dated [      ], due April 16, 2020, issued by the Company in favor of [          ] (the “Existing Note”).  This Note is executed and delivered in substitution for, but not in satisfaction of, the Existing Note.]

 

The Company will make required prepayments of principal on the dates and in the amounts specified in the Note Purchase Agreement.  This Note is also subject to optional prepayment, in whole or from time to time in part, at the times and on the terms specified in the Note Purchase Agreement but not otherwise.

 

Exhibit 2.2(a)-2

 

If an Event of Default, as defined in the Note Purchase Agreement, occurs and is continuing, the principal (including, for the avoidance of doubt, any accrued interest paid-in-kind) of this Note may be declared or otherwise become due and payable in the manner, at the price (including any applicable Make-Whole Amount) and with the effect provided in the Note Purchase Agreement.

 

This Note shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of New York excluding choice-of-law principles of the law of such State that would require the application of the laws of a jurisdiction other than such State.

 

	
 
    	
INTREPID   POTASH, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

Exhibit 2.2(a)-3

 

 

EXHIBIT 2.2(b)

 

[FORM OF SERIES B SENIOR SECURED NOTE]

 

THIS NOTE IS ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”) AS DEFINED BY SECTION 1273(A)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.  THE ISSUER AND HOLDER OF THE NOTE HAVE AGREED TO TREAT THE NOTE AS A CONTINGENT PAYMENT DEBT INSTRUMENT SUBJECT TO TREASURY REGULATIONS SECTION 1.1275-4(c).  A HOLDER OF THIS NOTE MAY CONTACT THE CHIEF FINANCIAL OFFICER OF THE COMPANY AT INTREPID POTASH, INC., 707 17TH STREET, SUITE 4200, DENVER, CO 80202 FOR INFORMATION CONCERNING THE NONCONTINGENT PAYMENT AMOUNTS, CONTINGENT PAYMENT AMOUNTS, AND THE ISSUE PRICE, AMOUNT OF OID AND YIELD TO MATURITY OF THE NONCONTINGENT PAYMENT AMOUNTS UNDER THIS NOTE, AND THE PRINCIPAL AND INTEREST COMPONENTS OF ANY CONTINGENT PAYMENTS AMOUNT UNDER THIS NOTE.

 

INTREPID POTASH, INC.

 

SENIOR SECURED NOTE, SERIES B
 DUE APRIL 14, 2023

 

	
No. BR-[     ]
    	
[Date]
    
	
$[       ]
    	
PPN: 46121Y B@0
    

 

FOR VALUE RECEIVED, the undersigned, INTREPID POTASH, INC., a Delaware corporation (the “Company”), promises to pay to [         ], or registered assigns, the principal sum of $[              ] (or so much thereof as shall not have been prepaid) on April 14, 2023 (the “Maturity Date”), with interest (computed on the basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance thereof at the rate equal to the sum of 4.13% per annum plus the Incremental Interest Rate from the date hereof, payable semiannually, on April 16 and October 16, in each year (each, an “Interest Payment Date”), commencing with the first of such dates to follow the date hereof, and on the Maturity Date, until the principal hereof shall have become due and payable, and (b) to the extent permitted by law and subject to Section 12.5 of the Note Purchase Agreement (as defined below), on any overdue payment of interest and, during the continuance of an Event of Default, on such unpaid balance and on any overdue payment of any Make-Whole Amount or Required Prepayment Premium, at a rate per annum from time to time equal to the Default Rate (or, at the option of the registered holder hereof, on demand).

 

Notwithstanding the foregoing, in lieu of making the interest payment on this Note in cash on any Interest Payment Date, the Company may, at its option, with prior written notice to the holder of this Note at least two (2) Business Days prior to such Interest Payment Date, elect to add to the outstanding principal amount of this Note on such Interest Payment Date the portion of the interest that would have accrued on this Note at the rate of interest in excess of 

 

Exhibit 2.2(b)-1

 

the sum of (i) 4.13% per annum plus (ii) the Cash Pay Interest Rate (each such addition with respect to this Note, a “PIK Interest Amount”).

 

Interest shall begin to accrue on each PIK Interest Amount beginning on and including the Interest Payment Date on which such PIK Interest Amount is added to the principal amount of this Note, and such interest shall accrue and be paid, together with the interest on the remaining principal amount of this Note, in accordance with this Note.  Notwithstanding anything herein to the contrary, all interest due and payable on the date that the entire then outstanding principal amount of this Note becomes due and payable, whether on the Maturity Date, by acceleration or otherwise, shall be due and payable in full in cash on such date.  All PIK Interest Amounts will for all purposes of this Note and the Note Purchase Agreement (as defined below) constitute outstanding principal on this Note.

 

Payments of principal of, interest on and any Make-Whole Amount and Required Prepayment Premium with respect to this Note are to be made in lawful money of the United States of America at the principal office of U.S. Bank National Association in New York City or at such other place as the Company shall have designated by written notice to the holder of this Note as provided in the Note Purchase Agreement referred to below.

 

This Note is one of a series of Senior Secured Notes (herein called the “Notes”) issued pursuant to a Note Purchase Agreement dated as of August 28, 2012 between the Company and the respective purchasers named therein, as amended and restated as of October 31, 2016 and as otherwise amended, restated, supplemented and modified and in effect from time to time (the “Note Purchase Agreement”) and is entitled to the benefits thereof.  Each holder of this Note will be deemed, by its acceptance hereof, (i) to have agreed to the confidentiality provisions set forth in Section 20 of the Note Purchase Agreement and (ii) to have made the representations set forth in Section 6.2 of the Note Purchase Agreement.  Unless otherwise indicated, capitalized terms used in this Note shall have the respective meanings ascribed to such terms in the Note Purchase Agreement.

 

This Note is a registered Note and, as provided in the Note Purchase Agreement, upon surrender of this Note for registration of transfer, duly endorsed, or accompanied by a written instrument of transfer duly executed, by the registered holder hereof or such holder’s attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the transferee.  Prior to due presentment for registration of transfer, the Company may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Company will not be affected by any notice to the contrary.

 

[This Note amends and restates that certain 4.13% Senior Note, Series B, dated [      ], due April 14, 2023, issued by the Company in favor of [          ] (the “Existing Note”).  This Note is executed and delivered in substitution for, but not in satisfaction of, the Existing Note.]

 

The Company will make required prepayments of principal on the dates and in the amounts specified in the Note Purchase Agreement.  This Note is also subject to optional 

 

Exhibit 2.2(b)-2

 

prepayment, in whole or from time to time in part, at the times and on the terms specified in the Note Purchase Agreement but not otherwise.

 

If an Event of Default, as defined in the Note Purchase Agreement, occurs and is continuing, the principal (including, for the avoidance of doubt, any accrued interest paid-in-kind) of this Note may be declared or otherwise become due and payable in the manner, at the price (including any applicable Make-Whole Amount) and with the effect provided in the Note Purchase Agreement.

 

This Note shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of New York excluding choice-of-law principles of the law of such State that would require the application of the laws of a jurisdiction other than such State.

 

	
 
    	
INTREPID   POTASH, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

Exhibit 2.2(b)-3

 

EXHIBIT 2.2(c)

 

[FORM OF SERIES C SENIOR SECURED NOTE]

 

THIS NOTE IS ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”) AS DEFINED BY SECTION 1273(A)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.  THE ISSUER AND HOLDER OF THE NOTE HAVE AGREED TO TREAT THE NOTE AS A CONTINGENT PAYMENT DEBT INSTRUMENT SUBJECT TO TREASURY REGULATIONS SECTION 1.1275-4(c).  A HOLDER OF THIS NOTE MAY CONTACT THE CHIEF FINANCIAL OFFICER OF THE COMPANY AT INTREPID POTASH, INC., 707 17TH STREET, SUITE 4200, DENVER, CO 80202 FOR INFORMATION CONCERNING THE NONCONTINGENT PAYMENT AMOUNTS, CONTINGENT PAYMENT AMOUNTS, AND THE ISSUE PRICE, AMOUNT OF OID AND YIELD TO MATURITY OF THE NONCONTINGENT PAYMENT AMOUNTS UNDER THIS NOTE, AND THE PRINCIPAL AND INTEREST COMPONENTS OF ANY CONTINGENT PAYMENTS AMOUNT UNDER THIS NOTE.

 

INTREPID POTASH, INC.

 

SENIOR SECURED NOTE, SERIES C
 DUE APRIL 16, 2025

 

	
No. CR-[     ]
    	
[Date]
    
	
$[       ]
    	
PPN: 46121Y B#8
    

 

FOR VALUE RECEIVED, the undersigned, INTREPID POTASH, INC., a Delaware corporation (the “Company”), promises to pay to [         ], or registered assigns, the principal sum of $[              ] (or so much thereof as shall not have been prepaid) on April 16, 2025 (the “Maturity Date”), with interest (computed on the basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance thereof at the rate equal to the sum of 4.28% per annum plus the Incremental Interest Rate from the date hereof, payable semiannually, on April 16 and October 16, in each year (each, an “Interest Payment Date”), commencing with the first of such dates to follow the date hereof, and on the Maturity Date, until the principal hereof shall have become due and payable, and (b) to the extent permitted by law and subject to Section 12.5 of the Note Purchase Agreement (as defined below), on any overdue payment of interest and, during the continuance of an Event of Default, on such unpaid balance and on any overdue payment of any Make-Whole Amount or Required Prepayment Premium, at a rate per annum from time to time equal to the Default Rate (or, at the option of the registered holder hereof, on demand).

 

Notwithstanding the foregoing, in lieu of making the interest payment on this Note in cash on any Interest Payment Date, the Company may, at its option, with prior written notice to the holder of this Note at least two (2) Business Days prior to such Interest Payment Date, elect to add to the outstanding principal amount of this Note on such Interest Payment Date the portion of the interest that would have accrued on this Note at the rate of interest in excess of 

 

Exhibit 2.2(c)-1

 

the sum of (i) 4.28% per annum plus (ii) the Cash Pay Interest Rate (each such addition with respect to this Note, a “PIK Interest Amount”).

 

Interest shall begin to accrue on each PIK Interest Amount beginning on and including the Interest Payment Date on which such PIK Interest Amount is added to the principal amount of this Note, and such interest shall accrue and be paid, together with the interest on the remaining principal amount of this Note, in accordance with this Note.  Notwithstanding anything herein to the contrary, all interest due and payable on the date that the entire then outstanding principal amount of this Note becomes due and payable, whether on the Maturity Date, by acceleration or otherwise, shall be due and payable in full in cash on such date.  All PIK Interest Amounts will for all purposes of this Note and the Note Purchase Agreement (as defined below) constitute outstanding principal on this Note.

 

Payments of principal of, interest on and any Make-Whole Amount and Required Prepayment Premium with respect to this Note are to be made in lawful money of the United States of America at the principal office of U.S. Bank National Association in New York City or at such other place as the Company shall have designated by written notice to the holder of this Note as provided in the Note Purchase Agreement referred to below.

 

This Note is one of a series of Senior Secured Notes (herein called the “Notes”) issued pursuant to a Note Purchase Agreement dated as of August 28, 2012 between the Company and the respective purchasers named therein, as amended and restated as of October 31, 2016 and as otherwise amended, restated, supplemented and modified and in effect from time to time (the “Note Purchase Agreement”) and is entitled to the benefits thereof.  Each holder of this Note will be deemed, by its acceptance hereof, (i) to have agreed to the confidentiality provisions set forth in Section 20 of the Note Purchase Agreement and (ii) to have made the representations set forth in Section 6.2 of the Note Purchase Agreement.  Unless otherwise indicated, capitalized terms used in this Note shall have the respective meanings ascribed to such terms in the Note Purchase Agreement.

 

This Note is a registered Note and, as provided in the Note Purchase Agreement, upon surrender of this Note for registration of transfer, duly endorsed, or accompanied by a written instrument of transfer duly executed, by the registered holder hereof or such holder’s attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the transferee.  Prior to due presentment for registration of transfer, the Company may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Company will not be affected by any notice to the contrary.

 

[This Note amends and restates that certain 4.28% Senior Note, Series C, dated [      ], due April 16, 2025, issued by the Company in favor of [          ] (the “Existing Note”).  This Note is executed and delivered in substitution for, but not in satisfaction of, the Existing Note.]

 

The Company will make required prepayments of principal on the dates and in the amounts specified in the Note Purchase Agreement.  This Note is also subject to optional 

 

Exhibit 2.2(c)-2

 

prepayment, in whole or from time to time in part, at the times and on the terms specified in the Note Purchase Agreement but not otherwise.

 

If an Event of Default, as defined in the Note Purchase Agreement, occurs and is continuing, the principal (including, for the avoidance of doubt, any accrued interest paid-in-kind) of this Note may be declared or otherwise become due and payable in the manner, at the price (including any applicable Make-Whole Amount) and with the effect provided in the Note Purchase Agreement.

 

This Note shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of New York excluding choice-of-law principles of the law of such State that would require the application of the laws of a jurisdiction other than such State.

 

	
 
    	
INTREPID   POTASH, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

Exhibit 2.2(c)-3Exhibit 10.2

 

	
 
    	
EXECUTION
   VERSION
    

 

 

 

CREDIT AGREEMENT

 

Dated as of October 31, 2016

 

among

 

INTREPID POTASH, INC.,

INTREPID POTASH — MOAB, LLC,

INTREPID POTASH—NEW MEXICO, LLC,

 

and

 

INTREPID POTASH — WENDOVER, LLC,

as Borrowers,

 

CERTAIN FINANCIAL INSTITUTIONS,

as Lenders,

 

and

 

BANK OF MONTREAL,

as Administrative Agent and Swing Line Lender

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
 
    	
ARTICLE I
    	
 
    
	
 
    	
DEFINITIONS AND ACCOUNTING   TERMS
    	
 
    
	
 
    	
 
    	
 
    
	
1.01
    	
Defined Terms
    	
1
    
	
 
    	
 
    	
 
    
	
1.02
    	
Other Interpretive   Provisions
    	
48
    
	
 
    	
 
    	
 
    
	
1.03
    	
Accounting Terms
    	
48
    
	
 
    	
 
    	
 
    
	
1.04
    	
Uniform Commercial Code
    	
49
    
	
 
    	
 
    	
 
    
	
1.05
    	
Rounding
    	
49
    
	
 
    	
 
    	
 
    
	
1.06
    	
Times of Day
    	
49
    
	
 
    	
 
    	
 
    
	
1.07
    	
Letter of Credit   Amounts
    	
49
    
	
 
    	
 
    	
 
    
	
1.08
    	
Intercreditor Agreement
    	
49
    
	
 
    	
 
    	
 
    
	
 
    	
ARTICLE II
    	
 
    
	
 
    	
THE COMMITMENTS   AND CREDIT EXTENSIONS
    	
 
    
	
 
    	
 
    	
 
    
	
2.01
    	
Loan Commitments
    	
50
    
	
 
    	
 
    	
 
    
	
2.02
    	
Borrowings, Conversions   and Continuations of Loans
    	
52
    
	
 
    	
 
    	
 
    
	
2.03
    	
Letters of Credit
    	
53
    
	
 
    	
 
    	
 
    
	
2.04
    	
Swing Line Loans
    	
60
    
	
 
    	
 
    	
 
    
	
2.05
    	
Repayment of Loans
    	
62
    
	
 
    	
 
    	
 
    
	
2.06
    	
Prepayments
    	
63
    
	
 
    	
 
    	
 
    
	
2.07
    	
Termination or   Reduction of Commitments
    	
66
    
	
 
    	
 
    	
 
    
	
2.08
    	
Interest
    	
66
    
	
 
    	
 
    	
 
    
	
2.09
    	
Fees
    	
67
    
	
 
    	
 
    	
 
    
	
2.10
    	
Computation of Interest   and Fees
    	
68
    
	
 
    	
 
    	
 
    
	
2.11
    	
Evidence of Debt
    	
68
    
	
 
    	
 
    	
 
    
	
2.12
    	
Payments Generally; the   Administrative Agent’s Clawback
    	
68
    
	
 
    	
 
    	
 
    
	
2.13
    	
Sharing of Payments by   Lenders
    	
70
    
	
 
    	
 
    	
 
    
	
2.14
    	
Settlement Among   Lenders
    	
71
    
	
 
    	
 
    	
 
    
	
2.15
    	
Nature and Extent of   Each Borrower’s Liability
    	
71
    
	
 
    	
 
    	
 
    
	
2.16
    	
Cash Collateral
    	
74
    
	
 
    	
 
    	
 
    
	
2.17
    	
Defaulting Lenders
    	
75
    
	
 
    	
 
    	
 
    
	
2.18
    	
Increase in Revolving   Credit Commitments
    	
77
    
	
 
    	
 
    	
 
    
	
 
    	
ARTICLE III
    	
 
    
	
 
    	
TAXES, YIELD   PROTECTION AND ILLEGALITY
    	
 
    
	
 
    	
 
    	
 
    
	
3.01
    	
Taxes
    	
79
    
	
 
    	
 
    	
 
    
	
3.02
    	
Illegality
    	
82
    

 

i

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
3.03
    	
Inability to Determine   Rates
    	
83
    
	
 
    	
 
    	
 
    
	
3.04
    	
Increased Costs;   Reserves on LIBOR Loans
    	
83
    
	
 
    	
 
    	
 
    
	
3.05
    	
Compensation for Losses
    	
85
    
	
 
    	
 
    	
 
    
	
3.06
    	
Mitigation Obligations;   Replacement of Lenders
    	
85
    
	
 
    	
 
    	
 
    
	
3.07
    	
Survival
    	
86
    
	
 
    	
 
    	
 
    
	
 
    	
ARTICLE IV
    	
 
    
	
 
    	
SECURITY AND ADMINISTRATION   OF COLLATERAL
    	
 
    
	
 
    	
 
    	
 
    
	
4.01
    	
Security
    	
86
    
	
 
    	
 
    	
 
    
	
4.02
    	
Collateral   Administration
    	
86
    
	
 
    	
 
    	
 
    
	
4.03
    	
After Acquired   Property; Further Assurances
    	
88
    
	
 
    	
 
    	
 
    
	
4.04
    	
Cash Management
    	
88
    
	
 
    	
 
    	
 
    
	
4.05
    	
Information Regarding   Collateral
    	
90
    
	
 
    	
 
    	
 
    
	
 
    	
ARTICLE V
    	
 
    
	
 
    	
CONDITIONS PRECEDENT   TO CREDIT EXTENSIONS
    	
 
    
	
 
    	
 
    	
 
    
	
5.01
    	
Conditions of Initial   Credit Extension
    	
90
    
	
 
    	
 
    	
 
    
	
5.02
    	
Conditions to all   Credit Extensions
    	
93
    
	
 
    	
 
    	
 
    
	
 
    	
ARTICLE VI
    	
 
    
	
 
    	
REPRESENTATIONS   AND WARRANTIES
    	
 
    
	
 
    	
 
    	
 
    
	
6.01
    	
Existence,   Qualification and Power
    	
94
    
	
 
    	
 
    	
 
    
	
6.02
    	
Authorization; No   Contravention
    	
94
    
	
 
    	
 
    	
 
    
	
6.03
    	
Governmental   Authorization; Other Consents
    	
94
    
	
 
    	
 
    	
 
    
	
6.04
    	
Binding Effect
    	
94
    
	
 
    	
 
    	
 
    
	
6.05
    	
Financial Statements;   No Material Adverse Effect
    	
94
    
	
 
    	
 
    	
 
    
	
6.06
    	
Litigation
    	
95
    
	
 
    	
 
    	
 
    
	
6.07
    	
No Default
    	
95
    
	
 
    	
 
    	
 
    
	
6.08
    	
Ownership of Property;   Liens
    	
95
    
	
 
    	
 
    	
 
    
	
6.09
    	
Environmental   Compliance
    	
96
    
	
 
    	
 
    	
 
    
	
6.10
    	
Insurance
    	
96
    
	
 
    	
 
    	
 
    
	
6.11
    	
Taxes
    	
97
    
	
 
    	
 
    	
 
    
	
6.12
    	
ERISA Compliance
    	
97
    
	
 
    	
 
    	
 
    
	
6.13
    	
Subsidiaries; Equity   Interests
    	
98
    
	
 
    	
 
    	
 
    
	
6.14
    	
Margin Regulations;   Investment Company Act
    	
98
    
	
 
    	
 
    	
 
    
	
6.15
    	
Disclosure
    	
98
    

 

ii

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
6.16
    	
Compliance with Laws
    	
98
    
	
 
    	
 
    	
 
    
	
6.17
    	
Intellectual Property;   Licenses, Etc.
    	
98
    
	
 
    	
 
    	
 
    
	
6.18
    	
Labor Matters
    	
99
    
	
 
    	
 
    	
 
    
	
6.19
    	
Deposit Accounts and Securities   Accounts
    	
99
    
	
 
    	
 
    	
 
    
	
6.20
    	
Accounts
    	
99
    
	
 
    	
 
    	
 
    
	
6.21
    	
Anti-Terrorism Laws and   Foreign Asset Control Regulations
    	
100
    
	
 
    	
 
    	
 
    
	
6.22
    	
Brokers
    	
101
    
	
 
    	
 
    	
 
    
	
6.23
    	
Material Contracts
    	
101
    
	
 
    	
 
    	
 
    
	
6.24
    	
Senior Indebtedness
    	
101
    
	
 
    	
 
    	
 
    
	
6.25
    	
Immaterial Subsidiaries
    	
101
    
	
 
    	
 
    	
 
    
	
 
    	
ARTICLE VII
    	
 
    
	
 
    	
AFFIRMATIVE   COVENANTS
    	
 
    
	
 
    	
 
    	
 
    
	
7.01
    	
Financial Statements
    	
101
    
	
 
    	
 
    	
 
    
	
7.02
    	
Borrowing Base   Certificate; Other Information
    	
102
    
	
 
    	
 
    	
 
    
	
7.03
    	
Notices
    	
104
    
	
 
    	
 
    	
 
    
	
7.04
    	
Payment of Obligations
    	
105
    
	
 
    	
 
    	
 
    
	
7.05
    	
Preservation of   Existence, Etc.
    	
105
    
	
 
    	
 
    	
 
    
	
7.06
    	
Maintenance of   Properties
    	
105
    
	
 
    	
 
    	
 
    
	
7.07
    	
Maintenance of   Insurance; Condemnation Proceeds
    	
105
    
	
 
    	
 
    	
 
    
	
7.08
    	
Compliance with Laws
    	
107
    
	
 
    	
 
    	
 
    
	
7.09
    	
Books and Records
    	
107
    
	
 
    	
 
    	
 
    
	
7.10
    	
Inspection Rights and   Appraisals; Meetings with the Administrative Agent
    	
107
    
	
 
    	
 
    	
 
    
	
7.11
    	
Use of Proceeds
    	
107
    
	
 
    	
 
    	
 
    
	
7.12
    	
New Subsidiaries
    	
108
    
	
 
    	
 
    	
 
    
	
7.13
    	
Compliance with ERISA
    	
108
    
	
 
    	
 
    	
 
    
	
7.14
    	
Further Assurances
    	
109
    
	
 
    	
 
    	
 
    
	
7.15
    	
Reserved
    	
109
    
	
 
    	
 
    	
 
    
	
7.16
    	
Environmental Laws
    	
109
    
	
 
    	
 
    	
 
    
	
7.17
    	
Leases, Mortgages and   Third-Party Agreements
    	
109
    
	
 
    	
 
    	
 
    
	
7.18
    	
Material Contracts
    	
110
    
	
 
    	
 
    	
 
    
	
7.19
    	
Treasury Management   Services
    	
110
    
	
 
    	
 
    	
 
    
	
7.20
    	
Enhancements to Senior   Notes Indebtedness
    	
110
    

 

iii

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
 
    	
ARTICLE VIII
    	
 
    
	
 
    	
NEGATIVE COVENANTS
    	
 
    
	
 
    	
 
    	
 
    
	
8.01
    	
Indebtedness
    	
110
    
	
 
    	
 
    	
 
    
	
8.02
    	
Liens
    	
112
    
	
 
    	
 
    	
 
    
	
8.03
    	
Investments
    	
114
    
	
 
    	
 
    	
 
    
	
8.04
    	
Fundamental Changes
    	
114
    
	
 
    	
 
    	
 
    
	
8.05
    	
Dispositions
    	
115
    
	
 
    	
 
    	
 
    
	
8.06
    	
Restricted Payments
    	
116
    
	
 
    	
 
    	
 
    
	
8.07
    	
Change in Nature of   Business
    	
116
    
	
 
    	
 
    	
 
    
	
8.08
    	
Transactions with Affiliates
    	
116
    
	
 
    	
 
    	
 
    
	
8.09
    	
Burdensome Agreements
    	
117
    
	
 
    	
 
    	
 
    
	
8.10
    	
Use of Proceeds
    	
117
    
	
 
    	
 
    	
 
    
	
8.11
    	
Prepayment of   Indebtedness; Amendment to Material Agreements
    	
117
    
	
 
    	
 
    	
 
    
	
8.12
    	
Financial Covenants
    	
118
    
	
 
    	
 
    	
 
    
	
8.13
    	
Creation of New   Subsidiaries
    	
118
    
	
 
    	
 
    	
 
    
	
8.14
    	
Reserved
    	
118
    
	
 
    	
 
    	
 
    
	
8.15
    	
Sale and Leaseback
    	
118
    
	
 
    	
 
    	
 
    
	
8.16
    	
Organization Documents;   Fiscal Year
    	
118
    
	
 
    	
 
    	
 
    
	
8.17
    	
Immaterial Subsidiaries
    	
119
    
	
 
    	
 
    	
 
    
	
8.18
    	
Anti-Money Laundering   and Terrorism Laws and Regulations
    	
119
    
	
 
    	
 
    	
 
    
	
8.19
    	
Economic Sanctions Laws   and Regulations
    	
119
    
	
 
    	
 
    	
 
    
	
 
    	
ARTICLE IX
    	
 
    
	
 
    	
EVENTS OF   DEFAULT AND REMEDIES
    	
 
    
	
 
    	
 
    	
 
    
	
9.01
    	
Events of Default
    	
119
    
	
 
    	
 
    	
 
    
	
9.02
    	
Remedies Upon Event of   Default
    	
122
    
	
 
    	
 
    	
 
    
	
9.03
    	
Application of Funds
    	
122
    
	
 
    	
 
    	
 
    
	
 
    	
ARTICLE X
    	
 
    
	
 
    	
ADMINISTRATIVE   AGENT
    	
 
    
	
 
    	
 
    	
 
    
	
10.01
    	
Appointment and   Authority
    	
124
    
	
 
    	
 
    	
 
    
	
10.02
    	
Rights as a Lender
    	
124
    
	
 
    	
 
    	
 
    
	
10.03
    	
Exculpatory Provisions
    	
124
    
	
 
    	
 
    	
 
    
	
10.04
    	
Reliance by the   Administrative Agent
    	
125
    
	
 
    	
 
    	
 
    
	
10.05
    	
Delegation of Duties
    	
126
    

 

iv

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
10.06
    	
Resignation of the   Administrative Agent
    	
126
    
	
 
    	
 
    	
 
    
	
10.07
    	
Non-Reliance on the   Administrative Agent and Other Lenders
    	
127
    
	
 
    	
 
    	
 
    
	
10.08
    	
No Other Duties, Etc.
    	
127
    
	
 
    	
 
    	
 
    
	
10.09
    	
The Administrative   Agent May File Proofs of Claim; Credit Bidding
    	
127
    
	
 
    	
 
    	
 
    
	
10.10
    	
Collateral Matters
    	
128
    
	
 
    	
 
    	
 
    
	
10.11
    	
Other Collateral   Matters
    	
129
    
	
 
    	
 
    	
 
    
	
10.12
    	
Credit Product   Arrangement Provisions
    	
129
    
	
 
    	
 
    	
 
    
	
10.13
    	
Intercreditor   Agreement/Subordination Agreements
    	
130
    
	
 
    	
 
    	
 
    
	
 
    	
ARTICLE XI
    	
 
    
	
 
    	
MISCELLANEOUS
    	
 
    
	
 
    	
 
    	
 
    
	
11.01
    	
Amendments, Etc.
    	
130
    
	
 
    	
 
    	
 
    
	
11.02
    	
Notices; Effectiveness;   Electronic Communication
    	
134
    
	
 
    	
 
    	
 
    
	
11.03
    	
No Waiver; Cumulative   Remedies
    	
136
    
	
 
    	
 
    	
 
    
	
11.04
    	
Expenses; Indemnity;   Damage Waiver
    	
136
    
	
 
    	
 
    	
 
    
	
11.05
    	
Marshalling; Payments   Set Aside
    	
138
    
	
 
    	
 
    	
 
    
	
11.06
    	
Successors and Assigns
    	
139
    
	
 
    	
 
    	
 
    
	
11.07
    	
Treatment of Certain   Information; Confidentiality
    	
143
    
	
 
    	
 
    	
 
    
	
11.08
    	
Right of Setoff
    	
143
    
	
 
    	
 
    	
 
    
	
11.09
    	
Interest Rate   Limitation
    	
144
    
	
 
    	
 
    	
 
    
	
11.10
    	
Counterparts;   Integration; Effectiveness
    	
144
    
	
 
    	
 
    	
 
    
	
11.11
    	
Survival
    	
144
    
	
 
    	
 
    	
 
    
	
11.12
    	
Severability
    	
145
    
	
 
    	
 
    	
 
    
	
11.13
    	
Replacement of Lenders
    	
145
    
	
 
    	
 
    	
 
    
	
11.14
    	
Governing Law;   Jurisdiction; Etc.
    	
146
    
	
 
    	
 
    	
 
    
	
11.15
    	
Waiver of Jury Trial
    	
147
    
	
 
    	
 
    	
 
    
	
11.16
    	
Electronic Execution of   Assignments and Certain Other Documents
    	
147
    
	
 
    	
 
    	
 
    
	
11.17
    	
USA PATRIOT Act Notice
    	
147
    
	
 
    	
 
    	
 
    
	
11.18
    	
No Advisory or   Fiduciary Responsibility
    	
147
    
	
 
    	
 
    	
 
    
	
11.19
    	
Attachments
    	
148
    
	
 
    	
 
    	
 
    
	
11.20
    	
Acknowledgement and   Consent to Bail-In of EEA Financial Institutions
    	
148
    
	
 
    	
 
    	
 
    
	
 
    	
ARTICLE XII
    	
 
    
	
 
    	
CONTINUING   GUARANTY
    	
 
    
	
 
    	
 
    	
 
    
	
12.01
    	
Guaranty
    	
148
    

 

v

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
12.02
    	
Rights of Lenders
    	
149
    
	
 
    	
 
    	
 
    
	
12.03
    	
Certain Waivers
    	
149
    
	
 
    	
 
    	
 
    
	
12.04
    	
Obligations Independent
    	
149
    
	
 
    	
 
    	
 
    
	
12.05
    	
Subrogation
    	
149
    
	
 
    	
 
    	
 
    
	
12.06
    	
Termination;   Reinstatement
    	
150
    
	
 
    	
 
    	
 
    
	
12.07
    	
Subordination
    	
150
    
	
 
    	
 
    	
 
    
	
12.08
    	
Stay of Acceleration
    	
150
    
	
 
    	
 
    	
 
    
	
12.09
    	
Condition of Borrowers
    	
150
    
	
 
    	
 
    	
 
    
	
12.10
    	
Keepwell
    	
150
    
	
 
    	
 
    	
 
    
	
12.11
    	
Limitation of Guaranty
    	
151
    

 

vi

 

	
SCHEDULES
    
	
 
    
	
1.01
    	
Existing Letters of   Credit
    
	
1.02
    	
Mortgaged Property
    
	
1.03
    	
IRB
    
	
2.01
    	
Commitments and   Applicable Percentages
    
	
4.05
    	
Information Regarding   Collateral
    
	
5.01
    	
Good Standing and   Foreign Qualification Jurisdictions
    
	
6.06
    	
Litigation
    
	
6.08(b)(1)
    	
Owned Real Property
    
	
6.08(b)(2)
    	
Leased Real Property
    
	
6.09
    	
Environmental Matters
    
	
6.10
    	
Insurance
    
	
6.12(d)
    	
Pension Plans
    
	
6.13
    	
Subsidiaries; Other   Equity Investments
    
	
6.18
    	
Labor Matters
    
	
6.19
    	
Deposit Accounts,   Securities Accounts and Commodity Contracts
    
	
6.23
    	
Material Contracts
    
	
8.01
    	
Existing Indebtedness
    
	
8.02
    	
Existing Liens
    
	
8.03
    	
Existing Investments
    
	
8.08
    	
Transactions with   Affiliates
    
	
8.17
    	
Immaterial Subsidiaries
    
	
11.02
    	
Administrative Agent’s   Office; Certain Addresses for Notices
    

 

	
EXHIBITS
    	
 
    
	
 
    	
Form of
    
	
A-1
    	
Revolving Credit Loan   Note
    
	
B
    	
Compliance Certificate
    
	
C
    	
Security Agreement
    
	
D
    	
Borrowing Base   Certificate
    
	
E
    	
Assignment and   Assumption Agreement
    
	
F
    	
Credit Product Notice
    

 

i

 

CREDIT AGREEMENT

 

This CREDIT AGREEMENT (this “Agreement”) is entered into as of October 31, 2016, among INTREPID POTASH, INC., a Delaware corporation (the “Company”), INTREPID POTASH — MOAB, LLC, a Delaware limited liability company (“Intrepid Moab”), INTREPID POTASH—NEW MEXICO, LLC, a New Mexico limited liability company (“Intrepid New Mexico”), INTREPID POTASH — WENDOVER, LLC, a Colorado limited liability company, and each other Person that may join hereto as a borrower (each may be referred to individually, as a “Borrower” and collectively herein, as “Borrowers”), 203 E. FLORENCE, LLC, a Delaware limited liability company (“203 E. Florence”), MOAB GAS PIPELINE, LLC, a Colorado limited liability company, and each other Person that may join hereto as a Guarantor, EACH LENDER FROM TIME TO TIME PARTY HERETO (collectively, the “Lenders” and individually, a “Lender”), and BANK OF MONTREAL, as Administrative Agent, Swing Line Lender and a Letter of Credit Issuer.

 

Preliminary Statements

 

A.                                    The Borrowers have requested that Lenders, the Swing Line Lender and the Letter of Credit Issuer provide certain credit facilities to the Borrowers to finance their mutual and collective business enterprise.

 

B.                                    Lenders are willing to provide the credit facilities on the terms and conditions set forth in this Agreement.

 

In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:

 

ARTICLE I
 DEFINITIONS AND ACCOUNTING TERMS

 

1.01                        Defined Terms.  As used in this Agreement, the following terms shall have the meanings set forth below:

 

“203 E. Florence” has the meaning specified in the introductory paragraph hereto.

 

“Account” means “accounts” as defined in the UCC.

 

“Account Debtor” means any Person who is or may become obligated under or on account of any Account, Contractual Obligation, Chattel Paper or General Intangible.

 

“ACH” means automated clearing house transfers.

 

“Acquisition” means any transaction, or any series of related transactions, by which a Person, directly or indirectly, acquires (a) any business or assets of another Person which constitute all or substantially all of the assets of such Person or of a division, line of business or other business unit of such Person, whether through purchase of assets, merger or otherwise or (b) a majority of the Voting Stock or other controlling ownership interest in another Person (including the purchase of an option, warrant or convertible or similar type security to acquire such a controlling interest at the time it becomes exercisable by the holder thereof), whether by purchase of such equity or other ownership interest or upon the exercise of an option or warrant for, or conversion of securities into, such equity or other ownership interest.  As used herein, “Voting Stock” means, with respect to any Person, Equity Interests issued by such Person the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the

 

 

election of directors (or persons performing similar functions) of such Person, even though the right to so vote has been suspended by the happening of such contingency.

 

“Additional Commitment Lender” has the meaning specified in Section 2.18(c).

 

“Adjustment Date” has the meaning specified in the definition of “Applicable Margin”.

 

“Administrative Agent” means Bank of Montreal, in its capacity as administrative agent under any of the Loan Documents, or any successor administrative agent.

 

“Administrative Agent’s Office” means the Administrative Agent’s address and, as appropriate, account as set forth on Schedule 11.02, or such other address or account as the Administrative Agent may from time to time notify to the Borrower Agent and the Lenders.

 

“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.

 

“Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

 

“Agent Indemnitee” has the meaning specified in Section 11.04(c).

 

“Agent Indemnitee Liabilities” has the meaning specified in Section 11.04(c).

 

“Aggregate Revolving Credit Commitments” means, as at any date of determination thereof, the sum of all Revolving Credit Commitments of all Lenders at such date.

 

“Agreement” means this Credit Agreement.

 

“Allocable Amount” has the meaning specified in Section 2.15(c)(ii).

 

“ALTA Survey” means a survey satisfactory to the Administrative Agent prepared in accordance with the standards adopted by the American Land Title Association and the American Congress on Surveying and Mapping in 1997, known as the “Minimum Standard Detail Requirements of Land Title Surveys” and sufficient form to satisfy the requirements any applicable title insurance company to provide extended coverage over survey defects and shall also show the location of all easements, utilities, and covenants of record, dimensions of all improvements, encroachments from any adjoining property, and certify as to the location of any flood plain area affecting the subject Real Property.

 

“Anti-Corruption Laws” shall have the meaning specified in Section 6.21.

 

“Anti-Money Laundering Laws” shall have the meaning specified in Section 8.17.

 

“Applicable Margin” means with respect to any Type of Loan, the percentages per annum set forth below, as based upon the Average Availability for the immediately preceding month:

 

2

 

	
Level
    	
 
    	
Average Availability
   (as a percentage of
   Aggregate Revolving Credit
   Commitments)
    	
 
    	
LIBOR
   Loans
    	
 
    	
Base Rate
   Loans
    	
 
    
	
I
    	
 
    	
>   66.67%
    	
 
    	
1.75
    	
%
    	
0.75
    	
%
    
	
II
    	
 
    	
<   66.67% but > 33.33%
    	
 
    	
2.00
    	
%
    	
1.00
    	
%
    
	
III
    	
 
    	
<   33.33%
    	
 
    	
2.25
    	
%
    	
1.25
    	
%
    

 

From the Closing Date through the last day of the month ending on April 30, 2017, margins shall be determined as if Level II were applicable.  Thereafter, commencing on May 1, 2017, any increase or decrease in the Applicable Margin resulting from a change in Average Availability shall become effective as of the first day of each month (each, an “Adjustment Date”) based upon Average Availability for the immediately preceding month.  If any Borrowing Base Certificate (including any required financial information in support thereof) of the Borrowers is not received by Administrative Agent by the date required pursuant to Section 7.02(a), then the Applicable Margin shall be determined as if the Average Availability for the immediately preceding month is at Level III until such time as such Borrowing Base Certificate and supporting information are received.

 

“Applicable Percentage” means, with respect to any Revolving Credit Lender at any time, the percentage (carried out to the ninth decimal place) of the Revolving Credit Facility, represented by the amount of the Revolving Credit Commitment of such Revolving Credit Lender at such time; provided that if the Aggregate Revolving Credit Commitments have been terminated at such time, then the Applicable Percentage of each Revolving Credit Lender shall be the Applicable Percentage of such Revolving Credit Lender immediately prior to such termination and after giving effect to any subsequent assignments.  The initial Applicable Percentage of each Lender with respect to the Facility is set forth opposite the name of such Lender on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable.

 

“Appropriate Lender” means, at any time, (a) with respect to the Facility, a Lender that has a Commitment with respect to the Facility or holds a Loan under the Facility at such time, (b) with respect to the Letter of Credit Sublimit, (i) the Letter of Credit Issuer and (ii) if any Letters of Credit have been issued, the Revolving Credit Lenders and (c) with respect to the Swing Line Sublimit, (i) the Swing Line Lender and (ii) if any Swing Line Loans are outstanding, the Revolving Credit Lenders.

 

“Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

 

“Assignee Group” means two or more Eligible Assignees that are Affiliates of one another or two or more Approved Funds managed by the same investment advisor.

 

“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 11.06(b)), and accepted by the Administrative Agent, in substantially the form of Exhibit E or any other form approved by the Administrative Agent.

 

“Assumed Indebtedness” means Indebtedness of a Person which is (a) in existence at the time such Person becomes a Subsidiary or (b) assumed in connection with an Investment in or Acquisition of such Person, and which, in each case, (i) has not been incurred or created in connection with, or in anticipation or contemplation of, such Person becoming a Subsidiary, (ii) only such Person (or its Subsidiaries so acquired) are obligors with respect to such Indebtedness, (iii) such Indebtedness is not a revolving loan facility; and (iv) such Indebtedness is not secured by any Liens on working capital assets.

 

“Attributable Indebtedness” means, on any date, (a) in respect of any Capital Lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of

 

3

 

such date in accordance with GAAP, and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of the remaining lease payments under the relevant lease that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease were accounted for as a Capital Lease.

 

“Audited Financial Statements” means the audited Consolidated balance sheet of the Company and its Subsidiaries for the fiscal year ended December 31, 2015, and the related Consolidated statements of income or operations, retained earnings and cash flows for such fiscal year of the Company and its Subsidiaries, including the notes thereto.

 

“Auditor” has the meaning specified in Section 7.01(a).

 

“Auto-Extension Letter of Credit” has the meaning specified in Section 2.03(b)(iii).

 

“Availability” means (a) the Maximum Borrowing Amount minus (b) Total Outstandings.

 

“Availability Period” means the period (a) in the case of the issuance of Letters of Credit with a maximum aggregate amount available to be drawn thereunder on the Closing Date not to exceed $500,000 (the “Available Closing Date L/Cs”), from the Closing Date to the Revolving Credit Termination Date and (b) in the case of the Revolving Credit Facility (other than the Available Closing Date L/Cs), from the Business Day immediately following the Closing Date to the Revolving Credit Termination Date.

 

“Availability Reserves” means, without duplication of any other Reserves or items that are otherwise addressed or excluded through eligibility criteria, such reserves as the Administrative Agent from time to time determines in its discretion exercised in good faith as being appropriate (a) to reflect the impediments to the Administrative Agent’s ability to realize upon the Collateral consisting of Eligible Accounts or Eligible Inventory, (b) to reflect sums that any Loan Party may be required to pay under any Section of this Agreement or any other Loan Document (including Taxes, assessments, insurance premiums, or, in the case of leased assets, rents or other amounts payable under such leases) and has failed to pay, (c) to reflect amounts for which claims may be reasonably expected to be asserted against the Collateral, the Administrative Agent or the Lenders or (d) to reflect criteria, events, conditions, contingencies or risks which adversely affect any component of the Borrowing Base, or the assets, business, financial performance or financial condition of any Loan Party.  Without limiting the generality of the foregoing, Availability Reserves may include (but are not limited to) reserves based on: (i) Rent and Charges Reserves; (ii) customs duties, and other costs to release Inventory which is being imported into the United States; (iii) outstanding Taxes and other governmental charges, including, without limitation, ad valorem, real estate, personal property, sales, and other Taxes which might have priority over the interests of the Administrative Agent in the Collateral; (iv) salaries, wages and benefits due to employees of any Loan Party (including amounts for employee wage claims for earned wages, vacation pay, health care reimbursements and other amounts due under Wisconsin wage lien law, Wis. Stat 109.01, et seq., or any similar state or local law); (v) any liabilities that are or may become secured by Liens on the Collateral (including Permitted Liens) which might have priority over the Liens or interests of the Administrative Agent in the Collateral; (vi) Credit Product Reserves; (vii) reserves with respect to the salability of Eligible Inventory or which reflect such other factors as affect the market value of the Eligible Inventory, including obsolescence, seasonality, Shrink; vendor chargebacks, imbalance, change in Inventory character, composition or mix, markdowns and out of date and/or expired Inventory; (viii) the Dilution Reserve; (ix) changes in the market price of potash and/or other Inventory owned by any Loan Party (as reasonably determined by the Administrative Agent); and (x) the Permanent Reserve.

 

4

 

“Average Availability” means for any period, the average daily amount of Availability during such period.

 

“Aviation” means Intrepid Aviation LLC, a Colorado limited liability company.

 

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.

 

“Bail-In Legislation” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.

 

“Bankruptcy Code” means Title 11 of the United States Code.

 

“Base Rate” means, for any day, a fluctuating rate per annum equal to the highest of (a) the rate of interest announced by BMO from time to time as its prime rate for such day (with any change in such rate announced by BMO taking effect at the opening of business on the day specified in the public announcement of such change); (b) the Federal Funds Rate for such day, plus 0.50%; or (c) the LIBOR Rate for a one month Interest Period plus 1.00%.

 

“Base Rate Loan” means a Loan that bears interest based on the Base Rate.

 

“Blocked Person” shall have the meaning specified in Section 6.21.

 

“BMO” means Bank of Montreal.

 

“BMO Harris” means BMO Harris Bank N.A.

 

“Board of Directors” means, with respect to any Person, (a) in the case of any corporation, the board of directors of such Person or any committee thereof duly authorized to act on behalf of such board, (b) in the case of any limited liability company, the board of managers or board of directors or sole member or manager of such Person or any Person or any committee thereof duly authorized to act on behalf of such board, (c) in the case of any partnership, the Board of Directors of a general partner of such Person and (d) in any other case, the functional equivalent of the foregoing.

 

“Borrower Agent” has the meaning specified in Section 2.15(g).

 

“Borrowers” has the meaning specified in the introductory paragraph hereto.

 

“Borrower Materials” has the meaning specified in Section 7.02.

 

“Borrowing” means any of (a) a Revolving Credit Borrowing or (b) a Swing Line Borrowing, as the context may require.

 

“Borrowing Base” means, at any time of calculation, an amount equal to:

 

(a)                                 the Value of Eligible Accounts (less all cash received but not yet applied in respect of such Eligible Accounts) multiplied by 85%; plus

 

(b)                                 the least of (i) the NOLV of Eligible Inventory multiplied by 85% or (ii) the Cost of Eligible Inventory multiplied by 80%; minus

 

5

 

(c)                                  the Permanent Reserve; minus

 

(d)                                 the amount of all Availability Reserves (other than the Permanent Reserve).

 

The term “Borrowing Base” and the calculation thereof shall not include any assets or property acquired in an Acquisition or otherwise outside the ordinary course of business unless (x) if so required by the Administrative Agent, the Administrative Agent has conducted Field Exams and appraisals reasonably required by it (with results reasonably satisfactory to the Administrative Agent) and (y) the Person owning such assets or property shall be a (directly or indirectly) wholly-owned Domestic Subsidiary of the Company and have become a Borrower.

 

“Borrowing Base Certificate” means a certificate, in the form of Exhibit D hereto and otherwise in satisfactory to Administrative Agent, by which Borrowers certify calculation of the Borrowing Base.

 

“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, the state where the Administrative Agent’s Office is located and, if such day relates to any interest rate settings as to a LIBOR Loan, any fundings, disbursements, settlements and payments in respect of any such LIBOR Loan, or any other dealings to be carried out pursuant to this Agreement in respect of any such LIBOR Loan, means any such day that is also a London Banking Day.

 

“Capital Leases” means all leases that have been or should be, in accordance with GAAP, recorded as capitalized leases.

 

“Cash Collateralize” means to pledge and deposit with or deliver to the Administrative Agent, (a) for the benefit of one or more of the Letter of Credit Issuer or the Revolving Credit Lenders, as collateral for Letter of Credit Obligations or obligations of the Revolving Credit Lenders to fund participations in respect of Letter of Credit Obligations, cash or deposit account balances or, if the Administrative Agent and the Letter of Credit Issuer shall agree in their sole discretion, other credit support, in each case pursuant to documentation in form and substance satisfactory to the Administrative Agent and the Letter of Credit Issuer or (b) for the benefit of the Administrative Agent, as collateral for Protective Advances or Swing Line Loans that have not been refunded by the Revolving Credit Lenders, cash or deposit account balances or, if the Administrative Agent shall agree in its sole discretion, other credit support, in each case pursuant to documentation in form and substance satisfactory to the Administrative Agent or (c) for the benefit of the Secured Parties during the continuance of an Event of Default or in connection with the Payment in Full, as collateral for any Obligations that are due or may become due, cash or deposit account balances or, if the Administrative Agent shall agree in its sole discretion, other credit support, in each case pursuant to documentation in form and substance satisfactory to the Administrative Agent.  “Cash Collateral” shall have a meaning correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support.

 

“Cash Equivalents” means any of the following types of property, to the extent owned by the Company or any of its Subsidiaries free and clear of all Liens (other than (x) Liens created under the Security Instruments and (y) Liens in favor of the Senior Notes Agent so long as those Liens are at all times subject to the terms of the Intercreditor Agreement):

 

(a)                                 cash, denominated in Dollars;

 

(b)                                 readily marketable direct obligations of the government of the United States or any agency or instrumentality thereof, or obligations the timely payment of principal and interest on which are fully and unconditionally guaranteed by the government of the United States or any state or municipality

 

6

 

thereof (including, without limitation, variable rate demand notes), in each case so long as such obligation is Ratings Compliant;

 

(c)                                  Ratings Compliant commercial paper;

 

(d)                                 insured certificates of deposit or bankers’ acceptances of, or time deposits with any Lender or with any commercial bank;

 

(e)                                  Ratings Compliant readily marketable general obligations of any corporation organized under the laws of any state of the United States of America, payable in the United States of America, expressed to mature not later than twenty-four months following the date of issuance thereof;

 

(f)                                   Ratings Compliant money market sweep vehicles; and

 

(g)                                  readily marketable shares of investment companies or money market funds that, in each case, invest solely in the foregoing Investments described in clauses (a) through (e) above.

 

“CERCLA” means the Comprehensive Environmental Response, Compensation and Liability Act of 1980.

 

“CERCLIS” means the Comprehensive Environmental Response, Compensation and Liability Information System maintained by the U.S. Environmental Protection Agency.

 

“CFC” means a “controlled foreign corporation” within the meaning of Section 957 of the Code.

 

“CFCHC” means any Subsidiary that owns no material assets other than the capital stock or indebtedness of one or more CFCs and/or one or more CFCHCs.

 

“Change in Law” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.

 

“Change of Control” means an event or series of events by which:

 

(a)                                 any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act, but excluding any employee benefit plan of the Company or its Subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) (i) becomes the “beneficial owner” (as defined in Rules 13d-4 and 13d-6 under the Exchange Act, except that a person or group shall be deemed to have “beneficial ownership” of all securities that such person or group has the right to acquire (such right, an “option right”), whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of 35% or more of the Equity Interests of the Company on a fully-diluted basis (and taking into account all such Equity Interests that such person or group has the right to acquire pursuant to any option right) or (ii) obtains the power

 

7

 

(whether or not exercised) to elect a majority of the members of the board of directors or other equivalent governing body; or

 

(b)                                 the Company shall fail to own and control, beneficially and of record (directly or indirectly), 100% of the issued and outstanding Equity Interests of each of its Subsidiaries, except where such failure is the result of a transaction permitted under the Loan Documents; or

 

(c)                                  any “change of control” or similar event occurs under the Notes Documents.

 

“Closing Date” means the first date all the conditions precedent in Section 5.01 are satisfied or waived in accordance with Section 11.01 (or, in the case of Section 5.01(e), waived by the Person entitled to receive the applicable payment).

 

“Code” means the Internal Revenue Code of 1986.

 

“Collateral” means, collectively, certain personal property of the Loan Parties or any other Person in which the Administrative Agent or any Secured Party is granted a Lien under any Security Instrument as security for all or any portion of the Obligations or any other obligation arising under any Loan Document.

 

“Commitment” means a Revolving Credit Commitment.

 

“Commitment Increase” has the meaning specified in Section 2.18(a).

 

“Committed Loan Notice” means a notice of (a) a Borrowing, (b) a conversion of Loans from one Type to the other, or (c) a continuation of LIBOR Loans, in each case, described in Section 2.02.

 

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.

 

“Company” has the meaning specified in the introductory paragraph hereto.

 

“Compliance Certificate” means a certificate substantially in the form of Exhibit B.

 

“Concentration Account” has the meaning specified in Section 4.04(b).

 

“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

 

“Consolidated” means the consolidation, in accordance with GAAP, of the financial condition or operating results of such Person and its Subsidiaries.

 

“Consolidated Capital Expenditures” means, without duplication, any expenditures for any purchase or other acquisition of any asset which would be classified as a fixed or capital asset on a Consolidated balance sheet of the Company and its Subsidiaries prepared in accordance with GAAP; provided, that “Consolidated Capital Expenditures” shall not include (a) capitalized interest under GAAP, (b) expenditures funded with net cash proceeds received by a Loan Party with respect to any insurance or condemnation proceeds for assets being replaced, in each case, received or paid to the account of any Loan Party, (c) any like kind or non-monetary exchange of assets or (d) at any time Tier IV or Tier V applies in the determination of the Incremental Interest Rate (in each case, as defined and determined in the Senior Notes Agreement), any Permitted Acquisition.

 

8

 

“Consolidated EBITDA” means, for any period, Consolidated Net Income plus, to the extent deducted from revenues in determining Consolidated Net Income and without duplication, (i) Consolidated Interest Charges, (ii) expense for income, franchise or similar Taxes paid in cash or accrued, (iii) depreciation expense, (iv) amortization expense, (v) impairment expense, (vi) all non-cash expenses related to stock based compensation, (vii) non-cash expenses (other than related to stock based compensation) in an aggregate amount not to exceed $2,000,000 for any fiscal quarter, (viii) extraordinary expenses as defined by GAAP, (ix) depletion expense, (x) accretion expense, (xi) costs qualifying as abnormal production costs under GAAP, (xii) any deferred financing costs related to prepayments of the Senior Notes, (xiii) any payments of Make-Whole Amount or Required Prepayment Premium on the Senior Notes, (xiv) any deferred financing costs related to a permanent reduction of commitments to lend under the Existing Agreement and this Agreement, and (xv) any restructuring costs, fees and expenses, including without limitation, the costs, fees and expenses of the Financial Advisor paid by the Company and closing and related fees paid by the Company in connection with and contemplated by the Senior Notes Agreement, this Agreement and the termination of the Existing Agreement (A) in an unlimited amount prior to the Closing Date and (B) in an aggregate amount for this clause (xv) after the Closing Date not to exceed $2,000,000, provided that any expenses or costs added pursuant to clauses (v), (vi), (viii) and/or (xi) above that are associated with the conversion of the East Mine Facility to Trio-only production shall not exceed $2,000,000 in the aggregate, minus, to the extent included in Consolidated Net Income, (1) extraordinary income or extraordinary gains, in each case as defined by GAAP, (2) all non-cash income or gains, (3) non-recurring or unusual cash income or gains, (4) income tax credits and refunds (to the extent not netted from tax expense), and (5) any cash payments made during such period in respect of non-cash items described in clause (vi) above subsequent to the fiscal quarter in which the relevant non-cash expenses, charges or losses were incurred, all calculated for the Company and its Subsidiaries on a Consolidated basis for such period.  Any determination of Consolidated EBITDA shall exclude (I) unrealized gains or losses in respect of Rate Management Transactions and (II) any gross potash sales revenue, freight costs, discounts related to sales, warehouse and handling relating expenses, costs of goods sold, lower-of-cost-or-market charges, royalties, by-product credits, environmental remediation expenses, geology expenses (other than those incurred in performing care and maintenance activities), charitable contributions and other income and expenses (other than care and maintenance expenses) related to the West Mine Facility.  For purposes of any determination of Consolidated EBITDA for any period, Consolidated Net Income shall exclude, solely to the extent not otherwise added or subtracted (as the case may be) in determining Consolidated EBITDA for such period, net losses or gains realized in connection with (i) any sale, lease, conveyance or other disposition of any asset (other than in the Ordinary Course of Business) or (ii) repayment, repurchase or redemption of Indebtedness.

 

“Consolidated Fixed Charge Coverage Ratio” means, as of any date of calculation, the ratio of (i) Consolidated EBITDA for the Company’s then most recently ended consecutive four fiscal quarters for which financial statements have been delivered pursuant to Section 7.01(a) or (b) minus (x) the greater of (1) the Capital Expenditure Amount for such period and (2) the aggregate amount of Consolidated Capital Expenditures made during such period minus (y) cash income taxes paid during such period to (ii) Consolidated Fixed Charges.  As used herein, the “Capital Expenditure Amount” means (A) with respect to any consecutive four fiscal quarter period ending on or prior to December 31, 2017, $20,000,000, (B) with respect to any consecutive four fiscal quarter period ending after December 31, 2017 and on or prior to December 31, 2018, $15,000,000, and (C) with respect to any consecutive four fiscal quarter period ending after December 31, 2018, $10,000,000.

 

“Consolidated Fixed Charges” means, for any period, for the Company and its Subsidiaries on a Consolidated basis, the sum of, without duplication, Consolidated Interest Charges for such period (excluding any interest that is paid in kind in respect of the Senior Notes), plus scheduled principal amortization of long term Consolidated Funded Indebtedness paid or payable during such period (other

 

9

 

than in respect of any Synthetic Lease Obligations), plus all Restricted Payments made in cash during such period, all calculated for the Company and its Subsidiaries on a Consolidated basis in accordance with GAAP.

 

“Consolidated Funded Indebtedness” means, at any time, the aggregate amount of Consolidated Indebtedness, excluding (without duplication) (i) obligations of the Company or a Subsidiary representing the deferred purchase price of property or services (other than accounts payable arising in the Ordinary Course of Business), (ii) obligations of the Company or a Subsidiary, whether or not assumed, secured by Liens or payable out of the proceeds or production from property now or hereafter owned or acquired by such Person (other than obligations for borrowed money and obligations which are evidenced by notes, bonds or other similar instruments), (iii) obligations of the Company or a Subsidiary to purchase securities or other property arising out of or in connection with the sale of the same or substantially similar securities or property, but only if such obligation to purchase can be enforced prior to the Maturity Date, (iv) obligations of the Company or a Subsidiary as an account party with respect to commercial Letters of Credit, (v) Contingent Obligations of the Company or a Subsidiary relating to Indebtedness of a type described in clauses (i) through (iv) of this definition (other than Indebtedness of the Company or a Subsidiary), and (vi) Net Mark-To-Market Exposure of the Company or a Subsidiary under Rate Management Transactions.

 

“Consolidated Indebtedness” means at any time the Indebtedness of the Company and its Subsidiaries calculated on a Consolidated basis as of such time.

 

“Consolidated Interest Charges” means, with reference to any period, the interest expense of the Company and its Subsidiaries calculated in accordance with GAAP on a Consolidated basis for such period, plus (without duplication), to the extent treated as interest in accordance with GAAP, premium payments, debt discount, fees (excluding (x) accelerated amortization of fees paid in respect of permanent reductions of commitments to lend under the Existing Agreement and this Agreement, (y) accelerated amortization of fees paid in respect of prepayments of the Senior Notes, and (z) payments of Make-Whole Amount or Required Prepayment Premium (as defined in the Senior Notes Agreement as in effect on the date hereof) on the Senior Notes, in each case in accordance with GAAP), charges and related expenses of the Company and its Subsidiaries in connection with borrowed money (including capitalized interest) or in connection with the deferred purchase price of assets, in each case calculated in accordance with GAAP on a Consolidated basis for such period.

 

“Consolidated Net Income” means, for any period, the net income (or loss) for the Company and its Subsidiaries on a Consolidated basis calculated in accordance with GAAP for such period.

 

“Consolidated Total Assets” means, as of the date of any determination thereof, total assets of the Company and its Subsidiaries calculated in accordance with GAAP on a Consolidated basis as of such date.

 

“Contingent Obligation” of a Person means any agreement, undertaking or arrangement by which such Person assumes, guarantees, endorses, contingently agrees to purchase or provide funds for the payment of, or otherwise becomes or is contingently liable upon, the obligation or liability of any other Person, or agrees to maintain the net worth or working capital or other financial condition of any other Person, or otherwise assures any creditor of such other Person against loss relating to the obligation or liability of any other Person, including, without limitation, any comfort letter tantamount to a guaranty, any operating agreement tantamount to a guaranty, any take-or-pay contract, or the obligations of any such Person as general partner of a partnership with respect to the liabilities of the partnership (other than such obligations of such partnership (or portion thereof) that are made non-recourse to such general partner); provided, that “Contingent Obligation” shall not include warranties or indemnities for goods or

 

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services sold in the ordinary course of business or endorsements of instruments for deposit or collection in the ordinary course of business, and unless otherwise expressly limited by the terms of a guarantee, the amount of any guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith.

 

“Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.

 

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise.  “Controlling” and “Controlled” have meanings correlative thereto.  Without limiting the generality of the foregoing, a Person shall be deemed to be Controlled by another Person if such other Person possesses, directly or indirectly, power to vote 10% or more of the securities having ordinary voting power for the election of directors, managing general partners or the equivalent.

 

“Control Agreement” means, with respect to any Deposit Account, Securities Account or Commodity Account, an agreement, in form and substance satisfactory to the Administrative Agent, among the Administrative Agent, the financial institution or other Person at which such account is maintained and the Loan Party maintaining such account, effective to grant “control” (as defined under the applicable UCC) over such account to the Administrative Agent.

 

“Controlled Account Bank” means each bank with whom Deposit Accounts are maintained in which any funds of any of the Loan Parties are concentrated and with whom a Control Agreement has been, or is required to be, executed in accordance with the terms hereof.

 

“Controlled Deposit Account” means each Deposit Account (including all funds on deposit therein) that is the subject of an effective Control Agreement and that is maintained by any Loan Party with a financial institution approved by the Administrative Agent.

 

“Core Business” means any material line of business conducted by the Company and its Subsidiaries as of the Closing Date and any business incidental, reasonably related or complementary thereto.

 

“Cost” means (a) with respect to Inventory, the lower of (i) cost (as reflected in the general ledger of such Person) and (ii) market value, in each case, determined in accordance with GAAP calculated on a first-in, first-out basis and in accordance with the Loan Parties’ accounting practices as in effect on the Closing Date and (b) with respect to Equipment, Real Property and other property, the lower of (i) cost (as reflected in the general ledger of such Person) and (ii) market value, in each case, determined in accordance with GAAP.

 

“Credit Exposure” means, as to any Lender at any time, the aggregate amount of such Lender’s Revolving Credit Exposure at such time.

 

“Credit Extension” means each of the following: (a) a Borrowing and (b) a Letter of Credit Extension.

 

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“Credit Product Arrangements” means, collectively, (a) Swap Contracts between a Loan Party or an Affiliate of a Loan Party and any Lender or Affiliate of a Lender and (b) Treasury Management and Other Services.

 

“Credit Product Indemnitee” has the meaning assigned to such term in Section 10.12(a).

 

“Credit Product Notice” means the written notice from a Credit Product Provider and the Borrower Agent to the Administrative Agent relating to Credit Product Arrangements in the form of Exhibit F hereto, or such other form as may be acceptable to the Administrative Agent.

 

“Credit Product Obligations” means Indebtedness and other obligations of any Loan Party or an Affiliate of any Loan Party (a) arising under Credit Product Arrangements owing to BMO or its Affiliates or (b) arising under Credit Product Arrangements owing to any Credit Product Provider and with respect to which the Borrower Agent has expressly requested in the applicable Credit Product Notice that such obligations be treated as Credit Product Obligations for purposes hereof; it being understood that such obligations under this clause (b) shall only constitute Credit Product Obligations up to the maximum amount (or, in the case of Credit Product Obligations arising under Swap Contracts, the Swap Termination Value thereunder) specified by the applicable Credit Product Notice, which amount may be established and increased further by written notice from such provider to the Administrative Agent from time to time so long as no Event of Default is continuing and no Overadvance would exist if a Credit Product Reserve were established therefor; provided that Credit Product Obligations shall not include Excluded Swap Obligations.

 

“Credit Product Provider” means (a) BMO or any of its Affiliates and (b) any other Lender or an Affiliate of a Lender that is a provider under a Credit Product Arrangement, so long as such provider and the Borrower Agent deliver a Credit Product Notice to the Administrative Agent by the later of the Closing Date or, if not outstanding on the Closing Date, 10 days following the entering into of the applicable Credit Product Arrangement, (i) describing the Credit Product Arrangement and setting forth the maximum amount of Credit Product Obligations thereunder to be secured by the Collateral (and, if all or any portion of such Credit Product Obligations arise under Swap Contracts, the Swap Termination Value of such Credit Product Obligations) and the methodology to be used in calculating such amount and (ii) agreeing to be bound by Section 10.12.

 

“Credit Product Reserve” means (a) reserves which shall be established by the Administrative Agent in an amount equal to not less than the last reported Swap Termination Value (as given in accordance with the definition of Credit Product Obligation) of the then outstanding Priority Swap Obligations for the account of the Loan Parties or their Affiliates, and (b) reserves established by the Administrative Agent from time to time in its discretion to reflect the reasonably anticipated liabilities in respect of the then outstanding Credit Product Obligations.

 

“Debtor Relief Laws” means the Bankruptcy Code, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

 

“Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would unless cured or waived be an Event of Default.

 

“Default Rate” means an interest rate equal to (a) the Base Rate plus (b) the Applicable Margin with respect to Base Rate Loans plus (c) 2% per annum; provided, however, that (i) with respect to a LIBOR Loan, until the end of the Interest Period during which the Default Rate is first applicable, the

 

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Default Rate shall be an interest rate equal to the interest rate (including any Applicable Margin) otherwise applicable to such LIBOR Loan plus 2% per annum, and thereafter as set forth in the portion of this sentence preceding this proviso, and (ii) with respect to Letter of Credit Fees, the Default Rate shall equal the Letter of Credit Fee then in effect plus 2% per annum, in each case to the fullest extent permitted by applicable Laws.

 

“Defaulting Lender” means, subject to Section 2.17(b), any Lender that (a) has failed to (i) fund all or any portion of its Loans within two Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrower Agent in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent, the Letter of Credit Issuer, the Swing Line Lender or any other Lender any other amount required to be paid by it hereunder (including, in the case of any Revolving Credit Lender, in respect of its participations in Letters of Credit or Swing Line Loans) within two Business Days of the date when due, (b) has notified any Borrower, the Administrative Agent, the Letter of Credit Issuer or the Swing Line Lender in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three Business Days after written request by the Administrative Agent or the Borrower Agent, to confirm in writing to the Administrative Agent and the Borrower Agent that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Borrower Agent), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity or (iii) become the subject of a Bail-In Action; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any Equity Interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender.  Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.17(b)) upon delivery of written notice of such determination by the Administrative Agent to the Borrower Agent, the Letter of Credit Issuer, the Swing Line Lender and each other Lender.

 

“Dilution Percent” means the percent, determined for the most recent Measurement Period, equal to (a) bad debt write-downs or write-offs, discounts, returns, promotions, credits, credit memos and other dilutive items with respect to Accounts, divided by (b) gross sales.

 

“Dilution Reserve” means, at any date of determination, (a) the percentage amount by which the Dilution Percent exceeds five percent (5%) times (b) the amount of Eligible Accounts of the Borrowers.

 

“Direct Foreign Subsidiary” means a Foreign Subsidiary or CFCHC directly owned by a Loan Party.

 

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“Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction and any casualty or condemnation) of any property (including any Equity Interest), or part thereof, by any Person, including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.

 

“Disqualified Equity Interest” means any Equity Interest that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, (a) matures (excluding any maturity as the result of an optional redemption by the issuer thereof) or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, in whole or in part, on or prior to the date that is 180 days after the Maturity Date, (b) is convertible into or exchangeable for debt securities (unless only occurring at the sole option of the issuer thereof), or (c) (i) contains any repurchase obligation that may come into effect prior to, (ii) requires cash dividend payments (other than Taxes) prior to, or (iii) provides the holders thereof with any rights to receive any cash upon the occurrence of a change of control or sale of assets prior to, in each case, the date that is 180 days after the Maturity Date; provided, however, that (i) with respect to any Equity Interests issued to any employee or to any plan for the benefit of employees of the Company or its Subsidiaries or by any such plan to such employees, such Equity Interest shall not constitute Disqualified Equity Interests solely because it may be required to be repurchased by the Company or one of its Subsidiaries in order to satisfy applicable statutory or regulatory obligations or as a result of such employee’s termination, resignation, death or disability, (ii) any class of Equity Interest of such Person that by its terms authorizes such Person to satisfy its obligations thereunder by delivery of an Equity Interest that is not a Disqualified Equity Interest shall not be deemed to be Disqualified Equity Interests and (iii) only the portion of such Equity Interests which so matures or is so mandatorily redeemable, is so convertible or exchangeable or is so redeemable at the option of the holder thereof prior to such date shall be deemed to be Disqualified Equity Interests.

 

“Dollar” and “$” mean lawful money of the United States.

 

“Domestic Subsidiary” means any Subsidiary that is organized under the laws of the United States, any State thereof or the District of Columbia (but excluding, for the avoidance of doubt, any territory or possession thereof).

 

“Dominion Trigger Period” means the period (a) commencing on the day that (i) a Specified Event of Default occurs and is continuing or (ii) for a period of five (5) consecutive days, Availability is less than the greater of (x) seventeen and one-half percent (17.5%) of the Aggregate Revolving Credit Commitments at such time and (y) $7,000,000 and (b) continuing until the date that during the previous thirty (30) consecutive days, (i) no Default or Event of Default has existed and (ii) Availability has been greater than the greater of (x) seventeen and one-half percent (17.5%) of the Aggregate Revolving Credit Commitments at such time and (y) $7,000,000.

 

“East Mine Facility” means the Company’s mine identified as “East” or “Carlsbad East” in the annual report of the Company on Form 10-K for the fiscal year ended December 31, 2015.

 

“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

 

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“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

 

“EEA Resolution Authority” means any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

 

“Egan-Jones” means Egan-Jones Ratings Company and any successor thereto.

 

“Eligible Accounts” means Accounts due to a Borrower that are determined by the Administrative Agent, in its reasonable judgment, to be Eligible Accounts.  Except as otherwise agreed by the Administrative Agent, none of the following shall be deemed to be Eligible Accounts:

 

(a)                                 Accounts that are not fully earned by performance (or otherwise represent a progress billing, pre-billing or rebate accrual) or not evidenced by an invoice which has been delivered to the applicable Account Debtor;

 

(b)                                 Accounts that have been outstanding for more than one hundred twenty (120) days from the original invoice date or more than sixty (60) days past the original due date whichever comes first;

 

(c)                                  Accounts due from any Account Debtor, fifty percent (50%) of whose Accounts are otherwise ineligible under the terms of clause (b) above;

 

(d)                                 Accounts with respect to which (i) any representation or warranty set for in any Loan Document with respect thereto is not true and correct in all material respects, (ii) a Borrower does not have good, valid and marketable title thereto, free and clear of any Lien (other than Permitted Liens described in clause (a) of Section 8.02) or (iii) the applicable Account Debtor has not been instructed to (or does not in fact) remit payment to a deposit account of a Borrower subject to a Control Agreement;

 

(e)                                  Accounts which are disputed or with respect to which a claim, counterclaim, offset or chargeback has been asserted, but only to the extent of such dispute, counterclaim, offset or chargeback;

 

(f)                                   Accounts which (i) do not arise out of a sale of goods or rendition of services in the ordinary course of business, (ii)  do not arise upon credit terms usual to the business of the Borrowers or (iii) are not payable in Dollars;

 

(g)                                  Accounts (i) upon which a Borrower’s right to receive payment is not absolute or is contingent upon the fulfillment of any condition whatsoever, including cash on delivery and cash in advance transactions or (ii) as to which a Borrower is not able to bring suit or otherwise enforce its remedies against the related Account Debtor through judicial process;

 

(h)                                 Accounts which are owed by (i) any other Borrower or (ii) any Affiliate which is not a Borrower;

 

(i)                                     Accounts for which all material consents, approvals or authorizations of, or registrations or declarations with any Governmental Authority required to be obtained, effected or given in connection with the performance of such Account by the Account Debtor or in connection with the enforcement of such Account by the Administrative Agent have not been duly obtained, effected or given or are not in full force and effect;

 

15

 

(j)                                    Accounts due from an Account Debtor which is the subject of any bankruptcy, insolvency or similar proceeding under any Debtor Relief Laws, has had a trustee or receiver appointed for all or a substantial part of its property, has made an assignment for the benefit of creditors or has suspended its business;

 

(k)                                 Accounts due from any Governmental Authority, except to the extent that the subject Account Debtor has complied with the Federal Assignment of Claims Act of 1940, the Financial Administration Act (Canada), or any similar state, territorial, municipal, county or provincial legislation;

 

(l)                                     Accounts (i) owing from any Account Debtor that is also a supplier to or creditor of a Borrower unless such Person has waived any right of setoff in a manner reasonably acceptable to the Administrative Agent but only to the extent of the aggregate amount of such Borrower’s liability to such Account Debtor, (ii) to the extent representing any manufacturer’s or supplier’s allowances, credits, discounts, incentive plans or similar arrangements entitling such Borrower to discounts on future purchase therefrom, (iii) to the extent constituting amounts owed with respect to loans or advances, or (iv) to the extent relating to payment of interest, fees or late charges;

 

(m)                             Accounts arising out of sales on a bill-and-hold, guaranteed sale, sale-or-return, sale on approval or consignment basis or subject to any right of return, setoff or charge back;

 

(n)                                 Accounts arising out of sales to Account Debtors outside the United States or Canada unless either (i) such Accounts are fully backed by an irrevocable letter of credit on terms, and issued by a financial institution, acceptable to the Administrative Agent and such irrevocable letter of credit is in the possession of the Administrative Agent, or (ii) such Accounts are supported by credit insurance acceptable to the Administrative Agent, naming the Administrative Agent as an additional insured and loss payee (calculated net of the amount of any premiums, deductibles, co-insurance, fees or similar costs of and amounts relating to such credit insurance payable by any Borrower);

 

(o)                                 Accounts that are evidenced by a judgment, Instrument or Chattel Paper;

 

(p)                                 Accounts due from an Account Debtor and its Affiliates, the aggregate of which Accounts due from such Account Debtor represents more than twenty percent (20%) of all then outstanding Accounts owed to the Borrowers, but only to the extent of such excess;

 

(q)                                 Accounts that remain open after the applicable Account Debtor has made a partial payment in respect of the applicable invoice (whether or not the applicable Account Debtor has provided an explanation for such partial payment);

 

(r)                                    Accounts where the applicable Account Debtor tendered a check or other item of payment in full or partial satisfaction and such check or other item of payment has been returned by the financial institution on which it is drawn;

 

(s)                                   Accounts for which payment has been received by the applicable Borrower but such payment has not been applied to the applicable Account;

 

(t)                                    Accounts that represent service charges, late fees or similar charges due to processors; or

 

(u)                                 Accounts that are not subject to a valid and enforceable agreement between the applicable Borrower and Account Debtor.

 

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“Eligible Assignee” means (a) a Lender or any of its Affiliates; (b) an Approved Fund; and (c) any other Person (other than a natural person) approved by (i) the Administrative Agent, the Letter of Credit Issuer (if the applicable assignment increases the obligation of the assignee to participate in exposure under one or more Letters of Credit (whether or not then outstanding)) and the Swing Line Lender (if the applicable assignment increases the obligation of the assignee to participate in exposure under one or more Swing Line Loans (whether or not then outstanding)) (each such approval not to be unreasonably withheld or delayed), and (ii) unless an Event of Default has occurred and is continuing, the Borrower Agent (such approval not to be unreasonably withheld or delayed); provided that, notwithstanding the foregoing, “Eligible Assignee” shall not include a Loan Party or any of the Loan Parties’ Affiliates.

 

“Eligible Inventory” means Inventory of a Borrower that is determined by the Administrative Agent, in its reasonable judgment exercised in good faith, to be Eligible Inventory.  Except as otherwise agreed by the Administrative Agent, the following items of Inventory shall not be included in Eligible Inventory:

 

(a)                                 Inventory that is not solely owned by a Borrower or a Borrower does not have good and valid title thereto;

 

(b)                                 Inventory that (i) does not consist of finished goods or (ii) is not readily saleable in the Ordinary Course of Business;

 

(c)                                  Inventory that does not comply with each of the covenants, representations and warranties respecting Inventory made by the Borrowers in the Loan Documents;

 

(d)                                 Inventory that is leased by a Borrower;

 

(e)                                  Inventory that is not located in the United States of America or Canada (excluding territories or possessions of the United States or Canada);

 

(f)                                   Inventory that is not at a location that is owned by a Borrower, provided, however, that such Inventory that is located on leased premises or in the possession of a warehouseman, bailee, processor, repairman, mechanic or similar other Person in the ordinary course of business shall not be excluded from Eligible Inventory under this clause (f) so long as the lessor or such Person possessing such Inventory has delivered a Lien Waiver to the Administrative Agent or, if elected by the Administrative Agent, an appropriate Rent and Charges Reserve has been established;

 

(g)                                  Inventory on consignment by any Borrower to any consignee which is a customer of a Borrower unless (i) the consignee has (x) executed a Lien Waiver with Administrative Agent, and (y) provided evidence acceptable to Administrative Agent that the applicable Borrower has properly perfected a first priority security interest in such consigned Inventory and has properly notified in writing the other creditors of consignee who hold an interest in such Inventory of such Borrower’s security interest in such Inventory, (ii) such Inventory is easily identifiable and not comingled with assets owned by such consignee or any other Person, (iii) the value of such Inventory does not exceed $5,000,000 in the aggregate and (iv) the applicable Borrower has taken such other actions with respect to such consigned Inventory as Administrative Agent may reasonably request;

 

(h)                                 Inventory that is in transit, except between locations of Borrowers (or between locations of Borrowers and processors or vendors in the Ordinary Course of Business);

 

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(i)                                     Inventory that is comprised of goods which (i) are damaged, defective, “seconds” or otherwise unmerchantable, (ii) have been returned or are to be returned to the vendor, (iii) are discontinued products, obsolete or slow moving or (iv) are otherwise subject to recall or similar notice;

 

(j)                                    Inventory consisting of work-in-process (unless work-in-process approved by the Administrative Agent) or spare parts or “stores” Inventory;

 

(k)                                 Inventory consisting of promotional, marketing, packaging and shipping materials or supplies used or consumed in the Borrowers’ business and other similar non-merchandise categories;

 

(l)                                     Inventory that is not in compliance in all material respects with all standards imposed by any Governmental Authority having regulatory authority over such Inventory, its use or sale;

 

(m)                             Inventory that is subject to any warehouse receipt, bill of lading or negotiable Document that has not been issued to or in the name of the Administrative Agent;

 

(n)                                 Inventory consisting of or containing Hazardous Materials;

 

(o)                                 Inventory that is not subject to a perfected first priority Lien in favor of the Administrative Agent (subject only to Permitted Liens set forth in clauses (c), (d) or (m) of Section 8.02 hereof);

 

(p)                                 Inventory that is not insured in compliance with the provisions of this Agreement and the other Loan Documents;

 

(q)                                 Inventory not on a perpetual schedule; or

 

(r)                                    Inventory that is subject to any License or other arrangement that restricts such Borrowers’ or the Administrative Agent’s right to dispose of such Inventory, unless (i) Administrative Agent has received an appropriate Lien Waiver or, if elected by the Administrative Agent, an appropriate Rent and Charges Reserve has been established and (ii) such Borrowers have not received notice of a dispute in respect of any such License or other arrangement.

 

“Environmental Laws” means any and all federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, or other applicable governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including those related to hazardous substances or wastes, air emissions and discharges to waste or public systems.

 

“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of a Loan Party or any of its Subsidiaries directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

 

“Equity Interests” means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other

 

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ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.

 

“ERISA” means the Employee Retirement Income Security Act of 1974.

 

“ERISA Affiliate” means any trade or business (whether or not incorporated) under common control with any Loan Party within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).

 

“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) the withdrawal of any Loan Party or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which such entity was a “substantial employer” as defined in Section 4001(a)(3) of ERISA or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by any Loan Party or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Pension Plan amendment as a termination under Section 4041 or 4041A of ERISA; (e) the institution by the PBGC of proceedings to terminate a Pension Plan; (f) any event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan; (g) the determination that any Pension Plan is considered an at-risk plan or a plan in endangered or critical status within the meaning of Sections 430, 431 and 432 of the Code or Sections 303, 304 and 305 of ERISA; or (h) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon any Loan Party or any ERISA Affiliate.

 

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor thereto), as in effect from time to time.(1)

 

“Eurocurrency liabilities” has the meaning specified in Section 3.04(e).

 

“Event of Default” has the meaning specified in Section 9.01.

 

“Exchange Act” means the Securities Exchange Act of 1934 and the regulations promulgated thereunder.

 

“Excluded Deposit Account” means (a) Deposit Accounts the balance of which consists exclusively of withheld income Taxes and federal, state or local employment Taxes, (b) all Deposit Accounts constituting (and the balance of which consists solely of funds set aside in connection with) payroll accounts, trust accounts, and accounts dedicated to the payment of accrued employee benefits, medical, dental and employee benefits claims to employees of any Loan Party, (c) zero balance disbursement accounts, (d) Excluded Escrow/Cash Collateral Accounts and (e) other Deposit Accounts maintained in the Ordinary Course of Business containing cash amounts that do not exceed at any time $10,000 for any such account.

 

“Excluded Domestic Subsidiary” means (a) each Domestic Subsidiary that is not a wholly-owned Subsidiary (for so long as such Subsidiary remains a non-wholly-owned Subsidiary), (b) each Domestic

 

(1)  The EU Bail-In Legislation Schedule may be found at http://www.lma.eu.com/uploads/files/EU%20BAIL-IN%20LEGISLATION%20SCHEDULE%2022-Dec-2015%2010-46%20.pdf

 

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Subsidiary that is an Immaterial Subsidiary, and (c) any Domestic Subsidiary that is (i) a CFCHC or (ii) a direct or indirect Subsidiary of any CFC or CFCHC; provided, however that, notwithstanding the foregoing, no Borrower shall be an Excluded Domestic Subsidiary.

 

“Excluded Equity Interests” shall mean (a) any Voting Equity Interests of any Direct Foreign Subsidiary in excess of 65% of the outstanding Voting Equity Interests of such Direct Foreign Subsidiary, (b) any Equity Interests of any Subsidiary of a Direct Foreign Subsidiary, (c) the Equity Interests of a Subsidiary that is not a wholly-owned Subsidiary the pledge of which would violate a contractual obligation to the owners of the other Equity Interests of such Subsidiary (other than any such owners that are the Company or Affiliates of the Company) that is binding on or relating to such Equity Interests, or the applicable organizational documents, joint venture agreement or shareholders’ agreement of such Subsidiary, and (d) Equity Interests of any Immaterial Subsidiary.

 

“Excluded Escrow/Cash Collateral Account” means:

 

(a)                                 any Deposit Account containing only escrowed amounts or cash collateral, in each case in favor of or securing obligations owed to Governmental Authorities, provided that any Lien on such Deposit Account is permitted in accordance with Section 8.02, or

 

(b)                                 that certain Deposit Account of the Company located at U.S. Bank National Association with account number 433001391, provided that such Deposit Account contains exclusively cash collateral, in an amount not to exceed $550,000 at any time, which secures a letter of credit in the face amount of $500,000 issued by U.S. Bank National Association to the landlord under a real estate lease of the Company.

 

“Excluded Real Property” means (a) any fee-owned Real Property of a Loan Party with a purchase price of less than $500,000 individually and that is not subject to the Lien of the Senior Notes Agent, (b) any Real Property that is subject to a Lien permitted by Sections 8.02(c) or (j), (c) any Real Property with respect to which, in the reasonable judgment of the Administrative Agent the cost (including as a result of adverse tax consequences) of providing a Mortgage shall be excessive in view of the benefits to be obtained by the Lenders, (d) any Real Property to the extent providing a mortgage on such Real Property would (i) be prohibited or limited by any applicable law, rule or regulation (but only so long as such prohibition or limitation is in effect), (ii) violate a contractual obligation to the owners of such Real Property (other than any such owners that are Loan Parties or their Affiliates) that is binding on or relating to such Real Property but only to the extent such contractual obligation was not incurred in anticipation of this provision or (iii) give any other party to any contract, agreement, instrument or indenture governing such Real Property the right to terminate its obligations thereunder.

 

“Excluded Securities Account” means Securities Accounts maintained in the Ordinary Course of Business containing assets, including securities entitlements, financial assets or other amounts, with a fair market value that do not exceed at any time $10,000 for any such account.

 

“Excluded Swap Obligation” means, with respect to any Loan Party, any Swap Obligation if, and to the extent that, all or a portion of the Guarantee of such Loan Party of, or the grant by such Loan Party of a Lien to secure, such Swap Obligation (or any Guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Loan Party’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the Guarantee of such Loan Party or the grant of such Lien becomes effective with respect to such Swap Obligation.  If a Swap Obligation arises under a

 

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master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such Guarantee or Lien is or becomes illegal.

 

“Excluded Taxes” means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated and including U.S. federal backup withholding Taxes), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its Lending Office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan or Commitment (other than pursuant to an assignment request by the Borrower Agent under Section 11.13) or (ii) such Lender changes its Lending Office, except in each case to the extent that, pursuant to Section 3.01, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its Lending Office, (c) Taxes attributable to such Recipient’s failure to comply with Section 3.01(e) and (d) any U.S. federal withholding Taxes imposed pursuant to FATCA.

 

“Existing Agreement” means that certain Credit Agreement, dated as of August 3, 2011, among the Company, U.S. Bank National Association, as administrative agent, and a syndicate of lenders, as amended through the Closing Date.

 

“Existing Letters of Credit” means the letters of credit issued by a Lender and outstanding under the Existing Agreement which are identified on Schedule 1.01 hereto.

 

“Extraordinary Expenses” means all costs, expenses, liabilities or advances that Administrative Agent may incur or make during a Default or Event of Default, or during the pendency of a proceeding of any Loan Party under any Debtor Relief Laws, including those relating to (a) any audit, inspection, repossession, storage, repair, appraisal, insurance, manufacture, preparation or advertising for sale, sale, collection, or other preservation of or realization upon any Collateral; (b) any action, arbitration or other proceeding (whether instituted by or against Administrative Agent, any Lender, any Loan Party, any representative of creditors of a Loan Party or any other Person) in any way relating to any Collateral (including the validity, perfection, priority or avoidability of Administrative Agent’s Liens with respect to any Collateral), Loan Documents, Letters of Credit or Obligations, including any lender liability or other claims; (c) the exercise, protection or enforcement of any rights or remedies of Administrative Agent in, or the monitoring of, any proceeding applicable to any Loan Party under any Debtor Relief Laws; (d) settlement or satisfaction of any Taxes, charges or Liens with respect to any Collateral; (e) any enforcement action; (f) negotiation and documentation of any modification, waiver, workout, restructuring or forbearance with respect to any Loan Documents or Obligations; and (g) Protective Advances.  Such costs, expenses and advances include transfer fees, Other Taxes, storage fees, insurance costs, permit fees, utility reservation and standby fees, legal fees, appraisal fees, brokers’ fees and commissions, auctioneers’ fees and commissions, accountants’ fees, environmental study fees, wages and salaries paid to employees of any Loan Party or independent contractors in liquidating any Collateral, and travel expenses.

 

“Facility” means the Revolving Credit Facility.

 

“Facility Termination Date” means the date as of which Payment in Full has occurred.

 

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“Fair Market Value” means, with respect to any asset or any group of assets, as of any date of determination, the value of the consideration obtainable in a sale of such assets at such date of determination assuming a sale by a willing seller to a willing purchaser dealing at arm’s length and arranged in an orderly manner over a reasonable period of time giving regard to the nature and characteristics of such asset.

 

“FASB ASC” means the Accounting Standards Codification of the Financial Accounting Standards Board.

 

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code and any applicable intergovernmental agreements entered into with respect to the foregoing and any applicable Law implementing such intergovernmental agreement.

 

“FCPA” means the U.S. Foreign Corrupt Practices Act.

 

“Federal Funds Rate” means, for any day, the rate per annum equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to BMO on such day on such transactions as determined by the Administrative Agent.

 

“Fee Letter” means that certain amended and restated fee letter agreement dated the date hereof, between the Company and BMO.

 

“Field Exam” means any visit and inspection of the properties, assets and records of any Loan Party during the term of this Agreement, which shall include access to such properties, assets and records sufficient to permit the Administrative Agent or its representatives to examine, audit and make extracts from any Loan Party’s books and records, make examinations and audits of any Loan Party’s other financial matters and Collateral as Administrative Agent deems appropriate in its reasonable judgment exercised in good faith, and discussions with its officers, employees, agents, advisors and independent accountants regarding such Loan Party’s business, financial condition, assets, prospects and results of operations.

 

“Financial Advisor” means FTI Consulting, Inc..

 

“FIRREA” means The Financial Institutions Reform, Recovery, and Enforcement Act of 1989.

 

“Fitch” means Fitch Ratings Inc. and any successor thereto.

 

“Fixed Charge Trigger Period” means the period (a) commencing on the day that Availability is less than the greater of (i) fifteen percent (15.0%) of the Aggregate Revolving Credit Commitments at such time and (ii) $6,000,000 and (b) continuing until the date that during the previous thirty (30) consecutive days, Availability has been equal to or greater than the greater of (i) fifteen percent (15.0%)

 

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of the Aggregate Revolving Credit Commitments at such time and (ii) $6,000,000 at all times during such period.

 

“FLSA” means the Fair Labor Standards Act of 1938.

 

“Foreign Lender” means a Lender that is not a U.S. Person.

 

“Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.

 

“FRB” means the Board of Governors of the Federal Reserve System of the United States.

 

“Fronting Exposure” means, at any time there is a Defaulting Lender that is a Revolving Credit Lender, (a) with respect to the Letter of Credit Issuer, such Defaulting Lender’s Applicable Percentage of the outstanding Letter of Credit Obligations other than Letter of Credit Obligations as to which such Defaulting Lender’s participation obligation has been reallocated to other Revolving Credit Lenders or Cash Collateralized in accordance with the terms hereof, (b) with respect to the Swing Line Lender, such Defaulting Lender’s Applicable Percentage of Swing Line Loans other than Swing Line Loans as to which such Defaulting Lender’s participation obligation has been reallocated to other Revolving Credit Lenders and (c) with respect to the Administrative Agent, such Defaulting Lender’s Applicable Percentage of Protective Advances other than Protective Advances as to which such Defaulting Lender’s participation obligation has been reallocated to other Revolving Credit Lenders.

 

“Fund” means any Person (other than a natural Person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its activities.

 

“GAAP” means generally accepted accounting principles as in effect from time to time in the United States, consistently applied.

 

“Governmental Authority” means the government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

 

“Governmental Official” means any officer or employee of a Governmental Authority, or of a public national or international organization, or any person acting in an official capacity for or on behalf of any such Governmental Authority, or for or on behalf of any such public national or international organization.

 

“Guarantee” means, as to any Person, any (a) obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other obligation of the payment or performance thereof or to

 

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protect such obligee against loss in respect thereof (in whole or in part), or (b) Lien on any assets of such Person securing any Indebtedness or other obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain any such Lien).  The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith.  The term “Guarantee” as a verb has a corresponding meaning.

 

“Guarantor” means each Person who executes or becomes a party to this Agreement as a guarantor pursuant to Article XII or otherwise executes and delivers a guaranty agreement acceptable to the Administrative Agent guaranteeing any of the Obligations.

 

“Guarantor Payment” has the meaning specified in Section 2.15(c).

 

“Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.

 

“Honor Date” has the meaning specified in Section 2.03(c)(i).

 

“Immaterial Subsidiary” means any Subsidiary the gross revenue or total assets of which accounts for not more than (i) 2.5% of the consolidated gross revenues (after intercompany eliminations) of the Company and its Subsidiaries and (ii) 2.5% of Consolidated Total Assets (after intercompany eliminations), in each case, as of the last day of the most recently completed fiscal quarter as reflected on the financial statements for such quarter. If the Subsidiaries that constitute Immaterial Subsidiaries pursuant to the previous sentence account for, in the aggregate, more than (i) 5.0% of such consolidated gross revenues (after intercompany eliminations) or (ii) 5.0% of Consolidated Total Assets (after intercompany eliminations), each as described in the previous sentence, then the term “Immaterial Subsidiary” shall exclude each such Subsidiary (starting with the Subsidiary that accounts for the most consolidated gross revenues or Consolidated Total Assets and then in descending order) necessary to limit the Immaterial Subsidiaries as a group to the lesser of 5.0% of the consolidated gross revenues and 5.0% of Consolidated Total Assets, each as described in the previous sentence.

 

“Indebtedness” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:

 

(a)                                 all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments or upon which interest is customarily paid;

 

(b)                                 all direct or Contingent Obligations of such Person arising under or in respect of letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and other financial products and services (including treasury management and commercial credit card, merchant card and purchase or procurement card services);

 

(c)                                  net obligations of such Person under any Swap Contract;

 

(d)                                 all obligations of such Person to pay the deferred purchase price of property or services (other than trade accounts payable in the Ordinary Course of Business);

 

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(e)                                  indebtedness secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;

 

(f)                                   obligations under Capital Leases of such Person;

 

(g)                                  all obligations of such Person with respect to the redemption, repayment or other repurchase or payment in respect of any Disqualified Equity Interest; and

 

(h)                                 all Guarantees of such Person in respect of any of the foregoing.

 

For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, to the extent such Indebtedness is recourse to such Person.  The amount of any net obligation under any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such date.  The amount of any Capital Lease or Synthetic Lease Obligation as of any date shall be deemed to be the amount of Attributable Indebtedness in respect thereof as of such date.

 

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document and (b) to the extent not otherwise described in clause (a), Other Taxes.

 

“Indemnitees” has the meaning specified in Section 11.04(b).

 

“Information” has the meaning specified in Section 11.07.

 

“Insolvency Event” means, with respect to any Person:

 

(a)                                 the commencement of: (i) a voluntary case by such Person under the Bankruptcy Code or (ii) the seeking of relief by such Person under other Debtor Relief Laws;

 

(b)                                 the commencement of an involuntary case or proceeding against such Person under the Bankruptcy Code or other Debtor Relief Laws and the petition or other filing is not controverted or dismissed within sixty (60) days after commencement of the case or proceeding;

 

(c)                                  a custodian (as defined in the Bankruptcy Code or equal term under any other Debtor Relief Law, including a receiver, interim receiver, receiver manager, trustee or monitor) is appointed for, or takes charge of, all or substantially all of the property of such Person;

 

(d)                                 such Person commences (including by way of applying for or consenting to the appointment of, or the taking charge by, a rehabilitator, receiver, interim receiver, custodian, trustee, monitor, conservator or liquidator (or any equal term under any other Debtor Relief Laws) (collectively, a “conservator”) of such Person or all or any substantial portion of its property) any other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency, liquidation, rehabilitation, conservatorship or similar law of any jurisdiction whether now or hereafter in effect relating to such Person;

 

(e)                                  such Person is adjudicated by a court of competent jurisdiction to be insolvent or bankrupt;

 

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(f)                                   any order of relief or other order approving any such case or proceeding referred to in clauses (a)  or (b)  above is entered;

 

(g)                                  such Person suffers any appointment of any conservator or the like for it or any substantial part of its property that continues undischarged or unstayed for a period of sixty (60) days; or

 

(h)                                 such Person makes an assignment for the benefit of creditors or generally does not pay its debts as such debts become due.

 

“Intellectual Property” means all past, present and future: trade secrets, know-how and other proprietary information; trademarks, uniform resource locations (URLs), internet domain names, service marks, sound marks, trade dress, trade names, business names, designs, logos, slogans (and all translations, adaptations, derivations and combinations of the foregoing) indicia and other source and/or business identifiers, and the goodwill of the business relating thereto and all registrations or applications for registrations which have heretofore been or may hereafter be issued thereon throughout the world; copyrights (including copyrights for computer programs) and copyright registrations or applications for registrations which have heretofore been or may hereafter be issued throughout the world and all tangible property embodying the copyrights, unpatented inventions (whether or not patentable); patent applications and patents; industrial design applications and registered industrial designs; license agreements related to any of the foregoing and income therefrom; books, records, writings, computer tapes or disks, flow diagrams, specification sheets, computer software, source codes, object codes, executable code, data, databases and other physical manifestations, embodiments or incorporations of any of the foregoing; the right to sue for all past, present and future infringements of any of the foregoing; all other intellectual property; and all common law and other rights throughout the world in and to all of the foregoing.

 

“Intercreditor Agreement” means that certain intercreditor agreement among the Administrative Agent, the Senior Notes Agent and the Loan Parties, dated as of the date hereof and in form and substance acceptable to the Administrative Agent.

 

“Interest Payment Date” means, (a) as to any LIBOR Loan, (i) the last day of each Interest Period applicable to such LIBOR Loan; provided that if any Interest Period for a LIBOR Loan is greater than three months, the respective dates that fall every three months after the beginning of such Interest Period shall also be Interest Payment Dates (ii) any date that such Loan is prepaid or converted, in whole or in part, and (iii) the Maturity Date; and (b) as to any Base Rate Loan (including a Swing Line Loan), (i) the first day of each calendar quarter with respect to interest accrued through the last day of the immediately preceding calendar quarter, (ii) any date that such Loan is prepaid or converted, in whole or in part, and (iii) the Maturity Date; provided, further, that interest accruing at the Default Rate shall be payable from time to time upon demand of the Administrative Agent.

 

“Interest Period” means, as to each LIBOR Loan, the period commencing on the date such LIBOR Loan is disbursed or converted to or continued as a LIBOR Loan and ending, in each case, on the date one, two, three or six months thereafter, as selected by the Borrower Agent in its Committed Loan Notice; provided that:

 

(a)                                 any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day;

 

(b)                                 any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and

 

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(c)                                  no Interest Period shall extend beyond the Maturity Date.

 

“Intrepid Moab” has the meaning specified in the introductory paragraph hereto.

 

“Intrepid New Mexico” has the meaning specified in the introductory paragraph hereto.

 

“Investment” means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of Equity Interests of another Person (including through the purchase of an option, warrant or convertible or similar type of security), (b) a loan, advance or capital contribution to, Guarantee or assumption of debt of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person and any arrangement pursuant to which the investor Guarantees Indebtedness of such other Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute a business unit.  For purposes of compliance with Section 8.03, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment, less all returns of principal or equity thereon (and without adjustment by reason of the financial condition of such other Person) and shall, if made by the transfer or exchange of property other than cash, be deemed to have been made in an original principal or capital amount equal to the Fair Market Value of such property at the time of such transfer or exchange.

 

“IP Rights” rights of any Person to use any Intellectual Property.

 

“IRB” means any self-funded industrial revenue bond transaction set forth in Schedule 1.03, or any such transaction entered into by the Company or any of its Subsidiaries after the date hereof pursuant to the provisions of Sections 4-59-1 to 4-59-16 of the New Mexico Statutes Annotated, 1978 Compilation, as amended, or any comparable statute, regulation or program in any other state, so long as, in each case, such transaction is debt-neutral (with the relevant municipality or county issuing such bonds, the Company purchasing such bonds, and the relevant Subsidiary receiving the proceeds from the sales of such bonds) and is generally of the kind and nature entered into by the Company and its Subsidiaries prior to the date hereof.

 

“ISP” means, with respect to any Letter of Credit, the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance).

 

“Issuer Documents” means with respect to any Letter of Credit, the Letter of Credit Application, and any other document, agreement and instrument entered into by the Letter of Credit Issuer and any Borrower (or any Subsidiary) or in favor the Letter of Credit Issuer and relating to any such Letter of Credit.

 

“Laws” means, collectively, all international, foreign, federal, state and local statutes, treaties, rules, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.

 

“Lender” has the meaning specified in the introductory paragraph hereto and, as the context requires, includes the Letter of Credit Issuer and the Swing Line Lender.

 

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“Lending Office” means, as to any Lender, the office or offices of such Lender described as such in such Lender’s Administrative Questionnaire, or such other office or offices as a Lender may from time to time notify the Borrower Agent and the Administrative Agent.

 

“Letter of Credit” means any standby or documentary letter of credit issued by an Letter of Credit Issuer for the account of a Borrower, or any indemnity, guarantee, exposure transmittal memorandum or similar form of credit support issued by the Administrative Agent or an Letter of Credit Issuer for the benefit of a Borrower, and shall include the Existing Letters of Credit.

 

“Letter of Credit Advance” means each Revolving Credit Lender’s funding of its participation in any Letter of Credit Borrowing in accordance with its Applicable Percentage.  All Letter of Credit Advances shall be denominated in Dollars.

 

“Letter of Credit Application” means an application and agreement for the issuance or amendment of a Letter of Credit in the form from time to time in use by the Letter of Credit Issuer.

 

“Letter of Credit Borrowing” means an extension of credit resulting from a drawing under any Letter of Credit which has not been reimbursed on the date when made or refinanced as a Revolving Credit Borrowing.

 

“Letter of Credit Expiration Date” means the day that is ten days prior to the Maturity Date (or, if such day is not a Business Day, the preceding Business Day).

 

“Letter of Credit Extension” means, with respect to any Letter of Credit, the issuance thereof or extension of the expiry date thereof, or the renewal or increase of the amount thereof.

 

“Letter of Credit Fees” means, collectively or individually as the context may indicate, the fees with respect to Letters of Credit described in Section 2.09(b).

 

“Letter of Credit Issuer” means BMO, in its capacity as an issuer of Letters of Credit hereunder, or any successor issuer of Letters of Credit hereunder.  At any time there is more than one Letter of Credit Issuer, all singular references to the Letter of Credit Issuer shall mean any Letter of Credit Issuer, either Letter of Credit Issuer, each Letter of Credit Issuer, the Letter of Credit Issuer that has issued the applicable Letter of Credit, or both Letter of Credit Issuers, as the context may require.

 

“Letter of Credit Obligations” means, as at any date of determination, (a) the aggregate undrawn amount of all outstanding Letters of Credit, plus (b) the aggregate of all Unreimbursed Amounts, including all Letter of Credit Borrowings, plus (c) the aggregate amount of all accrued and unpaid Letter of Credit Fees.  For purposes of computing the amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.07.  For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be drawn.

 

“Letter of Credit Sublimit” means an amount equal to the lesser of (a) $5,000,000 and (b) the Aggregate Revolving Credit Commitments.  The Letter of Credit Sublimit is part of, and not in addition to, the Aggregate Revolving Credit Commitments.

 

“LIBOR Loan” means a Loan that bears interest at a rate based on clause (a) of the definition of “LIBOR Rate.”

 

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“LIBOR Rate” means:

 

(a)                                 for any Interest Period with respect to a LIBOR Loan, the rate per annum equal to (but in no event less than zero) (i) the ICE Benchmark Administration (or the successor thereto if the ICE Benchmark Administration is no longer making the LIBOR Rate available) LIBOR Rate (“ICE LIBOR”), as published by Reuters (or such other commercially available source providing quotations of ICE LIBOR as designated by the Administrative Agent from time to time) at approximately 11:00 a.m., London time, two London Banking Days prior to the commencement of such Interest Period, for Dollar deposits (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period or, (ii) if such rate is not available at such time for any reason, the rate per annum determined by the Administrative Agent to be the rate at which deposits in Dollars for delivery on the first day of such Interest Period in same day funds in the approximate amount of the LIBOR Loan being made, continued or converted and with a term equivalent to such Interest Period would be offered by such other authoritative source (as is selected by the Administrative Agent in its sole reasonable discretion)  to major banks in the London interbank eurodollar market at their request at approximately 11:00 a.m. (London time) two (2) London Banking Days prior to the commencement of such Interest Period; and

 

(b)                                 for any interest calculation with respect to a Base Rate Loan on any date, the rate per annum equal to (but which shall never be less than zero) (i) ICE LIBOR, at approximately 11:00 a.m., London time on such date for Dollar deposits being delivered in the London interbank market for a term of one month commencing that day or (ii) if such published rate is not available at such time for any reason, the rate per annum determined by the Administrative Agent to be the rate at which deposits in Dollars for delivery on the date of determination in same day funds in the approximate amount of the Base Rate Loan being made or maintained and with a term equal to one month would be offered by such other authoritative source (as is selected by the Administrative Agent in its sole reasonable discretion) to major banks in the London interbank eurodollar market at their request at the date and time of determination.

 

“License” means any license or agreement under which a Loan Party is granted IP Rights in connection with any manufacture, marketing, distribution or disposition of Collateral, any use of assets or property or any other conduct of its business.

 

“Licensor” means any Person from whom a Loan Party obtains IP Rights.

 

“Lien” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge or other security interest, or any preference, priority or other security agreement or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to Real Property, and any financing lease having substantially the same economic effect as any of the foregoing).

 

“Lien Waiver” means an agreement, in form and substance reasonably satisfactory to the Administrative Agent, by which (a) for any material Collateral located on leased premises or owned premises subject to a mortgage, the lessor or mortgagee, as applicable, agrees to, among other things, waive or subordinate any Lien it may have on the Collateral and permit the Administrative Agent to enter upon the premises and remove the Collateral or to use the premises to store or dispose of the Collateral; (b) for any Collateral held by a warehouseman, processor, shipper, customs broker or freight forwarder, such Person waives or subordinates any Lien it may have on the Collateral, agrees to hold any Documents in its possession relating to the Collateral as agent for the Administrative Agent, and agrees to deliver the Collateral to the Administrative Agent upon request; (c) for any Collateral held by a repairman, mechanic or bailee, such Person acknowledges the Administrative Agent’s Lien, waives or subordinates any Lien it

 

29

 

may have on the Collateral, and agrees to deliver the Collateral to Administrative Agent upon request; (d) for any Collateral subject to a Licensor’s IP Rights, the Licensor grants to the Administrative Agent the right, vis-à-vis such Licensor, to enforce the Administrative Agent’s Liens with respect to the Collateral, including the right to dispose of it with the benefit of the Intellectual Property, whether or not a default exists under any applicable License; and (e) for any Collateral held by a customer of a Borrower, in addition to any applicable agreement required by the immediately foregoing clauses (a) through (d), such customer agrees to (and causes any secured party of such customer to), among other things, waive or subordinate any interest it may have on the Collateral and permit the Administrative Agent to enter upon the premises and remove the Collateral or to use the premises to store or dispose of the Collateral.

 

“Line Reserve” means the sum of (a) the Rent and Charges Reserve; (b) the Credit Product Reserve; (c) the aggregate amount of liabilities at any time secured by Liens upon Collateral that are senior to the Administrative Agent’s Liens; (d) sums that any Loan Party may be required to pay under any Section of this Agreement or any other Loan Document (including Taxes, assessments, insurance premiums, or, in the case of leased assets, rents or other amounts payable under such leases) and has failed to pay and (e) amounts for which claims may be reasonably expected to be asserted against the Collateral, the Administrative Agent or the Lenders.  For the avoidance of doubt, the Line Reserve shall not include the Permanent Reserve.

 

“Loan” means an extension of credit under Article II in the form of a Revolving Credit Loan, a Protective Advance or a Swing Line Loan.

 

“Loan Account” has the meaning assigned to such term in Section 2.11(a).

 

“Loan Documents” means this Agreement, each Note, each Security Instrument, each Committed Loan Notice, Swing Line Loan Notice, each Issuer Document, each Borrowing Base Certificate, each Compliance Certificate, the Intercreditor Agreement, the Fee Letter, any agreement creating or perfecting rights in Cash Collateral securing any Obligation hereunder and all other instruments and documents heretofore or hereafter executed or delivered to or in favor of any Lender or the Administrative Agent in connection with the Loans made and transactions contemplated by this Agreement, but excluding, for the avoidance of doubt, Credit Product Arrangements.

 

“Loan Obligations” means all Obligations other than amounts (including fees) owing by any Loan Party pursuant to any Credit Product Arrangements.

 

“Loan Parties” means the Borrowers and each Guarantor.

 

“London Banking Day” means any day on which dealings in Dollar deposits are conducted by and between banks in the London interbank eurodollar market.

 

“Make-Whole Amount” has the meaning ascribed to such term in Section 8.7 of the Senior Notes Agreement as in effect on the Closing Date.

 

“Material Adverse Effect” means (a) a material adverse effect on, the operations, business, assets, properties, or financial condition of the Company and its Subsidiaries, taken as a whole; (b) a material adverse effect on the ability of any Loan Party to perform its obligations under any Loan Document to which it is a party; or (c) a material adverse effect upon the validity or enforceability against any Loan Party of any Loan Document to which it is a party or on the ability of the Administrative Agent to collect any Obligation or realize upon any material portion of the Collateral.

 

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“Material Contract” means any agreement or arrangement to which a Loan Party or Subsidiary is party (other than the Loan Documents) (a) that is deemed to be a material contract under any securities laws applicable to such Loan Party, including the Securities Act of 1933; (b) for which breach, termination, nonperformance or failure to renew could reasonably be expected to have a Material Adverse Effect; or (c) that relates to Subordinated Debt or the Senior Notes, or to Indebtedness in an aggregate amount of $500,000 or more.

 

“Material License” has the meaning assigned to such term in Section 7.15.

 

“Material Third-Party Agreement” has the meaning assigned to such term in Section 7.17(a).

 

“Maturity Date” means October 31, 2018.

 

“Maximum Borrowing Amount” means the lesser of (a) the Aggregate Revolving Credit Commitments minus the Line Reserves, if any, and (b) the Borrowing Base.

 

“Measurement Period” means, at any date of determination, the most recently completed four (4) consecutive fiscal quarters of the Company and its Subsidiaries for which financial statements have or should have been delivered in accordance with Section 7.01(a) or 7.01(b).

 

“Minimum Collateral Amount” means, at any time, (a) with respect to Cash Collateral consisting of cash or Deposit Account balances provided to reduce or eliminate Fronting Exposure during the existence of a Defaulting Lender, an amount equal to 103% of the Fronting Exposure of the Letter of Credit Issuer with respect to Letters of Credit issued and outstanding at such time plus 103% of the Fronting Exposure of the Administrative Agent with respect to Protective Advances outstanding at such time, (b) with respect to Cash Collateral consisting of cash or Deposit Account balances provided in accordance with the provisions of Section 2.16(a)(i) or 2.16(a)(ii), an amount equal to 103% of the Outstanding Amount of all Letter of Credit Obligations, and (c) otherwise, an amount determined by the Administrative Agent and the Letter of Credit Issuer in their sole discretion.

 

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.

 

“Mortgage Related Documents” means, with respect to any Real Property subject to a Mortgage, the following, in form and substance satisfactory to the Administrative Agent and received by the Administrative Agent for review at least 15 days prior to the effective date of the Mortgage:  (a) an ALTA mortgagee title policy (or binder therefor) covering the Administrative Agent’s interest under the Mortgage, in a form and amount and by an insurer acceptable to the Administrative Agent, which must be fully paid on such effective date; (b) such assignments of leases, estoppel letters, attornment agreements, consents, waivers and releases as the Administrative Agent may require with respect to other Persons having an interest in the Real Property; (c) an ALTA Survey by a licensed surveyor acceptable to the Administrative Agent; (d) a life-of-loan flood hazard determination and, if the Real Property is located in a flood plain, an acknowledged notice to borrower and flood insurance in an amount, with endorsements and by an insurer acceptable to the Administrative Agent; (e) a current appraisal of the Real Property, prepared by an appraiser acceptable to the Administrative Agent, and in form and substance satisfactory to Required Lenders; (f) an environmental assessment, prepared by environmental engineers acceptable to the Administrative Agent, and accompanied by such reports, certificates, studies or data as the Administrative Agent may reasonably require, which shall all be in form and substance satisfactory to Required Lenders; and (g) an environmental indemnity agreement and such other documents, instruments or agreements as the Administrative Agent may reasonably require with respect to any environmental risks regarding the Real Property.

 

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“Mortgaged Property” means (a) the Real Property and leasehold interests in Real Property of the Loan Parties listed on Schedule 1.02 hereto and (b) Real Property, other than Excluded Real Property, required from time to time to be subject to a Mortgage pursuant to the terms of the Loan Documents.

 

“Mortgages” means the mortgages, leasehold mortgages, deeds of trust, leasehold deeds of trust or deeds to secure debt executed by a Loan Party on or about the Closing Date, or from time to time thereafter as may be required under the Loan Documents, in favor of the Administrative Agent, for the benefit of the Secured Parties, by which such Loan Party has granted to the Administrative Agent, as security for the Obligations, a Lien upon the Mortgaged Property described therein, together with all mortgages, deeds of trust and comparable documents now or at any time hereafter securing the whole or any part of the Obligations.

 

“Multiemployer Plan” means any employee benefit plan of the type described in Section 4001(a)(4) of ERISA, to which any Loan Party or any ERISA Affiliate makes or is obligated to make contributions, or during the preceding five plan years, has made or been obligated to make contributions.

 

“Multiple Employer Plan” means a Plan which has two or more contributing sponsors (including any Loan Party or any ERISA Affiliate) at least two of whom are not under common control, as such a plan is described in Section 4064 of ERISA.

 

“Net Cash Proceeds” means

 

(a)                                 with respect to the Disposition of any asset of any Loan Party or any Subsidiary, the excess, if any, of (i) the sum of the cash and cash equivalents received in connection with such Disposition (including any cash received by way of deferred payment pursuant to, or by monetization of, a note receivable or otherwise, but only as and when so received) over (ii) the sum of (A) the principal amount of any Indebtedness that is secured by such asset and that is required to be repaid in connection with the Disposition thereof (other than Indebtedness under the Loan Documents and Indebtedness owing to the Company or any Subsidiary), (B) the reasonable out-of-pocket expenses incurred by such Loan Party or any Subsidiary in connection with such Disposition, including any brokerage commissions, underwriting fees and discount, legal fees, finder’s fees and other similar fees and commissions, (C) Taxes paid or reasonably estimated to be payable by the Loan Party or any Subsidiary in connection with the relevant Disposition, (D) the amount of any reasonable reserve required to be established in accordance with GAAP against liabilities (other than Taxes deducted pursuant to clause (C) above) to the extent such reserves are (x) associated with the assets that are the object of such Disposition and (y) retained by such Loan Party or applicable Subsidiary, and (E) the amount of any reasonable reserve for purchase price adjustments and retained fixed liabilities reasonably expected to be payable by such Loan Party or applicable Subsidiary in connection therewith to the extent such reserves are (1) associated with the assets that are the object of such Disposition and (2) retained by such Loan Party or applicable Subsidiary; provided that the amount of any subsequent reduction of any reserve provided for in clause (D) or (E) above (other than in connection with a payment in respect of such liability) shall (X) be deemed to be Net Cash Proceeds of such Disposition occurring on the date of such reduction, and (Y) immediately be applied to the prepayment of Loans in accordance with Section 2.06(c); and

 

(b)                                 with respect to any issuance of Indebtedness or Equity Interests by any Loan Party or any Subsidiary, the excess, if any, of (i) the sum of the cash and cash equivalents received in connection with such issuance over (ii) the sum of (A) the reasonable out-of-pocket expenses incurred by such Loan Party or any Subsidiary in connection with such issuance, including any brokerage commissions, underwriting fees and discount, legal fees, and other similar fees and commissions and (B) Taxes paid or payable to the

 

32

 

applicable Governmental Authorities by the Loan Party or any Subsidiary in connection with and at the time of such issuance.

 

“Net Mark-To-Market Exposure” has the meaning ascribed to such term in the Senior Notes Agreement as in effect on the Closing Date.

 

“NOLV” means with respect to the Borrowers’ Inventory, the net orderly liquidation value of such Inventory (a percentage of the Cost of such Inventory) that might be realized at an orderly, negotiated sale held within a reasonable period of time, net of all liquidation expenses, as determined from time to time by reference to the most recent appraisal received by the Administrative Agent conducted by an independent appraiser engaged by the Administrative Agent.

 

“Non-Consenting Lender” has the meaning assigned to such term in Section 11.01.

 

“Non-Defaulting Lender” means, at any time, each Lender that is not a Defaulting Lender at such time.

 

“Non-Extension Notice Date” has the meaning specified in Section 2.03(b)(iii).

 

“Non-Loan Party Prepayment Funds” has the meaning specified in Section 2.03(b)(iii).

 

“Notes” means the Revolving Credit Loan Notes.

 

“NPL” means the National Priorities List pursuant to CERCLA, as updated from time to time.

 

“Obligations” means (a) all amounts owing by any Loan Party to the Administrative Agent, any Lender or any other Secured Party pursuant to or in connection with this Agreement or any other Loan Document or otherwise with respect to any Loan or Letter of Credit, including all Letter of Credit Obligations, and including all principal, interest (including any interest accruing after the filing of any petition in bankruptcy or the commencement of any proceeding under any Debtor Relief Law relating to any Loan Party, or would accrue but for such filing or commencement, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), reimbursement obligations, indemnification and reimbursement payments, fees, costs and expenses (including all fees, costs and expenses of counsel to the Administrative Agent) incurred in connection with this Agreement or any other Loan Document, whether direct or indirect, absolute or contingent, liquidated or unliquidated, now existing or hereafter arising hereunder or thereunder, together with all renewals, extensions, modifications or refinancings thereof and (b) Credit Product Obligations; provided, that Obligations of a Loan Party shall not include its Excluded Swap Obligations.

 

“OFAC” has the meaning specified in Section 7.11.

 

“OFAC Listed Person” shall have the meaning specified in Section 6.21.

 

“Ordinary Course of Business” means the ordinary course of business of the Company and its Subsidiaries, consistent with past practices and undertaken in good faith.

 

“Organization Documents” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of

 

33

 

formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

 

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).

 

“Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 11.13).

 

“Outstanding Amount” means (a) with respect to Revolving Credit Loans, Protective Advances and Swing Line Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any Borrowings and any prepayments or repayments of Revolving Credit Loans, Protective Advances or Swing Line Loans occurring on such date; and (b) with respect to any Letter of Credit Obligations on any date, (i) the aggregate outstanding amount of such Letter of Credit Obligations on such date after giving effect to any Letter of Credit Extension occurring on such date plus and any other changes in the aggregate amount of the Letter of Credit Obligations as of such date, including as a result of any reimbursements by the Borrowers of Unreimbursed Amounts and all Letter of Credit Borrowings on such date.

 

“Overadvance” has the meaning given to such term in Section 2.01(c)(i)(A).

 

“Overadvance Loan” means a Base Rate Loan made when an Overadvance exists or is caused by the funding thereof.

 

“Overnight Rate” means, for any day and from time to time as in effect, the greater of (a) the Federal Funds Rate and (b) an overnight rate determined by the Administrative Agent, the Letter of Credit Issuer, or the Swing Line Lender, as the case may be, in accordance with banking industry rules on interbank compensation.

 

“Participant” has the meaning assigned to such term in clause (d) of Section 11.06.

 

“Participant Register” has the meaning assigned to such term in clause (d) of Section 11.06.

 

“Patent Security Agreement” means any patent security agreement pursuant to which a Loan Party assigns to Administrative Agent, for the benefit of the Secured Parties, such Person’s interests in its patents, as security for the Obligations.

 

“PATRIOT Act” means United States Public Law 107-56, Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect.

 

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“Payment Conditions” means, with respect to any Specified Transaction, the satisfaction of the following conditions:

 

(a)                                 as of the date of any such Specified Transaction and immediately after giving effect thereto, no Default or Event of Default has occurred and is continuing;

 

(b)                                 Availability (after giving Pro Forma Effect to such Specified Transaction) both as of such date and on an average daily basis during the thirty (30) consecutive day period immediately preceding the making of such Specified Transaction shall be not less than (i) in the case of a Specified Restricted Payment or Specified Debt Payment, the greater of (A) 25% of the Maximum Borrowing Amount and (B) $10,000,000, or (ii) in the case of a Specified Investment, the greater of (A) 20% of the Maximum Borrowing Amount and (B) $8,000,000, in each case, as of such date;

 

(c)                                  the Consolidated Fixed Charge Coverage Ratio as of the end of the most recently ended Measurement Period prior to the making of such Specified Transaction, calculated on a Pro Forma Basis, shall be equal to or greater than 1.00 to 1.00; and

 

(d)                                 the Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower Agent certifying as to compliance with the preceding clauses and demonstrating (in reasonable detail) the calculations required thereby.

 

“Payment in Full” means (a) the indefeasible payment in full in cash of all Obligations, together with all accrued and unpaid interest and fees thereon, other than Letter of Credit Obligations that have been fully Cash Collateralized in an amount equal to 103% of the amount thereof or as to which other arrangements with respect thereto satisfactory to the Administrative Agent and the Letter of Credit Issuer shall have been made and other than those Obligations expressly stated to survive termination and contingent obligations as to which no claim has been asserted or threatened, (b) the Commitments shall have terminated or expired, (c) the obligations and liabilities of each Loan Party and its Affiliates under all Credit Product Arrangements shall have been fully, finally and irrevocably paid and satisfied in full and the Credit Product Arrangements shall have expired or been terminated, or other arrangements satisfactory to the counterparties shall have been made with respect thereto, and (d) all claims of the Loan Parties against any Secured Party arising on or before the payment date in connection with the Loan Documents or any Credit Product Arrangements, as applicable, shall have been released on terms acceptable to the Administrative Agent; provided, that notwithstanding full payment or Cash Collateralization of the Obligations as provided herein, the Administrative Agent shall not be required to terminate its Liens in any Collateral unless, with respect to any damages the Administrative Agent may incur as a result of the dishonor or return of Payment Items applied to Obligations, Administrative Agent receives (a) a written agreement, executed by Borrowers and any Person whose advances are used in whole or in part to satisfy the Obligations, indemnifying the Administrative Agent and Lenders from any such damages; or (b) such Cash Collateral as the Administrative Agent, in its discretion, deems necessary to protect against any such damages.

 

“Payment Item” means each check, draft or other item of payment payable to a Borrower, including those constituting proceeds of any Collateral.

 

“PBGC” means the Pension Benefit Guaranty Corporation.

 

“Pension Funding Rules” means the rules of the Code and ERISA regarding minimum required contributions (including any installment payment thereof) to Pension Plans and Multiemployer Plans and set forth in Sections 412, 430, 431, 432 and 436 of the Code and Sections 302, 303, 304 and 305 of ERISA.

 

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“Pension Plan” means any employee pension benefit plan (including a Multiple Employer Plan or a Multiemployer Plan) that is maintained or is contributed to by any Loan Party and any ERISA Affiliate and is either covered by Title IV of ERISA or is subject to the minimum funding standards under Section 412 of the Code.

 

“Permanent Reserve” means $5,000,000.

 

“Permitted Acquisition” means any Acquisition by a Loan Party so long as:

 

(a)                                 the Person to be (or whose assets are to be) acquired does not oppose such Acquisition and the line or lines of business of the Person to be acquired constitute Core Businesses;

 

(b)                                 no Default or Event of Default shall have occurred and be continuing either immediately prior to or immediately after giving effect to such Acquisition;

 

(c)                                  the Borrower Agent shall have furnished to the Administrative Agent a certificate of a Responsible Officer of the Borrower Agent, in form and substance reasonably satisfactory to the Administrative Agent, (i) certifying that all of the requirements set forth above will be satisfied on or prior to the consummation of such Acquisition and (ii) certifying as to compliance with the Payment Conditions and demonstrating (in reasonable detail) the calculations required thereby; and

 

(d)                                 the Borrower Agent shall have furnished the Administrative Agent with ten (10) days’ (or such shorter time as Administrative Agent may agree) prior written notice of such intended Acquisition and shall have furnished the Administrative Agent with a current draft of the applicable acquisition documents (and final copies thereof as and when executed), and to the extent available, appropriate financial statements of the Person which is the subject of such Acquisition, pro forma projected financial statements for the twelve (12) month period following such Acquisition after giving effect to such Acquisition (including, to the extent available, balance sheets, cash flows and income statements by month for the acquired Person, individually, and on a Consolidated basis with all Loan Parties), and, to the extent available, such other information as the Administrative Agent may reasonably request.

 

“Permitted Liens” has the meaning specified in Section 8.02.

 

“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

 

“Plan” means any employee benefit plan within the meaning of Section 3(3) of ERISA (including a Pension Plan), maintained for employees of any Loan Party or any ERISA Affiliate or any such Plan to which any Loan Party or any ERISA Affiliate is required to contribute on behalf of any of its employees.

 

“Platform” has the meaning specified in Section 7.02.

 

“Post-Closing Agreement” means that certain Post-Closing Agreement by and between the Borrower Agent and the Administrative Agent dated as of the Closing Date with respect to the satisfaction after the Closing Date of certain collateral matters.

 

“Priority Swap Obligations” means Credit Product Obligations under Swap Contracts (a) owing to BMO or its Affiliates (so long as BMO (in its discretion) shall have established a Credit Product Reserve with respect thereto) or (b) owing to any other Credit Product Provider and identified as “Priority Swap Obligations” in a Credit Product Notice from the Borrower Agent and such Credit Product Provider to the Administrative Agent (which at all times shall be subject to a Credit Product Reserve).

 

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“Pro Forma Adjustment” means, for the purposes of calculating Consolidated EBITDA for any Measurement Period, if at any time during such Measurement Period, the Company or any of its Subsidiaries shall have made a Permitted Acquisition or Disposition permitted hereunder, Consolidated EBITDA for such Measurement Period shall be calculated after giving pro forma effect thereto as if any such Permitted Acquisition or Disposition permitted hereunder occurred on the first day of such Measurement Period, including (a) with respect to an any Permitted Acquisition, inclusion of (i) the actual historical results of operation of such acquired Person or line of business during such Measurement Period and (ii) pro forma adjustments arising out of events which are directly attributable to such Permitted Acquisition, are factually supportable, and are expected to have a continuing impact, in each case determined on a basis consistent with Article 11 of Regulation S-X promulgated under the Securities Act and as interpreted by the staff of the SEC and reasonably acceptable to the Administrative Agent and (b) with respect to any Disposition permitted hereunder, exclusion of the actual historical results of operations of the disposed of Person or line of business or assets during such Measurement Period.

 

“Pro Forma Basis,” “Pro Forma Compliance” and “Pro Forma Effect” means, with respect to compliance with any test, financial ratio or covenant hereunder required by the terms of this Agreement to be made on a pro forma basis, that (a) to the extent applicable, the Pro Forma Adjustment shall have been made and, without duplication, (b) all Specified Pro Forma Transactions that have been made during the applicable period of measurement or subsequent to such period and prior to or simultaneously with the event for which the calculation is made (the period beginning on the first day of such fiscal quarter and continuing until the date of the consummation of such event, the “Reference Period”) shall be deemed to have occurred as of the first day of the applicable Reference Period; provided that (i) income statement items (whether positive or negative) attributable to the property or Person subject to such Specified Pro Forma Transaction, (A) shall be excluded in the case of a Disposition of all or substantially all Equity Interests in or assets of any Loan Party or its Subsidiaries or any division, product line, or facility used for operations of the Loan Parties or their Subsidiaries, and (B) shall be included in the case of a Permitted Acquisition or Investment described in the definition of Specified Pro Forma Transaction, and (ii) all Indebtedness issued, incurred or assumed as a result of, or to finance, any relevant transactions (other than Indebtedness under the Loan Documents) or permanently repaid in connection with the relevant transaction during the Reference Period shall be deemed to have been issued, incurred, assumed or permanently repaid at the beginning of such Reference Period (with interest expense of such person attributable to any Indebtedness for which pro forma effect is being given as provided in the preceding clause (ii) that has a floating or formula rate, shall have an implied rate of interest for the applicable Reference Period determined by utilizing the rate that is or would be in effect with respect to such Indebtedness as at the relevant date of determination); provided, that, the foregoing pro forma adjustments may be applied to any such test, financial ratio or covenant solely to the extent that such adjustments are consistent with the definition of Consolidated EBITDA and the definition of Pro Forma Adjustment.

 

“Properly Contested” means with respect to any obligation of a Loan Party, (a) the obligation is subject to a bona fide dispute regarding amount or such Loan Party’s liability to pay; (b) the obligation is being properly contested in good faith by appropriate proceedings promptly instituted and diligently pursued; and (c) appropriate reserves have been established in accordance with GAAP.

 

“Protective Advance” has the meaning specified in Section 2.01(c)(ii)(A).

 

“Public Lender” has the meaning specified in Section 7.02.

 

“Qualified ECP” means, in respect of any Swap Obligation, any Loan Party that has total assets exceeding $10,000,000 at the time the relevant Guarantee or grant of the relevant security interest becomes effective with respect to such Swap Obligation or such other Person as constitutes an “eligible contract participant” under the Commodity Exchange Act or any regulations promulgated thereunder and

 

37

 

can cause another Person to qualify as an “eligible contract participant” at such time by entering into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

 

“Ratable Share” has the meaning specified in Section 2.01(c)(ii)(C).

 

“Rate Management Transactions” means any transaction (including an agreement with respect thereto) now existing or hereafter entered by the Company or any Subsidiary which is a rate swap, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap, equity or equity index option, bond option, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction, forward transaction, currency swap transaction, cross-currency rate swap transaction, currency option or any other similar transaction (including any option with respect to any of these transactions) or any combination thereof, whether linked to one or more interest rates, foreign currencies, commodity prices, equity prices or other financial measures.

 

“Ratings Compliant” means, with respect to any type of property rated by nationally recognized ratings agencies, that such property is rated at or above either (a) one of the ratings set forth below or (b) an equivalent rating by a nationally recognized rating agency not listed below.

 

	
Agency
    	
 
    	
Long-Term Rating
    	
 
    	
Short-Term
   Rating
    
	
Moody’s
    	
 
    	
Baa3
    	
 
    	
P2
    
	
S&P
    	
 
    	
BBB-
    	
 
    	
A2
    
	
Fitch
    	
 
    	
BBB-
    	
 
    	
F2
    
	
Egan-Jones
    	
 
    	
BBB-
    	
 
    	
A2
    

 

“Real Property” means all land, together with the buildings, structures, parking areas, and other improvements thereon, now or hereafter owned by any Person, including all easements, rights-of-way, and similar rights appurtenant thereto and all leases, tenancies, and occupancies thereof.

 

“Recipient” means the Administrative Agent, any Lender or any Letter of Credit Issuer.

 

“Refinancing Conditions” means the following conditions for Refinancing Indebtedness:  (a) it is in an aggregate principal amount that does not exceed the principal amount of the Indebtedness being extended, renewed or refinanced plus accrued interest and reasonable fees and expenses incurred in connection with such refinancing, refunding, renewal or extension; (b) the interest rate applicable to any such refinancing, refunding, renewing or extending Indebtedness does not exceed the greater of the (i) interest rate for the Indebtedness being refinanced, refunded, renewed, or extended and (ii) the otherwise market rate of interest for such Indebtedness; (c) it has a final maturity no sooner than and, if applicable, a weighted average life no less than the Indebtedness being extended, renewed or refinanced; (d) it is subordinated to the Obligations at least to the same extent as the Indebtedness being extended, renewed or refinanced; (e) such Refinancing Indebtedness continues to be subject to substantially the same subordination agreements or subordination terms applicable to the Indebtedness being extended, renewed or refinanced; (f) no additional Liens, if any, are granted with respect to such Refinancing Indebtedness; (g) no additional Person is obligated, primarily or contingently, on such Refinancing Indebtedness; and (h) such Refinancing Indebtedness shall be on terms no less favorable to the Administrative Agent and the Lenders, and no more restrictive to the Loan Parties, than the Indebtedness

 

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being extended, renewed or refinanced, in each case, except for terms applicable only to periods after the Maturity Date at the time of incurrence of such Indebtedness.

 

“Refinancing Indebtedness” means the Indebtedness that is the result of an extension, renewal or refinancing of Indebtedness permitted under Section 8.01(b), (f), (g), (h), (o), (p) and (q) as to which the Refinancing Conditions are satisfied; provided that the incurrence of any such Refinancing Indebtedness will be deemed to utilize permitted amounts of Indebtedness, if any, under each clause thereof.

 

“Register” has the meaning specified in Section 11.06(c).

 

“Registered Public Accounting Firm” has the meaning specified in the Securities Laws and shall be independent of the Company as prescribed in the Securities Laws.

 

“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees, administrators, managers, advisors and representatives of such Person and of such Person’s Affiliates.

 

“Rent and Charges Reserve” means the aggregate of (a) all past due rent and other amounts owing by a Borrower to any landlord, warehouseman, processor, repairman, mechanic, shipper, freight forwarder, broker or other Person who possesses any Collateral or could assert a Lien on any Collateral; and (b) a reserve at least equal to three months’ rent and other charges that could be payable to any such Person, unless it has executed a Lien Waiver.

 

“Reportable Event” means any of the events set forth in Section 4043(c) of ERISA, other than events for which the 30 day notice period has been waived.

 

“Reporting Trigger Period” means the period (a) commencing on the day that (i) a Specified Event of Default occurs and is continuing or (ii) for a period of five (5) consecutive days, Availability is less than the greater of (x) twenty percent (20.0%) of the Aggregate Revolving Credit Commitments at such time and (y) $8,000,000 and (b) continuing until the date that during the previous thirty (30) consecutive days, (i) no Default or Event of Default has existed and (ii) Availability has been greater than the greater of (x) twenty percent (20.0%) of the Aggregate Revolving Credit Commitments at such time and (y) $8,000,000.

 

“Request for Credit Extension” means (a) with respect to a Borrowing, conversion or continuation of Loans, a Committed Loan Notice, (b) with respect to a Letter of Credit Extension, a Letter of Credit Application, and (c) with respect to a Swing Line Loan, a Swing Line Loan Notice.

 

“Required Lenders” means, as of any date of determination, Lenders holding more than 50% of the Total Credit Exposure of all Lenders; provided, that if at any time there are 2 or more Lenders (who are not Affiliates of one another), “Required Lenders” must include at least 2 Lenders (who are not Affiliates of one another).  The Total Credit Exposure of any Defaulting Lender shall be disregarded in determining Required Lenders at any time.

 

“Required Prepayment Premium” has the meaning ascribed to such term in the Senior Notes Agreement as in effect on the Closing Date.

 

“Required Supermajority Lenders” means, as of any date of determination, Lenders holding at least sixty-six and two-thirds percent (662/3%) of the Total Credit Exposure of all Lenders.  The Total Credit Exposure of any Defaulting Lender shall be disregarded in determining Required Supermajority Lenders at any time.

 

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“Reserve” means any reserve constituting all or any portion of the Availability Reserve or the Line Reserve.

 

“Responsible Officer” means, with respect to each Loan Party, the chief executive officer,  executive chairman, president, principal financial officer, chief financial officer, chief accounting officer, treasurer, controller or assistant treasurer or any vice president of such Loan Party.  Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.

 

“Restricted Payment” means (i) any dividend or other distribution (whether in cash, securities or other property) with respect to any capital stock or other Equity Interest of the Company or any Subsidiary, (ii) any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such capital stock or other Equity Interest, or on account of any return of capital to the Company’s or any Subsidiary’s stockholders, partners or members (or the equivalent Person thereof) or (iii) any distribution, advance or repayment of Indebtedness to or for the account of a holder of Equity Interests of the Company.

 

“Revolving Credit Borrowing” means a borrowing consisting of simultaneous Revolving Credit Loans of the same Type and, in the case of LIBOR Loans, having the same Interest Period, made by each of the Revolving Credit Lenders pursuant to Section 2.01(a).

 

“Revolving Credit Commitment” means, as to each Revolving Credit Lender, its obligation to (a) make Revolving Credit Loans to the Borrowers pursuant to Section 2.01(a), (b) purchase participations in Letter of Credit Obligations, and (c) purchase participations in Swing Line Loans, in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Revolving Credit Lender’s name on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement.

 

“Revolving Credit Exposure” means, as to any Lender at any time, the aggregate principal amount at such time of its outstanding Revolving Credit Loans and such Lender’s participation in Letter of Credit Obligations, Swing Line Loans and Protective Advances at such time.

 

“Revolving Credit Facility” means the facility described in Sections 2.01(a), 2.03 and 2.04 providing for Revolving Credit Loans, Letters of Credit and Swing Line Loans to or for the benefit of the Borrowers by the Revolving Credit Lenders, Letter of Credit Issuer and Swing Line Lender, as the case may be, in the maximum aggregate principal amount at any time outstanding of $35,000,000, as adjusted from time to time pursuant to the terms of this Agreement.

 

“Revolving Credit Lender” means each Lender that has a Revolving Credit Commitment or, following termination of the Revolving Credit Commitments, has any Revolving Credit Exposure.

 

“Revolving Credit Loan” has the meaning specified in Section 2.01(a).

 

“Revolving Credit Loan Note” means a promissory note made by the Borrowers in favor of a Revolving Credit Lender evidencing Revolving Credit Loans made by such Revolving Credit Lender, substantially in the form of Exhibit A-1.

 

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“Revolving Credit Settlement Date” has the meaning provided in Section 2.14(a).

 

“Revolving Credit Termination Date” means the earliest of (a) the Maturity Date, (b) the date of termination of the Aggregate Revolving Credit Commitments pursuant to Section 2.07, and (c) the date of termination of the commitment of each Lender to make Loans and of the obligation of the Letter of Credit Issuer to make Letter of Credit Extensions pursuant to Section 9.02.

 

“S&P” means Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw-Hill Companies, Inc. and any successor thereto.

 

“Same Day Funds” means immediately available funds.

 

“Sanctions” means economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by the U.S. government, including those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State.

 

“Sarbanes-Oxley” means the Sarbanes-Oxley Act of 2002.

 

“SEC” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

 

“Secured Party” means (a) each Lender, (b) each Credit Product Provider, (c) the Administrative Agent, (d) the Letter of Credit Issuer and (e) the successors and permitted assigns of each of the foregoing.

 

“Securities Laws” means the Securities Act of 1933, the Exchange Act, Sarbanes-Oxley and the applicable accounting and auditing principles, rules, standards and practices promulgated, approved or incorporated by the SEC or the Public Company Accounting Oversight Board, as each of the foregoing may be amended and in effect on any applicable date hereunder.

 

“Security Agreement” means the Pledge and Security Agreement dated as of the date hereof by the Loan Parties and the Administrative Agent for the benefit of the Secured Parties, substantially in the form of Exhibit C.

 

“Security Instruments” means, collectively or individually as the context may indicate, the Security Agreement, the Control Agreements, the Mortgages, the Mortgage Related Documents, the Patent Security Agreement, the Trademark Security Agreement, each Lien Waiver and all other agreements (including securities account control agreements), instruments and other documents, whether now existing or hereafter in effect, pursuant to which any Loan Party or other Person shall grant or convey to the Administrative Agent or the Lenders a Lien in property as security for all or any portion of the Obligations.

 

“Senior Notes” means, collectively, (a) the 3.23% Senior Notes, Series A, due April 16, 2020 in an original principal amount of $60,000,000, (b) the 4.13% Senior Notes, Series B, due April 14, 2023 in an original principal amount of $45,000,000 and (c) the 4.28% Senior Notes, Series C, due April 16, 2025 in an original principal amount of $45,000,000, in each case issued in April 2013 by the Company pursuant to the Senior Notes Agreement, as amended on or prior to the Closing Date and, thereafter, as amended, supplemented, restated or otherwise modified in accordance with Section 8.11(b), and any registered exchange notes issued in exchange therefor, and/or any Refinancing Indebtedness incurred in respect thereof in accordance with Section 8.01.

 

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“Senior Notes Agent” means U.S. Bank National Association, in its capacity as collateral agent for the holders of Senior Notes, or any successor collateral agent appointed in accordance with the Senior Notes Collateral Agency Agreement.

 

“Senior Notes Agreement” means the Note Purchase Agreement dated as of August 28, 2012, among the Company and the holders of the Senior Notes party thereto from time to time, as amended on or prior to the Closing Date (including, without limitation, by the Senior Notes Agreement Amendment) and, thereafter, as amended, supplemented, restated or otherwise modified in accordance with Section 8.11(b) and as replaced in connection with any Refinancing Indebtedness incurred in respect thereof in accordance with Section 8.01.

 

“Senior Notes Agreement Amendment” means the Amended and Restated Note Purchase Agreement dated as of October 31, 2016, among the Company and the holders of the Senior Notes party thereto.

 

“Senior Notes Closing Date Documents” means, collectively, the Senior Notes Agreement Amendment, the Senior Notes Security Agreement, the Subsidiary Guaranty (as defined in the Senior Notes Agreement), the Mortgages (as defined in the Senior Notes Agreement), and the Senior Notes Collateral Agency Agreement.

 

“Senior Notes Collateral Agency Agreement” means the Collateral Agency Agreement dated as of October 31, 2016, by and among the Senior Notes Agent and the Existing Noteholders (as defined in the Senior Notes Agreement), and acknowledged by the Loan Parties.

 

“Senior Notes Documents” means, collectively, the Senior Notes, the Senior Notes Agreement and the Senior Notes Closing Date Documents, as each may be amended, restated, supplemented or otherwise modified from time to time in accordance with the terms of the Intercreditor Agreement, including any agreements and documents governing indebtedness incurred to refinance, replace, extend, renew, refund, repay, prepay, redeem, purchase, defease or retire, or issued in exchange or replacement for, all or any of the Senior Notes.

 

“Senior Notes Security Agreement” means the Security and Pledge Agreement dated as of October 31, 2016, among the Company, the other parties identified as “Grantors” thereunder from time to time, and Senior Notes Agent.

 

“Shrink” means Inventory which has been lost, misplaced, stolen, or is otherwise unaccounted for.

 

“Solvent” means, as to any Person, such Person (a) owns property or assets whose fair salable value is greater than the amount required to pay all of its debts (including contingent, subordinated, unmatured and unliquidated liabilities); (b) owns property or assets whose present fair salable value (as defined below) is greater than the probable total liabilities (including contingent, subordinated, unmatured and unliquidated liabilities) of such Person as they become absolute and matured; (c) is able to pay all of its debts as they mature; (d) has capital that is not unreasonably small for its business and is sufficient to carry on its business and transactions and all business and transactions in which it is about to engage; (e) is not “insolvent” within the meaning of Section 101(32) of the Bankruptcy Code; and (f) has not incurred (by way of assumption or otherwise) any obligations or liabilities (contingent or otherwise) under any Loan Documents, or made any conveyance in connection therewith, with actual intent to hinder, delay or defraud either present or future creditors of such Person or any of its Affiliates.  “Fair salable value” means the amount that could be obtained for assets within a reasonable time, either through collection or through sale under ordinary selling conditions by a capable and diligent seller to an

 

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interested buyer who is willing (but under no compulsion) to purchase.  For purposes hereof, the amount of all contingent liabilities at any time shall be computed as the amount that, in light of all the facts and circumstances existing at the time, can reasonably be expected to become an actual or matured liability.

 

“Specified Debt Payment” means any payment or prepayment of Indebtedness made pursuant to Section 8.11(a)(i)(y)(F), Section 8.11(a)(v)(x)(2) or Section 8.11(a)(v)(y).

 

“Specified Event of Default” means an Event of Default under Section 9.01(a), Section 9.01(b) (as a result of any Loan Party failing to perform or observe any term, covenant or agreement contained in any of Sections 4.04, 7.02(a), 7.02(b) or 8.12), or Section 9.01(f).

 

“Specified Loan Party” means a Loan Party that is not then an “eligible contract participant” under the Commodity Exchange Act (determined prior to giving effect to Section 2.15(c)).

 

“Specified Investment” means any Investment made pursuant to Section 8.03(g).

 

“Specified Pro Forma Transaction” means, with respect to any period, any Investment, Disposition, incurrence or repayment of Indebtedness, Restricted Payment, subsidiary designation or other event that by the terms of the Loan Documents requires “Pro Forma Compliance” with a test or covenant hereunder or requires such test or covenant to be calculated on a “Pro Forma Basis.”

 

“Specified Property” means the following:

 

(e)                                  Excess Water Rights held by Intrepid New Mexico located in New Mexico and represented by the Office of the New Mexico State Engineer File Numbers L-1880 thru L-1884, and associated real property surface rights owned by Intrepid New Mexico with the following legal description:

 

T. 17 S., R. 33 E., N.M.P.M.

Sec. 1: SW4

Sec. 12: W/2

Sec. 13: W/2, SE/4

Sec. 24: N/2

Lea County, New Mexico;

 

(f)                                   Excess Water Rights held by Intrepid Moab in respect of the Colorado River located in Utah and represented by (i) the State of Utah Division of Water Right Users’ Claim No. 01-34, Certificate No. 11406, (ii) the State of Utah Division of Water Right Users’ Claim No. 01-37, Certificate No. 9161, (iii) the State of Utah Division of Water Right Users’ Claim No. 01-43, Certificate No. 9162, (iv) the State of Utah Division of Water Right Users’ Claim No. 01-44, Certificate No. 9160, and (v) the State of Utah Division of Water Right Users’ Claim No. 01-47, Certificate No. 11405;

 

(g)                                  Excess Water Rights held by Intrepid New Mexico in respect of the Pecos River located in New Mexico and represented by the Office of New Mexico State Engineer File Numbers 302, 1856, 1955, 1942, 2045, C-791 and C-1217 through C-1217-S, and associated real property surface rights owned by Intrepid New Mexico with the following legal description:

 

T. 23 S., R. 28 E., N.M.P.M.

Sec. 11: NWSE

Sec. 12: S/2SE

Sec. 13: W/2NE

 

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Eddy County, New Mexico;

 

(h)                                 that certain parcel of land owned by Intrepid Moab located in Moab, Utah, with the following legal description:

 

T. 25 S., R. 20 E., S.L.B & M.

Sec. 2;  S/2SW, NWSW, SWSE;

Sec. 3:  Lots 1, 8, 9, 10, 14, 15, 16, S/2;

Sec. 10:  NE, N/2NW;

Sec. 11:  NW;

Grand County, Utah;

 

(i)                                     that certain warehouse located at 203 E. Florence, St. Joseph, Missouri, owned by 203 E. Florence; and

 

(j)                                    any property (other than cash) received by any Borrower or a Subsidiary as consideration for the Disposition of any property described in clauses (a) through (e) above.

 

As used herein, “Excess Water Rights” means Water Rights held by the Company or a Subsidiary which are not necessary or desirable for the conduct of the businesses of the Company and its Subsidiaries as presently conducted or planned to be conducted.

 

“Specified Restricted Payment” means any Restricted Payment pursuant to Section 8.06(e).

 

“Specified Transaction” means each Specified Debt Payment, Specified Investment and Specified Restricted Payment.

 

“Subordinated Debt” means Indebtedness which is expressly subordinated in right of payment to the prior Payment in Full and which is in form and on terms satisfactory to, and approved in writing by, the Administrative Agent.

 

“Subordination Provisions” means any provision relating to debt or lien subordination applicable to or contained in any documents evidencing any Subordinated Debt or the Senior Notes, including as set forth in the Intercreditor Agreement or other applicable subordination and/or intercreditor agreements.

 

“Subsidiary” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity (but not a representative office of such Person) of which a majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person.  Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Company.

 

“Subsidiary Guarantor” means any Subsidiary of the Company that is a Guarantor.

 

“Supplemental Facility” has the meaning provided in Section 11.01(c).

 

“Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or

 

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forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement, together with any related schedules.

 

“Swap Obligation” means, with respect to any Loan Party, any obligation to perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of Section 1a(47) of the Commodity Exchange Act.

 

“Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include a Lender or any Affiliate of a Lender); provided, however that it is understood and agreed that such amounts provided by the applicable Credit Product Provider with respect to Credit Product Obligations under Swap Contracts may include a commercially reasonable level of “cushion” to account for normal short-term market fluctuations.

 

“Swing Line” means the revolving credit facility made available by the Swing Line Lender pursuant to Section 2.04.

 

“Swing Line Borrowing” means a borrowing of a Swing Line Loan pursuant to Section 2.04.

 

“Swing Line Lender” means BMO in its capacity as provider of Swing Line Loans, or any successor swing line lender hereunder.

 

“Swing Line Loan” has the meaning specified in Section 2.04(a).

 

“Swing Line Loan Notice” means a notice of a Swing Line Borrowing pursuant to Section 2.04(b).

 

“Swing Line Sublimit” means an amount equal to the lesser of (a) $4,000,000 and (b) the Aggregate Revolving Credit Commitments.  The Swing Line Sublimit is part of, and not in addition to, the Aggregate Revolving Credit Commitments.

 

“Synthetic Lease Obligation” means the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or possession of property creating obligations that do not appear on the balance sheet of such Person but which, upon the insolvency or bankruptcy of such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment).

 

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“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

 

“Threshold Amount” means $10,000,000.

 

“Total Credit Exposure” means, as to any Lender at any time, the unused outstanding Commitments of such Lender and the Credit Exposure of such Lender at such time.

 

“Total Outstandings” means, without duplication, the aggregate Outstanding Amount of all Revolving Credit Loans, Protective Advances, Swing Line Loans and Letter of Credit Obligations.

 

“Trademark Security Agreement” means any trademark security agreement pursuant to which any Loan Party assigns to the Administrative Agent, for the benefit of the Secured Parties, such Person’s interest in its trademarks as security for the Obligations.

 

“Transaction” means, individually or collectively as the context may indicate, (a) the entering by the Loan Parties of the Senior Notes Closing Date Documents and (b) the entering by the Loan Parties of the Loan Documents to which they are a party and the funding of the Revolving Credit Facility.

 

“Treasury Management and Other Services” means (a) all arrangements for the delivery of treasury and cash management services, (b) all commercial credit card, purchase card, p-card and merchant card services; and (c) all other banking products or services, including trade and supply chain finance services and leases, other than Letters of Credit, in each case, to or for the benefit of any Loan Party or an Affiliate of any Loan Party which are entered into or maintained with a Lender or an Affiliate of a Lender and which are not prohibited by the express terms of the Loan Documents.

 

“Type” means, with respect to a Loan, its character as a Base Rate Loan or a LIBOR Loan.

 

“UCC” means the Uniform Commercial Code as in effect from time to time in the State of Illinois; provided that if, with respect to any financing statement or by reason of any mandatory provisions of law, the perfection or the effect of perfection or non-perfection of the security interests granted to the Administrative Agent pursuant to any applicable Loan Document is governed by the Uniform Commercial Code as in effect in a jurisdiction of the United States other than Illinois, the term “UCC” shall also include the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions of this Agreement, each Loan Document and any financing statement relating to such perfection or effect of perfection or non-perfection.

 

“United States” and “U.S.” mean the United States of America.

 

“Unreimbursed Amount” has the meaning specified in Section 2.03(c)(i).

 

“Unused Fee Rate” means a per annum rate equal to 0.50%.

 

“Unused Revolving Credit Facility Amount” means the daily amount by which (a) the Aggregate Revolving Credit Commitments exceeds (b) the sum of (i) Outstanding Amount of all Revolving Credit Loans other than Swing Line Loans and (ii) the Outstanding Amount of all Letter of Credit Obligations, subject to adjustment as provided in Section 2.17.  For the avoidance of doubt, the Outstanding Amount of Swing Line Loans shall not be considered usage for purposes of determining the Unused Revolving Credit Facility Amount.

 

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“Unused Revolving Credit Fee” has the meaning specified in Section 2.09(a).

 

“U.S. Person” means any Person that is a “United States Person” as defined in Section 7701(a)(30) of the Code.

 

“Value” means, for an Eligible Account, the face amount of such Eligible Account, net of any returns, rebates, discounts (calculated on the shortest terms), credits, allowances or Taxes (including sales, excise or other Taxes) that have been or could reasonably be expected to be claimed by the Account Debtor or any other Person.

 

“Voluntary Payment Conditions” means, with respect to any applicable Specified Debt Payment, the satisfaction of the following conditions:

 

(a)                                 as of the date of any such Specified Debt Payment and immediately after giving effect thereto, (i) no Default or Event of Default has occurred and is continuing and (ii) no Revolving Credit Loans shall be outstanding;

 

(b)                                 Availability (after giving Pro Forma Effect to such Specified Debt Payment) both as of such date and on an average daily basis during the thirty (30) consecutive day period immediately preceding the making of such Specified Debt Payment shall be not less than the greater of (i) 25% of the Maximum Borrowing Amount and (ii) $10,000,000;

 

(c)                                  the Consolidated Fixed Charge Coverage Ratio as of the end of the most recently ended Measurement Period prior to the making of such Specified Debt Payment, calculated on a Pro Forma Basis, shall be equal to or greater than 1.00 to 1.00; and

 

(d)                                 the Administrative Agent shall have received (i) updated financial projections of the Company and its Subsidiaries prepared in good faith in a manner consistent with those required by Section 7.01 for the remaining term of this Agreement demonstrating no anticipated Revolving Credit Loan borrowings and (ii) a certificate of a Responsible Officer of the Borrower Agent certifying as to compliance with the preceding clauses and demonstrating (in reasonable detail) the calculations required thereby.

 

“Voting Equity Interests” means Equity Interests with respect to which the holders thereof are ordinarily, in the absence of contingencies, entitled to vote for the election of members of the Board of Directors of the issuer thereof, even if the right so to vote has been suspended by the happening of such a contingency.

 

“Water Rights” means all water and water rights, ditches and ditch rights, reservoirs and storage rights, wells and groundwater rights (whether tributary or nontributary), water shares, water contracts, water allotments, and other rights in and to the use of water of any kind or nature, whether like or unlike the foregoing, decreed or undecreed.

 

“West Mine Facility” means the Company’s mine identified as “West” or “Carlsbad West” in the annual report of the Company on Form 10-K for the fiscal year ended December 31, 2015.

 

“Write-Down and Conversion Powers” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.

 

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1.02                        Other Interpretive Provisions.  With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:

 

(a)                                 The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.”  The word “will” shall be construed to have the same meaning and effect as the word “shall.”  Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document (including any Organization Document) shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or in any other Loan Document), (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (iii) the words “herein,” “hereof” and “hereunder,” and words of similar import when used in any Loan Document, shall be construed to refer to such Loan Document in its entirety and not to any particular provision thereof, (iv) all references in a Loan Document to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, the Loan Document in which such references appear, (v) any reference to any law shall include all statutory and regulatory provisions consolidating, amending, replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time, and (vi) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

 

(b)                                 In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including;” the words “to” and “until” each mean “to but excluding;” and the word “through” means “to and including.”

 

(c)                                  Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan Document.

 

(d)                                 A reference to Loan Parties’ “knowledge” or similar concept means actual knowledge of a Responsible Officer, or knowledge that a Responsible Officer would have obtained if he or she had engaged in good faith and diligent performance of his or her duties, including reasonably specific inquiries of employees or agents and a good faith attempt to ascertain the matter.

 

1.03                        Accounting Terms.

 

(a)                                 Generally.  All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect on the Closing Date, except (i) with respect to any reports or financial information required to be delivered pursuant to Section 7.01, which shall be prepared in accordance with GAAP as in effect and applicable to that accounting period in respect of which reference to GAAP is being made and (ii) as otherwise specifically prescribed herein.  Notwithstanding the foregoing, for purposes of determining compliance with any covenant (including the computation of any financial covenant) contained herein, Indebtedness of each Borrower and its Subsidiaries shall be deemed to be carried at 100% of the outstanding principal amount thereof, and the effects of FASB ASC 825 and FASB ASC 470-20 on financial liabilities shall be disregarded.

 

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(b)                                 Changes in GAAP.  If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Borrower Agent or the Required Lenders shall so request, the Administrative Agent, the Lenders and the Borrower Agent shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders); provided that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) the Borrower Agent shall provide to the Administrative Agent and the Lenders financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.

 

(c)                                  Consolidation of Variable Interest Entities.  Except as expressly provided otherwise herein, all references herein to Consolidated financial statements of the Company and its Subsidiaries or to the determination of any amount for the Company and its Subsidiaries on a Consolidated basis or any similar reference shall, in each case, be deemed to include each variable interest entity that the Company is required to consolidate pursuant to FASB ASC 810 as if such variable interest entity were a Subsidiary as defined herein.

 

(d)                                 Calculations.  In computing financial ratios and other financial calculations of the Company and its Subsidiaries required to be submitted pursuant to this Agreement, all Indebtedness of the Company and its Subsidiaries shall be calculated at par value irrespective if the Company has elected the fair value option pursuant to FASB Interpretation No. 159 — The Fair Value Option for Financial Assets and Financial Liabilities—Including an amendment of FASB Statement No. 115 (February 2007).

 

1.04                        Uniform Commercial Code.  As used herein, the following terms are defined in accordance with the UCC in effect in the State of Illinois from time to time:  “As-extracted collateral,” “Chattel Paper,” “Commodity Account,” “Commodity Contracts,” “Deposit Account,” “Documents,” “Equipment”, “General Intangibles,” “Instrument,” “Inventory,” “Investment Property,” “Record,” and “Securities Account.”

 

1.05                        Rounding.  Any financial ratios required to be maintained by the Borrowers pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).

 

1.06                        Times of Day.  Unless otherwise specified, all references herein to times of day shall be references to Central time (daylight or standard, as applicable).

 

1.07                        Letter of Credit Amounts.  Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the stated amount of such Letter of Credit in effect at such time; provided, however, that with respect to any Letter of Credit that, by its terms or the terms of any Issuer Document related thereto, provides for one or more automatic increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at such time.

 

1.08                        Intercreditor Agreement.  Notwithstanding anything herein to the contrary, the terms of this Agreement are subject to the provisions of the Intercreditor Agreement.  In the event of any conflict between the terms of the Intercreditor Agreement and this Agreement with respect to the exercise of rights and remedies, the terms of the Intercreditor Agreement shall govern and control.

 

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ARTICLE II
 THE COMMITMENTS AND CREDIT EXTENSIONS

 

2.01                        Loan Commitments.

 

(a)                                 Revolving Credit Commitments.  Subject to the terms and conditions set forth herein, each Lender having a Revolving Credit Commitment severally agrees to make loans (each such loan, a “Revolving Credit Loan”) to the Borrowers from time to time during the Availability Period, in an aggregate amount not to exceed at any time outstanding the lesser of (i) the amount of such Lender’s Revolving Credit Commitment, or (ii) such Lender’s Applicable Percentage of the Borrowing Base; provided however, that after giving effect to any Revolving Credit Borrowing, (A) the Total Outstandings shall not exceed the Maximum Borrowing Amount, and (B) the Revolving Credit Exposure of each Lender shall not exceed such Lender’s Revolving Credit Commitment.

 

Within such limits and subject to the other terms and conditions hereof, the Borrowers may borrow under this Section 2.01(a), prepay under Section 2.06(a)(i), and reborrow under this Section 2.01(a).  The Administrative Agent shall have the right, at any time and from time to time on and after the Closing Date in good faith and in the exercise of reasonable credit judgment to establish, modify or eliminate Reserves.

 

(b)                                 [Reserved].

 

(c)                                  Overadvances and Protective Advances.

 

(i)                                     Overadvances.

 

(A)                               If at any time the aggregate principal balance of all Revolving Credit Loans exceeds the Borrowing Base (an “Overadvance”), the excess amount shall be payable by the Borrowers on demand by the Administrative Agent.  All Overadvance Loans shall constitute Obligations secured by the Collateral and shall be entitled to all benefits of the Loan Documents.

 

(B)                               The Administrative Agent may, in its sole discretion (but shall have absolutely no obligation to), require Lenders to honor requests for Overadvance Loans and to forbear from requiring the applicable Borrower(s) to cure an Overadvance as long as (a) such Overadvance does not continue for more than 30 consecutive days and (b) the aggregate amount of the Overadvances existing at any time, together with the Protective Advances outstanding at any time, do not exceed ten percent (10.0%) of the Aggregate Revolving Credit Commitments then in effect.  Overadvance Loans may be required even if the conditions set forth in Section 5.02 have not been satisfied.  In no event shall Overadvance Loans be required that would cause the Total Outstandings to exceed the Aggregate Revolving Credit Commitments.  Required Lenders may at any time revoke the Administrative Agent’s authority to make further Overadvance Loans to any or all Borrowers by written notice to the Administrative Agent.  Any funding of an Overadvance Loan or sufferance of an Overadvance shall not constitute a waiver by the Administrative Agent or Lenders of the Event of Default caused thereby.  In no event shall any Borrower or other Loan Party be deemed a beneficiary of this Section 2.01(c) nor authorized to enforce any of its terms.

 

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(ii)                                  Protective Advances.

 

(A)                               The Administrative Agent shall be authorized by each Borrower and the Lenders from time to time in the Administrative Agent’s sole discretion (but shall have absolutely no obligation to), to make Base Rate Loans to the Borrowers on behalf of the Lenders (any of such Loans are herein referred to as “Protective Advances”) which the Administrative Agent deems necessary or desirable to (a) preserve or protect Collateral or any portion thereof or (b) to enhance the likelihood of, or maximize the amount of, repayment of the Loans and other Revolving Credit Exposure; provided that no Protective Advance shall cause the aggregate amount of the Total Outstandings at such time to exceed the Aggregate Revolving Credit Commitments then in effect.  All Protective Advances made by the Administrative Agent constitute Obligations, secured by the Collateral and shall be treated for all purposes as Base Rate Loans.

 

(B)                               The aggregate amount of Protective Advances outstanding at any time shall not exceed ten percent (10.0% percent) of the Aggregate Revolving Credit Commitments then in effect, and such Protective Advances, together with the aggregate amount of Overadvances existing at any time, shall not exceed ten percent (10.0%) of the Aggregate Revolving Credit Commitments then in effect.  Protective Advances may be made even if the conditions set forth in Section 5.02 have not been satisfied.  Each Revolving Credit Lender shall participate in each Protective Advance on a ratable basis.  Required Lenders may at any time revoke the Administrative Agent’s authority to make further Protective Advances to any or all Borrowers by written notice to the Administrative Agent.  Absent such revocation, the Administrative Agent’s determination that funding of a Protective Advance is appropriate shall be conclusive.  At any time that there is sufficient Availability and the conditions precedent set forth in Section 5.02 have been satisfied, the Administrative Agent may request the Revolving Credit Lenders to make a Loan to repay a Protective Advance.  At any other time, the Administrative Agent may require the Revolving Credit Lenders to fund their risk participations described in Section 2.01(c)(ii)(C).

 

(C)                               Upon the making of a Protective Advance by the Administrative Agent (whether before or after the occurrence of a Default or Event of Default), each Revolving Credit Lender shall be deemed, without further action by any party hereto, to have unconditionally and irrevocably purchased from the Administrative Agent without recourse or warranty, an undivided interest and participation in such Protective Advance equal to the proportion of the Total Credit Exposure of such Revolving Credit Lender to the Total Credit Exposure of all Revolving Credit Lenders (its “Ratable Share”) of such Protective Advance.  Each Revolving Credit Lender shall transfer (a “Transfer”) the amount of such Revolving Credit Lender’s purchased interest and participation promptly when requested to the Administrative Agent, to such account of the Administrative Agent as the Administrative Agent may designate, but in any case not later than 3:00 p.m. on the Business Day notified (if notice is provided by the Administrative Agent prior to 12:00 p.m. and otherwise on the immediately following Business Day (the “Transfer Date”)).  Transfers may occur during the existence of a Default or Event of Default and whether or not the applicable conditions precedent set forth in Section 5.02 have then been satisfied.  Such amounts transferred to the Administrative Agent shall be applied against the amount of the applicable Protective Advance and shall constitute Loans of such Revolving Credit Lenders, respectively.  If any such amount is not transferred to the Administrative Agent by any Revolving Credit Lender on such Transfer Date, the Administrative Agent shall be entitled to recover such amount on demand from such

 

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Revolving Credit Lender together with interest thereon for each day from the date such payment was due until the date such amount is paid to the Administrative Agent, at the Overnight Rate for three (3) Business Days and thereafter at the Base Rate.  From and after the date, if any, on which any Revolving Credit Lender is required to fund, and funds, its interest and participation in any Protective Advance purchased hereunder, the Administrative Agent shall promptly distribute to such Revolving Credit Lender, such Revolving Credit Lender’s Ratable Share of all payments of principal and interest and all proceeds of Collateral received by the Administrative Agent in respect of such Protective Advance.

 

2.02                        Borrowings, Conversions and Continuations of Loans.

 

(a)                                 Each Borrowing, each conversion of Loans from one Type to the other, and each continuation of LIBOR Loans shall be made upon the Borrower Agent’s irrevocable notice to the Administrative Agent, which may be given by telephone.  Each such notice must be received by the Administrative Agent not later than 11:00 a.m. (i) three Business Days prior to the requested date of any Borrowing of, conversion to or continuation of LIBOR Loans or of any conversion of LIBOR Loans to Base Rate Loans, and (ii) on the requested date of any Borrowing of Base Rate Loans.  Each telephonic notice by the Borrower Agent pursuant to this Section 2.02(a) must be promptly confirmed in writing by a Responsible Officer of the Borrower Agent.  Each Borrowing of, conversion to or continuation of LIBOR Loans shall be in a principal amount of $1,000,000 or a whole multiple of $500,000 in excess thereof.  Except as provided in Sections 2.02(f), 2.03(c) and 2.04(c), each Borrowing of or conversion to Base Rate Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof.  During a Dominion Trigger Period, there shall be no minimum borrowing amounts for Base Rate Loans.  Each such notice (whether telephonic or written) shall specify (i) the principal amount of Loans to be borrowed, converted or continued, (ii) the Type of Loans to be borrowed or to which existing Loans are to be converted, (iii) the requested date of the Borrowing, conversion or continuation, as the case may be (which shall be a Business Day) and (iv) if applicable, the duration of the Interest Period with respect thereto.  If the Borrowers fail to specify a Type of Loan or if the Borrowers fail to give a timely notice requesting a conversion or continuation, then the applicable Loans shall be made as, or converted to, Base Rate Loans.  Any such automatic conversion to Base Rate Loans shall be effective as of the last day of the Interest Period then in effect with respect to the applicable LIBOR Loans.  If the Borrowers request a Borrowing of, conversion to, or continuation of LIBOR Loans in any such Committed Loan Notice, but fail to specify an Interest Period, they will be deemed to have specified an Interest Period of one month.

 

(b)                                 Following receipt of a Committed Loan Notice, the Administrative Agent shall promptly notify each Appropriate Lender of the amount of its Applicable Percentage, and if no timely notice of a conversion or continuation is provided by the Borrower Agent, the Administrative Agent shall notify each Appropriate Lender of the details of any automatic conversion to Base Rate Loans described in the preceding subsection.  Each Appropriate Lender shall make the amount of its Loan available to the Administrative Agent in immediately available funds at the Administrative Agent’s Office not later than 1:00 p.m. on the Business Day specified in the applicable Committed Loan Notice.  Upon satisfaction of the applicable conditions set forth in Section 5.02 (and, if such Borrowing is the initial Credit Extension, Section 5.01), the Administrative Agent shall make all funds so received available to the Borrowers in like funds as received by the Administrative Agent either by (i) crediting the account of the Borrowers on the books of BMO with the amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to (and reasonably acceptable to) the Administrative Agent by the Borrower; provided, however, that if, on the date a Committed Loan Notice with respect to a Revolving Credit Borrowing is given by the Borrower, there are Letter of Credit Borrowings outstanding, then the proceeds of such Revolving Credit Borrowing, first, shall be applied to the payment in full of any such Letter of Credit Borrowings, and second, shall be made available to the Borrowers as provided above.

 

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(c)                                  Except as otherwise provided herein, a LIBOR Loan may be continued or converted only on the last day of an Interest Period for such LIBOR Loan.  During the existence of a Default, no Loans may be requested as, converted to or continued as LIBOR Loans without the consent of the Required Lenders.

 

(d)                                 The Administrative Agent shall promptly notify the Borrower Agent and the Lenders of the interest rate applicable to any Interest Period for LIBOR Loans upon determination of such interest rate.  At any time that Base Rate Loans are outstanding, the Administrative Agent shall notify the Borrower Agent and the Lenders of any change in BMO’s prime rate used in determining the Base Rate promptly following the public announcement of such change.

 

(e)                                  After giving effect to all conversions of Loans from one Type to the other, and all continuations of Loans as the same Type, there shall not be more than eight (8) Interest Periods in effect in respect of the Facility.

 

(f)                                   Borrowers and each Lender hereby irrevocably authorize the Administrative Agent, in the Administrative Agent’s sole discretion, to advance to Borrowers, and/or to pay and charge to Borrowers’ Loan Account hereunder, all sums necessary to pay (i) any interest accrued on the Obligations when due and to pay all fees, costs and expenses and other Obligations at any time owed by any Loan Party to the Administrative Agent or any Lender hereunder and (ii) any service charge or expenses due pursuant to Section 11.04 when due.  The Administrative Agent shall advise the Borrower Agent of any such advance or charge promptly after the making thereof.  Such action on the part of the Administrative Agent shall not constitute a waiver of the Administrative Agent’s rights and the Borrowers’ obligations under this Agreement.  Any amount which is added to the principal balance of the Loan Account as provided in this Section 2.02(f) shall constitute Revolving Credit Loans (notwithstanding the failure of the Borrowers to satisfy any of the conditions to Credit Extensions in Section 5.02) and Obligations hereunder and shall bear interest at the interest rate then and thereafter applicable to Base Rate Loans.

 

2.03                        Letters of Credit.

 

(a)                                 The Letter of Credit Commitment.

 

(i)                                     Subject to the terms and conditions set forth herein, (A) the Letter of Credit Issuer agrees, in reliance upon the agreements of the Revolving Credit Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the earlier to occur of the Letter of Credit Expiration Date or the termination of the Availability Period, to issue Letters of Credit at the request of the Borrower Agent for the account of a Borrower (or any Subsidiary of the Company so long as such Borrower is a joint and several co-applicant; references to a “Borrower” in this Section 2.03 shall be deemed to include reference to such Subsidiary), and to amend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drafts under the Letters of Credit; and (B) the Revolving Credit Lenders severally agree to participate in Letters of Credit issued for the account of the a Borrower and any drawings thereunder; provided that the Letter of Credit Issuer shall not be obligated to make any Letter of Credit Extension with respect to any Letter of Credit, and no Revolving Credit Lender shall be obligated to participate in any Letter of Credit, if as of the date of such Letter of Credit Extension, (A) the Total Outstandings would exceed the Maximum Borrowing Amount, (B) the Revolving Credit Exposure of any Revolving Credit Lender would exceed such Revolving Credit Lender’s Revolving Credit Commitment, or (C) the Outstanding Amount of all Letter of Credit Obligations would exceed the Letter of Credit Sublimit.  Each request by the Borrower Agent for the issuance or amendment of a Letter of Credit shall be deemed to be a representation by the Borrower Agent that the Letter of Credit Extension so

 

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requested complies with the conditions set forth in the proviso to the preceding sentence.  Within the foregoing limits, and subject to the terms and conditions hereof, the Borrowers’ ability to obtain Letters of Credit shall be fully revolving, and accordingly the Borrowers may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.  All Existing Letters of Credit shall be deemed to have been issued pursuant hereto, and from and after the Closing Date shall be subject to and governed by the terms and conditions hereof and all fees in respect thereof pursuant to Sections 2.03(h) and 2.09(b) shall be payable (in substitution for any fees set forth in the applicable letter of credit reimbursement agreements or applications relating to the Existing Letters of Credit, except to the extent that such fees are also payable pursuant to Section 2.03(h) and 2.09(b)) as if the Existing Letters of Credit had been issued on the Closing Date.  Notwithstanding the foregoing, (x) the Borrowers shall not be required to pay any additional issuance fees with respect to the issuance of the Existing Letters of Credit solely as a result of such letters of credit being converted to a Letter of Credit hereunder, it being understood that the fronting, participation and other fees set forth in Section 2.03(h) and 2.09(b) shall otherwise apply to the Existing Letters of Credit and (y) no Existing Letter of Credit may be extended or renewed.

 

(ii)                                  The Letter of Credit Issuer shall not issue any Letter of Credit, if:

 

(A)                               subject to Section 2.03(b)(iii), the expiry date of such requested Letter of Credit would occur (i) as to standby Letters of Credit, more than twelve months after the date of issuance or last renewal, and (ii) as to commercial Letters of Credit, later than the earlier of (1) 270 days after the date of issuance thereof and (2) 30 days before the Maturity Date (or, if such day is not a Business Day, the preceding Business Day), unless in each case the Required Lenders have approved such expiry date; or

 

(B)                               the expiry date of such requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless Cash Collateralized or all the Lenders have approved such expiry date;

 

(iii)                               The Letter of Credit Issuer shall not be under any obligation to issue any Letter of Credit if:

 

(A)                               any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the Letter of Credit Issuer from issuing such Letter of Credit or any Law applicable to the Letter of Credit Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the Letter of Credit Issuer shall prohibit, or request that the Letter of Credit Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the Letter of Credit Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the Letter of Credit Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the Letter of Credit Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the Letter of Credit Issuer in good faith deems material to it;

 

(B)                               the issuance of such Letter of Credit would violate one or more policies of the Letter of Credit Issuer;

 

(C)                               such Letter of Credit is in an initial amount less than $10,000;

 

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(D)                               any Lender is at that time a Defaulting Lender, unless the Letter of Credit Issuer has entered into arrangements, including the delivery of Cash Collateral, satisfactory to the Letter of Credit Issuer (in its sole discretion) with the Borrowers or such Lender to eliminate the Letter of Credit Issuer’s actual or potential Fronting Exposure (after giving effect to Section 2.17(a)(iv)) with respect to the Defaulting Lender arising from either the Letter of Credit then proposed to be issued or that Letter of Credit and all other Letter of Credit Obligations as to which the Letter of Credit Issuer has actual or potential Fronting Exposure, as it may elect in its sole discretion.

 

(iv)                              The Letter of Credit Issuer shall not amend any Letter of Credit if the Letter of Credit Issuer would not be permitted at such time to issue such Letter of Credit in its amended form under the terms hereof.

 

(v)                                 The Letter of Credit Issuer shall be under no obligation to amend any Letter of Credit if (A) the Letter of Credit Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.

 

(vi)                              The Letter of Credit Issuer shall act on behalf of the Revolving Credit Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and the Letter of Credit Issuer shall have all of the benefits and immunities (A) provided to the Administrative Agent in Article X with respect to any acts taken or omissions suffered by the Letter of Credit Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such Letters of Credit as fully as if the term “Administrative Agent” as used in Article X included the Letter of Credit Issuer with respect to such acts or omissions, and (B) as additionally provided herein with respect to the Letter of Credit Issuer.

 

(b)                                 Procedures for Issuance and Amendment of Letters of Credit; Auto-Extension Letters of Credit.

 

(i)                                     Each Letter of Credit shall be issued or amended, as the case may be, upon the request of the Borrower Agent delivered to the Letter of Credit Issuer (with a copy to the Administrative Agent) in the form of a Letter of Credit Application, appropriately completed and signed by a Responsible Officer of the Borrower Agent and, if applicable, of the applicable Borrower.  Such Letter of Credit Application must be received by the Letter of Credit Issuer and the Administrative Agent not later than 11:00 a.m. at least two Business Days (or such later date and time as the Administrative Agent and the Letter of Credit Issuer may agree in a particular instance in its sole discretion) prior to the proposed issuance date or date of amendment, as the case may be.  In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the Letter of Credit Issuer: (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing or presentation thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing or presentation thereunder; and (G) such other matters as the Letter of Credit Issuer may require.  In the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the Letter of Credit Issuer (A) the Letter of Credit to be amended; (B) the proposed date of amendment thereof (which shall be a Business Day); (C) the nature of the proposed amendment; and (D) such other matters as the Letter of Credit Issuer may require.  Additionally, the Borrower Agent shall 

 

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furnish to the Letter of Credit Issuer and the Administrative Agent such other documents and information pertaining to such requested Letter of Credit issuance or amendment, including any Issuer Documents, as the Letter of Credit Issuer or the Administrative Agent may require.

 

(ii)                                  Promptly after receipt of any Letter of Credit Application, the Letter of Credit Issuer will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of such Letter of Credit Application from the applicable Borrower and, if not, the Letter of Credit Issuer will provide the Administrative Agent with a copy thereof.  Unless the Letter of Credit Issuer has received written notice from any Revolving Credit Lender, the Administrative Agent or any Borrower, at least one Business Day prior to the requested date of issuance or amendment of the applicable Letter of Credit, that one or more applicable conditions contained in Article V shall not then be satisfied, then, subject to the terms and conditions hereof, the Letter of Credit Issuer shall, on the requested date, issue a Letter of Credit for the account of the Company or the Company and the applicable Borrower or enter into the applicable amendment, as the case may be, in each case in accordance with the Letter of Credit Issuer’s usual and customary business practices.  Immediately upon the issuance of each Letter of Credit, each Revolving Credit Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Letter of Credit Issuer a risk participation in such Letter of Credit in an amount equal to the product of such Revolving Credit Lender’s Applicable Percentage times the amount of such Letter of Credit.

 

(iii)                               If the Borrower Agent so requests in any applicable Letter of Credit Application, the Letter of Credit Issuer may, in its sole and absolute discretion, agree to issue a Letter of Credit other than a commercial Letter of Credit that has automatic extension provisions (each, an “Auto-Extension Letter of Credit”); provided that any such Auto-Extension Letter of Credit must permit the Letter of Credit Issuer to prevent any such extension at least once in each twelve-month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a day (the “Non-Extension Notice Date”) in each such twelve-month period to be agreed upon at the time such Letter of Credit is issued.  Unless otherwise directed by the Letter of Credit Issuer, the Borrower Agent shall not be required to make a specific request to the Letter of Credit Issuer for any such extension.  Once an Auto-Extension Letter of Credit has been issued, the Revolving Credit Lenders shall be deemed to have authorized (but may not require) the Letter of Credit Issuer to permit the extension of such Letter of Credit at any time to an expiry date not later than the Letter of Credit Expiration Date; provided, however, that the Letter of Credit Issuer shall not permit any such extension if (A) the Letter of Credit Issuer has determined that it would not be permitted, or would have no obligation, at such time to issue such Letter of Credit in its revised form (as extended) under the terms hereof (by reason of the provisions clause (ii) or (iii) of Section 2.03(a) or otherwise), or (B) it has received notice (which may be by telephone or in writing) on or before the day that is five Business Days before the Non-Extension Notice Date (1) from the Administrative Agent that the Required Lenders have elected not to permit such extension or (2) from the Administrative Agent, any Revolving Credit Lender or the Borrower Agent that one or more of the applicable conditions specified in Section 5.02 is not then satisfied, and in each such case directing the Letter of Credit Issuer not to permit such extension.

 

(iv)                              Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to an advising bank with respect thereto or to the beneficiary thereof, the Letter of Credit Issuer will also deliver to the Borrower Agent and the Administrative Agent a true and complete copy of such Letter of Credit or amendment.

 

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(c)                                  Drawings and Reimbursements; Funding of Participations.

 

(i)                                     Upon receipt from the beneficiary of any Letter of Credit of any notice of a drawing or presentation of documents under such Letter of Credit, the Letter of Credit Issuer shall notify the Borrower Agent and the Administrative Agent thereof. Not later than 1:00 p.m. on the date of any payment by the Letter of Credit Issuer under a Letter of Credit (each such date, an “Honor Date”), the Borrowers shall reimburse the Letter of Credit Issuer through the Administrative Agent in Dollars and in an amount equal to the amount of such drawing.  If the Borrowers fail to reimburse the Letter of Credit Issuer by such time, the Administrative Agent shall promptly notify each Revolving Credit Lender of the Honor Date, the amount of the unreimbursed drawing or payment (the “Unreimbursed Amount”), and the amount of such Revolving Credit Lender’s Applicable Percentage thereof.  In such event, the Borrower Agent shall be deemed to have requested a Revolving Credit Borrowing of Base Rate Loans to be disbursed on the Honor Date in an amount equal to the Unreimbursed Amount, without regard to the minimum and multiples specified in Section 2.03 for the principal amount of Base Rate Loans, but subject to the amount of the unutilized portion of the Aggregate Revolving Credit Commitments and the conditions set forth in Section 5.02 (other than the delivery of a Committed Loan Notice).  Any notice given by the Letter of Credit Issuer or the Administrative Agent pursuant to this Section 2.03(c)(i) may be given by telephone if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.

 

(ii)                                  Each Revolving Credit Lender shall upon any notice pursuant to Section 2.03(c)(i) make funds available (and the Administrative Agent may apply Cash Collateral provided for this purpose) to the Administrative Agent for the account of the Letter of Credit Issuer, in Dollars, at the Administrative Agent’s Office for Dollar denominated payments an amount equal to its Applicable Percentage of the Unreimbursed Amount not later than 3:00 p.m. on the Business Day specified in such notice by the Administrative Agent, whereupon, subject to the provisions of Section 2.03(c)(iii), each Revolving Credit Lender that so makes funds available shall be deemed to have made a Base Rate Loan to the Borrower Agent in such amount.  The Administrative Agent shall remit the funds so received to the Letter of Credit Issuer in Dollars.

 

(iii)                               With respect to any Unreimbursed Amount that is not fully refinanced by a Revolving Credit Borrowing of Base Rate Loans because the conditions set forth in Section 5.02 cannot be satisfied or for any other reason, the Borrowers shall be deemed to have incurred from the Letter of Credit Issuer a Letter of Credit Borrowing in the amount of the Unreimbursed Amount that is not so refinanced, which Letter of Credit Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the Default Rate.  In such event, each Revolving Credit Lender’s payment to the Administrative Agent for the account of the Letter of Credit Issuer pursuant to Section 2.03(c)(ii) shall be deemed payment in respect of its participation in such Letter of Credit Borrowing and shall constitute an Letter of Credit Advance from such Revolving Credit Lender in satisfaction of its participation obligation under this Section 2.03.

 

(iv)                              Until each Revolving Credit Lender funds its Revolving Credit Loan or Letter of Credit Advance pursuant to this Section 2.03(c) to reimburse the Letter of Credit Issuer for any amount drawn under any Letter of Credit, interest in respect of such Revolving Credit Lender’s Applicable Percentage of such amount shall be solely for the account of the Letter of Credit Issuer.

 

(v)                                 Each Revolving Credit Lender’s obligation to make Revolving Credit Loans or Letter of Credit Advances to reimburse the Letter of Credit Issuer for amounts drawn under Letters of Credit, as contemplated by this Section 2.03(c), shall be absolute and unconditional and

 

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shall not be affected by any circumstance, including (A) any set-off, counterclaim, recoupment, defense or other right which such Revolving Credit Lender may have against the Letter of Credit Issuer, any Borrower or any other Person for any reason whatsoever; (B) the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing.  No such making of a Letter of Credit Advance shall relieve or otherwise impair the obligation of the Borrowers to reimburse the Letter of Credit Issuer for the amount of any payment made by the Letter of Credit Issuer under any Letter of Credit, together with interest as provided herein.

 

(vi)                              If any Revolving Credit Lender fails to make available to the Administrative Agent for the account of the Letter of Credit Issuer any amount required to be paid by such Revolving Credit Lender pursuant to the foregoing provisions of this Section 2.03(c) by the time specified in Section 2.03(c)(ii), then, without limiting the other provisions of this Agreement, the Letter of Credit Issuer shall be entitled to recover from such Revolving Credit Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the Letter of Credit Issuer at a rate per annum equal to the applicable Overnight Rate for three (3) Business Days and thereafter at the Base Rate, plus any administrative, processing or similar fees customarily charged by the Letter of Credit Issuer in connection with the foregoing.  A certificate of the Letter of Credit Issuer submitted to any Revolving Credit Lender (through the Administrative Agent) with respect to any amounts owing under this clause (vi) shall be conclusive absent manifest error.

 

(d)                                 Repayment of Participations.  At any time after the Letter of Credit Issuer has made a payment under any Letter of Credit and has received from any Revolving Credit Lender such Revolving Credit Lender’s Letter of Credit Advance in respect of such payment in accordance with Section 2.03(c), if the Administrative Agent receives for the account of the Letter of Credit Issuer any payment in respect of the related Unreimbursed Amount or interest thereon (whether directly from the Borrowers or otherwise, including proceeds of Cash Collateral applied thereto by the Administrative Agent), the Administrative Agent will distribute to such Revolving Credit Lender its Applicable Percentage thereof in Dollars (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Revolving Credit Lender’s Letter of Credit Advance was outstanding) and in the same funds as those received by the Administrative Agent.

 

(e)                                  Obligations Absolute.  The obligation of the Borrowers to reimburse the Letter of Credit Issuer for each drawing under each Letter of Credit, and to repay each Letter of Credit Borrowing shall be joint and several and absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the following:

 

(i)                                     any lack of validity or enforceability of such Letter of Credit, this Agreement, or any other agreement or instrument relating thereto;

 

(ii)                                  the existence of any claim, counterclaim, set-off, defense or other right that any Borrower or any Subsidiary may have at any time against any beneficiary or any transferee of such Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), the Letter of Credit Issuer or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or by such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction;

 

(iii)                               any draft, demand, certificate or other document or endorsement presented under or in connection with such Letter of Credit proving to be forged, fraudulent, invalid or

 

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insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under such Letter of Credit;

 

(iv)                              any payment by the Letter of Credit Issuer under such Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of Credit, or any payment made by the Letter of Credit Issuer under such Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in connection with any proceeding under any Debtor Relief Law; or

 

(v)                                 any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, any Borrower or any Subsidiary.

 

(f)                                   Role of Letter of Credit Issuer.  Each Revolving Credit Lender and the Borrowers agree that, in paying any drawing under a Letter of Credit, the Letter of Credit Issuer shall not have any responsibility to obtain any document (other than any sight draft, certificates and documents expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such document.  None of the Letter of Credit Issuer, the Administrative Agent, any of their respective Related Parties nor any correspondent, participant or assignee of the Letter of Credit Issuer shall be liable to any Lender for (i) any action taken or omitted in connection herewith at the request or with the approval of the Revolving Credit Lenders or the Required Lenders, as applicable; (ii) any action taken or omitted in the absence of gross negligence or willful misconduct; or (iii) the due execution, effectiveness, validity or enforceability of any document or instrument related to any Letter of Credit or Issuer Document.  Each Borrower hereby assumes all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit.  The Letter of Credit Issuer may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary, and the Letter of Credit Issuer shall not be responsible for the validity or sufficiency of any instrument endorsing, transferring or assigning or purporting to endorse, transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason.

 

(g)                                  Applicability of ISP and UCP.  Unless otherwise expressly agreed by the Letter of Credit Issuer and the Borrower Agent, when a Letter of Credit is issued (including any such agreement applicable to an Existing Letter of Credit), (i) the rules of the ISP shall apply to each standby Letter of Credit, and (ii) the rules of the Uniform Customs and Practice for Documentary Credits, as most recently published by the International Chamber of Commerce at the time of issuance shall apply to each commercial Letter of Credit.

 

(h)           Fronting Fee and Documentary and Processing Charges Payable to Letter of Credit Issuer. The Borrowers shall pay directly to the Letter of Credit Issuer for its own account a fronting fee with respect to each Letter of Credit, at a rate equal to one-eighth of one percent (0.125%), computed on the amount of such Letter of Credit (a “Fronting Fee”), and payable upon the issuance or renewal (automatic or otherwise) thereof or upon any amendment increasing the amount thereof.  In addition, the Borrowers shall pay directly to the Letter of Credit Issuer for its own account, in Dollars, the customary issuance, presentation, amendment, cancellation, negotiation, drawing under, transfer and other processing fees, and other standard documentary, processing and other costs and charges, of the Letter of 

 

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Credit Issuer relating to letters of credit issued by it as from time to time in effect.  Such customary fees and standard costs and charges are due and payable on demand and are nonrefundable.

 

(i)                                     Conflict with Issuer Documents.  In the event of any conflict between the terms hereof and the terms of any Issuer Document, the terms hereof shall control.

 

(j)                                    Letters of Credit Issued for Subsidiaries.  Notwithstanding that a Letter of Credit issued or outstanding hereunder is in support of any obligations of, or is for the account of, a Subsidiary or any other Borrower, each Borrower shall be obligated to reimburse the Letter of Credit Issuer hereunder for any and all drawings under such Letter of Credit.  Each Borrower hereby acknowledges that the issuance of Letters of Credit for the account of Subsidiaries or any other Borrower inures to the benefit of such Borrower, and that such Borrower’s business derives substantial benefits from the businesses of such Subsidiaries or other Borrower.

 

2.04                        Swing Line Loans.

 

(a)                                 The Swing Line.  Subject to the terms and conditions set forth herein, the Swing Line Lender may, but shall not be obligated to, make loans in reliance upon the agreements of the other Lenders set forth in this Section 2.04 in Dollars (each such loan, a “Swing Line Loan”) to the Borrowers from time to time on any Business Day during the Availability Period in an aggregate amount not to exceed at any time outstanding the amount of the Swing Line Sublimit, notwithstanding the fact that such Swing Line Loans, when aggregated with the Applicable Percentage of the Outstanding Amount of Revolving Credit Loans and Letter of Credit Obligations of the Revolving Credit Lender acting as Swing Line Lender, may exceed the amount of such Revolving Credit Lender’s Revolving Credit Commitment; provided, however, that after giving effect to any Swing Line Loan, (i) the Total Outstandings shall not exceed the Maximum Borrowing Amount, and (ii) the Revolving Credit Exposure of any Revolving Credit Lender shall not exceed such Revolving Credit Lender’s Revolving Credit Commitment, and provided, further, that the Borrowers shall not use the proceeds of any Swing Line Loan to refinance any outstanding Swing Line Loan.  Within the foregoing limits and subject to the discretion of the Swing Line Lender to make Swing Line Loans, and subject to the other terms and conditions hereof, the Borrowers may borrow under this Section 2.04, prepay under Section 2.06(a)(ii), and reborrow under this Section 2.04.  Each Swing Line Loan shall be a Base Rate Loan.  Immediately upon the making of a Swing Line Loan, each Revolving Credit Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Swing Line Lender a risk participation in such Swing Line Loan in an amount equal to the product of such Revolving Credit Lender’s Applicable Percentage times the amount of such Swing Line Loan.

 

(b)                                 Borrowing Procedures.  Each Swing Line Borrowing shall be made upon the Borrower Agent’s irrevocable notice to the Swing Line Lender and the Administrative Agent, which may be given by telephone.  Each such notice must be received by the Swing Line Lender and the Administrative Agent not later than 12:00 noon on the requested borrowing date, and shall specify (i) the amount to be borrowed, which shall be a minimum of $500,000 and integral multiples of $100,000 in excess thereof, and (ii) the requested borrowing date, which shall be a Business Day.  Each such telephonic notice must be confirmed promptly by delivery to the Swing Line Lender and the Administrative Agent of a written Swing Line Loan Notice, appropriately completed and signed by a Responsible Officer of the Borrower Agent.  Promptly after receipt by the Swing Line Lender of any telephonic Swing Line Loan Notice, the Swing Line Lender will (i) deliver notice to the Borrower Agent and the Administrative Agent as to whether it will or will not make such Swing Line Loan available to the Borrowers and, if agreeing to make such Swing Line Loan, (ii) confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has also received such Swing Line Loan Notice and, if not, the Swing Line Lender will notify the Administrative Agent (by telephone or in writing) of the contents thereof.  Unless

 

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the Swing Line Lender has received notice (by telephone or in writing) from the Administrative Agent (including at the request of any Revolving Credit Lender) prior to 1:00 p.m. on the date of the proposed Swing Line Borrowing (A) directing the Swing Line Lender not to make such Swing Line Loan as a result of the limitations set forth in the proviso to the first sentence of Section 2.04(a), or (B) that one or more of the applicable conditions specified in Article V is not then satisfied, then, subject to the terms and conditions hereof, the Swing Line Lender may, not later than 3:00 p.m. on the borrowing date specified in such Swing Line Loan Notice, make the amount of its Swing Line Loan available to the Borrower Agent at its office by crediting the account of the Borrower Agent on the books of the Swing Line Lender in Same Day Funds.

 

(c)                                  Refinancing of Swing Line Loans.

 

(i)                                     The Swing Line Lender at any time in its sole and absolute discretion, but no less frequently than weekly, may request, on behalf of the Borrowers (which hereby irrevocably authorizes the Swing Line Lender to so request on its behalf), that each Revolving Credit Lender make a Base Rate Loan in an amount equal to such Revolving Credit Lender’s Applicable Percentage of the amount of Swing Line Loans then outstanding.  Such request shall be made in writing (which written request shall be deemed to be a Committed Loan Notice for purposes hereof) and in accordance with the requirements of Section 2.02 without regard to the minimum and multiples specified therein for the principal amount of Base Rate Loans, but subject to the unutilized portion of the Aggregate Revolving Credit Commitments and the conditions set forth in Section 5.02.  The Swing Line Lender shall furnish the Borrower Agent with a copy of the applicable Committed Loan Notice promptly after delivering such notice to the Administrative Agent.  Each Revolving Credit Lender shall make an amount equal to its Applicable Percentage of the amount specified in such Committed Loan Notice available to the Administrative Agent in Same Day Funds (and the Administrative Agent may apply Cash Collateral available with respect to the applicable Swing Line Loan) for the account of the Swing Line Lender at the Administrative Agent’s Office not later than 2:00 p.m. on the day specified in such Committed Loan Notice, whereupon, subject to Section 2.04(c)(ii), each Revolving Credit Lender that so makes funds available shall be deemed to have made a Base Rate Loan to the Borrowers in such amount.  The Administrative Agent shall remit the funds so received to the Swing Line Lender.

 

(ii)                                  If for any reason any Swing Line Loan cannot be refinanced by such a Revolving Credit Borrowing in accordance with Section 2.04(c)(i), the request for Base Rate Loans submitted by the Swing Line Lender as set forth herein shall be deemed to be a request by the Swing Line Lender that each of the Revolving Credit Lenders fund its risk participation in the relevant Swing Line Loan and each Revolving Credit Lender’s payment to the Administrative Agent for the account of the Swing Line Lender pursuant to Section 2.04(c)(i) shall be deemed payment in respect of such participation.

 

(iii)                               If any Revolving Credit Lender fails to make available to the Administrative Agent for the account of the Swing Line Lender any amount required to be paid by such Revolving Credit Lender pursuant to the foregoing provisions of this Section 2.04(c) by the time specified in Section 2.04(c)(i), the Swing Line Lender shall be entitled to recover from such Revolving Credit Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the Swing Line Lender at a rate per annum equal to the applicable Overnight Rate for three (3) Business Days and thereafter at the Base Rate, plus any administrative processing or similar fees customarily charged by the Swing Line Lender in connection with the foregoing.  A certificate of the Swing Line Lender submitted to any

 

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Revolving Credit Lender (through the Administrative Agent) with respect to any amounts owing under this clause (iii) shall be conclusive absent manifest error.

 

(iv)                              Each Revolving Credit Lender’s obligation to make Revolving Credit Loans or to purchase and fund risk participations in Swing Line Loans pursuant to this Section 2.04(c) shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any set-off, counterclaim, recoupment, defense or other right which such Revolving Credit Lender may have against the Swing Line Lender, the Borrowers or any other Person for any reason whatsoever, (B) the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided, however, that each Revolving Credit Lender’s obligation to make Revolving Credit Loans pursuant to this Section 2.04(c) is subject to the conditions set forth in Section 5.02.  No such funding of risk participations shall relieve or otherwise impair the obligation of the Borrowers to repay Swing Line Loans, together with interest as provided herein.

 

(v)                                 All refinancings and fundings under this Section 2.04(c) shall be in addition to and without duplication of the settlement procedures and obligations under Section 2.14.

 

(d)                                 Repayment of Participations.  At any time after any Revolving Credit Lender has purchased and funded a risk participation in a Swing Line Loan, if the Swing Line Lender receives any payment on account of such Swing Line Loan, the Swing Line Lender will distribute to such Revolving Credit Lender its Applicable Percentage of such payment (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Revolving Credit Lender’s risk participation was funded) in the same funds as those received by the Swing Line Lender.

 

(e)                                  Interest for Account of Swing Line Lender.  The Swing Line Lender shall be responsible for invoicing the Borrowers for interest on the Swing Line Loans.  Until each Revolving Credit Lender funds its Base Rate Loan or risk participation pursuant to this Section 2.04 to refinance such Revolving Credit Lender’s Applicable Percentage of any Swing Line Loan, interest in respect of such Applicable Percentage shall be solely for the account of the Swing Line Lender.

 

(f)                                   Payments Directly to Swing Line Lender.  The Borrowers shall make all payments of principal and interest in respect of the Swing Line Loans directly to the Swing Line Lender.

 

2.05                        Repayment of Loans.

 

(a)                                 Revolving Credit Loans.  The Borrowers shall repay to the Administrative Agent for the account of each of the Revolving Credit Lenders on the Maturity Date the aggregate principal amount of and all accrued and unpaid interest on all Revolving Credit Loans (and if any, Protective Advances) outstanding on such date.

 

(b)                                 Swing Line Loans.  The Borrowers shall repay each Swing Line Loan on the earlier to occur of (i) each refinancing date arising under Section 2.04(c) and (ii) the Maturity Date.

 

(c)                                  Protective Advances.  The Borrowers shall repay all Protective Advances on the earlier to occur of (i) demand by the Administrative Agent and (ii) the Maturity Date.

 

(d)                                 Other Obligations.  Obligations other than principal and interest on the Loans, including Letter of Credit Obligations and, subject to Section 11.04, Extraordinary Expenses, shall be paid by Borrowers as specifically provided herein and in any other applicable Loan Documents or, if no payment date is specified, on demand.

 

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2.06                        Prepayments.

 

(a)                                 Optional.

 

(i)                                     The Borrowers may, upon notice to the Administrative Agent from the Borrower Agent, at any time or from time to time voluntarily prepay Revolving Credit Loans in whole or in part without premium or penalty; provided that except with respect to prepayments in accordance with Section 4.04(c), (A) such notice must be received by the Administrative Agent not later than 11:00 a.m. (1) three Business Days prior to any date of prepayment of LIBOR Loans and (2) on the date of prepayment of Base Rate Loans; (B) any prepayment of LIBOR Loans shall be in a principal amount of $1,000,000 or a whole multiple of $500,000 in excess thereof; and (C) any prepayment of Base Rate Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof or, in each case, if less, the entire principal amount thereof then outstanding.  During a Dominion Trigger Period, there shall be no minimum repayment amount for Base Rate Loans.  Each such notice shall specify the date and amount of such prepayment and the Type(s) of Loans to be prepaid and, if LIBOR Loans are to be prepaid, the Interest Period(s) of such Loans.  The Administrative Agent will promptly notify each Lender of its receipt of each such notice, and of the amount of such Lender’s ratable portion of such prepayment (based on such Lender’s Applicable Percentage).  If such notice is given by the Borrower Agent, the Borrowers shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein.  Any prepayment of a LIBOR Loan shall be accompanied by all accrued interest on the amount prepaid, together with any additional amounts required pursuant to Section 3.05.  Subject to Section 2.17, such prepayments shall be paid to the Lenders in accordance with their respective Applicable Percentages.

 

(ii)                                  The Borrowers may, upon notice to the Swing Line Lender (with a copy to the Administrative Agent) from the Borrower Agent, at any time or from time to time, voluntarily prepay Swing Line Loans in whole or in part without premium or penalty; provided that (A) such notice must be received by the Swing Line Lender and the Administrative Agent not later than 1:00 p.m. on the date of the prepayment, and (B) any such prepayment shall be in a minimum principal amount of $100,000.  Each such notice shall specify the date and amount of such prepayment.  If such notice is given by the Borrower Agent, the Borrowers shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein.

 

(b)                                 Mandatory.

 

(i)                                     [Reserved].

 

(ii)                                  Asset Dispositions.  Subject to Section 2.06(d), if a Disposition occurs with respect to any property of any Loan Party or any of its Subsidiaries (other than any Disposition of property permitted by Section 8.05(a), (b), (c), (e), (f), (g), (h), (i), (j), (l) or (m)) which results in the realization by such Person of Net Cash Proceeds in excess of $1,000,000 in any consecutive 365-day period ending on the date of such Disposition, the Borrowers shall, subject to the terms of the Intercreditor Agreement, prepay an aggregate principal amount of Loans (and Cash Collateralize Letter of Credit Obligations, if applicable) equal to 100% of such Net Cash Proceeds promptly upon (but in any event within five Business Days (or such later time as the Administrative Agent shall agree in its sole discretion) of) receipt thereof by such Person.

 

(iii)                               [Reserved].

 

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(iv)                              Debt Incurrence.  Upon the incurrence or issuance by any Loan Party or any of its Subsidiaries of any Indebtedness (other than Indebtedness expressly permitted to be incurred or issued pursuant to Section 8.01), the Borrowers shall, subject to the terms of the Intercreditor Agreement, prepay an aggregate principal amount of Loans (and Cash Collateralize Letter of Credit Obligations, if applicable) equal to 100% of all Net Cash Proceeds received therefrom immediately upon receipt thereof by such Loan Party or such Subsidiary.

 

(v)                                 Extraordinary Receipts.  Upon receipt of any cash by (or paid to or for the account of) any Loan Party or its Subsidiaries not in the ordinary course of business (other than any proceeds from issuances of Equity Interests, Indebtedness expressly permitted to be incurred or issued pursuant to Section 8.01 and consideration in respect of Dispositions permitted under Section 8.05), including Tax refunds, pension plan reversions, proceeds of insurance (other than proceeds of business interruption insurance to the extent such proceeds constitute compensation for lost earnings), indemnity payments, purchase price adjustments, judgments, settlements or other payments in connection with any cause of action, and not otherwise included in clause (ii), (iii) or (iv) of this Section 2.06(b), the Borrowers shall, subject to the terms of the Intercreditor Agreement, prepay an aggregate principal amount of Loans (and Cash Collateralize Letter of Credit Obligations, if applicable) equal to 100% of the cash amount thereof (net of all reasonable out-of-pocket expenses or other amounts required to be paid in connection therewith) promptly upon (but in any event within five Business Days (or such later time as the Administrative Agent shall agree in its sole discretion) of) receipt thereof by such Person.

 

(vi)                              Overadvances. If for any reason the Total Outstandings at any time exceed the Borrowing Base at such time, the Borrowers shall upon demand prepay Revolving Credit Loans, Swing Line Loans and Letter of Credit Borrowings and/or Cash Collateralize the Letter of Credit Obligations in an aggregate amount equal to such excess; provided, however, that the Borrowers shall not be required to Cash Collateralize the Letter of Credit Obligations pursuant to this Section 2.06(b)(vi) unless, after the prepayment of the Revolving Credit Loans and Swing Line Loans, the Total Outstandings exceed the Aggregate Revolving Credit Commitments at such time.

 

(c)                                  Application of Mandatory Prepayments.  Subject to Section 9.03:

 

(i)                                     Each prepayment of Loans pursuant to the provisions of Section 2.06(b) shall be applied to the Revolving Credit Facility in the manner set forth in clause (ii) below.  Subject to Section 2.17, such prepayments shall be paid to the Lenders in accordance with their respective Applicable Percentages.

 

(ii)                                  Except as otherwise provided in Section 2.17, prepayments of the Revolving Credit Facility made pursuant to Section 2.06(b), first, shall be applied ratably to the Letter of Credit Borrowings and the Swing Line Loans, second, shall be applied ratably to the outstanding Revolving Credit Loans, third, shall be used to Cash Collateralize the remaining Letter of Credit Obligations in the Minimum Collateral Amount and, fourth, the amount remaining, if any, after the prepayment in full of all outstanding Obligations (other than Credit Product Obligations) and the Cash Collateralization of the remaining Letter of Credit Obligations in the Minimum Collateral Amount may be retained by the Borrowers for use in the ordinary course of Borrowers’ business.  Upon the drawing of any Letter of Credit that has been Cash Collateralized, the funds held as Cash Collateral shall be applied (without any further action by or notice to or from the Borrowers or any other Loan Party or any Defaulting Lender that has provided Cash Collateral) to reimburse the Letter of Credit Issuer or the Revolving Credit Lenders, as applicable.

 

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(d)                                 Reinvestment. Notwithstanding the foregoing, with respect to any Net Cash Proceeds realized in connection with a Disposition described in Section 2.06(b)(ii) or any receipt of net proceeds as described in Section 2.06(b)(v), at the election of the Borrowers (as notified by the Borrower Agent to the Administrative Agent on or prior to the date of such Disposition or receipt of proceeds) and so long as no Default shall have occurred and be continuing, such Loan Party or such Subsidiary may reinvest all or any portion of such Net Cash Proceeds or proceeds (as the case may be) in operating assets within 365 days after the receipt of such Net Cash Proceeds or proceeds (as the case may be) (the consummation of such reinvestment to be certified by the Borrower Agent in writing to the Administrative Agent within such period); provided, however, that any such Net Cash Proceeds or proceeds (as the case may be) in excess of $1,000,000 in any 365-day period not so reinvested shall be immediately applied to the prepayment of the Loans as set forth in Section 2.06(c); provided, further, however, that (x) no Loan Party nor any Subsidiary shall reinvest any Net Cash Proceeds realized in connection with a Disposition described in Section 2.06(b)(ii) of Revolving Credit Priority Collateral (as defined in the Intercreditor Agreement) in excess of $1,000,000 in any 365-day period without the prior written consent of the Administrative Agent and (y) during a Dominion Trigger Period, no Loan Party nor any Subsidiary shall reinvest any proceeds of Revolving Credit Priority Collateral (as defined in the Intercreditor Agreement) received as described in Section 2.06(b)(v) without the prior written consent of the Administrative Agent, but rather such proceeds shall be immediately applied to the prepayment of the Loans as set forth in Section 2.06(c).

 

(e)                                  Non-Loan Party Prepayment Amounts; Restrictions on Repatriation.  Notwithstanding any other provisions of Section 2.06(b) to the contrary, with respect to any Net Cash Proceeds required to be used for a prepayment under Sections 2.06(b)(ii) through (v) above that are held by and derive from a non-Loan Party (“Non-Loan Party Prepayment Funds”):

 

(A)                               to the extent that the Borrowers have determined in good faith that the repatriation to the United States of such Non-Loan Party Prepayment Funds is prohibited, delayed or restricted by any local law, rule or regulation applicable to such non-Loan Party, such Non-Loan Party Prepayment Funds shall be exempt from the prepayment requirements of Section 2.06(b) and may be retained by the applicable non-Loan Party for so long, but only so long, as (x) the applicable local law, rule or regulation prohibits, delays or restricts repatriation of such Non-Loan Party Prepayment Funds to the United States and (y) the Borrowers shall have caused (and continue to cause) the applicable non-Loan Party to take all commercially reasonable actions required by the applicable local law, rule or regulation to comply with, overcome or remove any such prohibition, delay or restriction; provided that, if at any time such prohibition, delay or restriction is overcome or removed or no longer applicable to any Non-Loan Party Prepayment Funds, the Borrowers shall promptly (and in any event within two Business Days) prepay the Revolving Credit Loans (or such other Indebtedness as is required by Section 2.06(b)) in the amount of such Non-Loan Party Prepayment Funds (net of additional Taxes payable or reserve required as a result of repatriation of such funds) in accordance with the other provisions of Section 2.06(b); and

 

(B)                               to the extent that the Borrowers have determined in good faith that the repatriation of such Non-Loan Party Prepayment Funds would result in a material increase in Taxes payable by the Borrowers, if elected by the Borrowers, such Non-Loan Party Prepayment Funds shall be exempt from the prepayment requirements of Section 2.06(b) and may be retained by the applicable non-Loan Party for so long, but only for so long, as such material increase in Taxes would occur; provided that, if at any time such material increase in Taxes shall no longer be applicable to any Non-Loan Party Prepayment Funds, the Borrowers shall promptly (and in any event within two Business Days) prepay the Revolving Credit Loans (or such other Indebtedness as is required by

 

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Section 2.06(b)) in the amount of such Non-Loan Party Prepayment Funds (net of any additional Taxes payable or reserve required as a result of repatriation of such funds) in accordance with the other provisions of Section 2.06(b).

 

2.07                        Termination or Reduction of Commitments.  The Borrowers may, upon notice to the Administrative Agent from the Borrower Agent, terminate the Aggregate Revolving Credit Commitments, the Letter of Credit Sublimit or the Swing Line Sublimit, or from time to time permanently reduce the Aggregate Revolving Credit Commitments, the Letter of Credit Sublimit or the Swing Line Sublimit; provided that (i) any such notice shall be received by the Administrative Agent not later than 11:00 a.m. three Business Days (or such shorter time as agreed by Administrative Agent) prior to the date of termination or reduction, (ii) any such partial reduction shall be in an aggregate amount of $5,000,000 or any whole multiple of $1,000,000 in excess thereof, (iii) the Borrowers shall not terminate or reduce (A) the Aggregate Revolving Credit Commitments if, after giving effect thereto and to any concurrent prepayments hereunder, the Total Outstandings would exceed the Aggregate Revolving Credit Commitments, (B) the Letter of Credit Sublimit if, after giving effect thereto, the Outstanding Amount of Letter of Credit Obligations not fully Cash Collateralized hereunder would exceed the Letter of Credit Sublimit, or (C) the Swing Line Sublimit if, after giving effect thereto and to any concurrent prepayments hereunder, the Outstanding Amount of Swing Line Loans would exceed the Swing Line Sublimit and (iv) if, after giving effect to any reduction or termination of the Aggregate Revolving Credit Commitments, the Letter of Credit Sublimit or the Swing Line Sublimit exceeds the amount of the Aggregate Revolving Credit Commitments, such Sublimit shall be automatically reduced by the amount of such excess.  The Administrative Agent will promptly notify the Lenders of any such notice of termination or reduction of the Aggregate Revolving Credit Commitments, the Letter of Credit Sublimit or the Swing Line Sublimit.  Any reduction of the Aggregate Revolving Credit Commitments shall be applied to the Revolving Credit Commitment of each Revolving Credit Lender according to its Applicable Percentage.  All fees accrued until the effective date of any termination of the Aggregate Revolving Credit Commitments shall be paid on the effective date of such termination.

 

2.08                        Interest.

 

(a)                                 Subject to the provisions of subsection (b) below, (i) each LIBOR Loan shall bear interest on the outstanding principal amount thereof for each Interest Period at a rate per annum equal to the LIBOR Rate for such Interest Period plus the Applicable Margin; (ii) each Base Rate Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate plus the Applicable Margin; (iii) each Swing Line Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate plus the Applicable Margin and (iv) each other Obligation (including, to the extent not prohibited by applicable Law, interest not paid when due) shall bear interest on the unpaid amount thereof at a rate per annum equal to the Base Rate plus the Applicable Margin.

 

(b)                                 (i)                                     If any amount payable by the Borrowers under any Loan Document is not paid when due (without regard to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, then such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.

 

(ii)                                  If any other Event of Default exists, then the Administrative Agent may, and upon the request of the Required Lenders shall, following delivery of notice thereof to the Borrower Agent, require that all outstanding Loan Obligations shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate; provided, that upon such delivery of notice to the Borrower Agent, the effective date of such imposition of the Default Rate shall be the date upon which the first such Event of Default occurred.

 

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(iii)                               Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand.

 

(c)                                  Interest on each Loan shall be due and payable in arrears on each Interest Payment Date applicable thereto and at such other times as may be specified herein.  Interest hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law.

 

2.09                        Fees.

 

(a)                                 Unused Revolving Credit Fee.  The Borrowers shall pay to the Administrative Agent for the account of each Revolving Credit Lender in accordance with its Applicable Percentage, a fee (the “Unused Revolving Credit Fee”) equal to the Unused Fee Rate times the Unused Revolving Credit Facility Amount.  The Unused Revolving Credit Fee shall accrue at all times during the Availability Period for the Revolving Credit Facility (commencing, for the avoidance of doubt, on the Closing Date), including at any time during which one or more of the conditions in Article V is not met, and shall be due and payable quarterly in arrears on the first Business Day after each calendar quarter, commencing with the first such date to occur after the Closing Date, and on the last day of the Availability Period for the Revolving Credit Facility.

 

(b)                                 Letter of Credit Fees.  Subject to the provisions of the last sentence of this clause (b), the Borrowers shall pay to the Administrative Agent for the account of each Revolving Credit Lender in accordance with its Applicable Percentage, in Dollars, a Letter of Credit fee (“Letter of Credit Fee”) for each Letter of Credit equal to the Applicable Margin for LIBOR Loans times the daily maximum amount available to be drawn under such Letter of Credit (whether or not such maximum amount is then in effect under such Letter of Credit); provided, however, any Letter of Credit Fees otherwise payable for the account of a Defaulting Lender with respect to any Letter of Credit as to which such Defaulting Lender has not provided Cash Collateral satisfactory to the Letter of Credit Issuer shall be payable, to the maximum extent permitted by applicable Law, to the other Revolving Credit Lenders in accordance with the upward adjustments in their respective Applicable Percentages allocable to such Letter of Credit pursuant to Section 2.17(a)(iv), with the balance of such fee, if any, payable to the Letter of Credit Issuer for its own account.  For purposes of computing the daily amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.07.  The Letter of Credit Fee shall accrue at all times during the Availability Period, including at any time during which one or more of the conditions in Article V is not met, and shall be due and payable quarterly in arrears on the first Business Day after each calendar quarter, commencing with the first such date to occur after the Closing Date, and on the last day of the Availability Period.  If there is any change in the Applicable Margin for LIBOR Loans during any quarter, the daily maximum amount of each Letter of Credit shall be computed and multiplied by the Applicable Margin for LIBOR Loans separately for each period during such quarter that such Applicable Margin was in effect.  At all times that the Default Rate shall be applicable to any Loans pursuant to Section 2.08(b), the Letter of Credit Fees payable under this clause (b) shall accrue and be payable at the Default Rate.

 

(c)                                  Fee Letter.  The Borrowers agree to pay to the Administrative Agent, for its own account, the fees payable in the amounts and at the times set forth in the Fee Letter.

 

(d)                                 Generally.  All fees payable hereunder shall be paid on the dates due, in immediately available funds, to (i) the Administrative Agent for distribution, in the case of commitment fees and participation fees, to the Revolving Credit Lenders, and otherwise, to the Lenders entitled thereto or (ii) the Letter of Credit Issuer, in the case of fees payable to it. Fees paid shall not be refundable under any circumstances.

 

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2.10                        Computation of Interest and Fees.  All computations of interest for Base Rate Loans (including Base Rate Loans determined by reference to the LIBOR Rate) and the Unused Revolving Credit Fee shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed.  All other computations of fees and interest shall be made on the basis of a 360-day year and actual days elapsed (which results in more fees or interest, as applicable, being paid than if computed on the basis of a 365-day year).  Interest shall accrue on each Loan or other Loan Obligation not paid when due for the day on which the Loan is made or such Loan Obligation is due and unpaid, and shall not accrue on a Loan, or any portion thereof, or such Loan Obligation for the day on which the Loan, or such portion thereof, or Loan Obligation is paid, provided that any Loan that is repaid on the same day on which it is made shall, subject to Section 2.12(a), bear interest for one day.  Each determination by the Administrative Agent of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.

 

2.11                        Evidence of Debt.

 

(a)                                 Loan Account.  The Credit Extensions made by each Lender shall be evidenced by one or more accounts or records maintained by the Administrative Agent (the “Loan Account”) in the ordinary course of business. In addition, each Lender may record in such Lender’s internal records, an appropriate notation evidencing the date and amount of each Loan from such Lender, each payment and prepayment of principal of any such Loan, and each payment of interest, fees and other amounts due in connection with the Loan Obligations due to such Lender.  The accounts or records maintained by the Administrative Agent and each Lender shall be conclusive absent manifest error of the amount of the Credit Extensions made by the Lenders to the Borrowers and the interest and payments thereon.  Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrowers hereunder to pay any amount owing with respect to the Loan Obligations.  In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error.  Upon the request of any Lender made through the Administrative Agent, the Borrowers shall execute and deliver to such Lender (through the Administrative Agent) a Note, which shall evidence such Lender’s Loans in addition to such accounts or records.  Each Lender may attach schedules to its Note and endorse thereon the date, Type (if applicable), amount and maturity of its Loans and payments with respect thereto.

 

(b)                                 Account Records.  In addition to the accounts and records referred to in (a) above, each Lender and the Administrative Agent shall maintain in accordance with its usual practice accounts or records evidencing the purchases and sales by such Lender of participations in Letters of Credit and Swing Line Loans.  In the event of any conflict between the accounts and records maintained by the Administrative Agent and the accounts and records of any Lender in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error.

 

2.12                        Payments Generally; the Administrative Agent’s Clawback.

 

(a)                                 General.  All payments to be made by the Borrowers shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff.  Except as otherwise expressly provided herein, all payments by the Borrowers hereunder shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the Administrative Agent’s Office in Dollars and in immediately available funds not later than 2:00 p.m. on the date specified herein.  Subject to Sections 2.14 and 9.03 and payments made during a Dominion Trigger Period from the Concentration Account, the Administrative Agent will promptly distribute to each Lender its Applicable Percentage (or other applicable share as provided herein) of such payment in like funds as received by wire transfer to such Lender’s Lending Office.  All payments received by the Administrative Agent after 2:00 p.m. shall 

 

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be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue.  If any payment to be made by the Borrowers shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected on computing interest or fees, as the case may be.

 

(b)                                 Presumptions by Administrative Agent.

 

(i)                                     Funding by Lenders.  Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing of LIBOR Loans (or, in the case of any Borrowing of Base Rate Loans, prior to 12:00 noon on the date of such Borrowing) that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with Section 2.02 (or, in the case of a Borrowing of Base Rate Loans, that such Lender has made such share available in accordance with and at the time required by Section 2.02) and may, in reliance upon such assumption, make available to the Borrowers a corresponding amount.  In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrowers severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount in immediately available funds with interest thereon, for each day from and including the date such amount is made available to the Borrowers to but excluding the date of payment to the Administrative Agent, at (A) in the case of a payment to be made by such Lender, the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by the Administrative Agent in connection with the foregoing, and (B) in the case of a payment to be made by the Borrower, the interest rate applicable to Base Rate Loans.  If the Borrowers and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to the Borrowers the amount of such interest paid by the Borrowers for such period.  If such Lender pays its share of the applicable Borrowing to the Administrative Agent, then the amount so paid shall constitute such Lender’s Loan included in such Borrowing.  Any payment by the Borrowers shall be without prejudice to any claim the Borrowers may have against a Lender that shall have failed to make such payment to the Administrative Agent.

 

(ii)                                  Payments by Borrower.  Unless the Administrative Agent shall have received notice from the Borrower Agent prior to the time at which any payment is due to the Administrative Agent for the account of the Lenders or the Letter of Credit Issuer hereunder that the Borrowers will not make such payment, the Administrative Agent may assume that the Borrowers have made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Appropriate Lenders or the Letter of Credit Issuer, as the case may be, the amount due.  In such event, if the Borrowers have not in fact made such payment, then each of the Appropriate Lenders or the Letter of Credit Issuer, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or the Letter of Credit Issuer, in immediately available funds with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

 

A notice of the Administrative Agent to any Lender or any Borrower with respect to any amount owing under this subsection (b) shall be conclusive, absent manifest error.

 

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(c)                                  Failure to Satisfy Conditions Precedent.  If any Lender makes available to the Administrative Agent funds for any Loan to be made by such Lender as provided in the foregoing provisions of this Article II, and such funds are not made available to the Borrowers by the Administrative Agent because the conditions to the applicable Credit Extension set forth in Article V are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall return such funds (in like funds as received from such Lender) to such Lender, without interest.

 

(d)                                 Obligations of Lenders Several.  The obligations of the Lenders hereunder to make Revolving Credit Loans, to fund participations in Letters of Credit and Swing Line Loans and to make payments pursuant to Section 11.04(c) are several and not joint.  The failure of any Lender to make any Loan, to fund any such participation or to make any payment under Section 11.04(c) on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Loan, to purchase its participation or to make its payment under Section 11.04(c).

 

(e)                                  Funding Source.  Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner.

 

(f)                                   Insufficient Funds.  If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, Letter of Credit Borrowings, interest and fees then due hereunder, such funds shall be applied as provided in Section 2.06(c).

 

2.13                        Sharing of Payments by Lenders.  If any Lender shall, by exercising any right of setoff or counterclaim or otherwise (other than in connection with a Supplemental Facility), obtain payment in respect of (a) the Loan Obligations due and payable to such Lender hereunder and under the other Loan Documents at such time in excess of its ratable share (according to the proportion of (i) the amount of such Loan Obligations due and payable to such Lender at such time to (ii) the aggregate amount of the Loan Obligations due and payable to all Lenders hereunder and under the other Loan Documents at such time) of payments on account of the Loan Obligations due and payable to all Lenders hereunder and under the other Loan Documents at such time obtained by all the Lenders at such time or (b) the Loan Obligations owing (but not due and payable) to such Lender hereunder and under the other Loan Documents at such time in excess of its ratable share (according to the proportion of (i) the amount of such Loan Obligations owing (but not due and payable) to such Lender at such time to (ii) the aggregate amount of the Loan Obligations owing (but not due and payable) to all Lenders hereunder and under the other Loan Documents at such time) of payments on account of the Loan Obligations owing (but not due and payable) to all Lenders hereunder and under the other Loan Documents at such time obtained by all of the Lenders at such time, then, in each case under clauses (a) and (b) above, the Lender receiving such greater proportion shall (A) notify the Administrative Agent of such fact, and (B) purchase (for cash at face value) participations in the Loans and subparticipations in Letter of Credit Obligations and Swing Line Loans of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of Loan Obligations then due and payable to the Lenders or owing (but not due and payable) to the Lenders, as the case may be, provided that:

 

(i)                                     if any such participations or subparticipations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations or subparticipations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and

 

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(ii)                                  the provisions of this Section shall not be construed to apply to (A) any payment made by or on behalf of any Loan Party pursuant to and in accordance with the express terms of this Agreement (including the application of funds arising from the existence of a Defaulting Lender), (B) the application of Cash Collateral provided for in Section 2.16, or (C) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or subparticipations in Letter of Credit Obligations or Swing Line Loans to any assignee or participant, other than an assignment to any Loan Party or any Affiliate thereof (as to which the provisions of this Section shall apply).

 

Each Loan Party consents to the foregoing and agrees, to the extent it may effectively do so under applicable Law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against such Loan Party rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of such Loan Party in the amount of such participation.

 

2.14                        Settlement Among Lenders.

 

(a)                                 The amount of each Revolving Credit Lender’s Applicable Percentage of outstanding Revolving Credit Loans shall be computed weekly (or more frequently in the Administrative Agent’s discretion) and such amount shall be adjusted upward or downward based on all Revolving Credit Loans and repayments of Revolving Credit Loans received by the Administrative Agent as of 3:00 p.m. on the first Business Day (such date, the “Revolving Credit Settlement Date”) following the end of the period specified by the Administrative Agent.

 

(b)                                 The Administrative Agent shall deliver to each of the Revolving Credit Lenders promptly after a Revolving Credit Settlement Date a summary statement of the amount of outstanding Revolving Credit Loans for the period and the amount of repayments received for the period.  As reflected on the summary statement, (i) the Administrative Agent shall transfer to each Revolving Credit Lender its Applicable Percentage of repayments, and (ii) each Revolving Credit Lender shall transfer to the Administrative Agent (as provided below) or the Administrative Agent shall transfer to each Revolving Credit Lender, such amounts as are necessary to ensure that, after giving effect to all such transfers, the Revolving Credit Exposure of each Revolving Credit Lender shall be equal to such Revolving Credit Lender’s Applicable Percentage of the Total Outstandings as of such Revolving Credit Settlement Date.  If the summary statement requires transfers to be made to the Administrative Agent by the Revolving Credit Lenders and is received prior to 1:00 p.m. on a Business Day, such transfers shall be made in immediately available funds no later than 3:00 p.m. that day; and, if received after 1:00 p.m., then no later than 3:00 p.m. on the next Business Day. The obligation of each Revolving Credit Lender to transfer such funds is irrevocable, unconditional and without recourse to or warranty by the Administrative Agent.  If and to the extent any Revolving Credit Lender shall not have so made its transfer to the Administrative Agent, such Lender agrees to pay to the Administrative Agent, forthwith on demand such amount, together with interest thereon, for each day from such date until the date such amount is paid to the Administrative Agent, equal to the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation plus any reasonable administrative, processing, or similar fees customarily charged by the Administrative Agent in connection with the foregoing.

 

2.15                        Nature and Extent of Each Borrower’s Liability.

 

(a)                                 Joint and Several Liability.  Each Borrower agrees that it is jointly and severally liable for all Obligations, except Excluded Swap Obligations, under the Loan Documents.  Each Borrower agrees that its guaranty obligations hereunder constitute a continuing guaranty of payment and not of collection, that such obligations shall not be discharged until the Facility Termination Date, and that such obligations 

 

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are absolute and unconditional, irrespective of (i) the genuineness, validity, regularity, enforceability, subordination or any future modification of, or change in, any Obligations or Loan Document, or any other document, instrument or agreement to which any Borrower is or may become a party or be bound; (ii) the absence of any action to enforce this Agreement (including this Section) or any other Loan Document, or any waiver, consent or indulgence of any kind by the Administrative Agent or any Lender with respect thereto; (iii) the existence, value or condition of, or failure to perfect a Lien or to preserve rights against, any security or guaranty for the Obligations or any action, or the absence of any action, by the Administrative Agent or any Lender in respect thereof (including the release of any security or guaranty); (iv) the insolvency of any other Borrower; (v) any election by the Administrative Agent or any Lender in proceeding under Debtor Relief Laws for the application of Section 1111(b)(2) of the Bankruptcy Code; (vi) any borrowing or grant of a Lien by any other Borrower, as debtor-in-possession under Section 364 of the Bankruptcy Code or otherwise; (vii) the disallowance of any claims of the Administrative Agent or any Lender against any other Borrower for the repayment of any Obligations under Section 502 of the Bankruptcy Code or otherwise; or (viii) any other action or circumstances that might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor, except full payment in cash or Cash Collateralization of all Obligations (other than those Obligations expressly stated to survive termination, contingent obligations as to which no claim has been asserted or threatened and Credit Product Obligations as to which arrangements satisfactory to the applicable Credit Product Provider have been made) on the Facility Termination Date.

 

(b)                                 Waivers.

 

(i)                                     Each Borrower expressly waives all rights that it may have now or in the future under any statute, at common law, in equity or otherwise, to compel the  Administrative Agent or Lenders to marshal assets or to proceed against any Borrower, other Person or security for the payment or performance of any Obligations before, or as a condition to, proceeding against such Borrower.  Each Borrower waives all defenses available to a surety, guarantor or accommodation co-obligor other than full payment of all Obligations (other than those Obligations expressly stated to survive termination, contingent obligations as to which no claim has been asserted or threatened and Credit Product Obligations as to which arrangements satisfactory to the applicable Credit Product Provider have been made).  It is agreed among each Borrower, the Administrative Agent and Lenders that the provisions of this Section 2.15 are of the essence of the transaction contemplated by the Loan Documents and that, but for such provisions, the Administrative Agent and Lenders would decline to make Loans and issue Letters of Credit.  Each Borrower acknowledges that its guaranty pursuant to this Section is necessary to the conduct and promotion of its business, and can be expected to benefit such business.

 

(ii)                                  The Administrative Agent and Lenders may, in their discretion, pursue such rights and remedies as they deem appropriate, including realization upon Collateral by judicial foreclosure or non-judicial sale or enforcement, without affecting any rights and remedies under this Section 2.15.  If, in taking any action in connection with the exercise of any rights or remedies, the Administrative Agent or any Lender shall forfeit any other rights or remedies, including the right to enter a deficiency judgment against any Borrower or other Person, whether because of any applicable Laws pertaining to “election of remedies” or otherwise, each Borrower consents to such action and waives any claim of forfeiture of such rights or remedies based upon it, even if the action may result in loss of any rights of subrogation that such Borrower might otherwise have had.  Any election of remedies that results in denial or impairment of the right of the Administrative Agent or any Lender to seek a deficiency judgment against any Borrower shall not impair any other Borrower’s obligation to pay the full amount of the Obligations.  Each Borrower waives all rights and defenses arising out of an election of remedies, such as nonjudicial foreclosure with respect to any security for the Obligations, even though that election 

 

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of remedies destroys such Borrower’s rights of subrogation against any other Person.  The Administrative Agent may bid all or a portion of the Obligations at any foreclosure or trustee’s sale or at any private sale, and the amount of such bid need not be paid by the Administrative Agent but shall be credited against the Obligations.  The amount of the successful bid at any such sale, whether the Administrative Agent or any other Person is the successful bidder, shall be conclusively deemed to be the fair market value of the Collateral, and the difference between such bid amount and the remaining balance of the Obligations shall be conclusively deemed to be the amount of the Obligations guaranteed under this Section 2.15, notwithstanding that any present or future law or court decision may have the effect of reducing the amount of any deficiency claim to which the Administrative Agent or any Lender might otherwise be entitled but for such bidding at any such sale.

 

(c)                                  Extent of Liability; Contribution.

 

(i)                                     Notwithstanding anything herein to the contrary, each Borrower’s liability under this Section 2.15 shall be limited to the greater of (i) all amounts for which such Borrower is primarily liable, as described below, and (ii) such Borrower’s Allocable Amount.

 

(ii)                                  If any Borrower makes a payment under this Section 2.15 of any Obligations (other than amounts for which such Borrower is primarily liable) (a “Guarantor Payment”) that, taking into account all other Guarantor Payments previously or concurrently made by any other Borrower, exceeds the amount that such Borrower would otherwise have paid if each Borrower had paid the aggregate Obligations satisfied by such Guarantor Payments in the same proportion that such Borrower’s Allocable Amount bore to the total Allocable Amounts of all Borrowers, then such Borrower shall be entitled to receive contribution and indemnification payments from, and to be reimbursed by, each other Borrower for the amount of such excess, pro rata based upon their respective Allocable Amounts in effect immediately prior to such Guarantor Payment.  The “Allocable Amount” for any Borrower shall be the maximum amount that could then be recovered from such Borrower under this Section 2.15 without rendering such payment voidable under Section 548 of the Bankruptcy Code or under any applicable state fraudulent transfer or conveyance act, or similar statute or common law.

 

(iii)                               Each Loan Party that is a Qualified ECP shall comply with the terms of Section 12.10.

 

(d)                                 Direct Liability. Nothing contained in this Section 2.15 shall limit the liability of any Borrower to pay Loans made directly or indirectly to that Borrower (including Loans advanced to any other Borrower and then re-loaned or otherwise transferred to, or for the benefit of, such Borrower), Letter of Credit Obligations relating to Letters of Credit issued to support such Borrower’s business, and all accrued interest, fees, expenses and other related Obligations with respect thereto, for which such Borrower shall be primarily liable for all purposes hereunder.

 

(e)                                  Joint Enterprise.  Each Borrower has requested that the Administrative Agent and Lenders make this credit facility available to Borrowers on a combined basis, in order to finance Borrowers’ business most efficiently and economically.  The Borrowers’ business is a mutual and collective enterprise, and the successful operation of each Borrower is dependent upon the successful performance of the integrated group.  The Borrowers believe that consolidation of their credit facility will enhance the borrowing power of each Borrower and ease administration of the Facility, all to their mutual advantage.  The Borrowers acknowledge that the Administrative Agent’s and Lenders’ willingness to extend credit and to administer the Collateral on a combined basis hereunder is done solely as an accommodation to Borrowers and at Borrowers’ request.

 

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(f)                                   Subordination.  Each Loan Party hereby subordinates any claims, including any rights at law or in equity to payment, subrogation, reimbursement, exoneration, contribution, indemnification or set off, that it may have at any time against any other Loan Party, howsoever arising, to the full payment in cash or Cash Collateralization of all Obligations (other than those Obligations expressly stated to survive termination, contingent obligations as to which no claim has been asserted or threatened and Credit Product Obligations as to which arrangements satisfactory to the applicable Credit Product Provider have been made) on the Facility Termination Date.

 

(g)                                  Borrower Agent.

 

(i)                                     Each Loan Party hereby irrevocably appoints and designates (or, if not a party hereto, by execution and delivery of a guaranty agreement acceptable to Administrative Agent or otherwise becoming a Guarantor hereunder shall be deemed to have irrevocably appointed and designated) the Company (“Borrower Agent”) as its representative and agent and attorney-in-fact for all purposes under the Loan Documents, including, as applicable, requests for Credit Extensions, designation of interest rates, delivery or receipt of communications, preparation and delivery of Borrowing Base and financial reports, receipt and payment of Obligations, requests for waivers, amendments or other accommodations, actions under the Loan Documents (including in respect of compliance with covenants), and all other dealings with the Administrative Agent, the Swing Line Lender, the Letter of Credit Issuers or any Lender.

 

(ii)                                  Any notice, election, representation, warranty, agreement or undertaking by or on behalf of any Loan Party by the Borrower Agent shall be deemed for all purposes to have been made by such Loan Party and shall be binding upon and enforceable against such Loan Party to the same extent as if made directly by such Loan Party.

 

(iii)                               The Borrower Agent hereby accepts the appointment by each Loan Party hereunder to act as its agent and attorney-in-fact.

 

(iv)                              The Administrative Agent and Lenders shall be entitled to rely upon, and shall be fully protected in relying upon, any notice or communication (including any notice of borrowing) delivered by Borrower Agent on behalf of any Borrower or other Loan Party.  The Administrative Agent and Lenders may give any notice to or communication with a Loan Party hereunder to the Borrower Agent on behalf of such Loan Party.  Each of the Administrative Agent, the Letter of Credit Issuers and the Lenders shall have the right, in its discretion, to deal exclusively with Borrower Agent for any or all purposes under the Loan Documents.  Each Loan Party agrees (or, if not a party hereto, by execution and delivery of a guaranty agreement acceptable to Administrative Agent or otherwise becoming a Guarantor hereunder shall be deemed to have agreed) that any notice, election, communication, representation, agreement or undertaking made on its behalf by Borrower Agent shall be binding upon and enforceable against it.

 

2.16                        Cash Collateral.

 

(a)                                 Certain Credit Support Events.  If (i) the Letter of Credit Issuer has honored any full or partial drawing request under any Letter of Credit upon presentation and such drawing has resulted in an Letter of Credit Borrowing, (ii) as of the Letter of Credit Expiration Date, any Letter of Credit Obligation for any reason remains outstanding, (iii) any Protective Advance shall not have been funded by the Lenders upon demand by the Administrative Agent, (iv) the Borrowers shall be required to provide Cash Collateral pursuant to Section 9.02 or (v) there shall exist a Defaulting Lender, the Borrowers shall immediately (in the case of clause (iv) above) or within one Business Day (in all other cases) following any request by the Administrative Agent or the Letter of Credit Issuer, provide Cash Collateral in an 

 

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amount not less than the Minimum Collateral Amount (determined in the case of Cash Collateral provided pursuant to clause (v) above, after giving effect to Section 2.17(a)(iv) and any Cash Collateral provided by the Defaulting Lender).

 

(b)                                 Grant of Security Interest.  The Borrowers, and to the extent provided by any Defaulting Lender, such Defaulting Lender, hereby grant to (and subjects to the control of) the Administrative Agent, for the benefit of the Administrative Agent, the Letter of Credit Issuer and the Lenders, and agree to maintain, a first priority security interest (subject to the Intercreditor Agreement) in all such cash, deposit accounts and all balances therein, and all other property so provided as collateral pursuant hereto, and in all proceeds of the foregoing, all as security for the obligations to which such Cash Collateral may be applied pursuant to Section 2.16(c).  If at any time the Administrative Agent determines that Cash Collateral is less than the Minimum Collateral Amount or otherwise deficient for any reason, the Borrowers will, promptly upon demand by the Administrative Agent, pay or provide to the Administrative Agent additional Cash Collateral in an amount sufficient to eliminate such deficiency. All Cash Collateral (other than credit support not constituting funds subject to deposit) shall be maintained in one or more blocked, non-interest bearing deposit accounts at BMO.

 

(c)                                  Application.  Notwithstanding anything to the contrary contained in this Agreement, Cash Collateral provided in respect of Letters of Credit, Swing Line Loans or Protective Advances shall be held and applied to the specific Letter of Credit Obligations, Swing Line Loans or Protective Advances (including any the Defaulting Lender’s obligation to fund participations in respect thereof) for which the Cash Collateral was so provided (including, as to Cash Collateral provided by a Defaulting Lender, any interest accrued on such obligation) and other obligations for which the Cash Collateral was so provided, prior to any other application of such property as may be provided for herein.

 

(d)                                 Release.  Cash Collateral (or the appropriate portion thereof) provided to reduce Fronting Exposure or to secure other obligations shall be released promptly following (i) the elimination of the applicable Fronting Exposure or other obligations giving rise thereto (including by the termination of Defaulting Lender status of the applicable Revolving Credit Lender (or, as appropriate, its assignee following compliance with Section 11.06(b)(vi)) or (ii) the determination by the Administrative Agent and the Letter of Credit Issuer that there exists excess Cash Collateral.

 

2.17                        Defaulting Lenders.

 

(a)                                 Adjustments.  Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as that Lender is no longer a Defaulting Lender, to the extent permitted by applicable Law:

 

(i)                                     Waivers and Amendments.  Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definition of “Required Lenders”, “Required Supermajority Lenders” and Section 11.01.

 

(ii)                                  Reallocation of Payments.  Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article IX or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 11.08 shall be applied at such time or times as may be determined by the Administrative Agent as follows: first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second, if such Defaulting Lender is a Revolving Credit Lender, to the payment on a pro rata basis of any amounts owing by that Defaulting Lender to the Letter of Credit Issuer or 

 

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Swing Line Lender hereunder; third, if such Defaulting Lender is a Revolving Credit Lender, to Cash Collateralize the Letter of Credit Issuer’s and the Administrative Agent’s Fronting Exposure with respect to such Defaulting Lender in accordance with Section 2.16; fourth, as the Borrower Agent may request (so long as no Default or Event of Default exists) to the funding of any Loan in respect of which that Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; fifth, if so determined by the Administrative Agent and the Borrower Agent, to be held in a deposit account and released in order to (x) satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement and (y) Cash Collateralize the Letter of Credit Issuer’s and the Administrative Agent’s future Fronting Exposure with respect to such Defaulting Lender with respect to future Letters of Credit and Protective Advances; sixth, in the case of a Defaulting Lender under the Facility, to the payment of any obligations owing to the other Lenders under the Facility (including the Letter of Credit Issuer or Swing Line Lender) as a result of any judgment of a court of competent jurisdiction obtained by any Lender under the Facility (including the Letter of Credit Issuer or Swing Line Lender) against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; seventh, so long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrowers as a result of any judgment of a court of competent jurisdiction obtained by the Borrowers against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; and eighth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans or Letter of Credit Borrowings in respect of which that Defaulting Lender has not fully funded its appropriate share and (y) such Loans were made or the related Letters of Credit were issued at a time when the conditions set forth in Section 5.02 were satisfied or waived, such payment shall be applied solely to pay the Loans of, and Letter of Credit Obligations owed to, all Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or Letter of Credit Obligations owed to, such Defaulting Lender until such time as all Loans and funded and unfunded participations in Letter of Credit Obligations, Swing Line Loans and Protective Advances are held by the Lenders pro rata in accordance with the Commitments hereunder without giving effect to Section 2.17(a)(iv).  Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this Section 2.17(a)(ii) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

 

(iii)                               Certain Fees.  No Defaulting Lender shall be entitled to receive any Unused Revolving Credit Fee payable pursuant to Section 2.09(a) for any period during which that Lender is a Defaulting Lender (and the Borrowers shall not be required to pay any such fee that otherwise would have been required to have been paid to that Defaulting Lender).  Each Defaulting Lender which is a Revolving Credit Lender shall be entitled to receive Letter of Credit Fees for any period during which that Lender is a Defaulting Lender only to the extent allocable to its Applicable Percentage of the stated amount of Letters of Credit for which it has provided Cash Collateral pursuant to Section 2.16.  With respect to any Letter of Credit Fee not required to be paid to any Defaulting Lender pursuant to this clause (iii), the Borrowers shall (A) pay to each Non-Defaulting Lender which is a Revolving Credit Lender that portion of any such fee otherwise payable to such Defaulting Lender with respect to such Defaulting Lender’s participation in Letter of Credit Obligations that has been reallocated to such Non-Defaulting Lender pursuant to clause (iv) below, (B) pay to the Letter of Credit Issuer the amount of any such fee otherwise payable to such Defaulting Lender to the extent allocable to such Letter of Credit Issuer’s Fronting Exposure to such Defaulting Lender, and (C) not be required to pay the remaining amount of any such fee.

 

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(iv)                              Reallocation of Applicable Percentages to Reduce Fronting Exposure.  All or any part of such Defaulting Lender’s participation in Letter of Credit Obligations, Swing Line Loans and Protective Advances shall be reallocated among the Non-Defaulting Lenders which are Revolving Credit Lenders in accordance with their respective Applicable Percentages (calculated without regard to such Defaulting Lender’s Revolving Credit Commitment) but only to the extent that (x) the conditions set forth in Section 5.02 are satisfied at the time of such reallocation (and, unless the Borrower Agent shall have otherwise notified the Administrative Agent at such time, the Borrowers shall be deemed to have represented and warranted that such conditions are satisfied at such time), and (y) such reallocation does not cause the aggregate Revolving Credit Exposure of any Non-Defaulting Lender to exceed such Non-Defaulting Lender’s Revolving Credit Commitment.  Subject to Section 11.20, no reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased exposure following such reallocation.

 

(b)                                 Defaulting Lender Cure.  If the Borrower Agent, the Administrative Agent and, in the case that a Defaulting Lender is a Revolving Credit Lender, the Swing Line Lender and the Letter of Credit Issuer, agree in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), that Lender will, to the extent applicable, purchase at par that portion of outstanding Revolving Credit Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Revolving Credit Loans and funded and unfunded participations in Letters of Credit, Swing Line Loans and Protective Advances to be held on a pro rata basis by the Lenders in accordance with their Applicable Percentages (without giving effect to Section 2.17(a)(iv)), whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrowers while that Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

 

2.18                        Increase in Revolving Credit Commitments.

 

(a)                                 Request for Increase.  Provided there exists no Default, upon notice to and with the written consent of the Administrative Agent (which shall promptly notify the applicable Revolving Credit Lenders), the Borrower Agent may from time to time request an increase in the Aggregate Revolving Credit Commitments by an amount (for all such requests) not exceeding $20,000,000 (each such increase, a “Commitment Increase”); provided that any such request for an increase shall be in a minimum amount of $5,000,000 in the aggregate or, if less, the entire unutilized amount of the maximum amount of all such requests set forth above.  At the time of sending such notice, the Borrower Agent (in consultation with the Administrative Agent) shall specify the time period within which each applicable Revolving Credit Lender is requested to respond (which shall in no event be less than ten Business Days from the date of delivery of such notice to the applicable Revolving Credit Lenders).

 

(b)                                 Revolving Credit Lender Elections to Increase.  Each Revolving Credit Lender shall notify the Administrative Agent within such time period whether or not it agrees to commit to a portion of the requested increase of the Revolving Credit Facility and, if so, whether by an amount equal to, greater than, or less than its Applicable Percentage.  Any Revolving Credit Lender not responding within such time period shall be deemed to have declined to commit to any portion of the requested increase.

 

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(c)                                  Notification by Administrative Agent; Additional Revolving Credit Lenders.  The Administrative Agent shall notify the Borrower Agent of the Revolving Credit Lenders’ responses to each request made hereunder.  To achieve the full amount of a requested increase and subject to the approval of the Administrative Agent (which approval shall not be unreasonably withheld), the Borrower Agent may also invite additional Eligible Assignees to become Revolving Credit Lenders pursuant to a joinder agreement in form and substance satisfactory to the Administrative Agent and its counsel (each such Eligible Assignee issuing a commitment, executing and delivering such joinder agreement and becoming a Revolving Credit Lender, an “Additional Commitment Lender”), provided, however, that without the consent of the Administrative Agent, at no time shall the Commitment of any Additional Commitment Lender be less than $5,000,000.

 

(d)                                 Effective Date and Allocations.  If the Aggregate Revolving Credit Commitments are increased in accordance with this Section 2.18, the Administrative Agent and the Borrower Agent shall determine the effective date (the “Increase Effective Date”) and the final allocation of such increase.  The Administrative Agent shall promptly notify the Borrower Agent and the Revolving Credit Lenders of the final allocation of such increase and the Increase Effective Date.

 

(e)                                  Conditions to Effectiveness of Increase.  As a condition precedent to such increase, (i) the Borrower Agent shall deliver to the Administrative Agent a certificate of each Loan Party dated as of the Increase Effective Date (in sufficient copies for each Lender) signed by a Responsible Officer of such Loan Party (A) certifying and attaching the resolutions adopted by such Loan Party approving or consenting to such increase, and (B) certifying that, before and after giving effect to such increase, the representations and warranties contained in Article VI and in the other Loan Documents, or which are contained in any document furnished at any time under or in connection herewith or therewith, are true and correct in all material respects (without duplication of any materiality qualifier contained therein) on and as of the Increase Effective Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct in all material respects (without duplication of any materiality qualifier contained therein)  as of such earlier date, and except that for purposes of this Section 2.18, the representations and warranties contained in subsections (a)and (b) of Section 6.05 shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 7.01; (ii) the Borrowers, the Administrative Agent, and any Additional Commitment Lender shall have executed and delivered a joinder to the Loan Documents in form and substance satisfactory to the Administrative Agent; (iii) the Borrowers shall have paid such fees and other compensation to the Revolving Credit Lenders increasing their Revolving Credit Commitments and to the Additional Commitment Lenders as the Borrowers and such Lenders and Additional Commitment Lenders shall agree; (iv) the Borrowers shall have paid such arrangement fees, if any, to the Administrative Agent as the Borrowers and the Administrative Agent may agree; (v) other than the fees and compensation referred to in clauses (iii) and (iv) above, the Commitment Increase shall be on the same terms and pursuant to the same documentation applicable to the existing Revolving Credit Commitments, (vi) the Borrowers shall deliver to the Administrative Agent (A) an opinion or opinions, in form and substance reasonably satisfactory to the Administrative Agent, from counsel to the Loan Parties reasonably satisfactory to the Administrative Agent and dated such date and (B) a certification from the Borrower Agent, or other evidence reasonably satisfactory to the Administrative Agent, that such increase is permitted under the documents governing the Senior Notes and any other material Indebtedness; (vii) the Borrowers, the Lenders increasing their Commitments and each Additional Commitment Lender shall have delivered such other instruments, documents and agreements as the Administrative Agent may reasonably have requested; and (viii) no Default or Event of Default exists or shall result therefrom.  The Revolving Credit Loans outstanding on the Increase Effective Date shall be reallocated and adjusted between and among the applicable Lenders, and the Borrowers shall pay any additional amounts required pursuant to Section 3.05 resulting therefrom, to the extent necessary to keep the outstanding applicable Revolving Credit Loans ratable among the applicable Lenders with any revised Applicable Percentages, 

 

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as applicable, arising from any nonratable increase in the applicable Revolving Credit Loans under this Section 2.18.

 

(f)                                   Conflicting Provisions.  This Section 2.18 shall supersede any provisions in Section 2.13 or 11.01 to the contrary.

 

ARTICLE III
 TAXES, YIELD PROTECTION AND ILLEGALITY

 

3.01                        Taxes.

 

(a)                                 Payments Free of Taxes; Obligation to Withhold; Payments on Account of Taxes.

 

(i)                                     Any and all payments by or on account of any obligation of the Loan Parties hereunder or under any other Loan Document shall to the extent permitted by applicable Laws be made free and clear of and without reduction or withholding for any Taxes.  If, however, applicable Laws require the Loan Parties or the Administrative Agent to withhold or deduct any Tax, such Tax shall be withheld or deducted in accordance with such Laws as determined by the Borrower Agent or the Administrative Agent, as the case may be, upon the basis of the information and documentation to be delivered pursuant to Section 3.01(e) below.

 

(ii)                                  If any Loan Party or the Administrative Agent shall be required by applicable Law to withhold or deduct any Taxes, including both U.S. federal backup withholding and nonresident withholding Taxes, from any payment hereunder to any Recipient, then (A) such Loan Party or the Administrative Agent, as applicable, shall withhold or make such deductions as are determined by the applicable withholding agent to be required based upon the information and documentation it has received pursuant to Section 3.01(e) below, (B) such Loan Party or the Administrative Agent, as applicable, shall timely pay the full amount withheld or deducted to the relevant Governmental Authority in accordance with applicable Law, and (C) to the extent that the withholding or deduction is made on account of Indemnified Taxes, the sum payable by the Loan Parties shall be increased as necessary so that after any required withholding or the making of all required deductions for such Indemnified Taxes (including deductions for Indemnified Taxes applicable to additional sums payable under this Section 3.01) the Administrative Agent, Lender or Letter of Credit Issuer, as the case may be, receives an amount equal to the sum it would have received had no such withholding or deduction for such Indemnified Taxes been made.

 

(b)                                 Payment of Other Taxes by the Borrowers.  Without duplication of Section 3.01(a), the Loan Parties shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable Law.

 

(c)                                  Tax Indemnification by the Borrowers.

 

(i)                                     Without duplication of Section 3.01(a) or (b) above, each Loan Party shall, and does hereby, indemnify each Recipient, and shall make payment in respect thereof within 10 days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section 3.01) withheld or deducted by the Loan Parties or the Administrative Agent or paid by the Recipient, as the case may be, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of any such payment or liability 

 

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delivered to the Borrower Agent by a Lender or the Letter of Credit Issuer (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender or the Letter of Credit Issuer, shall be conclusive absent manifest error.

 

(ii)                                  Without limiting the provisions of subsection (a) or (b) above, each Lender and the Letter of Credit Issuer shall, and does hereby, indemnify the Loan Parties and the Administrative Agent, and shall make payment in respect thereof within 10 days after demand therefor, against any and all Taxes and any and all related losses, claims, liabilities, penalties, interest and expenses (including the fees, charges and disbursements of any counsel for the Borrowers or the Administrative Agent) incurred by or asserted against the Loan Parties or the Administrative Agent by any Governmental Authority as a result of the failure by such Lender or the Letter of Credit Issuer, as the case may be, to deliver, or as a result of the inaccuracy, inadequacy or deficiency of, any documentation required to be delivered by such Lender or the Letter of Credit Issuer, as the case may be, to the Borrower Agent or the Administrative Agent pursuant to Section 3.01(e).  Each Lender and the Letter of Credit Issuer hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender or the Letter of Credit Issuer, as the case may be, under this Agreement or any other Loan Document against any amount due to the Administrative Agent under this Section 3.01(c)(ii).

 

(d)                                 Evidence of Payments.  Upon request by the Borrower Agent or the Administrative Agent, as the case may be, after any payment of Taxes by the Loan Parties or by the Administrative Agent to a Governmental Authority as provided in this Section 3.01, the Borrower Agent shall deliver to the Administrative Agent or the Administrative Agent shall deliver to the Borrower Agent, as the case may be, the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of any return required by Laws to report such payment or other evidence of such payment reasonably satisfactory to the Borrower Agent or the Administrative Agent, as the case may be.

 

(e)                                  Status of Lenders; Tax Documentation.

 

(i)                                     Each Lender shall deliver to the Borrower Agent and to the Administrative Agent, at the time or times prescribed by applicable Laws or when reasonably requested by the Borrower Agent or the Administrative Agent, such properly completed and executed documentation prescribed by applicable Laws or by the relevant Governmental Authorities of any jurisdiction and such other reasonably requested information as will permit the Borrower Agent or the Administrative Agent, as the case may be, to determine (A) whether or not payments made hereunder or under any other Loan Document are subject to Taxes, (B) if applicable, the required rate of withholding or deduction, and (C) such Lender’s entitlement to any available exemption from, or reduction of, applicable Taxes in respect of all payments to be made to such Lender by the Loan Parties pursuant to this Agreement or otherwise to establish such Lender’s status for withholding Tax purposes in the applicable jurisdiction.

 

(ii)                                  Without limiting the generality of the foregoing:

 

(A)                               any Lender that is a U.S. Person shall deliver to the Borrower Agent and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the request of the Borrower Agent or the Administrative Agent) executed copies of Internal Revenue Service Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding Tax; and

 

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(B)                               each Foreign Lender shall deliver to the Borrower Agent and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the request of the Borrower Agent or the Administrative Agent, but only if such Foreign Lender is legally entitled to do so), whichever of the following is applicable:

 

(I)                                   executed copies of Internal Revenue Service Form W-8BEN-E (or, if applicable W-8BEN) establishing the status of such Lender as a Foreign Lender and, if applicable, claiming eligibility for benefits of an income tax treaty to which the United States is a party,

 

(II)                              executed copies of Internal Revenue Service Form W-8ECI,

 

(III)                         executed copies of Internal Revenue Service Form W-8IMY and all required supporting documentation,

 

(IV)                          in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate to the effect that such Foreign Lender is not (A) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of any Borrower within the meaning of Section 881(c)(3)(B) of the Code, or (C) a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code and (y) executed copies of Internal Revenue Service Form W-8BEN-E (or, if applicable W-8BEN), or

 

(V)                               executed copies of any other form prescribed by applicable Laws as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax together with such supplementary documentation as may be prescribed by applicable Laws to permit the Borrower Agent or the Administrative Agent to determine the withholding or deduction required to be made; and

 

(C)                               if a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower Agent and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by any Borrower or the Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by any Borrower or the Administrative Agent as may be necessary for the Borrowers and the Administrative Agent to comply with their obligations under FATCA or to determine the amount to deduct and withhold from such payment.  Solely for purposes of this clause (C), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.  For purposes of this Section 3.01, “Laws” shall include FATCA.

 

(iii)                               If Administrative Agent is not a U.S. Person, on or before the date of any payment by any Loan Party under this Agreement, Administrative Agent shall deliver to Borrower Agent (A) an executed copy of Internal Revenue Service Form W-8ECI with respect to any amounts payable to Administrative Agent for its own account, (B) an executed copy of Internal Revenue Service Form W-8IMY with respect to any amounts payable to Administrative 

 

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Agent for the account of others, certifying that it is a “U.S. branch” and that the payments it receives for the account of others are not effectively connected with the conduct of its trade or business in the United States and that it is using such form as evidence of its agreement with the Loan Parties to be treated as a U.S. Person with respect to such payments (and the Loan Parties and Administrative Agent agree to so treat Administrative Agent as a U.S. Person with respect to such payments as contemplated by Treasury Regulation Section 1.1441-1(b)(2)(iv)) and (C) such other forms or certifications as may be required under applicable Law to establish that Administrative Agent is entitled to receive any payment by the Loan Parties under this Agreement (whether for its own account or for the account of others) without deduction or withholding of any U.S. federal withholding Taxes unless in any such case there has been a Change in Law which renders all such forms inapplicable or which would prevent Administrative Agent from duly completing and delivering any such form with respect to it and Administrative Agent so advises Borrower Agent.

 

(iv)                              Each Recipient agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower Agent and the Administrative Agent in writing of its legal inability to do so.  Each Lender shall promptly (A) notify the Borrower Agent and the Administrative Agent of any change in circumstances which would modify or render invalid any claimed exemption or reduction, and (B) take such steps as shall not be materially disadvantageous to it, in the reasonable judgment of such Lender, and as may be reasonably necessary (including the re-designation of its Lending Office) to avoid any requirement of applicable Laws of any jurisdiction that the Loan Parties or the Administrative Agent make any withholding or deduction for Taxes from amounts payable to such Lender.

 

(f)                                   Treatment of Certain Refunds.  Unless required by applicable Laws, at no time shall the Administrative Agent have any obligation to file for or otherwise pursue on behalf of a Lender or the Letter of Credit Issuer, or have any obligation to pay to any Lender or the Letter of Credit Issuer, any refund of Taxes withheld or deducted from funds paid for the account of such Lender or the Letter of Credit Issuer, as the case may be.  If the Administrative Agent, any Lender or the Letter of Credit Issuer determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified by any Loan Party or with respect to which any Loan Party has paid additional amounts pursuant to this Section 3.01, it shall pay to such Loan Party an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by any Loan Party under this Section 3.01 with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses incurred by the Administrative Agent, such Lender or the Letter of Credit Issuer, as the case may be, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund), provided that each Loan Party, upon the request of the Administrative Agent, such Lender or the Letter of Credit Issuer, agrees to repay the amount paid over to any Loan Party (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent, such Lender or the Letter of Credit Issuer in the event the Administrative Agent, such Lender or the Letter of Credit Issuer is required to repay such refund to such Governmental Authority.  This subsection shall not be construed to require the Administrative Agent, any Lender or the Letter of Credit Issuer to make available its tax returns (or any other information relating to its Taxes that it deems confidential) to any Loan Party or any other Person.

 

3.02                        Illegality.  If any Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending Office to make, maintain or fund Loans whose interest is determined by reference to the LIBOR Rate, or to determine or charge interest rates based upon the LIBOR Rate, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of, 

 

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Dollars in the London interbank market, then, on notice thereof by such Lender to the Borrower Agent through the Administrative Agent, (i) any obligation of such Lender to make or continue LIBOR Loans or to convert Base Rate Loans to LIBOR Loans shall be suspended, and (ii) if such notice asserts the illegality of such Lender making or maintaining Base Rate Loans the interest rate on which is determined by reference to the LIBOR Rate component of the Base Rate, the interest rate on which Base Rate Loans of such Lender shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to the LIBOR Rate component of the Base Rate, in each case until such Lender notifies the Administrative Agent and the Borrower Agent that the circumstances giving rise to such determination no longer exist.  Upon receipt of such notice, (x) the Loan Parties shall, upon demand from such Lender (with a copy to the Administrative Agent), prepay or, if applicable, convert all LIBOR Loans of such Lender to Base Rate Loans (the interest rate on which Base Rate Loans of such Lender shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to the LIBOR Rate component of the Base Rate), either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such LIBOR Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such LIBOR Loans and (y) if such notice asserts the illegality of such Lender determining or charging interest rates based upon the LIBOR Rate, the Administrative Agent shall during the period of such suspension compute the Base Rate applicable to such Lender without reference to the LIBOR Rate component thereof until the Administrative Agent is advised in writing by such Lender that it is no longer illegal for such Lender to determine or charge interest rates based upon the LIBOR Rate.  Upon any such prepayment or conversion, the Loan Parties shall also pay accrued interest on the amount so prepaid or converted.

 

3.03                        Inability to Determine Rates.  If the Required Lenders determine that for any reason in connection with any request for a LIBOR Loan or a conversion to or continuation thereof that (a) Dollar deposits are not being offered to banks in the London interbank eurodollar market for the applicable amount and Interest Period of such LIBOR Loan, (b) adequate and reasonable means do not exist for determining the LIBOR Rate for any requested Interest Period with respect to a proposed LIBOR Loan or in connection with an existing or proposed Base Rate Loan, or (c) the LIBOR Rate for any requested Interest Period with respect to a proposed LIBOR Loan does not adequately and fairly reflect the cost to such Lenders of funding such Loan, the Administrative Agent will promptly so notify the Borrower Agent and each Lender.  Thereafter, (x) the obligation of the Lenders to make or maintain LIBOR Loans shall be suspended, and (y) in the event of a determination described in the preceding sentence with respect to the LIBOR Rate component of the Base Rate, the utilization of the LIBOR Rate component in determining the Base Rate shall be suspended, in each case until the Administrative Agent (upon the instruction of the Required Lenders) revokes such notice.  Upon receipt of such notice, the Borrower Agent may revoke any pending request for a Borrowing of, conversion to or continuation of LIBOR Loans or, failing that, will be deemed to have converted such request into a request for a Borrowing of Base Rate Loans in the amount specified therein.

 

3.04                        Increased Costs; Reserves on LIBOR Loans.

 

(a)                                 Increased Costs Generally.  If any Change in Law shall:

 

(i)                                     impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender (except any reserve requirement contemplated by Section 3.04(e)) or the Letter of Credit Issuer;

 

(ii)                                  subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and (C) Connection 

 

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Income Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or

 

(iii)                               impose on any Lender or the Letter of Credit Issuer or the London interbank market any other condition, cost or expense (other than Taxes) affecting this Agreement or LIBOR Loans made by such Lender or any Letter of Credit or participation therein;

 

and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Loan the interest on which is determined by reference to the LIBOR Rate (or of maintaining its obligation to make any such Loan), or to increase the cost to such Lender or the Letter of Credit Issuer issuing or maintaining any Letter of Credit (or of maintaining its obligation to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Lender or the Letter of Credit Issuer hereunder (whether of principal, interest or any other amount) then, upon request of such Lender or the Letter of Credit Issuer, the Loan Parties will pay to such Lender or the Letter of Credit Issuer, as the case may be, such additional amount or amounts as will compensate such Lender or the Letter of Credit Issuer, as the case may be, for such additional costs incurred or reduction suffered.

 

(b)                                 Capital Requirements.  If any Lender or the Letter of Credit Issuer determines that any Change in Law affecting such Lender or the Letter of Credit Issuer or any Lending Office of such Lender or such Lender’s or the Letter of Credit Issuer’s holding company, if any, regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender’s or the Letter of Credit Issuer’s capital or on the capital of such Lender’s or the Letter of Credit Issuer’s holding company, if any, as a consequence of this Agreement, the Revolving Credit Commitments of such Lender or the Loans made by, or participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by the Letter of Credit Issuer, to a level below that which such Lender or the Letter of Credit Issuer or such Lender’s or the Letter of Credit Issuer’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or the Letter of Credit Issuer’s policies and the policies of such Lender’s or the Letter of Credit Issuer’s holding company with respect to capital adequacy), then from time to time pursuant to subsection (c) below the Loan Parties will pay to such Lender or the Letter of Credit Issuer, as the case may be, such additional amount or amounts as will compensate such Lender or the Letter of Credit Issuer or such Lender’s or the Letter of Credit Issuer’s holding company for any such reduction suffered.

 

(c)                                  Certificates for Reimbursement.  A certificate of a Lender or the Letter of Credit Issuer setting forth the amount or amounts necessary to compensate such Lender or the Letter of Credit Issuer or its holding company, as the case may be, as specified in subsection (a) or (b) of this Section and delivered to the Borrower Agent shall be conclusive absent manifest error.  The Loan Parties shall pay such Lender or the Letter of Credit Issuer, as the case may be, the amount shown as due on any such certificate within 10 Business Days after receipt thereof.

 

(d)                                 Delay in Requests.  Failure or delay on the part of any Lender or the Letter of Credit Issuer to demand compensation pursuant to the foregoing provisions of this Section shall not constitute a waiver of such Lender’s or the Letter of Credit Issuer’s right to demand such compensation, provided that the Loan Parties shall not be required to compensate a Lender or the Letter of Credit Issuer pursuant to the foregoing provisions of this Section for any increased costs incurred or reductions suffered more than nine months prior to the date that such Lender or the Letter of Credit Issuer, as the case may be, notifies the Loan Parties of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or the Letter of Credit Issuer’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the nine-month period referred to above shall be extended to include the period of retroactive effect thereof).

 

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(e)                                  Reserves on LIBOR Loans.  The Borrowers shall pay to each Lender, as long as such Lender shall be required to maintain reserves with respect to liabilities or assets consisting of or including Eurocurrency funds or deposits (currently known as “Eurocurrency liabilities”), additional interest on the unpaid principal amount of each LIBOR Loan equal to the actual costs of such reserves allocated to such Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive), which shall be due and payable on each date on which interest is payable on such Loan, provided the Borrower Agent shall have received at least 10 days’ prior notice (with a copy to the Administrative Agent) of such additional interest from such Lender.  If a Lender fails to give notice 10 days prior to the relevant Interest Payment Date, such additional interest shall be due and payable 10 days from receipt of such notice.

 

3.05                        Compensation for Losses.  Upon demand of any Lender (with a copy to the Administrative Agent) from time to time, the Borrowers shall promptly compensate such Lender for and hold such Lender harmless from any loss, cost or expense incurred by it as a result of:

 

(a)                                 any continuation, conversion, payment or prepayment of any Loan other than a Base Rate Loan on a day other than the last day of the Interest Period for such Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise);

 

(b)                                 any failure by Borrowers (for a reason other than the failure of such Lender to make a Loan) to prepay, borrow, continue or convert any Loan other than a Base Rate Loan on the date or in the amount notified by the Borrower Agent; or

 

(c)                                  any assignment of a LIBOR Loan on a day other than the last day of the Interest Period therefor as a result of a request by the Borrower Agent pursuant to Section 11.13;

 

including any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Loan or from fees payable to terminate the deposits from which such funds were obtained.  The Borrowers shall also pay any customary administrative fees charged by such Lender in connection with the foregoing.

 

For purposes of calculating amounts payable by the Borrowers to the Lenders under this Section 3.05, each Lender shall be deemed to have funded each LIBOR Loan made by it at the LIBOR Rate for such Loan by a matching deposit or other borrowing in the London interbank eurodollar market for a comparable amount and for a comparable period, whether or not such LIBOR Loan was in fact so funded.

 

3.06                        Mitigation Obligations; Replacement of Lenders.

 

(a)                                 Designation of a Different Lending Office.  If any Lender requests compensation under Section 3.04, or the Borrowers are required to pay any additional amount to any Lender, the Letter of Credit Issuer or any Governmental Authority for the account of any Lender or the Letter of Credit Issuer pursuant to Section 3.01, or if any Lender gives a notice pursuant to Section 3.02, then such Lender or the Letter of Credit Issuer, as applicable, shall use reasonable efforts to designate a different Lending Office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender or the Letter of Credit Issuer, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 3.01 or 3.04, as the case may be, in the future, or eliminate the need for the notice pursuant to Section 3.02, as applicable, and (ii) in each case, would not subject such Lender or the Letter of Credit Issuer, as the case may be, to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender or the Letter of Credit Issuer, as the case may be.  The Borrowers hereby agree to pay all reasonable costs 

 

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and expenses incurred by any Lender or the Letter of Credit Issuer in connection with any such designation or assignment.

 

(b)                                 Replacement of Lenders.  If any Lender requests compensation under Section 3.04, or if the Borrowers are required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, the Borrowers may replace such Lender in accordance with Section 11.13.

 

3.07                        Survival.  All of the parties’ obligations under this Article III shall survive the resignation of the Administrative Agent, the Letter of Credit Issuer and the Swing Line Lender, the assignment of rights by or replacement of any Lender, the termination of the Commitments and the occurrence of the Facility Termination Date.

 

ARTICLE IV
 SECURITY AND ADMINISTRATION OF COLLATERAL

 

4.01                        Security.

 

(a)                                 Generally.  As security for the full and timely payment and performance of all Obligations, Borrower Agent shall, and shall cause each other Borrower to, on or before the Closing Date, do or cause to be done all things necessary in the opinion of the Administrative Agent and its counsel to grant to the Administrative Agent for the benefit of the Secured Parties a duly perfected first priority security interest in all Collateral subject to no prior Lien or other encumbrance or restriction on transfer, except as expressly permitted hereunder and subject to the Intercreditor Agreement.  Without limiting the foregoing, on the Closing Date Borrower Agent shall deliver, and shall cause each other Borrower to deliver, to the Administrative Agent, in form and substance reasonably acceptable to the Administrative Agent, (a) the Security Agreement, which shall pledge to the Administrative Agent for the benefit of the Secured Parties certain personal property of the Borrowers and the other Loan Parties more particularly described therein, and (b) Uniform Commercial Code financing statements in form, substance and number as requested by the Administrative Agent, reflecting the Lien in favor of the Secured Parties on the Collateral, and shall take such further action and deliver or cause to be delivered such further documents as required by the Security Instruments or otherwise as the Administrative Agent may request to effect the transactions contemplated by this Article IV.

 

4.02                        Collateral Administration.

 

(a)                                 Administration of Accounts.

 

(i)                                     Records and Schedules of Accounts.  Each Borrower shall keep accurate and complete records of its Accounts, including all payments and collections thereon, and shall submit to the Administrative Agent sales, collection, reconciliation and other reports in form satisfactory to the Administrative Agent, on such periodic basis as the Administrative Agent may request.

 

(ii)                                  Taxes.  If an Account of any Borrower includes a charge for any Taxes, Administrative Agent is authorized, in its discretion, to pay the amount thereof to the proper Governmental Authority for the account of such Borrower and to charge Borrowers therefor; provided, however, that neither the Administrative Agent nor Lenders shall be liable for any Taxes that may be due from Borrowers or with respect to any Collateral.

 

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(iii)                               Account Verification.  Whether or not a Default or Event of Default exists, the Administrative Agent shall have the right at any time, in the name of the Administrative Agent, any designee of the Administrative Agent or (during the continuance of any Event of Default) any Borrower, to verify the validity, amount or any other matter relating to any Accounts of Borrowers by mail, telephone or otherwise.  Borrowers shall cooperate fully with the Administrative Agent in an effort to facilitate and promptly conclude any such verification process.

 

(iv)                              Proceeds of Collateral.  Borrowers shall request in writing and otherwise take all necessary steps to ensure that all payments on Accounts or otherwise relating to Collateral are made directly to a Controlled Deposit Account (or a lockbox relating to a Controlled Deposit Account).  If any Borrower or Subsidiary receives cash or Payment Items with respect to any Collateral, it shall hold same in trust for the Administrative Agent and promptly (but in any event within three Business Days) deposit same into a Controlled Deposit Account.

 

(v)                                 Extensions of Time for Payment.  In addition, upon the occurrence and during the continuance of an Event of Default, other than in the Ordinary Course of Business and in amounts which are not material to such Borrower, each Borrower will not (i) grant any extension of the time for payment of any Account, (ii) compromise or settle any Account for less than the full amount thereof, (iii) release, wholly or partially, any Person liable for the payment of any Account, (iv) allow any credit or discount whatsoever on any Account or (v) amend, supplement or modify any Account in any manner that could adversely affect the value thereof.

 

(b)                                 Administration of Inventory.

 

(i)                                     Records and Reports of Inventory.  Each Borrower shall keep accurate and complete records of its Inventory, including costs and daily withdrawals and additions, and shall submit to the Administrative Agent inventory and reconciliation reports in form satisfactory to the Administrative Agent, on such periodic basis as the Administrative Agent may request.  Each Borrower shall conduct a physical inventory at least once per calendar year (and on a more frequent basis if requested by the Administrative Agent when an Event of Default exists) and periodic cycle counts consistent with historical practices, and shall provide to the Administrative Agent a report based on each such inventory and count promptly upon completion thereof, together with such supporting information as the Administrative Agent may request.  The Administrative Agent may participate in and observe each physical count.

 

The Administrative Agent, in its reasonable discretion, if any Event of Default is continuing, may cause additional such inventories to be taken as the Administrative Agent determines (each, at the expense of the Loan Parties).

 

(ii)                                  Acquisition, Sale and Maintenance.  No Borrower shall acquire or accept any product Inventory on consignment or approval, and shall take all steps to assure that all Inventory is produced in accordance with applicable Law, including the FLSA.  The Borrowers shall use, store and maintain all product Inventory with reasonable care and caution, in accordance with applicable standards of any insurance and in conformity with all applicable Laws, and shall make current rent payments (within applicable grace periods provided for in leases) at all locations where any Collateral is located.

 

(c)                                  Collateral at Locations Subject to a Material Third-Party Agreement.  With respect to any location of Collateral subject to a Material Third-Party Agreement in effect as of the Closing Date or entered into after the Closing Date, each Loan Party shall use commercially reasonable efforts to provide 

 

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the Administrative Agent with Lien Waivers with respect to the premises subject to such Material Third-Party Agreements.  Loan Parties acknowledge that if such Lien Waivers are not delivered, then, at the election of the Administrative Agent, all or a portion of the Collateral at such locations may be deemed ineligible for inclusion in the Borrowing Base and/or the Administrative Agent may establish a Rent and Charges Reserve for such location.

 

4.03                        After Acquired Property; Further Assurances.

 

(a)                                 New Deposit Accounts and Securities Accounts.  Concurrently with or prior to the opening of any Deposit Account, Securities Account or Commodity Account by any Loan Party, other than any Excluded Deposit Account and any Excluded Securities Account, such Loan Party shall deliver to the Administrative Agent a Control Agreement covering such Deposit Account, Securities Account or Commodity Account, duly executed by such Loan Party, the Administrative Agent and the applicable Controlled Account Bank, securities intermediary or financial institution at which such account is maintained.

 

(b)                                 Acquired Real Property.  If any Loan Party acquires, owns or holds an interest in any fee-owned Real Property not constituting Excluded Real Property, the Company will promptly (and in any event within ten (10) days of the acquisition thereof (or such longer period as the Administrative Agent may agree)) notify the Administrative Agent in writing of such event, identifying the property or interests in question, and, the Loan Party will, or will cause such Subsidiary to, within sixty (60) days or such longer period as the Administrative Agent may reasonably agree, deliver to the Administrative Agent, in each case in form and substance reasonably satisfactory to the Administrative Agent, Mortgages and Mortgage Related Documents with respect to such Real Property, in each case, subject to the Intercreditor Agreement.

 

(c)                                  UCC Authorization.  The Administrative Agent is hereby irrevocably authorized to execute (if necessary) and file or cause to be filed, with or if permitted by applicable Law without the signature of any Borrower appearing thereon, all UCC or Personal Property Security Act financing statements reflecting any Borrower as “debtor” and the Administrative Agent as “secured party”, and continuations thereof and amendments thereto, as the Administrative Agent reasonably deems necessary or advisable to give effect to the transactions contemplated hereby and by the other Loan Documents.

 

4.04                        Cash Management.

 

(a)                                 Controlled Deposit Accounts.  Each Loan Party agrees to, on or prior to the Closing Date, enter into a Control Agreement with respect to each Deposit Account listed on part (a) of Schedule 6.19, other than Excluded Deposit Accounts, which shall include all lockboxes and related lockbox accounts used for the collection of Accounts; provided, that with respect to Deposit Accounts of the Loan Parties not covered by a Control Agreement as of the Closing Date, the Loan Parties shall either, within 60 days after the Closing Date (or such later date as the Administrative Agent may agree in writing in its sole discretion) (the “Control Agreement Post-Closing Period”), (i) cause each such Deposit Account to be covered by a Control Agreement or (ii) close each such Deposit Account; provided, further, that, during the Control Agreement Post-Closing Period, each Loan Party shall cause all funds deposited or otherwise held in a Deposit Account not covered by a Control Agreement (other than Excluded Deposit Accounts) and/or in any related lockbox to be remitted, on a not less than weekly basis (or such other incremental basis as agreed by the Administrative Agent in writing), to a Controlled Deposit Account.  Each Loan Party agrees that all invoices rendered and other requests made by any Loan Party for payment in respect of Accounts shall contain a written statement directing payment in respect of such Accounts to be paid to a Controlled Deposit Account in its name (it being agreed that an invoice indicating that payments should be directed to a Controlled Deposit Account is sufficient).  All remittances received by any Loan Party on 

 

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account of Accounts, together with the proceeds of any other Collateral, shall be held as the Administrative Agent’s property, for its benefit and the benefit of Lenders, by such Loan Party as trustee of an express trust for Administrative Agent’s benefit and such Loan Party shall immediately deposit the same in a Controlled Deposit Account.  The Administrative Agent retains the right at all times after the occurrence and during the continuance of a Default or an Event of Default to notify Account Debtors that a Loan Party’s Accounts have been assigned to the Administrative Agent and to collect such Loan Party’s Accounts directly in its own name, or in the name of the Administrative Agent’s agent, and to charge the collection costs and expenses, including reasonable attorneys’ fees, to the Loan Account.

 

(b)                                 Concentration Account.  Each Control Agreement with respect to a Controlled Deposit Account shall require that, during a Dominion Trigger Period, the Controlled Account Bank transfer all cash receipts and other collections by ACH or wire transfer no less frequently than daily (and whether or not there are then any outstanding Obligations) to the concentration account maintained by the Administrative Agent at BMO (the “Concentration Account”).  The Concentration Account shall at all times be under the sole dominion and control of the Administrative Agent.  The Loan Parties hereby acknowledge and agree that (i) the Loan Parties have no right of withdrawal from the Concentration Account, (ii) the funds on deposit in the Concentration Account shall at all times be collateral security for all of the Obligations and (iii) the funds on deposit in the Concentration Account shall be applied as provided in Section 4.04(c) below.  In the event that, notwithstanding the provisions of this Section 4.04, any Loan Party receives or otherwise has dominion and control of any such proceeds or collections described above, such proceeds and collections shall be held in trust by such Loan Party for the Administrative Agent, shall not be commingled with any of such Loan Party’s other funds or deposited in any account of such Loan Party and shall, not later than the Business Day after receipt thereof, be deposited into a Controlled Deposit Account, or during a Dominion Trigger Period, the Concentration Account, or dealt with in such other fashion as such Loan Party may be instructed by the Administrative Agent.

 

(c)                                  Application of Funds in the Concentration Account.  All funds received in the Concentration Account in immediately available funds shall, subject to Section 9.03, be applied on a daily basis first, to the Letter of Credit Borrowings and the Swing Line Loans, second, to the outstanding Revolving Credit Loans, and third, to any fees, expenses, costs or reimbursement obligations due and owing to the Administrative Agent or the Lenders.  All funds received in the Concentration Account that are not immediately available funds (checks, drafts and similar forms of payment) shall be deemed applied by Administrative Agent on account of the Obligations (subject to final payment of such items) in accordance with the foregoing sentence on the first Business Day after receipt by Administrative Agent of such items in Administrative Agent’s account located in Chicago, Illinois.  If as the result of such application of funds a credit balance exists in the Loan Account, such credit balance shall not accrue interest in favor of Borrowers and Administrative Agent may, at its option, offset such credit balance against any of the Obligations, Cash Collateralize the remaining Letter of Credit Obligations in the Minimum Collateral Amount, and/or hold such credit balance as Collateral for the Obligations.

 

(d)                                 Controlled Securities Accounts. Each Loan Party agrees to, on or prior to the Closing Date, enter into a Control Agreement with respect to each Securities Account and Commodity Account listed on part (b) of Schedule 6.19, other than Excluded Securities Accounts; provided, that with respect to Securities Accounts and Commodity Accounts of the Loan Parties not covered by a Control Agreement as of the Closing Date, the Loan Parties shall either, within 60 days after the Closing Date (or such later date as the Administrative Agent may agree in writing in its sole discretion), (i) cause each such Securities Account and Commodity Account to be covered by a Control Agreement or (ii) close each such Securities Account and Commodity Account.  The Borrower Agent shall cause account statements and/or other reports from the applicable broker, financial institution or other financial intermediary to be delivered to the Administrative Agent not less often than monthly, accurately setting forth all assets, 

 

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including securities entitlements, financial assets or other amounts, held in each Securities Account or Commodity Account.

 

4.05                        Information Regarding Collateral.  Each Borrower represents, warrants and covenants that (a) the chief executive office of each Loan Party on the Closing Date is located at the address or addresses specified on Schedule 4.05, and (b) Schedule 4.05 contains a true and complete list of (i) the exact legal name, jurisdiction of formation, jurisdiction identification number, each location of the chief executive office, and (if different from the chief executive office) each address within the United States of, in each case, each Loan Party and of each other Person that has effected any merger or consolidation with a Loan Party or contributed or transferred to a Loan Party any property constituting Collateral at any time since, in each case, October 31, 2011 (excluding Persons making sales in the ordinary course of their businesses to a Loan Party of property constituting Inventory in the hands of such seller) and (ii) each location within the United States in which material goods constituting Collateral are located as of the Closing Date (together with the name of each owner of the property located at such address if not the applicable Loan Party, a summary description of the relationship between the applicable Loan Party and such Person and the maximum approximate book or market value of the Collateral held or to be held at such location).  The Company shall not change, and shall not permit any other Loan Party to change, its name, jurisdiction of formation (whether by reincorporation, merger or otherwise), the location of its chief executive office or any location specified in clause (b)(ii) of the immediately preceding sentence, or use or permit any other Loan Party to use, any additional trade name, trademark or other trade style, except upon giving not less than thirty (30) days’ prior written notice to the Administrative Agent and taking or causing to be taken all such action at Borrowers’ or such other Loan Parties’ expense as may be reasonably requested by the Administrative Agent to perfect or maintain the perfection and priority of the Lien of the Administrative Agent in the Collateral.

 

ARTICLE V
 CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

 

5.01                        Conditions of Initial Credit Extension.  The obligation of each Lender and the Letter of Credit Issuer to make any initial Credit Extension hereunder is subject to satisfaction of the following conditions precedent:

 

(a)                                 The Administrative Agent’s receipt of the following items (except those items that are expressly permitted to be delivered after the Closing Date pursuant to the Post-Closing Agreement), each properly executed by a Responsible Officer of each Loan Party which is party thereto and each other party which is a party thereto, as applicable, each dated as of the Closing Date (or, in the case of certificates of governmental officials, a recent date before the Closing Date) and each in form and substance satisfactory to the Administrative Agent and its legal counsel:

 

(i)                                     executed counterparts of this Agreement, the Fee Letter and each of the Security Instruments;

 

(ii)                                  Notes executed by the Borrowers in favor of each Lender requesting a Note;

 

(iii)                               such certificates of resolutions or other action, incumbency certificates (including specimen signatures), and/or other certificates of Responsible Officers of each Loan Party as the Administrative Agent may require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Agreement and the other Loan Documents to which such Loan Party is a party;

 

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(iv)                              such documents and certifications as the Administrative Agent may reasonably require to evidence that each Loan Party is duly organized or formed, and that each Loan Party is validly existing, in good standing and qualified to engage in business in its jurisdiction of organization and in any other jurisdiction in which the failure to be so qualified could reasonably be expected to have a Material Adverse Effect, including certified copies of such Loan Party’s Organization Documents, shareholders’ agreements, certificates of good standing and/or qualification to engage in business from each jurisdiction identified on Schedule 5.01 hereto;

 

(v)                                 a favorable opinion of Latham & Watkins LLP, counsel to the Loan Parties, and acceptable local counsel to the Loan Parties, each addressed to the Administrative Agent and each Lender and their successors and assigns, as to the matters concerning the Loan Parties and the Loan Documents as the Administrative Agent may reasonably request;

 

(vi)                              certificates of Responsible Officers of the Borrower Agent or the applicable Loan Parties either (A) stating that all consents, licenses and approvals required in connection with the execution, delivery and performance by each Borrower and the validity against each such Loan Party of the Loan Documents to which it is a party are in full force and effect, and attaching true and correct copies thereof or (B) stating that no such consents, licenses or approvals are so required;

 

(vii)                           a certificate signed by a Responsible Officer of the Borrower Agent certifying that the conditions specified in Sections 5.02(a) and 5.02(b) have been satisfied;

 

(viii)                        (A) audited financial statements and unaudited quarterly financial statements (including, without limitation, income statements, balance sheets and cash flow statements) of the Company and its Subsidiaries, in each case for each of the three fiscal years immediately preceding the Closing Date, (B) unaudited interim financial statements (including, without limitation, an income statement, balance sheet and cash flow statement) for the Company and its Subsidiaries as of June 30, 2016 for such month and for the portion of the fiscal year then elapsed, setting forth in comparative form corresponding figures for the preceding fiscal year, and (C) financial projections of the Company and its Subsidiaries for the next five (5) fiscal years (including, without limitation, quarterly projected financial statements for the twelve calendar months following the Closing Date);

 

(ix)                              a certificate signed by the principal financial officer of the Borrower Agent certifying that, after giving effect to the entering into of the Loan Documents and the consummation of all of the Transactions, (A) each Borrower is Solvent and (B) the Loan Parties, taken as a whole, are Solvent;

 

(x)                                 evidence that all insurance required to be maintained pursuant to the Loan Documents has been obtained and is in effect;

 

(xi)                              an initial Borrowing Base Certificate;

 

(xii)                           initial written notice of Borrowing;

 

(xiii)                        delivery of Uniform Commercial Code financing statements, suitable in form and substance for filing in all places required by applicable law to perfect the Liens of the Administrative Agent under the Security Instruments as a Lien as to items of Collateral in which a security interest may be perfected by the filing of financing statements, including Uniform Commercial Code financing statements covering, inter alia, As-extracted collateral for filing in

 

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each county in which any Loan Party owns or leases any real property, and such other documents and/or evidence of other actions as may be reasonably necessary under applicable law to perfect the Liens of the Administrative Agent under such Security Instruments as a first priority Lien in and to such other Collateral as the Administrative Agent may require subject to the Intercreditor Agreement;

 

(xiv)                       Uniform Commercial Code search results showing only those Liens as are acceptable to the Administrative Agent and Lenders;

 

(xv)                          evidence of the payment in full and termination of the Existing Agreement, including terminations of Uniform Commercial Code financing statements filed in connection therewith and other evidence of lien releases and other related matters on terms acceptable to the Administrative Agent;

 

(xvi)                       copies of the Senior Notes Documents, all certified as true and correct by the Borrower Agent;

 

(xvii)                    evidence that the Senior Notes Agent has received the originals of any pledged Collateral representing all of the issued and outstanding Equity Interests constituting Collateral under the Loan Documents, in each case together with original stock powers (or the equivalent) duly executed in blank with respect thereto;

 

(xviii)                 all documentation and other information required by Law relating to “know your customer” and anti-money laundering rules and regulations, including, without limitation, the United States Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), and requested by any Lender in writing at least one Business Day prior to the anticipated Closing Date;

 

(xix)                       an updated desktop Inventory appraisal with results satisfactory to the Administrative Agent;

 

(xx)                          executed counterparts of the Intercreditor Agreement; and

 

(xxi)                       executed counterparts of the Post-Closing Agreement.

 

(b)                                 Satisfactory completion by the Administrative Agent of due diligence with respect to each Loan Party, including, without limitation, receipt of, and satisfaction with, the Administrative Agent’s third party due diligence, including, without limitation, a third party due diligence report including a quality of earnings report, collateral audit, inventory appraisal, management background checks, and an insurance review, in each case, conducted by a Person acceptable to the Administrative Agent.

 

(c)                                  The terms and conditions of the Senior Notes Documents and all documents executed in connection therewith shall be satisfactory to the Administrative Agent and not require any payment of principal in respect of the Senior Notes on the Closing Date.

 

(d)                                 There shall have been no material adverse change in the business, financial condition, operations or properties of the Company or any of its Subsidiaries, taken as a whole, from that reflected in the most recent fiscal year-end audited financial statements; provided, that in no event shall any adverse change in such business or financial condition which is known to the Administrative Agent and which has occurred on or prior to July 26, 2016 constitute a material adverse change.

 

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(e)                                  Any fees required to be paid on or before the Closing Date shall have been paid.

 

(f)                                   Unless waived by the Administrative Agent, the Borrowers shall have paid all reasonable fees, charges and disbursements of counsel to the Administrative Agent to the extent invoiced prior to or on the Closing Date, plus such additional amounts of such reasonable fees, charges and disbursements as shall constitute its reasonable estimate of such reasonable fees, charges and disbursements incurred or to be incurred by it through the closing proceedings (provided that such estimate shall not thereafter preclude a final settling of accounts between the Borrowers and the Administrative Agent).

 

Without limiting the generality of the provisions of Section 10.04, for purposes of determining compliance with the conditions specified in this Section 5.01, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.

 

5.02                        Conditions to all Credit Extensions.  The obligation of each Lender or Letter of Credit Issuer to honor any Request for Credit Extension (other than one requesting only a conversion of Loans to the other Type or a continuation of LIBOR Loans) or make the initial Credit Extension hereunder is subject to the following conditions precedent:

 

(a)                                 The representations and warranties of the Loan Parties contained in Article VI or any other Loan Document, or which are contained in any document furnished at any time under or in connection herewith or therewith, shall be true and correct in all material respects (and in all respects, if already qualified by materiality or Material Adverse Effect) on and as of the date of such Credit Extension, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects (and in all respects, if already qualified by materiality or Material Adverse Effect) as of such earlier date, and except that for purposes of this Section 5.02(a), the representations and warranties contained in subsections (a) and (b) of Section 6.05 shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 7.01.

 

(b)                                 No Default shall have occurred and be continuing, or would result from such proposed Credit Extension or from the application of the proceeds thereof.

 

(c)                                  The Administrative Agent and, if applicable, the Letter of Credit Issuer or the Swing Line Lender shall have received a Request for Credit Extension in accordance with the requirements hereof.

 

(d)                                 After giving effect to each Credit Extension, Total Outstandings do not exceed the lesser of (i) the Aggregate Revolving Credit Commitments minus all Line Reserves and (ii) the Borrowing Base.

 

Each Request for Credit Extension (other than one requesting only a conversion of Loans to the other Type or a continuation of LIBOR Loans) submitted by the Borrower Agent shall be deemed to be a representation and warranty that the conditions specified in Sections 5.02(a), 5.02(b) and 5.02(d) have been satisfied on and as of the date of the applicable Credit Extension.

 

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ARTICLE VI
 REPRESENTATIONS AND WARRANTIES

 

To induce the Secured Parties to enter into this Agreement and to make Loans and to issue Letters of Credit hereunder, each Loan Party represents and warrants to the Administrative Agent and the Lenders, subject to the limitation set forth in Section 5.02(a), that:

 

6.01                        Existence, Qualification and Power.  Each Loan Party and each Subsidiary (a) is a corporation, partnership or limited liability company duly organized or formed, validly existing and in good standing under the Laws of the jurisdiction of its incorporation, organization or formation, (b) has all requisite power and authority and all requisite governmental licenses, authorizations, consents and approvals to (i) own or lease its assets and carry on its business as is now being conducted and (ii) execute, deliver and perform its obligations under the Loan Documents to which it is a party and to consummate the Transactions to which it is a party, and (c) is duly qualified and is licensed and in good standing under the Laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification or license; except in each case referred to in clause (b)(i), or (c), to the extent that failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  No Loan Party is a credit institution, investment firm, or parent company of a credit institution or investment firm, in each case that is established in a member state of the European Union, Iceland, Liechtenstein or Norway, and no Loan Party is a subsidiary of any of the foregoing.

 

6.02                        Authorization; No Contravention.  The execution, delivery and performance by each Loan Party of each Loan Document to which such Person is party, and the consummation of the Transactions, have been duly authorized by all necessary corporate or other organizational action, and do not and will not (a) contravene the terms of the Organization Documents of any such Person; (b) conflict with or result in any breach or contravention of (i) any material Contractual Obligation to which such Person is a party or (ii) any material order, injunction, writ or decree of any Governmental Authority or any arbitral award to which such Person or its property is subject; (c) result in or require the creation or imposition of any Lien upon any assets of any Loan Party other than Permitted Liens; or (d) violate any material Law in any material respect.

 

6.03                        Governmental Authorization; Other Consents.  No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with (a) the execution, delivery or performance by any Loan Party of this Agreement or any other Loan Document or the consummation of the Transactions, (b) the grant by any Loan Party of the Liens granted by it pursuant to the Security Instruments, (c) the perfection or maintenance of the Liens created under the Security Instruments (including the priority thereof contemplated by the Intercreditor Agreement) or (d) the exercise by the Administrative Agent or any Lender of its rights under the Loan Documents or the remedies in respect of the Collateral pursuant to the Security Instruments, except for recordings and filings in connection with the Liens grant to Agent under this Agreement and the Security Instruments and authorizations, approvals, actions, notices and filings which have been duly obtained, taken, given or made and are in full force and effect.

 

6.04                        Binding Effect.  This Agreement has been, and each other Loan Document, when delivered hereunder, will have been, duly executed and delivered by each Loan Party that is party thereto.  This Agreement constitutes, and each other Loan Document when so delivered will constitute, a legal, valid and binding obligation of such Loan Party, enforceable against each Loan Party that is party thereto in accordance with its terms, except (a) as rights to indemnification hereunder may be limited by applicable Law and (b) as the enforcement hereof may be limited by any applicable Debtor Relief Laws or by general equitable principles.

 

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6.05                        Financial Statements; No Material Adverse Effect.

 

(a)                                 The Audited Financial Statements (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein; (ii) fairly present in all material respects the financial condition of the Company and its Subsidiaries as of the date thereof and their results of operations for the period covered thereby in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein.

 

(b)                                 The unaudited Consolidated balance sheet of the Company and its Subsidiaries dated as of June 30, 2016, and the related Consolidated statements of income or operations, shareholders’ equity and cash flows for the fiscal quarter then ended (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein, and (ii) fairly present in all material respects the financial condition of the Company and its Subsidiaries as of the date thereof and their results of operations for the period covered thereby, subject, in the case of clauses (i) and (ii), to the absence of footnotes and to normal year-end audit adjustments.

 

(c)                                  Since the date of the Audited Financial Statements there has been no event or circumstance, either individually or in the aggregate, that has had or could reasonably be expected to have a Material Adverse Effect.

 

(d)                                 Each Borrower is Solvent and the Loan Parties, on a Consolidated basis, are Solvent. No transfer of property has been or will be made by any Loan Party and no obligation has been or will be incurred by any Loan Party in connection with the transactions contemplated by this Agreement or the other Loan Documents with the intent to hinder, delay, or defraud either present or future creditors of any Loan Party.

 

6.06                        Litigation.  There are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of any Loan Party after due investigation, threatened or contemplated, at law, in equity, in arbitration or before any Governmental Authority, by or against any Loan Party or any of its Subsidiaries or against any of their properties or revenues, that (a) purport to affect or pertain to this Agreement or any other Loan Document or any of the Transactions or (b) except as specifically disclosed in Schedule 6.06, either individually or in the aggregate, if determined adversely, could reasonably be expected to have a Material Adverse Effect.

 

6.07                        No Default.  No Loan Party nor any Subsidiary is in default under or with respect to any material Contractual Obligation that could, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  No Default has occurred and is continuing or would result from the consummation of the transactions contemplated by this Agreement or any other Loan Document.

 

6.08                        Ownership of Property; Liens.

 

(a)                                 Each Loan Party and each Subsidiary has good title to, or valid leasehold interests in, all its Real Property and personal property, in each instance necessary to its business, if any (including the Mortgaged Properties), (i) free and clear of all Liens except for Permitted Liens and (ii) except for minor defects in title that do not materially interfere with its ability to conduct its business as currently conducted or as proposed to be conducted or to utilize such properties for their intended purposes.

 

(b)                                 Schedule 6.08(b)(1) sets forth a legal description (and, where available, the street address and county) of all Real Property that is owned by the Loan Parties as of the Closing Date.  Each Loan Party and each of its Subsidiaries has good, marketable and insurable fee simple title to the Real Property owned by such Loan Party or such Subsidiary, free and clear of all Liens, other than Permitted Liens.  Schedule 6.08(b)(2) sets forth the address (including street address, county and state) of all leases of the Loan Parties, together with a list of the lessor and its contact information with respect to each such lease

 

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as of the Closing Date.  Each of such leases is in full force and effect and the Loan Parties are not in default of any material terms thereof, except, in each case, as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

6.09                        Environmental Compliance.

 

(a)                                 Except as disclosed in Schedule 6.09, no Loan Party or any Subsidiary thereof (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) has become subject to a pending claim with respect to any Environmental Liability or (iii) has received written notice of any claim with respect to any Environmental Liability except, in each case, as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

(b)                                 Except as otherwise set forth in Schedule 6.09 or as would not individually or in the aggregate reasonably be expected to result in a Material Adverse Effect, (i) none of the properties currently owned or operated by any Loan Party or any Subsidiary thereof is listed or, to the knowledge of the Loan Parties, proposed for listing on the NPL or on the CERCLIS or any analogous foreign, state or local list or is adjacent to any such property; (ii) there are no and, to the knowledge of the Loan Parties, never have been any underground or above-ground storage tanks or any surface impoundments, septic tanks, pits, sumps or lagoons in which Hazardous Materials are being or have been treated, stored or disposed on any property currently owned or operated by any Loan Party or any Subsidiary thereof; (iii) to the knowledge of the Loan Parties, there are no Hazardous Materials present on any property currently owned or operated by any Loan Party or Subsidiary thereof except in compliance with all applicable Environmental Laws; and (iv) Hazardous Materials have not been released, discharged or disposed of by any Loan Party or Subsidiary in violation of Environmental Laws or, to the knowledge of the Loan Parties, by any other Person in violation of Environmental Laws on any property currently owned or operated by any Loan Party or any Subsidiary thereof.

 

(c)                                  Except as otherwise set forth on Schedule 6.09 or as would not individually or in the aggregate reasonably be expected to result in a Material Adverse Effect, no Loan Party or any Subsidiary thereof is undertaking, and no Loan Party or any Subsidiary thereof has completed, either individually or together with other potentially responsible parties, any investigation or assessment or remedial or response action relating to any actual or threatened release, discharge or disposal of Hazardous Materials at any site, location or operation, either voluntarily or pursuant to the order of any Governmental Authority or the requirements of any Environmental Law; and all Hazardous Materials generated, used, treated, handled or stored by any Loan Party or any Subsidiary at, or transported to or from by or on behalf of any Loan Party or any Subsidiary, any property currently owned or operated by any Loan Party or any Subsidiary thereof have, to the knowledge of the Loan Parties, been disposed of in a manner not reasonably expected to result in material liability to any Loan Party or any Subsidiary thereof.

 

(d)                                 Each Loan Party conducts in the Ordinary Course of Business a review of the effect of existing Environmental Laws and claims alleging potential liability or responsibility for violation of any Environmental Law on their respective businesses, operations and properties, and as a result thereof each Loan Party has reasonably concluded that, except as set forth on Schedule 6.09, such Environmental Laws and claims could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

6.10                        Insurance.  The properties of the Loan Parties and their Subsidiaries are insured with financially sound and reputable insurance companies which are not Affiliates of the Loan Parties, in such amounts, with such deductibles and covering such risks (including, without limitation, workmen’s compensation, public liability, business interruption and property damage insurance) as are customarily

 

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carried by companies engaged in similar businesses and owning similar properties in localities where the Loan Parties or the applicable Subsidiary operates.  Schedule 6.10 sets forth a description of all insurance maintained by or on behalf of the Loan Parties as of the Closing Date. Each insurance policy listed on Schedule 6.10 is in full force and effect and all premiums in respect thereof that are due and payable have been paid.

 

6.11                        Taxes.  Each Loan Party and its Subsidiaries have filed all federal and state income tax returns and other material tax returns and reports required to be filed, and have paid all federal and state income Taxes and other material Taxes levied or imposed upon them or their properties, income or assets otherwise due and payable, except those which are being Properly Contested and except where the failure to file such returns or reports could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  There is no proposed tax assessment against the Company or any Subsidiary that would, if resolved unfavorably to the Company or such Subsidiary, have a Material Adverse Effect.  Neither the Company nor any Subsidiary thereof is party to any tax sharing agreement.

 

6.12                        ERISA Compliance.

 

(a)                                 Each Plan is in compliance in all material respects with the applicable provisions of ERISA, the Code and other federal or state Laws.  Each Plan that is intended to be a qualified plan under Section 401(a) of the Code has received a favorable determination letter from the Internal Revenue Service to the effect that the form of such Plan is qualified under Section 401(a) of the Code and the trust related thereto has been determined by the Internal Revenue Service to be exempt from federal income tax under Section 501(a) of the Code, or an application for such a letter is currently being processed by the Internal Revenue Service.  To the best knowledge of each Loan Party, nothing has occurred that would prevent or cause the loss of such tax-qualified status.

 

(b)                                 There are no pending or, to the knowledge of any Loan Party, threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Plan that could reasonably be expected to have a Material Adverse Effect.  There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan that has resulted or could reasonably be expected to result in a Material Adverse Effect.

 

(c)                                  (i) No ERISA Event has occurred, and no Loan Party nor any ERISA Affiliate is aware of any fact, event or circumstance that could reasonably be expected to constitute or result in an ERISA Event with respect to any Pension Plan; (ii) each Loan Party and each ERISA Affiliate has met all applicable requirements under the Pension Funding Rules in respect of each Pension Plan, and no waiver of the minimum funding standards under the Pension Funding Rules has been applied for or obtained; (iii) no Loan Party nor any ERISA Affiliate has incurred any liability to the PBGC other than for the payment of premiums, and there are no premium payments which have become due that are unpaid; (iv) no Loan Party nor any ERISA Affiliate has engaged in a transaction that could be subject to Section 4069 or Section 4212(c) of ERISA; and (v) no Pension Plan is in the process of being terminated by the plan administrator thereof nor by the PBGC, and no event or circumstance has occurred or exists that could reasonably be expected to cause the PBGC to institute proceedings under Title IV of ERISA to terminate any Pension Plan.

 

(d)                                 No Loan Party nor any ERISA Affiliate maintains or contributes to, or has any unsatisfied obligation to contribute to, or liability under, any active or terminated Pension Plan other than (A) on the Closing Date, those listed on Schedule 6.12(d) hereto and (B) thereafter, Pension Plans not otherwise prohibited by this Agreement.

 

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6.13                        Subsidiaries; Equity Interests.  No Loan Party (a) has any Subsidiaries other than those specifically disclosed in part (a) of Schedule 6.13 (which Schedule sets forth the legal name, jurisdiction of incorporation or formation and authorized Equity Interests (if applicable) of each such Subsidiary) or created or acquired in compliance with Section 7.12, and (b) has any equity investments in any other corporation or entity other than those specifically disclosed on part (b) of Schedule 6.13, except, in each case, Subsidiaries acquired or created and equity investments made on or after the Closing Date in compliance with this Agreement and the other Loan Documents.  All of the outstanding Equity Interests in such Subsidiaries have been validly issued, are fully paid and non-assessable and are owned by a Loan Party (or a Subsidiary of a Loan Party) in the amounts specified on Part (a) of Schedule 6.13 free and clear of all Liens except for those Liens created under the Security Instruments and those Liens permitted by Section 8.02(o) in connection with the Senior Notes and/or the Senior Notes Agreement.  All of the outstanding Equity Interests in the Loan Parties have been validly issued, and are fully paid and non-assessable and are owned in the amounts specified on part (c) of Schedule 6.13 free and clear of all Liens except for those Liens created under the Security Instruments and those Liens permitted by Section 8.02(o) in connection with the Senior Notes and/or the Senior Notes Agreement.

 

6.14                        Margin Regulations; Investment Company Act.  No Loan Party is engaged nor will engage, principally or as one of its important activities, in the business of purchasing or carrying margin stock (within the meaning of Regulation U issued by the FRB), or extending credit for the purpose of purchasing or carrying margin stock.  None of the Loan Parties, any Person Controlling any Loan Party, nor any Subsidiary is or is required to be registered as an “investment company” under the Investment Company Act of 1940.

 

6.15                        Disclosure.  Each Loan Party has disclosed or caused the Borrower Agent to disclose, either through its public filings and disclosures or otherwise to the Administrative Agent and the Lenders all agreements, instruments and corporate or other restrictions to which it or any of its Subsidiaries is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.  No report, financial statement, certificate (including the Borrowing Base Certificates) or other information furnished in writing by or on behalf of any Loan Party or any Subsidiary to the Administrative Agent or any Lender in connection with the transactions contemplated hereby and the negotiation of this Agreement or delivered hereunder or under any other Loan Document (in each case, as modified or supplemented by other information so furnished), when taken as a whole, contains any untrue statement of a material fact or omits any material fact  necessary to make the statements therein, in the light of the circumstances under which they were made, not materially misleading as of the time when made or delivered; provided that, with respect to projected financial information, each Loan Party represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time.

 

6.16                        Compliance with Laws.  Each Loan Party and each Subsidiary is in compliance in all material respects with the requirements of all applicable Laws and all orders, writs, injunctions and decrees applicable to it or to its properties, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted or (b) the failure to comply therewith, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

 

6.17                        Intellectual Property; Licenses, Etc.  Each Loan Party and its Subsidiaries own, or possess the right to use, all of the Intellectual Property (including IP Rights) that are reasonably necessary for the operation of their respective businesses, without known conflict with the IP Rights of any other Person, except to the extent any failure so to own or possess the right to use could not reasonably be expected to have a Material Adverse Effect.  To the knowledge of each Loan Party, the operation by each

 

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Loan Party and its Subsidiaries of their respective businesses does not infringe in any material respect upon any IP Rights held by any other Person.

 

6.18                        Labor Matters.  Except as would not reasonably be expected to result, individually or in the aggregate, in a Material Adverse Effect or as set forth on Schedule 6.18, (i) there are no strikes, lockouts, slowdowns or other material labor disputes against any Loan Party or any Subsidiary thereof pending or, to the knowledge of any Loan Party, threatened, (ii) the hours worked by and payments made to employees of the Loan Parties comply with the FLSA and any other applicable federal, state, local or foreign Law dealing with such matters and (iii) all payments due from any Loan Party and its Subsidiaries, or for which any claim may be made against any Loan Party, on account of wages and employee health and welfare insurance and other benefits, have been paid or properly accrued in accordance with GAAP as a liability on the books of such Loan Party. No Loan Party or any of its Subsidiaries has incurred any liability or obligation under the Worker Adjustment and Retraining Act or similar state Law in excess of $500,000 in the aggregate at any one time which remains unpaid or unsatisfied. Except as set forth on Schedule 6.18, no Loan Party or any Subsidiary is a party to or bound by any collective bargaining agreement, management agreement, employment agreement, bonus, restricted stock, stock option, or stock appreciation plan or agreement or any similar plan, agreement or arrangement. There are no representation proceedings pending or, to any Loan Party’s knowledge, threatened to be filed with the National Labor Relations Board, and no labor organization or group of employees of any Loan Party or any Subsidiary has made a pending demand for recognition. There are no complaints, unfair labor practice charges, grievances, arbitrations, unfair employment practices charges or any other claims or complaints against any Loan Party or any Subsidiary pending or, to the knowledge of any Loan Party, threatened to be filed with any Governmental Authority or arbitrator based on, arising out of, in connection with, or otherwise relating to the employment or termination of employment of any employee of any Loan Party or any of its Subsidiaries which, individually or in the aggregate, would reasonably be expected to result in a Material Adverse Effect. The consummation of the transactions contemplated by the Loan Documents will not give rise to any right of termination or right of renegotiation on the part of any union under any collective bargaining agreement to which any Loan Party or any of its Subsidiaries is bound.

 

6.19                        Deposit Accounts and Securities Accounts.

 

(a)                                 Part (a) of Schedule 6.19 sets forth a list of all Deposit Accounts maintained by the Loan Parties as of the Closing Date, which Schedule includes, with respect to each Deposit Account (i) the name and address of the depository; (ii) the account number(s) maintained with such depository; and (iii) a contact person at such depository.

 

(b)                                 Part (b) of Schedule 6.19 sets forth a list of all Securities Accounts and Commodity Accounts maintained by the Loan Parties as of the Closing Date, which Schedule includes (i) the name and address of the securities intermediary or institution holding such account; (ii) the account number(s) maintained with such securities intermediary or institution; and (iii) a contact person at such securities intermediary or institution.

 

6.20                        Accounts.  The Administrative Agent may rely, in determining which Accounts are Eligible Accounts, on all statements and representations made by the Loan Parties with respect thereto.  Each Borrower warrants, with respect to each Account at the time it is shown as an Eligible Account in a Borrowing Base Certificate, that such Account (a) arises out of a completed, bona fide sale and delivery of goods in the Ordinary Course of Business, and substantially in accordance with any purchase order, contract or other document relating thereto, (b) is for a sum certain, maturing as stated in the invoice covering such sale, a copy of which has been furnished or is available to the Administrative Agent on

 

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request, and (c) is not excluded as ineligible by virtue of one or more of the excluding criteria (other than Administrative Agent-discretionary criteria) set forth in the definition of Eligible Accounts.

 

6.21                        Anti-Terrorism Laws and Foreign Asset Control Regulations.

 

(a)                                 No Loan Party, Subsidiary or any of their respective directors or officers or, to the knowledge of any Loan Party, any agent, employee, or other person acting on behalf of any Loan Party or any Subsidiary, is (i) a Person whose name appears on the list of Specially Designated Nationals and Blocked Persons published by OFAC (an “OFAC Listed Person”), or (ii) an agent, department, or instrumentality of, or is otherwise beneficially owned by, controlled by or acting on behalf of, directly or indirectly, (x) any OFAC Listed Person or (y) any Person, entity, organization, foreign country or regime that is the target of Sanctions, (each OFAC Listed Person and each other Person, entity, organization and government of a country described in clauses (i) or (ii) a “Blocked Person”).  No Loan Party, Subsidiary or, to the knowledge of any Loan Party, any director, officer, agent, employee, or other person acting on behalf of any Loan Party or any Subsidiary has been notified that its name appears or may in the future appear on a state list of Persons that engage in investment or other commercial activities in Iran or any other country that is the target of Sanctions.

 

(b)                                 No part of the proceeds from the Credit Extensions constitutes or will constitute funds obtained on behalf of any Blocked Person or will otherwise be used by any Loan Party, any Subsidiary or, to the knowledge of any Loan Party, any director, officer, agent, employee, or other person acting on behalf of any Loan Party or any Subsidiary, directly or indirectly, (i) in connection with any investment in, or any transactions or dealings with, any Blocked Person or (ii) otherwise in violation of Sanctions.

 

(c)                                  No Loan Party, Subsidiary or, to the knowledge of any Loan Party, any director, officer, agent, employee, or other person acting on behalf of any Loan Party or any Subsidiary (i) has been found in violation of, charged with, or convicted of, money laundering, drug trafficking, terrorist-related activities or other money laundering predicate crimes under any Anti-Money Laundering Law or any Sanctions violations, (ii) to the Company’s actual knowledge after making due inquiry, is under investigation by any Governmental Authority for possible violation of Anti-Money Laundering Laws or any Sanctions violations, (iii) has been assessed civil penalties under any Anti-Money Laundering Laws or any Sanctions or (iv) has had any of its funds seized or forfeited in an action under any Anti-Money Laundering Laws.  The Company has taken measures as required by applicable law to ensure that the Company, each of its Subsidiaries, and, to the knowledge of the Company, any director, officer, agent, employee, or other person acting on behalf of any Loan Party or any Subsidiary is and will continue to be in compliance with all applicable current and future Anti-Money Laundering Laws and Sanctions.

 

(d)                                 (i)                                     No Loan Party, Subsidiary or any of their respective directors or officers or, to the knowledge of any Loan Party, any agent, employee, or other person acting on behalf of any Loan Party or any Subsidiary (w) has been charged with, or convicted of bribery or any other anti-corruption related activity under any applicable law or regulation in a U.S. or any non-U.S. country or jurisdiction, including but not limited to, the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act 2010 (collectively, “Anti-Corruption Laws”), (x) to the Company’s actual knowledge after making due inquiry, is under investigation by any U.S. or non-U.S. Governmental Authority for possible violation of Anti-Corruption Laws, (y) has been assessed civil or criminal penalties under any Anti-Corruption Laws or (z) has been or is the target of sanctions imposed by the United Nations or the European Union.

 

(ii)                                  To the Company’s actual knowledge after making due inquiry, no Loan Party,  Subsidiary or any director, officer, agent, employee, or other person acting on behalf of any Loan Party or any Subsidiary has, within the last five years, directly or indirectly offered, promised, given, paid or authorized the offer, promise, giving or payment of anything of value to a

 

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Governmental Official or a commercial counterparty for the purposes of: (x) influencing any act, decision or failure to act by such Governmental Official in his or her official capacity or such commercial counterparty, (y) inducing a Governmental Official to do or omit to do any act in violation of the Governmental Official’s lawful duty, or (z) inducing a Governmental Official or a commercial counterparty to use his or her influence with a government or instrumentality to affect any act or decision of such government or entity; in each case in order to obtain, retain or direct business or to otherwise secure an improper advantage.

 

(iii)                               No part of the proceeds of the Credit Extensions will be used, directly or indirectly, for any improper payments, including bribes, to any Governmental Official or commercial counterparty in order to obtain, retain or direct business or obtain any improper advantage.  The Company has taken measures as required by applicable law to ensure that the Company, each of its Subsidiaries and, to the knowledge of the Company, each director, officer, agent, employee, and other person acting on behalf of any Loan Party or any Subsidiary is and will continue to be in compliance with all applicable current and future Anti-Corruption Laws.

 

6.22                        Brokers.  No broker or finder brought about the obtaining, making or closing of the Loans or transactions contemplated by the Loan Documents, and no Loan Party or Affiliate thereof has any obligation to any Person in respect of any finder’s or brokerage fees in connection therewith.

 

6.23                        Material Contracts.  Schedule 6.23 sets forth all Material Contracts to which any Loan Party is a party or is bound as of the Closing Date.

 

6.24                        Senior Indebtedness.  All Obligations including those to pay principal of and interest (including post-petition interest, whether or not allowed as a claim under Debtor Relief Laws) on the Loans and other Obligations, and fees and expenses in connection therewith, are entitled to the benefits of the Subordination Provisions.  Each Loan Party acknowledges that the Administrative Agent and each Lender is entering into this Agreement and each Lender is extending its Commitments in reliance upon the Subordination Provisions.

 

6.25                        Immaterial Subsidiaries.  As of the Closing Date, Aviation constitutes an Immaterial Subsidiary.

 

ARTICLE VII
 AFFIRMATIVE COVENANTS

 

So long as any Lender shall have any Commitment hereunder or any Loan Obligation hereunder shall remain unpaid or unsatisfied, each Loan Party shall, and shall cause each Subsidiary to, or with respect to Sections 7.01, 7.02 and 7.03, the Borrower Agent shall:

 

7.01                        Financial Statements.  Deliver to the Administrative Agent and each Lender:

 

(a)                                 as soon as available, but in any event within 90 days after the end of each fiscal year of the Company or, if earlier, 15 days after the date required to be filed with the SEC (without giving effect to any extension permitted by the SEC), a Consolidated balance sheet of the Company and its Subsidiaries as at the end of such fiscal year, and the related Consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail and prepared in accordance with GAAP, such Consolidated statements to be audited and accompanied by a report and opinion of a Registered Public Accounting Firm of nationally recognized standing reasonably acceptable to the Administrative Agent (the “Auditor”), which report and opinion shall be prepared in accordance

 

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with audit standards of the Public Company Accounting Oversight Board and applicable Securities Laws and shall not be subject to any “going concern” or like qualification or exception or any qualification or exception as to the scope of such audit (other than a “going concern” qualification resulting solely from an upcoming maturity date under the Loans occurring within one year from the time such opinion is delivered);

 

(b)                                 quarterly, as soon as available, but in any event within 45 days after the end of each fiscal quarter, or, if earlier, 15 days after the date required to be filed with the SEC (without giving effect to any extension permitted by the SEC), for the first three fiscal quarters of each fiscal year, unaudited Consolidated balance sheets of the Company and its Subsidiaries as of the end of such fiscal quarter and the related statements of income and cash flow for such fiscal quarter and for the portion of the fiscal year then elapsed, on a Consolidated basis for the Company and its Subsidiaries, which balance sheets shall be prepared in accordance with applicable Securities Laws; and

 

(c)                                  as soon as available but not later than 30 days after the beginning of each fiscal year, annual financial projections of the Company and its Subsidiaries for such fiscal year on a Consolidated basis, consistent with past practice or otherwise in form reasonably satisfactory to the Administrative Agent and the Required Lenders, consisting of (i) Consolidated balance sheets and statements of income or operations and cash flows and (ii) monthly Availability for Borrowers for such fiscal year.

 

As to any information contained in materials furnished pursuant to Section 7.02(d), the Loan Parties shall not be separately required to furnish such information under clause (a) or (b) above, but the foregoing shall not be in derogation of the obligation of the Loan Parties to furnish the information and materials described in subsections (a) and (b) above at the times specified therein.

 

7.02                        Borrowing Base Certificate; Other Information.  Deliver to the Administrative Agent and each Lender, in form and detail satisfactory to the Administrative Agent and the Required Lenders:

 

(a)                                 (i) on or before the 20th of each month from and after the date hereof, prepared as of the close of business as of the previous fiscal month and (ii) during a Reporting Trigger Period, on or before the third Business Day of each week, as of the prior week-end, Borrower Agent shall deliver to Administrative Agent, in form acceptable to the Administrative Agent, a Borrowing Base Certificate, with such supporting materials as the Administrative Agent shall reasonably request (including (x) monthly reporting of gross inventory, inventory ineligibles and accounts receivable ineligibles and (y) during a Reporting Trigger Period or otherwise upon the Administrative Agent’s reasonable request, weekly reporting of rolling forward accounts receivable data by reporting weekly sales, cash collections and credits).  If the Administrative Agent shall request (in its reasonable discretion), during the continuance of an Event of Default, Borrower Agent shall execute and deliver to the Administrative Agent Borrowing Base Certificates more frequently than weekly.  All calculations of Availability in any Borrowing Base Certificate shall originally be made by Borrowers and certified by a Responsible Officer; provided, that the Administrative Agent may from time to time review and adjust any such calculation (a) to reflect its reasonable estimate of declines in value of any Collateral, due to collections received in the Concentration Account or otherwise; (b) to adjust advance rates to reflect changes in dilution, quality, mix and other factors affecting Collateral; and (c) to the extent the calculation is not made in accordance with this Agreement or does not accurately reflect the Availability Reserve;

 

(b)                                 on or before the 20th day of each calendar month from and after the date hereof, Borrower Agent shall deliver to the Administrative Agent, in form reasonably acceptable to the Administrative Agent, (i) reconciliations of all Borrowers’ Accounts as shown on the month-end Borrowing Base Certificate for the immediately preceding month to Borrowers’ accounts receivable agings, to Borrowers’ general ledger and to Borrowers’ most recent financial statements, (ii) a detailed aged trial balance of all

 

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Accounts as of the end of the preceding fiscal month, specifying each Account’s Account Debtor name and address, amount, invoice date and due date and such other information as the Administrative Agent may reasonably request (including, upon the Administrative Agent’s reasonable request, information or materials showing any discount, allowance, credit, authorized return or dispute, proof of delivery, copies of invoices and invoice registers, and copies of related documents, repayment histories and/or status reports), (iii) accounts payable agings, (iv) accounts receivable agings, (v) reconciliations of Borrowers’ Inventory as shown on Borrowers’ perpetual inventory, to Borrowers’ general ledger and to Borrowers’ financial statements and (vi) Inventory status reports, all with supporting materials as the Administrative Agent shall reasonably request;

 

(c)                                  a Compliance Certificate executed by the principal financial officer of Borrower Agent which certifies compliance with Section 8.12 and provides a reasonably detailed calculation of the Consolidated Fixed Charge Coverage Ratio delivered (i) concurrently with delivery of financial statements under Sections 7.01(a) and 7.01(b) above, whether or not a Fixed Charge Trigger Period then exists, (ii) on the first day of any Fixed Charge Trigger Period (certifying compliance as of the last day of the Measurement Period most recently ended prior to the start of such Fixed Charge Trigger Period) and (iii) as requested by Administrative Agent while a Default or Event of Default exists;

 

(d)                                 promptly after the same are available, copies of each annual report, proxy or financial statement sent to the stockholders of the Company, and copies of all annual, regular, periodic and special reports and registration statements which the Company may file or be required to file with the SEC under Section 13 or 15(d) of the Exchange Act, and not otherwise required to be delivered to the Administrative Agent pursuant hereto;

 

(e)                                  at the Administrative Agent’s reasonable request (but not more frequently than monthly unless an Event of Default has occurred and is continuing), a listing of each Borrower’s trade payables, specifying the trade creditor and balance due, and a detailed trade payable aging, all in form and scope satisfactory to the Administrative Agent;

 

(f)                                   when and as delivered to the Senior Notes Agent, any material reports, appraisals or other materials required to be delivered to the Senior Notes Agent under the terms of the Senior Notes Agreement; and

 

(g)                                  promptly, such additional information regarding the business, financial or corporate affairs of any Loan Party or any Subsidiary, or compliance with the terms of the Loan Documents, as the Administrative Agent or any Lender may from time to time reasonably request, all in form and scope reasonably acceptable to the Administrative Agent.

 

The Borrower Agent shall ensure that the Administrative Agent receives automatically generated electronic mail from the Borrower Agent’s website providing notice of the filing of any financial statement or other information required to be furnished pursuant to Section 7.01(a) or 7.01(b) or Section 7.02(c), and the Administrative Agent shall then give notice of any such filing to the Lenders. Such filings shall be deemed to have been furnished on the date on which the Administrative Agent receives notice that the Borrower Agent has filed such financial statement or information with the U.S. Securities and Exchange Commission and it is available on the Borrower Agent’s website or the EDGAR website on the Internet at www.sec.gov or any successor government website that is freely and readily available to the Administrative Agent and the Lenders without charge. Notwithstanding the foregoing, the Borrower Agent shall deliver paper copies of any such financial statement or information to the Administrative Agent if the Administrative Agent reasonably requests the Borrower Agent to furnish such paper copies until written notice to cease delivering such paper copies is given by the Administrative Agent.

 

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Each Loan Party hereby acknowledges that (a) the Administrative Agent will make available to the Lenders and the Letter of Credit Issuer materials and/or information provided by or on behalf of the Borrowers hereunder (collectively, “Borrower Materials”) by posting the Borrower Materials on SyndTrak or another similar electronic system (the “Platform”) and (b) certain of the Lenders (each, a “Public Lender”) may have personnel who do not wish to receive material non-public information with respect to the Loan Parties or their Affiliates, or the respective securities of any of the foregoing, and who may be engaged in investment and other market-related activities with respect to such Persons’ securities.  Each Loan Party hereby agrees that, so long as any Borrower is the issuer of any outstanding debt or equity securities that are registered or issued pursuant to a private offering or is actively contemplating issuing any such securities, (w) all Borrower Materials that are to be made available to Public Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof; (x) by marking Borrower Materials “PUBLIC”, each Loan Party shall be deemed to have authorized the Administrative Agent, the Letter of Credit Issuer and the Lenders to treat such Borrower Materials as not containing any material non-public information with respect to any Loan Party or its securities for purposes of United States federal and state securities laws (provided, however, that to the extent such Borrower Materials constitute Information, they shall be treated as set forth in Section 11.07); (y) all Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated “Public Investor”; and (z) the Administrative Agent shall be entitled to treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Investor”.  Notwithstanding the foregoing, the Borrowers shall be under no obligation to mark any Borrower Materials “PUBLIC.”

 

7.03                        Notices.  Promptly notify the Administrative Agent and each Lender:

 

(a)                                 of the occurrence of any Default or Event of Default;

 

(b)                                 of any matter that has resulted or would reasonably be expected to result in a Material Adverse Effect, including (i) breach or non-performance of, or any default under, a Contractual Obligation of any Loan Party or any Subsidiary; (ii) any dispute, litigation, investigation, proceeding or suspension between any Loan Party or any Subsidiary and any Governmental Authority; (iii) the commencement of, or any material development in, any litigation or proceeding affecting any Loan Party or any Subsidiary, including pursuant to any applicable Environmental Laws; violation or asserted violation of any applicable Law;

 

(c)                                  of the occurrence of any ERISA Event;

 

(d)                                 of the occurrence of a Change of Control;

 

(e)                                  the creation or acquisition of any Subsidiary;

 

(f)                                   of any material change in accounting policies or financial reporting practices by any Loan Party or any Subsidiary;

 

(g)                                  of any collective bargaining agreement or other labor contract to which a Loan Party becomes a party, or the application for the certification of a collective bargaining agent, in each case that would reasonably be expected to result in a Material Adverse Effect;

 

(h)                                 of the filing of any Lien for unpaid Taxes against any Loan Party in excess of $1,000,000;

 

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(i)                                     of any casualty or other insured damage to any portion of the Collateral with an aggregate fair market value equal to or greater than $1,000,000 or the commencement of any action or proceeding for the taking of any interest in any portion of the Collateral with an aggregate fair market value equal to or greater than $1,000,000 under power of eminent domain or by condemnation or similar proceeding or if any portion of the Collateral with an aggregate fair market value equal to or greater than $1,000,000 is damaged or destroyed; and

 

(j)                                    of any failure by any Loan Party to pay rent at any of such Loan Party’s locations if such failure continues for more than fifteen (15) days following the day on which such rent first came due and such failure would reasonably be expected to result in a Material Adverse Effect.

 

Each notice pursuant to this Section 7.03 shall be accompanied by a statement of a Responsible Officer of the Borrower Agent setting forth details of the occurrence referred to therein and stating what action the Borrowers have taken and proposes to take with respect thereto.  Each notice pursuant to Section 7.03(a) shall describe with particularity any and all provisions of this Agreement and any other Loan Document that have been breached.

 

7.04                        Payment of Obligations.  Pay and discharge as the same shall become due and payable:  (a) all material Taxes, assessments and governmental charges or levies upon it or its properties or assets, unless the same are being Properly Contested; (b) all lawful claims which, if unpaid, would by law become a Lien upon its property, except to the extent that any such Lien would otherwise be permitted by Section 8.02; (c) all Indebtedness having an aggregate principal amount (including undrawn committed or available amounts and including amounts owing to all creditors under any combined or syndicated credit arrangement) of more than $250,000, as and when due and payable, but subject to any subordination provisions contained in any instrument or agreement evidencing such Indebtedness; and (d) any other material obligation or liability unless the non-payment thereof is permitted by the foregoing clauses (a)-(c).

 

7.05                        Preservation of Existence, Etc.  (a) Preserve, renew and maintain in full force and effect its legal existence and good standing under the Laws of the jurisdiction of its organization or formation except in a transaction permitted by Section 8.04 or 8.05; (b) take all reasonable action to maintain all rights, privileges, permits, licenses and franchises necessary or desirable in the normal conduct of its business, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect; and (c) preserve or renew all of its registered Intellectual Property, the non-preservation of which could reasonably be expected to have a Material Adverse Effect.

 

7.06                        Maintenance of Properties.  (a) Maintain, preserve and protect all of its properties (other than properties immaterial to the Loan Parties) and equipment necessary in the operation of its business in good working order and condition, ordinary wear and tear excepted except where the failure to do so could not reasonably be expected to have a Material Adverse Effect; (b) make all necessary repairs thereto and renewals and replacements thereof except where the failure to do so could not reasonably be expected to have a Material Adverse Effect; and (c) use the standard of care typical in the industry in the operation and maintenance of its facilities.

 

7.07                        Maintenance of Insurance; Condemnation Proceeds.

 

(a)                                 Maintain with financially sound and reputable insurance companies and not Affiliates of the Loan Parties, insurance with respect to its properties and business against loss or damage of the kinds customarily insured against by Persons engaged in the same or similar business and operating in the same or similar locations or as is required by applicable Law, of such types and in such amounts as are customarily carried under similar circumstances by such other Persons and as are reasonably acceptable to

 

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the Administrative Agent (it being hereby acknowledged by the Administrative Agent that the insurance coverages in effect for the Loan Parties on the Closing Date are acceptable to the Administrative Agent).

 

(b)                                 Maintain flood insurance with respect to any Mortgaged Property located in any area identified by FEMA (or any successor agency) as a Special Flood Zone with such providers, on such terms and in such amounts as required pursuant to the Flood Disaster Protection Act and the National Flood Insurance Act of 1968, and all applicable rules and regulations promulgated thereunder, or as otherwise required by the Lenders.

 

(c)                                  Cause all casualty policies, including fire and extended coverage policies, maintained with respect to any Collateral to be endorsed or otherwise amended to include lenders’ loss payable clause (regarding personal property), in form and substance reasonably satisfactory to the Administrative Agent.

 

(d)                                 Cause commercial general liability policies to be endorsed to name the Administrative Agent as an additional insured; and cause business interruption policies to name the Administrative Agent as a loss payee.

 

(e)                                  Cause each such policy referred to in this Section 7.07 to also provide that it shall not be canceled, modified or not renewed (i) by reason of nonpayment of premium except upon not less than ten (10) days’ prior written notice thereof by the insurer to the Administrative Agent (giving the Administrative Agent the right to cure defaults in the payment of premiums) or (ii) for any other reason except upon not less than thirty (30) days’ prior written notice thereof by the insurer to the Administrative Agent.

 

(f)                                   Deliver to the Administrative Agent, substantially concurrently with the cancellation, modification or non-renewal of any such policy of insurance, a copy of a renewal or replacement policy or insurance certificate (or other evidence of renewal of a policy previously delivered to the Administrative Agent, including an insurance binder) together with evidence reasonably satisfactory to the Administrative Agent of payment of the premium therefor.

 

(g)                                  Permit any representatives that are designated by the Administrative Agent to inspect and/or examine the insurance policies maintained by or on behalf of the Loan Parties and to inspect and/or examine books and records related thereto. The Loan Parties shall pay the reasonable fees and expenses of any representatives retained by the Administrative Agent to conduct up to one such inspection and/or examination during any twelve (12) month period if no Event of Default has occurred and is continuing; provided, however, that if an insurance inspection and/or examination is initiated during an Event of Default, all fees and expenses therefor shall be paid by the Loan Parties without regard to such limits.

 

(h)                                 None of the Secured Parties, or their agents or employees shall be liable for any loss or damage insured by the insurance policies required to be maintained under this Section 7.07.  Each Loan Party shall look solely to its insurance companies or any other parties other than the Secured Parties for the recovery of such loss or damage and such insurance companies shall have no rights of subrogation against any Secured Party or its agents or employees.  If, however, the insurance policies do not provide waiver of subrogation rights against such parties, as required above, then the Loan Parties hereby agree, to the extent permitted by law, to waive their right of recovery, if any, against the Secured Parties and their agents and employees.  The designation of any form, type or amount of insurance coverage by any Secured Party under this Section 7.07 shall in no event be deemed a representation, warranty or advice by such Secured Party that such insurance is adequate for the purposes of the business of the Loan Parties or the protection of their properties.

 

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7.08                        Compliance with Laws.  Comply in all material respects with the requirements of all Laws (including without limitation all applicable Environmental Laws) and all orders, writs, injunctions and decrees applicable to it or to its business or property, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being Properly Contested; or (b) the failure to comply therewith would not reasonably be expected to have a Material Adverse Effect.

 

7.09                        Books and Records.  (a)  Maintain proper books of record and account, in which full, true and correct entries in conformity with GAAP consistently applied shall be made of all financial transactions and matters involving the assets and business of the Loan Parties or such Subsidiary, as the case may be; and (b) maintain such books of record and account in material conformity with all applicable requirements of any Governmental Authority having regulatory jurisdiction over any Loan Party or such Subsidiary, as the case may be.

 

7.10                        Inspection Rights and Appraisals; Meetings with the Administrative Agent.

 

(a)                                 Permit the Administrative Agent or its designees or representatives from time to time, subject to reasonable notice and normal business hours (except, in each case, when a Default or Event of Default exists), to conduct Field Exams and/or appraisals of Inventory and to examine its corporate, financial and operating records, and make copies thereof or abstracts therefrom, and to discuss its affairs, finances and accounts with its directors, officers and Auditors; provided that representatives of the Borrower Agent shall be given the opportunity to participate in any discussions with the Auditors.  The Administrative Agent shall not have any duty to any Loan Party to share any results of any Field Exam with any Loan Party.  Appraisals may be shared with the Borrower Agent upon request.  The Loan Parties acknowledge that all Field Exams, appraisals and reports are prepared by or for the Administrative Agent and Lenders for their purposes, and Loan Parties shall not be entitled to rely upon them.

 

(b)                                 Reimburse the Administrative Agent for all reasonable and documented out-of-pocket charges, costs and expenses of the Administrative Agent in connection with (i) up to one Field Exam, one full Inventory appraisal and, if requested at the Administrative Agent’s discretion, one desktop Inventory appraisal, in each case during any twelve (12) month period during which no Reporting Trigger Period has arisen and (ii) up to one additional full Inventory appraisal, one additional desktop Inventory appraisal and one additional Field Exam in any twelve (12) month period during which a Reporting Trigger Period has arisen, in each case which appraisals and Field Exams shall be conducted by a Person acceptable to the Administrative Agent; provided, however, that if a Field Exam or appraisal is initiated during a Default or Event of Default, all charges, costs and expenses therefor shall be reimbursed by the Loan Parties without regard to such limits; provided, further, that, at any time and from time to time, without limiting the obligations of any Loan Party or Subsidiary under this Section 7.10(b), the Administrative Agent may elect, in its sole discretion, to use a desktop Inventory appraisal in lieu of any full Inventory appraisal.

 

(c)                                  Without limiting the foregoing, participate and will cause their key management personnel to participate in meetings with the Administrative Agent and Lenders periodically during each year, which meetings shall be held at such times and such places as may be reasonably requested by the Administrative Agent.

 

7.11                        Use of Proceeds.  Use the proceeds of the Credit Extensions (i) to refinance certain Indebtedness under the Existing Agreement, (ii) to pay fees and expenses in connection with the Transactions and (iii) for working capital, capital expenditures, and other general corporate purposes not in contravention of any Law or of any Loan Document.  None of the proceeds of the Credit Extensions will be used, directly or indirectly, to finance or refinance dealings or transactions (x) by or with any Blocked Person or otherwise in violation of Sanctions or (y) that would violate Anti-Corruption Laws.

 

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7.12                        New Subsidiaries.  As soon as practicable but in any event within 30 Business Days (or such longer period as may be agreed by the Administrative Agent) following the acquisition or creation of any Domestic Subsidiary (other than an Excluded Domestic Subsidiary), or the time any existing Domestic Subsidiary ceases to be an Excluded Domestic Subsidiary, cause to be delivered to the Administrative Agent each of the following, as applicable:

 

(a)                                 a joinder agreement acceptable to the Administrative Agent duly executed by such Domestic Subsidiary sufficient to cause such Subsidiary to become a Guarantor (or, with the consent of the Administrative Agent if such Subsidiary is to own any assets of the type included in the Borrowing Base, a Borrower hereunder), together with executed counterparts of each other Loan Document reasonably requested by the Administrative Agent, including all Security Instruments and other documents reasonably requested to establish and preserve the Lien of the Administrative Agent in all Collateral of such Domestic Subsidiary;

 

(b)                                 (i) Uniform Commercial Code financing statements naming such Person as “Debtor” and naming the Administrative Agent for the benefit of the Secured Parties as “Secured Party,” in form, substance and number sufficient in the reasonable opinion of the Administrative Agent and its special counsel to be filed in all Uniform Commercial Code filing offices and in all jurisdictions in which filing is necessary to perfect in favor of the Administrative Agent for the benefit of the Secured Parties the Lien on the Collateral conferred under such Security Instrument to the extent such Lien may be perfected by Uniform Commercial Code filing, and (ii) pledge agreements, control agreements, Documents and original collateral (including pledged Equity Interests (other than Excluded Equity Interests), Securities and Instruments) and such other documents and agreements as may be reasonably required by the Administrative Agent, all as necessary to establish and maintain a valid, perfected security interest in all Collateral in which such Domestic Subsidiary has an interest consistent with the terms of the Loan Documents, in each case, subject to the Intercreditor Agreement;

 

(c)                                  upon the request of the Administrative Agent, an opinion of counsel to each such Domestic Subsidiary and addressed to the Administrative Agent and the Lenders, in form and substance reasonably acceptable to the Administrative Agent, each of which opinions may be in form and substance, including assumptions and qualifications contained therein, substantially similar to those opinions of counsel delivered pursuant to Section 5.01(a);

 

(d)                                 current copies of the Organization Documents of each such Domestic Subsidiary, together with minutes of duly called and conducted meetings (or duly effected consent actions) of the Board of Directors, partners, or appropriate committees thereof (and, if required by such Organization Documents or applicable law, of the shareholders, members or partners) of such Person authorizing the actions and the execution and delivery of documents described in this Section 7.12, all certified by the applicable Governmental Authority or appropriate officer as the Administrative Agent may elect; and

 

(e)                                  with respect to any Subsidiary to become a Borrower hereunder, within three (3) Business Days prior to becoming a Borrower, all “know-your-customer” and customer due diligence documentation satisfactory to the Lenders to the extent such information is requested by the Administrative Agent or the Lenders reasonably promptly after written notice to the Administrative Agent of the proposed joinder of a Borrower.

 

7.13                        Compliance with ERISA.  Do, and cause each of its ERISA Affiliates to do, each of the following: (a) maintain each Plan in compliance in all material respects with the applicable provisions of ERISA, the Code and other applicable Laws; (b) cause each Plan which is qualified under Section 401(a) of the Code to maintain such qualification; and (c) make all required contributions to any Plan subject to the Pension Funding Rules.  The Loan Parties and each of their respective Subsidiaries shall not

 

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withdraw, and shall cause each ERISA Affiliate not to withdraw, in whole or in part, from any Multiemployer Plan so as to give rise to withdrawal liability resulting in payments by any Loan Party exceeding the Threshold Amount.  At no time shall the actuarial present value of unfunded liabilities for post-employment health care benefits, whether or not provided under a Plan, calculated in a manner consistent with Statement No. 106 of the Financial Accounting Standards Board, exceed the Threshold Amount.

 

7.14                        Further Assurances.  At the Borrowers’ cost and expense, upon request of the Administrative Agent, duly execute and deliver or cause to be duly executed and delivered, to the Administrative Agent such further information, instruments, documents, certificates, financing and continuation statements, and do and cause to be done such further acts that may be reasonably necessary or advisable in the reasonable opinion of the Administrative Agent to carry out more effectively the provisions and purposes of this Agreement, the Security Instruments and the other Loan Document, including, to create, continue or preserve the liens and security interests in Collateral (and the perfection and priority thereof) of the Administrative Agent contemplated hereby and by the other Loan Documents and specifically including all Collateral acquired by the Borrowers after the Closing Date.

 

7.15                        Reserved.

 

7.16                        Environmental Laws.  (a) Conduct its operations and keep and maintain its Real Property in material compliance with all Environmental Laws, other than any such non-compliance which would not reasonably be expected to result, individually or in the aggregate, in a Material Adverse Effect; (b) obtain and renew all environmental permits necessary for its operations and properties, other than any environmental permits the failure of which to obtain would not reasonably be expected to result, individually or in the aggregate, in a Material Adverse Effect; and (c) implement any and all investigation, remediation, removal and response actions that are required to comply with Environmental Laws pertaining to the presence, generation, treatment, storage, use, disposal, transportation or release of any Hazardous Materials on, at, in, under or about any of its Real Property other than any such non-compliance which would not reasonably be expected to result, individually or in the aggregate, in a Material Adverse Effect.

 

7.17                        Leases, Mortgages and Third-Party Agreements.

 

(a)                                 Upon request, provide Administrative Agent with copies of all existing and future agreements (including any mortgage, deed of trust or similar security document) entered into between a Loan Party and any landlord, warehouseman, processor, shipper, bailee or other Person that owns, or has a mortgage or similar lien on, any premises at which any Collateral with an aggregate value of $1,000,000 or greater may be kept or that otherwise may possess any Collateral with an aggregate value of $1,000,000 or greater (each a “Material Third-Party Agreement”).

 

(b)                                 Except as otherwise expressly permitted hereunder, (i) make all payments and otherwise perform all obligations in respect of all leases and all mortgages, deeds of trust or similar security documents constituting Material Third Party Agreements and not allow such leases, mortgages, deeds of trust or similar security documents to lapse or be terminated (or any rights to renew such leases, mortgages, deeds of trust or similar security documents to be forfeited or cancelled), (ii) notify the Administrative Agent of any default by the applicable Loan Party or Subsidiary with respect to such leases or mortgages, deeds of trust or similar security documents and (iii) promptly cure any such default by the applicable Loan Party or Subsidiary. If any such default is not so cured, each Loan Party hereby authorizes the Administrative Agent (as its non-fiduciary agent and on its behalf) to, if elected by the Administrative Agent in its sole discretion, make such payments and/or take such other actions as the Administrative Agent may elect in order to cure any such default (whether or not an Event of Default

 

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under this Agreement exists at such time).  Any payment made pursuant to this Section 7.17(b) shall be deemed a Protective Advance hereunder.  Each Loan Party agrees that the Administrative Agent shall have no obligation to exercise any right to cure hereunder, whether or not such right is exercised on any one or more occasions.

 

7.18                        Material Contracts.  Perform and observe all the payment terms and other material terms and provisions of each Material Contract to be performed or observed by it, maintain each such Material Contract in full force and effect, enforce each such Material Contract in accordance with its terms, take all such action to such end as may be from time to time reasonably requested by the Administrative Agent and, upon reasonable request of the Administrative Agent, make to each other party to each such Material Contract such demands and requests for information and reports or for action as any Loan Party or any of its Subsidiaries is entitled to make under such Material Contract, and cause each of its Subsidiaries to do so, except, in any case, where the failure to do any of the foregoing, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

 

7.19                        Treasury Management Services.  Commencing with the date which is ninety (90) days after the Closing Date (or such longer period as may be agreed by the Administrative Agent), each Borrower shall maintain its lockbox deposit accounts exclusively with BMO Harris and shall utilize BMO Harris for its primary disbursement account and other Treasury Management and Other Services, provided that BMO Harris agrees to provide such disbursing bank services and other Treasury Management and Other Services on reasonably competitive pricing terms.

 

7.20                        Enhancements to Senior Notes Indebtedness.  If Senior Notes Agent or any holder of Senior Notes receives any additional guaranty or other credit enhancement after the Closing Date from any Loan Party, Borrowers shall cause the same to be granted to Administrative Agent for the benefit of the Secured Parties, subject to the terms of the Intercreditor Agreement.

 

ARTICLE VIII
 NEGATIVE COVENANTS

 

So long as any Lender shall have any Commitment hereunder or any Loan Obligation hereunder shall remain unpaid or unsatisfied, no Loan Party shall, nor shall it permit any Subsidiary to, directly or indirectly:

 

8.01                        Indebtedness.  Create, incur, assume or suffer to exist any Indebtedness or issue any Disqualified Equity Interest, except:

 

(a)                                 Indebtedness under the Loan Documents;

 

(b)                                 Indebtedness outstanding on the date hereof and listed on Schedule 8.01;

 

(c)                                  Guarantees of any Loan Party in respect of Indebtedness otherwise permitted hereunder of any other Loan Party; provided that any Guarantee of Indebtedness permitted hereunder that is subordinated to the Obligations shall be subordinated to the Obligations on substantially the same terms as such guaranteed Indebtedness;

 

(d)                                 obligations (contingent or otherwise) existing or arising under any Swap Contract, provided that (i) such obligations are (or were) entered into by such Person in the Ordinary Course of Business for the purpose of directly mitigating risks reasonably anticipated by such Person associated with liabilities, commitments, investments, assets, cash flows of or property held by, or changes in the value of securities issued by, such Person, and not for purposes of speculation or taking a “market view”

 

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and (ii) such Swap Contract does not contain any provision exonerating the non-defaulting party from its obligation to make payments on outstanding transactions to the defaulting party;

 

(e)                                  Indebtedness arising in the Ordinary Course of Business in connection with treasury management and commercial credit card, merchant card and purchase or procurement card services including Treasury Management and Other Services;

 

(f)                                   Indebtedness in respect of Capital Leases, Synthetic Lease Obligations and purchase money obligations for Real Property and fixed or capital assets within the limitations set forth in Section 8.02(i); provided, however, that the aggregate amount of all such Indebtedness at any one time outstanding, together with the Swap Termination Value of all Swap Contracts permitted under Section 8.01(d) above, shall not exceed $5,000,000;

 

(g)                                  Assumed Indebtedness in an aggregate principal amount not to exceed $3,000,000 at any time outstanding;

 

(h)                                 Indebtedness incurred to finance or as part of the consideration for any Permitted Acquisition; provided, that, (i) no Event of Default exists at the time of or would be caused by the incurrence of such Indebtedness and (ii) such Indebtedness (A) is unsecured, (B) bears interest (and provided for fees) at a rate (or amount) no greater than the then current arm’s length market rate (or amount) for similar Indebtedness, (C) does not require the payment in cash of principal (other than in respect of working capital adjustments) prior to ninety-one (91) days following the Maturity Date, (D) has a maturity at least 91 days after the Maturity Date, and (E) is subordinated to the Obligations on terms reasonably acceptable to the Administrative Agent;

 

(i)                                     [Reserved];

 

(j)                                    the endorsement of negotiable instruments for deposit or collection or similar transactions in the Ordinary Course of Business;

 

(k)                                 Indebtedness in respect of any bankers’ acceptance, bank guarantees, letters of credit, warehouse receipt or similar facilities entered into in the ordinary course of business in respect of workers’ compensation and other casualty claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers’ compensation and other casualty claims);

 

(l)                                     Indebtedness incurred or arising in the Ordinary Course of Business and not in connection with the borrowing of money in respect of (i) obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms; (ii) performance bonds, bid bonds, appeal bonds, surety bonds, performance and completion guarantees and similar instruments or obligations; and (iii) obligations to pay insurance premiums;

 

(m)                             Indebtedness representing deferred compensation to employees, consultants or independent contractors incurred in the ordinary course of business;

 

(n)                                 surety bonds, deposits and similar obligations permitted under Section 8.02(e) or (f);

 

(o)                                 unsecured Indebtedness of (A) any Loan Party owing to any other Loan Party or any Subsidiary that is not a Loan Party (so long as such Indebtedness owing to a Subsidiary that is not a Loan Party (x) bears interest (and provided for fees) at a rate (or amount) no greater than the then current arm’s

 

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length market rate (or amount) for similar Indebtedness, (y) does not require the payment in cash of principal (at maturity or otherwise) prior to ninety-one (91) days following the Maturity Date and (z) is subordinated to the Obligations on terms reasonably acceptable to the Administrative Agent), (B) any Subsidiary that is not a Loan Party owing to any other Subsidiary that is not a Loan Party and (C) any Subsidiary that is not a Loan Party owing to any Loan Party; provided that any such Indebtedness described in this clause which is owing to a Loan Party, shall (1) to the extent the principal amount thereof is in excess of $50,000, be evidenced by promissory notes in form and substance satisfactory to the Administrative Agent and pledged to the Administrative Agent on terms acceptable to it, (2) be permitted under Section 8.03(c)(iv) or (h), and (3) not be forgiven or otherwise discharged for any consideration other than payment in full in cash unless the Administrative Agent otherwise consents;

 

(p)                                 Indebtedness under the Senior Notes Documents in an aggregate principal amount outstanding at any time not to exceed the Noteholder Maximum Amount (as defined in the Intercreditor Agreement), and Subordinated Debt;

 

(q)                                 other unsecured Indebtedness (i) that bears interest (and provided for fees) at a rate (or amount) no greater than the then current arm’s length market rate (or amount) for similar Indebtedness, (ii) has a stated maturity date no earlier than 91 days following the Maturity Date, (iii) as to which at the time of incurrence thereof no Default or Event of Default has occurred and is continuing or would result therefrom, (iv) the aggregate outstanding principal amount of which does not exceed $500,000 at any time, and (v) with respect to which at least ten (10) Business Days prior to each such incurrence, the Borrower Agent has delivered a certificate to the Administrative Agent demonstrating compliance with each of clauses (i) through (iv) above; and

 

(r)                                    Refinancing Indebtedness.

 

8.02                        Liens.  Create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, other than the following (“Permitted Liens”):

 

(a)                                 Liens in favor of the Administrative Agent pursuant to any Loan Document;

 

(b)                                 Liens existing on the date hereof as described on Schedule 8.02 (setting forth, as of the Closing Date, the lienholder thereof, the principal amount of the obligations secured thereby and the property or assets of such Loan Party or such Subsidiary subject thereto) and any renewals or extensions thereof, provided that (i) the Lien does not extend to any additional property, and (ii) the obligations secured or benefited thereby constitutes Refinancing Indebtedness;

 

(c)                                  Liens for Taxes, assessments or other governmental charges, not yet due or which are being Properly Contested, and which in all cases are junior to the Lien of the Administrative Agent;

 

(d)                                 Liens of carriers, warehousemen, mechanics, materialmen, repairmen, landlords or other like Liens imposed by Law or arising in the Ordinary Course of Business which are not overdue for a period of more than 30 days or which are being Properly Contested;

 

(e)                                  Liens, pledges or deposits in the Ordinary Course of Business in connection with (i) insurance, workers compensation, unemployment insurance and social security legislation, (ii) contracts, bids, government contracts, and surety, appeal, customs, performance and return-of-money bonds and (iii) other similar obligations (exclusive of obligations in respect of the payment for borrowed money), whether pursuant to contracts, statutory requirements, common law or consensual arrangements, other than any Lien imposed by ERISA;

 

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(f)                                   Liens arising in the Ordinary Course of Business consisting of deposits to secure the performance of bids, trade contracts and leases (other than Indebtedness), statutory obligations, surety bonds (other than bonds related to judgments or litigation), performance bonds and other obligations of a like nature, in each case, incurred in the Ordinary Course of Business;

 

(g)                                  Liens with respect to minor imperfections of title and easements, rights-of-way, covenants, consents, reservations, encroachments, variations and zoning and other similar restrictions, charges, encumbrances or title defects affecting Real Property which, in the aggregate, are not substantial in amount, and which do not in any case materially detract from the value of the property subject thereto or materially interfere with the ordinary conduct of the business of the applicable Person and do not materially detract from the value of or materially impair the use by the Loan Parties in the Ordinary Course of Business of the property subject to or to be subject to such encumbrance;

 

(h)                                 Liens securing judgments for the payment of money not constituting an Event of Default under Section 9.01 or securing appeal or other surety bonds related to such judgments, and which in all cases are junior to the Lien of the Administrative Agent;

 

(i)                                     Liens securing Indebtedness permitted under Section 8.01(f); provided that (i) such Liens do not at any time encumber any property other than the property financed by such Indebtedness and (ii) the Indebtedness secured thereby does not exceed the cost or Fair Market Value, whichever is lower, of the property being acquired on the date of acquisition;

 

(j)                                    Liens securing Assumed Indebtedness of the Loan Parties or any Subsidiary permitted pursuant to Section 8.01(g); provided that (i) such Liens do not at any time encumber any property other than property of the Subsidiary acquired, or the property acquired, and proceeds thereof in connection with such Assumed Indebtedness and shall not attach to any assets of the Loan Parties theretofore existing or (except for any such proceeds) which arise after the date thereof and (ii) the Assumed Indebtedness and other secured Indebtedness of the Loan Parties secured by any such Lien does not exceed the Fair Market Value of the property being acquired in connection with such Assumed Indebtedness;

 

(k)                                 Liens on assets of Foreign Subsidiaries of the Company securing Indebtedness of such Foreign Subsidiaries permitted pursuant to Section 8.01(i);

 

(l)                                     operating leases or subleases granted by the Loan Parties to any other Person in the Ordinary Course of Business;

 

(m)                             Liens (a) of a collection bank arising under Section 4-210 of the UCC or any comparable or successor provision on items in the course of collection, (b) attaching to commodity trading accounts or other commodity brokerage accounts incurred in the ordinary course of business and (c) in favor of banking institutions arising as a matter of law encumbering deposits (including the right of set-off) and which are within the general parameters customary in the banking industry;

 

(n)                                 Liens in favor of customs and revenue authorities imposed by Law to secure payment of customs duties in connection with the importation of goods and arising in the Ordinary Course of Business which are not overdue for a period of more than 30 days or which are being Properly Contested;

 

(o)                                 Liens in favor of the Senior Notes Agent in and on the assets and properties of the Loan Parties constituting Collateral to secure the Indebtedness permitted under Section 8.01(p), so long as those Liens are at all times subject to the terms of the Intercreditor Agreement; and

 

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(p)                                 any Lien arising from the Company’s provision of cash collateral, in an amount not to exceed $550,000 at any time, securing a letter of credit in the face amount of $500,000 issued by U.S. Bank National Association to the landlord under a real estate lease of the Company.

 

8.03                        Investments.  Make or maintain any Investments, except (subject, in each case, to the proviso immediately following Section 8.03(h)):

 

(a)                                 Investments held by the Loan Parties in the form of Cash Equivalents or other Investment Property that are held in a securities account or deposit account subject to a Control Agreement in favor of the Administrative Agent, pursuant to documentation in form and substance satisfactory to the Administrative Agent;

 

(b)                                 loans and advances to officers, directors and employees of the Company and its Subsidiaries made in the Ordinary Course of Business and approved by the board of directors of the Company, in an aggregate amount at any one time outstanding not to exceed $2,500,000 (or its equivalent in other currencies);

 

(c)                                  Investments in Loan Parties;

 

(d)                                 Investments consisting of extensions of credit in the nature of Accounts or notes receivable arising from the grant of trade credit in the Ordinary Course of Business, and Investments received in satisfaction or partial satisfaction thereof from financially troubled Account Debtors to the extent reasonably necessary in order to prevent or limit loss;

 

(e)                                  Guarantees permitted by Section 8.01;

 

(f)                                   Investments existing as of the date hereof as described in Schedule 8.03 (setting forth, as of the Closing Date, the amount, obligor or issuer and maturity, if any, thereof) and extensions or renewals thereof, provided that no such extension or renewal shall be permitted if it would (i) increase the amount of such Investment at the time of such extension or renewal or (ii) result in a Default hereunder; and

 

(g)                                  Investments constituting a Permitted Acquisition so long as (after giving effect to such Acquisition on a Pro Forma Basis and the costs related thereto (including cash and other property (other than Equity Interests or options to acquire Equity Interests of any Loan Party) given as consideration, any Indebtedness incurred, assumed or acquired by any Loan Party or any Subsidiary in connection with such Acquisition, all additional purchase price amounts in the form of earnouts and other Contingent Obligations), and all fees, expenses and transaction costs incurred in connection therewith) the Payment Conditions are satisfied with respect thereto;

 

provided, however, that, notwithstanding anything herein to the contrary, no Loan Party shall, nor shall it permit any Subsidiary to, directly or indirectly, acquire any Equity Interests of any Person that will not, after giving effect to such acquisition, constitute a Subsidiary.

 

8.04                        Fundamental Changes.  Merge, dissolve, liquidate, consolidate with or into another Person, except that, so long as no Default exists or would result therefrom:

 

(a)                                 any Subsidiary of the Company may merge or consolidate with or liquidate or dissolve into a Loan Party; provided, that, (i) the Loan Party shall be the continuing or surviving Person and (ii) in the case of any merger of a Borrower and a Subsidiary Guarantor, such Borrower shall be the continuing or surviving Person;

 

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(b)           in connection with a Permitted Acquisition, any Subsidiary of a Loan Party may merge with or into or consolidate with any other Person or permit any other Person to merge with or into or consolidate with it; provided, that, (i) the Person surviving such merger shall be a wholly-owned Subsidiary of a Loan Party and (ii) in the case of any such merger to which any Loan Party is a party, such Loan Party is the surviving Person; and

 

(c)           any Subsidiary that is not a Loan Party may merge into any other Subsidiary that is not a Loan Party; provided that, when any wholly-owned Subsidiary is merging with another Subsidiary that is not wholly-owned, the wholly-owned Subsidiary shall be the continuing or surviving Person.

 

8.05        Dispositions.  Make any Disposition or enter into any agreement to make any Disposition, except:

 

(a)           Dispositions of Inventory and, so long as no Event of Default exists or is created thereby, Cash Equivalents, each in the Ordinary Course of Business;

 

(b)           Dispositions in the Ordinary Course of Business of Equipment or fixed assets (other than Specified Property) that are obsolete, worn out or no longer useful to the Core Business;

 

(c)           Dispositions that constitute (i) an Investments permitted under Section 8.03, (ii) a Lien permitted under Section 8.02, (iii) a merger, dissolution, consolidation or liquidation permitted under Section 8.04(a), or (iv) a Restricted Payment permitted under Section 8.06;

 

(d)           Dispositions that result from a casualty or condemnation in respect of such property or assets and is not otherwise an Event of Default so long as all proceeds thereof are applied in accordance with Section 2.06(c);

 

(e)           the licensing, on a non-exclusive basis, of patents, trademarks, copyrights, and other Intellectual Property rights in the Ordinary Course of Business,

 

(f)            (i) the lapse of immaterial registered patents, trademarks, copyrights and other Intellectual Property to the extent maintaining such registered Intellectual Property is not economically desirable in the conduct of its business or (ii) the abandonment of patents, trademarks, copyrights, or other intellectual property rights in the Ordinary Course of Business so long as in each case under clauses (i) and (ii), such lapse or abandonment is not materially adverse to the interests of the Secured Parties;

 

(g)           the leasing or subleasing of assets (other than sale and leaseback transactions prohibited under Section 8.15) in the Ordinary Course of Business;

 

(h)           Dispositions that consist of the sale or discount in the Ordinary Course of Business of overdue Accounts that are not Eligible Accounts in connection with the compromise or collection thereof, provided that the Net Cash Proceeds from such Disposition shall be deposited in a Controlled Deposit Account;

 

(i)            Dispositions among the Loan Parties or by any Subsidiary to a Loan Party;

 

(j)            Dispositions by any Subsidiary which is not a Loan Party to another Subsidiary that is not a Loan Party;

 

(k)           [Reserved];

 

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(l)            Dispositions of Noteholder Priority Collateral (as defined in the Intercreditor Agreement) (other than Equity Interests of Subsidiaries of the Company) so long as all Net Cash Proceeds of such Dispositions are (i) applied to permanently prepay the Senior Notes and/or (ii) reinvested in accordance with Section 2.06(d) in other assets that are useful in the business of the Loan Parties;

 

(m)          Dispositions of Specified Property, so long as all Net Cash Proceeds of such Dispositions are offered to be prepaid in accordance with the Senior Notes Documents or are actually applied to permanently prepay the Senior Notes; and

 

(n)           other Dispositions of assets, other than Collateral of a type included in the Borrowing Base, so long as (i) no Event of Default has occurred and is continuing at the time of such Disposition and (ii) the Fair Market Value of all such assets Disposed of, whether individually or in a series of related transactions, does not exceed $2,500,000 in the aggregate in any fiscal year.

 

8.06        Restricted Payments.  Declare or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except that, in each case (except Section 8.06(a)) so long as no Default or Event of Default shall have occurred and be continuing (both before or as a result of the making of such Restricted Payment):

 

(a)           each Subsidiary may make Restricted Payments, directly or indirectly, to any Borrower;

 

(b)           the Company and each Subsidiary may declare and make dividend payments or other distributions payable solely in the common stock or other common Equity Interests of such Person;

 

(c)           the Company and each of its Subsidiaries may purchase, redeem or otherwise acquire shares of its common stock or other common Equity Interests or warrants or options to acquire any such shares in connection with customary employee agreements or management agreements, plans or arrangements, all in an aggregate amount not to exceed $1,000,000 in any fiscal year;

 

(d)           the Company may make Restricted Payments in connection with the withholding of Equity Interests to cover withholding taxes due upon the vesting of equity compensation paid to employees, directors or consultants; and

 

(e)           the Company shall be permitted to make other Restricted Payments in the form of cash dividends, distributions, purchases, redemptions or other acquisitions of or with respect to shares of its common stock or other common Equity Interests if the Payment Conditions are satisfied with respect thereto.

 

8.07        Change in Nature of Business.  Engage in any material line of business substantially different from those lines of business conducted by the Borrowers and their Subsidiaries on the date hereof or any business substantially related or incidental thereto.

 

8.08        Transactions with Affiliates.  Enter into any transaction of any kind with any Affiliate of any Loan Party, whether or not in the Ordinary Course of Business, other than:

 

(a)           transactions on fair and reasonable terms substantially as favorable to such Loan Party or Subsidiary as would be obtainable by such Loan Party or such Subsidiary at the time in a comparable arm’s length transaction with a Person other than an Affiliate;

 

(b)           transactions between or among the Loan Parties;

 

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(c)           transactions constituting Investments permitted under Section 8.03(c)(iii) and other transactions expressly permitted by Sections 8.04, 8.05, 8.06 and 8.13; and

 

(d)           transactions pursuant to agreements in existence or contemplated on the Closing Date as set forth on Schedule 8.08 or any amendment thereto to the extent such an amendment is not adverse to the Secured Parties in any material respect.

 

8.09        Burdensome Agreements.  Enter into any Contractual Obligation (other than this Agreement, any other Loan Document or the Senior Notes Documents) that:

 

(a)           requires the grant of a Lien to secure an obligation of such Person if a Lien is granted to secure another obligation of such Person; or

 

(b)           limits the ability (i) of any Subsidiary to make Restricted Payments to the Company or any other Borrower or to otherwise transfer property to the Company or any other Borrower, (ii) of any Subsidiary to Guarantee the Indebtedness of the Borrowers or become a direct Borrower hereunder, or (iii) of any Borrower or any Subsidiary to create, incur, assume or suffer to exist Liens on property of such Person; provided, however, that this clause (iii) shall not prohibit any negative pledge incurred or provided in favor of any holder of Indebtedness permitted under Section 8.01(e) solely to the extent any such negative pledge relates to the property financed by or the subject of such Indebtedness.

 

8.10        Use of Proceeds.  Use the proceeds of any Credit Extension, whether directly or indirectly, and whether immediately, incidentally or ultimately, in any manner that might cause the Credit Extension or the application of such proceeds to violate Regulations T, U or X of the FRB, in each case as in effect on the date or dates of such Credit Extension and such use of proceeds.

 

8.11        Prepayment of Indebtedness; Amendment to Material Agreements.

 

(a)           Make or pay, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Indebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Indebtedness, except:

 

(i)            payments when due of regularly scheduled interest and principal payments and mandatory prepayments, other than (x) payments in respect of any Subordinated Debt prohibited by the Subordination Provisions thereof and (y) any regularly scheduled principal payments and mandatory prepayments in respect of the Senior Notes, unless (A) such payments are funded with Net Cash Proceeds from Dispositions of Noteholder Priority Collateral (as defined in the Intercreditor Agreement), (B) such payments are funded with Net Cash Proceeds from Dispositions of Specified Property, (C) such payments are funded with Net Cash Proceeds from any issuance of Equity Interests by the Company in the form of either (I) common equity or (II) other equity having terms reasonably acceptable to the Administrative Agent and, in the case of any such issuance of Equity Interests, not constituting Disqualified Equity Interests, (D) any such payment is due on the maturity date of such Senior Notes stated therein or as such maturity date may be stated in any Refinancing Indebtedness in respect thereof, (E) such payment occurs as a result of a Change of Control (under and as defined in the Senior Notes Agreement as in effect on the date hereof) and the Required Lenders have waived, in writing, the Event of Default hereunder as a result of any Change of Control or (F) as of the date of any such payment and after giving effect thereto, the Payment Conditions are satisfied;

 

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(ii)           payments made through the incurrence of Refinancing Indebtedness;

 

(iii)          payments of secured Indebtedness that becomes due as a result of a voluntary sale or transfer permitted hereunder of the property securing such Indebtedness;

 

(iv)          payments made solely from and substantially contemporaneously with the proceeds of the issuance of Equity Interests by the Company (other than Disqualified Equity Interests); and

 

(v)           optional payments or prepayments in respect of (x) the Senior Notes, solely if (1) such payments or prepayments, as the case may be, are funded with Net Cash Proceeds from (A) Dispositions of Noteholder Priority Collateral (as defined in the Intercreditor Agreement) or receipt of any Extraordinary Insurance Receipts (as defined in the Senior Notes Agreement as in effect on the date hereof) in respect thereof, (B) Dispositions of Specified Property or receipt of any Extraordinary Insurance Receipts in respect thereof, or (C) any issuance of Equity Interests by the Company in the form of either (I) common equity or (II) other equity having terms reasonably acceptable to the Administrative Agent and, in the case of any such issuance of Equity Interests, not constituting Disqualified Equity Interests or (2) as of the date of any such payment or prepayment and after giving effect thereto, the Voluntary Payment Conditions are satisfied, and (y) any other Indebtedness (other than Subordinated Debt to the extent contrary to the Subordination Provisions applicable thereto), provided that as of the date of any such payment or prepayment and after giving effect thereto, the Voluntary Payment Conditions are satisfied.

 

(b)           Amend, modify or change in any manner any term or condition of (i) any Senior Notes Document to the extent prohibited by the terms of the Intercreditor Agreement or (ii) any other Indebtedness for borrowed money so that the terms and conditions thereof are less favorable in any material respect to the Administrative Agent and the Lenders than the terms of such Indebtedness as of the Closing Date.

 

8.12        Financial Covenants.

 

(a)           Consolidated Fixed Charge Coverage Ratio.  Permit the Consolidated Fixed Charge Coverage Ratio, determined on a Pro Forma Basis as of (i) the last day of the Measurement Period most recently ended before the commencement of a Fixed Charge Trigger Period and (ii) the last day of each Measurement Period thereafter ending during any Fixed Charge Trigger Period to be less than 1.00 to 1.00 for such Measurement Period.

 

8.13        Creation of New Subsidiaries.  Create or acquire any new Subsidiary after the Closing Date other than Subsidiaries created or acquired in accordance with Section 7.12.

 

8.14        Reserved.

 

8.15        Sale and Leaseback.  Enter into any agreement or arrangement with any other Person providing for the leasing by any Loan Party or any Subsidiary of real or personal property which has been or is to be sold or transferred by any Loan Party or any Subsidiary to such other Person or to any other Person to whom funds have been or are to be advanced by such Person on the security of such property or rental obligations of a Loan Party or any Subsidiary.

 

8.16        Organization Documents; Fiscal Year.  (a) Amend, modify or otherwise change any of its Organization Documents in any material respect, except in connection with a transaction permitted

 

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under Section 8.04, but in any case not in any manner that could have a material adverse effect on the interests of the Secured Parties, or (b) change its fiscal year.

 

8.17        Immaterial Subsidiaries.  In the case of Aviation, so long as such Person constitutes an Immaterial Subsidiary and is not required to join as a Borrower or a Guarantor under this Agreement and each other Loan Document pursuant to Section 7.12, engage in any operations or business (other than activities as described in Schedule 8.17); provided, however, that notwithstanding anything to the contrary in this Agreement, Aviation shall not (i) consolidate or merge with, or liquidate or dissolve into, or convey, transfer or lease all or substantially all of its assets to, any Person other than a Loan Party (in which case, the Loan Party shall be the continuing or surviving Person), (ii) directly or indirectly sell or otherwise dispose of any Equity Interests of any Borrower, or (iii) fail to hold itself out to the public as a legal entity separate and distinct from all other Persons.

 

8.18        Anti-Money Laundering and Terrorism Laws and Regulations.  Permit any Loan Party, any Subsidiary or, to the knowledge of any Loan Party, any director, officer, agent, employee, or other authorized person acting on behalf of any Loan Party or any Subsidiary to:

 

(a)           become (including by virtue of being owned or controlled by a Blocked Person), own or control a Blocked Person or any Person that is the target of sanctions imposed by the United Nations or by the European Union;

 

(b)           directly or indirectly have any investment in or engage in any dealing or transaction (including, without limitation, any investment, dealing or transaction involving the proceeds of the Credit Extensions) with any Person if such investment, dealing or transaction (A) would cause any Secured Party to be in violation of any law or regulation applicable to such Secured Party or (B) is prohibited by or subject to Sanctions;

 

(c)           conduct, engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, or facilitate a violation of, any of the prohibitions set forth in Executive Order No. 13224, the Currency and Foreign Regulations Reporting Act of 1970 (otherwise known as the Bank Secrecy Act), the PATRIOT Act, the Money Laundering Control Act or any other United States anti-money laundering or anti-terrorism law or regulation (collectively, “Anti-Money Laundering Laws”); or

 

(d)           engage, or permit any of its Affiliates to engage, in any activity that could subject such Person or any Secured Party to Sanctions.

 

8.19        Economic Sanctions Laws and Regulations.  Permit any Loan Party, any Subsidiary or, to the knowledge of any Loan Party, any director, officer, agent, employee, or other authorized person acting on behalf of any Loan Party or any Subsidiary to conduct, transact, engage in, or facilitate, any business or activity on behalf of such Loan Party or its Subsidiaries in violation of Sanctions.

 

ARTICLE IX
 EVENTS OF DEFAULT AND REMEDIES

 

9.01        Events of Default.  Any of the following shall constitute an Event of Default:

 

(a)           Non-Payment.  Any Borrower fails to pay (i) when and as required to be paid herein, any amount of principal of any Loan or any Letter of Credit Obligation, or (ii) within three days after the same becomes due, any interest on any Loan or on any Letter of Credit Obligation, or any commitment or other

 

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fee due hereunder, or (iii) within five days after the same becomes due, any other amount payable hereunder or under any other Loan Document; or

 

(b)           Specific Covenants.  Any Loan Party fails to perform or observe any term, covenant or agreement contained (i) in any of Sections 7.01(a), 7.01(b), 7.03, 7.05, 7.07, 7.10, 7.11 or 7.19 or Article VIII, or (ii) in any of Sections 4.04, 7.02(a), 7.02(b) or 7.02(c) and such failure continues for three (3) or more Business Days; or

 

(c)           Other Defaults.  Any Loan Party fails to perform or observe any other covenant or agreement (not specified in subsection (a) or (b) above) contained in any Loan Document on its part to be performed or observed and such failure continues for 30 days after the earlier of (i) receipt of notice of such default by a Responsible Officer of the Borrower Agent from the Administrative Agent, or (ii) any Responsible Officer of any Loan Party becomes aware of such default; or

 

(d)           Representations and Warranties.  Any representation, warranty, certification or statement of fact made or deemed made by or on behalf of any Loan Party or its Subsidiaries herein, in any other Loan Document, or in any document delivered in connection herewith or therewith shall be incorrect or misleading when made or deemed made in any material respect; or

 

(e)           Cross-Default.  (i) With respect to any Indebtedness or guarantee (other than Indebtedness hereunder and Indebtedness under Swap Contracts) having an aggregate principal amount (including undrawn committed or available amounts and including amounts owing to all creditors under any combined or syndicated credit arrangement) of more than the Threshold Amount, any Loan Party or its Subsidiaries (A) fails to make any payment when due (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise, and after passage of any grace period) in respect of any such Indebtedness or guarantee, or (B) fails to observe or perform any other agreement or condition relating to any such Indebtedness or guarantee or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event occurs, and such default continues for more than the grace or cure period, if any, therein specified, the effect of which default or other event is to cause, or to permit the holder of such Indebtedness or beneficiary of such guarantee (or a trustee or agent on behalf of such holder or beneficiary) to cause, with the giving of notice if required, such Indebtedness to be demanded or to become due or to be repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease or redeem such Indebtedness to be made, prior to its stated maturity, or such guarantee to become payable or cash collateral in respect thereof to be demanded; (ii) there occurs under any Swap Contract an Early Termination Date (as defined in such Swap Contract) resulting from (A) any event of default under such Swap Contract as to which any Loan Party or any Subsidiary is the Defaulting Party (as defined in such Swap Contract) or (B) any Termination Event (as so defined) under such Swap Contract as to which any Loan Party or any Subsidiary is an Affected Party (as so defined) and, in either event, the Swap Termination Value owed by a Loan Party or any Subsidiary as a result thereof is greater than Threshold Amount; or (iii) without limitation of the preceding clause (i), any “Event of Default” under and as such term is defined in the Senior Notes Documents shall have occurred and be continuing; or

 

(f)            Insolvency Events.  Any Insolvency Event shall occur with respect to any Loan Party; or

 

(g)           Inability to Pay Debts; Attachment.  (i) Any Loan Party becomes unable or admits in writing its inability or fails generally to pay its debts as they become due, (ii) any writ or warrant of attachment or execution or similar process is issued or levied against all or any material part of the property of any Loan Party and is not released, vacated or fully bonded within 30 days after its issue or levy; (iii) any Loan Party is enjoined, restrained or in any way prevented by any Governmental Authority from conducting any material part of its business; (iv) any Loan Party suffers the loss, revocation or

 

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termination of any material license, permit, lease or agreement necessary to its business; (v) there is a cessation of any material part of any Loan Party’s business for a material period of time; or (vi) any material Collateral or property or assets of a Loan Party is taken or impaired through condemnation; or

 

(h)           Judgments.  There is entered against any Loan Party (i) one or more final judgments or orders for the payment of money in an aggregate amount exceeding the Threshold Amount (to the extent not covered by insurance as to which the insurer does not dispute coverage), or (ii) any one or more non-monetary final judgments that have, or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and, in either case, such judgment or order remains unvacated and unpaid and either (A) enforcement proceedings are commenced by any creditor upon such judgment or order, or (B) there is a period of 30 consecutive days during which a stay of enforcement of such judgment, by reason of a pending appeal or otherwise, is not in effect; or

 

(i)            ERISA.  (i) An ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan which has resulted or could reasonably be expected to result in liability of any Loan Party under Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of the Threshold Amount, or (ii) a Loan Party or any ERISA Affiliate fails to pay when due, after the expiration of any applicable grace period, any installment payment with respect to its withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount in excess of the Threshold Amount; or

 

(j)            Invalidity of Loan Documents.  Any Loan Document, or any Lien granted thereunder, at any time after its execution and delivery and for any reason, other than as expressly permitted hereunder or upon Payment in Full, ceases to be in full force and effect (except with respect to immaterial assets); or any Borrower or any other Person contests in any manner the validity or enforceability of any Loan Document or any Lien granted to the Administrative Agent pursuant to the Security Instruments; or any Borrower denies that it has any or further liability or obligation under any Loan Document, or purports to revoke, terminate or rescind any Loan Document; or any party to the Intercreditor Agreement contests in any manner the validity or enforceability of the Intercreditor Agreement or denies that it has any liability or obligation thereunder or purports to revoke, terminate or rescind the Intercreditor Agreement; or

 

(k)           Breach of Contractual Obligation.  Any Loan Party or any Subsidiary thereof fails to make any payment when due (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) in respect of any contract to which it is party or fails to observe or perform any other agreement or condition relating to any such contract to which it is party or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event occurs, the effect of which default or other event is to cause, or to permit the counterparty to such contract to terminate such contract, in each case which would, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect; or

 

(l)            Indictment.  (i) Any Loan Party is (A) criminally indicted or convicted of a felony for fraud or dishonesty in connection with the Loan Parties’ business or (B) charged by a Governmental Authority under any law that would reasonably be expected to lead to forfeiture of any material portion of Collateral, or (ii) any director or senior officer of any Loan Party is (A) criminally indicted or convicted of a felony for fraud or dishonesty in connection with the Loan Parties’ business, unless such director or senior officer promptly resigns or is removed or replaced or (B) charged by a Governmental Authority under any law that would reasonably be expected to lead to forfeiture of any material portion of Collateral; or

 

(m)          Subordination Provisions.  (i) The Subordination Provisions shall fail to be enforceable by the Lenders (which have not effectively waived the benefits thereof) in accordance with the terms

 

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thereof; or (ii) the principal or interest on any Loan, any Letter of Credit Obligation or other Loan Obligations shall fail to constitute “designated senior debt” (or any other similar term) under any document, instrument or agreement evidencing such Subordination Provisions; or (iii) any Loan Party or any of its Subsidiaries shall, directly or indirectly, disavow or contest in any manner (A) the effectiveness, validity or enforceability of any of the Subordination Provisions, or (B) that any of such Subordination Provisions exist for the benefit of any Secured Party; or (iv) any Loan Party or any Subsidiary thereof or any other Person fails to observe or perform any of the Subordination Provisions; or

 

(n)           Change of Control.  There occurs (i) any Change of Control or (ii) any “change of control” (or equivalent change) under and as defined in the Senior Notes Documents.

 

9.02        Remedies Upon Event of Default.  If any Event of Default occurs and is continuing, the Administrative Agent may, and at the direction of the Required Lenders shall, take any or all of the following actions:

 

(a)           declare the commitment of each Lender to make Loans and any obligation of the Letter of Credit Issuer to make Letter of Credit Extensions to be terminated, whereupon such commitments and obligation shall be terminated;

 

(b)           declare the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon, and all other Loan Obligations owing or payable hereunder or under any other Loan Document to be immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Borrowers;

 

(c)           require that the Borrowers Cash Collateralize the Letter of Credit Obligations (in an amount equal to the then Outstanding Amount thereof) or any other Loan Obligations that are contingent or not yet due and payable in amount determined by the Administrative Agent in accordance with this Agreement; and

 

(d)           exercise on behalf of itself and the Lenders all rights and remedies available to it and the Lenders under the Loan Documents or applicable Law;

 

provided, however, that upon the occurrence of an Event of Default under Section 9.01(f), the obligation of each Lender to make Loans and any obligation of the Letter of Credit Issuer to make Letter of Credit Extensions shall automatically terminate, the unpaid principal amount of all outstanding Loans and all interest and other amounts as aforesaid shall automatically become due and payable, and the obligation of the Borrowers to Cash Collateralize the Letter of Credit Obligations as aforesaid shall automatically become effective, in each case without further act of the Administrative Agent or any Lender.

 

No remedy herein is intended to be exclusive of any other remedy and each and every remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute or any other provision of Law.

 

9.03        Application of Funds.

 

(a)           Subject to Section 9.03(b) below, all payments made by Loan Parties in respect of the Loan Obligations shall be applied (a) first, as specifically required in the Loan Documents; (b) second, to Loan Obligations then due and owing; (c) third, to other Loan Obligations specified by Borrower Agent, so long as such instructions of Borrower Agent do not contravene the terms of this Agreement; and (d) fourth, as determined by the Administrative Agent in its discretion.

 

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(b)           Notwithstanding any provision to the contrary contained herein, after the exercise of remedies provided for in Section 9.02 (or after the Loans have automatically become immediately due and payable and the Letter of Credit Obligations have automatically been required to be Cash Collateralized as set forth in the proviso to Section 9.02), any amounts received on account of the Obligations shall, subject to the provisions of Sections 2.16 and 2.17, be applied by the Administrative Agent in the following order:

 

First, to all fees, indemnities, expenses and other amounts (including reasonable fees, charges and disbursements of counsel to the Administrative Agent and amounts payable under Article IV) due to the Administrative Agent in its capacity as such, until paid in full;

 

Second, to all Protective Advances and unreimbursed Overadvances payable to the Administrative Agent until paid in full;

 

Third, to all amounts owing to the Swing Line Lender for outstanding Swing Line Loans until paid in full;

 

Fourth, to that portion of the Loan Obligations constituting fees, indemnities and other amounts (other than principal, interest, Letter of Credit Fees and other Obligations expressly described in clauses Fifth through Eighth below) payable to the Lenders and the Letter of Credit Issuer (including reasonable fees, charges and disbursements of counsel to the respective Lenders and the Letter of Credit Issuer and amounts payable under Article III), ratably among them in proportion to the respective amounts described in this clause Fourth payable to them until paid in full;

 

Fifth, to that portion of the Loan Obligations constituting accrued and unpaid Letter of Credit Fees and interest on the Loans, Letter of Credit Borrowings and other Loan Obligations, ratably among the Lenders and the Letter of Credit Issuer in proportion to the respective amounts described in this clause Fifth payable to them until paid in full;

 

Sixth, to (i) that portion of the Obligations constituting unpaid principal of the Loans and Letter of Credit Borrowings and to Cash Collateralize that portion of Letter of Credit Obligations comprising the aggregate undrawn amount of Letters of Credit to the extent not otherwise Cash Collateralized by the Borrowers and (ii) the payment of Priority Swap Obligations to the extent a Credit Product Reserve has been established therefor, ratably among the Lenders, Letter of Credit Issuer and the applicable Credit Product Providers in proportion to the respective amounts described in this clause Sixth payable to them until paid in full;

 

Seventh, to payment of Credit Product Obligations (other than Priority Swap Obligations to the extent paid under clause Sixth above), ratably to the Credit Product Providers in proportion to the respective amounts described in this clause Seventh payable to them until paid in full;

 

Eighth, to all other Obligations of the Borrowers that are due and payable to the Administrative Agent and the other Secured Parties, or any of them, on such date, ratably based on the respective aggregate amounts of all such Obligations owing to the Administrative Agent and the other Secured Parties on such date until paid in full; and

 

Last, the balance, if any, after Payment in Full, to the Borrowers or as otherwise required by Law.

 

(c)           Subject to Sections 2.03(c) and 2.17, amounts used to Cash Collateralize the aggregate undrawn amount of Letters of Credit pursuant to clause Sixth above shall be applied to satisfy drawings

 

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under such Letters of Credit as they occur.  Amounts distributed with respect to any Credit Product Obligations shall be the lesser of (i) the maximum Credit Product Obligations last reported to the Administrative Agent or (ii) the actual Credit Product Obligations as calculated by the methodology reported to the Administrative Agent for determining the amount due.  The Administrative Agent shall have no obligation to calculate the amount to be distributed with respect to any Credit Product Obligations, and may request a reasonably detailed calculation of such amount from the applicable Credit Product Provider.  The allocations set forth in this Section are solely to determine the rights and priorities of Administrative Agent and Secured Parties as among themselves, and may be changed by agreement among them without the consent of any Borrower.  This Section is not for the benefit of or enforceable by any Loan Party.

 

(d)           For purposes of Section 9.03(b), “paid in full” of a type of Obligation means payment in cash or immediately available funds of all amounts owing on account of such type of Obligation, including interest accrued after the commencement of any Insolvency Event, default interest, interest on interest, and expense reimbursements, irrespective of whether any of the foregoing would be or is allowed or disallowed in whole or in part in any proceeding under Debtor Relief Laws.

 

(e)           Administrative Agent shall not be liable for any application of amounts made by it in good faith under this Section 9.03, notwithstanding the fact that any such application is subsequently determined to have been made in error.

 

ARTICLE X
 ADMINISTRATIVE AGENT

 

10.01      Appointment and Authority.  Each of the Lenders and the Letter of Credit Issuer hereby irrevocably appoints BMO to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto.  The provisions of this Article are solely for the benefit of the Administrative Agent, the Lenders and the Letter of Credit Issuer, and no Loan Party shall have rights as a third party beneficiary of any of such provisions.  The Administrative Agent alone shall be authorized to determine whether any Accounts or Inventory constitute Eligible Accounts or Eligible Inventory, or whether to impose or release any Reserve, or whether any conditions to funding any Loan or to issuance of a Letter of Credit have been satisfied, which determinations and judgments, if exercised in good faith, shall exonerate Administrative Agent from liability to any Lender or other Person for any error in judgment or mistake.

 

10.02      Rights as a Lender.  The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity.  Such Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Loan Parties or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.

 

10.03      Exculpatory Provisions.  The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents.  Without limiting the generality of the foregoing, the Administrative Agent:

 

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(a)                                 shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;

 

(b)                                 shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents), provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable Law; and

 

(c)                                  shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to any Loan Party or any of its Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.

 

The Administrative Agent shall not be liable to any other Secured Party for any action taken or not taken by it under or in connection with the Loan Documents, except for direct (as opposed to consequential) losses directly and solely caused by the Administrative Agent’s gross negligence or willful misconduct.  The Administrative Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 11.01 and 9.02).  The Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given to the Administrative Agent by the Borrower Agent, a Lender or the Letter of Credit Issuer.

 

The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document or (v) the satisfaction of any condition set forth in Article V or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

 

10.04                 Reliance by the Administrative Agent.  The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person.  The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon.  In determining compliance with any condition hereunder to the making of a Loan, or the issuance of a Letter of Credit that by its terms must be fulfilled to the satisfaction of a Lender or the Letter of Credit Issuer, the Administrative Agent may presume that such condition is satisfactory to such Lender or the Letter of Credit Issuer unless the Administrative Agent shall have received notice to the contrary from such Lender or the Letter of Credit Issuer prior to the making of such Loan or the issuance of such Letter of Credit.  The Administrative Agent may consult with legal counsel (who may be counsel for the Borrowers), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

 

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10.05                 Delegation of Duties.  The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Administrative Agent.  The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties.  The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as the Administrative Agent.

 

10.06                 Resignation of the Administrative Agent.  The Administrative Agent may at any time give notice of its resignation to the Lenders, the Letter of Credit Issuer and the Borrower Agent.  Upon receipt of any such notice of resignation, the Required Lenders shall have the right, in consultation with the Borrower Agent, to appoint a successor, which shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States.  If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may on behalf of the Lenders and the Letter of Credit Issuer, appoint a successor Administrative Agent meeting the qualifications set forth above; provided that if the Administrative Agent shall notify the Borrower Agent and the Lenders that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (1) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any Collateral held by the Administrative Agent on behalf of the Lenders or the Letter of Credit Issuer under any of the Loan Documents, the retiring Administrative Agent shall continue to hold such Collateral until such time as a successor Administrative Agent is appointed) and (2) all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender and the Letter of Credit Issuer directly, until such time as the Required Lenders appoint a successor Administrative Agent as provided for above in this Section.  Upon the acceptance of a successor’s appointment as the Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent, and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this Section).  The fees payable by the Borrowers to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrowers and such successor.  After the retiring Administrative Agent’s resignation hereunder and under the other Loan Documents, the provisions of this Article and Section 11.04 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as the Administrative Agent.

 

Any resignation by BMO as the Administrative Agent pursuant to this Section shall also constitute its resignation as Letter of Credit Issuer and Swing Line Lender.  Upon the acceptance of a successor’s appointment as the Administrative Agent hereunder, (a) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring Letter of Credit Issuer and Swing Line Lender, (b) the retiring Letter of Credit Issuer and Swing Line Lender shall be discharged from all of their respective duties and obligations hereunder or under the other Loan Documents, and (c) the successor Letter of Credit Issuer shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or make other arrangements satisfactory to the retiring Letter of Credit Issuer to effectively assume the obligations of the retiring Letter of Credit Issuer with respect to such Letters of Credit.

 

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10.07                 Non-Reliance on the Administrative Agent and Other Lenders.  Each Lender and the Letter of Credit Issuer acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement.  Each Lender and the Letter of Credit Issuer also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

 

10.08                 No Other Duties, Etc.  Anything herein to the contrary notwithstanding, none of the Bookrunners, Arrangers, Syndication Agents or Documentation Agents listed on the cover page hereof shall have any rights, powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent, a Lender or the Letter of Credit Issuer hereunder.

 

10.09                 The Administrative Agent May File Proofs of Claim; Credit Bidding.  In case of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to any Loan Party, the Administrative Agent (irrespective of whether the principal of any Loan or Letter of Credit Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on any Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise:

 

(a)                                 to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, Letter of Credit Obligations and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders, the Letter of Credit Issuer and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the Letter of Credit Issuer and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders, the Letter of Credit Issuer and the Administrative Agent under Sections 2.03(h), 2.09 and 11.04) allowed in such judicial proceeding; and

 

(b)                                 to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

 

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender and the Letter of Credit Issuer to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders and the Letter of Credit Issuer, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 2.09 and 10.04.

 

Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender or the Letter of Credit Issuer any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or the Letter of Credit Issuer to authorize the Administrative Agent to vote in respect of the claim of any Lender or the Letter of Credit Issuer in any such proceeding.

 

The Loan Parties and the Secured Parties hereby irrevocably authorize the Administrative Agent, based upon the instruction of the Required Lenders, to (a) credit bid and in such manner purchase (either

 

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directly or through one or more acquisition vehicles) all or any portion of the Collateral at any sale thereof conducted under the provisions of the Bankruptcy Code, including under Section 363 of the Bankruptcy Code or any similar Laws in any other jurisdictions to which a Loan Party is subject, or (b) credit bid and in such manner purchase (either directly or through one or more acquisition vehicles) all or any portion of the Collateral at any other sale or foreclosure conducted by (or with the consent or at the direction of) the Administrative Agent (whether by judicial action or otherwise) in accordance with applicable Law.  In connection with any such credit bid and purchase, the Obligations owed to the Secured Parties shall be entitled to be, and shall be, credit bid on a ratable basis (with Obligations with respect to contingent or unliquidated claims being estimated for such purpose if the fixing or liquidation thereof would not unduly delay the ability of the Administrative Agent to credit bid and purchase at such sale or other disposition of the Collateral and, if such claims cannot be estimated without unduly delaying the ability of the Administrative Agent to credit bid, then such claims shall be disregarded, not credit bid, and not entitled to any interest in the asset or assets purchased by means of such credit bid) and the Secured Parties whose Obligations are credit bid shall be entitled to receive interests (ratably based upon the proportion of their Obligations credit bid in relation to the aggregate amount of Obligations so credit bid) in the asset or assets so purchased (or in the Equity Interests of the acquisition vehicle or vehicles that are used to consummate such purchase).  Upon request by the Administrative Agent or the Borrower Agent at any time, the Secured Parties will confirm in writing the Administrative Agent’s authority to release any such Liens on particular types or items of Collateral pursuant to this Section 10.09.

 

10.10                 Collateral Matters.  The Secured Parties irrevocably authorize the Administrative Agent, at its option and in its discretion,

 

(a)                                 to release any Lien on any Collateral (i) upon the occurrence of the Facility Termination Date, (ii) that is Disposed or to be Disposed as part of or in connection with any Disposition permitted hereunder or under any other Loan Document, or (iii) subject to Section 11.01, if approved, authorized or ratified in writing by the Required Lenders;

 

(b)                                 to release any Lien on any Noteholder Priority Collateral (as defined in the Intercreditor Agreement) as and when required to be released pursuant to the terms of the Intercreditor Agreement;

 

(c)                                  to release or subordinate any Lien (and any Indebtedness secured thereby) on any property granted to or held by the Administrative Agent under any Loan Document to the holder of any Lien on such property that is permitted by Section 8.02(i), so long as the Borrower Agent shall have delivered to the Administrative Agent on or prior to the date of release or subordination, as the case may be, a certificate of a Responsible Officer certifying that such Lien (and the Indebtedness secured thereby) is permitted by Section 8.02(i) (and the Administrative Agent may rely conclusively on any such certificate, without further inquiry), or if such release or subordination is required under the Intercreditor Agreement; and

 

(d)                                 to release any Subsidiary from its obligations under the Loan Documents, and release any Lien granted by such Subsidiary thereunder, if such Person ceases to be a Subsidiary as a result of a transaction permitted hereunder, so long as the Borrower Agent shall have delivered to the Administrative Agent on or prior to the date of release a certificate of a Responsible Officer certifying that such transaction is permitted by this Agreement (and the Administrative Agent may rely conclusively on any such certificate, without further inquiry).

 

Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’s authority to release or subordinate its interest in particular types or items of property, or to release any Loan Party from its obligations under the Loan Documents pursuant to this Section 10.10.

 

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10.11                 Other Collateral Matters.

 

(a)                                 Care of Collateral.  The Administrative Agent shall have no obligation to assure that any Collateral exists or is owned by a Borrower, or is cared for, protected or insured, nor to assure that the Administrative Agent’s Liens have been properly created, perfected or enforced, or are entitled to any particular priority, nor to exercise any duty of care with respect to any Collateral.

 

(b)                                 Lenders as Agent For Perfection by Possession or Control.  The Administrative Agent and Secured Parties appoint each Lender as agent (for the benefit of Secured Parties) for the purpose of perfecting Liens in any Collateral held or controlled by such Lender, to the extent such Liens are perfected by possession or control.  If any Lender obtains possession or control of any Collateral, it shall notify the Administrative Agent thereof and, promptly upon the Administrative Agent’s request, deliver such Collateral to the Administrative Agent or otherwise deal with it in accordance with the Administrative Agent’s instructions.

 

(c)                                  Reports.  The Administrative Agent shall promptly forward to each Lender, when complete, copies of any Field Exam or appraisal report prepared by or for the Administrative Agent with respect to any Borrower or Collateral (“Report”).  Each Lender agrees (a) that neither BMO nor the Administrative Agent makes any representation or warranty as to the accuracy or completeness of any Report, and shall not be liable for any information contained in or omitted from any Report; (b) that the Reports are not intended to be comprehensive audits or examinations, and that the Administrative Agent or any other Person performing any audit or examination will inspect only specific information regarding Obligations or the Collateral and will rely significantly upon Borrowers’ books and records as well as upon representations of Borrowers’ officers and employees; and (c) to keep all Reports confidential and strictly for such Lender’s internal use, and not to distribute any Report (or the contents thereof) to any Person (except to such Lender’s Participants, attorneys and accountants) or use any Report in any manner other than administration of the Loans and other Obligations.  Each Lender shall indemnify and hold harmless the Administrative Agent and any other Person preparing a Report from any action such Lender may take as a result of or any conclusion it may draw from any Report, as well as from any claims arising as a direct or indirect result of the Administrative Agent furnishing a Report to such Lender.

 

10.12                 Credit Product Arrangement Provisions.  (a)  No Credit Product Provider that is party to any Credit Product Arrangement permitted hereunder that obtains the benefits of Section 9.03 or any Collateral by virtue of the provisions hereof or of any Security Instrument shall have any right to notice of any action or right to consent to, direct or object to any action hereunder or under any other Loan Document or otherwise in respect of the Collateral (including the release or impairment of any Collateral) other than in its capacity as a Lender, if applicable, and, in such case, only to the extent expressly provided in the Loan Documents.  Notwithstanding any other provision of this Article X to the contrary, the Administrative Agent shall not be required to verify the payment of, or that other satisfactory arrangements have been made with respect to, Credit Product Obligations unless the Administrative Agent has received written notice of such Credit Product Obligations, together with such supporting documentation as the Administrative Agent may reasonably request, from the applicable Credit Product Provider.  The Lenders irrevocably authorize the Administrative Agent to secure all Credit Product Obligations with the Collateral to the same extent as other Obligations, all to the extent contemplated hereunder as determined by the Administrative Agent in its reasonable judgment.

 

(b)                                 By delivery of a Credit Product Notice, each Credit Product Provider that is not a Lender (a “Non-Lender Credit Product Provider”) shall be deemed to have joined this Agreement and be bound by Section 9.03, this Article X and Section 11.04(c) as if it were a Lender hereunder holding a “Loan” in the amount of its applicable Credit Product Obligations.  No Non-Lender Credit Product Provider shall have any right or claim against any Loan Party under the Loan Documents other than as a Secured Party 

 

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under the Security Instruments, nor shall any of them be a third party beneficiary of any provisions of this Agreement by which the Loan Parties are bound other than provisions relating to the granting of the Lien of the Administrative Agent on the Collateral and the application of proceeds thereof pursuant to Section 9.03.

 

10.13                 Intercreditor Agreement/Subordination Agreements.  The Lenders acknowledge that the Indebtedness evidenced by the Senior Notes is secured by Liens on the Collateral and that the exercise of certain rights and remedies of Administrative Agent under the Loan Documents may be subject to the provisions of the Intercreditor Agreement and any other subordination or intercreditor agreement pertaining to any subordinated debt.  Each Lender irrevocably (a) consents to the terms and conditions of the Intercreditor Agreement and any other subordination or intercreditor agreement pertaining to any subordinated debt; (b) authorizes and directs Administrative Agent to execute and deliver the Intercreditor Agreement, any documents relating thereto, and any other subordination or intercreditor agreement pertaining to any other subordinated debt, in each case, on behalf of such Lender and to take all actions (and execute all documents) required (or deemed advisable) by it in accordance with the terms of the Intercreditor Agreement and any other subordination or intercreditor agreement pertaining to any other subordinated debt, in each case, and without any further consent, authorization or other action by such Lender; (c) agrees that, upon the execution and delivery thereof, such Lender will be bound by the provisions of the Intercreditor Agreement and any other subordination or intercreditor agreement pertaining to any other subordinated debt as if it were a signatory thereto and will take no actions contrary to the provisions of the Intercreditor Agreement and any other subordination or intercreditor agreement pertaining to any other subordinated debt; (d) agrees that no Lender shall have any right of action whatsoever against Administrative Agent as a result of any action taken by Administrative Agent pursuant to this Section 10.13 or in accordance with the terms of the Intercreditor Agreement and any other subordination or intercreditor agreement pertaining to any other subordinated debt; and (e) acknowledges (or is deemed to acknowledge) that copies of the Intercreditor Agreement have been delivered, or made available, to such Lender.  Each Lender hereby further irrevocably authorizes and directs Administrative Agent to enter into such amendments, supplements, or other modifications to the Intercreditor Agreement and any other subordination or intercreditor agreement pertaining to any other subordinated debt as are approved by Administrative Agent and the Required Lenders (except as to any amendment that expressly requires the approval of all Lenders as set forth in Section 11.01); provided, that Administrative Agent may execute and deliver such amendments, supplements, and modifications thereto as are contemplated by the Intercreditor Agreement and any other subordination or intercreditor agreement pertaining to any other subordinated debt in connection with any extension, renewal, refinancing, or replacement of this Agreement or any refinancing of the Obligations, in each case, on behalf of such Lender and without any further consent, authorization or other action by any Lender.  Administrative Agent shall have the benefit of each of the provisions of Article X with respect to all actions taken by it pursuant to this Section 10.13 or in accordance with the terms of the Intercreditor Agreement and any other subordination or intercreditor agreement pertaining to any other subordinated debt to the full extent thereof.

 

ARTICLE XI
 MISCELLANEOUS

 

11.01                 Amendments, Etc.

 

(a)                                 No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by the Borrowers or any other Borrower therefrom, shall be effective unless in writing signed by the Required Lenders and the Borrowers or the applicable Borrower, as the case may be, and acknowledged by the Administrative Agent, and each such waiver or consent 

 

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shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no such amendment, waiver or consent shall:

 

(i)                                     extend or increase the Commitment of any Lender (or reinstate any Commitment terminated pursuant to Section 9.02) without the written consent of such Lender;

 

(ii)                                  postpone any date fixed by this Agreement or any other Loan Document for any payment (but excluding the delay or waiver of any mandatory prepayment) of principal, interest, fees or other amounts due to the Lenders (or any of them), including the Maturity Date, or any scheduled reduction of the Commitments hereunder or under any other Loan Document, in each case without the written consent of each Lender directly affected thereby;

 

(iii)                               reduce the principal of, or the rate of interest specified herein on, any Loan or Letter of Credit Borrowing, or reduce any fees or other amounts payable hereunder or under any other Loan Document, without the written consent of each Lender directly affected thereby; provided, however, that only the consent of the Required Lenders shall be necessary (A) to amend the definition of “Default Rate” (so long as such amendment does not result in the Default Rate being lower than the interest rate then applicable to Base Rate Loans or LIBOR Loans, as applicable) or to waive any obligation of the Borrowers to pay interest or Letter of Credit Fees at the Default Rate or (B) to amend any financial covenant hereunder (or any defined term used therein);

 

(iv)                              change Section 2.13 or Section 9.03 in a manner that would alter the pro rata sharing of payments required thereby without the written consent of each Lender directly affected thereby;

 

(v)                                 change any provision of this Section or the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender;

 

(vi)                              except as provided in Section 2.18, increase the Aggregate Revolving Credit Commitments without the written consent of each Revolving Credit Lender;

 

(vii)                           release any Loan Party from this Agreement or any material Security Instrument to which it is a party without the written consent of each Lender, except to the extent such Loan Party is the subject of a Disposition permitted by Section 8.05 (in which case such release may be made by the Administrative Agent acting alone);

 

(viii)                        release all or a material part of the Collateral without the written consent of each Lender except (A) with respect to Dispositions and releases of Collateral permitted or required hereunder (including pursuant to Section 8.05) or under the Security Agreement or (B) to the extent required pursuant to the terms of the Intercreditor Agreement (in which case such release may be made by the Administrative Agent acting alone);

 

(ix)                              subordinate any Lien on any property granted to or held by the Administrative Agent under any Loan Document to the holder of any other Lien on such property without the written consent of each Lender, except with respect to (A) subordination of such Liens to Liens permitted pursuant to Sections 8.02(i) or 8.02(j) and (B) subordination of such Liens to other Liens on Collateral (other than Accounts and Inventory) with an aggregate book value not to exceed $5,000,000;

 

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(x)                                 without the prior written consent of the Required Supermajority Lenders, amend the definition of “Borrowing Base” or any defined term used therein in a manner that would increase availability; provided, that the foregoing shall not limit the discretion of the Administrative Agent to change, establish or eliminate any Reserves or to determine eligibility of Accounts or Inventory or other assets of the type available to be included in the Borrowing Base in accordance with such terms; or

 

(xi)                              without the prior written consent of each Lender, impose any materially greater restriction on the ability of any Lender to assign any of its rights or obligations hereunder.

 

(b)                                 In addition to the foregoing, (i) no amendment, waiver or consent shall, unless in writing and signed by the Letter of Credit Issuer in addition to the Lenders required above, affect the rights or duties of the Letter of Credit Issuer under this Agreement or any Issuer Document relating to any Letter of Credit issued or to be issued by it; (ii) no amendment, waiver or consent shall, unless in writing and signed by the Swing Line Lender in addition to the Lenders required above, affect the rights or duties of the Swing Line Lender under this Agreement; (iii) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above, affect the rights or duties of the Administrative Agent under this Agreement or any other Loan Document; (iv) the Fee Letter may be amended, or rights or privileges thereunder waived, in a writing executed only by the respective parties thereto; (v) no amendment, waiver or consent which has the effect of enabling the Borrowers to satisfy any condition to a Borrowing contained in Section 5.02 hereof which, but for such amendment, waiver or consent would not be satisfied, shall be effective to require the Lenders, the Swing Line Lender or the Letter of Credit Issuer to make any additional Revolving Credit Loan or Swing Line Loan, or to issue any additional or renew any existing Letter of Credit, unless and until the Required Lenders (or, if applicable, all Revolving Credit Lenders) shall have approved such amendment, waiver or consent and (vi) the Administrative Agent and the Borrowers shall be permitted to amend any provision of the Loan Documents (and such amendment shall become effective without any further action or consent of any other party to any Loan Document) if the Administrative Agent and the Borrower shall have jointly identified an obvious error or any error or omission of a technical or immaterial nature in any such provision.  Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder (and any amendment, waiver or consent which by its terms requires the consent of all Lenders or each affected Lender may be effected with the consent of the applicable Lenders other than Defaulting Lenders), except that (x) the Revolving Credit Commitment of any Defaulting Lender may not be increased or extended without the consent of such Lender and (y) any waiver, amendment or modification requiring the consent of all Lenders or each affected Lender that by its terms affects any Defaulting Lender more adversely than other affected Lenders shall require the consent of such Defaulting Lender.

 

(c)                                  Notwithstanding any provision herein to the contrary, this Agreement may be amended with the written consent of the Required Lenders, the Administrative Agent and the Borrowers (i) to add one or more additional revolving credit facilities (each a “Supplemental Facility”) to this Agreement, in each case subject to the limitations in Section 2.18, and to permit the extensions of credit and all related obligations and liabilities arising in connection therewith from time to time outstanding to share ratably (or on a basis subordinated to the existing facilities hereunder) in the benefits of this Agreement and the other Loan Documents with the obligations and liabilities from time to time outstanding in respect of the existing facilities hereunder, and (ii) in connection with the foregoing, to permit, as deemed appropriate by the Administrative Agent and approved by the Required Lenders, the Lenders providing such Supplemental Facilities to participate in any required vote or action required to be approved by the Required Lenders or by any other number, percentage or class of Lenders hereunder.

 

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(d)                                 If any Lender does not consent (a “Non-Consenting Lender”) to a proposed amendment, waiver, consent or release with respect to any Loan Document that requires the consent of each Lender and that has been approved by the Required Lenders, the Borrower may replace such Non-Consenting Lender in accordance with Section 11.13; provided that such amendment, waiver, consent or release can be effected as a result of the assignment contemplated by such Section (together with all other such assignments required by the Borrower to be made pursuant to this paragraph).

 

(e)                                  No Loan Party will, directly or indirectly, pay any remuneration or other thing of value, whether by way of additional interest, fee or otherwise, to any Lender or its Affiliates as consideration for agreement by such Lender to any amendment, waiver, consent or release with respect to any Loan Document, unless such remuneration or value is concurrently paid, on the same terms, on a ratable basis to all Lenders providing their agreement.  Notwithstanding the terms of this Agreement or any amendment, waiver, consent or release with respect to any Loan Document, Non-Consenting Lenders shall not be entitled to receive any fees or other compensation paid to the Lenders in connection with any amendment, waiver, consent or release approved in accordance with the terms of this Agreement by the Required Lenders.

 

(f)                                   Each Borrower, for themselves and each other Loan Party, hereby acknowledges and agrees that if any amendment or modification to the Senior Notes Agreement or any other Senior Notes Document (i) adds an additional financial covenant that is not a springing covenant or (ii) adds any additional affirmative or negative covenant, then this Agreement and the other Loan Documents, as applicable, will be automatically amended or modified to effect similar amendments or modifications to this Agreement or the other Loan Documents, as applicable, without the need for any further action or consent by any Loan Party or any other Person.

 

(g)                                  IN NO EVENT SHALL THE REQUIRED LENDERS, WITHOUT THE PRIOR WRITTEN CONSENT OF EACH LENDER, DIRECT THE ADMINISTRATIVE AGENT TO ACCELERATE AND DEMAND PAYMENT OF THE LOANS HELD BY ONE LENDER WITHOUT ACCELERATING AND DEMANDING PAYMENT OF ALL OTHER LOANS OR TO TERMINATE THE COMMITMENTS OF ONE OR MORE LENDERS WITHOUT TERMINATING THE COMMITMENTS OF ALL LENDERS.  EACH LENDER AGREES THAT, EXCEPT AS OTHERWISE PROVIDED IN ANY OF THE LOAN DOCUMENTS AND WITHOUT THE PRIOR WRITTEN CONSENT OF THE REQUIRED LENDERS, IT WILL NOT TAKE ANY LEGAL ACTION OR INSTITUTE ANY ACTION OR PROCEEDING AGAINST ANY LOAN PARTY WITH RESPECT TO ANY OF THE OBLIGATIONS OR COLLATERAL, OR ACCELERATE OR OTHERWISE ENFORCE ITS PORTION OF THE OBLIGATIONS. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, NO LENDER MAY EXERCISE ANY RIGHT THAT IT MIGHT OTHERWISE HAVE UNDER APPLICABLE LAW TO CREDIT BID AT FORECLOSURE SALES, UNIFORM COMMERCIAL CODE SALES OR OTHER SIMILAR SALES OR DISPOSITIONS OF ANY OF THE COLLATERAL EXCEPT AS AUTHORIZED BY THE REQUIRED LENDERS.  NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN THIS SECTION OR ELSEWHERE HEREIN, EACH LENDER SHALL BE AUTHORIZED TO TAKE SUCH ACTION TO PRESERVE OR ENFORCE ITS RIGHTS AGAINST ANY LOAN PARTY WHERE A DEADLINE OR LIMITATION PERIOD IS OTHERWISE APPLICABLE AND WOULD, ABSENT THE TAKING OF SPECIFIED ACTION, BAR THE ENFORCEMENT OF OBLIGATIONS HELD BY SUCH LENDER AGAINST SUCH LOAN PARTY, INCLUDING THE FILING OF PROOFS OF CLAIM IN ANY INSOLVENCY PROCEEDING.

 

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11.02                 Notices; Effectiveness; Electronic Communication.

 

(a)                                 Notices Generally.  Except in the case of notices and other communications expressly permitted to be given by telephone or in the case of notices otherwise expressly provided herein (and except as provided in subsection (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopier as follows, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows:

 

(i)                                     if to a Loan Party, the Administrative Agent, the Letter of Credit Issuer or the Swing Line Lender, to the address, telecopier number, electronic mail address or telephone number specified for such Person below, as changed pursuant to subsection (d) below:

 

	
(A)
    	
 
    	
If to Administrative Agent, Swing Line Lender or   Letter of Credit Issuer:
    	
 
    	
Bank of Montreal
    
	
 
    	
 
    	
 
    	
111 West Monroe
    
	
 
    	
 
    	
 
    	
Chicago, Illinois 60603
    
	
 
    	
 
    	
 
    	
Attention: Stephanie Bach
    
	
 
    	
 
    	
 
    	
 
    	
Facsimile No.: (312) 293-8532
    
	
 
    	
 
    	
 
    	
 
    	
Email: stephanie.bach@bmo.com
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
With a copy to:
    	
 
    	
McGuireWoods LLP
    
	
 
    	
 
    	
 
    	
 
    	
77 West Wacker Drive, Suite 4100
    
	
 
    	
 
    	
 
    	
 
    	
Chicago, Illinois 60601
    
	
 
    	
 
    	
 
    	
 
    	
Attention: Philip J. Perzek
    
	
 
    	
 
    	
 
    	
 
    	
Facsimile No.: (312) 698-4555
    
	
 
    	
 
    	
 
    	
 
    	
Email: PPerzek@mcguirewoods.com
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)
    	
 
    	
If to a Loan Party:
    	
 
    	
Intrepid Potash, Inc., as Borrower Agent
    
	
 
    	
 
    	
 
    	
 
    	
707 17th Street, Suite 4200
    
	
 
    	
 
    	
 
    	
 
    	
Denver, Colorado 80202
    
	
 
    	
 
    	
 
    	
 
    	
Attention: Brian   Frantz, Senior Vice President, Chief Accounting Officer
    
	
 
    	
 
    	
 
    	
 
    	
Email: Brian.Frantz@intrepidpotash.com
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
With a copy to:
    	
 
    	
Latham & Watkins LLP
    
	
 
    	
 
    	
 
    	
 
    	
330 North Wabash Avenue, Suite 2800
    
	
 
    	
 
    	
 
    	
 
    	
Chicago, Illinois 60611
    
	
 
    	
 
    	
 
    	
 
    	
Attention: David Heller
    
	
 
    	
 
    	
 
    	
 
    	
Email: David.Heller@lw.com
    

 

(ii)                                  if to any other Lender, to the address, telecopier number, electronic mail address or telephone number specified in its Administrative Questionnaire, as changed pursuant to subsection (d) below (including, as appropriate, notices delivered solely to the Person designated by a Lender on its Administrative Questionnaire then in effect for the delivery of notices that may contain material non-public information relating to the Borrowers).

 

Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by telecopier shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next business day for the recipient).  Notices

 

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delivered through electronic communications to the extent provided in subsection (b) below, shall be effective as provided in such subsection (b).

 

(b)                                 Electronic Communications.  Notices and other communications to the Lenders and the Letter of Credit Issuer hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent, provided that the foregoing shall not apply to notices to any Lender or the Letter of Credit Issuer pursuant to Article II if such Lender or the Letter of Credit Issuer, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication.  The Administrative Agent or the Borrowers may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to particular notices or communications.

 

Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), provided that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor.

 

(c)                                  The Platform.  THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.”  THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS.  NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM.  In no event shall the Administrative Agent or any of its Related Parties (collectively, the “Agent Parties”) have any liability to any Borrower, any Lender, the Letter of Credit Issuer or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of a Borrower’s or the Administrative Agent’s transmission of Borrower Materials through the Internet, except to the extent that such losses, claims, damages, liabilities or expenses are determined by a court of competent jurisdiction by a final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Agent Party; provided, however, that in no event shall any Agent Party have any liability to any Borrower, any Lender, the Letter of Credit Issuer or any other Person for indirect, special, incidental, consequential or punitive damages (as opposed to direct or actual damages).

 

(d)                                 Change of Address, Etc.  Each of the Borrowers, the Administrative Agent, the Letter of Credit Issuer and the Swing Line Lender may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the other parties hereto.  Each other Lender may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the Borrower Agent, the Administrative Agent, the Letter of Credit Issuer and the Swing Line Lender.  In addition, each Lender agrees to notify the Administrative Agent from time to time to ensure that the Administrative Agent has on record (i) an effective address, contact name, telephone number, telecopier number and electronic mail address to which notices and other communications may be sent and (ii) accurate wire instructions for such Lender.

 

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(e)                                  Reliance by Administrative Agent, Letter of Credit Issuer and Lenders.The Administrative Agent, the Letter of Credit Issuer and the Lenders shall be entitled to rely and act upon any notices (including telephonic Committed Loan Notices and Swing Line Loan Notices) purportedly given by or on behalf of the Borrowers even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof.  The Borrowers shall indemnify the Administrative Agent, the Letter of Credit Issuer, each Lender and the Related Parties of each of them from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of the Borrowers.  All telephonic notices to and other telephonic communications with the Administrative Agent may be recorded by the Administrative Agent, and each of the parties hereto hereby consents to such recording.

 

11.03                 No Waiver; Cumulative Remedies.  No failure by any Lender, the Letter of Credit Issuer or the Administrative Agent to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

 

Notwithstanding anything to the contrary contained herein or in any other Loan Document, the authority to enforce rights and remedies hereunder and under the other Loan Documents against the Borrowers or any other Loan Party or any of them (including enforcement action with respect to any Collateral) shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, the Administrative Agent in accordance with Section 9.02 for the benefit of all the Secured Parties; provided, however, that the foregoing shall not prohibit (a) the Administrative Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Administrative Agent) hereunder and under the other Loan Documents, (b) the Letter of Credit Issuer from exercising the rights and remedies that inure to its benefit (solely in its capacity as Letter of Credit Issuer) hereunder and under the other Loan Documents, (c) any Lender from exercising setoff rights in accordance with Section 11.08 (subject to the terms of Section 2.14), or (d) any Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to any Borrower under any Debtor Relief Law but only to the extent the Administrative Agent shall have failed to do so within a reasonable time after notice; and provided further, that if at any time there is no Person acting as Administrative Agent hereunder and under the other Loan Documents, then (i) the Required Lenders shall have the rights otherwise ascribed to the Administrative Agent pursuant to Section 9.02 and (ii) in addition to the matters set forth in clauses (b), (c) and (d) of the preceding proviso and subject to Section 2.14, any Lender may, with the consent of the Required Lenders, enforce any rights and remedies available to it and as authorized by the Required Lenders.

 

11.04                 Expenses; Indemnity; Damage Waiver.

 

(a)                                 Costs and Expenses.  The Borrowers shall pay (i) all reasonable and documented costs and out-of-pocket expenses (including any Extraordinary Expenses) incurred by the Administrative Agent and its Affiliates (A) in connection with this Agreement and the other Loan Documents, including without limitation the reasonable and documented fees, charges and disbursements of (1) counsel for the Administrative Agent, (2) outside consultants for the Administrative Agent, (3) appraisers, (4) Field Exams, (5) all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of the Obligations, and (6) environmental site assessments, (B) in connection with (1) the syndication of the credit facilities provided for herein, (2) the preparation, negotiation, administration, 

 

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management, execution and delivery of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (3) the enforcement or protection of their rights in connection with this Agreement or the Loan Documents or efforts to preserve, protect, collect, or enforce the Collateral, or (4) any workout, restructuring or negotiations in respect of any Obligations, and (ii) with respect to the Letter of Credit Issuer, and its Affiliates, all reasonable and documented out-of-pocket expenses incurred in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder; and (iii) all reasonable and documented costs and out-of-pocket expenses incurred by the Secured Parties who are not the Administrative Agent, the Letter of Credit Issuer or any Affiliate of any of them (including without limitation the documented fees, charges and disbursements of counsel), after the occurrence and during the continuance of a Default or an Event of Default, including, without limitation, in connection with the enforcement or protection of their respective rights under this Agreement or the Loan Documents; provided, that, such Secured Parties shall be entitled to reimbursement for no more than one counsel representing all such Secured Parties (absent a conflict of interest in which case the Secured Parties may engage and be reimbursed for additional counsel).

 

(b)                                 Indemnification by the Borrowers.  Each Loan Party shall indemnify the Administrative Agent (and any sub-agent thereof), each other Secured Party and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold harmless each Indemnitee from, any and all losses, claims, damages, liabilities and related expenses (including the reasonable and documented fees, charges and disbursements of any counsel for any Indemnitee and any settlement costs for any Indemnitee), incurred by any Indemnitee or asserted against any Indemnitee by any third party or by the Borrowers or any other Loan Party arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder, the consummation of the transactions contemplated hereby or thereby or, in the case of the Administrative Agent (and any sub-agent thereof) and its Related Parties only, the administration of this Agreement and the other Loan Documents (including in respect of any matters addressed in Section 4.01), (ii) any Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by the Letter of Credit Issuer to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by any Loan Party or any of its Subsidiaries, or any Environmental Liability related in any way to any Loan Party or any of its Subsidiaries, (iv) any claims of, or amounts paid by any Secured Party to, a Controlled Account Bank or other Person which has entered into a control agreement with any Secured Party hereunder or (v) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Borrowers or any other Loan Party, and regardless of whether any Indemnitee is a party thereto; provided, that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from (x) the gross negligence or willful misconduct of such Indemnitee or (y) a breach of the funding obligations of such Indemnitee under this Agreement.  This Section 11.04(b) shall not apply to any Taxes other than Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim.

 

(c)                                  Indemnification of Administrative Agent by Lenders.  To the extent that (i) the Loan Parties for any reason fail to indefeasibly pay any amount required under subsection (a) or (b) of this Section to be paid by it, or (ii) any liabilities, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever are be imposed on, incurred by, or asserted

 

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against, the Administrative Agent, the Letter of Credit Issuer or a Related Party (an “Agent Indemnitee”) in any way relating to or arising out of this Agreement or any other Loan Document or any action taken or omitted to be taken by any Agent Indemnitee in connection therewith (collectively, “Agent Indemnitee Liabilities”), then each Lender severally agrees to pay to the Administrative Agent for the benefit of such Agent Indemnitee, such Lender’s Ratable Share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such Agent Indemnitee Liabilities, so long as the Agent Indemnitee Liabilities were incurred by or asserted against the Administrative Agent (or any such sub-agent) or the Letter of Credit Issuer in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent) or Letter of Credit Issuer in connection with such capacity.  The obligations of the Lenders under this subsection (c) are subject to the provisions of Section 2.12(d).  In no event shall any Lender have any obligation hereunder to indemnify or hold harmless an Agent Indemnitee with respect to any Agent Indemnitee Liabilities that are determined in a final, non-appealable judgment by a court of competent jurisdiction to result from the gross negligence or willful misconduct of such Agent Indemnitee.  In the Administrative Agent’s discretion, it may reserve for any Agent Indemnitee Liabilities of an Agent Indemnitee, and may satisfy any judgment, order or settlement relating thereto, from proceeds of Collateral prior to making any distribution of Collateral proceeds to the Secured Parties.  If the Administrative Agent is sued by any creditor representative, debtor-in-possession or other Person for any alleged preference or fraudulent transfer, then any monies paid by the Administrative Agent in settlement or satisfaction of such proceeding, together with all interest, costs and expenses (including attorneys’ fees) incurred in the defense of same, shall be promptly reimbursed to the Administrative Agent by each Lender to the extent of its Ratable Share thereof.

 

(d)                                 Waiver of Consequential Damages, Etc.  To the fullest extent permitted by applicable Law, the Loan Parties shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or Letter of Credit or the use of the proceeds thereof.  No Indemnitee referred to in subsection (b) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby.

 

(e)                                  Payments.  All amounts due under this Section shall be payable not later than ten Business Days after demand therefor.

 

(f)                                   Survival.  The agreements in this Section shall survive the resignation of the Administrative Agent, the Letter of Credit Issuer and the Swing Line Lender, the replacement of any Lender and the occurrence of the Facility Termination Date.

 

11.05                 Marshalling; Payments Set Aside.  None of the Administrative Agent or Lenders shall be under any obligation to marshal any assets in favor of any Loan Party or against any Obligations.  To the extent that any payment by or on behalf of any Loan Party is made to a Secured Party, or a Secured Party exercises its right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by such Secured Party in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred, and (b) each Lender and the Letter of Credit Issuer severally agrees to pay to the

 

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Administrative Agent upon demand its applicable share (without duplication) of any amount so recovered from or repaid by the Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the applicable Overnight Rate, in the applicable currency of such recovery or payment.  The obligations of the Lenders and the Letter of Credit Issuer under clause (b) of the preceding sentence shall survive the occurrence of the Facility Termination Date.

 

11.06                 Successors and Assigns.

 

(a)                                 Successors and Assigns Generally.  The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that no Loan Party may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an Eligible Assignee in accordance with the provisions of subsection (b) of this Section, (ii) by way of participation in accordance with the provisions of subsection (d) of this Section, or (iii) by way of pledge or assignment of a security interest subject to the restrictions of subsection (f) of this Section (and any other attempted assignment or transfer by any party hereto shall be null and void).  Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in subsection (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of each of the Secured Parties) any legal or equitable right, remedy or claim under or by reason of this Agreement.

 

(b)                                 Assignments by Lenders. Any Lender may at any time assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment(s) and the Loans (including for purposes of this Section 11.06(b), participations in Letter of Credit Obligations and in Swing Line Loans) at the time owing to it); provided that any such assignment shall be subject to the following conditions:

 

(i)                                     Minimum Amounts.  Except in the case of (A) an assignment of the entire remaining amount of the assigning Lender’s Commitment under the Facility and the Loans at the time owing to it under the Facility or (B) an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment, determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of the Trade Date, shall not be less than $5,000,000, unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Borrower Agent otherwise consents (each such consent not to be unreasonably withheld or delayed); provided, however, that concurrent assignments to members of an Assignee Group and concurrent assignments from members of an Assignee Group to a single Eligible Assignee (or to an Eligible Assignee and members of its Assignee Group) will be treated as a single assignment for purposes of determining whether such minimum amount has been met.

 

(ii)                                  Proportionate Amounts.  Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Loans or the Commitment assigned, except that this clause (ii) shall not apply to the Swing Line Lender’s rights and obligations in respect of Swing Line Loans.

 

(iii)                               Required Consents.  No consent shall be required for any assignment to an Eligible Assignee except to the extent required by subsection (b)(i)(B) of this Section; provided

 

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that the Borrower Agent shall be deemed to have given the consent required in the definition of “Eligible Assignee” to such assignment if Borrower Agent has not, on behalf of all Borrowers, responded in writing within ten (10) Business Days of a request for consent.

 

(iv)                              Assignment and Assumption.  The parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee in the amount of $3,500, unless, in the case of the processing and recordation fee, such assignment is to a Lender or an Affiliate of a Lender or an Approved Fund or the Administrative Agent, in its sole discretion, elects to waive such processing and recordation fee.  The assignee, if it is not a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.

 

(v)                                 No Assignment to Certain Persons.  No such assignment shall be made (A) to the Borrowers or any of a Borrower’s Affiliates or Subsidiaries, (B) to any Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing Persons described in this clause (B), or (C) to a natural person.

 

(vi)                              Certain Additional Payments.  In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of the Borrower and the Administrative Agent, the applicable pro rata share of Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent or any Lender hereunder (and interest accrued thereon) and (y) acquire (and fund as appropriate) its full pro rata share of all Loans and participations in Letters of Credit and Swing Line Loans in accordance with its Applicable Percentage.  Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under applicable Law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.

 

(vii)                           Effect of Assignment.  Subject to acceptance and recording thereof by the Administrative Agent pursuant to subsection (c) of this Section, from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 3.01, 3.04, 3.05 and 11.04 with respect to facts and circumstances occurring prior to the effective date of such assignment).  Upon request, each Borrower (at its expense) shall execute and deliver a Note to the assignee Lender.  Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this subsection shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with Section 11.06(d).

 

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(c)                                  Register.  The Administrative Agent, acting solely for this purpose as an agent of the Borrowers (and such agency being solely for tax purposes) (in such capacity, subject to Section 11.18), shall maintain at the Administrative Agent’s Office a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts of the Loans and Loan Obligations owing to, each Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be conclusive, and the Borrowers, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary.  In addition, the Administrative Agent shall maintain on the Register information regarding the designation, and revocation of designation, of any Lender as a Defaulting Lender.  The Register shall be available for inspection by the Borrower Agent and any Lender at any reasonable time and from time to time upon reasonable prior notice.  In addition, at any time that a request for a consent for a material or substantive change to the Loan Documents is pending, any Lender may request and receive from the Administrative Agent a copy of the Register.

 

(d)                                 Participations.  Any Lender may at any time, without the consent of, or notice to, any Borrower or the Administrative Agent, sell participations to any Person (other than a natural person, a Defaulting Lender or a Borrower or any of the Borrowers’ Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Revolving Credit Commitment and/or the Loans (including such Lender’s participations in Letter of Credit Obligations and/or Swing Line Loans) owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrowers, the Administrative Agent, the Lenders and the Letter of Credit Issuer shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement.

 

Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, waiver or other modification described in the first proviso to Section 11.01 that affects such Participant.  Subject to subsection (e) of this Section, the Borrowers agree that each Participant shall be entitled to the benefits of Sections 3.01, 3.04 and 3.05 (subject to the requirements and limitations therein), and shall be subject to requirements of Section 3.06, to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to subsection (b) of this Section.  To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 11.08 as though it were a Lender, provided such Participant agrees to be subject to Section 2.13 as though it were a Lender.

 

If any Lender (or any assignee thereof) sells a participation, such Lender (or such assignee) shall, acting solely for this purpose as an agent of the Borrowers, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under the Loan Documents (the “Participant Register”); provided that no Lender (nor any assignee thereof) shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any commitments, loans, letters of credit or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations.  The entries in the Participant Register shall be conclusive absent manifest error, and such Lender (or such assignee) shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding 

 

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any notice to the contrary.  For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

 

(e)                                  Limitations upon Participant Rights.  A Participant shall not be entitled to receive any greater payment under Section 3.01 or 3.04 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower Agent’s prior written consent and, for the avoidance of doubt, such entitlement to greater payment results from a Change in Law after the Participant acquires the participation.  A Participant shall not be entitled to the benefits of Section 3.01 unless the Borrower Agent is notified of the participation sold to such Participant and such Participant complies with Section 3.01(e) as though it were a Lender.

 

(f)                                   Certain Pledges.  Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement (including under its Note, if any) to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

 

(g)                                  Electronic Execution of Assignments.  The words “execution,” “signed,” “signature,” and words of like import in any Assignment and Assumption shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable Law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

 

(h)                                 Resignation as Letter of Credit Issuer and/or Swing Line Lender after Assignment.  Notwithstanding anything to the contrary contained herein, if at any time BMO assigns all of its Revolving Credit Commitment and Revolving Credit Loans pursuant to subsection (b) above, it may, (i) upon 30 days’ notice to the Borrower Agent and the Lenders, resign as Letter of Credit Issuer and/or (ii) upon 30 days’ notice to the Borrower Agent, resign as Swing Line Lender.  In the event of any such resignation as Letter of Credit Issuer, or Swing Line Lender, the Borrower Agent shall be entitled to appoint from among the Lenders willing to serve in such capacity a successor Letter of Credit Issuer or Swing Line Lender hereunder, as the case may be; provided, however, that no failure by the Borrower Agent to appoint any such successor shall affect the resignation of BMO as Letter of Credit Issuer or Swing Line Lender, as the case may be.  If BMO resigns as Letter of Credit Issuer, it shall retain all the rights, powers, privileges and duties of the Letter of Credit Issuer hereunder with respect to all Letters of Credit outstanding as of the effective date of its resignation as Letter of Credit Issuer and all Letter of Credit Obligations with respect thereto (including the right to require the Lenders to make Base Rate Loans or fund risk participations in Unreimbursed Amounts pursuant to Section 2.03(c)).  If BMO resigns as Swing Line Lender, it shall retain all the rights of the Swing Line Lender provided for hereunder with respect to Swing Line Loans made by it and outstanding as of the effective date of such resignation, including the right to require the Lenders to make Base Rate Loans or fund risk participations in outstanding Swing Line Loans pursuant to Section 2.04(c).  Upon the appointment of a successor Letter of Credit Issuer and/or Swing Line Lender, (a) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring Letter of Credit Issuer or Swing Line Lender, as the case may be, and (b) the successor Letter of Credit Issuer shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such successor or make other arrangements satisfactory to the retiring Letter of Credit Issuer to effectively assume the obligations of such Letter of Credit Issuer with respect to such Letters of Credit.

 

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11.07                 Treatment of Certain Information; Confidentiality.  Each of the Secured Parties agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its Affiliates and to its and its Affiliates’ respective partners, directors, trustees, officers, employees, agents, advisors and representatives (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority purporting to have jurisdiction over it (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by applicable Laws or regulations or by any subpoena or similar legal process, (d) to any other party hereto, (e) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrowers and their obligations, (g) with the consent of the Borrower Agent or (h) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section or (y) becomes available to the Secured Parties or any of their respective Affiliates on a nonconfidential basis from a source other than the Loan Parties.

 

For purposes of this Section, “Information” means all information received from any Loan Party or any Subsidiary relating to a Loan Party or any Subsidiary or any of their respective businesses, other than any such information that is available to any Secured Party on a nonconfidential basis prior to disclosure by a Loan Party or any Subsidiary, provided that, in the case of information received from a Loan Party or any Subsidiary after the date hereof, any information not marked “PUBLIC” at the time of delivery will be deemed to be confidential; provided that any information marked “PUBLIC” may also be marked “Confidential”.  Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

 

Each of the Secured Parties acknowledges that (a) the Information may include material non-public information concerning a Loan Party or a Subsidiary, as the case may be, (b) it has developed compliance procedures regarding the use of material non-public information and (c) it will handle such material non-public information in accordance with applicable Law, including federal and state securities Laws.

 

Each of the Loan Parties hereby authorizes the Administrative Agent to publish the name of any Loan Party and the amount of the credit facility provided hereunder in any “tombstone” or comparable advertisement which the Administrative Agent elects to publish.  The Administrative Agent reserves the right to provide to industry trade organizations information necessary and customary for inclusion in league table measurements.

 

11.08                 Right of Setoff.  If an Event of Default shall have occurred and be continuing, each Lender, the Letter of Credit Issuer and each of their respective Affiliates is hereby authorized at any time and from time to time, only after obtaining the prior written consent of the Administrative Agent, to the fullest extent permitted by applicable Law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Lender, the Letter of Credit Issuer or any such Affiliate to or for the credit or the account of the Borrowers against any and all of the obligations of the Borrowers now or hereafter existing under this Agreement or any other Loan Document to such Lender or the Letter of Credit Issuer, irrespective of whether or not such Lender or the Letter of Credit Issuer shall have made

 

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any demand under this Agreement or any other Loan Document and although such obligations of the Borrowers may be contingent or unmatured or are owed to a branch or office of such Lender or the Letter of Credit Issuer different from the branch or office holding such deposit or obligated on such indebtedness; provided that in the event that any Defaulting Lender or any Affiliate thereof shall exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 2.17 and, pending such payment, shall be segregated by such Defaulting Lender or its Affiliate (as applicable) from its other funds and deemed held in trust for the benefit of the Administrative Agent and the Lenders, and (y) the Defaulting Lender or its Affiliate shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender or its Affiliates as to which such right of setoff was exercised.  The rights of each Lender, the Letter of Credit Issuer and their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender, the Letter of Credit Issuer or their respective Affiliates may have.  Each Lender and the Letter of Credit Issuer agrees to notify the Borrower Agent and the Administrative Agent promptly after any such setoff and application, provided that the failure to give such notice shall not affect the validity of such setoff and application.

 

11.09                 Interest Rate Limitation.  Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the “Maximum Rate”).  If the Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the Borrowers.  In determining whether the interest contracted for, charged, or received by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Loan Obligations hereunder.

 

11.10                 Counterparts; Integration; Effectiveness.  This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  This Agreement and the other Loan Documents constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof.  Except as provided in Section 5.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto.  Delivery of an executed counterpart of a signature page of this Agreement by telecopy shall be effective as delivery of a manually executed counterpart of this Agreement.

 

11.11                 Survival.  All representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof.  Such representations and warranties have been or will be relied upon by the Secured Parties, regardless of any investigation made by any Secured Party or on their behalf and notwithstanding that any Secured Party may have had notice or knowledge of any Default at the time of any Credit Extension, and shall continue in full force and effect as long as any Loan or any other Loan Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.

 

Further, the provisions of Sections 3.01, 3.04, 3.05 and 11.04 and Article X shall survive and remain in full force and effect regardless of the repayment of the Obligations, the expiration or

 

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termination of the Letters of Credit and the Commitments or the termination of this Agreement or any provision hereof.  In connection with the termination of this Agreement and the release and termination of the security interests in the Collateral, the Administrative Agent may require such indemnities and collateral security as they shall reasonably deem necessary or appropriate to protect the Secured Parties against (x) loss on account of credits previously applied to the Obligations that may subsequently be reversed or revoked, and (y) any obligations that may thereafter arise with respect to Credit Product Obligations.

 

11.12                 Severability.  If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions.  The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.  Without limiting the foregoing provisions of this Section 11.12, if and to the extent that the enforceability of any provisions in this Agreement relating to Defaulting Lenders shall be limited by Debtor Relief Laws, as determined in good faith by the Administrative Agent, the Letter of Credit Issuer or the Swing Line Lender, as applicable, then such provisions shall be deemed to be in effect only to the extent not so limited.

 

11.13                 Replacement of Lenders.  If any Lender requests compensation under Section 3.04, if the Borrowers are required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, if any Lender is a Defaulting Lender, or if any Lender fails to approve any amendment, waiver or consent requested by Borrower Agent pursuant to Section 11.01 that has received the written approval of not less than the Required Lenders but also requires the approval of such Lender, then in each such case the Borrower Agent may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 11.06), all of its interests, rights and obligations under this Agreement and the related Loan Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that:

 

(a)                                 the Borrower Agent shall have paid to the Administrative Agent the assignment fee specified in Section 11.06(b);

 

(b)                                 such Lender shall have received the following, as applicable:

 

(i)                                     if such Lender is not a Defaulting Lender, both (A) payment of an amount equal to the outstanding principal of its Loans and Letter of Credit Advances, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 3.05) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower Agent (in the case of all other amounts) and (B) evidence that the obligations and liabilities of each Loan Party or their Affiliates under all Credit Product Arrangements shall have been fully, finally and irrevocably paid and satisfied in full and the Credit Product Arrangements shall have expired or been terminated, or other arrangements satisfactory to the counterparties shall have been made with respect thereto; or

 

(ii)                                  if such Lender is a Defaulting Lender, payment of an amount equal to the outstanding principal of its Loans and Letter of Credit Advances, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents 

 

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(including any amounts under Section 3.05) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower Agent (in the case of all other amounts);

 

(c)                                  in the case of any such assignment resulting from a claim for compensation under Section 3.04 or payments required to be made pursuant to Section 3.01, such assignment will result in a reduction in such compensation or payments thereafter;

 

(d)                                 in the case of any such assignment resulting from the refusal of a Lender to approve a requested amendment, waiver or consent, the Person to whom such assignment is being made has agreed to approve such requested amendment, waiver or consent; and

 

(e)                                  such assignment does not conflict with applicable Laws.

 

A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrowers to require such assignment and delegation cease to apply.

 

11.14                 Governing Law; Jurisdiction; Etc.

 

(a)                                 THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF ILLINOIS.

 

(b)                                 EACH LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF ILLINOIS SITTING IN COOK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE NORTHERN DISTRICT OF ILLINOIS, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH ILLINOIS STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT.  EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.  NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT, ANY LENDER OR THE LETTER OF CREDIT ISSUER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE BORROWERS OR THEIR PROPERTIES IN THE COURTS OF ANY JURISDICTION.

 

(c)                                  EACH LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.  EACH PARTY HERETO HEREBY WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY 

 

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RIGHT THAT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION OR PROCEEDING REFERRED TO IN THIS SECTION 11.14 ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES.

 

(d)                                 EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 11.02.  NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

 

11.15                 Waiver of Jury Trial.  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

11.16                 Electronic Execution of Assignments and Certain Other Documents.  The words “execution,” “signed,” “signature,” and words of like import in any Assignment and Assumption or in any amendment or other modification hereof (including waivers and consents) shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

 

11.17                 USA PATRIOT Act Notice.  Each Lender that is subject to the PATRIOT Act and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Borrowers that pursuant to the requirements of the PATRIOT Act, it is required to obtain, verify and record information that identifies the Borrowers, which information includes the name and address of the Borrowers and other information that will allow such Lender or the Administrative Agent, as applicable, to identify the Borrowers in accordance with the PATRIOT Act.

 

11.18                 No Advisory or Fiduciary Responsibility.  In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), each Loan Party acknowledges and agrees, and acknowledges its Affiliates’ understanding, that:  (i) (A) the arranging and other services regarding this Agreement provided by the Secured Parties are arm’s-length commercial transactions between each Loan Party, on the one hand, and the Secured Parties, on the other hand, (B) each Loan Party has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (C) each Loan Party is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; (ii) (A) each Secured Party is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for any Loan Party or any of its Affiliates or any other Person and (B) no Secured Party has any obligation to any Loan Party or any of its

 

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Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents, (iii) the Secured Parties may be engaged in a broad range of transactions that involve interests that differ from those of the Loan Parties and their Affiliates, and no Secured Party has any obligation to disclose any of such interests to any Loan Party or its Affiliates and (iv) the Secured Parties have not provided and will not provide any legal, accounting, regulatory or tax advice with respect to any of the transactions contemplated hereby (including any amendment, waiver or other modification hereof or of any other Loan Document) and each of the Loan Parties has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate.  To the fullest extent permitted by law, each Loan Party hereby waives and releases any claims that it may have against any Secured Party with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.

 

11.19                 Attachments.  The exhibits, schedules and annexes attached to this Agreement are incorporated herein and shall be considered a part of this Agreement for the purposes stated herein; except, that, in the event of any conflict between any of the provisions of such exhibits and the provisions of this Agreement, the provisions of this Agreement shall prevail.

 

11.20                 Acknowledgement and Consent to Bail-In of EEA Financial Institutions.  Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any EEA Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the write-down and conversion powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

 

(a)                                 the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and

 

(b)                                 the effects of any Bail-In Action on any such liability, including, if applicable:

 

(i)                                     a reduction in full or in part or cancellation of any such liability;

 

(ii)                                  a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or

 

(iii)                               the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of any EEA Resolution Authority.

 

ARTICLE XII
 CONTINUING GUARANTY

 

12.01                 Guaranty.  Each Subsidiary Guarantor hereby absolutely and unconditionally guarantees (this “Guaranty”), as a guaranty of payment and performance and not merely as a guaranty of collection, prompt payment when due, whether at stated maturity, by required prepayment, upon acceleration, demand or otherwise, and at all times thereafter, of any and all of the Obligations (other than Excluded Swap Obligations), whether for principal, interest, premiums, fees, indemnities, damages, costs, expenses or otherwise, of the Borrowers to the Secured Parties, arising hereunder or under any other Loan Document (including all renewals, extensions, amendments, refinancings and other modifications thereof

 

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and all costs, attorneys’ fees and expenses incurred by the Secured Parties in connection with the collection or enforcement thereof) (the “Guarantied Obligations”).  The Administrative Agent’s books and records showing the amount of the Guarantied Obligations shall be admissible in evidence in any action or proceeding, and shall be binding upon each Subsidiary Guarantor, and conclusive for the purpose of establishing the amount of the Guarantied Obligations.  This Guaranty shall not be affected by the genuineness, validity, regularity or enforceability of the Guarantied Obligations or any instrument or agreement evidencing any Guarantied Obligations, or by the existence, validity, enforceability, perfection, non-perfection or extent of any collateral therefor, or by any fact or circumstance relating to the Guarantied Obligations which might otherwise constitute a defense to the obligations of any Subsidiary Guarantor under this Guaranty, and each Subsidiary Guarantor hereby irrevocably waives any defenses it may now have or hereafter acquire in any way relating to any or all of the foregoing (other than Payment in Full).

 

12.02                 Rights of Lenders.  Each Subsidiary Guarantor consents and agrees that the Secured Parties may, at any time and from time to time, without notice or demand, and without affecting the enforceability or continuing effectiveness hereof:  (a) amend, extend, renew, compromise, discharge, accelerate or otherwise change the time for payment or the terms of the Guarantied Obligations or any part thereof; (b) take, hold, exchange, enforce, waive, release, fail to perfect, sell, or otherwise dispose of any security for the payment of this Guaranty or any Guarantied Obligations; (c) apply such security and direct the order or manner of sale thereof as the Administrative Agent, the Letter of Credit Issuer and the Lenders in their sole discretion may determine; and (d) release or substitute one or more of any endorsers or other guarantors of any of the Guarantied Obligations.  Without limiting the generality of the foregoing, each Subsidiary Guarantor consents to the taking of, or failure to take, any action which might in any manner or to any extent vary the risks of any Subsidiary Guarantor under this Guaranty or which, but for this provision, might operate as a discharge of any Subsidiary Guarantor.

 

12.03                 Certain Waivers.  Each Subsidiary Guarantor waives (a) any defense arising by reason of any disability or other defense of the Borrowers or any other guarantor, or the cessation from any cause whatsoever (including any act or omission of any Secured Party) of the liability of the Borrowers; (b) any defense based on any claim that any Subsidiary Guarantor’s obligations exceed or are more burdensome than those of the Borrowers; (c) the benefit of any statute of limitations affecting any Subsidiary Guarantor’s liability hereunder; (d) any right to proceed against the Borrowers, proceed against or exhaust any security for the Guarantied Obligations, or pursue any other remedy in the power of any Secured Party whatsoever; (e) any benefit of and any right to participate in any security now or hereafter held by any Secured Party; and (f) to the fullest extent permitted by law, any and all other defenses or benefits that may be derived from or afforded by applicable Law limiting the liability of or exonerating guarantors or sureties (other than Payment in Full).  Each Subsidiary Guarantor expressly waives all setoffs and counterclaims and all presentments, demands for payment or performance, notices of nonpayment or nonperformance, protests, notices of protest, notices of dishonor and all other notices or demands of any kind or nature whatsoever with respect to the Guarantied Obligations, and all notices of acceptance of this Guaranty or of the existence, creation or incurrence of new or additional Guarantied Obligations.

 

12.04                 Obligations Independent.  The obligations of each Subsidiary Guarantor hereunder are those of primary obligor, and not merely as surety, and are independent of the Guarantied Obligations and the obligations of any other guarantor, and a separate action may be brought against each Subsidiary Guarantor to enforce this Guaranty whether or not any Borrower or any other person or entity is joined as a party.

 

12.05                 Subrogation.  No Subsidiary Guarantor shall exercise any right of subrogation, contribution, indemnity, reimbursement or similar rights with respect to any payments it makes under this Guaranty until the Facility Termination Date.  If any amounts are paid to any Subsidiary Guarantor in

 

149

 

violation of the foregoing limitation, then such amounts shall be held in trust for the benefit of the Secured Parties and shall forthwith be paid to the Secured Parties to reduce the amount of the Obligations, whether matured or unmatured.

 

12.06                 Termination; Reinstatement.  This Guaranty is a continuing and irrevocable guaranty of all Guarantied Obligations now or hereafter existing and shall remain in full force and effect until the Facility Termination Date.  Notwithstanding the foregoing, this Guaranty shall continue in full force and effect or be revived, as the case may be, if any payment by or on behalf of any Borrower or any Subsidiary Guarantor is made, or any of the Secured Parties exercises its right of setoff, in respect of the Guarantied Obligations and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by any of the Secured Parties in their discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Laws or otherwise, all as if such payment had not been made or such setoff had not occurred and whether or not the Secured Parties are in possession of or have released this Guaranty and regardless of any prior revocation, rescission, termination or reduction.  The obligations of each Subsidiary Guarantor under this paragraph shall survive termination of this Guaranty.

 

12.07                 Subordination.  Each Subsidiary Guarantor hereby subordinates the payment of all obligations and indebtedness of the Borrowers owing to such Subsidiary Guarantor, whether now existing or hereafter arising, including but not limited to any obligation of the Borrowers to any Subsidiary Guarantor as subrogee of the Secured Parties or resulting from any Subsidiary Guarantor’s performance under this Guaranty, to the Payment in Full.  If the Secured Parties so request, any such obligation or indebtedness of the Borrowers to any Subsidiary Guarantor shall be enforced and performance received by such Subsidiary Guarantor as trustee for the Secured Parties and the proceeds thereof shall be paid over to the Secured Parties on account of the Guarantied Obligations, but without reducing or affecting in any manner the liability of any Subsidiary Guarantor under this Guaranty.

 

12.08                 Stay of Acceleration.  If acceleration of the time for payment of any of the Guarantied Obligations is stayed, in connection with any case commenced by or against any Subsidiary Guarantor or the Borrowers under any Debtor Relief Laws, or otherwise, all such amounts shall nonetheless be payable by each Subsidiary Guarantor immediately upon demand by the Secured Parties.

 

12.09                 Condition of Borrowers.  Each Subsidiary Guarantor acknowledges and agrees that it has the sole responsibility for, and has adequate means of, obtaining from the Borrowers and any other guarantor such information concerning the financial condition, business and operations of the Borrowers and any such other guarantor as such Subsidiary Guarantor requires, and that none of the Secured Parties has any duty, and no Subsidiary Guarantor is relying on the Secured Parties at any time, to disclose to such Subsidiary Guarantor any information relating to the business, operations or financial condition of the Borrowers or any other guarantor (each Subsidiary Guarantor waiving any duty on the part of the Secured Parties to disclose such information and any defense relating to the failure to provide the same).

 

12.10                 Keepwell.  Each Guarantor that is a Qualified ECP hereby jointly and severally absolutely, unconditionally and irrevocably undertakes to provide such funds or other support as may be needed from time to time by each other Loan Party to honor all of its obligations under this Guaranty in respect of Swap Obligations (provided, however, that each Qualified ECP shall only be liable under this Section 12.10 for the maximum amount of such liability that can be hereby incurred without rendering its obligations under this Section 12.10, or otherwise under this Guaranty, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount). The obligations of each Guarantor that is a Qualified ECP under this Section shall remain in full force and effect until the Guarantied Obligations have been paid in full in cash (other than those Guarantied Obligations expressly

 

150

 

stated to survive termination, contingent obligations as to which no claim has been asserted or threatened and Credit Product Obligations as to which arrangements satisfactory to the applicable Credit Product Provider have been made). Each Guarantor that is a Qualified ECP intends that this Section 12.10 constitute, and this Section 12.10 shall be deemed to constitute, a “keepwell, support, or other agreement” for the benefit of each other Loan Party for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

 

12.11                 Limitation of Guaranty.  Notwithstanding anything to the contrary herein or otherwise, the Borrowers, the Administrative Agent and the Lenders hereby irrevocably agree that the Guarantied Obligations of each Subsidiary Guarantor in respect of the guarantee set forth in Article XII hereof at any time shall be limited to the maximum amount as will result in the Guarantied Obligations of such Subsidiary Guarantor not constituting a fraudulent transfer or conveyance after giving full effect to the liability under such guarantee set forth in Article XII hereof and its related contribution rights but before taking into account any liabilities under any other guarantee by such Subsidiary Guarantor.

 

[Signature pages follow.]

 

151

 

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

 

	
 
    	
INTREPID   POTASH, INC.,
    
	
 
    	
a Delaware corporation, as a Borrower
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Brian D. Frantz
    
	
 
    	
Name:
    	
Brian D. Frantz
    
	
 
    	
Title:
    	
Senior Vice President and
    
	
 
    	
 
    	
Chief Accounting Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
INTREPID   POTASH — MOAB, LLC,
    
	
 
    	
a Delaware limited liability   company, as a Borrower
    
	
 
    	
 
    
	
 
    	
By: INTREPID POTASH, INC., its   Manager
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Brian D. Frantz
    
	
 
    	
Name:
    	
Brian D. Frantz
    
	
 
    	
Title:
    	
Senior Vice President and
    
	
 
    	
 
    	
Chief Accounting Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
INTREPID POTASH—NEW MEXICO, LLC,
    
	
 
    	
a New Mexico limited liability company, as   a Borrower
    
	
 
    	
 
    
	
 
    	
By: INTREPID POTASH, INC., its   Manager
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Brian D. Frantz
    
	
 
    	
Name:
    	
Brian D. Frantz
    
	
 
    	
Title:
    	
Senior Vice President and
    
	
 
    	
 
    	
Chief Accounting Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
INTREPID POTASH — WENDOVER, LLC,
    
	
 
    	
a Colorado limited liability company, as a   Borrower
    
	
 
    	
 
    
	
 
    	
By: INTREPID POTASH, INC., its   Manager
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Brian D. Frantz
    
	
 
    	
Name:
    	
Brian D. Frantz
    
	
 
    	
Title:
    	
Senior Vice President and
    
	
 
    	
 
    	
Chief Accounting Officer
    

 

[Signature Page to Credit Agreement]

 

 

	
 
    	
203   E. FLORENCE, LLC,
    
	
 
    	
a Delaware limited liability   company, as a Guarantor
    
	
 
    	
 
    
	
 
    	
By: INTREPID POTASH, INC., its   Manager
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Brian D. Frantz
    
	
 
    	
Name:
    	
Brian D. Frantz
    
	
 
    	
Title:
    	
Senior Vice President and
    
	
 
    	
 
    	
Chief Accounting Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
MOAB GAS PIPELINE, LLC,
    
	
 
    	
a Colorado limited liability company, as a   Guarantor
    
	
 
    	
 
    
	
 
    	
By: INTREPID POTASH, INC., its   Manager
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Brian D. Frantz
    
	
 
    	
Name:
    	
Brian D. Frantz
    
	
 
    	
Title:
    	
Senior Vice President and
    
	
 
    	
 
    	
Chief Accounting Officer
    

 

[Signature Page to Credit Agreement]

 

 

	
 
    	
BANK   OF MONTREAL,
    
	
 
    	
as Administrative Agent, Letter of Credit Issuer,
    
	
 
    	
Swing Line Lender and a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Craig Thistlethwaite
    
	
 
    	
Name:
    	
Craig Thistlethwaite
    
	
 
    	
Title:
    	
Managing Director
    

 

[Signature Page to Credit Agreement]

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