Document:

ex10_3.htm

Exhibit 10.3

 

 

 

 

PURCHASE AND SALE AGREEMENT

 

BY AND BETWEEN

 

MARITECH RESOURCES, INC.

 

AS SELLER

 

AND

 

TANA EXPLORATION COMPANY LLC

 

AS BUYER

 

MARITECH 2011 DIVESTITURE PACKAGE

 

OFFSHORE GULF OF MEXICO

 

 

 

  

  

  

TABLE OF CONTENTS

 

	
ARTICLE 1 SALE AND PURCHASE OF THE ASSETS 

	
1

	
1.1           Acquired Assets 

	
1

	
1.2           Excluded Assets 

	
3

	
1.3           Ownership of Production from the Assets 

	
5

	
ARTICLE 2 Purchase Price 

	
5

	
2.1           Purchase Price 

	
5

	
2.2           Deposit 

	
5

	
ARTICLE 3 Purchase Price Adjustments 

	
6

	
3.1           Adjustments to the Base Purchase Price 

	
6

	
3.2           Closing Statement 

	
8

	
3.3           Post-Closing Adjustments.

	
8

	
3.4           Imbalances 

	
9

	
3.5           Allocation of Revenues and Expenses Upon Closing.

	
10

	
ARTICLE 4 BUYER’S DUE DILIGENCE

	
11

	
4.1           Access 

	
11

	
4.2           Buyer’s Environmental Assessment 

	
11

	
4.3           Buyer’s Indemnification of Seller 

	
12

	
ARTICLE 5 TITLE MATTERS 

	
12

	
5.1           Certain Definitions. 

	
12

	
5.2           Notice of Title Defects 

	
15

	
5.3           Remedies for Title Defects 

	
15

	
5.4           Title Benefits 

	
16

	
ARTICLE 6 ENVIRONMENTAL ASSESSMENT 

	
16

	
6.1           Certain Definitions. 

	
16

	
6.2           Notice of Adverse Environmental Conditions 

	
17

	
6.3           Remedies for Adverse Environmental Conditions 

	
17

	
ARTICLE 7 INDEPENDENT EXPERT. 

	
18

	
7.1           Independent Expert 

	
18

	
ARTICLE 8 Casualty loss 

	
19

	
8.1           Casualty Losses and Government Takings 

	
19

	
8.2           Remedies for Casualty Losses and Government Takings 

	
19

	
8.3           Change in Condition 

	
19

	
ARTICLE 9 PREFERENTIAL RIGHTS AND CONSENTS 

	
20

	
9.1           Consents 

	
20

	
9.2           Preferential Rights. 

	
20

	
ARTICLE 10 REPRESENTATIONS AND WARRANTIES OF SELLER 

	
21

 

  

i

  

 

	
10.1           Seller’s Representations and Warranties 

	
21

	
10.2           Scope of Representations of Seller. 

	
25

	
ARTICLE 11 REPRESENTATIONS AND WARRANTIES OF BUYER 

	
27

	
11.1           Buyer’s Representations and Warranties 

	
27

	
ARTICLE 12 INTERIM OPERATIONS 

	
29

	
12.1           Interim Operations 

	
29

	
12.2           Disposal Barge and Equipment 

	
30

	
ARTICLE 13 CONDITIONS PRECEDENT TO CLOSING OBLIGATIONS OF BUYER 

	
30

	
13.1           No Litigation 

	
30

	
13.2           Representations and Warranties; Covenants 

	
30

	
13.3           Aggregate Adjustments Base to Purchase Price 

	
30

	
ARTICLE 14 CONDITIONS PRECEDENT TO CLOSING OBLIGATIONS OF SELLER 

	
31

	
14.1           No Litigation 

	
31

	
14.2           Representations and Warranties; Covenants 

	
31

	
14.3           Aggregate Adjustments Base to Purchase Price 

	
31

	
14.4           Buyer’s Qualification and Bonding 

	
31

	
ARTICLE 15 CLOSING 

	
31

	
15.1           Closing 

	
31

	
15.2           Deliveries by Seller 

	
31

	
15.3           Deliveries by Buyer.  At Closing, Buyer shall deliver to Seller: 

	
32

	
ARTICLE 16 TERMINATION 

	
33

	
16.1           Termination 

	
33

	
16.2           Effect of Termination 

	
33

	
ARTICLE 17 BUYER’S POST-CLOSING BONDING AND INSURANCE OBLIGATIONS 

	
33

	
17.1           Governmental Bonds 

	
33

	
17.2           Supplemental Bonding Requirements 

	
34

	
17.3           Insurance Coverages 

	
34

	
ARTICLE 18 OTHER POST-CLOSING COVENANTS 

	
35

	
18.1           Seller’s 

	
35

	
18.2           Records 

	
36

	
18.3           Operatorship 

	
36

	
18.4           Suspended Funds 

	
36

	
18.5           Notice of Transfer 

	
36

	
18.6           Work Bid Opportunities 

	
36

	
18.7           Employee Matters 

	
36

	
18.8           Contribution Agreement 

	
37

	
18.9           EC 328 A_Platform P&A Obligations 

	
37

	
18.10           Option to Lease Office Space 

	
37

	
ARTICLE 19 TAXES 

	
38

 

  

ii

  

 

	
19.1           Asset Taxes. 

	
38

	
19.2           Tax Reporting 

	
39

	
19.3           Transfer Taxes 

	
39

	
19.4           Income and Franchise Taxes 

	
39

	
ARTICLE 20 ASSUMED OBLIGATIONS; INDEMNIFICATION 

	
39

	
20.1           Buyer’s Assumption of Obligations After Closing 

	
39

	
20.2           Indemnification By Buyer 

	
41

	
20.3           Indemnification By Seller 

	
41

	
20.4           Limitation on Seller’s Indemnity Obligations 

	
42

	
20.5           Survival of Provisions 

	
42

	
20.6           Notice of Claim 

	
42

	
20.7           Exclusive Remedy 

	
43

	
ARTICLE 21 MEDIATION AND ARBITRATION 

	
43

	
21.1           Mediation and Arbitration 

	
43

	
ARTICLE 22 MISCELLANEOUS 

	
45

	
22.1           Confidentiality 

	
45

	
22.2           Notice 

	
45

	
22.3           Press Releases and Public Announcements 

	
46

	
22.4           COMPLIANCE WITH EXPRESS NEGLIGENCE RULE 

	
47

	
22.5           Governing Law 

	
47

	
22.6           Exhibits 

	
47

	
22.7           Fees, Expenses, and Recording 

	
47

	
22.8           Assignment 

	
47

	
22.9           Buyer’s Parent as a Party 

	
48

	
22.10           Seller’s Parent as a Party 

	
48

	
22.11           Entire Agreement 

	
48

	
22.12           Severability 

	
48

	
22.13           Captions 

	
48

	
22.14           Counterpart Execution 

	
48

	
22.15           Waiver of Certain Damages 

	
48

	
22.16           Amendments and Waivers 

	
48

	
22.17           Seller’s Knowledge 

	
49

	
22.18           Like-Kind Exchanges 

	
49

	
22.19           Further Cooperation 

	
49

 

  

iii  

  

Exhibits:

 

1.1(A)                      Leases and Lands

1.1(B)                      Properties

1.1(C)                      Wells

1.1(D)                      Easements

1.1(G)                      Contracts and Material Contracts

1.1(H)                      Related Assets

1.1(J)                      Vessels and Vehicles

1.2(K)                      Excluded Claims

1.2(N)                      EC 328 A Platform P&A Obligations

1.2(O)                      Excluded Property and Easements

1.2(P)                      Disposal Barge and Equipment

15.2(A)                    Form of Assignment, Bill of Sale and Conveyance

15.2(B)                    Form of Certificate of Non-Foreign Status

 

Schedules:

 

1.3A                      Inventory Hydrocarbons

2.1                        Allocated Values

3.4                        Agreed Imbalance

5.1(G)                   Liens and Encumbrances

10.1(H)                 Taxes

10.1(I)                   Suspended Funds

10.1(J)                  Compliance with Laws and Regulations

10.1(K)                 Preferential Rights and Consents to Assign

10.1(M)                 Authorities for Expenditure

10.1(N)                 Take or Pay

10.1(Q)                 Personal Property and Fixture Condition

17.1                      Bonding Requirements

18.7                      Excluded Employees

18.8                      Contribution Agreement

 

  

iv  

  

INDEX OF CERTAIN DEFINED TERMS

 

	
AAA

	
44

	
GAAP

	
6

	
Accounting Referee

	
9

	
Government Taking

	
19

	
Actual Asset Taxes

	
39

	
Hydrocarbons

	
2

	
Adverse Environmental Condition

	
17

	
Imbalance

	
10

	
Agreed Imbalance

	
10

	
Indemnitee

	
43

	
Agreement

	
1

	
Indemnity Cap

	
43

	
Allocated Value

	
5

	
Independent Expert

	
19

	
Allocation

	
39

	
Individual Claim Threshold

	
43

	
Asset Taxes

	
8

	
Interim Period

	
29

	
Assets

	
1

	
Inventory Hydrocarbons

	
5

	
Assumed Environmental Obligations

	
41

	
Lands

	
1

	
Assumed Obligations

	
40

	
Leases

	
1

	
Assumed Plugging and Abandonment Obligations

	
40

	
MMMF

	
27

	
Base Purchase Price

	
5

	
NORM

	
27

	
BOEMRE

	
32

	
Overestimated Amount

	
39

	
BOEMRE Lease Bonds

	
34

	
Parties

	
1

	
Buyer

	
1

	
Party

	
1

	
Buyer’s Indemnified Claim

	
42

	
Permitted Encumbrance

	
13

	
Buyer’s Parent

	
1

	
Phase I Environmental Assessment

	
11

	
Casualty Loss

	
19

	
Phase II Environmental Assessment

	
11

	
Casualty Loss Amount

	
20

	
Post-Closing Adjustment Statement

	
9

	
Claimant

	
44

	
Preferential Rights

	
20

	
Closing

	
32

	
Properties

	
1

	
Closing Adjustment Statement

	
8

	
Purchase Price

	
6

	
Closing Date

	
32

	
Records

	
3

	
Confidentiality Agreement

	
46

	
Related Assets

	
2

	
Contracts

	
2

	
Respondent

	
44

	
Contribution Agreement

	
37

	
Revised Allocation

	
39

	
Contribution Amount

	
38

	
Royalties

	
6

	
Conveyance

	
32

	
Rules

	
45

	
curative

	
17

	
Seller

	
1

	
cure

	
17

	
Seller’s Indemnified Claim

	
42

	
Current Tax Period

	
8

	
Seller’s knowledge

	
49

	
Damages

	
42

	
Seller’s Parent

	
1

	
Defect Deductible

	
12

	
Seller’s Pro Rata Share

	
39

	
Defect Notice Deadline

	
12

	
Survival Period

	
43

	
Defensible Title

	
12

	
Title Benefit

	
13

	
Deposit

	
5

	
Title Benefit Amount

	
16

	
Disputes

	
44

	
Title Benefit Notice

	
16

	
Easements

	
2

	
Title Defect

	
13

	
Effective Time

	
1

	
Title Defect Notice

	
15

	
Environmental Defect Value

	
17

	
Title Defect Value

	
13

	
Environmental Laws

	
17

	
Transition Services Agreement

	
32

	
Estimated Asset Taxes

	
39

	
Underestimated Amount

	
39

	
Excluded Assets

	
3

	
Units

	
2

	
Excluded Employees

	
37

	
Wells

	
1

  

v  

  

PURCHASE AND SALE AGREEMENT

 

This Purchase and Sale Agreement (this “Agreement”) is entered into the 1st day of April, 2011, by and among MARITECH RESOURCES, INC., a Delaware corporation (“Seller”), and TANA EXPLORATION COMPANY LLC, a Delaware limited liability company (“Buyer”), and, for the limited purposes described in Sections 22.9 and 22.10, respectively, TRT HOLDINGS, INC., a Delaware corporation (“Buyer’s Parent”) and TETRA TECHNOLOGIES, INC., a Delaware corporation (“Seller’s Parent”).  Buyer and Seller are sometimes collectively referred to herein as the “Parties” and each is sometimes individually referred to as a “Party.”

 

RECITALS

 

A.           Seller desires to sell to Buyer certain oil, gas and mineral properties and other assets on the terms and conditions set forth in this Agreement.

 

B.           Buyer desires to purchase from Seller such assets on the terms and conditions set forth in this Agreement.

 

AGREEMENT

 

In consideration of the mutual agreements contained in this Agreement and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Buyer and Seller agree as follows:

 

ARTICLE 1

SALE AND PURCHASE OF THE ASSETS

 

1.1 Acquired Assets. Subject to the terms and conditions of this Agreement, Seller agrees to sell, assign and deliver to Buyer, and Buyer agrees to purchase and acquire from Seller, as of 7:00 a.m. (Central Time) on January 1, 2011 (the “Effective Time”), all of Seller’s right, title and interest in and to the following, less and except the Excluded Assets, as defined hereafter (collectively, the “Assets”):

 

	
(A)  

	
The oil and gas leases described on Exhibit 1.1(A) (including all working interests, royalty interests, overriding royalty interests, net profits interests, production payments, reversionary rights and all other interests therein, whether described or not), insofar, and only insofar as such leases cover the lands and, where indicated, depths described on Exhibit 1.1(A) (the “Lands”) (such leases, insofar as they cover the Lands, being referred to herein as the “Leases”);

 

	
(B)  

	
the facilities and lands described on Exhibit 1.1(B) (the “Properties”);

 

	
(C)  

	
All wells located on or associated with the Leases or Lands (whether producing, not producing or abandoned) (the “Wells”), including, without limitation, the Wells identified on Exhibit 1.1(C);

 

  

1

  

 

	
(D)  

	
To the extent assignable or transferable, all easements, rights of way, licenses, permits, servitudes and other rights, privileges, benefits and powers to the extent used in connection with the operation of the Leases, Units (hereinafter defined), Wells, or Related Assets (hereinafter defined) (collectively, the “Easements”), including, without limitation, the Easements identified on Exhibit 1.1(D);

 

	
(E)  

	
All rights, obligations and interests in any unit or pooled area in which the Leases are included, including all interests in any Wells within the Units associated with the Leases, together with the rights in and to all existing and effective unitization, pooling and communitization agreements, declarations and orders, and the properties covered and the Units created thereby, to the extent they relate to or affect any of the Leases, Lands, Properties and Wells (the “Units”);

 

	
(F)  

	
All of the oil and gas and associated hydrocarbons in, on and under or that may be produced from or otherwise attributable to the Lands, the Leases, the Units or the Properties (“Hydrocarbons”) from and after the Effective Time;

 

	
(G)  

	
To the extent assignable and applicable to the Assets, all hydrocarbon purchase and sale agreements, farmin agreements, farmout agreements, bottom hole agreements, acreage contribution agreements, operating agreements, unit agreements, processing agreements, options, leases of equipment or facilities, joint venture agreements, pooling agreements, transportation agreements, rights-of-way and other contracts, agreements and rights, which are owned by Seller, in whole or in part, and are appurtenant to the Leases, Lands, Wells, Units or Properties, or used in connection with the sale, distribution or disposal of Hydrocarbons or water from the Leases, Lands, Wells, Units or Properties (collectively, the “Contracts”), including, without limitation, the Contracts identified on Exhibit 1.1(G);

 

	
(H)  

	
All well equipment, platforms, caissons and other such structures, pipelines, flowlines, gathering systems, plants, piping, buildings, treatment facilities, disposal facilities, injection facilities, compressors, casing, tanks, tubing, pumps, pumping units, motors, fixtures, machinery and other equipment located in or on the Leases, Lands, Wells, Units or Properties or used in the operation thereof which are owned by Seller, in whole or in part (the “Related Assets”), including, without limitation, the Related Assets identified on Exhibit 1.1(H);

 

	
(I)  

	
To the extent assignable, all governmental permits, licenses and authorizations, as well as any applications for the same, related to the Leases, Lands, Wells, Units, Properties, Contracts or Related Assets, or the use thereof;

 

  

2

  

 

	
(J)  

	
All vehicles and vessels used in the operation of the Assets, including without limitation the vehicles and vessels listed on Exhibit 1.1(J); and

 

	
(K)  

	
All of Seller’s files, records and data relating to the items described in subsections (A) through (J) above, including, without limitation, all lease, well, division order and other title records (including title curative documents); surveys, maps and drawings; contracts; correspondence; regulatory, geological records and information; production records, electric logs, core data, pressure data, decline curves, graphical production curves and all related matters and construction documents; and Seller’s proprietary geophysical and seismic records and interpretations of same, data and related information, if any, that is not subject to contractual restrictions on disclosure or transfer (collectively, the “Records”).

 

1.2 Excluded Assets.  Notwithstanding the foregoing, the Assets shall not include, and there is excepted, reserved and excluded from the purchase and sale contemplated herein, the following items (collectively, the “Excluded Assets”):

 

	
(A)  

	
all credits, rebates, refunds, adjustments, accounts, instruments and general intangibles, and all insurance claims, all to the extent attributable to the Assets with respect to any period of time prior to the Effective Time and received by Buyer or Seller within eighteen (18) months after the Closing Date (hereinafter defined);

 

	
(B)  

	
to the extent monetary settlement for same is received by Buyer or Seller within eighteen (18) months after the Closing Date all claims of Seller for refunds of or loss carry forwards with respect to (i) ad valorem, severance, production or any other taxes attributable to any period prior to the Effective Time, (ii) income or franchise taxes of Seller, or (iii) any taxes attributable to the other Excluded Assets, and such other refunds, and rights thereto, for amounts paid in connection with the Assets and attributable to the period prior to the Effective Time, including refunds of amounts paid under any gas gathering or transportation agreement;

 

	
(C)  

	
all proceeds, income or revenues (and any security or other deposits made) attributable to (i) to the extent monetary settlement for same is received by Buyer or Seller within eighteen (18) months after the Closing Date, the Assets for any period prior to the Effective Time, or (ii) any other Excluded Assets;

 

	
(D)  

	
all of Seller’s proprietary computer software, technology, patents, trade secrets, copyrights, names, trademarks, logos and other intellectual property;

 

	
(E)  

	
all of Seller’s rights and interests in geological and geophysical data which cannot be transferred without the consent of, or payment to, any

 

  

3

  

 

 

	
  

	
party, unless Buyer obtains  the applicable consent or makes the applicable payment;

 

	
(F)  

	
all documents and instruments of Seller that are protected by an attorney-client privilege (other than title opinions);

 

	
(G)  

	
data and other information that cannot be disclosed or assigned to Buyer as a result of confidentiality or similar arrangements under agreements with persons unaffiliated with Seller;

 

	
(H)  

	
any and all files, records, contracts and documents relating to Seller’s efforts to sell the Assets (or any other discussions or negotiations regarding the sale or other disposition of any of the Assets), including any research, valuation or pricing information prepared by Seller and/or its consultants in connection therewith, and any bids received for such interests and information and correspondence in connection therewith;

 

	
(I)  

	
to the extent monetary settlement for same is received by Buyer or Seller within eighteen (18) months after the Closing Date, all audit rights arising under any of the Contracts or otherwise with respect to any period prior to the Effective Time or with respect to any of the other Excluded Assets;

 

	
(J)  

	
all corporate, partnership, and income tax records of Seller;

 

	
(K)  

	
all claims arising from acts, omissions or events, or damage to or destruction of the Assets before the Effective Time listed on Exhibit 1.2(K) and all rights, titles, claims and interests of Seller related thereto (i) under any policy or agreement of insurance or indemnity, (ii) under any bond or letter of credit, or (iii) to any insurance or condemnation proceeds or awards;

 

	
(L)  

	
all bonds posted by Seller;

 

	
(M)  

	
all of Seller’s right, title and interest in, to and under the Contribution Agreements, as more fully described in Section 18.8;

 

	
(N)  

	
all obligations to plug, abandon and remove the East Cameron 328 A Platform (together with all obligations to plug, abandon and/or remove all wells, equipment, pipeline segments, subsurface debris and obstructions related thereto, as set forth on Exhibit 1.2(N), the “EC 328 A Platform P&A Obligations”);

 

	
(O)  

	
the property described in Exhibit 1.2(O), together with an undivided interest in all easements, rights-of-way, licenses, permits, servitudes, surface leases, surface use agreements, and similar rights, obligations and interests, to the extent they are attributable and allocable to rights and interests so retained by Seller;

 

  

4

  

 

	
(P)  

	
the equipment, material and barge currently located at Timbalier Bay and described on Exhibit 1.2(P) (the “Disposal Barge and Equipment”)

 

	
(Q)  

	
all obligations, liability, and benefits related to claims and/or counterclaims asserted in the litigation listed on Schedule 10.1(H), to the extent related to production prior to the Effective Time, and the responsibility for the cost of defense thereof.

 

1.3 Ownership of Production from the Assets

 

	
(A)  

	
Production Before the Effective Time.  Seller shall own all Hydrocarbons produced from or attributable to the Assets before the Effective Time.  If, at the Effective Time, merchantable Hydrocarbons produced from or attributable to the Assets are stored in tanks (the “Inventory Hydrocarbons”), Seller shall sell to Buyer, and Buyer shall purchase from Seller, the Inventory Hydrocarbons at the contract price in effect as of the Effective Time or the market value if there is no contract price in effect as of the Effective Time.   The Inventory Hydrocarbons have been gauged and measured as of the Effective Time as set forth on Schedule 1.3A, which the Parties may update prior to Closing.  Buyer shall pay Seller for the Inventory Hydrocarbons as an adjustment to the Purchase Price at Closing, as provided in Section 3.1(A)(ii).

 

	
(B)  

	
Production After the Effective Time.  Upon Closing, Buyer will own all Hydrocarbons produced from or attributable to the Assets from and after the Effective Time; provided, however, that Seller may sell on Buyer’s behalf all Hydrocarbons produced from or attributable to the Assets between the Effective Time and the Closing Date, and Seller will credit Buyer with the proceeds received from such sales as an adjustment to the Purchase Price subject to adjustment as provided in Section 3.1(B)(i).

 

ARTICLE 2

PURCHASE PRICE

 

2.1 Purchase Price.  The purchase price for the Assets is Two Hundred Twenty-Two Million Two Hundred Fifty Thousand Dollars (U.S.) ($222,250,000) (the “Base Purchase Price”), subject to the adjustments provided for herein.  The Base Purchase Price is allocated among the Assets as provided in Schedule 2.1 (the portion of the Base Purchase Price so allocated to an Asset being referred to herein as its “Allocated Value.”)

 

2.2 Deposit.  Within two (2) business days after Buyer’s receipt of notice of the approval of this Agreement and the transactions contemplated by this Agreement by Board of Directors of Seller’s Parent, Buyer shall pay to Seller, by wire transfer of immediately available funds, a performance guarantee deposit (the “Deposit”) in the amount of five percent (5%) of the Base Purchase Price.  Said sum is considered and recognized by Buyer and Seller as a deposit on the above stated Base Purchase Price and as earnest money for Buyer’s performance hereunder.  If Buyer fails to pay the Deposit within two (2) business days after Buyer’s receipt of notice of 

 

  

5

  

 

the approval of this Agreement and the transactions contemplated by this Agreement by Board of Directors of Seller’s Parent, Seller may, at its sole discretion, terminate this Agreement upon written notice to Buyer, and, in such event, Seller and Buyer shall have no further obligation(s) to one another.  If the Board of Directors of Seller’s Parent fails or refuses to approve this Agreement and the transactions contemplated hereunder on or before April 8, 2011, then this Agreement shall terminate and in such event, Seller and Buyer shall have no further obligation(s) to one another.

 

ARTICLE 3

PURCHASE PRICE ADJUSTMENTS

 

3.1 Adjustments to the Base Purchase Price.  The Base Purchase Price shall be adjusted as follows (as so adjusted, the “Purchase Price”).

 

	
(A)  

	
The Base Purchase Price shall be adjusted upward (without duplication) by:

 

	
(i)  

	
an amount equal to the proceeds actually received by Buyer from the sale of Hydrocarbons produced from or attributable to the Assets prior to the Effective Time (other than Inventory Hydrocarbons), net of lessors’ royalties, overriding royalties, production payments, net profits interests, carried working interests and other similar burdens payable to third parties which burden the Assets (collectively, “Royalties”) and severance taxes paid by Buyer to third parties with respect thereto (without duplication of any amounts included in the downward adjustment to the Base Purchase Price pursuant to Section 3.1(B)(ii));

 

	
(ii)  

	
an amount equal to the value of all Inventory Hydrocarbons, such value to be based upon the contract price governing Hydrocarbon sales from the applicable Asset in effect as of the Effective Time (or the market value if there is no price in effect as of the Effective Time), net of Royalties and severance taxes (without duplication of any amounts included in the downward adjustment to the Base Purchase Price pursuant to Section 3.1(B)(ii));

 

	
(iii)  

	
without duplication of any adjustment pursuant to Section 3.1(B)(i), an amount equal to all operating and capital costs, expenses and other expenditures (whether capitalized or expensed), actually paid by Seller, in compliance with this Agreement, that are, in accordance with generally accepted accounting principles in the United States, consistently applied (“GAAP”), attributable to the ownership or operation of the Assets after the Effective Time, including, without duplication, all Royalties, rentals and other burdens on production, transportation and other fees and expenses relating to the transportation, processing and marketing of Hydrocarbons produced after the 

 

  

6

  

 

 

	
  

	
Effective Time; rentals and other similar charges; expenses under applicable joint operating agreements or other contracts or agreements, including without limitation, drilling, completion, reworking, deepening, sidetracking, and plugging and abandonment costs; and ad valorem, property, production, excise, severance, and any other taxes (except income or franchise taxes) based upon or measured by the ownership of the Assets or the production of Hydrocarbons therefrom after the Effective Time;

 

	
(iv)  

	
a fixed monthly rate, prorated if necessary, of $150,000 as compensation for overhead, operation and maintenance expenses (excluding workover costs, plugging and abandoning costs, and major costs) from and after the Effective Time to the Closing Date; provided, however, that Seller shall be entitled to retain amounts paid to Seller by third parties expressly designated as overhead charges pursuant to the  joint operating agreement governing the applicable Asset from and after the Effective Time to the Closing Date;

 

	
(v)  

	
to the extent the Assets are, in the aggregate, underproduced, the value of such net Imbalance, calculated as provided in Section 3.4;

 

	
(vi)  

	
adjustments with respect to Title Benefits, pursuant to Section 5.4; and

 

	
(vii)  

	
any other amount agreed upon in writing by Seller and Buyer.

 

	
(B)  

	
The Base Purchase Price shall be adjusted downward (without duplication) by:

 

	
(i)  

	
an amount equal to the proceeds actually received by Seller from the sale of Hydrocarbons produced from or attributable to the Assets after the Effective Time, net of Royalties and severance taxes paid by Seller (without duplication of any amounts included in the adjustment to the Base Purchase Price pursuant to Section 3.1(A)(iii));

 

	
(ii)  

	
an amount equal to all operating and capital costs, expenses and other expenditures (whether capitalized or expensed), actually paid by Buyer that are, in accordance with GAAP, attributable to the ownership or operation of the Assets prior to the Effective Time, including, without duplication, all Royalties, rentals and other burdens on production, transportation and other fees and expenses relating to the transportation, processing and marketing of Hydrocarbons produced prior to the Effective Time; rentals and other similar charges; expenses under applicable joint operating agreements or other contracts or agreements, including without 

 

  

7

  

 

 

	
 

	
limitation, drilling, completion, reworking, deepening, sidetracking, and plugging and abandonment costs; and, without duplication of any adjustment pursuant to Section 3.1(A)(i), ad valorem, property, production, excise, severance, and any other taxes (except income or franchise taxes) based upon or measured by the ownership of the Assets or the production of Hydrocarbons therefrom prior to the Effective Time;

 

	
(iii)  

	
all amounts related to Preferential Rights as determined pursuant to Section 9.2;

 

	
(iv)  

	
to the extent the Assets are, in the aggregate, overproduced, the value of such net Imbalance, calculated as provided in Section 3.4;

 

	
(v)  

	
the amount of any adjustment for Title Defects and Adverse Environmental Conditions, determined as provided in Article 5 and Article 6, respectively;

 

	
(vi)  

	
Seller’s share of the amount of all ad valorem, severance, property or other taxes (other than income and sales or use taxes) paid or payable with respect to or attributable to the Assets (“Asset Taxes”) for the tax period in which the Effective Time occurs (the “Current Tax Period”) which are unpaid as of the Closing Date, to the extent attributable to periods prior to the Effective Time, which amount shall, where possible, be computed based upon the tax rate and values applicable to the tax assessment period in question; otherwise, the amount of the adjustment under this paragraph shall be estimated based upon such taxes assessed against the applicable portion of the Assets for the immediately preceding tax assessment period just ended; and

 

	
(vii)  

	
any other amount agreed upon in writing by Seller and Buyer.

 

3.2 Closing Statement.  Seller shall prepare, in accordance with the provisions of this Article 3, a statement (the “Closing Adjustment Statement”) setting forth each adjustment to the Base Purchase Price.  Seller shall submit the Closing Adjustment Statement to Buyer, together with reasonable documentation supporting the calculation of amounts presented on the Closing Adjustment Statement, no later than five (5) business days prior to the scheduled Closing Date.  In the event Buyer believes that the Closing Adjustment Statement does not accurately set forth the Purchase Price and/or the adjustments thereto, Buyer shall communicate to Seller in writing such inaccuracies no later than three (3) business days prior to Closing. The Parties shall cooperate to prepare a mutually agreeable Closing Adjustment Statement on or before the date that is two (2) days prior to Closing.  When available, actual figures will be used for the adjustments at Closing.  To the extent actual figures are not available, estimates shall be used, subject to final adjustments as described in Section 3.3 below.

 

3.3 Post-Closing Adjustments.

 

  

8

  

 

	
(A)  

	
A post-closing adjustment statement (the “Post-Closing Adjustment Statement”) based on the actual income and expenses shall be prepared and delivered by Seller to Buyer within one hundred twenty (120) days after the Closing Date, proposing further adjustments to the calculation of the Purchase Price based on the information then available.  Seller and Buyer shall each be given access to and shall be entitled to review and audit the other Party’s records pertaining to the computation of amounts in such Post-Closing Adjustment Statement.

 

	
(B)  

	
Within one hundred fifty (150) days after the Closing Date, Buyer shall deliver to Seller a written statement describing in reasonable detail its objections (if any) to any amounts or items set forth on or omitted from the Post-Closing Adjustment Statement.  If Buyer does not raise objections within such period, then the Post-Closing Adjustment Statement shall become final and binding upon the Parties at the end of such period.

 

	
(C)  

	
If Buyer raises objections, the Parties shall negotiate in good faith to resolve any such objections.  If the Parties are unable to resolve any disputed item within fifteen (15) days after Seller’s receipt of Buyer’s written objections to the Post-Closing Adjustment Statement, any such disputed item shall be submitted to a nationally recognized independent accounting firm mutually agreeable to the Parties (the “Accounting Referee”) who shall be instructed to resolve such disputed item within thirty (30) days.  The resolution of disputes by the Accounting Referee shall be set forth in writing and shall be conclusive, binding upon and non-appealable by the Parties.  The fees and expenses of the Accounting Referee shall be paid one-half by Buyer and one-half by Seller.

 

	
(D)  

	
Within five (5) days after the Post-Closing Adjustment Statement has become final and binding on the Parties or, if applicable, the issuance of the Accounting Referee’s decision, then, (i) in the event the estimated Purchase Price paid at Closing is greater than the final Purchase Price, as finally determined in the Post-Closing Adjustment Statement or by the Accounting Referee, as applicable, then Seller shall pay the amount of such difference to Buyer; and (ii) in the event the estimated Purchase Price paid at Closing is less than the final Purchase Price, as finally determined in the Post-Closing Adjustment Statement or by the Accounting Referee, as applicable, then Buyer shall pay the amount of such difference to Seller.

 

3.4 Imbalances.  Buyer shall assume all rights and obligations of Seller arising from Imbalances pertaining to the Assets from and after the Effective Time (whether overproduced or underproduced). The Net Imbalances attributable to the Assets as of the Effective Time are estimated to be as set forth on Schedule 3.4 (the “Agreed Imbalance”), notwithstanding that the actual Imbalance may be less or greater.  Seller shall use reasonable efforts to attempt to determine the actual net Imbalances in preparation of the Post-Closing Adjustment Statement.  The Base Purchase Price shall be increased in the Post-Closing Adjustment Statement by the 

 

  

9

  

 

actual Imbalance as of the Effective Time in the manner set forth below if the Assets are underproduced and shall be decreased in the same manner if the Assets are overproduced, in each case as provided in Section 3.1.  Such Imbalances shall be accounted for between the Parties at the price of $4.00 per MMBtu for gas and $90.00 per barrel for oil (and associated Hydrocarbons).  Such settlement shall be final and neither Party thereafter shall make claim upon the other concerning the Imbalances of the Assets, each Party hereby waiving any such claim to the extent permitted by applicable law.  The term “Imbalance” means any Hydrocarbons production or pipeline imbalance existing as of the Effective Time with respect to any of the Assets, together with any related rights or obligations as to future cash and/or gas or product balancing, as a result of, production or pipeline delivery imbalances.

 

3.5 Allocation of Revenues and Expenses Upon Closing.

 

	
(A)  

	
Allocation of Refunds and Receivables as of the Effective Time.  Seller shall retain all receivables, refunds and other amounts attributable to the ownership or operation of the Assets prior to the Effective Time to the extent received by Buyer or Seller within eighteen (18) months after the Closing Date.  Except to the extent an upward adjustment of the Base Purchase Price has been made with respect thereto, if Buyer collects any such receivable, refund or other amount, then Buyer shall promptly remit any such amount to Seller.  After Closing, Buyer shall own all receivables, refunds and other amounts attributable to the ownership or operation of the Assets on or after the Effective Time.  Except to the extent a downward adjustment of the Base Purchase Price has been made with respect thereto, if Seller collects any such receivable, refund or other amount, then Seller shall promptly remit any such amount to Buyer.

 

	
(B)  

	
Audit Adjustments.  Seller shall retain all rights and obligations relating to adjustments resulting from any operating agreement and other audit claims asserted by or against third party operators to the extent attributable to ownership or operation of the Assets prior to the Effective Time.  Any credit received by Buyer pertaining to such an audit claim shall be paid to Seller within thirty (30) days after receipt.

 

	
(C)  

	
Refunds of Asset Taxes.  Refunds of Asset Taxes shall be promptly paid as follows (or to the extent payable but not paid due to offset against other Taxes shall be promptly paid (or retained, as appropriate) by the Party receiving the benefit of the offset as follows):  (i) to Seller to the extent attributable to periods prior to the Effective Time; and (ii) to Buyer to the extent attributable to periods from and after the Effective Time.

 

	
(D)  

	
Other Proceeds and Expenses.  Upon and after Closing, subject to and except as otherwise provided herein and except to the extent an adjustment or an accounting with respect thereto has previously been made, (A) all monies, refunds, proceeds, receipts, credits, receivables, accounts and income attributable to the Assets conveyed hereunder (i) for all periods of time from and after the Effective Time shall be the property and 

 

  

10

  

 

	
 

	
entitlement of Buyer, and, to the extent received by Seller, Seller shall fully disclose and account therefor to Buyer promptly, and (ii) for the period of time prior to the Effective Time shall be the sole property and entitlement of Seller and to the extent received by Buyer, Buyer shall fully disclose and account therefor to Seller promptly and, similarly, (B) all operating expenses and capital expenditures relating to the ownership and operation of the Assets (i) which are attributable to periods prior to the Effective Time shall be the sole responsibility of Seller, and Seller shall promptly pay same, or if paid by Buyer, promptly reimburse Buyer for same and (ii) which are attributable to periods from and after the Effective Time shall be the sole obligation of Buyer and Buyer shall promptly pay same, or if paid by Seller, promptly reimburse Seller for same.

 

	
(E)  

	
Cooperation.  Each Party covenants and agrees to promptly inform the other with respect to amounts owing under this Section 3.5.

 

ARTICLE 4

BUYER’S DUE DILIGENCE

 

4.1 Access.  Prior to Closing, Seller shall grant to Buyer and its representatives, employees, consultants, independent contractors, attorneys and other advisors reasonable access during Seller’s normal  business hours to (i) the Contracts and the Records, which shall be made available for review in Seller’s offices; and (ii) the Leases and other Assets operated by Seller, provided that Buyer and its representatives shall first execute such boarding agreements as may be reasonably requested by Seller prior to entering the Leases, and, with respect to Leases and other Assets not operated by Seller, Seller shall reasonably cooperate with Buyer, at no cost or expense to Seller, to obtain the operator’s consent to Buyer’s access to such non-operated leases, but Seller cannot assure such access.

 

4.2 Buyer’s Environmental Assessment.  Buyer’s inspection of the Assets may include a Phase I Environmental Assessment and a limited Phase II Environmental Assessment of soil and water sampling and sampling interior building materials of any structure intended for human entry at sites selected by Buyer, subject to obtaining access rights pursuant to Section 4.1.  For purposes of this Agreement, a “Phase I Environmental Assessment” means (i) a review of Seller’s and governmental records with respect to the compliance of the Assets with environmental laws, and (ii) subject to access rights pursuant to Section 4.1, a site visit to visually inspect and survey the Assets and obtain data regarding Asset condition through non-invasive or non-destructive means.  For purposes of this Agreement, a “Phase II Environmental Assessment” means limited soil and water sampling and sampling interior building materials of any structure intended for human entry at sites selected by Buyer, subject to obtaining access rights pursuant to Section 4.1. Seller shall be provided at least forty-eight (48) hours’ prior notice of any such inspections, and Seller’s representative(s) shall have the right to witness all such inspections.  Buyer shall give Seller twenty-four (24) hours notice prior to conducting invasive testing or sampling of any kind.  Buyer shall conduct any sampling so as to be minimally invasive with respect to the Assets and so as to not interfere with or damage same.  With respect to any samples taken in connection with Buyer’s assessment, Buyer shall take split samples, providing one of each such sample, properly labeled and identified, to Seller.  Buyer will, if so 

 

  

11

  

 

requested by Seller, furnish Seller with a copy of any Phase I and Phase II Environmental Assessments and sampling results for the Assets including, without limitation, all final reports, data, and conclusions.  The cost and expense of Buyer’s assessments, if any, shall be borne solely by Buyer.

 

4.3 Buyer’s Indemnification of Seller.  Buyer hereby RELEASES and INDEMNIFIES and SHALL DEFEND AND HOLD HARMLESS Seller and its affiliates and their respective shareholders, officers, directors, employees, agents, representatives, contractors, successors, and assigns from and against any and all claims, demands, causes of action, damages, liabilities, payments, charges, costs, and expenses of any kind or character arising from Buyer’s inspection of the Assets, including, without limitation, claims for personal or bodily injuries to or death of any person or damage to the Assets or the property of any person.  THE FOREGOING INDEMNITY INCLUDES, AND THE PARTIES INTEND IT TO INCLUDE, AN INDEMNIFICATION OF THE INDEMNIFIED PARTIES FROM AND AGAINST CLAIMS ARISING OUT OF OR RESULTING, IN WHOLE OR PART, FROM THE CONDITION OF THE ASSETS OR THE SOLE, JOINT, COMPARATIVE, OR CONCURRENT NEGLIGENCE (BUT NOT GROSS NEGLIGENCE OR WILLFUL MISCONDUCT) OR STRICT LIABILITY OF, ANY OF THE INDEMNIFIED PARTIES.

 

ARTICLE 5

TITLE MATTERS

 

5.1 Certain Definitions.

 

	
(A)  

	
“Defect Deductible” means an amount equal to two percent (2%) of the Base Purchase Price.

 

	
(B)  

	
“Defect Notice Deadline” means 5:00 p.m. Central Time on the day which is the tenth (10th) day prior to the Closing Date.

 

	
(C)  

	
“Defensible Title” means, with respect to an Asset, such title to the Asset that, subject to Permitted Encumbrances, (i) entitles Seller to receive not less than the percentage set forth in Exhibit 1.1(A) as Seller’s “Net Revenue Interest” of all Hydrocarbons produced, saved and marketed from the Asset; (ii) obligates Seller to bear not greater than the percentage set forth in Exhibit 1.1(A) as Seller’s “Working Interest” of the costs and expenses relating to the maintenance, development and operation of the Asset (unless there is a corresponding increase in the Net Revenue Interest); and (iii) is free and clear of all liens, claims and encumbrances.

 

	
(D)  

	
“Title Benefit” shall mean that (i) Seller’s Net Revenue Interest in any Asset is greater than the Net Revenue Interest with respect to such Asset set forth in Exhibit 1.1(A), or (ii) Seller’s Working Interest in any Asset is less than the Working Interest set forth in Exhibit 1.1(A) for such Asset without a proportionate decrease in Seller’s Net Revenue Interest in such Asset.

 

  

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(E)  

	
“Title Defect” shall mean any particular defect in or failure of Seller’s ownership of all or any portion of any Asset that causes Seller to not have Defensible Title to all or a portion of such Asset.  Notwithstanding any other provision in this Agreement to the contrary, the following shall not be considered Title Defects:  (a) defects or irregularities that have been cured or remedied by the passage of time, including, without limitation, applicable statutes of limitation or statutes for prescription; (b) any individual matter having a Title Defect Value of $50,000 or less, net to Seller’s interest; or (c) any failure to record state or federal Leases, or assignments thereof, in county or parish records.

 

	
(F)  

	
“Title Defect Value” means, with respect to an Asset, the amount by which the value of such Asset is impaired as a result of the existence of one or more Title Defects.  The Title Defect Value with respect to an Asset shall be determined taking into consideration the Allocated Value of the affected Asset, the portion of the Asset affected by such Title Defect, and the legal effect of such Title Defect on the Asset. If such Title Defect is in the nature of a lien, then Seller and Buyer agree that the Title Defect Value shall be equal to the amount required to fully discharge such lien.  If the Title Defect results from any matter not described above, the Title Defect Value shall be an amount equal to the difference between the value of the Asset as impaired by such Title Defect and the value of such Asset without such Title Defect (taking into account the Allocated Value of the Asset).

 

	
(G)  

	
“Permitted Encumbrance” means:

 

	
(i)  

	
Any materialman’s, mechanics’, repairman’s, employees’, contractors’, operators’, or other similar liens, security interests or charges for liquidated amounts arising in the ordinary course of business incidental to construction, maintenance, development, production or operation of the Assets, or the production or processing of Hydrocarbons therefrom, that are not delinquent or, if delinquent, are being contested in good faith by appropriate proceedings and are listed on Schedule 5.1(G);

 

	
(ii)  

	
To the extent that the net cumulative effect of such contracts and documents, as to a particular Asset, do not operate to reduce the Net Revenue Interest of Seller in such Asset below that specified in Exhibit 1.1(D) or obligate Seller to bear a greater Working Interest in such Asset above that specified in Exhibit 1.1(D); production sales contracts; division orders; contracts for sale, purchase, exchange, refining, processing or fractionating of hydrocarbons; compression agreements; equipment leases; surface leases; unitization and pooling designations, declarations, orders and agreements; processing agreements; plant agreements; pipeline, gathering, and transportation agreements; injection,

 

  

13

  

 

	
 

	
repressuring, and recycling agreements; salt water or other disposal agreements; seismic or geophysical permits or agreements; and any and all other agreements which are ordinary and customary in the oil and gas exploration, development, or extraction business, or in the business of processing of gas and gas condensate production for the extraction of products therefrom;

 

	
(iii)  

	
Any liens for taxes not yet delinquent or, if delinquent, that are being contested in good faith by appropriate proceedings and are listed on Schedule 5.1(G);

 

	
(iv)  

	
Any liens or security interests created by law or reserved in oil, gas and/or mineral leases for royalty, bonus, or rental or for compliance with the terms of any Asset which are not yet delinquent or, if delinquent, that are being contested in good faith by appropriate proceedings;

 

	
(v)  

	
Any easements, rights-of-way, servitudes, permits, licenses, surface leases and other rights with respect to surface operations, to the extent such matters do not interfere in any material respect with Seller’s (or, upon Closing, will not interfere in any material respect with Buyer’s) operation of the portion of the Asset burdened thereby;

 

	
(vi)  

	
All royalties, overriding royalties, net profits interests, carried interests, reversionary interests and other burdens, to the extent that the net cumulative effect of such burdens, as to a particular Asset, does not operate to reduce the Net Revenue Interest of Seller in such Asset below that specified in Exhibit 1.1(A);

 

	
(vii)  

	
Conventional rights of reassignment to third parties not affiliated with Seller arising upon surrender or abandonment of any Asset;

 

	
(viii)  

	
all approvals required to be obtained in connection with the transactions contemplated herein from governmental authorities which are customarily obtained post-closing;

 

	
(ix)  

	
preferential rights to purchase the Assets and required consents to the transfer of the Assets described on Schedule 10.1(K);

 

	
(x)  

	
Rights reserved to or vested in any governmental authority to control or regulate any of the Wells or Units included in the Asset and all applicable laws, rules, regulations and orders of such authorities;

 

	
(xi)  

	
Minor defects and irregularities in title and other restrictions that are of the nature customarily accepted by prudent purchasers of oil and gas properties and do not materially affect the value of any

 

  

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property encumbered thereby or materially impair the ability of the obligor to use any such property in its operations; provided the effect thereof does not operate to reduce the Net Revenue Interest of Seller for any Asset below the Net Revenue Interest set forth in Exhibit 1.1(A) or increase the Working Interest of Seller for any Asset above the Working Interest set forth in Exhibit 1.1(A) for such Asset (unless there is a corresponding increase in the Net Revenue Interest for such Asset); and

 

	
(xii)  

	
any matter described with particularity on any schedule or exhibit to this Agreement.

 

5.2 Notice of Title Defects.  If Buyer discovers any Title Defect affecting any of the Assets, Buyer shall notify Seller promptly, but in any event prior to the Defect Notice Deadline, of such alleged Title Defect.  To be effective, such notice (“Title Defect Notice”) must (i) be in writing, (ii) be received by Seller prior to the Defect Notice Deadline, (iii) describe the Title Defect in reasonable detail, (iv) identify the specific Asset(s) affected by such Title Defect, and (v) include Buyer’s reasonable estimate of the Title Defect Value.  Any matters that may otherwise constitute Title Defects, but of which Seller has not been specifically notified by Buyer in accordance with the foregoing, shall be deemed to have been waived by Buyer for all purposes.

 

5.3 Remedies for Title Defects.  Upon the receipt of a Title Defect Notice from Buyer delivered in accordance with Section 5.2, Seller shall have the option, but not the obligation, to attempt to cure such Title Defect at any time prior to the Closing.  The cost of such cure or attempted cure of such Title Defect shall be borne by Seller.  If Seller is unable or unwilling to cure the Title Defect before Closing, then Buyer and Seller will have the following rights and remedies with respect to the uncured Title Defect(s):

 

	
(A)  

	
Buyer may waive the uncured Title Defect and proceed with Closing without adjustment to the Base Purchase Price.

 

	
(B)  

	
If the aggregate Title Defect Values of uncured, unwaived Title Defects together with the aggregate Environmental Defect Values of uncured, unwaived Adverse Environmental Conditions are less than or equal to the Defect Deductible, Seller and Buyer shall proceed with Closing as to all of the Assets without curative action by Seller with respect to such Title Defects and without adjustment to the Base Purchase Price.

 

	
(C)  

	
If the aggregate Title Defect Values of uncured, unwaived Title Defects together with the aggregate Environmental Defect Values of uncured, unwaived Adverse Environmental Conditions exceeds the Defect Deductible, then the Base Purchase Price shall be reduced by the amount by which the aggregate Title Defect Values and Environmental Defect Values agreed to by the Parties exceed the Defect Deductible.  If the Parties are unable to agree on whether a Title Defect exists or the Title Defect Value attributable thereto, then (i) if the Title Defect Value of an 

 

  

15

  

 

	
 

	
Asset exceeds the Allocated Value for such Asset, Buyer or Seller may, at such Party’s election, exclude the affected Asset from this transaction and reduce the Base Purchase Price by the Allocated Value of the excluded Asset, without application of the Defect Deductible that might otherwise limit the reduction of the Base Purchase Price associated with a Title Defect; or (ii) either party may refer the dispute to an Independent Expert, as defined hereinafter, for determination, in which case the affected Asset shall be included in the Assets delivered at Closing, and, in the event the Title Defect Value(s), as determined by the Independent Expert, when aggregated with all other Title Defect Values and Environmental Defect Values, exceeds the Defect Deductible, the Base Purchase Price shall be adjusted with respect thereto in the Post-Closing Adjustment Statement.

 

	
(D)  

	
The remedies set forth in this Section 5.3 are Buyer’s exclusive remedies for all Title Defects, and Seller shall have no other liability to Buyer with respect to Title Defects.

 

5.4 Title Benefits.  If, prior to the Defect Notice Deadline, Buyer identifies a Title Benefit affecting the Assets, Buyer shall notify Seller of such Title Benefit.  Subject to the limitations set out below, Seller shall be entitled to an upward adjustment to the Base Purchase Price with respect to all Title Benefits of which either Party provides (or is required to provide) notice to the other Party (a “Title Benefit Notice”) prior to the Defect Notice Deadline.  If the Title Benefit is in the nature of Seller’s Net Revenue Interest in an Asset being greater than the Net Revenue Interest set forth on Exhibit 1.1(A) and the Working Interest is also proportionately increased, then Buyer and Seller agree that, subject to the limitation set out below, the Base Purchase Price shall be increased by an amount (the “Title Benefit Amount”) equal to the Allocated Value for the relevant Asset multiplied by a fraction, the numerator of which is the amount of the increase in such Net Revenue Interest as a result of such Title Benefit and the denominator of which is the Net Revenue Interest specified for such Asset on Exhibit 1.1(A).  No adjustment shall be made with respect to any Title Benefit unless the Title Benefit Amount attributable thereto exceeds $50,000. If with respect to a timely asserted Title Benefit the Parties have not agreed on the validity of the Title Benefit or the Title Benefit Amount attributable thereto on or before Closing, either Party shall have the right to elect by written notice to the other Party to have the validity of the Title Benefit and/or the Title Benefit Amount determined by an Independent Expert pursuant to Article 7.

 

ARTICLE 6

ENVIRONMENTAL ASSESSMENT

 

6.1 Certain Definitions.

 

	
(A)  

	
“Adverse Environmental Condition” means, with respect to any Asset, the failure of the Asset to be in compliance with applicable Environmental Laws; provided, however, that no individual matter shall be deemed to be or constitute an Adverse Environmental Condition unless the Environmental Defect Value for such matter exceeds $50,000, net to Seller’s interest in the Asset.

 

  

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(B)  

	
The term “cure” or “curative” means, with respect to any Adverse Environmental Condition, the undertaking and completion of those actions and activities necessary to remediate such Adverse Environmental Condition to the degree necessary such that such Adverse Environmental Condition no longer constitutes an Adverse Environmental Condition.

 

	
(C)  

	
“Environmental Defect Value” means, with respect to any Adverse Environmental Condition, the reasonably estimated costs and expenses to cure such Adverse Environmental Condition utilizing reasonably cost-effective remedies that are consistent with and in compliance with Environmental Laws (hereinafter defined), taking into account that non-permanent remedies (such as mechanisms to contain or stabilize hazardous materials, including monitoring site conditions, natural attenuation, risk-based corrective action, institutional controls or other appropriate restrictions on the use of property, caps, dikes, encapsulation, leachate collection systems, etc.) may be the most cost-effective manner reasonably available

 

	
(D)  

	
“Environmental Laws” means any statute, law, ordinance, rule, regulation, code, order, judicial writ, injunction, notice to lessees or decree issued by any federal, state, or local governmental authority in effect as of the Effective Time relating to the control of any pollutant or protection of the air, water, land, or environment or the release or disposal of hazardous materials, hazardous substances or waste materials.

 

6.2 Notice of Adverse Environmental Conditions.  Prior to the Defect Notice Deadline, Buyer shall notify Seller in writing of any Adverse Environmental Conditions identified by Buyer with respect to the Assets.  Such notice shall describe in reasonable detail the Adverse Environmental Condition, include all data and information in Buyer’s possession or control bearing thereon, and include the estimated Environmental Defect Value attributable thereto.  Any matters that may otherwise constitute Adverse Environmental Conditions, but of which Seller has not been specifically notified by Buyer in accordance with the foregoing, shall be deemed to have been waived by Buyer for all purposes under this Agreement.  Buyer shall disclose any such Adverse Environmental Condition only to Seller and shall maintain the existence of such Adverse Environmental Condition in confidence, unless it is required to report same to any applicable agency or authority in accordance with an applicable Environmental Law.

 

6.3 Remedies for Adverse Environmental Conditions.  Upon the receipt of a notice of Adverse Environmental Condition from Buyer delivered in accordance with Section 6.2, Seller shall have the option, but not the obligation, to attempt to cure such Adverse Environmental Condition at any time prior to the Closing.  The cost of such cure or attempted cure of such Adverse Environmental Condition shall be borne by Seller.  If Seller is unable or unwilling to cure the Adverse Environmental Condition before Closing, then Buyer and Seller will have the following rights and remedies with respect to the uncured Adverse Environmental Condition(s):

 

	
(A)  

	
Buyer may waive the uncured Adverse Environmental Condition and proceed with Closing without adjustment to the Base Purchase Price.

 

  

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(B)  

	
If the aggregate Environmental Defect Values of uncured, unwaived Adverse Environmental Conditions together with the aggregate Title Defect Values of uncured, unwaived Title Defects are less than or equal to the Defect Deductible, the Parties will be obligated to proceed with Closing without curative action by Seller with respect to such Adverse Environmental Conditions and without adjustment to the Base Purchase Price.

 

	
(C)  

	
If the aggregate Environmental Defect Values of uncured, unwaived Adverse Environmental Conditions together with the aggregate Title Defect Values of uncured, unwaived Title Defects exceeds the Defect Deductible, then the Base Purchase Price shall be reduced by the amount by which the aggregate Environmental Defect Values and Title Defect Values agreed to by the Parties exceeds the Defect Deductible.  If the Parties are unable to agree on whether an Adverse Environmental Condition exists or the Environmental Defect Value attributable thereto, then (i) if the Environmental Defect Value of an Asset exceeds the Allocated Value for such Asset, Buyer or Seller may, at such Party’s election, exclude the Asset affected thereby from this transaction and reduce the Base Purchase Price by the Allocated Value of the excluded Asset, without application of the Defect Deductible that might otherwise limit the reduction of the Base Purchase Price associated with an Environmental Defect; or (ii) either Party may refer the dispute to an Independent Expert, for determination, in which case the affected Asset shall be included in the Assets delivered at Closing, and, in the event the Environmental Defect Value(s), as determined by the Independent Expert, when aggregated with all other Environmental Defect Values and Title Defect Values, exceeds the Defect Deductible,  the Base Purchase Price shall be adjusted with respect thereto post-Closing.

 

	
(D)  

	
The remedies set forth in this Section 6.3 are the sole and exclusive remedies of Buyer with respect to any adverse environmental condition attributable to the Assets.

 

ARTICLE 7

INDEPENDENT EXPERT.

 

7.1 Independent Expert.  Each party shall have the right to submit disputes regarding the matters covered by Article 5, Article 6 (including the nature or calculation of Title Defects, Title Benefits and Environmental Defects), Article 8, or the pre-Closing Date representations in Sections 10.1(P) and (Q) to an independent expert appointed in accordance with this Section 7.1 (each, an “Independent Expert”), who shall serve as sole arbitrator of such dispute.  An Independent Expert shall be appointed by mutual agreement of Seller and Buyer from among candidates with experience and expertise in the area that is the subject of such dispute, and failing such agreement, such Independent Expert for such dispute shall be selected in accordance with the Rules (as hereinafter defined).  The cost of any such Independent Expert will be borne one-half by Seller and one-half by Buyer.  For any dispute resolution proceeding under this 

 

  

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Section 7.1, Seller and Buyer will present a written statement of their respective positions on the dispute to the Independent Expert as soon as practicable after, but in any event within thirty (30) days after, the Independent Expert is selected.  As soon as practicable after, but in any event within thirty (30) days after, receipt of such statements, the Independent Expert will make a determination of all points of disagreement in accordance with the terms and conditions of this Agreement.  The decision and determination of the value of the Title Defect, Title Benefit or Environmental Defect, as applicable, made by the Independent Expert shall be binding upon the Parties as an award under the Federal Arbitration Act and final and nonappealable to the maximum extent permitted by law, and judgment thereon may be entered in a court of competent jurisdiction and enforced by either Party as a final judgment of such court.

 

ARTICLE 8

CASUALTY LOSS

 

8.1 Casualty Losses and Government Takings.  If, prior to Closing, all or part of an Asset is damaged or destroyed by an act of God, terrorist action, fire, explosion, earthquake, wind storm, hurricane, tornado, tidal surge, flood, drought, condemnation, or other accident (a “Casualty Loss”), or is taken in condemnation or under the right of eminent domain, or if proceedings for such purposes shall be pending or threatened (a “Government Taking”), Seller shall promptly notify Buyer in writing of the nature and extent of the Casualty Loss or Government Taking and Seller’s estimate of the cost required to repair or replace that portion of the Assets affected by the Casualty Loss or value of the Asset taken by the Government Taking.  Notwithstanding the foregoing, no individual matter described above shall be deemed to be or constitute a Casualty Loss or a Government Taking unless the estimate of the cost required to repair or replace that portion of the Asset affected by the Casualty Loss or value of the Asset taken by the Government Taking exceeds $50,000, net to Seller’s interest therein.  No Casualty Loss or Government Taking will be considered a Title Defect.  As used herein, a Casualty Loss does not include depletion due to normal production or depreciation or failure of equipment or casing under normal operating conditions.

 

8.2 Remedies for Casualty Losses and Government Takings.  The Base Purchase Price shall be adjusted downward by the greater of the mutually agreed (i) amount by which the value of the affected Assets has been diminished as a result of Casualty Loss or Government Taking, or (ii) amount necessary to repair or replace the damaged, destroyed or taken Asset, in each case as such amount is determined by mutual agreement of the Parties (the “Casualty Loss Amount”).  Seller shall retain (i) all insurance proceeds payable to Seller with respect to any such Casualty Loss; (ii) all sums paid to Seller by third parties by reason of any such Casualty Loss; (iii) all compensation paid with respect to any such Government Taking; and (iv) all other right, title and interest of Seller in and to any unpaid awards or other payments from third parties arising out of the damage, destruction or taking of such Assets.  If the Parties are unable to agree upon the Casualty Loss Amount or the existence of a Casualty Loss, then either Party may refer the determination of the existence of a Casualty Loss and/or the amount of the Casualty Loss Amount to an Independent Expert pursuant to Section 7.1.

 

8.3 Change in Condition.  Except for Casualty Losses and Governmental Takings, Buyer shall assume all risk and loss with respect to, and any change in the condition of the Assets from and after the Effective Time, including normal depletion, the watering-out, casing 

 

  

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collapse or sand infiltration of any well, the depreciation of personal property through ordinary wear and tear, and changes arising from operations conducted by Seller pursuant to Section 12.1 in the absence of gross negligence on the part of Seller.  None of such events or conditions occurring after the Effective Time will be considered a Casualty Loss, nor will they be cause for any reduction in the Base Purchase Price, or give rise to any right to terminate this Agreement.

 

ARTICLE 9

PREFERENTIAL RIGHTS AND CONSENTS

 

9.1 Consents.  Promptly after the Parties’ execution of this Agreement, Seller shall commence, and Buyer and Seller shall thereafter exercise, commercially reasonable efforts to obtain all such permissions, approvals and consents from third parties (other than governmental consents customarily obtained post-closing) which may be required in connection with the transfer of any of the Assets to Buyer at Closing.  The Parties hereby acknowledge that “commercially reasonable efforts” shall not include any obligation to expend any money or other consideration in exchange for any consent or approval.  In the event any consent is not obtained prior to the date on which Closing is scheduled to occur, then either Buyer or Seller may, upon written notice to the other Party, extend the Closing for up to thirty (30) days in an effort to obtain such required consent.  In the event such required consent has not been obtained prior to the extended Closing Date then, unless waived by both Parties, the affected Asset shall be excluded from the Assets delivered at Closing and the Base Purchase Price shall be adjusted by the Allocated Value of such Asset (it being understood that, in the event the affected Asset has a negative Allocated Value, the exclusion thereof may result in an increase in the Base Purchase Price).

 

9.2 Preferential Rights.

 

	
(A)  

	
With respect to preferential rights of third parties to purchase all or any portion of the Assets (“Preferential Rights”), Seller agrees that promptly after the Parties’ execution of this Agreement, it will request a waiver of Preferential Rights from each holder thereof identified by Seller (which request shall be subject to Buyer’s prior review).

 

	
(B)  

	
If the holder of a Preferential Right exercises such right, (i) Seller shall tender to such party the required interest in the affected Asset at a price equal to the Allocated Value thereof, (ii) such interest in the Asset will be deemed an Excluded Asset and shall be excluded from the transaction contemplated hereby, and (iii) the Base Purchase Price will be adjusted downward by the Allocated Value of such Asset.

 

	
(C)  

	
If for any reason, other than Seller’s breach, the sale of an Asset covered by an exercised Preferential Right is not consummated with the holder of the Preferential Right, Seller shall so notify Buyer promptly, but no later than sixty (60) days after the Closing Date, and within ten (10) business days after Buyer’s receipt of such notice, Seller shall sell, assign and convey to Buyer, and Buyer shall purchase and accept from Seller, such

 

  

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Asset pursuant to the terms of this Agreement and for the Allocated Value thereof.

 

	
(D)  

	
If, on the date on which the Closing is scheduled to occur, the holder of a Preferential Right has not indicated whether or not it will exercise such Preferential Right and the time period within which the holder of the Preferential Right must exercise its right has not expired, then the Closing date shall be deferred until five (5) business days after the time period to exercise such Preferential Right has elapsed without being exercised.

 

ARTICLE 10

REPRESENTATIONS AND WARRANTIES OF SELLER

 

10.1 Seller’s Representations and Warranties.  Seller represents and warrants to Buyer as of the date hereof and as of the Closing Date as follows:

 

	
(A)  

	
Status.  Seller is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware and is duly qualified to carry on its business in the States of Texas and Louisiana.

 

	
(B)  

	
Authority.  Subject to the approval by the Board of directors of Seller’s Parent: (i) Seller owns the Assets and has the requisite power and authority to enter into this Agreement, to carry on its business as presently conducted, to carry out the transactions contemplated hereby, to transfer the Assets in the manner contemplated by this Agreement and the applicable conveyance documents, and to undertake all of the obligations of Seller set forth in this Agreement; and (ii) the execution, delivery and performance of this Agreement and the transactions contemplated hereby have been duly and validly authorized by all requisite action on Seller’s part.

 

	
(C)  

	
Validity of Obligations.  The execution, delivery and performance of this Agreement and any documents delivered by Seller at Closing, and the performance of the transactions contemplated by this Agreement and any documents delivered by Seller at Closing, will not in any respect violate, nor be in conflict with or constitute a default under (or an event that with the lapse of time or notice, or both would constitute a default), other than non-material defaults that would not impair Seller's ability to consummate the transactions contemplated herein, any provision of Seller’s charter, by-laws or other governing documents, or any agreement or instrument to which Seller is a party or is bound, or any judgment, decree, order, statute, law, rule, notice to lessees, or regulation applicable to Seller (subject to governmental consents and approvals customarily obtained after the Closing).  This Agreement constitutes legal, valid and binding obligations of Seller, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization and other similar laws of general application with respect to creditors, general principles of equity, and the 

 

  

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power of a court to deny enforcement of remedies generally based upon public policy.

 

	
(D)  

	
Brokers.  No broker or finder is entitled to any brokerage or finder’s fee, or to any commission, based in any way on agreements, arrangements or understandings made by or on behalf of Seller or any affiliate or Seller for which Buyer has or will have any liabilities or obligations (contingent or otherwise).

 

	
(E)  

	
Bankruptcy.  There are no bankruptcy, reorganization or arrangement proceedings pending, being contemplated by, or to the knowledge of Seller, threatened against Seller.

 

	
(F)  

	
Suits.  There is no suit, action, or administrative or arbitration proceeding brought by any person or entity or by any administrative agency or governmental authority pending or, to Seller’s knowledge, threatened against Seller or the Assets that has materially adversely affected or will materially adversely affect Seller’s ability to consummate the transactions contemplated herein or materially adversely affect the title to or value of the Assets.

 

	
(G)  

	
Royalties.  To Seller’s knowledge, all rentals, royalties and other payments due under the Leases during Seller’s ownership thereof have been paid in accordance with the terms of the applicable Lease, except those amounts, if any, held in suspense.

 

	
(H)  

	
Taxes.  To Seller’s knowledge, except as set forth on Schedule 10.1(H), all ad valorem, property, production, severance, excise and similar taxes and assessments based on or measured by Seller’s ownership of the Assets or the production of Hydrocarbons or the receipt of proceeds therefrom that have become due and payable have been paid in all material respects.

 

	
(I)  

	
Suspended Funds.  Except as set forth in Schedule 10.1(I), there are no proceeds from production attributable to the Assets which are being held in suspense as of the Effective Time.

 

	
(J)  

	
Compliance with Laws and Regulations.  To Seller’s knowledge, Seller’s ownership and, where applicable, operation of the Assets has been in material compliance with all applicable governmental rules, orders, regulations, notice to lessees, and laws (including Environmental Laws).  Except to the extent disclosed on Schedule 10.1(J), there are no outstanding unresolved incidents of material non-compliance pertaining to the Assets, and there are no  active, pending written claims known to or received by Seller from a third party relating to the Assets seeking monetary relief, injunctive relief, or remediation from Seller arising from Seller’s ownership or operation of the Assets or alleging a violation of regulation or Environmental Laws, or the unlawful disposal, discharge or 

 

  

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release of any hazardous substance.  Further, to Seller’s knowledge, all permits necessary for such ownership and, operation have been obtained, except where the failure to obtain any such permit would not, individually or in the aggregate, have a material adverse effect.

 

	
(K)  

	
Preferential Rights and Consents to Assign.  Except as set forth in Schedule 10.1(K), the transactions contemplated by this Agreement are not subject to any Preferential Rights to purchase or any material consents to assign (other than governmental consents customarily obtained subsequent to Closing).

 

	
(L)  

	
No Reservations. There are no reservations of or by Seller or its affiliates which affect the Assets other than those that are specifically identified on an Exhibit or Schedule to this Agreement.

 

	
(M)  

	
Authorities for Expenditure.  Except as set forth on Schedule 10.1(M), there exist no outstanding authorities for expenditure that (a) require the additional drilling of wells or other material development obligations in order to earn or continue to hold all or any portion of the Leases or (b) obligate Seller to make payments of any single expenditure amounts exceeding $200,000 (net to Seller) in connection with additional drilling of wells or other capital expenditures affecting the Leases.

 

	
(N)  

	
Take-or Pay. To Seller’s knowledge, except as disclosed on Schedule 10.1(N), with regard to the Assets, Seller is not obligated beyond Closing by virtue of (a) a prepayment arrangement under any contract (to which Seller or its affiliates are a party) for the sale of Hydrocarbons or (b) any arrangement to deliver Seller’s Hydrocarbons produced from the Leases at some future time without receiving full payment therefore.

 

	
(O)  

	
Material Contracts. Exhibit 1.1(G) sets forth all Contracts of the type described below (collectively, the “Material Contracts”) affecting the Assets:

 

	
(i)  

	
any Contract that can reasonably be expected to result in aggregate payments by Seller or its successor of more than Five Hundred Thousand Dollars ($500,000) during the current or any subsequent fiscal year (based solely on the terms thereof and without regard to any expected increase in volumes or revenues);

 

	
(ii)  

	
any Contract that can reasonably be expected to result in aggregate revenues to Seller or its successor of more than Five Hundred Dollars ($500,000) during the current or any subsequent fiscal year (based solely on the terms thereof and without regard to any expected increase in volumes or revenues);

 

  

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(iii)  

	
any Hydrocarbon purchase and sale, transportation, processing or similar Contract that is not terminable without penalty on sixty (60) days or less notice;

 

	
(iv)  

	
any indenture, mortgage, loan, credit or sale-leaseback or similar contract that can reasonably be expected to result in aggregate payments by Seller or its successor of more than One Hundred Thousand Dollars ($100,000) during the current or any subsequent fiscal year;

 

	
(v)  

	
any Contract that constitutes a lease under which Seller is the lessor or the lessee of real or personal property which lease (A) cannot be terminated by Seller or its successor without penalty upon sixty (60) days or less notice or (B) involves an annual base rental of more than Two Hundred Fifty Thousand Dollars ($250,000);

 

	
(vi)  

	
any farmout, exploration or participation agreement, production handling agreement, operating agreement, area of mutual interest agreement or similar contracts or agreements entered into by Seller or its predecessor that will burden the or affect the Assets after Closing;

 

	
(vii)  

	
any Contract that can reasonably be expected under existing circumstances to result in Seller’s or its successor’s responsibility for liabilities or obligations pertaining to the Assets in an amount greater than Five Hundred Thousand Dollars ($500,000.00); and

 

	
(viii)  

	
any Contract with any affiliate of Seller that will not be terminated prior to Closing.

 

To Seller’s knowledge, there exist no material defaults under the Material Contracts by Seller or, any other person that is a party to such Material Contracts, and no event has occurred that with notice or lapse of time or both would constitute any material default under any such Contract by Seller or any other person who is a party to such Material Contract. Prior to the execution of this Agreement, Seller has made available to Buyer true and correct copies of each Material Contract and all amendments thereto.

 

	
(P)  

	
Wellbore Condition.  With respect to a Well in which there are reserves indicated for a PDSI or PDBP reserve category, in the virtual data room materials provided to Buyer prior to the date of this Agreement the wellbore of such Well does not contain an obstruction or casing flaw that will be an impediment to Buyer’s production of the reserves indicated for such Well upon Closing.

 

  

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(Q)  

	
Personal Property and Fixture Condition.  Except as set forth in Schedule 10.1(Q), all personal property, fixtures, platforms, caissons and equipment constituting a part of the Assets are in a state of repair so as to be adequate for normal operations, and with respect to a Well in which there are reserves indicated for a PDSI, PDBP or PUD reserve category in the virtual data room materials provided to Buyer prior to the date of this Agreement, for operations necessary to produce the reserves indicated for such Well, unless capital cost for the installation, construction, repair or procurement of such personal property, fixtures, platforms, caissons and equipment is included in the electronic database regarding the Assets provided by Seller to Buyer.

 

	
(R)  

	
Imbalances.  Schedule 3.4 sets forth all material Imbalances associated with the Assets as of the Effective Time

 

	
(S)  

	
Foreign Person. Seller is not a “foreign person” within the meaning of Section 1445 of the Internal Revenue Code of 1986, as amended.

 

10.2 Scope of Representations of Seller.

 

	
(A)  

	
Information About the Assets.  Except as expressly set forth in Section 10.1 and the other provisions of this Agreement or in the Conveyance (hereinafter defined), Seller disclaims all liability and responsibility for any representation, warranty, statements or communications (orally or in writing) to Buyer, including any information contained in any opinion, information or advice that may have been provided to Buyer by any employee, officer, director, agent, consultant, engineer or engineering firm, trustee, representative, investment banker, financial advisor, partner, member, beneficiary, stock holder or contractor of Seller whenever and however made, including those made in any data room or internet site and any supplements or amendments thereto or during any negotiations with respect to this Agreement or any confidentiality agreement previously executed by the Parties with respect to the Assets.  FURTHER, EXCEPT AS SET FORTH IN SECTION 10.1 OF THIS AGREEMENT OR IN THE CONVEYANCE, SELLER MAKES NO WARRANTY OR REPRESENTATION, EXPRESS, STATUTORY OR IMPLIED, AS TO (i) THE ACCURACY, COMPLETENESS OR MATERIALITY OF ANY DATA, INFORMATION OR RECORDS FURNISHED TO BUYER IN CONNECTION WITH THE ASSETS OR OTHERWISE CONSTITUTING A PORTION OF THE ASSETS; (ii) THE PRESENCE, QUALITY AND QUANTITY OF OIL AND GAS RESERVES (IF ANY) ATTRIBUTABLE TO THE ASSETS, INCLUDING WITHOUT LIMITATION, SEISMIC DATA AND SELLER’S INTERPRETATION AND OTHER ANALYSIS THEREOF; (iii) THE ABILITY OF THE ASSETS TO PRODUCE OIL AND GAS, INCLUDING WITHOUT LIMITATION PRODUCTION RATES, DECLINE RATES AND 

 

  

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 RECOMPLETION OPPORTUNITIES; (iv) ALLOWABLES, OR OTHER REGULATORY MATTERS; (v) THE PRESENT OR FUTURE VALUE OF THE ANTICIPATED INCOME, COSTS OR PROFITS, IF ANY, TO BE DERIVED FROM THE ASSETS; (vi) THE ENVIRONMENTAL CONDITION OF THE ASSETS; (vii) THE PLUGGING AND ABANDONMENT AND DECOMMISSIONING LIABILITIES ASSOCIATED WITH THE ASSETS; (viii) ANY PROJECTIONS AS TO EVENTS THAT COULD OR COULD NOT OCCUR; (ix) THE TAX ATTRIBUTES OF ANY ASSET; AND (x) ANY OTHER MATTERS CONTAINED IN OR OMITTED FROM ANY INFORMATION OR MATERIAL FURNISHED TO BUYER BY SELLER OR OTHERWISE CONSTITUTING A PORTION OF THE ASSETS.  ANY DATA, INFORMATION OR OTHER RECORDS FURNISHED BY SELLER ARE PROVIDED TO BUYER AS A CONVENIENCE AND BUYER’S RELIANCE ON OR USE OF THE SAME IS AT BUYER’S SOLE RISK.

 

	
(B)  

	
Independent Investigation.  Buyer has, or by Closing will have, made its own independent investigation, analysis and evaluation of the transactions contemplated by this Agreement (including Buyer’s own estimate and appraisal of the extent and value of Seller’s oil and gas reserves attributable to the Assets and an independent assessment and appraisal of the environmental risks and liabilities associated with the acquisition of the Assets).  Buyer has had, or will have prior to Closing, access to perform its investigation and has not relied on any representations by Seller other than those expressly set forth in this Agreement or in the Conveyance.

 

	
(C)  

	
SALE “AS IS, WHERE IS”.  Except for the Seller’s express representations and warranties in Section 10.1 and the special warranty of title in the Conveyance, the Assets are to be sold AS IS AND WHERE IS AND WITHOUT WARRANTY OF ANY KIND, WHETHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF TITLE, MERCHANTABILITY, CONDITION OR FITNESS FOR A PARTICULAR PURPOSE.  PRIOR TO CLOSING, BUYER SHALL HAVE INSPECTED THE ASSETS AND UPON CLOSING WILL ACCEPT THE ASSETS “AS IS,” “WHERE IS,” AND “WITH ALL FAULTS” AND IN THEIR PRESENT CONDITION AND STATE OF REPAIR.

 

	
(D)  

	
Waiver of Deceptive Trade Practices Acts.  BUYER WAIVES ITS RIGHTS UNDER THE DECEPTIVE TRADE PRACTICES ACT SECTION 17.41 et seq., TEXAS BUSINESS & COMMERCE CODE, A LAW THAT GIVES CONSUMERS SPECIAL RIGHTS, AND UNDER SIMILAR STATUTES ADOPTED IN OTHER STATES, TO THE EXTENT THEY HAVE APPLICABILITY TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.  AFTER

 

  

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CONSULTATION WITH AN ATTORNEY OF ITS SELECTION, BUYER CONSENTS TO THIS WAIVER.

 

	
(E)  

	
Disclaimers as to Physical Condition of the Assets.

 

	
(i)  

	
Subject in all respects to Article 6, Section 10.1 and Section 20.3, (i) the Assets have been used for oil and gas drilling and production operations and possibly for the storage and disposal of waste materials or hazardous substances related to oil field operations, and physical changes in or under the Assets or adjacent lands may have occurred as a result of such uses; (ii) the Assets also may contain buried pipelines and other equipment, whether or not of a similar nature, the locations of which may not be known by Seller or be readily apparent by a physical inspection of the Assets; (iii) Seller does not make any representation or warranty regarding the condition of the Assets nor the effect any such use has had on the physical condition of the Assets; (iv) Buyer shall assume the risk that the Assets may contain wastes or contaminants and that adverse physical conditions, including the presence of waste or contaminants, may not have been revealed by Buyer’s investigation; and (v) upon Closing, Buyer shall assume all responsibility and liability related to or arising from the environmental condition of the Assets, including, without limitation, the disposal, spill or release of wastes or contamination on, in, under or from the Assets, regardless of whether such conditions arose before or after the Effective Time.

 

	
(ii)  

	
In addition, Buyer acknowledges that some oil field production equipment located on the Assets may contain asbestos and other man made material fibers (collectively, “MMMF”) and/or naturally occurring radioactive material (“NORM”).  In this regard, Buyer expressly understands that NORM may affix or attach itself to the inside of wells, materials and equipment as scale or in other forms, and that wells, materials and equipment located on the Assets described herein may contain NORM and that NORM-containing materials may be buried or have been otherwise disposed of on the Leases.  Buyer also expressly understands that special procedures may be required for the removal and disposal of MMMF and NORM from the Leases where they may be found, and that Buyer assumes all liability when such activities are performed.

 

ARTICLE 11

REPRESENTATIONS AND WARRANTIES OF BUYER

 

11.1 Buyer’s Representations and Warranties.  Buyer represents and warrants to Seller as of the date hereof and as of the Closing Date as follows:

 

  

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(A)  

	
Status of Incorporation or Organization.  Buyer is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware and is duly qualified to carry on its business in the States of Texas and Louisiana.

 

	
(B)  

	
Authority.  Buyer has the power and authority to carry on its business as presently conducted, to enter into this Agreement, to carry out the transactions contemplated hereby and to undertake all of the obligations of Buyer set forth in this Agreement.  The execution, delivery and performance of this Agreement and the transactions contemplated hereby have been duly and validly authorized by all requisite action on Buyer’s part.

 

	
(C)  

	
Validity of Obligations.  The execution, delivery and performance of this Agreement and any documents delivered by Buyer at Closing, and the performance of the transactions contemplated by this Agreement and any documents delivered by Buyer at Closing, will not in any respect violate, nor be in conflict with, any provision of Buyer’s operating agreement, by-laws or other governing documents, or any agreement or instrument to which Buyer is a party or is bound, or any judgment, decree, order, statute, rule or regulation applicable to Buyer (subject to governmental consents and approvals customarily obtained after the Closing).  This Agreement constitutes legal, valid and binding obligations of Buyer, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization and other similar laws of general application with respect to creditors, general principles of equity, and the power of a court to deny enforcement of remedies generally based upon public policy.

 

	
(D)  

	
Qualification and Bonding.  Buyer is qualified and shall hereafter continue to be qualified to own and operate federal oil, gas and mineral leases and rights-of-way in the federal waters in the Gulf of Mexico, and the consummation of the transactions contemplated by this Agreement will not cause Buyer to be disqualified as such an owner or operator.  Buyer acknowledges that none of the bonds and guarantees, if any, posted by Seller or its affiliates with the BOEMRE or other governmental entities and relating to the Assets are transferable to Buyer.

 

	
(E)  

	
Securities.  Buyer intends to acquire the Assets for its own benefit and account and is not acquiring said Assets with the intent of distributing fractional undivided interests thereof such as would be subject to regulation by federal or state securities laws, and if, in the future, it should sell, transfer or otherwise dispose of said Assets or fractional undivided interests therein, it will do so in compliance with any applicable federal and state securities laws.

 

	
(F)  

	
Evaluation.  Buyer represents that by reason of Buyer’s knowledge and experience in the evaluation, acquisition and operation of oil and gas

 

  

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properties, Buyer has evaluated the merits and risks of purchasing the Assets from Seller and has formed an opinion based solely upon Buyer’s knowledge and experience and upon the representations and warranties of Seller set forth in this Agreement.

 

	
(G)  

	
Financing.  At Closing, Buyer or an assignee of Buyer permitted under Section 22.8 will have (or Buyer’s Parent shall have furnished to Buyer or such assignee) sufficient cash, available lines of credit or other sources of immediately available funds to enable it to pay the Purchase Price to Seller.

 

	
(H)  

	
Broker’s Fees.  Buyer has incurred no obligation or liability, contingent or otherwise, for brokers’ or finders’ fees in respect of the matters provided for in this Agreement, and, if any such obligation or liability exists, it shall remain an obligation of Buyer, and Seller shall have no responsibility therefor.

 

	
(I)  

	
No Knowledge of Seller’s Breach.  As of the date of this Agreement, Buyer has no knowledge of any breach by Seller of any representation or warranty of Seller, or of any other fact, event, condition or circumstance that would excuse Buyer from the timely performance of its obligations hereunder.

 

ARTICLE 12

INTERIM OPERATIONS

 

12.1 Interim Operations.  With respect to operations of the Assets during the period between the execution of this Agreement and the Closing Date (the “Interim Period”), Seller covenants that it shall (i) to the extent within the control of Seller, cause the Assets to be maintained and operated in the ordinary course, consistent with past practices; (ii) provide notice of any AFE copies received by Seller for any operations involving Seller commitments of less than $100,000, net to Seller’s interest; (iii) obtain Buyer’s prior written approval prior to consenting to (A) any workover designed to change the existing completion interval with respect to any Well, and (B) any future expenditures and proposed contracts and agreements relating to the Assets that involve individual commitments of $100,000 or more, net to Seller’s interest;  (iv) obtain Buyer’s prior written approval prior to, by action or inaction, going non-consent on any proposal made pursuant to any joint operating or similar agreement affecting the Assets; and (v) obtain Buyer’s written approval before voting under any operating, unit, joint venture, or similar agreement; provided, however, that Buyer will not unreasonably withhold or delay a determination on any such approval under (iii), (iv) or (v) above.  Furthermore, during the Interim Period, Seller will not, without the prior written consent of Buyer, (a) enter into any agreement or arrangement transferring, selling, or encumbering any of the Assets, other than sales of current production or products in the ordinary course of business and dispositions in the ordinary course of business of any item of personal property or equipment having a value of less than $50,000 and that is promptly replaced with similar property or equipment of equal or greater value and utility; (b) grant any Preferential Right or other similar right to purchase any Assets; or (c) enter into, terminate or amend any Material Contract relating to the Assets, including entering 

 

  

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into any new production sales contract extending beyond the Closing Date and not terminable on sixty (60) days’ notice or less; or (d) commit to do any of the foregoing.  Notwithstanding the forgoing, in the face of serious risk to life, property, or the environment, Seller may take, or consent to, such action as a prudent operator, or non-operator, as the case may be, would take without obtaining Buyer’s prior consent. Seller shall notify Buyer of any emergency action taken, and to the extent reasonably practicable, obtain Buyer’s prior approval of such actions. However, except for emergency action that must be taken in the face of serious risk to life, property, or the environment, Seller has no obligation to undertake any actions with respect to the Assets that are not required in the course of the normal operation of the Assets.  To the extent that Seller is not the operator of any portion of the Assets, the obligations of Seller in Section 12.1 concerning operations or activities that normally, or pursuant to existing contracts are carried out or performed by the operator, shall be construed to require only that Seller use all reasonable efforts (without being obligated to incur any expense or institute any cause of action) to cause the operator of such portion of the Assets to take such actions or render such performance within the constraints of the applicable operating or other agreements.

 

12.2 Disposal Barge and Equipment.  Prior to Closing, Seller, at its cost and expense, shall remove and dispose of the Disposal Barge and Equipment, using a contractor or contractors licensed to handle and dispose of material containing NORM.

 

ARTICLE 13

CONDITIONS PRECEDENT TO CLOSING OBLIGATIONS OF BUYER

 

The Buyer’s obligations to proceed to Closing are, at Buyer’s election, subject to the fulfillment, prior to or at the Closing, of each of the following conditions:

 

13.1 No Litigation.  As of the date of Closing, no suit, action or other proceeding shall be pending before any court or governmental agency that seeks to prevent the consummation of the transactions contemplated by this Agreement.

 

13.2 Representations and Warranties; Covenants.  All representations and warranties of Seller contained in this Agreement shall be true and correct in all material respects as of the Closing as if such representations and warranties were made as of the Closing Date (except for those representations or warranties that are expressly made only as of another specific date, which representations and warranties shall be true in all material respects as of such other date) and Seller shall have performed and satisfied in all material respects all covenants and fulfilled all conditions required by this Agreement to be performed and satisfied by Seller at or prior to the Closing.

 

13.3 Aggregate Adjustments Base to Purchase Price.  The aggregate downward adjustment to the Base Purchase Price on account of Title Defects, Adverse Environmental Conditions, Casualty Loss, and the exercise of Preferential Rights does not exceed twenty-five percent (25%) of the Base Purchase Price.

 

  

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ARTICLE 14

CONDITIONS PRECEDENT TO CLOSING OBLIGATIONS OF SELLER

 

The Seller’s obligations to proceed to Closing are, at Seller’s election, subject to the fulfillment, prior to or at the Closing, of each of the following conditions:

 

14.1 No Litigation.  As of the date of Closing, no suit, action or other proceeding shall be pending before any court or governmental agency which attempts to prevent the occurrence of the transactions contemplated by this Agreement.

 

14.2 Representations and Warranties; Covenants.  All representations and warranties of Buyer contained in this Agreement shall be true in all material respects as of the Closing as if such representations and warranties were made as of the Closing Date (except for those representations or warranties that are expressly made only as of another specific date, which representations and warranties shall be true in all material respects as of such other date), and Buyer shall have performed and satisfied in all material respects all covenants and fulfilled all conditions required by this Agreement to be performed and satisfied by Buyer at or prior to the Closing.

 

14.3 Aggregate Adjustments Base to Purchase Price.  The aggregate downward adjustment to the Base Purchase Price on account of Title Defects, Adverse Environmental Conditions, Casualty Loss, and the exercise of Preferential Rights does not exceed twenty-five percent (25%) of the Base Purchase Price.

 

14.4 Buyer’s Qualification and Bonding.  Buyer shall have delivered to Seller documentation reasonably satisfactory to Seller (i) evidencing that Buyer is qualified to own and operate leases and rights-of-way on the Outer Continental Shelf; (ii) evidencing that Buyer has obtained or posted all such bonds or other security as may be required by each regulatory authority having jurisdiction over the Assets, including, without limitation, the BOEMRE, in order to own and operate the Assets, and (iii) if required under Section 20.1(E), the Chevron Letter of Credit.

 

ARTICLE 15

CLOSING

 

15.1 Closing.  The consummation of the sale and purchase of the Assets (“Closing”) shall be held at 10:00 a.m. Central Time on May 31, 2011, or such other date mutually agreed to in writing by the Parties.  The date on which Closing actually occurs is referred to herein as the “Closing Date.”  The Closing will take place at the offices of Seller at 24955 Interstate 45 North, The Woodlands, Texas 77380, or at such other location to which the parties may mutually agree.

 

15.2 Deliveries by Seller.  At Closing, Seller shall deliver to Buyer:

 

	
(A)  

	
An executed and acknowledged Assignment, Bill of Sale and Conveyance, substantially in the form attached hereto as Exhibit 15.2(A) (the “Conveyance”), in sufficient counterparts to facilitate recording, effecting the sale, transfer, conveyance and assignment to Buyer of the Assets.

 

  

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(B)  

	
Seller’s executed Certificate of Non-Foreign Status, substantially in the form attached hereto as Exhibit 15.2(B).

 

	
(C)  

	
Executed assignments of record title ownership or operating rights with respect to the Leases, as applicable, on appropriate U.S. Bureau of Ocean Energy Management, Regulation and Enforcement (“BOEMRE”) forms and such additional documentation as Buyer may reasonably request for purposes of filing in the applicable counties.

 

	
(D)  

	
Letters in lieu executed by Seller with respect to all of the Assets.

 

	
(E)  

	
Subject to the provisions of Section 18.3 below, change of operator forms executed by Seller designating Buyer to succeed Seller as operator of the Seller operated Assets.

 

	
(F)  

	
An executed Transition Services Agreement (the “Transition Services Agreement”)  in form and substance reasonably acceptable to Seller and Buyer pursuant to which Seller agrees to provide services related to the operation of the Assets at the request of Buyer, to the extent Seller has the capability of performing such services, including, but not limited to, accounting, information technology, operational, regulatory compliance, human resources services and other support after Closing upon the payment terms and for the Transition Period, all as more particularly described therein.

 

15.3 Deliveries by Buyer.  At Closing, Buyer shall deliver to Seller:

 

	
(A)  

	
An amount equal to the Purchase Price, as set forth in the Closing Adjustment Statement, less the Deposit, by wire transfer of immediately available funds to an account designated in writing by Seller.

 

	
(B)  

	
Duplicate executed originals of all applicable governmental forms required of Buyer by the BOEMRE and other governmental entities with jurisdiction over the Assets in connection with the transfer of the Assets and, if applicable, the operation thereof, including, without limitation, any designation of operator, designation of applicant and oil spill financial responsibility forms.

 

	
(C)  

	
Evidence, reasonably acceptable to Seller, that Buyer has obtained all bonds required by any regulatory agency having jurisdiction, including but not limited to the BOEMRE, in order to be recognized as the owner, and where applicable, the operator, of the Assets upon appropriate filings with such regulatory agencies.

 

	
(D)  

	
Certificates of insurance evidencing that Buyer has obtained the insurance coverages required under Section 17.3 below.

 

	
(E)  

	
An executed Transition Services Agreement.

 

  

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ARTICLE 16

TERMINATION

 

16.1 Termination.  This Agreement and the transactions contemplated herein may be terminated:

 

	
(A)  

	
At any time by mutual consent of the Parties, in which event the Deposit shall be returned to Buyer.

 

	
(B)  

	
By either Party if the Closing shall not have occurred by June 1, 2011; provided that the Party desiring to terminate is not in breach in any material respect of this Agreement.  In the event that this Agreement is terminated pursuant to this Section 16.1(B), the Deposit shall be returned to Buyer provided that Buyer is not in material breach of this Agreement.

 

	
(C)  

	
By Buyer if, on the Closing Date, any of the conditions set forth in Article 13 hereof shall not have been satisfied or waived, in which event the Deposit shall be returned to Buyer.

 

	
(D)  

	
By Seller if, on the Closing Date, Buyer’s conditions to Closing set forth in Article 13 have been satisfied but Buyer fails or refuses to close, in which event the Deposit shall be retained by Seller; provided that Seller is not in material breach of this Agreement, otherwise the Deposit shall be returned to Buyer.

 

	
(E)  

	
By Seller if, on the Closing Date, any of the conditions set forth in Article 14 hereof shall not have been satisfied or waived, in which event the Deposit shall be retained by Seller if the termination results from the failure of the conditions precedent set forth in Section 14.1, 14.2 or Section 14.4, otherwise the Deposit shall be returned to Buyer.

 

16.2 Effect of Termination.  In the event of the termination of this Agreement pursuant to the provisions of this Article 16 or elsewhere in this Agreement, (i) Seller’s sole remedy for such termination shall be the retention of the Deposit, to the extent that Seller has an express right to do so under the terms of the Agreement, and (ii) Buyer’s remedy shall be (A) the return of the Deposit, to the extent that Buyer has an express right therefore, or (B) at Buyer’s option, and provided that Buyer is not in material breach of this Agreement, the right to pursue specific performance of the obligations of Seller under this Agreement.  Notwithstanding the foregoing, the indemnity obligations of Buyer in Section 4.3 shall survive such termination.  Upon termination, Buyer shall return to Seller or destroy, all materials, documents and copies thereof provided to Buyer in the course of Buyer’s due diligence investigations, including all notes, reports, analyses and other materials derived therefrom.

 

ARTICLE 17

BUYER’S POST-CLOSING BONDING AND INSURANCE OBLIGATIONS

 

17.1 Governmental Bonds.  To the extent required by any applicable laws and except to the extent, if any, that Buyer will, as of Closing, be covered by the bonds or exempt status of 

 

  

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third party operators of the applicable Assets, Buyer will have as of Closing, and will thereafter continue to maintain, lease bonds, area-wide bonds, or any other surety bonds as may be required by, and in accordance with, all applicable laws governing the ownership of such Assets, and Buyer shall file any and all required reports necessary for such ownership with the BOEMRE and all other governmental entities having jurisdiction over such ownership, including, but not limited to, adequate financial assurance in accordance with the Oil Pollution Act of 1990, as amended.  Without limiting the foregoing, Buyer shall obtain, prior to Closing, the necessary bonds or parent guaranties or letters of credit as required by the BOEMRE for the plugging and abandonment and decommissioning of all Wells and dismantling of any Related Assets and provide Seller with a copy of same.  Promptly following Closing, Buyer shall provide proof satisfactory to Seller that the BOEMRE has accepted such bonds or letters of credit as sufficient assurance to cover the plugging and abandonment of all Wells and the decommissioning of all Related Assets.  Further, following Closing, Buyer shall provide to Seller copies of the approval by the BOEMRE concerning change of operatorship of the Assets.  In addition to any general bonds that may be required by the BOEMRE of Buyer, it is anticipated that Buyer will be required to post supplemental bonds with the BOEMRE, on a lease specific basis, for the properties and in the amounts specified on Schedule 17.1 attached hereto (the “BOEMRE Lease Bonds”).

 

17.2 Supplemental Bonding Requirements.  Buyer agrees to promptly purchase and post any and all bonds, supplemental bonds or other securities which may be required of it pursuant to all applicable federal, state, tribal and local laws, rules and regulations.

 

17.3 Insurance Coverages.  From the Closing through the end of the Transition Period, Buyer shall have in force and effect insurance policies in compliance with all applicable agreements, including, but not limited to, operating agreements and participation agreements relating to the Assets.  In no event shall such level of insurance be less than the following minimum amounts and, with respect to the coverages specified in this Section 17.3, each insurance policy shall contain an endorsement waiving the underwriters’ rights of subrogation against Seller with respect to liabilities assumed hereunder by Buyer and, except for Worker’s Compensation and Employer’s Liability, shall include Seller as an additional insured through the end of the Transition Period. The insurance provided by Buyer shall be primary to any other insurance carried by or on behalf of Seller.  At Closing, Buyer will provide Seller with confirmation that Buyer has secured and maintains the following minimum insurance coverage with limits of liability of not less than those set out below:

 

	
(A)  

	
Worker’s Compensation and Employer’s Liability: Worker’s Compensation Insurance in accordance with the laws of governmental bodies having jurisdiction including, if applicable, United States Longshore and Harbor Worker’s Compensation Act with Outer Continental Shelf Extension, Maritime Employer’s Liability (including, but not limited to, the Jones Act, the Death on the High Seas Act, as well as an endorsement to the effect that a claim in rem shall be treated as a claim against the insured) and Employer’s Liability Insurance.  Employer’s Liability Insurance shall provide minimum coverage of $1,000,000 for bodily injury per accident and by disease.

 

  

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(B)  

	
Commercial General Liability: Bodily Injury and Property Damage, including contractual liability covering Buyer’s obligations under this Agreement and sudden and accidental pollution coverage, with minimum limits of $1,000,000 per occurrence, combined single limit.

 

	
(C)  

	
Business Automobile Liability Insurance covering all Owned, Leased, Hired or Non-Owned Vehicles:  Bodily Injury and Property Damage with minimum limits of $1,000,000 per occurrence combined single limit.

 

	
(D)  

	
Vessels: If Buyer charters any vessels, Charterer’s Legal Liability (or equivalent coverage) with minimum limits of $1,000,000 will be carried.

 

	
(E)  

	
Umbrella Liability: Umbrella Liability Insurance with a minimum limit of $35,000,000 excess of all primary limits of liability insurance specified in paragraphs  17.3(A) through 17.3(D) above.

 

	
(F)  

	
Operator’s Extra Expense Insurance: Operator’s Extra Expense Insurance and Control of Well Insurance, including control of well due to blowout and/or cratering above or below the surface and Seepage and Pollution Liability including cleanup and containment. The policy will cover all the wells identified on Exhibit 1.1(C), and have a minimum limit of $35,000,000 (100%) each occurrence.

 

	
(G)  

	
 Property Insurance covering physical damage for the wells and structures identified in Exhibit 1.1(C) for a minimum limit of $7,500,000 each occurrence, including a $7,500,000 aggregate sublimit for Property and/or Operator’s Extra Expense losses arising from Named Wind Storm.  Such coverage will also be endorsed to include removal of wreck as customary.

 

Buyer shall obtain insurance coverage for all liability assumed under the terms of this Agreement with limits not less than those set out above. Seller shall not be obligated or authorized to obtain or carry on behalf of the Buyer any insurance covering the Assets or any operations to be conducted after the Closing Date.  All such insurance of Buyer hereunder shall be written by insurance companies with a minimum A.M. Best rating of A-VII.  Buyer shall furnish Seller with certificates of insurance listing all such insurance policies.  All certificates must be signed by authorized representatives of the insurance companies, and must endeavor to provide not less than thirty (30) days prior written notice to Seller in the event of policy cancellation or material change affecting Seller’s interest prior to the end of the Transition Period. Neither failure to comply, nor full compliance with the insurance provisions of this Agreement, shall limit or relieve Buyer from its indemnity obligations in accordance with this Agreement.

 

ARTICLE 18

OTHER POST-CLOSING COVENANTS

 

18.1 Seller’s Logos.  Within thirty (30) days after Closing, Buyer shall replace, or cover or cause to be covered by decals or new signage, any names and marks used by Seller, and 

 

  

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all variations and derivatives thereof and logos relating thereto, from the Assets and shall not thereafter make any use whatsoever of such names, marks and logos.

 

18.2 Records.  Within thirty (30) days after Closing, Seller shall deliver originals (or copies if originals are not available) of all of the Records to Buyer.  Seller shall have the right to make and retain copies of the Records as Seller may desire prior to the delivery of the Records to Buyer.  Buyer, for a period of  seven (7) years after the Closing Date, shall make available to Seller (at the location of such Records in Buyer’s organization) access to the Records upon the prior written request of Seller, during normal business hours.

 

18.3 Operatorship.  Immediately upon Closing, Seller will send notifications of its resignation as operator for all Wells that Seller currently operates and is selling to Buyer pursuant to this Agreement.  Seller makes no representation and/or warranty to Seller as to the transferability or assignability of operatorship of such Wells.  Buyer acknowledges that the rights and obligations associated with such Wells are governed by applicable agreements and that operatorship will be determined by the terms of those agreements.

 

18.4 Suspended Funds.  As of Closing, Schedule 10.1(I) describes all proceeds, if any, from production attributable to the Leases which are currently held in suspense, and shall transfer to Buyer all of those suspended proceeds.  BUYER SHALL BE RESPONSIBLE FOR PROPER DISTRIBUTION OF ALL THE SUSPENDED PROCEEDS, TO THE EXTENT SUCH FUNDS ARE DELIVERED TO BUYER BY SELLER, TO THE PARTIES LAWFULLY ENTITLED TO THEM AND SHALL BE RESPONSIBLE FOR ANY CLAIMS RELATED THERETO, AND BUYER HEREBY AGREES TO INDEMNIFY, DEFEND AND HOLD HARMLESS SELLER FROM AND AGAINST ANY AND ALL DAMAGES, AS DEFINED HEREIN, ARISING OUT OF OR RELATING TO SUCH SUSPENDED PROCEEDS IN EACH CASE TO THE EXTENT OF THE FUNDS RELATED THERETO DELIVERED TO BUYER BY SELLER.

 

18.5 Notice of Transfer.  Promptly after Closing, Buyer shall notify all pertinent operators, non-operators, oil or gas purchasers, governmental agencies and royalty owners that it has purchased the Assets.

 

18.6 Work Bid Opportunities.  For a period of two (2) years from the Closing Date, Buyer will make reasonable efforts to afford Seller’s Parent the opportunity to bid on any well, platform, facility or pipeline abandonment and decommissioning activity with respect to any of the Assets, to the extent the anticipated estimated cost of any such activity will exceed $250,000.  Nonetheless, nothing in this Section will require Buyer to accept any bid from Seller’s Parent.

 

18.7 Employee Matters.  From the date of this Agreement to thirty (30) days after the  termination of the Transition Services Agreement (the “Transition Period”), Buyer shall have the opportunity and right, but not the obligation, to interview and/or make offers of employment to any employees of Seller other than those listed on Schedule 18.7 (the “Excluded Employees”).  Buyer shall give notice to Seller at least fifteen (15) days prior to the end of the Transition Period of the employees of Seller to whom Buyer has or will make offers of employment. Seller shall not discourage any employee of Seller from accepting employment with Buyer.  The terms and conditions of employment of any employees hired by Buyer shall be at Buyer’s sole discretion.  

 

  

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Seller shall be responsible for all compensation due to Seller’s employees or former employees with respect to their employment with Seller, whether or not hired by Buyer.  This Agreement shall not obligate Buyer to be a successor employer or to assume any collective bargaining agreements between Seller and any union representative in effect prior to or as of the end of the Transition Period.  Seller shall be responsible for paying or causing to be paid directly to Seller’s current and former employees (including any employees who are hired by Buyer) or their dependents, all benefits to which they are entitled under any past or present employee benefit plans of Seller, and Buyer shall assume no liability for such benefits.  No portion of the assets of any plan, fund, program, or arrangement, whether written or unwritten, heretofore sponsored or maintained by Seller (and no amount attributable to any such plan, fund, program, or arrangement) shall be transferred to Buyer, and Buyer shall not be obligated or required to continue any such plan, fund, program, or arrangement after the Closing Date.  Seller shall pay all accrued vacation and pay for vacation days not used by its employees as of the date of any termination of such employees related to the transaction contemplated by this Agreement, whether or not they become employees of Buyer.

 

18.8 Contribution Agreement.  Reference is made to the contract specified on Schedule 18.8 attached hereto (the “Contribution Agreement”) which provides that upon completion of Assumed Plugging and Abandonment Obligations with respect to certain of the Assets covered by the Contribution Agreement, Seller will be entitled to a certain monetary amounts (the “Contribution Amount”) associated with the Assumed Plugging and Abandonment Obligations for such Assets.  Seller warrants that the Assets and the corresponding Contribution Amount provided for in the Contribution Agreement is as indicated on Schedule 18.8.  Seller has provided Buyer with a copy of the Contribution Agreement.  Upon completion by Buyer of the Assumed Plugging and Abandonment Obligations with respect to each of the Assets specified on Schedule 18.8, Buyer will furnish Seller with such information and documentation as may be required under the Contribution Agreement in order that Seller may request the Contribution Amount associated with such Assumed Plugging and Abandonment Obligations from the appropriate party pursuant to the Contribution Agreement.  Upon receipt of such Contribution Amount, Seller shall promptly thereafter pay such Contribution Amount to Buyer.  If Seller has not received the Contribution Amount within sixty (60) days of the date Buyer furnishes Seller with information and documentation as required under the Contribution Agreement, Seller will nonetheless pay such Contribution Amount to Buyer.

 

18.9 EC 328 A_Platform P&A Obligations.  Within sixteen (16) months after Closing (or by such earlier date as may be required by the BOEMRE), Seller will initiate on-site physical operations to perform the EC 328 A_Platform P&A Obligations.  Thereafter, Seller will use its reasonable commercial efforts to conduct and complete the EC 328 A_Platform P&A Obligations, subject to governmental interference or delay in issuing necessary permits and authorizations despite Seller’s efforts to timely obtain such permits and authorizations or address the related governmental issues, in compliance with all applicable legal and regulatory requirements.

 

18.10 Option to Lease Office Space.  Upon later of the Closing Date or the end of the Transition Period, Buyer shall have the option, exercisable by giving written notice to Seller by such date, to lease from Seller  the fifth (5th) floor of the office space currently occupied by Seller at 24955 Interstate 45 North, The Woodlands, Texas 77380, at a market rate per square 

 

  

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foot on a month-to-month basis for up to eighteen (18) months, with such other terms as are standard for commercial office space leases for comparable space in the area.

 

ARTICLE 19

TAXES

 

19.1 Asset Taxes.

 

	
(A)  

	
All Asset Taxes shall be prorated between Buyer and Seller as of the Effective Time for all taxable periods that include the Effective Time.  All Asset Taxes attributable to periods, including partial periods, prior to the Effective Time are the obligation of, and shall be borne by, Seller.  All Asset Taxes attributable to periods, including partial periods, from and after the Effective Time shall be borne by Buyer.  The Base Purchase Price shall be adjusted as provided in Section 3.1(A)(iii) and Section 3.1(B)(ii) with respect to the proration of Asset Taxes for the Current Tax Period that are paid prior to the Closing Date.  With respect to Asset Taxes for the Current Tax Period that are not paid prior to the Closing Date, a proration shall be made between the Parties as an adjustment to the Base Purchase Price pursuant to Section 3.1(B)(iv) based on the best current information available as of Closing, subject to further adjustment in the Post-Closing Adjustment Statement based on then-current information.  If actual Asset Taxes with respect to the Current Tax Period (“Actual Asset Taxes”) are greater than the amounts estimated for purposes of the Post-Closing Adjustment Statement pursuant to Section 3.3 (the “Estimated Asset Taxes”), then Seller shall pay Buyer an amount equal to such difference (the “Underestimated Amount”), multiplied by a fraction, the numerator of which is the number of days in the Current Tax Period which are prior to the Effective Time and the denominator of which is the total number of days in the Current Tax Period (“Seller’s Pro Rata Share”).  Seller shall pay such amount to Buyer within ten (10) business days of Seller’s receipt of Buyer’s invoice therefor.  If Actual Asset Taxes are less than Estimated Asset Taxes, then Buyer shall pay Seller an amount equal to such difference (the “Overestimated Amount”) multiplied by Seller’s Pro Rata Share.  Buyer shall pay such amount to Seller within ten (10) business days after Buyer’s receipt of statements setting out the amount of Actual Asset Taxes.

 

	
(B)  

	
For the Current Tax Period, Seller agrees to immediately forward to Buyer any tax reports and returns received by Seller after Closing and to provide Buyer with any information in Seller’s possession that is necessary for Buyer to timely file any required tax reports and returns.  With respect to taxable periods that include the Effective Time, Buyer shall file all tax returns and reports applicable to the Assets required to be filed after the Closing Date and shall indemnify the Seller against liability for the payment of Asset Taxes with respect to such tax returns and reports and the filing of such tax returns and reports.

 

  

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19.2 Tax Reporting.  Prior to Closing, Buyer and Seller shall confer and cooperate in the allocation of the Base Purchase Price among the Properties in accordance with Section 1060 of the Internal Revenue Code and the Treasury Regulations thereunder (and any similar provision of state, local or foreign law, as appropriate) (the “Allocation”).  Buyer and Seller shall confer and cooperate on any revisions to the Allocation (the “Revised Allocation”) so as to report any matters related to the Allocation that require updating (including adjustments to the Base Purchase Price) to be consistent with the agreed allocation.  Seller and Buyer shall report the transactions contemplated hereby on all tax returns, including, but not limited to Form 8594, in a manner consistent with the Allocation or, if applicable, the Revised Allocation.

 

19.3 Transfer Taxes.  The Parties believe that no sales, transfer or similar tax is applicable to the transactions contemplated herein and, accordingly, no such tax will be collected at Closing from Buyer in connection with this transaction.  If, however, this transaction is later deemed to be subject to sales, transfer or similar tax, for any reason, Buyer agrees to be solely responsible, and shall indemnify and hold Seller (and its affiliates, and its and their directors, officers, employees, attorneys, contractors and agents) harmless, for any and all sales, transfer or other similar taxes (including related penalty, interest or legal costs) due by virtue of this transaction on the Assets transferred pursuant hereto and the Buyer shall remit such taxes at that time.  Seller and Buyer agree to cooperate with each other in demonstrating that the requirements for exemptions from such taxes have been met.

 

19.4 Income and Franchise Taxes.  Notwithstanding any provision of this Agreement to the contrary, each Party shall be responsible for its own federal, state, local and foreign income and franchise taxes, if any, that are attributable to its ownership of the Properties or that may result from the consummation of the transactions contemplated by this Agreement.

 

ARTICLE 20

ASSUMED OBLIGATIONS; INDEMNIFICATION

 

20.1 Buyer’s Assumption of Obligations After Closing.  Upon and after Closing, Buyer assumes, agrees to pay and perform, and expressly releases and discharges Seller, Seller’s affiliates and Seller’s and its affiliates’ past, present and future managers, members, officers, directors, trustees, employees and partners from all of the following obligations, liabilities, and duties with respect to the Assets (collectively, the “Assumed Obligations”):

 

	
(A)  

	
All obligations, liabilities and duties with respect to the ownership and operation of the Assets attributable to periods from and after the Effective Time, including, without limitation, to the extent, in each case, attributable to periods from and after the Effective Time:

 

	
(i)  

	
The obligation to pay all operating expenses and capital expenditures attributable to the Assets;

 

	
(ii)  

	
The obligation to perform all express obligations and covenants under the terms of the Leases, the Easements and the Contracts and any implied obligations and covenants under the Leases;

 

  

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(iii)  

	
The obligation to pay all Royalties, rentals, shut-in payments, and other burdens or encumbrances to which the Leases are subject; and

 

	
(iv)  

	
The obligation to comply with all applicable laws, ordinances, rules, orders and regulations pertaining to the Assets;

 

	
(B)  

	
All obligations, liabilities and duties with respect to plugging, abandonment, decommissioning, and site clearance operations relating to the Assets, and all required remediation relating to the Assets, whether arising before or after the Effective Time, all in accordance with applicable laws (“Assumed Plugging and Abandonment Obligations”), including, without limitation, all of those plugging and abandonment obligations set forth in Section 13.29 of that Purchase and Sale Agreement dated July 7, 2005 by and between Pioneer Natural Resources USA, Inc. and Maritech Resources, Inc.  No later than January 31st of each calendar year, Buyer shall provide Seller with written confirmation that it has fulfilled its annual obligations for the prior year in accordance with Section 13.29 of that Purchase and Sale Agreement dated July 7, 2005 by and between Pioneer Natural Resources USA, Inc. and Maritech Resources, Inc.

 

	
(C)  

	
Subject to adjustment pursuant to Section 3.4, the Imbalances with respect to the Assets, whether arising before or after the Effective Time; and

 

	
(D)  

	
All obligations, liabilities and duties with respect to the environmental condition of the Assets, the compliance of the Assets or the operation thereof with Environmental Laws or the presence, release, disposal or storage of pollution, contamination, hazardous substances, wastes, materials and products by or in connection with the Assets, whether arising before or after the Effective Time, and regardless of whether resulting from any negligent acts or omissions or strict liability of Seller, its affiliates, its or its affiliates’ past, present or future members, managers, working interest partners, officers, directors, trustees, agents, and contractors, or Buyer, or the condition of the Assets when acquired, including, without limitation, clean-up responses, remediation, control, assessment and compliance with respect to air, water, surface or subsurface pollution, and other obligations, liabilities and duties relating to the presence or release of pollution or contamination, including pollution or contamination by oil and gas, brine, NORM or other materials or the release or disposal of any hazardous substances, wastes, materials and products generated by or used in connection with the ownership or operation of the Assets (“Assumed Environmental Obligations”).

 

	
(E)  

	
Reference is made to that Section 3.4(l) of that Purchase and Sale Agreement dated July 7, 2005 by and between Pioneer Natural Resources USA, Inc. and Maritech Resources, Inc.  If prior to Closing Chevron 

 

  

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U.S.A. Inc. or Chevron Corporation, or any applicable subsidiary, agrees to the substitution of Buyer’s letter of credit in the aggregate sum of Seven Million Dollars ($7,000,000) to secure the abandonment of wells and other asseets as set forth therein (the “Buyer’s Letter of Credit”), in place of Seller’s Parent letter of credit for such obligations (“Seller’s Parent Letter of Credit”), then the Base Purchase Price shall be reduced at Closing by Two Million  Dollars  ($2,000,000), and Buyer shall post the Buyer’s Letter of Credit.  If Chevron U.S.A. Inc. or Chevron Corporation, or any applicable subsidiary, fails or refuses to agree to the substitution of Buyer’s Letter of Credit prior to the Closing, then the Base Purchase Price shall be increased at Closing by Seven Hundred Fifty Thousand Dollars  ($750,000), and Seller’s Parent Letter of Credit shall remain in place. If, within five (5) years after Closing, Seller decides to negotiate with Chevron U.S.A. Inc. or Chevron Corporation, or any applicable subsidiary, and the applicable Chevron entity agrees to the substitution of Buyer’s Letter of Credit, then Buyer shall post the Buyer’s Letter of Credit and Seller shall promptly tender to Buyer Two Million Seven Hundred Fifty Thousand Dollars ($2,750,000) in cash.

 

20.2 Indemnification By Buyer.  From and after the Closing, Buyer shall assume, indemnify and hold Seller and its affiliates, and its and their respective directors, officers, employees, attorneys, contractors and agents harmless from and against any and all claims, actions, causes of action, liabilities, damages, costs or expenses (including, without limitation, court costs and consultants’ and attorneys’ fees) of any kind or character (“Damages”) (individually a “Seller’s Indemnified Claim” and collectively “Seller’s Indemnified Claims”) arising out of:

 

	
(A)  

	
any misrepresentation or breach of any warranty, covenant or agreement of Buyer contained in this Agreement;

 

	
(B)  

	
the ownership and/or operation of the Assets, whether accruing or arising before, on or after the Effective Time, subject to and except for those liabilities retained by Seller pursuant to Section 20.3, as limited by Sections 20.4 and 20.5; and

 

	
(C)  

	
the Assumed Obligations.

 

THE FOREGOING ASSUMPTIONS AND INDEMNIFICATIONS SHALL APPLY WHETHER OR NOT SUCH DUTIES, OBLIGATIONS OR LIABILITIES, OR SUCH CLAIMS, ACTIONS, CAUSES OF ACTION, LIABILITIES, DAMAGES, LOSSES, COSTS OR EXPENSES ARISE OUT OF (i) NEGLIGENCE (INCLUDING SOLE NEGLIGENCE, SIMPLE NEGLIGENCE, CONCURRENT NEGLIGENCE, ACTIVE OR PASSIVE NEGLIGENCE, BUT EXPRESSLY NOT INCLUDING GROSS NEGLIGENCE OR WILLFUL MISCONDUCT) OF ANY INDEMNIFIED PARTY, OR (ii) STRICT LIABILITY.

 

20.3 Indemnification By Seller.  From and after Closing, Seller shall indemnify and hold Buyer (and its directors, officers, employees, attorneys, contractors and agents) harmless 

 

  

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from and against any and all Damages (individually a “Buyer’s Indemnified Claim” and collectively “Buyer’s Indemnified Claims”) arising out of:

 

	
(A)  

	
any misrepresentation or breach of any warranty, covenant or agreement of Seller contained in this Agreement;

 

	
(B)  

	
the ownership and/or operation of the Assets prior to the Effective Time, excluding, however, the Assumed Obligations;

 

	
(C)  

	
any personal or bodily injury (including death) or property damage caused by or attributable to the Assets prior to the Closing Date;

 

	
(D)  

	
any mispayment or non-payment of Royalties attributable to the Assets prior to the Effective Time;

 

	
(E)  

	
off-site disposal by Seller or its agents, employees, representatives, operators, or contractors of wastes or materials from the Assets occurring prior to Closing; and

 

	
(F)  

	
the Excluded Assets.

 

20.4 Limitation on Seller’s Indemnity Obligations.  Seller shall not be required to indemnify Buyer under Sections 20.3(A) through 20.3(E) with respect to any individual Buyer’s Indemnified Claim in an amount less than $50,000 (“Individual Claim Threshold”).  Further, Seller shall not be obligated to indemnify Buyer under Sections 20.3(A) through 20.3(F) for Buyer’s Indemnified Claims unless, and then only to the extent that, the aggregate of all of Buyer’s Indemnified Claims exceeds two percent (2%) of the Base Purchase Price (the “Indemnity Deductible”). In addition, in no event shall Seller’s aggregate liability arising out of or related to Buyer’s Indemnified Claims exceed twenty-five percent (25%) of the Base Purchase Price (the “Indemnity Cap”).

 

20.5 Survival of Provisions.  Seller’s representations and warranties contained in this Agreement shall survive the Closing and the delivery of the Conveyance for a period of eighteen (18) months after the Closing Date. Seller’s covenants and obligations under Sections 18.8 and 20.3(F) shall survive the Closing and the delivery of the Conveyance without limitation as to time. Buyer’s representations and warranties and all covenants of Seller and Buyer contained in this Agreement shall survive the Closing and the delivery of the Conveyance without limitation as to time, except for  any covenant which by its terms terminates as of a specific date, or is only made for a specified period.  Notwithstanding the foregoing, Seller’s representations set forth in Sections 10.1(P) and 10.1(Q) shall terminate on the Closing Date. Each of the survival periods specified in this Section 20.5 is referred to as the “Survival Period.”  The indemnity obligations for which a timely and valid notice of claims is made pursuant to Section 20.6 shall continue for so long as the basis underlying such notice continues and until all related claims have been resolved.

 

20.6 Notice of Claim.  If indemnification pursuant to Section 20.2 or 20.3 is sought, the Party seeking indemnification (the “Indemnitee”) shall give written notice to the indemnifying Party during the applicable Survival Period of an event giving rise to the obligation 

 

  

42

  

 

to indemnify, describing in reasonable detail the factual basis for such claim, and shall allow the indemnifying Party to assume and conduct the defense of the claim or action with counsel reasonably satisfactory to the Indemnitee, and shall cooperate with the indemnifying Party in the defense thereof; provided, however, that the omission to give such notice to the indemnifying Party shall not relieve the indemnifying Party from any liability which it may have to the Indemnitee, except to the extent that the indemnifying Party is prejudiced by the failure to give such notice and as otherwise provided in Section 20.5.  The Indemnitee shall have the right to employ separate counsel to represent the Indemnitee if the Indemnitee is advised by counsel that an actual conflict of interest makes it advisable for the Indemnitee to be represented by separate counsel and the reasonable expenses and fees of such separate counsel shall be paid by the indemnifying Party.

 

20.7 Exclusive Remedy.  Upon Closing, the terms and provisions of this Article 20 shall be the sole and exclusive remedy of each of the Parties indemnified hereunder with respect to the claims described in Sections 20.2 and 20.3, including, without limitation, claims arising from breaches of the representations and warranties of the Parties set forth in this Agreement and the other documents executed and delivered hereunder, regardless of whether such claims are based on contract, tort, securities laws, strict liability, or other principles.

 

ARTICLE 21

MEDIATION AND ARBITRATION

 

21.1 Mediation and Arbitration.

 

	
(A)  

	
If a dispute (other than an accounting dispute subject to Section 3.3 or a dispute subject to Article 7) arises out of or in connection with this Agreement, and if the dispute cannot be settled through negotiation, the Parties agree first to try in good faith to settle the dispute by mediation under the Commercial Mediation Rules of the American Arbitration Association (“AAA”) before resorting to arbitration under this Section or any other Section in this Agreement.

 

	
(B)  

	
Except as provided in Section 21.1(A) and for the accounting dispute procedures of Section 3.3 and the Independent Expert procedures of Article 7, the Parties hereby agree to submit all other controversies, claims and matters of difference arising from or relating to this Agreement (“Disputes”) to arbitration.  Without limiting the generality of the foregoing, the following shall be considered Disputes for this purpose:  (1) all questions relating to the interpretation or breach of this Agreement, (2) all questions relating to any representations, negotiations and other proceedings leading to the execution hereof, and (3) all questions as to whether the right to arbitrate any question exists.

 

	
(C)  

	
Arbitration may be initiated by a Party (“Claimant”) serving written notice on the other Party (the “Respondent”) that Claimant elects to refer the Dispute to binding arbitration.  Disputes involving claims in an amount less than $500,000.00 shall be determined by a single arbitrator, who shall

 

  

43

  

 

	
 

	
be selected by mutual agreement of the Parties.  In the event the Parties are unable to agree within fourteen (14) days on an arbitrator, either Party may request the AAA to appoint an arbitrator, giving due regard to the selection criteria set out below.  Disputes involving claims in an amount of $500,000 or greater shall be determined by a panel of three (3) arbitrators.  Claimant’s notice initiating binding arbitration must identify the arbitrator Claimant has appointed. Respondent shall respond to Claimant within thirty (30) days after receipt of Claimant’s notice, identifying the arbitrator Respondent has appointed. If Respondent fails for any reason to name an arbitrator within the thirty (30) day period, Claimant will name the arbitrator for Respondent’s account. The two (2) arbitrators so chosen shall select a third arbitrator (who must have not less than ten (10) years experience as an oil and gas lawyer) within thirty (30) days after the second arbitrator has been appointed. If the two (2) arbitrators are unable to agree on a third arbitrator within sixty (60) days from initiation of arbitration, then a third arbitrator shall be selected by the AAA office administering the Dispute, with due regard given to the selection criteria above and input from the Parties and other arbitrators. The AAA shall select the third arbitrator not later than ninety (90) days from initiation of arbitration.  In the event AAA should fail to select the third arbitrator within ninety (90) days from initiation of arbitration, then either Party may petition the Chief United States District Judge for the Southern District of Texas to select the third arbitrator.  Due regard shall be given to the selection criteria above and input from the Parties and other arbitrators.

 

	
(D)  

	
All matters arbitrated hereunder shall be arbitrated in Houston, Texas, shall be governed by Texas law, without reference to any choice of law rules, and shall be conducted in accordance with the Commercial Arbitration Rules of the AAA (the “Rules”).  The arbitrators shall conduct a hearing no later than sixty (60) days after submission of the matter to arbitration, and a decision shall be rendered by the arbitrators within fifteen (15) days of the hearing.  At the hearing, the Parties shall present such evidence and witnesses as they may choose, with or without counsel.  Adherence to formal rules of evidence shall not be required but the arbitration panel shall consider any evidence and testimony that it determines to be relevant, in accordance with procedures that it determines to be appropriate.  Any award entered in an arbitration shall be made by a written opinion stating the reasons for the award made.

 

	
(E)  

	
This submission and agreement to arbitrate shall be specifically enforceable.  Arbitration may proceed in the absence of any Party if notice of the proceedings has been given to such Party.  The Parties agree to abide by all awards rendered in such proceedings.  Such awards shall be final and binding on all Parties to the extent and in the manner permitted under Texas law.  All awards may be filed with the clerk of one or more courts, state, federal or foreign having jurisdiction over the Party against whom such award is rendered or its property, as a basis of judgment and 

 

  

44

  

 

	
 

	
of the issuance of execution for its collection.  No Party shall be considered in default hereunder during the pendency of arbitration proceedings relating to such default, but nothing herein shall be deemed to toll the effectiveness of contract provisions relating to the accruing of or rate of interest on amounts not paid when due.

 

	
(F)  

	
The arbitrators may award legal and equitable relief, including but not limited to the award of specific performance.  With regard to the award of damages, the arbitrators are empowered to award only compensatory damages (which term may include attorney’s fees and costs and compensation for the time value of money).  EACH PARTY IRREVOCABLY WAIVES ANY DAMAGES IN EXCESS OF COMPENSATORY DAMAGES, INCLUDING WAIVER OF PUNITIVE AND MULTIPLE DAMAGES.  Nothing herein shall prevent a Party from seeking a preliminary injunction or similar preliminary judicial relief if in the good faith judgment of the Party such action is necessary to avoid irreparable damage.  Such Party must, however, continue to participate in good faith in the dispute resolution proceedings specified in this Section.

 

ARTICLE 22

MISCELLANEOUS

 

22.1 Confidentiality.  That certain Confidentiality Agreement between the Parties, dated January 28, 2011 the (“Confidentiality Agreement”), shall survive the execution and delivery of this Agreement, and shall not be superseded hereby.  In accordance with the terms of the Confidentiality Agreement, Buyer shall maintain the confidentiality of all due diligence materials concerning the Assets, including, without limitation, engineering, geological and geophysical data, seismic data, reports and maps, and the due diligence results and findings of Buyer (including,, without limitation, due diligence associated with environmental and title matters) and other data relating to the Assets.

 

22.2 Notice.  Any notice, request, demand, or consent required or permitted to be given hereunder shall be in writing and delivered in person or by certified mail, with return receipt requested or by prepaid overnight delivery service, or by facsimile addressed to the Party for whom intended at the following addresses:

 

SELLER:

 

Maritech Resources, Inc.

24955 Interstate 45 North

The Woodlands, Texas  77380

Attn:           President

Tel:           (281) 364-2280

Fax:           (281) 364-4310

With a Copy to:

 

  

45

  

 

TETRA Technologies, Inc.

24955 Interstate 45 North

The Woodlands, Texas  77380

Attn:           General Counsel

Tel:           (281) 364-2241

Fax:           (281) 364-4398

BUYER:

 

Tana Exploration Company LLC

1301 Fannin Street, Suite 2100

Houston, Texas 77002

Attn:  Kevin Talley and Carl Comstock

Tel:  832-325-6000

Fax:  832-325-6001

With a Copy to:

Winstead PC

1100 Carter Burgess Plaza

777 Main Street

Fort Worth, Texas 76102

Attn:           C. Scott Gladden

Tel:           (817) 420-8206

Fax:           (817) 420-8201

And

TRT Holdings, Inc.

600 East Las Colinas Blvd.

Suite 1900

Irving, Texas   75039

Attn:              Michael G. Smith and Paul Jorge

Tel:              214-283-8619

Fax:              214-283-8514

or at such other address as any of the above shall specify by like notice to the other.

 

22.3 Press Releases and Public Announcements.  No Party shall issue any press release or make any public announcement relating to the subject matter of this Agreement without the prior written approval of the other Party; provided, however, that any Party may make any public disclosure it believes in good faith is required by applicable law or any listing or trading agreement concerning its or its affiliates’ publicly-traded securities (in which case the disclosing 

 

  

46

  

 

Party shall use all reasonable efforts to advise the other Party, and give the other Party an opportunity to comment on the proposed disclosure, prior to making the disclosure).

 

22.4 COMPLIANCE WITH EXPRESS NEGLIGENCE RULE.  THE PARTIES AGREE THAT, EXCEPT AS MAY OTHERWISE BE EXPRESSLY PROVIDED HEREIN, THE INDEMNIFICATION OBLIGATIONS OF THE INDEMNIFYING PARTY SHALL BE WITHOUT REGARD TO THE NEGLIGENCE OR STRICT LIABILITY OF THE INDEMNIFIED PERSON(S), WHETHER THE NEGLIGENCE OR STRICT LIABILITY IS ACTIVE, PASSIVE, JOINT, CONCURRENT OR SOLE.

 

22.5 Governing Law.  This Agreement is governed by and must be construed according to the laws of the State of Texas, excluding any conflicts-of-law rule or principle that might apply the law of another jurisdiction.

 

22.6 Exhibits.  The Exhibits attached to this Agreement are incorporated into and made a part of this Agreement.

 

22.7 Fees, Expenses, and Recording.

 

	
(A)  

	
Each Party shall be solely responsible for all costs and expenses incurred by it in connection with this transaction (including, but not limited to fees and expenses of its counsel and accountants) and shall not be entitled to any reimbursements from the other Party, except as otherwise provided in this Agreement.

 

	
(B)  

	
Buyer shall, at its own cost, promptly record all instruments of conveyance and sale in the appropriate office of the state and parish offshore which the lands covered by such instrument are located.  Buyer shall promptly file for and obtain the necessary approval of all federal or state government agencies to the assignment of the Assets.  The assignment of any state or federal oil and gas leases shall be filed in the appropriate governmental offices on a form required and in compliance with the applicable rules of the applicable government agencies.  Buyer shall supply Seller with a true and accurate photocopy reflecting the recording information of all the recorded and filed assignments within a reasonable period of time after their recording and filing.

 

22.8 Assignment.  Neither this Agreement nor any part hereof (including without limitation any indemnification rights or any obligations or benefits hereunder) may be assigned by either Party without the prior written consent of the other Party and any transfer in absence of such consent shall be null and void; provided, however, upon notice to the other Party, either Party shall have the right to assign all or part of its rights (but none of its obligations) under this Agreement in order to qualify a transfer of the Assets as a “like-kind” exchange for federal tax purposes.  After Closing, any permitted assignment of this Agreement by a Party shall not relieve such assigning Party of any of its obligations and responsibilities to the non-assigning Party unless expressly released from same in writing by such non-assigning Party.  Subject to the foregoing, this Agreement is binding upon the Parties hereto and their respective successors and 

 

  

47

  

 

assigns.  Notwithstanding the restrictions and requirements of this Section 22.8, prior to Closing, Buyer shall have the right, without Seller’s consent, to assign all of its rights and obligations under this Agreement to an affiliate of Buyer, so long as such affiliated assignee of Buyer has the financial ability to perform Buyer’s obligations under this Agreement.  The restrictions on or requirements for assignment in this Section 22.8 shall not limit or apply to Buyer’s (or its successors’ or assigns’) ability to assign all or part of its interest in the Assets after Closing.

 

22.9 Buyer’s Parent as a Party.  Each of Buyer and Seller acknowledges and agrees that Buyer’s Parent is joined in the execution of this Agreement for the sole purpose of ensuring Buyer’s compliance with Section 11.1(G), and Buyer’s Parent shall have no other duties, obligations, responsibilities or liabilities of any kind whatsoever to Seller or otherwise arising out of this Agreement.

 

22.10 Seller’s Parent as a Party.  Each of Buyer and Seller acknowledges and agrees that Seller’s Parent is joined in the execution of this Agreement for the sole purpose of ensuring Seller’s compliance with Section 1.2(N), Section 18.8, Section 18.9, and, only to the extent related thereto, Section 20.5, and Seller’s Parent shall have no other duties, obligations, responsibilities or liabilities of any kind whatsoever to Buyer or otherwise arising out of this Agreement.

 

22.11 Entire Agreement.  This Agreement constitutes the entire agreement reached by the Parties with respect to the subject matter hereof, superseding all prior negotiations, discussions, agreements and understandings, whether oral or written, relating to such subject matter, except the Confidentiality Agreement shall remain in full force and effect in accordance with its terms.

 

22.12 Severability.  In the event that any one or more covenants, clauses or provisions of this Agreement shall be held invalid or illegal, such invalidity or unenforceability shall not affect any other provisions of this Agreement.

 

22.13 Captions.  The captions in this Agreement are for convenience only and shall not be considered a part of or affect the construction or interpretation of any provision of this Agreement.

 

22.14 Counterpart Execution.  This Agreement may be executed in any number of counterparts, and each such counterpart hereof shall be deemed to be an original, and all of which together shall constitute one and the same instrument.

 

22.15 Waiver of Certain Damages.  The indemnification obligations of the Parties under Article 20 shall be limited to actual losses, and shall not include, and each of the Parties hereby waives and agrees not to seek incidental, consequential, indirect, punitive or exemplary damages with respect to any claim, controversy, or dispute arising out of or relating to this Agreement or the breach thereof, except in the event such damages are awarded to a third party.

 

22.16 Amendments and Waivers.  This Agreement may not be modified or amended except by an instrument in writing signed by both Parties.  Any Party hereto may, only by an instrument in writing, waive compliance by another Party with any term or provision of this Agreement on the part of such other Party hereto to be performed or complied with.  The waiver 

 

  

48

  

 

by any Party hereto of a breach of any term or provision of this Agreement shall not be construed as a waiver of any subsequent breach.

 

22.17 Seller’s Knowledge.  For all purposes of this Agreement, “Seller’s knowledge” or words of similar import shall mean  the actual knowledge of one or more of the following officers of Seller:  Edgar A. Anderson, Mark A. Gregory, Herb Cole, Mike Simon, and Van Goff.

 

22.18 Like-Kind Exchanges.  Buyer shall cooperate fully, as and to the extent reasonably requested by Seller, in connection with the transactions contemplated herein to make such modifications as may be necessary, but at no cost or liability to Buyer, to qualify such transactions, in whole or in part, as a “like-kind” exchange pursuant to Section 1031 of the Code.

 

22.19 Further Cooperation.  At the Closing, and thereafter as may be necessary, Seller and Buyer shall execute and deliver such other instruments and documents and take such other actions as may be reasonably necessary to evidence and effectuate the transactions contemplated by this Agreement.

 

  

49  

  

Executed as of the day and year first above written.

 

SELLER:

Maritech Resources, Inc.

By:/s/Edgar A. Anderson                       

Edgar A. Anderson, President

SELLER'S PARENT:

Tetra Technologies, Inc.

 

By:/s/Stuart M. Brightman                                                                         

Name: Stuart M. Brightman                                                                          

Title: President & CEO                                                                          

BUYER:

Tana Exploration Company LLC

 

By:/s/Kevin D. Talley                                                                          

Name: Kevin D. Talley                                                                          

Title: President                                                                           

BUYER'S PARENT:

TRT Holdings, Inc.

By:/s/James D. Caldwell                                                                          

Name: James D. Caldwell                                                                          

Title: President                                                                          

Purchase and Sale Agreement Signature Page

 

  

  

  

 

EXHIBIT 1.1 (A) - LEASES

 

Attached to and made a part of that certain Purchase and Sale Agreement dated April 1, 2011, but effective January 1, 2011, by and between Maritech Resources, Inc. and Tana Exploration Company LLC

	
AREA

	
BLOCK

	
LEASE

	
STATUS

	
GROSS ACRES

	
NET ACRES

	
WD

	
OPERATOR

	
OWNER

	
CODE

	
INT.

	
INT TYPE

	
ROYALTY % (GROSS)

	
ADD'L BURDENS % (GROSS)

	
EFFECTIVE DATE

	
EXPIRATION DATE

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
EC

	
0328

	
G10638

	
PROD

	
5000.00

	  	
230

	
Maritech

	
Apache

	
A

	
100.00000

	
RT

	
16.67

	
*

	
5/1/1989

	
4/30/1994

	  	  	  	  	
5000.00

	
2500

	  	
Maritech (W2; N2NE4; SE4)

	
Maritech (surf - 3,515' MD)

	
B

	
50.00000

	  	  	  	  	  
	  	  	  	  	  	  	  	
Maritech

	
Arena Offshore

	
B

	
15.00000

	  	  	  	  	  
	  	  	  	  	  	  	  	
Maritech

	
Arena Energy

	
B

	
35.00000

	  	  	  	  	  
	  	  	  	  	
5000.00

	
2500

	  	
Arena (S2 NE4)

	
Maritech (3,515' MD - 4,195' TVD)

	
C

	
50.00000

	  	  	  	  	  
	  	  	  	  	  	  	  	
Arena

	
Arena Offshore

	
C

	
15.00000

	  	  	  	  	  
	  	  	  	  	  	  	  	
Arena

	
Arena Energy

	
C

	
35.00000

	  	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
EI

	
0342

	
G02319

	
PROD

	
2500.00

	
0

	
266

	
Chevron USA (Below 10,000' TVD)

	
Mariner (W2)

	
A

	
50.00000

	
RT

	
16.67

	
*

	
2/1/1973

	
1/31/1978

	  	  	  	  	  	  	  	
Chevron USA

	
Chevron (W2)

	
A

	
50.00000

	  	  	  	  	  
	  	  	  	  	  	  	  	
Mariner Oil

	
Mariner (E2)

	
B

	
50.00000

	  	  	  	  	  
	  	  	  	  	  	  	  	
Mariner Oil

	
Apache (E2)

	
B

	
25.00000

	  	  	  	  	  
	  	  	  	  	
2500.00

	
625

	  	
Mariner Oil

	
Maritech Res (E2)

	
B

	
25.00000

	
RT

	  	  	  	  
	  	  	  	  	  	  	  	
Mariner Oil

	
Mariner En Res (NW4 Surf - 8,225' TVD)

	
C

	
50.00000

	  	  	  	  	  
	  	  	  	  	  	  	  	
Mariner Oil

	
Apache (NW4)

	
C

	
25.00000

	  	  	  	  	  
	  	  	  	  	
1250.00

	
312.5

	  	
Mariner Oil

	
Maritech Res (NW4)

	
C

	
25.00000

	
OR

	  	
*

	  	  
	  	  	  	  	  	  	  	
Mariner (Surf-10,000')

	
Apache (SW4)

	
D

	
38.25000

	  	  	  	  	  
	  	  	  	  	
1250.00

	
478.13

	  	
Mariner Oil

	
Maritech Res(SW4)

	
D

	
38.25000

	
OR

	  	
*

	  	  
	  	  	  	  	  	  	  	
Mariner Oil

	
Mariner En Res (SW4)

	
D

	
23.50000

	  	  	  	  	  
	  	  	  	  	
1250.00

	
0

	  	
Chevron USA DpRt

	
Mariner (NW4 Below 8225')

	
E

	
50.00000

	  	  	  	  	  
	  	  	  	  	  	  	  	
Chevron USA DpRt

	
Chevron (NW4)

	
E

	
50.00000

	  	  	  	  	  
	  	  	  	  	  	  	  	
Mariner - DpRts

	
Mariner (E2)

	
F

	
50.00000

	  	  	  	  	  
	  	  	  	  	  	  	  	
Mariner - DpRts

	
Apache (E2)

	
F

	
25.00000

	  	  	  	  	  
	  	  	  	  	
2500.00

	
312.5

	  	
Mariner - DpRts

	
Maritech Res (E2)

	
F

	
12.50000

	  	  	  	  	  
	  	  	  	  	  	  	  	
Mariner - DpRts

	
Devon Energy (E2)

	
F

	
12.50000

	  	  	  	  	  
	  	  	  	  	  	  	  	
Chevron            below 10,000'

	
Apache (SW/4 - Dp Rts)

	
G

	
38.25000

	  	  	  	  	  
	  	  	  	  	
1250.00

	
239.06

	  	
Chevron            below 10,000'

	
Maritech (SW/4 - Dp Rts)

	
G

	
19.12500

	
OR

	  	  	  	  
	  	  	  	  	  	  	  	
Chevron            below 10,000'

	
Devon En (SW/4 - Dp Rts)

	
G

	
19.12500

	  	  	  	  	  
	  	  	  	  	  	  	  	
Chevron            below 10,000'

	
Mariner (SW/4 - Dp Rts)

	
G

	
23.50000

	  	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
MP

	
99

	
G21703

	
 SOP thru 4-30-11

	
4994.55

	
4994.55

	  	
Maritech Res

	
Maritech Res W1/2;W1/2E1/2;NE1/4NE1/4;SE1/4SE1/4

	
A

	
100.00000

	
RT

	
16.67

	  	
5/1/2000

	
4/30/2005

	  	  	  	  	  	  	  	  	
Sojitz

	
A

	
0.00000

	  	  	  	  	  
	  	  	  	  	  	  	  	
Maritech Res

	
Maritech Res SE/4 NE/4; NE/4 SE/4

	
A

	
100.00000

	
RT

	  	  	  	  
	  	  	  	  	  	  	  	
Maritech Res

	
Maritech Res NE1/4SE1/4; SE1/4NE1/4 surf - 13,680 MD

	
B

	
25.00000

	
OR

	  	  	  	  
	  	  	  	  	  	  	  	  	
Mariner

	
B

	
75.00000

	
OR

	  	  	  	  
	  	  	  	  	  	  	  	  	
Maritech Res NE1/4SE1/4; SE1/4NE1/4 Depths Below 13,680 MD

	
C

	
100.00000

	  	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
MP

	
160

	
G05245

	
 SOP thru 8-31-11

	
1248.64

	
749.18

	  	
Maritech

	
Chevron USA Inc.

	
A

	
50.00000

	
RT

	
16.67

	
13.00

	
4/1/1983

	
3/31/1988

	  	  	  	  	  	  	  	  	
Callon Petroleum

	
A

	
50.00000

	
RT

	  	  	  	  
	  	  	  	  	  	  	  	
Callon Petroleum

	
Callon Petroleum Surf - 6110 TVD

	
B

	
100.00000

	
OR

	  	  	  	  
	  	  	  	  	  	  	  	  	
Chevron USA Inc. Depths Below 6110' TVD

	
C

	
50.00000

	
OR

	  	  	  	  
	  	  	  	  	  	  	  	  	
Callon Petroleum

	
C

	
50.00000

	
OR

	  	  	  	  
	  	  	  	  	  	  	  	
Maritech

	
Maritech - S/2S/2 surf-3800' SS

	
D

	
60.00000

	
OR

	  	  	  	  
	  	  	  	  	  	  	  	  	
W&T OFFSHORE

	
D

	
40.00000

	
OR

	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
MP

	
163

	
G07809

	
SOP thru 4-30-11

	
4994.55

	
2996.73

	  	
Maritech Res - surf-10,100' TVD

	
Callon Petroleum

	
A

	
100.00000

	
RT

	
16.67

	
8.33

	
7/1/1985

	
6/30/1990

	  	  	  	  	  	  	  	
Maritech Res - surf-10,100' TVD

	
Callon Pet - Surf-5,499' TVD

	
B

	
100.00000

	  	  	  	  	  
	  	  	  	  	  	  	  	
Maritech Res - surf-10,100' TVD

	
Maritech - 5,500' TVD-10,100' SS

	
C

	
60.00000

	
OR

	  	  	  	  
	  	  	  	  	  	  	  	  	
W&T Offshore

	
C

	
40.00000

	
OR

	  	  	  	  
	  	  	  	  	  	  	  	  	
Callon Pet - Below 10,100' SS

	
D

	
100.00000

	  	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
MP

	
175

	
G08753

	
180-day clock thru 3/25/11

	
4994.55

	
4994.55

	
128

	
Maritech Res

	
Maritech Res

	
A

	
100.00000

	
RT

	
16.67

	
4.00

	
8/1/1987

	
7/1/1992

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	  	  	
Platform will become a RUE

	  	  	  	  	
Maritech Res

	
Maritech Res - surf to 4000'

	
B

	
100.00000

	  	  	  	  	  
	  	  	  	  	  	  	  	
Maritech Res - below 4000'TVD - 50,000'TVD

	
Maritech Res

	
C

	
21.24993

	
OR

	  	  	  	  
	  	  	  	  	  	  	  	
Maritech Res

	
Devon Energy

	
C

	
21.24992

	
OR

	  	  	  	  
	  	  	  	  	  	  	  	
Maritech Res

	
Fairways

	
C

	
50.00000

	
OR

	  	  	  	  
	  	  	  	  	  	  	  	
Maritech Res

	
Fidelity

	
C

	
7.50015

	
OR

	  	  	  	  
	
MP

	
178

	
RUE moved to Exhibit 1.1 D Easements-ROW

	  	  	  	  	  	  	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
MP

	
185

	
G25033

	
 SOP thru 4-30-11

	
4994.55

	
2330.79

	  	
Maritech Res

	
Maritech Res

	
A

	
46.66000

	
RT

	
16.67

	
2.00

	
5/1/2003

	
4/30/2008

	  	  	  	  	  	  	  	  	
W&T Offshore

	
A

	
33.34000

	
RT

	  	  	  	  
	  	  	  	  	  	  	  	  	
Energy Res Tech GOM

	
A

	
20.00000

	
RT

	  	  	  	  
	
MP

	
187

	
G26157

	
Lse held by 180-day clock thru 03-25-2011

	
4994.55

	
4994.55

	  	
Maritech Res

	
Maritech Res

	
A

	
100.00000

	
RT

	
16.67

	
2.00

	
6/1/2004

	
5/31/2009

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
MP

	
200

	
G23979

	
SOP thru 4-30-11

	
4994.55

	
2497.28

	  	
Maritech Res

	
Maritech Res

	
A

	
50.00000

	
RT

	
16.67

	
2.00

	
6/1/2002

	
5/31/2007

	  	  	  	  	  	  	  	  	
Energy Res Tech GOM

	
A

	
50.00000

	
RT

	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
MP

	
207

	
G22802

	
SI  12/16/10

	
4994.55

	
2497.28

	  	
Maritech Res

	
Maritech Res

	
A

	
50.00000

	
RT

	
16.67

	
2.00

	
7/1/2001

	
6/30/2006

	  	  	  	
180-DAY CLOCK TO 06/13/2011

	  	  	
Energy Res Tech GOM

	
A

	
50.00000

	
RT

	  	  	  	  	  	  
	  	  	  	  	  	  	  	  	
Maritech Res S1/2N1/2; N1/2N1/2S1/2 surf - 6100' TVD

	
B

	
40.00000

	
OR

	  	  	  	  
	  	  	  	  	  	  	  	  	
Energy Res Tech GOM

	
B

	
40.00000

	
OR

	  	  	  	  
	  	  	  	  	  	  	  	  	
Sojitz

	
B

	
20.00000

	
OR

	  	  	  	  
	  	  	  	  	  	  	  	  	
Maritech Res S2N2 Below 3,270 TVD

	
C

	
50.00000

	  	  	  	  	  
	  	  	  	  	  	  	  	  	
Energy Res Tech GOM

	
C

	
50.00000

	  	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
MP

	
211

	
G22803

	
SI 12-08-10

	
4994.55

	
2497.28

	  	
Maritech Res

	
Maritech Res

	
A

	
50.00000

	
RT

	
16.67

	
2.00

	
5/1/2001

	
4/30/2006

	  	  	  	
180-DAY CLOCK TO 06/05/2011

	  	  	
Energy Res Tech GOM

	
A

	
50.00000

	
RT

	  	  	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
MP

	
229

	
G32253

	
Primary Term

	
4994.55

	
4994.55

	  	
Maritech Resources

	
Maritech Res

	
A

	
100.00000

	
RT

	
18.75

	  	
7/1/2008

	
6/30/2013

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
MP

	
232

	
G22806

	
SI 12-08-10

	
4994.55

	
2497.28

	  	
Maritech Res

	
Maritech Res

	
A

	
50.00000

	
RT

	
16.67

	
2.00

	
7/1/2001

	
6/30/2006

	  	  	  	
180-day Clock to 06/05/2011

	  	  	
Energy Res Tech GOM

	
A

	
50.00000

	
RT

	  	  	  	  	  	  
	
MP

	
233

	
G23988

	
PROD

	
4994.55

	
1623.23

	  	
Energy Res Tech GOM

	
Energy Res Tech GOM

	
A

	
35.00000

	
RT

	
16.67

	
2.00

	
7/1/2002

	
6/30/2007

	  	  	  	  	  	  	  	  	
Maritech Res

	
A

	
32.50000

	
RT

	  	  	  	  
	  	  	  	  	  	  	  	  	
Implicit

	
A

	
32.50000

	
RT

	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
MP

	
235

	
G32255

	
Primary Term

	
4994.55

	
4994.55

	  	
Maritech Res

	
Maritech Res

	
A

	
100.00000

	
RT

	
18.75

	  	
8/1/2008

	
7/31/2013

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
MP

	
241

	
G22808

	
PROD

	
4994.55

	
2497.28

	  	
Maritech Res

	
Maritech Res

	
A

	
50.00000

	
RT

	
16.67

	
2.00

	
7/1/2001

	
6/30/2006

	  	  	  	  	  	  	  	  	
Energy Res Tech GOM

	
A

	
50.00000

	
RT

	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
MP

	
279

	
G26168

	
PROD

	
4994.55

	
575.37

	  	
W&T

	
W&T

	
A

	
88.50000

	
RT

	
16.67

	  	
7/1/2004

	
6/30/2009

	  	  	  	  	  	  	  	  	
Maritech Res

	
A

	
10.00000

	  	
16.67

	
5.00

	  	  
	  	  	  	  	  	  	  	  	
Maritech Res

	
A

	
1.50000

	  	
16.67

	  	  	  
	
T Bay

	
01772

	  	
PROD

	
2120.92

	
2120.92

	  	
Maritech T-Bay

	
Maritech T-Bay

	
A

	
100.00000

	  	
14.58333

	
3.00

	
3/2/1950

	  
	  	  	  	  	
Part Rel     11-08-78 -1,490 acs; Orig Lse 3,610.00 acs

	  	  	  	  	  	  	  	  	  	  	  
	
T Bay

	
01773

	  	
PROD

	
97.44

	
97.44

	  	
Maritech T-Bay

	
Maritech T-Bay

	
A

	
100.00000

	  	
14.58333

	
3.00

	
3/2/1950

	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
T Bay

	
00192

	  	
PROD

	
6000.00

	
6000.00

	  	
Maritech T-Bay

	
Maritech T-Bay

	
A

	
100.00000

	  	
12.50

	
15.50

	
2/20/1928

	  
	
T Bay

	
2243

	
SWD Lse

	  	
3.00

	  	  	
Maritech T-Bay

	
Maritech T-Bay

	
A

	
100.00000

	  	  	  	
1/1/2004

	
1/1/2014

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
T Bay

	
2507

	
SWD Lse

	  	
3.00

	  	  	
Maritech T-Bay

	
Maritech T-Bay

	
A

	
100.00000

	  	  	  	
1/1/2007

	
1/1/2017

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
T Bay

	
19926

	  	  	
1120.64

	
1120.64

	  	
Maritech T-Bay

	
Maritech T-Bay

	
A

	
100.00000

	  	
22.50

	  	
12/10/2008

	
12/10/2013

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
T Bay

	
19953

	  	  	
239.32

	
239.32

	  	
Maritech T-Bay

	
Maritech T-Bay

	
A

	
100.00000

	  	
22.50

	  	
12/10/2008

	
12/10/2011

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
T-Bay

	
20011

	  	  	
209.47

	
209.47

	  	
Maritech T-Bay

	
Maritech T-Bay

	
A

	
100.00000

	  	
22.50

	  	
1/14/2009

	
1/14/2012

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
T Bay

	
4467

	
ROW moved to Exh 1.1 D Easements-ROW

	  	  	  	  	  	  	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
T-BAY

	
4865

	
ROW moved to Exh 1.1 D Easements-ROW

	  	  	  	  	  	  	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
T-BAY

	
4878

	
ROW moved to Exh 1.1 D Easements-ROW

	  	  	  	  	  	  	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
T-BAY

	
4932

	
ROW moved to Exh 1.1 D Easements-ROW

	  	  	  	  	  	  	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
T-BAY

	
4933

	
ROW moved to Exh 1.1 D Easements-ROW

	  	  	  	  	  	  	  	  	  	  	  	  	  
	
WD

	
58

	
00146

	
PROD

	
5000.00

	
0

	
33

	
Palm Energy Offshore

	
Palm Energy Offshore

	
A

	
100.00000

	
RT

	
12.50

	  	
4/23/1947

	
4/22/1957

	  	  	  	  	
1875.00

	
1406.25

	  	
Maritech Res - SW4 surf - 14,000' TVD; W2SE4 surf - 11,300' TVD

	
Maritech Res - SW4 & W2SE4 surf-11,300' TVD Less #E-1 Prod. Sds

	
B

	
75.00000

	
OR

	  	
15.00

	  	  
	  	  	  	  	  	  	  	  	
Energy XXI GOM

	
B

	
25.00000

	  	  	  	  	  
	  	  	  	  	
1875.00

	
1875.00

	  	
Maritech Res - SW4 surf - 14,000' TVD; W2SE4 surf - 11,300' TVD

	
Maritech Res - SW4 & W2SE4 relative to #E-1 Prod. Sds

	
C

	
100.00000

	
OR

	  	
15.00

	  	  
	  	  	  	  	
1875.00

	
1875.00

	  	
Maritech Res - SW4 surf - 14,000' TVD; W2SE4 surf - 11,300' TVD

	
Maritech Res - SW4 & W2SE4 relative to #E-1 Well & further Limited to F Sd (currently prod.) & C Sd (not prod)

	
D

	
100.00000

	
OR

	  	
F-Sand-15.0; C-Sand-40.0 BPO, 15.0 APO

	  	  
	  	  	  	  	  	  	  	  	
Energy XXI GOM

	
E

	
12.50000

	  	  	  	  	  
	  	  	  	  	  	  	  	  	
Coldren Resources

	
E

	
50.00000

	  	  	  	  	  
	
WD

	
59

	
G16473

	
PROD

	
5000.00

	  	
36

	
Maritech Res - Surf to 13,462' TVD

	
Pisces Energy

	
A

	
40.67579

	  	  	  	  	  
	  	  	  	  	  	  	  	  	
Gulfsands Pet

	
A

	
13.15000

	  	  	  	  	  
	  	  	  	  	  	  	  	  	
Tammany O&G

	
A

	
14.00000

	  	  	  	  	  
	  	  	  	  	  	  	  	  	
The NW Mutual Life Ins Co

	
A

	
10.93750

	  	  	  	  	  
	  	  	  	  	  	  	  	  	
Dynamic Resources

	
A

	
11.85000

	  	  	  	  	  
	  	  	  	  	
5000.00

	
469.3

	  	  	
Maritech Res

	
A

	
9.38671

	  	  	  	  	  
	  	  	  	  	  	  	  	
Maritech Res - Surf to 13,462' TVD

	
Pisces - Surf - 100' below Strat Eq of 13,362' TVD (#1 Well)

	
B

	
3.12892

	  	  	  	  	  
	  	  	  	  	  	  	  	  	
Gulfsands Pet

	
B

	
13.15000

	  	  	  	  	  
	  	  	  	  	  	  	  	  	
Tammany O&G

	
B

	
14.00000

	  	  	  	  	  
	  	  	  	  	  	  	  	  	
The NW Mutual Life Ins Co

	
B

	
10.93750

	  	  	  	  	  
	  	  	  	  	  	  	  	  	
Dynamic Resources

	
B

	
11.85000

	  	  	  	  	  
	  	  	  	  	
5000.00

	
2346.7

	  	  	
Maritech Res

	
B

	
46.93358

	  	  	  	  	  
	  	  	  	  	  	  	  	
Maritech Res - Surf to 13,462' TVD

	
Pisces - depths 100' below Strat Eq of 13,362' TVD (#1 Well)

	
C

	
40.67579

	  	  	  	  	  
	  	  	  	  	  	  	  	  	
Gulfsands Pet

	
C

	
13.15000

	  	  	  	  	  
	  	  	  	  	  	  	  	  	
Tammany O&G

	
C

	
14.00000

	  	  	  	  	  
	  	  	  	  	  	  	  	  	
The NW Mutual Life Ins Co

	
C

	
10.93750

	  	  	  	  	  
	  	  	  	  	  	  	  	  	
Dynamic Resources

	
C

	
11.85000

	  	  	  	  	  
	  	  	  	  	
5000.00

	
469.3

	  	  	
Maritech Res

	
C

	
9.38671

	  	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
WD

	
61

	
G03186

	
PROD

	
5000.00

	
5000.00

	
56

	
Maritech Res

	
Maritech Res

	
A

	
100.00000

	
RT

	
16.67

	
15.00

	
7/1/1975

	
6/30/1980

	  	  	  	  	
2500.00

	
2250

	  	
Maritech Res - S/2 surf-13,200' TVD Less & Excpt "S" Sd in aliquots desc below

	
Maritech Res

	
B

	
90.00000

	
OR

	  	
15.00

	  	  
	  	  	  	  	
703.13

	
562.5

	  	
Maritech Res - S/2NW4SW4, S2NE4SW4, N2SW4SW4, N2SE4SW4, NW4SW4SE4 as to S Sd & in the S-1 Sd

	
Maritech Res

	
C

	
90.00000

	
OR

	  	
15.00

	  	  
	  	  	  	  	  	  	  	  	
Tammany O&G

	
C

	
10.00000

	  	  	  	  	  
	  	  	  	  	  	  	  	
Maritech Res -S/2 Depths below 13,200' TVD

	
Maritech Res

	
D

	
100.00000

	
RT

	  	
15.00

	  	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
WD

	
63

	
G19839

	
PROD

	
5000.00

	
2500

	
89

	
Maritech Res - E/2 all depths

	
Maritech Res

	
A

	
50.00000

	  	
16.67

	
2.50

	
6/1/1998

	
5/31/2003

	  	  	  	  	  	  	  	  	
Energy XXI GOM LLC

	
A

	
50.00000

	  	  	  	  	  
	  	  	  	  	
2500.00

	
0

	  	
Peregrine - W/2 surf - 4719' TVD

	
Peregrine

	
B

	
100.00000

	
ORRI

	  	
10.00

	  	  
	  	  	  	  	
2500.00

	
1250

	  	
Maritech Res - W/2 from 4719' TVD - 99,999' TVD

	
Maritech Res

	
C

	
50.00000

	
RT

	  	
2.50

	  	  
	  	  	  	  	  	  	  	  	
Energy XXI GOM LLC

	
C

	
50.00000

	  	  	  	  	  
	  	
* See Exhibit 1.1 (C) WELLS list for NRI

	  	  	  	  	  	  	  	  	  	  	  	  	  	  

 

 

 

 

EXHIBIT 1.1 (B) - PROPERTIES

 

Attached to and made a part of that certain Purchase and Sale Agreement dated April 1, 2011, but effective January 1, 2011, by and between Maritech Resources, Inc. and Tana Exploration Company LLC

 

NONE

 

 

 

 

  

  

  

 

EXHIBIT 1.1 (C) - WELLS

 

Attached to and made a part of that certain Purchase and Sale Agreement dated April 1, 2011, but effective January 1, 2011, by and between Maritech Resources, Inc. and Tana Exploration Company LLC

 

	
OGSYS PN#

	
BLOCK / LEASE

	
OPERATOR

	
Description

	
Platform Produced From

	
Current Status (Prod, SI, PROD, SI, PA, TA, & Sold)

	
 Total Vertical Depth Comp / Prod

	  	
 Top Perf Depth (MD)

	
MRI WI

	
MRI NRI

	
 Active Net  Depth

	
 Notes

	  	  	  	  	  	  	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  	  	  
	
5100020

	
EC 328 OCSG10638

	
MARITECH

	
B-1

	
EC 328 B

	
PROD

	
          3,598

	
          2,327

	
         4,654

	
50.0000%

	
41.2880%

	
          2,327

	  
	
5100022

	
EC 328 OCSG10638

	
MARITECH

	
B-2 ST1      

	
EC 328 B

	
PROD

	
          2,700

	
          1,432

	
         2,863

	
50.0000%

	
41.2880%

	
          1,432

	  
	
5100023

	
EC 328 OCSG10638

	
MARITECH

	
B-3 ST2         

	
EC 328 B

	
PROD

	
          3,850

	
          2,204

	
         4,407

	
50.0000%

	
41.2880%

	
          2,204

	  
	
5100024

	
EC 328 OCSG10638

	
MARITECH

	
B-4                

	
EC 328 B

	
PROD

	
          2,751

	
          1,313

	
         2,626

	
50.0000%

	
41.2880%

	
          1,313

	  
	
5100025

	
EC 328 OCSG10638

	
MARITECH

	
B-5               

	
EC 328 B

	
PROD

	
          4,209

	
          2,275

	
         4,550

	
50.0000%

	
41.2880%

	
          2,275

	  
	
5100026

	
EC 328 OCSG10638

	
MARITECH

	
B-6

	
EC 328 B

	
PROD

	
          2,780

	
          1,320

	
         2,640

	
50.0000%

	
41.2880%

	
          1,320

	  
	  	  	  	  	  	  	  	  	  	  	  	  	  
	
8453160

	
EI 342 C-10 OCSG 02319

	
Mariner/Apache

	
C-10

	
EI 342 C

	
TA

	
        10,606

	
          2,252

	
         9,007

	
25.0000%

	
16.6700%

	
               -

	  
	
8453162

	
EI 342 C-12/12D OCSG 02319

	
Mariner/Apache

	
C-12 C12 D

	
EI 342 C

	
SI

	
          8,188

	  	
         8,188

	
25.0000%

	
16.6700%

	
          2,047

	  
	
8453164

	
EI 342 C-14 OCSG 02319

	
Mariner/Apache

	
C-14

	
EI 342 C

	
PROD

	
          7,444

	  	
       11,472

	
25.0000%

	
16.6700%

	
          2,868

	  
	
8453165

	
EI 342 C-15 OCSG 02319

	
Mariner/Apache

	
C-15

	
EI 342 C

	
PROD

	
          8,125

	
          3,288

	
       13,150

	
25.0000%

	
16.6700%

	
          3,288

	  
	
8453166

	
EI 342 C-16 OCSG 02319

	
Mariner/Apache

	
C-16

	
EI 342 C

	
PROD

	
          7,252

	
          3,282

	
       13,127

	
25.0000%

	
20.8333%

	
          3,282

	  
	
8453152

	
EI 342 C-2 OCSG 02319

	
Mariner/Apache

	
C-2 ST1

	
EI 342 C

	
PROD

	
          6,975

	
          2,471

	
         6,460

	
38.2500%

	
30.0000%

	
          2,471

	  
	
8453153

	
EI 342 C-3 OCSG 02319

	
Mariner/Apache

	
C-3

	
EI 342 C

	
TA

	
          7,493

	  	
         5,598

	
38.2500%

	
30.0000%

	
               -

	  
	
8453154

	
EI 342 C-4/4D OCSG 02319

	
Mariner/Apache

	
C-4/ C-4D

	
EI 342 C

	
SI

	
          6,800

	  	
         5,510

	
38.2500%

	
30.0000%

	
          2,108

	  
	
8453156

	
EI 342 C-6 OCSG 02319

	
Mariner/Apache

	
C-6

	
EI 342 C

	
PROD

	
          6,800

	
          2,529

	
         6,613

	
38.2500%

	
30.0000%

	
          2,529

	  
	
8453157

	
EI 342 C-7 OCSG 02319

	
Mariner/Apache

	
C-7

	
EI 342 C

	
PROD

	
          7,951

	  	
         8,227

	
25.0000%

	
30.0000%

	
          2,057

	  
	
8453158

	
EI 342 C-8 OCSG 02319

	
Mariner/Apache

	
C-8

	
EI 342 C

	
SI

	
          9,390

	  	
         6,652

	
38.2500%

	
30.0000%

	
          2,544

	  
	
8453159

	
EI 342 C-9 OCSG 02319

	
Mariner/Apache

	
C-9

	
EI 342 C

	
PROD

	
          7,308

	
          2,504

	
         6,546

	
38.2500%

	
30.0000%

	
          2,504

	  
	  	  	  	  	  	  	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  	  	  
	
7500001

	
MP  99 OCSG21703

	
MARITECH

	
A001

	
MP 99

	
PROD

	
        13,432

	
        11,255

	
       11,255

	
100.0000%

	
83.3333%

	
        11,255

	
 

	  	  	  	  	  	  	  	  	  	  	  	  	  
	
7510001

	
MP 163 OCSG07809

	
MARITECH

	
A003

	
MP 160

	
PROD

	
          8,950

	
          5,272

	
         8,786

	
60.0000%

	
45.0000%

	
          5,272

	  
	  	  	  	  	  	  	  	  	  	  	  	  	  
	
7550001

	
MP 175 OCSG08753

	
MARITECH

	
A001

	
MP 175

	
PROD

	
          4,335

	  	
         3,914

	
100.0000%

	
79.3333%

	
          3,914

	
 

	
7550002

	
MP 175 OCSG08753

	
MARITECH

	
A002/A002D

	  	
SI

	
          3,211

	  	
         3,823

	
100.0000%

	
79.3333%

	
          3,823

	  
	
7550003

	
MP 175 OCSG08753

	
MARITECH

	
A003

	  	
SI

	
          3,900

	  	
         6,062

	
100.0000%

	
79.3333%

	
          6,062

	
 

	  	  	  	  	  	  	  	  	  	  	  	  	
 

	
7610001

	
MP 185 OCSG25033

	
MARITECH

	
SS#1

	
MP 175

	
PROD

	
        10,761

	
          4,062

	
         8,706

	
46.6600%

	
38.2500%

	
          4,062

	
SUBSEA

	  	  	  	  	  	  	  	  	  	  	  	  	  
	
7630001

	
MP 187 OCSG26157

	
MARITECH

	
SS#1 (LS)

	
MP 175

	
PROD

	
          2,463

	
          2,528

	
         2,528

	
100.0000%

	
81.3333%

	
          2,528

	
SUBSEA

	  	  	  	  	  	  	  	  	  	  	  	  	  
	
7640001

	
MP 200 OCSG23979

	
MARITECH

	
SS#1

	
MP 175

	
PROD

	
          8,596

	
          4,281

	
         8,562

	
50.0000%

	
41.1666%

	
          4,281

	
SUBSEA

	  	  	  	  	  	  	  	  	  	  	  	  	  
	
7650001

	
MP 206 OCSG23983

	
MARITECH

	
A001

	  	
SI

	
          3,397

	  	
         5,872

	
40.0000%

	  	
          2,349

	
EXPIRED LEASE

	  	  	  	  	  	  	  	  	  	  	  	  	  
	
7660002

	
MP 207 OCSG22802

	
MARITECH

	
A002

	
MP 178

	
SI

	
          6,000

	
          3,327

	
         8,317

	
40.0000%

	
32.9333%

	
          3,327

	  
	  	  	  	  	  	  	  	  	  	  	  	  	  
	
7680001

	
MP 211 OCSG22803

	
MARITECH

	
SS #1

	
MP 242 A

	
PROD

	
          4,012

	  	
         4,034

	
50.0000%

	
41.1666%

	
          2,017

	
 SUBSEA

	  	  	  	  	  	  	  	  	  	  	  	  	  
	
7700002

	
MP 232 OCSG22806

	
MARITECH

	
SS #2

	
MP 242 A

	
PROD

	
          4,036

	
          2,031

	
         4,061

	
50.0000%

	
41.1666%

	
          2,031

	
SUBSEA.

	  	  	  	  	  	  	  	  	  	  	  	  	  
	
7710001

	
MP 233 OCSG01645

	
ERT

	
SS #1

	
MP 242 A

	
PROD

	
        10,864

	
          3,531

	
       10,865

	
32.5000%

	
26.6630%

	
          3,531

	
SUBSEA

	  	  	  	  	  	  	  	  	  	  	  	  	  
	
7720002

	
MP 241 OCSG22808

	
MARITECH

	
SS #2

	
MP 242 A

	
PROD

	
          5,035

	
          3,090

	
         6,180

	
50.0000%

	
41.1666%

	
          3,090

	
SUBSEA.

	  	  	  	  	  	  	  	  	  	  	  	  	  
	
8030104

	
MP 242 G 18114

	
MARITECH

	
A-4

	
MP 242 A

	
SI

	
          3,057

	  	
         5,910

	
100.0000%

	  	
          5,910

	
EXPIRED LEASE

	
8030202

	
MP 267 G 19864

	
MARITECH

	
A-2

	
MP 242 A

	
SI

	
          4,286

	  	
         9,984

	
100.0000%

	  	
          9,984

	
EXPIRED LEASE

	  	  	  	  	  	  	  	  	  	  	  	  	  
	  	
MP 279 G 26168

	
W&T

	
A-5 ST

	
MP 283 A

	
PROD

	
          9,671

	  	
       12,410

	
11.5000%

	
9.0800%

	
          1,427

	  
	  	
MP 279 G 26168

	
W&T

	
A-6 ST

	
MP 283 A

	
PROD

	
        13,410

	  	
       14,264

	
11.5000%

	
9.0800%

	
          1,640

	  
	  	  	  	  	  	  	  	  	  	  	  	  	  
	
8320060

	
SL 1772

	
MARITECH

	
#6

	  	
PROD

	
        13,972

	  	
         2,304

	
100.0000%

	
82.4170%

	
          2,304

	  
	
8320070

	
SL 1772

	
MARITECH

	
#7

	  	
PROD

	
          9,036

	
        11,077

	
       11,077

	
100.0000%

	
77.6760%

	
        11,077

	
SL 1772 #007 BP1: 82.4170%

	
8320110

	
SL 1772

	
MARITECH

	
#11

	  	
SI

	
        11,042

	  	
       11,042

	
100.0000%

	  	
        11,042

	  
	  	
SL 1772

	
MARITECH

	
#16

	  	
SI

	  	  	  	  	  	  	  
	
8320180

	
SL 1772

	
MARITECH

	
#18

	  	
SI

	
        11,148

	
          9,686

	
         9,686

	
100.0000%

	
82.4170%

	
          9,686

	  
	
8320200

	
SL 1772

	
MARITECH

	
#20

	  	
SI

	
        10,190

	  	
       10,236

	
100.0000%

	  	
        10,236

	  
	
8320240

	
SL 1772

	
MARITECH

	
#24

	  	
SI

	
        10,348

	  	
       11,761

	
100.0000%

	  	
        11,761

	  
	
8320271

	
SL 1772

	
MARITECH

	
#27D/27 T

	  	
SI

	
          2,304

	  	
       10,578

	
100.0000%

	  	
        10,578

	  
	
8320300

	
SL 1772

	
MARITECH

	
#30/30 D

	  	
SI

	
        12,036

	  	
       11,148

	
100.0000%

	  	
        11,148

	  
	
8320310

	
SL 1772

	
MARITECH

	
#31

	  	
PROD

	
        12,306

	
        10,154

	
       10,154

	
100.0000%

	
76.9930%

	
        10,154

	
SL 1772 #031 BP1: 82.4170%

	
8320371

	
SL 1772

	
MARITECH

	
#37D

	  	
SI

	
          3,044

	  	
       10,558

	
100.0000%

	  	
        10,558

	  
	
8320380

	
SL 1772

	
MARITECH

	
#38

	  	
SI

	
        11,658

	
          3,292

	
         3,292

	
100.0000%

	
82.4170%

	
          3,292

	  
	
8320400

	
SL 1772

	
MARITECH

	
#40/40 D

	  	
SI

	
        10,924

	  	
       11,228

	
100.0000%

	  	
        11,228

	  
	
8320410

	
SL 1772

	
MARITECH

	
#41

	  	
SI

	
        13,796

	  	
         3,362

	
100.0000%

	
82.4170%

	
          3,362

	  
	
8320420

	
SL 1772

	
MARITECH

	
#42

	  	
SI

	
        12,891

	  	
       12,844

	
100.0000%

	  	
        12,844

	  
	
8320450

	
SL 1772

	
MARITECH

	
#45

	  	
SI

	
        13,684

	  	
       10,618

	
100.0000%

	  	
        10,618

	  
	
8320460

	
SL 1772

	
MARITECH

	
#46 INJ

	  	
SI

	
        11,589

	  	
       11,354

	
100.0000%

	  	
        11,354

	  
	
8320551

	
SL 1772

	
MARITECH

	
#55T INJ

	  	
SI

	
          3,336

	  	
       10,830

	
100.0000%

	  	
        10,830

	  
	  	
SL 1772

	
MARITECH

	
#56

	  	
SI

	  	  	  	  	  	  	  
	
8320621

	
SL 1772

	
MARITECH

	
#62D

	  	
SI

	
          9,928

	  	
       12,036

	
100.0000%

	
82.4170%

	
        12,036

	  
	
8320640

	
SL 1772

	
MARITECH

	
#64

	  	
SI

	
          9,224

	  	
       12,306

	
100.0000%

	  	
        12,306

	  
	
8320690

	
SL 1772

	
MARITECH

	
#69

	  	
SI

	
          2,758

	  	
         3,044

	
100.0000%

	  	
          3,044

	  
	
8320721

	
SL 1772

	
MARITECH

	
#72D

	  	
SI

	
          6,778

	  	
       11,658

	
100.0000%

	  	
        11,658

	  
	
8320730

	
SL 1772

	
MARITECH

	
#73

	  	
SI

	
          9,956

	  	
       10,924

	
100.0000%

	
82.4170%

	
        10,924

	  
	
8320750

	
SL 1772

	
MARITECH

	
#75

	  	
SI

	
        13,433

	  	
       13,429

	
100.0000%

	
82.4170%

	
        13,429

	  
	
8320760

	
SL 1772

	
MARITECH

	
#76

	  	
PROD

	
        11,632

	
        10,970

	
       10,970

	
100.0000%

	
77.6760%

	
        10,970

	
 

	
8320810

	
SL 1772

	
MARITECH

	
#81/81 D

	  	
SI

	
          8,710

	  	
       11,172

	
100.0000%

	  	
        11,172

	  
	
8320821

	
SL 1772

	
MARITECH

	
#82D

	  	
SI

	
          8,378

	  	
       10,818

	
100.0000%

	
82.4170%

	
        10,818

	  
	
8320830

	
SL 1772

	
MARITECH

	
#83

	  	
PROD

	
        10,078

	  	
       13,684

	
100.0000%

	
82.4170%

	
        13,684

	  
	
8320841

	
SL 1772

	
MARITECH

	
#84 ST

	  	
SI

	
          9,262

	  	
       11,589

	
100.0000%

	
82.4170%

	
        11,589

	  
	
8320850

	
SL 1772

	
MARITECH

	
#85D

	  	
SI

	
          8,362

	  	
       11,172

	
100.0000%

	  	
        11,172

	  
	
8320870

	
SL 1772

	
MARITECH

	
#87

	  	
SI

	
          8,707

	  	
       10,714

	
100.0000%

	  	
        10,714

	  
	
8320950

	
SL 1772

	
MARITECH

	
#95 /95 D

	  	
SI

	
          8,756

	  	
       14,570

	
100.0000%

	
82.4170%

	
        14,570

	
 

	
8321020

	
SL 1772

	
MARITECH

	
#102

	  	
SI

	
          2,921

	  	
         2,921

	
100.0000%

	
82.4170%

	
          2,921

	  
	
8321031

	
SL 1772

	
MARITECH

	
#103D

	  	
SI

	
        11,860

	  	
       11,860

	
100.0000%

	  	
        11,860

	  
	
8321040

	
SL 1772

	
MARITECH

	
#104

	  	
SI

	
        11,688

	  	
       11,688

	
100.0000%

	
82.4170%

	
        11,688

	  
	
8321060

	
SL 1772

	
MARITECH

	
#106

	  	
SI

	
        10,865

	  	
       10,865

	
100.0000%

	  	
        10,865

	  
	
8321090

	
SL 1772

	
MARITECH

	
#109

	  	
SI

	
        11,020

	  	
       11,020

	
100.0000%

	  	
        11,020

	  
	
8321100

	
SL 1772

	
MARITECH

	
#110

	  	
SI

	
        11,014

	  	
       11,014

	
100.0000%

	  	
        11,014

	  
	
8321120

	
SL 1772

	
MARITECH

	
#112D

	  	
SI

	
          3,324

	  	
         3,324

	
100.0000%

	
78.8620%

	
          3,324

	
SL 1772 #112 BP1, BP2, BP3: 82.4170%

	
8321131

	
SL 1772

	
MARITECH

	
#113/113D

	  	
SI

	
        12,036

	  	
       12,036

	
100.0000%

	  	
        12,036

	  
	
8321141

	
SL 1772

	
MARITECH

	
#114

	  	
PROD

	
        11,554

	
          3,234

	
         3,234

	
100.0000%

	
82.4170%

	
          3,234

	
SL 1772 #114 ST BP1 3500A: 82.4170%

	
8321170

	
SL 1772

	
MARITECH

	
#117/117D

	  	
PROD

	
        10,636

	  	
       11,554

	
100.0000%

	
82.4170%

	
        11,554

	  
	
8321191

	
SL 1772

	
MARITECH

	
#119D

	  	
SI

	
        11,143

	  	
       10,636

	
100.0000%

	
82.4170%

	
        10,636

	  
	
8321250

	
SL 1772

	
MARITECH

	
#125

	  	
SI

	
        12,245

	  	
         9,683

	
100.0000%

	  	
          9,683

	  
	
8321260

	
SL 1772

	
MARITECH

	
#126

	  	
SI

	
        12,910

	
        11,496

	
       11,496

	
100.0000%

	
82.4170%

	
        11,496

	  
	
8321280

	
SL 1772

	
MARITECH

	
#128

	  	
SI

	
        10,236

	  	
       12,245

	
100.0000%

	
82.4170%

	
        12,245

	  
	
8321310

	
SL 1772

	
MARITECH

	
#131

	  	
SI

	
        11,172

	  	
       12,910

	
100.0000%

	
82.4170%

	
        12,910

	  
	
8321370

	
SL 1772

	
MARITECH

	
#137

	  	
SI

	
        11,761

	
        11,084

	
       11,084

	
100.0000%

	
82.4170%

	
        11,084

	
 

	
8321440

	
SL 1772

	
MARITECH

	
#138/138D

	  	
PROD

	
        10,578

	
        11,922

	
       11,922

	
100.0000%

	  	
        11,922

	
#138: 82.4170; #138D: 79.6560

	  	
SL 1772

	
MARITECH

	
#139

	  	  	  	  	  	
100.0000%

	
82.4170%

	  	  
	
8321400

	
SL 1772

	
MARITECH

	
#140

	  	
SI

	
          6,820

	
        10,970

	
       10,970

	
100.0000%

	
82.4170%

	
        10,970

	  
	  	
SL 1772

	
MARITECH

	
#141

	  	
SI

	  	  	  	
100.0000%

	
82.4170%

	  	  
	  	
SL 1772

	
MARITECH

	
#142

	  	
PROD

	
        16,762

	  	
       16,762

	
100.0000%

	
80.4830%

	
        16,762

	  
	  	
SL 1772

	
MARITECH

	
SWD 1

	  	  	  	  	  	  	  	  	  
	  	
SL 1772

	
MARITECH

	
SWD 2

	  	  	  	  	  	  	  	  	  
	  	
SL 1772

	
MARITECH

	
SWD 3 (formerly 121)

	  	  	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
8310040

	
SL 192 PP

	
MARITECH

	
PP #4

	  	
SI

	
          5,330

	  	
         5,330

	
100.0000%

	  	
          5,330

	  	  
	
8310060

	
SL 192 PP

	
MARITECH

	
PP #6

	  	
SI

	
          7,896

	  	
         6,739

	
100.0000%

	
72.0000%

	
          6,739

	  	  
	
8310170

	
SL 192 PP

	
MARITECH

	
PP #17

	  	
SI

	
          8,610

	
          6,658

	
         6,658

	
100.0000%

	
72.0000%

	
          6,658

	  	  
	  	
SL 192 PP

	
MARITECH

	
PP #25

	  	
SI

	  	  	  	  	  	
               -

	  	  
	  	
SL 192 PP

	
MARITECH

	
PP #26

	  	
SI

	
          9,806

	  	
         7,377

	
100.0000%

	
72.0000%

	
          7,377

	  	  
	  	
SL 192 PP

	
MARITECH

	
PP #27

	  	
SI

	
          3,515

	  	
         4,922

	
100.0000%

	
72.0000%

	
          4,922

	  	  
	  	
SL 192 PP

	
MARITECH

	
PP #34

	  	
SI

	  	  	  	  	  	
               -

	  	  
	
8310450

	
SL 192 PP

	
MARITECH

	
PP #45

	  	
SI

	
          7,373

	
          5,189

	
         5,189

	
100.0000%

	
72.0000%

	
          5,189

	  	  
	  	
SL 192 PP

	
MARITECH

	
PP #48

	  	
SI

	  	  	  	  	  	  	  	  
	
8310490

	
SL 192 PP

	
MARITECH

	
PP #49

	  	
SI

	
          9,806

	  	
         6,820

	
100.0000%

	  	
          6,820

	  	  
	
8310521

	
SL 192 PP

	
MARITECH

	
PP #52D

	  	
PROD

	
          9,816

	  	
         9,806

	
100.0000%

	
72.0000%

	
          9,806

	  	  
	
8310620

	
SL 192 PP

	
MARITECH

	
PP #62

	  	
SI

	
          6,816

	  	
         7,896

	
100.0000%

	  	
          7,896

	  	  
	
8310661

	
SL 192 PP

	
MARITECH

	
PP #66

	  	
PROD

	
          2,751

	
          3,243

	
         3,243

	
100.0000%

	
72.0000%

	
          3,243

	  	  
	
8310720

	
SL 192 PP

	
MARITECH

	
PP #72

	  	
SI

	
          9,022

	  	
         6,816

	
100.0000%

	
72.0000%

	  	  	  
	
8310781

	
SL 192 PP

	
MARITECH

	
PP #78

	  	
SI

	
          2,792

	  	
         2,752

	
100.0000%

	
72.0000%

	  	  	  
	
8310791

	
SL 192 PP

	
MARITECH

	
PP #79 # 79T INJ

	
SI

	
          9,022

	  	
         9,022

	
100.0000%

	  	  	  	  
	
8310920

	
SL 192 PP

	
MARITECH

	
PP #92

	  	
SI

	
          3,515

	  	
         3,515

	
100.0000%

	  	  	  	  
	
8311040

	
SL 192 PP

	
MARITECH

	
PP #104

	  	
PROD

	
          8,456

	
          7,706

	
         7,706

	
100.0000%

	
72.0000%

	
          7,706

	  	  
	
8311051

	
SL 192 PP

	
MARITECH

	
PP #105

	  	
SI

	
          8,310

	  	
         9,928

	
100.0000%

	  	
          9,928

	  	  
	
8311130

	
SL 192 PP

	
MARITECH

	
PP #113

	  	
PROD

	
          7,773

	  	
         9,224

	
100.0000%

	
72.0000%

	
          9,224

	  	  
	
8311170

	
SL 192 PP

	
MARITECH

	
PP #117

	  	
SI

	
          8,798

	  	
         2,758

	
100.0000%

	
72.0000%

	
          2,758

	  	  
	
8311210

	
SL 192 PP

	
MARITECH

	
PP #121 INJ

	  	
SI

	
          8,610

	  	
         9,036

	
100.0000%

	  	
          9,036

	  	  
	
8311220

	
SL 192 PP

	
MARITECH

	
PP #122

	  	
SI

	
          9,100

	  	
         6,778

	
100.0000%

	  	
          6,778

	  	  
	
8311230

	
SL 192 PP

	
MARITECH

	
PP #123

	  	
PROD

	
          7,253

	  	
         9,956

	
100.0000%

	
72.0000%

	
          9,956

	  	  
	
8311240

	
SL 192 PP

	
MARITECH

	
PP #124

	  	
SI

	
          5,330

	  	
         8,768

	
100.0000%

	  	
          8,768

	  	  
	
8311270

	
SL 192 PP

	
MARITECH

	
PP #127

	  	
SI

	
          9,424

	  	
       11,632

	
100.0000%

	  	
        11,632

	  	  
	
8311281

	
SL 192 PP

	
MARITECH

	
PP #128 INJ

	  	
SI

	
          8,676

	  	
         8,710

	
100.0000%

	  	
          8,710

	  	  
	
8311301

	
SL 192 PP

	
MARITECH

	
PP #130D

	  	
SI

	
          8,646

	  	
         8,378

	
100.0000%

	  	
          8,378

	  	  
	
8311330

	
SL 192 PP

	
MARITECH

	
PP #133

	  	
SI

	
          7,792

	  	
       10,078

	
100.0000%

	
72.0000%

	
        10,078

	  	  
	
8311340

	
SL 192 PP

	
MARITECH

	
PP #134

	  	
SI

	
          7,876

	  	
         9,262

	
100.0000%

	  	
          9,262

	  	  
	
8311361

	
SL 192 PP

	
MARITECH

	
PP #136D

	  	
SI

	
          5,672

	  	
         8,362

	
100.0000%

	  	
          8,362

	  	  
	
8311401

	
SL 192 PP

	
MARITECH

	
PP #140/140 D

	
PROD

	
          8,644

	  	
         8,707

	
100.0000%

	  	
          8,707

	  	  
	
8311420

	
SL 192 PP

	
MARITECH

	
PP #142 INJ

	  	
SI

	
          8,683

	  	
         9,200

	
100.0000%

	  	
          9,200

	  	  
	
8311430

	
SL 192 PP

	
MARITECH

	
PP #143

	  	
PROD

	
          8,600

	
        10,021

	
       10,021

	
100.0000%

	
72.0000%

	
        10,021

	  	  
	
8311450

	
SL 192 PP

	
MARITECH

	
PP #145

	  	
SI

	
          6,892

	  	
         8,756

	
100.0000%

	  	
          8,756

	  	  
	
8311460

	
SL 192 PP

	
MARITECH

	
PP #146

	  	
SI

	
          6,776

	  	
         6,776

	
100.0000%

	  	
          6,776

	  	  
	
8311470

	
SL 192 PP

	
MARITECH

	
PP #147

	  	
SI

	
          6,820

	  	
         6,820

	
100.0000%

	  	
          6,820

	  	  
	
8311480

	
SL 192 PP

	
MARITECH

	
PP #148

	  	
SI

	
          7,301

	  	
         7,301

	
100.0000%

	
72.0000%

	
          7,301

	  	  
	
8311500

	
SL 192 PP

	
MARITECH

	
PP #150

	  	
SI

	
          8,456

	  	
         8,456

	
100.0000%

	  	
          8,456

	  	  
	
8311550

	
SL 192 PP

	
MARITECH

	
PP #155

	  	
SI

	
          8,310

	
          8,462

	
         8,462

	
100.0000%

	
72.0000%

	
          8,462

	  	  
	
8311570

	
SL 192 PP

	
MARITECH

	
PP #157

	  	
SI

	
          2,370

	
          2,304

	
         2,304

	
100.0000%

	
72.0000%

	
          2,304

	  	  
	
8311590

	
SL 192 PP

	
MARITECH

	
PP #159

	  	
SI

	
          8,798

	  	
         8,310

	
100.0000%

	  	
          8,310

	  	  
	  	
SL 192 PP

	
MARITECH

	
PP #166

	  	
SI

	  	  	  	  	  	
               -

	  	  
	  	
SL 192 PP

	
MARITECH

	
PP #173

	  	
SI

	  	  	  	  	  	
               -

	  	  
	
8311741

	
SL 192 PP

	
MARITECH

	
PP #174 LS/SS

	
SI

	
          9,100

	
          6,972

	
         6,972

	
100.0000%

	
72.0000%

	
          6,972

	  	  	  
	
8311760

	
SL 192 PP

	
MARITECH

	
PP #176

	  	
SI

	
          7,253

	  	
         7,773

	
100.0000%

	  	
          7,773

	  	  	  
	
8311780

	
SL 192 PP

	
MARITECH

	
PP #178

	  	
SI

	
          5,330

	  	
         8,798

	
100.0000%

	  	
          8,798

	  	  	  
	
8311791

	
SL 192 PP

	
MARITECH

	
PP #179ST

	  	
PROD

	
          9,424

	  	
         8,610

	
100.0000%

	
72.0000%

	
          8,610

	  	  	  
	
8311810

	
SL 192 PP

	
MARITECH

	
PP #181

	  	
SI

	
          8,676

	
          6,758

	
         6,758

	
100.0000%

	
72.0000%

	
          6,758

	  	  	  
	
8311821

	
SL 192 PP

	
MARITECH

	
PP #182D INJ

	
SI

	
          8,646

	  	
         9,100

	
100.0000%

	
72.0000%

	
          9,100

	  	  	  
	
8311851

	
SL 192 PP

	
MARITECH

	
PP #185

	  	
SI

	
          7,792

	  	
         7,253

	
100.0000%

	
72.0000%

	
          7,253

	  	  	  
	
8311860

	
SL 192 PP

	
MARITECH

	
PP #186

	  	
PROD

	
          7,876

	  	
         5,330

	
100.0000%

	
72.0000%

	
          5,330

	  	  	  
	
8311871

	
SL 192 PP

	
MARITECH

	
PP #187 ALT

	
SI

	
          5,672

	
          3,206

	
         3,206

	
100.0000%

	
72.0000%

	
          3,206

	  	  	  
	
8311890

	
SL 192 PP

	
MARITECH

	
PP #189

	  	
SI

	
          8,644

	  	
         9,424

	
100.0000%

	
72.0000%

	
          9,424

	  	  	  
	
8311900

	
SL 192 PP

	
MARITECH

	
PP #190

	  	
SI

	
          8,683

	  	
         8,676

	
100.0000%

	  	
          8,676

	  	  	  
	
8311911

	
SL 192 PP

	
MARITECH

	
PP #191

	  	
SI

	
          8,600

	  	
         8,646

	
100.0000%

	
72.0000%

	
          8,646

	  	  	  
	
8311920

	
SL 192 PP

	
MARITECH

	
PP #192

	  	
SI

	
          6,892

	  	
         7,792

	
100.0000%

	  	
          7,792

	  	  	  
	  	
SL 192 PP

	
MARITECH

	
PP #195

	  	
SI

	  	  	  	
100.0000%

	  	
               -

	  	  	  
	  	
SL 192 PP

	
MARITECH

	
PP #196

	  	
SI

	  	  	  	
100.0000%

	  	
               -

	  	  	  
	  	
SL 192 PP

	
MARITECH

	
PP #197

	  	
SI

	  	  	  	
100.0000%

	  	  	  	  	  
	
8311981

	
SL 192 PP

	
MARITECH

	
PP #198

	  	
PROD

	
          2,824

	
          5,862

	
         5,862

	
100.0000%

	
72.0000%

	
          5,862

	  	  	  
	
8312020

	
SL 192 PP

	
MARITECH

	
PP #202

	  	
SI

	
          9,780

	  	
         8,644

	
100.0000%

	  	
          8,644

	  	  	  
	
8312071

	
SL 192 PP

	
MARITECH

	
PP #207D INJ

	
SI

	
          7,678

	  	
         8,683

	
100.0000%

	  	
          8,683

	  	  	  
	
8312090

	
SL 192 PP

	
MARITECH

	
PP #209/ 209D

	
SI

	
          7,470

	  	
         8,600

	
100.0000%

	  	
          8,600

	  	  	  
	
8312100

	
SL 192 PP

	
MARITECH

	
PP #210

	  	
SI

	
          5,758

	  	
         6,892

	
100.0000%

	  	
          6,892

	  	  	  
	
8312120

	
SL 192 PP

	
MARITECH

	
PP #212

	  	
SI

	
          7,377

	
          5,422

	
         5,422

	
100.0000%

	
72.0000%

	
          5,422

	  	  	  
	
8312160

	
SL 192 PP

	
MARITECH

	
PP #216

	  	
PROD

	
          8,649

	
          6,790

	
         6,790

	
100.0000%

	
72.0000%

	
          6,790

	  	  	  
	
8312170

	
SL 192 PP

	
MARITECH

	
PP #217

	  	
PROD

	
          7,734

	
          5,834

	
         5,834

	
100.0000%

	
72.0000%

	
          5,834

	  	  	  
	
8312191

	
SL 192 PP

	
MARITECH

	
PP #219

	  	
SI

	
          3,454

	
          7,345

	
         7,345

	
100.0000%

	
72.0000%

	
          7,345

	  	  	  
	
8312210

	
SL 192 PP

	
MARITECH

	
PP #221

	  	
PROD

	
          6,770

	
          8,884

	
         8,884

	
100.0000%

	
72.4480%

	
          8,884

	  	  	  
	
8312220

	
SL 192 PP

	
MARITECH

	
PP #222

	  	
PROD

	
          7,220

	
          3,265

	
         3,265

	
100.0000%

	
72.0000%

	
          3,265

	  	  	  
	
8312250

	
SL 192 PP

	
MARITECH

	
PP #225

	  	
SI

	
        10,480

	  	
         9,718

	
100.0000%

	  	
          9,718

	  	  	  
	
8312260

	
SL 192 PP

	
MARITECH

	
PP #226

	  	
SI

	
          4,922

	  	
         9,742

	
100.0000%

	  	
          9,742

	  	  	  
	
8322270

	
SL 192 PP

	
MARITECH

	
PP #227

	  	
SI

	
          9,166

	  	
         9,912

	
100.0000%

	  	
          9,912

	  	  	  
	
8312280

	
SL 192 PP

	
MARITECH

	
PP #228

	  	
SI

	
          8,642

	  	
         9,848

	
100.0000%

	  	
          9,848

	  	  	  
	
8312300

	
SL 192 PP

	
MARITECH

	
PP #230

	  	
SI

	
          4,910

	  	
         9,808

	
100.0000%

	  	
          9,808

	  	  	  
	
8312310

	
SL 192 PP

	
MARITECH

	
PP #231

	  	
SI

	
          3,265

	  	
         2,824

	
100.0000%

	  	
          2,824

	  	  	  
	
8312330

	
SL 192 PP

	
MARITECH

	
PP #233

	  	
SI

	
          5,846

	  	
         9,780

	
100.0000%

	  	
          9,780

	
 

	  	  
	
8312380

	
SL 192 PP

	
MARITECH

	
PP #238 /238D

	
PROD

	
          3,379

	
          9,890

	
         9,890

	
100.0000%

	
72.0000%

	
          9,890

	  	  	  
	
8312400

	
SL 192 PP

	
MARITECH

	
PP #240/ 240D

	
PROD

	
          6,997

	
          9,273

	
         9,273

	
100.0000%

	
72.4480%

	
          9,273

	  	  	  
	
8312410

	
SL 192 PP

	
MARITECH

	
PP #241

	  	
SI

	
          8,688

	  	
         9,525

	
100.0000%

	  	
          9,525

	
 

	  	  
	
8312450

	
SL 192 PP

	
MARITECH

	
PP #245

	  	
PROD

	
          7,792

	
          4,894

	
         4,894

	
100.0000%

	
72.0000%

	
          4,894

	  	  	  
	
8312460

	
SL 192 PP

	
MARITECH

	
PP #246

	  	
PROD

	
          5,379

	
          5,362

	
         5,362

	
100.0000%

	
72.0000%

	
          5,362

	  	  	  
	
8312481

	
SL 192 PP

	
MARITECH

	
PP #248D

	  	
SI

	
        10,592

	  	
         7,678

	
100.0000%

	  	
          7,678

	  	  	  
	
8312500

	
SL 192 PP

	
MARITECH

	
PP #250

	  	
PROD

	
          5,330

	
          8,802

	
         8,802

	
100.0000%

	
72.0000%

	
          8,802

	  	  	  
	  	
SL 192 PP

	
MARITECH

	
PP#251

	  	
SI

	  	  	  	
100.0000%

	  	  	  	  	  
	
8312530

	
SL 192 PP

	
MARITECH

	
PP #253

	  	
SI

	
          4,904

	
          8,708

	
         8,708

	
100.0000%

	
72.0000%

	
          8,708

	  	  	  
	
8312570

	
SL 192 PP

	
MARITECH

	
PP #257

	  	
SI

	
          7,373

	  	
         7,470

	
100.0000%

	  	
          7,470

	  	  	  
	
8312590

	
SL 192 PP

	
MARITECH

	
PP #259

	  	
SI

	
          6,820

	  	
         5,758

	
100.0000%

	
72.0000%

	
          5,758

	  	  	  
	
8312620

	
SL 192 PP

	
MARITECH

	
PP #262

	  	
SI

	
          9,816

	  	
         8,649

	
100.0000%

	  	
          8,649

	  	  	  
	
8312630

	
SL 192 PP

	
MARITECH

	
PP #263

	  	
SI

	
          6,739

	  	
         7,734

	
100.0000%

	
72.0000%

	
          7,734

	  	  	  
	
8312660

	
SL 192 PP

	
MARITECH

	
PP #266

	  	
SI

	
          7,896

	  	
         3,454

	
100.0000%

	
72.0000%

	
          3,454

	  	  	  
	
8312670

	
SL 192 PP

	
MARITECH

	
PP #267

	  	
SI

	
          6,816

	  	
         6,770

	
100.0000%

	  	
          6,770

	  	  	  
	
8312680

	
SL 192 PP

	
MARITECH

	
PP #268

	  	
SI

	
          2,751

	  	
         7,220

	
100.0000%

	  	
          7,220

	  	  	  
	
8312690

	
SL 192 PP

	
MARITECH

	
PP #269

	  	
SI

	
          9,022

	  	
       10,480

	
100.0000%

	
72.0000%

	
        10,480

	  	  	  
	  	
SL 192 PP

	
MARITECH

	
PP#271

	  	
SI

	  	  	  	
100.0000%

	  	  	  	  	  
	
8312720

	
SL 192 PP

	
MARITECH

	
PP #272

	  	
PROD

	
          4,912

	
          4,912

	
         4,912

	
100.0000%

	
72.0000%

	
          4,912

	  	  	  
	
8312771

	
SL 192 PP

	
MARITECH

	
PP #277

	  	
SI

	
          6,153

	
          6,153

	
         6,153

	
100.0000%

	
72.0000%

	
          6,153

	  	  	  
	
8312830

	
SL 192 PP

	
MARITECH

	
PP #283

	  	
SI

	
          6,708

	
          6,708

	
         6,708

	
100.0000%

	
72.0000%

	
          6,708

	  	  	  
	
8312840

	
SL 192 PP

	
MARITECH

	
PP #284

	  	
SI

	
          9,166

	  	
         9,166

	
100.0000%

	
72.4480%

	
          9,166

	  	  	  
	
8312850

	
SL 192 PP

	
MARITECH

	
PP #285

	  	
PROD

	
          8,642

	
          8,652

	
         8,652

	
100.0000%

	
72.4480%

	
          8,652

	  	  	  
	
8312890

	
SL 192 PP

	
MARITECH

	
PP #289

	  	
PROD

	
          4,910

	  	
         8,642

	
100.0000%

	
72.0000%

	
          8,642

	
 

	  	  
	
8312910

	
SL 192 PP

	
MARITECH

	
PP #291

	  	
PROD

	
          5,846

	  	
         3,265

	
100.0000%

	
72.0000%

	
          3,265

	  	  	  
	
8312920

	
SL 192 PP

	
MARITECH

	
PP #292

	  	
PROD

	
          3,379

	  	
         5,846

	
100.0000%

	
72.0000%

	
          5,846

	  	  	  
	
8312950

	
SL 192 PP

	
MARITECH

	
PP #295

	  	
SI

	
          6,997

	
          5,850

	
         5,850

	
100.0000%

	
72.0000%

	
          5,850

	  	  	  
	
8312970

	
SL 192 PP

	
MARITECH

	
PP #297

	  	
PROD

	
          8,688

	
          9,070

	
         9,070

	
100.0000%

	
72.0000%

	
          9,070

	  	  	  
	
8312980

	
SL 192 PP

	
MARITECH

	
PP #298

	  	
PROD

	
          7,792

	
          6,884

	
         6,884

	
100.0000%

	
72.0000%

	
          6,884

	  	  	  
	
8313000

	
SL 192 PP

	
MARITECH

	
PP #300

	  	
SI

	
          7,148

	
          5,461

	
         5,461

	
100.0000%

	
72.0000%

	
          5,461

	  	  	  
	
8313011

	
SL 192 PP

	
MARITECH

	
PP #301

	  	
PROD

	
        10,592

	
          7,987

	
         7,987

	
100.0000%

	
72.0000%

	
          7,987

	  	  	  
	
8313020

	
SL 192 PP

	
MARITECH

	
PP #302

	  	
SI

	
          5,330

	
          6,987

	
         6,987

	
100.0000%

	
72.0000%

	
          6,987

	  	  	  
	
8313051

	
SL 192 PP

	
MARITECH

	
PP #305

	  	
SI

	
          4,904

	  	
         3,379

	
100.0000%

	
72.0000%

	
          3,379

	  	  	  
	
8313070

	
SL 192 PP

	
MARITECH

	
PP #307

	  	
PROD

	
          7,373

	
          7,110

	
         7,110

	
100.0000%

	
72.0000%

	
          7,110

	  	  	  
	
8313080

	
SL 192 PP

	
MARITECH

	
PP #308

	  	
SI

	
          6,820

	
          6,892

	
         6,892

	
100.0000%

	
72.0000%

	
          6,892

	  	  	  
	
8313090

	
SL 192 PP

	
MARITECH

	
PP #309

	  	
PROD

	
          9,806

	  	
         6,997

	
100.0000%

	
72.0000%

	
          6,997

	  	  	  
	
8313101

	
SL 192 PP

	
MARITECH

	
PP #310

	  	
SI

	
          9,816

	  	
         8,688

	
100.0000%

	  	
          8,688

	  	  	  
	
8313121

	
SL 192 PP

	
MARITECH

	
PP #312

	  	
PROD

	
          6,739

	  	
         7,792

	
100.0000%

	
72.0000%

	
          7,792

	
 

	  	  
	
8313131

	
SL 192 PP

	
MARITECH

	
PP #313

	  	
PROD

	
          7,896

	
          6,878

	
         6,878

	
100.0000%

	
72.0000%

	
          6,878

	  	  	  
	
8313150

	
SL 192 PP

	
MARITECH

	
PP #315

	  	
SI

	
          6,816

	  	
         7,148

	
100.0000%

	
72.0000%

	
          7,148

	  	  	  
	
8313210

	
SL 192 PP

	
MARITECH

	
PP #321

	  	
PROD

	
          2,751

	
          7,731

	
         7,731

	
100.0000%

	
72.0000%

	
          7,731

	  	  	  
	
8313220

	
SL 192 PP

	
MARITECH

	
PP #322

	  	
PROD

	
          9,022

	
          7,060

	
         7,060

	
100.0000%

	
72.0000%

	
          7,060

	  	  	  
	
8313331

	
SL 192 PP

	
MARITECH

	
PP #323

	  	
PROD

	
          7,330

	
          7,140

	
         7,140

	
100.0000%

	
72.0000%

	
          7,140

	  	  	  
	
8313334

	
SL 192 PP

	
MARITECH

	
PP #324

	  	
PROD

	
          7,957

	
          7,957

	
         7,957

	
100.0000%

	  	
          7,957

	  	  	  
	
8313335

	
SL 192 PP

	
MARITECH

	
PP #325

	  	
PROD

	
          7,750

	
          7,750

	
         7,750

	
100.0000%

	
72.0000%

	
          7,750

	  	  	  
	
8313332

	
SL 192 PP

	
MARITECH

	
PP #326 / 326D

	
PROD

	
        10,440

	
        10,440

	
       10,440

	
100.0000%

	
77.6760%

	
        10,440

	
Drilled 7/09; PP#326 (D13): 72.0000

	  
	
8313333

	
SL 192 PP

	
MARITECH

	
PP #327

	  	
PROD

	
        10,712

	
        10,712

	
       10,712

	
100.0000%

	
77.6760%

	
          7,586

	
Drlled 7/2010

	  
	
8313328

	
SL 192 PP

	
MARITECH

	
PP #328

	  	
PROD

	
          7,348

	
          7,348

	
         7,348

	
100.0000%

	
72.0000%

	
          7,104

	
Drilled 6/2010

	  
	
8313290

	
SL 192 PP

	
MARITECH

	
PP #329

	  	
SI

	
        10,946

	  	
       10,900

	
100.0000%

	
72.0000%

	
          7,730

	
Drilled 2010

	  
	
8313300

	
SL 192 PP

	
MARITECH

	
PP #330

	  	
SI

	
        10,946

	
        10,684

	
       10,677

	
100.0000%

	
72.0000%

	
        10,677

	
SL 192 PP#330 BP1 (D12U):  77.6760%

	  
	
8313329

	
SL 192 PP

	
MARITECH

	
PP #332

	  	
PROD

	
          8,481

	  	
         8,454

	
100.0000%

	
72.0000%

	
          8,454

	  	  
	  	
SL 192 PP

	
MARITECH

	
PP #333

	  	
PROD

	
          7,287

	  	
         7,586

	
100.0000%

	
72.0000%

	  	
SL 192 PP #333 ATTIC: 77.6760%

	  
	  	
SL 192 PP

	
MARITECH

	
PP #334

	  	
PROD

	
          7,516

	  	
         7,104

	
100.0000%

	
72.0000%

	  	  	  
	  	
SL 192 PP

	
MARITECH

	
PP #336

	  	
PROD

	
          7,114

	  	
         7,730

	
100.0000%

	
72.0000%

	
          7,730

	  	  
	  	
SL 192 PP

	
MARITECH

	
SWD 2

	  	  	  	  	  	  	  	  	  	  
	  	
SL 192 PP

	
MARITECH

	
SWD 3

	  	  	  	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
8496001

	
WD 58 OCSG00146

	
MARITECH

	
E1

	  	
PROD

	
        11,400

	
          9,700

	
         9,700

	
100.0000%

	
72.5000%

	
          9,700

	  	  
	
8496002

	
WD 58 OCSG00146

	
MARITECH

	
E2

	  	
SI

	
        13,551

	
          4,763

	
       12,700

	
37.5000%

	
26.2500%

	
          4,763

	  	  
	
8496003

	
WD 58 OCSG00146

	
MARITECH

	
E3 / E3D

	  	
SI

	
        11,400

	
          7,403

	
         9,870

	
100.000 BPO; 75.000% APO

	
72.500 BPO; 54.375% APO

	  	  	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
8497002

	
WD 59 OCSG16473

	
MARITECH

	
2

	  	
PROD

	
        13,277

	
          5,728

	
       12,206

	
46.9300%

	
34.0424%

	
          5,728

	  	  
	
8497001

	
WD 59 OCSG16473

	
MARITECH

	
1 ST 1

	  	
SI

	
        13,362

	
          5,547

	
       11,820

	
46.9300%

	
34.0424%

	
          5,547

	  	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
8498001

	
WD 61 OCSG03186

	
MARITECH

	
B1

	  	
PROD

	
        13,437

	
        12,384

	
       13,760

	
90.0000%

	
61.5000%

	
        12,384

	  	  
	
8498002

	
WD 61 OCSG03186

	
MARITECH

	
B2 / B2 D

	  	
PROD

	
        13,610

	  	
       14,414

	
90.0000%

	
61.5000%

	
        12,973

	  	  
	
8498003

	
WD 61 OCSG03186

	
MARITECH

	
B3

	  	
PROD

	
          3,253

	  	
         3,954

	
90.0000%

	
61.5000%

	
          3,559

	  	  
	
8498004

	
WD 61 OCSG03186

	
MARITECH

	
C1 (10) / C1D

	
SI

	
        14,494

	  	
       12,280

	
90.0000%

	
61.5000%

	
        11,052

	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
8500001

	
WD 63 OCSG19839

	
MARITECH

	
A1 ST1

	  	
PROD

	
        13,920

	  	
       13,896

	
50.0000%

	
40.4166%

	
          6,948

	  	  	  	  
	
8500002

	
WD 63 OCSG19839

	
MARITECH

	
A2 ST1

	  	
SI

	
        13,810

	
          6,654

	
       13,308

	
50.0000%

	
40.4166%

	
          6,654

	  	  	  	  
	  	
WD 63 OCSG19839

	
Peregrine

	
D003

	  	  	  	  	  	
0.0000%

	
3.7500%

	  	  	  	  	  
	  	
WD 63 OCSG19839

	
Peregrine

	
W001

	  	  	  	  	  	
0.0000%

	
1.2500%

	  	  	  	  	  

 

 

 

 

 

EXHIBIT 1.1 D - EASEMENTS /RIGHTS OF WAY

 

Attached to and made a part of that certain Purchase and Sale Agreement dated April 1, 2011, but effective January 1, 2011, by and between Maritech Resources, Inc. and Tana Exploration Company LLC

 

	
Seg. No.

	
ROW Number

	
Originating Id Name

	
Originating Area Code

	
Originating Block Number

	
Originating Lease Number

	
Receiving Id Name

	
Receiving Area Code

	
Receiving Block Number

	
Receiving Lease Number

	
Approved Date

	
Install Date

	
Status Code

	
Pipeline Size Code

	
Production Code

	
Facility Operator

	
Operator

	
Max Water Depth

	
Max Operating Pressure

	
Cathodic Code

	
Pipeline ROW Segment Status Code

	
Pipeline ROW Permit

	
ROW Holder

	
Segment Length

	
Authority

	
Bidirectional

	
RIGHTS OF WAY

	
10375

	
G14716

	
FLANGE

	
EC

	
328

	
G10638

	
08 SSTI

	
EC

	
322

	
G02254

	
10/6/1994

	
11/23/1994

	
ACT

	
4

	
OIL

	
2409

	
Maritech Resources, Inc.

	
243

	
2140

	
A

	
ACT

	
2409

	
Maritech Resources, Inc.

	
15448

	
DOI

	
N

	
10376

	
G14717

	
Flange

	
EC

	
328

	
G10638

	
12-inch SSTI

	
EC

	
323

	
UNLEASE

	
10/12/1994

	
1/25/1995

	
ACT

	
4

	
GAS

	
2409

	
Maritech Resources, Inc.

	
238

	
1440

	
A

	
ACT

	
2409

	
Maritech Resources, Inc.

	
8295

	
DOI

	
Y

	
15842

	
G28223

	
C

	
EC

	
328

	
G10638

	
B

	
EC

	
328

	
G10638

	
10/17/2006

	
6/1/2007

	
COMB

	
6

	
BLKO

	
2409

	
Maritech Resources, Inc.

	
250

	
2220

	  	
RELQ

	
2409

	
Maritech Resources, Inc.

	
4143

	
DOI

	  
	
15843

	
G28224

	
C

	
EC

	
328

	
G10638

	
B

	
EC

	
328

	
G10638

	
10/17/2006

	
5/21/2007

	
COMB

	
4

	
BLKO

	
2409

	
Maritech Resources, Inc.

	
250

	
2220

	  	
RELQ

	
2409

	
Maritech Resources, Inc.

	
4136

	
DOI

	  
	
15844

	
G28225

	
B

	
EC

	
328

	
G10638

	
C

	
EC

	
328

	
G10638

	
10/17/2006

	
5/31/2007

	
R/C

	
2

	
LIFT

	
2409

	
Maritech Resources, Inc.

	
250

	
1480

	  	
RELQ

	
2409

	
Maritech Resources, Inc.

	
4133

	
DOI

	  
	
16195

	
G14716

	
A Platform

	
EC

	
328

	
G10638

	
Flange

	
EC

	
328

	
G10638

	  	  	
ABN

	
4

	
OIL

	
2409

	
Maritech Resources, Inc.

	
243

	
2140

	  	
RELQ

	
2409

	
Maritech Resources, Inc.

	
1150

	
DOI

	
N

	
16196

	
G14717

	
A Platform

	
EC

	
328

	
G10638

	
Flange

	
EC

	
328

	
G10638

	  	  	
ABN

	
4

	
GAS

	
2409

	
Maritech Resources, Inc.

	
238

	
1440

	  	
RELQ

	
2409

	
Maritech Resources, Inc.

	
1073

	
DOI

	
N

	
16292

	
G28223

	
Cut End

	
EC

	
328

	
G10638

	
Cut End

	
EC

	
328

	
G10638

	  	  	
PABN

	
6

	
BLKO

	
2409

	
Maritech Resources, Inc.

	
250

	
2220

	  	
RELQ

	
2409

	
Maritech Resources, Inc.

	
200

	
DOI

	
N

	
16293

	
G28224

	
Cut End

	
EC

	
328

	
G10638

	
Cut End

	
EC

	
328

	
G10638

	  	  	
PABN

	
4

	
BLKO

	
2409

	
Maritech Resources, Inc.

	
250

	
2220

	  	
RELQ

	
2409

	
Maritech Resources, Inc.

	
201

	
DOI

	
N

	
16294

	
G28225

	
Cut End

	
EC

	
328

	
G10638

	
Cut End

	
EC

	
328

	
G10638

	  	  	
PABN

	
2

	
LIFT

	
2409

	
Maritech Resources, Inc.

	
250

	
1480

	  	
RELQ

	
2409

	
Maritech Resources, Inc.

	
201

	
DOI

	
N

	
7943

	
G08541

	
C

	
EI

	
342

	
G02319

	
8 SSTI

	
EI

	
327

	
G02910

	
9/15/1986

	
10/27/1986

	
ACT

	
4

	
OIL

	
2851

	
Mariner Energy Resources, Inc.

	
285

	
1440

	
A

	
ACT

	
2851

	
Mariner Energy Resources, Inc.

	
18657

	
DOI

	
N

	
14828

	
G25455

	
Caisson # 1

	
MP

	
99

	
G21703

	
Platform A

	
MP

	
178

	
G18105

	
10/1/2004

	
4/22/2005

	
OUT

	
6

	
BLKG

	
2409

	
Maritech Resources, Inc.

	
155

	
2220

	  	
ACT

	
2409

	
Maritech Resources, Inc.

	
59393

	
DOI

	  
	
17406

	
G28375

	
Capped End

	
MP

	
108

	
G04832

	
Capped End

	
MP

	
108

	
G04832

	
2/21/2008

	
10/18/1991

	
REM

	
3

	
COND

	
2349

	
Maritech Resources, Inc.

	
135

	
1440

	  	
RELQ

	
2409

	
Maritech Resources, Inc.

	
1680

	
DOI

	  
	
14183

	
G24688

	
# 3 Caisson

	
MP

	
160

	
G05245

	
A Platform

	
MP

	
164

	
G21143

	
6/27/2003

	
8/27/2003

	
OUT

	
4

	
BLKG

	
2409

	
Maritech Resources, Inc.

	
132

	
1480

	  	
ACT

	
2409

	
Maritech Resources, Inc.

	
8888

	
DOI

	  
	
9683

	
G13743

	
A

	
MP

	
175

	
G08753

	
12 SSTI

	
MP

	
178

	
G13020

	
8/20/1992

	
10/7/1992

	
ACT

	
6

	
GAS

	
2409

	
Maritech Resources, Inc.

	
140

	
1440

	
A

	
ACT

	
2409

	
Maritech Resources, Inc.

	
31212

	
DOI

	
N

	
15918

	
G28246

	
A

	
MP

	
175

	
G08753

	
Flange Point

	
MP

	
181

	
G12092

	
9/14/2007

	
3/13/2008

	
OUT

	
3

	
COND

	
2409

	
Maritech Resources, Inc.

	
150

	
1480

	  	
ACT

	
2409

	
Maritech Resources, Inc.

	
69161

	
DOI

	  
	
14874

	
G25472

	
Plat "A"

	
MP

	
178

	
G18105

	
18" SSTI

	
MP

	
268

	
UNLEASE

	
1/18/2005

	  	
CNCL

	
8

	
OIL

	
2409

	
Maritech Resources, Inc.

	
212

	
1950

	  	
RELQ

	
2409

	
Maritech Resources, Inc.

	
91466

	
DOI

	  
	
15919

	
G28518

	
A

	
MP

	
178

	
UNLEASE

	
3" SSTI

	
MP

	
178

	
UNLEASE

	
9/14/2007

	
3/29/2008

	
OUT

	
3

	
COND

	
2409

	
Maritech Resources, Inc.

	
150

	
1480

	  	
ACT

	
2409

	
Maritech Resources, Inc.

	
1496

	
DOI

	  
	
9433

	
G13223

	
A

	
MP

	
181

	
G12092

	
12 SSTI

	
MP

	
108

	
G04832

	
7/29/1991

	
10/17/1991

	
ABN

	
8

	
GAS

	
2409

	
Maritech Resources, Inc.

	
138

	
1200

	
A

	
RELQ

	
2409

	
Maritech Resources, Inc.

	
37283

	
DOI

	
N

	
17205

	
G28375

	
Flange Point

	
MP

	
181

	
G12092

	
Platform A

	
MP

	
108

	
G04832

	
9/28/2007

	
10/18/1991

	
OUT

	
3

	
COND

	
2409

	
Maritech Resources, Inc.

	
135

	
1480

	  	
ACT

	
2409

	
Maritech Resources, Inc.

	
33561

	
DOI

	  
	
14751

	
G25427

	
A

	
MP

	
207

	
G22802

	
6" SSTI

	
MP

	
178

	
G18105

	
10/12/2004

	
8/15/2005

	
OUT

	
6

	
BLKG

	
2409

	
Maritech Resources, Inc.

	
177

	
2220

	  	
ACT

	
2409

	
Maritech Resources, Inc.

	
46047

	
DOI

	
N

	
17376

	
G28434

	
SSW #SS001

	
MP

	
211

	
G22803

	
A

	
MP

	
242

	
UNLEASE

	
5/21/2008

	  	
ACT

	
3

	
BLKG

	
2409

	
Maritech Resources, Inc.

	
197

	
2160

	  	
ACT

	
2409

	
Maritech Resources, Inc.

	
29688

	
DOI

	  
	
17372

	
G28432

	
SSW #SS002

	
MP

	
232

	
G22806

	
A

	
MP

	
242

	
UNLEASE

	
5/21/2008

	
2/2/2009

	
ACT

	
3

	
BLKG

	
2409

	
Maritech Resources, Inc.

	
197

	
2162

	  	
ACT

	
2409

	
Maritech Resources, Inc.

	
23610

	
DOI

	  
	
17374

	
G28433

	
SSW #SS002

	
MP

	
241

	
G22808

	
A

	
MP

	
242

	
UNLEASE

	
5/21/2008

	
2/13/2009

	
ACT

	
3

	
BLKG

	
2409

	
Maritech Resources, Inc.

	
197

	
2162

	  	
ACT

	
2409

	
Maritech Resources, Inc.

	
16439

	
DOI

	  
	
12408

	
G21482

	
A

	
MP

	
242

	
G18114

	
A

	
MP

	
265

	
G19863

	
4/24/2000

	
6/14/2000

	
ACT

	
6

	
BLKG

	
2409

	
Maritech Resources, Inc.

	
210

	
2160

	
A

	
ACT

	
2409

	
Maritech Resources, Inc.

	
23254

	
DOI

	
N

	
12449

	
G21522

	
A

	
MP

	
242

	
G18114

	
A

	
MP

	
265

	
G19863

	
4/27/2000

	
6/15/2000

	
ACT

	
6

	
BLKG

	
2409

	
Maritech Resources, Inc.

	
210

	
2160

	
A

	
ACT

	
2409

	
Maritech Resources, Inc.

	
23254

	
DOI

	
N

	
17373

	
G28432

	
A

	
MP

	
242

	
UNLEASE

	
SSW #SS002

	
MP

	
232

	
G22806

	
5/21/2008

	  	
ACT

	
1

	
UMB

	
2409

	
Maritech Resources, Inc.

	
197

	
0

	  	
ACT

	
2409

	
Maritech Resources, Inc.

	
23610

	
DOI

	  
	
17375

	
G28433

	
A

	
MP

	
242

	
UNLEASE

	
SSW #SS002

	
MP

	
241

	
G22808

	
5/21/2008

	  	
ACT

	
1

	
UMB

	
2409

	
Maritech Resources, Inc.

	
197

	
0

	  	
ACT

	
2409

	
Maritech Resources, Inc.

	
16439

	
DOI

	  
	
17377

	
G28434

	
A

	
MP

	
242

	
UNLEASE

	
SSW #SS001

	
MP

	
211

	
G22803

	
5/21/2008

	  	
ACT

	
1

	
UMB

	
2409

	
Maritech Resources, Inc.

	
197

	
0

	  	
ACT

	
2409

	
Maritech Resources, Inc.

	
29688

	
DOI

	  
	
15189

	  	
Caisson E

	
WD

	
58

	
146

	
Caisson #1

	
WD

	
59

	
G16473

	
8/22/2005

	
11/20/2005

	
ACT

	
6

	
BLKG

	
2409

	
Maritech Resources, Inc.

	
60

	
2220

	  	  	  	  	
5180

	
DOI

	  
	
13130

	  	
Caisson No. 1

	
WD

	
59

	
G16473

	
SSTI w 17995

	
WD

	
59

	
G16473

	
2/7/2001

	
2/23/2001

	
ACT

	
6

	
G/C

	
2409

	
Maritech Resources, Inc.

	
62

	
2220

	
A

	  	  	  	
5092

	
DOI

	
N

	
17995

	
G28970

	
No. 2 Caisson

	
WD

	
59

	
G16473

	
B Platform

	
WD

	
61

	
G03186

	
1/15/2010

	  	
ACT

	
6

	
G/C

	
2409

	
Maritech Resources, Inc.

	
105

	
2220

	  	
ACT

	
2409

	
Maritech Resources, Inc.

	
17571

	
DOI

	  
	
17049

	
G28316

	
C Platform

	
WD

	
61

	
G03186

	
A Platform

	
WD

	
62

	
G25007

	
6/19/2007

	
7/5/2004

	
OUT

	
4

	
BLKG

	
2409

	
Maritech Resources, Inc.

	
134

	
2162

	  	
ACT

	
2409

	
Maritech Resources, Inc.

	
13769

	
DOI

	  
	
17052

	
G28319

	
B Platform

	
WD

	
61

	
G03186

	
A Platform

	
WD

	
62

	
G25007

	
5/22/2007

	
10/30/2002

	
PROP

	
4

	
BLKG

	
2409

	
Maritech Resources, Inc.

	
128

	
1440

	  	
ACT

	
2409

	
Maritech Resources, Inc.

	
17623

	
DOI

	  
	
17053

	
G28320

	
B platform

	
WD

	
61

	
G03186

	
A Platform

	
WD

	
62

	
G25007

	
5/22/2007

	
10/30/2002

	
ACT

	
4

	
BLKG

	
1834

	
Stone Energy Corporation

	
128

	
1440

	  	
ACT

	
2409

	
Maritech Resources, Inc.

	
17623

	
DOI

	  
	
15920

	
G24250

	
Platform A

	
WD

	
62

	
G25007

	
12-Inch SSTI

	
WD

	
62

	
G25007

	
12/8/2006

	
4/2/1990

	
ACT

	
6-Apr

	
OIL

	
2409

	
Maritech Resources, Inc.

	
135

	
1440

	  	
ACT

	
2409

	
Maritech Resources, Inc.

	
1109

	  	  
	
17048

	
G28315

	
Platform A

	
WD

	
62

	
G25007

	
18-inch SSTI

	
WD

	
62

	
G25007

	
9/14/2007

	
9/18/2007

	
ACT

	
4

	
GAS

	
2409

	
Maritech Resources, Inc.

	
125

	
1440

	  	
ACT

	
2409

	
Maritech Resources, Inc.

	
3413

	
DOI

	  
	
17051

	
G28318

	
A

	
WD

	
62

	
G25007

	
A

	
WD

	
63

	
G19839

	
9/6/2007

	
10/30/2002

	
ACT

	
2

	
SPLY

	
2409

	
Maritech Resources, Inc.

	
163

	
1440

	  	
ACT

	
2409

	
Maritech Resources, Inc.

	
5815

	
DOI

	  
	
17050

	
G28317

	
A

	
WD

	
63

	
G19839

	
A

	
WD

	
62

	
G25007

	
9/6/2007

	
4/12/1990

	
ACT

	
8

	
BLKG

	
2409

	
Maritech Resources, Inc.

	
135

	
1440

	  	
ACT

	
2409

	
Maritech Resources, Inc.

	
5653

	
DOI

	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
AREA

	
LEASE #

	
OPERATOR

	
OWNER

	
INTEREST

	
EFF DATE

	
EXP DATE

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
TBAY

	
4467

	
Maritech

	
Maritech

	
100%

	
2/25/2004

	
2/25/2024

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
TBAY

	
4865

	
Maritech

	
Maritech

	
100%

	
7/6/2007

	
7/6/2027

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
TBAY

	
4878

	
Maritech

	
Maritech

	
100%

	
7/19/2007

	
7/19/2027

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
TBAY

	
4932

	
Maritech

	
Maritech

	
100%

	
9/28/2007

	
2/28/2027

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
TBAY

	
4933

	
Maritech

	
Maritech

	
100%

	
9/28/2007

	
2/28/2027

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
RIGHTS OF USE AND EASEMENTS

	
Area

	
Block

	
Field

	
RUE/Lease Number

	
Structure Name

	
Structure Number

	
Struc Type Code

	
Authority Type

	
Authority Status

	
Bus Asc Name

	
Complex ID Number

	
Maj Struc Flag

	
Install Date

	
District Code

	
Heliport Flag

	
Lease Number

	
Water Depth

	
Latitude

	
Longitude

	
Nad Year Cd

	
Proj Code

	
Ptfrm X Location

	
Ptfrm Y Location

	
Surf N S Dist

	
Surf N S Code

	
Surf E W Dist

	
MP

	
178

	
MP178

	
G30061

	
A

	
1

	
FIXED

	
Right-of-Use and Easement

	
Approved

	
Maritech Resources, Inc.

	
972

	
Y

	  	
1

	
Y

	
G18105

	
150

	
29.577

	
-88.472785

	
27

	
72

	
2909221

	
342290

	
5210

	
S

	
6379

	
MP

	
242

	
WILD

	
G30011

	
A

	
1

	
FIXED

	
Right-of-Use and Easement

	
Approved

	
Maritech Resources, Inc.

	
627

	
N

	  	
1

	
Y

	  	
197

	
29.364

	
-88.352401

	
27

	
72

	
2949489

	
265914

	
2584

	
S

	
4389

	
MP

	
164

	
MP164

	
G30062

	
A

	
1

	
FIXED

	
Right-of-Use and Easement

	
Approved

	
Maritech Resources, Inc.

	
948

	
N

	  	
1

	
Y

	  	
130

	
29.637

	
-88.487662

	
27

	
72

	
2903952

	
363967

	
2613

	
N

	
3102

	
WD

	
62

	
WD061

	
G30071

	
A

	
1

	
FIXED

	
Right-of-Use and Easement

	
Approved

	
Maritech Resources, Inc.

	
23817

	
Y

	  	
1

	
Y

	  	
120

	
29.022

	
-89.663761

	
27

	
72

	
2533646

	
133147.2

	
9313

	
S

	
1318

  

  

  

 

EXHIBIT 1.1(G) – CONTRACTS

Attached to and made a part of that certain

Purchase and Sale Agreement dated April 1, 2011, but effective January 1, 2011,

by and between Maritech Resources, Inc. and Tana Exploration Company LLC

	
PROPERTIES - BLOCKS

	
DATE OF AGREEMENT

	
PARTY

	
PARTY

	
INSTRUMENT TYPE

	
EC 328

	
January 1, 2005

	
Maritech, as Operator

	
Arena, as Non-operator

	
Offshore Operating Agreement covering all of Block 328, East Cameron Area, South Addition from the surface of the earth down to and including the stratigraphic equivalent of the base of the HB-5 sand as seen at a depth of 4,195 feet TVD in the Mesa Petroleum Co. OCS-G 2255 Well No. A-22 located in East Cameron 323.

 

	  
	
EC 328

	
November 23, 2004

	
Arena Energy LLC

	
Maritech Resources, Inc.

	
Participation & Acquisition Agreement as amended effective December 22, 2004 and as amended effective January 1, 2005

	  
	
EC 328

	
November 23, 2004.

	
Arena Energy LLC

	
Maritech Resources, Inc.

	
Option Agreement, as amended effective October 12, 2005

	  
	
EC 328

	
January 1, 2005

	
Arena Energy LLC

	
Maritech Resources, Inc.

	
Stipulation of Interest & Agreement, as amended effective November 5, 2005

 

 

	  
	
EC 328

	
October 1, 1994 as amended on January 18, 1995.

 

	
Union Pacific Resources Company

	
Zilkha Energy Company

	
Farmout Agreement, as amended

	  
	
EC 328

	
April 22, 1992 as amended on September 1, 1993

	
Union Pacific Resources Company

	
Zilkha Energy Company

 

	
Farmout Agreement, as amended

 

	  
	
EC 328

	
August 22, 2001

	
El Paso Production GOM Inc.

	
Louis Dreyfus Natural Gas Corp.

	
Agreement of Temporary Reduction of Overriding Royalty Interest

	  
	
EC 328

	
December 1, 2004

	
El Paso Production GOM Inc.

	
Maritech Resources, Inc.

	
Agreement of Partial Suspension of Overriding Royalty Interest

	  
	
EC 328

	
August 18, 1993, effective August 11, 1993

	
Zilkha Energy Company

	
David T. Cameron, et al

	
Assignment of Net Profits Interest

	  
	
EC 328

	
April 1, 1996

	
Union Pacific Resources Company

	
Zilkha Energy Company

	
Assignment of Overriding Royalty in Oil and Gas Lease

	  
	
EC 328

	
April 1, 1996

	
Union Pacific Resources Company

	
Zilkha Energy Company

	
Corrective Assignment of Overriding Royalty in Oil and Gas Lease

	  
	
EC 328

	
April 1, 1996

	
Zilkha Energy Company

	
William Harmon, et al

	
Assignment of Net Profits Interest

	  
	
EC 328

	
January 1, 2005

	
Maritech Resources, Inc.

	
Arena Offshore, LLC

	
Assignment of Operating Rights and Bill of Sale

	  
	
EC 328

	
January 1, 1990

	
Zilkha Energy Company

	  	
Incentive Pool Plan, as amended

 

	  
	
EC 328

	
June 20, 1996 but effective April 1, 1996

	
Union Pacific Resources Company

	
Zilkha Energy Company

	
Sale of Interest and Equity Trades Letter Agreement

	  
	
EC 328

	
February 1, 2006

	
Maritech Resources, Inc.

	
El Paso Production GOM Inc.

	
Election to Purchase Overriding Royalty Interest

	  
	
EC 328

	
February 27, 2006

	
Maritech Resources, Inc.

	
Arena Energy, L.L.C.

	
Election to Purchase Undivided One-half Overriding Royalty Interest

 

	  
	
EC 328

	
June 30, 2005

	
El Paso E&P Company LP

	
Maritech Resources, Inc.

	
Assignment of Overriding Royalty Interest

	  
	
EC 328

	
June 30, 2005

	
Maritech Resources, Inc.

	
Arena Energy, L.L.C., et al

	
Assignment of Overriding Royalty Interest

	  
	
EI 342/343/344

	
12/19/03

	
Forest Oil Corporation, operator of Eugene Island Block 342 "C" Platform; Devon Energy Production Company, L.P., et al, working interest owners of Eugene Island Block 342 "C" Platform

	
Spinnaker Exploration Co. LLC, User, as operator/owner of Eugene Island Block 343 and W/2 of Eugene Island Block 344

	
Production Processing Handling and Operating Agreement

	  
	
EI 342/343/344,

	
12/19/03

	
Forest Oil Corporation, operator of Eugene Island Block 342 "C" Platform; Devon Energy Production Company, L.P., et al, working interest owners of Eugene Island Block 342 "C" Platform

	
Spinnaker Exploration Co. LLC, User, as operator

	
Production Processing Handling and Operating Agreement

	  
	
EI 342

 

	
5/1/1988

	
Elf Aquitaine Operating, Inc., Operator

	
Plumb Offshore, Inc. and TXP Operating Company, Non-Operators

	
Offshore Operating Agreement covering W/2 Block 342

	  
	
EI 342

	
5/9/86

	
Texaco Inc., as First Party

	
Huffco Petroleum Corporation, as Second Party

	
Sublease Agreement covering the NW/4 Block 342

	  
	
EI 342

	
9/5/84

	
Texaco Inc. and Tenneco Exploration, Ltd., as First Party

	
Huffco Petroleum Corporation, as Second Party

	
Sublease Agreement covering the SW/4 Block 342

	  
	
EI 342

	
5/9/86

	  	
Huffco Petroleum Corporation

	
Sublease Agreement covering the NW/4 Block 342

	  
	
EI 342

 

	
9/5/84

	
Texaco Inc. and Tenneco Exploration, Ltd., as First Party

	
Huffco Petroleum Corporation, as Second Party

	
Sublease covering the SW/4 Block 342

	  
	
EI 342

	
August 1, 2009

	
Louis Dreyfus Producer Services

	
MRI

	
Consent & Assignment of Dreyfus Gas Processing Agreement w/ Targa Resources

	  
	
EI 342

	
May 1, 2008

	
TXP Operating Company

	
Elf Aquitaine

	
Gas Balancing Agreement

	  
	
EI 342

	
May 1, 2010

	
Tennessee Pipeline

	
MRI

	
HC Liquids Transport Agreement

	  
	
EI 342

 

	
12/1/1984

	
TXP Operating Company, Plumb Offshore, Inc.

	
Huffco Petroleum Corp.

	
Participation Agreement and Operating Agreement covering SW/4 Block 342

	  
	
EI 342

 

	
2/1/1971

	
Tenneco Oil Company

	
Texaco Inc

	
Operating Agreement covering the E/2 Block 342

	  
	
EI 342

	
April 24, 1987

	
Huffco Petroleum Corporation, TXP Operating Company

	
Plumb Offshore, Inc.

 

	
Platform Cost Allocation Letter Agreement

	  
	
EI 342

 

	
January 1, 2008 and as amended by July 28,2008

	
Mariner Energy Resources, Inc., et al, as Owners

	
Chevron U.S.A. Inc., as Producers, and Mariner Energy, Inc., as Operator

	
Slot Use Agreement

	  
	
EI 342

 

	
July 28, 2008

	
Mariner Energy, Inc., Maritech Resources, Inc., and Apache Corporation

	
Chevron U.S.A. Inc. and Mariner Energy, Inc.

	
C-5 Well Sidetrack Letter Agreement provides for Chevron and Mariner to take over the C-5 well for purpose of drilling a new sidetrack well and amended certain provisions of the Slot Use Agreement

	  
	
EC 328

	
August 22, 2001

	
El Paso Production GOM Inc.

	
Louis Dreyfus Natural Gas Corp.

	
Agreement of Temporary Reduction of Overriding Royalty Interest

	  
	
WD 58

	
January 1, 1990

	
Conoco, Inc., et al, as Assignors

	
Pan Petroleum, Inc., as Assignee

	
Assignment of Operating Rights regarding call on production and lease termination

	  
	
WD 58

	
December 8, 1999

	
Panaco, Inc.

	
Basin Exploration, Inc.

	
Letter Agreement

	  
	
WD 58

 

	
December 23, 1999

	
Panaco, Inc., as Farmor

	
Basin Exploration, Inc., as Farmee

	
Farmout Agreement

	  
	
WD 58

	
March 24, 2000

	
Panaco, Inc.

	
Basin Exploration, Inc.

	
Letter Agreement

	  
	
WD 58

	
May 11, 2000

	
Panaco, Inc.

	
Basin Exploration, Inc.

	
Letter Agreement

	  
	
WD 58

	
July 9, 2001

	
Panaco, Inc.

	
Stone Energy Corporation.

	
Letter Agreement

	  
	
WD 58

	
February 22, 2000

	
Basin Exploration, Inc.

	
Duke Energy Hydrocarbons, LLC.

 

	
Participation Agreement

	  
	
WD 58

	
February 22, 2000

	
Basin Exploration, Inc.

	
Duke Energy Hydrocarbons, LLC

 

	
Assignment of Farmout Agreement

	  
	
WD 58

	
May 3, 2000

	
Basin Exploration, Inc.

	
Duke Energy Hydrocarbons, LLC.

	
Letter Agreement

	  
	
WD 58

	
May 3, 2000

	
Basin Exploration, Inc., as Operator

	
Duke Energy Hydrocarbons, LLC, as Non-operator

	
Offshore Operating Agreement covers Shallow Rights 0 -- 11,300'

	  
	
WD 58

 

	
May 3, 2000

	
Stone Energy Corporation

	
Duke Energy Hydrocarbons, LLC

	
Amendment to Operating Agreement, amended Exhibit A to include W2SE4 and Stone as successor of Basin

	  
	
WD 58

 

	
January 27, 2004

	
Stone Energy Corporation

	
Marlin Energy Offshore, LLC

	
Amendment to Operating Agreement, amended Insurance Exhibit

	  
	
WD 58

 

	
May 2, 2000

	
Basin Exploration, Inc. as Farmee

	
Energy Development Corporation, et al, as Farmors

	
Farmout Letter Agreement, pertains to deep Rights in SW4 below 11,300'  to 14,000' TVD

	  
	
WD 58

	
April 28, 2000

	
Basin Exploration, Inc., as Operator

	
Energy Development Corporation, et al, as Non-operators

	
Offshore Operating Agreement pertains to deep Rights in SW4 below 11,300'  to 14,000' TVD

	  
	
WD 58

	
May 22, 2000

	
Basin Exploration, Inc.

	
Duke Energy Hydrocarbons, LLC

	
Letter Agreement

	  
	
WD 58

 

	
January 16, 2004

	
Stone Energy Corporation

	
Entech Enterprises, Inc.

	
Amendment to Operating Agreement, amended Insurance Exhibit

	  
	
WD 58

	
August 9, 2000

	
Basin Exploration, Inc.

	
Duke Energy Hydrocarbons, LLC, Energy Development Corporation and Entech Enterprises, Inc.

	
Letter Agreement, regarding ownership, AFE and cost sharing of installation of caisson and bridge to WD 58 "D" Platform.

 

	  
	
WD 58

	
November 13, 2002

	
Stone Energy Corporation

	
Duke Energy Hydrocarbons, LLC, Samedan Oil Corporation and Entech Enterprises, Inc.

	
Letter Agreement, setting out ownership of WD 58 "E" Caisson as follows:  Stone - 70.84%; Duke - 12.5%, Samedan - 15.83%, and Entech - 0.83%

 

	  
	
WD 58

	
Effective May 1, 2000, as amended on January 29, 2001 (First Amendment), May 7, 2001 (Second Amendment), December 14, 2001 (Third Amendment), June 25, 2002 (Fourth Amendment), April 1, 2002 (Fifth Amendment), May 27, 2005 (Sixth Amendment) and October 1, 2005 (Seventh Amendment

	
Stone Energy Corporation, as Producer

	
Dynegy Midstream Services, Limited Partnership, as Processor

	
Natural Gas Processing Agreement

	  
	
WD 58, WD 59

	
June 1, 2005 Terminated by 4-9-10 letter

 

	
Palm Energy Offshore, L.L.C. Inc., as operator of WD 58 "D" Platform

	
Stone Energy Corporation, et al, as producers of WD 59 # 1 and 2 wells and WD 58 # D-5 (E-1) E-2 and E-3 wells

	
Production Processing Agreement

	  
	
WD 58 and WD 59, WD 61

	
April 28, 2010

	
Maritech Resources, Inc.

	
Tammany Oil & Gas LLC, et al

	
Flowline Agreement

	  
	
WD 59

 

	
March 18, 1996

	
Tana Oil and Gas Corporation, as Operator

	
Enserch Exploration, Inc., The Northwestern Mutual Life Insurance Co., PB-SB Investment Partnership II, and Energy Development Corporation, as Non-operators

	
Offshore Operating Agreement

	  
	
WD 58

	
June 1, 2005 Terminated by 4-9-10 letter

 

	
Palm Energy Offshore, L.L.C. Inc., as operator of WD 58 "D" Platform

	
Stone Energy Corporation, et al, as producers of WD 59 # 1 and 2 wells and WD 58 # D-5 (E-1) E-2 and E-3 wells

	
Production Processing Agreement

	  
	
WD 58 and WD 59

	
April 28, 2010

	
Maritech Resources, Inc.

	
Tammany Oil & Gas LLC, et al

	
Flowline Agreement

	  
	  	  	  	  	  	  
	
WD 59, 60 and 78

 

	
March 18, 1996

	
Tana Oil and Gas Corporation, as Operator

	
Enserch Exploration, Inc., The Northwestern Mutual Life Insurance Co., PB-SB Investment Partnership II, and Energy Development Corporation, as Non-operators

	
Offshore Operating Agreement

	  
	
WD 59

 

	
August 9, 1999

	
Tana Oil and Gas Corporation, as Farmor

	
Basin Exploration, Inc., as Farmee

	
Farmout Proposal Letter Agreement

	  
	
WD 59

 

	
August 23, 1999

	
Basin Exploration, Inc.

	
Northwestern Mutual Life insurance Co., et al

	
Well  Participation Election Letter Agreement

	  
	
WD 59

	
October 5, 1999 and effective August 10, 1999

	
Tana Oil and Gas Corporation, as Farmor

	
Basin Exploration, Inc., as Farmee

 

	
Farmout and Exploration Agreement

	  
	
WD 59

 

	
January 19, 2004

	
Stone Energy, as Operator

	
The Northwestern Mutual Life Insurance Company and NCX Company, L.L.C., as Non-operators

	
Amendment to Operating Agreement Insurance Exhibit

	  
	
WD 59 & WD 62

	
April 28, 2010, and made effective March 1, 2010

	
Maritech Resources, Inc., as Processor

	
Tammany Oil & Gas LLC, et al, as Producers.

	
Production Handling Agreement pertains to processing of production from WD 59 at WD 62 A Platform

	  
	
WD 61

 

	
February 1, 1998, as amended on April 28, 1998, March 26, 2002 and July 2, 2002

	
Pioneer Natural Resources USA, Inc., as Farmor

	
Basin Exploration, Inc., as Farmee

	
Farmout Agreement

	  
	
WD 61

 

	
April 30, 1998

	
Basin Exploration, Inc.

	
GHP Corporation

	
Prospect Trade Agreement

	  
	
WD 61

 

	
May 22, 1998

	
Basin Exploration, Inc., as Assignor

	
GHP Corporation, as Assignee

	
Assignment of Farmout Agreement

	  
	
WD 61

 

	
April 29, 1998, as amended on October 27, 1998, December 4, 2003 and May 1, 2004

	
Basin Exploration, Inc., as Operator

	
IP Petroleum Company, Inc., et al, as Non-Operators

	
Offshore Operating Agreement

	  
	
WD 61

 

	
January 1, 2002, as amended

	
Stone Energy  Corporation, as Producer

	
Dynegy Midstream Services, Limited Partnership, as Processor

	
Natural Gas Processing Agreement

	  
	
WD 61

 

	
February 22, 1999

	
Pioneer Natural Resources USA, Inc.

	
Basin Exploration, Inc.

	
Pipeline Crossing Letter  Agreement

	  
	
WD 61 & WD 62

 

	
September 10, 2002

	
Stone Energy  Corporation

	
Pure Partners, LP, et al

	
Platform Processing Agreement

	  
	
WD 61

 

	
July 1, 2003

	
Pioneer Natural Resources USA, Inc., as Farmor

	
Stone Energy Corporation, as Farmee

	
Farmout Agreement

	  
	
WD 61

 

	
December 4, 2003

	
Stone Energy  Corporation

	
NCX Company, L.L.C., as non-operator

	
Amendment to Operating Agreement Insurance Exhibit

	  
	
WD 61

	
April 1, 2010

	
Targa Resources

	
MRI

	
Amendment to add WD 58-59 to Gas Processing Agreement

	  
	
WD  62

 

	
August 10, 2006

	
ExxonMobil Pipeline Company

	
Stone Energy Corporation

	
Connection Agreement

	  
	
WD 62

	
January 2, 1990, as amended

	
Southern Natural Gas Company

	
Walter Oil and Gas Corporation

	
Construction, Installation, Operation and Maintenance of Measurement and Pipeline Facilities Agreement

	  
	
WD 62

	
June 1, 2002

	
Walter Oil and Gas Corporation

	
Stone Energy Corporation

	
Assignment and Bill of Sale

	  
	
WD 62

	
September 16, 2002 and effective July 1, 2002

	
Southern Natural Gas Company

	
Stone Energy Corporation

	
Adoption, Ratification and Amendment of Construction, Installation, Operation and Maintenance of Measurement and Pipeline Facilities Agreement

	  
	
WD 63

	
May 17, 1999

	
Basin Exploration, Inc.

	
DETMI Management, Inc.

	
Participation Agreement

	  
	
WD 63

	
May 24, 1999 and as amended January 27, 2004

	
Basin Exploration, Inc., as Operator

	
DETMI Management, Inc., as Non-operator

	
Offshore Operating Agreement

	  
	
WD 63 & WD 62

 

	
September 10, 2002

	
Stone Energy Corporation as Owner

	
Duke Energy Hydrocarbons, LLC, et al as Producer

	
Platform Processing Agreement

	  
	
WD 63

 

	
June 10, 2005

	
Peregrine Oil & Gas, LP

	
Stone Energy Corporation

	
Option Agreement

	  
	
WD 63

 

	
June 10, 2005 as amended on January 25, 2006 and May 12, 2006

	
Stone Energy Corporation, et al, as Farmor

	
Peregrine Oil & Gas, LP, as Farmee

	
Farmout Agreement

	  
	
MP 99, 160, 163, 175, 185, 187, 200, 207, 211, 232, 233, 241,

	
11/20/2007, effective 9/1/2007

	
MAGNUM HUNTER PRODUCTION, INC. (SELLER)

	
MARITECH RESOURCES, INC. (PURCHASER)

	
PURCHASE AND SALE AGREEMENT

	  
	
MP 99, 160, 163, 175, 185, 200,

	
10/1/2007

	
MAGNUM HUNTER PRODUCTION, INC. (GATHERER TRANSPORTER)

	
MARITECH RESOURCES, INC., ET AL (PRODUCERS)

	
CONDENSATE GATHERING AND TRANSPORTATION AGREEMENT , PROVIDES FOR CONSTRUCTION, INSTALLATION, MAINTENANCE AND ABANDONMENT OF A 12-MILE CONDENSATE PIPELINE, AND RELATED FACILITEIS, COMPRISING THE MAIN PASS PIPELINE SYSTEM

	  
	
MP 99, 160, 163, 175, 185, 200,

	
12/14/2007

	
MAGNUM HUNTER PRODUCTION, INC. (GATHERER TRANSPORTER)

 

JPMORGAN CHASE, ESCROW AGENT

	
MARITECH RESOURCES, INC., ET AL (PRODUCERS)

	
ESCROW AGREEMENT, PROVIDES FOR ESTABLISHMENT OF AN ESCROW ACCOUNT TO WHICH THE PARTIES DEPOSIT THEIR PROORTIONATE SHARES OF ABANDONMENT COSTS RELATIVE TO MAIN PASS PIPELINE SYSTEM.

	  
	
MP 99, 160, 163, 175, 185, 200,

	
10/1/2007

	
OFFSHORE SHELF, LLC, ET AL (PROCESSORS)

	
MARITECH RESOURCES, INC., ET AL (PRODUCERS)

	
PRODUCTION HANDLING AGREEMENT, PROVIDES FOR HANDLING OF CONDENSATE PRODUCED FROM MAIN PASS PIPELINE SYSTEM WELLS AT THE MP 108 "A" PLATFORM

	  
	
MP 99

	
7/15/2004

	
FOREST OIL CORPORATION (SELLER)

	
MAGNUM HUNGER PRODUCTION, INC. (BUYER)

	
PURCHASE AND SALE AGREEMENT

	  
	
MP 99

	
7/27/2004

	
MAGNUM HUNTER PRODUCTION, INC.

	
NI ENERGY VENTURE INC.

	
LETTER OF INTENT: ACQUISITION OF INTEREST

	  
	
MP 160

	
2/12/2003

	
MAGNUM HUNTER PRODUCTION, INC. (OPERATOR)

	
W&T OFFSHORE, INC. (NON-OPERATOR)

	
OPERATING AGREEMENT OFFSHORE LOUISIANA, COVERS: (1) S/2S/2 MAIN PASS BLOCK 160 FROM SURFACE TO 3,800' MD; AND (2) MAIN PASS BLOCK 163 FROM 5,500' TO 10,100' TVD

	  
	
MP 160

	
2/12/2003

	
MAGNUM HUNTER PRODUCTION, INC.

	
W&T OFFSHORE, INC.

	
PARTICIPATION AGREEMENT

	  
	
MP 160

	
6/29/2005, effective 10/1/2003

	
MAGNUM HUNTER PRODUCTION, INC. (PLATFORM OWNER)

 

	
W&T OFFSHORE, INC., ET AL (PRODUCERS)

	
PRODUCTION HANDLING AGREEMENT, PROVIDES FOR HANDLING OF PRODUCTION FROM MP 163 A-3 WELL AT MP 160 “A” PLATFORM

	  
	
MP 160

	
5/10/2002

	
CALLON PETROLEUM OPERATING COMPANY (FARMOR)

	
MAGNUM HUNTER PRODUCTION, INC. (FARMEE)

	
FARMOUT AGREEMENT

	  
	
MP 160

	
11/12/2002

	
CALLON PETROLEUM OPERATING COMPANY (FARMOR)

	
MAGNUM HUNTER PRODUCTION, INC. (FARMEE)

	
FIRST AMENDMENT TO FARMOUT AGREEMENT: EXTENSION OF TIME

	  
	
MP 160

	
2/19/2003

	
CALLON PETROLEUM OPERATING COMPANY (FARMOR)

	
MAGNUM HUNTER PRODUCTION, INC. (FARMEE)

	
SECOND AMENDMENT TO FARMOUT AGREEMENT

	  
	
MP 160

	
4/9/2003

	
CALLON PETROLEUM OPERATING COMPANY (FARMOR)

	
MAGNUM HUNTER PRODUCTION, INC. (FARMEE)

	
THIRD AMENDMENT TO FARMOUT AGREEMENT

	  
	
MP 160

	
6/3/1996

Effective

4/1/1996

	
MURPHY EXPLORATION AND PRODUCTION COMPANY

	
CALLON PETROLEUM OPERATING COMPANY

	
ACT OF EXCHANGE

	  
	
MP 163

	
2/12/2003

	
MAGNUM HUNTER PRODUCTION, INC. (OPERATOR)

 

	
W&T OFFSHORE, INC. (NON-OPERATOR)

	
OPERATING AGREEMENT OFFSHORE LOUISIANA, COVERS MP 163 FROM 5,500’ TO 10,100’ TVD

	  
	
MP 163

	
2/12/2003

	
MAGNUM HUNTER PRODUCTION, INC.

	
W&T OFFSHORE, INC.

	
PARTICIPATION AGREEMENT

	  
	
MP 163, 164 AND 178

	
6/29/2005

Effective

10/1/2003

	
MAGNUM HUNTER PRODUCTION, INC. (PLATFORM OWNER)

	
W&T OFFSHORE, INC., ET AL (PRODUCERS)

	
PRODUCTION HANDLING AGREEMENT

PROVIDES FOR HANDLING OF PRODUCTION FROM MP 163 #3 WELL AT MP 164 “A” AND MP 178 “A” PLATFORMS

	  
	
MP 163

	
5/10/2002

	
CALLON PETROLEUM OPERATING COMPANY (FARMOR)

	
MAGNUM HUNTER PRODUCTION, INC. (FARMEE)

	
FARMOUT AGREEMENT

	  
	
MP 163

	
11/12/2002

	
CALLON PETROLEUM OPERATING COMPANY (FARMOR)

	
MAGNUM HUNTER PRODUCTION, INC. (FARMEE)

	
FIRST AMENDMENT TO FARMOUT AGREEMENT: EXTENSION OF TIME

	  
	
MP 163

	
2/19/2003

	
CALLON PETROLEUM OPERATING COMPANY (FARMOR)

	
MAGNUM HUNTER PRODUCTION, INC. (FARMEE)

	
SECOND AMENDMENT TO FARMOUT AGREEMENT

	  
	
MP 163

	
4/9/2003

	
CALLON PETROLEUM OPERATING COMPANY (FARMOR)

	
MAGNUM HUNTER PRODUCTION, INC. (FARMEE)

	
THIRD AMENDMENT TO FARMOUT AGREEMENT

	  
	
MP 163

	
6/3/1996

Effective

4/1/1996

	
MURPHY EXPLORATION AND PRODUCTION COMPANY

	
CALLON PETROLEUM OPERATING COMPANY

	
ACT OF EXCHANGE

	  
	
MP 175

	
4/1/2008

	
MARITECH RESOURCES, INC. (PROCESSOR)

 

	
MARITECH RESOURCES, INC., ET AL (PRODUCERS)

	
PRODUCTION HANDLING AGREEMENT, PROVIDES FOR HANDLING OF PRODUCTION FROM MP 185 AT THE MP 175 "A" PLATFORM

	  
	
MP 175

	
4/1/2008

	
MARITECH RESOURCES, INC. (PROCESSOR)

	
MARITECH RESOURCES, INC., ET AL (PRODUCERS)

	
PRODUCTION HANDLING AGREEMENT, PROVIDES FOR HANDLING OF PRODUCTION FROM MP 200 AT THE MP 175"A" PLATFORM

	  
	
MP 175

	
6/1/2006

	
FAIRWAYS OFFSHORE EXPLORATION, INC., ET AL (SELLERS)

	
MAGNUM HUNTER PRODUCTION, INC. (BUYER)

	
ASSET SALE LETTER AGREEMENT, SALE/PURCHASE OF 100% RECORD TITLE INTEREST IN MP 175

	  
	
MP 175

	
7/22/2005,

effective

1/1/2005

	
DEVON ENERGY PRODUCTION COMPANY, L.P., ET AL (SELLER)

	
MARITECH RESOURCES, INC. (BUYER)

	
PURCHASE AND SALE AGREEMENT, 42.49985% RECORD TITLE;

21.24992% OPERATING RIGHTS FROM 4,400' TVD TO 50,000' TVD

	  
	
MP 175

	
6/16/2006

	
MAGNUM HUNTER PRODUCTION, INC.

	
TETRA APPLIED TECHNOLOGIES, LP

	
LETTER AGREEMENT:  RIGHT OF FIRST REFUSAL OF P&A OPERATIONS

	  
	
MP 175

	
12/17/1992

	
TEXAS EASTERN TRANSMISSION CORP.

	
GENERAL ATLANTIC RESOURCES, INC. (PRODUCER)

	
GAS MEASUREMENT & PIPELINE CORROSION INHIBITOR INJECTION AGREEMENT

	  
	
MP 175

	
9/24/1992

	
OPI INTERNATIONAL, INC.

	
GENERAL ATLANTIC RESOURCES, INC.

	
CONTRACT FOR THE TRANSPORTATION & INSTALLATION OF FOUR-PILE PLATFORM

	  
	
MP 175

	
9/17/1992

	
TEXAS EASTERN TRANSMISSION CORP.

	
GENERAL ATLANTIC RESOURCES, INC. (PRODUCER)

	
FACILITIES INTERCONNECT & REIMBURSEMENT AGREEMENT (LETTER AGREEMENT)

	  
	
MP 178

	
8/21/2006

	
SOJITZ ENERGY VENTURE, INC.

	
CIMAREX ENERGY CO.

	
LETTER AGREEMENT: WITHDRAWAL BY SOJITZ

	  
	
MP 178

	
8/1/2004

	
MAGNUM HUNTER PRODUCTION, INC. (SELLER)

	
NI ENERGY VENTURE, INC. (BUYER)

	
PURCHASE AND SALE AGREEMENT

	  
	
MP 178

	
1/3/2002

	
THE CIT GROUP – EQUIPMENT FINANCING, INC.

	
MAGNUM HUNTER PRODUCTION, INC.

	
EQUIPMENT SCHEDULE C-1 TO MASTER LEASE AGREEMENT

	  
	
MP 178

	
10/17/2001

	
TEXAS EASTERN TRANSMISSION CORP. (FORMERLY DUKE ENERGY CO.)

	
MAGNUM HUNTER PRODUCTION, INC.

	
OPERATION & MAINTENANCE AGREEMENT – INTERCONNECTION AGREEMENT FOR MP 178/164

	  
	
MP 178

	
11/17/1999

	
UNION PACIFIC RESOURCES COMPANY (SELLER)

	
MAGNUM HUNTER RESOURCE, INC. (BUYER)

	
PURCHASE AND SALE AGREEMENT

	  
	
 MP 185

	
5/1/2003

	
MAGNUM HUNTER PRODUCTION, INC. (OPERATOR)

	
W&T OFFSHORE, INC., ET AL (NON-OPERATORS)

	
OPERATING AGREEMENT OFFSHORE LOUISIANA, COVERS ALL OF MP 185

	  
	
 MP 185

	
4/1/2008

	
MARITECH RESOURCES, INC. (PROCESSOR)

	
MARITECH RESOURCES, INC., ET AL (PRODUCERS)

	
OPERATING AGREEMENT OFFSHORE LOUISIANA, PRODUCTION HANDLING AGREEMENT, PROVIDES FOR HANDLING OF MP 185 PRODUCTION AT THE MP 175 "A" PLATFORM

	  
	
MP 200

	
7/12/2002

	
MAGNUM HUNTER PRODUCTION, INC. (OPERATOR)

	
REMINGTON OIL AND GAS CORPORATION (NON-OPERATOR)

	
OPERATING AGREEMENT COVERS ALL OF MP 200

	  
	
MP 200

	
4/1/2008

	
MARITECH RESOURCES, INC. (PROCESSOR)

	
MARITECH RESOURCES, INC., ET AL (PRODUCERS)

	
PRODUCTION HANDLING AGREEMENT, PROVIDES FOR HANDLING OF MP 200 PRODUCTION AT THE MP 175 "A" PLATFORM

	  
	
MP 207

	
7/1/2001

	
MAGNUM HUNTER PRODUCTION, INC. (OPERATOR)

	
REMINGTON OIL AND GAS CORPORATION (NON-OPERATOR)

	
OPERATING AGREEMENT OFFSHORE LOUISIANA, COVERS ALL OF MP 207

	  
	
MP 207

	
12/1/2005

	
MAGNUM HUNTER PRODUCTION, INC. (PLATFORM OWNER)

	
SOJITZ ENERGY VENTURE, INC., ET AL (PRODUCER)

	
PRODUCTION HANDLING AGREEMENT, PROVIDES FOR HANDLING OF MP 207 PRODUCTION AT THE MP 178 "A" PLATFORM

	  
	
MP 207

	
9/7/2004

effective

7/1/2004

	
MAGNUM HUNER PRODUCTION, INC. (SELLER)

	
NI ENERGY VENTURE INC. (BUYER)

	
PURCHASE, SALE AND PARTICIPATION AGREEMENT

	  
	
MP 207

	
7/27/2004

	
MAGNUM HUNTER PRODUCTION, INC.

	
NI ENERGY VENTURE INC.

	
LETTER OF INTENT: ACQUISITION OF INTEREST

	  
	
MP 207

	
9/5/2003

	
MAGNUM HUNTER PRODUCTION, INC.

	
NI ENERGY VENTURE

	
LETTER AGREEMENT: MARKETING

	  
	
MP 207

	
9/1/2004

	
MAGNUM HUNTER PRODUCTION, INC.

	
NI ENERGY VENTURE

	
FIRST AMENDMENT TO LETTER AGREEMENT: MARKETING

INCLUDES MP 207

	  
	
MP 211

	
5/1/2002

	
MAGNUM HUNTER PRODUCTION, INC. (OPERATOR)

	
REMINGTON OIL AND GAS CORPORATION (NON-OPERATOR)

	
OPERATING AGREEMENT OFFSHORE LOUISIANA, COVERS ALL OF MP 211

	  
	
MP 211, 232, 233, 241

	
10/1/2008

	
PALM ENERGY OFFSHORE, LLC, ET AL (OPERATOR)

	
MARITECH RESOURCES, INC. (PRODUCER)

	
PRODUCTION HANDLING AGREEMENT, PROVIDES FOR PROCESSING OF PRODUCTION FROM MP 211, 232, 233 & 241 AT THE MP 265 "A" PLATFORM.  THIS PHA SUPERCEDES PHA DTD 10/20/2005 BETWEEN EL PASO PRODUCTION USA, L.P. AND MARITECH RESOURCES, INC.

	  
	
MP 211, 232, 233, 241

	
2/4/2009, effective 10/1/2008

	
PALM ENERGY OFFSHORE, LLC, ET AL (OPERATOR)

	
MARITECH RESOURCES, INC. (PRODUCER)

	
FIRST AMENDED PRODUCTION HANDLING AGREEMENT, SUPERCEDES PHA DTD 10/1/2008 BETWEEN PALM AND MARITECH.

	  
	
MP 211, 232, 241

	
2/9/2009, effective 10/1/2008

	
MARITECH RESOURCES, INC. (PLATFORM OPERATOR/GATHERER)

	
ENERGY RESOURCE TECHNOLOGY (GOM), INC., ET AL (PRODUCERS)

	
GATHERING AND PRODUCTION HANDLING AGREEMENT, PROVIDES FOR GATHERING OF PRODUCTION FROM MP 211, 232 AND 241 AND HANDLING OF PRODUCTION AT THE MP 265 "A" PLATFORM

	  
	
MP 232

	
5/1/2001

	
MAGNUM HUNTER PRODUCTION, INC. (OPERATOR)

	
REMINGTON OIL AND GAS CORPORATION (NON-OPERATOR)

	
OPERATING AGREEMENT OFFSHORE LOUISIANACOVERS ALL OF MP 232

	  
	
MP 233

	
7/1/2002

	
MAGNUM HUNTER PRODUCTION, INC. (OPERATOR)

	
REMINGTON OIL AND GAS CORPORATION (NON-OPERATOR)

	
OPERATING AGREEMENT OFFSHORE LOUISIANA, COVERS ALL OF MP 233

	  
	
MP 233

	
2/9/2009, effective 10/1/2008

	
ENERGY RESOURCE TECHNOLOGY (GOM), INC., ET AL (PRODUCERS)

	
MARITECH RESOURCES, INC. (PLATFORM OPERATOR/GATHERER)

	
GATHERING AND PRODUCTION HANDLING AGREEMENT, PROVIDES FOR GATHERING OF PRODUCTION FROM MP 233 AND HANDLING OF PRODUCTION AT THE MP 265 "A" PLATFORM

	  
	
MP 233

	
2/13/2009, effective 1/1/2009

	
MARITECH RESOURCES, INC. (CONTRACT OPERATOR)

	
ENERGY RESOURCE TECHNOLOGY (GOM), INC.

	
AGREEMENT FOR CONTRACT OFFSHORE OPERATIONS, PROVIDES FOR CONTRACT OPERATIONS PERFORMED BY MARITECH FROM THE MP 242 "A" PLATFORM

	  
	
MP 241

	
11/20/2007

	
MAGNUM HUNTER PRODUCTION, INC. (OPERATOR)

	
REMINGTON OIL AND GAS CORPORATION (NON-OPERATOR)

	
OPERATING AGREEMENT OFFSHORE LOUISIANA, COVERS ALL OF MP 241

	  
	
MP 242

	
6/30/2005

	
EL PASO PRODUCTION COMPANY, ET AL (SELLER)

	
MARITECH RESOURCES, INC. (BUYER)

	
PURCHASE AND SALE AGREEMENT, EXHIBIT 2.1 PROVIDES AMOUNTS OF ABANDONMENT CONTRIBUTIONS

	  
	
MP 242

	
3/9/2006

	
EL PASO PRODUCTION COMPANY, ET AL (SELLER)

	
MARITECH RESOURCES, INC. (BUYER)

	
AMENDMENT TO PURCHASE AND SALE AGREEMENT, REPLACES EXHIBIT 2.1 WITH NEW EXHIBIT 2.1 "PURCHASE PRICE PAYMENT" -- ABANDONMENT CONTRIBUTIONS

	  
	  	  	  	  	  	  
	  	  	  	  	  	  
	
MP 211, 232, 233, 241

	
11-1-08

	
DCP Mobile Bay Processing (Processor)

	
MARITECH RESOURCES, INC. (PRODUCER)

	
GAS PROCESSING AGREEMENT

	  
	
MP 99, 160, 163, 175, 185, 200,

	
6/17/2008

	
W&T OFFSHORE, INC.

 

	
MARITECH RESOURCES, INC.

	
FLASH GAS MARKETING LETTER AGREEMENT

	  
	
 

MP 99, 160, 163, 175, 185, 200,

	
 

2/17/2011

	
 

W&T OFFSHORE, INC.

 

	
 

MARITECH RESOURCES, INC.

	
 

LETTER AGREEMENT -- TRANSPORTATION OF CONDENSATE THRU LLOG PIPELINE

	  
	
Timbalier Bay

	
10/25/2007

	
CHEVRON PIPELINE COMPANY

	
MARITECH TIMBALIER BAY, L.P.

	
CONNECTION AGREEMENT,

PROVIDES FOR CONNECTION OF MARITECH'S LATERAL PL TO CHEVRON'S FOURCHON TERMINAL PL

 

 

	  
	
Timbalier Bay

	
7/7/2005, effective 4/1/2005

	
PIONEER NATURAL RESOURCES USA, INC.

	
MARITECH RESOURCES, INC.

	
PURCHASE AND SALE AGREEMENT

	  
	
Timbalier Bay

	
4/16/2007

	
CHEVRON PIPELINE COMPANY

	
MARITECH RESOURCES, INC.

	
LETTER AGREEMENT

	  
	
Timbalier Bay

	
10/1/2008

	
ENERGY XXI GOM, LLC

	
MARITECH RESOURCES, INC.

	
SCRUBBER LIQUIDS HANDLING AGREEMENT

	  
	
Timbalier Bay

	
April 1, 2010

	
Targa Resources

	
MARITECH RESOURCES, INC.

	
Gas Processing Agreement

	  
	
Timbalier Bay

	
9/2/2005

	
SHELL Trading US Company

	
MARITECH RESOURCES, INC.

	
Crude Sales Contract

	  
	
Timbalier Bay

	
3/1/2007

	
MARITECH TIMBALIER BAY, L.P.

	
ENERGY XXI GOM, L.L.C.

	
TIMBALIER BAY INTERCONNECTING PIPELINE CONSTRUCTION AND OPERATING AGREEMENT PROVIDES FOR CONSTRUCTION AND OPERATION OF INTERCONNECTING LATERAL P/L AND GATHERING OF PRODUCTION FROM TIMBALIER BAY FIELD AND SOUTH TIMBALIER BLOCK 21

	  

 

 

 

 

 

 

 

EXHIBIT 1.1 (H) - RELATED ASSETS

 

Attached to and made a part of that certain

Purchase and Sale Agreement dated April 1, 2011, but effective January 1, 2011,

by and between Maritech Resources, Inc. and Tana Exploration Company LLC

 

	
PLATFORMS  OPERATED

	  	  	  	  	  	  	  	  	  	  	  	  	  
	  	  	  	  	
LATITUDE

	
LONGITUDE

	  	  	  	  	  	  	  
	
Block / Lease Platform Description

	
Lease

(OCS #)

	
Facility ID Station

	
D

	
M

	
SEC

	
D

	
M

	
SEC

	
Year Installed

	
Water Depth

	
Deck Height

	
MRI Working Interest

	
STRUCTURE

 TYPE

	
NO. OF

SLOTS

	
FUNCTION

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
OGSYS PN#

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
EAST CAMERON 328

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
5100501

	
EC 328 B

	
G10638

	
1991-1

	
28

	
10

	
26.35

	
92

	
41

	
7.883

	
2007

	
        243

	
    57.00

	
50.000%

	
4-P

	
10

	
PROD

	  	
EC 328 C

	
G10638

	
2387-1

	
28

	
10

	
48.25

	
92

	
41

	
40.27

	
2010

	
        243

	
    60.00

	
50.000%

	
4-P

	
9

	
WP

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
MAIN PASS AREA

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
7500500

	
MP 99

	
G21703

	
1475-1

	
29

	
34

	
0.85

	
88

	
39

	
32.98

	
2004

	
          65

	
52

	
100.000%

	
B-CAIS

	
1

	
WP

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
7510500

	
MP 160

	
G5245

	
1292-1

	
29

	
38

	
39.26

	
88

	
30

	
43.06

	
2003

	
        124

	
60

	
60.000%

	
B-CAIS

	
1

	
WP

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
7520500

	
MP 164

	
G21143

	
948-1

	
29

	
38

	
12.06

	
88

	
29

	
15.58

	
2001

	
        135

	
72.6

	
100.000%

	
TRI

	
2

	
JUNC

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
7550500

	
MP 175

	
G08753

	
24126-1

	
29

	
34

	
40.93

	
88

	
21

	
17.57

	
1992

	
        137

	
52.6

	
100.000%

	
4-P

	
4

	
PROD

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
7570500

	
MP 178

	
G18105

	
972-1

	
29

	
34

	
36.23

	
88

	
28

	
22.03

	
2001

	
        150

	
58.3

	
100.000%

	
TRI

	
3

	
PROD

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
7610001

	
MP 185 (Subsea)

	
G25033

	
N/A

	
29

	
32

	
47.85

	
88

	
21

	
57.02

	
2005

	
155

	
NA

	
46.670%

	
NONE

	
1

	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
7630001

	
MP 187 (Subsea)

	
G02157

	
N/A

	
29

	
32

	
48.43

	
88

	
16

	
31.39

	
2006

	
142

	
NA

	
100.000%

	
NONE

	
1

	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
7640001

	
MP 200 (Subsea)

	
G23979

	
N/A

	
29

	
29

	
45.39

	
88

	
19

	
32.4

	
2006

	
163

	
NA

	
50.000%

	
NONE

	
1

	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
7660500

	
MP 207

	
G22802

	
1503-1

	
29

	
27

	
50.23

	
88

	
34

	
45.96

	
2005

	
        174

	
56

	
40.000%

	
TRI

	
3

	
PROD

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
7680001

	
MP 211 (Subsea)

	
G22803

	
N/A

	
29

	
26

	
30.48

	
88

	
21

	
43.23

	
2006

	
178

	
NA

	
50.000%

	
NONE

	
1

	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
7700002

	
MP 232 (Subsea)

	
G22806

	
N/A

	
29

	
25

	
0.03

	
88

	
23

	
16.39

	
2007

	
178

	
NA

	
50.000%

	
NONE

	
1

	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
7720002

	
MP 241 (Subsea)

	
G22808

	
N/A

	
29

	
22

	
49.3

	
88

	
23

	
51.75

	
2006

	
186

	
NA

	
50.000%

	
NONE

	
1

	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
8030500

	
MP 242 A Platform

	
G12096

	
672-1

	
29

	
21

	
50.19

	
93

	
19

	
0.413

	
2000

	
   196.00

	
59

	
100.000%

	
TRI

	
3

	
PROD

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
TIMBALIER BAY

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
8300522

	
SF 1 & 22 well cribbings/flflowlines,

6 valve plats, gas Junc. Plat

	
PP-192

	
State

	
29

	
5

	
29

	
90

	
18

	
30

	
1950

	
           5

	
    14.00

	
100.000%

	  	  	
JUNC

	
8300523

	
SF 4A & 3 well cribbings/flow lines,

6 valve plats

	
PP-192

	
State

	
29

	
5

	
15.23

	
90

	
17

	
48.15

	
2007

	
           9

	
    14.70

	
100.000%

	  	  	
PROD

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
8300529

	
SF 5  A & 35 well cribbings and flowlines

	  	
State

	
29

	
4

	
39.4

	
90

	
19

	
2.8

	
2009

	
           5

	
    16.00

	
100.000%

	  	  	
PROD

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
8300521

	
SF CF & 30 well cribbings, flow lines, 2 SWD wells, 1 valve plat, SF2, SF3, Sat. Bulk Header Plat, PL Pump plat

	
Cent Fac

	
State

	
29

	
4

	
6

	
90

	
19

	
27

	
1950

	
           5

	
 Various

	
100.000%

	  	  	
PROD

	
8300520

	
Comp Station & Dehy Plat, Air Comp Plat, Gen. Bldg., MRI Qtrs., Camp Hill Bldg.

	  	
State

	  	  	  	  	  	  	  	  	  	  	  	  	
PROD

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
WEST DELTA 58

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
8496500

	
E PLATFORM

	
G00146

	
773-1

	
29

	
1

	
14.33

	
89

	
31

	
53.45

	
2000

	
49

	
51.75

	
70.840%

	
CAIS

	
3

	
WP

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
WEST DELTA 59

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
8497501

	
CAISSON #1

	
G16473

	
600-1

	
29

	
0

	
45.58

	
89

	
32

	
37.52

	
2002

	
60

	
40

	
46.930%

	
CAIS

	
1

	
WP

	
8497502

	
CAISSON #2

	
G16473

	
856-1

	
29

	
0

	
14.24

	
89

	
33

	
22.24

	
2001

	
60

	
40

	
46.930%

	
CAIS

	
1

	
WP

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
WEST DELTA 61

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
8498500

	
B PLATFORM

	
G03186

	
368-1

	
29

	
0

	
44.7

	
89

	
36

	
35.19

	
1998

	
105

	
55

	
90.000%

	
4-P

	
3

	
PROD

	
8498501

	
C PLATFORM

	
G03186

	
1480-1

	
29

	
0

	
12.37

	
89

	
37

	
50.66

	
2004

	
133

	
56

	
90.000%

	
B-CAIS

	
1

	
WP

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
WEST DELTA 62

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
8499500

	
A Platform

	
G23559

	
23817-1

	
29

	
1

	
19.59

	
89

	
39

	
49.54

	
1998

	
120

	
51.7

	
100.000%

	
6-P

	
4

	
PROD

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
WEST DELTA 63

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
8500500

	
A Platform

	
G19839

	
582-1

	
29

	
0

	
38.51

	
89

	
40

	
28.53

	
1999

	
136

	
45

	
100.000%

	
4-P

	
2

	
WP

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  

 

 

 

 

EXHIBIT 1.1 (J) VEHICLES AND VESSELS

 

Attached to and made a part of that certain Purchase and Sale Agreement dated April 1, 2011, but effective January 1, 2011, by and between Maritech Resources, Inc. and Tana Exploration Company LLC

 

	  	  	
Registration

	  	
Type

	
Propulsion

	  	
Hull

	  
	
Vessel

	
Registration No.

	
Expiration Date

	
Decal No.

	
Propulsion

	
Serial Number

	
Hull Description

	
Manufacturer

	
Hull ID No.

	
MV Miss Annalisa

	
LA-0903-HA

	
9/12/2013

	
09356-13

	
GM 6V-71(165HP)

	
N/A

	
1968 - 26' Alum Joboat

	
N/A

	
N/A

	
MV Miss Elise

	
APPLIED 8/16/2010

	  	  	  	
NA

	
1979 - 26 ft Monarch Alum Joboat

	
Monarch

	
MAK35330099

	
MV Miss Marilyn

	
LA-7818-BK

	
9/23/2012

	
107443-12

	
GM 6V-71(165HP)

	
N/A

	
1985 - 29' Alum Joboat

	
HMDE

	
LAZ01514H585

	
MV Miss Mindy

	
LA-3331-BB

	
8/11/2013

	
087158-13

	
GM 6V-71(165HP)

	
N/A

	
1983 - 30' Alum Joboat

	
HMDE

	
LAZ49794J583

	
MV Miss Melinda

	
LA-1272-BD

	
2/27/2011

	
033025-11

	
GM 6V-71(165HP)

	
N/A

	
1984 - 29' Alum Joboat

	
HMDE

	
LAZ25744B084

	
MV Miss Michelle

	
Official USCG #  1178756

	
8/6/2010

	
-

	
2 - 225 HP Honda

	
N/A

	
2005 - 34' Aluminum

	
BPL Boats

	
LQNWK003D505

	
MV Miss Pat

	
LA-8695-FW

	
10/1/2013

	
105757

	
2 - 150 HP Yamaha

	
63 PX 1094084 63PX 1093629

	
2010 - 26' 06" Aluminum

	
Scully's

	
GOK01677G010

	
MV Sherri L

	
N/A

	
NA

	
NA

	
1 - 90 HP Honda

	
N/A

	
 20' Aluminum Joboat

	
N/A

	
N/A

	
MV Miss Suzy

	
APPLIED 11/1/2010

	  	  	
2 - 200 HP Yamaha

	
60LX102901   60MX1001844

	
2010 - 28' 06" Aluminum

	
Scully's

	
GOK01687H010

	
GPC Work Barge 14511

	
LA-4552-BU

	
9/23/2012

	
107213-12

	
TWIN GM 6-71(180HP)

	
N/A

	
1978 - 88' Steel Work Barge

	
N/A

	
N/A

	
Miss Judi - Quarters Barge

	
645150

	
NA

	
           N/A

	
N/A

	
N/A

	
1982 - 120.1x30.1x6.6 Steel Barge

	
N/A

	
N/A

	
Aluminum Barge

	
LA-1511-FK

	
5/26/2013

	
047636-13

	
N/A

	
N/A

	
2004 - 10' x 18' x 24" Alum. Barge

	
Quirk

	
LQWBG001D404

	
Flatboat  -  Flying Handrail

	
LA-2736-FF

	
3/12/2011

	
033027-11

	
25 hp Yamaha

	  	
2001 15' Alum Flatboat

	
Hanko

	
HKO43634A002

	
Flatboat - The Hand

	
LA-6049-FH

	
6/25/2009

	
059151

	
25 hp Yamaha

	  	
2003 16' Alum Flatboat

	
Hanko

	
HKO43756E303

	
Flatboat  - SF#5

	
LA-8367-FJ

	
4/22/2013

	
039149-13

	
25 hp Yamaha

	  	
2004 16' Alum Flatboat

	
Hanko

	
HKO43820C404

	
Flatboat

	
LA-7421-FP

	
3/19/2013

	
030767-13

	
25 hp Yamaha

	  	
2007 16' Alum Flatboat

	
Hanko

	
HKO44063B707

	
Vechicles

	  	  	  	  	  	  	  	  
	
Division

	
VIN

	
State

	
Make Name

	
VIN Model

	
Mailings

	
Model Year

	
Model Name

	
Lic Plate

	
MARITECH

	
1FTRX12W25FA70520

	
LA

	
FORD

	
F150

	
LAFAYETTE2

	
2005

	
F150

	
B550543

	
MARITECH

	
1FTRX12W65FA70522

	
LA

	
FORD

	
F150

	
LAFAYETTE

	
2005

	
F150

	
B550534

  

  

  

 

Exhibit 1.2 (K) - Excluded Claims

Attached to and made a part of that certain Purchase and Sale Agreement

dated effective April 1, 2011, but effective January 1, 2011, by and between

Maritech Resources, Inc. and Tana Exploration Company LLC

TAXES

 

 

Cynthia Bridges, Secretary, Louisiana Department of Revenue and Taxation vs. Maritech Resources, Inc., Docket No. 597831 in the 19th Judicial District, State of Louisiana, Parish of Baton Rouge.

 

The Plaintiff in this proceeding alleges that Seller underpaid severance taxes on crude oil during the period from January 1, 2007 through December 31, 2010 with respect to “crude oil produced in Louisiana from the following fields, including but not limited to; Timbalier Bay, Ship Shoal Block 47 and Lake Hermitage.”

 

 

 

 

 

 

EXHIBIT 1.2 (N)

 

EC 328 “A” Platform P&A Obligations

 

Attached to and made a part of that certain

Purchase and Sale Agreement dated April 1, 2011, but effective January 1, 2011,

by and between Maritech Resources, Inc. and Tana Exploration Company LLC

 

 

 

	
1.  

	
Maritech retains all of its right, title and interest in the EC 328 “A” Platform toppled platform located in East Cameron, Block 328:

 

 

East Cameron, Block 328

 

	
Platform ID

	
Lease Number

	
Platform

	
Location

	  	
27008 - 1

	
G-10638

	
A

	
EC 328: 3,428’ FNL; 7,013’ FWL

 

 

 

 

EXHIBIT 1.2 (O) – Excluded Property and Easements

Attached to and made a part of that certain Purchase and Sale Agreement

dated effective April 1, 2011, but effective January 1, 2011, by and between

Maritech Resources, Inc. and Tana Exploration Company LLC

 

NONE

 

 

 

 

 

 

 

 

 

EXHIBIT 1.2 (P) – Disposal Vessels and Equipment

Attached to and made a part of that certain Purchase and Sale Agreement

dated effective April 1, 2011, but effective January 1, 2011, by and between

Maritech Resources, Inc. and Tana Exploration Company LLC

TIMBALIER BAY FIELD

LAFOURCHE PARISH, LOUISIANA

	
·  

	
4 vessels located on a storage barge located in the Timbalier Bay field on the northside of the compressor complex. The vessels are currently, as of March 31, 2011, located on the storage barge and consist of the following:

	
o  

	
12’ x 34” separator

	
o  

	
Heater from SF4

	
o  

	
Small storage tank

	
o  

	
Heater from SF5

	
·  

	
Maritech is in the process of cleaning and removing the vessels from the barge and the Timbalier Bay field

  

  

  

 

EXHIBIT 15.2 (A)

 

Attached to and made a part of that certain Purchase and Sale Agreement dated April 1, 2011, but effective January 1, 2011, by and between Maritech Resources, Inc. and Tana Exploration Company LLC

ASSIGNMENT, CONVEYANCE, AND BILL OF SALE

This Assignment, Conveyance, and Bill of Sale (“Assignment”), dated effective as of 7:00 a.m. local time where the Lands (as defined below) are located on the 1st day of January, 2011 (the “Effective Time”), is from Maritech Resources, Inc., a Delaware corporation, whose address is 24955 Interstate 45 North, The Woodlands, Texas 77380 (“Assignor”) to Tana Exploration Company LLC, a Delaware limited liability company, whose address is 1301 Fannin Street, Suite 2100, Houston, Texas 77002 (“Assignee”).

FOR AND IN CONSIDERATION of the sum of One Hundred and No/100 Dollars ($100.00) in hand paid by Assignee to Assignor and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor does hereby ASSIGN, TRANSFER, CONVEY and DELIVER unto Assignee all of Assignor’s right, title and interest in and to the following (collectively, the “Assets”).

	
(A)  

	
The oil and gas leases described on Exhibit 1.1(A) (including all working interests, royalty interests, overriding royalty interests, net profits interests, production payments, reversionary rights and all other interests therein, whether described or not), insofar, and only insofar as such leases cover the lands and, where indicated, depths described on Exhibit 1.1(A) (the “Lands”) (such leases, insofar as they cover the Lands, being referred to herein as the “Leases”);

 

	
(B)  

	
the facilities and lands described on Exhibit 1.1(B) (the “Properties”);

 

	
(C)  

	
All wells located on or associated with the Leases or Lands (whether producing, not producing or abandoned) (the “Wells”), including, without limitation, the Wells identified on Exhibit 1.1(C);

 

	
(D)  

	
To the extent assignable or transferable, all easements, rights of way, licenses, permits, servitudes and other rights, privileges, benefits and powers to the extent used in connection with the operation of the Leases, Units (as hereinafter defined), Wells, or Related Assets (hereinafter defined) (collectively, the “Easements”), including, without limitation, the Easements identified on Exhibit 1.1(D);

 

	
(E)  

	
All rights, obligations and interests in any unit or pooled area in which the Leases are included, including all interests in any Wells within the Units associated with the Leases, together with the rights in and to all existing and effective unitization, pooling and communitization agreements, declarations and orders, and the properties covered and the Units created thereby, to the extent they relate to or affect any of the Leases, Lands, Properties and Wells (the “Units”);

 

  

  

  

 

	
(F)  

	
All of the oil and gas and associated hydrocarbons in, on and under or that may be produced from or otherwise attributable to the Lands, the Leases, the Units or the Properties (“Hydrocarbons”) from and after the Effective Time;

 

	
(G)  

	
To the extent assignable and applicable to the Assets, all hydrocarbon purchase and sale agreements, farmin agreements, farmout agreements, bottom hole agreements, acreage contribution agreements, operating agreements, unit agreements, processing agreements, options, leases of equipment or facilities, joint venture agreements, pooling agreements, transportation agreements, rights-of-way and other contracts, agreements and rights, which are owned by Assignor, in whole or in part, and are appurtenant to the Leases, Lands, Wells, Units or Properties, or used in connection with the sale, distribution or disposal of Hydrocarbons or water from the Leases, Lands, Wells, Units or Properties (collectively, the “Contracts”), including, without limitation, the Contracts identified on Exhibit 1.1(G);

 

	
(H)  

	
All well equipment; platforms, caissons and other such structures; pipelines, flowlines, gathering systems, plants, piping, buildings, treatment facilities, disposal facilities, injection facilities, compressors, casing, tanks, tubing, pumps, pumping units, motors, fixtures, machinery and other equipment located in or on the Leases, Lands, Wells, Units or Properties or used in the operation thereof which are owned by Assignor, in whole or in part (the “Related Assets”), including, without limitation, the Related Assets identified on Exhibit 1.1(H);

 

	
(I)  

	
To the extent assignable, all governmental permits, licenses and authorizations, as well as any applications for the same, related to the Leases, Lands, Wells, Units, Properties, Contracts or Related Assets, or the use thereof;

 

	
(J)  

	
All vessels and vehicles used in the operation of the Assets, including without limitation the vessels and vehicles listed on Exhibit 1.1(J); and

 

	
(K)  

	
All of Assignor’s files, records and data relating to the items described in subsections (A) through (J) above, including, without limitation, all lease, well, division order and other title records (including title curative documents); surveys, maps and drawings; contracts; correspondence; regulatory, geological records and information; production records, electric logs, core data, pressure data, decline curves, graphical production curves and all related matters and construction documents; and Assignor’s proprietary geophysical and seismic records and interpretations of same, data and related information, if any, that is not subject to contractual restrictions on disclosure or transfer (collectively, the “Records.”)

 

  

2

  

 

TO HAVE AND TO HOLD the Assets, together with all the property, rights, privileges, benefits and appurtenances in any way belonging to, incidental to, or appertaining thereto, unto Assignee and its successors and assigns forever, subject to the reservation, exception, and other matters in this Assignment.

The Assets do not include, and Assignor expressly reserves and excepts from this Assignment, the following (collectively, the “Excluded Assets”):

	
  

	
(A)

	
all credits, rebates, refunds, adjustments, accounts, instruments and general intangibles, and all insurance claims, all to the extent attributable to the Assets with respect to any period of time prior to the Effective Time and received by Buyer or Seller within eighteen (18) months after May 31, 2011;

 

	
  

	
(B)

	
to the extent monetary settlement for same is received by Buyer or Seller within eighteen (18) months after May 31, 2011, all claims of Assignor for refunds of or loss carry forwards with respect to (i) ad valorem, severance, production or any other taxes attributable to any period prior to the Effective Time, (ii) income or franchise taxes of Assignor, or (iii) any taxes attributable to the other Excluded Assets, and such other refunds, and rights thereto, for amounts paid in connection with the Assets and attributable to the period prior to the Effective Time, including refunds of amounts paid under any gas gathering or transportation agreement;

 

	
  

	
(C)

	
all proceeds, income or revenues (and any security or other deposits made) attributable to (i) to the extent monetary settlement for same is received by Buyer or Seller within eighteen (18) months after May 31, 2011, the Assets for any period prior to the Effective Time, or (ii) any other Excluded Assets;

 

	
  

	
(D)

	
all of Assignor’s proprietary computer software, technology, patents, trade secrets, copyrights, names, trademarks, logos and other intellectual property;

 

	
  

	
(E)

	
all of Assignor’s rights and interests in geological and geophysical data which cannot be transferred without the consent of, or payment to, any third party unless Assignee obtains the applicable consent or makes the applicable payment;

 

	
  

	
(F)

	
all documents and instruments of Assignor that are protected by an attorney-client privilege (other than title opinions);

 

  

3

  

 

	
  

	
(G)

	
data and other information that cannot be disclosed or assigned to Assignee as a result of confidentiality or similar arrangements under agreements with persons unaffiliated with Assignor;

 

	
  

	
(H)

	
any and all files, records, contracts and documents relating to Assignor’s efforts to sell the Assets (or any other discussions or negotiations regarding the sale or other disposition of any of the Assets), including any research, valuation or pricing information prepared by Assignor and/or its consultants in connection therewith, and any bids received for such interests and information and correspondence in connection therewith;

 

	
  

	
(I)

	
to the extent monetary settlement for same is received by Buyer or Seller within eighteen (18) months after May 31, 2011, all audit rights arising under any of the Contracts or otherwise with respect to any period prior to the Effective Time or with respect to any of the other Excluded Assets;

 

(J)           all corporate, partnership, and income tax records of Assignor;

 

	
  

	
(K)

	
all claims arising from acts, omissions or events, or damage to or destruction of the Assets before the Effective Time listed on Exhibit 1.2(K) of the Purchase and Sale Agreement and all rights, titles, claims and interests of Assignor related thereto (i) under any policy or agreement of insurance or indemnity, (ii) under any bond or letter of credit, or (iii) to any insurance or condemnation proceeds or awards;

 

	
  

	
(L)

	
all bonds posted by Assignor;

 

	
  

	
(M)

	
all of Assignor’s right, title and interest in, to and under the Contribution Agreements, as more fully described in the Purchase and Sale Agreement, as defined herein;

 

	
  

	
(N)

	
all obligations to plug, abandon and remove the East Cameron 328 A Platform (together with all obligations to plug, abandon and/or remove all wells, equipment, pipeline segments, subsurface debris and obstructions related thereto, as set forth on Exhibit 1.2(N) of the Purchase and Sale Agreement, the “EC 328 A Platform P&A Obligations”);

 

	
  

	
(O)

	
the property described in Exhibit 1.2(O) of the Purchase and Sale Agreement, together with an undivided interest in all easements, rights-of-way, licenses, permits, servitudes, surface leases, surface use agreements, and similar rights, obligations and interests, to the extent they are attributable and allocable to rights and interests so retained by Assignor; and

 

	
  

	
(P)

	
the equipment, material and barge currently located at Timbalier Bay and described on Schedule 1.2(P) of the Purchase and Sale Agreement.

 

  

4

  

 

The Assets are hereby assigned and conveyed by Assignor and accepted by Assignee without warranty of title express, implied, or statutory.

EXCEPT AS EXPRESSLY PROVIDED IN THE PURCHASE AND SALE AGREEMENT AS DEFINED HEREIN, THE ASSETS ARE TO BE HEREBY ASSIGNED “AS IS AND WHERE IS,” “WITH ALL FAULTS” AND WITHOUT WARRANTY OF ANY KIND, WHETHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF TITLE, MERCHANTABILITY, CONDITION OR FITNESS FOR A PARTICULAR PURPOSE. ASSIGNEE HEREBY ACCEPTS THE ASSETS “AS IS,” “WHERE IS,” AND “WITH ALL FAULTS” AND IN THEIR PRESENT CONDITION AND STATE OF REPAIR. ASSIGNOR AND ASSIGNEE FURTHER NEGATE ANY RIGHTS OF ASSIGNEE UNDER STATUTES TO CLAIM DIMINUTION OF CONSIDERATION AND ANY CLAIMS BY ASSIGNEE FOR DAMAGES BECAUSE OF REDHIBITORY VICES OR DEFECTS, WHETHER KNOWN OR UNKNOWN.

 

Notwithstanding the above limitation of warranties, this Assignment is made with rights of substitution and subrogation of Assignee in and to all rights and actions of warranty against previous owners, assignors and grantors, to the extent the same are transferable.

 

This Assignment is made subject to and is burdened by the terms, covenants and conditions contained in all valid and subsisting product sales contracts, processing contracts, gathering contracts, transportation contracts, farm-in and farm-out contracts, areas of mutual interest, operating agreements, balancing contracts, and other contracts, agreements and instruments relating to or burdening the Assets; and on and after the Effective Time, Assignee agrees to be bound by, assume the obligations arising under, and perform all of the terms, covenants and conditions contained therein.

 

This Assignment is made subject to all applicable laws, statutes, ordinances, permits, decrees, orders, judgments, rules and regulations that are promulgated, issued or enacted by a governmental entity having jurisdiction, and Assignee agrees to comply with the same on and after the Effective Time.

 

The terms, covenants and conditions contained in this Assignment are binding upon and inure to the benefit of the Parties and their respective successors and assigns, and such terms, covenants and conditions are covenants running with the land and with each subsequent transfer or assignment of the Assets or any part thereof.

 

This Assignment is made in accordance with and is subject to the terms, covenants and conditions contained in that certain Purchase and Sale Agreement dated March __, 2011, by and between Assignor, and Assignee (the “Purchase and Sale Agreement”), a copy of which can be obtained from Assignee at the above referenced address. The terms and conditions of the Purchase and Sale Agreement are incorporated herein by reference, and if there is a conflict between the provisions of the Purchase and Sale Agreement and this Assignment, the provisions of the Purchase and Sale Agreement shall control.

 

This Assignment is intended to assign and convey all the Assets being assigned and conveyed pursuant to the Purchase and Sale Agreement. Some of the Assets assigned by this 

 

  

5

  

 

Assignment may require approval to transfer by a government entity, and as such may require separate assignment instruments made on officially approved forms, or forms acceptable to such government entity, in sufficient multiple originals to satisfy applicable statutory and regulatory requirements. The interests conveyed by such separate assignments are the same, and not in addition to, the interests conveyed in this Assignment.

 

This Assignment may be executed in multiple counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.

 

  

6

  

 

EXECUTED on the respective dates set forth in the acknowledgments below but effective for all purposes as of the Effective Time.

 

 

ASSIGNOR

MARITECH RESOURCES, INC.

By:                                                                    

      Edgar A. Anderson, President

 

ASSIGNEE

 

TANA EXPLORATION COMPANY LLC

By:                                                             

      Kevin D. Talley, President

  

7

  

 

EXHIBIT 15.2 (B)

 

Attached to and made a part of that certain Purchase and Sale Agreement dated April 1, 2011, but effective January 1, 2011, by and between Maritech Resources, Inc. and Tana Exploration Company LLC

 

Certificate as to Non-Foreign Status

 

Section 1445 of the Internal Revenue Code of 1986, as amended (the “Code”), provides that a buyer of a U.S. real property interest must withhold tax if the transferor is a “foreign person” as defined in the Code.  For U.S. tax purposes (including section 1445 of the Code), the owner of a disregarded entity (which has legal title to a U.S. real property interest under local law) will be the transferor of the property and not the disregarded entity.  To inform the transferee, Tana Exploration Company LLC, a Delaware limited liability company (“Buyer”), that withholding of tax is not required upon the disposition by Maritech Resources, Inc., a Delaware corporation (“Seller”), of a U.S. real property interest in various offshore Louisiana and Outer Continental Shelf oil and gas leases and related properties, the undersigned hereby certifies the following on behalf of Seller:

 

	
1.  

	
Seller is not a foreign corporation, foreign partnership, foreign trust, or foreign estate (as those terms are defined in the Code and the Treasury Regulations promulgated thereunder);

 

	
2.  

	
Seller is not a disregarded entity as defined in Treasury Regulation §1.1445-2(b)(2)(iii);

 

	
3.  

	
Seller’s U.S. employer identification number is ___________________; and

 

	
4.  

	
Seller’s office address is:

 

Maritech Resources, Inc.

24955 Interstate 45 North

The Woodlands, TX 77380

Seller understands that this certification may be disclosed to the Internal Revenue Service by Buyer and that any false statement contained herein could be punished by fine, imprisonment, or both.

 

Under penalties of perjury I, the undersigned, declare that I have examined this certification and to the best of my knowledge and belief it is true, correct and complete, and I further declare that I have authority to sign this document on behalf of Seller.

 

Maritech Resources, Inc.

By:                                                                                         

Name:  Edgar A. Anderson                                                               

Title:  President                                                              

Date: 4/1/2011                                          

 

 

  

  

  

 

TANA EXPLORATION COMPANY, LLC

 

May 31, 2011

Maritech Resources, Inc.

24955 Interstate 45 North

The Woodlands, TX  77380

Attention: Mr. Edgar Anderson, President

 

	
  

	
Re:

	
First Amendment to Purchase and Sale Agreement (“PSA”) dated April 1, 2011 by and between Maritech Resources, Inc. (“Seller”) and Tana Exploration Company LLC (“Buyer”) regarding Employee Related Closing Adjustments

 

Gentlemen:

Buyer intends for this letter to serve as an amendment to the PSA.  Capitalized terms not defined in this letter agreement shall have the meanings given in the PSA.

Buyer proposes that the following actions be taken at the Closing of the transaction contemplated by the PSA, in addition to those already called for in the PSA:

	
1)

	
Seller will credit to Buyer, at Closing as a Purchase Price Adjustment, an amount equal to $80,960.53, being the total of all “Total Closing Statement Adjustments” for all employees shown on Exhibit 1.

	
2)

	
Buyer will credit each employee with the amount of personal time off (“PTO”) days for use during the remainder of 2011 that corresponds to the number of days indicated for such employee in the column with the heading “PTO Days to be Transferred to Buyer” on Exhibit 1.

	
3)

	
Buyer will credit each employee with or deposit for the benefit of such employee, as applicable, the amount of positive flex spending account (“FSA”) funds indicated for such employee in the column with the heading “FSA Balance to be Transferred to Buyer” on Exhibit 1.  Such credit or deposit in Buyer’s FSA program will be effective immediately upon such employee being eligible for Buyer’s FSA program.

Seller states that it has distributed to all of the employees listed on Exhibit 1 a copy of the Disclosure and PTO Election Form in the form attached as Exhibit 2 to this letter, and all of such forms received by Seller from an employee listed on Exhibit 1 have been delivered to Buyer.

If this correctly reflects Seller’s understanding of Buyer’s and Seller’s agreements regarding the matters covered by this letter agreement, please acknowledge Seller’s agreement to the terms hereof by executing below.

 

Sincerely,

 

TANA EXPLORATION COMPANY LLC

 

 

By:/s/Kevin Talley                                       

 

Kevin Talley, President

 

 

 

AGREED:

 

MARITECH RESOURCES, INC.

 

 

By:/s/Edgar A. Anderson                    

 

Name: Edgar A. Anderson

 

Its: President

 

 

cc:       TETRA Technologies, Inc.

24955 Interstate 45 North

The Woodlands, TX  77380

 

 

  

  

  

 

TANA EXPLORATION COMPANY LLC

 

May 31, 2011

 

Maritech Resources, Inc.

24955 Interstate 45 North

The Woodlands, TX  77380

Attention: Mr. Edgar Anderson, President

 

	
  

	
Re:

	
Third Second Amendment to Purchase and Sale Agreement (“PSA”) dated April 1, 2011 by and between Maritech Resources, Inc. (“Seller”) and Tana Exploration Company LLC (“Buyer”) regarding Employee Related Closing Adjustments

 

Gentlemen:

Buyer intends, subject to Seller’s agreement, for this letter to serve as an amendment to the PSA to reflect certain agreements reached regarding the Assets.  Capitalized terms not defined in this letter agreement shall have the meanings given in the PSA.  Buyer proposes that the following amendments to the PSA be made:

	
1.  

	
The following language shall be added to the end of Section 1.1(I) of the PSA: “, including, without limitation, those listed on Exhibit 1.1(I);”.  Exhibit 1.1(I) attached to this letter agreement is agreed to be Exhibit 1.1(I) to the PSA.

	
2.  

	
The following language shall be added to the end of Section 3.2 of the PSA:

For purposes of the Closing Adjustment Statement, the estimated amount by which the Purchase Price shall be adjusted downward at Closing pursuant to Section 3.1(B)(i) for the production during the month of May 2011 is $12,994,090.00, and the estimated amount by which the Purchase Price shall be adjusted upward at Closing pursuant to Section 3.1(A)(iii) for costs, expenses or other expenditures related to operations during the month of May 2011 is $3,077,932.62.  To the extent that after Closing and prior to July 15, 2011 Buyer receives proceeds covered by Section 3.1(B)(i) and attributable to production during the month of May 2011, Buyer shall pay such proceeds to Seller on or before July 29, 2011.  To the extent that after Closing and prior to July 15, 2011 Buyer pays for costs, expenses or other expenditures covered by Section 3.1(A)(iii) and attributable to operations during the month of May 2011, Seller shall reimburse Buyer for such costs, expenses and other expenditures on or before July 29, 2011.  Payments due under the two preceding sentences shall be offset to the effect that only one net payment shall be made by the applicable Party for the net amount due.  The adjustments set forth herein are intended to reflect the Parties’ approximation of the May 2011 production revenues and expenses in the Closing Adjustment Statement, but nothing herein shall otherwise affect the procedure set forth in Sections 3.1 and Section 3.3 for purposes of calculating the Post-Closing Adjustment Statement.

	
3.  

	
Section 18.10 of the PSA shall be amended by replacing “, at a market rate per square foot on a month-to-month basis for up to eighteen (18) months, with such other terms as are standard for commercial office space leases for comparable space in the area” with “on the terms and conditions reflected in the Leases Agreement attached as Exhibit 18.10.”  Exhibit 18.10 attached to this letter agreement is agreed to be Exhibit 18.10 to the PSA.

	
4.  

	
The existing Exhibits and Schedules to the PSA referenced in Exhibit A to this letter agreement shall be amended as noted in such Exhibit A.

	
5.  

	
The Parties agree the Seismic Micro-Technology, Inc.’s Software License Assignment Agreement (the “License Assignment”) attached to this letter agreement as a part of Exhibit B shall be executed by the Parties at Closing.  Seller represents and warrants that the Maintenance Fee(s) (as defined in the License Assignment) and any transfer and administrative fees applicable to the License Assignment or the underlying licenses are current and paid in full or will be paid in full within five (5) days after Closing.  Seller further agrees and acknowledges that the total amount due under the “Purchase Letter” attached to this letter agreement as a part of Exhibit B and all amounts due as administrative fees applicable to the License Assignment or the underlying licenses are included in the $133,551.76 paid to Seller by Buyer at Closing, and any portion of such amount due and payable to Seismic Micro-Technology, Inc. shall be paid by Seller within five (5) days after Closing.

 

 

If this correctly reflects Seller’s understanding of Buyer’s and Seller’s agreements regarding the matters covered by this letter agreement, please acknowledge Seller’s agreement to the terms hereof by executing below.

 

Sincerely,

 

TANA EXPLORATION COMPANY LLC

 

 

By:/s/Kevin Talley                                       

 

Kevin Talley, President

 

 

 

AGREED:

 

MARITECH RESOURCES, INC.

 

 

By:/s/Edgar A. Anderson                    

 

Name: Edgar A. Anderson

 

Its: President

 

 

cc:       TETRA Technologies, Inc.

24955 Interstate 45 North

The Woodlands, TX  77380

 

  

  

  

EXHIBIT A

	
 

TO THE THIRD SECOND AMENDMENT TO THE PURCHASE AND SALE AGREEMENT BETWEEN MARITECH RESOURCES, INC. AND TANA EXPLORATION COMPANY LLC

Exhibit 1.1(B) to the PSA is amended to add the following:

	
1.  

	
Assignment of Lease effective as of May 31, 2011 by and between Maritech Resources, Inc. and Tana Exploration Company LLC covering certain space in the building located at 4023 Ambassador Caffery, Lafayette, Louisiana.

	
2.  

	
Landlord’s Estoppel Certificate and Consent from Caffery Plaza, L.P. to Maritech Resources, Inc. and Tana Exploration Company LLC.

Exhibit 1.1(D) to the PSA is amended as follows:

	
1.  

	
The reference to ROW Number 4865 is changed to ROW Number 4864.

 

	
2.  

	
Right of Way 4718 is added, with the following information: Area: TBAY, Lease #: 4718, Operator: Maritech, Owner: Maritech; Interest: 100%, Eff Date: ______, and Exp Date: ______.

 

	
3.  

	
Segment Number 15842, OCS-G28223, Originating Block EC 328 is deleted.

 

	
4.  

	
Segment Number 15843, OCS-G28224, Originating Block EC 328 is deleted.

 

	
5.  

	
Segment Number 15844, OCS-G28225, Originating Block EC 328 is deleted.

 

	
6.  

	
Segment Number 16195, OCS-G14716, Originating Block EC 328 is deleted.

 

	
7.  

	
Segment Number 16196, OCS-G14717, Originating Block EC 328 is deleted.

 

	
8.  

	
Segment Number 16292, OCS-G28223, Originating Block EC 328 is deleted.

 

	
9.  

	
Segment Number 16293, OCS-G28224, Originating Block EC 328.is deleted.

 

	
10.  

	
Segment Number 16294, OCS-G28225, Originating Block EC 328.is deleted.

 

	
11.  

	
Segment Number 7943, OCS-G08541, Originating Block EI 342 is deleted.

 

	
12.  

	
Segment Number 17406, OCS-G28375, Originating Block MP 108 is deleted.

 

	
13.  

	
Segment Number 9433, OCS-G13223, Originating Block MP 181 is deleted.

 

	
14.  

	
Segment Number 15289, no ROW number, Originating Block WD 58 is deleted.

 

	
15.  

	
Segment Number 13130, no ROW number, Originating Block WD 59 is deleted.

 

  

  

  

 

 

Exhibit 1.1(G) to the PSA is amended to add the following:

__________________________________

EXHIBIT B

TO THE SECOND AMENDMENT TO THE PURCHASE AND SALE AGREEMENT BETWEEN MARITECH RESOURCES, INC. AND TANA EXPLORATION COMPANY LLC

[See Attached]

 

 

  

  

  

 

TANA EXPLORATION COMPANY, LLC

 

 

May 31, 2011

 

Maritech Resources, Inc.

24955 Interstate 45 North

The Woodlands, TX 77380

Attention:  Mr. Edgar Anderson, President

	
  

	
Re:

	
Third Amendment to Purchase and Sale Agreement (“PSA”) dated April 1, 2011 by and between Maritech Resources, Inc. (”Seller”) and Tana Exploration Company LLC (“Buyer”)

Gentlemen:

Buyer intends for this letter to serve as an amendment to the PSA.  Capitalized terms not defined in this letter agreement shall have the meanings given in the PSA.

Section 20.1(E) of the PSA contemplates that Buyer will substitute the Buyer’s Letter of Credit in place of Seller’s Parent Letter of Credit on or before the Closing, and in such case the Base Purchase Price will be reduced by $2,000,000.  Section 20.1(E) further provides that if the Buyer’s Letter of Credit does not replace Seller’s Parent Letter of Credit on or before the Closing, the Base Purchase Price will be increased by $750,000.

Buyer has not substituted the Buyer’s Letter of Credit, but believes it will be able to do so very soon.  Accordingly the Parties have agreed to close the transaction contemplated by the PSA using a Base Purchase Price reduced by $2,000,000.  The Parties will cooperate with one another in an effort to obtain Chevron’s agreement to accept the substitution of the Buyer’s Letter of Credit; provided, however, that if Seller has not received notification that the Seller’s Parent Letter of Credit has been terminated by Tuesday, June 14, 2011 at 5:00 PM, then upon request by Seller, Buyer shall pay by wire transfer to an account specified by Seller the amount of $2,750,000 by not later than Wednesday, June 15, 2011.  Except as modified herein, Section 20.1(E) of the PSA remains in full force and effect.

If this correctly reflects Seller’s understanding of Buyer’s and Seller’s agreements regarding the matters covered by this letter agreement, please acknowledge Seller’s agreement to the terms hereof by executing below.

Sincerely,

 

TANA EXPLORATION COMPANY LLC

 

 

By:/s/Kevin Talley                                       

 

Kevin Talley, President

 

 

 

AGREED:

 

MARITECH RESOURCES, INC.

 

 

By:/s/Edgar A. Anderson                    

 

Name: Edgar A. Anderson

 

Its: President

 

 

cc:       TETRA Technologies, Inc.

24955 Interstate 45 North

The Woodlands, TX  77380exhibit10-1.htm

 

 

	  

 

CREDIT AGREEMENT

 

by and among

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Administrative Agent,

 

WELLS FARGO BANK, NATIONAL ASSOCIATION, and

PNC BANK, NATIONAL ASSOCIATION,

as Joint Lead Arrangers,

 

WELLS FARGO BANK, NATIONAL ASSOCIATION, and

PNC BANK, NATIONAL ASSOCIATION,

as Joint Book Runners,

 

PNC BANK, NATIONAL ASSOCIATION,

as Syndication Agent,

 

THE LENDERS THAT ARE PARTIES HERETO

as the Lenders,

 

and

 

USA TRUCK, INC.

and

ITS SUBSIDIARIES THAT ARE SIGNATORIES HERETO

as Borrowers

 

Dated as of August 24, 2012

 

	  

\40023676.15

  

  

  

TABLE OF CONTENTS

Page

 

	
1.

	
DEFINITIONS AND CONSTRUCTION 

	
1

 

	
  

	
1.1

	
Definitions 

	
1

 

	
  

	
1.2

	
Accounting Terms 

	
1

 

	
  

	
1.3

	
Code 

	
1

 

	
  

	
1.4

	
Construction 

	
2

 

	
  

	
1.5

	
Time References 

	
2

 

	
  

	
1.6

	
Schedules and Exhibits 

	
2

 

	
2.

	
LOANS AND TERMS OF PAYMENT 

	
2

 

	
  

	
2.1

	
Revolving Loans 

	
2

 

	
  

	
2.2

	
[Intentionally Omitted] 

	
3

 

	
  

	
2.3

	
Borrowing Procedures and Settlements 

	
3

 

	
  

	
2.4

	
Payments; Reductions of Commitments; Prepayments 

	
9

 

	
  

	
2.5

	
Promise to Pay 

	
13

 

	
  

	
2.6

	
Interest Rates and Letter of Credit Fee:  Rates, Payments, and Calculations 

	
13

 

	
  

	
2.7

	
Crediting Payments 

	
15

 

	
  

	
2.8

	
Designated Account 

	
15

 

	
  

	
2.9

	
Maintenance of Loan Account; Statements of Obligations 

	
15

 

	
  

	
2.10

	
Fees 

	
15

 

	
  

	
2.11

	
Letters of Credit 

	
16

 

	
  

	
2.12

	
LIBOR Option 

	
21

 

	
  

	
2.13

	
Capital Requirements 

	
23

 

	
  

	
2.14

	
Accordion 

	
24

 

	
  

	
2.15

	
Joint and Several Liability of Borrowers 

	
25

 

	
3.

	
CONDITIONS; TERM OF AGREEMENT 

	
27

 

	
  

	
3.1

	
Conditions Precedent to the Initial Extension of Credit 

	
27

 

	
  

	
3.2

	
Conditions Precedent to all Extensions of Credit 

	
27

 

	
  

	
3.3

	
Maturity 

	
27

 

	
  

	
3.4

	
Effect of Maturity 

	
27

 

	
  

	
3.5

	
Early Termination by Borrowers 

	
28

 

	
4.

	
REPRESENTATIONS AND WARRANTIES 

	
28

 

	
  

	
4.1

	
Due Organization and Qualification; Subsidiaries 

	
28

 

	
  

	
4.2

	
Due Authorization; No Conflict 

	
29

 

	
  

	
4.3

	
Governmental Consents 

	
29

 

	
  

	
4.4

	
Binding Obligations; Perfected Liens 

	
29

 

	
  

	
4.5

	
Title to Assets; No Encumbrances 

	
30

 

	
  

	
4.6

	
Litigation 

	
30

 

	
  

	
4.7

	
Compliance with Laws 

	
30

 

	
  

	
4.8

	
No Material Adverse Effect 

	
30

 

	
  

	
4.9

	
Solvency 

	
30

 

	
  

	
4.10

	
Employee Benefits 

	
31

 

	
  

	
4.11

	
Environmental Condition 

	
31

 

	
  

	
4.12

	
Complete Disclosure 

	
31

 

	
  

	
4.13

	
Patriot Act 

	
31

 

	
  

	
4.14

	
Indebtedness 

	
31

 

	
  

	
4.15

	
Payment of Taxes 

	
32

 

	
  

	
4.16

	
Margin Stock 

	
32

 

	
  

	
4.17

	
Governmental Regulation 

	
32

 

	
  

	
4.18

	
OFAC 

	
32

 

	
  

	
4.19

	
Employee and Labor Matters 

	
32

 

	
  

	
4.20

	
[Intentionally Omitted] 

	
32

 

	
  

	
4.21

	
Leases 

	
33

 

	
  

	
4.22

	
Eligible Accounts and Eligible Unbilled Accounts 

	
33

 

	
  

	
4.23

	
Eligible Revenue Equipment 

	
33

 

	
  

	
4.24

	
Location of Equipment 

	
33

 

	
  

	
4.25

	
Revenue Equipment Records 

	
33

 

	
5.

	
AFFIRMATIVE COVENANTS 

	
33

 

	
  

	
5.1

	
Financial Statements, Reports, Certificates 

	
33

 

	
  

	
5.2

	
Reporting 

	
33

 

	
  

	
5.3

	
Existence 

	
34

 

	
  

	
5.4

	
Maintenance of Properties 

	
34

 

	
  

	
5.5

	
Taxes 

	
34

 

	
  

	
5.6

	
Insurance 

	
34

 

	
  

	
5.7

	
Inspection 

	
34

 

	
  

	
5.8

	
Compliance with Laws 

	
35

 

	
  

	
5.9

	
Environmental 

	
35

 

	
  

	
5.10

	
Disclosure Updates 

	
35

 

	
  

	
5.11

	
Formation of Subsidiaries 

	
35

 

	
  

	
5.12

	
Further Assurances 

	
36

 

	
  

	
5.13

	
Lender Meetings 

	
36

 

	
  

	
5.14

	
Location of Equipment 

	
37

 

	
  

	
5.15

	
[Intentionally Omitted] 

	
37

 

	
  

	
5.16

	
Post-Closing Matters 

	
37

 

	
6.

	
NEGATIVE COVENANTS 

	
37

 

	
  

	
6.1

	
Indebtedness 

	
37

 

	
  

	
6.2

	
Liens 

	
37

 

	
  

	
6.3

	
Restrictions on Fundamental Changes 

	
37

 

	
  

	
6.4

	
Disposal of Assets 

	
38

 

	
  

	
6.5

	
Nature of Business 

	
38

 

	
  

	
6.6

	
Prepayments and Amendments 

	
38

 

	
  

	
6.7

	
Restricted Payments 

	
39

 

	
  

	
6.9

	
Investments 

	
40

 

	
  

	
6.10

	
Transactions with Affiliates 

	
40

 

	
  

	
6.11

	
Use of Proceeds 

	
40

 

	
  

	
6.12

	
Limitation on Issuance of Equity Interests 

	
41

 

	
  

	
6.13

	
Equipment with Bailees 

	
41

 

	
7.

	
FINANCIAL COVENANTS 

	
41

 

	
8.

	
EVENTS OF DEFAULT 

	
41

 

	
  

	
8.1

	
Payments 

	
41

 

	
  

	
8.2

	
Covenants 

	
41

 

	
  

	
8.3

	
Judgments 

	
42

 

	
  

	
8.4

	
Voluntary Bankruptcy, etc 

	
42

 

	
  

	
8.5

	
Involuntary Bankruptcy, etc 

	
42

 

	
  

	
8.6

	
Default Under Other Agreements 

	
42

 

	
  

	
8.7

	
Representations, etc 

	
42

 

	
  

	
8.8

	
Guaranty 

	
42

 

	
  

	
8.9

	
Security Documents 

	
42

 

	
  

	
8.10

	
Loan Documents 

	
43

 

	
  

	
8.11

	
Change in Control 

	
43

 

	
9.

	
RIGHTS AND REMEDIES 

	
43

 

	
  

	
9.1

	
Rights and Remedies 

	
43

 

	
  

	
9.2

	
Remedies Cumulative 

	
43

 

	
10.

	
WAIVERS; INDEMNIFICATION 

	
44

 

	
  

	
10.1

	
Demand; Protest; etc 

	
44

 

	
  

	
10.2

	
The Lender Group’s Liability for Collateral 

	
44

 

	
  

	
10.3

	
Indemnification 

	
44

 

	
11.

	
NOTICES 

	
45

 

	
12.

	
CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER 

	
45

 

	
13.

	
ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS 

	
47

 

	
  

	
13.1

	
Assignments and Participations 

	
47

 

	
  

	
13.2

	
Successors 

	
50

 

	
14.

	
AMENDMENTS; WAIVERS 

	
50

 

	
  

	
14.1

	
Amendments and Waivers 

	
50

 

	
  

	
14.2

	
Replacement of Certain Lenders 

	
51

 

	
  

	
14.3

	
No Waivers; Cumulative Remedies 

	
52

 

	
15.

	
AGENT; THE LENDER GROUP 

	
52

 

	
  

	
15.1

	
Appointment and Authorization of Agent 

	
52

 

	
  

	
15.2

	
Delegation of Duties 

	
53

 

	
  

	
15.3

	
Liability of Agent 

	
53

 

	
  

	
15.4

	
Reliance by Agent 

	
53

 

	
  

	
15.5

	
Notice of Default or Event of Default 

	
54

 

	
  

	
15.6

	
Credit Decision 

	
54

 

	
  

	
15.7

	
Costs and Expenses; Indemnification 

	
54

 

	
  

	
15.8

	
Agent in Individual Capacity 

	
55

 

	
  

	
15.9

	
Successor Agent 

	
55

 

	
  

	
15.10

	
Lender in Individual Capacity 

	
56

 

	
  

	
15.11

	
Collateral Matters 

	
56

 

	
  

	
15.12

	
Restrictions on Actions by Lenders; Sharing of Payments 

	
57

 

	
  

	
15.13

	
Agency for Perfection 

	
58

 

	
  

	
15.14

	
Payments by Agent to the Lenders 

	
58

 

	
  

	
15.15

	
Concerning the Collateral and Related Loan Documents 

	
58

 

	
  

	
15.16

	
Field Examination Reports; Confidentiality; Disclaimers by Lenders; Other Reports and Information 

	
58

 

	
  

	
15.17

	
Several Obligations; No Liability 

	
59

 

	
  

	
15.18

	
Joint Lead Arrangers, Joint Book Runners, and Syndication Agent 

	
59

 

	
16.

	
WITHHOLDING TAXES 

	
59

 

	
  

	
16.1

	
Payments 

	
59

 

	
  

	
16.2

	
Exemptions 

	
60

 

	
  

	
16.3

	
Reductions 

	
61

 

	
  

	
16.4

	
Refunds 

	
61

 

	
17.

	
GENERAL PROVISIONS 

	
62

 

	
  

	
17.1

	
Effectiveness 

	
62

 

	
  

	
17.2

	
Section Headings 

	
62

 

	
  

	
17.3

	
Interpretation 

	
62

 

	
  

	
17.4

	
Severability of Provisions 

	
62

 

	
  

	
17.5

	
Bank Product Providers 

	
62

 

	
  

	
17.6

	
Debtor-Creditor Relationship 

	
63

 

	
  

	
17.7

	
Counterparts; Electronic Execution 

	
63

 

	
  

	
17.8

	
Revival and Reinstatement of Obligations; Certain Waivers 

	
63

 

	
  

	
17.9

	
Confidentiality 

	
63

 

	
  

	
17.10

	
Survival 

	
64

 

	
  

	
17.11

	
Patriot Act 

	
65

 

	
  

	
17.12

	
Integration 

	
65

 

	
  

	
17.13

	
USA Truck as Agent for Borrowers 

	
65

 

 

--

\40023676.15

  

  

  

 

EXHIBITS AND SCHEDULES

 

Exhibit A-1                                           Form of Assignment and Acceptance

Exhibit B-1                                           Form of Borrowing Base Certificate

Exhibit B-2                                           Form of Bank Product Provider Agreement

Exhibit C-1                                           Form of Compliance Certificate

Exhibit L-1                                           Form of LIBOR Notice

Exhibit P-1                                           Form of Perfection Certificate

Schedule A-1                                           Agent’s Account

Schedule A-2                                           Authorized Persons

Schedule C-1                                           Commitments

Schedule D-1                                           Designated Account

Schedule P-1                                           Permitted Investments

Schedule P-2                                           Permitted Liens

Schedule 1.1                                           Definitions

Schedule 3.1                                           Conditions Precedent

Schedule 4.1(b)                                           Capitalization of Borrowers

Schedule 4.1(c)                                           Capitalization of Borrowers’ Subsidiaries

Schedule 4.1(d)                                           Subscriptions, Options, Warrants, Calls

Schedule 4.6(b)                                           Litigation

Schedule 4.11                                           Environmental Matters

Schedule 4.14                                           Indebtedness

Schedule 4.19                                           Employee and Labor Matters

Schedule 4.24                                           Locations of Equipment

Schedule 5.1                                           Financial Statements, Reports, Certificates

Schedule 5.2                                           Collateral Reporting

Schedule 5.14                                           Chief Executive Offices

Schedule 5.16                                           Post-Closing Matters

Schedule 6.5                                           Nature of Business

Schedule 6.10                                           Transactions with Affiliates

 

--

\40023676.15

  

  

  

CREDIT AGREEMENT

 

 

THIS CREDIT AGREEMENT (this “Agreement”), is entered into as of August 24, 2012, by and among the lenders identified on the signature pages hereof (each of such lenders, together with its successors and permitted assigns, is referred to hereinafter as a “Lender”, as that term is hereinafter further defined), WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as administrative agent for each member of the Lender Group and the Bank Product Providers (in such capacity, together with its successors and assigns in such capacity, “Agent”), WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, and PNC BANK, NATIONAL ASSOCIATION, a national banking association, as joint lead arrangers (in such capacity, together with their successors and assigns in such capacity, the “Joint Lead Arrangers”), WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, and PNC BANK, NATIONAL ASSOCIATION, a national banking association, as joint book runners (in such capacity, together with their successors and assigns in such capacity, the “Joint Book Runners”), PNC BANK, NATIONAL ASSOCIATION, a national banking association, as syndication agent (in such capacity, together with its successors and assigns in such capacity, the “Syndication Agent”), USA TRUCK, INC., a Delaware corporation (“USA Truck”), and the Subsidiaries of USA Truck identified on the signature pages hereof or otherwise joined from time to time hereto as a borrower (such Subsidiaries, together with USA Truck, are referred to hereinafter each individually as a “Borrower”, and individually and collectively, jointly and severally, as the “Borrowers”).

 

The parties agree as follows:

 

1. DEFINITIONS AND CONSTRUCTION.

 

1.1 Definitions.  Capitalized terms used in this Agreement shall have the meanings specified therefor on Schedule 1.1.

 

1.2 Accounting Terms.  All accounting terms not specifically defined herein shall be construed in accordance with GAAP; provided, that if Administrative Borrower notifies Agent that Borrowers request an amendment to any provision hereof to eliminate the effect of any Accounting Change occurring after the Closing Date or in the application thereof on the operation of such provision (or if Agent notifies Administrative Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such Accounting Change or in the application thereof, then Agent and Borrowers agree that they will negotiate in good faith amendments to the provisions of this Agreement that are directly affected by such Accounting Change with the intent of having the respective positions of the Lenders and Borrowers after such Accounting Change conform as nearly as possible to their respective positions as of the date of this Agreement and, until any such amendments have been agreed upon and agreed to by the Required Lenders, the provisions in this Agreement shall be calculated as if no such Accounting Change had occurred.  When used herein, the term “financial statements” shall include the notes and schedules thereto.  Whenever the term “Borrowers” is used in respect of a financial covenant or a related definition, it shall be understood to mean Borrowers and their Subsidiaries on a consolidated basis, unless the context clearly requires otherwise.  Notwithstanding anything to the contrary contained herein, (a) all financial statements delivered hereunder shall be prepared, and all financial covenants contained herein shall be calculated, without giving effect to any election under the Statement of Financial Accounting Standards No. 159 (or any similar accounting principle) permitting a Person to value its financial liabilities or Indebtedness at the fair value thereof, and (b) the term “unqualified opinion” as used herein to refer to opinions or reports provided by accountants shall mean an opinion or report that is (i) unqualified, and (ii) does not include any explanation, supplemental comment, or other comment concerning the ability of the applicable Person to continue as a going concern or concerning the scope of the audit.

 

1.3 Code.  Any terms used in this Agreement that are defined in the Code shall be construed and defined as set forth in the Code unless otherwise defined herein; provided, that to the extent that the Code is used to define any term herein and such term is defined differently in different Articles of the Code, the definition of such term contained in Article 9 of the Code shall govern.

 

1.4 Construction.  Unless the context of this Agreement or any other Loan Document clearly requires otherwise, references to the plural include the singular, references to the singular include the plural, the terms “includes” and  “including” are not limiting, and the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or.”  The words “hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this Agreement or any other Loan Document refer to this Agreement or such other Loan Document, as the case may be, as a whole and not to any particular provision of this Agreement or such other Loan Document, as the case may be.  Section, subsection, clause, schedule, and exhibit references herein are to this Agreement unless otherwise specified.  Any reference in this Agreement or in any other Loan Document to any agreement, instrument, or document shall include all alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements, thereto and thereof, as applicable (subject to any restrictions on such alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements set forth herein).  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.  Any reference herein or in any other Loan Document to the satisfaction, repayment, or payment in full of the Obligations shall mean (a) the payment or repayment in full in immediately available funds of (i) the principal amount of, and interest accrued and unpaid with respect to, all outstanding Loans, together with the payment of any premium applicable to the repayment of the Loans, (ii) all Lender Group Expenses that have accrued and are unpaid regardless of whether demand has been made therefor, (iii) all fees or charges that have accrued hereunder or under any other Loan Document (including the Letter of Credit Fee and the Unused Line Fee) and are unpaid, (b) in the case of contingent reimbursement obligations with respect to Letters of Credit, providing Letter of Credit Collateralization, (c) in the case of obligations with respect to Bank Products (other than Hedge Obligations), providing Bank Product Collateralization, (d) the receipt by Agent of cash collateral in order to secure any other contingent Obligations for which a claim or demand for payment has been made on or prior to such time or in respect of matters or circumstances known to Agent or a Lender at such time that are reasonably expected to result in any loss, cost, damage, or expense (including attorneys fees and legal expenses), such cash collateral to be in such amount as Agent reasonably determines is appropriate to secure such contingent Obligations, (e) the payment or repayment in full in immediately available funds of all other outstanding Obligations (including the payment of any termination amount then applicable (or which would or could become applicable as a result of the repayment of the other Obligations) under Hedge Agreements provided by Hedge Providers) other than (i) unasserted contingent indemnification Obligations, (ii) any Bank Product Obligations (other than Hedge Obligations) that, at such time, are allowed by the applicable Bank Product Provider to remain outstanding without being required to be repaid or cash collateralized, and (iii) any Hedge Obligations that, at such time, are allowed by the applicable Hedge Provider to remain outstanding without being required to be repaid, and (f) the termination of all of the Commitments of the Lenders.  Any reference herein to any Person shall be construed to include such Person’s successors and assigns.  Any requirement of a writing contained herein or in any other Loan Document shall be satisfied by the transmission of a Record.

 

1.5 Time References.  Unless the context of this Agreement or any other Loan Document clearly requires otherwise, all references to time of day refer to Eastern standard time or Eastern daylight saving time, as in effect in Atlanta, Georgia on such day.  For purposes of the computation of a period of time from a specified date to a later specified date, the word “from” means “from and including” and the words “to” and “until” each means “to and including”; provided that, with respect to a computation of fees or interest payable to Agent or any Lender, such period shall in any event consist of at least one full day.

 

1.6 Schedules and Exhibits.  All of the schedules and exhibits attached to this Agreement shall be deemed incorporated herein by reference.

 

2. LOANS AND TERMS OF PAYMENT.

 

2.1 Revolving Loans.

 

(a) Subject to the terms and conditions of this Agreement, and during the term of this Agreement, each Revolving Lender agrees (severally, not jointly or jointly and severally) to make revolving loans (“Revolving Loans”) to Borrowers in an amount at any one time outstanding not to exceed the lesser of:

 

(i) such Lender’s Revolver Commitment, or

 

(ii) such Lender’s Pro Rata Share of an amount equal to the lesser of:

 

(A) the amount equal to (1) the Maximum Revolver Amount less (2) the sum of (y) the Letter of Credit Usage at such time, plus (z) the principal amount of Swing Loans outstanding at such time, and

 

(B) the amount equal to (1) the Borrowing Base as of such date (based upon the most recent Borrowing Base Certificate delivered by Borrowers to Agent) less (2) the sum of (y) the Letter of Credit Usage at such time, plus (z) the principal amount of Swing Loans outstanding at such time.

 

(b) Amounts borrowed pursuant to this Section 2.1 may be repaid and, subject to the terms and conditions of this Agreement, reborrowed at any time during the term of this Agreement.  The outstanding principal amount of the Revolving Loans, together with interest accrued and unpaid thereon, shall constitute Obligations and shall be due and payable on the Maturity Date or, if earlier, on the date on which they are declared due and payable pursuant to the terms of this Agreement.

 

(c) Anything to the contrary in this Section 2.1 notwithstanding, Agent shall have the right (but not the obligation), in the exercise of its Permitted Discretion, to establish, increase, decrease, eliminate, or otherwise adjust Receivable Reserves, Bank Product Reserves, and other Reserves against the Borrowing Base or the Maximum Revolver Amount.  The amount of any Receivable Reserve, Bank Product Reserve, or other Reserve established by Agent shall have a reasonable relationship to the event, condition, other circumstance, or fact that is the basis for such reserve and shall not be duplicative of any other reserve established and currently maintained.  Without limiting the foregoing, the Borrowers acknowledge and agree that Agent shall be entitled to establish and maintain at all times during the term of this Agreement (i) a Reserve in the amount of two weeks of payroll obligations for the Borrowers and their Subsidiaries, (ii) a Reserve in the amount of all annual tag and title fees in respect of Revenue Equipment constituting Collateral, and (iii) a Reserve in the amount of $12,500,000 concurrent with the first Increase pursuant to Section 2.14, in each case, which shall be deemed to be a Reserve established in accordance with Agent’s Permitted Discretion.

 

2.2 [Intentionally Omitted].

 

2.3 Borrowing Procedures and Settlements.

 

(a) Procedure for Borrowing Revolving Loans.  Each Borrowing shall be made by a written request by an Authorized Person delivered to Agent and received by Agent no later than 1:00 p.m. (i) on the Business Day that is the requested Funding Date in the case of a request for a Swing Loan, and (ii) on the Business Day that is 1 Business Day prior to the requested Funding Date in the case of all other requests, specifying (A) the amount of such Borrowing, and (B) the requested Funding Date (which shall be a Business Day); provided, that Agent may, in its sole discretion, elect to accept as timely requests that are received later than 1:00 p.m. on the applicable Business Day.  At Agent’s election, in lieu of delivering the above-described written request, any Authorized Person may give Agent telephonic notice of such request by the required time.  In such circumstances, Borrowers agree that any such telephonic notice will be confirmed in writing within 24 hours of the giving of such telephonic notice, but the failure to provide such written confirmation shall not affect the validity of the request.

 

(b) Making of Swing Loans.  In the case of a request for a Revolving Loan and so long as either (i) the aggregate amount of Swing Loans made since the last Settlement Date, minus all payments or other amounts applied to Swing Loans since the last Settlement Date, plus the amount of the requested Swing Loan does not exceed the greater of (A) 10% of the Maximum Revolver Amount and (B) $12,500,000 (or such greater amount to which the Required Lenders have given their written consent), or (ii) Swing Lender, in its sole discretion, agrees to make a Swing Loan notwithstanding the foregoing limitation, Swing Lender shall make a Revolving Loan (any such Revolving Loan made by Swing Lender pursuant to this Section 2.3(b) being referred to as a “Swing Loan” and all such Revolving Loans being referred to as “Swing Loans”) available to Borrowers on the Funding Date applicable thereto by transferring immediately available funds in the amount of such requested Borrowing to the Designated Account. Each Swing Loan shall be deemed to be a Revolving Loan hereunder and shall be subject to all the terms and conditions (including Section 3) applicable to other Revolving Loans, except that all payments (including interest) on any Swing Loan shall be payable to Swing Lender solely for its own account.  Subject to the provisions of Section 2.3(d)(ii), Swing Lender shall not make and shall not be obligated to make any Swing Loan if Swing Lender has actual knowledge that (i) one or more of the applicable conditions precedent set forth in Section 3 will not be satisfied on the requested Funding Date for the applicable Borrowing, or (ii) the requested Borrowing would exceed the Availability on such Funding Date.  Swing Lender shall not otherwise be required to determine whether the applicable conditions precedent set forth in Section 3 have been satisfied on the Funding Date applicable thereto prior to making any Swing Loan.  The Swing Loans shall be secured by Agent’s Liens, constitute Revolving Loans and Obligations, and bear interest at the rate applicable from time to time to Revolving Loans that are Base Rate Loans.

 

(c) Making of Revolving Loans.

 

(i) In the event that Swing Lender is not obligated to make a Swing Loan, then after receipt of a request for a Borrowing pursuant to Section 2.3(a), Agent shall notify the Lenders by telecopy, telephone, email, or other electronic form of transmission, of the requested Borrowing; such notification to be sent on the Business Day that is 1 Business Day prior to the requested Funding Date.  If Agent has notified the Lenders of a requested Borrowing on the Business Day that is 1 Business Day prior to the Funding Date, then each Lender shall make the amount of such Lender’s Pro Rata Share of the requested Borrowing available to Agent in immediately available funds, to Agent’s Account, not later than 1:00 p.m. on the Business Day that is the requested Funding Date.  After Agent’s receipt of the proceeds of such Revolving Loans from the Lenders, Agent shall make the proceeds thereof available to Borrowers on the applicable Funding Date by transferring immediately available funds equal to such proceeds received by Agent to the Designated Account; provided, that, subject to the provisions of Section 2.3(d)(ii), no Lender shall have an obligation to make any Revolving Loan, if (1) one or more of the applicable conditions precedent set forth in Section 3 will not be satisfied on the requested Funding Date for the applicable Borrowing unless such condition has been waived, or (2) the requested Borrowing would exceed the Availability on such Funding Date.

 

(ii) Unless Agent receives notice from a Lender prior to 12:00 p.m. on the Business Day that is the requested Funding Date relative to a requested Borrowing as to which Agent has notified the Lenders of a requested Borrowing that such Lender will not make available as and when required hereunder to Agent for the account of Borrowers the amount of that Lender’s Pro Rata Share of the Borrowing, Agent may assume that each Lender has made or will make such amount available to Agent in immediately available funds on the Funding Date and Agent may (but shall not be so required), in reliance upon such assumption, make available to Borrowers a corresponding amount.  If, on the requested Funding Date, any Lender shall not have remitted the full amount that it is required to make available to Agent in immediately available funds and if Agent has made available to Borrowers such amount on the requested Funding Date, then such Lender shall make the amount of such Lender’s Pro Rata Share of the requested Borrowing available to Agent in immediately available funds, to Agent’s Account, no later than 10:00 a.m. on the Business Day that is the first Business Day after the requested Funding Date (in which case, the interest accrued on such Lender’s portion of such Borrowing for the Funding Date shall be for Agent’s separate account).  If any Lender shall not remit the full amount that it is required to make available to Agent in immediately available funds as and when required hereby and if Agent has made available to Borrowers such amount, then that Lender shall be obligated to immediately remit such amount to Agent, together with interest at the Defaulting Lender Rate for each day until the date on which such amount is so remitted.  A notice submitted by Agent to any Lender with respect to amounts owing under this Section 2.3(c)(ii) shall be conclusive, absent manifest error.  If the amount that a Lender is required to remit is made available to Agent, then such payment to Agent shall constitute such Lender’s Revolving Loan for all purposes of this Agreement.  If such amount is not made available to Agent on the Business Day following the Funding Date, Agent will notify Borrowers of such failure to fund and, upon demand by Agent, Borrowers shall pay such amount to Agent for Agent’s account, together with interest thereon for each day elapsed since the date of such Borrowing, at a rate per annum equal to the interest rate applicable at the time to the Revolving Loans composing such Borrowing.

 

(d) Protective Advances and Optional Overadvances.

 

(i) Any contrary provision of this Agreement or any other Loan Document notwithstanding, at any time (A) after the occurrence and during the continuance of a Default or an Event of Default, or (B) that any of the other applicable conditions precedent set forth in Section 3 are not satisfied, Agent hereby is authorized by Borrowers and the Lenders, from time to time, in Agent’s sole discretion, to make Revolving Loans to, or for the benefit of, Borrowers, on behalf of the Revolving Lenders, that Agent, in its Permitted Discretion, deems necessary or desirable (1) to preserve or protect the Collateral, or any portion thereof, or (2) to enhance the likelihood of repayment of the Obligations (other than the Bank Product Obligations) (the Revolving Loans described in this Section 2.3(d)(i) shall be referred to as “Protective Advances”).  Notwithstanding the foregoing, the aggregate amount of all Protective Advances outstanding at any one time shall not exceed the greater of (x) 10% of the Maximum Revolver Amount and (y) $12,500,000.

 

(ii) Any contrary provision of this Agreement or any other Loan Document notwithstanding, the Lenders hereby authorize Agent or Swing Lender, as applicable, and either Agent or Swing Lender, as applicable, may, but is not obligated to, knowingly and intentionally, continue to make Revolving Loans (including Swing Loans) to Borrowers notwithstanding that an Overadvance exists or would be created thereby, so long as (A) after giving effect to such Revolving Loans, the outstanding Revolver Usage does not exceed the Borrowing Base by more than the greater of (1) 10% of the Maximum Revolver Amount and (2) $12,500,000, and (B) after giving effect to such Revolving Loans, the outstanding Revolver Usage (except for and excluding amounts charged to the Loan Account for interest, fees, or Lender Group Expenses) does not exceed the Maximum Revolver Amount.  In the event Agent obtains actual knowledge that the Revolver Usage exceeds the amounts permitted by the immediately foregoing provisions, regardless of the amount of, or reason for, such excess, Agent shall notify the Lenders as soon as practicable (and prior to making any (or any additional) intentional Overadvances (except for and excluding amounts charged to the Loan Account for interest, fees, or Lender Group Expenses) unless Agent determines that prior notice would result in imminent harm to the Collateral or its value, in which case Agent may make such Overadvances and provide notice as promptly as practicable thereafter), and the Lenders with Revolver Commitments thereupon shall, together with Agent, jointly determine the terms of arrangements that shall be implemented with Borrowers intended to reduce, within a reasonable time, the outstanding principal amount of the Revolving Loans to Borrowers to an amount permitted by the preceding sentence.  In such circumstances, if any Lender with a Revolver Commitment objects to the proposed terms of reduction or repayment of any Overadvance, the terms of reduction or repayment thereof shall be implemented according to the determination of the Required Lenders.  The foregoing provisions are meant for the benefit of the Lenders and Agent and are not meant for the benefit of Borrowers, which shall continue to be bound by the provisions of Section 2.4(e)(i).  Each Lender with a Revolver Commitment shall be obligated to settle with Agent as provided in Section 2.3(e) (or Section 2.3(g), as applicable) for the amount of such Lender’s Pro Rata Share of any unintentional Overadvances by Agent reported to such Lender, any intentional Overadvances made as permitted under this Section 2.3(d)(ii), and any Overadvances resulting from the charging to the Loan Account of interest, fees, or Lender Group Expenses.

 

(iii) Each Protective Advance and each Overadvance (each, an “Extraordinary Advance”) shall be deemed to be a Revolving Loan hereunder, except that no Extraordinary Advance shall be eligible to be a LIBOR Rate Loan and, prior to Settlement therefor, all payments on the Extraordinary Advances shall be payable to Agent solely for its own account.  The Extraordinary Advances shall be repayable on demand, secured by Agent’s Liens, constitute Obligations hereunder, and bear interest at the rate applicable from time to time to Revolving Loans that are Base Rate Loans.  The provisions of this Section 2.3(d) are for the exclusive benefit of Agent, Swing Lender, and the Lenders and are not intended to benefit Borrowers (or any other Loan Party) in any way.

 

(iv) Notwithstanding anything contained in this Agreement or any other Loan Document to the contrary: (A) no Extraordinary Advance may be made by Agent if such Extraordinary Advance would cause the aggregate principal amount of Extraordinary Advances outstanding to exceed an amount equal to 10% of the Maximum Revolver Amount; (B) no Extraordinary Advance may be made by Agent if such Extraordinary Advance would cause the aggregate Revolver Usage to exceed the Maximum Revolver Amount; and (C) no Lender will be required to fund any Extraordinary Advance to the extent that such Extraordinary Advance would cause such Lender’s funded portion of the Revolving Loans to exceed such Lender’s Revolver Commitment.

 

(e) Settlement.  It is agreed that each Lender’s funded portion of the Revolving Loans is intended by the Lenders to equal, at all times, such Lender’s Pro Rata Share of the outstanding Revolving Loans.  Such agreement notwithstanding, Agent, Swing Lender, and the other Lenders agree (which agreement shall not be for the benefit of Borrowers) that in order to facilitate the administration of this Agreement and the other Loan Documents, settlement among the Lenders as to the Revolving Loans, the Swing Loans, and the Extraordinary Advances shall take place on a periodic basis in accordance with the following provisions:

 

(i) Agent shall request settlement (“Settlement”) with the Lenders on a weekly basis, or on a more frequent basis if so determined by Agent in its sole discretion (1) on behalf of Swing Lender, with respect to the outstanding Swing Loans, (2) for itself, with respect to the outstanding Extraordinary Advances, and (3) with respect to Borrowers’ or any of their Subsidiaries’ payments or other amounts received, as to each by notifying the Lenders by telecopy, telephone, or other similar form of transmission, of such requested Settlement, no later than 5:00 p.m. on the Business Day immediately prior to the date of such requested Settlement (the date of such requested Settlement being the “Settlement Date”).  Such notice of a Settlement Date shall include a summary statement of the amount of outstanding Revolving Loans, Swing Loans, and Extraordinary Advances for the period since the prior Settlement Date.  Subject to the terms and conditions contained herein (including Section 2.3(g)):  (y) if the amount of the Revolving Loans (including Swing Loans, and Extraordinary Advances) made by a Lender that is not a Defaulting Lender exceeds such Lender’s Pro Rata Share of the Revolving Loans (including Swing Loans, and Extraordinary Advances) as of a Settlement Date, then Agent shall, by no later than 3:00 p.m. on the Settlement Date, transfer in immediately available funds to a Deposit Account of such Lender (as such Lender may designate), an amount such that each such Lender shall, upon receipt of such amount, have as of the Settlement Date, its Pro Rata Share of the Revolving Loans (including Swing Loans, and Extraordinary Advances), and (z) if the amount of the Revolving Loans (including Swing Loans, and Extraordinary Advances) made by a Lender is less than such Lender’s Pro Rata Share of the Revolving Loans (including Swing Loans, and Extraordinary Advances) as of a Settlement Date, such Lender shall no later than 3:00 p.m. on the Settlement Date transfer in immediately available funds to Agent’s Account, an amount such that each such Lender shall, upon transfer of such amount, have as of the Settlement Date, its Pro Rata Share of the Revolving Loans (including Swing Loans and Extraordinary Advances).  Such amounts made available to Agent under clause (z) of the immediately preceding sentence shall be applied against the amounts of the applicable Swing Loans or Extraordinary Advances and, together with the portion of such Swing Loans or Extraordinary Advances representing Swing Lender’s Pro Rata Share thereof, shall constitute Revolving Loans of such Lenders.  If any such amount is not made available to Agent by any Lender on the Settlement Date applicable thereto to the extent required by the terms hereof, Agent shall be entitled to recover for its account such amount on demand from such Lender together with interest thereon at the Defaulting Lender Rate.

 

(ii) In determining whether a Lender’s balance of the Revolving Loans, Swing Loans, and Extraordinary Advances is less than, equal to, or greater than such Lender’s Pro Rata Share of the Revolving Loans, Swing Loans, and Extraordinary Advances as of a Settlement Date, Agent shall, as part of the relevant Settlement, apply to such balance the portion of payments actually received in good funds by Agent with respect to principal, interest, fees payable by Borrowers and allocable to the Lenders hereunder, and proceeds of Collateral.

 

(iii) Between Settlement Dates, Agent, to the extent Extraordinary Advances or Swing Loans are outstanding, may pay over to Agent or Swing Lender, as applicable, any payments or other amounts received by Agent, that in accordance with the terms of this Agreement would be applied to the reduction of the Revolving Loans, for application to the Extraordinary Advances or Swing Loans.  Between Settlement Dates, Agent, to the extent no Extraordinary Advances or Swing Loans are outstanding, may pay over to Swing Lender any payments or other amounts received by Agent, that in accordance with the terms of this Agreement would be applied to the reduction of the Revolving Loans, for application to Swing Lender’s Pro Rata Share of the Revolving Loans.  If, as of any Settlement Date, payments or other amounts of Borrowers or their Subsidiaries received since the then immediately preceding Settlement Date have been applied to Swing Lender’s Pro Rata Share of the Revolving Loans other than to Swing Loans, as provided for in the previous sentence, Swing Lender shall pay to Agent for the accounts of the Lenders, and Agent shall pay to the Lenders (other than a Defaulting Lender if Agent has implemented the provisions of Section 2.3(g)), to be applied to the outstanding Revolving Loans of such Lenders, an amount such that each such Lender shall, upon receipt of such amount, have, as of such Settlement Date, its Pro Rata Share of the Revolving Loans.  During the period between Settlement Dates, Swing Lender with respect to Swing Loans, Agent with respect to Extraordinary Advances, and each Lender with respect to the Revolving Loans other than Swing Loans and Extraordinary Advances, shall be entitled to interest at the applicable rate or rates payable under this Agreement on the daily amount of funds employed by Swing Lender, Agent, or the Lenders, as applicable.

 

(iv) Anything in this Section 2.3(e) to the contrary notwithstanding, in the event that a Lender is a Defaulting Lender, Agent shall be entitled to refrain from remitting settlement amounts to the Defaulting Lender and, instead, shall be entitled to elect to implement the provisions set forth in Section 2.3(g).

 

(f) Notation.  Agent, as a non-fiduciary agent for Borrowers, shall maintain a register showing the principal amount of the Revolving Loans owing to each Lender, including the Swing Loans owing to Swing Lender, and Extraordinary Advances owing to Agent, and the interests therein of each Lender, from time to time and such register shall, absent manifest error, conclusively be presumed to be correct and accurate.

 

(g) Defaulting Lenders.

 

(i) Notwithstanding the provisions of Section 2.4(b)(ii), Agent shall not be obligated to transfer to a Defaulting Lender any payments made by Borrowers to Agent for the Defaulting Lender’s benefit or any proceeds of Collateral that would otherwise be remitted hereunder to the Defaulting Lender, and, in the absence of such transfer to the Defaulting Lender, Agent shall transfer any such payments (A) first, to Swing Lender to the extent of any Swing Loans that were made by Swing Lender and that were required to be, but were not, paid by the Defaulting Lender, (B) second, to Issuing Bank, to the extent of the portion of a Letter of Credit Disbursement that was required to be, but was not, paid by the Defaulting Lender, (C) third, to each Non-Defaulting Lender ratably in accordance with their Commitments (but, in each case, only to the extent that such Defaulting Lender’s portion of a Revolving Loan (or other funding obligation) was funded by such other Non-Defaulting Lender), (D) to a suspense account maintained by Agent, the proceeds of which shall be retained by Agent and may be made available to be re-advanced to or for the benefit of Borrowers (upon the request of Administrative Borrower and subject to the conditions set forth in Section 3.2) as if such Defaulting Lender had made its portion of Revolving Loans (or other funding obligations) hereunder, and (E) from and after the date on which all other Obligations have been paid in full, to such Defaulting Lender in accordance with tier (L) of Section 2.4(b)(ii).  Subject to the foregoing, Agent may hold and, in its discretion, re-lend to Borrowers for the account of such Defaulting Lender the amount of all such payments received and retained by Agent for the account of such Defaulting Lender.  Solely for the purposes of voting or consenting to matters with respect to the Loan Documents (including the calculation of Pro Rata Share in connection therewith) and for the purpose of calculating the fee payable under Section 2.10(b), such Defaulting Lender shall be deemed not to be a “Lender” and such Lender’s Commitment shall be deemed to be zero; provided, that the foregoing shall not apply to any of the matters governed by Section 14.1(a)(i) through (iii).  The provisions of this Section 2.3(g) shall remain effective with respect to such Defaulting Lender until the earlier of (y) the date on which all of the Non-Defaulting Lenders, Agent, Issuing Bank, and Borrowers shall have waived, in writing, the application of this Section 2.3(g) to such Defaulting Lender, or (z) the date on which such Defaulting Lender makes payment of all amounts that it was obligated to fund hereunder, pays to Agent all amounts owing by Defaulting Lender in respect of the amounts that it was obligated to fund hereunder, and, if requested by Agent, provides adequate assurance of its ability to perform its future obligations hereunder (on which earlier date, so long as no Event of Default has occurred and is continuing, any remaining cash collateral held by Agent pursuant to Section 2.3(g)(ii) shall be released to Borrowers).  The operation of this Section 2.3(g) shall not be construed to increase or otherwise affect the Commitment of any Lender, to relieve or excuse the performance by such Defaulting Lender or any other Lender of its duties and obligations hereunder, or to relieve or excuse the performance by any Borrower of its duties and obligations hereunder to Agent, Issuing Bank, or to the Lenders other than such Defaulting Lender.  Any failure by a Defaulting Lender to fund amounts that it was obligated to fund hereunder shall constitute a material breach by such Defaulting Lender of this Agreement and shall entitle Borrowers, at their option, upon written notice to Agent by Administrative Borrower, to arrange for a substitute Lender to assume the Commitment of such Defaulting Lender, such substitute Lender to be reasonably acceptable to Agent.  In connection with the arrangement of such a substitute Lender, the Defaulting Lender shall have no right to refuse to be replaced hereunder, and agrees to execute and deliver a completed form of Assignment and Acceptance in favor of the substitute Lender (and agrees that it shall be deemed to have executed and delivered such document if it fails to do so) subject only to being paid its share of the outstanding Obligations (other than Bank Product Obligations, but including (1) all interest, fees, and other amounts that may be due and payable in respect thereof, and (2) an assumption of its Pro Rata Share of its participation in the Letters of Credit); provided, that any such assumption of the Commitment of such Defaulting Lender shall not be deemed to constitute a waiver of any of the Lender Groups’ or Borrowers’ rights or remedies against any such Defaulting Lender arising out of or in relation to such failure to fund.  In the event of a direct conflict between the priority provisions of this Section 2.3(g) and any other provision contained in this Agreement or any other Loan Document, it is the intention of the parties hereto that such provisions be read together and construed, to the fullest extent possible, to be in concert with each other.  In the event of any actual, irreconcilable conflict that cannot be resolved as aforesaid, the terms and provisions of this Section 2.3(g) shall control and govern.

 

(ii) If any Swing Loan or Letter of Credit is outstanding at the time that a Lender becomes a Defaulting Lender then:

 

(A) such Defaulting Lender’s Swing Loan Exposure and Letter of Credit Exposure shall be reallocated among the Non-Defaulting Lenders in accordance with their respective Pro Rata Shares but only to the extent (x) the sum of all Non-Defaulting Lenders’ Revolving Loan Exposures plus such Defaulting Lender’s Swing Loan Exposure and Letter of Credit Exposure does not exceed the total of all Non-Defaulting Lenders’ Revolver Commitments and (y) the conditions set forth in Section 3.2 are satisfied at such time;

 

(B) if the reallocation described in clause (A) above cannot, or can only partially, be effected, Borrowers shall within one Business Day following notice by the Agent (x) first, prepay such Defaulting Lender’s Swing Loan Exposure (after giving effect to any partial reallocation pursuant to clause (A) above) and (y) second, cash collateralize such Defaulting Lender’s Letter of Credit Exposure (after giving effect to any partial reallocation pursuant to clause (A) above), pursuant to a cash collateral agreement to be entered into in form and substance reasonably satisfactory to the Agent, for so long as such Letter of Credit Exposure is outstanding; provided, that Borrowers shall not be obligated to cash collateralize any Defaulting Lender’s Letter of Credit Exposure if such Defaulting Lender is also the Issuing Bank;

 

(C) if Borrowers cash collateralize any portion of such Defaulting Lender’s Letter of Credit Exposure pursuant to this Section 2.3(g)(ii), Borrowers shall not be required to pay any Letter of Credit Fees to Agent for the account of such Defaulting Lender pursuant to Section 2.6(b) with respect to such cash collateralized portion of such Defaulting Lender’s Letter of Credit Exposure during the period such Letter of Credit Exposure is cash collateralized;

 

(D) to the extent the Letter of Credit Exposure of the Non-Defaulting Lenders is reallocated pursuant to this Section 2.3(g)(ii), then the Letter of Credit Fees payable to the Non-Defaulting Lenders pursuant to Section 2.6(b) shall be adjusted in accordance with such Non-Defaulting Lenders’ Letter of Credit Exposure;

 

(E) to the extent any Defaulting Lender’s Letter of Credit Exposure is neither cash collateralized nor reallocated pursuant to this Section 2.3(g)(ii), then, without prejudice to any rights or remedies of the Issuing Bank or any Lender hereunder, all Letter of Credit Fees that would have otherwise been payable to such Defaulting Lender under Section 2.6(b) with respect to such portion of such Letter of Credit Exposure shall instead be payable to the Issuing Bank until such portion of such Defaulting Lender’s Letter of Credit Exposure is cash collateralized or reallocated;

 

(F) so long as any Lender is a Defaulting Lender, the Swing Lender shall not be required to make any Swing Loan and the Issuing Bank shall not be required to issue, amend, or increase any Letter of Credit, in each case, to the extent (x) the Defaulting Lender’s Pro Rata Share of such Swing Loans or Letter of Credit cannot be reallocated pursuant to this Section 2.3(g)(ii) or (y) the Swing Lender or Issuing Bank, as applicable, has not otherwise entered into arrangements reasonably satisfactory to the Swing Lender or Issuing Bank, as applicable, and Borrowers to eliminate the Swing Lender’s or Issuing Bank’s risk with respect to the Defaulting Lender’s participation in Swing Loans or Letters of Credit; and

 

(G) Agent may release any cash collateral provided by Borrowers pursuant to this Section 2.3(g)(ii) to the Issuing Bank and the Issuing Bank may apply any such cash collateral to the payment of such Defaulting Lender’s Pro Rata Share of any Letter of Credit Disbursement that is not reimbursed by Borrowers pursuant to Section 2.11(d).

 

(h) Independent Obligations.  All Revolving Loans (other than Swing Loans and Extraordinary Advances) shall be made by the Lenders contemporaneously and in accordance with their Pro Rata Shares.  It is understood that (i) no Lender shall be responsible for any failure by any other Lender to perform its obligation to make any Revolving Loan (or other extension of credit) hereunder, nor shall any Commitment of any Lender be increased or decreased as a result of any failure by any other Lender to perform its obligations hereunder, and (ii) no failure by any Lender to perform its obligations hereunder shall excuse any other Lender from its obligations hereunder.

 

2.4 Payments; Reductions of Commitments; Prepayments.

 

(a) Payments by Borrowers.

 

(i) Except as otherwise expressly provided herein, all payments by Borrowers shall be made to Agent’s Account for the account of the Lender Group and shall be made in immediately available funds, no later than 2:00 p.m. on the date specified herein.  Any payment received by Agent later than 2:00 p.m. shall be deemed to have been received (unless Agent, in its sole discretion, elects to credit it on the date received) on the following Business Day and any applicable interest or fee shall continue to accrue until such following Business Day.

 

(ii) Unless Agent receives notice from Administrative Borrower prior to the date on which any payment is due to the Lenders that Borrowers will not make such payment in full as and when required, Agent may assume that Borrowers have made (or will make) such payment in full to Agent on such date in immediately available funds and Agent may (but shall not be so required), in reliance upon such assumption, distribute to each Lender on such due date an amount equal to the amount then due such Lender.  If and to the extent Borrowers do not make such payment in full to Agent on the date when due, each Lender severally shall repay to Agent on demand such amount distributed to such Lender, together with interest thereon at the Defaulting Lender Rate for each day from the date such amount is distributed to such Lender until the date repaid.

 

(b) Apportionment and Application.

 

(i) So long as no Application Event has occurred and is continuing and except as otherwise provided herein with respect to Defaulting Lenders, all principal and interest payments received by Agent shall be apportioned ratably among the Lenders (according to the unpaid principal balance of the Obligations to which such payments relate held by each Lender) and all payments of fees and expenses received by Agent (other than fees or expenses that are for Agent’s separate account or for the separate account of Issuing Bank) shall be apportioned ratably among the Lenders having a Pro Rata Share of the type of Commitment or Obligation to which a particular fee or expense relates.  Subject to Section 2.4(b)(iv) and Section 2.4(e), all payments to be made hereunder by Borrowers shall be remitted to Agent and all such payments, and all proceeds of Collateral received by Agent, shall be applied, so long as no Application Event has occurred and is continuing and except as otherwise provided herein with respect to Defaulting Lenders, to reduce the balance of the Revolving Loans outstanding and, thereafter, to Borrowers (to be wired to the Designated Account) or such other Person entitled thereto under applicable law.

 

(ii) At any time that an Application Event has occurred and is continuing and except as otherwise provided herein with respect to Defaulting Lenders, all payments remitted to Agent and all proceeds of Collateral received by Agent shall be applied as follows:

 

(A) first, to pay any Lender Group Expenses (including cost or expense reimbursements) or indemnities then due to Agent under the Loan Documents, until paid in full,

 

(B) second, to pay any fees or premiums then due to Agent under the Loan Documents until paid in full,

 

(C) third, to pay interest due in respect of all Protective Advances until paid in full,

 

(D) fourth, to pay the principal of all Protective Advances until paid in full,

 

(E) fifth, ratably, to pay any Lender Group Expenses (including cost or expense reimbursements) or indemnities then due to any of the Lenders under the Loan Documents, until paid in full,

 

(F) sixth, ratably, to pay any fees or premiums then due to any of the Lenders under the Loan Documents until paid in full,

 

(G) seventh, to pay interest accrued in respect of the Swing Loans until paid in full,

 

(H) eighth, to pay the principal of all Swing Loans until paid in full,

 

(I) ninth, ratably, to pay interest accrued in respect of the Revolving Loans (other than Protective Advances) until paid in full,

 

(J) tenth, ratably

 

i. to pay the principal of all Revolving Loans until paid in full,

 

ii. to Agent, to be held by Agent, for the benefit of Issuing Bank (and for the ratable benefit of each of the Lenders that have an obligation to pay to Agent, for the account of Issuing Bank, a share of each Letter of Credit Disbursement), as cash collateral in an amount up to 105% of the Letter of Credit Usage (to the extent permitted by applicable law, such cash collateral shall be applied to the reimbursement of any Letter of Credit Disbursement as and when such disbursement occurs and, if a Letter of Credit expires undrawn, the cash collateral held by Agent in respect of such Letter of Credit shall, to the extent permitted by applicable law, be reapplied pursuant to this Section 2.4(b)(ii), beginning with tier (A) hereof), and

 

iii. ratably, up to the lesser of (y) the amount (after taking into account any amounts previously paid pursuant to this clause iii. during the continuation of the applicable Application Event) of the most recently established Bank Product Reserve and (z) $10,000,000 in the aggregate (after taking into account any amounts previously paid pursuant to this clause iii. during the continuation of the applicable Application Event), to (I) the Bank Product Providers based upon amounts then certified by the applicable Bank Product Provider to Agent (in form and substance satisfactory to Agent) to be due and payable to such Bank Product Providers on account of Bank Product Obligations, and (II) with any balance to be paid to Agent, to be held by Agent, for the ratable benefit of the Bank Product Providers, as cash collateral (which cash collateral may be released by Agent to the applicable Bank Product Provider and applied by such Bank Product Provider to the payment or reimbursement of any amounts due and payable with respect to Bank Product Obligations owed to the applicable Bank Product Provider as and when such amounts first become due and payable and, if and at such time as all such Bank Product Obligations are paid or otherwise satisfied in full, the cash collateral held by Agent in respect of such Bank Product Obligations shall be reapplied pursuant to this Section 2.4(b)(ii), beginning with tier (A) hereof),

 

(K) eleventh, to pay any other Obligations other than Obligations owed to Defaulting Lenders (including being paid, ratably, to the Bank Product Providers on account of all amounts then due and payable in respect of Bank Product Obligations, with any balance to be paid to Agent, to be held by Agent, for the ratable benefit of the Bank Product Providers, as cash collateral (which cash collateral may be released by Agent to the applicable Bank Product Provider and applied by such Bank Product Provider to the payment or reimbursement of any amounts due and payable with respect to Bank Product Obligations owed to the applicable Bank Product Provider as and when such amounts first become due and payable and, if and at such time as all such Bank Product Obligations are paid or otherwise satisfied in full, the cash collateral held by Agent in respect of such Bank Product Obligations shall be reapplied pursuant to this Section 2.4(b)(ii), beginning with tier (A) hereof),

 

(L) twelfth, ratably to pay any Obligations owed to Defaulting Lenders, and

 

(M) thirteenth, to Borrowers (to be wired to the Designated Account) or such other Person entitled thereto under applicable law.

 

(iii) Agent promptly shall distribute to each Lender, pursuant to the applicable wire instructions received from each Lender in writing, such funds as it may be entitled to receive, subject to a Settlement delay as provided in Section 2.3(e).

 

(iv) In each instance, so long as no Application Event has occurred and is continuing, Section 2.4(b)(i) shall not apply to any payment made by Borrowers to Agent and specified by Borrowers to be for the payment of specific Obligations then due and payable (or prepayable) under any provision of this Agreement or any other Loan Document.

 

(v) For purposes of Section 2.4(b)(ii), “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 Proceeding, 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 Insolvency Proceeding.

 

(vi) In the event of a direct conflict between the priority provisions of this Section 2.4 and any other provision contained in this Agreement or any other Loan Document, it is the intention of the parties hereto that such provisions be read together and construed, to the fullest extent possible, to be in concert with each other.  In the event of any actual, irreconcilable conflict that cannot be resolved as aforesaid, if the conflict relates to the provisions of Section 2.3(g) and this Section 2.4, then the provisions of Section 2.3(g) shall control and govern, and if otherwise, then the terms and provisions of this Section 2.4 shall control and govern.

 

(c) Reduction of Commitments.  The Revolver Commitments shall terminate on the Maturity Date.  Borrowers may reduce the Revolver Commitments, without premium or penalty, to an amount (which may be zero) not less than the sum of (A) the Revolver Usage as of such date, plus (B) the principal amount of all Revolving Loans not yet made as to which a request has been given by an Authorized Person under Section 2.3(a), plus (C) the amount of all Letters of Credit not yet issued as to which a request has been given by Administrative Borrower pursuant to Section 2.11(a).  Each such reduction shall be in an amount which is not less than $10,000,000 (unless the Revolver Commitments are being reduced to zero and the amount of the Revolver Commitments in effect immediately prior to such reduction are less than $10,000,000), shall be made by providing not less than 10 Business Days prior written notice to Agent, and shall be irrevocable.  Once reduced, the Revolver Commitments may not be increased.  Each such reduction of the Revolver Commitments shall reduce the Revolver Commitments of each Lender proportionately in accordance with its ratable share thereof.

 

(d) Optional Prepayments.  Borrowers may prepay the principal of any Revolving Loan at any time in whole or in part, without premium or penalty.

 

(e) Mandatory Prepayments.

 

(i) Borrowing Base.  If, at any time (including, without limitation, as the result of a scheduled reduction in the Eligible Revenue Equipment Formula Amount in accordance with the definition of Eligible Revenue Equipment Formula Amount), (A) the Revolver Usage on such date exceeds (B) the Borrowing Base reflected in the Borrowing Base Certificate most recently delivered by Borrowers to Agent, then Borrowers shall immediately prepay the Obligations in accordance with Section 2.4(f) in an aggregate amount equal to the amount of such excess.

 

(ii) Dispositions.  Within 1 Business Day of the date of receipt by any Borrower or any of its Subsidiaries of the Net Cash Proceeds of any voluntary or involuntary sale or disposition by such Borrower or any of its Subsidiaries of any item of Collateral (including casualty losses or condemnations but excluding sales or dispositions which qualify as Permitted Dispositions under clauses (a), (b), (c), (d), (e), (i), (j), (k), (l), (m), (n), or (q) of the definition of Permitted Dispositions), Borrowers shall prepay (or cause to be prepaid) the outstanding principal amount of the Obligations in accordance with Section 2.4(f) in an amount equal to 100% of such Net Cash Proceeds (including condemnation awards and payments in lieu thereof) received by such Person in connection with such sales or dispositions; provided that, so long as (A) no Default or Event of Default shall have occurred and is continuing or would result therefrom, (B) Administrative Borrower shall have given Agent prior written notice of such Borrower’s or its Subsidiaries’ intention to apply such monies to the costs of replacement of the properties or assets that are the subject of such sale or disposition or the cost of purchase or construction of other assets useful in the business of such Borrower or its Subsidiaries, (C) the monies are held in a Deposit Account in which Agent has a perfected first-priority security interest, and (D) such Borrower or its Subsidiaries, as applicable, complete such replacement, purchase, or construction within 180 days (or, with respect to construction, such longer period as Agent may approve in writing) after the initial receipt of such monies, then the Loan Party whose assets were the subject of such disposition shall have the option to apply such monies to the costs of replacement of the assets that are the subject of such sale or disposition or the costs of purchase or construction of other assets useful in the business of such Loan Party unless and to the extent that such applicable period shall have expired without such replacement, purchase, or construction being made or completed, in which case, any amounts remaining in the Deposit Account referred to in clause (C) above shall be paid to Agent and applied in accordance with Section 2.4(f); provided, that no Borrower nor any of its Subsidiaries shall have the right to use such Net Cash Proceeds to make such replacements, purchases, or construction in excess of $500,000 in any given fiscal year.  Nothing contained in this Section 2.4(e)(ii) shall permit any Borrower or any of its Subsidiaries to sell or otherwise dispose of any assets other than in accordance with Section 6.4.

 

(iii) Extraordinary Receipts.  Within 1 Business Day of the date of receipt by any Borrower or any of its Subsidiaries of any Extraordinary Receipts, Borrowers shall prepay (or cause to be prepaid) the outstanding principal amount of the Obligations in accordance with Section 2.4(f) in an amount equal to 100% of such Extraordinary Receipts, net of any reasonable expenses incurred in collecting such Extraordinary Receipts.

 

(iv) Indebtedness.  Within 1 Business Day of the date that a Borrower or any of its Subsidiaries receives any Net Cash Proceeds in connection with the incurrence by such Borrower or Subsidiaries of any Indebtedness (other than Permitted Indebtedness), Borrowers shall prepay (or cause to be prepaid) the outstanding principal amount of the Obligations in accordance with Section 2.4(f) in an amount equal to 100% of the Net Cash Proceeds received by such Person in connection with such incurrence.  The provisions of this Section 2.4(e)(iv) shall not be deemed to be implied consent to any such incurrence otherwise prohibited by the terms of this Agreement.

 

(v) Equity.  Within 1 Business Day of the date that a Borrower or any of its Subsidiaries receives any Net Cash Proceeds in connection with the issuance by such Borrower or Subsidiaries of any Equity Interests (other than (A) in the event that any Borrower or any of its Subsidiaries forms any Subsidiary in accordance with the terms hereof, the issuance by such Subsidiary of Equity Interests to such Borrower or such Subsidiary, as applicable, (B) the issuance of Equity Interests of Administrative Borrower to directors, officers and employees of Administrative Borrower and its Subsidiaries pursuant to employee stock option plans (or other employee incentive plans or other compensation arrangements) approved by the Board of Directors or any duly authorized committee thereof, (C) the issuance of Equity Interests of Administrative Borrower in order to finance the purchase consideration (or a portion thereof) in connection with a Permitted Acquisition, and (D) the issuance of Equity Interests by a Subsidiary of a Borrower to its parent or member in connection with the contribution by such parent or member to such Subsidiary of the proceeds of an issuance described in clauses (A) – (C) above), Borrowers shall prepay (or cause to be prepaid) the outstanding principal amount of the Obligations in accordance with Section 2.4(f) in an amount equal to 100% of the Net Cash Proceeds received by such Person in connection with such issuance.  The provisions of this Section 2.4(e)(v) shall not be deemed to be implied consent to any such issuance otherwise prohibited by the terms of this Agreement.

 

(f) Application of Payments.  Each prepayment pursuant to Section 2.4(d), 2.4(e)(i), 2.4(e)(ii), 2.4(e)(iii), 2.4(e)(iv), or 2.4(e)(v) shall, (A) so long as no Application Event shall have occurred and be continuing, be applied, first, to the outstanding principal amount of the Revolving Loans until paid in full (with no reduction in the Maximum Revolver Amount), and second, to cash collateralize the Letters of Credit in an amount equal to 105% of the then outstanding Letter of Credit Usage, and (B) if an Application Event shall have occurred and be continuing, be applied in the manner set forth in Section 2.4(b)(ii).

 

2.5 Promise to Pay.

 

(a) Borrowers agree to pay the Lender Group Expenses on the date on which demand therefor is made by Agent (it being acknowledged and agreed that any charging of such costs, expenses or Lender Group Expenses to the Loan Account pursuant to the provisions of Section 2.6(d) shall be deemed to constitute a demand for payment thereof for the purposes of this Section 2.5(a)).  Borrowers promise to pay all of the Obligations (including principal, interest, premiums, if any, fees, costs, and expenses (including Lender Group Expenses)) in full on the Maturity Date or, if earlier, on the date on which the Obligations (other than the Bank Product Obligations) become due and payable pursuant to the terms of this Agreement.  Borrowers agree that their obligations contained in the first sentence of this Section 2.5(a) shall survive payment or satisfaction in full of all other Obligations.

 

(b) Any Lender may request that any portion of its Commitments or the Loans made by it be evidenced by one or more promissory notes.  In such event, Borrowers shall execute and deliver to such Lender the requested promissory notes payable to the order of such Lender in a form furnished by Agent and reasonably satisfactory to Borrowers.  Thereafter, the portion of the Commitments and Loans evidenced by such promissory notes and interest thereon shall at all times be represented by one or more promissory notes in such form payable to the order of the payee named therein.

 

2.6 Interest Rates and Letter of Credit Fee:  Rates, Payments, and Calculations.

 

(a) Interest Rates.  Except as provided in Section 2.6(c), all Obligations (except for undrawn Letters of Credit) that have been charged to the Loan Account pursuant to the terms hereof shall bear interest as follows:

 

(i) if the relevant Obligation is a LIBOR Rate Loan, at a per annum rate equal to the LIBOR Rate plus the LIBOR Rate Margin, and

 

(ii) otherwise, at a per annum rate equal to the Base Rate plus the Base Rate Margin.

 

(b) Letter of Credit Fee.  Borrowers shall pay Agent (for the ratable benefit of the Revolving Lenders), a Letter of Credit fee (the “Letter of Credit Fee”) (which fee shall be in addition to the fronting fees and commissions, other fees, charges and expenses set forth in Section 2.11(k)) that shall accrue at a per annum rate equal to the LIBOR Rate Margin times the undrawn amount of all outstanding Letters of Credit.

 

(c) Default Rate.  Upon the occurrence and during the continuation of an Event of Default and, in the case of any Event of Default other than an Event of Default described in Section 8.4 or Section 8.5, at the written election of Agent or the Required Lenders or, in the case of any Event of Default described in Section 8.4 or Section 8.5, immediately,

 

(i) all Obligations (except for undrawn Letters of Credit) that have been charged to the Loan Account pursuant to the terms hereof shall bear interest at a per annum rate equal to 2 percentage points above the per annum rate otherwise applicable thereunder, and

 

(ii) the Letter of Credit Fee shall be increased to 2 percentage points above the per annum rate otherwise applicable hereunder.

 

(d) Payment.  Except to the extent provided to the contrary in Section 2.10 or Section 2.12(a), (i) all interest, all Letter of Credit Fees and all other fees payable hereunder or under any of the other Loan Documents shall be due and payable, in arrears, on the first day of each month and (ii) all costs and expenses payable hereunder or under any of the other Loan Documents, and all Lender Group Expenses shall be due and payable on the date on which demand therefor is made by Agent (it being acknowledged and agreed that any charging of such costs, expenses or Lender Group Expenses to the Loan Account pursuant to the provisions of the following sentence shall be deemed to constitute a demand for payment thereof for the purposes of this subclause (ii)).  Borrowers hereby authorize Agent, from time to time without prior notice to Borrowers, to charge to the Loan Account (A) on the first day of each month, all interest accrued during the prior month on the Revolving Loans hereunder, (B) on the first day of each month, all Letter of Credit Fees accrued or chargeable hereunder during the prior month, (C) as and when incurred or accrued, all fees and costs provided for in Section 2.10 (a) or (c), (D) on the first day of each month, the Unused Line Fee accrued during the prior month pursuant to Section 2.10(b), (E) as and when due and payable, all other fees payable hereunder or under any of the other Loan Documents, (F) as and when incurred or accrued, the fronting fees and all commissions, other fees, charges and expenses provided for in Section 2.11(k), (G) as and when incurred or accrued, all other Lender Group Expenses, and (H) as and when due and payable all other payment obligations payable under any Loan Document or any Bank Product Agreement (including any amounts due and payable to the Bank Product Providers in respect of Bank Products).  All amounts (including interest, fees, costs, expenses, Lender Group Expenses, or other amounts payable hereunder or under any other Loan Document or under any Bank Product Agreement) charged to the Loan Account shall thereupon constitute Revolving Loans hereunder, shall constitute Obligations hereunder, and shall initially accrue interest at the rate then applicable to Revolving Loans that are Base Rate Loans (unless and until converted into LIBOR Rate Loans in accordance with the terms of this Agreement).

 

(e) Computation.  All interest and fees chargeable under the Loan Documents shall be computed on the basis of a 360 day year, in each case, for the actual number of days elapsed in the period during which the interest or fees accrue.  In the event the Base Rate is changed from time to time hereafter, the rates of interest hereunder based upon the Base Rate automatically and immediately shall be increased or decreased by an amount equal to such change in the Base Rate.

 

(f) Intent to Limit Charges to Maximum Lawful Rate.  In no event shall the interest rate or rates payable under this Agreement, plus any other amounts paid in connection herewith, exceed the highest rate permissible under any law that a court of competent jurisdiction shall, in a final determination, deem applicable.  Borrowers and the Lender Group, in executing and delivering this Agreement, intend legally to agree upon the rate or rates of interest and manner of payment stated within it; provided, that, anything contained herein to the contrary notwithstanding, if such rate or rates of interest or manner of payment exceeds the maximum allowable under applicable law, then, ipso facto, as of the date of this Agreement, Borrowers are and shall be liable only for the payment of such maximum amount as is allowed by law, and payment received from Borrowers in excess of such legal maximum, whenever received, shall be applied to reduce the principal balance of the Obligations to the extent of such excess.

 

2.7 Crediting Payments.  The receipt of any payment item by Agent shall not be required to be considered a payment on account unless such payment item is a wire transfer of immediately available federal funds made to Agent’s Account or unless and until such payment item is honored when presented for payment.  Should any payment item not be honored when presented for payment, then Borrowers shall be deemed not to have made such payment and interest shall be calculated accordingly.  Anything to the contrary contained herein notwithstanding, any payment item shall be deemed received by Agent only if it is received into Agent’s Account on a Business Day on or before 2:00 p.m.  If any payment item is received into Agent’s Account on a non-Business Day or after 2:00 p.m. on a Business Day (unless Agent, in its sole discretion, elects to credit it on the date received), it shall be deemed to have been received by Agent as of the opening of business on the immediately following Business Day.

 

2.8 Designated Account.  Agent is authorized to make the Revolving Loans, and Issuing Bank is authorized to issue the Letters of Credit, under this Agreement based upon telephonic or other instructions received from anyone purporting to be an Authorized Person or, without instructions, if pursuant to Section 2.6(d).  Administrative Borrower agrees to establish and maintain the Designated Account with the Designated Account Bank for the purpose of receiving the proceeds of the Revolving Loans requested by an Authorized Person and made by Agent or the Lenders hereunder.  Unless otherwise agreed by Agent and Administrative Borrower, any Revolving Loan or Swing Loan requested by an Authorized Person and made by Agent or the Lenders hereunder shall be made to the Designated Account.

 

2.9 Maintenance of Loan Account; Statements of Obligations.  Agent shall maintain an account on its books in the name of Borrowers (the “Loan Account”) on which Borrowers will be charged with all Revolving Loans (including Extraordinary Advances and Swing Loans) made by Agent, Swing Lender, or the Lenders to Borrowers or for Borrowers’ account, the Letters of Credit issued or arranged by Issuing Bank for Borrowers’ account, and with all other payment Obligations hereunder or under the other Loan Documents, including, accrued interest, fees and expenses, and Lender Group Expenses.  In accordance with Section 2.7, the Loan Account will be credited with all payments received by Agent from Borrowers or for Borrowers’ account.  Agent shall make available to Administrative Borrower monthly statements regarding the Loan Account, including the principal amount of the Revolving Loans, interest accrued hereunder, fees accrued or charged hereunder or under the other Loan Documents, and a summary itemization of all charges and expenses constituting Lender Group Expenses accrued hereunder or under the other Loan Documents, and each such statement, absent manifest error, shall be conclusively presumed to be correct and accurate and constitute an account stated between Borrowers and the Lender Group unless, within 30 days after Agent first makes such a statement available to Administrative Borrower, Administrative Borrower shall deliver to Agent written objection thereto describing the error or errors contained in such statement.

 

2.10 Fees.

 

(a) Agent Fees.  Borrowers shall pay to Agent, for the account of Agent, as and when due and payable under the terms of the Fee Letter, the fees set forth in the Fee Letter.

 

(b) Unused Line Fee.  Borrowers shall pay to Agent, for the ratable account of the Revolving Lenders, an unused line fee (the “Unused Line Fee”) in an amount equal to the Applicable Unused Line Fee Percentage per annum times the result of (i) the aggregate amount of the Revolver Commitments, less (ii) the average amount of the Revolver Usage during the immediately preceding month (or portion thereof), which Unused Line Fee shall be due and payable on the first day of each month from and after the Closing Date up to the first day of the month prior to the date on which the Obligations are paid in full and on the date on which the Obligations are paid in full.

 

(c) Field Examination and Other Fees.  Borrowers shall pay to Agent, field examination, appraisal, and valuation fees and charges, as and when incurred or chargeable, as follows (i) a fee of $1,000 per day, per examiner, plus reasonable out-of-pocket expenses (including travel, meals, and lodging) for each field examination of any Borrower or any of its Subsidiaries performed by personnel employed by Agent, (ii) if implemented by any Borrower or its Subsidiaries, a fee of $1,000 per day, per Person, plus reasonable out-of-pocket expenses (including travel, meals, and lodging) in connection with the establishment by such Borrower and/or such Subsidiaries of electronic collateral reporting, and (iii) the fees or charges actually paid or incurred by Agent (but, in any event, no less than a charge of $1,000 per day, per Person, plus reasonable out of pocket expenses (including travel, meals, and lodging)) if it elects to employ the services of one or more third Persons to perform financial audits, quality of earnings analyses or field examinations of any Borrower or its Subsidiaries, to appraise the Collateral (including the Revenue Equipment constituting Collateral), or any portion thereof, or to assess any Borrower’s or its Subsidiaries’ business valuation; provided, that for any calendar year, so long as (x) no Event of Default shall have occurred and be continuing and (y) Excess Availability is at all times greater than 17.5% of the Maximum Revolver Amount, Borrowers shall not be obligated to reimburse Agent for more than two (2) field examinations during such calendar year and more than three (3) appraisals (at least one of which shall be a desk top appraisal) of the Collateral (including the Revenue Equipment constituting Collateral) during such calendar year.

 

2.11 Letters of Credit.

 

(a) Subject to the terms and conditions of this Agreement, upon the request of Administrative Borrower made in accordance herewith, and prior to the Maturity Date, Issuing Bank agrees to issue a requested Letter of Credit for the account of Borrowers.  By submitting a request to Issuing Bank for the issuance of a Letter of Credit, Borrowers shall be deemed to have requested that Issuing Bank issue the requested Letter of Credit.  Each request for the issuance of a Letter of Credit, or the amendment, renewal, or extension of any outstanding Letter of Credit, shall be irrevocable and shall be made in writing by an Authorized Person and delivered to Issuing Bank via telefacsimile or other electronic method of transmission reasonably acceptable to Issuing Bank and reasonably in advance of the requested date of issuance, amendment, renewal, or extension.  Each such request shall be in form and substance reasonably satisfactory to Issuing Bank and (i) shall specify (A) the amount of such Letter of Credit, (B) the date of issuance, amendment, renewal, or extension of such Letter of Credit, (C) the proposed expiration date of such Letter of Credit, (D) the name and address of the beneficiary of the Letter of Credit, and (E) such other information (including, the conditions to drawing, and, in the case of an amendment, renewal, or extension, identification of the Letter of Credit to be so amended, renewed, or extended) as shall be necessary to prepare, amend, renew, or extend such Letter of Credit, and (ii) shall be accompanied by such Issuer Documents as Agent or Issuing Bank may request or require, to the extent that such requests or requirements are consistent with the Issuer Documents that Issuing Bank generally requests for Letters of Credit in similar circumstances.  Bank’s records of the content of any such request will be conclusive.  Anything contained herein to the contrary notwithstanding, Issuing Bank may, but shall not be obligated to, issue a Letter of Credit that supports the obligations of Borrowers or one of their Subsidiaries in respect of (x) a lease of real property to the extent that the face amount of such Letter of Credit exceeds the highest rent (including all rent-like charges) payable under such lease for a period of one year, or (y) an employment contract to the extent that the face amount of such Letter of Credit exceeds the highest compensation payable under such contract for a period of one year.

 

(b) Issuing Bank shall have no obligation to issue a Letter of Credit if any of the following would result after giving effect to the requested issuance:

 

(i) the Letter of Credit Usage would exceed $15,000,000, or

 

(ii) the Letter of Credit Usage would exceed the Maximum Revolver Amount less the outstanding amount of Revolving Loans (including Swing Loans), or

 

(iii) the Letter of Credit Usage would exceed the Borrowing Base at such time less the outstanding principal balance of the Revolving Loans (inclusive of Swing Loans) at such time.

 

(c) In the event there is a Defaulting Lender as of the date of any request for the issuance of a Letter of Credit, the Issuing Bank shall not be required to issue or arrange for such Letter of Credit to the extent (i) the Defaulting Lender’s Letter of Credit Exposure with respect to such Letter of Credit may not be reallocated pursuant to Section 2.3(g)(ii), or (ii) the Issuing Bank has not otherwise entered into arrangements reasonably satisfactory to it and Borrowers to eliminate the Issuing Bank’s risk with respect to the participation in such Letter of Credit of the Defaulting Lender, which arrangements may include Borrowers cash collateralizing such Defaulting Lender’s Letter of Credit Exposure in accordance with Section 2.3(g)(ii).  Additionally, Issuing Bank shall have no obligation to issue a 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 Issuing Bank from issuing such Letter of Credit, or any law applicable to Issuing Bank or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over Issuing Bank shall prohibit or request that Issuing Bank refrain from the issuance of letters of credit generally or such Letter of Credit in particular, (B) the issuance of such Letter of Credit would violate one or more policies of Issuing Bank applicable to letters of credit generally, or (C) if amounts demanded to be paid under any Letter of Credit will or may not be in United States Dollars.

 

(d) Any Issuing Bank (other than Wells Fargo or any of its Affiliates) shall notify Agent in writing no later than the Business Day immediately following the Business Day on which such Issuing Bank issued any Letter of Credit; provided that (i) until Agent advises any such Issuing Bank that the provisions of Section 3.2 are not satisfied, or (ii) unless the aggregate amount of the Letters of Credit issued in any such week exceeds such amount as shall be agreed by Agent and such Issuing Bank, such Issuing Bank shall be required to so notify Agent in writing only once each week of the Letters of Credit issued by such Issuing Bank during the immediately preceding week as well as the daily amounts outstanding for the prior week, such notice to be furnished on such day of the week as Agent and such Issuing Bank may agree.  Each Letter of Credit shall be in form and substance reasonably acceptable to Issuing Bank, including the requirement that the amounts payable thereunder must be payable in Dollars.  If Issuing Bank makes a payment under a Letter of Credit, Borrowers shall pay to Agent an amount equal to the applicable Letter of Credit Disbursement on the Business Day such Letter of Credit Disbursement is made and, in the absence of such payment, the amount of the Letter of Credit Disbursement immediately and automatically shall be deemed to be a Revolving Loan hereunder (notwithstanding any failure to satisfy any condition precedent set forth in Section 3) and, initially, shall bear interest at the rate then applicable to Revolving Loans that are Base Rate Loans. If a Letter of Credit Disbursement is deemed to be a Revolving Loan hereunder, Borrowers’ obligation to pay the amount of such Letter of Credit Disbursement to Issuing Bank shall be automatically converted into an obligation to pay the resulting Revolving Loan.  Promptly following receipt by Agent of any payment from Borrowers pursuant to this paragraph, Agent shall distribute such payment to Issuing Bank or, to the extent that Revolving Lenders have made payments pursuant to Section 2.11(e) to reimburse Issuing Bank, then to such Revolving Lenders and Issuing Bank as their interests may appear.

 

(e) Promptly following receipt of a notice of a Letter of Credit Disbursement pursuant to Section 2.11(d), each Revolving Lender agrees to fund its Pro Rata Share of any Revolving Loan deemed made pursuant to Section 2.11(d) on the same terms and conditions as if Borrowers had requested the amount thereof as a Revolving Loan and Agent shall promptly pay to Issuing Bank the amounts so received by it from the Revolving Lenders.  By the issuance of a Letter of Credit (or an amendment, renewal, or extension of a Letter of Credit) and without any further action on the part of Issuing Bank or the Revolving Lenders, Issuing Bank shall be deemed to have granted to each Revolving Lender, and each Revolving Lender shall be deemed to have purchased, a participation in each Letter of Credit issued by Issuing Bank, in an amount equal to its Pro Rata Share of such Letter of Credit, and each such Revolving Lender agrees to pay to Agent, for the account of Issuing Bank, such Revolving Lender’s Pro Rata Share of any Letter of Credit Disbursement made by Issuing Bank under the applicable Letter of Credit.  In consideration and in furtherance of the foregoing, each Revolving Lender hereby absolutely and unconditionally agrees to pay to Agent, for the account of Issuing Bank, such Revolving Lender’s Pro Rata Share of each Letter of Credit Disbursement made by Issuing Bank and not reimbursed by Borrowers on the date due as provided in Section 2.11(d), or of any reimbursement payment that is required to be refunded (or that Agent or Issuing Bank elects, based upon the advice of counsel, to refund) to Borrowers for any reason.  Each Revolving Lender acknowledges and agrees that its obligation to deliver to Agent, for the account of Issuing Bank, an amount equal to its respective Pro Rata Share of each Letter of Credit Disbursement pursuant to this Section 2.11(e) shall be absolute and unconditional and such remittance shall be made notwithstanding the occurrence or continuation of an Event of Default or Default or the failure to satisfy any condition set forth in Section 3.  If any such Revolving Lender fails to make available to Agent the amount of such Revolving Lender’s Pro Rata Share of a Letter of Credit Disbursement as provided in this Section, such Revolving Lender shall be deemed to be a Defaulting Lender and Agent (for the account of Issuing Bank) shall be entitled to recover such amount on demand from such Revolving Lender together with interest thereon at the Defaulting Lender Rate until paid in full.

 

(f) Each Borrower agrees to indemnify, defend and hold harmless each member of the Lender Group (including Issuing Bank and its branches, Affiliates, and correspondents) and each such Person’s respective directors, officers, employees, attorneys and agents (each, including Issuing Bank, a “Letter of Credit Related Person”) (to the fullest extent permitted by law) from and against any and all claims, demands, suits, actions, investigations, proceedings, liabilities, fines, costs, penalties, and damages, and all reasonable fees and disbursements of attorneys, experts, or consultants and all other costs and expenses actually incurred in connection therewith or in connection with the enforcement of this indemnification (as and when they are incurred and irrespective of whether suit is brought), which may be incurred by or awarded against any Letter of Credit Related Person (other than Taxes, which shall be governed by Section 16) (the “Letter of Credit Indemnified Costs”), and which arise out of or in connection with, or as a result of this Agreement, any Letter of Credit, any Issuer Document, or any Drawing Document referred to in or related to any Letter of Credit, or any action or proceeding arising out of any of the foregoing (whether administrative, judicial or in connection with arbitration); in each case, including that resulting from the Letter of Credit Related Person’s own negligence; provided, however,  that such indemnity shall not be available to any Letter of Credit Related Person claiming indemnification to the extent that such Letter of Credit Indemnified Costs may be finally determined in a final, non-appealable judgment of a court of competent jurisdiction to have resulted directly from the gross negligence or willful misconduct of the Letter of Credit Related Person claiming indemnity.  This indemnification provision shall survive termination of this Agreement and all Letters of Credit.

 

(g) The liability of Issuing Bank (or any other Letter of Credit Related Person) under, in connection with or arising out of any Letter of Credit (or pre-advice), regardless of the form or legal grounds of the action or proceeding, shall be limited to direct damages suffered by Borrowers that are caused directly by Issuing Bank’s gross negligence or willful misconduct in (i) honoring a presentation under a Letter of Credit that on its face does not at least substantially comply with the terms and conditions of such Letter of Credit, (ii) failing to honor a presentation under a Letter of Credit that strictly complies with the terms and conditions of such Letter of Credit or (iii) retaining Drawing Documents presented under a Letter of Credit.  Issuing Bank shall be deemed to have acted with due diligence and reasonable care if Issuing Bank’s conduct is in accordance with Standard Letter of Credit Practice or in accordance with this Agreement.  Borrowers’ aggregate remedies against Issuing Bank and any Letter of Credit Related Person for wrongfully honoring a presentation under any Letter of Credit or wrongfully retaining honored Drawing Documents shall in no event exceed the aggregate amount paid by Borrowers to Issuing Bank in respect of the honored presentation in connection with such Letter of Credit under Section 2.11(d), plus interest at the rate then applicable to Base Rate Loans hereunder.  Borrowers shall take action to avoid and mitigate the amount of any damages claimed against Issuing Bank or any other Letter of Credit Related Person, including by enforcing its rights against the beneficiaries of the Letters of Credit.  Any claim by Borrowers under or in connection with any Letter of Credit shall be reduced by an amount equal to the sum of (x) the amount (if any) saved by Borrowers as a result of the breach or alleged wrongful conduct complained of; and (y) the amount (if any) of the loss that would have been avoided had Borrowers taken all reasonable steps to mitigate any loss, and in case of a claim of wrongful dishonor, by specifically and timely authorizing Issuing Bank to effect a cure.

 

(h) Borrowers are responsible for preparing or approving the final text of the Letter of Credit as issued by Issuing Bank, irrespective of any assistance Issuing Bank may provide such as drafting or recommending text or by Issuing Bank’s use or refusal to use text submitted by Borrowers.  Borrowers are solely responsible for the suitability of the Letter of Credit for Borrowers’ purposes.  With respect to any Letter of Credit containing an “automatic amendment” to extend the expiration date of such Letter of Credit, Issuing Bank, in its sole and absolute discretion, may give notice of nonrenewal of such Letter of Credit and, if Borrowers do not at any time want such Letter of Credit to be renewed, Borrowers will so notify Agent and Issuing Bank at least 15 calendar days before Issuing Bank is required to notify the beneficiary of such Letter of Credit or any advising bank of such nonrenewal pursuant to the terms of such Letter of Credit.

 

(i) Borrowers’ reimbursement and payment obligations under this Section 2.11 are absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever, provided, however, that subject to Section 2.11(g) above, the foregoing shall not release Issuing Bank from such liability to Borrowers as may be finally determined in a final, non-appealable judgment of a court of competent jurisdiction against Issuing Bank following reimbursement or payment of the obligations and liabilities, including reimbursement and other payment obligations, of Borrowers to Issuing Bank arising under, or in connection with, this Section 2.11 or any Letter of Credit.

 

(j) Without limiting any other provision of this Agreement, Issuing Bank and each other Letter of Credit Related Person (if applicable) shall not be responsible to Borrowers for, and Issuing Bank’s rights and remedies against Borrowers and the obligation of Borrowers to reimburse Issuing Bank for each drawing under each Letter of Credit shall not be impaired by:

 

(i) honor of a presentation under any Letter of Credit that on its face substantially complies with the terms and conditions of such Letter of Credit, even if the Letter of Credit requires strict compliance by the beneficiary;

 

(ii) honor of a presentation of any Drawing Document that appears on its face to have been signed, presented or issued (A) by any purported successor or transferee of any beneficiary or other Person required to sign, present or issue such Drawing Document or (B) under a new name of the beneficiary;

 

(iii) acceptance as a draft of any written or electronic demand or request for payment under a Letter of Credit, even if nonnegotiable or not in the form of a draft or notwithstanding any requirement that such draft, demand or request bear any or adequate reference to the Letter of Credit;

 

(iv) the identity or authority of any presenter or signer of any Drawing Document or the form, accuracy, genuineness or legal effect of any Drawing Document (other than Issuing Bank’s determination that such Drawing Document appears on its face substantially to comply with the terms and conditions of the Letter of Credit);

 

(v) acting upon any instruction or request relative to a Letter of Credit or requested Letter of Credit that Issuing Bank in good faith believes to have been given by a Person authorized to give such instruction or request;

 

(vi) any errors, omissions, interruptions or delays in transmission or delivery of any message, advice or document (regardless of how sent or transmitted) or for errors in interpretation of technical terms or in translation or any delay in giving or failing to give notice to Borrowers;

 

(vii) any acts, omissions or fraud by, or the insolvency of, any beneficiary, any nominated person or entity or any other Person or any breach of contract between any beneficiary and any Borrower or any of the parties to the underlying transaction to which the Letter of Credit relates;

 

(viii) assertion or waiver of any provision of the ISP or UCP that primarily benefits an issuer of a letter of credit, including any requirement that any Drawing Document be presented to it at a particular hour or place;

 

(ix) payment to any paying or negotiating bank (designated or permitted by the terms of the applicable Letter of Credit) claiming that it rightfully honored or is entitled to reimbursement or indemnity under Standard Letter of Credit Practice applicable to it;

 

(x) acting or failing to act as required or permitted under Standard Letter of Credit Practice applicable to where Issuing Bank has issued, confirmed, advised or negotiated such Letter of Credit, as the case may be;

 

(xi) honor of a presentation after the expiration date of any Letter of Credit notwithstanding that a presentation was made prior to such expiration date and dishonored by Issuing Bank if subsequently Issuing Bank or any court or other finder of fact determines such presentation should have been honored;

 

(xii) dishonor of any presentation that does not strictly comply or that is fraudulent, forged or otherwise not entitled to honor; or

 

(xiii) honor of a presentation that is subsequently determined by Issuing Bank to have been made in violation of international, federal, state or local restrictions on the transaction of business with certain prohibited Persons.

 

(k) Borrowers shall pay immediately upon demand to Agent for the account of Issuing Bank as non-refundable Lender Group Expenses:  (i) a fronting fee which shall be imposed by Issuing Bank upon the issuance of each Letter of Credit of 0.25% per annum of the face amount thereof, plus (ii) any and all other customary commissions, fees and charges then in effect imposed by, and any and all expenses incurred by, Issuing Bank, or by any adviser, confirming institution or entity or other nominated person, relating to Letters of Credit, at the time of issuance of any Letter of Credit and upon the occurrence of any other activity with respect to any Letter of Credit (including transfers, assignments of proceeds, amendments, drawings, renewals or cancellations).

 

(l) If by reason of (x) any Change in Law, or (y) compliance by Issuing Bank or any other member of the Lender Group with any direction, request, or requirement (irrespective of whether having the force of law) of any Governmental Authority or monetary authority including, Regulation D of the Board of Governors as from time to time in effect (and any successor thereto):

 

(i) any reserve, deposit, or similar requirement is or shall be imposed or modified in respect of any Letter of Credit issued or caused to be issued hereunder or hereby, or

 

(ii) there shall be imposed on Issuing Bank or any other member of the Lender Group any other condition regarding any Letter of Credit,

 

and the result of the foregoing is to increase, directly or indirectly, the cost to Issuing Bank or any other member of the Lender Group of issuing, making, participating in, or maintaining any Letter of Credit or to reduce the amount receivable in respect thereof, then, and in any such case, Agent may, at any time within a reasonable period after the additional cost is incurred or the amount received is reduced, notify Administrative Borrower, and Borrowers shall pay within 30 days after demand therefor, such amounts as Agent may specify to be necessary to compensate Issuing Bank or any other member of the Lender Group for such additional cost or reduced receipt, together with interest on such amount from the date of such demand until payment in full thereof at the rate then applicable to Base Rate Loans hereunder; provided, that (A) Borrowers shall not be required to provide any compensation pursuant to this Section 2.11(l) for any such amounts incurred more than 270 days prior to the date on which the demand for payment of such amounts is first made to Borrowers, and (B) if an event or circumstance giving rise to such amounts is retroactive, then the 270-day period referred to above shall be extended to include the period of retroactive effect thereof.  The determination by Agent of any amount due pursuant to this Section 2.11(l), as set forth in a certificate setting forth the calculation thereof in reasonable detail, shall, in the absence of manifest or demonstrable error, be final and conclusive and binding on all of the parties hereto.

 

(m) Unless otherwise expressly agreed by Issuing Bank and Borrowers when a Letter of Credit is issued, (i) the rules of the ISP and the UCP shall apply to each standby Letter of Credit, and (ii) the rules of the UCP shall apply to each commercial Letter of Credit.

 

(n) In the event of a direct conflict between the provisions of this Section 2.11 and any provision contained in any Issuer Document, it is the intention of the parties hereto that such provisions be read together and construed, to the fullest extent possible, to be in concert with each other.  In the event of any actual, irreconcilable conflict that cannot be resolved as aforesaid, the terms and provisions of this Section 2.11 shall control and govern.

 

2.12 LIBOR Option.

 

(a) Interest and Interest Payment Dates.  In lieu of having interest charged at the rate based upon the Base Rate, Borrowers shall have the option, subject to Section 2.12(b) below (the “LIBOR Option”) to have interest on all or a portion of the Revolving Loans be charged (whether at the time when made (unless otherwise provided herein), upon conversion from a Base Rate Loan to a LIBOR Rate Loan, or upon continuation of a LIBOR Rate Loan as a LIBOR Rate Loan) at a rate of interest based upon the LIBOR Rate.  Interest on LIBOR Rate Loans shall be payable on the earliest of (i) the last day of the Interest Period applicable thereto; provided, that, subject to the following clauses (ii) and (iii), in the case of any Interest Period greater than 3 months in duration, interest shall be payable at 3 month intervals after the commencement of the applicable Interest Period and on the last day of such Interest Period, (ii) the date on which all or any portion of the Obligations are accelerated pursuant to the terms hereof, or (iii) the date on which this Agreement is terminated pursuant to the terms hereof.  On the last day of each applicable Interest Period, unless Borrowers have properly exercised the LIBOR Option with respect thereto, the interest rate applicable to such LIBOR Rate Loan automatically shall convert to the rate of interest then applicable to Base Rate Loans of the same type hereunder.  At any time that an Event of Default has occurred and is continuing, at the written election of the Required Lenders, Borrowers no longer shall have the option to request that Revolving Loans bear interest at a rate based upon the LIBOR Rate.

 

(b) LIBOR Election.

 

(i) Borrowers may, at any time and from time to time, so long as Administrative Borrower has not received a notice from Agent (which notice Agent may elect to give or not give in its discretion unless Agent is directed to give such notice by the Required Lenders, in which case, it shall give the notice to Administrative Borrower), after the occurrence and during the continuance of an Event of Default, to terminate the right of Borrowers to exercise the LIBOR Option during the continuance of such Event of Default, elect to exercise the LIBOR Option by Administrative Borrower’s notifying Agent prior to 2:00 p.m. at least 1 Business Day prior to the commencement of the proposed Interest Period (the “LIBOR Deadline”).  Notice of Borrowers’ election of the LIBOR Option for a permitted portion of the Revolving Loans and an Interest Period pursuant to this Section 2.12(b) shall be made by delivery by Administrative Borrower to Agent of a LIBOR Notice received by Agent before the LIBOR Deadline, or by telephonic notice received by Agent before the LIBOR Deadline (to be confirmed by delivery to Agent of a LIBOR Notice received by Agent prior to 5:00 p.m. on the same day).  Promptly upon its receipt of each such LIBOR Notice, Agent shall provide a copy thereof to each of the affected Lenders.

 

(ii) Each LIBOR Notice shall be irrevocable and binding on Borrowers.  In connection with each LIBOR Rate Loan, each Borrower shall indemnify, defend, and hold Agent and the Lenders harmless against any loss, cost, or expense actually incurred by Agent or any Lender as a result of (A) the payment of any principal of any LIBOR Rate Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default), (B) the conversion of any LIBOR Rate Loan other than on the last day of the Interest Period applicable thereto, or (C) the failure to borrow, convert, continue or prepay any LIBOR Rate Loan on the date specified in any LIBOR Notice delivered pursuant hereto (such losses, costs, or expenses, “Funding Losses”).  A certificate of Agent or a Lender delivered to Administrative Borrower setting forth in reasonable detail any amount or amounts that Agent or such Lender is entitled to receive pursuant to this Section 2.12 shall be conclusive absent manifest error.  Borrowers shall pay such amount to Agent or the Lender, as applicable, within 30 days of the date of its receipt of such certificate.  If a payment of a LIBOR Rate Loan on a day other than the last day of the applicable Interest Period would result in a Funding Loss, Agent may, in its sole discretion at the request of Administrative Borrower, hold the amount of such payment as cash collateral in support of the Obligations until the last day of such Interest Period and apply such amounts to the payment of the applicable LIBOR Rate Loan on such last day, it being agreed that Agent has no obligation to so defer the application of payments to any LIBOR Rate Loan and that, in the event that Agent does not defer such application, Borrowers shall be obligated to pay any resulting Funding Losses.

 

(iii) Unless Agent, in its sole discretion, agrees otherwise, Borrowers shall have not more than 5 LIBOR Rate Loans in effect at any given time.  Borrowers may only exercise the LIBOR Option for proposed LIBOR Rate Loans of at least $500,000.

 

(c) Conversion.  Borrowers may convert LIBOR Rate Loans to Base Rate Loans at any time; provided, that in the event that LIBOR Rate Loans are converted or prepaid on any date that is not the last day of the Interest Period applicable thereto, including as a result of any prepayment through the required application by Agent of any payments or proceeds of Collateral in accordance with Section 2.4(b) or for any other reason, including early termination of the term of this Agreement or acceleration of all or any portion of the Obligations pursuant to the terms hereof, each Borrower shall indemnify, defend, and hold Agent and the Lenders and their Participants harmless against any and all Funding Losses in accordance with Section 2.12(b)(ii).

 

(d) Special Provisions Applicable to LIBOR Rate.

 

(i) The LIBOR Rate may be adjusted by Agent with respect to any Lender on a prospective basis to take into account any additional or increased costs to such Lender of maintaining or obtaining any eurodollar deposits or increased costs, in each case, due to changes in applicable law occurring subsequent to the commencement of the then applicable Interest Period, including any Changes in Law (including any changes in tax laws (except changes of general applicability in corporate income tax laws)) and changes in the reserve requirements imposed by the Board of Governors, which additional or increased costs would increase the cost of funding or maintaining loans bearing interest at the LIBOR Rate.  In any such event, the affected Lender shall give Administrative Borrower and Agent notice of such a determination and adjustment and Agent promptly shall transmit the notice to each other Lender and, upon its receipt of the notice from the affected Lender, Borrowers may, by notice from the Administrative Borrower to such affected Lender (A) require such Lender to furnish to Administrative Borrower a statement setting forth in reasonable detail the basis for adjusting such LIBOR Rate and the method for determining the amount of such adjustment, or (B) repay the LIBOR Rate Loans of such Lender with respect to which such adjustment is made (together with any amounts due under Section 2.12(b)(ii)).

 

(ii) In the event that any change in market conditions or any Change in Law shall at any time after the date hereof, in the reasonable opinion of any Lender, make it unlawful or impractical for such Lender to fund or maintain LIBOR Rate Loans or to continue such funding or maintaining, or to determine or charge interest rates at the LIBOR Rate, such Lender shall give notice of such changed circumstances to Agent and Administrative Borrower and Agent promptly shall transmit the notice to each other Lender and (y) in the case of any LIBOR Rate Loans of such Lender that are outstanding, the date specified in such Lender’s notice shall be deemed to be the last day of the Interest Period of such LIBOR Rate Loans, and interest upon the LIBOR Rate Loans of such Lender thereafter shall accrue interest at the rate then applicable to Base Rate Loans, and (z) Borrowers shall not be entitled to elect the LIBOR Option until such Lender determines that it would no longer be unlawful or impractical to do so.

 

(e) No Requirement of Matched Funding.  Anything to the contrary contained herein notwithstanding, neither Agent, nor any Lender, nor any of their Participants, is required actually to acquire eurodollar deposits to fund or otherwise match fund any Obligation as to which interest accrues at the LIBOR Rate.

 

2.13 Capital Requirements.

 

(a) If, after the date hereof, Issuing Bank or any Lender determines that (i) any Change in Law regarding capital or reserve requirements for banks or bank holding companies, or (ii) compliance by Issuing Bank or such Lender, or their respective parent bank holding companies, with any guideline, request or directive of any Governmental Authority regarding capital adequacy (whether or not having the force of law), has the effect of reducing the return on Issuing Bank’s, such Lender’s, or such holding companies’ capital as a consequence of Issuing Bank’s or such Lender’s commitments hereunder to a level below that which Issuing Bank, such Lender, or such holding companies could have achieved but for such Change in Law or compliance (taking into consideration Issuing Bank’s, such Lender’s, or such holding companies’ then existing policies with respect to capital adequacy and assuming the full utilization of such entity’s capital) by any amount deemed by Issuing Bank or such Lender to be material, then Issuing Bank or such Lender may notify Administrative Borrower and Agent thereof.  Following receipt of such notice, Borrowers agree to pay Issuing Bank or such Lender on demand the amount of such reduction of return of capital as and when such reduction is determined, payable within 30 days after presentation by Issuing Bank or such Lender of a statement in the amount and setting forth in reasonable detail Issuing Bank’s or such Lender’s calculation thereof and the assumptions upon which such calculation was based (which statement shall be deemed true and correct absent manifest error).  In determining such amount, Issuing Bank or such Lender may use any reasonable averaging and attribution methods.  Failure or delay on the part of Issuing Bank or any Lender to demand compensation pursuant to this Section shall not constitute a waiver of Issuing Bank’s or such Lender’s right to demand such compensation; provided that Borrowers shall not be required to compensate Issuing Bank or a Lender pursuant to this Section for any reductions in return incurred more than 270 days prior to the date that Issuing Bank or such Lender notifies Administrative Borrower of such Change in Law giving rise to such reductions and of such Lender’s intention to claim compensation therefor; provided further that if such claim arises by reason of the Change in Law that is retroactive, then the 270-day period referred to above shall be extended to include the period of retroactive effect thereof.

 

(b) If Issuing Bank or any Lender requests additional or increased costs referred to in Section 2.11(l) or Section 2.12(d)(i) or amounts under Section 2.13(a) or sends a notice under Section 2.12(d)(ii) relative to changed circumstances (such Issuing Bank or Lender, an “Affected Lender”), then such Affected Lender shall use reasonable efforts to promptly designate a different one of its lending offices or to assign its rights and obligations hereunder to another of its offices or branches, if (i) in the reasonable judgment of such Affected Lender, such designation or assignment would eliminate or reduce amounts payable pursuant to Section 2.11(l), Section 2.12(d)(i) or Section 2.13(a), as applicable, or would eliminate the illegality or impracticality of funding or maintaining LIBOR Rate Loans and (ii) in the reasonable judgment of such Affected Lender, such designation or assignment would not subject it to any material unreimbursed cost or expense and would not otherwise be materially disadvantageous to it.  Borrowers agree to pay all reasonable out-of-pocket costs and expenses incurred by such Affected Lender in connection with any such designation or assignment.  If, after such reasonable efforts, such Affected Lender does not so designate a different one of its lending offices or assign its rights to another of its offices or branches so as to eliminate Borrowers’ obligation to pay any future amounts to such Affected Lender pursuant to Section 2.11(l), Section 2.12(d)(i) or Section 2.13(a), as applicable, or to enable Borrowers to obtain LIBOR Rate Loans, then Borrowers (without prejudice to any amounts then due to such Affected Lender under Section 2.11(l), Section 2.12(d)(i) or Section 2.13(a), as applicable) may, unless prior to the effective date of any such assignment the Affected Lender withdraws its request for such additional amounts under Section 2.11(l), Section 2.12(d)(i) or Section 2.13(a), as applicable, or indicates that it is no longer unlawful or impractical to fund or maintain LIBOR Rate Loans, may designate a different Issuing Bank or substitute a Lender, in each case, reasonably acceptable to Agent to purchase the Obligations owed to such Affected Lender and such Affected Lender’s commitments hereunder (a “Replacement Lender”), and if such Replacement Lender agrees to such purchase, such Affected Lender shall assign to the Replacement Lender its Obligations and commitments, and upon such purchase by the Replacement Lender, which such Replacement Lender shall be deemed to be “Issuing Bank” or a “Lender” (as the case may be) for purposes of this Agreement and such Affected Lender shall cease to be “Issuing Bank” or a “Lender” (as the case may be) for purposes of this Agreement.

 

(c) Notwithstanding anything herein to the contrary, the protection of Sections 2.11(l), 2.12(d), and 2.13 shall be available to Issuing Bank and each Lender (as applicable) regardless of any possible contention of the invalidity or inapplicability of the law, rule, regulation, judicial ruling, judgment, guideline, treaty or other change or condition which shall have occurred or been imposed, so long as it shall be customary for issuing banks or lenders affected thereby to comply therewith.  Notwithstanding any other provision herein, neither Issuing Bank nor any Lender shall demand compensation pursuant to this Section 2.13 if it shall not at the time be the general policy or practice of Issuing Bank or such Lender (as the case may be) to demand such compensation in similar circumstances under comparable provisions of other credit agreements, if any.

 

2.14 Accordion.

 

(a) At any time during the period from and after the Closing Date through but excluding the date that is the 4 year anniversary of the Closing Date, at the option of Borrowers (but subject to the conditions set forth in clause (b) below), the Revolver Commitments and the Maximum Revolver Amount may be increased by an amount in the aggregate for all such increases of the Revolver Commitments and the Maximum Revolver Amount not to exceed the Available Increase Amount (each such increase, an “Increase”).  Agent shall invite each Lender to increase its Revolver Commitments (it being understood that no Lender shall be obligated to increase its Revolver Commitments) in connection with a proposed Increase at the interest margin proposed by Borrowers, and if sufficient Lenders do not agree to increase their Revolver Commitments in connection with such proposed Increase, then Agent or Borrowers may invite any prospective lender who is reasonably satisfactory to Agent and Borrowers to become a Lender in connection with a proposed Increase.  Any Increase shall be in an amount of at least $10,000,000 and integral multiples of $10,000,000 in excess thereof.  In no event may the Revolver Commitments and the Maximum Revolver Amount be increased pursuant to this Section 2.14 on more than five (5) occasions in the aggregate for all such Increases.  Additionally, for the avoidance of doubt, it is understood and agreed that in no event shall the aggregate amount of the Increases to the Revolver Commitments exceed $50,000,000.

 

(b) Each of the following shall be conditions precedent to (or, where otherwise indicated, conditions concurrent with) any Increase of the Revolver Commitments and the Maximum Revolver Amount in connection therewith:

 

(i) Agent or Borrowers have obtained the commitment of one or more Lenders (or other prospective lenders) reasonably satisfactory to Agent and Borrowers to provide the applicable Increase and any such Lenders (or prospective lenders), Borrowers, and Agent have signed a joinder agreement to this Agreement (an “Increase Joinder”), in form and substance reasonably satisfactory to Agent, to which such Lenders (or prospective lenders), Borrowers, and Agent are party,

 

(ii) each of the conditions precedent set forth in Section 3.2 are satisfied,

 

(iii) Borrowers have delivered to Agent updated pro forma Projections (after giving effect to the applicable Increase) for Borrowers and their Subsidiaries evidencing compliance on a pro forma basis with Section 7 for the twelve consecutive month period immediately following the proposed date of the applicable Increase,

 

(iv) Borrowers shall have reached agreement with the Lenders (or prospective lenders) agreeing to the increased Revolver Commitments with respect to the interest margins applicable to Revolving Loans to be made pursuant to the increased Revolver Commitments (which interest margins may be higher than or equal to the interest margins applicable to Revolving Loans set forth in this Agreement immediately prior to the date of the increased Revolver Commitments (the date of the effectiveness of the increased Revolver Commitments and the Maximum Revolver Amount, the “Increase Date”)) and shall have communicated the amount of such interest margins to Agent.  Any Increase Joinder may, with the consent of Agent, Borrowers and the Lenders or prospective lenders agreeing to the proposed Increase, effect such amendments to this Agreement and the other Loan Documents as may be necessary or appropriate to effectuate the provisions of this Section 2.14 (including any amendment necessary to effectuate the interest margins for the Revolving Loans to be made pursuant to the increased Revolver Commitments).  Anything to the contrary contained herein notwithstanding, if the interest margin that is to be applicable to the Revolving Loans to be made pursuant to the increased Revolver Commitments are higher than the interest margin applicable to the Revolving Loans immediately prior to the applicable Increase Date (the amount by which the interest margin is higher, the “Excess”), then the interest margin applicable to the Revolving Loans immediately prior to the Increase Date shall be increased by the amount of the Excess, effective on the applicable Increase Date, and without the necessity of any action by any party hereto,

 

(v) Agent shall have received payment in immediately available funds of such closing fees as shall be mutually determined by Agent and Administrative Borrower, for the account of Agent and/or the Lenders (or prospective lenders) providing the applicable Increase,

 

(vi) Agent shall have received the first full appraisal of the Revenue Equipment constituting Collateral after the occurrence of the Closing Date,

 

(vii) the Revolver Commitment of PNC shall not exceed $50,000,000 after giving effect to any such Increase, and

 

(viii) concurrent with the effectiveness of the first such Increase, a $12,500,000 Reserve shall have been established and at all times thereafter maintained against the lesser of (determined before giving effect to such $12,500,000 Reserve) (x) the Borrowing Base and (y) the Maximum Revolver Amount.

 

(c) [Intentionally omitted].

 

(d) Unless otherwise specifically provided herein, all references in this Agreement and any other Loan Document to Revolving Loans shall be deemed, unless the context otherwise requires, to include Revolving Loans made pursuant to the increased Revolver Commitments and Maximum Revolver Amount pursuant to this Section 2.14.

 

(e) Each of the Lenders having a Revolver Commitment prior to the Increase Date (the “Pre-Increase Revolver Lenders”) shall assign to any Lender which is acquiring a new or additional Revolver Commitment on the Increase Date (the “Post-Increase Revolver Lenders”), and such Post-Increase Revolver Lenders shall purchase from each Pre-Increase Revolver Lender, at the principal amount thereof, such interests in the Revolving Loans and participation interests in Letters of Credit on such Increase Date as shall be necessary in order that, after giving effect to all such assignments and purchases, such Revolving Loans and participation interests in Letters of Credit will be held by Pre-Increase Revolver Lenders and Post-Increase Revolver Lenders ratably in accordance with their Pro Rata Share after giving effect to such increased Revolver Commitments.

 

(f) The Revolving Loans, Revolver Commitments, and Maximum Revolver Amount established pursuant to this Section 2.14 shall constitute Revolving Loans, Revolver Commitments, and Maximum Revolver Amount under, and shall be entitled to all the benefits afforded by, this Agreement and the other Loan Documents, and shall, without limiting the foregoing, benefit equally and ratably from any guarantees and the security interests created by the Loan Documents.  Borrowers shall take any actions reasonably required by Agent to ensure and demonstrate that the Liens and security interests granted by the Loan Documents continue to be perfected under the Code or otherwise after giving effect to the establishment of any such new Revolver Commitments and Maximum Revolver Amount.

 

2.15 Joint and Several Liability of Borrowers.

 

(a) Each Borrower is accepting joint and several liability hereunder and under the other Loan Documents in consideration of the financial accommodations to be provided by the Lender Group under this Agreement, for the mutual benefit, directly and indirectly, of each Borrower and in consideration of the undertakings of the other Borrowers to accept joint and several liability for the Obligations.

 

(b) Each Borrower, jointly and severally, hereby irrevocably and unconditionally accepts, not merely as a surety but also as a co-debtor, joint and several liability with the other Borrowers, with respect to the payment and performance of all of the Obligations (including any Obligations arising under this Section 2.15), it being the intention of the parties hereto that all the Obligations shall be the joint and several obligations of each Borrower without preferences or distinction among them.

 

(c) If and to the extent that any Borrower shall fail to make any payment with respect to any of the Obligations as and when due or to perform any of the Obligations in accordance with the terms thereof, then in each such event the other Borrowers will make such payment with respect to, or perform, such Obligation until such time as all of the Obligations are paid in full.

 

(d) The Obligations of each Borrower under the provisions of this Section 2.15 constitute the absolute and unconditional, full recourse Obligations of each Borrower enforceable against each Borrower to the full extent of its properties and assets, irrespective of the validity, regularity or enforceability of the provisions of this Agreement (other than this Section 2.15(d)) or any other circumstances whatsoever.

 

(e) Except as otherwise expressly provided in this Agreement, each Borrower hereby waives notice of acceptance of its joint and several liability, notice of any Revolving Loans or Letters of Credit issued under or pursuant to this Agreement, notice of the occurrence of any Default, Event of Default, or of any demand for any payment under this Agreement, notice of any action at any time taken or omitted by Agent or Lenders under or in respect of any of the Obligations, any requirement of diligence or to mitigate damages and, generally, to the extent permitted by applicable law, all demands, notices and other formalities of every kind in connection with this Agreement (except as otherwise provided in this Agreement).  Each Borrower hereby assents to, and waives notice of, any extension or postponement of the time for the payment of any of the Obligations, the acceptance of any payment of any of the Obligations, the acceptance of any partial payment thereon, any waiver, consent or other action or acquiescence by Agent or Lenders at any time or times in respect of any default by any Borrower in the performance or satisfaction of any term, covenant, condition or provision of this Agreement, any and all other indulgences whatsoever by Agent or Lenders in respect of any of the Obligations, and the taking, addition, substitution or release, in whole or in part, at any time or times, of any security for any of the Obligations or the addition, substitution or release, in whole or in part, of any Borrower.  Without limiting the generality of the foregoing, each Borrower assents to any other action or delay in acting or failure to act on the part of any Agent or Lender with respect to the failure by any Borrower to comply with any of its respective Obligations, including, without limitation, any failure strictly or diligently to assert any right or to pursue any remedy or to comply fully with applicable laws or regulations thereunder, which might, but for the provisions of this Section 2.15 afford grounds for terminating, discharging or relieving any Borrower, in whole or in part, from any of its Obligations under this Section 2.15, it being the intention of each Borrower that, so long as any of the Obligations hereunder remain unsatisfied, the Obligations of each Borrower under this Section 2.15 shall not be discharged except by performance and then only to the extent of such performance.  The Obligations of each Borrower under this Section 2.15 shall not be diminished or rendered unenforceable by any winding up, reorganization, arrangement, liquidation, reconstruction or similar proceeding with respect to any other Borrower or any Agent or Lender.

 

(f) Each Borrower represents and warrants to Agent and Lenders that such Borrower is currently informed of the financial condition of Borrowers and of all other circumstances which a diligent inquiry would reveal and which bear upon the risk of nonpayment of the Obligations.  Each Borrower further represents and warrants to Agent and Lenders that such Borrower has read and understands the terms and conditions of the Loan Documents.  Each Borrower hereby covenants that such Borrower will continue to keep informed of Borrowers’ financial condition and of all other circumstances which bear upon the risk of nonpayment or nonperformance of the Obligations.

 

(g) The provisions of this Section 2.15 are made for the benefit of Agent, each member of the Lender Group, each Bank Product Provider, and their respective successors and assigns, and may be enforced by it or them from time to time against any or all Borrowers as often as occasion therefor may arise and without requirement on the part of Agent, any member of the Lender Group, any Bank Product Provider, or any of their successors or assigns first to marshal any of its or their claims or to exercise any of its or their rights against any Borrower or to exhaust any remedies available to it or them against any Borrower or to resort to any other source or means of obtaining payment of any of the Obligations hereunder or to elect any other remedy.  The provisions of this Section 2.15 shall remain in effect until all of the Obligations shall have been paid in full or otherwise fully satisfied.  If at any time, any payment, or any part thereof, made in respect of any of the Obligations, is rescinded or must otherwise be restored or returned by Agent or any Lender upon the insolvency, bankruptcy or reorganization of any Borrower, or otherwise, the provisions of this Section 2.15 will forthwith be reinstated in effect, as though such payment had not been made.

 

(h) Each Borrower hereby agrees that it will not enforce any of its rights of contribution or subrogation against any other Borrower with respect to any liability incurred by it hereunder or under any of the other Loan Documents, any payments made by it to Agent or Lenders with respect to any of the Obligations or any collateral security therefor until such time as all of the Obligations have been paid in full in cash.  Any claim which any Borrower may have against any other Borrower with respect to any payments to any Agent or any member of the Lender Group hereunder or under any of the Bank Product Agreements are hereby expressly made subordinate and junior in right of payment, without limitation as to any increases in the Obligations arising hereunder or thereunder, to the prior payment in full in cash of the Obligations and, in the event of any insolvency, bankruptcy, receivership, liquidation, reorganization or other similar proceeding under the laws of any jurisdiction relating to any Borrower, its debts or its assets, whether voluntary or involuntary, all such Obligations shall be paid in full in cash before any payment or distribution of any character, whether in cash, securities or other property, shall be made to any other Borrower therefor.

 

(i) Each Borrower hereby agrees that after the occurrence and during the continuance of any Event of Default, such Borrower will not demand, sue for or otherwise attempt to collect any indebtedness of any other Borrower owing to such Borrower until the Obligations shall have been paid in full in cash.  If, after the occurrence and during the continuance of any Event of Default, and notwithstanding the foregoing sentence, such Borrower shall collect, enforce or receive any amounts in respect of such indebtedness, such amounts shall be collected, enforced and received by such Borrower as trustee for Agent, and such Borrower shall deliver any such amounts to Agent for application to the Obligations in accordance with Section 2.4(b).

 

3. CONDITIONS; TERM OF AGREEMENT.

 

3.1 Conditions Precedent to the Initial Extension of Credit.  The obligation of each Lender to make the initial extensions of credit provided for hereunder is subject to the fulfillment, to the satisfaction of Agent and each Lender, of each of the conditions precedent set forth on Schedule 3.1 (the making of such initial extensions of credit by a Lender being conclusively deemed to be its satisfaction or waiver of the conditions precedent).

 

3.2 Conditions Precedent to all Extensions of Credit.  The obligation of the Lender Group (or any member thereof) to make any Revolving Loans hereunder (or to extend any other credit hereunder) at any time shall be subject to the following conditions precedent:

 

(a) the representations and warranties of each Borrower or its Subsidiaries contained in this Agreement or in the other Loan Documents shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) on and as of the date of such extension of credit, as though made on and as of such date (except to the extent that such representations and warranties relate solely to an earlier date, in which case such representations and warranties shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) as of such earlier date); and

 

(b) no Default or Event of Default shall have occurred and be continuing on the date of such extension of credit, nor shall either result from the making thereof.

 

3.3 Maturity.  This Agreement shall continue in full force and effect for a term ending on the Maturity Date.

 

3.4 Effect of Maturity.  On the Maturity Date, all commitments of the Lender Group to provide additional credit hereunder shall automatically be terminated and all of the Obligations immediately shall become due and payable without notice or demand and Borrowers shall be required to repay all of the Obligations in full.  No termination of the obligations of the Lender Group (other than payment in full of the Obligations and termination of the Commitments) shall relieve or discharge any Loan Party of its duties, obligations, or covenants hereunder or under any other Loan Document and Agent’s Liens in the Collateral shall continue to secure the Obligations and shall remain in effect until all Obligations have been paid in full and the Commitments have been terminated.  When all of the Obligations have been paid in full and the Lender Group’s obligations to provide additional credit under the Loan Documents have been terminated irrevocably, Agent will, at Borrowers’ sole expense, execute and deliver any termination statements, lien releases, discharges of security interests, and other similar discharge or release documents (and, if applicable, in recordable form) as are reasonably necessary to release, as of record, Agent’s Liens and all notices of security interests and liens previously filed by Agent.

 

3.5 Early Termination by Borrowers.  Borrowers have the option, at any time upon 10 Business Days prior written notice to Agent, to terminate this Agreement and terminate the Commitments hereunder by repaying to Agent all of the Obligations in full.  The foregoing notwithstanding, (a) Borrowers may rescind termination notices relative to proposed payments in full of the Obligations with the proceeds of third party Indebtedness if the closing for such issuance or incurrence does not happen on or before the date of the proposed termination (in which case, a new notice shall be required to be sent in connection with any subsequent termination), and (b) Borrowers may extend the date of termination at any time with the consent of Agent (which consent shall not be unreasonably withheld or delayed).

 

4. REPRESENTATIONS AND WARRANTIES.

 

In order to induce the Lender Group to enter into this Agreement, each Borrower makes the following representations and warranties to the Lender Group which shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof), as of the Closing Date, and shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof), as of the date of the making of each Revolving Loan (or other extension of credit) made thereafter, as though made on and as of the date of such Revolving Loan (or other extension of credit) (except to the extent that such representations and warranties relate solely to an earlier date, in which case such representations and warranties shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) as of such earlier date) and such representations and warranties shall survive the execution and delivery of this Agreement:

 

4.1 Due Organization and Qualification; Subsidiaries.

 

(a) Each Loan Party (i) is duly organized and existing and in good standing under the laws of the jurisdiction of its organization, (ii) is qualified to do business in any state where the failure to be so qualified could reasonably be expected to result in a Material Adverse Effect, and (iii) has all requisite corporate or limited liability company (as applicable) power and authority to own and operate its properties, to carry on its business as now conducted and as proposed to be conducted, to enter into the Loan Documents to which it is a party and to carry out the transactions contemplated thereby.

 

(b) Set forth on Schedule 4.1(b) (as such Schedule may be updated from time to time to reflect changes resulting from transactions permitted under this Agreement) is a complete and accurate description of the authorized Equity Interests of each Borrower (other than USA Truck), by class, and, as of the Closing Date, a description of the number of shares of each such class that are issued and outstanding.  Other than as described on Schedule 4.1(b), no Borrower is subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its Equity Interests or any security convertible into or exchangeable for any of its Equity Interests.

 

(c) Set forth on Schedule 4.1(c) (as such Schedule may be updated from time to time to reflect changes resulting from transactions permitted under this Agreement), is a complete and accurate list of the Loan Parties’ direct and indirect Subsidiaries, showing: (i) the number of shares of each class of common and preferred Equity Interests authorized for each of such Subsidiaries, and (ii) the number and the percentage of the outstanding shares of each such class owned directly or indirectly by USA Truck.  All of the outstanding Equity Interests of each such Subsidiary has been validly issued and is fully paid and non-assessable.

 

(d) Except as set forth on Schedule 4.1(d) (as such Schedule may be updated from time to time to reflect changes resulting from transactions permitted under this Agreement), there are no subscriptions, options, warrants, or calls relating to any shares of any of USA Truck’s Subsidiaries’ Equity Interests, including any right of conversion or exchange under any outstanding security or other instrument.

 

(e) To the extent that any of Schedules 4.1(b), (c), or (d) may be updated from time to time to reflect changes resulting from transactions permitted under this Agreement, such schedules shall be deemed to have been updated for the purposes of making any representation under this Section 4.1 at the time that Agent shall have received written notice of such change from the Administrative Borrower together with clean and marked replacement schedule(s).

 

4.2 Due Authorization; No Conflict.

 

(a) As to each Loan Party, the execution, delivery, and performance by such Loan Party of the Loan Documents to which it is a party have been duly authorized by all necessary corporate or limited liability company (as applicable) action on the part of such Loan Party.

 

(b) As to each Loan Party, the execution, delivery, and performance by such Loan Party of the Loan Documents to which it is a party do not and will not (i) violate any material provision of federal, state, or local law or regulation applicable to any Loan Party or its Subsidiaries, the Governing Documents of any Loan Party or its Subsidiaries, or any order, judgment, or decree of any court or other Governmental Authority binding on any Loan Party or its Subsidiaries, (ii) conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any Material Contract of any Loan Party or its Subsidiaries where any such conflict, breach or default could individually or in the aggregate reasonably be expected to have a Material Adverse Effect, (iii) result in or require the creation or imposition of any Lien of any nature whatsoever upon any assets of any Loan Party, other than Permitted Liens, or (iv) require any approval of any holder of Equity Interests of a Loan Party or any approval or consent of any Person under any Material Contract of any Loan Party or its Subsidiaries, other than consents or approvals that have been obtained and that are still in force and effect and except, in the case of Material Contracts, where the failure to obtain such consents or approvals could not individually or in the aggregate reasonably be expected to cause a Material Adverse Effect.

 

4.3 Governmental Consents.  The execution, delivery, and performance by each Loan Party of the Loan Documents to which such Loan Party is a party and the consummation of the transactions contemplated by the Loan Documents do not and will not require any registration with, consent, or approval of, or notice to, or other action with or by, any Governmental Authority, other than registrations, consents, approvals, notices, or other actions that have been obtained and that are still in force and effect and except for filings and recordings with respect to the Collateral to be made, or otherwise delivered to Agent for filing or recordation.

 

4.4 Binding Obligations; Perfected Liens.

 

(a) Each Loan Document has been duly executed and delivered by each Loan Party that is a party thereto and is the legally valid and binding obligation of such Loan Party, enforceable against such Loan Party in accordance with its respective terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors’ rights generally.

 

(b) Agent’s Liens in the Collateral are validly created and upon the filing of financing statements in the appropriate filing offices in accordance with the filing procedures established in the applicable jurisdictions, including, without limitation, the payment of all required filing fees and taxes, the Agent’s Liens in the Collateral will be first priority, perfected Liens, to the extent such Liens are capable of being perfected under the applicable Uniform Commercial Code by the filing of such financing statements.  The Collateral is subject to no Liens other than Permitted Liens which are non-consensual Permitted Liens, permitted purchase money Liens, or the interests of lessors under Capital Leases.

 

4.5 Title to Assets; No Encumbrances.  Each of the Loan Parties and its Subsidiaries has (a) good, sufficient and legal title to (in the case of fee interests in Real Property), (b) valid leasehold interests in (in the case of leasehold interests in real or personal property), and (c) good and marketable title to (in the case of all other personal property), all of their respective assets reflected in their most recent financial statements delivered pursuant to Section 5.1, in each case except for assets disposed of (i) prior to the Closing Date or (ii) since the date of such financial statements to the extent permitted hereby.  All of such assets are free and clear of Liens except for Permitted Liens.

 

4.6 Litigation.

 

(a) There are no actions, suits, or proceedings pending or, to the knowledge of any Borrower, after due inquiry, threatened in writing against a Loan Party or any of its Subsidiaries that either individually or in the aggregate could reasonably be expected to result in a Material Adverse Effect.

 

(b) Except as set forth on Schedule 4.6(b) or as otherwise disclosed by Administrative Borrower to Agent in writing, there are no actions, suits, or proceedings pending or, to the knowledge of any Borrower, threatened against a Loan Party or its Subsidiaries that are reasonably likely to result in liabilities in excess of $250,000 (exclusive of any amounts covered (other than to the extent of customary deductibles and self-insured retention amounts) by insurance pursuant to which the insurer has not denied coverage).

 

4.7 Compliance with Laws.  No Loan Party nor any of its Subsidiaries (a) is in violation of any applicable laws, rules, regulations, executive orders, or codes (including Environmental Laws) that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect, or (b) is subject to or in default with respect to any final judgments, writs, injunctions, decrees, rules or regulations (that have not been stayed by appropriate proceedings) of any court or any federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.

 

4.8 No Material Adverse Effect.  All historical financial statements relating to the Loan Parties and their Subsidiaries that have been delivered by Borrowers to Agent have been prepared in accordance with GAAP (except, in the case of unaudited financial statements, for the lack of footnotes and being subject to year-end audit adjustments) and present fairly in all material respects, the Loan Parties’ and their Subsidiaries’ consolidated financial condition as of the date thereof and results of operations for the period then ended.  Since December 31, 2011, no event, circumstance, or change has occurred that has or could reasonably be expected to result in a Material Adverse Effect with respect to the Loan Parties and their Subsidiaries.

 

4.9 Solvency.

 

(a) Each Borrower is, and the Loan Parties taken as a whole are Solvent.

 

(b) No transfer of property is being made by any Loan Party and no obligation is being 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 such Loan Party.

 

4.10 Employee Benefits.  No Loan Party, none of their Subsidiaries, and none of any of their ERISA Affiliates maintains or contributes to any Benefit Plan.

 

4.11 Environmental Condition.  Except as set forth on Schedule 4.11, (a) to each Borrower’s knowledge, no Loan Party’s nor any of its Subsidiaries’ properties or assets has ever been used by a Loan Party, its Subsidiaries, or by previous owners or operators in the disposal of, or to produce, store, handle, treat, release, or transport, any Hazardous Materials, where such disposal, production, storage, handling, treatment, release or transport was in violation of any applicable Environmental Law and such violation (if any) is reasonably likely to have a Material Adverse Effect, (b) to each Borrower’s knowledge, after due inquiry, no Loan Party’s nor any of its Subsidiaries’ properties or assets has ever been designated or identified in any manner pursuant to any environmental protection statute as a Hazardous Materials disposal site, except where the same could not reasonably be expected to have a Material Adverse Effect, (c) no Loan Party nor any of its Subsidiaries has received notice that a Lien (other than a Permitted Lien) arising under any Environmental Law has attached to any revenues or to any Real Property owned or operated by a Loan Party or its Subsidiaries, and (d) no Loan Party nor any of its Subsidiaries nor any of their respective facilities or operations is subject to any outstanding written order, consent decree, or settlement agreement with any Person relating to any Environmental Law or Environmental Liability that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

 

4.12 Complete Disclosure.  All factual information taken as a whole (other than forward-looking information and projections and information of a general economic nature and general information about Borrowers’ industry) furnished prior to, on or after the date hereof by or on behalf of a Loan Party or its Subsidiaries in writing to Agent or any Lender (including all information contained in the Schedules hereto or in the other Loan Documents) for purposes of or in connection with this Agreement or the other Loan Documents, is true and accurate, in all material respects, on the date as of which such information is dated or certified and not incomplete by omitting to state any fact necessary to make such information (taken as a whole) not misleading in any material respect at such time in light of the circumstances under which such information was provided.  The Projections delivered to Agent on July 17, 2012 represent, and as of the date on which any other Projections are delivered to Agent, such additional Projections represent, Borrowers’ good faith estimate, on the date such Projections are delivered, of the Loan Parties’ and their Subsidiaries’ future performance for the periods covered thereby based upon assumptions believed by Borrowers to be reasonable at the time of the delivery thereof to Agent (it being understood that such Projections are subject to significant uncertainties and contingencies, many of which are beyond the control of the Loan Parties and their Subsidiaries, and no assurances can be given that such Projections will be realized, and although reflecting Borrowers’ good faith estimate, projections or forecasts based on methods and assumptions that Borrowers believed to be reasonable at the time such Projections were prepared, are not to be viewed as facts, and that actual results during the period or periods covered by the Projections may differ materially from projected or estimated results).

 

4.13 Patriot Act.  To the extent applicable, each Loan Party is in compliance, in all material respects, with the (a) Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto, and (b) Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA Patriot Act of 2001) (the “Patriot Act”).  No part of the proceeds of the loans made hereunder will be used by any Loan Party or any of their Affiliates, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.

 

4.14 Indebtedness.  Set forth on Schedule 4.14 is a true and complete list of all Indebtedness of each Loan Party and each of its Subsidiaries outstanding immediately prior to the Closing Date that is to remain outstanding immediately after giving effect to the closing and application of the initial Revolving Loan hereunder on the Closing Date and such Schedule accurately sets forth the aggregate principal amount of such Indebtedness as of the Closing Date.

 

4.15 Payment of Taxes.  Except as otherwise permitted under Section 5.5, (a) all federal and other material tax returns and reports of each Loan Party and its Subsidiaries required to be filed by any of them have been timely filed and (b) all federal and other material taxes shown on such tax returns to be due and payable and all material tax assessments, fees and other governmental charges upon a Loan Party and its Subsidiaries and upon their respective assets, income, businesses and franchises that are due and payable have been paid when due and payable.  Each Loan Party and each of its Subsidiaries have made adequate provision in accordance with GAAP for all taxes not yet due and payable.  No Borrower knows of any proposed material tax assessment against a Loan Party or any of its Subsidiaries that is not being actively contested by such Loan Party or such Subsidiary diligently, in good faith, and by appropriate proceedings; provided such reserves or other appropriate provisions, if any, as shall be required in conformity with GAAP shall have been made or provided therefor.

 

4.16 Margin Stock.  No Loan Party or any of its Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying any Margin Stock.  No part of the proceeds of the loans made to Borrowers will be used to purchase or carry any Margin Stock or to extend credit to others for the purpose of purchasing or carrying any Margin Stock or for any purpose that violates the provisions of Regulation T, U or X of the Board of Governors.

 

4.17 Governmental Regulation.  No Loan Party or any of its Subsidiaries is subject to regulation under the Federal Power Act or the Investment Company Act of 1940 or under any other federal or state statute or regulation which may limit its ability to incur Indebtedness or which may otherwise render all or any portion of the Obligations unenforceable.  No Loan Party or any of its Subsidiaries is a “registered investment company” or a company “controlled” by a “registered investment company” or a “principal underwriter” of a “registered investment company” as such terms are defined in the Investment Company Act of 1940.

 

4.18 OFAC.  No Loan Party or any of its Subsidiaries is in violation of any of the country or list based economic and trade sanctions administered and enforced by OFAC.  No Loan Party or any of its Subsidiaries (a) is a Sanctioned Person or a Sanctioned Entity, (b) has its assets located in Sanctioned Entities, or (c) derives revenues from investments in, or transactions with Sanctioned Persons or Sanctioned Entities.  No proceeds of any loan made hereunder will be used to fund any operations in, finance any investments or activities in, or make any payments to, a Sanctioned Person or a Sanctioned Entity.

 

4.19 Employee and Labor Matters.  Except as set forth on Schedule 4.19, there is (i) no unfair labor practice complaint pending or, to the knowledge of any Borrower, threatened against any Borrower or its Subsidiaries before any Governmental Authority and no grievance or arbitration proceeding pending or threatened against any Borrower or its Subsidiaries that arises out of or under any collective bargaining agreement and that could reasonably be expected to result in a material liability, (ii) no strike, labor dispute, slowdown, stoppage or similar action or grievance pending or threatened in writing against any Borrower or its Subsidiaries that could reasonably be expected to result in a material liability, or (iii) to the knowledge of any Borrower, after due inquiry, no union representation question existing with respect to the employees of any Borrower or its Subsidiaries and no union organizing activity taking place with respect to any of the employees of any Borrower or its Subsidiaries that has not been disclosed in writing to Agent.  None of any Borrower or its Subsidiaries has incurred any liability or obligation under the Worker Adjustment and Retraining Notification Act or similar state law, which remains unpaid or unsatisfied.  The hours worked and payments made to employees of each Borrower and its Subsidiaries have not been in violation of the Fair Labor Standards Act or any other applicable legal requirements, except to the extent such violations could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  All material payments due from any Borrower or its Subsidiaries on account of wages and employee health and welfare insurance and other benefits have been paid or accrued as a liability on the books of Borrowers, except where the failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

4.20 [Intentionally Omitted].

 

4.21 Leases.  Each Loan Party and its Subsidiaries enjoy peaceful and undisturbed possession under all leases material to the continued operation of their business and to which they are parties or under which they are operating, and, subject to Permitted Protests, all of such material leases are valid and subsisting and no default by the applicable Loan Party or its Subsidiaries exists under any of them that could reasonably be expected to have a Material Adverse Effect.

 

4.22 Eligible Accounts and Eligible Unbilled Accounts.  As to each Account that is identified by Borrowers as an Eligible Account or an Eligible Unbilled Account in a Borrowing Base Certificate submitted to Agent, such Account is (a) a bona fide existing payment obligation of the applicable Account Debtor created by the rendition of services or sale of goods to such Account Debtor in the ordinary course of the Borrowers’ business, (b) owed to a Borrower, (c) in the case of Eligible Accounts, not excluded as ineligible by virtue of one or more of the excluding criteria (other than any Agent-discretionary criteria) set forth in the definition of Eligible Accounts, and (d) in the case of Eligible Unbilled Accounts, not excluded as ineligible by virtue of one or more of the excluding criteria (other than any Agent-discretionary criteria) set forth in the definition of Eligible Unbilled Accounts.

 

4.23 Eligible Revenue Equipment.  As to each item of Revenue Equipment that is identified by any Borrower as Eligible Revenue Equipment in a Borrowing Base Certificate submitted to Agent, such Revenue Equipment is not excluded as ineligible by virtue of one or more of the excluding criteria (other than Agent-discretionary criteria) set forth in the definition of Eligible Revenue Equipment.

 

4.24 Location of Equipment.  The Equipment constituting Collateral (including any Revenue Equipment constituting Collateral) of Borrowers and their Subsidiaries is located only at, or in-transit between or to, the locations identified on Schedule 4.24 (as such Schedule may be updated pursuant to Section 5.14) except for (a) any Equipment out for repair, (b) any Revenue Equipment which is in over the road use (it being understood and agreed that "over the road use" shall not preclude customary retention of such Revenue Equipment for the purpose of loading or unloading; customary retention not to exceed 7 calendar days) and (c) Revenue Equipment of no more than (i) 25 units at any one location in the continental United States constituting trailers or other non-power units, (ii) 25 units located in Canada constituting trailers or other non-power units and/or (iii) 5 units at any one location in the continental United States or Canada constituting tractors or other powered units.

 

4.25 Revenue Equipment Records.  Each Loan Party keeps correct and accurate records itemizing and describing the type, quality, and quantity of its and its Subsidiaries’ Revenue Equipment and, in each case, the book value thereof.

 

5. AFFIRMATIVE COVENANTS.

 

Each Borrower covenants and agrees that, until termination of all of the Commitments and payment in full of the Obligations:

 

5.1 Financial Statements, Reports, Certificates.  Borrowers (a) will deliver to Agent or cause the Administrative Borrower to deliver to Agent, with copies to each Lender, each of the financial statements, reports, and other items set forth on Schedule 5.1 no later than the times specified therein, (b) agree that no Subsidiary of a Loan Party will have a fiscal year different from that of USA Truck, (c) agree to maintain a system of accounting that enables Borrowers to produce financial statements in accordance with GAAP, and (d) agree that they will, and will cause each other Loan Party to, (i) keep a reporting system that shows all additions, sales, claims, returns, and allowances with respect to their and their Subsidiaries’ sales, and (ii) maintain their billing systems and practices substantially as in effect as of the Closing Date and shall only make material modifications thereto with notice to Agent.

 

5.2 Reporting.  Borrowers (a) will deliver to Agent or cause the Administrative Borrower to deliver to Agent (and if so requested by Agent, with copies for each Lender) each of the reports set forth on Schedule 5.2 at the times specified therein, and (b) agree, working individually or collectively through the Administrative Borrower, to use commercially reasonable efforts in cooperation with Agent to facilitate and implement a system of electronic collateral reporting in order to provide electronic reporting of each of the items set forth on such Schedule.

 

5.3 Existence.  Except as otherwise permitted under Section 6.3 or Section 6.4, each Borrower will, and will cause each of its Subsidiaries to, at all times preserve and keep in full force and effect such Person’s valid existence and good standing in its jurisdiction of organization and, except as could not reasonably be expected to result in a Material Adverse Effect, good standing with respect to all other jurisdictions in which it is qualified to do business and any rights, franchises, permits, licenses, accreditations, authorizations, or other approvals material to their businesses.

 

5.4 Maintenance of Properties.  Each Borrower will, and will cause each of its Subsidiaries to, maintain and preserve all of its assets that are necessary or useful in the proper conduct of its business in good working order and condition, ordinary wear, tear, casualty, and condemnation and Permitted Dispositions excepted.

 

5.5 Taxes.  Each Borrower will, and will cause each of its Subsidiaries to, pay in full before delinquency or before the expiration of any extension period all material governmental assessments and taxes imposed, levied, or assessed against it, or any of its assets or in respect of any of its income, businesses, or franchises, except to the extent that the validity of such governmental assessment or tax is the subject of a Permitted Protest.

 

5.6 Insurance.  Each Borrower will, and will cause each of its Subsidiaries to, at Borrowers’ expense, (a) maintain insurance respecting each of each Borrower’s and its Subsidiaries’ assets wherever located, covering liabilities, losses or damages as are customarily insured against by other Persons engaged in same or similar businesses and similarly situated and located.  All such policies of insurance shall be with financially sound and reputable insurance companies acceptable to Agent (it being agreed that all of the insurance companies providing the Borrowers and their Subsidiaries with insurance on the Closing Date are reputable insurance companies acceptable to Agent) and in such amounts as are carried generally in accordance with sound business practice by companies in similar businesses similarly situated and located and, in any event, in amount, adequacy, and scope reasonably satisfactory to Agent (it being agreed that the amount, adequacy, and scope of the policies of insurance of Borrowers in effect as of the Closing Date, including, without limitation, self-insured retention amounts, are acceptable to Agent).  All property insurance policies covering the Collateral are to be made payable to Agent for the benefit of Agent and the Lenders, as their interests may appear, in case of loss, pursuant to a standard loss payable endorsement with a standard non-contributory “lender” or “secured party” clause and are to contain such other provisions as Agent may reasonably require to fully protect the Lenders’ interest in the Collateral and to any payments to be made under such policies.  All certificates of property and general liability insurance are to be delivered to Agent, with the loss payable (but only in respect of Collateral) and additional insured endorsements in favor of Agent and shall provide for not less than 30 days (10 days in the case of non-payment) prior written notice to Agent of the exercise of any right of cancellation.  If any Borrower or its Subsidiaries fails to maintain such insurance, Agent may arrange for such insurance, but at Borrowers’ expense and without any responsibility on Agent’s part for obtaining the insurance, the solvency of the insurance companies, the adequacy of the coverage, or the collection of claims.  Administrative Borrower shall give Agent prompt notice of any loss (including business interruption losses) in excess of $1,000,000 over the amount covered by applicable insurance.  Upon the occurrence and during the continuance of an Event of Default, Agent shall have the sole right to file claims under any property and general liability insurance policies in respect of the Collateral, to receive, receipt and give acquittance for any payments that may be payable thereunder, and to execute any and all endorsements, receipts, releases, assignments, reassignments or other documents that may be necessary to effect the collection, compromise or settlement of any claims under any such insurance policies.

 

5.7 Inspection.

 

(a) Each Borrower will, and will cause each of its Subsidiaries to, permit Agent, any Lender, and each of their respective duly authorized representatives or agents to visit any of its properties and inspect any of its assets or books and records, to examine and make copies of its books and records, and to discuss its affairs, finances, and accounts with, and to be advised as to the same by, its officers and employees (provided an authorized representative of a Borrower shall be allowed to be present) at such reasonable times and intervals as Agent or any Lender, as applicable, may designate and, so long as no Default or Event of Default has occurred and is continuing, with reasonable prior notice to Administrative Borrower and during regular business hours.

 

(b) Subject to the provisions of Section 2.10(c), each Borrower will, and will cause each of its Subsidiaries to, permit Agent and each of its duly authorized representatives or agents to conduct appraisals and valuations at such reasonable times and intervals as Agent may designate, it being understood and acknowledged by each Borrower that Agent shall require its first full scope appraisal of the Revenue Equipment constituting Collateral to occur within 60 days of the Closing Date.

 

5.8 Compliance with Laws.  Each Borrower will, and will cause each of its Subsidiaries to, comply with the requirements of all applicable laws, rules, regulations, and orders of any Governmental Authority, other than laws, rules, regulations, and orders the non-compliance with which, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

 

5.9 Environmental.  Each Borrower will, and will cause each of its Subsidiaries to,

 

(a) Keep any property either owned or operated by any Borrower or its Subsidiaries free of any Environmental Liens or post bonds or other financial assurances sufficient to satisfy the obligations or liability evidenced by such Environmental Liens,

 

(b) Comply, in all material respects, with Environmental Laws and provide to Agent documentation of such compliance which Agent reasonably requests,

 

(c) Promptly notify Agent of any release of which any Borrower has knowledge of a Hazardous Material from or onto property owned or operated by any Borrower or its Subsidiaries if such release is required to be reported to any Governmental Authority under applicable Environmental Laws (and could reasonably be expected to result in a material liability) and take any Remedial Actions required to abate said release or otherwise to come into compliance, in all material respects, with applicable Environmental Law, and

 

(d) Promptly, but in any event within 5 Business Days of its receipt thereof, provide Agent with written notice of any of the following:  (i) notice that an Environmental Lien has been filed against any of the real or personal property of a Borrower or its Subsidiaries, (ii) commencement of any Environmental Action or written notice that an Environmental Action will be filed against a Borrower or its Subsidiaries, and (iii) written notice of a violation, citation, or other administrative order from a Governmental Authority.

 

5.10 Disclosure Updates.  The Administrative Borrower will promptly, and in no event later than 5 Business Days after obtaining knowledge thereof, notify Agent if any written information, exhibit, or report furnished to Agent or the Lenders contained, at the time it was furnished, any untrue statement of a material fact or omitted to state any material fact necessary to make the statements contained therein not misleading in light of the circumstances in which made.  The foregoing to the contrary notwithstanding, any notification pursuant to the foregoing provision will not cure or remedy the effect of the prior untrue statement of a material fact or omission of any material fact nor shall any such notification have the effect of amending or modifying this Agreement or any of the Schedules hereto.

 

5.11 Formation of Subsidiaries.  At the time that any Loan Party forms any direct or indirect Subsidiary or acquires any direct or indirect Subsidiary after the Closing Date, such Loan Party shall within 10 days of such formation or acquisition (or such later date as permitted by Agent in its sole discretion): (a) cause such new Subsidiary to provide to Agent a joinder to the Guaranty and Security Agreement, together with such other security agreements, as well as appropriate financing statements, all in form and substance reasonably satisfactory to Agent (including being sufficient to grant Agent a first priority Lien (subject to Permitted Liens) in and to the assets constituting Collateral of such newly formed or acquired Subsidiary); provided, that the joinder to the Guaranty and Security Agreement, and such other security agreements shall not be required to be provided to Agent with respect to any Subsidiary of any Loan Party that is a CFC if providing such agreements would result in material adverse tax consequences or the costs to the Loan Parties of providing such guaranty or such security agreements are unreasonably excessive (as determined by Agent in consultation with Administrative Borrower) in relation to the benefits to Agent and the Lenders of the security or guarantee afforded thereby, (b) provide, or cause the applicable Loan Party to provide, to Agent a pledge agreement (or an addendum to the Guaranty and Security Agreement) and appropriate certificates and powers or financing statements, pledging all of the direct or beneficial ownership interest in such new Subsidiary in form and substance reasonably satisfactory to Agent; provided, that only 65% of the total outstanding voting Equity Interests of any first tier Subsidiary of a Loan Party that is a CFC (and none of the Equity Interests of any Subsidiary of such CFC) shall be required to be pledged if pledging a greater amount would result in material adverse tax consequences or the costs to the Loan Parties of providing such pledge are unreasonably excessive (as determined by Agent in consultation with Administrative Borrower) in relation to the benefits to Agent and the Lenders of the security afforded thereby (which pledge, if reasonably requested by Agent, shall be governed by the laws of the jurisdiction of such Subsidiary), and (c) provide to Agent all other documentation, including one or more opinions of counsel reasonably satisfactory to Agent, which, in its opinion, is appropriate with respect to the execution and delivery of the applicable documentation referred to above.  Any document, agreement, or instrument executed or issued pursuant to this Section 5.11 shall constitute a Loan Document.

 

5.12 Further Assurances.  Each Borrower will, and will cause each of the other Loan Parties to, at any time upon the reasonable request of Agent, execute or deliver to Agent any and all financing statements, security agreements, pledges, assignments, opinions of counsel, and all other documents (the “Additional Documents”) that Agent may reasonably request in form and substance reasonably satisfactory to Agent, to create, perfect, and continue perfected or to better perfect Agent’s Liens in all of the assets of each Borrower and its Subsidiaries (whether now owned or hereafter arising or acquired, tangible or intangible, but excluding all Real Property owned or leased by any Borrower or its Subsidiaries and excluding any item of personal property excluded from the term “Collateral” by the terms of the Guaranty and Security Agreement) and in order to fully consummate all of the transactions contemplated hereby and under the other Loan Documents; provided that the foregoing shall not apply to any Subsidiary of a Borrower that is a CFC if providing such documents would result in material adverse tax consequences or the costs to the Loan Parties of providing such documents are unreasonably excessive (as determined by Agent in consultation with Borrowers) in relation to the benefits to Agent and the Lenders of the security afforded thereby.  To the maximum extent permitted by applicable law, if any Borrower or any other Loan Party refuses or fails to execute or deliver any reasonably requested Additional Documents within a reasonable period of time following the request to do so, each Borrower and each other Loan Party hereby authorizes Agent to execute any such Additional Documents in the applicable Loan Party’s name and authorizes Agent to file such executed Additional Documents in any appropriate filing office.  In furtherance of, and not in limitation of, the foregoing, each Loan Party shall take such actions as Agent may reasonably request from time to time to ensure that the Obligations are guarantied by the Guarantors and are secured by substantially all of the assets of each Borrower and its Subsidiaries, including all of the outstanding capital Equity Interests of each Borrower (other than USA Truck) and its Subsidiaries (subject to exceptions and limitations contained in the Loan Documents with respect to CFCs), and excluding all Real Property owned or leased by any Borrower or its Subsidiaries and any item of personal property excluded from the term “Collateral” by the terms of the Guaranty and Security Agreement.

 

5.13 Lender Meetings.  Borrowers will, within 120 days after the close of each fiscal year of USA Truck, at the request of Agent or of the Required Lenders and upon reasonable prior notice, hold a meeting (at a mutually agreeable location and time or, at the option of Agent, by conference call) with all Lenders who choose to attend such meeting at which meeting shall be reviewed the financial results of the previous fiscal year and the financial condition of Borrowers and their Subsidiaries and the projections presented for the current fiscal year of USA Truck.  Borrowers shall reimburse the Joint Lead Arrangers for all reasonable out-of-pocket costs and expenses incurred in connection with attendance at any such Lender meetings and agree that the same shall constitute a Lender Group Expense.  Notwithstanding anything in this Agreement or any of the other Loan Documents to the contrary, the costs incurred by any Lender (other than the Joint Lead Arrangers) choosing to attend any such Lender meeting for travel, meals, or lodging shall be borne by such Lender, and Borrowers and their Subsidiaries shall have no obligation to reimburse any Lender (other than the Joint Lead Arrangers) for any such expense, whether the same shall be deemed a Lender Group Expense or otherwise.

 

5.14 Location of Equipment.  Each Borrower will keep its, and will cause each of its Subsidiaries’, Equipment constituting Collateral (excluding (a) any Equipment out for repair, (b) any Revenue Equipment which is in over the road use (it being understood and agreed that “over the road use” shall not preclude customary retention of such Revenue Equipment for the purpose of loading or unloading; customary retention not to exceed 7 calendar days) and (c) Revenue Equipment of no more than (i) 25 units at any one location in the continental United States constituting trailers or other non-power units, (ii) 25 units located in Canada constituting trailers or other non-power units and/or (iii) 5 units at any one location in the continental United States or Canada constituting tractors or other powered units) to be kept only at the locations identified on Schedule 4.24 and their chief executive offices only at the locations identified on Schedule 5.14; provided, however, that (a) any Borrower may amend Schedule 5.14 so long as such amendment occurs by written notice to Agent not less than 10 days prior to the date on which such chief executive office is relocated and so long as such new location is within the continental United States and (b) any Borrower may amend Schedule 4.24 so long as such amendment occurs by written notice to Agent not later than the due date of the next monthly Compliance Certificate to be delivered pursuant to clause (b) of Schedule 5.1 following the date on which such Equipment is moved to such new location, and so long as such new location is within the continental United States and such Borrower complies with the requirements of Section 6.13 hereof.  In addition, Borrowers shall, upon request of Agent or its representatives, provide Agent with such additional information regarding the location of the Revenue Equipment of Borrowers which constitutes Collateral as Agent and/or its representatives may reasonably request, including, without limitation, location information which can be derived from Borrowers’ electronic tracking systems for their Revenue Equipment.

 

5.15 [Intentionally Omitted].

 

5.16 Post-Closing Matters.  Borrowers will complete each of the tasks and other items set forth on Schedule 5.16 no later than the times specified therein or such later date as Agent may agree in writing.

 

6. NEGATIVE COVENANTS.

 

Each Borrower covenants and agrees that, until termination of all of the Commitments and payment in full of the Obligations:

 

6.1 Indebtedness.  Each Borrower will not, and will not permit any of its Subsidiaries to create, incur, assume, suffer to exist, guarantee, or otherwise become or remain, directly or indirectly, liable with respect to any Indebtedness, except for Permitted Indebtedness.

 

6.2 Liens.  Each Borrower will not, and will not permit any of its Subsidiaries to create, incur, assume, or suffer to exist, directly or indirectly, any Lien on or with respect to any of its assets, of any kind, whether now owned or hereafter acquired, or any income or profits therefrom, except for Permitted Liens.

 

6.3 Restrictions on Fundamental Changes.  Each Borrower will not, and will not permit any of its Subsidiaries to,

 

(a) Other than in order to consummate a Permitted Acquisition, enter into any merger, consolidation, reorganization, or recapitalization, or reclassify its Equity Interests, except for (i) any merger between Loan Parties, provided, that a Borrower must be the surviving entity of any such merger, (ii) any merger between a Loan Party and a Subsidiary of such Loan Party that is not a Loan Party so long as such Loan Party is the surviving entity of any such merger, (iii) any merger between Subsidiaries of any Borrower that are not Loan Parties, and (iv) any stock split or reverse stock split of USA Truck's Equity Interests,

 

(b) liquidate, wind up, or dissolve itself (or suffer any liquidation or dissolution), except for (i) the liquidation or dissolution of non-operating Subsidiaries of any Borrower with nominal assets and nominal liabilities, (ii) the liquidation or dissolution of a Loan Party (other than any Borrower) or any of its wholly-owned Subsidiaries so long as all of the assets (including any interest in any Equity Interests) of such liquidating or dissolving Loan Party or Subsidiary are transferred to a Loan Party that is not liquidating or dissolving, or (iii) the liquidation or dissolution of a Subsidiary of any Borrower that is not a Loan Party (other than any such Subsidiary the Equity Interests of which (or any portion thereof) is subject to a Lien in favor of Agent) so long as all of the assets of such liquidating or dissolving Subsidiary are transferred to a Subsidiary of a Borrower that is not liquidating or dissolving, or

 

(c) suspend or cease operating a substantial portion of its or their business, except as permitted pursuant to clauses (a) or (b) above or in connection with a transaction permitted under Section 6.4.

 

6.4 Disposal of Assets.  Other than Permitted Dispositions or transactions expressly permitted by Sections 6.3 or 6.9, each Borrower will not, and will not permit any of its Subsidiaries to convey, sell, lease, license, assign, transfer, or otherwise dispose of (or enter into an agreement to convey, sell, lease, license, assign, transfer, or otherwise dispose of) any of its or their assets.

 

6.5 Nature of Business.  Each Borrower will not, and will not permit any of its Subsidiaries to make any change in the nature of its or their business as described in Schedule 6.5 or acquire any properties or assets that are not reasonably related to the conduct of such business activities; provided, that the foregoing shall not prevent any Borrower or its Subsidiaries from engaging in any business that is reasonably related or ancillary to their business.

 

6.6 Prepayments and Amendments.  Each Borrower will not, and will not permit any of its Subsidiaries to,

 

(a) Except in connection with Refinancing Indebtedness permitted by Section 6.1,

 

(i) optionally prepay, redeem, defease, purchase, or otherwise acquire any Indebtedness of any Borrower or its Subsidiaries, other than (A) the Obligations in accordance with this Agreement, and (B) repayment, in full, of the outstanding principal, accrued interest, and accrued fees and expenses owing under or in connection with the Existing Credit Facility, as permitted by Section 6.11, (C) payment of secured Indebtedness that becomes due as a result of (or is otherwise required to effectuate) any Permitted Disposition of the assets securing such Indebtedness, (D) repayment, in full, of secured Indebtedness so long as the Lien securing such Indebtedness is terminated and by virtue thereof the assets previously securing such Indebtedness become Collateral; provided that (x) no Event of Default shall have occurred and be continuing immediately prior to any such repayment and (y) the aggregate principal amount of the secured Indebtedness so repaid shall not exceed $2,500,000 in any fiscal year, and (E) Permitted Intercompany Advances, or

 

(ii) make any payment on account of Indebtedness that has been contractually subordinated in right of payment to the Obligations if such payment is not permitted at such time under the subordination terms and conditions, or

 

(b) Directly or indirectly, amend, modify, or change any of the terms or provisions of

 

(i) any agreement, instrument, document, indenture, or other writing evidencing  or concerning Permitted Indebtedness other than (A) the Obligations in accordance with this Agreement, (B) Permitted Intercompany Advances, (C) Indebtedness permitted under clauses (c), (h), (j), (k), (r), and (u) of the definition of Permitted Indebtedness and (D) any other agreement, instrument, document, indenture, or other writing evidencing or concerning Permitted Indebtedness not otherwise referred to in this clause (b)(i) if such amendment, modification, or change could not, individually or in the aggregate, reasonably be expected to be materially adverse to the interests of the Lenders; provided that amendments, modifications and changes made in respect of Permitted Indebtedness which is the subject of refinancing meeting the requirements of Refinancing Indebtedness shall be deemed to not be materially adverse to the interests of the Lenders,

 

(ii) any Material Contract (other than those concerning Permitted Indebtedness governed by the foregoing clause (b)(i)) except to the extent that such amendment, modification, or change could not, individually or in the aggregate, reasonably be expected to be materially adverse to the interests of the Lenders, or

 

(iii) the Governing Documents of any Loan Party or any of its Subsidiaries if the effect thereof, either individually or in the aggregate, could reasonably be expected to be materially adverse to the interests of the Lenders.

 

6.7 Restricted Payments.  Each Borrower will not, and will not permit any of its Subsidiaries to make any Restricted Payment; provided, that, so long as it is permitted by law, and so long as no Default or Event of Default shall have occurred and be continuing or would result therefrom,

 

(a) a Borrower or any of its Subsidiaries may make Restricted Payments to a Loan Party and a Subsidiary of a Borrower that is not a Loan Party may make Restricted Payments to another Subsidiary of a Borrower that is not a Loan Party,

 

(b) USA Truck may issue stock dividends in connection with any stock split of USA Truck's Equity Interests and in lieu of issuing a fractional share to a shareholder in connection with any stock split of USA Truck's Equity Interests, USA Truck may pay cash to such shareholder in an amount equal to the fair market value of such fractional share; provided that the aggregate amount of such cash paid to shareholders in connection with all such stock splits does not exceed $250,000 in any fiscal year,

 

(c) USA Truck may make Restricted Payments to former employees, officers, or directors of USA Truck (or any spouses, ex-spouses, or estates of any of the foregoing) on account of redemptions of Equity Interests of USA Truck held by such Persons, provided, that (i) both before and immediately after giving effect to any such Restricted Payment, (x) Borrowers shall have a Fixed Charge Coverage Ratio of at least 1.00 to 1.00 and (y) Borrowers shall have Excess Availability equal to or greater than 20.0% of the Maximum Revolver Amount, and (ii) the aggregate amount of such redemptions made by USA Truck during the term of this Agreement plus the amount of Indebtedness outstanding under clause (l) of the definition of Permitted Indebtedness does not exceed $5,000,000 in the aggregate,

 

(d) USA Truck may make distributions to former employees, officers, or directors of USA Truck (or any spouses, ex-spouses, or estates of any of the foregoing), solely in the form of forgiveness of Indebtedness of such Persons owing to USA Truck on account of repurchases of the Equity Interests of USA Truck held by such Persons; provided that such Indebtedness was incurred by such Persons solely to acquire Equity Interests of USA Truck, and

 

(e) USA Truck may make Restricted Payments not otherwise permitted by clauses (a) through (d) above, so long as (i) both before and immediately after giving effect to any such Restricted Payment, (x) Borrowers shall have a Fixed Charge Coverage Ratio of at least 1.00 to 1.00 and (y) Borrowers shall have Excess Availability equal to or greater than 20.0% of the Maximum Revolver Amount, and (ii) after giving effect to each such Restricted Payment, the aggregate of all Restricted Payments made by USA Truck solely in reliance on this clause (e) in any fiscal year does not exceed $5,000,000.

 

6.8 Accounting Methods.  Each Borrower will not, and will not permit any of its Subsidiaries to, modify or change its fiscal year or its method of accounting (other than as may be required to conform to GAAP).

 

6.9 Investments.  Each Borrower will not, and will not permit any of its Subsidiaries to, directly or indirectly, make or acquire any Investment or incur any liabilities (including contingent obligations) for or in connection with any Investment except for Permitted Investments.

 

6.10 Transactions with Affiliates.  Each Borrower will not, and will not permit any of its Subsidiaries to, directly or indirectly, enter into or permit to exist any transaction with any Affiliate of any Borrower or any of its Subsidiaries except for:

 

(a) transactions (other than the payment of management, consulting, monitoring, or advisory fees) between such Borrower or its Subsidiaries, on the one hand, and any Affiliate of such Borrower or its Subsidiaries, on the other hand, so long as such transactions (i) are fully disclosed to Agent prior to the consummation thereof, if they involve one or more payments by such Borrower or its Subsidiaries in excess of $500,000 for any single transaction or series of related transactions, and (ii) are no less favorable, taken as a whole, to such Borrower or its Subsidiaries, as applicable, than would be obtained in an arm’s length transaction with a non-Affiliate,

 

(b) so long as it is provided for in the Governing Documents of such Borrower or its applicable Subsidiary, or so long as it has been approved by such Borrower’s or its applicable Subsidiary’s board of directors (or comparable governing body) in accordance with applicable law, any indemnity provided for the benefit of directors (or comparable managers) of such Borrower or its applicable Subsidiary,

 

(c) so long as it has been approved by such Borrower’s or its applicable Subsidiary’s board of directors (or comparable governing body) in accordance with applicable law, the payment of reasonable compensation, severance, employee benefit arrangements, or fees to employees, officers, and directors of such Borrower and its Subsidiaries in the ordinary course of business,

 

(d) transactions not otherwise prohibited by any provision of any Loan Document between or among two or more Loan Parties not involving any other Affiliate,

 

(e) transactions entered into pursuant to any agreement identified on Schedule 6.10, as those agreements may be amended, modified, supplemented, extended, or renewed from time to time in accordance with the terms of this Agreement, and so long as such transactions are no less favorable, taken as a whole, to such Borrower or its Subsidiaries, as applicable, than would be obtained in an arm’s length transaction with a non-Affiliate,

 

(f) transactions permitted by Section 6.3 or Section 6.7, Investments permitted pursuant to clauses (e), (g), (j), (l), and (n) of the definition of Permitted Investments, or Indebtedness permitted pursuant to clauses (b) and (l) of the definition of Permitted Indebtedness,

 

(g) any issuances of securities or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment agreements, stock options and stock ownership plans of USA Truck approved by USA Truck’s board of directors, and

 

(h) the payment of reasonable out-of-pocket expenses pursuant to any financial advisory, financing, underwriting, or placement agreement or in respect of other investment banking activities, including in connection with acquisitions or divestitures that are permitted by this Agreement.

 

6.11 Use of Proceeds.  Each Borrower will not, and will not permit any of its Subsidiaries to use the proceeds of any loan made hereunder for any purpose other than (a) on the Closing Date, (i) to repay, in full, the outstanding principal, accrued interest, and accrued fees and expenses owing under or in connection with the Existing Credit Facility and (ii) to pay the fees, costs, and expenses incurred in connection with this Agreement, the other Loan Documents, and the transactions contemplated hereby and thereby, in each case, as set forth in the Flow of Funds Agreement, and (b) thereafter, consistent with the terms and conditions hereof, to finance working capital, fund Capital Expenditures, for general corporate purposes, and for their other lawful and permitted purposes (including that no part of the proceeds of the loans made to Borrowers will be used to purchase or carry any such Margin Stock or to extend credit to others for the purpose of purchasing or carrying any such Margin Stock or for any purpose that violates the provisions of Regulation T, U or X of the Board of Governors).

 

6.12 Limitation on Issuance of Equity Interests.  Except for the issuance or sale of Qualified Equity Interests by USA Truck, each Borrower will not, and will not permit any of its Subsidiaries to issue or sell or enter into any agreement or arrangement for the issuance or sale of any of its Equity Interests.

 

6.13 Equipment with Bailees.  Each Borrower will not, and will not permit any of its Subsidiaries to store the Equipment of such Borrower or such Subsidiaries (excluding (a) any Equipment out for repair and (b) Revenue Equipment of no more than (i) 25 units at any one location in the continental United States or Canada constituting trailers or other non-power units, and/or (ii) 5 units at any one location in the continental United States or Canada constituting tractors or other powered units) at any time now or hereafter with a bailee, warehouseman, or similar party, unless (a) such bailee, warehouseman, or similar party has provided Agent a Collateral Access Agreement in form and substance satisfactory to Agent or (b) the applicable Borrower has provided Agent with prior written notice of the storage location, and, if Agent elects, Agent has established a related Reserve against the Borrowing Base and/or the Maximum Revolver Amount in accordance with Section 2.1(c).  For the avoidance of doubt, and without intending to either limit or expand upon the forgoing, it is hereby understood and agreed that customary retention of Revenue Equipment for the purpose of loading and unloading (customary retention not to exceed 7 calendar days), shall not be deemed storage of such Revenue Equipment.

 

7. FINANCIAL COVENANTS.

 

Each Borrower covenants and agrees that, until termination of all of the Commitments and payment in full of the Obligations, Borrowers (and, in the case of clause (b), their Subsidiaries) will:

 

7.1.           Excess Availability.  Have Excess Availability at all times equal to or greater than 15.0% of the Maximum Revolver Amount; and

 

7.2.           Total Capital Expenditures.  Make Total Capital Expenditures (excluding the amount, if any, of Total Capital Expenditures made with Net Cash Proceeds reinvested pursuant to the first proviso in Section 2.4(e)(ii)) in any fiscal year in an amount less than or equal to, but not greater than, the amount set forth in the following table for the applicable period:

 

	
Fiscal year of USA Truck ending December 31, 2012

	
Fiscal year of USA Truck ending December 31, 2013

	
Fiscal year of USA Truck ending December 31, 2014

	
Each fiscal year of USA Truck thereafter

	
$53,840,000

	
$71,004,000

	
$73,528,000

	
$75,000,000

 

provided, that if the amount of the Total Capital Expenditures permitted to be made in any fiscal year as set forth in the above table is greater than the actual amount of the Total Capital Expenditures (excluding the amount, if any, of Total Capital Expenditures made with Net Cash Proceeds reinvested pursuant to the first proviso in Section 2.4(e)(ii)) actually made in such fiscal year (the amount by which such permitted Total Capital Expenditures for such fiscal year exceeds the actual amount of Total Capital Expenditures for such fiscal year, the “Excess Amount”), then the lesser of (i) such Excess Amount and (ii) 10% of the amount set forth in the above table for such fiscal year (such lesser amount referred to as the “Carry-Over Amount”) may be carried forward to the next succeeding fiscal year (the “Succeeding Fiscal Year”); provided further, that the Carry-Over Amount applicable to a particular Succeeding Fiscal Year may not be used in that fiscal year until the amount permitted above to be expended in such fiscal year has first been used in full, and the Carry-Over Amount applicable to a particular Succeeding Fiscal Year may not be carried forward to another fiscal year.

 

 

8. EVENTS OF DEFAULT.

 

Any one or more of the following events shall constitute an event of default (each, an “Event of Default”) under this Agreement:

 

8.1 Payments.  If Borrowers fail to pay when due and payable, or when declared due and payable, (a) all or any portion of the Obligations consisting of interest, fees, or charges due the Lender Group, reimbursement of Lender Group Expenses, or other amounts (other than any portion thereof constituting principal) constituting Obligations (including any portion thereof that accrues after the commencement of an Insolvency Proceeding, regardless of whether allowed or allowable in whole or in part as a claim in any such Insolvency Proceeding), and such failure continues for a period of 3 Business Days, (b) all or any portion of the principal of the Loans, or (c) any amount payable to Issuing Bank in reimbursement of any drawing under a Letter of Credit;

 

8.2 Covenants.  If any Loan Party or any of its Subsidiaries:

 

(a) fails to perform or observe any covenant or other agreement contained in any of (i) Sections 5.1, 5.2, 5.3 (solely if any Borrower is not in good standing in its jurisdiction of organization), 5.6, 5.7 (solely if any Borrower refuses to allow Agent or its representatives or agents to visit any Borrower’s properties, inspect its assets or books or records, examine and make copies of its books and records, or discuss Borrowers’ affairs, finances, and accounts with officers and employees of any Borrower), 5.10, 5.11, 5.13, 5.14 or 5.16 of this Agreement, (ii) Section 6 of this Agreement, (iii) Section 7 of this Agreement, or (iv) Section 7 of the Guaranty and Security Agreement;

 

(b) fails to perform or observe any covenant or other agreement contained in any of Sections 5.3 (other than if any Borrower is not in good standing in its jurisdiction of organization), 5.4, 5.5, 5.8, and 5.12 of this Agreement and such failure continues for a period of 10 days after the earlier of (i) the date on which such failure shall first become known to any officer of any Borrower or (ii) the date on which written notice thereof is given to Administrative Borrower by Agent; or

 

(c) fails to perform or observe any covenant or other agreement contained in this Agreement, or in any of the other Loan Documents, in each case, other than any such covenant or agreement that is the subject of another provision of this Section 8 (in which event such other provision of this Section 8 shall govern), and such failure continues for a period of 30 days after the earlier of (i) the date on which such failure shall first become known to any officer of any Borrower or (ii) the date on which written notice thereof is given to Administrative Borrower by Agent;

 

8.3 Judgments.  If one or more judgments, orders, or awards for the payment of money involving an aggregate amount of $1,000,000, or more in excess of applicable insurance (other than to the extent of customary deductibles) pursuant to which the insurer has not denied coverage is entered or filed against a Loan Party or any of its Subsidiaries, or with respect to any of their respective assets, and either (a) there is a period of 30 consecutive days at any time after the entry of any such judgment, order, or award during which (1) the same is not discharged, satisfied, vacated, or bonded pending appeal, or (2) a stay of enforcement thereof is not in effect, or (b) enforcement proceedings are commenced upon such judgment, order, or award;

 

8.4 Voluntary Bankruptcy, etc.  If an Insolvency Proceeding is commenced by a Loan Party or any of its Subsidiaries;

 

8.5 Involuntary Bankruptcy, etc.  If an Insolvency Proceeding is commenced against a Loan Party or any of its Subsidiaries and any of the following events occur: (a) such Loan Party or such Subsidiary consents to the institution of such Insolvency Proceeding against it, (b) the petition commencing the Insolvency Proceeding is not timely controverted, (c) the petition commencing the Insolvency Proceeding is not dismissed within 60 calendar days of the date of the filing thereof, (d) an interim trustee is appointed to take possession of all or any substantial portion of the properties or assets of, or to operate all or any substantial portion of the business of, such Loan Party or its Subsidiary, or (e) an order for relief shall have been issued or entered therein;

 

8.6 Default Under Other Agreements.  If there is (a) a default in one or more agreements to which a Loan Party or any of its Subsidiaries is a party with one or more third Persons relative to a Loan Party’s or any of its Subsidiaries’ Indebtedness involving an aggregate amount of $1,000,000 or more, and such default (i) occurs at the final maturity of the obligations thereunder, or (ii) results in a right by such third Person, irrespective of whether exercised, to accelerate the maturity of such Loan Party’s or its Subsidiary’s obligations thereunder, or (b) a default in or an involuntary early termination of one or more Hedge Agreements to which a Loan Party or any of its Subsidiaries is a party involving an aggregate amount of $1,000,000 or more;

 

8.7 Representations, etc.  If any warranty, representation, certificate, statement, or Record made herein or in any other Loan Document or delivered in writing to Agent or any Lender in connection with this Agreement or any other Loan Document proves to be untrue in any material respect (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) as of the date of issuance or making or deemed making thereof;

 

8.8 Guaranty.  If the obligation of any Guarantor under the guaranty contained in the Guaranty and Security Agreement is limited or terminated by operation of law or by such Guarantor (other than in accordance with the terms of this Agreement);

 

8.9 Security Documents.  If the Guaranty and Security Agreement or any other Loan Document that purports to create a Lien, shall, for any reason, fail or cease to create a valid, perfected, and, except to the extent of Permitted Liens which are non-consensual Permitted Liens, permitted purchase money Liens or the interest of lessors under Capital Leases, first priority Lien on the Collateral covered thereby, except (a) as a result of a disposition of the applicable Collateral in a transaction permitted under this Agreement or (b) as the result of an action or failure to act on the part of Agent;

 

8.10 Loan Documents.  The validity or enforceability of any Loan Document shall at any time for any reason (other than solely as the result of an action or failure to act on the part of Agent) be declared to be null and void, or a proceeding shall be commenced by a Loan Party or its Subsidiaries, or by any Governmental Authority having jurisdiction over a Loan Party or its Subsidiaries, seeking to establish the invalidity or unenforceability thereof, or a Loan Party or its Subsidiaries shall deny that such Loan Party or its Subsidiaries has any liability or obligation purported to be created under any Loan Document; or

 

8.11 Change in Control.  A Change in Control shall occur, whether directly or indirectly.

 

9. RIGHTS AND REMEDIES.

 

9.1 Rights and Remedies.  Upon the occurrence and during the continuation of an Event of Default, Agent may, and, at the instruction of the Required Lenders, shall (in each case under clauses (a) or (b) by written notice to Administrative Borrower), in addition to any other rights or remedies provided for hereunder or under any other Loan Document or by applicable law, do any one or more of the following:

 

(a) (i) declare the principal of, and any and all accrued and unpaid interest and fees in respect of, the Loans and all other Obligations (other than the Bank Product Obligations), whether evidenced by this Agreement or by any of the other Loan Documents to be immediately due and payable, whereupon the same shall become and be immediately due and payable and Borrowers shall be obligated to repay all of such Obligations in full, without presentment, demand, protest, or further notice or other requirements of any kind, all of which are hereby expressly waived by each Borrower, and (ii) direct Borrowers to provide (and Borrowers agree that upon receipt of such notice Borrowers will provide) Letter of Credit Collateralization to Agent to be held as security for Borrowers’ reimbursement obligations for drawings that may subsequently occur under issued and outstanding Letters of Credit;

 

(b) declare the Commitments terminated, whereupon the Commitments shall immediately be terminated together with (i) any obligation of any Revolving Lender to make Revolving Loans, (ii) the obligation of the Swing Lender to make Swing Loans, and (iii) the obligation of Issuing Bank to issue Letters of Credit; and

 

(c) exercise all other rights and remedies available to Agent or the Lenders under the Loan Documents, under applicable law, or in equity.

 

The foregoing to the contrary notwithstanding, upon the occurrence of any Event of Default described in Section 8.4 or Section 8.5, in addition to the remedies set forth above, without any notice to Administrative Borrower or any other Person or any act by the Lender Group, the Commitments shall automatically terminate and the Obligations (other than the Bank Product Obligations), inclusive of the principal of, and any and all accrued and unpaid interest and fees in respect of, the Loans and all other Obligations (other than the Bank Product Obligations), whether evidenced by this Agreement or by any of the other Loan Documents, shall automatically become and be immediately due and payable and Borrowers shall automatically be obligated to repay all of such Obligations in full (including Borrowers being obligated to provide (and Borrowers agree that they will provide) (1) Letter of Credit Collateralization to Agent to be held as security for Borrowers’ reimbursement obligations in respect of drawings that may subsequently occur under issued and outstanding Letters of Credit and (2) Bank Product Collateralization to be held as security for Borrowers’ or their Subsidiaries’ obligations in respect of outstanding Bank Products), without presentment, demand, protest, or notice or other requirements of any kind, all of which are expressly waived by Borrowers.

 

9.2 Remedies Cumulative.  The rights and remedies of the Lender Group under this Agreement, the other Loan Documents, and all other agreements shall be cumulative.  The Lender Group shall have all other rights and remedies not inconsistent herewith as provided under the Code, by law, or in equity.  No exercise by the Lender Group of one right or remedy shall be deemed an election, and no waiver by the Lender Group of any Event of Default shall be deemed a continuing waiver.  No delay by the Lender Group shall constitute a waiver, election, or acquiescence by it.

 

10. WAIVERS; INDEMNIFICATION.

 

10.1 Demand; Protest; etc.  Each Borrower waives demand, protest, notice of protest, notice of default or dishonor, notice of payment and nonpayment, nonpayment at maturity, release, compromise, settlement, extension, or renewal of documents, instruments, chattel paper, and guarantees at any time held by the Lender Group on which any Borrower may in any way be liable.

 

10.2 The Lender Group’s Liability for Collateral.  Each Borrower hereby agrees that:  (a) so long as Agent complies with its obligations, if any, under the Code, the Lender Group shall not in any way or manner be liable or responsible for:  (i) the safekeeping of the Collateral, (ii) any loss or damage thereto occurring or arising in any manner or fashion from any cause, (iii) any diminution in the value thereof, or (iv) any act or default of any carrier, warehouseman, bailee, forwarding agency, or other Person, and (b) all risk of loss, damage, or destruction of the Collateral shall be borne by Borrowers.

 

10.3 Indemnification.  Each Borrower shall pay, indemnify, defend, and hold the Agent-Related Persons, the Lender-Related Persons, and each Participant (each, an “Indemnified Person”) harmless (to the fullest extent permitted by law) from and against any and all claims, demands, suits, actions, investigations, proceedings, liabilities, fines, costs, penalties, and damages, and all reasonable fees and disbursements of attorneys, experts, or consultants and all other costs and expenses actually incurred in connection therewith or in connection with the enforcement of this indemnification (as and when they are incurred and irrespective of whether suit is brought), at any time asserted against, imposed upon, or incurred by any of them (a) in connection with or as a result of or related to the execution and delivery (provided that Borrowers shall not be liable for costs and expenses (including attorneys fees) of any Lender (other than Wells Fargo) incurred in advising, structuring, drafting, reviewing, administering or syndicating the Loan Documents), enforcement, performance, or administration (including any restructuring or workout with respect hereto) of this Agreement, any of the other Loan Documents, or the transactions contemplated hereby or thereby or the monitoring of Borrowers’ and their Subsidiaries’ compliance with the terms of the Loan Documents (provided, that the indemnification in this clause (a) shall not extend to (i) disputes solely between or among the Lenders that do not involve any acts or omissions of any Loan Party, or (ii) disputes solely between or among the Lenders and their respective Affiliates that do not involve any acts or omissions of any Loan Party; it being understood and agreed that the indemnification in this clause (a) shall extend to Agent (but not the Lenders) relative to disputes between or among Agent on the one hand, and one or more Lenders, or one or more of their Affiliates, on the other hand, or (iii) any Taxes or any costs attributable to Taxes, which shall be governed by Section 16), (b) with respect to any actual or prospective investigation, litigation, or proceeding related to this Agreement, any other Loan Document, the making of any Loans or issuance of any Letters of Credit hereunder, or the use of the proceeds of the Loans or the Letters of Credit provided hereunder (irrespective of whether any Indemnified Person is a party thereto), or any act, omission, event, or circumstance in any manner related thereto, and (c) in connection with or arising out of any presence or release of Hazardous Materials at, on, under, to or from any assets or properties owned, leased or operated by any Borrower or any of its Subsidiaries or any Environmental Actions, Environmental Liabilities or Remedial Actions related in any way to any such assets or properties of any Borrower or any of its Subsidiaries (each and all of the foregoing, the “Indemnified Liabilities”).  The foregoing to the contrary notwithstanding, no Borrower shall have any obligation to any Indemnified Person under this Section 10.3 with respect to any Indemnified Liability that a court of competent jurisdiction finally determines to have resulted from the gross negligence or willful misconduct of such Indemnified Person or its officers, directors, employees, attorneys, or agents.  This provision shall survive the termination of this Agreement and the repayment in full of the Obligations.  If any Indemnified Person makes any payment to any other Indemnified Person with respect to an Indemnified Liability as to which Borrowers were required to indemnify the Indemnified Person receiving such payment, the Indemnified Person making such payment is entitled to be indemnified and reimbursed by Borrowers with respect thereto.  WITHOUT LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO EACH INDEMNIFIED PERSON WITH RESPECT TO INDEMNIFIED LIABILITIES WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF ANY NEGLIGENT ACT OR OMISSION OF SUCH INDEMNIFIED PERSON OR OF ANY OTHER PERSON.

 

11. NOTICES.

 

Unless otherwise provided in this Agreement, all notices or demands relating to this Agreement or any other Loan Document shall be in writing and (except for financial statements and other informational documents which may be sent by first-class mail, postage prepaid) shall be personally delivered or sent by registered or certified mail (postage prepaid, return receipt requested), overnight courier, electronic mail (at such email addresses as a party may designate in accordance herewith), or telefacsimile.  In the case of notices or demands to Administrative Borrower or Agent, as the case may be, they shall be sent to the respective address set forth below:

 

	
If to Administrative Borrower:

	
USA Truck, Inc.

3200 Industrial Park Rd.

	  	
Van Buren, AR  72956

	  	
Attn:  Jeffery Burns

	  	
Fax No.:  479-410-8037

	  	
E-mail:  jeffery.burns@usa-truck.com

	  	  
	
with copies to:

	
Scudder Law Firm, P.C., L.L.O.

	  	
411 South 13th Street, Second Floor

	  	
Lincoln, NE  68508

	  	
Attn:  Mark Scudder, Esq.

	  	
Fax No.:  402-435-4239

	  	
E-mail:  mscudder@scudderlaw.com

	  	  
	
If to Agent:

	
Wells Fargo Bank, National Association

1100 Abernathy Road, Suite 1600

	  	
Atlanta, GA  30328

	  	
Attn: Loan Portfolio Manager (USA Truck)

	  	
Fax No.:  855-260-0212

	  	  
	
with copies to:

	
McGuireWoods LLP

	  	
77 West Wacker Drive, Suite 4100

	  	
Chicago, Illinois  60601

	  	
Attn:  Philip J. Perzek, Esq.

	  	
Fax No.:  (312) 698-4555

	  	
E-mail:  PPerzek@mcguirewoods.com

 

Any party hereto may change the address at which they are to receive notices hereunder, by notice in writing in the foregoing manner given to the other party.  All notices or demands sent in accordance with this Section 11, shall be deemed received on the earlier of the date of actual receipt or 3 Business Days after the deposit thereof in the mail; provided, that (a) notices sent by overnight courier service shall be deemed to have been given when received, (b) notices by facsimile 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) and (c) notices by electronic mail shall be deemed received upon the sender’s receipt of an acknowledgment from the intended recipient (such as by the “return receipt requested” function, as available, return email or other written acknowledgment).

 

12. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.

 

(a) THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF, THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO, AND ANY CLAIMS, CONTROVERSIES OR DISPUTES ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

(b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK; PROVIDED, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT ELECTS TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND.  EACH BORROWER AND EACH MEMBER OF THE LENDER GROUP WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 12(b).

 

(c) TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EACH BORROWER AND EACH MEMBER OF THE LENDER GROUP HEREBY WAIVE THEIR RESPECTIVE RIGHTS, IF ANY, TO A JURY TRIAL OF ANY CLAIM, CONTROVERSY, DISPUTE OR CAUSE OF ACTION DIRECTLY OR INDIRECTLY BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS (EACH A “CLAIM”).  EACH BORROWER AND EACH MEMBER OF THE LENDER GROUP REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

 

(d) EACH BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK AND THE STATE OF NEW YORK, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT.  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 ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT AGENT MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST ANY LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

 

(e) NO CLAIM MAY BE MADE BY ANY LOAN PARTY AGAINST THE AGENT, THE SWING LENDER, ANY OTHER LENDER, ISSUING BANK, OR ANY AFFILIATE, DIRECTOR, OFFICER, EMPLOYEE, COUNSEL, REPRESENTATIVE, AGENT, OR ATTORNEY-IN-FACT OF ANY OF THEM FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL, PUNITIVE OR EXEMPLARY DAMAGES OR LOSSES IN RESPECT OF ANY CLAIM FOR BREACH OF CONTRACT OR ANY OTHER THEORY OF LIABILITY ARISING OUT OF OR RELATED TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY ACT, OMISSION, OR EVENT OCCURRING IN CONNECTION THEREWITH, AND EACH LOAN PARTY HEREBY WAIVES, RELEASES, AND AGREES NOT TO SUE UPON ANY CLAIM FOR SUCH DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR.

 

13. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.

 

13.1 Assignments and Participations.

 

(a) (i)  Subject to the conditions set forth in clause (a)(ii) below, any Lender may assign and delegate all or any portion of its rights and duties under the Loan Documents (including the Obligations owed to it and its Commitments) to one or more assignees (each, an “Assignee”), with the prior written consent (such consent not to be unreasonably withheld or delayed) of:

 

(A)           Administrative Borrower; provided, that no consent of Administrative Borrower shall be required (1) if an Event of Default has occurred and is continuing or (2) in connection with an assignment to a Person that is a Lender or an Affiliate (other than natural persons) of a Lender; provided further, that Administrative Borrower shall be deemed to have consented to a proposed assignment unless it objects thereto by written notice to Agent within 5 Business Days after having received notice thereof; and

 

(B)           Agent, Swing Lender, and Issuing Bank.

 

(ii)           Assignments shall be subject to the following additional conditions:

 

(A)           no assignment may be made to a natural person,

 

(B)           no assignment may be made to a Loan Party or an Affiliate of a Loan Party,

 

(C)           the amount of the Commitments and the other rights and obligations of the assigning Lender hereunder and under the other Loan Documents subject to each such assignment (determined as of the date the Assignment and Acceptance with respect to such assignment is delivered to Agent) shall be in a minimum amount (unless waived by Agent) of $5,000,000 (except such minimum amount shall not apply to (I) an assignment or delegation by any Lender to any other Lender, an Affiliate of any Lender, or a Related Fund of such Lender or (II) a group of new Lenders, each of which is an Affiliate of each other or a Related Fund of such new Lender to the extent that the aggregate amount to be assigned to all such new Lenders is at least $5,000,000),

 

(D)           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,

 

(E)           the parties to each assignment shall execute and deliver to Agent an Assignment and Acceptance; provided, that Borrowers and Agent may continue to deal solely and directly with the assigning Lender in connection with the interest so assigned to an Assignee until written notice of such assignment, together with payment instructions, addresses, and related information with respect to the Assignee, have been given to Administrative Borrower and Agent by such Lender and the Assignee,

 

(F)           unless waived by Agent, the assigning Lender or Assignee has paid to Agent, for Agent’s separate account, a processing fee in the amount of $5,000, and

 

(G)           the assignee, if it is not a Lender, shall deliver to Agent an Administrative Questionnaire in a form approved by Agent (the “Administrative Questionnaire”).

 

(b) From and after the date that Agent receives the executed Assignment and Acceptance and, if applicable, payment of the required processing fee, (i) the Assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment and Acceptance, shall be a “Lender” and shall have the rights and obligations of a Lender under the Loan Documents, and (ii) the assigning Lender shall, to the extent that rights and obligations hereunder and under the other Loan Documents have been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights (except with respect to Section 10.3) and be released from any future obligations under this Agreement (and in the case of an Assignment and Acceptance covering all or the remaining portion of an assigning Lender’s rights and obligations under this Agreement and the other Loan Documents, such Lender shall cease to be a party hereto and thereto); provided, that nothing contained herein shall release any assigning Lender from obligations that survive the termination of this Agreement, including such assigning Lender’s obligations under Section 15 and Section 17.9(a).

 

(c) By executing and delivering an Assignment and Acceptance, the assigning Lender thereunder and the Assignee thereunder confirm to and agree with each other and the other parties hereto as follows:  (i) other than as provided in such Assignment and Acceptance, such assigning Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other Loan Document furnished pursuant hereto, (ii) such assigning Lender makes no representation or warranty and assumes no responsibility with respect to the financial condition of any Borrower or the performance or observance by any Borrower of any of its obligations under this Agreement or any other Loan Document furnished pursuant hereto, (iii) such Assignee confirms that it has received a copy of this Agreement, together with such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance, (iv) such Assignee will, independently and without reliance upon Agent, such assigning Lender or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement, (v) such Assignee appoints and authorizes Agent to take such actions and to exercise such powers under this Agreement and the other Loan Documents as are delegated to Agent, by the terms hereof and thereof, together with such powers as are reasonably incidental thereto, and (vi) such Assignee agrees that it will perform all of the obligations which by the terms of this Agreement are required to be performed by it as a Lender.

 

(d) Immediately upon Agent’s receipt of the required processing fee, if applicable, and delivery of notice to the assigning Lender pursuant to Section 13.1(b), this Agreement shall be deemed to be amended to the extent, but only to the extent, necessary to reflect the addition of the Assignee and the resulting adjustment of the Commitments arising therefrom.  The Commitment allocated to each Assignee shall reduce such Commitments of the assigning Lender pro tanto.

 

(e) Any Lender may at any time sell to one or more commercial banks, financial institutions, or other Persons (a “Participant”) participating interests in all or any portion of its Obligations, its Commitment, and the other rights and interests of that Lender (the “Originating Lender”) hereunder and under the other Loan Documents; provided, that (i) the Originating Lender shall remain a “Lender” for all purposes of this Agreement and the other Loan Documents and the Participant receiving the participating interest in the Obligations, the Commitments, and the other rights and interests of the Originating Lender hereunder shall not constitute a “Lender” hereunder or under the other Loan Documents and the Originating Lender’s obligations under this Agreement shall remain unchanged, (ii) the Originating Lender shall remain solely responsible for the performance of such obligations, (iii) Borrowers, Agent, and the Lenders shall continue to deal solely and directly with the Originating Lender in connection with the Originating Lender’s rights and obligations under this Agreement and the other Loan Documents, (iv) no Lender shall transfer or grant any participating interest under which the Participant has the right to approve any amendment to, or any consent or waiver with respect to, this Agreement or any other Loan Document, except to the extent such amendment to, or consent or waiver with respect to this Agreement or of any other Loan Document would (A) extend the final maturity date of the Obligations hereunder in which such Participant is participating, (B) reduce the interest rate applicable to the Obligations hereunder in which such Participant is participating, (C) release all or substantially all of the Collateral or guaranties (except to the extent expressly provided herein or in any of the Loan Documents) supporting the Obligations hereunder in which such Participant is participating, (D) postpone the payment of, or reduce the amount of, the interest or fees payable to such Participant through such Lender (other than a waiver of default interest), or (E) decreases the amount or postpones the due dates of scheduled principal repayments or prepayments or premiums payable to such Participant through such Lender, (v) no participation shall be sold to a natural person, (vi) no participation shall be sold to a Loan Party or an Affiliate of a Loan Party, and (vii) all amounts payable by Borrowers hereunder shall be determined as if such Lender had not sold such participation, except that, if amounts outstanding under this Agreement are due and unpaid, or shall have been declared or shall have become due and payable upon the occurrence of an Event of Default, each Participant shall be deemed to have the right of set off in respect of its participating interest in amounts owing under this Agreement to the same extent as if the amount of its participating interest were owing directly to it as a Lender under this Agreement.  The rights of any Participant only shall be derivative through the Originating Lender with whom such Participant participates and no Participant shall have any rights under this Agreement or the other Loan Documents or any direct rights as to the other Lenders, Agent, Borrowers, the Collateral, or otherwise in respect of the Obligations.  No Participant shall have the right to participate directly in the making of decisions by the Lenders among themselves.

 

(f) In connection with any such assignment or participation or proposed assignment or participation or any grant of a security interest in, or pledge of, its rights under and interest in this Agreement, a Lender may, subject to the provisions of Section 17.9, disclose all documents and information which it now or hereafter may have relating to any Borrower and its Subsidiaries and their respective businesses.

 

(g) Any other provision in this Agreement notwithstanding, any Lender may at any time create a security interest in, or pledge, all or any portion of its rights under and interest in this Agreement in favor of any Federal Reserve Bank in accordance with Regulation A of the Federal Reserve Bank or U.S. Treasury Regulation 31 CFR §203.24, and such Federal Reserve Bank may enforce such pledge or security interest in any manner permitted under applicable law.

 

(h) Agent (as a non-fiduciary agent on behalf of Borrowers) shall maintain, or cause to be maintained, a register (the “Register”) on which it enters the name and address of each Lender as the registered owner of the Revolving Loans and a Revolver Commitment (and the principal amount thereof and stated interest thereon) held by such Lender (each, a “Registered Loan”).  Other than in connection with an assignment by a Lender of all or any portion of its portion of the Revolving Loans and its Revolver Commitment to an Affiliate of such Lender or a Related Fund of such Lender (i) a Registered Loan (and the registered note, if any, evidencing the same) may be assigned or sold in whole or in part only by registration of such assignment or sale on the Register (and each registered note shall expressly so provide) and (ii) any assignment or sale of all or part of such Registered Loan (and the registered note, if any, evidencing the same) may be effected only by registration of such assignment or sale on the Register, together with the surrender of the registered note, if any, evidencing the same duly endorsed by (or accompanied by a written instrument of assignment or sale duly executed by) the holder of such registered note, whereupon, at the request of the designated assignee(s) or transferee(s), one or more new registered notes in the same aggregate principal amount shall be issued to the designated assignee(s) or transferee(s).  Prior to the registration of assignment or sale of any Registered Loan (and the registered note, if any evidencing the same), Borrowers shall treat the Person in whose name such Registered Loan (and the registered note, if any, evidencing the same) is registered as the owner thereof for the purpose of receiving all payments thereon and for all other purposes, notwithstanding notice to the contrary.  In the case of any assignment by a Lender of all or any portion of the Revolving Loans and its Revolver Commitment to an Affiliate of such Lender or a Related Fund of such Lender, and which assignment is not recorded in the Register, the assigning Lender, on behalf of Borrowers, shall maintain a register comparable to the Register.

 

(i) In the event that a Lender sells participations in the Registered Loan, such Lender, as a non-fiduciary agent on behalf of Borrowers, shall maintain (or cause to be maintained) a register on which it enters the name of all participants in the Registered Loans held by it (and the principal amount (and stated interest thereon) of the portion of such Registered Loans that is subject to such participations) (the “Participant Register”).  A Registered Loan (and the Registered Note, if any, evidencing the same) may be participated in whole or in part only by registration of such participation on the Participant Register (and each registered note shall expressly so provide).  Any participation of such Registered Loan (and the registered note, if any, evidencing the same) may be effected only by the registration of such participation on the Participant Register.

 

(j) Agent shall make a copy of the Register available for review by Borrowers and Lenders from time to time as Administrative Borrower or Lenders, as applicable, may reasonably request.  Each Lender shall make a copy of its Participant Register, to the extent it has one, available for review by Borrowers from time to time as Administrative Borrower may reasonably request.

 

13.2 Successors.  This Agreement shall bind and inure to the benefit of the respective successors and assigns of each of the parties; provided, that no Borrower may assign this Agreement or any rights or duties hereunder without the Lenders’ prior written consent and any prohibited assignment shall be absolutely void ab initio.  No consent to assignment by the Lenders shall release any Borrower from its Obligations.  A Lender may assign this Agreement and the other Loan Documents and its rights and duties hereunder and thereunder pursuant to Section 13.1 and, except as expressly required pursuant to Section 13.1, no consent or approval by any Borrower is required in connection with any such assignment.

 

14. AMENDMENTS; WAIVERS.

 

14.1 Amendments and Waivers.

 

(a) No amendment, waiver or other modification of any provision of this Agreement or any other Loan Document (other than Bank Product Agreements or the Fee Letter), and no consent with respect to any departure by any Borrower therefrom, shall be effective unless the same shall be in writing and signed by the Required Lenders (or by Agent at the written request of the Required Lenders) and the Loan Parties that are party thereto and then any such waiver or consent shall be effective, but only in the specific instance and for the specific purpose for which given; provided, that no such waiver, amendment, or consent shall, unless in writing and signed by all of the Lenders directly affected thereby and all of the Loan Parties that are party thereto, do any of the following:

 

(i) increase the amount of or extend the expiration date of any Commitment of any Lender or amend, modify, or eliminate the last sentence of Section 2.4(c),

 

(ii) postpone or delay any date fixed by this Agreement or any other Loan Document for any payment of principal, interest, fees, or other amounts due hereunder or under any other Loan Document,

 

(iii) reduce the principal of, or the rate of interest on, any loan or other extension of credit hereunder, or reduce any fees or other amounts payable hereunder or under any other Loan Document (except (y) in connection with the waiver of applicability of Section 2.6(c) (which waiver shall be effective with the written consent of the Required Lenders), and (z) that any amendment or modification of defined terms used in the financial covenants in this Agreement shall not constitute a reduction in the rate of interest or a reduction of fees for purposes of this clause (iii)),

 

(iv) amend, modify, or eliminate this Section 14.1 or any provision of this Agreement providing for consent or other action by all Lenders,

 

(v) amend, modify, or eliminate Section 3.1 or 3.2,

 

(vi) amend, modify, or eliminate Section 15.11,

 

(vii) other than as permitted by Section 15.11, release Agent’s Lien in and to any of the Collateral,

 

(viii) amend, modify, or eliminate the definitions of “Required Lenders” or “Pro Rata Share”,

 

(ix) contractually subordinate any of Agent’s Liens,

 

(x) other than in connection with a merger, liquidation, dissolution or sale of such Person expressly permitted by the terms hereof or the other Loan Documents, release any Borrower or any Guarantor from any obligation for the payment of money or consent to the assignment or transfer by any Borrower or any Guarantor of any of its rights or duties under this Agreement or the other Loan Documents,

 

(xi) amend, modify, or eliminate any of the provisions of Section 2.4(b)(i) or (ii) or Section 2.4(e) or (f), or

 

(xii) amend, modify, or eliminate any of the provisions of Section 13.1;

 

(b) No amendment, waiver, modification, or consent shall amend, modify, waive, or eliminate,

 

(i) the definition of, or any of the terms or provisions of, the Fee Letter, without the written consent of Agent and Borrowers (and shall not require the written consent of any of the Lenders), or

 

(ii) any provision of Section 15 pertaining to Agent, or any other rights or duties of Agent under this Agreement or the other Loan Documents, without the written consent of Agent, Borrowers, and the Required Lenders;

 

(c) No amendment, waiver, modification, elimination, or consent shall, without written consent of Agent, Borrowers and each Lender, amend, modify, or eliminate the definition of Borrowing Base or any of the defined terms (including the definitions of Eligible Accounts, Eligible Revenue Equipment, and Eligible Revenue Equipment Formula Amount) that are used in such definition to the extent that any such change results in more credit being made available to Borrowers based upon the Borrowing Base, but not otherwise, or the definition of Maximum Revolver Amount, or change Section 2.1(c);

 

(d) No amendment, waiver, modification, elimination, or consent shall amend, modify, or waive any provision of this Agreement or the other Loan Documents pertaining to Issuing Bank, or any other rights or duties of Issuing Bank under this Agreement or the other Loan Documents, without the written consent of Issuing Bank, Agent, Borrowers, and the Required Lenders;

 

(e) No amendment, waiver, modification, elimination, or consent shall amend, modify, or waive any provision of this Agreement or the other Loan Documents pertaining to Swing Lender, or any other rights or duties of Swing Lender under this Agreement or the other Loan Documents, without the written consent of Swing Lender, Agent, Borrowers, and the Required Lenders; and

 

(f) Anything in this Section 14.1 to the contrary notwithstanding, (i) any amendment, modification, elimination, waiver, consent, termination, or release of, or with respect to, any provision of this Agreement or any other Loan Document that relates only to the relationship of the Lender Group among themselves, and that does not affect the rights or obligations of any Borrower, shall not require consent by or the agreement of any Loan Party, and (ii) any amendment, waiver, modification, elimination, or consent of or with respect to any provision of this Agreement or any other Loan Document may be entered into without the consent of, or over the objection of, any Defaulting Lender other than any of the matters governed by Section 14.1(a)(i) through (iii) that affect such Lender.

 

14.2 Replacement of Certain Lenders.

 

(a) If (i) any action to be taken by the Lender Group or Agent hereunder requires the consent, authorization, or agreement of all Lenders or all Lenders affected thereby and if such action has received the consent, authorization, or agreement of the Required Lenders but not of all Lenders or all Lenders affected thereby, or (ii) any Lender makes a claim for compensation under Section 16, then Administrative Borrower or Agent, upon at least 5 Business Days prior irrevocable notice, may permanently replace any Lender that failed to give its consent, authorization, or agreement (a “Non-Consenting Lender”) or any Lender that made a claim for compensation (a “Tax Lender”) with one or more Replacement Lenders, and the Non-Consenting Lender or Tax Lender, as applicable, shall have no right to refuse to be replaced hereunder.  Such notice to replace the Non-Consenting Lender or Tax Lender, as applicable, shall specify an effective date for such replacement, which date shall not be later than 15 Business Days after the date such notice is given.

 

(b) Prior to the effective date of such replacement, the Non-Consenting Lender or Tax Lender, as applicable, and each Replacement Lender shall execute and deliver an Assignment and Acceptance, subject only to the Non-Consenting Lender or Tax Lender, as applicable, being repaid in full its share of the outstanding Obligations (without any premium or penalty of any kind whatsoever, but including (i) all interest, fees and other amounts that may be due in payable in respect thereof, and (ii) an assumption of its Pro Rata Share of participations in the Letters of Credit).  If the Non-Consenting Lender or Tax Lender, as applicable, shall refuse or fail to execute and deliver any such Assignment and Acceptance prior to the effective date of such replacement, Agent may, but shall not be required to, execute and deliver such Assignment and Acceptance in the name or and on behalf of the Non-Consenting Lender or Tax Lender, as applicable, and irrespective of whether Agent executes and delivers such Assignment and Acceptance, the Non-Consenting Lender or Tax Lender, as applicable, shall be deemed to have executed and delivered such Assignment and Acceptance.  The replacement of any Non-Consenting Lender or Tax Lender, as applicable, shall be made in accordance with the terms of Section 13.1.  Until such time as one or more Replacement Lenders shall have acquired all of the Obligations, the Commitments, and the other rights and obligations of the Non-Consenting Lender or Tax Lender, as applicable, hereunder and under the other Loan Documents, the Non-Consenting Lender or Tax Lender, as applicable, shall remain obligated to make the Non-Consenting Lender’s or Tax Lender’s, as applicable, Pro Rata Share of Revolving Loans and to purchase a participation in each Letter of Credit, in an amount equal to its Pro Rata Share of participations in such Letters of Credit.

 

14.3 No Waivers; Cumulative Remedies.  No failure by Agent or any Lender to exercise any right, remedy, or option under this Agreement or any other Loan Document, or delay by Agent or any Lender in exercising the same, will operate as a waiver thereof.  No waiver by Agent or any Lender will be effective unless it is in writing, and then only to the extent specifically stated.  No waiver by Agent or any Lender on any occasion shall affect or diminish Agent’s and each Lender’s rights thereafter to require strict performance by Borrowers of any provision of this Agreement.  Agent’s and each Lender’s rights under this Agreement and the other Loan Documents will be cumulative and not exclusive of any other right or remedy that Agent or any Lender may have.

 

15. AGENT; THE LENDER GROUP.

 

15.1 Appointment and Authorization of Agent.  Each Lender hereby designates and appoints Wells Fargo as its agent under this Agreement and the other Loan Documents and each Lender hereby irrevocably authorizes (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to designate, appoint, and authorize) Agent to execute and deliver each of the other Loan Documents on its behalf and to take such other action on its behalf under the provisions of this Agreement and each other Loan Document and to exercise such powers and perform such duties as are expressly delegated to Agent by the terms of this Agreement or any other Loan Document, together with such powers as are reasonably incidental thereto.  Agent agrees to act as agent for and on behalf of the Lenders (and the Bank Product Providers) on the conditions contained in this Section 15.  Any provision to the contrary contained elsewhere in this Agreement or in any other Loan Document notwithstanding, Agent shall not have any duties or responsibilities, except those expressly set forth herein or in the other Loan Documents, nor shall Agent have or be deemed to have any fiduciary relationship with any Lender (or Bank Product Provider), and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against Agent.  Without limiting the generality of the foregoing, the use of the term “agent” in this Agreement or the other Loan Documents with reference to Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law.  Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only a representative relationship between independent contracting parties.  Each Lender hereby further authorizes (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to authorize) Agent to act as the secured party under each of the Loan Documents that create a Lien on any item of Collateral.  Except as expressly otherwise provided in this Agreement, Agent shall have and may use its sole discretion with respect to exercising or refraining from exercising any discretionary rights or taking or refraining from taking any actions that Agent expressly is entitled to take or assert under or pursuant to this Agreement and the other Loan Documents.  Without limiting the generality of the foregoing, or of any other provision of the Loan Documents that provides rights or powers to Agent, Lenders agree that Agent shall have the right to exercise the following powers as long as this Agreement remains in effect:  (a) maintain, in accordance with its customary business practices, ledgers and records reflecting the status of the Obligations, the Collateral, payments and proceeds of Collateral, and related matters, (b) execute or file any and all financing or similar statements or notices, amendments, renewals, supplements, documents, instruments, proofs of claim, notices and other written agreements with respect to the Loan Documents, (c) make Revolving Loans, for itself or on behalf of Lenders, as provided in the Loan Documents, (d) exclusively receive, apply, and distribute payments and proceeds of the Collateral as provided in the Loan Documents, (e) open and maintain such bank accounts and cash management arrangements as Agent deems necessary and appropriate in accordance with the Loan Documents for the foregoing purposes, (f) perform, exercise, and enforce any and all other rights and remedies of the Lender Group with respect to any Borrower or its Subsidiaries, the Obligations, the Collateral, or otherwise related to any of same as provided in the Loan Documents, and (g) incur and pay such Lender Group Expenses as Agent may deem necessary or appropriate for the performance and fulfillment of its functions and powers pursuant to the Loan Documents.

 

15.2 Delegation of Duties.  Agent may execute any of its duties under this Agreement or any other Loan Document by or through agents, employees or attorneys in fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties.  Agent shall not be responsible for the negligence or misconduct of any agent or attorney in fact that it selects as long as such selection was made without gross negligence or willful misconduct.

 

15.3 Liability of Agent.  None of the Agent-Related Persons shall (a) be liable for any action taken or omitted to be taken by any of them under or in connection with this Agreement or any other Loan Document or the transactions contemplated hereby (except for its own gross negligence or willful misconduct), or (b) be responsible in any manner to any of the Lenders (or Bank Product Providers) for any recital, statement, representation or warranty made by any Borrower or any of its Subsidiaries or Affiliates, or any officer or director thereof, contained in this Agreement or in any other Loan Document, or in any certificate, report, statement or other document referred to or provided for in, or received by Agent under or in connection with, this Agreement or any other Loan Document, or the validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document, or for any failure of any Borrower or its Subsidiaries or any other party to any Loan Document to perform its obligations hereunder or thereunder.  No Agent-Related Person shall be under any obligation to any Lenders (or Bank Product Providers) to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the books and records or properties of any Borrower or its Subsidiaries.

 

15.4 Reliance by Agent.  Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, resolution, notice, consent, certificate, affidavit, letter, telegram, telefacsimile or other electronic method of transmission, telex or telephone message, statement or other document or conversation believed by it to be genuine and correct and to have been signed, sent, or made by the proper Person or Persons, and upon advice and statements of legal counsel (including counsel to Borrowers or counsel to any Lender), independent accountants and other experts selected by Agent.  Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Loan Document unless Agent shall first receive such advice or concurrence of the Lenders as it deems appropriate and until such instructions are received, Agent shall act, or refrain from acting, as it deems advisable.  If Agent so requests, it shall first be indemnified to its reasonable satisfaction by the Lenders (and, if it so elects, the Bank Product Providers) against any and all liability and expense that may be incurred by it by reason of taking or continuing to take any such action.  Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement or any other Loan Document in accordance with a request or consent of the Required Lenders and such request and any action taken or failure to act pursuant thereto shall be binding upon all of the Lenders (and Bank Product Providers).

 

15.5 Notice of Default or Event of Default.  Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default, except with respect to defaults in the payment of principal, interest, fees, and expenses required to be paid to Agent for the account of the Lenders and, except with respect to Events of Default of which Agent has actual knowledge, unless Agent shall have received written notice from a Lender or Administrative Borrower referring to this Agreement, describing such Default or Event of Default, and stating that such notice is a “notice of default.”  Agent promptly will notify the Lenders of its receipt of any such notice or of any Event of Default of which Agent has actual knowledge.  If any Lender obtains actual knowledge of any Event of Default, such Lender promptly shall notify the other Lenders and Agent of such Event of Default.  Each Lender shall be solely responsible for giving any notices to its Participants, if any.  Subject to Section 15.4, Agent shall take such action with respect to such Default or Event of Default as may be requested by the Required Lenders in accordance with Section 9; provided, that unless and until Agent has received any such request, Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable.

 

15.6 Credit Decision.  Each Lender (and Bank Product Provider) acknowledges that none of the Agent-Related Persons has made any representation or warranty to it, and that no act by Agent hereinafter taken, including any review of the affairs of any Borrower and its Subsidiaries or Affiliates, shall be deemed to constitute any representation or warranty by any Agent-Related Person to any Lender (or Bank Product Provider).  Each Lender represents (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to represent) to Agent that it has, independently and without reliance upon any Agent-Related Person and based on such due diligence, documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, prospects, operations, property, financial and other condition and creditworthiness of each Borrower or any other Person party to a Loan Document, and all applicable bank regulatory laws relating to the transactions contemplated hereby, and made its own decision to enter into this Agreement and to extend credit to Borrowers.  Each Lender also represents (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to represent) that it will, independently and without reliance upon any Agent-Related Person and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Loan Documents, and to make such investigations as it deems necessary to inform itself as to the business, prospects, operations, property, financial and other condition and creditworthiness of each Borrower or any other Person party to a Loan Document.  Except for notices, reports, and other documents expressly herein required to be furnished to the Lenders by Agent, Agent shall not have any duty or responsibility to provide any Lender (or Bank Product Provider) with any credit or other information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of any Borrower or any other Person party to a Loan Document that may come into the possession of any of the Agent-Related Persons.  Each Lender acknowledges (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to acknowledge) that Agent does not have any duty or responsibility, either initially or on a continuing basis (except to the extent, if any, that is expressly specified herein) to provide such Lender (or Bank Product Provider) with any credit or other information with respect to any Borrower, its Affiliates or any of their respective business, legal, financial or other affairs, and irrespective of whether such information came into Agent’s or its Affiliates’ or representatives’ possession before or after the date on which such Lender became a party to this Agreement (or such Bank Product Provider entered into a Bank Product Agreement).

 

15.7 Costs and Expenses; Indemnification.  Agent may incur and pay Lender Group Expenses to the extent Agent reasonably deems necessary or appropriate for the performance and fulfillment of its functions, powers, and obligations pursuant to the Loan Documents, including court costs, attorneys fees and expenses, fees and expenses of financial accountants, advisors, consultants, and appraisers, costs of collection by outside collection agencies, auctioneer fees and expenses, and costs of security guards or insurance premiums paid to maintain the Collateral, whether or not Borrowers are obligated to reimburse Agent or Lenders for such expenses pursuant to this Agreement or otherwise.  Agent is authorized and directed to deduct and retain sufficient amounts from payments or proceeds of the Collateral received by Agent to reimburse Agent for such out-of-pocket costs and expenses prior to the distribution of any amounts to Lenders (or Bank Product Providers).  In the event Agent is not reimbursed for such costs and expenses by Borrowers or their Subsidiaries, each Lender hereby agrees that it is and shall be obligated to pay to Agent such Lender’s ratable thereof.  Whether or not the transactions contemplated hereby are consummated, each of the Lenders, on a ratable basis, shall indemnify and defend the Agent-Related Persons (to the extent not reimbursed by or on behalf of Borrowers and without limiting the obligation of Borrowers to do so) from and against any and all Indemnified Liabilities; provided, that no Lender shall be liable for the payment to any Agent-Related Person of any portion of such Indemnified Liabilities resulting solely from such Person’s gross negligence or willful misconduct nor shall any Lender be liable for the obligations of any Defaulting Lender in failing to make a Revolving Loan or other extension of credit hereunder.  Without limitation of the foregoing, each Lender shall reimburse Agent upon demand for such Lender’s ratable share of any costs or out of pocket expenses (including attorneys, accountants, advisors, and consultants fees and expenses) incurred by Agent in connection with the preparation, execution, delivery, administration, modification, amendment, or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement or any other Loan Document to the extent that Agent is not reimbursed for such expenses by or on behalf of Borrowers.  The undertaking in this Section 15.7 shall survive the payment of all Obligations hereunder and the resignation or replacement of Agent.

 

15.8 Agent in Individual Capacity.  Wells Fargo and its Affiliates may make loans to, issue letters of credit for the account of, accept deposits from, provide Bank Products to, acquire Equity Interests in, and generally engage in any kind of banking, trust, financial advisory, underwriting, or other business with any Borrower and its Subsidiaries and Affiliates and any other Person party to any Loan Document as though Wells Fargo were not Agent hereunder, and, in each case, without notice to or consent of the other members of the Lender Group.  The other members of the Lender Group acknowledge (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to acknowledge) that, pursuant to such activities, Wells Fargo or its Affiliates may receive information regarding a Borrower or its Affiliates or any other Person party to any Loan Documents that is subject to confidentiality obligations in favor of such Borrower or such other Person and that prohibit the disclosure of such information to the Lenders (or Bank Product Providers), and the Lenders acknowledge (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to acknowledge) that, in such circumstances (and in the absence of a waiver of such confidentiality obligations, which waiver Agent will use its reasonable best efforts to obtain), Agent shall not be under any obligation to provide such information to them.  The terms “Lender” and “Lenders” include Wells Fargo in its individual capacity.

 

15.9 Successor Agent.  Agent may resign as Agent upon 30 days (10 days if an Event of Default has occurred and is continuing) prior written notice to the Lenders (unless such notice is waived by the Required Lenders) and Administrative Borrower (unless such notice is waived by Administrative Borrower) and without any notice to the Bank Product Providers.  If Agent resigns under this Agreement, the Required Lenders shall be entitled, with (so long as no Event of Default has occurred and is continuing) the consent of Administrative Borrower (such consent not to be unreasonably withheld, delayed, or conditioned), appoint a successor Agent for the Lenders (and the Bank Product Providers).  If, at the time that Agent’s resignation is effective, it is acting as Issuing Bank or the Swing Lender, such resignation shall also operate to effectuate its resignation as Issuing Bank or the Swing Lender, as applicable, and it shall automatically be relieved of any further obligation to issue Letters of Credit, or to make Swing Loans.  If no successor Agent is appointed prior to the effective date of the resignation of Agent, Agent may appoint, after consulting with the Lenders and Administrative Borrower, a successor Agent.  If Agent has materially breached or failed to perform any material provision of this Agreement or of applicable law, the Required Lenders may agree in writing to remove and replace Agent with a successor Agent from among the Lenders with (so long as no Event of Default has occurred and is continuing) the consent of Administrative Borrower (such consent not to be unreasonably withheld, delayed, or conditioned).  In any such event, upon the acceptance of its appointment as successor Agent hereunder, such successor Agent shall succeed to all the rights, powers, and duties of the retiring Agent and the term “Agent” shall mean such successor Agent and the retiring Agent’s appointment, powers, and duties as Agent shall be terminated.  After any retiring Agent’s resignation hereunder as Agent, the provisions of this Section 15 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this Agreement.  If no successor Agent has accepted appointment as Agent by the date which is 30 days following a retiring Agent’s notice of resignation, the retiring Agent’s resignation shall nevertheless thereupon become effective and the Lenders shall perform all of the duties of Agent hereunder until such time, if any, as the Lenders appoint a successor Agent as provided for above.

 

15.10 Lender in Individual Capacity.  Any Lender and its respective Affiliates may make loans to, issue letters of credit for the account of, accept deposits from, provide Bank Products to, acquire Equity Interests in and generally engage in any kind of banking, trust, financial advisory, underwriting, or other business with any Borrower and its Subsidiaries and Affiliates and any other Person party to any Loan Documents as though such Lender were not a Lender hereunder without notice to or consent of the other members of the Lender Group (or the Bank Product Providers).  The other members of the Lender Group acknowledge (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to acknowledge) that, pursuant to such activities, such Lender and its respective Affiliates may receive information regarding a Borrower or its Affiliates or any other Person party to any Loan Documents that is subject to confidentiality obligations in favor of such Borrower or such other Person and that prohibit the disclosure of such information to the Lenders, and the Lenders acknowledge (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to acknowledge) that, in such circumstances (and in the absence of a waiver of such confidentiality obligations, which waiver such Lender will use its reasonable best efforts to obtain), such Lender shall not be under any obligation to provide such information to them.

 

15.11 Collateral Matters.

 

(a) The Lenders hereby irrevocably authorize (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to authorize) Agent to release any Lien on any Collateral (i) upon the termination of the Commitments and payment and satisfaction in full by Borrowers of all of the Obligations, (ii) constituting property being sold or disposed of if a release is required or desirable in connection therewith and if Administrative Borrower certifies to Agent that the sale or disposition is permitted under Section 6.4 (and Agent may rely conclusively on any such certificate, without further inquiry), (iii) constituting property in which no Borrower or its Subsidiaries owned any interest at the time Agent’s Lien was granted nor at any time thereafter, (iv) constituting property leased or licensed to a Borrower or its Subsidiaries under a lease or license that has expired or is terminated in a transaction permitted under this Agreement, or (v) in connection with a credit bid or purchase authorized under this Section 15.11.  The Loan Parties and the Lenders hereby irrevocably authorize (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to authorize) Agent, based upon the instruction of the Required Lenders, to (a) consent to, credit bid or purchase (either directly or indirectly through one or more entities) all or any portion of the Collateral at any sale thereof conducted under the provisions of the Bankruptcy Code, including Section 363 of the Bankruptcy Code, (b) credit bid or purchase (either directly or indirectly through one or more entities) all or any portion of the Collateral at any sale or other disposition thereof conducted under the provisions of the Code, including pursuant to Sections 9-610 or 9-620 of the Code, or (c) credit bid or purchase (either directly or indirectly through one or more entities) all or any portion of the Collateral at any other sale or foreclosure conducted or consented to by Agent in accordance with applicable law in any judical action or proceeding or by the exercise of any legal or equitable remedy.  In connection with any such credit bid or purchase, (i) the Obligations owed to the Lenders and the Bank Product Providers 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 impair or unduly delay the ability of Agent to credit bid or purchase at such sale or other disposition of the Collateral and, if such contingent or unliquidated claims cannot be estimated without impairing or unduly delaying the ability of Agent to credit bid at such sale or other disposition, then such claims shall be disregarded, not credit bid, and not entitled to any interest in the Collateral that is the subject of such credit bid or purchase) and the Lenders and the Bank Product Providers 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 Collateral that is the subject of such credit bid or purchase (or in the Equity Interests of the any entities that are used to consummate such credit bid or purchase), and (ii) Agent, based upon the instruction of the Required Lenders, may accept non-cash consideration, including debt and equity securities issued by any entities used to consummate such credit bid or purchase and in connection therewith Agent may reduce the Obligations owed to the Lenders and the Bank Product Providers (ratably based upon the proportion of their Obligations credit bid in relation to the aggregate amount of Obligations so credit bid) based upon the value of such non-cash consideration.  Except as provided above, Agent will not execute and deliver a release of any Lien on any Collateral without the prior written authorization of (y) if the release is of all or substantially all of the Collateral, all of the Lenders (without requiring the authorization of the Bank Product Providers), or (z) otherwise, the Required Lenders (without requiring the authorization of the Bank Product Providers).  Upon request by Agent or Administrative Borrower at any time, the Lenders will (and if so requested, the Bank Product Providers will) confirm in writing Agent’s authority to release any such Liens on particular types or items of Collateral pursuant to this Section 15.11; provided, that (1) anything to the contrary contained in any of the Loan Documents notwithstanding, Agent shall not be required to execute any document or take any action necessary to evidence such release on terms that, in Agent’s opinion, could expose Agent to liability or create any obligation or entail any consequence other than the release of such Lien without recourse, representation, or warranty, and (2) such release shall not in any manner discharge, affect, or impair the Obligations or any Liens (other than those expressly released) upon (or obligations of Borrowers in respect of) any and all interests retained by any Borrower, including, the proceeds of any sale, all of which shall continue to constitute part of the Collateral.  Each Lender further hereby irrevocably authorize (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to irrevocably authorize) Agent, at its option and in its sole discretion, to subordinate any Lien granted to or held by Agent under any Loan Document to the holder of any Permitted Lien on such property if such Permitted Lien secures Permitted Purchase Money Indebtedness.

 

(b) Agent shall have no obligation whatsoever to any of the Lenders (or the Bank Product Providers) (i) to verify or assure that the Collateral exists or is owned by Borrowers or their Subsidiaries or is cared for, protected, or insured or has been encumbered, (ii) to verify or assure that Agent’s Liens have been properly or sufficiently or lawfully created, perfected, protected, or enforced or are entitled to any particular priority, (iii) to verify or assure that any particular items of Collateral meet the eligibility criteria applicable in respect thereof, (iv) to impose, maintain, increase, reduce, implement, or eliminate any particular reserve hereunder or to determine whether the amount of any reserve is appropriate or not, or (v) to exercise at all or in any particular manner or under any duty of care, disclosure or fidelity, or to continue exercising, any of the rights, authorities and powers granted or available to Agent pursuant to any of the Loan Documents, it being understood and agreed that in respect of the Collateral, or any act, omission, or event related thereto, subject to the terms and conditions contained herein, Agent may act in any manner it may deem appropriate, in its sole discretion given Agent’s own interest in the Collateral in its capacity as one of the Lenders and that Agent shall have no other duty or liability whatsoever to any Lender (or Bank Product Provider) as to any of the foregoing, except as otherwise expressly provided herein.

 

15.12 Restrictions on Actions by Lenders; Sharing of Payments.

 

(a) Each of the Lenders agrees that it shall not, without the express written consent of Agent, and that it shall, to the extent it is lawfully entitled to do so, upon the written request of Agent, set off against the Obligations, any amounts owing by such Lender to any Borrower or its Subsidiaries or any deposit accounts of any Borrower or its Subsidiaries now or hereafter maintained with such Lender.  Each of the Lenders further agrees that it shall not, unless specifically requested to do so in writing by Agent, take or cause to be taken any action, including, the commencement of any legal or equitable proceedings to enforce any Loan Document against any Borrower or any Guarantor or to foreclose any Lien on, or otherwise enforce any security interest in, any of the Collateral.

 

(b) If, at any time or times any Lender shall receive (i) by payment, foreclosure, setoff, or otherwise, any proceeds of Collateral or any payments with respect to the Obligations, except for any such proceeds or payments received by such Lender from Agent pursuant to the terms of this Agreement, or (ii) payments from Agent in excess of such Lender’s Pro Rata Share of all such distributions by Agent, such Lender promptly shall (A) turn the same over to Agent, in kind, and with such endorsements as may be required to negotiate the same to Agent, or in immediately available funds, as applicable, for the account of all of the Lenders and for application to the Obligations in accordance with the applicable provisions of this Agreement, or (B) purchase, without recourse or warranty, an undivided interest and participation in the Obligations owed to the other Lenders so that such excess payment received shall be applied ratably as among the Lenders in accordance with their Pro Rata Shares; provided, that to the extent that such excess payment received by the purchasing party is thereafter recovered from it, those purchases of participations shall be rescinded in whole or in part, as applicable, and the applicable portion of the purchase price paid therefor shall be returned to such purchasing party, but without interest except to the extent that such purchasing party is required to pay interest in connection with the recovery of the excess payment.

 

15.13 Agency for Perfection.  Agent hereby appoints each other Lender (and each Bank Product Provider) as its agent (and each Lender hereby accepts (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to accept) such appointment) for the purpose of perfecting Agent’s Liens in assets which, in accordance with Article 8 or Article 9, as applicable, of the Code can be perfected by possession or control.  Should any Lender obtain possession or control of any such Collateral, such Lender shall notify Agent thereof, and, promptly upon Agent’s request therefor shall deliver possession or control of such Collateral to Agent or in accordance with Agent’s instructions.

 

15.14 Payments by Agent to the Lenders.  All payments to be made by Agent to the Lenders (or Bank Product Providers) shall be made by bank wire transfer of immediately available funds pursuant to such wire transfer instructions as each party may designate for itself by written notice to Agent.  Concurrently with each such payment, Agent shall identify whether such payment (or any portion thereof) represents principal, premium, fees, or interest of the Obligations.

 

15.15 Concerning the Collateral and Related Loan Documents.  Each member of the Lender Group authorizes and directs Agent to enter into this Agreement and the other Loan Documents.  Each member of the Lender Group agrees (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to agree) that any action taken by Agent in accordance with the terms of this Agreement or the other Loan Documents relating to the Collateral and the exercise by Agent of its powers set forth therein or herein, together with such other powers that are reasonably incidental thereto, shall be binding upon all of the Lenders (and such Bank Product Provider).

 

15.16 Field Examination Reports; Confidentiality; Disclaimers by Lenders; Other Reports and Information.  By becoming a party to this Agreement, each Lender:

 

(a) is deemed to have requested that Agent furnish such Lender, promptly after it becomes available, a copy of each field examination report respecting any Borrower or its Subsidiaries (each, a “Report”) prepared by or at the request of Agent, and Agent shall so furnish each Lender with such Reports,

 

(b) expressly agrees and acknowledges that Agent does not (i) make any representation or warranty as to the accuracy of any Report, and (ii) shall not be liable for any information contained in any Report,

 

(c) expressly agrees and acknowledges that the Reports are not comprehensive audits or examinations, that Agent or other party performing any field examination will inspect only specific information regarding Borrowers and their Subsidiaries and will rely significantly upon Borrowers’ and their Subsidiaries’ books and records, as well as on representations of Borrowers’ personnel,

 

(d) agrees to keep all Reports and other material, non-public information regarding Borrowers and their Subsidiaries and their operations, assets, and existing and contemplated business plans in a confidential manner in accordance with Section 17.9, and

 

(e) without limiting the generality of any other indemnification provision contained in this Agreement, agrees:  (i) to hold Agent and any other Lender preparing a Report harmless from any action the indemnifying Lender may take or fail to take or any conclusion the indemnifying Lender may reach or draw from any Report in connection with any loans or other credit accommodations that the indemnifying Lender has made or may make to Borrowers, or the indemnifying Lender’s participation in, or the indemnifying Lender’s purchase of, a loan or loans of Borrowers, and (ii) to pay and protect, and indemnify, defend and hold Agent, and any such other Lender preparing a Report harmless from and against, the claims, actions, proceedings, damages, costs, expenses, and other amounts (including, attorneys fees and costs) incurred by Agent and any such other Lender preparing a Report as the direct or indirect result of any third parties who might obtain all or part of any Report through the indemnifying Lender.

 

(f) In addition to the foregoing,  (x) any Lender may from time to time request of Agent in writing that Agent provide to such Lender a copy of any report or document provided by any Borrower or its Subsidiaries to Agent that has not been contemporaneously provided by such Borrower or such Subsidiary to such Lender, and, upon receipt of such request, Agent promptly shall provide a copy of same to such Lender, (y) to the extent that Agent is entitled, under any provision of the Loan Documents, to request additional reports or information from any Borrower or its Subsidiaries, any Lender may, from time to time, reasonably request Agent to exercise such right as specified in such Lender’s notice to Agent, whereupon Agent promptly shall request of Administrative Borrower the additional reports or information reasonably specified by such Lender, and, upon receipt thereof from such Borrower or such Subsidiary, Agent promptly shall provide a copy of same to such Lender, and (z) any time that Agent renders to Administrative Borrower a statement regarding the Loan Account, Agent shall send a copy of such statement to each Lender.

 

15.17 Several Obligations; No Liability.  Notwithstanding that certain of the Loan Documents now or hereafter may have been or will be executed only by or in favor of Agent in its capacity as such, and not by or in favor of the Lenders, any and all obligations on the part of Agent (if any) to make any credit available hereunder shall constitute the several (and not joint) obligations of the respective Lenders on a ratable basis, according to their respective Commitments, to make an amount of such credit not to exceed, in principal amount, at any one time outstanding, the amount of their respective Commitments.  Nothing contained herein shall confer upon any Lender any interest in, or subject any Lender to any liability for, or in respect of, the business, assets, profits, losses, or liabilities of any other Lender.  Each Lender shall be solely responsible for notifying its Participants of any matters relating to the Loan Documents to the extent any such notice may be required, and no Lender shall have any obligation, duty, or liability to any Participant of any other Lender.  Except as provided in Section 15.7, no member of the Lender Group shall have any liability for the acts of any other member of the Lender Group.  No Lender shall be responsible to any Borrower or any other Person for any failure by any other Lender (or Bank Product Provider) to fulfill its obligations to make credit available hereunder, nor to advance for such Lender (or Bank Product Provider) or on its behalf, nor to take any other action on behalf of such Lender (or Bank Product Provider) hereunder or in connection with the financing contemplated herein.

 

15.18 Joint Lead Arrangers, Joint Book Runners, and Syndication Agent.  Each of the Joint Lead Arrangers, Joint Book Runners, and Syndication Agent, in such capacities, shall not have any right, power, obligation, liability, responsibility, or duty under this Agreement other than those applicable to it in its capacity as a Lender, as Agent, as Swing Lender, or as Issuing Bank.  Without limiting the foregoing, each of the Joint Lead Arrangers, Joint Book Runners, and Syndication Agent, in such capacities, shall not have or be deemed to have any fiduciary relationship with any Lender or any Loan Party.  Each Lender, Agent, Swing Lender, Issuing Bank, and each Loan Party acknowledges that it has not relied, and will not rely, on the Joint Lead Arrangers, Joint Book Runners, and Syndication Agent in deciding to enter into this Agreement or in taking or not taking action hereunder.  Each of the Joint Lead Arrangers, Joint Book Runners, and Syndication Agent, in such capacities, shall be entitled to resign at any time by giving notice to Agent and Administrative Borrower.

 

16. WITHHOLDING TAXES.

 

16.1 Payments.  All payments made by Borrowers hereunder or under any note or other Loan Document will be made without setoff, counterclaim, or other defense.  In addition, all such payments will be made free and clear of, and without deduction or withholding for, any present or future Indemnified Taxes, and in the event any deduction or withholding of Indemnified Taxes is required, Borrowers shall comply with the next sentence of this Section 16.1.  If any Indemnified Taxes are so levied or imposed, Borrowers agree to pay the full amount of such Indemnified Taxes and such additional amounts as may be necessary so that every payment of all amounts due under this Agreement, any note, or Loan Document, including any amount paid pursuant to this Section 16.1 after withholding or deduction for or on account of any Indemnified Taxes, will not be less than the amount provided for herein; provided, that Borrowers shall not be required to increase any such amounts to the extent that the increase in such amount payable results from Agent’s or such Lender’s own willful misconduct or gross negligence (as finally determined by a court of competent jurisdiction).  Administrative Borrower will furnish to Agent as promptly as possible after the date the payment of any Indemnified Tax is due pursuant to applicable law, certified copies of tax receipts evidencing such payment by Borrowers.  Borrowers agree to pay any present or future stamp, value added or documentary taxes or any other excise or property taxes, charges, or similar levies that arise from any payment made hereunder or from the execution, delivery, performance, recordation, or filing of, or otherwise with respect to this Agreement or any other Loan Document.

 

16.2 Exemptions.

 

(a) If a Lender or Participant is entitled to claim an exemption or reduction from United States withholding tax, such Lender or Participant agrees with and in favor of Agent, to deliver to Agent (or, in the case of a Participant, to the Lender granting the participation only) one of the following before receiving its first payment under this Agreement:

 

(i) if such Lender or Participant is entitled to claim an exemption from United States withholding tax pursuant to the portfolio interest exception, (A) a statement of the Lender or Participant, signed under penalty of perjury, that it is not a (I) a “bank” as described in Section 881(c)(3)(A) of the IRC, (II) a 10% shareholder of USA Truck (within the meaning of Section 871(h)(3)(B) of the IRC), or (III) a controlled foreign corporation related to Borrowers within the meaning of Section 864(d)(4) of the IRC, and (B) a properly completed and executed IRS Form W-8BEN or Form W-8IMY (with proper attachments);

 

(ii) if such Lender or Participant is entitled to claim an exemption from, or a reduction of, withholding tax under a United States tax treaty, a properly completed and executed copy of IRS Form W-8BEN;

 

(iii) if such Lender or Participant is entitled  to claim that interest paid under this Agreement is exempt from United States withholding tax because it is effectively connected with a United States trade or business of such Lender, a properly completed and executed copy of IRS Form W-8ECI;

 

(iv) if such Lender or Participant is entitled to claim that interest paid under this Agreement is exempt from United States withholding tax because such Lender or Participant serves as an intermediary, a properly completed and executed copy of IRS Form W-8IMY (with proper attachments); or

 

(v) a properly completed and executed copy of any other form or forms, including IRS Form W-9, as may be required under the IRC or other laws of the United States as a condition to exemption from, or reduction of, United States withholding or backup withholding tax.

 

(b) Each Lender or Participant shall provide new forms (or successor forms) upon the expiration or obsolescence of any previously delivered forms and to promptly notify Agent (or, in the case of a Participant, to the Lender granting the participation only) of any change in circumstances which would modify or render invalid any claimed exemption or reduction.

 

(c) If a Lender or Participant claims an exemption from withholding tax in a jurisdiction other than the United States, such Lender or such Participant agrees with and in favor of Agent, to deliver to Agent (or, in the case of a Participant, to the Lender granting the participation only) any such form or forms, as may be required under the laws of such jurisdiction as a condition to exemption from, or reduction of, foreign withholding or backup withholding tax before receiving its first payment under this Agreement, but only if such Lender or such Participant is legally able to deliver such forms, provided, that nothing in this Section 16.2(c) shall require a Lender or Participant to disclose any information that it deems to be confidential (including without limitation, its tax returns).  Each Lender and each Participant shall provide new forms (or successor forms) upon the expiration or obsolescence of any previously delivered forms and to promptly notify Agent (or, in the case of a Participant, to the Lender granting the participation only) of any change in circumstances which would modify or render invalid any claimed exemption or reduction.

 

(d) If a Lender or Participant claims exemption from, or reduction of, withholding tax and such Lender or Participant sells, assigns, grants a participation in, or otherwise transfers all or part of the Obligations of Borrowers to such Lender or Participant, such Lender or Participant agrees to notify Agent (or, in the case of a sale of a participation interest, to the Lender granting the participation only) of  the percentage amount in which it is no longer the beneficial owner of Obligations of Borrowers to such Lender or Participant.  To the extent of such percentage amount, Agent will treat such Lender’s or such Participant’s documentation provided pursuant to Section 16.2(a) or 16.2(c) as no longer valid.  With respect to such percentage amount, such Participant or Assignee may provide new documentation, pursuant to Section 16.2(a) or 16.2(c), if applicable.  Borrowers agree that each Participant shall be entitled to the benefits of this Section 16 with respect to its participation in any portion of the Commitments and the Obligations so long as such Participant complies with the obligations set forth in this Section 16 with respect thereto.

 

16.3 Reductions.

 

(a) If a Lender or a Participant is entitled to a reduction in the applicable withholding tax, Agent (or, in the case of a Participant, to the Lender granting the participation) may withhold from any interest payment to such Lender or such Participant an amount equivalent to the applicable withholding tax after taking into account such reduction.  If the forms or other documentation required by Section 16.2(a) or 16.2(c) are not delivered to Agent (or, in the case of a Participant, to the Lender granting the participation), then Agent (or, in the case of a Participant, to the Lender granting the participation) may withhold from any interest payment to such Lender or such Participant not providing such forms or other documentation an amount equivalent to the applicable withholding tax.

 

(b) If the IRS or any other Governmental Authority of the United States or other jurisdiction asserts a claim that Agent (or, in the case of a Participant, to the Lender granting the participation) did not properly withhold tax from amounts paid to or for the account of any Lender or any Participant due to a failure on the part of the Lender or any Participant (because the appropriate form was not delivered, was not properly executed, or because such Lender failed to notify Agent (or such Participant failed to notify the Lender granting the participation) of a change in circumstances which rendered the exemption from, or reduction of, withholding tax ineffective, or for any other reason) such Lender shall indemnify and hold Agent harmless (or, in the case of a Participant, such Participant shall indemnify and hold the Lender granting the participation harmless) for all amounts paid, directly or indirectly, by Agent (or, in the case of a Participant, to the Lender granting the participation), as tax or otherwise, including penalties and interest, and including any taxes imposed by any jurisdiction on the amounts payable to Agent (or, in the case of a Participant, to the Lender granting the participation only) under this Section 16, together with all costs and expenses (including attorneys fees and expenses).  The obligation of the Lenders and the Participants under this subsection shall survive the payment of all Obligations and the resignation or replacement of Agent.

 

16.4 Refunds.  If Agent or a Lender determines, in its sole discretion, that it has received a refund of any Indemnified Taxes to which Borrowers have paid additional amounts pursuant to this Section 16, so long as no Default or Event of Default has occurred and is continuing, it shall pay over such refund to Borrowers (but only to the extent of payments made, or additional amounts paid, by Borrowers under this Section 16 with respect to Indemnified Taxes giving rise to such a refund), net of all out-of-pocket expenses of Agent or such Lender and without interest (other than any interest paid by the applicable Governmental Authority with respect to such a refund); provided, that Borrowers, upon the request of Agent or such Lender, agrees to repay the amount paid over to Borrowers (plus any penalties, interest or other charges, imposed by the applicable Governmental Authority, other than such penalties, interest or other charges imposed as a result of the willful misconduct or gross negligence of Agent hereunder) to Agent or such Lender in the event Agent or such Lender is required to repay such refund to such Governmental Authority.  Notwithstanding anything in this Agreement to the contrary, this Section 16 shall not be construed to require Agent or any Lender to make available its tax returns (or any other information which it deems confidential) to Borrowers or any other Person.

 

17. GENERAL PROVISIONS.

 

17.1 Effectiveness.  This Agreement shall be binding and deemed effective when executed by each Borrower, Agent, and each Lender whose signature is provided for on the signature pages hereof.

 

17.2 Section Headings.  Headings and numbers have been set forth herein for convenience only.  Unless the contrary is compelled by the context, everything contained in each Section applies equally to this entire Agreement.

 

17.3 Interpretation.  Neither this Agreement nor any uncertainty or ambiguity herein shall be construed against the Lender Group or any Borrower, whether under any rule of construction or otherwise.  On the contrary, this Agreement has been reviewed by all parties and shall be construed and interpreted according to the ordinary meaning of the words used so as to accomplish fairly the purposes and intentions of all parties hereto.

 

17.4 Severability of Provisions.  Each provision of this Agreement shall be severable from every other provision of this Agreement for the purpose of determining the legal enforceability of any specific provision.

 

17.5 Bank Product Providers.  Each Bank Product Provider in its capacity as such shall be deemed a third party beneficiary hereof and of the provisions of the other Loan Documents for purposes of any reference in a Loan Document to the parties for whom Agent is acting.  Agent hereby agrees to act as agent for such Bank Product Providers and, by virtue of entering into a Bank Product Agreement, the applicable Bank Product Provider shall be automatically deemed to have appointed Agent as its agent and to have accepted the benefits of the Loan Documents.  It is understood and agreed that the rights and benefits of each Bank Product Provider under the Loan Documents consist exclusively of such Bank Product Provider’s being a beneficiary of the Liens and security interests (and, if applicable, guarantees) granted to Agent and the right to share in payments and collections out of the Collateral as more fully set forth herein. In addition, each Bank Product Provider, by virtue of entering into a Bank Product Agreement, shall be automatically deemed to have agreed that Agent shall have the right, but shall have no obligation, to establish, maintain, relax, or release reserves in respect of the Bank Product Obligations and that if reserves are established there is no obligation on the part of Agent to determine or insure whether the amount of any such reserve is appropriate or not.  In connection with any such distribution of payments or proceeds of Collateral, Agent shall be entitled to assume no amounts are due or owing to any Bank Product Provider unless such Bank Product Provider has provided a written certification (setting forth a reasonably detailed calculation) to Agent as to the amounts that are due and owing to it and such written certification is received by Agent a reasonable period of time prior to the making of such distribution.  Agent shall have no obligation to calculate the amount due and payable with respect to any Bank Products, but may rely upon the written certification of the amount due and payable from the applicable Bank Product Provider.  In the absence of an updated certification, Agent shall be entitled to assume that the amount due and payable to the applicable Bank Product Provider is the amount last certified to Agent by such Bank Product Provider as being due and payable (less any distributions made to such Bank Product Provider on account thereof).  Borrowers may obtain Bank Products from any Bank Product Provider, although Borrowers are not required to do so and may obtain Bank Products from other service providers as well.  Each Borrower acknowledges and agrees that no Bank Product Provider has committed to provide any Bank Products and that the providing of Bank Products by any Bank Product Provider is in the sole and absolute discretion of such Bank Product Provider.  Notwithstanding anything to the contrary in this Agreement or any other Loan Document, no provider or holder of any Bank Product shall have any voting or approval rights hereunder (or be deemed a Lender) solely by virtue of its status as the provider or holder of such agreements or products or the Obligations owing thereunder, nor shall the consent of any such provider or holder be required (other than in their capacities as Lenders, to the extent applicable) for any matter hereunder or under any of the other Loan Documents, including as to any matter relating to the Collateral or the release of Collateral or Guarantors.

 

17.6 Debtor-Creditor Relationship.  The relationship between the Lenders and Agent, on the one hand, and the Loan Parties, on the other hand, is solely that of creditor and debtor.  No member of the Lender Group has (or shall be deemed to have) any fiduciary relationship or duty to any Loan Party arising out of or in connection with the Loan Documents or the transactions contemplated thereby, and there is no agency or joint venture relationship between the members of the Lender Group, on the one hand, and the Loan Parties, on the other hand, by virtue of any Loan Document or any transaction contemplated therein.

 

17.7 Counterparts; Electronic Execution.  This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Agreement.  Delivery of an executed counterpart of this Agreement by telefacsimile or other electronic method of transmission shall be equally as effective as delivery of an original executed counterpart of this Agreement.  Any party delivering an executed counterpart of this Agreement by telefacsimile or other electronic method of transmission also shall deliver an original executed counterpart of this Agreement but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Agreement.  The foregoing shall apply to each other Loan Document mutatis mutandis.

 

17.8 Revival and Reinstatement of Obligations; Certain Waivers.  If any member of the Lender Group or any Bank Product Provider repays, refunds, restores, or returns in whole or in part, any payment or property (including any proceeds of Collateral) previously paid or transferred to such member of the Lender Group or such Bank Product Provider in full or partial satisfaction of any Obligation or on account of any other obligation of any Loan Party under any Loan Document or any Bank Product Agreement, because the payment, transfer, or the incurrence of the obligation so satisfied is asserted or declared to be void, voidable, or otherwise recoverable under any law relating to creditors’ rights, including provisions of the Bankruptcy Code relating to fraudulent transfers, preferences, or other voidable or recoverable obligations or transfers (each, a “Voidable Transfer”), or because such member of the Lender Group or Bank Product Provider elects to do so on the reasonable advice of its counsel in connection with a claim that the payment, transfer, or incurrence is or may be a Voidable Transfer, then, as to any such Voidable Transfer, or the amount thereof that such member of the Lender Group or Bank Product Provider elects to repay, restore, or return (including pursuant to a settlement of any claim in respect thereof), and as to all reasonable costs, expenses, and attorneys fees of such member of the Lender Group or Bank Product Provider related thereto, (i) the liability of the Loan Parties with respect to the amount or property paid, refunded, restored, or returned will automatically and immediately be revived, reinstated, and restored and will exist and (ii) Agent’s Liens securing such liability shall be effective, revived, and remain in full force and effect, in each case, as fully as if such Voidable Transfer had never been made.  If, prior to any of the foregoing, (A) Agent’s Liens shall have been released or terminated or (B) any provision of this Agreement shall have been terminated or cancelled, Agent’s Liens, or such provision of this Agreement, shall be reinstated in full force and effect and such prior release, termination, cancellation or surrender shall not diminish, release, discharge, impair or otherwise affect the obligation of any Loan Party in respect of such liability or any Collateral securing such liability.

 

17.9 Confidentiality.

 

(a) Agent and Lenders each individually (and not jointly or jointly and severally) agree that material, non-public information regarding Borrowers and their Subsidiaries, their operations, assets, and existing and contemplated business plans (“Confidential Information”) shall be treated by Agent and the Lenders in a confidential manner, and shall not be disclosed by Agent and the Lenders to Persons who are not parties to this Agreement, except:  (i) to attorneys for and other advisors, accountants, auditors, and consultants to any member of the Lender Group and to employees, directors and officers of any member of the Lender Group (the Persons in this clause (i), “Lender Group Representatives”) on a “need to know” basis in connection with this Agreement and the transactions contemplated hereby and on a confidential basis, (ii) to Subsidiaries and Affiliates of any member of the Lender Group (including the Bank Product Providers), provided that any such Subsidiary or Affiliate shall have agreed to receive such information hereunder subject to the terms of this Section 17.9, (iii) as may be required by regulatory authorities so long as such authorities are informed of the confidential nature of such information, (iv) as may be required by statute, decision, or judicial or administrative order, rule, or regulation; provided that (x) prior to any disclosure under this clause (iv), the disclosing party agrees to provide Administrative Borrower with prior notice thereof, to the extent that it is practicable to do so and to the extent that the disclosing party is permitted to provide such prior notice to Administrative Borrower pursuant to the terms of the applicable statute, decision, or judicial or administrative order, rule, or regulation and (y) any disclosure under this clause (iv) shall be limited to the portion of the Confidential Information as may be required by such statute, decision, or judicial or administrative order, rule, or regulation, (v) as may be agreed to in advance in writing by Administrative Borrower, (vi) as requested or required by any Governmental Authority pursuant to any subpoena or other legal process, provided, that, (x) prior to any disclosure under this clause (vi) the disclosing party agrees to provide Administrative Borrower with prior written notice thereof, to the extent that it is practicable to do so and to the extent that the disclosing party is permitted to provide such prior written notice to Administrative Borrower pursuant to the terms of the subpoena or other legal process and (y) any disclosure under this clause (vi) shall be limited to the portion of the Confidential Information as may be required by such Governmental Authority pursuant to such subpoena or other legal process, (vii) as to any such information that is or becomes generally available to the public (other than as a result of prohibited disclosure by Agent or the Lenders or the Lender Group Representatives), (viii) in connection with any assignment, participation or pledge of any Lender’s interest under this Agreement, provided that prior to receipt of Confidential Information any such assignee, participant, or pledgee shall have agreed in writing to receive such Confidential Information either subject to the terms of this Section 17.9 or pursuant to confidentiality requirements substantially similar to those contained in this Section 17.9 (and such Person may disclose such Confidential Information to Persons employed or engaged by them as described in clause (i) above), (ix) in connection with any litigation or other adversary proceeding involving parties hereto which such litigation or adversary proceeding involves claims related to the rights or duties of such parties under this Agreement or the other Loan Documents; provided, that, prior to any disclosure to any Person (other than any Loan Party, Agent, any Lender, any of their respective Affiliates, or their respective counsel) under this clause (ix) with respect to litigation involving any Person (other than any Borrower, Agent, any Lender, any of their respective Affiliates, or their respective counsel), the disclosing party agrees to provide Administrative Borrower with prior written notice thereof, and (x) in connection with, and to the extent reasonably necessary for, the exercise of any secured creditor remedy under this Agreement or under any other Loan Document.

 

(b) Anything in this Agreement to the contrary notwithstanding, Agent may disclose information concerning the terms and conditions of this Agreement and the other Loan Documents to loan syndication and pricing reporting services or in its marketing or promotional materials, with such information to consist of deal terms and other information customarily found in such publications or marketing or promotional materials and may otherwise use the name, logos, and other insignia of any Borrower or the other Loan Parties and the Commitments provided hereunder in any “tombstone” or other advertisements, on its website or in other marketing materials of the Agent.

 

(c) The Loan Parties hereby acknowledge that Agent or its Affiliates may make available to the Lenders materials or information provided by or on behalf of Borrowers hereunder (collectively, “Borrower Materials”) by posting the Borrower Materials on IntraLinks, SyndTrak or another similar electronic system (the “Platform”) and certain of the Lenders may be “public-side” Lenders (i.e., Lenders that do not wish to receive material non-public information with respect to the Loan Parties or their securities) (each, a “Public Lender”).  The Loan Parties shall be deemed to have authorized Agent and its Affiliates and the Lenders to treat Borrower Materials marked “PUBLIC” or otherwise at any time filed with the SEC as not containing any material non-public information with respect to the Loan Parties or their securities for purposes of United States federal and state securities laws.  All Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated as “Public Investor” (or another similar term).  Agent and its Affiliates and the Lenders shall be entitled to treat any Borrower Materials that are not marked “PUBLIC” or that are not at any time filed with the SEC as being suitable only for posting on a portion of the Platform not marked as “Public Investor” (or such other similar term).

 

17.10 Survival.  All representations and warranties made by the Loan Parties in the Loan Documents and in the certificates or other instru­ments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made by any such other party or on its behalf and notwithstanding that Agent, Issuing Bank, or any Lender may have had notice or knowledge of any Default or Event of Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of, or any accrued interest on, any Loan or any fee or any other amount payable under this Agreement is outstanding or unpaid or any Letter of Credit is outstanding and so long as the Commitments have not expired or been terminated.

 

17.11 Patriot Act.  Each Lender that is subject to the requirements of the Patriot Act hereby notifies Borrowers that pursuant to the requirements of the Act, it is required to obtain, verify and record information that identifies each Borrower, which information includes the name and address of each Borrower and other information that will allow such Lender to identify each Borrower in accordance with the Patriot Act.  In addition, if Agent is required by law or regulation or internal policies to do so, it shall have the right to periodically conduct (a) Patriot Act searches, OFAC/PEP searches, and customary individual background checks for the Loan Parties and (b) OFAC/PEP searches and customary individual  background checks for the Loan Parties’ senior management and key principals, and each Borrower agrees to cooperate in respect of the conduct of such searches and further agrees that the reasonable costs and charges for such searches shall constitute Lender Group Expenses hereunder and be for the account of Borrowers.

 

17.12 Integration.  This Agreement, together with the other Loan Documents, reflects the entire understanding of the parties with respect to the transactions contemplated hereby and shall not be contradicted or qualified by any other agreement, oral or written, before the date hereof.  The foregoing to the contrary notwithstanding, all Bank Product Agreements, if any, are independent agreements governed by the written provisions of such Bank Product Agreements, which will remain in full force and effect, unaffected by any repayment, prepayments, acceleration, reduction, increase, or change in the terms of any credit extended hereunder, except as otherwise expressly provided in such Bank Product Agreement.

 

17.13 USA Truck as Agent for Borrowers.  Each Borrower hereby irrevocably appoints USA Truck as the borrowing agent and attorney-in-fact for all Borrowers (the “Administrative Borrower”) which appointment shall remain in full force and effect unless and until Agent shall have received prior written notice signed by each Borrower that such appointment has been revoked and that another Borrower has been appointed Administrative Borrower.  Each Borrower hereby irrevocably appoints and authorizes the Administrative Borrower (a) to provide Agent with all notices with respect to Revolving Loans and Letters of Credit obtained for the benefit of any Borrower and all other notices and instructions under this Agreement and the other Loan Documents (and any notice or instruction provided by Administrative Borrower shall be deemed to be given by Borrowers hereunder and shall bind each Borrower), (b) to receive notices and instructions from members of the Lender Group (and any notice or instruction provided by any member of the Lender Group to the Administrative Borrower in accordance with the terms hereof shall be deemed to have been given to each Borrower), and (c) to take such action as the Administrative Borrower deems appropriate on its behalf to obtain Revolving Loans and Letters of Credit and to exercise such other powers as are reasonably incidental thereto to carry out the purposes of this Agreement.  It is understood that the handling of the Loan Account and Collateral in a combined fashion, as more fully set forth herein, is done solely as an accommodation to Borrowers in order to utilize the collective borrowing powers of Borrowers in the most efficient and economical manner and at their request, and that Lender Group shall not incur liability to any Borrower as a result hereof.  Each Borrower expects to derive benefit, directly or indirectly, from the handling of the Loan Account and the Collateral in a combined fashion since the successful operation of each Borrower is dependent on the continued successful performance of the integrated group.  To induce the Lender Group to do so, and in consideration thereof, each Borrower hereby jointly and severally agrees to indemnify each member of the Lender Group and hold each member of the Lender Group harmless against any and all liability, expense, loss or claim of damage or injury, made against the Lender Group by any Borrower or by any third party whosoever, arising from or incurred by reason of (i) the handling of the Loan Account and Collateral of Borrowers as herein provided, or (ii) the Lender Group’s relying on any instructions of the Administrative Borrower, except that Borrowers will have no liability to the relevant Agent-Related Person or Lender-Related Person under this Section 17.13 with respect to any liability that has been finally determined by a court of competent jurisdiction to have resulted solely from the gross negligence or willful misconduct of such Agent-Related Person or Lender-Related Person, as the case may be.

 

 

[Signature pages to follow.]

 

\40023676.15

  

  

  

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

 

	  	
USA TRUCK, INC.,

as a Borrower and as the initial Administrative Borrower

	  	  
	  	  
	  	
By:

	
/s/ Darron R. Ming

	  	
Name:

	
Darron R. Ming

	  	
Title:

	
Executive Vice President and Chief Financial Officer

	  	  

[Signature page to Credit Agreement]

\40023676.15

  

  

  

	  	  
	  	
WELLS FARGO BANK, NATIONAL ASSOCIATION,

a national banking association, as Agent, as Joint Lead Arranger, as Joint Book Runner and as a Lender

	  	  
	  	  
	  	
By:

	
/s/ Megan E. Enlow

	  	
Name:

	
Megan E. Enlow

	  	
Title:

	
Vice President

	  	  	  

[Signature page to Credit Agreement]

\40023676.15

  

  

  

	  	  
	  	
PNC BANK, NATIONAL ASSOCIATION,

a national banking association, as Joint Lead Arranger, as Joint Book Runner, as Syndication Agent and as a Lender

	  	  
	  	  
	  	
By:

	
/s/ Jeffrey Marchetti

	  	
Name:

	
Jeffrey Marchetti

	  	
Title:

	
Relationship Manager

	  	  

 

 

 

[Signature page to Credit Agreement]

\40023676.15

  

  

  

EXHIBIT A-1

 

 

FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT

 

This ASSIGNMENT AND ACCEPTANCE AGREEMENT (“Assignment Agreement”) is entered into as of  between  (“Assignor”) and  (“Assignee”).  Reference is made to the Agreement described in Annex I hereto (the “Credit Agreement”).  Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Credit Agreement.

 

1. In accordance with the terms and conditions of Section 13 of the Credit Agreement, the Assignor hereby sells and assigns to the Assignee, and the Assignee hereby purchases and assumes from the Assignor, that interest in and to the Assignor’s rights and obligations under the Loan Documents as of the date hereof with respect to the Obligations owing to the Assignor, and Assignor’s portion of the Commitments, all to the extent specified on Annex I.

 

2. The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any adverse claim and (ii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment Agreement and to consummate the transactions contemplated hereby; (b) makes no representation or warranty and assumes no responsibility with respect to (i) any statements, representations or warranties made in or in connection with the Loan Documents, or (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any other instrument or document furnished pursuant thereto; (c) makes no representation or warranty and assumes no responsibility with respect to the financial condition of any Borrower or any Guarantor or the performance or observance by any Borrower or any Guarantor of any of their respective obligations under the Loan Documents or any other instrument or document furnished pursuant thereto, and (d) represents and warrants that the amount set forth as the Purchase Price on Annex I represents the amount owed by the Borrowers to Assignor with respect to Assignor’s share of the Revolving Loans assigned hereunder, as reflected on Assignor’s books and records.

 

3. The Assignee (a) confirms that it has received copies of the Credit Agreement and the other Loan Documents, together with copies of the financial statements referred to therein and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment Agreement; (b) agrees that it will, independently and without reliance upon Agent, Assignor, or any other Lender, based upon such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking any action under the Loan Documents; (c) appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers under the Loan Documents as are delegated to Agent by the terms thereof, together with such powers as are reasonably incidental thereto; (d) agrees that it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender; [and (e) attaches the forms prescribed by the Internal Revenue Service of the United States certifying as to the Assignee’s status for purposes of determining exemption from United States withholding taxes with respect to all payments to be made to the Assignee under the Credit Agreement or such other documents as are necessary to indicate that all such payments are subject to such rates at a rate reduced by an applicable tax treaty.]

 

4. Following the execution of this Assignment Agreement by the Assignor and Assignee, the Assignor will deliver this Assignment Agreement to the Agent for recording by the Agent.  The effective date of this Assignment (the “Settlement Date”) shall be the latest to occur of (a) the date of the execution and delivery hereof by the Assignor and the Assignee, (b) the receipt by Agent for its sole and separate account of a processing fee in the amount of $5,000 (if required by the Credit Agreement), (c) the receipt of any required consent of the Agent, and (d) the date specified in Annex I.

 

5. As of the Settlement Date (a) the Assignee shall be a party to the Credit Agreement and, to the extent of the interest assigned pursuant to this Assignment Agreement, have the rights and obligations of a Lender thereunder and under the other Loan Documents, and (b) the Assignor shall, to the extent of the interest assigned pursuant to this Assignment Agreement, relinquish its rights and be released from its obligations under the Credit Agreement and the other Loan Documents, provided, however, that nothing contained herein shall release any assigning Lender from obligations that survive the termination of this Agreement, including such assigning Lender’s obligations under Section 15 and Section 17.9(a) of the Credit Agreement.

 

6. Upon the Settlement Date, Assignee shall pay to Assignor the Purchase Price (as set forth in Annex I).  From and after the Settlement Date, Agent shall make all payments that are due and payable to the holder of the interest assigned hereunder (including payments of principal, interest, fees and other amounts) to Assignor for amounts which have accrued up to but excluding the Settlement Date and to Assignee for amounts which have accrued from and after the Settlement Date.  On the Settlement Date, Assignor shall pay to Assignee an amount equal to the portion of any interest, fee, or any other charge that was paid to Assignor prior to the Settlement Date on account of the interest assigned hereunder and that are due and payable to Assignee with respect thereto, to the extent that such interest, fee or other charge relates to the period of time from and after the Settlement Date.

 

7. This Assignment Agreement may be executed in counterparts and by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument.  This Assignment Agreement may be executed and delivered by telecopier or other facsimile transmission all with the same force and effect as if the same were a fully executed and delivered original manual counterpart.

 

8. THIS ASSIGNMENT AGREEMENT SHALL BE SUBJECT TO THE PROVISIONS REGARDING CHOICE OF LAW AND VENUE AND JURY TRIAL WAIVER SET FORTH IN SECTION 12 OF THE CREDIT AGREEMENT, AND SUCH PROVISIONS ARE INCORPORATED HEREIN BY THIS REFERENCE, MUTATIS MUTANDIS.

 

Exhibit A-1

Page 

\40023676.15

  

  

  

IN WITNESS WHEREOF, the parties hereto have caused this Assignment Agreement and Annex I hereto to be executed by their respective officers, as of the first date written above.

 

[NAME OF ASSIGNOR]

  as Assignor

By         

Name:

Title:

[NAME OF ASSIGNEE]

  as Assignee

By         

Name:

Title:

ACCEPTED THIS ____ DAY OF

_______________

WELLS FARGO BANK, NATIONAL ASSOCIATION,

a national banking association, as Agent

By           

Name:

Title:

Exhibit A-1

Page 

\40023676.15

  

  

  

ANNEX FOR ASSIGNMENT AND ACCEPTANCE

 

 

ANNEX I

 

	
1.

	
Borrowers:  USA Truck, Inc., a Delaware corporation, and certain of its Subsidiaries from time to time party to the Credit Agreement

 

	
2.

	
Name and Date of Credit Agreement:

 

Credit Agreement, dated as of August 24, 2012 (as amended, restated, supplemented, or otherwise modified from time to time, the “Credit Agreement”), by and among Borrowers, the lenders party thereto as “Lenders”, Wells Fargo Bank, National Association, a national banking association (“Wells Fargo”), as administrative agent for each member of the Lender Group and the Bank Product Providers, Wells Fargo, as joint lead arranger, Wells Fargo, as joint book runner, and PNC Bank, National Association, a national banking association, as joint lead arranger, as joint book runner, and as syndication agent.

3.           Date of Assignment Agreement:                                                                                                

4.           Amounts:

	
(i)  

	
Assigned Amount of Revolver Commitment                                                                                     $                      

 

	
(ii)  

	
Assigned Amount of Revolving Loans                                                                                     $                      

 

5.           Settlement Date:                                                                                                

6.           Purchase Price                                                                                                $_____________

7.           Notice and Payment Instructions, etc.

Assignee:                                                        Assignor:

	  	  

Exhibit A-1

Page 

\40023676.15

  

  

  

 

EXHIBIT B-1 

 

FORM OF BORROWING BASE CERTIFICATE

 

See attached.1

 

1 To be attached in form separately provided. 

 

Exhibit B-1

 

Page 1

 

\40023676.15

  

  

  

 

 

Summary Page Borrowing Base Certificate

 

Date

 

Name          USA Truck, Inc.

 

A/R As of:

 

The undersigned, USA Truck, Inc. (“Administrative Borrower”), pursuant to that certain Credit Agreement dated as of _____________ (as amended, restated, modified, supplemented, refinanced,

 

renewed, or extended from time to time, the “Credit Agreement”), entered into among Administrative Borrower, the Subsidiaries of Administrative Borrower identified on the signature pages thereof

(each a "Borrower" and collectively "Borrowers"), the lenders signatory thereto from time to time, Wells Fargo Bank, National Association, a national banking association (“Wells Fargo”), as administrative agent for each member of the Lender Group and the Bank Product Providers (in such capacity, together with its successors and assigns, in such capacity, the “Agent”), and as joint lead arranger and joint book runner, hereby certifies to Agent that the following items, calculated in accordance with the terms and definitions set forth in the Credit Agreement for such items, are true and correct, and that each Borrower is in compliance with and, after giving effect to any currently requested Revolving Loans, will be in compliance with, the terms, conditions, and provisions of the Credit Agreement.  All initially capitalized terms used in the Borrowing Base Certificate have the meanings set forth in the Credit Agreement unless specifically defined herein.

 

Accounts Receivable 

 

Accounts Receivable Balance  per Aging Report Assigned To Wells Fargo Capital Finance                                                                                                                                                    

 

Less Ineligibles (detailed on page 2)                                                                                                                 

 

Net Eligible Accounts Receivable                                                                                                                           

 

Accounts Receivable Availability before Sublimit(s)                                                                                                                            

 

Net Available Accounts Receivable after Sublimit(s) 

 

Rolling Stock

 

NOLV of rolling stock                                                                                                                           ‐

 

Advance rate                                                                                                                          85%

 

Available Rolling Stock 

 

Reserves

 

95% of NBV Limiter                                                                                                                 ‐

 

Net Available Rolling Stock 

 

Total Availability

 

Total Availability before Reserves‐

 

Reserves

 

3 Month Reserve for Tracking Expenses                                                                                                                 ‐

 

3 Month Rent Reserve                                                                                                                  ‐

 

Total Reserves‐

 

Total Availability after Reserves before Loan Balance and LCs‐

 

Total Credit Line 125,000,000.00 Suppressed Availability ‐

 

Reserves (Applied Against Suppressed Availability)

 

2 Week Payroll Reserve                                                                                                                 ‐

 

Annual Tag & Title Reserve                                                                                                                  ‐

 

Net Suppressed Availability‐

 

Availability before Loan Balance‐

 

Letter of Credit Balance                                                                             As of:                                               ‐

 

Loan Ledger Balance                                                                             As of:                                               ‐

 

Net Availability ‐

 

Additionally, the undersigned hereby certifies and represents and warrants to the Lender Group on behalf of Borrowers that (i) as of the date hereof, each representation or warranty contained in or

pursuant to any Loan Document, any agreement, instrument, certificate, document or other writing furnished at any time under or in connection with any Loan Document, and as of the effective date of any advance, revolving loan, continuation or conversion requested above, is true and correct in all material respects (except to the extent any representation or warranty expressly related to an earlier date, and except that such materiality qualifier shall not be applicable to any representation or warranty that already is qualified or modified by materiality in the text thereof), (ii) each of the covenants and agreements contained in any Loan Document have been performed (to the extent required to be performed on or before the date hereof or each such effective date), (iii) no Default or Event of Default has occurred and is continuing on the date hereof, nor will any thereof occur after giving effect to the request above, and (iv) all of the foregoing is true and correct as of the effective date of the calculations set forth above and that such calculations have been made in accordance with the requirements of the Credit Agreement.

 

List of attachments with this Borrowing Base Certificate: 

 

Authorized Signer                                                                          Page 2 ‐ Accounts Receivable Availability Detail

Page 2b ‐ Accounts Receivable Concentrations

Page 2c ‐ Accounts Receivable Dilution

  

  

  

 

Accounts Receivable Availability Detail 

 

Name:             USA Truck, Inc.

 

Report based on Aging dated:

 

Loan ID #:                               TBD                    TBD

 

Division Name:                                    Billed                  Unbilled Total

 

Aging Spreads:

 

Unbilled                                                                                  ‐                    ‐

 

1 ‐ 30 DOI                                                                                  ‐                    ‐

 

31 ‐ 60 DOI                                                                                  ‐                    ‐

 

61 ‐ 90 DOI                                                                                  ‐                    ‐

 

91 ‐ 120 DOI                                                                                  ‐                    ‐

 

121+ DOI                                                                                  ‐                    ‐

 

A/R Aging Balance:‐ ‐

 

Ineligibles:

 

Past Due‐91+ DOI, 61+ DPD for billed, 31+ days from

 

ERS         revenue date for unbilled                                                                                                      

 

ERS         Past Due Credits                                                                                  ‐                    ‐

 

ERS         CrossAge                                                                                  ‐                    ‐

 

ERS         Intercompany                                                                                  ‐                    ‐

 

ERS         Foreign                                                                                  ‐                    ‐

 

ERS         Government                                                                                  ‐                    ‐

 

ERS         COD                                                                                  ‐                    ‐

 

ERS         Debit Memo                                                                                  ‐                    ‐

 

ERS         Customer Deposits                                                                                  ‐                    ‐

 

ERS         Employee Sales                                                                                  ‐                    ‐

 

ERS         Progress Billing                                                                                  ‐                    ‐

 

ERS         Extended Terms                                                                                  ‐                    ‐

 

ERS         Finance Charges                                                                                  ‐                    ‐

 

ERS         Guaranteed                                                                                  ‐                    ‐

 

ERS         Coop Advertising                                                                                  ‐                    ‐

 

ERS         Samples                                                                                  ‐                    ‐

 

ERS         Consignment Sales                                                                                  ‐                    ‐

 

ERS         Bill & Hold                                                                                  ‐                    ‐

 

ERS         Bankrupt/Doubtful                                                                                  ‐                    ‐

 

ERS         Contra                                                                                  ‐                    ‐

 

ERS         Other1‐Short pays                                                                                  ‐                    ‐

 

ERS         Other2                                                                                  ‐                    ‐

 

ERS         Other3                                                                                  ‐                    ‐

 

ERS         Other4                                                                                  ‐                    ‐

 

ERS         Other5                                                                                  ‐                    ‐

 

ERS         Other6                                                                                  ‐                    ‐

 

Manual                                                                                                               Contra overcount adjustment‐

 

Manual                                                                                            Customer Deposits per exam as of 5/31/12‐‐

 

Manual                                                                                            Unreconciled (Aging > GL) per exam as of 5/31/12‐‐

 

GL# 113199 ‐ AR‐Revenue Recognition per exam as of

 

Manual                                                                                            5/31/12                    

 

Manual                                                                                                               Zero out negative availability‐

 

Manual                                                                                            Concentration Cap‐‐

 

Manual                                                                                            Dilution Ineligible (grossed up)‐‐

 

Total Ineligible A/R:‐ ‐

 

Eligible A/R                                                                                               ‐                    ‐

 

Advance Rate                                                                                              85%                    75%

 

A/R Availability before Sublimit(s)‐ ‐

 

Line Limit or Sublimit(s) 125,000,000.00 10,000,000.00 125,000,000.00

 

Net A/R Availability‐ ‐

 

RM Signature

 

Page 2 - AR Detail 

  

  

  

EXHIBIT B-2

 

FORM OF BANK PRODUCT PROVIDER AGREEMENT

 

[Letterhead of Specified Bank Products Provider]

 

[Date]

 

	
To:

	
Wells Fargo Bank, N.A., as Agent

	
  

	
1100 Abernathy Road, Suite 1600

	
  

	
Atlanta, GA  30328

	
  

	
Attn: Loan Portfolio Manager (USA Truck)

 

Reference hereby is made to that certain Credit Agreement dated as of August 24, 2012 (as amended, restated, supplemented, or otherwise modified from time to time, the “Credit Agreement”) by and among USA Truck, Inc., a Delaware corporation (“USA Truck”), and the Subsidiaries of USA Truck identified on the signature pages thereof or otherwise joined from time to time thereto as a borrower (collectively, with USA Truck, “Borrowers”), the lenders party thereto as “Lenders”, Wells Fargo Bank, National Association, a national banking association (“Wells Fargo”), as administrative agent for each member of the Lender Group and the Bank Product Providers (in such capacity, together with its successors and assigns in such capacity, the “Agent”), Wells Fargo, as joint lead arranger, Wells Fargo, as joint book runner, and PNC Bank, National Association, a national banking association, as joint lead arranger, as joint book runner, and as syndication agent.  Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to them in the Credit Agreement.

 

Reference is also made to that certain [describe the Bank Product Agreement or Agreements] ([each, a][the] “Specified Bank Product Agreement”) dated as of [__________] by and between [Lender or Affiliate of Lender] (the “Specified Bank Products Provider”) and [identify the Loan Party].

 

1. Appointment of Agent.  The Specified Bank Products Provider hereby designates and appoints Agent, and Agent by its signature below hereby accepts such appointment, as its agent under the Credit Agreement and the other Loan Documents. The Specified Bank Products Provider hereby acknowledges that it has reviewed Sections 15.1 through 15.15 and Sections 15.17, 15.18, and 17.5 (collectively such sections are referred to herein as the “Agency Provisions”), including, as applicable, the defined terms used therein.  Specified Bank Products Provider and Agent each agree that the Agency Provisions which govern the relationship, and certain representations, acknowledgements, appointments, rights, restrictions, and agreements, between the Agent, on the one hand, and the Lenders or the Lender Group, on the other hand, shall, from and after the date of this letter agreement also apply to and govern, mutatis mutandis, the relationship between the Agent, on the one hand, and the Specified Bank Product Provider with respect to the Bank Products provided pursuant to the Specified Bank Product Agreement[s], on the other hand.

 

2. Acknowledgement of Certain Provisions of Credit Agreement.  The Specified Bank Products Provider hereby acknowledges that it has reviewed the provisions of Sections 2.4(b)(ii), 14.1, 15, and 17.5 of the Credit Agreement, including, as applicable, the defined terms used therein, and agrees to be bound by the provisions thereof.  Without limiting the generality of any of the foregoing referenced provisions, Specified Bank Product Provider understands and agrees that its rights and benefits under the Loan Documents consist solely of it being a beneficiary of the Liens and security interests granted to Agent and the right to share in proceeds of the Collateral to the extent set forth in the Credit Agreement.

 

3. Reporting Requirements.  Agent shall have no obligation to calculate the amount due and payable with respect to any Bank Products.  On a monthly basis (not later than the 10th Business Day of each calendar month) or as more frequently as Agent shall request, the Specified Bank Products Provider agrees to provide Agent with a written report, in form and substance satisfactory to Agent, detailing Specified Bank Products Provider’s reasonable determination of the liabilities and obligations (and mark-to-market exposure) of Borrowers and the other Loan Parties in respect of the Bank Products provided by Specified Bank Products Provider pursuant to the Specified Bank Products Agreement[s].  If Agent does not receive such written report within the time period provided above, Agent shall be entitled to assume that the reasonable determination of the liabilities and obligations (and mark-to-market exposure) of Borrowers and the other Loan Parties with respect to the Bank Products provided pursuant to the Specified Bank Products Agreement[s] is either (a) if the Specified Bank Products Provider has not ever delivered any such written report to Agent pursuant to this agreement, zero, or (b) otherwise, the amount of such liabilities and obligations (and mark-to-market exposure) set forth in the written report then most recently delivered to Agent pursuant to this Section 3, in each case, until such time as Agent receives another written report, in form and substance satisfactory to Agent, containing the Specified Bank Products Provider’s reasonable determination of such liabilities and obligations (and mark-to-market exposure).  Notwithstanding the foregoing, the provisions of this Section 3 are subject to and governed by the provisions of Section 17.5 of the Credit Agreement.

 

4. Bank Product Reserve Conditions. Specified Bank Products Provider further acknowledges and agrees that Agent shall have the right (to the extent permitted pursuant to the Credit Agreement), but shall have no obligation to establish, maintain, relax, or release reserves in respect of any of the Bank Product Obligations and that if reserves are established there is no obligation on the part of the Agent to determine or insure whether the amount of any such reserve is appropriate or not (including whether it is sufficient in amount).  If Agent chooses to implement a reserve, Specified Bank Products Provider acknowledges and agrees that Agent shall be entitled to rely on the information in the reports described above to establish the Bank Product Reserve Amount.

 

5. Bank Product Obligations.  From and after the delivery to Agent of this agreement duly executed by Specified Bank Product Provider and the acknowledgement of this agreement by Agent and Administrative Borrower, on behalf of Borrowers, the obligations and liabilities of Borrowers and the other Loan Parties to Specified Bank Product Provider in respect of Bank Products evidenced by the Specified Bank Product Agreement[s] shall constitute Bank Product Obligations (and which, in turn, shall constitute Obligations), and Specified Bank Product Provider shall constitute a Bank Product Provider until such time as Specified Bank Products Provider or its Affiliate is no longer a Lender. Specified Bank Products Provider acknowledges that other Bank Products (which may or may not be Specified Bank Products) may exist at any time.

 

6. Notices.  All notices and other communications provided for hereunder shall be given in the form and manner provided in Section 11 of the Credit Agreement, and, if to Agent, shall be mailed, sent, or delivered to Agent in accordance with Section 11 in the Credit Agreement, if to Administrative Borrower, shall be mailed, sent, or delivered to Administrative Borrower in accordance with Section 11 in the Credit Agreement, and, if to Specified Bank Products Provider, shall be mailed, sent or delivered to the address set forth below, or, in each case as to any party, at such other address as shall be designated by such party in a written notice to the other party.

 

	
If to Specified Bank Products Provider:

	
_________________________

_________________________

_________________________

Attn: ____________________

Fax No. __________________

	  	  

7. Miscellaneous.  This agreement shall bind and inure to the benefit of the respective successors and assigns of each of the parties hereto (including any successor agent pursuant to Section 15.9 of the Credit Agreement); provided, that no Borrower may assign this agreement or any rights or duties hereunder without the other parties’ prior written consent and any prohibited assignment shall be absolutely void ab initio.  Unless the context of this agreement clearly requires otherwise, references to the plural include the singular, references to the singular include the plural, the terms “includes” and  “including” are not limiting, and the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or.”   This agreement may be executed in any number of counterparts and by different parties on separate counterparts.  Each of such counterparts shall be deemed to be an original, and all of such counterparts, taken together, shall constitute but one and the same agreement.  Delivery of an executed counterpart of this letter by telefacsimile or other means of electronic transmission shall be equally effective as delivery of a manually executed counterpart.

 

8. Governing Law, Etc.  THIS AGREEMENT SHALL BE SUBJECT TO THE PROVISIONS REGARDING CHOICE OF LAW AND VENUE AND JURY TRIAL WAIVER SET FORTH IN SECTION 12 OF THE CREDIT AGREEMENT, AND SUCH PROVISIONS ARE INCORPORATED HEREIN BY THIS REFERENCE, MUTATIS MUTANDIS.

 

[Signature pages to follow.]

 

Exhibit B-2

Page 

\40023676.15

  

  

  

Sincerely,

 

[SPECIFIED BANK PRODUCTS PROVIDER]

 

By:           

 

Name:           

 

Title:           

 

 

Acknowledged, accepted, and agreed

 

 

as of the date first written above:

 

USA TRUCK, INC.,

 

as Administrative Borrower on behalf of Borrowers

 

By:           

 

Name:           

 

Title:           

 

 

Acknowledged, accepted, and agreed

 

 

as of _______________, 20____:

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

 

a national banking association, as Agent

 

By:           

Name:           

Title:           

Exhibit B-2

Page 

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EXHIBIT C-1

FORM OF COMPLIANCE CERTIFICATE

[on Administrative Borrower’s letterhead]

 

	
To:

	
Wells Fargo Bank, N.A., as Agent

	
  

	
1100 Abernathy Road, Suite 1600

	
  

	
Atlanta, GA  30328

	
  

	
Attn: Loan Portfolio Manager (USA Truck)

 

Re:           Compliance Certificate dated ____________  __, 20__

 

Ladies and Gentlemen:

 

Reference is made to that certain Credit Agreement dated as of August 24, 2012 (as amended, restated, supplemented, or otherwise modified from time to time, the “Credit Agreement”) by and among USA Truck, Inc., a Delaware corporation (“USA Truck”), and the Subsidiaries of USA Truck identified on the signature pages thereof or otherwise joined from time to time thereto as a borrower (collectively, with USA Truck, “Borrowers”), the lenders party thereto as “Lenders”, Wells Fargo Bank, National Association, a national banking association (“Wells Fargo”), as administrative agent for each member of the Lender Group and the Bank Product Providers (in such capacity, together with its successors and assigns in such capacity, the “Agent”), Wells Fargo, as joint lead arranger, Wells Fargo, as joint book runner, and PNC Bank, National Association, a national banking association, as joint lead arranger, as joint book runner, and as syndication agent.  Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to them in the Credit Agreement.

 

Pursuant to Section 5.1 of the Credit Agreement, the undersigned officer of Administrative Borrower hereby certifies, on behalf of Borrowers, as of the date hereof that:

 

1.           The financial statements of Borrowers and their Subsidiaries furnished in Schedule 1 attached hereto, has been prepared in accordance with GAAP (except, in the case of unaudited financial statements, for year-end audit adjustments and the lack of footnotes), and fairly presents in all material respects the financial condition of Borrowers and their Subsidiaries as of the date set forth therein.

 

2.           Such officer has reviewed the terms of the Credit Agreement and has made, or caused to be made under his/her supervision, a review in reasonable detail of the transactions and financial condition of Borrowers and their Subsidiaries during the accounting period covered by the financial statements furnished in Schedule 1 attached hereto.

 

3.           Such review has not disclosed the existence on and as of the date hereof, and the undersigned does not have knowledge of the existence as of the date hereof, of any event or condition that constitutes a Default or Event of Default, except for such conditions or events listed on Schedule 2 attached hereto, in each case specifying the nature and period of existence thereof and what action Borrowers and/or their Subsidiaries have taken, are taking, or propose to take with respect thereto.

 

4.           Except as set forth on Schedule 3 attached hereto, the representations and warranties of Borrowers and their Subsidiaries set forth in the Credit Agreement and the other Loan Documents are true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) on and as of the date hereof (except to the extent that such representations and warranties relate solely to an earlier date, in which case such representations and warranties shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) as of such earlier date.

 

5.           Borrowers had Excess Availability at all times during the accounting period covered by the financial statements furnished in Schedule 1 attached hereto equal to or greater than 15.0% of the Maximum Revolver Amount.

 

6.           Borrowers and their Subsidiaries are in compliance with the covenant contained in Section 7.2 of the Credit Agreement as demonstrated on Schedule 4 hereof.

 

7.           During the accounting period covered by the financial statements furnished in Schedule 1 attached hereto, the Borrowers and/or their Subsidiaries [did not make] [made] additions or deletions of Revenue Equipment constituting Collateral.  Schedule 5 attached hereto contains [a clean]1 [a clean and marked]2 version of Schedule 12 to the Guaranty and Security Agreement reflecting [all Revenue Equipment constituting Collateral as of the end of the accounting period covered by the financial statements furnished in Schedule 1]3 [such additions and/or deletions]4.

 

[Signature page follows.]

 

  

1 Use if no additions/deletions made.

  

2Use if additions/deletions made.

  

3 Use if no additions/deletions made.

  

4 Use if additions/deletions made.

Exhibit C-1

Page 

\40023676.15

  

  

  

IN WITNESS WHEREOF, this Compliance Certificate is executed by the undersigned this _____ day of _______________, 20__.

 

 

USA TRUCK, INC.,

 

 

as Administrative Borrower

 

By:           

 

Name:           

 

Title:           

 

Exhibit C-1

Page 

\40023676.15

  

  

  

SCHEDULE 1

 

Financial Statements

 

Exhibit C-1

Page 

\40023676.15

  

  

  

SCHEDULE 2

 

Default or Event of Default

 

Exhibit C-1

Page 

\40023676.15

  

  

  

SCHEDULE 3

 

Representations and Warranties

 

Exhibit C-1

Page 

\40023676.15

  

  

  

SCHEDULE 4

 

Financial Covenants

 

1.           Total Capital Expenditures.

 

Borrowers’ and their Subsidiaries’ Total Capital Expenditures from the beginning of USA Truck’s most recent fiscal year to the date hereof is ____________, (i) which [is/is not] greater than the amount set forth in Section 7.2 of the Credit Agreement for the corresponding period and (ii) which [is/is not] less than or equal to the amount set forth in Section 7.2 of the Credit Agreement for the corresponding period.

Exhibit C-1

Page 

\40023676.15

  

  

  

SCHEDULE 5

 

Schedule 12 to Guaranty and Security Agreement

 

REVENUE EQUIPMENT

(as of [Insert applicable date])

 

 

 

Exhibit C-1

Page 

\40023676.15

  

  

  

 

EXHIBIT L-1

 

FORM OF LIBOR NOTICE

 

	
  

	
Wells Fargo Bank, N.A., as Agent

	
  

	
under the below referenced Credit Agreement

1100 Abernathy Road, Suite 1600

Atlanta, GA  30328

Attn: Loan Portfolio Manager (USA Truck)

 

Ladies and Gentlemen:

 

Reference hereby is made to that certain Credit Agreement dated as of August 24, 2012 (as amended, restated, supplemented, or otherwise modified from time to time, the “Credit Agreement”) by and among USA Truck, Inc., a Delaware corporation (“USA Truck”), and the Subsidiaries of USA Truck identified on the signature pages thereof or otherwise joined from time to time thereto as a borrower (collectively, with USA Truck, “Borrowers”), the lenders party thereto as “Lenders”, Wells Fargo Bank, National Association, a national banking association (“Wells Fargo”), as administrative agent for each member of the Lender Group and the Bank Product Providers (in such capacity, together with its successors and assigns in such capacity, the “Agent”), Wells Fargo, as joint lead arranger, Wells Fargo, as joint book runner, and PNC Bank, National Association, a national banking association, as joint lead arranger, as joint book runner, and as syndication agent.  Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to them in the Credit Agreement.

 

This LIBOR Notice represents Borrowers’ request to elect the LIBOR Option with respect to outstanding Revolving Loans in the amount of $________ (the “LIBOR Rate Advance”)[, and is a written confirmation of the telephonic notice of such election given to Agent].

 

The LIBOR Rate Advance will have an Interest Period of [1 month, 2 months, or 3 months] commencing on.

 

This LIBOR Notice further confirms Borrowers’ acceptance, for purposes of determining the rate of interest based on the LIBOR Rate under the Credit Agreement, of the LIBOR Rate as determined pursuant to the Credit Agreement.

 

Administrative Borrower, on behalf of Borrowers, represents and warrants that (i) as of the date hereof, the representations and warranties of Borrowers and their Subsidiaries contained in this Agreement and in the other Loan Documents are true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) on and as of the date hereof, as though made on and as of such date (except to the extent that such representations and warranties relate solely to an earlier date, in which case such representations and warranties shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) as of such earlier date)), (ii) each of the covenants and agreements contained in any Loan Document have been performed (to the extent required to be performed on or before the date hereof or each such effective date), and (iii) no Default or Event of Default has occurred and is continuing on the date hereof, nor will any thereof occur after giving effect to the request above.

 

Exhibit L-1

Page 

\40023676.15

  

  

  

 

Dated:                      

 

 

 

 

 

 

USA TRUCK, INC.,

 

 

as Administrative Borrower

 

By:           

 

Name:           

 

Title:           

 

 

Acknowledged by:

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

 

a national banking association, as Agent

 

By:           

 

Name:           

 

Title:           

 

Exhibit L-1

Page 

\40023676.15

  

  

  

EXHIBIT P-1

 

FORM OF PERFECTION CERTIFICATE

 

See attached.1

  

1 To be attached in form separately provided.

 

  

  

  

EXHIBIT P-1

 

PERFECTION CERTIFICATE

 

Reference is hereby made to (a) that certain Credit Agreement dated as of August [___], 2012 (as amended, restated, supplemented, or otherwise modified from time to time, the “Credit Agreement”) by and among USA TRUCK, INC., a Delaware corporation (“USA Truck”), and the Subsidiaries of USA Truck party thereto (each of such Subsidiaries, together with USA Truck, is referred to herein as a “Borrower”), the lenders party thereto as “Lenders” (each of such Lenders, together with its successors and permitted assigns, is referred to hereinafter as a “Lender”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association (“Wells Fargo”), in its capacity as administrative agent for each member of the Lender Group and the Bank Product Providers (in such capacity, together with its successors and assigns in such capacity, “Agent”), Wells Fargo, as joint lead arranger, Wells Fargo, as joint book runner, and PNC Bank, National Association, a national banking association, as joint lead arranger, as joint book runner, and as syndication agent, and (b) that certain Guaranty and Security Agreement dated as of August [___], 2012 (as amended, restated, supplemented, or otherwise modified from time to time, the “Guaranty and Security Agreement”) by and among Borrowers, the Subsidiaries of USA Truck party thereto as “Grantors”, and Agent.

 

All initially capitalized terms used herein without definition shall have the meanings ascribed thereto in the Credit Agreement.  Any terms (whether capitalized or lower case) used in this Perfection Certificate that are defined in the Code shall be construed and defined as set forth in the Code unless otherwise defined herein or in the Credit Agreement; provided that to the extent that the Code is used to define any term used herein and if such term is defined differently in different Articles of the Code, the definition of such term contained in Article 9 of the Code shall govern.  As used herein, the term “Loan Parties” shall mean the “Loan Parties” as that term is defined in the Credit Agreement and “Code” shall mean the “Code” as that term is defined in the Guaranty and Security Agreement.

 

The undersigned, the [________] of [______________]2, hereby certifies (in my capacity as [__________] and not in my individual capacity) to Agent and each of the other members of the Lender Group and the Bank Product Providers as follows as of ____________ ___, 20__:

 

1. Names.

 

(a) The exact legal name of each Loan Party, as such name appears in its certified certificate of incorporation, articles of incorporation, certificate of formation, or any other organizational document, is set forth in Schedule 1(a).  Each Loan Party is (i) the type of entity disclosed next to its name in Schedule 1(a) and (ii) a registered organization except to the extent disclosed in Schedule 1(a).  Also set forth in Schedule 1(a) is the organizational identification number, if any, of each Loan Party that is a registered organization, the Federal Taxpayer Identification Number of each Loan Party and the jurisdiction of formation of each Loan Party.  Each Loan Party has qualified to do business in the states listed on Schedule 1(a).

 

(b) Set forth in Schedule 1(b) hereto is a list of any other legal names each Loan Party has had in the past five years, together with the date of the relevant name change.

 

(c) Set forth in Schedule 1(c) is a list of all other names used by each Loan Party in connection with any business or organization to which such Loan Party became the successor by merger, consolidation, acquisition, change in form, nature or jurisdiction of organization or otherwise or on any filings with the Internal Revenue Service, in each case, at any time in the past five years.  Except as set forth in Schedule 1(c), no Loan Party has changed its jurisdiction of organization at any time during the past four months.

 

2. Chief Executive Offices.  The chief executive office of each Loan Party is located at the address set forth in Schedule 2 hereto.

 

3. Real Property.

 

(a) Attached hereto as Schedule 3(a) is a list of all (i) Real Property of each Loan Party, (ii) common names, addresses and uses of each parcel of Real Property (stating improvements located thereon) and (iii) other information relating thereto required by such Schedule.  Except as described on Schedule 3(a) attached hereto:  (A) no Loan Party has entered into any leases, subleases, tenancies, franchise agreements, licenses or other occupancy arrangements as owner, lessor, sublessor, licensor, franchisor or grantor (collectively “Leases”) with respect to any of the real property described on Schedule 3(a) and (B) no Loan Party has any Leases which require the consent of the landlord, tenant or other party thereto to the transactions contemplated by the Loan Documents.

 

(b) Attached hereto as Schedule 3(b) is a list of all leases for real property that each Loan Party has entered into as lessee, including (i) the name and address of each such lessor, (ii) the address of each subject property, (iii) the term and expiration date of each such lease, (iv) encumbrances, (v) any renewal or purchase options thereunder, and (vi) the monthly base rental amount thereunder.

 

(c)           Other than in the case of (i) any Equipment out for repair, (ii) any Revenue Equipment which is in over the road use (it being understood and agreed that “over the road use” shall not preclude customary retention of such Revenue Equipment for the purpose of loading or unloading; customary retention not to exceed 7 calendar days), (iii) Revenue Equipment of no more than (x) 25 units at any one location in the continental United States constituting trailers or other non-power units, (y) 25 units located in Canada constituting trailers or other non-power units and/or (z) 5 units at any one location in the continental United States or Canada constituting tractors or other powered units, (iv) any Revenue Equipment at any Real Property location listed in Schedule 3(a), and (v) any lessor listed in Schedule 3(b), Schedule 3(c) sets forth all third parties (“Bailees”) with possession of any Collateral (including inventory and equipment) of the Loan Parties, including the name and address of such Bailee, a description of the inventory and equipment in such Bailee’s possession and the location of such inventory and equipment (if none please so state).

 

4. Extraordinary Transactions.  Except for those purchases, mergers, acquisitions, consolidations, and other transactions described on Schedule 4 attached hereto, all of the Collateral has been originated by each Loan Party in the ordinary course of business or consists of goods which have been acquired by such Loan Party in the ordinary course of business from a person in the business of selling goods of that kind.

 

5. File Search Reports.  Attached hereto as Schedule 5 is a true and accurate summary of certified file search reports from the Uniform Commercial Code filing offices (i) in each jurisdiction of formation identified in Section 1(a) and in each location identified in Section 2 with respect to each legal name set forth in Section 1 and (ii) in each jurisdiction described in Schedule 1(c) or Schedule 3 relating to any of the transactions described in Schedule 1(c) or Schedule 4 with respect to each legal name of the person or entity from which each Loan Party purchased or otherwise acquired any assets.  A true copy of each financing statement, including judgment and tax liens, bankruptcy and pending lawsuits or other filing identified in such file search reports has been delivered to Agent.

 

6. UCC Filings.  The financing statements (duly authorized by each Loan Party constituting the debtor therein), including the indications of the collateral, attached as Schedule 6 relating to the Guaranty and Security Agreement, are in the appropriate forms for filing in the filing offices in the jurisdictions identified in Schedule 7 hereof.

 

7. Schedule of Filings.  Attached hereto as Schedule 7 is a schedule of (i) the appropriate filing offices for the financing statements attached hereto as Schedule 6 and (ii) the appropriate filing offices for the filings described in Schedule 11(c) and (iii) any other actions required to create, preserve, protect and perfect the security interests in the Collateral (as defined in the Guaranty and Security Agreement) granted, assigned or pledged to Agent pursuant to the Guaranty and Security Agreement or any other Loan Document.  No other filings or actions are required to create, preserve, protect and perfect the security interests in the Collateral granted, assigned or pledged to Agent pursuant to the Loan Documents.

 

8. Termination Statements.  Attached hereto as Schedule 8 are the duly authorized termination statements in the appropriate form for filing in each applicable jurisdiction identified in Schedule 8 hereto with respect to each Lien described therein.

 

9. Stock Ownership and Other Equity Interests.  Attached hereto as Schedule 9(a) is a true and correct list of each of all of the authorized, and the issued and outstanding, Equity Interests of each Loan Party and its Subsidiaries and the record and beneficial owners of such Equity Interests.  Also set forth on Schedule 9(a) is each equity investment of each Loan Party that represents 50% or less of the equity of the entity in which such investment was made.  Attached hereto as Schedule 9(b) is a true and correct organizational chart of USA Truck and its Subsidiaries.

 

10. Instruments and Chattel Paper.  Attached hereto as Schedule 10 is a true and correct list of all promissory notes, instruments (other than checks to be deposited in the ordinary course of business), tangible chattel paper, electronic chattel paper and other evidence of Indebtedness held by each Loan Party as of ____________ ___, 20__ having an aggregate value or face amount in excess of $250,000, including all intercompany notes between or among any two or more Loan Parties or any of their Subsidiaries.

 

11. Intellectual Property.

 

(a) Schedule 11(a) provides a complete and correct list of all registered Copyrights (as defined in the Guaranty and Security Agreement) owned by any Loan Party, all applications for registration of Copyrights owned by any Loan Party, and all other Copyrights owned by any Loan Party and material to the conduct of the business of any Loan Party.  Schedule 11(a) provides a complete and correct list of all Patents (as defined in the Guaranty and Security Agreement) owned by any Loan Party and all applications for Patents  owned by any Loan Party.  Schedule 11(a) provides a complete and correct list of all registered Trademarks (as defined in the Guaranty and Security Agreement) owned by any Loan Party, all applications for registration of Trademarks owned by any Loan Party, and all other Trademarks owned by any Loan Party and material to the conduct of the business of any Loan Party.

 

(b) Schedule 11(b) provides a complete and correct list of all Intellectual Property Licenses (as defined in the Guaranty and Security Agreement) entered into by any Loan Party pursuant to which (i) any Loan Party has provided any license or other rights in Intellectual Property (as defined in the Guaranty and Security Agreement) owned or controlled by such Loan Party to any other Person (other than non-exclusive software licenses granted in the ordinary course of business) or (ii) any Person has granted to any Loan Party any license or other rights in Intellectual Property owned or controlled by such Person that is material to the business of such Loan Party, including any Intellectual Property that is incorporated in any Inventory, software, or other product marketed, sold, licensed, or distributed by such Loan Party;

 

(c) Attached hereto as Schedule 11(c) in proper form for filing with the United States Patent and Trademark Office and United States Copyright Office (as applicable) are the filings necessary to preserve, protect and perfect the security interests in the United States Trademarks, United States Patents, United States Copyrights and Intellectual Property Licenses set forth on Schedule 11(a) and Schedule 11(b), including duly signed copies of each of the Patent Security Agreement, Trademark Security Agreement and the Copyright Security Agreement, as applicable.

 

12. Commercial Tort Claims.  Attached hereto as Schedule 12 is a true and correct list of all commercial tort claims that exceed $500,000 held by each Loan Party, including a brief description thereof.

 

13. Deposit Accounts and Securities Accounts.  Attached hereto as Schedule 13 is a true and complete list of all Deposit Accounts and Securities Accounts (each as defined in the Guaranty and Security Agreement) maintained by each Loan Party, including the name of each institution where each such account is held, the name of each such account and the name of each entity that holds each account.

 

14. Letter-of-Credit Rights.  Attached hereto as Schedule 14 is a true and correct list of all letters of credit issued in favor of any Loan Party, as beneficiary thereunder, having an aggregate value or face amount in excess of $250,000.

 

15. Motor Vehicles.  Attached hereto as Schedule 15 is a true and correct list of all motor vehicles and other goods (covered by certificates of title or ownership) constituting Collateral and the owner of such motor vehicles.

 

16. Other Assets:  A Loan Party owns the following kinds of assets:

 

	
Aircraft:

	
Yes ____  No ____

	
Vessels, boats or ships:

	
Yes ____  No ____

	
Railroad rolling stock:

	
Yes ____  No ____

 

If the answer is yes to any of these other types of assets, please describe on Schedule 16.

 

 

[The Remainder of this Page has been intentionally left blank]

  

2 Insert appropriate officer(s), as applicable.

 

  

  

  

IN WITNESS WHEREOF, we have hereunto signed this Perfection Certificate as of this ___ day of ____________, 20__.

 

 

	
  

	
USA TRUCK, INC.

 

	
  

	
By:

	 	 

	
  

	
Name:

	
  

	
Title:

 

INTERNATIONAL FREIGHT SERVICES, INC.

 

	
  

	
By:

	 	 

	
  

	
Name:

	
  

	
Title:

-  -

  

  

  

Schedule 1(a)

 

Legal Names, Etc.

 

 

	
Legal Name

	
Type of Entity

	
Registered Organization

(Yes/No)

	
Organizational Number3

	
Federal Taxpayer

Identification Number

	
Jurisdiction of Formation

	  	  	  	  	  	  
	  	  	  	  	  	  
	  	  	  	  	  	  

  

3           If none, so state.

	
CG&R DRAFT:  8/8/12 6:12 PM #599337 v8 (Y99908_.DOC)

                                                                                             -  -

  

  

  

Schedule 1(b)

 

Prior Names

 

 

	
Loan Party/Subsidiary

	
Prior Name

	
Date of Change

	  	  	  
	  	  	  
	  	  	  
	  	  	  

-  -

 

 

  

  

  

Schedule 1(c)

 

Changes in Corporate Identity; Other Names

 

 

	
Loan Party/Subsidiary

	
Name of Entity

	
Action

	
Date of Action

	
State of Formation

	
List of All Other Names Used on Any Filings with the Internal Revenue Service During Past Five Years

	  	  	  	  	  	  
	  	  	  	  	  	  
	  	  	  	  	  	  
	  	  	  	  	  	  
	  	  	  	  	  	  
	  	  	  	  	  	  
	  	  	  	  	  	  
	  	  	  	  	  	  
	  	  	  	  	  	  

[Add Information required by Section 1 to the extent required by Section 1(c) of the Perfection Certificate]

-  -

 

 

  

  

  

Schedule 2

 

Chief Executive Offices

 

 

	
Loan Party/Subsidiary

	
Address

	
City

	
County

	
State

	  	  	  	  	  
	  	  	  	  	  

-  -

 

 

  

  

  

Schedule 3(a)

 

Real Property

 

	
Entity of Record

	
Common Name and Address

	
Owned

	
Landlord / Owner if Leased or Other Interest

	
Description of Lease or Other Documents Evidencing Interest

	
Purpose/

Use

	
Improvements Located on Real Property

	
[ ]

	
[ ]

	  	
[ ]

	
[ ]

	
[ ]

	
[ ]

	  	  	  	  	  	  	  

-  -

 

 

  

  

  

Schedule 3(a)

 

Real Property (cont.)

 

 

Required Consents; Loan Party Held Landlord/ Grantor Interests

 

I. Landlord’s / Tenant’s Consent Required

 

1.  [LIST EACH LEASE OR OTHER INSTRUMENT WHERE LANDLORD’S / TENANT’S CONSENT IS REQUIRED].

 

 

 

II. Leases, Subleases, Tenancies, Franchise Agreements, Licenses or Other Occupancy Agreements Pursuant to which any Loan Party holds Landlord’s / Grantor’s Interest

 

 

1.  [LIST EACH LEASE OR OTHER INSTRUMENT WHERE ANY LOAN PARTY HOLDS LANDLORD’S / GRANTOR’S INTEREST].

 

 

-  -

 

 

  

  

  

Schedule 3(b)

 

Loan Party as Lessee

 

	
Lessor

	
Lessee

	
Property Address

	
Term/

Expiration Date

	
Encumbered

	
Option to Purchase/Renew

	
Monthly Rent

	
[ ]

	
[ ]

	
[ ]

	
[ ]

	
[YES/NO]

	
[YES/NO]

	
$

	  	  	  	  	  	  	  

-  -

 

 

  

  

  

Schedule 3(c)

 

Bailees

 

-  -

 

 

  

  

  

Schedule 4

 

Transactions Other Than in the Ordinary Course of Business

 

 

	
Loan Party/Subsidiary

	
Description of Transaction Including Parties Thereto

	
Date of Transaction

	  	  	  
	  	  	  
	  	  	  

-  -

 

 

  

  

  

Schedule 5

 

Certified File Search Reports

 

	
Loan Party/Subsidiary

	
Search Report dated

	
Prepared by

	
Jurisdiction

	  	  	  	  
	  	  	  	  
	  	  	  	  

See attached.

 

-  -

 

 

  

  

  

Schedule 6

 

Copy of Financing Statements To Be Filed

 

See attached.

 

-  -

 

 

  

  

  

Schedule 7

 

Filings/Filing Offices

 

 

	
Type of Filing4

	
Entity

	
Applicable Collateral Document

[Mortgage, Security Agreement or Other]

	
Jurisdictions

	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  

 

  

4           UCC-1 financing statement, fixture filing, mortgage, intellectual property filing or other necessary filing.

-  -

 

 

  

  

  

Schedule 8

 

Attached hereto is a true copy of each termination statement filing duly acknowledged or otherwise identified by the filing officer.

 

Termination Statement Filings

 

	
Debtor

	
Jurisdiction

	
Secured Party

	
Type of Collateral

	
UCC-1 File Date

	
UCC-1 File Number

	  	  	  	  	  	  
	  	  	  	  	  	  
	  	  	  	  	  	  
	  	  	  	  	  	  

-  -

  

  

  

Schedule 9(a)

 

(a)  Equity Interests of Loan Parties and Subsidiaries

 

	
Current Legal Entities Owned

	
Record Owner

	
Certificate No.

	
No. Shares/Interest

	
Percent Pledged

	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  

(b) Other Equity Interests

 

-  -

 

 

  

  

  

Schedule 9(b)

 

Organizational Chart

 

 

-  -

 

 

  

  

  

Schedule 10

 

Instruments and Chattel Paper

 

1.           Promissory Notes:

 

	
Entity

	
Principal Amount

	
Date of Issuance

	
Interest Rate

	
Maturity Date

	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  

2.           Chattel Paper:

 

-  -

 

 

  

  

  

Schedule 11(a)

 

Copyrights, Patents and Trademarks

 

 

UNITED STATES COPYRIGHTS

 

Registrations:

	
OWNER

	
TITLE

	
REGISTRATION NUMBER

	  	  	  

 

Applications:

 

	
OWNER

	
APPLICATION NUMBER

	  	  

OTHER COPYRIGHTS

 

Registrations:

	
OWNER

	
COUNTRY/STATE

	
TITLE

	
REGISTRATION NUMBER

	  	  	  	  

 

Applications:

 

	
OWNER

	
COUNTRY/STATE

	
APPLICATION NUMBER

	  	  	  

-  -

 

 

  

  

  

Schedule 11(a)

 

Copyrights, Patents and Trademarks (cont.)

 

 

UNITED STATES PATENTS:

 

Registrations:

 

	

 

OWNER

 

	

 

REGISTRATION NUMBER

 

	

 

DESCRIPTION

 

	  	  	  

 

Applications:

 

	

 

OWNER

 

	

 

APPLICATION NUMBER

 

	

 

DESCRIPTION

 

	  	  	  

 

OTHER PATENTS:

 

Registrations:

 

	

 

OWNER

 

	

 

REGISTRATION NUMBER

 

	

 

COUNTRY/STATE

 

	

 

DESCRIPTION

 

	  	  	  	  

 

Applications:

 

	

 

OWNER

 

	

 

APPLICATION NUMBER

 

	

 

COUNTRY/STATE

 

	

 

DESCRIPTION

 

	  	  	  	  

-  -

 

 

  

  

  

Schedule 11(a)

 

Copyrights, Patents and Trademarks (cont.)

 

UNITED STATES TRADEMARKS:

 

Registrations:

	

 

OWNER

 

	

 

REGISTRATION NUMBER

 

	

 

TRADEMARK

 

	  	  	  

 

Applications:

 

	

 

OWNER

 

	

 

APPLICATION NUMBER

 

	

 

TRADEMARK

 

	  	  	  

OTHER TRADEMARKS:

 

Registrations:

	

 

OWNER

 

	

 

REGISTRATION NUMBER

 

	

 

COUNTRY/STATE

 

	

 

TRADEMARK

 

	  	  	  	  

 

Applications:

 

	

 

OWNER

 

	

 

APPLICATION NUMBER

 

	

 

COUNTRY/STATE

 

	

 

TRADEMARK

 

	  	  	  	  

-  -

 

 

  

  

  

Schedule 11(b)

 

Intellectual Property Licenses

 

	

 

LICENSEE

 

	

 

LICENSOR

 

	

 

COUNTRY/STATE

 

	

 

REGISTRATION/ APPLICATION NUMBER, IF ANY

 

	

 

DESCRIPTION

 

	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  

 

-  -

 

 

  

  

  

Schedule 11(c)

 

Intellectual Property Filings

 

 

	
Type of Filing

	
Entity

	
Applicable Collateral Document

[Mortgage, Security Agreement or Other]

	
Jurisdictions

	  	  	  	  
	  	  	  	  

-  -

 

 

  

  

  

 

Schedule 12

 

Commercial Tort Claims

 

-  -

 

 

  

  

  

Schedule 13

 

Deposit Accounts and Securities Accounts

 

	
OWNER

	
TYPE OF ACCOUNT

	
BANK OR INTERMEDIARY

	
ACCOUNT NUMBERS

	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  

-  -

 

 

  

  

  

Schedule 14

 

Letter of Credit Rights

 

-  -

 

 

  

  

  

Schedule 15

 

Motor Vehicles

 

-  -

 

 

  

  

  

Schedule 16

 

Other Assets

 

-  -

 

 

  

  

  

FORM OF SUPPLEMENT TO PERFECTION CERTIFICATE

Supplement (this “Supplement”), dated as of ____, 20__, to the Perfection Certificate, dated as of ________, 20__ (as amended, restated, supplemented or otherwise modified from time to time, the “Perfection Certificate”) by each of the parties listed on the signature pages thereto and those additional entities that thereafter become Loan Parties (collectively, jointly and severally, “Grantors” and each individually “Grantor”).

 

Reference is hereby made to (a) that certain Credit Agreement dated as of [August ___], 2012 (as amended, restated, supplemented, or otherwise modified from time to time, the “Credit Agreement”) by and among USA TRUCK, INC., a Delaware corporation (“USA Truck”), and the Subsidiaries of USA Truck party thereto (each of such Subsidiaries, together with USA Truck, is referred to herein as a “Borrower”), the lenders party thereto as “Lenders” (each of such Lenders, together with its successors and permitted assigns, is referred to hereinafter as a “Lender”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association (“Wells Fargo”), in its capacity as administrative agent for each member of the Lender Group and the Bank Product Providers (in such capacity, together with its successors and assigns in such capacity, “Agent”), Wells Fargo, as joint lead arranger, Wells Fargo, as joint book runner, and PNC Bank, National Association, a national banking association, as joint lead arranger, as joint book runner, and as syndication agent, and (b) that certain Guaranty and Security Agreement dated as of [August ___], 2012 (as amended, restated, supplemented, or otherwise modified from time to time, the “Guaranty and Security Agreement”) by and among Borrowers, the Subsidiaries of USA Truck party thereto as “Grantors”, and Agent.

 

All initially capitalized terms used herein without definition shall have the meanings ascribed thereto in the Credit Agreement.  Any terms (whether capitalized or lower case) used in this Perfection Certificate that are defined in the Code shall be construed and defined as set forth in the Code unless otherwise defined herein or in the Credit Agreement; provided that to the extent that the Code is used to define any term used herein and if such term is defined differently in different Articles of the Code, the definition of such term contained in Article 9 of the Code shall govern.  As used herein, the term “Code” shall mean the “Code” as that term is defined in the Guaranty and Security Agreement.

 

WHEREAS, pursuant to Section 5.2 of the Credit Agreement, the Loan Parties must execute and deliver a Perfection Certificate and the execution and delivery of the Perfection Certificate may be accomplished by the execution of this Supplement in favor of Agent, for the benefit of each member of the Lender Group and the Bank Product Providers;

 

In accordance with Section 5.2 of the Credit Agreement, the undersigned, the [________] of [_________]5, hereby certify (in my capacity as [__________] and not in my individual capacity) to Agent and each of the other members of the Lender Group and the Bank Product Providers as follows as of _______, 20__:  [the information in the Perfection Certificate delivered on or prior to the Closing Date is true, correct, and complete on and as of the date hereof.] [Schedule 1(a), “Legal Names, Etc.”, Schedule 1(b), “Prior Names”, Schedule 1(c), “Changes in Corporate Identity; Other Names”, Schedule 2, “Chief Executive Offices”, Schedule 3(a), “Real Property”, Schedule 3(b), “Loan Party as Lessee”, Schedule 3(c), “Bailees”, Schedule 4, “Transactions Other Than in the Ordinary Course of Business”, Schedule 9(a), “Equity Interests”, Schedule 9(b), “Organizational Chart” Schedule 10, “Instruments and Chattel Paper”, Schedule 11(a), “Copyrights, Patents and Trademarks”, Schedule 11(b), “Intellectual Property Licenses”, Schedule 12, “Commercial Tort Claims”, Schedule 13, “Deposit Accounts and Securities Accounts”, Schedule 14, “Letter-of-Credit Rights”, Schedule 15, “Motor Vehicles”, and Schedule 16, “Other Assets” attached hereto supplement Schedule 1(a), Schedule 1(b), Schedule 1(c), Schedule 2, Schedule 3, Schedule 4, Schedule 9(a), Schedule 9(b), Schedule 10, Schedule 11(a), Schedule 11(b), Schedule 12, Schedule 13, Schedule 14, Schedule 15, and Schedule 16 respectively, to the Perfection Certificate and shall be deemed a part thereof for all purposes of the Perfection Certificate.]

 

The undersigned officers of each of the Loan Parties hereby certify as of the date hereof on behalf of the Loan Parties in their capacity as officers of the Loan Parties and not in their individual capacities that no additional filings or actions are required to create, preserve or perfect the security interests in the Collateral granted, assigned or pledged to Agent pursuant to the Loan Documents.

 

           Except as expressly supplemented hereby, the Perfection Certificate shall remain in full force and effect.

 

IN WITNESS WHEREOF, we have hereunto signed this Supplement to Perfection Certificate as of this ____ day of ________________, 20_.

 

 

USA TRUCK, INC.

 

	
  

	
By:

	 	 

 

 

	
  

	
Name:

 

 

	
  

	
Title:

 

 

INTERNATIONAL FREIGHT SERVICES, INC.

 

	
  

	
By:

	 	 

 

 

	
  

	
Name:

 

 

	
  

	
Title:

 

  

5 Insert appropriate officer(s), as applicable.

 

-  -

 

 

  

  

  

Schedule 1(a)

 

Legal Names, Etc.

 

 

	
Legal Name

	
Type of Entity

	
Registered Organization

(Yes/No)

	
Organizational Number6

	
Federal Taxpayer

Identification Number

	
Jurisdiction of Formation

	  	  	  	  	  	  
	  	  	  	  	  	  
	  	  	  	  	  	  

  

6           If none, so state.

-  -

  

  

  

Schedule 1(b)

 

Prior Names

 

 

	
Loan Party/Subsidiary

	
Prior Name

	
Date of Change

	  	  	  
	  	  	  
	  	  	  
	  	  	  

  

  

  

Schedule 1(c)

 

Changes in Corporate Identity; Other Names

 

 

	
Loan Party/Subsidiary

	
Name of Entity

	
Action

	
Date of Action

	
State of Formation

	
List of All Other Names Used on Any Filings with the Internal Revenue Service During Past Five Years

	  	  	  	  	  	  
	  	  	  	  	  	  
	  	  	  	  	  	  
	  	  	  	  	  	  
	  	  	  	  	  	  
	  	  	  	  	  	  
	  	  	  	  	  	  
	  	  	  	  	  	  
	  	  	  	  	  	  

[Add Information required by Section 1 to the extent required by Section 1(c) of the Perfection Certificate]

  

  

  

Schedule 2

 

Chief Executive Offices

 

 

	
Loan Party/Subsidiary

	
Address

	
City

	
County

	
State

	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  

  

  

  

Schedule 3(a)

 

Real Property

 

	
Entity of Record

	
Common Name and Address

	
Owned

	
Landlord / Owner if Leased or Other Interest

	
Description of Lease or Other Documents Evidencing Interest

	
Purpose/

Use

	
Improvements Located on Real Property

	
[ ]

	
[ ]

	  	
[ ]

	
[ ]

	
[ ]

	
[ ]

	  	  	  	  	  	  	  

  

  

  

Schedule 3(a)

 

Real Property (cont.)

 

 

Required Consents; Loan Party Held Landlord/ Grantor Interests

 

I. Landlord’s / Tenant’s Consent Required

 

1.  [LIST EACH LEASE OR OTHER INSTRUMENT WHERE LANDLORD’S / TENANT’S CONSENT IS REQUIRED].

 

 

 

II. Leases, Subleases, Tenancies, Franchise Agreements, Licenses or Other Occupancy Agreements Pursuant to which any Loan Party holds Landlord’s / Grantor’s Interest

 

1.  [LIST EACH LEASE OR OTHER INSTRUMENT WHERE ANY LOAN PARTY HOLDS LANDLORD’S / GRANTOR’S INTEREST].

 

-  -

  

  

  

Schedule 3(b)

 

Loan Party as Lessee

 

	
Lessor

	
Lessee

	
Property Address

	
Term/

Expiration Date

	
Encumbered

	
Option to Purchase/Renew

	
Monthly Rent

	
[ ]

	
[ ]

	
[ ]

	
[ ]

	
[YES/NO]

	
[YES/NO]

	
$

	  	  	  	  	  	  	  

 

 

-  -

  

  

  

Schedule 3(c)

 

Bailees

 

 

-  -

  

  

  

Schedule 4

 

Transactions Other Than in the Ordinary Course of Business

 

 

	
Loan Party/Subsidiary

	
Description of Transaction Including Parties Thereto

	
Date of Transaction

	  	  	  
	  	  	  
	  	  	  

-  -

 

 

  

  

  

 Schedule 9(a)

 

(a)  Equity Interests of Loan Parties and Subsidiaries

 

	
Current Legal Entities Owned

	
Record Owner

	
Certificate No.

	
No. Shares/Interest

	
Percent Pledged

	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  

(b) Other Equity Interests

 

-  -

 

 

  

  

  

Schedule 9(b)

 

Organizational Chart

 

-  -

 

 

  

  

  

Schedule 10

 

Instruments and Chattel Paper

 

1.           Promissory Notes:

 

	
Entity

	
Principal Amount

	
Date of Issuance

	
Interest Rate

	
Maturity Date

	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  

2.           Chattel Paper:

 

-  -

 

 

  

  

  

Schedule 11(a)

 

Copyrights, Patents and Trademarks

 

 

UNITED STATES COPYRIGHTS:

 

Registrations:

	
OWNER

	
TITLE

	
REGISTRATION NUMBER

	  	  	  

 

Applications:

 

	
OWNER

	
APPLICATION NUMBER

	  	  

OTHER COPYRIGHTS:

 

Registrations:

	
OWNER

	
COUNTRY/STATE

	
TITLE

	
REGISTRATION NUMBER

	  	  	  	  

 

Applications:

 

	
OWNER

	
COUNTRY/STATE

	
APPLICATION NUMBER

	  	  	  

-  -

 

 

  

  

  

Schedule 11(a)

 

Copyrights, Patents and Trademarks (cont.)

 

UNITED STATES PATENTS:

 

Registrations:

	

 

OWNER

 

	

 

REGISTRATION NUMBER

 

	

 

DESCRIPTION

 

	  	  	  

 

Applications:

 

	

 

OWNER

 

	

 

APPLICATION NUMBER

 

	

 

DESCRIPTION

 

	  	  	  

OTHER PATENTS:

 

Registrations:

	

 

OWNER

 

	

 

REGISTRATION NUMBER

 

	

 

COUNTRY/STATE

 

	

 

DESCRIPTION

 

	  	  	  	  

 

Applications:

 

	

 

OWNER

 

	

 

APPLICATION NUMBER

 

	

 

COUNTRY/STATE

 

	

 

DESCRIPTION

 

	  	  	  	  

-  -

 

 

  

  

  

Schedule 11(a)

 

Copyrights, Patents and Trademarks (cont.)

 

 

UNITED STATES TRADEMARKS:

 

Registrations:

 

	

 

OWNER

 

	

 

REGISTRATION NUMBER

 

	

 

TRADEMARK

 

	  	  	  

 

Applications:

 

	

 

OWNER

 

	

 

APPLICATION NUMBER

 

	

 

TRADEMARK

 

	  	  	  

 

OTHER TRADEMARKS:

 

Registrations:

 

	

 

OWNER

 

	

 

REGISTRATION NUMBER

 

	

 

COUNTRY/STATE

 

	

 

TRADEMARK

 

	  	  	  	  

 

Applications:

 

	

 

OWNER

 

	

 

APPLICATION NUMBER

 

	

 

COUNTRY/STATE

 

	

 

TRADEMARK

 

	  	  	  	  

-  -

 

 

  

  

  

Schedule 11(b)

 

Intellectual Property Licenses

 

	

 

LICENSEE

 

	

 

LICENSOR

 

	

 

COUNTRY/STATE

 

	

 

REGISTRATION/ APPLICATION NUMBER, IF ANY

 

	

 

DESCRIPTION

 

	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  

-  -

 

 

  

  

  

Schedule 12

 

Commercial Tort Claims

 

-  -

 

 

  

  

  

Schedule 13

 

Deposit Accounts and Securities Accounts

 

	
OWNER

	
TYPE OF ACCOUNT

	
BANK OR INTERMEDIARY

	
ACCOUNT NUMBERS

	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  

-  -

 

 

  

  

  

Schedule 14

 

Letter of Credit Rights

 

 

-  -

 

 

  

  

  

Schedule 15

 

Motor Vehicles

 

-  -

 

 

  

  

  

Schedule 16

 

Other Assets

 

 

 

  

  

  

Schedule A-1

Agent’s Account

 

An account at a bank designated by Agent from time to time as the account into which the Borrowers shall make all payments to Agent for the benefit of the Lender Group and into which the Lender Group shall make all payments to Agent under this Agreement and the other Loan Documents; unless and until Agent notifies Borrowers and the Lender Group to the contrary, Agent’s Account shall be that certain deposit account bearing account number 4124923723 and maintained by Agent with Wells Fargo Bank, N.A., 420 Montgomery Street, San Francisco, CA, ABA  #121-000-248.

 

  

  

  

SCHEDULE A-2

 

AUTHORIZED PERSONS

 

	
Name

	
Title

	
USA Truck

	
IFS

	
Clifton R. Beckham

	
President and

Chief Executive Officer

	
President and

Chief Executive Officer

	
Darron R. Ming

	
Executive Vice President and

Chief Financial Officer

	
Vice President and Treasurer

	
J. Rodney Mills

	
Executive Vice President, Secretary, and Chief Administrative Officer

	
Secretary

 

  

  

  

Schedule C-1

 

Commitments

 

	
 

Lender

	
Revolver Commitment

	
 

Total Commitment

	
Wells Fargo Bank, National Association

	
$62,500,000

	
$62,500,000

	
PNC Bank, National Association

	
$62,500,000

	
$62,500,000

	  	  	  
	  	  	  
	  	  	  
	
All Lenders

	
$125,000,000

	
$125,000,000

 

 

 

\40023676.15

  

  

  

Schedule D-1

 

Designated Account

 

Account number 5106103684 of USA Truck maintained with USA Truck’s Designated Account Bank, or such other deposit account of a Borrower (located within the United States) that has been designated as such, in writing, by Administrative Borrower to Agent.

 

“Designated Account Bank” means Branch Banking and Trust Company, whose office is located at 200 West 2nd St., Winston-Salem, NC, and whose ABA number is 053101121.

 

\40023676.15

  

  

  

SCHEDULE P-1

 

PERMITTED INVESTMENTS

 

	
1.  

	
USA Truck owns 1,000 shares of common stock of IFS (representing 100% of the currently issued and outstanding stock of IFS on the Closing Date).

  

  

  

SCHEDULE P-2

 

PERMITTED LIENS

	
Debtor: USA Truck, Inc.

	
Jurisdiction

	
Secured Party/Plaintiff

	
Type

	
Filing Date

	
File No.

	
Collateral Type

	
 

Delaware Secretary of State

	
Banc of America Leasing & Capital, LLC

	
UCC-1

	
08/09/07

	
2007 3031290

	
Equipment—copier

	
09/29/08

	
2008 3293790

	
Equipment—printers and copier

	
CIT Finance LLC

	
UCC-1

	
03/16/12

	
2012 1018722

	
  Equipment

	
Daimler Trust

	
UCC-1

	
02/09/11

	
2011 0485782

	
  Various vehicles

	
Inter-Tel Leasing, Inc.

	
UCC-1

	
10/03/07

	
 2007 3724076

	
This filing is made for informational purposes only and is intended to represent an equipment rental.

	
Regions Equipment Finance, Ltd.

 

	
UCC-1

	
07/15/08

	
  2008 2431565

	
Various vehicles

	
UCC-3

	
07/06/10

	
  2010 2348534

	
Restated collateral description of various vehicles

	
 UCC-1

	
09/17/09

	
  2009 2976386

	
Various vehicles

	
 UCC-3

	
07/08/10

	
2010 2367740

	
Restated collateral description of various vehicles

	
Greatamerica Leasing Corporation

	
UCC-1

	
06/30/09

	
2009 2097704

	
This filing is made for informational purposes only and is intended to represent a true lease.

	
Mitel Leasing, Inc.

 

	
UCC-1

	
02/16/12

	
2012 0625352

	
This filing is made for informational purposes only and is intended to represent a true lease.

	
07/10/12

	
2012 2651711

	
This filing is only intended to make an equipment rental a matter of public record.

	
07/26/12

	
2012 2883876

	
This filing is only intended to make an equipment rental a matter of public record.

	
Arkansas Secretary of State

 

	
Regions Equipment Finance, Ltd.

 

	
UCC-1

	
05/05/08

	
7130541773

	
This filing is made for informational purposes only and is intended to represent an equipment lease.

	
UCC-1

	
06/24/08

	
7130699836

	
This filing is made for informational purposes only and is intended to represent an equipment lease.

  

  

  

 

Schedule 1.1

 

As used in the Agreement, the following terms shall have the following definitions:

 

“Account” means an account (as that term is defined in the Code).

 

“Account Debtor” means any Person who is obligated on an Account, chattel paper, or a general intangible.

 

“Accounting Changes” means changes in accounting principles required by the promulgation of any rule, regulation, pronouncement or opinion by the Financial Accounting Standards Board of the American Institute of Certified Public Accountants (or successor thereto or any agency with similar functions).

 

“Acquired Indebtedness” means Indebtedness of a Person whose assets or Equity Interests are acquired by a Borrower or any of its Subsidiaries in a Permitted Acquisition; provided, that such Indebtedness (a) is either purchase money Indebtedness or a Capital Lease with respect to Equipment or mortgage financing with respect to Real Property, (b) was in existence prior to the date of such Permitted Acquisition, and (c) was not incurred in connection with, or in contemplation of, such Permitted Acquisition.

 

“Acquisition” means (a) the purchase or other acquisition by a Person or its Subsidiaries of all or substantially all of the assets of (or any division or business line of) any other Person, or (b) the purchase or other acquisition (whether by means of a merger, consolidation, or otherwise) by a Person or its Subsidiaries of all or substantially all of the Equity Interests of any other Person; provided, however, that the formation or organization of a wholly-owned subsidiary shall not, in and of itself, constitute an “Acquisition”.

 

“Additional Documents” has the meaning specified therefor in Section 5.12 of the Agreement.

 

“Administrative Borrower” has the meaning specified therefor in Section 17.13 of the Agreement.

 

“Administrative Questionnaire” has the meaning specified therefor in Section 13.1(a) of the Agreement.

 

“Affected Lender” has the meaning specified therefor in Section 2.13(b) of the Agreement.

 

“Affiliate” means, as applied to any Person, any other Person who controls, is controlled by, or is under common control with, such Person.  For purposes of this definition, “control” means the possession, directly or indirectly through one or more intermediaries, of the power to direct the management and policies of a Person, whether through the ownership of Equity Interests, by contract, or otherwise; provided, that, for purposes of the definition of Eligible Accounts and Section 6.10 of the Agreement: (a) any Person which owns directly or indirectly 10% or more of the Equity Interests having ordinary voting power for the election of directors or other members of the governing body of a Person or 10% or more of the partnership or other ownership interests of a Person (other than as a limited partner of such Person) shall be deemed an Affiliate of such Person, (b) each director (or comparable manager) of a Person shall be deemed to be an Affiliate of such Person, and (c) each partnership in which a Person is a general partner shall be deemed an Affiliate of such Person.

 

“Agent” has the meaning specified therefor in the preamble to the Agreement.

 

“Agent-Related Persons” means Agent, together with its Affiliates, officers, directors, employees, attorneys, and agents.

 

“Agent’s Account” means the Deposit Account of Agent identified on Schedule A-1 to the Agreement (or such other Deposit Account of Agent that has been designated as such, in writing, by Agent to Borrowers and the Lenders).

 

“Agent’s Liens” means the Liens granted by each Borrower or its Subsidiaries to Agent under the Loan Documents and securing the Obligations.

 

“Agreement” means the Credit Agreement to which this Schedule 1.1 is attached.

 

“Applicable Margin” means, as of any date of determination and with respect to Base Rate Loans or LIBOR Rate Loans, as applicable, the applicable margin set forth in the following table that corresponds to the Average Excess Availability of Borrowers for the most recently completed month; provided, that for the period from the Closing Date through the date Agent receives the Average Excess Availability calculation in respect of the testing period ending December 31, 2012, the Applicable Margin shall be set at the margin in the row styled “Level II”; provided further, that any time an Event of Default has occurred and is continuing, the Applicable Margin shall be set at the margin in the row styled “Level III”:

 

	
Level

	
Average Excess Availability

	
Applicable Margin Relative to Base Rate Loans

	
Applicable Margin Relative to LIBOR Rate Loans

	
I

	
> $50,000,000

	
1.25 percentage points

	
2.25 percentage points

	
II

	
< $50,000,000 and > $30,000,000

	
1.50 percentage points

	
2.50 percentage points

	
III

	
< $30,000,000

	
1.75 percentage points

	
2.75 percentage points

The Applicable Margin shall be re-determined as of the first day of each calendar month.  The Applicable Margin relative to Base Rate Loans is referred to as the “Base Rate Margin.”  The Applicable Margin relative to LIBOR Rate Loans is referred to as the “LIBOR Rate Margin.”

 

“Applicable Unused Line Fee Percentage” means, as of any date of determination, the applicable percentage set forth in the following table that corresponds to the Average Revolver Usage of Borrowers for the most recently completed month as determined by Agent in its Permitted Discretion; provided, that for the period from the Closing Date through the date Agent receives the Average Excess Availability calculation in respect of the testing period ending December 31, 2012, the Applicable Unused Line Fee Percentage shall be set at the rate in the row styled “Level II”:

 

	
Level

	
Average Revolver Usage

	
Applicable Unused Line Fee Percentage

	
I

	
> $60,000,000

	
0.375 percentage points

	
II

	
< $60,000,000

	
0.500 percentage points

The Applicable Unused Line Fee Percentage shall be re-determined on the first date of each calendar month by Agent.

 

“Application Event” means the occurrence of (a) a failure by Borrowers to repay all of the Obligations in full on the Maturity Date, or (b) an Event of Default and the election by Agent or the Required Lenders to require that payments and proceeds of Collateral be applied pursuant to Section 2.4(b)(ii) of the Agreement.

 

“Assignee” has the meaning specified therefor in Section 13.1(a) of the Agreement.

 

“Assignment and Acceptance” means an Assignment and Acceptance Agreement substantially in the form of Exhibit A-1 to the Agreement.

 

“Authorized Person” means any one of the individuals identified on Schedule A-2 to the Agreement, as such schedule is updated from time to time by written notice from Administrative Borrower to Agent.

 

“Availability” means, as of any date of determination, the amount that Borrowers are entitled to borrow as Revolving Loans under Section 2.1 of the Agreement (after giving effect to the then outstanding Revolver Usage).

 

“Available Increase Amount” means, as of any date of determination, an amount equal to the result of (a) $50,000,000 minus (b) the aggregate principal amount of Increases to the Revolver Commitments previously made pursuant to Section 2.14 of the Agreement.

 

“Average Excess Availability” means, with respect to any period, the sum of the aggregate amount of Excess Availability for each Business Day in such period (calculated as of the end of each respective Business Day) divided by the number of Business Days in such period.

 

“Average Revolver Usage” means, with respect to any period, the sum of the aggregate amount of Revolver Usage for each Business Day in such period (calculated as of the end of each respective Business Day) divided by the number of Business Days in such period.

 

“Bank Product” means any one or more of the following financial products or accommodations extended to a Borrower or its Subsidiaries by a Bank Product Provider:  (a) credit cards (including commercial cards (including so-called “purchase cards”, “procurement cards” or “p-cards”)), (b) credit card processing services, (c) debit cards, (d) stored value cards, (e) Cash Management Services, or (f) transactions under Hedge Agreements.

 

“Bank Product Agreements” means those agreements entered into from time to time by a Borrower or its Subsidiaries with a Bank Product Provider in connection with the obtaining of any of the Bank Products.

 

“Bank Product Collateralization” means providing cash collateral (pursuant to documentation reasonably satisfactory to Agent) to be held by Agent for the benefit of the Bank Product Providers (other than the Hedge Providers) in an amount determined by Agent as sufficient to satisfy the reasonably estimated credit exposure with respect to the then existing Bank Product Obligations (other than Hedge Obligations).

 

“Bank Product Obligations” means (a) all obligations, liabilities, reimbursement obligations, fees, or expenses owing by each Borrower and its Subsidiaries to any Bank Product Provider pursuant to or evidenced by a Bank Product Agreement and irrespective of whether for the payment of money, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, (b) all Hedge Obligations, and (c) all amounts that Agent or any Lender is obligated to pay to a Bank Product Provider as a result of Agent or such Lender purchasing participations from, or executing guarantees or indemnities or reimbursement obligations to, a Bank Product Provider with respect to the Bank Products provided by such Bank Product Provider to a Borrower or its Subsidiaries; provided, in order for any item described in clauses (a) (b), or (c) above, as applicable, to constitute “Bank Product Obligations”, if the applicable Bank Product Provider is any Person other than Wells Fargo or its Affiliates, then the applicable Bank Product must have been provided on or after the Closing Date and Agent shall have received a Bank Product Provider Agreement within 10 days after the date of the provision of the applicable Bank Product to a Borrower or its Subsidiaries.

 

“Bank Product Provider” means any Lender or any of its Affiliates, including each of the foregoing in its capacity, if applicable, as a Hedge Provider; provided, that no such Person (other than Wells Fargo or its Affiliates) shall constitute a Bank Product Provider with respect to a Bank Product unless and until Agent receives a Bank Product Provider Agreement from such Person and with respect to the applicable Bank Product within 10 days after the provision of such Bank Product to a Borrower or its Subsidiaries; provided further, that if, at any time, a Lender ceases to be a Lender under the Agreement, then, from and after the date on which it ceases to be a Lender thereunder, neither it nor any of its Affiliates shall constitute Bank Product Providers and the obligations with respect to Bank Products provided by such former Lender or any of its Affiliates shall no longer constitute Bank Product Obligations.

 

“Bank Product Provider Agreement” means an agreement in substantially the form attached hereto as Exhibit B-2 to the Agreement, in form and substance satisfactory to Agent, duly executed by the applicable Bank Product Provider, Borrowers, and Agent.

 

“Bank Product Reserves” means, as of any date of determination, those reserves that Agent deems necessary or appropriate, in its Permitted Discretion and subject to Section 2.1(c), to establish (based upon the Bank Product Providers’ determination of the liabilities and obligations of each Borrower and its Subsidiaries in respect of Bank Product Obligations) in respect of Bank Products then provided or outstanding.

 

“Bankruptcy Code” means title 11 of the United States Code, as in effect from time to time.

 

“Base Rate” means the greatest of (a) the Federal Funds Rate plus 1.00%, (b) the LIBOR Rate (which rate shall be calculated based upon an Interest Period of three (3) months and shall be determined on a daily basis), plus 1.00%, and (c) the rate of interest announced, from time to time, within Wells Fargo at its principal office in San Francisco as its “prime rate”, with the understanding that the “prime rate” is one of Wells Fargo’s base rates (not necessarily the lowest of such rates) and serves as the basis upon which effective rates of interest are calculated for those loans making reference thereto and is evidenced by the recording thereof after its announcement in such internal publications as Wells Fargo may designate.

 

“Base Rate Loan” means each portion of the Revolving Loans that bears interest at a rate determined by reference to the Base Rate.

 

“Base Rate Margin” has the meaning set forth in the definition of Applicable Margin.

 

“Benefit Plan” means a “defined benefit plan” (as defined in Section 3(35) of ERISA) for which any Borrower or any of its Subsidiaries or ERISA Affiliates has been an “employer” (as defined in Section 3(5) of ERISA) within the past six years.

 

“Board of Directors” means, as to any Person, the board of directors (or comparable managers) of such Person, or any committee thereof duly authorized to act on behalf of the board of directors (or comparable managers).

 

“Board of Governors” means the Board of Governors of the Federal Reserve System of the United States (or any successor).

 

“Borrower” and “Borrowers” have the respective meanings specified therefor in the preamble to the Agreement.

 

“Borrower Materials” has the meaning specified therefor in Section 17.9(c) of the Agreement.

 

“Borrowing” means a borrowing consisting of Revolving Loans made on the same day by the Lenders (or Agent on behalf thereof), or by Swing Lender in the case of a Swing Loan, or by Agent in the case of an Extraordinary Advance.

 

“Borrowing Base” means, as of any date of determination, the result of:

 

(a)           85% of the amount of Eligible Accounts, less the amount, if any, of the Dilution Reserve, plus

 

(b)           the lesser of

 

(i)           75% of the amount of Eligible Unbilled Accounts, less the amount, if any, of the Dilution Reserve,

 

(ii)           15% of the aggregate amount of credit availability created by the sum of clauses (a) and (b)(i) above, and

 

(iii)           $10,000,000, plus

 

(c)           the Eligible Revenue Equipment Formula Amount, minus

 

(d)           the aggregate amount of reserves, if any, established by Agent under Section 2.1(c) of the Agreement.

 

“Borrowing Base Certificate” means a certificate in the form of Exhibit B-1.

 

“Business Day” means any day that is not a Saturday, Sunday, or other day on which banks are authorized or required to close in the state of New York, except that, if a determination of a Business Day shall relate to a LIBOR Rate Loan, the term “Business Day” also shall exclude any day on which banks are closed for dealings in Dollar deposits in the London interbank market.

 

“Capital Expenditures” means, with respect to any Person for any period, the amount of all expenditures by such Person and its Subsidiaries during such period that are capital expenditures as determined in accordance with GAAP, but excluding, without duplication (a) expenditures that are financed with Indebtedness for borrowed money (other than Revolving Loans), (b) expenditures made during such period in connection with the replacement, substitution, or restoration of assets or properties pursuant to Section 2.4(e)(ii) of the Agreement, (c) with respect to the purchase price of assets that are purchased substantially contemporaneously with the trade-in of existing assets during such period, the amount of the trade-in allowance granted by the seller of such assets for the assets being traded in at such time, (d) expenditures made during such period to consummate one or more Permitted Acquisitions, and (e) expenditures during such period that, pursuant to a written agreement, are reimbursed by a third Person (excluding any Borrower or any of its Affiliates).

 

“Capitalized Lease Obligation” means that portion of the obligations under a Capital Lease that is required to be capitalized in accordance with GAAP.

 

“Capital Lease” means a lease that is required to be capitalized for financial reporting purposes in accordance with GAAP.

 

“Cash Equivalents” means (a) marketable direct obligations issued by, or unconditionally guaranteed by, the United States or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within 1 year from the date of acquisition thereof, (b) marketable direct obligations issued or fully guaranteed by any state of the United States or any political subdivision of any such state or any public instrumentality thereof maturing within 1 year from the date of acquisition thereof and, at the time of acquisition, having one of the two highest ratings obtainable from either Standard & Poor’s Rating Group (“S&P”) or Moody’s Investors Service, Inc. (“Moody’s”), (c) commercial paper maturing no more than 270 days from the date of creation thereof and, at the time of acquisition, having a rating of at least A-1 from S&P or at least P-1 from Moody’s, (d) certificates of deposit, time deposits, overnight bank deposits or bankers’ acceptances maturing within 1 year from the date of acquisition thereof issued by any bank organized under the laws of the United States or any state thereof or the District of Columbia or any United States branch of a foreign bank having at the date of acquisition thereof combined capital and surplus of not less than $500,000,000, (e) Deposit Accounts maintained with (i) any bank that satisfies the criteria described in clause (d) above, or (ii) any other bank organized under the laws of the United States or any state thereof so long as the full amount maintained with any such other bank is insured by the Federal Deposit Insurance Corporation, (f) repurchase obligations of any commercial bank satisfying the requirements of clause (d) of this definition or recognized securities dealer having combined capital and surplus of not less than $500,000,000, having a term of not more than seven days, with respect to securities satisfying the criteria in clauses (a) or (d) above, (g) debt securities with maturities of six months or less from the date of acquisition backed by standby letters of credit issued by any commercial bank satisfying the criteria described in clause (d) above, and (h) Investments in money market funds substantially all of whose assets are invested in the types of assets described in clauses (a) through (g) above.

 

“Cash Management Services” means any cash management or related services including treasury, depository, return items, overdraft, controlled disbursement, merchant store value cards, e-payables services, electronic funds transfer, interstate depository network, automatic clearing house transfer (including the Automated Clearing House processing of electronic funds transfers through the direct Federal Reserve Fedline system) and other cash management arrangements.

 

“CFC” means a controlled foreign corporation (as that term is defined in the IRC).

 

“Change in Control” means that:

 

(a)           any Person or two or more Persons (other than the Exempt Group) acting in concert shall have acquired beneficial ownership, directly or indirectly, of Equity Interests of USA Truck (or other securities convertible into such Equity Interests) representing 30% or more of the combined voting power of all Equity Interests of USA Truck entitled (without regard to the occurrence of any contingency) to vote for the election of members of the Board of Directors of USA Truck;

 

(b)           any Person or two or more Persons acting in concert shall have acquired by contract or otherwise, or shall have entered into a contract or arrangement that, upon consummation thereof, will result in its or their acquisition of the power to exercise, directly or indirectly, a controlling influence over the management or policies of USA Truck or control over the Equity Interests of such Person entitled to vote for members of the Board of Directors of USA Truck 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) representing 30% or more of the combined voting power of such Equity Interests;

 

(c)           during any period of 24 consecutive months commencing on or after the Closing Date, the occurrence of a change in the composition of the Board of Directors of USA Truck such that a majority of the members of such Board of Directors are not Continuing Directors; or

 

(d)           USA Truck fails to own and control, directly or indirectly, 100% of the Equity Interests of each other Loan Party.

 

“Change in Law” means the occurrence after the date of the Agreement of:  (a) the adoption or effectiveness of any law, rule, regulation, judicial ruling, judgment or treaty, (b) any change in any law, rule, regulation, judicial ruling, judgment or treaty or in the administration, interpretation, implementation or application by any Governmental Authority of any law, rule, regulation, guideline or treaty, or (c) the making or issuance by any Governmental Authority of any request, rule, guideline or directive, whether or not having the force of law; provided that notwithstanding anything in the Agreement to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (ii) all requests, rules, guidelines or directives concerning capital adequacy 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 shall, in each case, be deemed to be a “Change in Law,” regardless of the date enacted, adopted or issued.

 

“Closing Date” means the date of the making of the initial Revolving Loan (or other extension of credit) under the Agreement.

 

“Code” means the New York Uniform Commercial Code, as in effect from time to time.

 

“Collateral” means all assets and interests in assets and proceeds thereof now owned or hereafter acquired by any Borrower or its Subsidiaries in or upon which a Lien is granted by such Person in favor of Agent or the Lenders under any of the Loan Documents.

 

“Collateral Access Agreement” means a landlord waiver, bailee letter, or acknowledgement agreement of any lessor, warehouseman, processor, consignee, or other Person in possession of, having a Lien upon, or having rights or interests in any Borrower’s or its Subsidiaries’ books and records or Equipment constituting Collateral (including any Revenue Equipment constituting Collateral), in each case, in form and substance reasonably satisfactory to Agent.

 

“Commitment” means, with respect to each Lender, its Revolver Commitment, and, with respect to all Lenders, their Revolver Commitments, in each case as such Dollar amounts are set forth beside such Lender’s name under the applicable heading on Schedule C-1 to the Agreement or in the Assignment and Acceptance pursuant to which such Lender became a Lender under the Agreement, as such amounts may be reduced or increased from time to time pursuant to assignments made in accordance with the provisions of Section 13.1 of the Agreement.

 

“Compliance Certificate” means a certificate substantially in the form of Exhibit C-1 to the Agreement delivered by the chief financial officer of Administrative Borrower to Agent.

 

“Confidential Information” has the meaning specified therefor in Section 17.9(a) of the Agreement.

 

“Continuing Director” means (a) any member of the Board of Directors who was a director (or comparable manager) of USA Truck on the Closing Date, and (b) any individual who becomes a member of the Board of Directors after the Closing Date if such individual was approved, appointed or nominated for election to the Board of Directors by a majority of the Continuing Directors, but excluding any such individual originally proposed for election in opposition to the Board of Directors in office at the Closing Date in an actual or threatened election contest relating to the election of the directors (or comparable managers) of USA Truck and whose initial assumption of office resulted from such contest or the settlement thereof.

 

“Control Agreement” means a control agreement, in form and substance reasonably satisfactory to Agent, executed and delivered by a Borrower or one of its Subsidiaries, Agent, and the applicable securities intermediary (with respect to a Securities Account) or bank (with respect to a Deposit Account).

 

“Copyright Security Agreement” has the meaning specified therefor in the Guaranty and Security Agreement.

 

“Default” means an event, condition, or default that, with the giving of notice, the passage of time, or both, would be an Event of Default.

 

“Defaulting Lender” means any Lender that (a) has failed to fund any amounts required to be funded by it under the Agreement within three Business Days of the date that it is required to do so under the Agreement (including the failure to make available to Agent amounts required pursuant to a Settlement or to make a required payment in connection with a Letter of Credit Disbursement), (b) notified Borrowers, Agent, or any Lender in writing that it does not intend to comply with all or any portion of its funding obligations under the Agreement, (c) has made a public statement to the effect that it does not intend to comply with its funding obligations under the Agreement or under other agreements generally (as reasonably determined by Agent) under which it has committed to extend credit, (d) failed, within three Business Days after written request by Agent, to confirm that it will comply with the terms of the Agreement relating to its obligations to fund any amounts required to be funded by it under the Agreement, (e) otherwise failed to pay over to Agent or any other Lender any other amount required to be paid by it under the Agreement within three Business Days of the date that it is required to do so under the Agreement, unless the subject of a good faith dispute, or (f) (i) becomes or is insolvent or has a parent company that has become or is insolvent or (ii) becomes the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, or custodian or appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment or has a parent company that has become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, or custodian appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment.

 

“Defaulting Lender Rate” means (a) for the first three (3) days from and after the date the relevant payment is due, the Base Rate, and (b) thereafter, the interest rate then applicable to Revolving Loans that are Base Rate Loans (inclusive of the Base Rate Margin applicable thereto).

 

“Deposit Account” means any deposit account (as that term is defined in the Code).

 

“Designated Account” means the Deposit Account of USA Truck identified on Schedule D-1 to the Agreement (or such other Deposit Account of USA Truck located at Designated Account Bank that has been designated as such, in writing, by Borrowers to Agent).

 

“Designated Account Bank” has the meaning specified therefor in Schedule D-1 to the Agreement (or such other bank that is located within the United States that has been designated as such, in writing, by Borrowers to Agent).

 

“Dilution” means, as of any date of determination, a percentage, based upon the experience of the immediately prior three (3) months, that is the result of dividing the Dollar amount of (a) bad debt write-downs, discounts, advertising allowances, credits, or other dilutive items with respect to Borrowers’ Accounts during such period, by (b) Borrowers’ billings with respect to Accounts during such period.

 

“Dilution Reserve” means, as of any date of determination, an amount sufficient to reduce the advance rate against Eligible Accounts or Eligible Unbilled Accounts, as the case may be, by 1 percentage point for each percentage point by which Dilution is in excess of 5%.

 

“Disqualified Equity Interests” shall mean any Equity Interest that, by its terms (or by the terms of any security or other Equity Interests into which it is convertible or for which it is exchangeable), or upon the happening of any event or condition (a) matures or is mandatorily redeemable (other than solely for Qualified Equity Interests), pursuant to a sinking fund obligation or otherwise (except as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the Loans and all other Obligations that are accrued and payable and the termination of the Commitments), (b) is redeemable at the option of the holder thereof (other than solely for Qualified Equity Interests), in whole or in part, (c) provides for the scheduled payments of dividends in cash, or (d) is or becomes convertible into or exchangeable for Indebtedness or any other Equity Interests that would constitute Disqualified Equity Interests, in each case, prior to the date that is 180 days after the Maturity Date.

 

“Dollars” or “$” means United States dollars.

 

“Drawing Document” means any Letter of Credit or other document presented for purposes of drawing under any Letter of Credit.

 

“Earn-Outs” shall mean unsecured liabilities of a Loan Party arising under an agreement to make any deferred payment as a part of the Purchase Price for a Permitted Acquisition, including, without limitation, performance bonuses or consulting payments in any related services, employment or similar agreement, in an amount that is subject to or contingent upon the revenues, income, cash flow or profits (or the like) of the target of such Permitted Acquisition.

 

“EBITDA” means for any fiscal period,

 

(a) the consolidated net earnings (or loss) attributable to such assets or such Person, as the case may be,

 

minus

 

(b) without duplication, the sum of the following amounts attributable to such assets or such Person, as the case may be, for such period to the extent included in determining consolidated net earnings (or loss) for such period, in each case, determined in accordance with GAAP:

 

(i)           non-cash gains (including, without limitation, non-cash, extraordinary gains), and

 

(ii)           interest income,

 

plus

 

(c) without duplication, the sum of the following amounts attributable to such assets or such Person, as the case may be, for such period to the extent included in determining consolidated net earnings (or loss) for such period, in each case, determined in accordance with GAAP:

 

(i)           non-cash losses (including, without limitation, non-cash extraordinary losses),

 

(ii)           Interest Expense,

 

(iii)           income taxes, and

 

(iv)           depreciation and amortization.

 

“Eligible Accounts” means those Accounts created by a Borrower in the ordinary course of its business, that arise out of such Borrower’s sale of goods or rendition of services, that comply with each of the representations and warranties respecting Eligible Accounts made in the Loan Documents, and that are not excluded as ineligible by virtue of one or more of the excluding criteria set forth below; provided, that such criteria may be revised from time to time by Agent in Agent’s Permitted Discretion to address the results of any field examination performed by (or on behalf of) Agent from time to time after the Closing Date.  In determining the amount to be included, Eligible Accounts shall be calculated net of customer deposits, unapplied cash, taxes, discounts, credits, allowances, and rebates.  Eligible Accounts shall not include the following:

 

(a)           Accounts that the Account Debtor has failed to pay within 90 days of original invoice date or within 60 days of the date when due or Accounts with selling terms of more than 60 days,

 

(b)           Accounts owed by an Account Debtor (or its Affiliates) where 50% or more of all Accounts owed by that Account Debtor (or its Affiliates) are deemed ineligible under clause (a) above,

 

(c)           Accounts with respect to which the Account Debtor is an Affiliate of any Borrower or an employee or agent of any Borrower or any Affiliate of any Borrower,

 

(d)           Accounts arising in a transaction wherein goods are placed on consignment or are sold pursuant to a guaranteed sale, a sale or return, a sale on approval, a bill and hold, or any other terms by reason of which the payment by the Account Debtor may be conditional,

 

(e)           Accounts that are not payable in Dollars,

 

(f)           Accounts with respect to which the Account Debtor either (i) does not maintain its chief executive office in the United States, or (ii) is not organized under the laws of the United States or any state thereof, or (iii) is the government of any foreign country or sovereign state, or of any state, province, municipality, or other political subdivision thereof, or of any department, agency, public corporation, or other instrumentality thereof, unless (A) the Account is supported by an irrevocable letter of credit reasonably satisfactory to Agent (as to form, substance, and issuer or domestic confirming bank) that has been delivered to Agent and is directly drawable by Agent, or (B) the Account is covered by credit insurance in form, substance, and amount, and by an insurer, reasonably satisfactory to Agent,

 

(g)           Accounts with respect to which the Account Debtor is either (i) the United States or any department, agency, or instrumentality of the United States (exclusive, however, of Accounts with respect to which Borrowers have complied, to the reasonable satisfaction of Agent, with the Assignment of Claims Act, 31 USC §3727), or (ii) any state of the United States,

 

(h)           Accounts with respect to which the Account Debtor is a creditor of a Borrower, has or has asserted a right of recoupment or setoff, or has disputed its obligation to pay all or any portion of the Account, to the extent of such claim, right of recoupment or setoff, or dispute,

 

(i)           Accounts with respect to an Account Debtor whose total obligations owing to Borrowers exceed 10% (such percentage, as applied to a particular Account Debtor, being subject to reduction by Agent in its Permitted Discretion if the creditworthiness of such Account Debtor deteriorates) of all Eligible Accounts and Eligible Unbilled Accounts, to the extent of the obligations owing by such Account Debtor in excess of such percentage; provided, that, in each case, the amount of Accounts that are excluded because they exceed the foregoing percentage shall be determined by Agent based on all of the otherwise Eligible Accounts and Eligible Unbilled Accounts prior to giving effect to any eliminations based upon the foregoing concentration limit,

 

(j)           Accounts with respect to which the Account Debtor is subject to an Insolvency Proceeding, is publicly known to not be Solvent (or any Borrower knows such Account Debtor is not Solvent), has gone out of business, or as to which any Borrower has received notice of an imminent Insolvency Proceeding or a material impairment of the financial condition of such Account Debtor,

 

(k)           Accounts, the collection of which, Agent, in its Permitted Discretion, believes to be doubtful, including by reason of the Account Debtor’s financial condition,

 

(l)           Accounts that are not subject to a valid and perfected first priority Agent’s Lien,

 

(m)           Accounts with respect to which (i) the goods giving rise to such Account (if any) have not been shipped to the Account Debtor, or (ii) the services (if any) giving rise to such Account have not been performed,

 

(n)           Accounts that have not been billed to the Account Debtor,

 

(o)           Accounts with respect to which the Account Debtor is a Sanctioned Person or Sanctioned Entity,

 

(p)           Accounts that represent the right to receive progress payments or other advance billings that are due prior to the completion of performance by the applicable Borrower of the subject contract for goods or services, or

 

(q)           Accounts owned by a target acquired in connection with a Permitted Acquisition, until the completion of an appraisal and field examination with respect to such target, in each case, reasonably satisfactory to Agent (which appraisal and field examination may be conducted prior to the closing of such Permitted Acquisition).

 

“Eligible Revenue Equipment” means Revenue Equipment of any Borrower that complies with each of the representations and warranties respecting Eligible Revenue Equipment made in the Loan Documents and that is not excluded as ineligible by virtue of one or more of the excluding criteria set forth below; provided, that such criteria may be revised from time to time by Agent in Agent’s Permitted Discretion to address the results of any field examination or appraisal performed by (or on behalf of) Agent from time to time after the Closing Date.  In determining the amount to be included, Eligible Revenue Equipment shall be valued at the net book value (calculated on a basis consistent with Borrowers’ historical accounting practices).  An item of Revenue Equipment shall not be included in Eligible Revenue Equipment if:

 

(a)           a Borrower does not have good, valid, and marketable title thereto,

(b)           when not in use by a customer, a Borrower does not have actual and exclusive possession thereof (either directly or through a bailee or agent of such Borrower),

(c)           with respect to such item of Revenue Equipment (i) prior to the Eligible Revenue Equipment Trigger Date, Borrowers have not caused to be submitted a duly executed application to the applicable titling authority for the issuance of a certificate of title naming Agent as the sole lienholder thereon in the manner prescribed by the applicable jurisdiction together with payment of all applicable fees in connection therewith or have not taken all other actions which are required by applicable law to cause such item of Revenue Equipment to be subject to a valid and perfected first-priority Agent’s Lien, and (ii) upon and following the Eligible Revenue Equipment Trigger Date, such item of Revenue Equipment is not subject to a valid certificate of title issued in the name of USA Truck which lists Agent as the first and sole lienholder; provided, however, that the provisions of this clause (c) shall not prohibit any item of Revenue Equipment from being classified as Eligible Revenue Equipment in the nine (9) calendar month period following the Closing Date if the certificate of title for such item of Revenue Equipment is issued in the name of USA Truck and evidences no Lien other than a Lien in favor of the Existing Agent that secures obligations owing under the Existing Credit Facility,

(d)           it was acquired in connection with a Permitted Acquisition, until the completion of an appraisal and field examination of such Revenue Equipment, in each case, reasonably satisfactory to Agent (which appraisal and field examination may be conducted prior to the closing of such Permitted Acquisition), or

(e)           the acquisition or purchase of such item of Revenue Equipment was financed through a Capital Lease or other secured Indebtedness (other than Indebtedness evidenced by this Agreement or the other Loan Documents).

“Eligible Revenue Equipment Formula Amount” means, at any time, an amount equal to the least of the following:

 

(a)           95% of the most recently determined net book value of Eligible Revenue Equipment (which for purposes hereof shall include the net book value of auxiliary power units attached to Eligible Revenue Equipment); and

 

(b)           the product of, prior to the occurrence of the Suppressed Availability Trigger Date, 85%, and upon and at all times following the occurrence of the Suppressed Availability Trigger Date, 80%, multiplied by the most recently determined Net Liquidation Percentage multiplied by the net book value of Borrowers’ Eligible Revenue Equipment (calculated on a basis consistent with Borrowers’ historical accounting practices and inclusive for purposes hereof of the book value of auxiliary power units attached to Eligible Revenue Equipment);

 

provided, that in the case of any new and unused Eligible Revenue Equipment purchased by a Borrower following the Closing Date, Eligible Revenue Equipment Formula Amount shall mean, commencing on the Invoice Receipt Date for such Eligible Revenue Equipment through and including the date Agent receives an appraisal of such Eligible Revenue Equipment from an appraisal company selected by Agent pursuant to Section 5.7(b) of the Agreement, an amount equal to the product of, prior to the occurrence of the Suppressed Availability Trigger Date, 85%, and upon and at all times following the occurrence of the Suppressed Availability Trigger Date, 80%, multiplied by the invoiced cost of such Eligible Revenue Equipment (a copy of which invoice shall be provided by the Administrative Borrower to Agent together with the items required pursuant to clause (l) of Schedule 5.2 to the Agreement on or prior to the first date such Eligible Revenue Equipment is included in the Borrowing Base (the “Invoice Receipt Date”)); provided further, that upon the occurrence of the Suppressed Availability Trigger Date, the Eligible Revenue Equipment Formula Amount shall be permanently reduced effective as of the first day of each calendar month occurring thereafter (beginning on the first day of the calendar month immediately following the Suppressed Availability Trigger Date) by an amount equal to 1/72th (0.013888889%) of such Eligible Revenue Equipment Formula Amount as of the Suppressed Availability Trigger Date.

 

“Eligible Revenue Equipment Trigger Date” means, from and after the Closing Date, the first date on which Suppressed Availability is less than $20,000,000.

 

“Eligible Unbilled Accounts” means those Unbilled Accounts created by any Borrower in the ordinary course of its business, that arise out of such Borrower’s sale of goods or rendition of services, that comply with each of the representations and warranties respecting Eligible Unbilled Accounts made in the Loan Documents, that both (a) would be Eligible Accounts but for their being excluded as ineligible by virtue of the excluding criteria set forth in clause (n) of the definition of Eligible Accounts and (b) are not aged more than 15 days after the date on which the goods giving rise to such Unbilled Account were delivered to the Account Debtor or the services giving rise to such Unbilled Account were performed for the Account Debtor.

 

“Enhanced Reporting Period” means a period which shall commence on any date on which an Event of Default occurs or Excess Availability is less than 17.5% of the Maximum Revolver Amount and shall continue until the later of (a) the date that is the last day of the second full fiscal quarter after that commencement date, and (b) the last day of the fiscal quarter after that commencement date in which, for a period of 60 consecutive days, no Event of Default occurred or was continuing and Average Excess Availability was greater than or equal to 17.5% of the Maximum Revolver Amount.

 

“Environmental Action” means any written complaint, summons, citation, notice, directive, order, claim, litigation, investigation, judicial or administrative proceeding, judgment, letter, or other written communication from any Governmental Authority, or any third party involving violations of Environmental Laws or releases of Hazardous Materials (a) from any assets, properties, or businesses of any Borrower, any Subsidiary of any Borrower, or any of their predecessors in interest, (b) from adjoining properties or businesses, or (c) from or onto any facilities which received Hazardous Materials generated by any Borrower, any Subsidiary of any Borrower, or any of their predecessors in interest.

 

“Environmental Law” means any applicable federal, state, provincial, foreign or local statute, law, rule, regulation, ordinance, code, binding and enforceable guideline, binding and enforceable written policy, or rule of common law now or hereafter in effect and in each case as amended, or any judicial or administrative interpretation thereof, including any judicial or administrative order, consent decree or judgment, in each case, to the extent binding on any Borrower or its Subsidiaries, relating to the environment, the effect of the environment on employee health, or Hazardous Materials, in each case as amended from time to time.

 

“Environmental Liabilities” means all liabilities, monetary obligations, losses, damages, costs and expenses (including all reasonable fees, disbursements and expenses of counsel, experts, or consultants, and costs of investigation and feasibility studies), fines, penalties, sanctions, and interest incurred as a result of any claim or demand, or Remedial Action required, by any Governmental Authority or any third party, and which relate to any Environmental Action.

 

“Environmental Lien” means any Lien in favor of any Governmental Authority for Environmental Liabilities.

 

“Equipment” means equipment (as that term is defined in the Code).

 

“Equity Interest” means, with respect to a Person, all of the shares, options, warrants, interests, participations, or other equivalents (regardless of how designated) of or in such Person, whether voting or nonvoting, including capital stock (or other ownership or profit interests or units), preferred stock, or any other “equity security” (as such term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the SEC under the Exchange Act).

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and any successor statute thereto.

 

“ERISA Affiliate” means (a) any Person subject to ERISA whose employees are treated as employed by the same employer as the employees of any Borrower or its Subsidiaries under IRC Section 414(b), (b) any trade or business subject to ERISA whose employees are treated as employed by the same employer as the employees of any Borrower or its Subsidiaries under IRC Section 414(c), (c) solely for purposes of Section 302 of ERISA and Section 412 of the IRC, any organization subject to ERISA that is a member of an affiliated service group of which any Borrower or any of its Subsidiaries is a member under IRC Section 414(m), or (d) solely for purposes of Section 302 of ERISA and Section 412 of the IRC, any Person subject to ERISA that is a party to an arrangement with any Borrower or any of its Subsidiaries and whose employees are aggregated with the employees of such Borrower or its Subsidiaries under IRC Section 414(o).

 

“Event of Default” has the meaning specified therefor in Section 8 of the Agreement.

 

“Excess” has the meaning specified therefor in Section 2.14 of the Agreement.

 

“Excess Availability” means, as of any date of determination, the amount equal to Availability minus the aggregate amount, if any, of all trade payables of Borrowers and their Subsidiaries aged in excess of 60 days past their original due date and all book overdrafts of Borrowers and their Subsidiaries in excess of historical practices with respect thereto, in each case as determined by Agent in its Permitted Discretion.

 

“Exchange Act” means the Securities Exchange Act of 1934, as in effect from time to time.

 

“Excluded Taxes” means (i) any tax imposed on the net income or net profits of any Lender or any Participant (including any branch profits taxes), in each case imposed by the jurisdiction (or by any political subdivision or taxing authority thereof) in which such Lender or such Participant is organized or the jurisdiction (or by any political subdivision or taxing authority thereof) in which such Lender’s or such Participant’s principal office is located in each case as a result of a present or former connection between such Lender or such Participant and the jurisdiction or taxing authority imposing the tax (other than any such connection arising solely from such Lender or such Participant having executed, delivered or performed its obligations or received payment under, or enforced its rights or remedies under the Agreement or any other Loan Document); (ii) taxes resulting from a Lender’s or a Participant’s failure to comply with the requirements of Section 16.2 of the Agreement, and (iii) any United States federal withholding taxes that would be imposed on amounts payable to a Foreign Lender based upon the applicable withholding rate in effect at the time such Foreign Lender becomes a party to the Agreement (or designates a new lending office), except that Taxes shall include (A) any amount that such Foreign Lender (or its assignor, if any) was previously entitled to receive pursuant to Section 16.1 of the Agreement, if any, with respect to such withholding tax at the time such Foreign Lender becomes a party to the Agreement (or designates a new lending office), and (B) additional United States federal withholding taxes that may be imposed after the time such Foreign Lender becomes a party to the Agreement (or designates a new lending office), as a result of a change in law, rule, regulation, order or other decision with respect to any of the foregoing by any Governmental Authority.

 

“Exempt Group” means (i) Robert M. Powell, James B. Speed, Clifton R. Beckham, Michael R. Weindel, Jr., J. Rodney Mills, and Darron R. Ming, each of their spouses, each of their lineal descendants, and the spouses of each of their lineal descendants; (ii) estates of Persons described in clause (i); (iii) trusts established for the benefit of any Person or Persons described in clause (i); and (iv) corporations, limited liability companies, partnerships or similar entities 90% or more owned by any Person or Persons described in clauses (i) through (iii).

 

“Existing Agent” has the meaning specified therefor in clause (d)(x) of Schedule 3.1 to the Agreement.

 

“Existing Credit Facility” means that certain Credit Agreement dated as of April 19, 2010, among USA Truck, IFS, Existing Agent, and the lenders party thereto, as in effect on the Closing Date immediately before the making of the initial Revolving Loan (or other extension of credit) under the Agreement.

 

“Extraordinary Advances” has the meaning specified therefor in Section 2.3(d)(iii) of the Agreement.

 

“Extraordinary Receipts” means (a) so long as no Event of Default has occurred and is continuing, proceeds of judgments, proceeds of settlements, or other consideration of any kind received in connection with any cause of action or claim (but excluding, for the avoidance of doubt, any proceeds received with respect to any insurance claim), and (b) if an Event of Default has occurred and is continuing, any payments received by any Borrower or any of its Subsidiaries not in the ordinary course of business (and not consisting of proceeds described in Section 2.4(e)(ii) of the Agreement) consisting of (i) proceeds of judgments, proceeds of settlements, or other consideration of any kind received in connection with any cause of action or claim (but excluding, for the avoidance of doubt, any proceeds received with respect to any insurance claim), (ii) indemnity payments (other than to the extent such indemnity payments after being received by any Borrower or any of its Subsidiaries are immediately payable by such Borrower or Subsidiary to a Person that is not an Affiliate of any Borrower or any of its Subsidiaries), and (iii) any purchase price adjustment received in connection with any Permitted Acquisition.

 

“Fee Letter” means that certain fee letter, dated as of even date with the Agreement, among Borrowers and Agent, in form and substance reasonably satisfactory to Agent.

 

“Federal Funds Rate” means, for any period, a fluctuating interest rate per annum equal to, for each day during such period, the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by Agent from three Federal funds brokers of recognized standing selected by it.

 

“Fixed Charge Coverage Ratio” means, with respect to any fiscal period and with respect to Borrowers determined on a consolidated basis in accordance with GAAP, the ratio of (a) EBITDA for such period minus Capital Expenditures made (to the extent not already incurred in a prior period) or incurred during such period, to (b) Fixed Charges for such period.

 

“Fixed Charges” means, with respect to any fiscal period and with respect to Borrowers determined on a consolidated basis in accordance with GAAP, the sum, without duplication, of (a) Interest Expense accrued (other than interest paid-in-kind, amortization of financing fees, and other non-cash Interest Expense) during such period, (b) principal payments in respect of Indebtedness that are required to be paid during such period, (c) all federal, state, and local income taxes accrued during such period, and (d) all Restricted Payments paid (whether in cash or other property, other than common Equity Interests) during such period.

 

“Flow of Funds Agreement” means a flow of funds agreement, dated as of even date herewith, in form and substance reasonably satisfactory to Agent, executed and delivered by each Loan Party and Agent.

 

“Foreign Lender” means any Lender or Participant that is not a United States person within the meaning of IRC section 7701(a)(30).

 

“Funding Date” means the date on which a Borrowing occurs.

 

“Funding Losses” has the meaning specified therefor in Section 2.12(b)(ii) of the Agreement.

 

“GAAP” means generally accepted accounting principles as in effect from time to time in the United States, consistently applied.

 

“Governing Documents” means, with respect to any Person, the certificate or articles of incorporation, by-laws, or other organizational documents of such Person.

 

“Governmental Authority” means the government of any nation or any political subdivision thereof, whether at the national, state, territorial, provincial, municipal or any other level, 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).

 

“Guarantor” means (a) each non-Borrower Subsidiary of each Borrower (other than any Subsidiary that is not required to become a Guarantor pursuant to Section 5.11 of the Agreement) and (b) each other Person that becomes a guarantor after the Closing Date pursuant to Section 5.11 of the Agreement.

 

“Guaranty and Security Agreement” means a guaranty and security agreement, dated as of even date with the Agreement, in form and substance reasonably satisfactory to Agent, executed and delivered by each of the Borrowers and each of the Guarantors to Agent.

 

“Hazardous Materials” means (a) substances that are defined or listed in, or otherwise classified pursuant to, any applicable laws or regulations as “hazardous substances,” “hazardous materials,” “hazardous wastes,” “toxic substances,” or any other formulation intended to define, list, or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, reproductive toxicity, or “EP toxicity”, (b) oil, petroleum, or petroleum derived substances, natural gas, natural gas liquids, synthetic gas, drilling fluids, produced waters, and other wastes associated with the exploration, development, or production of crude oil, natural gas, or geothermal resources, (c) any flammable substances or explosives or any radioactive materials, and (d) asbestos in any form or electrical equipment that contains any oil or dielectric fluid containing levels of polychlorinated biphenyls in excess of 50 parts per million.

 

“Hedge Agreement” means a “swap agreement” as that term is defined in Section 101(53B)(A) of the Bankruptcy Code.

 

“Hedge Obligations” means any and all obligations or liabilities, whether absolute or contingent, due or to become due, now existing or hereafter arising, of each Borrower and its Subsidiaries arising under, owing pursuant to, or existing in respect of Hedge Agreements entered into with one or more of the Hedge Providers.

 

“Hedge Provider” means any Lender or any of its Affiliates; provided, that no such Person (other than Wells Fargo or its Affiliates) shall constitute a Hedge Provider unless and until Agent receives a Bank Product Provider Agreement from such Person and with respect to the applicable Hedge Agreement within 10 days after the execution and delivery of such Hedge Agreement with a Borrower or its Subsidiaries; provided further, that if, at any time, a Lender ceases to be a Lender under the Agreement, then, from and after the date on which it ceases to be a Lender thereunder, neither it nor any of its Affiliates shall constitute Hedge Providers and the obligations with respect to Hedge Agreements entered into with such former Lender or any of its Affiliates shall no longer constitute Hedge Obligations.

 

“IFS” means International Freight Services, Inc., a Delaware corporation.

 

“Increase” has the meaning specified therefor in Section 2.14.

 

“Increase Date” has the meaning specified therefor in Section 2.14.

 

“Increase Joinder” has the meaning specified therefor in Section 2.14.

 

“Indebtedness” as to any Person means (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes, or other similar instruments and all reimbursement or other obligations in respect of letters of credit, bankers acceptances, or other financial products, (c) all obligations of such Person as a lessee under Capital Leases, (d) all obligations or liabilities of others secured by a Lien on any asset of such Person, irrespective of whether such obligation or liability is assumed, (e) all obligations of such Person to pay the deferred purchase price of assets (other than trade payables incurred in the ordinary course of business and repayable in accordance with customary trade practices and, for the avoidance of doubt, other than royalty payments payable in the ordinary course of business in respect of non-exclusive licenses), (f) all monetary obligations of such Person owing under Hedge Agreements (which amount shall be calculated based on the amount that would be payable by such Person if the Hedge Agreement were terminated on the date of determination), (g) any Disqualified Equity Interests of such Person, and (h) any obligation of such Person guaranteeing or intended to guarantee (whether directly or indirectly guaranteed, endorsed, co-made, discounted, or sold with recourse) any obligation of any other Person that constitutes Indebtedness under any of clauses (a) through (g) above.  For purposes of this definition, (i) the amount of any Indebtedness represented by a guaranty or other similar instrument shall be the lesser of the principal amount of the obligations guaranteed and still outstanding and the maximum amount for which the guaranteeing Person may be liable pursuant to the terms of the instrument embodying such Indebtedness, and (ii) the amount of any Indebtedness which is limited or is non-recourse to a Person or for which recourse is limited to an identified asset shall be valued at the lesser of (A) if applicable, the limited amount of such obligations, and (B) if applicable, the fair market value of such assets securing such obligation.

 

“Indemnified Liabilities” has the meaning specified therefor in Section 10.3 of the Agreement.

 

“Indemnified Person” has the meaning specified therefor in Section 10.3 of the Agreement.

 

“Indemnified Taxes” means, any Taxes other than Excluded Taxes.

 

“Insolvency Proceeding” means any proceeding commenced by or against any Person under any provision of the Bankruptcy Code or under any other state or federal bankruptcy or insolvency law, assignments for the benefit of creditors, formal or informal moratoria, compositions, or proceedings seeking reorganization, arrangement, or other similar relief.

 

“Intercompany Subordination Agreement” means an intercompany subordination agreement, dated as of even date with the Agreement, executed and delivered by each Borrower, each of its Subsidiaries, each of the other Loan Parties, and Agent, the form and substance of which is reasonably satisfactory to Agent.

 

“Interest Expense” means, with respect to any Person, for any period, the aggregate of the interest expense attributable to such assets or such Person, for such period, determined in accordance with GAAP.

 

“Interest Period” means, with respect to each LIBOR Rate Loan, a period commencing on the date of the making of such LIBOR Rate Loan (or the continuation of a LIBOR Rate Loan or the conversion of a Base Rate Loan to a LIBOR Rate Loan) and ending 1, 2, or 3 months thereafter; provided, that (a) interest shall accrue at the applicable rate based upon the LIBOR Rate from and including the first day of each Interest Period to, but excluding, the day on which any Interest Period expires, (b) any Interest Period that would 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, (c) with respect to an 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), the Interest Period shall end on the last Business Day of the calendar month that is 1, 2, or 3 months after the date on which the Interest Period began, as applicable, and (d) Borrowers (or Administrative Borrower on behalf thereof) may not elect an Interest Period which will end after the Maturity Date.

 

“Inventory” means inventory (as that term is defined in the Code).

 

“Investment” means, with respect to any Person, any investment by such Person in any other Person (including Affiliates) in the form of loans, guarantees, advances, capital contributions (excluding (a) commission, travel, and similar advances to officers and employees of such Person made in the ordinary course of business, and (b) bona fide accounts receivable arising in the ordinary course of business), or acquisitions of Indebtedness, Equity Interests, or all or substantially all of the assets of such other Person (or of any division or business line of such other Person), and any other items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP.  The amount of any Investment shall be the original cost of such Investment plus the cost of all additions thereto, without any adjustment for increases or decreases in value, or write-ups, write-downs, or write-offs with respect to such Investment.

 

“IRC” means the Internal Revenue Code of 1986, as in effect from time to time.

 

“ISP” means, with respect to any Letter of Credit, the International Standby Practices 1998 (International Chamber of Commerce Publication No. 590) and any subsequent revision thereof adopted by the International Chamber of Commerce on the date such Letter of Credit is issued.

 

“Issuer Document” means, with respect to any Letter of Credit, a letter of credit application, a letter of credit agreement, or any other document, agreement or instrument entered into (or to be entered into) by a Borrower in favor of Issuing Bank and relating to such Letter of Credit.

 

“Issuing Bank” means Wells Fargo or any other Lender that, at the request of Administrative Borrower and with the consent of Agent (such consent not to be unreasonably withheld, conditioned or delayed), agrees, in such Lender’s sole discretion, to become an Issuing Bank for the purpose of issuing Letters of Credit pursuant to Section 2.11 of the Agreement, and Issuing Bank shall be a Lender.

 

“Joint Book Runners” has the meaning set forth in the preamble to the Agreement.

 

“Joint Lead Arrangers” has the meaning set forth in the preamble to the Agreement.

 

“Landlord Reserve” means, as to each location at which a Borrower has Equipment (including any Revenue Equipment constituting Collateral) or books and records located and as to which a Collateral Access Agreement has not been received by Agent, a reserve in an amount equal to the greater of (a) the number of months rent for which the landlord will have, under applicable law, a Lien in the Equipment (including any Revenue Equipment constituting Collateral) of such Borrower to secure the payment of rent or other amounts under the lease relative to such location, or (b) 3 months rent under the lease relative to such location.

 

“Lender” has the meaning set forth in the preamble to the Agreement, shall include Issuing Bank and the Swing Lender, and shall also include any other Person made a party to the Agreement pursuant to the provisions of Section 13.1 of the Agreement and “Lenders” means each of the Lenders or any one or more of them.

 

“Lender Group” means each of the Lenders (including Issuing Bank and the Swing Lender) and Agent, or any one or more of them.

 

“Lender Group Expenses” means all (a) costs or expenses (including taxes and insurance premiums) required to be paid by any Borrower or its Subsidiaries under any of the Loan Documents that are paid, advanced, or incurred by the Lender Group, (b) documented out-of-pocket fees or charges paid or incurred by Agent in connection with the Lender Group’s transactions with each Borrower and its Subsidiaries under any of the Loan Documents, including, fees or charges for background checks, OFAC/PEP searches, photocopying, notarization, couriers and messengers, telecommunication, public record searches, filing fees, recording fees, publication, appraisal (including periodic collateral appraisals or business valuations to the extent of the fees and charges (and up to the amount of any limitation) contained in the Agreement or the Fee Letter), real estate surveys, real estate title policies and endorsements, and environmental audits, (c) Agent’s customary fees and charges (as adjusted from time to time) with respect to the disbursement of funds (or the receipt of funds) to or for the account of any Borrower (whether by wire transfer or otherwise), together with any out-of-pocket costs and expenses incurred in connection therewith, (d) customary charges imposed or incurred by Agent resulting from the dishonor of checks payable by or to any Loan Party, (e) reasonable documented out-of-pocket costs and expenses paid or incurred by the Lender Group to correct any default or enforce any provision of the Loan Documents, or during the continuance of an Event of Default, in gaining possession of, maintaining, handling, preserving, storing, shipping, selling, preparing for sale, or advertising to sell the Collateral, or any portion thereof, irrespective of whether a sale is consummated, (f) field examination, appraisal, and valuation fees and expenses of Agent related to any field examinations, appraisals, or valuation to the extent of the fees and charges (and up to the amount of any limitation) provided in Section 2.10 of the Agreement, (g) Agent’s reasonable costs and expenses (including reasonable documented attorneys fees and expenses) relative to third party claims or any other lawsuit or adverse proceeding paid or incurred, whether in enforcing or defending the Loan Documents or otherwise in connection with the transactions contemplated by the Loan Documents, Agent’s Liens in and to the Collateral, or the Lender Group’s relationship with any Borrower or any of its Subsidiaries, (h) Agent’s reasonable documented costs and expenses (including reasonable documented attorneys fees and due diligence expenses) incurred in advising, structuring, drafting, reviewing, administering (including travel, meals, and lodging), syndicating (including reasonable costs and expenses relative to CUSIP, DXSyndicateTM, SyndTrak or other communication costs incurred in connection with a syndication of the loan facilities), or amending, waiving, or modifying the Loan Documents, (i) Agent’s and each Lender’s reasonable documented costs and expenses (including reasonable documented attorneys, accountants, consultants, and other advisors fees and expenses) incurred in terminating, enforcing (including attorneys, accountants, consultants, and other advisors fees and expenses incurred in connection with a “workout,” a “restructuring,” or an Insolvency Proceeding concerning any Borrower or any of its Subsidiaries or in exercising rights or remedies under the Loan Documents), or defending the Loan Documents, irrespective of whether a lawsuit or other adverse proceeding is brought, or in taking any enforcement action or any Remedial Action with respect to the Collateral, and (j) the fronting fees and commissions, other fees, charges and expenses provided for in Section 2.11(k) of the Agreement.

 

“Lender Group Representatives” has the meaning specified therefor in Section 17.9 of the Agreement.

 

“Lender-Related Person” means, with respect to any Lender, such Lender, together with such Lender’s Affiliates, officers, directors, employees, attorneys, and agents.

 

“Letter of Credit” means a letter of credit (as that term is defined in the Code) issued by Issuing Bank.

 

“Letter of Credit Collateralization” means either (a) providing cash collateral (pursuant to documentation reasonably satisfactory to Agent, including provisions that specify that the Letter of Credit Fees and all commissions, fees, charges and expenses provided for in Section 2.11(k) of the Agreement (including any fronting fees) will continue to accrue while the Letters of Credit are outstanding) to be held by Agent for the benefit of the Revolving Lenders in an amount equal to 105% of the then existing Letter of Credit Usage, (b) delivering to Agent documentation executed by all beneficiaries under the Letters of Credit, in form and substance reasonably satisfactory to Agent and Issuing Bank, terminating all of such beneficiaries’ rights under the Letters of Credit, or (c) providing Agent with a standby letter of credit, in form and substance reasonably satisfactory to Agent, from a commercial bank acceptable to Agent (in its sole discretion) in an amount equal to 105% of the then existing Letter of Credit Usage (it being understood that the Letter of Credit Fee and all fronting fees set forth in the Agreement will continue to accrue while the Letters of Credit are outstanding and that any such fees that accrue must be an amount that can be drawn under any such standby letter of credit).

 

“Letter of Credit Disbursement” means a payment made by Issuing Bank pursuant to a Letter of Credit.

 

“Letter of Credit Exposure” means, as of any date of determination with respect to any Lender, such Lender’s Pro Rata Share of the Letter of Credit Usage on such date.

 

“Letter of Credit Fee” has the meaning specified therefor in Section 2.6(b) of the Agreement.

 

“Letter of Credit Indemnified Costs” has the meaning specified therefor in Section 2.11(f) of the Agreement.

 

“Letter of Credit Related Person” has the meaning specified therefor in Section 2.11(f) of the Agreement.

 

“Letter of Credit Usage” means, as of any date of determination, the aggregate undrawn amount of all outstanding Letters of Credit.

 

“LIBOR Deadline” has the meaning specified therefor in Section 2.12(b)(i) of the Agreement.

 

“LIBOR Notice” means a written notice in the form of Exhibit L-1 to the Agreement.

 

“LIBOR Option” has the meaning specified therefor in Section 2.12(a) of the Agreement.

 

“LIBOR Rate” means the per annum rate appearing on Macro*World’s (www.mworld.com; the “Service”) Page BBA LIBOR - USD (or on any successor or substitute page of such Service, or any successor to or substitute for such Service) 2 Business Days prior to the commencement of the requested Interest Period, for a term, and in an amount, comparable to the Interest Period and the amount of the LIBOR Rate Loan requested (whether as an initial LIBOR Rate Loan or as a continuation of a LIBOR Rate Loan or as a conversion of a Base Rate Loan to a LIBOR Rate Loan) by Administrative Borrower in accordance with the Agreement (and, if any such rate is below zero, the LIBOR Rate shall be deemed to be zero), which determination shall be made by Agent and shall be conclusive in the absence of manifest error.

 

“LIBOR Rate Loan” means each portion of a Revolving Loan that bears interest at a rate determined by reference to the LIBOR Rate.

 

“LIBOR Rate Margin” has the meaning set forth in the definition of Applicable Margin.

 

“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment, charge, deposit arrangement, encumbrance, easement, lien (statutory or other), security interest, or other security arrangement and any other preference, priority, or preferential arrangement of any kind or nature whatsoever, including any conditional sale contract or other title retention agreement, the interest of a lessor under a Capital Lease and any synthetic or other financing lease having substantially the same economic effect as any of the foregoing.

 

“Loan” shall mean any Revolving Loan, Swing Loan or Extraordinary Advance made (or to be made) hereunder.

 

“Loan Account” has the meaning specified therefor in Section 2.9 of the Agreement.

 

“Loan Documents” means the Agreement, the Control Agreements, the Copyright Security Agreement, any Borrowing Base Certificate, the Fee Letter, the Guaranty and Security Agreement, the Intercompany Subordination Agreement, any Issuer Documents, the Letters of Credit, the Patent Security Agreement, the Trademark Security Agreement, any note or notes executed by Borrowers in connection with the Agreement or any of the other documents listed herein and payable to any member of the Lender Group, and any other instrument or agreement entered into, now or in the future, by any Borrower or any of its Subsidiaries and any member of the Lender Group in connection with the Agreement or any of the other documents listed herein, including, without limitation, any amendment, consent, modification, or waiver thereto.

 

“Loan Party” means any Borrower or any Guarantor.

 

“Margin Stock” as defined in Regulation U of the Board of Governors as in effect from time to time.

 

“Material Adverse Effect” means (a) a material adverse effect in the business, operations, results of operations, assets, liabilities or financial condition of Borrowers and their Subsidiaries, taken as a whole, (b) a material impairment of Borrowers’ and their Subsidiaries ability to perform their obligations under the Loan Documents to which they are parties or of the Lender Group’s ability to enforce the Obligations or realize upon the Collateral (other than as a result of an action taken or not taken that is solely in the control of Agent), or (c) a material impairment of the enforceability or priority of Agent’s Liens with respect to all or a material portion of the Collateral.

 

“Material Contract” means any agreement to which any Borrower or Subsidiary of a Borrower is party (other than the Loan Documents) that is deemed to be a “material contract” under Item 601 of Regulation S-K promulgated under the Securities Act of 1933.

 

“Maturity Date” means August 24, 2017.

 

“Maximum Revolver Amount” means $125,000,000, decreased by the amount of reductions in the Revolver Commitments made in accordance with Section 2.4(c) of the Agreement and increased by the amount of Increases made in accordance with Section 2.14 of the Agreement.

 

“Moody’s” has the meaning specified therefor in the definition of Cash Equivalents.

 

“Net Cash Proceeds” means:

 

(a)  with respect to any sale or disposition by any Borrower or any of its Subsidiaries of assets, the amount of cash proceeds received (directly or indirectly) from time to time (whether as initial consideration or through the payment of deferred consideration) by or on behalf of such Borrower or such Subsidiary, in connection therewith after deducting therefrom only (i) the amount of any Indebtedness secured by any Permitted Lien on any asset (other than (A) Indebtedness owing to Agent or any Lender under the Agreement or the other Loan Documents and (B) Indebtedness assumed by the purchaser of such asset) which is required to be, and is, repaid in connection with such sale or disposition, (ii) reasonable fees, commissions, and expenses related thereto and required to be paid by such Borrower or such Subsidiary in connection with such sale or disposition, (iii) taxes paid or payable to any taxing authorities by such Borrower or such Subsidiary in connection with such sale or disposition, in each case to the extent, but only to the extent, that the amounts so deducted are, at the time of receipt of such cash, actually paid or payable to a Person that is not an Affiliate of any Borrower or any of its Subsidiaries, and are properly attributable to such transaction; and (iv) all amounts that are set aside as a reserve (A) for adjustments in respect of the purchase price of such assets, (B) for any liabilities associated with such sale or casualty, to the extent such reserve is required by GAAP, and (C) for the payment of unassumed liabilities relating to the assets sold or otherwise disposed of at the time of, or within 30 days after, the date of such sale or other disposition, to the extent that in each case the funds described above in this clause (iv) are (x) deposited into escrow with a third party escrow agent or set aside in a separate Deposit Account that is subject to a Control Agreement in favor of Agent and (y) paid to Agent as a prepayment of the applicable Obligations in accordance with Section 2.4(e) of the Agreement at such time when such amounts are no longer required to be set aside as such a reserve; and

 

(b)  with respect to the issuance or incurrence of any Indebtedness by any Borrower or any of its Subsidiaries, or the issuance by any Borrower or any of its Subsidiaries of any Equity Interests, the aggregate amount of cash received (directly or indirectly) from time to time (whether as initial consideration or through the payment or disposition of deferred consideration) by or on behalf of such Borrower or such Subsidiary in connection with such issuance or incurrence, after deducting therefrom only (i) reasonable fees, commissions, and expenses related thereto and required to be paid by such Borrower or such Subsidiary in connection with such issuance or incurrence, (ii) taxes paid or payable to any taxing authorities by such Borrower or such Subsidiary in connection with such issuance or incurrence, in each case to the extent, but only to the extent, that the amounts so deducted are, at the time of receipt of such cash, actually paid or payable to a Person that is not an Affiliate of any Borrower or any of its Subsidiaries, and are properly attributable to such transaction.

 

“Net Liquidation Percentage” means, as of any date of determination, the percentage of the book value of Borrowers’ Eligible Revenue Equipment that is estimated to be recoverable in an orderly liquidation of such Eligible Revenue Equipment net of all associated costs and expenses of such liquidation, and in each case with such percentage to be determined as to each category of Eligible Revenue Equipment and to be as specified in the most recent appraisal received by Agent from an appraisal company selected by Agent.

 

“Non-Consenting Lender” has the meaning specified therefor in Section 14.2(a) of the Agreement.

 

“Non-Defaulting Lender” means each Lender other than a Defaulting Lender.

 

“Obligations” means (a) all loans (including the Revolving Loans (inclusive of Extraordinary Advances and Swing Loans)), debts, principal, interest (including any interest that accrues after the commencement of an Insolvency Proceeding, regardless of whether allowed or allowable in whole or in part as a claim in any such Insolvency Proceeding), reimbursement or indemnification obligations with respect to Letters of Credit (irrespective of whether contingent), premiums, liabilities (including all amounts charged to the Loan Account pursuant to the Agreement), obligations (including indemnification obligations), fees (including the fees provided for in the Fee Letter), Lender Group Expenses (including any fees or expenses that accrue after the commencement of an Insolvency Proceeding, regardless of whether allowed or allowable in whole or in part as a claim in any such Insolvency Proceeding), guaranties, and all covenants and duties of any other kind and description owing by any Loan Party arising out of, under, pursuant to, in connection with, or evidenced by the Agreement or any of the other Loan Documents and irrespective of whether for the payment of money, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, and including all interest not paid when due and all other expenses or other amounts that Borrowers are required to pay or reimburse by the Loan Documents or by law or otherwise in connection with the Loan Documents, and (b) all Bank Product Obligations.  Without limiting the generality of the foregoing, the Obligations of Borrowers under the Loan Documents include the obligation to pay (i) the principal of the Revolving Loans, (ii) interest accrued on the Revolving Loans, (iii) the amount necessary to reimburse Issuing Bank for amounts paid or payable pursuant to Letters of Credit, (iv) Letter of Credit commissions, fees (including fronting fees) and charges, (v) Lender Group Expenses, (vi) fees payable under the Agreement or any of the other Loan Documents, and (vii) indemnities and other amounts payable by any Loan Party under any Loan Document.  Any reference in the Agreement or in the Loan Documents to the Obligations shall include all or any portion thereof and any extensions, modifications, renewals, or alterations thereof, both prior and subsequent to any Insolvency Proceeding.

 

“OFAC” means The Office of Foreign Assets Control of the U.S. Department of the Treasury.

 

“Originating Lender” has the meaning specified therefor in Section 13.1(e) of the Agreement.

 

“Overadvance” means, as of any date of determination, that the Revolver Usage is greater than any of the limitations set forth in Section 2.1 or Section 2.11.

 

“Participant” has the meaning specified therefor in Section 13.1(e) of the Agreement.

 

“Participant Register” has the meaning set forth in Section 13.1(i) of the Agreement.

 

“Patent Security Agreement” has the meaning specified therefor in the Guaranty and Security Agreement.

 

“Patriot Act” has the meaning specified therefor in Section 4.13 of the Agreement.

 

“Perfection Certificate” means a certificate in the form of Exhibit P-1 to the Agreement.

 

“Permitted Acquisition” means (i) the acquisition of assets of the type described in clause (n) of the definition of Permitted Dispositions, and (ii) any other Acquisition so long as (with respect to this clause (ii)):

 

(a)  no Default or Event of Default shall have occurred and be continuing or would result from the consummation of the proposed Acquisition and the proposed Acquisition is consensual,

 

(b)  no Indebtedness will be incurred, assumed, or would exist with respect to any Borrower or its Subsidiaries as a result of such Acquisition, other than Indebtedness permitted under clauses (f) or (g) of the definition of Permitted Indebtedness and no Liens will be incurred, assumed, or would exist with respect to the assets of any Borrower or its Subsidiaries as a result of such Acquisition other than Permitted Liens,

 

(c)  Administrative Borrower has provided Agent with written confirmation, supported by reasonably detailed calculations, that on a pro forma basis, Borrowers and their Subsidiaries are projected on a consolidated basis to be in compliance with the financial covenant in Section 7 of the Agreement at all times during the twelve calendar month period immediately succeeding the proposed date of consummation of such proposed Acquisition,

 

(d)  Administrative Borrower has provided Agent with its due diligence package relative to the proposed Acquisition, including forecasted balance sheets, profit and loss statements, and cash flow statements of the Person or assets to be acquired, all prepared on a basis consistent with such Person’s (or assets’) historical financial statements, together with appropriate supporting details and a statement of underlying assumptions for the 1 year period following the date of the proposed Acquisition, on a quarter by quarter basis, in form and substance (including as to scope and underlying assumptions) reasonably satisfactory to Agent,

 

(e)  Borrowers shall have Availability plus Qualified Cash in an amount equal to or greater than $25,000,000 immediately after giving effect to the consummation of the proposed Acquisition,

 

(f)  Borrowers shall have a Fixed Charge Coverage Ratio of at least 1.00 to 1.00 both before and immediately after giving effect to the consummation of the proposed Acquisition,

 

(g)  the assets being acquired or the Person whose Equity Interests are being acquired did not have negative EBITDA during the 12 consecutive month period most recently concluded prior to the date of the proposed Acquisition,

 

(h)  Administrative Borrower has provided Agent with written notice of the proposed Acquisition at least 15 Business Days prior to the anticipated closing date of the proposed Acquisition and, not later than 5 Business Days prior to the anticipated closing date of the proposed Acquisition, the most current drafts of the acquisition agreement and other material documents relative to the proposed Acquisition (and, to the extent such drafts are not then in final form, final drafts of such acquisition agreement and other material documents as soon as practicable prior to the anticipated closing date), which agreement and documents must be reasonably acceptable to Agent,

 

(i)  the assets being acquired (other than a de minimis amount of assets in relation to Borrowers’ and their Subsidiaries’ total assets), or the Person whose Equity Interests are being acquired, are useful in or engaged in, as applicable, the business of Borrowers and their Subsidiaries or a business reasonably related thereto,

 

(j)  the assets being acquired (other than a de minimis amount of assets in relation to the assets being acquired) are located within the United States or the Person whose Equity Interests are being acquired is organized in a jurisdiction located within the United States,

 

(k)  the subject assets or Equity Interests, as applicable, are being acquired directly by a Borrower or one of its Subsidiaries that is a Loan Party, and, in connection therewith, the applicable Loan Party shall have complied with Section 5.11 or 5.12 of the Agreement, as applicable, of the Agreement and, in the case of an acquisition of Equity Interests, the applicable Loan Party shall have demonstrated to Agent that the new Loan Parties have received consideration sufficient to make the joinder documents binding and enforceable against such new Loan Parties, and

 

(l)  the purchase consideration payable in respect of all Permitted Acquisitions (including the proposed Acquisition and including deferred payment obligations) shall not exceed (i) $3,000,000 in the aggregate during any fiscal year and (ii) $15,000,000 in the aggregate during the term of the Agreement.

 

“Permitted Discretion” means a determination made in the exercise of reasonable (from the perspective of a secured asset-based lender) business judgment.

 

“Permitted Dispositions” means:

 

(a) sales, abandonment, or other dispositions of Equipment that is substantially worn, damaged, or obsolete or no longer used or useful in the ordinary course of business and sales and other dispositions of Real Property, including, without limitation, leases or subleases of Real Property no longer used or useful in the conduct of the business of Borrowers and their Subsidiaries,

 

(b) sales of Inventory to buyers in the ordinary course of business,

 

(c) the use or transfer of money or Cash Equivalents in a manner that is not prohibited by the terms of the Agreement or the other Loan Documents,

 

(d) the licensing, on a non-exclusive basis, of patents, trademarks, copyrights, and other intellectual property rights in the ordinary course of business,

 

(e) the granting of Permitted Liens,

 

(f) the sale or discount, in each case without recourse, of accounts receivable arising in the ordinary course of business, but only in connection with the compromise, settlement or collection thereof,

 

(g) any involuntary loss, damage or destruction of property,

 

(h) any involuntary condemnation, seizure or taking, by exercise of the power of eminent domain or otherwise, or confiscation or requisition of use of property,

 

(i) the leasing or subleasing of assets of any Borrower or its Subsidiaries in the ordinary course of business,

 

(j) the sale or issuance of Equity Interests (other than Disqualified Equity Interests) of USA Truck,

 

(k) (i) the lapse of registered patents, trademarks, copyrights and other intellectual property of any Borrower or any of its Subsidiaries to the extent 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)), (A) with respect to copyrights, such copyrights are not material revenue generating copyrights, and (B) such lapse is not materially adverse to the interests of the Lender Group,

 

(l)  the making of Restricted Payments that are expressly permitted to be made pursuant to the Agreement,

 

(m)  the making of Permitted Investments,

 

(n) so long as no Event of Default has occurred and is continuing or would immediately result therefrom, transfers of assets (i) from any Borrower or any of its Subsidiaries to a Loan Party, and (ii) from any Subsidiary of any Borrower that is not a Loan Party to any other Subsidiary of any Borrower,

 

(o) dispositions of assets acquired by Borrowers and their Subsidiaries pursuant to a Permitted Acquisition consummated within 12 months of the date of the proposed disposition so long as (i) the consideration received for the assets to be so disposed is at least equal to the fair market value of such assets, (ii) the assets to be so disposed are not necessary or economically desirable in connection with the business of Borrowers and their Subsidiaries, and (iii) the assets to be so disposed are readily identifiable as assets acquired pursuant to the subject Permitted Acquisition,

 

(p)  sales, transfers, trades and other dispositions of Revenue Equipment not otherwise permitted in clauses (a) through (o) above; so long as (i) after giving effect to each such sale, transfer, trade or other disposition, the Borrowers shall be in pro forma compliance with Sections 2.4(e)(i) and 7 of the Agreement, (ii) the consideration received by the Loan Party from such sale, transfer, trade or other disposition is in the form of (x) cash and/or (y) an allowance, trade-in or similar credit, in an aggregate amount for any such sale, transfer, trade or other disposition not less than the fair market value of such Revenue Equipment, and (iii) the lesser of (x) the aggregate net book value and (y) the most recently determined Net Liquidation Percentage multipled by the aggregate net book value, in each case of the Revenue Equipment sold or otherwise disposed of in such sale, transfer, trade or other disposition (including the proposed disposition) in any fiscal year shall not exceed 10% of the consolidated total assets of the Borrowers and their Subsidiaries (as determined in accordance with GAAP) as of the end of the immediately preceding fiscal year,

 

(q)  sales, trades, leases, subleases or other dispositions of non-Collateral assets, and

(r)  sales or dispositions of assets (other than Accounts or Equity Interests of Subsidiaries of any Borrower) not otherwise permitted in clauses (a) through (q) above so long as (i) each such disposition is made at fair market value, (ii) the aggregate fair market value of all assets disposed of in any fiscal year (including the proposed disposition) would not exceed $250,000, and (iii) if any such disposition includes any item of Revenue Equipment identified by any Borrower as Eligible Revenue Equipment in the Borrowing Base Certificate most recently submitted to Agent, then Borrowers have delivered to Agent a Borrowing Base Certificate that gives pro forma effect to such disposition, which Borrowing Base Certificate must be satisfactory to Agent.

 

“Permitted Indebtedness” means:

 

(a) Indebtedness evidenced by the Agreement or the other Loan Documents,

 

(b) Indebtedness set forth on Schedule 4.14 to the Agreement and any Refinancing Indebtedness in respect of such Indebtedness (and any Refinancing Indebtedness in respect of such Refinancing Indebtedness),

 

(c) Permitted Purchase Money Indebtedness and any Refinancing Indebtedness in respect of such Indebtedness (and any Refinancing Indebtedness in respect of such Refinancing Indebtedness),

 

(d) endorsement of instruments or other payment items for deposit,

 

(e) Indebtedness consisting of (i) unsecured guarantees incurred in the ordinary course of business with respect to surety and appeal bonds, performance bonds, bid bonds, appeal bonds, completion guarantee and similar obligations; (ii) unsecured guarantees arising with respect to customary indemnification obligations to purchasers in connection with Permitted Dispositions; and (iii) unsecured guarantees with respect to Indebtedness of any Borrower or one of its Subsidiaries, to the extent that the Person that is obligated under such guaranty could have incurred such underlying Indebtedness,

 

(f) unsecured Indebtedness of any Borrower that is incurred on the date of the consummation of a Permitted Acquisition solely for the purpose of consummating such Permitted Acquisition so long as (i) no Event of Default has occurred and is continuing or would result therefrom, (ii) such unsecured Indebtedness is not incurred for working capital purposes, (iii) such unsecured Indebtedness does not mature prior to the date that is 12 months after the Maturity Date, (iv) such unsecured Indebtedness does not amortize until 12 months after the Maturity Date, (v) such unsecured Indebtedness does not provide for the payment of interest thereon in cash or Cash Equivalents prior to the date that is 12 months after the Maturity Date, and (vi) such Indebtedness is subordinated in right of payment to the Obligations on terms and conditions reasonably satisfactory to Agent,

 

(g) Acquired Indebtedness in an amount not to exceed $5,000,000 outstanding at any one time,

 

(h) Indebtedness incurred in the ordinary course of business under performance, surety, statutory, or appeal bonds,

 

(i) Indebtedness owed to any Person providing property, casualty, liability, or other insurance to any Borrower or any of its Subsidiaries, so long as the amount of such Indebtedness is not in excess of the amount of the unpaid cost of, and shall be incurred only to defer the cost of, such insurance for the year in which such Indebtedness is incurred and such Indebtedness is outstanding only during such year,

 

(j) the incurrence by any Borrower or its Subsidiaries of Indebtedness under Hedge Agreements that are incurred for the bona fide purpose of hedging the interest rate, commodity, or foreign currency risks associated with Borrowers’ and their Subsidiaries’ operations and not for speculative purposes,

 

(k) Indebtedness incurred in the ordinary course of business in respect of credit cards, credit card processing services, debit cards, stored value cards, commercial cards (including so-called “purchase cards”, “procurement cards” or “p-cards”), or Cash Management Services,

 

(l) unsecured Indebtedness of any Borrower owing to former employees, officers, or directors (or any spouses, ex-spouses, or estates of any of the foregoing) incurred in connection with the repurchase by such Borrower of the Equity Interests of USA Truck that had been issued to such Persons, so long as (i) no Default or Event of Default has occurred and is continuing or would result from the incurrence of such Indebtedness, (ii) the aggregate amount of all such Indebtedness outstanding at any one time does not exceed $250,000, and (iii) such Indebtedness is subordinated to the Obligations on terms and conditions reasonably acceptable to Agent,

 

(m)  unsecured Indebtedness owing to sellers of assets or Equity Interests to a Loan Party that is incurred by the applicable Loan Party in connection with the consummation of one or more Permitted Acquisitions so long as (i) the aggregate principal amount for all such unsecured Indebtedness does not exceed $250,000 at any one time outstanding, (ii) such unsecured Indebtedness is subordinated to the Obligations on terms and conditions reasonably acceptable to Agent, and (iii) such unsecured Indebtedness is otherwise on terms and conditions (including all economic terms and the absence of covenants) reasonably acceptable to Agent,

 

(n)  contingent liabilities in respect of any indemnification obligation, adjustment of purchase price, non-compete, or similar obligation of any Loan Party incurred in connection with the consummation of one or more Permitted Acquisitions,

 

(o)  Indebtedness composing Permitted Investments,

 

(p)  unsecured Indebtedness incurred in respect of netting services, overdraft protection, and other like services, in each case, incurred in the ordinary course of business,

 

(q)  unsecured Indebtedness of any Borrower or its Subsidiaries in respect of Earn-Outs owing to sellers of assets or Equity Interests to such Borrower or its Subsidiaries that is incurred in connection with the consummation of one or more Permitted Acquisitions so long as such unsecured Indebtedness is on terms and conditions reasonably acceptable to Agent,

 

(r)  Indebtedness in an aggregate outstanding principal amount not to exceed $250,000 at any time outstanding for all Subsidiaries of each Borrower that are CFCs; provided, that such Indebtedness is not directly or indirectly recourse to any of the Loan Parties or of their respective assets,

 

(s)  accrual of interest, accretion or amortization of original issue discount, or the payment of interest in kind, in each case, on Indebtedness that otherwise constitutes Permitted Indebtedness,

 

(t)  Subordinated Indebtedness, the aggregate outstanding amount of which does not exceed $1,000,000,

 

(u)  Bank Product Obligations, and

 

(v)  any other unsecured Indebtedness incurred by any Borrower or any of its Subsidiaries in an aggregate outstanding amount not to exceed $5,000,000 at any one time.

 

“Permitted Intercompany Advances” means loans made by (a) a Loan Party to another Loan Party, (b) a Subsidiary of a Borrower that is not a Loan Party to another Subsidiary of a Borrower that is not a Loan Party, and (c) a Subsidiary of a Borrower that is not a Loan Party to a Loan Party, so long as, in the case of (a) and (c) above, the parties thereto are party to the Intercompany Subordination Agreement.

 

“Permitted Investments” means:

 

(a) Investments in cash and Cash Equivalents,

 

(b) Investments in negotiable instruments deposited or to be deposited for collection in the ordinary course of business,

 

(c) advances made in connection with purchases of goods or services in the ordinary course of business,

 

(d) Investments received in settlement of amounts due to any Loan Party or any of its Subsidiaries effected in the ordinary course of business or owing to any Loan Party or any of its Subsidiaries as a result of Insolvency Proceedings involving an Account Debtor or upon the foreclosure or enforcement of any Lien in favor of a Loan Party or its Subsidiaries,

 

(e) Investments owned by any Loan Party or any of its Subsidiaries on the Closing Date and set forth on Schedule P-1 to the Agreement,

 

(f) guarantees permitted under the definition of Permitted Indebtedness,

 

(g) Permitted Intercompany Advances,

 

(h) Equity Interests or other securities acquired in connection with the satisfaction or enforcement of Indebtedness or claims due or owing to a Loan Party or its Subsidiaries (in bankruptcy of customers or suppliers or otherwise outside the ordinary course of business) or as security for any such Indebtedness or claims,

 

(i) deposits of cash made in the ordinary course of business to secure performance of operating leases,

 

(j) (i) non-cash loans and advances to employees, officers, and directors of a Borrower or any of its Subsidiaries for the purpose of purchasing Equity Interests in USA Truck so long as the proceeds of such loans are used in their entirety to purchase such Equity Interests in USA Truck, (ii) loans and advances to employees and officers of a Borrower or any of its Subsidiaries for any other purpose, (iii) loans and advances for driver education or training made in the ordinary course of business, and (iv) loans and advances in the ordinary course of business to any owner operator or similar individual performing services for a Borrower or any of its Subsidiaries to finance the purchase or lease of Revenue Equipment, so long as (x) until payment and performance in full of the Obligations, the Revenue Equipment purchased or leased is subject to a valid certificate of title which lists Agent as the first and sole lienholder and (y) such Borrower or its applicable Subsidiary has delivered to Agent the original executed promissory note evidencing the Indebtedness from such owner operator or similar individual in favor of such Borrower or such Subsidiary; provided, that the aggregate amount of loans and advances made in accordance with this clause (j) shall not exceed $5,000,000 at any one time outstanding,

 

(k) Permitted Acquisitions,

 

(l) Investments in the form of capital contributions and the acquisition of Equity Interests made by any Loan Party in any other Loan Party (other than capital contributions to or the acquisition of Equity Interests of USA Truck),

 

(m) Investments resulting from entering into (i) Bank Product Agreements, or (ii) agreements relative to Indebtedness that is permitted under clause (j) of the definition of Permitted Indebtedness,

 

(n) equity Investments by any Loan Party in any Subsidiary of such Loan Party which is required by law to maintain a minimum net capital requirement or as may be otherwise required by applicable law,

 

(o) Investments held by a Person acquired in a Permitted Acquisition to the extent that such Investments were not made in contemplation of or in connection with such Permitted Acquisition and were in existence on the date of such Permitted Acquisition,

 

(p) so long as no Event of Default has occurred and is continuing or would result therefrom, any other Investments in an aggregate amount not to exceed $250,000 during the term of the Agreement, and

 

(q) so long as (i) no Event of Default has occurred and is continuing or would result therefrom and (ii) both before and immediately after giving effect to any such Investment, (x) Borrowers shall have a Fixed Charge Coverage Ratio of at least 1.00 to 1.00 and (y) Borrowers shall have Excess Availability equal to or greater than 20.0% of the Maximum Revolver Amount, any other Investments in an aggregate amount not to exceed $5,000,000 during the term of the Agreement.

 

“Permitted Liens” means

 

(a) Liens granted to, or for the benefit of, Agent to secure the Obligations,

 

(b) Liens for unpaid taxes, assessments, or other governmental charges or levies that either (i) are not yet delinquent, or (ii) do not have priority over Agent’s Liens and the underlying taxes, assessments, or charges or levies are the subject of Permitted Protests,

 

(c) judgment Liens arising solely as a result of the existence of judgments, orders, or awards that do not constitute an Event of Default under Section 8.3 of the Agreement,

 

(d) Liens set forth on Schedule P-2 to the Agreement; provided, that to qualify as a Permitted Lien, any such Lien described on Schedule P-2 to the Agreement shall only secure the Indebtedness that it secures on the Closing Date and any Refinancing Indebtedness in respect thereof,

 

(e) the interests of lessors under operating leases and non-exclusive licensors under license agreements,

 

(f) purchase money Liens or the interests of lessors under Capital Leases to the extent that such Liens or interests secure Permitted Purchase Money Indebtedness and so long as (i) such Lien attaches only to the asset purchased or acquired and the proceeds thereof, and (ii) such Lien only secures the Indebtedness that was incurred to acquire the asset purchased or acquired or any Refinancing Indebtedness in respect thereof,

 

(g) Liens arising by operation of law in favor of warehousemen, landlords, carriers, mechanics, materialmen, laborers, or suppliers, incurred in the ordinary course of business and not in connection with the borrowing of money, and which Liens either (i) are for sums not yet delinquent, or (ii) are the subject of Permitted Protests,

 

(h) Liens on amounts deposited to secure any Borrower’s and its Subsidiaries’ obligations in connection with worker’s compensation or other unemployment insurance,

 

(i) Liens on amounts deposited to secure any Borrower’s and its Subsidiaries’ obligations in connection with the making or entering into of bids, tenders, or leases in the ordinary course of business and not in connection with the borrowing of money,

 

(j) Liens on amounts deposited to secure any Borrower’s and its Subsidiaries’ reimbursement obligations with respect to surety or appeal bonds obtained in the ordinary course of business,

 

(k) with respect to any Real Property, easements, rights of way, and zoning restrictions that do not materially interfere with or impair the use or operation thereof,

 

(l) non-exclusive licenses of patents, trademarks, copyrights, and other intellectual property rights in the ordinary course of business,

 

(m) Liens that are replacements of Permitted Liens to the extent that the original Indebtedness is the subject of permitted Refinancing Indebtedness and so long as the replacement Liens only encumber those assets that secured the original Indebtedness,

 

(n) rights of setoff or bankers’ liens upon deposits of funds in favor of banks or other depository institutions, solely to the extent incurred in connection with the maintenance of such Deposit Accounts in the ordinary course of business,

 

(o) Liens granted in the ordinary course of business on the unearned portion of insurance premiums securing the financing of insurance premiums to the extent the financing is permitted under the definition of Permitted Indebtedness,

 

(p) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods,

 

(q) Liens solely on any cash earnest money deposits made by a Borrower or any of its Subsidiaries in connection with any letter of intent or purchase agreement with respect to a Permitted Acquisition,

 

(r) Liens assumed by any Borrower or its Subsidiaries in connection with a Permitted Acquisition that secure Acquired Indebtedness, and

 

(s) other Liens which do not secure Indebtedness for borrowed money, Indebtedness of the type referred to in clauses (e), (f), (l) or (m) of the definition of “Permitted Indebtedness”, or letters of credit and as to which the aggregate amount of the obligations secured thereby does not exceed $250,000.

 

“Permitted Protest” means the right of any Borrower or any of its Subsidiaries to protest any Lien (other than any Lien that secures the Obligations), taxes (other than payroll taxes or taxes that are the subject of a United States federal tax lien), or rental payment, provided that (a) a reserve with respect to such obligation is established on such Borrower’s or its Subsidiaries’ books and records in such amount as is required under GAAP, (b) any such protest is instituted promptly and prosecuted diligently by such Borrower or its Subsidiary, as applicable, in good faith, and (c) Agent is satisfied that, while any such protest is pending, there will be no impairment of the enforceability, validity, or priority of any of Agent’s Liens.

 

“Permitted Purchase Money Indebtedness” means Indebtedness (other than the Obligations, but including, without limitation, Capitalized Lease Obligations) incurred after the Closing Date (a) to finance the acquisition by one or more Loan Parties of Revenue Equipment consisting of tractors or trailers in the ordinary course of business of the Loan Parties and (b) without duplication of the foregoing clause (a), to finance the acquisition, construction or improvement of any fixed or capital assets; provided that, in each case, such Indebtedness is incurred within forty-five (45) days before or after such purchase or acquisition or the completion of such construction or improvement, as applicable, and in the case of clause (b), such Indebtedness shall not exceed, in an aggregate principal amount outstanding at any one time, $1,000,000.

 

“Person” means natural persons, corporations, limited liability companies, limited partnerships, general partnerships, limited liability partnerships, joint ventures, trusts, land trusts, business trusts, or other organizations, irrespective of whether they are legal entities, and governments and agencies and political subdivisions thereof.

 

“Platform” has the meaning specified therefor in Section 17.9(c) of the Agreement.

 

“PNC” means PNC Bank, National Association, a national banking association.

 

“Post-Increase Revolver Lenders” has the meaning specified therefor in Section 2.14 of the Agreement.

 

“Pre-Increase Revolver Lenders” has the meaning specified therefor in Section 2.14 of the Agreement.

 

“Projections” means Borrowers’ forecasted (a) balance sheets, (b) profit and loss statements, and (c) cash flow statements, all prepared on a basis consistent with Borrowers’ historical financial statements, together with appropriate supporting details and a statement of underlying assumptions.

 

“Pro Rata Share” means, as of any date of determination:

 

(a)  with respect to a Lender’s obligation to make all or a portion of the Revolving Loans, with respect to such Lender’s right to receive payments of interest, fees, and principal with respect to the Revolving Loans, and with respect to all other computations and other matters related to the Revolver Commitments or the Revolving Loans, the percentage obtained by dividing (i) the Revolving Loan Exposure of such Lender by (ii) the aggregate Revolving Loan Exposure of all Lenders,

 

(b)  with respect to a Lender’s obligation to participate in the Letters of Credit, with respect to such Lender’s obligation to reimburse Issuing Bank, and with respect to such Lender’s right to receive payments of Letter of Credit Fees, and with respect to all other computations and other matters related to the Letters of Credit, the percentage obtained by dividing (i) the Revolving Loan Exposure of such Lender by (ii) the aggregate Revolving Loan Exposure of all Lenders; provided, that if all of the Revolving Loans have been repaid in full and all Revolver Commitments have been terminated, but Letters of Credit remain outstanding, Pro Rata Share under this clause shall be determined as if the Revolver Commitments had not been terminated and based upon the Revolver Commitments as they existed immediately prior to their termination, and

 

(c)  with respect to all other matters and for all other matters as to a particular Lender (including the indemnification obligations arising under Section 15.7 of the Agreement), the percentage obtained by dividing (i) the Revolving Loan Exposure of such Lender by (ii) the aggregate Revolving Loan Exposure of all Lenders, in any such case as the applicable percentage may be adjusted by assignments permitted pursuant to Section 13.1; provided, that if all of the Loans have been repaid in full, all Letters of Credit have been made the subject of Letter of Credit Collateralization, and all Commitments have been terminated, Pro Rata Share under this clause shall be determined as if the Revolving Loan Exposures had not been repaid, collateralized, or terminated and shall be based upon the Revolving Loan Exposures as they existed immediately prior to their repayment, collateralization, or termination.

 

“Protective Advances” has the meaning specified therefor in Section 2.3(d)(i) of the Agreement.

 

“Public Lender” has the meaning specified therefor in Section 17.9(c) of the Agreement.

 

“Qualified Cash” means, as of any date of determination, the amount of unrestricted cash and Cash Equivalents of Borrowers and their Subsidiaries that is in Deposit Accounts or in Securities Accounts, or any combination thereof, and which such Deposit Account or Securities Account is the subject of a Control Agreement and is maintained by a branch office of the bank or securities intermediary located within the United States.

 

“Qualified Equity Interest” means and refers to any Equity Interests issued by USA Truck (and not by one or more of its Subsidiaries) that is not a Disqualified Equity Interest.

 

“Real Property” means any estates or interests in real property now owned or hereafter acquired by any Borrower or one of its Subsidiaries and the improvements thereto.

 

“Receivable Reserves” means, as of any date of determination, those reserves that Agent deems necessary or appropriate, in its Permitted Discretion and subject to Section 2.1(c), to establish and maintain (including reserves for rebates, discounts, warranty claims, and returns) with respect to the Eligible Accounts, the Eligible Unbilled Accounts or the Maximum Revolver Amount.

 

“Record” means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

 

“Refinancing Indebtedness” means refinancings, renewals, or extensions of Indebtedness so long as:

 

(a) such refinancings, renewals, or extensions do not result in an increase in the principal amount of the Indebtedness so refinanced, renewed, or extended, other than (i) by the amount of premiums paid thereon and the fees and expenses incurred in connection therewith, (ii) by the amount of unfunded commitments with respect thereto, or (iii) (x) to the extent such Indebtedness constitutes Permitted Purchase Money Indebtedness under clause (a) thereof, to an amount not to exceed the fair market value of the assets securing such Permitted Purchase Money Indebtedness and (y) to the extent such Indebtedness constitutes Permitted Purchase Money Indebtedness under clause (b) thereof, to an amount not to exceed the lesser of (A) the amount set forth in the proviso in the definition of Permitted Purchase Money Indebtedness and (B) the fair market value of the assets securing such Permitted Purchase Money Indebtedness,

 

(b) such refinancings, renewals, or extensions do not result in a shortening of the average weighted maturity (measured as of the refinancing, renewal, or extension) of the Indebtedness so refinanced, renewed, or extended, nor are they on terms or conditions that, taken as a whole, are or could reasonably be expected to be materially adverse to the interests of the Lenders,

 

(c) if the Indebtedness that is refinanced, renewed, or extended was subordinated in right of payment to the Obligations, then the terms and conditions of the refinancing, renewal, or extension must include subordination terms and conditions that are at least as favorable to the Lender Group as those that were applicable to the refinanced, renewed, or extended Indebtedness, and

 

(d) the Indebtedness that is refinanced, renewed, or extended is not recourse to any Person that is liable on account of the Obligations other than those Persons which were obligated with respect to the Indebtedness that was refinanced, renewed, or extended.

 

“Register” has the meaning set forth in Section 13.1(h) of the Agreement.

 

“Registered Loan” has the meaning set forth in Section 13.1(h) of the Agreement.

 

“Related Fund” means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course and that is administered, advised or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers, advises or manages a Lender.

 

“Remedial Action” means all actions taken to (a) clean up, remove, remediate, contain, treat, monitor, assess, evaluate, or in any way address Hazardous Materials in the indoor or outdoor environment, (b) prevent or minimize a release or threatened release of Hazardous Materials so they do not migrate or endanger or threaten to endanger public health or welfare or the indoor or outdoor environment, (c) restore or reclaim natural resources or the environment, (d) perform any pre-remedial studies, investigations, or post-remedial operation and maintenance activities, or (e) conduct any other actions with respect to Hazardous Materials required by Environmental Laws.

 

“Replacement Lender” has the meaning specified therefor in Section 2.13(b) of the Agreement.

 

“Report” has the meaning specified therefor in Section 15.16 of the Agreement.

 

“Required Availability” means that the sum of (a) Excess Availability, plus (b) Qualified Cash is equal to or greater than $35,000,000.

 

“Required Lenders” means, at any time, Lenders having or holding more than 50% of the aggregate Revolving Loan Exposure of all Lenders; provided, that (i) the Revolving Loan Exposure of any Defaulting Lender shall be disregarded in the determination of the Required Lenders and (ii) at any time there are 2 or more Lenders, “Required Lenders” must include at least 2 Lenders (who are not Affiliates of one another).

 

“Reserves” means, as of any date of determination, those reserves (other than Receivable Reserves and Bank Product Reserves) that Agent deems necessary or appropriate, in its Permitted Discretion and subject to Section 2.1(c), to establish and maintain (including Landlord Reserves and reserves with respect to (a) sums that any Borrower or its Subsidiaries are required to pay under any Section of the Agreement or any other Loan Document (such as 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 (b) amounts owing by any Borrower or its Subsidiaries to any Person to the extent secured by a Lien on, or trust over, any of the Collateral (other than a Permitted Lien), which Lien or trust, in the Permitted Discretion of Agent likely would have a priority superior to the Agent’s Liens (such as Liens or trusts in favor of landlords, warehousemen, carriers, mechanics, materialmen, laborers, or suppliers, or Liens or trusts for ad valorem, excise, sales, or other taxes where given priority under applicable law) in and to such item of the Collateral) with respect to the Borrowing Base or the Maximum Revolver Amount.

 

“Restricted Payment” means to (a) declare or pay any dividend or make any other payment or distribution, directly or indirectly, on account of Equity Interests issued by any Loan Party (including any payment in connection with any merger or consolidation involving such Loan Party) or to the direct or indirect holders of Equity Interests issued by any Loan Party in their capacity as such (other than dividends or distributions payable in Qualified Equity Interests issued by such Loan Party), (b) purchase, redeem, make any sinking fund or similar payment, or otherwise acquire or retire for value (including in connection with any merger or consolidation involving any Loan Party) any Equity Interests issued by any Loan Party, (c) make any payment to retire, or to obtain the surrender of, any outstanding warrants, options, or other rights to acquire Equity Interests of any Loan Party now or hereafter outstanding, and (d) make, or cause or suffer to permit any Borrower or any of its Subsidiaries to make, any payment or prepayment of principal of, premium, if any, or interest on, or redemption, purchase, retirement, defeasance (including in-substance or legal defeasance), sinking fund or similar payment with respect to, any Subordinated Indebtedness.

 

“Revenue Equipment” means any Equipment that (a) consists of trucks, tractors, trailers and/or other vehicles subject to certificates of title and (b) is owned or operated by any Loan Party or leased to produce revenue for the owner of such Equipment.

 

“Revolver Commitment” means, with respect to each Revolving Lender, its Revolver Commitment, and, with respect to all Revolving Lenders, their Revolver Commitments, in each case as such Dollar amounts are set forth beside such Revolving Lender’s name under the applicable heading on Schedule C-1 to the Agreement or in the Assignment and Acceptance pursuant to which such Revolving Lender became a Revolving Lender under the Agreement, as such amounts may be reduced or increased from time to time pursuant to assignments made in accordance with the provisions of Section 13.1 of the Agreement.

 

“Revolver Usage” means, as of any date of determination, the sum of (a) the amount of outstanding Revolving Loans (inclusive of Swing Loans and Protective Advances), plus (b) the amount of the Letter of Credit Usage.

 

“Revolving Lender” means a Lender that has a Revolving Loan Commitment or that has an outstanding Revolving Loan.

 

“Revolving Loan Exposure” means, with respect to any Revolving Lender, as of any date of determination (a) prior to the termination of the Revolver Commitments, the amount of such Lender’s Revolver Commitment, and (b) after the termination of the Revolver Commitments, the aggregate outstanding principal amount of the Revolving Loans of such Lender.

 

“Revolving Loans” has the meaning specified therefor in Section 2.1(a) of the Agreement.

 

“Sanctioned Entity” means (a) a country or a government of a country, (b) an agency of the government of a country, (c) an organization directly or indirectly controlled by a country or its government, (d) a Person resident in or determined to be resident in a country, in each case, that is subject to a country sanctions program administered and enforced by OFAC.

 

“Sanctioned Person” means a person named on the list of Specially Designated Nationals maintained by OFAC.

 

“S&P” has the meaning specified therefor in the definition of Cash Equivalents.

 

“SEC” means the United States Securities and Exchange Commission and any successor thereto.

 

“Securities Account” means a securities account (as that term is defined in the Code).

 

“Securities Act” means the Securities Act of 1933, as amended from time to time, and any successor statute.

 

“Settlement” has the meaning specified therefor in Section 2.3(e)(i) of the Agreement.

 

“Settlement Date” has the meaning specified therefor in Section 2.3(e)(i) of the Agreement.

 

“Solvent” means, with respect to any Person as of any date of determination, that (a) at fair valuations, the sum of such Person’s debts (including contingent liabilities) is less than all of such Person’s assets, (b) such Person is not engaged or about to engage in a business or transaction for which the remaining assets of such Person are unreasonably small in relation to the business or transaction or for which the property remaining with such Person is an unreasonably small capital, (c) such Person has not incurred and does not intend to incur, or reasonably believe that it will incur, debts beyond its ability to pay such debts as they become due (whether at maturity or otherwise), and (d) such Person is “solvent” or not “insolvent”, as applicable within the meaning given those terms and similar terms under applicable laws relating to fraudulent transfers and conveyances.  For purposes of this definition, the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability (irrespective of whether such contingent liabilities meet the criteria for accrual under Statement of Financial Accounting Standard No. 5).

 

“Standard Letter of Credit Practice” means, for Issuing Bank, any domestic or foreign law or letter of credit practices applicable in the city in which Issuing Bank issued the applicable Letter of Credit or, for its branch or correspondent, such laws and practices applicable in the city in which it has advised, confirmed or negotiated such Letter of Credit, as the case may be, in each case, (a) which letter of credit practices are of banks that regularly issue letters of credit in the particular city, and (b) which laws or letter of credit practices are required or permitted under ISP or UCP, as chosen in the applicable Letter of Credit.

 

“Subject Account” has the meaning specified therefor in Schedule 5.16 to the Agreement.

 

“Subordinated Indebtedness” means any unsecured Indebtedness of any Borrower or its Subsidiaries incurred from time to time that is subordinated in right of payment to the Obligations and (a) that is only guaranteed by the Guarantors, (b) that is not subject to scheduled amortization, redemption, sinking fund or similar payment and does not have a final maturity, in each case, on or before the date that is six months after the Maturity Date, (c) that does not include any financial covenants or any covenant or agreement that is more restrictive or onerous on any Loan Party in any material respect than any comparable covenant in the Agreement and is otherwise on terms and conditions reasonably acceptable to Agent, (d) shall be limited to cross-payment default and cross-acceleration to designated “senior debt” (including the Obligations”), and (e) the terms and conditions of the subordination are reasonably acceptable to Agent.

 

“Subsidiary” of a Person means a corporation, partnership, limited liability company, or other entity in which that Person directly or indirectly owns or controls the Equity Interests having ordinary voting power to elect a majority of the Board of Directors of such corporation, partnership, limited liability company, or other entity.

 

“Supermajority Lenders” means, at any time, Lenders having or holding more than 66 2/3% of the aggregate Revolving Loan Exposure of all Lenders; provided, that (i) the Revolving Loan Exposure of any Defaulting Lender shall be disregarded in the determination of the Supermajority Lenders and (ii) at any time there are 2 or more Lenders, “Supermajority Lenders” must include at least 2 Lenders (who are not Affiliates of one another).

 

“Suppressed Availability” means, as of any date of determination, the amount by which the Borrowing Base exceeds the Maximum Revolver Amount.

 

“Suppressed Availability Trigger Date” means, from and after the Closing Date, the first date on which Suppressed Availability is less than $30,000,000.

 

“Swing Lender” means Wells Fargo or any other Lender that, at the request of Administrative Borrower and with the consent of Agent agrees, in such Lender’s sole discretion, to become the Swing Lender under Section 2.3(b) of the Agreement.

 

“Swing Loan” has the meaning specified therefor in Section 2.3(b) of the Agreement.

 

“Swing Loan Exposure” means, as of any date of determination with respect to any Lender, such Lender’s Pro Rata Share of the Swing Loans on such date.

 

“Syndication Agent” has the meaning set forth in the preamble to the Agreement.

 

“Taxes” means any taxes, levies, imposts, duties, fees, assessments or other charges of whatever nature now or hereafter imposed by any jurisdiction or by any political subdivision or taxing authority thereof or therein, and all interest, penalties or similar liabilities with respect thereto.

 

“Tax Lender” has the meaning specified therefor in Section 14.2(a) of the Agreement.

 

“Titling Agent” means HCH Transportation Advisors, Inc. and any successor thereto.

 

“Total Capital Expenditures” means, with respect to any Person for any period, the amount of all expenditures by such Person and its Subsidiaries during such period that are capital expenditures as determined in accordance with GAAP, but excluding, without duplication (a) expenditures made during such period in connection with the replacement, substitution, or restoration of assets or properties pursuant to Section 2.4(e)(ii) of the Agreement, (b) with respect to the purchase price of assets that are purchased substantially contemporaneously with the trade-in of existing assets during such period, the amount of the trade-in allowance granted by the seller of such assets for the assets being traded in at such time, (c) expenditures made during such period to consummate one or more Permitted Acquisitions, and (d) expenditures during such period that, pursuant to a written agreement, are reimbursed by a third Person (excluding any Borrower or any of its Affiliates).

 

“Trademark Security Agreement” has the meaning specified therefor in the Guaranty and Security Agreement.

 

“UCP” means, with respect to any Letter of Credit, the Uniform Customs and Practice for Documentary Credits 2007 Revision, International Chamber of Commerce Publication No. 600 and any subsequent revision thereof adopted by the International Chamber of Commerce on the date such Letter of Credit is issued.

 

“Unbilled Account” means an Account with respect to which (a) the goods giving rise to such Account have been shipped but not billed to the Account Debtor, or (b) the services giving rise to such Account have been performed for but not billed to the Account Debtor.

 

“United States” means the United States of America.

 

“Unused Line Fee” has the meaning specified therefor in Section 2.10(b) of the Agreement.

 

“Voidable Transfer” has the meaning specified therefor in Section 17.8 of the Agreement.

 

“Wells Fargo” means Wells Fargo Bank, National Association, a national banking association.

 

 

Schedule 1.1

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Schedule 3.1

 

The obligation of each Lender to make its initial extension of credit provided for in the Agreement is subject to the fulfillment, to the satisfaction of each Lender (the making of such initial extension of credit by any Lender being conclusively deemed to be its satisfaction or waiver of the following), of each of the following conditions precedent:

 

(a) the Closing Date shall occur on or before August 31, 2012;

 

(b) Agent shall have received a letter duly executed by each Loan Party authorizing Agent to file appropriate financing statements in such office or offices as may be necessary or, in the opinion of Agent, desirable to perfect the security interests to be created by the Loan Documents;

 

(c) Agent shall have received evidence that appropriate financing statements have been duly filed in such office or offices as may be necessary or, in the opinion of Agent, desirable to perfect the Agent’s Liens in and to the Collateral;

 

(d) Agent shall have received each of the following documents, in form and substance satisfactory to Agent, duly executed and delivered by Loan Parties, and each such document shall be in full force and effect:

 

(i) the Agreement,

 

(ii) the Control Agreements,

 

(iii) the Controlled Account Agreements (as defined in the Guaranty and Security Agreement),

 

(iv) the Fee Letter,

 

(v) the Flow of Funds Agreement,

 

(vi) the Guaranty and Security Agreement,

 

(vii) the Intercompany Subordination Agreement,

 

(viii) a Perfection Certificate,

 

(ix) the Trademark Security Agreement, and

 

(x) a letter, in form and substance satisfactory to Agent, from Branch Banking and Trust Company, in its capacity as administrative agent under the Existing Credit Facility (“Existing Agent”) to Agent respecting the amount necessary to repay in full all of the obligations of Borrowers and their Subsidiaries owing under the Existing Credit Facility and obtain a release of all of the Liens existing in favor of Existing Agent in and to the assets of Borrowers and their Subsidiaries, together with termination statements and other documentation evidencing the termination by Existing Agent of its Liens in and to the properties and assets of Borrowers and their Subsidiaries, and respecting the issuance of backstop letters of credit to support the letters of credit outstanding under the Existing Credit Facility;

 

(e) Agent shall have received a certificate from the Secretary of each Loan Party (i) attesting to the resolutions of such Loan Party’s board of directors authorizing its execution, delivery, and performance of the Loan Documents to which it is a party, (ii) authorizing specific officers of such Loan Party to execute the same, and (iii) attesting to the incumbency and signatures of such specific officers of such Loan Party;

 

(f) Agent shall have received copies of each Loan Party’s Governing Documents, as amended, modified, or supplemented to the Closing Date, certified by the Secretary of such Loan Party;

 

(g) Agent shall have received a certificate of status with respect to each Loan Party, dated within 10 days of the Closing Date, such certificate to be issued by the appropriate officer of the jurisdiction of organization of such Loan Party, which certificate shall indicate that such Loan Party is in good standing in such jurisdiction;

 

(h) Agent shall have received certificates of status with respect to each Loan Party, each dated within 30 days of the Closing Date, such certificates to be issued by the appropriate officer of the jurisdictions (other than the jurisdiction of organization of such Loan Party) in which its failure to be duly qualified or licensed would constitute a Material Adverse Effect, which certificates shall indicate that such Loan Party is in good standing in such jurisdictions;

 

(i) Agent shall have received a certificate of insurance, together with the endorsements thereto, as are required by Section 5.6 of the Agreement, the form and substance of which shall be satisfactory to Agent;

 

(j) Agent shall have received Collateral Access Agreements with respect to the locations set forth on Schedule 4.24 (or established a Landlord Reserve in its Permitted Discretion in accordance with Section 2.1(c) of the Agreement);

 

(k) Agent shall have received an opinion of the Loan Parties’ counsel in form and substance satisfactory to Agent;

 

(l) Borrowers shall have the Required Availability after giving effect to the initial extensions of credit under the Agreement and the payment of all fees and expenses required to be paid by Borrowers on the Closing Date under the Agreement or the other Loan Documents;

 

(m) Agent shall have completed its business, legal, and collateral due diligence, including (i) a collateral audit and review of Borrowers’ and their Subsidiaries’ books and records and verification of Borrowers’ representations and warranties to Lender Group and (ii) a review of Borrowers’ and their Subsidiaries’ material agreements, in each case, the results of which shall be satisfactory to Agent;

 

(n) Agent shall have completed (i) Patriot Act searches, OFAC/PEP searches and customary individual background checks for each Loan Party, and (ii) OFAC/PEP searches and customary individual background searches for each Loan Party’s senior management and key principals,  the results of which shall be satisfactory to Agent;

 

(o) Agent shall have received an updated desktop appraisal of Borrowers’ and their Subsidiaries’ Revenue Equipment performed by Taylor & Martin, Inc., which appraisal shall include an appraisal of the Net Liquidation Percentage applicable to Borrowers’ and their Subsidiaries’ Revenue Equipment and the results of which appraisal shall be reasonably satisfactory to Agent;

 

(p) Agent shall have received a set of Projections of Loan Parties for the 3–year period following the Closing Date (on a year by year basis, and for the 1–year period following the Closing Date, on a month by month basis), in form and substance (including as to scope and underlying assumptions) satisfactory to Agent;

 

(q) Borrowers shall have paid, or shall have arranged to have paid from the initial extensions of credit under the Agreement, all Lender Group Expenses incurred in connection with the transactions evidenced by the Agreement and the other Loan Documents;

 

(r) Prior to or substantially concurrent with the effectiveness of the Closing Date, the Titling Agent shall have received an original certificate of title, as applicable, for each item of Revenue Equipment consisting of trailers and/or other vehicles subject to certificates of title intended to constitute Collateral as of the Closing Date, together with all other documents or instruments necessary to permit the Titling Agent to cause Agent’s Liens to be noted on any such certificate or with the appropriate state offices and to have Existing Agent’s Liens removed therefrom;

 

(s) each Borrower and each of its Subsidiaries shall have received all licenses, approvals or evidence of other actions required by any Governmental Authority in connection with the execution and delivery by each Borrower or its Subsidiaries of the Loan Documents or with the consummation of the transactions contemplated thereby; and

 

(t) all other documents and legal matters in connection with the transactions contemplated by the Agreement shall have been delivered, executed, or recorded and shall be in form and substance satisfactory to Agent.

 

Schedule 3.1

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Schedule 4.1(b)

Capitalization of Borrowers

None.

 

 

  

  

  

Schedule 4.1(c)

Capitalization of Borrowers’ Subsidiaries

	
Subsidiary of

USA Truck

	
Number of

authorized shares

	
Number of outstanding shares owned by

USA Truck

	
Percentage (%) of outstanding shares owned by USA Truck

	
Common

	
Preferred

	
Common

	
Preferred

	
Common

	
Preferred

	
IFS

	
1,000

	
n/a

	
1,000

	
n/a

	
100%

	
n/a

  

  

  

Schedule 4.1(d)

Subscriptions, Options, Warrants, Calls

None.

 

  

  

  

Schedule 4.6(b)

Litigation

None.

  

  

  

Schedule 4.11

Environmental Matters

None.

 

  

  

  

Schedule 4.14

Indebtedness

Any and all Indebtedness evidenced by the following:

 

	
1.  

	
Capital Leases for Revenue Equipment:

	
Lease #

	
Lessee

	
Lessor

	
Outstanding Balance

	
301

	
USA Truck, Inc.

	
The Fifth Third Leasing Company

	
           $        2,760,252

	
103

	
USA Truck, Inc.

	
Regions Equipment Finance, Ltd.

	
                     2,742,415

	
504

	
USA Truck, Inc.

	
Banc of America Leasing & Capital, LLC

	
                     2,889,477

	
506

	
USA Truck, Inc.

	
Banc of America Leasing & Capital, LLC

	
                     2,230,656

	
001

	
USA Truck, Inc.

	
Daimler Trust

	
                     3,189,594

	
505

	
USA Truck, Inc.

	
Banc of America Leasing & Capital, LLC

	
                     1,605,626

	
410

	
USA Truck, Inc.

	
U.S. Bancorp Equipment Finance, Inc.

	
                     1,716,614

	
411

	
USA Truck, Inc.

	
U.S. Bancorp Equipment Finance, Inc.

	
                     2,488,670

	
006

	
USA Truck, Inc.

	
Daimler Trust

	
                     1,921,821

	
302

	
USA Truck, Inc.

	
The Fifth Third Leasing Company

	
                     2,449,018

	
002

	
USA Truck, Inc.

	
Daimler Trust

	
                     3,486,103

	
412

	
USA Truck, Inc.

	
U.S. Bancorp Equipment Finance, Inc.

	
                     2,216,036

	
003

	
USA Truck, Inc.

	
Daimler Trust

	
                     2,247,003

	
413

	
USA Truck, Inc.

	
U.S. Bancorp Equipment Finance, Inc.

	
                        912,068

	
004

	
USA Truck, Inc.

	
Daimler Trust

	
                     1,856,583

	
005

	
USA Truck, Inc.

	
Daimler Trust

	
                     1,452,392

	
007

	
USA Truck, Inc.

	
Daimler Trust

	
                     6,431,616

	
008

	
USA Truck, Inc.

	
Daimler Trust

	
                     1,547,047

	
009

	
USA Truck, Inc.

	
Daimler Trust

	
                     2,088,969

	
010

	
USA Truck, Inc.

	
Daimler Trust

	
                     1,986,933

	
011

	
USA Truck, Inc.

	
Daimler Trust

	
                     2,812,750

	
012

	
USA Truck, Inc.

	
Daimler Trust

	
                     1,699,020

	  	  	  	
            $     52,730,665

	
2.  

	
Capital Lease for information technology equipment:

	
Lessee

	
Lessor

	
Outstanding Balance

	
USA Truck, Inc.

	
EMC

	
           $       233, 457

	
3.  

	
Note payable for insurance:

	
Borrower

	
Lender

	
Outstanding Balance

	
USA Truck, Inc.

	
Premium Assignment Corporation

	
         $        153,277

	
4.  

	
The following letters of credit, copies of which the Administrative Borrower and Agent acknowledge and agree have been delivered to Agent (each of the following letters of credit is subject to automatic one year renewals and is currently in effect notwithstanding its stated expiration date):

	  	
Outstanding

	  
	
Beneficiary Name

	
Amount

	
Type of Coverage

	
 

	
 

	
 

	
Bodily Injury and/or property damage claimants

	
 $  1,000,000.00

	
Bodily Injury and/or Property Damage Liability

	
Cargo Liability claimants

	
          10,000.00

	
Qualified Cargo Liability

	
Arkansas Workers' Compensation Commission

	
        200,000.00

	
Arkansas Self-Insured

	
Louisiana Department of Labor, Office of Workers' Compensation Administration

	
        100,000.00

	
Workers' Compensation

	
Ace American Insurance Co.

	
        903,000.00

	
Ace requirement on self-insurance layer

  

  

  

Schedule 4.19

Employee and Labor Matters

None.

  

  

  

Schedule 4.24

Locations of Equipment

	
State

	
County

	
City

	
Street Address

	
Arizona

	
Maricopa

	
Peoria

	
9132 West Cactus

	
Arizona

 

	
Maricopa

	
Phoenix

	
4030 W. Lower Buckeye Rd

	
South 39th Avenue

	
Arkansas

	
Washington

	
Springdale

	
5100 S. Thompson St.

	
Arkansas

	
Crittenden

	
West Memphis

	
2600 I-55 North Service Road West

	
Arkansas

	
Crawford

	
Van Buren

	
3108 Industrial Park Road

	
3010 Industrial Park Road

	
3006 Industrial Park Road

	
S. 28th  Street

	
California

	
Placer

	
Roseville

	
3001 Lava Ridge Court

	
California

	
San Diego

	
San Diego

	
9731 Siempre Viva Road

	
Florida

	
Pinellas

	
Clearwater

	
26133 U.S. Highway 19 North

	
Georgia

	
Clayton

	
Atlanta

	
317 Cash Memorial Drive

	
Georgia

	
DeKalb

	
College Park

	
47 Perimeter Center East

	
Illinois

	
Cook

	
South Holland

	
141 E. 168th Street

	
Illinois

	
Madison

	
Godfrey

	
5729 Godfrey Road

	
Illinois

	
Madison

	
Madison

	
1000 Access Blvd.

	
Illinois

	
DuPage

	
Naperville

	
700 Diehl Road

	
Indiana

	
Porter

	
Burns Harbor

	
321 Tech Drive

	
Ohio

	
Montgomery

	
Vandalia

	
11777 N. Dixie Dr.

	
Pennsylvania

	
Cumberland

	
Carlisle

	
1220 Newville Rd.

	
South Carolina

	
Spartanburg

	
Spartanburg

	
289 Access Road

	
291 Access Road

	
0 Access Road (identified as W OF ENGLAND PLACE S OF 176 PB 162-425 in the Spartanburg County Assessor’s records)

	
0 Access Road, Spartanburg, South Carolina (identified as S OF U S 176 & E OF I-85 BYPASS PB 146-874 PB 162-425 in the Spartanburg County Assessor’s records)

	
Texas

	
Denton

	
Denton

	
2401 Worthington Drive

	
Texas

	
Webb

	
Laredo

	
4202 Pan American Boulevard

	
4206 Pan American Boulevard

	
Texas

	
Collin

	
Plano

	
6210 Campbell Road

	
Utah

	
Salt Lake

	
Salt Lake City

	
2225 East Murray-Holladay Road

	
Virginia

	
Roanoke

	
Roanoke

	
3727 Tom Andrews Road, N.W.

	
Washington

	
King

	
Federal Way

	
930 South 336th St.

  

  

  

Schedule 5.1

 

The Administrative Borrower shall deliver to Agent (with copies for each Lender) each of the financial statements, reports, or other items set forth below at the following times in form satisfactory to Agent:

	
 

as soon as available, but in any event within 30 days (45 days in the case of a month that is the end of one of Borrowers’ fiscal quarters) after the end of each month during each of Borrowers’ fiscal years,

 

	
 

(a) an unaudited consolidated balance sheet, income statement, and statement of cash flow covering Borrowers’ and their Subsidiaries’ operations as of the end of and for such period and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, together with (in the case of each quarter end report) a corresponding discussion and analysis of results from management and a statement of shareholder's equity, and

 

(b) a Compliance Certificate along with the underlying calculations (which shall contain, inter alia, a certification regarding any additions or deletions of Revenue Equipment constituting Collateral since the last monthly Compliance Certificate and shall include, to the extent of any such changes, clean and marked versions of Schedule 12 to the Guaranty and Security Agreement reflecting such additions and/or deletions).

 

	
 

as soon as available, but in any event within 90 days after the end of each of Borrowers’ fiscal years,

 

	
 

(c) consolidated financial statements of Borrowers and their Subsidiaries as of the end of and for each such fiscal year, audited by independent certified public accountants reasonably acceptable to Agent and certified, without any qualifications (including any (A) “going concern” or like qualification or exception, (B) qualification or exception as to the scope of such audit, or (C) qualification which relates to the treatment or classification of any item and which, as a condition to the removal of such qualification, would require an adjustment to such item, the effect of which would be to cause any noncompliance with the provisions of Section 7 of the Agreement), by such accountants to have been prepared in accordance with GAAP (such audited financial statements to include a balance sheet, income statement, statement of cash flow, and statement of shareholder’s equity, and, if prepared, such accountants’ letter to management), and

 

(d) a Compliance Certificate along with the underlying calculations.

 

	
 

as soon as available, but in any event prior to the start of each of Borrowers’ fiscal years,

	
 

(e) copies of Borrowers’ Projections, in form and substance (including as to scope and underlying assumptions) satisfactory to Agent, in its Permitted Discretion, for the forthcoming 3 years, year by year, and for the forthcoming fiscal year, month by month, certified by the chief financial officer of Administrative Borrower as being such officer’s good faith estimate of the financial performance of Borrowers during the period covered thereby.

 

	
 

if and when filed by any Borrower,

	
 

(f) Form 10-Q quarterly reports, Form 10-K annual reports, and Form 8-K current reports filed with the SEC,

 

(g) any other filings made by a Borrower with the SEC, and

 

(h) any other material information that is provided by a Borrower to its shareholders generally.

 

	
 

promptly, but in any event within 5 Business Days after any Borrower has knowledge of any event or condition that constitutes a Default or an Event of Default,

 

	
 

(i) notice of such event or condition and a statement of the curative action that such Borrower proposes to take with respect thereto.

 

	
 

promptly after the commencement thereof, but in any event within 5 Business Days after the service of process with respect thereto on any Borrower or any of its Subsidiaries,

 

	
 

(j) notice of all actions, suits, or proceedings brought by or against such Borrower or such Subsidiaries before any Governmental Authority which reasonably could be expected to have a Material Adverse Effect.

 

	
 

upon the request of Agent,

 

	
 

(k) any other information reasonably requested relating to the financial condition of Borrowers or their Subsidiaries.

 

Notwithstanding anything herein to the contrary, any documents required to be furnished to the Agent and each Lender pursuant to clauses (f) and (g) of this Schedule 5.1, may be furnished to the Agent and each Lender electronically, and if so furnished, shall be deemed to have been furnished on the date (i) on which the Administrative Borrower posts, or causes to be posted, such documents, or provides a link thereto, on the Administrative Borrower’s website on the Internet, or (ii) on which such documents are posted on the Administrative Borrower’s behalf on IntraLinks®, SyndTrak, or another Internet or intranet website, if any, to which the Agent and each Lender have access (whether a commercial, third-party website or whether sponsored by the Agent); provided, that the Administrative Borrower shall notify the Agent and each Lender (by facsimile or electronic mail) of the posting of any such documents.

Schedule 5.1

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Schedule 5.2

 

The Administrative Borrower shall provide Agent (and if so requested by Agent, with copies for each Lender) with each of the documents set forth below at the following times in form satisfactory to Agent:

	
Monthly (no later than the 10th day after the end of each month, unless such 10th day is not a Business Day and then no later than the next succeeding Business Day) or, during an Enhanced Reporting Period, (x) weekly (no later than Tuesday of each week for the prior week, unless such Tuesday is not a Business Day and then no later than the next succeeding Business Day) or (y) more frequently as requested in writing to the Administrative Borrower by Agent or Required Lenders

	
(a) a summary aging of each Borrower’s Unbilled Accounts (delivered electronically in an acceptable format, if Borrowers have implemented electronic reporting),

(b) a detailed aging, by total, of each Borrower’s Accounts, together with a reconciliation and supporting documentation for any reconciling items noted (delivered electronically in an acceptable format, if Borrowers have implemented electronic reporting),

(c) a detailed calculation of those Accounts that are not eligible for the Borrowing Base, if Borrowers have not implemented electronic reporting,

(d) a detailed Revenue Equipment system/perpetual report together with a reconciliation to Borrowers’ general ledger accounts (delivered electronically in an acceptable format, if Borrowers have implemented electronic reporting),

(e) a detailed calculation of Revenue Equipment categories that are not eligible for the Borrowing Base, if Borrowers have not implemented electronic reporting,

(f) a summary aging, by vendor, of each Borrower’s and its Subsidiaries’ accounts payable and any book overdraft (delivered electronically in an acceptable format, if Borrowers have implemented electronic reporting) and an aging, by vendor, of any held checks,

(g) a detailed report regarding each Borrower’s and its Subsidiaries’ cash and Cash Equivalents, including an indication of which amounts constitute Qualified Cash,

(h) a general ledger trial balance for each Borrower (which shall include all accrued expenses) for such period,

(i) a SkyBitz report showing the location of each Borrower’s and its Subsidiaries’ Revenue Equipment constituting Collateral, and

(j) a monthly Account roll-forward, in a format acceptable to Agent in its discretion, tied to the beginning and ending account receivable balances of Borrowers’ general ledger.

	
Monthly (no later than the 12th day after the end of each month, unless such 12th day is not a Business Day and then no later than the next succeeding Business Day) or, during an Enhanced Reporting Period, (x) weekly (no later than Thursday of each week for the prior week, unless such Thursday is not a Business Day and then no later than the next succeeding Business Day) or (y) more frequently as requested in writing to the Administrative Borrower by Agent or Required Lenders

	
(k) an executed Borrowing Base Certificate, and

(l) to the extent applicable, (i) copies of invoices for all Eligible Revenue Equipment recently purchased by the Borrowers which are to be included into the Borrowing Base for the first time and (ii) copies of all vehicle title applications corresponding to such Eligible Revenue Equipment which have been filed with the applicable titling authority to note Agent as the first and sole lienholder thereon with proof of payment of all applicable filing fees.

	
Monthly within 30 days (45 days in the case of a month that is the end of one of Borrowers’ fiscal quarters) after the end of each month

	
(m) a reconciliation of Accounts and trade accounts payable of each Borrower’s general ledger accounts to its monthly financial statements including any book reserves related to each category, and

(n) if applicable, any amendments to Schedule 4.24 to reflect new locations of Equipment pursuant to Section 5.14 of the Agreement.

	
 

Quarterly

	
 

(o) a Perfection Certificate or a supplement to the Perfection Certificate.

	
 

Annually within 60 days after the end of each fiscal year

	
 

(p) a detailed list of each Borrower’s and its Subsidiaries’ customers, with address and contact information.

	
 

Prior to any proposed Permitted Disposition involving any item of Revenue Equipment identified by any Borrower as Eligible Revenue Equipment in the Borrowing Base Certificate most recently submitted to Agent

	
 

(q) a Borrowing Base Certificate that gives pro forma effect to such proposed Permitted Disposition.

	
 

Upon request by Agent

	
 

(r) a report regarding Loan Parties’ and their Subsidiaries’ accrued, but unpaid, ad valorem taxes,

(s) copies of purchase orders and invoices for Revenue Equipment acquired by any Borrower or its Subsidiaries,

(t) notice of all claims, offsets, or disputes asserted by Account Debtors with respect to Borrowers’ and their Subsidiaries’ Accounts,

(u) copies of invoices together with corresponding shipping and delivery documents, and credit memos together with corresponding supporting documentation, with respect to invoices and credit memos in excess of an amount determined in the sole discretion of Agent, from time to time, and

(v) such other reports as to the Collateral or the financial condition of any Loan Party and its Subsidiaries, as Agent may reasonably request.

Schedule 5.2

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Schedule 5.14

Chief Executive Offices

	
Borrower or Subsidiary

	
Address

	
City

	
County

	
State

	
USA Truck, Inc.

	
3200 Industrial Park Road

	
Van Buren

	
Crawford

	
Arkansas

	
International Freight Services, Inc.

	
4202 Pan American Boulevard

	
Laredo

	
Webb

	
Texas

  

  

  

SCHEDULE 5.16

 

Post-Closing Matters

 

Borrowers will complete each of the tasks and other items set forth below at the following times (or such later date as Agent may agree in writing) in a manner satisfactory to Agent:

 

	
No later than 10 days after the Closing Date

	
(a)          Deliver to Agent evidence, in form and substance reasonably satisfactory to Agent, that UCC-3 termination statements have been filed at (i) Delaware Secretary of State in respect of the UCC-1 financing statement bearing filing number 2008 2431565 and filing date July 15, 2008 listing Regions Equipment Finance, Ltd. as secured party and (ii) Arkansas Secretary of State in respect of the UCC-1 financing statement bearing filing number 7130541773 and filing date May 5, 2008 and the UCC-1 financing statement bearing filing number 7130699836 and filing date June 24, 2008, in each case listing Regions Equipment Finance, Ltd. as secured party.

	
No later than 30 days after the Closing Date

	
(b)          Deliver to Agent evidence, in form and substance reasonably satisfactory to Agent, that (i) the Sacramento County, California state tax lien against USA Truck bearing file number 201204041184 and file date April 4, 2012 and (ii) the California Secretary of State state tax lien against USA Truck bearing file number 127308900656 and file date April 2, 2012 have each been discharged;

(c)          Cease using the following Deposit Accounts (each, a “Subject Account”) for any purpose used by a Borrower or its Subsidiaries before the Closing Date other than the receipt and/or deposit of payments remitted by any Account Debtor.  Without intending to limit the foregoing, Borrowers and their Subsidiaries shall no later than 30 days after the Closing Date cease issuing checks or otherwise funding payments to third parties from the Subject Accounts, and instead, as applicable, utilize the cash management system established at Wells Fargo for all such purposes:

(i)          account no. xxxxx maintained by USA Truck with Branch Banking and Trust Company,

(ii)          account no. xxxxx maintained by USA Truck with Branch Banking and Trust Company,

(iii)          account no. xxxxx maintained by USA Truck with Branch Banking and Trust Company,

(iv)          account no. xxxxx maintained by USA Truck with Branch Banking and Trust Company,

(v)          account no. xxxxx maintained by USA Truck with Branch Banking and Trust Company,

(vi)          account no. xxxxx maintained by USA Truck with Regions Bank; and

(d)          Take all reasonable steps and issue all necessary instructions to cause each Account Debtor to cease remitting payments to any Subject Account and/or any related lockboxes and instead remit all such payments to a Deposit Account or related lockbox that is established at Wells Fargo for all such purposes.

	
No later than 120 days after the Closing Date

	
(e)          Cause each Subject Account maintained by USA Truck with Branch Banking and Trust Company and any related lockboxes to be closed and all funds deposited or otherwise held therein to be transferred to a Deposit Account that is established at Wells Fargo for all such purposes.

	
No later than 180 days after the Closing Date

	
(f)          Cause each Subject Account maintained by USA Truck with Regions Bank and any related lockboxes to be closed and all funds deposited or otherwise held therein to be transferred to a Deposit Account that is established at Wells Fargo for all such purposes.

	
No later than 10 Business Days after the Closing Date

	
(g)          Deliver, or cause to be delivered, to Agent a report, in form and substance satisfactory to Agent, from the Titling Agent verifying receipt by the Titling Agent of the original certificate of title (in proper form for filing with the Utah titling authority) for each item of Revenue Equipment set forth on Schedule 12 to the Guaranty and Security Agreement, and to the extent any such certificate of title has not been received or is not in proper form for filing with the Utah titling authority, setting forth the Asset ID, model year and vehicle identification number of the related item of Revenue Equipment.

	
No later than 30 days after the Closing Date

	
(h)          With respect to each item of Revenue Equipment that is a tractor intended to constitute Collateral as of the Closing Date and not previously disposed of as part of a Permitted Asset Disposition, deliver, or cause to be delivered, to Agent or its designee evidence, in form and substance satisfactory to Agent, that a duly executed application has been filed with the applicable titling authority to complete the issuance of a certificate of title naming Agent as the sole lienholder thereon in the manner prescribed by the applicable jurisdiction, and provision for the payment of all applicable fees in connection therewith has been made.

	
No later than 60 days after the Closing Date

	
(i)          With respect to each item of Revenue Equipment (other than the Revenue Equipment that is subject to the immediately foregoing clause (h)) intended to constitute Collateral as of the Closing Date and not previously disposed of as part of a Permitted Asset Disposition, deliver, or cause to be delivered, to Agent or its designee evidence, in form and substance satisfactory to Agent, that a duly executed application has been filed with the applicable titling authority to complete the issuance of a certificate of title naming Agent as the sole lienholder thereon in the manner prescribed by the applicable jurisdiction, and provision for the payment of all applicable fees in connection therewith has been made.

	
No later than 270 days after the Closing Date

	
(j)          With respect to each item of Revenue Equipment intended to constitute Collateral as of the Closing Date and not previously disposed of as part of a Permitted Asset Disposition, deliver, or cause to be delivered, to Agent or its designee evidence, in form and substance satisfactory to Agent, that Agent’s Liens have been noted on the certificate of title for each such item of Revenue Equipment and that Existing Agent’s Liens have been removed therefrom (which evidence shall include a “PDF” file sequenced in a manner that corresponds with Schedule 12 to the Guaranty and Security Agreement, and a spreadsheet that identifies each item of Revenue Equipment, if any, as to which Agent’s Liens have not been noted on the related certificate of title (such Revenue Equipment to be identified in the same format as Revenue Equipment are identified in Schedule 12 to the Guaranty and Security Agreement)); provided, that if solely in the event that Borrowers do not comply with the provisions of this Schedule 5.16(j) with respect to items of Revenue Equipment having an aggregate net book value not exceeding 10% of the aggregate net book value of all items of Revenue Equipment identified on Schedule 12 to the Guaranty and Security Agreement (the “Delinquent 10% Revenue Equipment”), then any such Delinquent 10% Revenue Equipment will not be considered Eligible Revenue Equipment until Borrowers have satisfied the conditions of this Schedule 5.16(j) with respect to such item of Revenue Equipment, but no such failure to comply with respect to any such Delinquent 10% Revenue Equipment will constitute a Default or an Event of Default under the Agreement.

Schedule 5.16

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Schedule 6.5

Nature of Business

The nature of the business is that of a diversified freight truckload carrier, which includes various transportation, general, dedicated, rail intermodal, freight brokerage, and other complementary services.

  

  

  

Schedule 6.10

Transactions with Affiliates

	
1.  

	
Employee Stock Option Plan of USA Truck (Exhibit 10.6 to USA Truck’s Form S-1, Registration No. 33-45682, filed with the SEC on February 13, 1992) terminated in 2002, except with respect to outstanding options.

	
2.  

	
Executive Profit-Sharing Incentive Plan, as amended effective January 1, 2007, for executive officers of USA Truck (Exhibit 10.1 to USA Truck’s current report on Form 8-K, filed with the SEC on October 20, 2006).

	
3.  

	
1997 Nonqualified Stock Option Plan for Nonemployee Directors of USA Truck (Exhibit 99.1 to USA Truck’s registration statement on Form S-8, Registration No. 333-20721, filed with the SEC on January 30, 1997).

	
4.  

	
USA Truck 2004 Equity Incentive Plan (Exhibit B to USA Truck’s definitive proxy statement, filed with the SEC on March 19, 2004).

	
5.  

	
Form of Restricted Stock Award under the 2004 Equity Incentive Plan (Exhibit 10.10 to USA Truck’s annual report on Form 10-K for the year ended December 31, 2011, filed with the SEC on March 14, 2012).

	
6.  

	
Form of Incentive Stock Option Agreement under the 2004 Equity Incentive Plan (Exhibit 10.3 to USA Truck’s quarterly report on Form 10-Q for the quarter ended March 30, 2009, filed with the SEC on May 5, 2009).

	
7.  

	
USA Truck Executive Team Incentive Plan, as revised January 29, 2009 (Exhibit 10.1 to USA Truck’s quarterly report on Form 10-Q for the quarter ended March 30, 2009, filed with the SEC on May 5, 2009).

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