UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): May 12, 2016 (May 9, 2016)
PENN VIRGINIA CORPORATION
(Exact Name of Registrant as Specified in Charter)
Virginia | 1-13283 | 23-1184320 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
Four Radnor Corporate Center; Suite 200 100 Matsonford Road, Radnor, Pennsylvania |
19087 | |
(Address of Principle Executive Offices) | (Zip Code) |
Registrants telephone number, including area code: (610) 687-8900
Not Applicable
(Former Name or Former Address, If Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01 | Entry into a Material Definitive Agreement. |
Restructuring Support Agreement
On May 10, 2016, Penn Virginia Corporation (the Company) and certain of its subsidiaries (the Filing Subsidiaries, and together with the Company, the Debtors) entered into that certain Restructuring Support Agreement (together with all exhibits and schedules thereto, the Restructuring Support Agreement), by and among: (i) the Debtors; (ii) lenders (the Consenting RBL Lenders) holding approximately 100% of the principal amount of the approximately $112.6 million in loans outstanding under the Debtors senior secured reserve-based revolving credit facility (the RBL Facility); and (iii) holders (the Consenting Noteholders, and together with the Consenting RBL Lenders, the Restructuring Support Parties) of approximately 86% of the principal amount of the Debtors $1,075 million in outstanding senior unsecured notes (the Notes).
The Restructuring Support Agreement contains certain covenants on the part of the Debtors and the Restructuring Support Parties, including that the Restructuring Support Parties vote in favor of the chapter 11 of the United States Bankruptcy Code (Chapter 11) plan of reorganization (the Plan) contemplated by the Restructuring Support Agreement and otherwise use commercially reasonable efforts to support and cooperate with the Debtors to take all commercially reasonable actions necessary to consummate the restructuring transactions contemplated by the Plan and the Restructuring Support Agreement. The Restructuring Support Agreement further provides that the Restructuring Support Parties shall have the right, but not the obligation, to terminate the Restructuring Support Agreement upon the occurrence of certain events, including the failure of the Debtors to achieve certain milestones.
In addition to a $25 million debtor-in-possession financing facility (the DIP Facility), the material terms of which are described below, the Restructuring Support Agreement contemplates that, on the effective date of the Plan (the Effective Date), the Debtors will (i) consummate a $50 million equity rights offering (the Rights Offering) backstopped by the Consenting Noteholders in accordance with the terms of the Backstop Commitment Agreement (as defined herein), the material terms of which are described below, and (ii) enter into a new reserve-based revolving exit facility with an initial availability of up to $128 million (the Exit Facility) funded by certain of the lenders under the RBL Facility. The Restructuring Support Agreement further contemplates that the Plan will provide for the following recoveries:
| holders of claims arising under the DIP Facility shall be paid in full, in cash on the Effective Date funded from cash on hand and proceeds from the Exit Facility and the Rights Offering; |
| holders of claims arising under the RBL Facility shall be paid in full, in cash on the Effective Date funded from cash on hand and proceeds from the Exit Facility and the Rights Offering; |
| holders of claims arising under the Notes and holders of general unsecured claims, collectively, shall each receive their pro rata share of an aggregate of 100% of the new common stock to be issued by the reorganized Company (the New Common Stock) on the Effective Date, subject to dilution on account of the Debtors management incentive plan, any fees payable in New Common Stock under the terms of the Backstop Commitment Agreement, and the New Common Stock issued in the Rights Offering; |
| holders of claims arising under the Notes shall also be entitled to participate in the Rights Offering in accordance with the Backstop Commitment Agreement and Restructuring Support Agreement; and |
| all existing equity interests in the Company shall be canceled, extinguished, and discharged. |
Backstop Commitment Agreement
On May 10, 2016, the Company entered into a backstop commitment agreement (the Backstop Commitment Agreement) with the parties thereto (collectively, the Backstop Parties), pursuant to which the Backstop Parties, which are holders of Notes, will provide a $50 million commitment to backstop the proposed Rights Offering to be conducted in connection with the Plan.
In accordance with the Plan, the Backstop Commitment Agreement, and the Companys proposed procedures for the conduct of the Rights Offering (the Rights Offering Procedures), the Company will offer eligible creditors, including the Backstop Parties, shares of New Common Stock of the reorganized Company upon emergence from Chapter 11 for an aggregate purchase price of $50 million (the Rights Offering Amount). Pursuant to the Backstop Commitment Agreement, the Backstop Parties have agreed to
purchase all shares of New Common Stock that are not duly subscribed for pursuant to the Rights Offering at a per share purchase price equal to $45,100,000 divided by the total number of shares of common stock of the Company outstanding as of emergence (without giving effect to the common stock issued or issuable under the rights offering or in respect of the Commitment Premium (as defined herein)).
Under the Backstop Commitment Agreement, the Company has agreed to pay the Backstop Parties, on the closing date of the transactions contemplated by the Backstop Commitment Agreement, a commitment premium equal to 6.0% of the Rights Offering Amount (the Commitment Premium). If the transactions contemplated by the Backstop Commitment Agreement are consummated, the Commitment Premium will be payable in shares of common stock of the Company. The Company will also be required to pay, in cash, a termination fee equal to 4.0% of the Rights Offering Amount upon the occurrence of certain termination events as set forth in the Backstop Commitment Agreement. Pursuant to the Backstop Commitment Agreement, the Company will also be required to (A) reimburse the Backstop Parties (i) for reasonable and documented fees and expenses of counsel, consultants and a financial advisor, and any other advisors or consultants as may be reasonably determined by the Consenting Noteholders and the Backstop Parties, and (ii) for filing fees, if any, required by antitrust laws and reasonable and documented expenses in connection with the transactions contemplated by the Backstop Commitment Agreement and (B) indemnify the Backstop Parties under certain circumstances for losses arising out of the Backstop Commitment Agreement, the Plan and the transactions contemplated thereby.
The rights to purchase common stock in the Rights Offering, any shares issued upon exercise thereof, and all shares issued to the Backstop Parties pursuant to the Backstop Commitment Agreement, will be issued in reliance upon the exemption from registration under the Securities Act of 1933 (the Securities Act) provided by Section 4(a)(2) thereof and/or Regulation D thereunder. As a condition to the closing of the transactions contemplated by the Backstop Commitment Agreement, the Company will enter into a registration rights agreement with certain of the Backstop Parties entitling such Backstop Parties to request that the Company register their securities for sale under the Securities Act at various times.
The Backstop Commitment Agreement and Rights Offering Procedures have been filed with, and are subject to the approval of, the court administering the Companys case in the United States Bankruptcy Court for the Eastern District of Virginia (the Bankruptcy Court). The Backstop Parties commitments to backstop the Rights Offering, and the other transactions contemplated by the Backstop Commitment Agreement, are conditioned upon the satisfaction of all conditions to the effectiveness of the Plan, and other applicable conditions precedent set forth in the Backstop Commitment Agreement. The issuances of common stock pursuant to the Rights Offering and the Backstop Commitment Agreement are conditioned upon, among other things, confirmation of the Plan by the Bankruptcy Court, and will be effective upon the Companys emergence from Chapter 11.
Debtor-In-Possession Credit Agreement
The transactions contemplated by the Restructuring Support Agreement also include a Debtor-In-Possession Credit Agreement (the Debtor-In-Possession Credit Agreement) entered into on May 11, 2016, among the Company, Penn Virginia Holding Corp. (Parent) the Filing Subsidiaries, the lenders party thereto (the DIP Lenders), and Wells Fargo Bank, National Association, as administrative and collateral agent.
Pursuant to the terms of the Debtor-In-Possession Credit Agreement, the DIP Lenders will make available a credit facility (the DIP Credit Facility) consisting of term loans in an aggregate principal amount not to exceed $25 million, to mature on or about October 11, 2016, as such maturity date may be extended pursuant to the terms of the Debtor-In-Possession Credit Agreement. Interest under the DIP Credit Facility will bear interest at the Companys election at rate of interest per annum equal to (a) a rate derived from the London Interbank Offered Rate, as adjusted for statutory reserve requirements for Eurocurrency liabilities (Adjusted LIBOR) plus an applicable margin of 6.00% or (b) the greater of (i) the prime rate, (ii) the federal funds effective rate plus 0.5% or (iii) the one-month Adjusted LIBOR rate plus 1.00% plus an applicable margin of 5.00%. Parent and the Filing Subsidiaries will guarantee the obligations under the DIP Credit Facility.
The proceeds of the DIP Credit Facility will be used: (i) to pay certain costs, fees and expenses related to the Chapter 11 proceedings, (ii) to pay adequate protection payments and (iii) to fund the working capital needs, capital improvements and expenditures of the Company, Parent and the Filing Subsidiaries during the Chapter 11 proceedings in accordance with a budget including the permitted variances thereto.
The foregoing descriptions of the Restructuring Support Agreement, the Backstop Commitment Agreement, and the Debtor-In-Possession Credit Agreement are not complete and are qualified in their entirety by reference to the full text of the Restructuring Support Agreement, the Backstop Commitment Agreement, and the Debtor-In-Possession Credit Agreement, copies of which are filed herewith as Exhibits 10.1, 10.2 and 10.3, respectively, and are incorporated herein by reference.
Item 2.03 | Creation of a Direct Financial Obligation or Obligation under an Off Balance Sheet Arrangement of a Registrant. |
The information included in Item 1.01 of this Current Report with respect to the Debtor-In-Possession Credit Agreement is incorporated by reference into this Item 2.03.
Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On May 9, 2016, the Company entered into employment agreements with each of Messrs. Steven A. Hartman (the Hartman Employment Agreement) and John A. Brooks (the Brooks Employment Agreement) and Ms. Nancy M. Snyder (the Snyder Employment Agreement), containing the terms set forth below. Copies of the Hartman, Brooks and Snyder Employment Agreements are attached hereto as Exhibits 10.4, 10.5 and 10.6, respectively, and are incorporated herein by reference. The following descriptions of the Hartman, Brooks and Snyder Employment Agreements do not purport to be complete, and each such description is qualified in its entirety by reference to the full text of the applicable Employment Agreement.
Mr. Hartmans Employment Agreement
Pursuant to the Hartman Employment Agreement, Mr. Hartman will continue to serve as the Companys Senior Vice President and Chief Financial Officer. The term of the Hartman Employment Agreement is 18 months, unless Mr. Hartman is terminated earlier in accordance with the terms of the Hartman Employment Agreement (Mr. Hartmans period of employment under the Hartman Employment Agreement, the Hartman Term). During the Hartman Term, Mr. Hartman will receive an annual base salary of $250,000, and he shall be eligible to receive equity and other long-term incentive awards under any applicable plan adopted by the Company during the Term. Additionally, the Company will provide Mr. Hartman with market relocation assistance in connection with his relocation to the Houston, Texas area by September 30, 2016.
Within 30 days of the Companys emergence from bankruptcy (the Emergence) pursuant to a Plan (as such term is defined in the Restructuring Support Agreement), subject to his employment with the Company as of the date of Emergence, Mr. Hartman will receive a restricted stock (or economic equivalent) equity award with a grant date fair value equal to $600,000 as of the date of Emergence (the Emergence Equity Award). The Emergence Equity Award will vest in three equal installments on each of the first three anniversaries of the date of Emergence, based solely on Mr. Hartmans continued employment with the Company as of the applicable vesting date. In the event that Mr. Hartman is terminated by the Company without cause or resigns for good reason (as such terms are defined in the Hartman Employment Agreement) before the Emergence Equity Award has fully vested, the installment scheduled to vest on the next vesting date shall vest as of Mr. Hartmans date of termination. The Emergence Equity Award may be subject to additional terms and conditions established by the Board of Directors of the Company; provided that such terms and conditions are consistent with the Hartman Employment Agreement and those applicable to equity awards granted to similarly situated executives.
Upon a termination of Mr. Hartmans employment by the Company without cause or by Mr. Hartman with good reason, Mr. Hartman will be entitled to receive, subject to his execution of a release of claims in favor of the Company, continued base salary payments for (x) the 18-month period commencing on Mr. Hartmans termination date, if the termination occurs before the six-month anniversary of Emergence, or (y) the 12-month period commencing on Mr. Hartmans termination date, if the termination occurs after the six-month anniversary of Emergence.
Effective upon Emergence and subject to Mr. Hartmans receipt of the Companys customary release of all claims against him and his successors and assigns, Mr. Hartmans outstanding performance-based restricted stock unit and restricted stock unit awards will be cancelled as of the Petition Date (as defined in the Plan), without payment of any consideration therefor.
Mr. Brooks Employment Agreement
Pursuant to the Brooks Employment Agreement, Mr. Brooks will continue to serve as the Companys Executive Vice President and Chief Operations Officer. The term of the Brooks Employment Agreement is five months, unless Mr. Brooks is terminated earlier in accordance with the terms of the Brooks Employment Agreement (Mr. Brooks period of employment under the Brooks Employment Agreement, the Brooks Term). During the Brooks Term, Mr. Brooks will receive an annual base salary of $385,000.
Mr. Brooks will receive a bonus equal to $500,000 (the Brooks Emergence Bonus), if Emergence occurs on or before October 31, 2016 (a Qualifying Emergence), and either (i) Mr. Brooks remains employed with the Company through the Qualifying Emergence or (ii) Mr. Brooks was terminated by the Company without cause (as defined in the Brooks Employment Agreement) before the Qualifying Emergence. Mr. Brooks will not receive the Emergence Bonus if the Qualifying Emergence does not occur. If Mr. Brooks employment is terminated during the Brooks Term as a result of his death, the Brooks Emergence Bonus, to the extent due, will be paid to Mr. Brooks representative or his estate.
Effective upon Emergence and subject to Mr. Brooks receipt of the Companys customary release of all claims against him and his successors and assigns, Mr. Brooks outstanding performance-based restricted stock unit and restricted stock unit awards and outstanding supplemental employee retirement program (SERP) entitlements will be cancelled as of the Petition Date, without payment of any consideration therefor.
Ms. Snyders Employment Agreement
Pursuant to the Snyder Employment Agreement, Ms. Snyder will continue to serve as the Companys Executive Vice President, Chief Administrative Officer, General Counsel and Corporate Secretary. The term of the Snyder Employment Agreement is five months, unless Ms. Snyder is terminated earlier in accordance with the terms of the Snyder Employment Agreement (Ms. Snyders period of employment under the Snyder Employment Agreement, the Snyder Term). During the Snyder Term, Ms. Snyder will receive an annual base salary of $335,000.
Ms. Snyder will receive a bonus equal to $500,000 (the Snyder Emergence Bonus), if Emergence occurs on or before October 31, 2016 (a Qualifying Emergence), and either (i) Ms. Snyder remains employed with the Company through the Qualifying Emergence or (ii) Ms. Snyder was terminated by the Company without cause (as defined in the Snyder Employment Agreement) before the Qualifying Emergence. Ms. Snyder will not receive the Snyder Emergence Bonus if the Qualifying Emergence does not occur. If Ms. Snyders employment is terminated during the Snyder Term as a result of her death, the Snyder Emergence Bonus, to the extent due, will be paid to Ms. Snyders representative or her estate.
Upon the later of the expiration of the Snyder Term or Emergence, provided that Ms. Snyder has not been terminated for cause (as such term is defined in the Snyder Employment Agreement) or due to her death, disability or voluntary resignation, the Company will enter into a non-exclusive consulting agreement (the Consulting Agreement) with Ms. Snyder, substantially in the form attached to the Snyder Employment Agreement. The Consulting Agreement has a 12-month term and provides Ms. Snyder with a consulting fee of $15,000 per month.
Effective upon Emergence and subject to Ms. Snyders receipt of the Companys customary release of all claims against her and her successors and assigns, Ms. Snyders outstanding performance-based restricted stock unit and restricted stock unit awards and outstanding SERP entitlements will be cancelled as of the Petition Date (as defined in the Plan), without payment of any consideration therefor.
Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
Exhibit No. |
Description | |
10.1 | Restructuring Support Agreement, dated May 10, 2016. | |
10.2 | Backstop Commitment Agreement, dated May 10, 2016. | |
10.3 | Debtor-In-Possession Credit Agreement, dated May 11, 2016. | |
10.4 | Hartman Employment Agreement, dated May 9, 2016. | |
10.5 | Brooks Employment Agreement, dated May 9, 2016. | |
10.6 | Snyder Employment Agreement, dated May 9, 2016. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Penn Virginia Corporation | ||
(Registrant) | ||
By: |
/s/ Nancy M. Snyder | |
Name: Nancy M. Snyder | ||
Title: Executive Vice President, Chief Administrative Officer, General Counsel and Corporate Secretary |
Date: May 12, 2016
Exhibit Index
Exhibit No. |
Description | |
10.1 | Restructuring Support Agreement, dated May 10, 2016. | |
10.2 | Backstop Commitment Agreement, dated May 10, 2016. | |
10.3 | Debtor-In-Possession Credit Agreement, dated May 11, 2016. | |
10.4 | Hartman Employment Agreement, dated May 9, 2016. | |
10.5 | Brooks Employment Agreement, dated May 9, 2016. | |
10.6 | Snyder Employment Agreement, dated May 9, 2016. |
Exhibit 10.1
Execution Version
PENN VIRGINIA CORPORATION
RESTRUCTURING SUPPORT AGREEMENT
May 10, 2016
This Restructuring Support Agreement (together with the exhibits and schedules attached hereto, as each may be amended, restated, supplemented, or otherwise modified from time to time in accordance with the terms hereof, this Agreement),1 dated as of May 10, 2016, is entered into by and among: (i) Penn Virginia Corporation (Penn Virginia); Penn Virginia Holding Corporation; Penn Virginia MC Corporation; Penn Virginia MC Energy L.L.C.; Penn Virginia MC Gathering Company L.L.C.; Penn Virginia MC Operating Company L.L.C.; Penn Virginia Oil & Gas Corporation; Penn Virginia Oil & Gas GP LLC; Penn Virginia Oil & Gas LP LLC; Penn Virginia Oil & Gas, L.P.; Penn Virginia Resource Holdings Corp. (such subsidiaries and Penn Virginia, each a PVA Entity, and such subsidiaries together with Penn Virginia, collectively, the PVA Entities); (ii) the lenders party to that certain Credit Agreement, dated as of September 28, 2012 (as amended, restated, modified, supplemented, or replaced from time to time in accordance with its terms, the RBL Credit Facility Agreement), by and among Penn Virginia Holding Corporation, as borrower, each of the guarantors party thereto, Wells Fargo Bank, N.A., as administrative agent and issuing bank (the RBL Agent), and the lenders party thereto (the RBL Lenders) that are (and any RBL Lender that may become in accordance with Section 12 hereof) signatories hereto (collectively, solely in their capacity as RBL Lenders with respect to the holdings of debt under the RBL Credit Facility identified below their respective names on the signature pages hereto, the Consenting RBL Lenders); (iii) the holders of notes (the Noteholders) issued pursuant to that certain Senior Indenture, dated as of June 15, 2009 (as amended, restated, modified, supplemented, or replaced from time to time, the Indenture), for the 7.250% Senior Notes due 2019 and the 8.500% Senior Notes due 2020 among Penn Virginia, as issuer, each of the guarantors party thereto, Wilmington Savings Fund Society, FSB, as indenture trustee (the Indenture Trustee), that are (and any Noteholder that may become in accordance with Section 12 hereof) signatories hereto (collectively, the Consenting Noteholders); and (iv) each of the DIP Lenders, the Backstop Parties, and the Exit Facility Lenders (each as defined below and, collectively with the Consenting RBL Lenders and the Consenting Noteholders, the Restructuring Support Parties). This Agreement collectively refers to the PVA Entities and the Restructuring Support Parties as the Parties and each individually as a Party. For the avoidance of doubt, the Indenture Trustee is not a Party to this Agreement.
1 | Unless otherwise noted, capitalized terms used but not immediately defined have the meanings given to such terms elsewhere in this Agreement or in the Restructuring Term Sheet (including any exhibits thereto), as applicable. |
RECITALS
WHEREAS, the Parties have engaged in good faith, arms-length negotiations regarding certain restructuring transactions (the Restructuring Transactions) pursuant to the terms and conditions set forth in this Agreement, including a joint prearranged plan of reorganization for the PVA Entities reflecting the terms and conditions of the term sheet attached hereto as Exhibit A (the Restructuring Term Sheet) (as may be amended, restated, supplemented, or otherwise modified from time to time in accordance with its terms and this Agreement, the Plan);
WHEREAS, it is anticipated that the Restructuring Transactions will be implemented through jointly administered voluntary cases commenced by the PVA Entities (the Chapter 11 Cases) under chapter 11 of title 11 of the United States Code, 11 U.S.C. §§ 1011532 (the, Bankruptcy Code), in the United States Bankruptcy Court for the Eastern District of Virginia, Richmond Division (the Bankruptcy Court), pursuant to the Plan, which will be filed by the PVA Entities in the Chapter 11 Cases;
WHEREAS, on March 15, 2016, the PVA Entities entered into that certain Eleventh Amendment to the RBL Credit Facility Agreement (the RBL Amendment) with the RBL Lenders and the RBL Agent, which RBL Amendment amends, to the extent set forth therein, the RBL Credit Facility Agreement and pursuant to which the RBL Lenders and the RBL Agent agreed inter alia to extend the time before certain defaults would become events of default under the RBL Credit Facility Agreement;
WHEREAS, on May 9, 2016, the PVA Entities entered into that certain Amendment to the RBL Amendment (the Amendment) with the RBL Lenders and the RBL Agent, which Amendment further amends, to the extent set forth therein, the RBL Credit Facility Agreement and pursuant to which the RBL Lenders and the RBL Agent agreed inter alia to further extend the time before certain defaults would become events of default under the RBL Credit Facility Agreement;
WHEREAS, (i) certain RBL Lenders or affiliates of RBL Lenders (in their capacities as such, the DIP Lenders) have agreed to provide a $25 million debtor-in-possession financing facility (the DIP Financing) and otherwise extend credit to the PVA Entities during the pendency of the Chapter 11 Cases, with the RBL Agent acting as the agent under the DIP Financing (in its capacity as such, the DIP Agent) and (ii) the Consenting RBL Lenders and the RBL Agent have agreed to the PVA Entities use of cash collateral, which DIP Financing and use of cash collateral will be in accordance with the terms and conditions set forth in the term sheet attached hereto as Exhibit B (the DIP Term Sheet);
WHEREAS, certain Noteholders (collectively, the Backstop Parties) have agreed to fund a $50 million rights offering in connection with the Restructuring Transactions substantially on the terms reflected in the Restructuring Term Sheet, pursuant to the Backstop Commitment Agreement attached hereto as Exhibit C (the Backstop Commitment Agreement), and in accordance with the rights offering procedures attached to the Backstop Commitment Agreement (the Rights Offering Procedures);
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WHEREAS, certain parties or affiliates thereof (in their capacities as such, the Exit Facility Lenders) have committed to provide the reorganized PVA Entities with a new reserve-based lending facility (the Exit Facility) on the terms and conditions set forth in the term sheet attached hereto as Exhibit D (the Exit Facility Term Sheet) and the commitment letter attached hereto as Exhibit E and related fee letters with respect thereto (the Exit Commitment Letters); and
NOW, THEREFORE, in consideration of the promises, mutual covenants, and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each of the Parties, intending to be legally bound, hereby agrees as follows:
AGREEMENT
1. RSA Effective Date. This Agreement shall become effective, and the obligations contained herein shall become binding upon the Parties, upon the first date (such date, the RSA Effective Date) that:
(a) | each of the Backstop Commitment Agreement and the Exit Commitment Letters has been executed and is effective in accordance with its respective terms; |
(b) | this Agreement has been executed by all of the following: |
(i) | each PVA Entity; |
(ii) | Consenting RBL Lenders (A) holding, in aggregate, at least 66.67% in principal amount of all claims outstanding under the RBL Credit Facility Agreement (the RBL Claims) and (B) comprising, in aggregate, at least one-half in number of all RBL Lenders; |
(iii) | the RBL Agent; and |
(iv) | Consenting Noteholders holding, in aggregate, at least 66.67% in principal amount of all claims outstanding under the Indenture (the Note Claims); |
(c) | each Swap Agreement (as defined in the RBL Credit Facility Agreement) shall, before the Petition Date, have been terminated and the proceeds thereof received by the RBL Agent as a payment of the obligations under the RBL Credit Facility Agreement; provided, that, prior to such payment, the RBL Agent shall, before the Petition Date, deposit $5 million of such proceeds (but in no event more than all such proceeds) in a deposit account of a PVA Entity, which amount shall be made available for the PVA Entities, subject to the terms of the DIP Orders. |
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2. Exhibits and Schedules Incorporated by Reference. Each of the exhibits attached hereto and any schedules to such exhibits (collectively, the Exhibits and Schedules) is expressly incorporated herein and made a part of this Agreement, and all references to this Agreement shall include the Exhibits and Schedules. In the event of any inconsistency between this Agreement (excluding the Exhibits and Schedules) and the Exhibits and Schedules, this Agreement (excluding the Exhibits and Schedules) shall govern.
3. Definitive Documentation.
(a) | The definitive documents and agreements governing the Restructuring Transactions (collectively, the Definitive Documentation) shall include: |
(i) | the Plan (and all exhibits thereto) and the Plan Supplement; |
(ii) | the confirmation order with respect to the Plan (the Confirmation Order); |
(iii) | the related disclosure statement (and all exhibits thereto) with respect to the Plan (the Disclosure Statement); |
(iv) | the solicitation materials with respect to the Plan (collectively, the Solicitation Materials); |
(v) | the order of the Bankruptcy Court approving the Disclosure Statement and the Solicitation Materials; |
(vi) | (A) the interim order authorizing use of cash collateral and debtor-in-possession financing, on terms consistent with the DIP Term Sheet (the Interim DIP Order) and (B) the final order authorizing use of cash collateral and debtor-in-possession financing on terms consistent with the DIP Term Sheet (the Final DIP Order and together with the Interim DIP Order, collectively, the DIP Orders); |
(vii) | the debtor-in-possession credit agreement for the DIP Financing (the DIP Credit Agreement) to be entered into in accordance with the DIP Term Sheet and the DIP Orders, including any amendments or modifications thereto; |
(viii) | the Exit Facility Term Sheet and the Exit Facility Commitment Letters; and |
(ix) | the order of the Bankruptcy Court approving the PVA Entities assumption of this Agreement and the Backstop Commitment Agreement (the Approval Order). |
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(b) | Except as set forth herein, the Definitive Documentation identified in Section 3(a) will, after the RSA Effective Date, remain subject to negotiation and shall, upon completion, contain terms, conditions, representations, warranties, and covenants consistent with the terms of this Agreement (including the Exhibits and Schedules) and be in form and substance reasonably satisfactory to each of: (i) the PVA Entities; (ii) Consenting Noteholders who hold, in the aggregate, at least 66.67%% in principal amount outstanding of all Note Claims held by Consenting Noteholders (the Majority Consenting Noteholders); and (iii) Consenting RBL Lenders who hold, in the aggregate, at least 66.67% in principal amount outstanding of all RBL Claims held by Consenting RBL Lenders (the Majority Consenting RBL Lenders, and together with the Majority Consenting Noteholders, collectively, the Required Consenting Creditors); provided, however, any Plan exhibits (including those documents included in the Plan Supplement) related solely to the allocation or ownership of the New Common Stock and/or corporate governance matters shall be satisfactory to the Majority Consenting Noteholders only. For the avoidance of doubt, when used herein, the term Required Consenting Creditors shall require the independent approval of the Majority Consenting RBL Lenders and the Majority Consenting Noteholders. |
4. Milestones. As provided in and subject to Section 6, the PVA Entities shall implement the Restructuring Transactions in accordance with the milestones set forth in the Restructuring Term Sheet (the Milestones). The PVA Entities may extend a Milestone only with the express prior written consent of the Required Consenting Creditors.
5. Commitment of Restructuring Support Parties. Each Restructuring Support Party shall (severally and not jointly), from the RSA Effective Date until the occurrence of a Termination Date (as defined in Section 10) applicable to such Restructuring Support Party:
(a) | use commercially reasonable efforts to support and cooperate with the PVA Entities to take all commercially reasonable actions necessary to consummate the Restructuring Transactions in accordance with the Plan and the terms and conditions of this Agreement and the Restructuring Term Sheet (but without limiting consent and approval rights provided in this Agreement and the Definitive Documentation), including by: (i) voting all of its claims against, or interests in, as applicable, the PVA Entities now or hereafter owned by such Restructuring Support Party (or for which such Restructuring Support Party now or hereafter serves as the nominee, investment manager, or advisor for holders thereof, provided that if a Restructuring Support Party acts as an investment manager or advisor with respect to any Note Claims acquired after the date hereof, such Restructuring Support Party may exercise its voting and dispositive power in connection with any fiduciary obligation it may have as investment manager or advisor for holders thereof without regard to such Restructuring Support Partys commitments hereto) to accept the Plan in accordance with the applicable procedures set forth in the Disclosure Statement and the Solicitation Materials upon receipt of the Disclosure |
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Statement and Solicitation Materials approved by the Bankruptcy Court; (ii) timely returning a duly-executed ballot and/or master ballot, as applicable, in connection therewith; and (iii) not opting out of any releases under the Plan; |
(b) | not withdraw, amend, or revoke (or cause to be withdrawn, amended, or revoked) its tender, consent, or vote with respect to the Plan; provided however, that all votes tendered by the Restructuring Support Parties in support of the Plan shall be immediately revoked and deemed void ab initio upon the occurrence of a Termination Date; |
(c) | use commercially reasonable efforts to support and not object to, delay, impede, or take any other action to interfere, directly or indirectly, with the Restructuring Transactions; and |
(d) | use commercially reasonable efforts to support and not object to, delay, impede, or take any other action to interfere with, directly or indirectly, and use commercially reasonable efforts to support the entry by the Bankruptcy Court of any of the DIP Orders, or propose, file or support, directly or indirectly, any use of cash collateral or debtor-in-possession financing other than as proposed in each of the DIP Orders. |
Notwithstanding the foregoing, nothing in this Agreement and neither a vote to accept the Plan by any Restructuring Support Party nor the acceptance of the Plan by any Restructuring Support Party shall (x) be construed to prohibit any Restructuring Support Party from contesting whether any matter, fact, or thing is a breach of, or is inconsistent with, this Agreement or the Definitive Documentation, or exercising rights or remedies specifically reserved herein; (y) be construed to prohibit or limit any Restructuring Support Party from appearing as a party-in-interest in any matter to be adjudicated in the Chapter 11 Cases, so long as, as, from the RSA Effective Date until the occurrence of a Termination Date, such appearance and the positions advocated in connection therewith are not materially inconsistent with this Agreement and are not for the purpose of hindering, delaying, or preventing the consummation of the Restructuring Transactions, provided, however, that any delay or other impact on consummation of the Restructuring Transactions contemplated by the Plan caused by a Restructuring Support Partys opposition to (i) any relief that is inconsistent with such Restructuring Transactions; (ii) a motion by the Debtors to enter into a material executory contract, lease, or other arrangement outside of the ordinary course of its business without obtaining the prior written consent of the Required Consenting Creditors; or (iii) any relief that is adverse to interests of the Restructuring Support Parties sought by the Debtors (or any other party), shall not constitute a violation of this Agreement; or (z) impair or waive the rights of any Restructuring Support Party to assert or raise any objection permitted under this Agreement in connection with any hearing on confirmation of the Plan or in the Bankruptcy Court.
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6. Commitment of the PVA Entities.
(a) | Subject to Sub-Clause (b) of this Section 6, the PVA Entities shall, from the RSA Effective Date until the occurrence of a Termination Date (as defined in Section 10): |
(i) | (A) support and make commercially reasonable efforts to complete the Restructuring Transactions set forth in the Plan and this Agreement, (B) negotiate in good faith all Definitive Documentation that is subject to negotiation as of the RSA Effective Date and take any and all necessary and appropriate actions in furtherance of the Plan and this Agreement, and (C) make commercially reasonable efforts to complete the Restructuring Transactions set forth in the Plan in accordance with each Milestone set forth in the Restructuring Term Sheet; |
(ii) | timely file a formal objection, in form and substance reasonably acceptable to the Required Consenting Creditors, to any motion filed with the Bankruptcy Court by a party seeking the entry of an order (A) directing the appointment of a trustee or examiner (with expanded powers beyond those set forth in section 1106(a)(3) and (4) of the Bankruptcy Code), (B) converting any of the Chapter 11 Cases to a case under chapter 7 of the Bankruptcy Code, or (C) dismissing any of the Chapter 11 Cases; |
(iii) | timely file a formal objection, in form and substance reasonably acceptable to the Required Consenting Creditors, to any motion filed with the Bankruptcy Court by a party seeking the entry of an order modifying or terminating the PVA Entities exclusive right to file and/or solicit acceptances of a plan of reorganization, as applicable; and |
(iv) | timely file a formal objection, in form and substance reasonably acceptable to the Required Consenting Creditors, to any motion filed with the Bankruptcy Court by a party seeking the formation and appointment of an official committee of equity interest holders. |
(b) | The PVA Entities shall not seek, solicit, or support any dissolution, winding up, liquidation, reorganization, assignment for the benefit of creditors, merger, transaction, consolidation, business combination, joint venture, partnership sale of assets, financing (debt or equity) or restructuring of the PVA Entities, other than the Restructuring Transactions (each, an Alternative Transaction); provided, however, that nothing in this section 6(b) shall limit the Parties ability to engage in marketing efforts, discussions, and/or negotiations with any party regarding the refinancing of the Exit Facility to be consummated |
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following the Effective Date (as defined in the Term Sheet); provided, further, that (i) if any of the PVA Entities receive a proposal or expression of interest regarding any Alternative Transaction from the RSA Effective Date until the occurrence of a Termination Date, the PVA Entities shall promptly notify counsel to the other Parties of any such proposal or expression of interest, with such notice to include the material terms thereof, including (unless prohibited by a separate agreement) the identity of the person or group of persons involved, and (ii) the PVA Entities shall promptly furnish counsel to the other Parties with copies of any written offer, oral offer, or any other information that they receive relating to the foregoing and shall promptly inform counsel to the other Parties of any material changes to such proposals. The PVA Entities shall not enter into any confidentiality agreement with a party interested in an Alternative Transaction unless such party consents to identifying and providing to counsel to the Parties (under a reasonably acceptable confidentiality agreement) the information contemplated under this Section 6(b). |
7. Restructuring Support Party Termination Events. Each of the (a) Majority Consenting RBL Lenders and (b) the Majority Consenting Noteholders (each such group, a Terminating Support Group) shall have the right, but not the obligation, upon notice to the other Parties, to terminate the obligations of the Consenting RBL Lenders or the Consenting Noteholders, respectively, under this Agreement upon the occurrence of any of the following events, unless waived, in writing, by the Required Consenting Creditors on a prospective or retroactive basis (each, a Restructuring Support Party Termination Event):
(a) | the failure to meet any of the Milestones unless (i) such failure is the result of any act, omission, or delay on the part of any Restructuring Support Parties, whose Terminating Support Group is seeking termination, in violation of its obligations under this Agreement or (ii) such Milestone is waived in accordance with Section 4 of this Agreement; |
(b) | the occurrence of a material breach of this Agreement by any PVA Entity that has not been cured (if susceptible to cure) within five business days after written notice to the PVA Entities of such material breach by the Terminating Support Group asserting such termination; |
(c) | the conversion of one or more of the Chapter 11 Cases to a case under chapter 7 of the Bankruptcy Code; |
(d) | the appointment of a trustee, receiver, or examiner with expanded powers beyond those set forth in section 1106(a)(3) and (4) of the Bankruptcy Code in one or more of the Chapter 11 Cases; |
(e) | the Definitive Documentation does not comply with Section 3 of this Agreement or any other document or agreement necessary to consummate the Restructuring Transactions is not reasonably satisfactory to the Majority Consenting Creditors; |
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(f) | any PVA Entity (i) amends, or modifies, or files a pleading seeking authority to amend or modify, the Definitive Documentation in a manner that is materially inconsistent with this Agreement; (ii) suspends or revokes the Restructuring Transactions; or (iii) publicly announces its intention to take any such action listed in Sub-Clauses (i) and (ii) of this subsection; |
(g) | any PVA Entity files or announces that it will file any plan of reorganization other than the Plan, or files any motion or application seeking authority to sell any material assets (other than as provided for in the Plan), without the prior written consent of the Required Consenting Creditors; |
(h) | the issuance by any governmental authority, including the Bankruptcy Court, any regulatory authority, or any other court of competent jurisdiction, of any ruling or order enjoining the substantial consummation of the Restructuring Transactions; provided, however, that the PVA Entities shall have five business days after issuance of such ruling or order to obtain relief that would allow consummation of the Restructuring Transactions in a manner that (i) does not prevent or diminish in a material way compliance with the terms of the Plan and this Agreement, or (ii) is reasonably acceptable to the Required Consenting Creditors; |
(i) | the Bankruptcy Court enters any order authorizing the use of cash collateral or post-petition financing that is not in the form of the DIP Orders or otherwise consented to by the Required Consenting Creditors; |
(j) | the occurrence of any Event of Default under the DIP Credit Agreement (as defined therein) that has not been cured (if susceptible to cure) in accordance with the terms of the DIP Credit Agreement; |
(k) | a breach by any PVA Entity of any representation, warranty, or covenant of such PVA Entity set forth in Section 16 of this Agreement that could reasonably be expected to have a material adverse impact on the consummation of the Restructuring Transactions that (to the extent curable) remains uncured for a period of 5 business days after the receipt by the PVA Entities of written notice and description of such breach from any other Party; |
(l) | either (i) any PVA Entity or any Restructuring Support Party files a motion, application, or adversary proceeding (or any PVA Entity or Restructuring Support Party supports any such motion, application, or adversary proceeding filed or commenced by any third party) (A) challenging the validity, enforceability, perfection, or priority of, or seeking avoidance or subordination of, the RBL Claims or the Note Claims, or (B) asserting any other cause of action against and/or with respect or relating to such claims or the prepetition liens securing such |
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claims; or (ii) the Bankruptcy Court (or any court with jurisdiction over the Chapter 11 Cases) enters an order providing relief adverse to the interests of any Restructuring Support Party with respect to any of the foregoing causes of action or proceedings; |
(m) | any PVA Entity terminates its obligations under and in accordance with Section 8 of this Agreement; |
(n) | if the Bankruptcy Court enters an order in the Chapter 11 Cases terminating any of the PVA Entities exclusive right to file a plan or plans of reorganization or to solicit acceptances thereof pursuant to section 1121 of the Bankruptcy Code; |
(o) | Mr. Bullock ceases to be the Chief Restructuring Officer prior to the Effective Date of the Plan, unless Mr. Bullock no longer holds such position on account of his (i) removal by the Board of Directors of Penn Virginia for gross mismanagement or willful misconduct or (ii) death; |
(p) | if the DIP Orders, any of the orders approving assumption of this Agreement, the Exit Commitment Letters, or the Backstop Commitment Agreement, or any of the orders confirming the Plan or approving the Disclosure Statement are reversed, stayed, dismissed, vacated, reconsidered, modified, or amended without the consent of the Required Consenting Creditors or a motion for reconsideration, reargument, or rehearing with respect to such orders has been filed and the PVA Entities have failed to timely object to such motion; |
(q) | the termination by another Terminating Support Group upon the occurrence of a Restructuring Support Party Termination Event; |
(r) | a breach by a Restructuring Support Party of any representation, warranty, or covenant of such Restructuring Support Party set forth in this Agreement that could reasonably be expected to have a material adverse impact on the consummation of the Restructuring Transactions that (to the extent curable) remains uncured for a period of five business days after notice to all Parties of such breach and a description thereof; or |
(s) | the occurrence of the Maturity Date (as defined in the DIP Credit Agreement). |
Notwithstanding anything to the contrary in this Agreement, following the commencement of the Chapter 11 Cases and unless and until there is an unstayed order of the Bankruptcy Court providing that the giving of notice under and/or termination of this Agreement in accordance with its terms is not prohibited by the automatic stay imposed by section 362 of the Bankruptcy Code (the Automatic Stay), the occurrence of any Restructuring Support Party Termination Event shall result in an automatic termination of this Agreement five business days following such occurrence unless waived in writing by the Required Consenting Creditors.
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8. The PVA Entities Termination Events. Each PVA Entity may, upon notice to the Restructuring Support Parties, terminate its obligations under this Agreement upon the occurrence of any of the following events (each a Company Termination Event, and together with the Restructuring Support Party Termination Events, the Termination Events), subject to the rights of the PVA Entities to fully or conditionally waive, in writing, on a prospective or retroactive basis, the occurrence of a Company Termination Event:
(a) | a breach by a Restructuring Support Party of any representation, warranty, or covenant of such Restructuring Support Party set forth in this Agreement that could reasonably be expected to have a material adverse impact on the consummation of the Restructuring Transactions that (to the extent curable) remains uncured for a period of five business days after notice to all Restructuring Support Parties of such breach and a description thereof; |
(b) | the occurrence of a breach of this Agreement by any Restructuring Support Party that has the effect of materially impairing any of the PVA Entities ability to effectuate the Restructuring Transactions and has not been cured (if susceptible to cure) within five business days after notice to all Restructuring Support Parties of such breach and a description thereof; |
(c) | upon notice to the Restructuring Support Parties, if the board of directors or board of managers, as applicable, of any PVA Entity determines, after receiving advice from counsel, that proceeding with the Restructuring Transactions (including, without limitation, the Plan or solicitation of the Plan) would be inconsistent with the exercise of its fiduciary duties; |
(d) | the issuance by any governmental authority, including the Bankruptcy Court, any regulatory authority, or any other court of competent jurisdiction, of any ruling or order enjoining the substantial consummation of the Restructuring Transactions; provided, however, that the PVA Entities have made commercially reasonable, good faith efforts to cure, vacate, or have overruled such ruling or order prior to terminating this Agreement; |
(e) | any Terminating Support Group terminates its obligations under and in accordance with Section 7 of this Agreement; or |
(f) | the Definitive Documentation does not comply with Section 3 of this Agreement. |
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9. Mutual Termination; Automatic Termination. This Agreement and the obligations of all Parties hereunder may be terminated by mutual written agreement by and among Penn Virginia, on behalf of itself and each other PVA Entity, and all of the Restructuring Support Parties. Notwithstanding anything in this Agreement to the contrary, this Agreement shall terminate automatically upon the occurrence of the Effective Date.
10. Effect of Termination. The earliest date on which termination of this Agreement as to a Party is effective in accordance with Sections 7, 8, or 9 of this Agreement shall be referred to, with respect to such Party, as a Termination Date. Upon the occurrence of a Termination Date, the terminating Partys obligations and, in the case of a Termination Date in accordance with Section 9 of this Agreement, all Parties obligations under this Agreement shall be terminated effective immediately, and such Party or Parties shall be released from its commitments, undertakings, and agreements; provided, however, that each of the following shall survive any such termination: (a) any claim for breach of this Agreement that occurs prior to such Termination Date, and all rights and remedies with respect to such claims shall not be prejudiced in any way; (b) the PVA Entities obligations under Section 14 of this Agreement accrued up to and including such Termination Date; and (c) Sections 10, 15, 17, 18, 19, 22, 23, 25, 27, 31, 33, and 34 hereof. The Automatic Stay shall not prohibit a Party from taking any action necessary to effectuate the termination of this Agreement pursuant to and in accordance with the terms hereof.
11. Cooperation and Support. Penn Virginia shall provide draft copies of all first day motions, applications, and other documents that any PVA Entity intends to file with the Bankruptcy Court in the Chapter 11 Cases to counsel for each Restructuring Support Party at least two business days (or as soon thereafter as is reasonably practicable under the circumstances) prior to the date when such PVA Entity intends to file such document, and shall consult in good faith with such counsel regarding the form and substance of any such proposed filing. Penn Virginia will use reasonable efforts to provide draft copies of all other material pleadings any PVA Entity intends to file with the Bankruptcy Court to counsel to each Restructuring Support Party at least two business days prior to filing such pleading, to the extent practicable, and shall consult in good faith with such counsel regarding the form and substance of any such proposed pleading. For the avoidance of doubt, the Parties agree, consistent with Sub-Clause (b) of Section 3 hereof, (a) to negotiate in good faith the Definitive Documentation that is subject to negotiation and completion on the RSA Effective Date and (b) that, notwithstanding anything herein to the contrary, the Definitive Documentation, including any motions or orders related thereto, shall be consistent with this Agreement and otherwise shall be in form and substance reasonably satisfactory to the Required Consenting Creditors. Penn Virginia shall (i) provide to the Restructuring Support Parties advisors, and shall direct its employees, officers, advisors, and other representatives to provide the Restructuring Support Parties advisors, (A) reasonable access (without any material disruption to the conduct of the PVA Entities businesses) during normal business hours to the PVA Entities books and records; (B) reasonable access during normal business hours to the management and advisors of the PVA Entities; and (C) timely and reasonable responses to all reasonable diligence requests, in each case for the purposes of evaluating the PVA Entities assets, liabilities, operations, businesses, finances, strategies, prospects, and affairs; and (ii) promptly notify the Restructuring Support Parties of any newly commenced material governmental or third party litigations, investigations, or hearings against any of the PVA Entities.
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12. Transfers of Claims and Interests.
(a) | Each Restructuring Support Party shall not (i) sell, transfer, assign, pledge, grant a participation interest in, or otherwise dispose of, directly or indirectly, its right, title, or interest in respect of any of such Restructuring Support Partys claims against, or interests in, any PVA Entity, as applicable, in whole or in part, or (ii) deposit any of such Restructuring Support Partys claims against or interests in any PVA Entity, as applicable, into a voting trust, or grant any proxies, or enter into a voting agreement with respect to any such claims or interests (the actions described in clauses (i) and (ii) are collectively referred to herein as a Transfer and the Restructuring Support Party making such Transfer is referred to herein as the Transferor), unless such Transfer is to another Restructuring Support Party or any other entity that (x) first agrees in writing to be bound by the terms of this Agreement by executing and delivering to Penn Virginia a Transferee Joinder substantially in the form attached hereto as Exhibit F (the Transferee Joinder), and (y) solely with respect to any Transferor that is a Backstop Party, agrees in writing to be bound by the obligations of the applicable Transferor under the Backstop Commitment Agreement and is determined, after due inquiry and investigation by the Restructuring Support Parties and the PVA Entities, to be reasonably capable of fulfilling such obligations. Upon compliance with the foregoing, the Transferor shall be deemed to relinquish its rights (and be released from its obligations, except for any claim for breach of this Agreement that occurs prior to such Transfer) under this Agreement to the extent of such transferred rights and obligations. Any Transfer made in violation of this Sub-Clause (a) of this Section 12 shall be deemed null and void ab initio and of no force or effect, regardless of any prior notice provided to the PVA Entities and/or any Restructuring Support Party, and shall not create any obligation or liability of any PVA Entity or any other Restructuring Support Party to the purported transferee. |
(b) | Notwithstanding Sub-Clause (a) of this Section 12, (i) an entity that is acting in its capacity as a Qualified Marketmaker shall not be required to be or become a Restructuring Support Party to effect any transfer (by purchase, sale, assignment, participation, or otherwise) of any claim against, or interest in, any PVA Entity, as applicable, by a Restructuring Support Party to a transferee; provided, that, such transfer by a Restructuring Support Party to a transferee shall be in all other respects in accordance with and subject to Sub-Clause (a) of this Section 12; and (ii) to the extent that a Restructuring Support Party, acting in its capacity as a Qualified Marketmaker, acquires any claim against, or interest in, any PVA Entity from a holder of such claim or interest who is not a Restructuring Support Party, it may transfer (by purchase, sale, assignment, participation, or otherwise) such claim or interest without the requirement that the transferee be or become a Restructuring Support |
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Party in accordance with this Section 12. For purposes of this Sub-Clause (b), a Qualified Marketmaker means an entity that (x) holds itself out to the market as standing ready in the ordinary course of its business to purchase from customers and sell to customers claims against, or interests in, the PVA Entities (including debt securities or other debt) or enter with customers into long and short positions in claims against, or interests in, the PVA Entities (including debt securities or other debt), in its capacity as a dealer or market maker in such claims against, or interests in, the PVA Entities, and (y) is in fact regularly in the business of making a market in claims against issuers or borrowers (including debt securities or other debt). |
13. Further Acquisition of Claims or Interests. Except as set forth in Section 12, nothing in this Agreement shall be construed as precluding any Restructuring Support Party or any of its affiliates from acquiring additional claims arising from the DIP Financing (the DIP Claims), RBL Claims, Note Claims, Penn Virginias existing common stock or existing Series A 6% Convertible Perpetual Preferred Stock or Series B 6% Convertible Perpetual Preferred Stock (such common stock and preferred stock, collectively, the Existing Equity Interests), or interests in the instruments underlying the DIP Claims, RBL Claims, Note Claims, or Existing Equity Interests; provided, however, that any such additional DIP Claims, RBL Claims, Note Claims, Existing Equity Interests, or interests acquired by any Restructuring Support Party or by any affiliate of a Consenting Noteholder, shall automatically be subject to the terms and conditions of this Agreement and, if such acquiring Restructuring Support Party is a Backstop Party to the terms and conditions of the Backstop Commitment Agreement. Upon any such further acquisition by a Restructuring Support Party or any affiliates of a Consenting Noteholder, such Restructuring Support Party shall promptly notify counsel to Penn Virginia, who will then promptly notify the counsel to the other Restructuring Support Parties.
14. Fees and Expenses. Subject to Section 10, and in accordance with and subject to the DIP Orders and the Approval Order, which orders shall provide for the payment of all of the Fees and Expenses described in this Agreement and the Backstop Commitment Agreement, as applicable, Penn Virginia shall pay or reimburse when due all reasonable and documented fees and expenses (including travel costs and expenses) of the following (regardless of whether such fees and expenses were incurred before or after the Petition Date): (a) Bracewell LLP (Bracewell) as primary counsel, one local counsel, and Opportune LLP (Opportune) as financial advisor, for all Consenting RBL Lenders; and (b) Milbank, Tweed, Hadley & McCloy LLP (Milbank) as primary counsel, one local counsel, W.D. Von Gonten & Co. as engineer consultants, and PJT Partners LP (PJT) as financial advisor, for all Consenting Noteholders and Backstop Parties, and Heidrick & Struggles as consultant, retained by Milbank, as counsel to the ad hoc committee of Noteholders, and any such other advisors or consultants as may be reasonably determined by the Consenting Noteholders and Backstop Parties, in consultation with Penn Virginia. Penn Virginias payment of fees and expenses owing to Opportune shall be in accordance with that certain Engagement Agreement, dated as of February 1, 2016, between Bracewell and Opportune (the Opportune Engagement Agreement). Penn Virginias payment of fees and expenses owing to Milbank shall be in accordance with that certain Letter Agreement, dated as of January 20, 2016, between Milbank and an ad hoc committee of certain Noteholders as identified therein (the Milbank Engagement Agreement) or pursuant to any
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Definitive Document superseding the Milbank Engagement Agreement. Penn Virginias payment of fees and expenses owing to PJT shall be in accordance with that certain Letter Agreement, dated as of December 16, 2015, between PJT and Milbank (the PJT Engagement Agreement). Each of the Opportune Engagement Agreement, the Milbank Engagement Agreement, and the PJT Engagement Agreement shall continue to be in full force and effect during the pendency of the Chapter 11 Cases and following the Effective Date, unless terminated in accordance with its respective terms.
15. Consents and Acknowledgments.
(a) | Each Party irrevocably acknowledges and agrees that this Agreement is not and shall not be deemed to be a solicitation for acceptances of the Plan. The acceptance of the Plan by each of the Restructuring Support Parties will not be solicited until such Restructuring Support Party has received the Disclosure Statement and Solicitation Materials in accordance with applicable law, and will be subject to sections 1125, 1126, and 1127 of the Bankruptcy Code. |
(b) | By executing this Agreement, each Restructuring Support Party (including, for the avoidance of doubt, any entity that may execute this Agreement or a Transferee Joinder after the RSA Effective Date) consents to the PVA Entities use of its cash collateral and incurrence of debtor-in-possession financing authorized by the DIP Orders until the occurrence of a Termination Date. |
(c) | By executing this Agreement, each Restructuring Support Party (including, for the avoidance of doubt, any entity that may execute this Agreement or a Transferee Joinder after the RSA Effective Date) irrevocably waives any Default or Event of Default as defined under the RBL Credit Facility Agreement or the Indenture, as applicable, that is caused by the PVA Entities entry into this Agreement or the other documents related to this Agreement and the transactions contemplated in this Agreement. |
16. Representations and Warranties.
(a) | Each Restructuring Support Party hereby represents and warrants on a several and not joint basis for itself and not any other person or entity that the following statements are true, correct, and complete, to the best of its actual knowledge, as of the date hereof: |
(i) | it has the requisite organizational power and authority to enter into this Agreement and to carry out the transactions contemplated by, and perform its respective obligations under, this Agreement; |
(ii) | the execution and delivery of this Agreement and the performance of its obligations hereunder have been duly authorized by all necessary corporate or other organizational action on its part; |
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(iii) | the execution and delivery by it of this Agreement does not (A) violate its certificates of incorporation, or bylaws, or other organizational documents, or, with respect to each Consenting Noteholder, those of any of its affiliates in any material respect, or (B) result in a breach of, or constitute (with due notice or lapse of time or both) a default (other than, for the avoidance of doubt, a breach or default that would be triggered as a result of the Chapter 11 Cases or any PVA Entitys undertaking to implement the Restructuring Transactions through the Chapter 11 Cases) under any material contractual obligation to which it or, with respect to each Consenting Noteholder, any of its affiliates is a party; |
(iv) | the execution, delivery, and performance by it of this Agreement does not require any registration or filing with, the consent or approval of, notice to, or any other action with any federal, state, or other governmental authority or regulatory body, except (i) any of the foregoing as may be necessary and/or required for disclosure by the Securities and Exchange Commission and applicable state securities or blue sky laws, (ii) any of the foregoing as may be necessary and/or required in connection with the Chapter 11 Cases, including the approval of the Disclosure Statement and confirmation of the Plan, (iii) filings of amended certificates of incorporation or articles of formation or other organizational documents with applicable state authorities, and other registrations, filings, consents, approvals, notices, or other actions that are reasonably necessary to maintain permits, licenses, qualifications, and governmental approvals to carry on the business of the PVA Entities, and (iv) any other registrations, filings, consents, approvals, notices, or other actions, the failure of which to make, obtain or take, as applicable, would not be reasonably likely, individually or in the aggregate, to materially delay or materially impair the ability of any Party hereto to consummate the transactions contemplated hereby; |
(v) | subject to the provisions of sections 1125 and 1126 of the Bankruptcy Code, this Agreement is its legally valid and binding obligation, enforceable against it in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium, or other similar laws relating to or limiting creditors rights generally, or by equitable principles relating to enforceability; |
(vi) | solely with respect to each Consenting Noteholder, it is an accredited investor within the meaning of Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended (the Securities Act), with sufficient knowledge and |
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experience to evaluate properly the terms and conditions of this Agreement, and has been afforded the opportunity to discuss other information concerning the PVA Entities with the PVA Entities representatives, and to consult with its legal and financial advisors with respect to its investment decision to execute this Agreement, and it has made its own analysis and decision to enter into this Agreement; |
(vii) | solely with respect to each Consenting Noteholder, it has been advised that (A) the offer and sale of the Reorganized Equity and any rights to acquire New Common Stock (as defined in the Plan) has not been, and will not be, registered under the Securities Act and (B) the offering and issuance of the Reorganized Equity and any rights to acquire Reorganized Equity is intended to be exempt from registration under the Securities Act pursuant to Section 4(a)(2) of the Securities Act and Regulation D thereunder or pursuant to section 1145 of the Bankruptcy Code; and |
(viii) | it (A) either (1) is the sole owner of the claims and interests identified below its name on its signature page hereof and in the amounts set forth therein, or (2) has all necessary investment or voting discretion with respect to the principal amount of claims and interests identified below its name on its signature page hereof, and has the power and authority to bind the owner(s) of such claims and interests to the terms of this Agreement; (B) is entitled (for its own accounts or for the accounts of such other owners) to all of the rights and economic benefits of such claims and interests; and (C) to the knowledge of the individuals working on the Restructuring Transactions, does not directly or indirectly own any RBL Claims, Note Claims, or Existing Equity Interests, other than as identified below its name on its signature page hereof. |
(b) | Each PVA Entity hereby represents and warrants on a joint and several basis (and not any other person or entity other than the PVA Entities) that the following statements are true, correct, and complete, to the best of its actual knowledge, as of the date hereof: |
(i) | it has the requisite corporate or other organizational power and authority to enter into this Agreement and, subject to the approval of the Bankruptcy Court of its assumption, to carry out the transactions contemplated by, and perform its respective obligations under, this Agreement; |
(ii) | the execution and delivery of this Agreement and, subject to the approval of the Bankruptcy Court of its assumption, the performance of its obligations hereunder have been duly authorized by all necessary corporate or other organizational action |
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on its part, including approval of each of the independent director(s) or manager(s), as applicable, of each of the corporate entities that comprise the PVA Entities; |
(iii) | the execution and delivery by it of this Agreement does not (A) violate its certificates of incorporation, or bylaws, or other organizational documents, or those of any of its affiliates in any material respect, or (B) result in a breach of, or constitute (with due notice or lapse of time or both) a default (other than, for the avoidance of doubt, a breach or default that would be triggered as a result of the Chapter 11 Cases or any PVA Entitys undertaking to implement the Restructuring Transactions through the Chapter 11 Cases) under any material contractual obligation to which it or any of its affiliates is a party; |
(iv) | the execution and delivery by it of this Agreement does not require any registration or filing with, the consent or approval of, notice to, or any other action with any federal, state, or other governmental authority or regulatory body, other than, for the avoidance of doubt, the actions with governmental authorities or regulatory bodies required in connection with implementation of the Restructuring Transactions; |
(v) | (A) the offer and sale of the Reorganized Equity and any rights to acquire Reorganized Equity has not been, and will not be, registered under the Securities Act and (B) the offering and issuance of the Reorganized Equity and any rights to acquire Reorganized Equity is intended to be exempt from registration under the Securities Act pursuant to Section 4(a)(2) of the Securities Act and Regulation D thereunder or pursuant to section 1145 of the Bankruptcy Code; |
(vi) | subject to the approval of the Bankruptcy Court of its assumption, this Agreement is its legally valid and binding obligation, enforceable against it in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium, or other similar laws relating to or limiting creditors rights generally, or by equitable principles relating to enforceability; and |
(vii) | it has sufficient knowledge and experience to evaluate properly the terms and conditions of the Plan and this Agreement, and has been afforded the opportunity to consult with its legal and financial advisors with respect to its decision to execute this Agreement, and it has made its own analysis and decision to enter into this Agreement and otherwise investigated this matter to its full satisfaction. |
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17. Survival of Agreement. Each of the Parties acknowledges and agrees that this Agreement is being executed in connection with negotiations concerning a possible financial restructuring of the PVA Entities and in contemplation of possible chapter 11 filings by the PVA Entities and the rights granted in this Agreement are enforceable by each signatory hereto without approval of any court, including the Bankruptcy Court.
18. Waiver. If the transactions contemplated herein are or are not consummated, or following the occurrence of a Termination Date, if applicable, nothing herein shall be construed as a waiver by any Party of any or all of such Partys rights, other than as provided in Section 15, and the Parties expressly reserve any and all of their respective rights. The Parties acknowledge that this Agreement, the Plan, and all negotiations relating hereto are part of a proposed settlement of matters that could otherwise be the subject of litigation. Pursuant to Rule 408 of the Federal Rules of Evidence, any applicable state rules of evidence, and any other applicable law, foreign or domestic, the Restructuring Term Sheet, this Agreement, the Plan, any related documents, and all negotiations relating thereto shall not be admissible into evidence in any proceeding other than a proceeding to enforce its terms.
19. Relationship Among Parties. Notwithstanding anything herein to the contrary, the duties and obligations of the Restructuring Support Parties under this Agreement shall be several, not joint. No Party shall have any responsibility by virtue of this Agreement for any trading by any other entity. No prior history, pattern, or practice of sharing confidences among or between the Parties shall in any way affect or negate this Agreement. The Parties hereto acknowledge that this agreement does not constitute an agreement, arrangement, or understanding with respect to acting together for the purpose of acquiring, holding, voting, or disposing of any equity securities of the PVA Entities and the Restructuring Support Parties do not constitute a group within the meaning of Rule 13d-5 under the Securities Exchange Act of 1934, as amended. No action taken by any Restructuring Support Party pursuant to this Agreement shall be deemed to constitute or to create a presumption by any of the Parties that the Restructuring Support Party are in any way acting in concert or as such a group.
20. Creditors Committee. All Parties agree that they shall not oppose, and nothing in this Agreement shall prohibit, the participation of any of the Consenting Noteholders or the Indenture Trustee on any official committee of unsecured creditors formed in the Chapter 11 Cases. Notwithstanding anything herein to the contrary, if any Consenting Noteholder is appointed to and serves on an official committee of creditors in the Chapter 11 Cases, the terms of this Agreement shall not be construed so as to limit such Consenting Noteholders exercise of its fiduciary duties to any person arising from its service on such committee, and any such exercise of such fiduciary duties shall not be deemed to constitute a breach of the terms of this Agreement; provided, that, nothing in this Agreement shall be construed as requiring any Consenting Noteholder to serve on any official committee in any of the Chapter 11 Cases.
21. Specific Performance. It is understood and agreed by the Parties that money damages may be an insufficient remedy for any breach of this Agreement by any Party and each non-breaching Party shall be entitled to seek specific performance and injunctive or other equitable relief as a remedy of any such breach of this Agreement, including, without limitation, an order of the Bankruptcy Court or other court of competent jurisdiction requiring any Party to comply promptly with any of its obligations hereunder.
19
22. Governing Law & Jurisdiction. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to such states choice of law provisions which would require the application of the law of any other jurisdiction, except where preempted by the Bankruptcy Code. By its execution and delivery of this Agreement, each Party irrevocably and unconditionally agrees for itself that any legal action, suit, or proceeding against it with respect to any matter arising under or arising out of or in connection with this Agreement or for recognition or enforcement of any judgment rendered in any such action, suit, or proceeding, may be brought in the United States District Court for the Southern District of New York, and by executing and delivering this Agreement, each of the Parties irrevocably accepts and submits itself to the exclusive jurisdiction of such court, generally and unconditionally, with respect to any such action, suit or proceeding. Notwithstanding the foregoing consent to New York jurisdiction, if the Chapter 11 Cases are commenced, each Party agrees that the Bankruptcy Court shall have exclusive jurisdiction of all matters arising out of or in connection with this Agreement. By executing and delivering this Agreement, and upon commencement of the Chapter 11 Cases, each of the Parties irrevocably and unconditionally submits to the personal jurisdiction of the Bankruptcy Court solely for purposes of any action, suit, proceeding, or other contested matter arising out of or relating to this Agreement, or for recognition or enforcement of any judgment rendered or order entered in any such action, suit, proceeding, or other contested matter.
23. Waiver of Right to Trial by Jury. Each of the Parties waives any right to have a jury participate in resolving any dispute, whether sounding in contract, tort or otherwise, between any of the Parties arising out of, connected with, relating to, or incidental to the relationship established between any of them in connection with this Agreement. Instead, any disputes resolved in court shall be resolved in a bench trial without a jury.
24. Successors and Assigns. Except as otherwise provided in this Agreement, this Agreement is intended to bind and inure to the benefit of each of the Parties and each of their respective permitted successors, assigns, heirs, executors, administrators, and representatives.
25. No Third-Party Beneficiaries. Unless expressly stated herein, this Agreement shall be solely for the benefit of the Parties and no other person or entity shall be a third-party beneficiary of this Agreement.
26. Notices. All notices (including, without limitation, any notice of termination or breach) and other communications from any Party hereunder shall be in writing and shall be deemed to have been duly given if personally delivered by courier service, messenger, email, or facsimile to the other Parties at the applicable addresses below, or such other addresses as may be furnished hereafter by notice in writing. Any notice of termination or breach shall be delivered to all other Parties.
(a) | If to any PVA Entity: |
Penn Virginia Corporation |
Attn: Nancy Snyder |
Four Radnor Corporate Center, Suite 200 |
20
100 Matsonford Road
Radnor, PA 19087
Tel: (610) 687-8900
Fax: (610) 687-3688
Email: nancy.snyder@pennvirginia.com
With a copy to:
Kirkland & Ellis LLP
Attn: Edward O. Sassower, P.C. and Brian Schartz
601 Lexington Avenue
New York, NY 10022-4611
Tel: (212) 446-4800
Fax: (212) 446-4900
Email: edward.sassower@kirkland.com
brian.schartz@kirkland.com
Kirkland & Ellis LLP
Attn: Justin Bernbrock and Benjamin Rhode
300 North LaSalle
Chicago, IL 60654
Tel: (312) 862-2000
Fax: (312) 862-2200
Email: justin.bernbrock@kirkland.com
benjamin.rhode@kirkland.com
(b) | If to the Consenting RBL Lenders: |
Bracewell LLP
Attn: Stephanie Song
711 Louisiana Street, Suite 2300
Houston, TX 77002
Tel: (713) 221-1542
Fax: (713) 221-2156
Email: Stephanie.Song@bracewelllaw.com
Bracewell LLP
Attn: Kurt Mayr and David Lawton
185 Asylum Street, 34th Floor
Hartford, CT 06103
Tel: (860) 256-8534
Fax: (860) 760-6528
Email: Kurt.Mayr@bracewelllaw.com
David.Lawton@bracewelllaw.com
21
(c) | If to the Consenting Noteholders: |
To each Consenting Noteholder at the addresses or e-mail addresses set forth below the Consenting Noteholders signature page to this Agreement (or to the signature page to a Joinder Agreement as the case may be)
With a copy to:
Milbank, Tweed, Hadley & McCloy LLP
Attn: Samuel Khalil, Brian Kinney, and Bradley Scott Friedman
28 Liberty Street
New York, NY 10005-1413
Tel: (212) 530-5000
Fax: (212) 530-5219
Email: skhalil@milbank.com
bkinney@milbank.com
bfriedman@milbank.com
27. Entire Agreement. This Agreement (including the Exhibits and Schedules) constitutes the entire agreement of the Parties with respect to the subject matter of this Agreement, and supersedes all prior negotiations, agreements, and understandings, whether written or oral, among the Parties with respect to the subject matter of this Agreement.
28. Amendments. Except as otherwise provided herein, this Agreement (including the Exhibits and Schedules) may not be modified, amended, or supplemented without the prior written consent of the PVA Entities and the Required Consenting Creditors; provided, however, that any modification of, amendment or supplement to, any exhibit hereto that materially and adversely affects any Party shall require the prior written consent of each Party so affected; provided, further, that the prior written consent of all Parties shall be required to modify, amend or supplement (a) any of Sections 1, 7, 8, 9, or 28 hereof or (b) the definition of Majority Consenting RBL Lenders, Majority Consenting Noteholders or Required Consenting Creditors herein.
29. Reservation of Rights.
(a) | Except as expressly provided in this Agreement or the Restructuring Term Sheet, including Section 5(a) of this Agreement, nothing herein is intended to, or does, in any manner waive, limit, impair, or restrict the ability of any Party to protect and preserve its rights, remedies and interests, including without limitation, its claims against any of the other Parties. |
(b) | Without limiting Sub-Clause (a) of this Section 29 in any way, if the Plan is not consummated in the manner set forth, and on the timeline set forth, in this Agreement, or if this Agreement is terminated for any reason, nothing shall be construed herein as a waiver by any Party of any or all of such Partys rights, remedies, claims, and defenses and the Parties expressly reserve any and all of their respective rights, remedies, claims and defenses, subject to Section 18 of this Agreement. This Agreement, |
22
the Plan, and any related document shall in no event be construed as or be deemed to be evidence of an admission or concession on the part of any Party of any claim or fault or liability or damages whatsoever. Each of the Parties denies any and all wrongdoing or liability of any kind and does not concede any infirmity in the claims or defenses which it has asserted or could assert. |
30. Counterparts. This Agreement may be executed in one or more counterparts, each of which, when so executed, shall constitute the same instrument, and the counterparts may be delivered by facsimile transmission or by electronic mail in portable document format (.pdf).
31. Other Support Agreements. Until a Termination Date, no PVA Entity shall enter into any other restructuring support agreement related to a partial or total restructuring of the PVA Entities balance sheet unless such support agreement is consistent in all respects with the Restructuring Term Sheet and is reasonably acceptable to the Required Consenting Creditors.
32. Public Disclosure. This Agreement, as well as its terms, its existence, and the existence of the negotiation of its terms are expressly subject to any existing confidentiality agreements executed by and among any of the Parties as of the date hereof; provided, however, that, after the Petition Date, the Parties may disclose the existence of, or the terms of, this Agreement or any other material term of the transaction contemplated herein without the express written consent of the other Parties; provided further, however, that no Party or its advisors shall disclose to any person or entity (including, for the avoidance of doubt, any other Party), other than advisors to the Penn Virginia, the principal amount or percentage of any notes issued under the Indenture held by any of the Consenting Noteholders, in each case, without such Consenting Noteholders prior written consent.
33. Headings. The section headings of this Agreement are for convenience of reference only and shall not, for any purpose, be deemed a part of this Agreement.
34. Interpretation. This Agreement is the product of negotiations among the Parties, and the enforcement or interpretation hereof, is to be interpreted in a neutral manner, and any presumption with regard to interpretation for or against any Party by reason of that Party having drafted or caused to be drafted this Agreement or any portion hereof, shall not be effective in regard to the interpretation hereof.
[Signatures and exhibits follow]
23
EXECUTED to be effective as of the date first above written.
PEEN VIRGINIA: | ||
PENN VIRGINIA CORPORATION | ||
By: /s/ R. Seth Bullock | ||
Name: R. Seth Bullock | ||
Title: Chief Restructuring officer | ||
PVA ENTITIES: | ||
PENN VIRGINIA HOLDING CORP. | ||
PENN VIRGINIA OIL & GAS CORPORATION | ||
PENN VIRGINIA OIL & GAS GP LLC | ||
PENN VIRGINIA OIL & GAS GP LLC | ||
PENN VIRGINIA MC CORPORATION | ||
PEEN VERGINIA MC ENERGY L.L.C. | ||
PENN VIRGINIA MC OPERATING COMPANY L.L.C. | ||
By: /s/ R. Seth Bullock | ||
Name: R. Seth Bullock | ||
Title: Chief Restructuring Officer | ||
PENN VIRGINIA OIL & GAS, L.P. | ||
By: Penn Virginia Oil & Gas GP LLC, its general partner | ||
By: /s/ R. Seth Bullock | ||
Name: R. Seth Bullock | ||
Title: Chief Restructuring Officer |
ANCHORAGE CAPITAL MASTER OFFSHORE, LTD. | ||||
By: Anchorage Capital Group, L.L.C., its investment manager | ||||
By: | /s/ Natalie A. Birrell | |||
Name: | Natalie A. Birrell | |||
Title: | Chief Operating Officer | |||
Holdings: | ||||
Holdings: | ||||
Holdings: | ||||
Holdings: |
If to Anchorage Capital Master Offshore, Ltd.:
Anchorage Capital Master Offshore, Ltd.
c/o Anchorage Capital Group, L.L.C
610 Broadway, 6th Floor
New York, NY 10012
Attn: Legal; Operations
Email: legal@anchoragecap.com; ops@anchoragecap.com
With a copy to:
Milbank, Tweed, Hadley & McCloy LLP
Attn: Samuel Khalil, Brian Kinney and Bradley Friedman
28 Liberty Street
New York, NY 10005-1413
Tel: (212) 530-5000
Fax: (212) 530-5219
Email: skhalil@milbank.com
bkinney@milbank.com
bfriedman@milbank.com
RAPTOR ENERGY, LP By: Anchorage Capital Group, L.L.C., its investment manager | ||||
By: | /s/ Natalie A. Birrell | |||
Name: | Natalie A. Birrell | |||
Title | Chief Operating Officer | |||
Holdings: | ||||
Holdings: | ||||
Holdings: | ||||
Holdings: |
[Signature Page to Restructuring Support Agreement]
If to Raptor Energy, LP:
Raptor Energy, LP
c/o Anchorage Capital Group, L.L.C
610 Broadway, 6th Floor
New York, NY 10012
Attn: Legal; Operations
Email: legal@anchoragecap.com; ops@anchoragecap.com
With a copy to:
Milbank, Tweed, Hadley & McCloy LLP
Attn: Samuel Khalil, Brian Kinney and Bradley Friedman
28 Liberty Street
New York, NY 10005-1413
Tel: (212) 530-5000
Fax: (212) 530-5219
Email: skhalil@milbank.com
bkinney@milbank.com
bfriedman@milbank.com
Execution Version
By: Contrarian Capital Management, L.L.C., on behalf of various managed accounts and affiliated entities | ||
By: | /s/ Jon R. Bauer | |
Name: | Jon R. Bauer | |
Title: | Managing Member | |
Holdings: |
If to Contrarian Capital Management, L.L.C.:
Contrarian Capital Management, L.L.C.
Attn: Jon Bauer, Graham Morris, & Josh Weisser
411 West Putnam Avenue, Suite 425
Greenwich, CT 06830
With a copy to:
Milbank, Tweed, Hadley & McCloy LLP
Attn: Samuel Khalil, Brian Kinney and Bradley Friedman
28 Liberty Street
New York, NY 10005-1413
Tel: (212) 530-5000
Fax: (212) 530-5219
Email: skhalil@milbank.com
bkinney@milbank.com
bfriedman@milbank.com
Execution Version
Global Credit Advisers, LLC as investment adviser | ||
By: | /s/ Steven Hornstein | |
Name: | Steven Hornstein | |
Title: | Managing Member | |
Holdings: | ||
Holdings: | ||
Holdings: | ||
Holdings: |
If to Global Credit Advisers:
Global Credit Advisers
c/o Dan Kecskes
101 Park Avenue, 26th Floor
New York, NY 10178
With a copy to:
Milbank, Tweed, Hadley & McCloy LLP
Attn: Samuel Khalil, Brian Kinney and Bradley Friedman
28 Liberty Street
New York, NY 10005-1413
Tel: (212) 530-5000
Fax: (212) 530-5219
Email: skhalil@milbank.com
bkinney@milbank.com
bfriedman@milbank.com
[JOINING PARTY] | ||
By: KLS Diversified Asset Management LP | ||
Name: | /s/ Authorized Signatory | |
Title: | Managing Partner | |
Holdings: | ||
Holdings: | ||
Holdings: | ||
Holdings: |
If to KLS Diversified:
KLS Diversified
c/o Michael Hanna
452 5th Avenue
22nd Floor
New York, NY 10018
With a copy to:
Milbank, Tweed, Hadley & McCloy LLP
Attn: Samuel Khalil, Brian Kinney and Bradley Friedman
28 Liberty Street
New York, NY 10005-1413
Tel: (212) 530-5000
Fax: (212) 530-5219
Email: skhalil@milbank.com
bkinney@milbank.com
bfriedman@milbank.com
Execution Version
THE MANGROVE PARTNERS MASTER FUND, LTD., | ||||||||
By: MANGROVE PARTNERS, its Investment Manager | ||||||||
By: | /s/ Ward Dietrich | |||||||
Name: | Ward Dietrich | |||||||
Title: | Authorized Person | |||||||
Holdings: | ||||||||
Holdings: | ||||||||
Holdings: | ||||||||
Holdings: |
If to Mangrove Partners:
Mangrove Partners
c/o Mangrove Partners
645 Madison Avenue
14th Floor
New York, NY 10022
212.897.9535
Ops@mangrovepartners.com
With a copy to:
Milbank, Tweed, Hadley & McCloy LLP
Attn: Samuel Khalil, Brian Kinney and Bradley Friedman
28 Liberty Street
New York, NY 10005-1413
Tel: (212) 530-5000
Fax: (212) 530-5219
Email: skhalil@milbank.com
bkinney@milbank.com
bfriedman@milbank.com
Marathon Asset Management, LP, solely on behalf of certain of its affiliated funds and managed accounts | ||||
By: | /s/ PETER COPPA | |||
Name: | PETER COPPA | |||
Title | AUTHORIZED SIGNATORY | |||
Holdings: | ||||
Holdings: | ||||
Holdings: | ||||
Holdings: |
[Signature Page to Restructuring Support Agreement]
If to Marathon Asset Management:
Marathon Asset Management
c/o Dan Pine
One Bryant Park
38th Floor
New York, NY 10036
With a copy to:
Milbank, Tweed, Hadley & McCloy LLP
Attn: Samuel Khalil, Brian Kinney and Bradley Friedman
28 Liberty Street
New York, NY 10005-1413
Tel: (212) 530-5000
Fax: (212) 530-5219
Email: skhalil@milbank.com
bkinney@milbank.com
bfriedman@milbank.com
Strategic Value Special Situations Offshore Fund III-A, L.P. | ||||
By: SVP Special Situations III-A LLC, its Investment Manager | ||||
By: | /s/ James Dougherty | |||
Name: | James Dougherty | |||
Title: | Fund Chief Financial Officer | |||
Holdings: | ||||
Holdings: | ||||
Holdings: | ||||
Holdings: |
[Signature Page to Restructuring Support Agreement]
Strategic Value Special Situations Master Fund III, L.P. | ||||
By: SVP Special Situations III LLC, its Investment Manager | ||||
By: | /s/ James Dougherty | |||
Name: | James Dougherty | |||
Title: | Fund Chief Financial Officer | |||
Holdings: | ||||
Holdings: | ||||
Holdings: | ||||
Holdings: |
[Signature Page to Restructuring Support Agreement]
Strategic Value Master Fund Ltd. | ||||
By: Strategic Value Partners, LLC, its Investment Manager | ||||
By: | /s/ James Dougherty | |||
Name: | James Dougherty | |||
Title: | Fund Chief Financial Officer | |||
Holdings: | ||||
Holdings: | ||||
Holdings: | ||||
Holdings: |
[Signature Page to Restructuring Support Agreement]
If to Strategic Value Partners:
Strategic Value Partners
c/o General Counsels Office
100 West Putnam Avenue, 2nd Floor
Greenwich, CT 06830
Email: legalnotices @svpglobal.com
Fax: 203-618-3501
With a copy to:
Milbank, Tweed, Hadley & McCloy LLP
Attn: Samuel Khalil, Brian Kinney and Bradley Friedman
28 Liberty Street
New York, NY 10005-1413
Tel: | (212) 530-5000 |
Fax: | (212) 530-5219 |
Email: | skhalil@milbank.com |
bkinney@milbank.com |
bfriedman@milbank.com |
Recipient:
Certain Funds and Accounts that are Consenting Noteholders and advised by T. Rowe Price Associates, Inc., severally and not jointly | ||||
By: T. Rowe Price Associates, Inc., as investment adviser | ||||
By: | /s/ Mark Vaselkik | |||
Name: | Mark Vaselkik | |||
Title: | Portfolio Manager | |||
By: | /s/ Rodney M. Rayburn | |||
Name: | Rodney M. Rayburn | |||
Title: | Vice President |
[Signature Page to Restructuring Support Agreement]
If to T. Rowe Price Associates, Inc.:
T. Rowe Price Associates, Inc.
c/o Andrew Baek
Vice President, Senior Legal Counsel
100 East Pratt Street
Mail Code BA-1020
Baltimore, MD 21202
Direct: 410-345-2090
Fax: 410-345-6575
With a copy to:
Milbank, Tweed, Hadley & McCloy LLP
Attn: | Samuel Khalil, Brian Kinney and Bradley Friedman |
28 Liberty Street
New York, NY 10005-1413
Tel: | (212) 530-5000 |
Fax: | (212) 530-5219 |
Email: | skhalil@milbank.com |
bkinney@milbank.com |
bfriedman@milbank.com |
[JOINING PARTY] | ||
FRANKLIN ADVISORS, INC., as investment manager on behalf of certain funds | ||
By: | /s/ Glenn Voyles | |
Name: | Glenn Voyles | |
Title: | VP / Director of Portfolio Management | |
Holdings: | ||
Holdings: | ||
Holdings: | ||
Holdings: |
Address for Notices:
1 Franklin Pkwy, San Mateo, CA 94403
Attn: Chris Chen
Telephone Number: (650) 312-3341
Email Address: chris.chen@franklintempleton.com
Notwithstanding anything to the contrary in the Restructuring Support Agreement, the Supporting Party shall vote all of its claims against, or interests in, as applicable, the Debtors now owned by the Supporting Party as set forth on this signature page or hereafter acquired (or for which the Supporting Party now has or hereafter acquires voting control over), to the extent permitted under its applicable investment guidelines in effect as of the date hereof, to accept the Plan in accordance with the applicable procedures set forth in the Disclosure Statement and the Solicitation Materials, as approved consistent with the Bankruptcy Code upon receipt of Solicitation Materials approved by the Bankruptcy Court. In addition, notwithstanding anything to the contrary in the Restructuring Support Agreement, the Supporting Party shall, in the context of a solicitation on the Plan, vote all claims set forth on this signature page, either beneficially owned by the Supporting Party or for which it is the nominee, investment manager, or advisor for beneficial holders thereof, to the extent permitted under applicable investment guidelines in effect as of the date hereof, in favor of the Plan in accordance with the applicable procedures set forth in the Disclosure Statement and accompanying voting materials, and return a duly-executed ballot in connection therewith no later than the deadline for voting on the Plan (except to the extent that the terms of such Plan are inconsistent with the terms contained in the Restructuring Term Sheet attached to the Restructuring Support Agreement). The Debtors acknowledge and agree that the foregoing provisions supersede anything to the contrary in the Restructuring Support Agreement. As of the date hereof, the Supporting Party acknowledges and agrees that all of its claims against, or interests in, as applicable, the Debtors set forth on this signature page can be voted in favor of the Plan as contemplated by the Restructuring Support Agreement.
If to Franklin Advisors, Inc.:
Franklin Advisors, Inc.
c/o Chris Chen
1 Franklin Parkway, San Mateo, CA 94403
Direct: 650-312-3341
Email: chris.chen@franklintempleton.com
With a copy to:
Milbank, Tweed, Hadley & McCloy LLP
Attn: | Samuel Khalil, Brian Kinney and Bradley Friedman |
28 Liberty Street
New York, NY 10005-1413
Tel: | (212) 530-5000 |
Fax: | (212) 530-5219 |
Email: | skhalil@milbank.com |
bkinney@milbank.com |
bfriedman@milbank.com |
Execution Version
Pine River Baxter Fund Ltd. | ||||
By: Pine River Capital Management L.P. Its: Investment Manager | ||||
By: | /s/ Tim OBrien | |||
Name: | Tim OBrien | |||
Title: | General Counsel and Co-Chief Operating Officer | |||
Holdings: | ||||
Holdings: | ||||
Holdings: | ||||
Holdings: |
Execution Version
Pine River Fixed Income Master Fund Ltd. | ||||
By: Pine River Capital Management L.P. Its: Investment Manager | ||||
By: | /s/ Tim OBrien | |||
Name: | Tim OBrien | |||
Title: | General Counsel and Co-Chief Operating Officer | |||
Holdings: | ||||
Holdings: | ||||
Holdings: | ||||
Holdings: |
Execution Version
Pine River Master Fund Ltd. | ||||
By: Pine River Capital Management L.P. Its: Investment Manager | ||||
By: | /s/ Tim OBrien | |||
Name: | Tim OBrien | |||
Title: | General Counsel and Co-Chief Operating Officer | |||
Holdings: | ||||
Holdings: | ||||
Holdings: | ||||
Holdings: |
Execution Version
LMA SPC for and on behalf of MAP 89 Segregated Portfolio | ||||
By: Pine River Capital Management L.P. Its: Investment Manager | ||||
By: | /s/ Tim OBrien | |||
Name: | Tim OBrien | |||
Title: | General Counsel and Co-Chief Operating Officer | |||
Holdings: | ||||
Holdings: | ||||
Holdings: | ||||
Holdings: |
If to Pine River Capital Management, L.P.:
c/o Pine River Capital Management L.P.
601 Carlson Parkway, 7th Floor
Minnetonka, MN 55305
Attn: Legal Department
Fax: (612) 238-3301
With a copy to:
Milbank, Tweed, Hadley & McCloy LLP
Attn: | Samuel Khalil, Brian Kinney and Bradley Friedman |
28 Liberty Street
New York, NY 10005-1413
Tel: | (212) 530-5000 |
Fax: | (212) 530-5219 |
Email: | skhalil@milbank.com |
bkinney@milbank.com |
bfriedman@milbank.com |
AMTRUST INTERNATIONAL INSURANCE, LTD. | ||||
By: | /s/ Stephen Unger | |||
Name: | StephenUnger | |||
Title: | Securities | |||
Holdings: | ||||
Holdings: | ||||
Holdings: | ||||
Holdings: |
[Signature Page to Restructuring Support Agreement]
If to AmTrust International Insurance, Ltd.:
AmTrust Financial Services Inc.
c/o Lawrence A. Heller and Harry Schlachter
59 Maiden Lane, 43rd Floor
New York, NY 10038
Email: lawrence.heller@amtrustgroup.com
Email: harry.schlachter@amtrustgroup.com
With a copy to:
Milbank, Tweed, Hadley & McCloy LLP
Attn: | Samuel Khalil, Brian Kinney and Bradley Friedman |
28 Liberty Street
New York, NY 10005-1413
Tel: | (212) 530-5000 |
Fax: | (212) 530-5219 |
Email: | skhalil@milbank.com |
bkinney@milbank.com |
bfriedman@milbank.com |
NAT GEN RE LTD. | ||||
By: | /s/ Peter Randall | |||
Name: | Peter Randall | |||
Title: | COO and Treasurer | |||
Holdings: | ||||
Holdings: | ||||
Holdings: | ||||
Holdings: |
[Signature Page to Restructuring Support Agreement]
If to National General:
AmTrust Financial Services Inc.
c/o Jeffrey Weissman, Daron Skipper, and Susan Eylward
59 Maiden Lane, 43rd Floor
New York, NY 10038
Email: Jeffrey.weissmann@ngic.com
Email: susan.eylward@ngic.com
With a copy to:
Milbank, Tweed, Hadley & McCloy LLP
Attn: | Samuel Khalil, Brian Kinney and Bradley Friedman |
28 Liberty Street
New York, NY 10005-1413
Tel: | (212) 530-5000 |
Fax: | (212) 530-5219 |
Email: | skhalil@milbank.com |
bkinney@milbank.com |
bfriedman@milbank.com |
Wexford Spectrum Investors LLC | ||
By: | /s/ Dante Domenichelli | |
Name: Dante Domenichelli | ||
Title: Vice President & Secretary | ||
Holdings: | ||
Holdings: | ||
Holdings: | ||
Holdings: |
[Signature Page to Restructuring Support Agreement]
Wexford Catalyst Investors LLC | ||
By: | /s/ Dante Domenichelli | |
Name: Dante Domenichelli | ||
Title: Vice President & Secretary | ||
Holdings: | ||
Holdings: | ||
Holdings: | ||
Holdings: |
[Signature Page to Restructuring Support Agreement]
Debello Investors LLC | ||
By: | /s/ Dante Domenichelli | |
Name: Dante Domenichelli | ||
Title: Vice President & Secretary | ||
Holdings: | ||
Holdings: | ||
Holdings: | ||
Holdings: |
[Signature Page to Restructuring Support Agreement]
If to Wexford Capital LP:
Wexford Capital LP
c/o Daniel J. Weiner and Marc McCarthy
411 West Putnam Avenue
Greenwich, CT 06830
With a copy to:
Milbank, Tweed, Hadley & McCloy LLP
Attn: Samuel Khalil, Brian Kinney and Bradley Friedman
28 Liberty Street
New York, NY 10005-1413
Tel: (212) 530-5000
Fax: (212) 530-5219
Email: skhalil@milbank.com
bkinney@milbank.com
bfriedman@milbank.com
Execution Version
By: | /s/ Tim Lang | |
Name: | Tim Lang | |
Title: | Authorized Trader, Grantham, Mayo, Van Otterloo & Co., LLC, investment manager of GMO Credit Opportunities Fund, L.P. | |
Holdings: |
If to Grantham, Mayo, Van Otterloo & Co. LLC:
Grantham, Mayo, Van Otterloo & Co. LLC
c/o Kevin OBrien and Jon Roiter
40 Rowes Wharf
Boston, MA 02110
Phone: 617-346-7518
Fax: 617-849-7243
Email: kevin.obrien@gmo.com
Email: jon.roiter@gmo.com
With a copy to:
Milbank, Tweed, Hadley & McCloy LLP
Attn: Samuel Khalil, Brian Kinney and Bradley Friedman
28 Liberty Street
New York, NY 10005-1413
Tel: (212) 530-5000
Fax: (212) 530-5219
Email: skhalil@milbank.com
bkinney@milbank.com
bfriedman@milbank.com
Execution Version
By: | J.P. MORGAN INVESTMENT MANAGEMENT, INC. AS INVESTMENT MANAGER AND AGENT FOR CERTAIN CLIENT ACCOUNTS | |
Name: | Alexander P. Sammarco | |
Title: | Executive Director | |
Holdings: | ||
Holdings: | ||
Holdings: | ||
Holdings: |
By: | J.P. MORGAN CHASE BANK, N.A. AS TRUSTEE FOR CERTAIN CLIENT ACCOUNTS | |
Name: | Alexander P. Sammarco | |
Title: | Executive Director | |
Holdings: | ||
Holdings: | ||
Holdings: | ||
Holdings: |
If to JP Morgan Asset Management:
J.P. Morgan Asset Management
Attn: Alexander Sammarco
Cc: Jim Shanahan and Laurie Whipkey
8044 Montgomery Road, Suite 555
Cincinnati, Ohio 45236
Phone: 513-699-4417
With a copy to:
Milbank, Tweed, Hadley & McCloy LLP
Attn: Samuel Khalil, Brian Kinney and Bradley Friedman
28 Liberty Street
New York, NY 10005-1413
Tel: (212) 530-5000
Fax: (212) 530-5219
Email: skhalil@milbank.com
bkinney@milbank.com
bfriedman@milbank.com
WELLS FARGO BANK, NATIONAL ASSOCIATION, | ||
By: | /s/ Bryan M. McDavid | |
Name: | Bryan M. McDavid | |
Title: | Director |
ROYAL BANK OF CANADA, | ||
By: | /s/ Mark Lumpkin, Jr. | |
Name: | Mark Lumpkin, Jr. | |
Title: | Authorized Signatory |
BANK OF AMERICA, N.A., | ||
GBAM Special Assets Group | ||
By: | /s/ Edna Aguilar Mitchell | |
Name: | Edna Aguilar Mitchell | |
Title: | Director |
SCOTIABANC INC., | ||
By: | /s/ J.F. Todd | |
Name: | J.F. Todd | |
Title: | Managing Director |
CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, | ||
By: | /s/ Didier Siffer | |
Name: | Didier Siffer | |
Title: | Authorized Signatory | |
By: | /s/ Laura Katherine Schembri | |
Name: | Laura Katherine Schembri | |
Title: | Authorized Signatory |
BRANCH BANKING AND TRUST COMPANY, | ||
By: | /s/ David A. White | |
Name: | David A. White | |
Title: | Senior Vice President |
BARCLAYS BANK PLC, | ||
By: | /s/ Vanessa Kurbatskiy | |
Name: | Vanessa Kurbatskiy | |
Title: | Vice President |
COMERICA BANK, | ||
By: | /s/ Barry Carroll | |
Name: | Barry Carroll | |
Title: | Vice President |
SOCIÉTÉ GÉNÉRALE, | ||
By: | /s/ Max Sonnonstine | |
Name: | Max Sonnonstine | |
Title: | Director |
CAPITAL ONE, NATIONAL ASSOCIATION, | ||
By: | /s/ Laurel Varney | |
Name: | Laurel Varney | |
Title: | Vice President |
SUNTRUST BANK, | ||
By: | /s/ William S. Krueger | |
Name: | William S. Krueger | |
Title: | First Vice President |
SANTANDER BANK, N.A., | ||
By: | /s/ Mark Connelly | |
Name: | Mark Connelly | |
Title: | Senior Vice President | |
By: | /s/ David ODriscoll | |
Name: | David ODriscoll | |
Title: | Senior Vice President |
Exhibit A to the Restructuring Support Agreement
Restructuring Term Sheet
Execution Version
PENN VIRGINIA CORPORATION
RESTRUCTURING TERM SHEET
May 10, 2016
Material Terms of the Restructuring | ||
Term |
Description | |
Overview of the Restructuring | This term sheet (this Term Sheet) contemplates a comprehensive restructuring of the PVA Entities balance sheet (the Restructuring). The Restructuring will be executed pursuant to a prearranged chapter 11 plan of reorganization (the Plan) to be confirmed by the United States Bankruptcy Court for the Eastern District of Virginia, Richmond Division (the Bankruptcy Court). To effectuate the Restructuring, certain parties (collectively, the Restructuring Support Parties) have entered into a restructuring support agreement (the RSA),1 to which this term sheet is attached as Exhibit A.
The Restructuring will be financed by (i) consensual use of cash collateral, including $6 million funded from the termination of certain of Penn Virginias swap contracts in accordance with the RBL Amendment; (ii) a new-money, $25 million investment in the form of DIP financing substantially on the terms set forth in the term sheet attached to the RSA as Exhibit B; and (iii) a $50 million rights offering (the Rights Offering) that is backstopped by certain Noteholders (in their capacity as such, the Backstop Parties) substantially on the terms set forth in the Backstop Commitment Agreement attached to the RSA as Exhibit C and in accordance with the rights offering procedures attached as an exhibit to the Backstop Commitment Agreement. All of the Backstop Parties obligations under the Backstop Commitment Agreement are subject to the entry of the Approval Order. On the Effective Date, the PVA Entities will enter into a new reserve-based lending facility credit agreement on the terms reflected on the term sheet attached to the RSA as Exhibit D, and the commitment letter and the related fee letter attached to the RSA as Exhibit E. | |
Backstop Commitment Agreement | The Backstop Commitment Agreement shall provide for a premium of 6% of the $50 million committed amount (the Commitment Premium) and a discount of 25% to total settled plan equity value of $125 million. The Commitment Premium will be fully earned and nonrefundable upon entry of the Approval Order and payable in shares of New Common Stock, unless the Backstop Commitment Agreement is terminated in connection with a breach by Penn Virginia or any PVA Entity, an Alternative Transaction, or Penn Virginias entry into an Alternative Transaction during a 12-month tail period; in any of the foregoing cases, the Backstop Parties shall be entitled to a termination fee of 4% of the $50 million committed amount, which fee shall be paid in cash. The Backstop Commitment Agreement also shall provide for the PVA Entities to pay for the reasonable and documented fees of all of the professionals, advisors, and consultants retained by the Backstop Parties, and filing fees required by antitrust laws, subject to entry of the Approval Order. |
1 | Capitalized terms used but not defined in this Term Sheet have the meanings given to such terms in the RSA. |
Milestones | The Restructuring will be achieved in accordance with the following milestones (collectively, the Milestones):2 | |
no later than 8:00 a.m. (prevailing Eastern Time) on May 12, 2016, the PVA Entities shall commence the Chapter 11 Cases by filing bankruptcy petitions with the Bankruptcy Court (such filing date, the Petition Date); | ||
on, or no later than 24 hours after, the Petition Date, the Debtors shall file with the Bankruptcy Court a motion seeking entry of the Interim DIP Order and the Final DIP Order; | ||
no later than three days after the Petition Date, the PVA Entities shall file with the Bankruptcy Court (i) the Plan and related disclosure statement (the Disclosure Statement) and (ii) a motion seeking entry of an order approving the PVA Entities assumption of the RSA and the Backstop Commitment Agreement (the Approval Motion); | ||
no later than three days after the Petition Date, the Bankruptcy Court shall have entered the Interim DIP Order; | ||
no later than fifteen days after the Petition Date, the PVA Entities shall file with the Bankruptcy Court (i) a motion to establish a bar date for filing proofs of claim and (ii) the schedules of assets and liabilities and statements of financial affairs for each PVA Entity; | ||
no later than thirty days after the Petition Date, (i) the Bankruptcy Court shall have entered the Final DIP Order, (ii) the Bankruptcy Court shall have entered an order (the Approval Order) granting the Approval Motion, and (iii) the PVA Entities shall have delivered a proposal with regard to the treatment of material contracts to the Majority Consenting Noteholders; | ||
no later than forty-five days after the Petition Date, the Bankruptcy Court shall have entered an order (the Disclosure Statement Order) approving the adequacy of the Disclosure Statement and related solicitation procedures (including the Rights Offering Procedures); | ||
no later than forty-five days after the entry of the Disclosure Statement Order, the Bankruptcy Court shall commence a hearing to confirm the Plan (the Confirmation Hearing); | ||
no later than five days after the commencement of the Confirmation Hearing, the Bankruptcy Court shall enter an order (the Confirmation Order) confirming the Plan; and | ||
no later than twenty-five days after entry of the Confirmation Order, the PVA Entities shall consummate the transactions contemplated by the Plan (the date of such consummation, the Effective Date). | ||
Conditions Precedent to Emergence | The occurrence of the Effective Date will be subject to the following conditions precedent: | |
the RSA shall not have been terminated and remains in full force and effect; | ||
entry of the Interim DIP Order and the Final DIP Order; | ||
entry of the Disclosure Statement Order; |
2 | For the avoidance of doubt, the computation of dates and deadlines set forth herein shall be in accordance with Rule 9006(a) of the Federal Rules of Bankruptcy Procedure. |
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entry of the Confirmation Order; | ||
the PVA Entities shall not be in default under the debtor-in-possession credit agreement (the DIP Credit Agreement) or the DIP Orders (or, to the extent that the PVA Entities have been in default or are in default on the proposed Effective Date, such default shall have been waived by the lenders thereunder or cured by the PVA Entities in a manner consistent with the DIP Credit Agreement and/or the DIP Orders); | ||
entry into the Exit Facility (with all conditions precedent thereto having been satisfied or waived); | ||
the Backstop Commitment Agreement shall not have been terminated and remains in full force and effect (with all conditions precedent thereto having been satisfied or waived); | ||
solely to the extent not in violation or breach of the Exit Facility, establishment of a professional fee escrow funded in the amount of estimated (with the reasonable consent of the Required Consenting Creditors, which consent shall not be unreasonably withheld) accrued but unpaid professional fees incurred by the PVA Entities during the Chapter 11 Cases; and | ||
all requisite governmental authorities and third parties will have approved or consented to the Restructuring, to the extent required. | ||
Status Upon Emergence | The PVA Entities shall use commercially reasonable efforts to prepare to be a publicly listed company shortly after the Effective Date, provided, however, that any such decision of publicly listing the new equity in reorganized Penn Virginia Corporation (the New Common Stock) on such an exchange will be determined by the New Board (as defined below). In addition, the PVA Entities shall use commercially reasonable efforts to quote the New Common Stock on the OTC Markets Group Inc. electronic interdealer quotation system, including OTCQX, OTCQB and OTC Pink, or any similar quotation system or association promptly after the Effective Date. | |
Registration Rights | Customary for any Backstop Party to the extent it receives any restricted or control New Common Stock under the Securities Act of 1933, as amended. | |
Rights Offering | As set forth in the Rights Offering Procedures, the Rights Offering shall be a private placement conducted pursuant to section 4(a)(2) of the Securities Act of 1933, as amended. | |
Releases | The exculpation provisions, the Debtor releases, and the Third-Party releases to be included in the Plan will be as set forth on Exhibit 1 attached hereto in all material respects. | |
The Consenting RBL Lenders, Consenting Noteholders, DIP Lenders, Backstop Parties, and Exit Facility Lenders, will, pursuant to the RSA, agree not to opt out of the consensual third party releases, including those granted to the PVA Entities current and former officers, directors, and employees. | ||
Employee Matters | Matters with respect to management and employees in connection with the Restructuring will be addressed in accordance with the term sheet set forth on Exhibit 2 attached hereto. | |
New Board | Reorganized Penn Virginias board of directors (the New Board) will be chosen by the Majority Consenting Noteholders and identified at or prior to the Confirmation Hearing. |
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Indemnification Obligations |
The PVA Entities indemnification obligations in place as of the Effective Date, whether in the bylaws, certificates of incorporation or formation, limited liability company agreements, other organizational or formation documents, board resolutions, management or indemnification agreements, employment contracts, or otherwise, for the directors and the officers that are currently employed by, or serving on the Board of Directors of, any of the PVA Entities (including with respect to H. Baird Whitehead in his former capacity as an employee of the PVA Entities, including as Chief Executive Officer of Penn Virginia, and in his current capacity as a director of Penn Virginia), as of the Petition Date, shall be assumed pursuant to the Plan. | |
Release of Avoidance Actions | Subject to diligence by the advisors to the Consenting Noteholders and the PVA Entities completed prior to the Petition Date, any and all actual or potential claims and causes of action to avoid a transfer of property or an obligation incurred by the Debtors arising under chapter 5 of the Bankruptcy Code, including sections 544, 545, 547, 548, 549, 550, 551, and 553(b) of the Bankruptcy Code (collectively, the Avoidance Actions) shall be released pursuant to the Plan, except for Avoidance Actions brought as counterclaims, offsets, or defenses to claims asserted against the PVA Entities or in the exercise of the rights of any PVA Entity under section 502(d) of the Bankruptcy Code; provided, that, such exception shall not apply to any claims asserted against the PVA Entities by the RBL Lenders in their capacities as such. | |
Business Plan | The PVA Entities shall operate their businesses in accordance with a business plan, agreed to by and among the Consenting RBL Lenders, the Consenting Noteholders, and the Backstop Parties on or before the Petition Date. | |
Treatment of Claims and Interests Under the Plan | ||
Claim |
Proposed Treatment | |
Administrative and Priority Claims | Paid in full, in cash on the Effective Date, or as otherwise determined in the discretion of the reorganized PVA Entities. | |
DIP Claims | DIP Claims (other than claims under any DIP hedges that have not been terminated prior to the Effective Date) shall be paid in cash in full, funded from cash on hand and proceeds of the Exit Facility and the Rights Offering, on the Effective Date. | |
Other Secured Debt | Unimpaired under the Plan. | |
RBL Claims | To the extent not paid pursuant to the DIP Credit Agreement, paid in full in cash, funded from cash on hand and proceeds of the Exit Facility and the Rights Offering, on the Effective Date. | |
Notes Claims | Convert into an aggregate of 100% of the New Common Stock on the Effective Date (on a pro rata basis with holders of Allowed Notes Claims and Allowed General Unsecured Claims), subject to dilution on account of the Management Incentive Plan Equity, any fees payable in New Common Stock under the terms of the Backstop Commitment Agreement (including the Commitment Premium), and the New Common Stock issued in the Rights Offering. Additionally, each holder of an allowed Note Claim shall be entitled to participate in the Rights Offering in accordance with the Backstop Commitment Agreement, the RSA, the Plan, and the Rights Offering Procedures. |
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General Unsecured Claims | Convert into an aggregate of 100% of the New Common Stock on the Effective Date (on a pro rata basis with holders of Allowed General Unsecured Claims and Allowed Notes Claims), subject to dilution on account of the Management Incentive Plan Equity, any fees payable in New Common Stock under the terms of the Backstop Commitment Agreement (including the Commitment Premium), and the New Common Stock issued in the Rights Offering. | |
Existing Equity Interests | No recovery and shall be cancelled, extinguished, and discharged. |
* * * *
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Exhibit 1 to Term Sheet
Release and Exculpation Provisions to be Included in the Plan
Defined Terms
1. | Affiliate has the meaning set forth in section 101(2) of the Bankruptcy Code. |
2. | Avoidance Actions means any and all avoidance, recovery, subordination, or other claims, actions, or remedies that may be brought by or on behalf of the Debtors or their Estates or other authorized parties in interest under the Bankruptcy Code or applicable non-bankruptcy law, including actions or remedies under sections 502, 510, 542, 544, 545, and 547 through and including 553 of the Bankruptcy Code. |
3. | Backstop Commitment Agreement means the Backstop Commitment Agreement attached as Exhibit C to the Restructuring Support Agreement pursuant to which the Backstop Parties have agreed to backstop the Rights Offering. |
4. | Backstop Parties means certain Noteholders that have agreed to backstop the Rights Offerings and are signatories to the Backstop Commitment Agreement, solely in their capacities as such. |
5. | Bankruptcy Code means title 11 of the United States Code, 11 U.S.C. §§ 1011532, as may be amended from time to time. |
6. | Bankruptcy Court means the United States Bankruptcy Court for the Eastern District of Virginia (Richmond Division) or another court having jurisdiction over the Chapter 11 Cases. |
7. | Bankruptcy Rules means the Federal Rules of Bankruptcy Procedure as promulgated by the United States Supreme Court under section 2075 of title 28 of the United States Code, 28 U.S.C. § 2075, as applicable to the Chapter 11 Cases and the general, local, and chambers rules of the Bankruptcy Court. |
8. | Causes of Action means any and all claims, actions, causes of action, choses in action, suits, debts, damages, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, judgments, remedies, rights of set-off, third-party claims, subrogation claims, contribution claims, reimbursement claims, indemnity claims, counterclaims, and crossclaims (including all claims and any avoidance, recovery, subordination, or other actions against insiders and/or any other Entities under the Bankruptcy Code) of any of the Debtors and/or the Debtors estates, whether known or unknown, liquidated or unliquidated, fixed or contingent, matured or unmatured, disputed or undisputed, that are or may be pending on the Effective Date or commenced by the Reorganized Debtors after the Effective Date against any Entity, based in law or equity, including under the Bankruptcy Code, whether direct, indirect, derivative, or otherwise and whether asserted or unasserted as of the date of entry of the Confirmation Order. |
9. | Chapter 11 Cases means the procedurally consolidated chapter 11 cases pending for the Debtors in the Bankruptcy Court. |
10. | Claim has the meaning set forth in section 101(5) of the Bankruptcy Code. |
11. | Class means a category of holders of Claims or Interests under section 1122(a) of the Bankruptcy Code. |
12. | Confirmation Date means the date on which the Bankruptcy Court enters the Confirmation Order on the docket of the Chapter 11 Cases within the meaning of Bankruptcy Rules 5003 and 9021. |
13. | Confirmation Hearing means the hearing(s) before the Bankruptcy Court under section 1128 of the Bankruptcy Code at which the Debtors seek entry of the Confirmation Order. |
14. | Confirmation Order means a Final Order of the Bankruptcy Court confirming the Plan pursuant to section 1129 of the Bankruptcy Code. |
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15. | Consenting Noteholders means each Noteholder that is party to the Restructuring Support Agreement, solely in its capacity as such. |
16. | Consenting RBL Lenders means each RBL Lender that is party to the Restructuring Support Agreement, solely in its capacity as such. |
17. | Consummation means the occurrence of the Effective Date. |
18. | Debtors means, collectively, each of the following: Penn Virginia Corporation; Penn Virginia Holding Corp.; Penn Virginia MC Corporation; Penn Virginia MC Energy L.L.C.; Penn Virginia MC Operating Company L.L.C.; Penn Virginia Oil & Gas Corporation; Penn Virginia Oil & Gas GP LLC; Penn Virginia Oil & Gas LP LLC; and Penn Virginia Oil & Gas, L.P. |
19. | DIP Agent means Wells Fargo Bank, N.A., or any successor thereto, as administrative agent under the DIP Facility, solely in its capacity as such. |
20. | DIP Credit Agreement means that certain senior secured debtor-in-possession credit agreement, dated as of May 11, 2016, as amended, restated, modified, supplemented, or replaced from time to time in accordance with its terms, by and among the Debtors, the DIP Lenders, and the DIP Agent. |
21. | DIP Facility means that certain $25 million debtor-in-possession financing facility provided by the DIP Lenders on the terms of, and subject to the conditions set forth in, the DIP Credit Agreement. |
22. | DIP Lenders means each of the lenders and their Affiliates under the DIP Facility, solely in their capacity as such. |
23. | Disclosure Statement means the Disclosure Statement for the Joint Chapter 11 Plan of Reorganization of Penn Virginia Corporation and its Debtor Affiliates [Docket No. ], dated as of May 12, 2016, as may be amended, supplemented, or modified from time to time, including all exhibits and schedules thereto and references therein that relate to the Plan, that is prepared and distributed in accordance with the Bankruptcy Code, the Bankruptcy Rules, and any other applicable law, in form and substance reasonably acceptable to the Required Consenting Creditors. |
24. | Effective Date means the date that is the first Business Day after the Confirmation Date on which all conditions precedent to the occurrence of the Effective Date set forth in Section 9.1 of the Plan have been satisfied or waived in accordance with Section 9.2 of the Plan. |
25. | Entity has the meaning set forth in section 101(15) of the Bankruptcy Code. |
26. | Estate means the estate of any Debtor created under sections 301 and 541 of the Bankruptcy Code upon the commencement of the applicable Debtors Chapter 11 Case. |
27. | Exculpated Parties means each of the following, solely in its capacity as such: (i)(a) the Debtors; (b) the Reorganized Debtors, and (c) with respect to each of the foregoing parties in clauses (i)(a) and (i)(b), each of such Entity and its current and former Affiliates, and such Entities and their current and former Affiliates current and former directors, managers, officers, principals, members, employees, predecessors, successors, assigns, subsidiaries, agents, advisory board members, financial advisors, partners, attorneys, accountants, investment bankers, consultants, representatives, and other professionals; and (ii)(a) the RBL Lenders; (b) the Noteholders; (c) the DIP Lenders; (d) the DIP Hedge Lenders; (e) the Backstop Parties; (f) the Exit Facility Lenders; (g) the Indenture Trustee; (h) the RBL Agent; (i) the DIP Agent; (j) the Exit Facility Agent; (k) the Consenting Noteholders; (l) the Consenting RBL Lenders; and (m) with respect to each of the foregoing parties in clauses (ii)(a) through (ii)(l), each of such Entitys current and former Affiliates, and such Entities and their current and former Affiliates current and former directors, managers, officers, principals, members, employees, equity holders (regardless of whether such interests are held directly or indirectly), predecessors, successors, assigns, subsidiaries, agents, advisory board members, financial advisors, partners, attorneys, accountants, investment bankers, consultants, representatives, and other professionals. |
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28. | Exit Facility means the new reserve-based lending facility credit agreement to be entered into by the Reorganized Debtors on the terms set forth in the Exit Facility Term Sheet and the Exit Commitment Letters attached to the Restructuring Support Agreement as Exhibit D and Exhibit E, respectively. |
29. | Exit Facility Agent means the administrative agent and collateral agent under the Exit Facility, or any successor thereto, solely in its capacity as such. |
30. | Exit Commitment Letters means the commitment letter attached to the Restructuring Support Agreement as Exhibit E and related fee letters with respect thereto setting forth the Exit Facility Lenders commitment to provide the Exit Facility and the fees related thereto. |
31. | Exit Facility Lenders means each of the lenders and their Affiliates under the Exit Facility, solely in their capacity as such. |
32. | Exit Facility Term Sheet means the term sheet attached to the Restructuring Support Agreement as Exhibit D setting forth the terms and conditions of the Exit Facility. |
33. | Indenture means that certain Senior Indenture, dated as of June 15, 2009, as amended, restated, modified, supplemented, or replaced from time to time prior to the Petition Date, for the 7.250% Senior Notes due 2019 and the 8.500% Senior Notes due 2020 among Penn Virginia, each of the guarantors party thereto, and the Indenture Trustee. |
34. | Indenture Trustee means Wilmington Savings Fund Society, FSB, or any successor thereto, as trustee under the Indenture. |
35. | Intercompany Interest means, other than an Interest in Penn Virginia, an Interest in one Debtor or Non Debtor Subsidiary held by another Debtor. |
36. | Interest means the common stock, preferred stock, limited liability company interests, and any other equity, ownership, or profits interests of any Debtor, including, without limitation, the Preferred Stock, and the Penn Virginia Common Stock, and options, warrants, rights, or other securities or agreements to acquire the common stock, preferred stock, limited liability company interests, or other equity, ownership, or profits interests of any Debtor (whether or not arising under or in connection with any employment agreement), including any Claim against the Debtors that is subject to subordination pursuant to section 510(b) of the Bankruptcy Code arising from or related to any of the foregoing, provided, however, that the term Interests shall not include the Intercompany Interests. |
37. | Notes means the 7.250% Senior Notes due 2019 and the 8.500% Senior Notes due 2020, in each case issued pursuant to the Indenture. |
38. | Noteholders means holders of the Notes, solely in their capacity as such. |
39. | Penn Virginia means Penn Virginia Corporation, a Virginia corporation, the ultimate parent of each of the Debtors and the predecessor to Reorganized Penn Virginia. |
40. | Penn Virginia Common Stock means Penn Virginias authorized and issued common stock outstanding as of the Effective Date. |
41. | Petition Date means the date on which each of the Debtors filed its respective petition for relief commencing the Chapter 11 Cases. |
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42. | Plan means this chapter 11 plan, as it may be altered, amended, modified, or supplemented from time to time in accordance with the terms hereof and the Restructuring Support Agreement, including the Plan Supplement and all exhibits, supplements, appendices, and schedules. |
43. | Plan Supplement means the compilation of documents and forms of documents, schedules, and exhibits to the Plan (as amended, supplemented, or modified from time to time in accordance with the terms hereof, the Bankruptcy Code, the Bankruptcy Rules, and the Restructuring Support Agreement), to be Filed by the Debtors no later than 14 days before the Confirmation Hearing, and additional documents or amendments to previously Filed documents, Filed before the Effective Date as amendments to the Plan Supplement, including the following, as applicable: (a) the Exit Facility Documents; (b) the New Organizational Documents; (c) a list of retained Causes of Action; (d) the New Shareholders Agreement; (e) the Description of Transaction Steps; (f) the Registration Rights Agreement; (g) the Schedule of Assumed Executory Contracts and Unexpired Leases; (h) the Schedule of Rejected Executory Contracts and Unexpired Leases; (i) the Backstop Commitment Agreement, including all exhibits and schedules thereto; and (j) any and all other documentation necessary to effectuate the Restructuring Transactions or that is contemplated by the Plan. The Debtors shall have the right to amend the documents contained in, and exhibits to, the Plan Supplement through the Effective Date consistent with the Restructuring Support Agreement. |
44. | Preferred Stock means all issuances of preferred stock issued by any of the Debtors prior to the Petition Date, including: (a) the Series A 6% Convertible Perpetual Preferred Stock; and (b) the Series B 6% Convertible Perpetual Preferred Stock. |
45. | RBL Agent means Wells Fargo Bank, N.A., or any successor thereto, as administrative agent under the RBL Credit Agreement, in its capacity as such. |
46. | RBL Credit Agreement means that certain Credit Agreement, dated as of September 28, 2012, as amended, restated, modified, supplemented, or replaced from time to time prior to the Petition Date, by and among Penn Virginia Holding Corporation, as borrower, Penn Virginia, as parent, each of the guarantors party thereto, the RBL Agent, and the RBL Lenders. |
47. | RBL Lenders means the lenders and their Affiliates party to the RBL Credit Agreement, in their capacities as such. |
48. | Released Parties means each of the following, solely in its capacity as such: (i)(a) the Debtors; (b) the Reorganized Debtors, and (c) with respect to each of the foregoing parties in clauses (i)(a) and (i)(b), each of such Entity and its current and former Affiliates, and such Entities and their current and former Affiliates current and former directors, managers, officers, principals, members, employees, predecessors, successors, assigns, subsidiaries, agents, advisory board members, financial advisors, partners, attorneys, accountants, investment bankers, consultants, representatives, and other professionals; and (ii)(a) the RBL Lenders; (b) the Noteholders; (c) the DIP Lenders; (d) the DIP Hedge Lenders (e) the Backstop Parties; (f) the Exit Facility Lenders; (g) the Indenture Trustee; (h) the RBL Agent; (i) the DIP Agent; (j) the Exit Facility Agent; (k) the Consenting Noteholders; (k) the Consenting RBL Lenders; and (l) with respect to each of the foregoing parties in clauses (ii)(a) through (ii)(k), each of such Entitys current and former Affiliates, and such Entities and their current and former Affiliates current and former directors, managers, officers, principals, members, employees, equity holders (regardless of whether such interests are held directly or indirectly), predecessors, successors, assigns, subsidiaries, agents, advisory board members, financial advisors, partners, attorneys, accountants, investment bankers, consultants, representatives, and other professionals; provided, however, that any holder of a Claim or Interest that opts out of the releases contained in, or otherwise objects to, the Plan shall not be a Released Party. |
49. | Releasing Parties means collectively, and in each case solely in its capacity as such: (a) the Debtors; (b) the Reorganized Debtors; (c) the RBL Lenders; (d) the DIP Hedge Lenders (e) the Noteholders; (f) the DIP Lenders; (g) the Backstop Parties; (h) the Exit Facility Lenders; (i) the Indenture Trustee; (j) the RBL Agent; (k) the DIP Agent; (l) the Exit Facility Agent; (m) all holders of Claims and Interests that are deemed to accept the Plan; (n) all holders of Claims who vote to accept the Plan; (o) all holders of Claims |
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in voting Classes who abstain from voting on the Plan and who do not opt out of the releases provided by the Plan; and (p) with respect to the foregoing clauses (a) through (o), each such Entity and its current and former Affiliates, and such Entities and their current and former Affiliates current and former directors, managers, officers, principals, members, employees, equity holders (regardless of whether such interests are held directly or indirectly), predecessors, successors, assigns, subsidiaries, agents, advisory board members, financial advisors, partners, attorneys, accountants, investment bankers, consultants, representatives, and other professionals; provided, however, that any holder of a Claim that opts out of the releases contained in the Plan shall not be a Releasing Party.
50. | Reorganized Debtor means a Debtor, or any successor thereto, by merger, consolidation, or otherwise, on and after the Effective Date. |
51. | Reorganized Penn Virginia means Penn Virginia, or any successors thereto, by merger, consolidation, or otherwise, on and after the Effective Date. |
52. | Restructuring Support Agreement means that certain restructuring support agreement, dated May 10, 2016, by and among the Debtors and the Restructuring Support Parties, including all exhibits thereto. |
53. | Restructuring Support Parties means, collectively, the Consenting Noteholders, the Consenting RBL Lenders, the DIP Lenders, and the Backstop Parties, in each case, that are party to the Restructuring Support Agreement. |
54. | Restructuring Term Sheet means the term sheet attached as Exhibit A to the Restructuring Support Agreement setting forth the terms and conditions of the Debtors comprehensive balance sheet restructuring. |
55. | Rights Offering means the rights offering that is backstopped by the Backstop Parties in connection with the Restructuring Transactions pursuant to the Backstop Commitment Agreement and in accordance with the Rights Offerings Procedures (including the Subscription Agreement). |
Releases by the Debtors
Notwithstanding anything contained in the Plan to the contrary, pursuant to section 1123(b) of the Bankruptcy Code, for good and valuable consideration, on and after the Effective Date, each Released Party is deemed released and discharged by the Debtors, the Reorganized Debtors, and their Estates from any and all Claims and Causes of Action, whether known or unknown, including any derivative claims, asserted on behalf of the Debtors, that the Debtors, the Reorganized Debtors, or their Estates would have been legally entitled to assert in their own right (whether individually or collectively) or on behalf of the holder of any Claim or Interest, based on or relating to, or in any manner arising from, in whole or in part, the Debtors (including the management, ownership or operation thereof), the Debtors in- or out-of-court restructuring efforts, any Avoidance Actions (but excluding Avoidance Action brought as counterclaims or defenses to Claims asserted against the Debtors), the formulation, preparation, dissemination, negotiation, or Filing of the Restructuring Support Agreement, or any Restructuring Transaction, contract, instrument, release, or other agreement or document (including providing any legal opinion requested by any Entity regarding any transaction, contract, instrument, document, or other agreement contemplated by the Plan or the reliance by any Released Party on the Plan or the Confirmation Order in lieu of such legal opinion) created or entered into in connection with the Restructuring Support Agreement, the Disclosure Statement, the Plan, the Plan Supplement, the Rights Offering, the DIP Facility, the Exit Facility, the DIP Credit Agreement, the Backstop Commitment Agreement, the Exit Commitment Letters, the Chapter 11 Cases, the filing of the Chapter 11 Cases, the pursuit of Confirmation, the pursuit of Consummation, the administration and implementation of the Plan, including the issuance or distribution of Securities pursuant to the Plan, or the distribution of property under the Plan, or upon any other act or omission, transaction, agreement, event, or other occurrence taking place on or before the Effective Date related or relating to the foregoing. Notwithstanding anything to the contrary in the foregoing, the releases set forth above do not release (a) any post-Effective Date obligations of any party or Entity under the Plan, any Restructuring Transaction, or any document, instrument, or agreement (including those set forth in the Plan Supplement) executed to implement the Plan or (b) any individual from any claim related to an act or omission that is determined in a Final Order by a court competent jurisdiction to have constituted actual fraud or willful misconduct.
5
Entry of the Confirmation Order shall constitute the Bankruptcy Courts approval, pursuant to Bankruptcy Rule 9019, of the Debtor Release, which includes by reference each of the related provisions and definitions contained in the Plan, and further, shall constitute the Bankruptcy Courts finding that the Debtor Release is: (1) in exchange for the good and valuable consideration provided by the Released Parties; (2) a good faith settlement and compromise of the Claims released by the Debtor Release; (3) in the best interests of the Debtors and all holders of Claims and Interests; (4) fair, equitable, and reasonable; (5) given and made after due notice and opportunity for hearing; and (6) a bar to any of the Debtors, the Reorganized Debtors, or the Debtors Estates asserting any Claim or Cause of Action released pursuant to the Debtor Release.
Releases by Holders of Claims and Interests
Notwithstanding anything contained in the Plan to the contrary, as of the Effective Date, each Releasing Party is deemed to have released and discharged each Debtor, Reorganized Debtor, and Released Party from any and all Claims and Causes of Action, whether known or unknown, including any derivative claims, asserted on behalf of the Debtors, that such Entity would have been legally entitled to assert (whether individually or collectively), based on or relating to, or in any manner arising from, in whole or in part, the Debtors (including the management, ownership or operation thereof), the Debtors in- or out-of-court restructuring efforts, any Avoidance Actions, the formulation, preparation, dissemination, negotiation, or Filing of the Restructuring Support Agreement, or any Restructuring Transaction, contract, instrument, release, or other agreement or document (including providing any legal opinion requested by any Entity regarding any transaction, contract, instrument, document, or other agreement contemplated by the Plan or the reliance by any Released Party on the Plan or the Confirmation Order in lieu of such legal opinion) created or entered into in connection with the Restructuring Support Agreement, the Disclosure Statement, the Plan, the Plan Supplement, the Rights Offering, the DIP Facility, the Exit Facility, the DIP Commitment Letters, the Backstop Commitment Agreement, the Exit Commitment Letters, the Chapter 11 Cases, the filing of the Chapter 11 Cases, the pursuit of Confirmation, the pursuit of Consummation, the administration and implementation of the Plan, including the issuance or distribution of Securities pursuant to the Plan, or the distribution of property under the Plan, or upon any other act or omission, transaction, agreement, event, or other occurrence taking place on or before the Effective Date related or relating to the foregoing. Notwithstanding anything to the contrary in the foregoing, the releases set forth above do not release (a) any post-Effective Date obligations of any party or Entity under the Plan, any Restructuring Transaction, or any document, instrument, or agreement (including those set forth in the Plan Supplement) executed to implement the Plan or (b) any individual from any claim related to an act or omission that is determined in a Final Order by a court competent jurisdiction to have constituted actual fraud or willful misconduct.
Entry of the Confirmation Order shall constitute the Bankruptcy Courts approval, pursuant to Bankruptcy Rule 9019, of the Third-Party Release, which includes by reference each of the related provisions and definitions contained herein, and, further, shall constitute the Bankruptcy Courts finding that the Third Party Release is: (1) consensual; (2) essential to the confirmation of the Plan; (3) given in exchange for the good and valuable consideration provided by the Released Parties; (4) a good-faith settlement and compromise of the Claims released by the Third-Party Release; (5) in the best interests of the Debtors and their Estates; (6) fair, equitable, and reasonable; (7) given and made after due notice and opportunity for hearing; and (8) a bar to any of the Releasing Parties asserting any claim or Cause of Action released pursuant to the Third-Party Release.
Exculpation
Notwithstanding anything contained herein to the contrary, no Exculpated Party shall have or incur liability for, and each Exculpated Party is hereby released and exculpated from, any Cause of Action for any claim related to any act or omission in connection with, relating to, or arising out of, the Chapter 11 Cases, the formulation, preparation, dissemination, negotiation, or Filing of the Restructuring Support Agreement and related prepetition transactions, the Disclosure Statement, the Plan, the Plan Supplement, or any Restructuring Transaction, contract, instrument, release or other agreement or document (including providing any legal opinion requested by any Entity regarding any transaction, contract, instrument, document, or other agreement contemplated by the Plan or the reliance by any Exculpated Party on the Plan or the Confirmation Order in lieu of such legal opinion) created or entered into in
6
connection with the Disclosure Statement, the Plan, the Plan Supplement, the Restructuring Support Agreement, the Rights Offering, the DIP Facility, the Exit Facility, the DIP Credit Agreement, the Backstop Commitment Agreement, the Exit Commitment Letters, the Filing of the Chapter 11 Cases, the pursuit of Confirmation, the pursuit of Consummation, the administration and implementation of the Plan, including the issuance of Securities pursuant to the Plan, or the distribution of property under the Plan, except for claims related to any act or omission that is determined in a Final Order by a court of competent jurisdiction to have constituted actual fraud or willful misconduct, but in all respects such Entities shall be entitled to reasonably rely upon the advice of counsel with respect to their duties and responsibilities pursuant to the Plan. The Exculpated Parties have, and upon completion of the Plan shall be deemed to have, participated in good faith and in compliance with the applicable laws with regard to the solicitation of, and distribution of, consideration pursuant to the Plan and, therefore, are not, and on account of such distributions shall not be, liable at any time for the violation of any applicable law, rule, or regulation governing the solicitation of acceptances or rejections of the Plan or such distributions made pursuant to the Plan.
7
Exhibit 2 to Term Sheet
Term Sheet Regarding Employee Matters
Revised Incentives for Management through Bankruptcy Pursuant to New Agreements3
The Company will enter into new 5-month employment agreements effective as of the RSA effective date (the Short-Term Agreements) with each of John A. Brooks and Nancy M. Snyder. The Company will enter into a new employment agreement (together with the Short-Term Agreements, the Agreements) with Steven A. Hartman. The term of Mr. Hartmans Agreement will begin on the RSA effective date and end on the date that is 18 months thereafter, unless terminated by either Mr. Hartman or the board of directors of the reorganized entity (the New Board) in accordance with its terms.
The Agreements will supersede the Change of Control Severance Agreements,4 Relocation Agreement and all other prior agreements between the Executive and the Company in their entirety and be assumed as of the Companys emergence from bankruptcy (the Emergence) pursuant to the plan of reorganization (the Plan). The finalized Agreements will be subject to review and comments by the Ad Hoc Committee and will contain other market terms, including customary restrictive covenants.
Terms of Proposal:
Base Salary: As of the RSA effective date, Mr. Hartmans base salary will be reduced to $250,000 per annum. Mr. Brooks and Ms. Snyder will continue receiving their current annualized base salaries of $385,000 and $335,000, respectively. The Company will provide Mr. Hartman with market relocation assistance with respect to his move to the Houston metropolitan area.
Emergence Bonus: Mr. Brooks and Ms. Snyder will each be paid an emergence bonus equal to $500,000, if Emergence occurs on or by 10/31/16 (a Qualifying Emergence) and either (i) he or she remains employed with the Company through the Qualifying Emergence or (ii) he or she was terminated by the Company without cause before the Qualifying Emergence.
Severance: If Mr. Hartman is terminated without cause or for good reason before the six month anniversary of Emergence, he will be entitled to 18 months of continued base salary (subject to the execution of general release). If Mr. Hartman is terminated without cause after the six month anniversary of the date of Emergence, he will be entitled to 12 months of continued base salary.
MIP: The MIP pool will consist of up to []%5 of the reorganized Companys stock determined on a fully-diluted basis. The New Board will determine the allocation and other terms and conditions of MIP participation; provided that Mr. Hartman will receive an award of restricted stock (or economic equivalent) with a grant date value equal to $600,000 based on the Company value provided for in the Plan (the Initial Equity Award), so long as he is employed at the time of Emergence. The Initial Equity Award will vest over 3 years and be subject to such other terms and conditions as determined by the New Board; provided that in the event Mr. Hartman is terminated without cause or for good reason, the next tranche of the Initial Equity Award will vest.
3 | Note, these proposals are made only with respect to S. Hartman, J. Brooks, and N. M. Snyder (each, an Executive). |
4 | For the avoidance of doubt, each Executive will waive any and all claims the Executive may have to payments or benefits under the applicable Change of Control Severance Agreement. |
5 | To be disclosed at or prior to the hearing to approve the Companys Disclosure Statement. |
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Release: The Agreements will provide for a mutual general release of claims (including release of Executives prepetition claims and any claims in respect of the SERP).
Consulting Agreement: Upon Emergence, the reorganized Company will enter into a non-exclusive consulting agreement with Nancy M. Snyder (the Consulting Agreement) in lieu of extending her Short-Term Agreement. The Consulting Agreement will provide for a term of twelve months and payment of a monthly fee of $15,000 to Ms. Snyder for her services, so long as her employment has not been terminated for cause (gross negligence, willful misconduct or conviction of a felony), or due to death, disability or her voluntary resignation. During the term of the Consulting Agreement, Ms. Snyder will report to the Chief Executive Officer, or his or her designee, and will provide consulting services as reasonably requested by the Company.
Treatment of Prepetition Obligations: All outstanding PBRSUs and RSUs will be cancelled without payment of any consideration pursuant to release.
Severance and Revised Incentives for Rank & File Employees During Chapter 11
The Company will establish a Key Employee Retention Plan (KERP) with annual payments not to exceed $2.0 million in the aggregate.
Upon a Company termination other than for cause on or prior to the 6 month anniversary of the confirmation date of the Plan, a KERP participant will receive as his or her severance the greater of (a) up to 13 weeks of base salary (taking into account seniority based on the Companys historical practices) and (b) the balance of any unpaid KERP payments. The severance payment contemplated by the foregoing clause (a) will be consistent with the total amounts previously provided to the Ad Hoc Committee in the 4.30.16 Comp Summary.
As a condition to participation in the KERP or to otherwise receiving severance, participants in the KERP or individuals who otherwise receive severance will be required to waive all prepetition claims he or she may have relating to prior employment or compensation arrangements, including, without limitation, any applicable Change of Control Severance Agreement, Relocation Agreement, or other severance agreement. All outstanding long-term incentives will receive the treatment set forth in the Plan.
Baird Whitehead
In full and final satisfaction of any and all claims that Mr. H. Baird Whitehead may have, or now has, against any of the PVA Entities in his former capacity as an employee of the PVA Entities (including as Chief Executive Officer of Penn Virginia) and in his current capacity as a director of Penn Virginia, and in exchange for inclusion in the debtor release, third-party release, exculpation, and indemnification provisions contained in the Plan as they relate to Mr. Whitehead in his former capacity as an employee of the PVA Entities (including as Chief Executive Officer of Penn Virginia) and in his current capacity as a director of Penn Virginia, Mr. Whitehead shall receive, on the Effective Date, a total recovery comprised of: (a) $110,000, paid in cash; and (b) at Mr. Whiteheads election, (i) $110,000, paid in cash, or (ii) an allowed general unsecured claim in an amount that would result in Mr. Whitehead receiving a recovery under the Plan on such
2
claim that would be valued (at plan valuation) at $110,000; provided, however, that the foregoing release by Mr. Whitehead shall not extend to (1) any claims to indemnification or insurance coverage to which Mr. Whitehead may be entitled under the PVA Entities certificates of incorporation, bylaws, indemnification agreements, directors and officers insurance policies or applicable law with respect to the period of Mr. Whiteheads employment by the PVA Entities (including as Chief Executive Officer of Penn Virginia), and (2) any claims or rights that Mr. Whitehead cannot waive by law (e.g., any right to workers compensation).
3
Exhibit 10.2
Execution Version
BACKSTOP COMMITMENT AGREEMENT
AMONG
PENN VIRGINIA CORPORATION
AND
THE COMMITMENT PARTIES PARTY HERETO
Dated as of May 10, 2016
TABLE OF CONTENTS
Page | ||||||
ARTICLE I DEFINITIONS | 2 | |||||
Section 1.1 |
Definitions | 2 | ||||
Section 1.2 |
Construction | 16 | ||||
ARTICLE II BACKSTOP COMMITMENT | 17 | |||||
Section 2.1 |
The Rights Offering; Subscription Rights | 17 | ||||
Section 2.2 |
The Backstop Commitment | 17 | ||||
Section 2.3 |
Commitment Party Default | 17 | ||||
Section 2.4 |
Escrow Account Funding | 18 | ||||
Section 2.5 |
Closing | 19 | ||||
Section 2.6 |
Designation and Assignment Rights | 19 | ||||
ARTICLE III BACKSTOP COMMITMENT PREMIUM AND EXPENSE REIMBURSEMENT | 21 | |||||
Section 3.1 |
Premium Payable by the Company | 21 | ||||
Section 3.2 |
Payment of Premium | 21 | ||||
Section 3.3 |
Expense Reimbursement | 22 | ||||
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY | 22 | |||||
Section 4.1 |
Organization and Qualification | 23 | ||||
Section 4.2 |
Corporate Power and Authority | 23 | ||||
Section 4.3 |
Execution and Delivery; Enforceability | 24 | ||||
Section 4.4 |
Authorized and Issued Capital Stock | 24 | ||||
Section 4.5 |
Issuance | 25 | ||||
Section 4.6 |
No Conflict | 25 | ||||
Section 4.7 |
Consents and Approvals | 25 | ||||
Section 4.8 |
Arms-Length | 26 |
i
TABLE OF CONTENTS (contd)
Page | ||||||
Section 4.9 |
Financial Statements | 26 | ||||
Section 4.10 |
Company SEC Documents and Disclosure Statement | 26 | ||||
Section 4.11 |
Absence of Certain Changes | 27 | ||||
Section 4.12 |
No Violation; Compliance with Laws | 27 | ||||
Section 4.13 |
Legal Proceedings | 27 | ||||
Section 4.14 |
Labor Relations | 27 | ||||
Section 4.15 |
Intellectual Property | 27 | ||||
Section 4.16 |
Title to Real and Personal Property | 28 | ||||
Section 4.17 |
No Undisclosed Relationships | 28 | ||||
Section 4.18 |
Licenses and Permits | 29 | ||||
Section 4.19 |
Environmental | 29 | ||||
Section 4.20 |
Tax Returns | 30 | ||||
Section 4.21 |
Employee Benefit Plans | 30 | ||||
Section 4.22 |
Internal Control Over Financial Reporting | 31 | ||||
Section 4.23 |
Disclosure Controls and Procedures | 31 | ||||
Section 4.24 |
Material Contracts | 32 | ||||
Section 4.25 |
No Unlawful Payments | 32 | ||||
Section 4.26 |
Compliance with Money Laundering Laws | 32 | ||||
Section 4.27 |
Compliance with Sanctions Laws | 32 | ||||
Section 4.28 |
No Brokers Fees | 33 | ||||
Section 4.29 |
Takeover Statutes | 33 | ||||
Section 4.30 |
Investment Company Act | 33 | ||||
Section 4.31 |
Insurance | 33 | ||||
Section 4.32 |
Alternative Transactions | 33 |
ii
TABLE OF CONTENTS (contd)
Page | ||||||
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE COMMITMENT PARTIES | 33 | |||||
Section 5.1 |
Incorporation | 33 | ||||
Section 5.2 |
Corporate Power and Authority | 33 | ||||
Section 5.3 |
Execution and Delivery | 34 | ||||
Section 5.4 |
No Conflict | 34 | ||||
Section 5.5 |
Consents and Approvals | 34 | ||||
Section 5.6 |
No Registration | 35 | ||||
Section 5.7 |
Purchasing Intent | 35 | ||||
Section 5.8 |
Sophistication; Investigation | 35 | ||||
Section 5.9 |
No Brokers Fees | 35 | ||||
Section 5.10 |
Note Claims | 35 | ||||
Section 5.11 |
Arms-Length | 36 | ||||
ARTICLE VI ADDITIONAL COVENANTS | 36 | |||||
Section 6.1 |
Orders Generally | 36 | ||||
Section 6.2 |
Confirmation Order; Plan and Disclosure Statement | 37 | ||||
Section 6.3 |
Conduct of Business | 37 | ||||
Section 6.4 |
Access to Information; Confidentiality | 38 | ||||
Section 6.5 |
Financial Information | 39 | ||||
Section 6.6 |
Commercially Reasonable Efforts | 39 | ||||
Section 6.7 |
Registration Rights Agreement; Reorganized Company Corporate Documents; Rights Offering Procedures | 40 | ||||
Section 6.8 |
Blue Sky | 41 | ||||
Section 6.9 |
DTC Eligibility | 41 | ||||
Section 6.10 |
Use of Proceeds | 41 |
iii
TABLE OF CONTENTS (contd)
Page | ||||||
Section 6.11 |
Share Legend | 41 | ||||
Section 6.12 |
Antitrust Approval | 42 | ||||
Section 6.13 |
Alternative Transactions | 43 | ||||
Section 6.14 |
Hedging Arrangements | 43 | ||||
ARTICLE VII CONDITIONS TO THE OBLIGATIONS OF THE PARTIES | 44 | |||||
Section 7.1 |
Conditions to the Obligations of the Commitment Parties | 44 | ||||
Section 7.2 |
Waiver of Conditions to Obligations of Commitment Parties | 46 | ||||
Section 7.3 |
Conditions to the Obligations of the Debtors | 46 | ||||
ARTICLE VIII INDEMNIFICATION AND CONTRIBUTION | 47 | |||||
Section 8.1 |
Indemnification Obligations | 47 | ||||
Section 8.2 |
Indemnification Procedure | 48 | ||||
Section 8.3 |
Settlement of Indemnified Claims | 49 | ||||
Section 8.4 |
Contribution | 49 | ||||
Section 8.5 |
Treatment of Indemnification Payments | 50 | ||||
Section 8.6 |
No Survival | 50 | ||||
ARTICLE IX TERMINATION | 50 | |||||
Section 9.1 |
Consensual Termination | 50 | ||||
Section 9.2 |
Automatic Termination | 50 | ||||
Section 9.3 |
Termination by the Company | 52 | ||||
Section 9.4 |
Effect of Termination | 53 | ||||
ARTICLE X GENERAL PROVISIONS | 54 | |||||
Section 10.1 |
Notices | 54 | ||||
Section 10.2 |
Assignment; Third Party Beneficiaries | 55 | ||||
Section 10.3 |
Prior Negotiations; Entire Agreement | 56 |
iv
TABLE OF CONTENTS (contd)
Page | ||||||
Section 10.4 |
Governing Law; Venue | 56 | ||||
Section 10.5 |
Waiver of Jury Trial | 57 | ||||
Section 10.6 |
Counterparts | 57 | ||||
Section 10.7 |
Waivers and Amendments; Rights Cumulative; Consent | 57 | ||||
Section 10.8 |
Headings | 57 | ||||
Section 10.9 |
Specific Performance | 58 | ||||
Section 10.10 |
Damages | 58 | ||||
Section 10.11 |
No Reliance | 58 | ||||
Section 10.12 |
Publicity | 58 | ||||
Section 10.13 |
Settlement Discussions | 58 | ||||
Section 10.14 |
No Recourse | 59 |
SCHEDULES
Schedule 1 | Backstop Commitment Percentages | |
Schedule 2 | Note Claims | |
Schedule 3 | Consents |
EXHIBITS
Exhibit A | Form of Rights Offering Procedures |
v
BACKSTOP COMMITMENT AGREEMENT
THIS BACKSTOP COMMITMENT AGREEMENT (this Agreement), dated as of May 10, 2016, is made by and among Penn Virginia Corporation, a Virginia corporation and the ultimate parent of each of the other Debtors (as the debtor in possession and a reorganized debtor, as applicable, the Company), on behalf of itself and the other Debtors, on the one hand, and the parties set forth on Schedule 1 hereto (each referred to herein, individually, as a Commitment Party and, collectively, as the Commitment Parties), on the other hand. The Company and each Commitment Party is referred to herein, individually, as a Party and, collectively, as the Parties. Capitalized terms that are used but not otherwise defined in this Agreement shall have the meanings given to them in Section 1.1 hereof or, if not defined therein, shall have the meaning given to them in the Plan.
RECITALS
WHEREAS, the Debtors and the Commitment Parties have entered into a Restructuring Support Agreement, dated as of May 10, 2016 (such agreement, including all the exhibits thereto, as may be amended, supplemented or otherwise modified from time to time, the Restructuring Support Agreement), which (a) provides for the restructuring of the Debtors capital structure and financial obligations pursuant to a prearranged plan of reorganization to be filed in jointly administered cases (the Chapter 11 Cases) under Title 11 of the United States Code, 11 U.S.C. §§ 101-1532 (as it may be amended from time to time, the Bankruptcy Code), in the United States Bankruptcy Court for Eastern District of Virginia, Richmond Division (the Bankruptcy Court), implementing the terms and conditions of the Restructuring Transactions, including the terms and conditions set forth in the Restructuring Term Sheet attached as Exhibit A to the Restructuring Support Agreement (the Restructuring Term Sheet) and (b) requires that the Plan be consistent with the Restructuring Support Agreement.
WHEREAS, the Debtors plan to file with the Bankruptcy Court, in accordance with the terms of the Restructuring Support Agreement, motions seeking entry of (u) the Approval Order; (v) the Plan Solicitation Order; (w) an interim Order authorizing use of cash collateral and debtor in-possession financing, on terms consistent with the DIP Credit Agreement (the Interim DIP Order); (x) a final Order authorizing use of cash collateral and debtor-in-possession financing on terms consistent with the DIP Credit Agreement (the Final DIP Order, and together with the Interim DIP Order, collectively, the DIP Orders); and (y) the Confirmation Order.
WHEREAS, pursuant to the Plan and this Agreement, and in accordance with the Rights Offering Procedures, the Company will conduct a rights offering for the Rights Offering Shares in the Rights Offering Amount at an aggregate purchase price of $50,000,000 and at the Per Share Purchase Price.
WHEREAS, subject to the terms and conditions contained in this Agreement, each Commitment Party has agreed to purchase (on a several and not joint basis) its Backstop Commitment Percentage of the Unsubscribed Shares, if any.
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NOW, THEREFORE, in consideration of the mutual promises, agreements, representations, warranties and covenants contained herein, each of the Parties hereby agrees as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. Except as otherwise expressly provided in this Agreement, whenever used in this Agreement (including any Exhibits and Schedules hereto), the following terms shall have the respective meanings specified therefor below or in the Plan, as applicable:
Acceptable Hedging Program has the meaning set forth in Section 6.14.
Ad Hoc Committee means that certain ad hoc committee of Noteholders (including any Ultimate Purchaser(s) to which any member thereof or any of its Affiliates has transferred all or a portion of its Backstop Commitment pursuant to Section 2.6(b)) represented by Milbank, Tweed, Hadley & McCloy LLP.
Affiliate has the meaning set forth in section 101(2) of the Bankruptcy Code. Affiliated has a correlative meaning.
Affiliated Fund means any investment fund the primary investment advisor to which is such Commitment Party or an Affiliate thereof.
Aggregate New Common Shares means the total number of shares of New Common Stock of the Reorganized Company outstanding as of the Closing Date (without giving effect to the New Common Stock issued or issuable under the Rights Offering or in respect of the Commitment Premium or in respect of the new management incentive plan adopted in accordance with the Restructuring Term Sheet).
Agreement has the meaning set forth in the Preamble.
Alternative Transaction means any dissolution, winding up, liquidation, reorganization, assignment for the benefit of creditors, merger, transaction, consolidation, business combination, joint venture, partnership, sale of assets, financing (debt or equity), or restructuring of any of the Debtors, other than the Restructuring Transactions.
Antitrust Authorities means the United States Federal Trade Commission, the Antitrust Division of the United States Department of Justice, the attorneys general of the several states of the United States and any other Governmental Entity having jurisdiction pursuant to the Antitrust Laws, and Antitrust Authority means any of them.
Antitrust Laws means the Sherman Act, the Clayton Act, the HSR Act, the Federal Trade Commission Act, and any other Law governing agreements in restraint of trade, monopolization, pre-merger notification, the lessening of competition through merger or acquisition or anti-competitive conduct, and any foreign investment Laws.
2
Applicable Consent has the meaning set forth in Section 4.7.
Approval Order means an Order of the Bankruptcy Court, approving the Debtors assumption of and entry into the Restructuring Support Agreement, including all exhibits and other attachments thereto, including without limitation this Agreement and the Exit Commitment Letters, pursuant to section 365 of the Bankruptcy Code.
Available Shares means the Unsubscribed Shares that any Commitment Party fails to purchase as a result of a Commitment Party Default by such Commitment Party.
Backstop Commitment has the meaning set forth in Section 2.2.
Backstop Commitment Percentage means, with respect to any Commitment Party, such Commitment Partys percentage of the Backstop Commitment as set forth opposite such Commitment Partys name under the column titled Backstop Commitment Percentage on Schedule 1 (as it may be amended, supplemented or otherwise modified from time to time in accordance with this Agreement). Any reference to Backstop Commitment Percentage in this Agreement means the Backstop Commitment Percentage in effect at the time of the relevant determination.
Bankruptcy Code has the meaning set forth in the Recitals.
Bankruptcy Court has the meaning set forth in the Recitals.
Bankruptcy Rules means the Federal Rules of Bankruptcy Procedure as promulgated by the United States Supreme Court under section 2075 of title 28 of the United States Code, 28 U.S.C. § 2075, as applicable to the Chapter 11 Cases and the general, local, and chambers rules of the Bankruptcy Court.
BCA Approval Obligations means the obligations of the Company and the other Debtors under this Agreement and the Approval Order.
Business Day means any day, other than a Saturday, Sunday or legal holiday, as defined in Bankruptcy Rule 9006(a).
Bylaws means the amended and restated bylaws of the Company as of the Closing Date, which shall be consistent with the terms set forth in the Restructuring Support Agreement and in form and substance reasonably satisfactory to the Requisite Commitment Parties and the Company.
Certificate of Incorporation means the amended and restated certificate of incorporation of the Company as of the Closing Date, which shall be consistent with the terms set forth in the Restructuring Support Agreement and the Plan, and otherwise be in form and substance reasonably satisfactory to the Requisite Commitment Parties and the Company.
Chapter 11 Cases has the meaning set forth in the Recitals.
Claim has the meaning set forth in section 101(5) of the Bankruptcy Code.
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Closing has the meaning set forth in Section 2.5(a).
Closing Date has the meaning set forth in Section 2.5(a).
Code means the Internal Revenue Code of 1986.
Commitment Party has the meaning set forth in the Preamble.
Commitment Party Default means the failure by any Commitment Party to (a) deliver and pay the aggregate Per Share Purchase Price for such Commitment Partys Backstop Commitment Percentage of any Unsubscribed Shares by the Escrow Account Funding Date in accordance with Section 2.4(b) or (b) fully exercise all Subscription Rights that are issued to it pursuant to the Rights Offering and duly purchase all Rights Offering Shares issuable to it pursuant to such exercise, in accordance with the Rights Offering Procedures and the Plan.
Commitment Party Replacement has the meaning set forth in Section 2.3(a).
Commitment Party Replacement Period has the meaning set forth in Section 2.3(a).
Commitment Premium has the meaning set forth in Section 3.1.
Commitment Premium Settlement Percentage means the percentage determined by multiplying (a) 100% by (b) the quotient determined by dividing (i) the Commitment Premium by (ii) the Discounted Equity Plan Value.
Company has the meaning set forth in the Preamble.
Company Disclosure Schedules means the disclosure schedules delivered by the Company to the Commitment Parties on the date of this Agreement.
Company Plan means any employee pension benefit plan, as such term is defined in Section 3(2) of ERISA, (other than a Multiemployer Plan), subject to the provisions of Title IV of ERISA or Section 412 or 430 of the Code or Section 302 of ERISA, and (i) sponsored or maintained (at the time of determination or at any time within the six years prior thereto) by the Company or any of its Subsidiaries or any ERISA Affiliate, or with respect to which any such entity has any liability or obligation or (ii) in respect of which the Company or any of its Subsidiaries or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an employer as defined in Section 3(5) of ERISA.
Company SEC Documents means all of the reports, schedules, forms, statements and other documents (including exhibits and other information incorporated therein) filed with the SEC by the Company.
Confirmation Date means the date on which the Bankruptcy Court enters the Confirmation Order on the docket of the Chapter 11 Cases within the meaning of Bankruptcy Rules 5003 and 9021.
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Confirmation Order means a Final Order of the Bankruptcy Court confirming the Plan pursuant to section 1129 of the Bankruptcy Code.
Consenting Noteholders means each Noteholder that is party to the Restructuring Support Agreement, solely in its capacity as such.
Consenting RBL Lenders means each RBL Lender that is party to the Restructuring Support Agreement, solely in its capacity as such.
Contract means any agreement, contract or instrument, including any loan, note, bond, mortgage, indenture, guarantee, deed of trust, license, franchise, commitment, lease, franchise agreement, letter of intent, memorandum of understanding or other obligation, and any amendments thereto, whether written or oral, but excluding the Plan.
Debtors means, collectively, each of the following, as the debtors in possession and reorganized debtors, as applicable: Penn Virginia Corporation; Penn Virginia Holding Corporation; Penn Virginia MC Corporation; Penn Virginia MC Energy L.L.C.; Penn Virginia MC Gathering Company L.L.C.; Penn Virginia MC Operating Company L.L.C.; Penn Virginia Oil & Gas Corporation; Penn Virginia Oil & Gas GP LLC; Penn Virginia Oil & Gas LP LLC; Penn Virginia Oil & Gas, L.P.; and Penn Virginia Resource Holdings Corp.
Defaulting Commitment Party means in respect of a Commitment Party Default that is continuing, the applicable defaulting Commitment Party.
Definitive Documentation means the definitive documents and agreements governing the Restructuring Transactions as set forth in the Restructuring Support Agreement.
DIP Agent means Wells Fargo Bank, N.A., or any successor thereto, as administrative agent under the DIP Facility, solely in its capacity as such.
DIP Credit Agreement means that certain senior secured debtor-in-possession credit agreement, dated as of May 11, 2016, as amended, restated, modified, supplemented, or replaced from time to time in accordance with its terms, by and among the Debtors, the DIP Lenders, and the DIP Agent.
DIP Facility means that certain $25 million debtor-in-possession financing facility provided by the DIP Lenders pursuant to the DIP Credit Agreement and the DIP Orders.
DIP Lenders means certain RBL Lenders that have agreed to provide the DIP Facility, solely in their capacity as such.
DIP Orders has the meaning set forth in the Recitals.
Disclosure Statement means the Disclosure Statement for the Joint Chapter 11 Plan of Reorganization of Penn Virginia Corporation and its Debtor Affiliates, dated as of May 12, 2016, as may be amended, supplemented, or modified from time to time, including all exhibits and schedules thereto and references therein that relate to the Plan, that is prepared and distributed in accordance with the Bankruptcy Code, the Bankruptcy Rules, and any other applicable law.
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Discounted Equity Plan Value means $95,100,000.
Effective Date means the date that is the first Business Day after the Confirmation Date on which all conditions precedent to the occurrence of the Effective Date set forth in Section 9.1 of the Plan have been satisfied or waived in accordance with Section 9.2 of the Plan.
Environmental Laws means all applicable laws (including common law), rules, regulations, codes, ordinances, orders in council, Orders, decrees, treaties, directives, judgments or legally binding agreements promulgated or entered into by or with any Governmental Entity, relating in any way to the environment, preservation or reclamation of natural resources, the generation, management, Release or threatened Release of, or exposure to, any Hazardous Material or to health and safety matters (to the extent relating to the environment or Hazardous Materials).
ERISA means the Employee Retirement Income Security Act of 1974.
ERISA Affiliate means any trade or business (whether or not incorporated) that, together with the Company or any of its Subsidiaries, is, or at any relevant time during the past six years was, treated as a single employer under any provision of Section 414 of the Code.
ERISA Event means (a) any Reportable Event or the requirements of Section 4043(b) of ERISA apply with respect to a Company Plan; (b) any failure by any Company Plan to satisfy the minimum funding standards (within the meaning of Section 412 of the Code or Section 302 of ERISA) applicable to such Company Plan, whether or not waived; (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Company Plan, the failure to make by its due date a required installment under Section 430(j) of the Code with respect to any Company Plan or the failure to make any required contribution to a Multiemployer Plan; (d) the incurrence by the Company or any of its Subsidiaries or any ERISA Affiliate of any liability under Title IV of ERISA with respect to the termination of any Company Plan, including the imposition of any Lien in favor of the PBGC or any Company Plan or Multiemployer Plan; (e) a determination that any Company Plan is, or is expected to be, in at-risk status (within the meaning of Section 303 of ERISA or Section 430 of the Code); (f) the receipt by the Company or any of its Subsidiaries or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Company Plan or to appoint a trustee to administer any Company Plan under Section 4042 of ERISA; (g) the incurrence by the Company or any of its Subsidiaries or any ERISA Affiliate of any liability with respect to the withdrawal or partial withdrawal from any Company Plan or Multiemployer Plan; (h) the receipt by the Company or any of its Subsidiaries or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Company or any of its Subsidiaries or any ERISA Affiliate of any notice, concerning the impending imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent (within the meaning of Section 4245 of ERISA), or in endangered or critical status (within the meaning of Section 305 of ERISA or Section 432 of
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the Code); (i) the conditions for imposition of a Lien under Section 303(k) of ERISA or Section 430(k) of the Code shall have been met with respect to any Company Plan; (j) the adoption of an amendment to a Company Plan requiring the provision of security to such Company Plan pursuant to Section 307 of ERISA; or (k) receipt from the IRS of notice of the failure of any Company Plan (or any other employee benefit plan intended to be qualified under Section 401(a) of the Code) to qualify under Section 401(a) of the Code, or the failure of any trust forming part of any Company Plan to qualify for exemption from taxation under Section 501(a) of the Code.
Escrow Account has the meaning set forth in Section 2.4(a).
Escrow Account Funding Date has the meaning set forth in Section 2.4(b).
Event means any event, development, occurrence, circumstance, effect, condition, result, state of facts or change.
Exchange Act means the Securities Exchange Act of 1934, as amended.
Exit Commitment Letters means the commitment letter and related fee letter with respect thereto attached to the Restructuring Support Agreement as Exhibit E setting forth the Exit Facility Lenders commitment to provide the Exit Facility.
Exit Facility means the new reserve-based lending facility credit agreement on the terms set forth in the Exit Facility Term Sheet and the Exit Commitment Letters attached to the Restructuring Support Agreement as Exhibit D and Exhibit E, respectively.
Exit Facility Lender means any lender under the Exit Facility, solely in its capacity as such.
Exit Facility Term Sheet means the term sheet attached to the Restructuring Support Agreement as Exhibit D setting forth the terms and conditions of the Exit Facility.
Expense Reimbursement has the meaning set forth in Section 3.3(a).
Filing Party has the meaning set forth in Section 6.12(b).
Final DIP Order has the meaning set forth in the Recitals.
Final Order means, as applicable, an Order of the Bankruptcy Court or other court of competent jurisdiction with respect to the relevant subject matter that has not been reversed, stayed, modified, or amended, and as to which the time to appeal or seek certiorari has expired and no appeal or petition for certiorari has been timely taken, or as to which any appeal that has been taken or any petition for certiorari that has been or may be filed has been resolved by the highest court to which the Order could be appealed or from which certiorari could be sought or the new trial, reargument, or rehearing shall have been denied, resulted in no modification of such Order, or has otherwise been dismissed with prejudice.
Financial Reports has the meaning set forth in Section 6.5(a).
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Financial Statements has the meaning set forth in Section 4.9.
Funding Notice has the meaning set forth in the Subscription Agreement.
GAAP has the meaning set forth in Section 4.9.
Governmental Entity has the meaning set forth in section 101(27) of the Bankruptcy Code.
Hazardous Materials means all pollutants, contaminants, wastes, chemicals, materials, substances and constituents, including explosive or radioactive substances or petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls or radon gas, of any nature subject to regulation or which can give rise to liability under any Environmental Law.
HSR Act means the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
Indemnified Claim has the meaning set forth in Section 8.2.
Indemnified Person has the meaning set forth in Section 8.1.
Indemnifying Party has the meaning set forth in Section 8.1.
Indenture means that certain Senior Indenture, dated as of June 15, 2009, as amended, restated, modified, supplemented, or replaced from time to time prior to the Petition Date, governing the Companys 7.250% Senior Notes due 2019 and the 8.500% Senior Notes due 2020, among the Company, each of the guarantors party thereto, and the Indenture Trustee.
Indenture Trustee means Wilmington Savings Fund Society, FSB, or any successor thereto, as trustee under the Indenture.
Intellectual Property Rights has the meaning set forth in Section 4.15.
Interim DIP Order has the meaning set forth in the Recitals.
IRS means the United States Internal Revenue Service.
Joint Filing Party has the meaning set forth in Section 6.12(c).
Knowledge of the Company means the actual knowledge, after reasonable inquiry of their direct reports, of the chief executive officer, chief financial officer, chief operating officer and general counsel of the Company. As used herein, actual knowledge means information that is personally known by the listed individual(s).
Law means any law (statutory or common), statute, regulation, rule, code or ordinance enacted, adopted, issued or promulgated by any Governmental Entity.
Legal Proceedings has the meaning set forth in Section 4.13.
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Legend has the meaning set forth in Section 6.11.
Lien means any lien, adverse claim, charge, option, right of first refusal, servitude, security interest, mortgage, pledge, deed of trust, easement, encumbrance, restriction on transfer, conditional sale or other title retention agreement, defect in title, lien or judicial lien as defined in sections 101(36) and (37) of the Bankruptcy Code or other restrictions of a similar kind.
Losses has the meaning set forth in Section 8.1.
Material Adverse Effect means any Event, which individually, or together with all other Events, has had or would reasonably be expected to have a material and adverse effect on (a) the business, assets, liabilities, finances, properties, results of operations or condition (financial or otherwise) of the Company and its Subsidiaries, taken as a whole, or (b) the ability of the Company and its Subsidiaries, taken as a whole, to perform their obligations under, or to consummate the transactions contemplated by, the Transaction Agreements, including the Rights Offering, in each case, except to the extent such Event results from, arises out of, or is attributable to, the following (either alone or in combination): (i) any change after the date hereof in global, national or regional political conditions (including hostilities, acts of war, sabotage, terrorism or military actions, or any escalation or material worsening of any such hostilities, acts of war, sabotage, terrorism or military actions existing or underway) or in the general business, market, financial or economic conditions affecting the industries, regions and markets in which the Company and its Subsidiaries operate, including any change in the United States or foreign economies or securities, commodities or financial markets, or force majeure events or acts of God; (ii) any changes after the date hereof in applicable Law or GAAP, or in the interpretation or enforcement thereof; (iii) the execution, announcement or performance of this Agreement or the other Transaction Agreements or the transactions contemplated hereby or thereby (including any act or omission of the Company or its Subsidiaries expressly required or prohibited, as applicable, by this Agreement or consented to or required by the Requisite Commitment Parties in writing); (iv) changes in the market price or trading volume of the claims or equity or debt securities of the Company or any of its Subsidiaries (but not the underlying facts giving rise to such changes unless such facts are otherwise excluded pursuant to the clauses contained in this definition); (v) the departure of officers or directors of the Company or any of its Subsidiaries (but not the underlying facts giving rise to such departure unless such facts are otherwise excluded pursuant to the clauses contained in this definition); (vi) the filing or pendency of the Chapter 11 Cases or actions taken in connection with the Chapter 11 Cases that are directed by the Bankruptcy Court and made in compliance with the Bankruptcy Code; (vii) declarations of national emergencies or natural disasters; (viii) the effect of any action taken by Commitment Parties or their Affiliates with respect to the DIP Facility or with respect to the Debtors (including through such Persons participation in the Chapter 11 Cases); (ix) any matters expressly disclosed in the Disclosure Statement or the Company Disclosure Schedules as delivered on the date hereof; or (x) the occurrence of a Commitment Party Default; provided, that the exceptions set forth in clauses (i) and (ii) shall not apply to the extent that such Event is disproportionately adverse to the Company and its Subsidiaries, taken as a whole, as compared to other companies in the industries in which the Company and its Subsidiaries operate.
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Material Contracts means (a) all plans of acquisition, reorganization, arrangement, liquidation or succession and material contracts (as such terms are defined in Items 601(b)(2) and 601(b)(10) of Regulation S-K under the Exchange Act) to which the Company or any of its Subsidiaries is a party, (b) any Contracts to which the Company or any of its Subsidiaries is a party that is likely to reasonably involve consideration of more than $5,000,000, in the aggregate, over a twelve-month period, and (c) the Contracts described in Section 1.1 of the Company Disclosure Schedules.
Minimum Commitment Parties means members of the Ad Hoc Committee holding at least thirty-five percent (35%) of the Backstop Commitment that is held by the Commitment Parties that are members of the Ad Hoc Committee as of the date on which the consent or approval of such members is solicited; provided, that for the purposes of this definition, each Commitment Party shall be deemed to hold the Backstop Commitment held by such Commitment Partys Related Purchasers.
Money Laundering Laws has the meaning set forth in Section 4.26.
Multiemployer Plan means a multiemployer plan as defined in Section 4001(a)(3) of ERISA to which the Company or any of its Subsidiaries or any ERISA Affiliate is making or accruing an obligation to make contributions, has within any of the preceding six plan years made or accrued an obligation to make contributions, or each such plan with respect to which any such entity has any liability or obligation.
New Common Stock means the common stock of the Reorganized Company.
Note Claims means all claims against the Debtors arising on account of the Indenture and the Notes.
Noteholders means all holders of the Notes.
Notes means the 7.250% Senior Notes due 2019 and the 8.500% Senior Notes due 2020, in each case issued pursuant to the Indenture.
Order means any judgment, order, award, injunction, writ, permit, license or decree of any Governmental Entity or arbitrator of applicable jurisdiction.
Outside Date has the meaning set forth in Section 9.2(a).
Party has the meaning set forth in the Preamble.
PBGC means the Pension Benefit Guaranty Corporation established pursuant to Section 4002 of ERISA, or any successor thereto.
Permitted Liens means (a) Liens for Taxes that (i) are not yet delinquent or (ii) are being contested in good faith by appropriate proceedings and for which adequate reserves have been made with respect thereto; (b) carriers, warehousemens, mechanics, materialmens, repairmens and other similar Liens for labor, materials or supplies provided with respect to any Real Property or personal property incurred in the ordinary course of business consistent with
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past practice and as otherwise not prohibited under this Agreement, for amounts that do not materially detract from the value of, or materially impair the use of, any of the Real Property or personal property of the Company or any of its Subsidiaries, or, if for amounts that do materially detract from the value of, or materially impair the use of, any of the Real Property or personal property of the Company or any of its Subsidiaries, if such Lien is being contested in good faith by appropriate proceedings and for which adequate reserves have been made with respect thereto; (c) zoning, building codes and other land use Laws regulating the use or occupancy of any Real Property or the activities conducted thereon that are imposed by any Governmental Entity having jurisdiction over such Real Property; provided, that no such zoning, building codes and other land use Laws prohibit the use or occupancy of such Real Property; (d) easements, covenants, conditions, restrictions on transfer and other similar matters affecting title to any Real Property (including any title retention agreement) and other title defects and encumbrances that do not or would not materially impair the ownership, use or occupancy of such Real Property or the operation of the Companys or any of its Subsidiaries business; (e) Liens granted under any Contracts (including joint operating agreements, oil and gas leases, farmout agreements, joint development agreements, transportation agreements, marketing agreements, seismic licenses and other similar operational oil and gas agreements), in each case, to the extent the same are ordinary and customary in the oil and gas business and do not or would not materially impair the ownership, use or occupancy of any Real Property or the operation of the Companys or any of its Subsidiaries business; (f) Liens granted under the DIP Credit Agreement and the DIP Orders; (g) from and after the occurrence of the Effective Date, Liens granted in connection with the Exit Facility; and (h) Liens that, pursuant to the Plan and the Confirmation Order, will be discharged and released on the Effective Date.
Per Share Purchase Price means (a) the difference between the Discounted Equity Plan Value and the Rights Offering Amount divided by (b) the Aggregate New Common Shares.
Person means an individual, firm, corporation (including any non-profit corporation), partnership, limited liability company, joint venture, associate, trust, Governmental Entity or other entity or organization.
Petition Date means the date on which each of the Debtors filed their petitions for relief commencing the Chapter 11 Cases.
Plan means the Debtors joint plan of reorganization to be approved by the Confirmation Order, including the Plan Supplement and all exhibits, supplements, appendices and schedules thereto, in form and substance reasonably satisfactory to each of the Requisite Commitment Parties and the Company, as may be amended, supplemented, or modified from time to time in accordance with its terms and with the Restructuring Support Agreement and in a manner that is reasonably acceptable to the Requisite Commitment Parties and the Company.
Plan Solicitation Motion means the Debtors motion, in form and substance reasonably satisfactory to the Requisite Commitment Parties and the Company, for an order, among other things, (a) approving the Disclosure Statement; (b) establishing a voting record date for the Plan; (c) approving solicitation packages and procedures for the distribution thereof; (d) approving the forms of ballots; (e) establishing procedures for voting on the Plan;
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(f) establishing notice and objection procedures for the confirmation of the Plan; (g) approving the Rights Offering Procedures; and (h) establishing procedures for the assumption and/or assignment of executory Contracts and unexpired leases under the Plan.
Plan Solicitation Order means an Order entered by the Bankruptcy Court approving the relief requested in the Plan Solicitation Motion, which Order shall be in form and substance reasonably satisfactory to the Requisite Commitment Parties and the Company.
Plan Supplement means the compilation of documents and forms of documents, schedules, and exhibits to the Plan (as amended, supplemented, or modified from time to time in accordance with the Plan, the Bankruptcy Code, the Bankruptcy Rules, and the Restructuring Support Agreement), including without limitation disclosure required under section 1129(a)(5) of the Bankruptcy Code, to be filed by the Debtors no later than 14 days before the Confirmation Hearing, and additional documents or amendments to previously filed documents, filed before the Effective Date as amendments to the Plan Supplement, including the following, as applicable: (a) the Exit Facility Documents; (b) the New Organizational Documents; (c) a list of retained Causes of Action; (d) the New Shareholders Agreement; (e) the Description of Transaction Steps; (f) the Registration Rights Agreement; (g) the Schedule of Assumed Executory Contracts and Unexpired Leases; (h) the Schedule of Rejected Executory Contracts and Unexpired Leases; (i) the Agreement; and (j) any and all other documentation necessary to effectuate the Restructuring Transactions or that is contemplated by the Plan. The Debtors shall have the right to amend the documents contained in, and exhibits to, the Plan Supplement through the Effective Date consistent with and subject to the Restructuring Support Agreement.
Pre-Closing Period has the meaning set forth in Section 6.3.
RBL Agent means Wells Fargo Bank, N.A., or any successor thereto, as administrative agent under the RBL Credit Agreement, solely in its capacity as such.
RBL Credit Agreement means that certain Credit Agreement, dated as of September 28, 2012, as amended, restated, modified, supplemented, or replaced from time to time prior to the Petition Date, by and among Penn Virginia Holding Corporation, as borrower, the Company, as parent, each of the guarantors party thereto, the RBL Agent, and the RBL Lenders.
RBL Lenders means the lenders party to the RBL Credit Agreement, solely in their capacity as such.
Real Property means, collectively, all right, title and interest (including any leasehold estate) in and to any and all parcels of or interests in real property owned in fee or leased by the Company or any of its Subsidiaries, together with, in each case, all easements, hereditaments and appurtenances relating thereto, all improvements and appurtenant fixtures incidental to the ownership or lease thereof.
Registration Rights Agreement has the meaning set forth in Section 6.7(a).
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Related Party means, with respect to any Person, (i) any former, current or future director, officer, agent, Affiliate, employee, general or limited partner, member, manager or stockholder of such Person and (ii) any former, current or future director, officer, agent, Affiliate, employee, general or limited partner, member, manager or stockholder of any of the foregoing.
Related Purchaser has the meaning set forth in Section 2.6(a).
Release means any spilling, leaking, seepage, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, disposing, depositing, emanating or migrating in, into, onto or through the environment. Released has a correlative meaning.
Reorganized Company means the Company, or any successors thereto, by merger, consolidation, or otherwise, on and after the Effective Date.
Reorganized Company Corporate Documents means, collectively, the Bylaws and the Certificate of Incorporation.
Replacing Commitment Parties has the meaning set forth in Section 2.3(a).
Reportable Event means any reportable event as defined in Section 4043(c) of ERISA or the regulations issued thereunder, other than those events as to which the 30 day notice period referred to in Section 4043(c) of ERISA has been waived, with respect to a Company Plan.
Representatives means, with respect to any Person, such Persons directors, officers, members, partners, managers, employees, agents, investment bankers, attorneys, accountants, advisors and other representatives.
Requisite Commitment Parties means members of the Ad Hoc Committee holding at least two-thirds of the Backstop Commitment that is held by the Commitment Parties that are members of the Ad Hoc Committee as of the date on which the consent or approval of such members is solicited; provided, that for the purposes of this definition, each Commitment Party shall be deemed to hold the Backstop Commitment held by such Commitment Partys Related Purchasers.
Restructuring Support Agreement has the meaning set forth in the Recitals.
Restructuring Support Parties means, collectively, the Consenting Noteholders, the DIP Lenders, the Commitment Parties, and the RBL Lenders in their capacity as Consenting RBL Lenders, DIP Lenders and Exit Facility Lenders, in each case, that are party to the Restructuring Support Agreement.
Restructuring Term Sheet has the meaning set forth in the Recitals.
Restructuring Transactions has the meaning set forth in the Restructuring Support Agreement.
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Rights Offering means the rights offering that is backstopped by the Commitment Parties in connection with the Restructuring Transactions substantially on the terms reflected in the Restructuring Support Agreement and this Agreement, and in accordance with the Rights Offering Procedures.
Rights Offering Amount means an amount equal to $50,000,000.
Rights Offering Expiration Time means the time and the date on which the rights offering subscription forms must be duly delivered to the Rights Offering Subscription Agent in accordance with the Rights Offering Procedures, together with the applicable aggregate Per Share Purchase Price.
Rights Offering Participants means those Persons who duly subscribe for Rights Offering Shares in accordance with the Rights Offering Procedures.
Rights Offering Procedures means the procedures with respect to the Rights Offering that are approved by the Bankruptcy Court pursuant to the Plan Solicitation Order, which procedures shall be in form and substance substantially as set forth on Exhibit A hereto, may be modified in a manner that is reasonably acceptable to the Requisite Commitment Parties and the Company.
Rights Offering Shares means the shares of New Common Stock (including all Unsubscribed Shares purchased by the Commitment Parties pursuant to this Agreement) distributed pursuant to and in accordance with the Rights Offering Procedures.
Rights Offering Subscription Agent means Epiq Bankruptcy Solutions LLC or another subscription agent appointed by the Company and satisfactory to the Requisite Commitment Parties.
RSA Effective Date has the meaning set forth in the Restructuring Support Agreement.
SEC means the U.S. Securities and Exchange Commission.
Securities Act means the Securities Act of 1933, as amended.
Subscription Agreement means that certain Subscription Agreement, by and between the Company and the Subscriber (as defined therein).
Subscription Rights means the subscription rights to purchase Rights Offering Shares.
Subsidiary means, with respect to any Person, any corporation, partnership, joint venture or other legal entity as to which such Person (either alone or through or together with any other subsidiary), (a) owns, directly or indirectly, more than fifty percent (50%) of the stock or other equity interests, (b) has the power to elect a majority of the board of directors or similar governing body, or (c) has the power to direct the business and policies.
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Takeover Statute means any restrictions contained in any fair price, moratorium, control share acquisition, business combination or other similar anti-takeover statute or regulation.
Taxes means all taxes, assessments, duties, levies or other mandatory governmental charges paid to a Governmental Entity, including all federal, state, local, foreign and other income, franchise, profits, gross receipts, capital gains, capital stock, transfer, property, sales, use, value-added, occupation, excise, severance, windfall profits, stamp, payroll, social security, withholding and other taxes, assessments, duties, levies or other mandatory governmental charges of any kind whatsoever paid to a Governmental Entity (whether payable directly or by withholding and whether or not requiring the filing of a return), all estimated taxes, deficiency assessments, additions to tax, penalties and interest thereon and shall include any liability for such amounts as a result of being a member of a combined, consolidated, unitary or affiliated group. For the avoidance of doubt, such term shall exclude any tax, penalties or interest thereon that result or have resulted from the non-payment of royalties.
Termination Date has the meaning set forth in the Restructuring Support Agreement.
Termination Fee means $2,000,000, which represents 4% of the Rights Offering Amount.
Transaction Agreements has the meaning set forth in Section 4.2(a).
Transfer means to sell, transfer, assign, pledge, hypothecate, participate, donate or otherwise encumber or dispose of, directly or indirectly (including through derivatives, options, swaps, pledges, forward sales or other transactions in which any Person receives the right to own or acquire any current or future interest in a Subscription Right, a Note Claim, a Rights Offering Share or a share of New Common Stock). Transfer used as a noun has a correlative meaning.
Ultimate Purchaser has the meaning set forth in Section 2.6(b).
Unfunded Pension Liability means the excess of a Company Plans benefit liabilities under Section 4001(a)(16) of ERISA, over the current value of that Company Plans assets, determined in accordance with the assumptions used for funding the Company Plan pursuant to Section 412 of the Code for the applicable plan year.
Unlegended Shares has the meaning set forth in Section 6.9.
Unsubscribed Shares means the Rights Offering Shares that have not been duly purchased by the Rights Offering Participants in accordance with the Rights Offering Procedures and the Plan.
willful or intentional breach has the meaning set forth in Section 9.4(a).
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Withdrawal Liability means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Section 4203 of ERISA.
Section 1.2 Construction. In this Agreement, unless the context otherwise requires:
(a) references to Articles, Sections, Exhibits and Schedules are references to the articles and sections or subsections of, and the exhibits and schedules attached to, this Agreement;
(b) references in this Agreement to writing or comparable expressions include a reference to a written document transmitted by means of electronic mail in portable document format (pdf), facsimile transmission or comparable means of communication;
(c) words expressed in the singular number shall include the plural and vice versa; words expressed in the masculine shall include the feminine and neuter gender and vice versa;
(d) the words hereof, herein, hereto and hereunder, and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole, including all Exhibits and Schedules attached to this Agreement, and not to any provision of this Agreement;
(e) the term this Agreement shall be construed as a reference to this Agreement as the same may have been, or may from time to time be, amended, modified, varied, novated or supplemented;
(f) include, includes and including are deemed to be followed by without limitation whether or not they are in fact followed by such words;
(g) references to day or days are to calendar days;
(h) references to the date hereof means the date of this Agreement;
(i) unless otherwise specified, references to a statute means such statute as amended from time to time and includes any successor legislation thereto and any rules or regulations promulgated thereunder in effect from time to time; and
(j) references to dollars or $ refer to currency of the United States of America, unless otherwise expressly provided.
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ARTICLE II
BACKSTOP COMMITMENT
Section 2.1 The Rights Offering; Subscription Rights. On and subject to the terms and conditions hereof, including entry of the Approval Order, the Company shall conduct the Rights Offering pursuant to and in accordance with the Rights Offering Procedures and the Plan Solicitation Order. If reasonably requested by the Requisite Commitment Parties from time to time prior to the Rights Offering Expiration Time (and any extensions thereto), the Company shall notify, or cause the Rights Offering Subscription Agent to notify, the Commitment Parties of the aggregate number of Subscription Rights known by the Company or the Rights Offering Subscription Agent to have been exercised pursuant to the Rights Offering as of the most recent practicable time before such request.
Section 2.2 The Backstop Commitment. On and subject to the terms and conditions hereof, including entry of the Approval Order, each Commitment Party agrees, severally and not jointly, to fully exercise all Subscription Rights that are issued to it pursuant to the Rights Offering and duly purchase all Rights Offering Shares issuable to it pursuant to such exercise, in accordance with the Rights Offering Procedures and the Plan; provided that any Commitment Party that fails to comply with such obligations shall be liable to each non-Defaulting Commitment Party as a result of such failure to comply. On and subject to the terms and conditions hereof, including entry of the Confirmation Order, each Commitment Party agrees, severally and not jointly, to purchase, and the Company agrees to sell to such Commitment Party, on the Closing Date for the applicable aggregate Per Share Purchase Price, the number of Unsubscribed Shares equal to (a) such Commitment Partys Backstop Commitment Percentage multiplied by (b) the aggregate number of Unsubscribed Shares, rounded among the Commitment Parties solely to avoid fractional shares as the Commitment Parties may determine in their sole discretion (provided that in no event shall such rounding reduce the aggregate commitment of such Commitment Parties). The obligations of the Commitment Parties to purchase the Unsubscribed Shares as described in this Section 2.2 shall be referred to as the Backstop Commitment.
Section 2.3 Commitment Party Default.
(a) Upon the occurrence of a Commitment Party Default, the Commitment Parties that are, or are Affiliated with, members of the Ad Hoc Committee (other than any Defaulting Commitment Party) shall have the right, but not the obligation, within five (5) Business Days after receipt of written notice from the Company to all Commitment Parties of such Commitment Party Default, which notice shall be given promptly following the occurrence of such Commitment Party Default and to all Commitment Parties substantially concurrently (such five (5) Business Day period, the Commitment Party Replacement Period), to make arrangements for one or more of the Commitment Parties that is, or is Affiliated with, a member of the Ad Hoc Committee (other than the Defaulting Commitment Party) to purchase all or any portion of the Available Shares (such purchase, a Commitment Party Replacement) on the terms and subject to the conditions set forth in this Agreement and in such amounts as may be agreed upon by all of the Commitment Parties electing to purchase all or any portion of the Available Shares, or, if no such agreement is reached, based upon the relative applicable Backstop Commitment Percentages of any such Commitment Parties that are, or are Affiliated with, members of the Ad Hoc Committee (other than the Defaulting Commitment Party) (such Commitment Parties, the Replacing Commitment Parties). Any such Available Shares purchased by a Replacing Commitment Party (and the commitment and applicable aggregate Per Share Purchase Price associated therewith) shall be included, among other things, in the determination of (x) the Unsubscribed Shares of such Replacing Commitment Party for all
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purposes hereunder, (y) the Backstop Commitment Percentage of such Replacing Commitment Party for purposes of Section 2.3(c) and Section 3.1 and (z) the Backstop Commitment of such Replacing Commitment Party for purposes of the definition of Requisite Commitment Parties. If a Commitment Party Default occurs, the Outside Date shall be delayed only to the extent necessary to allow for the Commitment Party Replacement to be completed within the Commitment Party Replacement Period.
(b) If a Commitment Party is a Defaulting Commitment Party, it shall not be entitled to any of the Commitment Premium or Termination Fee hereunder.
(c) Nothing in this Agreement shall be deemed to require a Commitment Party to purchase more than its Backstop Commitment Percentage of the Unsubscribed Shares.
(d) For the avoidance of doubt, notwithstanding anything to the contrary set forth in Section 9.4 but subject to Section 10.10, no provision of this Agreement shall relieve any Defaulting Commitment Party from liability hereunder, or limit the availability of the remedies set forth in Section 10.9, in connection with any such Defaulting Commitment Partys Commitment Party Default.
Section 2.4 Escrow Account Funding.
(a) Funding Notice. No later than the fifth (5th) Business Day following the Rights Offering Expiration Time, the Rights Offering Subscription Agent shall deliver to each Commitment Party the Funding Notice setting forth (i) the number of Rights Offering Shares elected to be purchased by the Rights Offering Participants and the aggregate Per Share Purchase Price therefor; (ii) the aggregate number of Unsubscribed Shares, if any, and the aggregate Per Share Purchase Price therefor; (iii) the aggregate number of Unsubscribed Shares (based upon such Commitment Partys Backstop Commitment Percentage) to be issued and sold by the Company to such Commitment Party and the aggregate Per Share Purchase Price therefor; and (iv) subject to the last sentence of Section 2.4(b), the escrow account designated in escrow agreements mutually satisfactory to each of the Parties, acting reasonably, to which such Commitment Party shall deliver and pay the aggregate Per Share Purchase Price for such Commitment Partys Backstop Commitment Percentage of the Unsubscribed Shares (the Escrow Account). The Company shall promptly direct the Rights Offering Subscription Agent to provide any written backup, information and documentation relating to the information contained in the applicable Funding Notice as any Commitment Party may reasonably request.
(b) Escrow Account Funding. At the Effective Date or such earlier date agreed with the Requisite Commitment Parties pursuant to escrow agreements mutually satisfactory to each of the Parties, acting reasonably (the Escrow Account Funding Date), each Commitment Party shall deliver and pay the aggregate Per Share Purchase Price for such Commitment Partys Backstop Commitment Percentage of the Unsubscribed Shares by wire transfer in immediately available funds in U.S. dollars into the Escrow Account in satisfaction of such Commitment Partys Backstop Commitment. Notwithstanding the foregoing, if the Parties are unable to agree to escrow agreements that are mutually acceptable to each of them, then all payments contemplated to be made by the Noteholders to the Escrow Account pursuant to this Section 2.4 shall instead be made to a Company bank account designated by the Company in the Funding Notice and shall be delivered and paid to such account on or prior to the Closing Date.
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Section 2.5 Closing.
(a) Subject to Article VII, unless otherwise mutually agreed in writing between the Company and the Requisite Commitment Parties, the closing of the Backstop Commitment (the Closing) shall take place at the offices of Milbank, Tweed, Hadley & McCloy LLP, 28 Liberty Street, New York, New York 10005, at 10:00 a.m., New York City time, on the date on which all of the conditions set forth in Article VII shall have been satisfied or waived in accordance with this Agreement (other than conditions that by their terms are to be satisfied at the Closing, but subject to the satisfaction or waiver of such conditions). The date on which the Closing actually occurs shall be referred to herein as the Closing Date.
(b) At the Closing, the funds held in the Escrow Account (and any amounts paid to a Company bank account pursuant to the last sentence of Section 2.4(b)) shall, as applicable, be released and utilized in accordance with the Plan.
(c) At the Closing, issuance of the Unsubscribed Shares will be made by the Company to each Commitment Party (or to its designee in accordance with Section 2.6(a)) against payment of the aggregate Per Share Purchase Price for the Unsubscribed Shares of such Commitment Party, in satisfaction of such Commitment Partys Backstop Commitment. Unless a Commitment Party requests delivery of a physical stock certificate, the entry of any Unsubscribed Shares to be delivered pursuant to this Section 2.5(c) into the account of a Commitment Party pursuant to the Companys book entry procedures and delivery to such Commitment Party of an account statement reflecting the book entry of such Unsubscribed Shares shall be deemed delivery of such Unsubscribed Shares for purposes of this Agreement. Notwithstanding anything to the contrary in this Agreement, all Unsubscribed Shares will be delivered with all issue, stamp, transfer, sales and use, or similar transfer Taxes or duties that are due and payable (if any) in connection with such delivery duly paid by the Company.
Section 2.6 Designation and Assignment Rights.
(a) Each Commitment Party shall have the right to designate by written notice to the Company no later than two (2) Business Days prior to the Closing Date that some or all of the Unsubscribed Shares that it is obligated to purchase hereunder be issued in the name of, and delivered to, one or more of its Affiliates or Affiliated Funds (other than any portfolio company of such Commitment Party or its Affiliates) (each, a Related Purchaser) upon receipt by the Company of payment therefor in accordance with the terms hereof, which notice of designation shall (i) be addressed to the Company and signed by such Commitment Party and each such Related Purchaser, (ii) specify the number of Unsubscribed Shares to be delivered to or issued in the name of such Related Purchaser and (iii) contain a confirmation by each such Related Purchaser of the accuracy of the representations set forth in Sections 5.6 through 5.9 as applied to such Related Purchaser; provided, that no such designation pursuant to this Section 2.6(a) shall relieve such Commitment Party from its obligations under this Agreement.
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(b) Except as set forth in Section 2.6(c), each Commitment Party shall have the right to Transfer all or any portion of its Backstop Commitment only to (i) any investment fund the primary investment advisor to which is such Commitment Party or an Affiliate thereof (an Affiliated Fund) or (ii) one or more special purpose vehicles that are wholly owned by one or more of such Commitment Party and its Affiliated Funds, created for the purpose of holding such Backstop Commitment or holding debt or equity of the Debtors, and with respect to which such Commitment Party either (A) has provided an adequate equity support letter or a guarantee of such special purpose vehicles Backstop Commitment or (B) otherwise remains obligated to fund the Backstop Commitment to be Transferred until the consummation of the Plan; provided, that such special purpose vehicle shall not be related to or Affiliated with any portfolio company of such Commitment Party or any of its Affiliates or Affiliated Funds (other than solely by virtue of its affiliation with such Commitment Party) and the equity of such special purpose vehicle shall not be directly or indirectly transferable other than to such Persons described in clause (i) or (ii) of this Section 2.6(b), and in such manner, as such Commitment Partys Backstop Commitment is transferable pursuant to this Section 2.6(b) (each of the Persons referred to in clauses (i) and (ii), an Ultimate Purchaser), and that, in each case, provides a written agreement to the Company under which it (x) confirms the accuracy of the representations set forth in Article V as applied to such Ultimate Purchaser, (y) agrees to purchase such portion of such Commitment Partys Backstop Commitment, and (z) agrees to be fully bound by, and subject to, this Agreement as a Commitment Party hereto; provided, that no sale or Transfer pursuant to this Section 2.6(b) shall relieve such Commitment Party from its obligations under this Agreement. Other than as set forth in this Section 2.6(b), no Commitment Party shall be permitted to Transfer its Backstop Commitment without the prior written consent of the Company and the Requisite Commitment Parties, which shall not be unreasonably withheld, conditioned or delayed.
(c) Additionally, each Commitment Party shall have the right to Transfer all or any portion of its Backstop Commitment to a Restructuring Support Party or any other entity to whom such Commitment Party transfers its Note Claims in accordance with the Restructuring Support Agreement, in each case, in full compliance with all transfer restrictions set forth in the Restructuring Support Agreement, including those contained in subclause (a) of Section 12 thereof, provided, further, that in accordance with the Restructuring Support Agreement, such transferee agrees in writing to be bound by the obligations of such Commitment Party under this Agreement and is determined, after due inquiry and investigation by the Restructuring Support Parties and the Debtors, to be reasonably capable of fulfilling such obligations. Upon compliance with this Section 2.6(c), the transferring Commitment Party shall be deemed to relinquish its rights (and be released from its obligations, except for any claim for breach of this Agreement that occurs prior to such Transfer) under this Agreement to the extent of such transferred rights and obligations. Any Transfer made in violation of this Section 2.6(c) shall be deemed null and void ab initio and of no force or effect, regardless of any prior notice provided to the Parties or any Commitment Party, and shall not create any obligation or liability of any Debtor or any other Commitment Party to the purported transferee.
(d) Each Commitment Party, severally and not jointly, agrees that it will not Transfer, at any time prior to the Closing Date or the earlier termination of this Agreement in accordance with its terms, any of its rights and obligations under this Agreement to any Person other than in accordance with Sections 2.3, 2.6(a), 2.6(b) or 2.6(c). After the Closing Date, nothing in this Agreement shall limit or restrict in any way the ability of any
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Commitment Party (or any permitted transferee thereof) to Transfer any of the shares of New Common Stock or any interest therein; provided, that any such Transfer shall be made pursuant to an effective registration statement under the Securities Act or an exemption from the registration requirements thereunder and pursuant to applicable securities Laws.
ARTICLE III
BACKSTOP COMMITMENT PREMIUM AND EXPENSE REIMBURSEMENT
Section 3.1 Premium Payable by the Company. Subject to Section 3.2, in consideration for the Backstop Commitment and the other agreements of the Commitment Parties in this Agreement, the Debtors shall pay or cause to be paid a nonrefundable aggregate premium in an amount equal to $3,000,000, which represents 6% of the Rights Offering Amount, payable in accordance with Section 3.2, to the Commitment Parties (including any Replacing Commitment Party, but excluding any Defaulting Commitment Party) or their designees based upon their respective Backstop Commitment Percentages at the time the payment is made (the Commitment Premium).
The provisions for the payment of the Commitment Premium, the Termination Fee and Expense Reimbursement, and the indemnification provided herein, are an integral part of the transactions contemplated by this Agreement and without these provisions the Commitment Parties would not have entered into this Agreement.
Section 3.2 Payment of Premium. The Commitment Premium shall be fully earned, nonrefundable and non-avoidable upon entry of the Approval Order and shall be paid by the Debtors, free and clear of any withholding or deduction for any applicable Taxes, on the Closing Date as set forth above. For the avoidance of doubt, to the extent payable in accordance with the terms of this Agreement, the Commitment Premium will be payable regardless of the amount of Unsubscribed Shares (if any) actually purchased. The Company shall satisfy its obligation to pay the Commitment Premium on the Closing Date by, in lieu of any cash payments, issuing the number of additional shares of New Common Stock (rounding down to the nearest whole share solely to avoid fractional shares) to the Commitment Parties that is required to be issued so that, after giving effect to the New Common Stock issued or issuable under the Rights Offering and in respect of the satisfaction of the Commitment Premium by way of issuance of such additional shares of New Common Stock pursuant to this Section 3.2, the Commitment Parties are issued, in satisfaction of the Companys obligation to pay the Commitment Premium, the Commitment Premium Settlement Percentage of the total number of shares of New Common Stock of the Reorganized Company outstanding as of the Closing Date (excluding from such total number of shares of New Common Stock any shares of New Common Stock issued or issuable in respect of the new management incentive plan adopted in accordance with the Restructuring Term Sheet); provided, that if the Closing does not occur, the Termination Fee shall be payable (in lieu of the Commitment Premium), in cash, to the extent provided in Section 9.4.
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Section 3.3 Expense Reimbursement.
(a) The Debtors agree to pay, in accordance with Section 3.3(b) below, (A) the reasonable and documented fees and expenses (including travel costs and expenses) of Milbank, Tweed, Hadley & McCloy LLP (Milbank) as primary counsel, one local counsel, W.D. Von Gonten & Co. as engineer consultants, and PJT Partners LP, as financial advisor, for all Consenting Noteholders and Commitment Parties, and Heidrick & Struggles as consultant, retained by Milbank, as counsel to the Ad Hoc Committee, and any such other advisors or consultants as may be reasonably determined by the Consenting Noteholders and the Commitment Parties, in consultation with the Company, and (B) subject to entry of the Approval Order, all filing fees, if any, required by the HSR Act or any other Antitrust Law in connection with the transactions contemplated by this Agreement and all reasonable and documented expenses related thereto (such payment obligations set forth in clauses (A) and (B) above, collectively, the Expense Reimbursement). The Expense Reimbursement shall, pursuant to the Approval Order, constitute allowed administrative expenses of the Debtors estate under sections 503(b) and 507 of the Bankruptcy Code.
(b) The Expense Reimbursement described in Section 3.3(a)(A) shall be paid in accordance with Section 14 of the Restructuring Support Agreement. The Expense Reimbursement described in Section 3.3(a)(B) accrued through the date on which the Approval Order is entered shall be paid in accordance with the DIP Orders, and the Approval Order upon its entry by the Bankruptcy Court, and in no event later than two Business Days after the date of the entry of the Approval Order. The Expense Reimbursement described in Section 3.3(a)(B) shall thereafter be payable by the Debtors in accordance with the DIP Orders and the Approval Order; provided, that the Debtors final payment shall be made contemporaneously with the Closing or the termination of this Agreement pursuant to Article IX. The Commitment Parties shall promptly provide summary copies of all invoices (redacted as necessary to protect privileges) to the Debtors and to the United States Trustee.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except (i) as set forth in the corresponding section of the Company Disclosure Schedules or (ii) as disclosed in the Company SEC Documents filed with the SEC on or after December 31, 2015 and publicly available on the SECs Electronic Data-Gathering, Analysis and Retrieval system prior to the date hereof (excluding the exhibits, annexes and schedules thereto, any disclosures contained in the Forward-Looking Statements or Risk Factors sections thereof, or any other statements that are similarly predictive, cautionary or forward looking in nature), the Debtors, jointly and severally, hereby represent and warrant to the Commitment Parties (unless otherwise set forth herein, as of the date of this Agreement and as of the Closing Date) as set forth below.
Section 4.1 Organization and Qualification. The Company and each of its Subsidiaries (a) is a duly organized and validly existing corporation, limited liability company or limited partnership, as the case may be, and, if applicable, in good standing (or the equivalent thereof) under the Laws of the jurisdiction of its incorporation or organization (except where the
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failure to be in good standing (or the equivalent) would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect), (b) has the corporate or other applicable power and authority to own its property and assets and to transact the business in which it is currently engaged and presently proposes to engage and (c) is duly qualified and is authorized to do business and is in good standing in each jurisdiction where the conduct of its business as currently conducted requires such qualifications, except in the cases of clauses (b) and (c) where the failure to have such authority or qualifications would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
Section 4.2 Corporate Power and Authority.
(a) The Company has the requisite corporate power and authority (i) (A) subject to entry of the Approval Order and the Confirmation Order, to enter into, execute and deliver this Agreement and to perform the BCA Approval Obligations and (B) subject to entry of the Approval Order and the Confirmation Order, to perform each of its other obligations hereunder and (ii) subject to entry of the Approval Order, the Plan Solicitation Order, and the Confirmation Order, to consummate the transactions contemplated herein and in the Plan, to enter into, execute and deliver the Registration Rights Agreement and all other agreements to which it will be a party as contemplated by this Agreement and the Plan (this Agreement, the Plan, the Disclosure Statement, the Restructuring Support Agreement, the Registration Rights Agreement, the debtor-in-possession credit agreement for the DIP Facility to be entered into in accordance with the DIP Credit Agreement and the DIP Orders, the Exit Facility, and such other agreements and any Plan supplements or documents referred to herein or therein or hereunder or thereunder, collectively, the Transaction Agreements) and to perform its obligations under each of the Transaction Agreements (other than this Agreement). Subject to the receipt of the foregoing Orders, as applicable, the execution and delivery of this Agreement and each of the other Transaction Agreements and the consummation of the transactions contemplated hereby and thereby have been or will be duly authorized by all requisite corporate action on behalf of the Company, and no other corporate proceedings on the part of the Company are or will be necessary to authorize this Agreement or any of the other Transaction Agreements or to consummate the transactions contemplated hereby or thereby.
(b) Subject to entry of the Approval Order, the Plan Solicitation Order, and the Confirmation Order, each of the other Debtors has the requisite power and authority (corporate or otherwise) to enter into, execute and deliver each Transaction Agreement to which such other Debtor is a party and to perform its obligations thereunder. Subject to entry of the Approval Order, the Plan Solicitation Order, and the Confirmation Order, the execution and delivery of this Agreement and each of the other Transaction Agreements and the consummation of the transactions contemplated hereby and thereby have been or will be duly authorized by all requisite action (corporate or otherwise) on behalf of each other Debtor party thereto, and no other proceedings on the part of any other Debtor party thereto are or will be necessary to authorize this Agreement or any of the other Transaction Agreements or to consummate the transactions contemplated hereby or thereby.
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Section 4.3 Execution and Delivery; Enforceability. Subject to entry of the Approval Order, this Agreement will have been, and subject to the entry of the Approval Order, the Plan Solicitation Order, and the Confirmation Order, each other Transaction Agreement will be, duly executed and delivered by the Company and each of the other Debtors party thereto. Upon entry of the Approval Order and assuming due and valid execution and delivery hereof by the Commitment Parties, the BCA Approval Obligations will constitute the valid and legally binding obligations of the Company and, to the extent applicable, the other Debtors, enforceable against the Company and, to the extent applicable, the other Debtors in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, moratorium and other similar Laws now or hereafter in effect relating to creditors rights generally and subject to general principles of equity. Upon entry of the Approval Order and assuming due and valid execution and delivery of this Agreement and the other Transaction Agreements by the Commitment Parties and, to the extent applicable, any other parties hereof and thereof, each of the obligations of the Company and, to the extent applicable, the other Debtors hereunder and thereunder will constitute the valid and legally binding obligations of the Company and, to the extent applicable, the other Debtors, enforceable against the Company and, to the extent applicable, the other Debtors, in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, moratorium and other similar Laws now or hereafter in effect relating to creditors rights generally and subject to general principles of equity.
Section 4.4 Authorized and Issued Capital Stock.
(a) On the Closing Date, (i) the total issued capital stock of the Company will consist of the Aggregate New Common Shares plus the shares of New Common Stock issued under the Rights Offering plus the shares of New Common Stock issued in respect of the Commitment Premium pursuant to Article III, (ii) no shares of New Common Stock will be held by the Company in its treasury, (iii) no shares of New Common Stock will be reserved for issuance upon exercise of stock options and other rights to purchase or acquire shares of New Common Stock granted in connection with any employment arrangement entered into in accordance with Section 6.3, except as reserved in respect of the new management incentive plan adopted in accordance with the Restructuring Term Sheet, and (iv) no warrants to purchase shares of New Common Stock will be issued and outstanding.
(b) As of the Closing Date, all issued and outstanding shares of New Common Stock will have been duly authorized and validly issued and will be fully paid and non-assessable, and will not be subject to any preemptive rights.
(c) Except as set forth in this Section 4.4, as of the Closing Date, no shares of capital stock or other equity securities or voting interest in the Company will have been issued, reserved for issuance or outstanding.
(d) Except as described in this Section 4.4 and except as set forth in the Registration Rights Agreement, the Reorganized Company Corporate Documents and this Agreement, as of the Closing Date, neither the Company nor any of its Subsidiaries will be party to or otherwise bound by or subject to any outstanding option, warrant, call, right, security, commitment, Contract, arrangement or undertaking (including any preemptive right) that (i) obligates the Company or any of its Subsidiaries to issue, deliver, sell or transfer, or repurchase, redeem or otherwise acquire, or cause to be issued, delivered, sold or transferred, or repurchased, redeemed or otherwise acquired, any shares of the capital stock of, or other equity or voting interests in, the Company or any of its Subsidiaries or any security convertible or
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exercisable for or exchangeable into any capital stock of, or other equity or voting interest in, the Company or any of its Subsidiaries, (ii) obligates the Company or any of its Subsidiaries to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking, (iii) restricts the Transfer of any shares of capital stock of the Company or any of its Subsidiaries (other than any restrictions included in the Exit Facility or any corresponding pledge agreement) or (iv) relates to the voting of any shares of capital stock of the Company.
Section 4.5 Issuance. The shares of New Common Stock to be issued pursuant to the Plan, including the shares of New Common Stock to be issued in connection with the consummation of the Rights Offering and pursuant to the terms hereof, will, when issued and delivered on the Closing Date in exchange for the aggregate Per Share Purchase Price therefor, be duly and validly authorized, issued and delivered and shall be fully paid and non-assessable, and free and clear of all Taxes, Liens (other than Transfer restrictions imposed hereunder or under the Reorganized Company Corporate Documents or by applicable Law), preemptive rights, subscription and similar rights (other than any rights set forth in the Reorganized Company Corporate Documents, and the Registration Rights Agreement).
Section 4.6 No Conflict. Assuming the consents described in clauses (a) through (g) of Section 4.7 are obtained, the execution and delivery by the Company and, if applicable, its Subsidiaries of this Agreement, the Plan and the other Transaction Agreements, the compliance by the Company and, if applicable, its Subsidiaries with the provisions hereof and thereof and the consummation of the transactions contemplated herein and therein will not (a) conflict with, or result in a breach, modification or violation of, any of the terms or provisions of, or constitute a default under (with or without notice or lapse of time, or both), or result, except to the extent specified in the Plan, in the acceleration of, or the creation of any Lien under, or cause any payment or consent to be required under any Contract to which the Company or any of its Subsidiaries (including any Subsidiaries that are not Debtors) will be bound as of the Closing Date after giving effect to the Plan or to which any of the property or assets of the Company or any of its Subsidiaries (including any Subsidiaries that are not Debtors) will be subject as of the Closing Date after giving effect to the Plan, (b) result in any violation of the provisions of the Reorganized Company Corporate Documents or any of the organization documents of any of the Companys Subsidiaries (other than, for the avoidance of doubt, a breach or default that would be triggered as a result of the Chapter 11 Cases or the Companys or any Debtors undertaking to implement the Restructuring Transactions through the Chapter 11 Cases), or (c) result in any violation of any Law or Order applicable to the Company or any of its Subsidiaries (including any Subsidiaries that are not Debtors) or any of their properties, except in each of the cases described in clause (a) or (c) for any conflict, breach, modification, violation, default, acceleration or Lien which would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
Section 4.7 Consents and Approvals. No consent, approval, authorization, Order, registration or qualification of or with any Governmental Entity having jurisdiction over the Company or any of its Subsidiaries or any of their properties (each, an Applicable Consent) is required for the execution and delivery by the Company and, to the extent relevant, its Subsidiaries of this Agreement, the Plan and the other Transaction Agreements, the compliance by the Company and, to the extent relevant, its Subsidiaries with the
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provisions hereof and thereof and the consummation of the transactions contemplated herein and therein, except for (a) the entry of the Approval Order authorizing the Company to assume this Agreement and perform the BCA Approval Obligations, (b) entry of the Plan Solicitation Order, (c) entry by the Bankruptcy Court, or any other court of competent jurisdiction, of orders as may be necessary in the Chapter 11 Cases from time-to-time; (d) the entry of the Confirmation Order, (e) filings, notifications, authorizations, approvals, consents, clearances or termination or expiration of all applicable waiting periods under any Antitrust Laws in connection with the transactions contemplated by this Agreement, (f) such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or Blue Sky Laws in connection with the purchase of the Unsubscribed Shares by the Commitment Parties, the issuance of the Subscription Rights, the issuance of the Rights Offering Shares pursuant to the exercise of the Subscription Rights, the issuance of New Common Stock as payment of the Commitment Premium, and (g) any Applicable Consents that, if not made or obtained, would not reasonably be expected to be material to the Company and its Subsidiaries taken as a whole.
Section 4.8 Arms-Length. The Company acknowledges and agrees that (a) each of the Commitment Parties is acting solely in the capacity of an arms-length contractual counterparty to the Company with respect to the transactions contemplated hereby (including in connection with determining the terms of the Rights Offering) and not as a financial advisor or a fiduciary to, or an agent of, the Company or any of its Subsidiaries and (b) no Commitment Party is advising the Company or any of its Subsidiaries as to any legal, tax, investment, accounting or regulatory matters in any jurisdiction.
Section 4.9 Financial Statements. The audited consolidated balance sheets of the Company as at December 31, 2015 and the related consolidated statements of operations and of cash flows for the fiscal year then ended, accompanied by a report thereon by KPMG LLP (collectively, the Financial Statements), present fairly the consolidated financial condition of the Company as at such date, and the consolidated results of its operations and its consolidated cash flows for the fiscal year then ended. All such Financial Statements, including the related schedules and notes thereto, have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) applied consistently throughout the periods involved (except as disclosed therein).
Section 4.10 Company SEC Documents and Disclosure Statement. Since December 31, 2014, the Company has filed all required reports, schedules, forms and statements with the SEC. As of their respective dates, and giving effect to any amendments or supplements thereto filed prior to the date of this Agreement, each of the Company SEC Documents that have been filed as of the date of this Agreement complied in all material respects with the requirements of the Securities Act or the Exchange Act applicable to such Company SEC Documents. The Company has filed with the SEC all Material Contracts that are required to be filed as exhibits to the Company SEC Documents that have been filed as of the date of this Agreement. No Company SEC Document that has been filed prior to the date of this Agreement, after giving effect to any amendments or supplements thereto and to any subsequently filed Company SEC Documents, in each case filed prior to the date of this Agreement, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. The Disclosure Statement as approved by the Bankruptcy Court will conform in all material respects with section 1125 of the Bankruptcy Code.
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Section 4.11 Absence of Certain Changes. Since December 31, 2015 to the date of this Agreement, no event, development, occurrence or change has occurred or exists that constitutes, individually or in the aggregate, a Material Adverse Effect.
Section 4.12 No Violation; Compliance with Laws. (i) The Company is not in violation of its charter or bylaws, and (ii) no Subsidiary of the Company is in violation of its respective charter or bylaws or similar organizational document in any material respect. Neither the Company nor any of its Subsidiaries is or has been at any time since January 1, 2013 in violation of any Law or Order, except for any such violations that have not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
Section 4.13 Legal Proceedings. Other than as listed in Section 4.13 of the Company Disclosure Schedules and other than the Chapter 11 Cases and any adversary proceedings or contested motions commenced in connection therewith, there are no material legal, governmental, administrative, judicial or regulatory investigations, audits, actions, suits, claims, arbitrations, demands, demand letters, claims, notices of noncompliance or violations, or proceedings (Legal Proceedings) pending or, to the Knowledge of the Company, threatened to which the Company or any of its Subsidiaries is a party or to which any property of the Company or any of its Subsidiaries is the subject, in each case that in any manner draws into question the validity or enforceability of this Agreement, the Plan or the other Transaction Agreements or that would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
Section 4.14 Labor Relations. Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect: (a) there are no strikes or other labor disputes pending or threatened against the Company or any of its Subsidiaries; (b) the hours worked and payments made to employees of the Company or any of its Subsidiaries have not been in violation of the Fair Labor Standards Act or any other applicable Law dealing with such matters; and (c) all payments due from the Company or any of its Subsidiaries or for which any claim may be made against the Company or any of 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 the Company or such Subsidiaries to the extent required by GAAP. Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, the consummation of the transactions contemplated by the Transaction Agreements will not give rise to a right of termination or right of renegotiation on the part of any union under any material collective bargaining agreement to which the Company or any of its Subsidiaries (or any predecessor) is a party or by which the Company or any of its Subsidiaries (or any predecessor) is bound.
Section 4.15 Intellectual Property. Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (a) each of the Company and its Subsidiaries owns, or possesses the right to use, all of the patents, patent rights, trademarks, service marks, trade names, copyrights, mask works, domain names, and any and all applications or registrations for any of the foregoing (collectively, Intellectual Property
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Rights) that are reasonably necessary for the operation of their respective businesses, without conflict with the rights of any other Person, (b) to the Knowledge of the Company, none of the Company or any of its Subsidiaries nor any Intellectual Property Right, proprietary right, product, process, method, substance, part, or other material now employed, sold or offered by or contemplated to be employed, sold or offered by such Person, is interfering with, infringing upon, misappropriating or otherwise violating any valid Intellectual Property Rights of any Person, and (c) no claim or litigation regarding any of the foregoing is pending or, to the Knowledge of the Company, threatened.
Section 4.16 Title to Real and Personal Property.
(a) Real Property. Each of the Company and its Subsidiaries has valid fee simple title to, or valid leasehold interests in, or easements or other limited property interests in, all its Real Properties and has valid title to its personal property and assets, in each case, except for Permitted Liens and except for defects in title that do not materially interfere with its ability to conduct its business as currently conducted or to utilize such properties and assets for their intended purposes and except where the failure to have such title would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. To the Knowledge of the Company, all such properties and assets are free and clear of Liens, other than Permitted Liens.
(b) Leased Real Property. Each of the Company and its Subsidiaries is in compliance with all obligations under all leases to which it is a party that have not been rejected in the Chapter 11 Cases, except where the failure to comply would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, and all such leases are in full force and effect, except leases in respect of which the failure to be in full force and effect would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. Each of the Company and its Subsidiaries enjoys peaceful and undisturbed possession under all such leases, other than leases in respect of which the failure to enjoy peaceful and undisturbed possession would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
(c) Personal Property. Each of the Company and its Subsidiaries owns or possesses the right to use, all Intellectual Property Rights and all licenses and rights with respect to any of the foregoing used in the conduct of their businesses, without any conflict (of which the Company or any of its Subsidiaries has been notified in writing) with the rights of others, and free from any burdensome restrictions on the present conduct of the Company and its Subsidiaries, as the case may be, except where such conflicts and restrictions would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
Section 4.17 No Undisclosed Relationships. Other than Contracts or other direct or indirect relationships between or among the Company and its Subsidiaries or between the Subsidiaries of the Company and each other, there are no Contracts or other direct or indirect relationships existing as of the date hereof between or among the Company or any of its Subsidiaries, on the one hand, and any director, officer or greater than five percent (5%) stockholder of the Company or any of its Subsidiaries, on the other hand, that is required by the Exchange Act to be described in the Companys filings with the SEC and that is not so
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described, except for the transactions contemplated by this Agreement. Any Contract existing as of the date hereof between or among the Company or any of its Subsidiaries, on the one hand, and any director, officer or greater than five percent (5%) stockholder of the Company or any of its Subsidiaries, on the other hand, that is required by the Exchange Act to be described in the Companys filings with the SEC is filed as an exhibit to, or incorporated by reference as indicated in, the Annual Report on Form 10-K for the year ended December 31, 2015 that the Company filed on March 15, 2016 or another Company SEC Document filed between March 15, 2016 and the date hereof.
Section 4.18 Licenses and Permits. The Company and its Subsidiaries possess all licenses, certificates, permits and other authorizations issued by, and have made all declarations and filings with, the appropriate Governmental Entities that are necessary for the ownership or lease of their respective properties and the conduct of the business, except where the failure to possess, make or give the same would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. Neither the Company nor any of its Subsidiaries (i) has received notice of any revocation or modification of any such license, certificate, permit or authorization or (ii) has any reason to believe that any such license, certificate, permit or authorization will not be renewed in the ordinary course, except to the extent that any of the foregoing would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
Section 4.19 Environmental. Except as to matters that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect: (a) no written notice, claim, demand, request for information, Order, complaint or penalty has been received by the Company or any of its Subsidiaries, and there are no judicial, administrative or other actions, suits or proceedings pending or, to the Knowledge of the Company, threatened which allege a violation of or liability under any Environmental Laws, in each case relating to the Company or any of its Subsidiaries, (b) the Company and each of its Subsidiaries has all environmental permits, licenses and other approvals, and has maintained all financial assurances, necessary for its operations to comply with all applicable Environmental Laws and is, and during the term of all applicable statutes of limitation, has been, in compliance with the terms of such permits, licenses and other approvals and with all other applicable Environmental Laws, (c) to the Knowledge of the Company, no Hazardous Material is located at, on or under any property currently owned, operated or leased by the Company or any of its Subsidiaries that would reasonably be expected to give rise to any cost, liability or obligation of the Company or any of its Subsidiaries under any Environmental Laws, (d) no Hazardous Material has been generated, owned, treated, stored, handled or controlled by the Company or any of its Subsidiaries and transported to or Released at any location in a manner that would reasonably be expected to give rise to any cost, liability or obligation of the Company or any of its Subsidiaries under any Environmental Laws, and (e) there are no agreements in which the Company or any of its Subsidiaries has expressly assumed or undertaken responsibility for any known or reasonably likely liability or obligation of any other Person arising under or relating to Environmental Laws, which in any such case has not been made available to the Commitment Parties prior to the date hereof.
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Section 4.20 Tax Returns.
(a) Except as would not reasonably be expected to be material to the Company and its Subsidiaries taken as a whole, (i) each of the Company and its Subsidiaries has filed or caused to be filed all U.S. federal, state, provincial, local and non-U.S. Tax returns required to have been filed by it and (ii) taken as a whole, each such Tax return is true and correct;
(b) Each of the Company and its Subsidiaries has timely paid or caused to be timely paid all Taxes shown to be due and payable by it on the returns referred to in clause (a) and all other Taxes or assessments (or made adequate provision (in accordance with GAAP) for the payment of all Taxes due) with respect to all periods or portions thereof ending on or before the date hereof (except Taxes or assessments that are being contested in good faith by appropriate proceedings and for which the Company and its Subsidiaries (as the case may be) has set aside on its books adequate reserves in accordance with GAAP or with respect to the Debtors only, except to the extent the non-payment thereof is permitted by the Bankruptcy Code), which Taxes, if not paid or adequately provided for, would reasonably be expected to be material to the Company and its Subsidiaries taken as a whole; and
(c) As of the date hereof, with respect to the Company and its Subsidiaries, other than in connection with the Chapter 11 Cases and other than Taxes or assessments that are being contested in good faith and are not expected to result in significant negative adjustments that would be material to the Company and its Subsidiaries taken as a whole, (i) there are no claims being asserted in writing with respect to any Taxes, (ii) no presently effective waivers or extensions of statutes of limitation with respect to Taxes have been given or requested and (iii) no Tax returns are being examined by, and no written notification of intention to examine has been received from, the IRS or any other Governmental Entity.
Section 4.21 Employee Benefit Plans.
(a) Except for the filing and pendency of the Chapter 11 Cases or otherwise as would not reasonably be expected to result, individually or in the aggregate, in material liability to the Company or any of its Subsidiaries: (i) each Company Plan and each Multiemployer Plan is in compliance with the applicable provisions of ERISA and the Code; (ii) no Reportable Event has occurred during the past six years (or is reasonably likely to occur); (iii) no Company Plan has any Unfunded Pension Liability in excess of $2,000,000 with respect to any single Company Plan and in excess of $3,000,000 with respect to all Company Plans in the aggregate; (iv) no ERISA Event has occurred or is reasonably expected to occur; (v) none of the Company or any of its Subsidiaries has engaged in a prohibited transaction (as defined in Section 406 of ERISA and Section 4975 of the Code) in connection with any employee pension benefit plan (as defined in Section 3(2) of ERISA) that would subject the Company or any of its Subsidiaries to Tax; (vi) no employee welfare plan (as defined in Section 3(1) of ERISA) maintained or contributed to by the Company or any of its Subsidiaries provides benefits to retired employees or other former employees (other than as required by Section 601 of ERISA); and (vii) none of the Company or any of its Subsidiaries or any ERISA Affiliate has incurred or is reasonably expected to incur any Withdrawal Liability.
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(b) Neither the Company nor any of its Subsidiaries has established, sponsored or maintained, or has any liability with respect to, any employee pension benefit plan or other employee benefit plan, program, policy, agreement or arrangement governed by or subject to the Laws of a jurisdiction other than the United States of America.
(c) Except as would not be reasonably expected to result, individually or in the aggregate, in a Material Adverse Effect, there are no pending, or to the Knowledge of the Company, threatened claims, sanctions, actions or lawsuits, asserted or instituted against any Company Plan or any Person as fiduciary or sponsor of any Company Plan, in each case other than claims for benefits in the normal course.
(d) Within the last six years, no Company Plan has been terminated, whether or not in a standard termination as that term is used in Section 4041(b)(1) of ERISA, except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect nor has any Company Plan with Unfunded Pension Liabilities been transferred outside of the controlled group (within the meaning of Section 4001(a)(14) of ERISA).
(e) Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, all compensation and benefit arrangements of the Company and its Subsidiaries comply and have complied in both form and operation with their terms and all applicable Laws and legal requirements, and neither the Company, nor any of its Subsidiaries, could reasonably be expected to have any obligation to provide any individual with a gross up or similar payment in respect of any Taxes that may become payable under Section 409A or 4999 of the Code.
(f) Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (i) the Company and each of its Subsidiaries has complied and is currently in compliance with all Laws and legal requirements in respect of personnel, employment and employment practices; (ii) all service providers of the Company or its Subsidiaries are correctly classified as employees, independent contractors, or otherwise for all purposes (including any applicable tax and employment policies or law); and (iii) the Company and its Subsidiaries have not and are not engaged in any unfair labor practice.
Section 4.22 Internal Control Over Financial Reporting.
The Company has established and maintains a system of internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act) that complies in all material respects with the requirements of the Exchange Act and has been designed to provide reasonable assurances regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. To the Knowledge of the Company, there are no material weaknesses in the Companys internal control over financial reporting as of the date hereof.
Section 4.23 Disclosure Controls and Procedures.
The Company maintains disclosure controls and procedures (within the meaning of Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange Act) designed to ensure that information required to be disclosed by the Company in the reports that it files and submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SECs
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rules and forms, including that information required to be disclosed by the Company in the reports that it files and submits under the Exchange Act is accumulated and communicated to management of the Company as appropriate to allow timely decisions regarding required disclosure.
Section 4.24 Material Contracts.
All Material Contracts are valid, binding and enforceable by and against the Company or its relevant Subsidiary and, to the Knowledge of the Company, each other party thereto (except where the failure to be valid, binding or enforceable does not constitute a Material Adverse Effect), and no written notice to terminate, in whole or part, any Material Contract has been delivered to the Company or any of its Subsidiaries (except where such termination would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect). Other than as a result of the filing of the Chapter 11 Cases, neither the Company nor any of its Subsidiaries nor, to the Knowledge of the Company, any other party to any Material Contract, is in material default or breach under the terms thereof, in each case, except for such instances of material default or breach that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
Section 4.25 No Unlawful Payments.
Since January 1, 2012, neither the Company nor any of its Subsidiaries nor, to the Knowledge of the Company, any of their respective directors, officers or employees has in any material respect: (a) used any funds of the Company or any of its Subsidiaries for any unlawful contribution, gift, entertainment or other unlawful expense, in each case relating to political activity; (b) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (c) violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977; or (d) made any bribe, rebate, payoff, influence payment, kickback or other similar unlawful payment.
Section 4.26 Compliance with Money Laundering Laws.
The operations of the Company and its Subsidiaries are and, since January 1, 2013 have been at all times, conducted in compliance in all material respects with applicable financial recordkeeping and reporting requirements of the U.S. Currency and Foreign Transactions Reporting Act of 1970, the money laundering statutes of all jurisdictions in which the Company and its Subsidiaries operate (and the rules and regulations promulgated thereunder) and any related or similar Laws (collectively, the Money Laundering Laws) and no material Legal Proceeding by or before any Governmental Entity or any arbitrator involving the Company or any of its Subsidiaries with respect to Money Laundering Laws is pending or, to the Knowledge of the Company, threatened.
Section 4.27 Compliance with Sanctions Laws.
Neither the Company nor any of its Subsidiaries nor, to the Knowledge of the Company, any of their respective directors, officers, employees or other Persons acting on their behalf with express authority to so act is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department. The Company will not directly or indirectly use the proceeds of the Rights Offering, or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or other Person, for the purpose of financing the activities of any Person that, to the Knowledge of the Company, is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department.
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Section 4.28 No Brokers Fees. Neither the Company nor any of its Subsidiaries is a party to any Contract with any Person (other than this Agreement) that would give rise to a valid claim against the Commitment Parties for a brokerage commission, finders fee or like payment in connection with the Rights Offering or the sale of the Unsubscribed Shares.
Section 4.29 Takeover Statutes. No Takeover Statute is applicable to this Agreement, the Backstop Commitment and the other transactions contemplated by this Agreement. As of the entry of the Approval Order, the board of directors of the Company shall have authorized and approved the issuance of the New Common Stock, including the Rights Offering Shares, pursuant to this Agreement, the Plan and the Rights Offering.
Section 4.30 Investment Company Act. Neither the Company nor any of its Subsidiaries is an investment company as defined in, or subject to regulation under, the Investment Company Act of 1940, as amended.
Section 4.31 Insurance. The Company and its Subsidiaries have insured their properties and assets against such risks and in such amounts as are customary for companies engaged in similar businesses. All premiums due and payable in respect of material insurance policies maintained by the Company and its Subsidiaries have been paid. The Company reasonably believes that the insurance maintained by or on behalf of the Company and its Subsidiaries is adequate in all material respects. As of the date hereof, to the Knowledge of the Company, neither the Company nor any of its Subsidiaries has received notice from any insurer or agent of such insurer with respect to any material insurance policies of the Company and its Subsidiaries of cancellation or termination of such policies, other than such notices which are received in the ordinary course of business or for policies that have expired in accordance with their terms.
Section 4.32 Alternative Transactions. As of the date hereof, neither the Company nor any of its Subsidiaries is pursuing, or in discussions regarding, any solicitation, offer, or proposal from any Person concerning any actual or proposed Alternative Transaction.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMMITMENT PARTIES
Each Commitment Party represents and warrants as to itself only (unless otherwise set forth herein, as of the date of this Agreement and as of the Closing Date) as set forth below.
Section 5.1 Incorporation. Such Commitment Party is a legal entity duly organized, validly existing and, if applicable, in good standing (or the equivalent thereof) under the Laws of its jurisdiction of incorporation or organization.
Section 5.2 Corporate Power and Authority. Such Commitment Party has the requisite power and authority (corporate or otherwise) to enter into, execute and deliver this Agreement and each other Transaction Agreements to which such Commitment Party is a party and to perform its obligations hereunder and thereunder and has taken all necessary action (corporate or otherwise) required for the due authorization, execution, delivery and performance by it of this Agreement and the other Transaction Agreements.
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Section 5.3 Execution and Delivery. This Agreement and each other Transaction Agreement to which such Commitment Party is a party (a) has been, or prior to its execution and delivery will be, duly and validly executed and delivered by such Commitment Party and (b) upon entry of the Approval Order and assuming due and valid execution and delivery hereof and thereof by the Company and the other Debtors (as applicable), will constitute valid and legally binding obligations of such Commitment Party, enforceable against such Commitment Party in accordance with their respective terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization or other similar Laws limiting creditors rights generally or by equitable principles relating to enforceability.
Section 5.4 No Conflict. Assuming that the consents referred to in clauses (a) and (b) of Section 5.5 are obtained, the execution and delivery by such Commitment Party of this Agreement and each other Transaction Agreement to which such Commitment Party is a party, the compliance by such Commitment Party with all of the provisions hereof and thereof and the consummation of the transactions contemplated herein and therein (a) will not conflict with, or result in breach, modification, termination or violation of, any of the terms or provisions of, or constitute a default under (with or without notice or lapse of time or both), or result in the acceleration of, or the creation of any Lien under, any Contract to which such Commitment Party is party or is bound or to which any of the property or assets or such Commitment Party are subject, (b) will not result in any violation of the provisions of the certificate of incorporation or bylaws (or comparable constituent documents) of such Commitment Party and (c) will not result in any material violation of any Law or Order applicable to such Commitment Party or any of its properties, except in each of the cases described in clauses (a) or (c), for any conflict, breach, modification, violation, default, acceleration or Lien which would not reasonably be expected, individually or in the aggregate, to prohibit or materially and adversely impact such Commitment Partys performance of its obligations under this Agreement.
Section 5.5 Consents and Approvals. No consent, approval, authorization, Order, registration or qualification of or with any Governmental Entity having jurisdiction over such Commitment Party or any of its properties is required for the execution and delivery by such Commitment Party of this Agreement and each other Transaction Agreement to which such Commitment Party is a party, the compliance by such Commitment Party with the provisions hereof and thereof and the consummation of the transactions (including the purchase by such Commitment Party of its Backstop Commitment Percentage of the Unsubscribed Shares and its portion of the Rights Offering Shares) contemplated herein and therein, except (a) any consent, approval, authorization, Order, registration or qualification which, if not made or obtained, would not reasonably be expected, individually or in the aggregate, to prohibit or materially and adversely impact such Commitment Partys performance of its obligations under this Agreement and each other Transaction Agreement to which such Commitment Party is a party and (b) filings, notifications, authorizations, approvals, consents, clearances or termination or expiration of all applicable waiting periods under any Antitrust Laws in connection with the transactions contemplated by this Agreement.
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Section 5.6 No Registration. Such Commitment Party understands that (a) the Unsubscribed Shares and any shares of New Common Stock issued to such Commitment Party in satisfaction of the Commitment Premium, have not been registered under the Securities Act by reason of a specific exemption from the registration provisions of the Securities Act, the availability of which depends on, among other things, the bona fide nature of the investment intent and the accuracy of such Commitment Partys representations as expressed herein or otherwise made pursuant hereto, and (b) the foregoing shares cannot be sold unless subsequently registered under the Securities Act or an exemption from registration is available.
Section 5.7 Purchasing Intent. Such Commitment Party is acquiring the Unsubscribed Shares and any shares of New Common Stock issued to such Commitment Party in satisfaction of the Commitment Premium, for its own account or accounts or funds over which it holds voting discretion, not otherwise as a nominee or agent, and not otherwise with the view to, or for resale in connection with, any distribution thereof not in compliance with applicable securities Laws, and such Commitment Party has no present intention of selling, granting any other participation in, or otherwise distributing the same, except in compliance with applicable securities Laws.
Section 5.8 Sophistication; Investigation. Such Commitment Party has such knowledge and experience in financial and business matters such that it is capable of evaluating the merits and risks of its investment in the Unsubscribed Shares and any shares of New Common Stock issued to such Commitment Party in satisfaction of the Commitment Premium. Such Commitment Party is an accredited investor within the meaning of Rule 501(a) of the Securities Act and a qualified institutional buyer within the meaning of Rule 144A of the Securities Act. Such Commitment Party understands and is able to bear any economic risks associated with such investment (including the necessity of holding such shares for an indefinite period of time). Except for the representations and warranties expressly set forth in this Agreement or any other Transaction Agreement, such Commitment Party disclaims reliance on any representations or warranties, either express or implied, by or on behalf of the Company or any of its Subsidiaries.
Section 5.9 No Brokers Fees. Such Commitment Party is not a party to any Contract with any Person (other than the Transaction Agreements and any Contract giving rise to the Expense Reimbursement hereunder) that would give rise to a valid claim against the Company or any of its Subsidiaries for a brokerage commission, finders fee or like payment in connection with the Rights Offering or the sale of the Unsubscribed Shares.
Section 5.10 Note Claims.
(a) As of the date hereof, such Commitment Party and its Affiliates (to the extent of such Commitment Partys knowledge) were, collectively, the beneficial owner of, or the investment advisor or manager for the beneficial owner of, at least the aggregate principal amount of Note Claims as set forth opposite such Commitment Partys name under the column titled Note Claims on Schedule 2 attached hereto.
(b) As of the date hereof, such Commitment Party or its applicable Affiliates has the full power to vote, dispose of and compromise at least the aggregate principal amount of the Note Claims set forth opposite such Commitment Partys name under the column titled Note Claims on Schedule 2 attached hereto.
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(c) As of the date hereof, such Commitment Party has not entered into any Contract to Transfer, in whole or in part, any portion of its right, title or interest in such Note Claims where such Transfer would prohibit such Commitment Party from complying with the terms of this Agreement or the Restructuring Support Agreement.
Section 5.11 Arms-Length. Such Commitment Party acknowledges and agrees that (a) the Company and its Subsidiaries are acting solely in the capacities of arms-length contractual counterparties to such Commitment Party with respect to the transactions contemplated hereby (including in connection with determining the terms of the Rights Offering) and not as a financial advisor or a fiduciary to, or an agent of, such Commitment Party and (b) neither the Company nor any of its Subsidiaries is advising such Commitment Party as to any legal, tax, investment, accounting or regulatory matters in any jurisdiction.
ARTICLE VI
ADDITIONAL COVENANTS
Section 6.1 Orders Generally. The Company shall support and make commercially reasonable efforts, consistent with the Restructuring Support Agreement, to (a) obtain the entry of the Approval Order, the Plan Solicitation Order, the Confirmation Order, and the DIP Orders, and (b) cause the Approval Order, the Plan Solicitation Order, the Confirmation Order, and the DIP Orders to become Final Orders (and request that such Orders become Final Orders effective immediately upon entry by the Bankruptcy Court pursuant to a waiver of Rules 3020 and 6004(h) of the Bankruptcy Rules, as applicable), in each case, as soon as reasonably practicable, consistent with the Bankruptcy Code, the Bankruptcy Rules, and the Restructuring Support Agreement, following the filing of the respective motion seeking entry of such Orders. The Company shall provide to each of the Commitment Parties and its counsel copies of the proposed motions seeking entry of the Approval Order, the Plan Solicitation Order, the Confirmation Order, and the DIP Orders (together with the proposed Plan Solicitation Order and the DIP Orders), and a reasonable opportunity to review and comment on such motions and such Orders prior to such motions and such Orders being filed with the Bankruptcy Court, and such motions and such Order must be in form and substance reasonably satisfactory to the Requisite Commitment Parties and the Company. Unless otherwise determined by the Requisite Commitment Parties, counsel to the Commitment Parties will provide the Company and its counsel with copies of the proposed Approval Order, and a reasonable opportunity to review and comment on such Orders prior to such Orders being filed with the Bankruptcy Court, and such Orders shall be in form and substance reasonably satisfactory to the Requisite Commitment Parties and the Company. Any amendments, modifications, changes, or supplements to any of the Approval Order, Plan Solicitation Order, Confirmation Order, and DIP Orders, and any of the motions seeking entry of such Orders, shall be in form and substance reasonably satisfactory to the Requisite Commitment Parties and the Company.
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Section 6.2 Confirmation Order; Plan and Disclosure Statement. The Debtors shall use their commercially reasonable efforts to obtain entry of the Confirmation Order. The Company shall provide to each of the Commitment Parties and its counsel a copy of the proposed Plan and the Disclosure Statement and any proposed amendment, modification, supplement or change to the Plan or the Disclosure Statement, and a reasonable opportunity to review and comment on such documents, and each such amendment, modification, supplement or change to the Plan or the Disclosure Statement must be in form and substance reasonably satisfactory to each of the Requisite Commitment Parties and the Company. The Company shall provide to each of the Commitment Parties and its counsel a copy of the proposed Confirmation Order (together with copies of any briefs, pleadings and motions related thereto), and a reasonable opportunity to review and comment on such Order, briefs, pleadings and motions prior to such Order, briefs, pleadings and motions being filed with the Bankruptcy Court, and such Order, briefs, pleadings and motions must be in form and substance reasonably satisfactory to each of the Requisite Commitment Parties and the Company.
Section 6.3 Conduct of Business. Except as expressly set forth in this Agreement or in the Restructuring Support Agreement or with the prior written consent of Requisite Commitment Parties (requests for which, including related information, shall be directed to the counsel and financial advisors to the Ad Hoc Committee), during the period from the date of this Agreement to the earlier of the Closing Date and the date on which this Agreement is terminated in accordance with its terms (the Pre-Closing Period), (a) the Company shall, and shall cause each of its Subsidiaries to, carry on its business in the ordinary course and use its commercially reasonable efforts to: (i) preserve intact its business, (ii) keep available the services of its officers and employees, (iii) preserve its material relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with the Company or its Subsidiaries in connection with their business, and (iv) file Company SEC Documents within the time periods required under the Exchange Act, in each case in accordance with ordinary course practices, and (b) the Company shall not, and shall not permit any of its Subsidiaries to, enter into any transaction that is material to their business other than (A) transactions in the ordinary course of business to the extent necessary to conduct operations of the Company and its Subsidiaries, as applicable, in a manner consistent with the financial and business projections provided to the Commitment Parties prior to the date hereof, (B) other transactions after prior notice to the Commitment Parties to implement tax planning which transactions are not reasonably expected to materially adversely affect any Commitment Party and (C) transactions expressly contemplated by the Transaction Agreements.
For the avoidance of doubt, the following shall be deemed to occur outside of the ordinary course of business of the Company and shall require the prior written consent of the Requisite Commitment Parties unless the same would otherwise be permissible under the preceding clause (B) or (C): (1) any amendment, modification, termination, waiver, supplement, restatement or other change to any Material Contract or any assumption of any Material Contract in connection with the Chapter 11 Cases (other than any Material Contracts that are otherwise addressed by clause (3) below), (2) entry into, or any amendment, modification, waiver, supplement or other change to, any employment agreement to which the Company or any of its Subsidiaries is a party or any assumption of any such employment agreement in connection with the Chapter 11 Cases, and (3) the adoption or amendment of any management incentive or equity plan by any of the Debtors except for the new management incentive plan in accordance with the Restructuring Term Sheet. Except as otherwise provided in this Agreement, nothing in this Agreement shall give the Commitment Parties, directly or indirectly, any right to control or direct the operations of the Company and its Subsidiaries. Prior to the Closing Date, the Company and its Subsidiaries shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of the business of the Company and its Subsidiaries.
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Section 6.4 Access to Information; Confidentiality.
(a) Subject to applicable Law and Section 6.4(b), upon reasonable notice during the Pre-Closing Period, the Company shall (and shall cause its Subsidiaries to) afford the Commitment Parties and their Representatives upon request reasonable access, during normal business hours and without unreasonable disruption or interference with the Companys and its Subsidiaries business or operations, to the Companys and its Subsidiaries employees, properties, books, Contracts and records and, during the Pre-Closing Period, the Company shall (and shall cause its Subsidiaries to) furnish promptly to such parties all reasonable information concerning the Companys and its Subsidiaries business, properties and personnel as may reasonably be requested by any such party, provided that the foregoing shall not require the Company (i) to permit any inspection, or to disclose any information, that in the reasonable judgment of the Company would cause the Company or any of its Subsidiaries to violate any of their respective obligations with respect to confidentiality to a third party if the Company shall have used its commercially reasonable efforts to obtain, but failed to obtain, the consent of such third party to such inspection or disclosure, (ii) to disclose any legally privileged information of the Company or any of its Subsidiaries or (iii) to violate any applicable Laws or Orders. All requests for information and access made in accordance with this Section 6.4 shall be directed to an executive officer of the Company or such Person as may be designated by the Companys executive officers.
(b) From and after the date hereof until the date that is one (1) year after the expiration of the Pre-Closing Period, each Commitment Party shall, and shall cause its Representatives to, (i) keep confidential and not provide or disclose to any Person any documents or information received or otherwise obtained by such Commitment Party or its Representatives pursuant to Section 6.4(a), Section 6.5 or in connection with a request for approval pursuant to Section 6.3 (except that provision or disclosure may be made to any Affiliate or Representative of such Commitment Party who needs to know such information for purposes of this Agreement or the other Transaction Agreements and who agrees to observe the terms of this Section 6.4(b) (and such Commitment Party will remain liable for any breach of such terms by any such Affiliate or Representative)), and (ii) not use such documents or information for any purpose other than in connection with this Agreement or the other Transaction Agreements or the transactions contemplated hereby or thereby. Notwithstanding the foregoing, the immediately preceding sentence shall not apply in respect of documents or information that (A) is now or subsequently becomes generally available to the public through no violation of this Section 6.4(b), (B) becomes available to a Commitment Party or its Representatives on a non-confidential basis from a source other than the Company or any of its Subsidiaries or any of their respective Representatives, (C) becomes available to a Commitment Party or its Representatives through document production or discovery in connection with the Chapter 11 Cases or other judicial or administrative process, but subject to any confidentiality restrictions imposed by the Chapter 11 Cases or other such process, or (D) such Commitment Party or any Representative thereof is required to disclose pursuant to judicial or administrative
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process or pursuant to applicable Law or applicable securities exchange rules; provided, that, such Commitment Party or such Representative shall provide the Company with prompt written notice of such legal compulsion and cooperate with the Company to obtain a protective Order or similar remedy to cause such information or documents not to be disclosed, including interposing all available objections thereto, at the Companys sole cost and expense; provided, further, that, in the event that such protective Order or other similar remedy is not obtained, the disclosing party shall furnish only that portion of such information or documents that is legally required to be disclosed and shall exercise its commercially reasonable efforts (at the Companys sole cost and expense) to obtain assurance that confidential treatment will be accorded such disclosed information or documents.
Section 6.5 Financial Information.
(a) During the Pre-Closing Period, the Company shall deliver to the counsel and financial advisors to the Ad Hoc Committee, and to each Commitment Party that so requests, all statements and reports the Company is required to deliver to the DIP Agent pursuant to Section 5.01 of the DIP Credit Agreement (as in effect on the date hereof) (the Financial Reports). Neither any waiver by the parties to the DIP Credit Agreement of their right to receive the Financial Reports nor any amendment or termination of the DIP Credit Agreement shall affect the Companys obligation to deliver the Financial Reports to the Commitment Parties in accordance with the terms of this Agreement.
(b) Information required to be delivered pursuant to Section 5.01 of the DIP Credit Agreement (as in effect on the date hereof) shall be deemed to have been delivered in accordance with Section 6.5(a) on the date on which the Company provides written notice to the counsel and financial advisors to the Ad Hoc Committee, and to each Commitment Party that so requests, such information that such information is available via the EDGAR system of the SEC on the internet (to the extent such information has been posted or is available as described in such notice).
(c) Each Commitment Party agrees that all information and reports delivered pursuant to this Section 6.5 shall be subject to the provisions of Section 6.4(b).
Section 6.6 Commercially Reasonable Efforts.
(a) Without in any way limiting any other respective obligation of the Company or any Commitment Party in this Agreement, each Party shall use commercially reasonable efforts to take or cause to be taken all actions, and do or cause to be done all things, reasonably necessary, proper or advisable in order to consummate and make effective the transactions contemplated by this Agreement and the Plan, including using commercially reasonable efforts in:
(i) timely preparing and filing all documentation reasonably necessary to effect all necessary notices, reports and other filings of such Person and to obtain as promptly as practicable all consents, registrations, approvals, permits and authorizations necessary or advisable to be obtained from any third party or Governmental Entity;
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(ii) defending any Legal Proceedings in any way challenging (A) this Agreement, the Plan or any other Transaction Agreement, (B) the Approval Order, the Plan Solicitation Order, the Confirmation Order or the DIP Orders or (C) the consummation of the transactions contemplated hereby and thereby, including seeking to have any stay or temporary restraining Order entered by any Governmental Entity vacated or reversed; and
(iii) working together in good faith to finalize the Reorganized Company Corporate Documents, Transaction Agreements and all other documents relating thereto for timely inclusion in the Plan and filing with the Bankruptcy Court.
(b) Subject to applicable Laws relating to the exchange of information, and in accordance with the Restructuring Support Agreement, the Commitment Parties and the Company shall have the right to review in advance, and to the extent practicable each will consult with the other on all of the information relating to Commitment Parties or the Company, as the case may be, and any of their respective Subsidiaries, that appears in any filing made with, or written materials submitted to, any third party and/or any Governmental Entity in connection with the transactions contemplated by this Agreement or the Plan; provided, however, that the Commitment Parties are not required to provide for review in advance declarations or other evidence submitted in connection with any filing with the Bankruptcy Court. In exercising the foregoing rights, the Parties shall act as reasonably and as promptly as practicable.
(c) Without limitation to Sections 6.1 and 6.2, to the extent exigencies permit, the Company shall provide or cause to be provided a draft of all motions, applications, pleadings, schedules, Orders, reports or other material papers (including all material memoranda, exhibits, supporting affidavits and evidence and other supporting documentation) in the Chapter 11 Cases relating to or affecting the Transaction Agreements in accordance with the Restructuring Support Agreement. All such motions, applications, pleadings, schedules, Orders, reports and other material papers shall be in form and substance reasonably satisfactory to each of the Requisite Commitment Parties and the Company.
(d) Nothing contained in this Section 6.6(d) shall limit the ability of any Commitment Party to consult with the Debtors, to appear and be heard, or to file objections, concerning any matter arising in the Chapter 11 Cases to the extent not inconsistent with the Restructuring Support Agreement.
Section 6.7 Registration Rights Agreement; Reorganized Company Corporate Documents; Rights Offering Procedures.
(a) The Plan will provide that from and after the Closing Date each Commitment Party receiving New Common Stock that are control or restricted securities shall be entitled to registration rights pursuant to a registration rights agreement, which agreement shall be in form and substance consistent with the terms set forth in the Restructuring Term Sheet and otherwise reasonably acceptable to the Requisite Commitment Parties and the Company (the Registration Rights Agreement). A form of the Registration Rights Agreement shall be filed with the Bankruptcy Court as part of the Plan Supplement or an amendment thereto.
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(b) The Plan will provide that on the Effective Date the Reorganized Company Corporate Documents will be approved, adopted and effective. Forms of the Reorganized Company Corporate Documents shall be filed with the Bankruptcy Court as part of the Plan Supplement or an amendment thereto.
Section 6.8 Blue Sky. The Company shall, on or before the Closing Date, take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for, or to qualify the Unsubscribed Shares issued hereunder, sale to the Commitment Parties at the Closing Date pursuant to this Agreement under applicable securities and Blue Sky Laws of the states of the United States (or to obtain an exemption from such qualification) and any applicable foreign jurisdictions, and shall provide evidence of any such action so taken to the Commitment Parties on or prior to the Closing Date. The Company shall timely make all filings and reports relating to the offer and sale of the Unsubscribed Shares issued hereunder required under applicable securities and Blue Sky Laws of the states of the United States following the Closing Date. The Company shall pay all fees and expenses in connection with satisfying its obligations under this Section 6.8.
Section 6.9 DTC Eligibility. Unless otherwise requested by the Requisite Commitment Parties, the Company shall use commercially reasonable efforts to promptly make, when applicable from time to time after the Closing, all Unlegended Shares eligible for deposit with The Depository Trust Company. Unlegended Shares means any shares of New Common Stock acquired by the Commitment Parties and their respective Affiliates (including any Related Purchaser or Ultimate Purchaser in respect thereof) pursuant to this Agreement and the Plan, including all shares issued to the Commitment Parties and their respective Affiliates in connection with the Rights Offering, that do not require, or are no longer subject to, the Legend.
Section 6.10 Use of Proceeds. The Debtors will apply the proceeds from the exercise of the Subscription Rights and the sale of the Unsubscribed Shares for the purposes identified in the Disclosure Statement and the Plan.
Section 6.11 Share Legend. Each certificate evidencing all shares of New Common Stock issued hereunder, including any certificate evidencing shares of New Common Stock that may be issued in satisfaction of the Commitment Premium as provided herein, and each certificate issued in exchange for or upon the Transfer of any such shares, shall be stamped or otherwise imprinted with a legend (the Legend) in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED ON [DATE OF ISSUANCE], HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE ACT), OR ANY OTHER APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN AVAILABLE EXEMPTION FROM REGISTRATION THEREUNDER.
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In the event that any such shares are uncertificated, such shares shall be subject to a restrictive notation substantially similar to the Legend in the stock ledger or other appropriate records maintained by the Company or agent and the term Legend shall include such restrictive notation. The Company shall remove the Legend (or restrictive notation, as applicable) set forth above from the certificates evidencing any such shares (or the stock ledger or other appropriate Company records, in the case of uncertified shares), upon request, at any time after the restrictions described in such Legend cease to be applicable, including, as applicable, when such shares may be sold under Rule 144 of the Securities Act. The Company may reasonably request such opinions, certificates or other evidence that such restrictions no longer apply as a condition to removing the Legend.
Section 6.12 Antitrust Approval.
(a) Each Party agrees to use commercially reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary to consummate and make effective the transactions contemplated by this Agreement, the Plan and the other Transaction Agreements, including (i) if applicable, filing, or causing to be filed, the Notification and Report Form pursuant to the HSR Act with respect to the transactions contemplated by this Agreement with the Antitrust Division of the United States Department of Justice and the United States Federal Trade Commission and any filings (or, if required by any Antitrust Authority, any drafts thereof) under any other Antitrust Laws that are necessary to consummate and make effective the transactions contemplated by this Agreement as soon as reasonably practicable and no later than fifteen (15) Business Days following the date hereof and (ii) promptly furnishing documents or information reasonably requested by any Antitrust Authority.
(b) The Company and each Commitment Party subject to an obligation pursuant to the Antitrust Laws to notify any transaction contemplated by this Agreement, the Plan or the other Transaction Agreements that has notified the Company in writing of such obligation (each such Commitment Party, a Filing Party) agree to reasonably cooperate with each other as to the appropriate time of filing such notification and its content. The Company and each Filing Party shall, to the extent permitted by applicable Law: (i) promptly notify each other of, and if in writing, furnish each other with copies of (or, in the case of material oral communications, advise each other orally of) any communications from or with an Antitrust Authority; (ii) not participate in any meeting with an Antitrust Authority unless it consults with each other Filing Party and the Company, as applicable, in advance and, to the extent permitted by the Antitrust Authority and applicable Law, give each other Filing Party and the Company, as applicable, a reasonable opportunity to attend and participate thereat; (iii) furnish each other Filing Party and the Company, as applicable, with copies of all correspondence and communications between such Filing Party or the Company and the Antitrust Authority; (iv) furnish each other Filing Party with such necessary information and reasonable assistance as may be reasonably necessary in connection with the preparation of necessary filings or submission of information to the Antitrust Authority; and (v) not withdraw its filing, if any, under the HSR Act without the prior written consent of the Requisite Commitment Parties and the Company.
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(c) Should a Filing Party be subject to an obligation under the Antitrust Laws to jointly notify with one or more other Filing Parties (each, a Joint Filing Party) any transaction contemplated by this Agreement, the Plan or the other Transaction Agreements, such Joint Filing Party shall promptly notify each other Joint Filing Party of, and if in writing, furnish each other Joint Filing Party with copies of (or, in the case of material oral communications, advise each other Joint Filing Party orally of) any communications from or with an Antitrust Authority.
(d) The Company and each Filing Party shall use their commercially reasonable efforts to obtain all authorizations, approvals, consents, or clearances under any applicable Antitrust Laws or to cause the termination or expiration of all applicable waiting periods under any Antitrust Laws in connection with the transactions contemplated by this Agreement at the earliest possible date after the date of filing. The communications contemplated by this Section 6.12 may be made by the Company or a Filing Party on an outside counsel-only basis or subject to other agreed upon confidentiality safeguards. The obligations in this Section 6.12 shall not apply to filings, correspondence, communications or meetings with Antitrust Authorities unrelated to the transactions contemplated by this Agreement, the Plan or the other Transaction Agreements.
Section 6.13 Alternative Transactions. The Company and the other Debtors shall not seek, solicit, or support any Alternative Transaction; provided, however, that nothing in this Section 6.13 shall limit the Parties ability to engage in marketing efforts, discussions, and/or negotiations with any party regarding refinancing of the Exit Facility to be consummated following the Effective Date; provided, further, that (i) if any of the Debtors receive a proposal or expression of interest regarding any Alternative Transaction from the RSA Effective Date until the occurrence of a Termination Date, the Debtors shall promptly notify counsel to the other parties to the Restructuring Support Agreement of any such proposal or expression of interest, with such notice to include the material terms thereof, including (unless prohibited by a separate agreement) the identity of the person or group of persons involved, and (ii) the Debtors shall promptly furnish counsel to the parties to the Restructuring Support Agreement with copies of any written offer, oral offer, or any other information that they receive relating to the foregoing and shall promptly inform counsel to the parties to the Restructuring Support Agreement of any material changes to such proposals. The Debtors shall not enter into any confidentiality agreement with a party interested in an Alternative Transaction unless such party consents to identifying and providing to counsel to the parties to the Restructuring Support Agreement (under a reasonably acceptable confidentiality agreement) the information contemplated under Section 6(b) of the Restructuring Support Agreement.
Section 6.14 Hedging Arrangements. The Company (or its relevant Subsidiaries) will use all good faith reasonable efforts necessary to implement a hedging program that is reasonably acceptable to the Minimum Commitment Parties (an Acceptable Hedging Program) as promptly as practicable and to maintain such program through the Closing Date.
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ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF THE PARTIES
Section 7.1 Conditions to the Obligations of the Commitment Parties. The obligations of each Commitment Party to consummate the transactions contemplated hereby shall be subject to (unless waived in accordance with Section 7.2) the satisfaction of the following conditions prior to or at the Closing:
(a) Approval Order. The Bankruptcy Court shall have entered the Approval Order and such Order shall be a Final Order.
(b) Plan Solicitation Order. The Bankruptcy Court shall have entered the Plan Solicitation Order, and such Order shall be a Final Order.
(c) Confirmation Order. The Bankruptcy Court shall have entered the Confirmation Order in form and substance reasonably satisfactory to the Requisite Commitment Parties, and such Order shall be a Final Order.
(d) DIP Orders. The Bankruptcy Court shall have entered the DIP Orders, and such Orders shall be Final Orders.
(e) Plan. The Company and all of the other Debtors shall have complied, in all material respects, with the terms of the Plan that are to be performed by the Company and the other Debtors on or prior to the Effective Date and the conditions to the occurrence of the Effective Date (other than any conditions relating to occurrence of the Closing) set forth in the Plan shall have been satisfied or waived in accordance with the terms of the Plan.
(f) Rights Offering; Rights Offering Procedures. The Rights Offering and Rights Offering Procedures shall have been conducted, in all material respects, in accordance with the Plan Solicitation Order and this Agreement, and the Rights Offering Expiration Time shall have occurred.
(g) Effective Date. The Effective Date shall have occurred, or shall be deemed to have occurred concurrently with the Closing, as applicable, in in accordance with the terms and conditions in the Plan and in the Confirmation Order.
(h) Registration Rights Agreement; Reorganized Company Corporate Documents.
(i) The Registration Rights Agreement shall have been executed and delivered by the Company, shall otherwise have become effective with respect to the Commitment Parties and the other parties thereto, and shall be in full force and effect.
(ii) The Reorganized Company Corporate Documents shall duly have been approved and adopted and shall be in full force and effect.
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(i) Expense Reimbursement. The Debtors shall have paid all Expense Reimbursement accrued through the Closing Date pursuant to Section 3.3.
(j) Consents. All governmental and third-party notifications, filings, consents, waivers and approvals set forth on Schedule 3 and required for the consummation of the transactions contemplated by this Agreement and the Plan shall have been made or received.
(k) Antitrust Approvals. All waiting periods imposed by any Governmental Entity or Antitrust Authority in connection with the transactions contemplated by this Agreement shall have terminated or expired and all authorizations, approvals, consents or clearances under the Antitrust Laws in connection with the transactions contemplated by this Agreement shall have been obtained.
(l) No Legal Impediment to Issuance. No Law or Order shall have been enacted, adopted or issued by any Governmental Entity that prohibits the implementation of the Plan or the transactions contemplated by this Agreement;
(m) Representations and Warranties.
(i) The representations and warranties of the Debtors contained in Sections 4.11 and 4.29 shall be true and correct in all respects on and as of the Closing Date with the same effect as if made on and as of the Closing Date (except for such representations and warranties made as of a specified date, which shall be true and correct only as of the specified date).
(ii) The representations and warranties of the Debtors contained in Sections 4.2, 4.3, 4.4, 4.5, and 4.6(b) shall be true and correct in all material respects on and as of the Closing Date after giving effect to the Plan with the same effect as if made on and as of the Closing Date after giving effect to the Plan (except for such representations and warranties made as of a specified date, which shall be true and correct in all material respects only as of the specified date).
(iii) The representations and warranties of the Debtors contained in this Agreement other than those referred to in clauses (i) and (ii) above shall be true and correct (disregarding all materiality or Material Adverse Effect qualifiers) on and as of the Closing Date after giving effect to the Plan with the same effect as if made on and as of the Closing Date after giving effect to the Plan (except for such representations and warranties made as of a specified date, which shall be true and correct only as of the specified date), except where the failure to be so true and correct does not constitute, individually or in the aggregate, a Material Adverse Effect.
(n) Covenants. The Debtors shall have performed and complied, in all material respects, with all of their respective covenants and agreements contained in this Agreement that contemplate, by their terms, performance or compliance prior to the Closing Date.
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(o) Material Adverse Effect. Since the date of this Agreement, there shall not have occurred, and there shall not exist, any event, development, occurrence or change that constitutes, individually or in the aggregate, a Material Adverse Effect.
(p) Officers Certificate. The Commitment Parties shall have received on and as of the Closing Date a certificate of the chief executive officer or chief financial officer of the Company confirming that the conditions set forth in Sections 7.1(m), (n), and (o) have been satisfied.
(q) Funding Notice. The Noteholders shall have received the Funding Notice.
(r) Exit Facility Borrowing Base. The Exit Facility Term Sheet and the Exit Facility Commitment Letters shall be in effect that provide for an initial borrowing base limit in the Exit Facility of no less than $128,000,000.
(s) Key Contracts. The assumption or rejection (in each case, pursuant to section 365 of the Bankruptcy Code) and/or amendment of the Contracts described in Section 1.1 of the Company Disclosure Schedules as of the Closing Date and the liabilities of the Reorganized Debtors with respect to such Contracts shall, in the aggregate, be reasonably satisfactory to the Requisite Commitment Parties.
Section 7.2 Waiver of Conditions to Obligations of Commitment Parties. All or any of the conditions set forth in Section 7.1 may only be waived in whole or in part with respect to all Commitment Parties by a written instrument executed by the Requisite Commitment Parties in their sole discretion and if so waived, all Commitment Parties shall be bound by such waiver.
Section 7.3 Conditions to the Obligations of the Debtors. The obligations of the Debtors to consummate the transactions contemplated hereby with the Commitment Parties is subject to (unless waived by the Company) the satisfaction of each of the following conditions:
(a) Approval Order. The Bankruptcy Court shall have entered the Approval Order and such Order shall be a Final Order.
(b) Plan Solicitation Order. The Bankruptcy Court shall have entered the Plan Solicitation Order, and such Order shall be a Final Order.
(c) Confirmation Order. The Bankruptcy Court shall have entered the Confirmation Order, and such Order shall be a Final Order.
(d) DIP Orders. The Bankruptcy Court shall have entered the DIP Orders, and such Orders shall be Final Orders.
(e) Effective Date. The Effective Date shall have occurred in accordance with the terms and conditions in the Plan and in the Confirmation Order.
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(f) Rights Offering. The Rights Offering Expiration Time shall have occurred.
(g) Antitrust Approvals. All waiting periods imposed by any Governmental Entity or Antitrust Authority in connection with the transactions contemplated by this Agreement shall have terminated or expired and all authorizations, approvals, consents or clearances under the Antitrust Laws in connection with the transactions contemplated by this Agreement shall have been obtained.
(h) No Legal Impediment to Issuance. No Law or Order shall have been enacted, adopted or issued by any Governmental Entity that prohibits the implementation of the Plan or the transactions contemplated by this Agreement.
(i) Representations and Warranties.
(i) The representations and warranties of the Commitment Parties contained in this Agreement that are qualified by materiality or material adverse effect or words or similar import shall be true and correct in all respects on and as of the Closing Date with the same effect as if made on and as of the Closing Date (except for such representations and warranties made as of a specified date, which shall be true and correct in all respects only as of the specified date).
(ii) The representations and warranties of the Commitment Parties contained in this Agreement that are not qualified by materiality or material adverse effect or words or similar import shall be true and correct in all material respects on and as of the Closing Date with the same effect as if made on and as of the Closing Date (except for such representations and warranties made as of a specified date, which shall be true and correct in all material respects only as of the specified date).
(j) Covenants. The Commitment Parties shall have performed and complied, in all material respects, with all of their covenants and agreements contained in this Agreement and in any other document delivered pursuant to this Agreement.
(k) Officers Certificate. Upon request of the Company, the Debtors shall have received on and as of the Closing Date a certificate of an executive officer or other authorized signatory of each of the Commitment Parties confirming that the conditions set forth in Section 7.3(i) and (j) have been satisfied.
ARTICLE VIII
INDEMNIFICATION AND CONTRIBUTION
Section 8.1 Indemnification Obligations. Following the entry of the Approval Order, the Company and the other Debtors (the Indemnifying Parties and each, an Indemnifying Party) shall, jointly and severally, indemnify and hold harmless each Commitment Party and its Affiliates, equity holders, members, partners, general partners,
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managers and its and their respective Representatives and controlling persons (each, an Indemnified Person) from and against any and all losses, claims, damages, liabilities and costs and expenses (other than Taxes of the Commitment Parties except to the extent otherwise provided for in this Agreement) (collectively, Losses) that any such Indemnified Person may incur or to which any such Indemnified Person may become subject arising out of or in connection with this Agreement, the Plan and the transactions contemplated hereby and thereby, including the Backstop Commitment, the Rights Offering, the payment of the Commitment Premium or the Termination Fee or the use of the proceeds of the Rights Offering, or any claim, challenge, litigation, investigation or proceeding relating to any of the foregoing, regardless of whether any Indemnified Person is a party thereto, whether or not such proceedings are brought by the Company, the other Debtors, their respective equity holders, Affiliates, creditors or any other Person, and reimburse each Indemnified Person upon demand for reasonable documented (with such documentation subject to redaction to preserve attorney client and work product privileges) legal or other third-party expenses incurred in connection with investigating, preparing to defend or defending, or providing evidence in or preparing to serve or serving as a witness with respect to, any lawsuit, investigation, claim or other proceeding relating to any of the foregoing (including in connection with the enforcement of the indemnification obligations set forth herein), irrespective of whether or not the transactions contemplated by this Agreement or the Plan are consummated or whether or not this Agreement is terminated; provided, that the foregoing indemnity will not, as to any Indemnified Person, apply to Losses (a) as to a Defaulting Commitment Party, its Related Parties or any Indemnified Person related thereto, caused by a Commitment Party Default by such Commitment Party, or (b) to the extent they are found by a final, non-appealable judgment of a court of competent jurisdiction to arise from the bad faith, willful misconduct or gross negligence of such Indemnified Person.
Section 8.2 Indemnification Procedure. Promptly after receipt by an Indemnified Person of notice of the commencement of any claim, challenge, litigation, investigation or proceeding (an Indemnified Claim), such Indemnified Person will, if a claim is to be made hereunder against the Indemnifying Party in respect thereof, notify the Indemnifying Party in writing of the commencement thereof; provided, that (a) the omission to so notify the Indemnifying Party will not relieve the Indemnifying Party from any liability that it may have hereunder except to the extent it has been materially prejudiced by such failure and (b) the omission to so notify the Indemnifying Party will not relieve the Indemnifying Party from any liability that it may have to such Indemnified Person otherwise than on account of this Article VIII. In case any such Indemnified Claims are brought against any Indemnified Person and it notifies the Indemnifying Party of the commencement thereof, the Indemnifying Party will be entitled to participate therein, and, at its election by providing written notice to such Indemnified Person, the Indemnifying Party will be entitled to assume the defense thereof, with counsel reasonably acceptable to such Indemnified Person; provided, that if the parties (including any impleaded parties) to any such Indemnified Claims include both such Indemnified Person and the Indemnifying Party and based on advice of such Indemnified Persons counsel there are legal defenses available to such Indemnified Person that are different from or additional to those available to the Indemnifying Party, such Indemnified Person shall have the right to select separate counsel to assert such legal defenses and to otherwise participate in the defense of such Indemnified Claims. Upon receipt of notice from the Indemnifying Party to such Indemnified Person of its election to so assume the defense of such Indemnified Claims with counsel reasonably acceptable to the Indemnified Person, the Indemnifying Party shall not be
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liable to such Indemnified Person for expenses incurred by such Indemnified Person in connection with the defense thereof or participation therein (other than reasonable costs of investigation) unless (i) such Indemnified Person shall have employed separate counsel (in addition to any local counsel) in connection with the assertion of legal defenses in accordance with the proviso to the immediately preceding sentence (it being understood, however, that the Indemnifying Party shall not be liable for the expenses of more than one separate counsel representing the Indemnified Persons who are parties to such Indemnified Claims (in addition to one local counsel in each jurisdiction in which local counsel is required)), (ii) the Indemnifying Party shall not have employed counsel reasonably acceptable to such Indemnified Person to represent such Indemnified Person within a reasonable time after the Indemnifying Party has received notice of commencement of the Indemnified Claims from, or delivered on behalf of, the Indemnified Person, (iii) after the Indemnifying Party assumes the defense of the Indemnified Claims, the Indemnified Person determines in good faith that the Indemnifying Party has failed or is failing to defend such claim and provides written notice of such determination and the basis for such determination, and such failure is not reasonably cured within ten (10) Business Days of receipt of such notice, or (iv) the Indemnifying Party shall have authorized in writing the employment of counsel for such Indemnified Person. Notwithstanding anything herein to the contrary, the Company and its Subsidiaries shall have sole control over any Tax controversy or Tax audit and shall be permitted to settle any liability for Taxes of the Company and its Subsidiaries.
Section 8.3 Settlement of Indemnified Claims. In connection with any Indemnified Claim for which an Indemnified Person is assuming the defense in accordance with this Article VIII, the Indemnifying Party shall not be liable for any settlement of any Indemnified Claims effected by such Indemnified Person without the written consent of the Indemnifying Party (which consent shall not be unreasonably withheld, conditioned or delayed). If any settlement of any Indemnified Claims is consummated with the written consent of the Indemnifying Party or if there is a final judgment for the plaintiff in any such Indemnified Claims, the Indemnifying Party agrees to indemnify and hold harmless each Indemnified Person from and against any and all Losses by reason of such settlement or judgment to the extent such Losses are otherwise subject to indemnification by the Indemnifying Party hereunder in accordance with, and subject to the limitations of, this Article VIII. The Indemnifying Party shall not, without the prior written consent of an Indemnified Person (which consent shall be granted or withheld, conditioned or delayed in the Indemnified Persons sole discretion), effect any settlement of any pending or threatened Indemnified Claims in respect of which indemnity or contribution has been sought hereunder by such Indemnified Person unless (i) such settlement includes an unconditional release of such Indemnified Person in form and substance satisfactory to such Indemnified Person from all liability on the claims that are the subject matter of such Indemnified Claims and (ii) such settlement does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any Indemnified Person.
Section 8.4 Contribution. If for any reason the foregoing indemnification is unavailable to any Indemnified Person or insufficient to hold it harmless from Losses that are subject to indemnification pursuant to Section 8.1, then the Indemnifying Party shall contribute to the amount paid or payable by such Indemnified Person as a result of such Loss in such proportion as is appropriate to reflect not only
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the relative benefits received by the Indemnifying Party, on the one hand, and such Indemnified Person, on the other hand, but also the relative fault of the Indemnifying Party, on the one hand, and such Indemnified Person, on the other hand, as well as any relevant equitable considerations. It is hereby agreed that the relative benefits to the Indemnifying Party, on the one hand, and all Indemnified Persons, on the other hand, shall be deemed to be in the same proportion as (a) the total value received or proposed to be received by the Company pursuant to the issuance and sale of the Unsubscribed Shares in the Rights Offering contemplated by this Agreement and the Plan bears to (b) the Commitment Premium paid or proposed to be paid to the Commitment Parties. The Indemnifying Parties also agree that no Indemnified Person shall have any liability based on their comparative or contributory negligence or otherwise to the Indemnifying Parties, any Person asserting claims on behalf of or in right of any of the Indemnifying Parties, or any other Person in connection with an Indemnified Claim.
Section 8.5 Treatment of Indemnification Payments. All amounts paid by an Indemnifying Party to an Indemnified Person under this Article VIII shall, to the extent permitted by applicable Law, be treated as adjustments to the Per Share Purchase Price for all Tax purposes. The provisions of this Article VIII are an integral part of the transactions contemplated by this Agreement and without these provisions the Commitment Parties would not have entered into this Agreement. The Approval Order shall provide that the obligations of the Company under this Article VIII shall constitute allowed administrative expenses of the Debtors estate under sections 503(b) and 507 of the Bankruptcy Code and are payable without further Order of the Bankruptcy Court, and that the Company may comply with the requirements of this Article VIII without further Order of the Bankruptcy Court.
Section 8.6 No Survival. All representations, warranties, covenants and agreements made in this Agreement shall not survive the Closing Date except for covenants and agreements that by their terms are to be satisfied after the Closing Date, which covenants and agreements shall survive until satisfied in accordance with their terms.
ARTICLE IX
TERMINATION
Section 9.1 Consensual Termination. This Agreement may be terminated and the transactions contemplated hereby may be abandoned at any time prior to the Closing Date by mutual written consent of the Company and the Requisite Commitment Parties.
Section 9.2 Automatic Termination. Notwithstanding anything to the contrary in this Agreement, following the commencement of the Chapter 11 Cases and unless and until there is an unstayed Order of the Bankruptcy Court providing that the giving of notice under and/or termination of this Agreement in accordance with its terms is not prohibited by the automatic stay imposed by section 362 of the Bankruptcy Code, and except as otherwise provided in this Section 9.2, at which point this Agreement may be terminated by the Requisite Commitment Parties upon written notice to the Company upon the occurrence of any of the following events, this Agreement shall terminate automatically without any further action or notice by any Party at 5:00 p.m., New York City time on the fifth Business Day following the occurrence of any of the following events; provided that the Requisite Commitment Parties may waive such termination or extend any applicable dates in accordance with Section 10.7:
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(a) the Closing Date has not occurred by 11:59 p.m., New York City time on the date that is one hundred twenty (120) days after the Petition Date (as it may be extended pursuant to this Section 9.2(a) or Section 2.3(a), the Outside Date), unless prior thereto the Effective Date occurs and the Rights Offering has been consummated; provided, that the Outside Date (i) may be waived or extended with the prior written consent of the Requisite Commitment Parties and (ii) shall automatically be extended to the extent the Termination Date (as defined in the Exit Commitment Letters) is extended; provided, that, in no event shall the Outside Date be extended pursuant to this Section 9.2(a)(ii) beyond 5:00 p.m. (New York City time) on the date that is one hundred fifty (150) days after the Petition Date;
(b) the obligations of the Consenting Noteholders under the Restructuring Support Agreement are terminated in accordance with the terms of the Restructuring Support Agreement;
(c) the Company, any of the other Debtors or any other Commitment Party files any motion, application or adversary proceeding (or any of the Company, any of the other Debtors or other Restructuring Support Party supports any such motion, application, or adversary proceeding filed or commenced by any third party) (A) challenging the validity, enforceability, perfection, or priority of, or seeking avoidance or subordination of the Note Claims, or (B) asserting any other cause of action against and/or with respect or relating to such claims or the prepetition liens securing such claims;
(d) (i) the Company or the other Debtors shall have breached any representation, warranty, covenant or other agreement made by the Company or the other Debtors in this Agreement or any such representation or warranty shall have become inaccurate and such breach or inaccuracy would, individually or in the aggregate, cause a condition set forth in Sections 7.1(m), (n), or (o) not to be satisfied, (ii) the Commitment Parties shall have delivered written notice of such breach or inaccuracy to the Company, (iii) such breach or inaccuracy is not cured by the Company or the other Debtors by the tenth (10th) Business Day after receipt of such notice, and (iv) as a result of such failure to cure, any condition set forth in Sections 7.1(m), (n), or (o) is not capable of being satisfied; provided, that, this Agreement shall not terminate automatically pursuant to this Section 9.2(d) if the Commitment Parties are then in willful or intentional breach of this Agreement;
(e) any Law or final and non-appealable Order shall have been enacted, adopted or issued by any Governmental Entity that prohibits the implementation of the Plan or the Rights Offering or the transactions contemplated by this Agreement or the other Transaction Agreements, and, by the tenth (10th) Business Day after such Law or final and non-appealable Order shall have been enacted, adopted or issued, no relief has been obtained allowing consummation of the Rights Offering or the transactions contemplated by this Agreement and the other Transaction Agreements in a manner that (i) does not prevent or diminish in a material way compliance with the terms of the Plan and this Agreement, or (ii) is reasonably acceptable to the Requisite Commitment Parties;
(f) (i) the Debtors have materially breached their obligations under Section 6.13; (ii) the Bankruptcy Court approves or authorizes an Alternative Transaction; or (iii) the Company or any of its Subsidiaries enters into any Contract providing for the consummation of any Alternative Transaction or files any motion or application seeking authority to propose, join in or participate in the formation of, any actual or proposed Alternative Transaction;
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(g) an acceleration of the obligations or termination of commitments under the DIP Facility;
(h) the Company or any other Debtor (i) amends or modifies, or files a pleading seeking authority to amend or modify, the Definitive Documentation in a manner that is materially inconsistent with this Agreement; (ii) suspends or revokes the Transaction Agreements; or (iii) publicly announces its intention to take any such action listed in sub-clauses (i) and (ii) of this subsection;
(i) any of the Approval Order, Plan Solicitation Order, Confirmation Order, or DIP Orders is terminated, reversed, stayed, dismissed, vacated, or reconsidered, or any such Order is modified or amended after entry without the prior written consent of the Requisite Commitment Parties; or
(j) the Requisite Commitment Parties determine, in their reasonable discretion, that either (i) at any time from and after May 19, 2016, the Company and its Subsidiaries do not have an Acceptable Hedging Program in place; provided, however, that such time period may be extended by the written consent of the Minimum Commitment Parties or (ii) the condition set forth in Section 7.1(r) is not capable of being satisfied prior to Closing.
Section 9.3 Termination by the Company.
This Agreement may be terminated by the Company upon written notice to each Commitment Party upon the occurrence of any of the following events, subject to the rights of the Company to fully and conditionally waive, in writing, on a prospective or retroactive basis the occurrence of such event:
(a) any Law or final and non-appealable Order shall have been enacted, adopted or issued by any Governmental Entity that prohibits the implementation of the Plan or the Rights Offering or the transactions contemplated by this Agreement or the other Transaction Agreements, and, by the tenth (10th) Business Day after such Law or final and non-appealable Order shall have been enacted, adopted or issued, no relief has been obtained allowing consummation of the Rights Offering or the transactions contemplated by this Agreement and the other Transaction Agreements in a manner that (i) does not prevent or diminish in a material way compliance with the terms of the Plan and this Agreement, or (ii) is reasonably acceptable to the Requisite Commitment Parties;
(b) subject to the right of the Commitment Parties to arrange a Commitment Party Replacement in accordance with Section 2.3(a) (which will be deemed to cure any breach by the replaced Commitment Party pursuant to this subsection (b)), (i) any Commitment Party shall have breached any representation, warranty, covenant or other agreement made by such Commitment Party in this Agreement or any such representation or warranty shall have become inaccurate and such breach or inaccuracy would, individually or in the aggregate, cause a condition set forth in Section 7.3(i) or Section 7.3(j) not to be satisfied, (ii) the Company shall
52
have delivered written notice of such breach or inaccuracy to such Commitment Party, (iii) such breach or inaccuracy is not cured by such Commitment Party by the tenth (10th) Business Day after receipt of such notice, and (iv) as a result of such failure to cure, any condition set forth in Section 7.3(i) or Section 7.3(j) is not capable of being satisfied; provided, that the Company shall not have the right to terminate this Agreement pursuant to this Section 9.3(b) if it is then in willful or intentional breach of this Agreement;
(c) the Company or any of its Subsidiaries determines, after receiving advice from counsel, that proceeding with the Restructuring Transactions (including, without limitation, the Plan or solicitation of the Plan) would be inconsistent with the exercise of the fiduciary duties of the board of directors or analogous governing body of the Company or such Subsidiary; provided, that, concurrently with such termination, the Company pays the Termination Fee pursuant to Section 9.4(b)(ii);
(d) the Restructuring Support Agreement is terminated in accordance with its terms; or
(e) the Closing Date has not occurred by the Outside Date (as the same may be extended pursuant to Section 9.2(a) or Section 2.3(a)), unless prior thereto the Effective Date occurs and the Rights Offering has been consummated; provided, that the Company shall not have the right to terminate this Agreement pursuant to this Section 9.3(e) if it is then in willful or intentional breach of this Agreement;
Section 9.4 Effect of Termination.
(a) Upon termination of this Agreement pursuant to this Article IX, this Agreement shall forthwith become void and there shall be no further obligations or liabilities on the part of the Parties; provided, that (i) the obligations of the Debtors to pay the Expense Reimbursement pursuant to Article III, to satisfy their indemnification obligations pursuant to Article VIII and to pay the Termination Fee pursuant to Section 9.4(b) shall survive the termination of this Agreement and shall remain in full force and effect, in each case, until such obligations have been satisfied, (ii) the provisions set forth in this Section 9.4 and Article X shall survive the termination of this Agreement in accordance with their terms and (iii) subject to Section 10.10, nothing in this Section 9.4 shall relieve any Party from liability for its gross negligence or any willful or intentional breach of this Agreement. For purposes of this Agreement, willful or intentional breach means a breach of this Agreement that is a consequence of an act undertaken by the breaching party with the knowledge that the taking of such act would, or would reasonably be expected to, cause a breach of this Agreement.
(b) The Debtors shall make payments to the Commitment Parties or their designees based upon their respective Backstop Commitment Percentages on the date of payment, by wire transfer of immediately available funds to such accounts as the Requisite Commitment Parties may designate, if this Agreement is terminated as follows:
(i) upon termination pursuant to Section 9.2(d) or Section 9.2(f), or Section 9.2(b) or Section 9.3(d) as a result of a termination of the Restructuring Support Agreement pursuant to Section 8(c) thereof, then the Company shall pay the Termination Fee, in cash, on or prior to the second (2nd) Business Day following such termination;
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(ii) if the Company shall terminate this Agreement pursuant to Section 9.3(c), then the Company shall pay the Termination Fee, in cash, concurrently with such termination; and
(iii) if this Agreement shall be terminated pursuant to Section 9.2 (other than clauses (d) or (f) of Section 9.2, or by the Company pursuant to Section 9.3(c)), and, within twelve (12) months after the date of such termination, any of the Debtors executes a definitive agreement with respect to, or consummates, an Alternative Transaction, or the Bankruptcy Court approves or authorizes an Alternative Transaction, then the Company shall pay the Termination Fee, in cash, on or prior to the second (2nd) Business Day following such execution or consummation.
To the extent that all amounts due in respect of the Termination Fee pursuant to this Section 9.4(b) have actually been paid by the Debtors to the Commitment Parties in connection with a termination of this Agreement, the Commitment Parties shall not have any additional recourse against the Debtors for any obligations or liabilities relating to or arising from this Agreement, except for liability for gross negligence or willful or intentional breach of this Agreement pursuant to Section 9.4(a). Except as set forth in this Section 9.4(b), the Termination Fee shall not be payable upon the termination of this Agreement. The Termination Fee shall, pursuant to the Approval Order, constitute allowed administrative expenses of the Debtors estate under sections 503(b) and 507 of the Bankruptcy Code.
ARTICLE X
GENERAL PROVISIONS
Section 10.1 Notices. All notices and other communications in connection with this Agreement shall be in writing and shall be deemed given if delivered personally, sent via electronic facsimile (with confirmation), mailed by registered or certified mail (return receipt requested) or delivered by an express courier (with confirmation) to the Parties at the following addresses (or at such other address for a Party as may be specified by like notice):
(a) | If to the Company or any of the other Debtors: |
Penn Virginia Corporation
Attn: Nancy Snyder
Four Radnor Corporate Center, Suite 200
100 Matsonford Road Radnor, PA 19087
Tel: (610) 687-8900
Fax: (610) 687-3688
Email: nancy.snyder@pennvirginia.com
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With a copy to:
Kirkland & Ellis LLP
Attn: Edward O. Sassower, P.C. and Brian Schartz
601 Lexington Avenue
New York, NY 10022-4611
Tel: (212) 446-4800
Fax: (212) 446-4900
Email: edward.sassower@kirkland.com
brian.schartz@kirkland.com
Kirkland & Ellis LLP
Attn: Justin Bernbrock and Benjamin Rhode
300 North LaSalle
Chicago, IL 60654
Tel: (312) 862-2000
Fax: (312) 862-2200
Email: justin.bernbrock@kirkland.com
benjamin.rhode@kirkland.com
(b) | If to the Commitment Parties: |
To each Commitment Party at the addresses or e-mail addresses set forth below the Commitment Partys signature page to this Agreement.
With a copy to:
Milbank, Tweed, Hadley & McCloy LLP
Attn: Samuel Khalil, Brian Kinney and Bradley Friedman
28 Liberty Street
New York, NY 10005-1413
Tel: (212) 530-5000
Fax: (212) 530-5219
Email: skhalil@milbank.com
bkinney@milbank.com bfriedman@milbank.com
Section 10.2 Assignment; Third Party Beneficiaries. Neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned by any Party (whether by operation of Law or otherwise) without the prior written consent of the Company and the Requisite Commitment Parties, other than an assignment by a Commitment Party expressly permitted by Section 2.3 or 2.6 and any purported assignment in violation of this Section 10.2 shall be void ab initio. Except as provided in Article VIII with respect to the Indemnified Persons, this Agreement (including the documents and instruments referred to in this Agreement) is not intended to and does not confer upon any Person any rights or remedies under this Agreement other than the Parties.
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Section 10.3 Prior Negotiations; Entire Agreement.
(a) This Agreement (including the agreements attached as Exhibits to and the documents and instruments referred to in this Agreement) constitutes the entire agreement of the Parties and supersedes all prior agreements, arrangements or understandings, whether written or oral, among the Parties with respect to the subject matter of this Agreement, except that the Parties hereto acknowledge that any confidentiality agreements heretofore executed among the Parties and the Restructuring Support Agreement (including the Restructuring Term Sheet) will each continue in full force and effect.
(b) Notwithstanding anything to the contrary in the Plan (including any amendments, supplements or modifications thereto) or the Confirmation Order (and any amendments, supplements or modifications thereto) or an affirmative vote to accept the Plan submitted by any Commitment Party, nothing contained in the Plan (including any amendments, supplements or modifications thereto) or Confirmation Order (including any amendments, supplements or modifications thereto) shall alter, amend or modify the rights of the Commitment Parties under this Agreement unless such alteration, amendment or modification has been made in accordance with Section 10.7.
Section 10.4 Governing Law; Venue. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO SUCH STATES CHOICE OF LAW PROVISIONS WHICH WOULD REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER JURISDICTION. BY ITS EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PARTY IRREVOCABLY AND UNCONDITIONALLY AGREES FOR ITSELF THAT ANY LEGAL ACTION, SUIT, OR PROCEEDING AGAINST IT WITH RESPECT TO ANY MATTER ARISING UNDER OR ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT RENDERED IN ANY SUCH ACTION, SUIT, OR PROCEEDING, MAY BE BROUGHT IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH OF THE PARTIES IRREVOCABLY ACCEPTS AND SUBMITS ITSELF TO THE EXCLUSIVE JURISDICTION OF SUCH COURT, GENERALLY AND UNCONDITIONALLY, WITH RESPECT TO ANY SUCH ACTION, SUIT OR PROCEEDING. NOTWITHSTANDING THE FOREGOING CONSENT TO NEW YORK JURISDICTION, IF THE CHAPTER 11 CASES ARE COMMENCED, EACH PARTY AGREES THAT THE BANKRUPTCY COURT SHALL HAVE EXCLUSIVE JURISDICTION OF ALL MATTERS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT. BY EXECUTING AND DELIVERING THIS AGREEMENT, AND UPON COMMENCEMENT OF THE CHAPTER 11 CASES, EACH OF THE PARTIES IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE PERSONAL JURISDICTION OF THE BANKRUPTCY COURT SOLELY FOR PURPOSES OF ANY ACTION, SUIT, PROCEEDING, OR OTHER CONTESTED MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT RENDERED OR ORDER ENTERED IN ANY SUCH ACTION, SUIT, PROCEEDING, OR OTHER CONTESTED MATTER. THE PARTIES HEREBY AGREE THAT MAILING OF PROCESS OR OTHER PAPERS IN CONNECTION WITH ANY SUCH ACTION OR PROCEEDING TO AN ADDRESS PROVIDED IN
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WRITING BY THE RECIPIENT OF SUCH MAILING, OR IN SUCH OTHER MANNER AS MAY BE PERMITTED BY LAW, SHALL BE VALID AND SUFFICIENT SERVICE THEREOF AND HEREBY WAIVE ANY OBJECTIONS TO SERVICE ACCOMPLISHED IN THE MANNER HEREIN PROVIDED.
Section 10.5 Waiver of Jury Trial. EACH PARTY HEREBY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY JURISDICTION IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE AMONG THE PARTIES UNDER THIS AGREEMENT, WHETHER IN CONTRACT, TORT OR OTHERWISE.
Section 10.6 Counterparts. This Agreement may be executed in any number of counterparts, all of which will be considered one and the same agreement and will become effective when counterparts have been signed by each of the Parties and delivered to each other Party (including via facsimile or other electronic transmission), it being understood that each Party need not sign the same counterpart.
Section 10.7 Waivers and Amendments; Rights Cumulative; Consent. This Agreement may be amended, restated, modified or changed only by a written instrument signed by the Company and the Requisite Commitment Parties; provided, that (a) any Commitment Partys prior written consent shall be required for any amendment that would, directly or indirectly: (i) modify such Commitment Partys Backstop Commitment Percentage, (ii) increase the Per Share Purchase Price to be paid in respect of the Unsubscribed Shares, or (iii) have a materially adverse and disproportionate effect on such Commitment Party; and (b) the prior written consent of each Commitment Party that was an original signatory hereto that is still a Commitment Party as of such date of amendment shall be required for any amendment to the definition of Requisite Commitment Parties. Notwithstanding the foregoing, Schedule 1 shall be revised as necessary without requiring a written instrument signed by the Company and the Requisite Commitment Parties to reflect changes in the composition of the Commitment Parties and Backstop Commitment Percentages as a result of Transfers permitted in accordance with the terms and conditions of this Agreement. The terms and conditions of this Agreement (other than the conditions set forth in Sections 7.1 and 7.3, the waiver of which shall be governed solely by Article VII) may be waived (A) by the Debtors only by a written instrument executed by the Company and (B) by the Requisite Commitment Parties only by a written instrument executed by the Requisite Commitment Parties. No delay on the part of any Party in exercising any right, power or privilege pursuant to this Agreement will operate as a waiver thereof, nor will any waiver on the part of any Party of any right, power or privilege pursuant to this Agreement, nor will any single or partial exercise of any right, power or privilege pursuant to this Agreement, preclude any other or further exercise thereof or the exercise of any other right, power or privilege pursuant to this Agreement.
Section 10.8 Headings. The headings in this Agreement are for reference purposes only and will not in any way affect the meaning or interpretation of this Agreement.
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Section 10.9 Specific Performance. The Parties agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the Parties shall be entitled to an injunction or injunctions without the necessity of posting a bond to prevent breaches of this Agreement or to enforce specifically the performance of the terms and provisions hereof, in addition to any other remedy to which they are entitled at law or in equity. Unless otherwise expressly stated in this Agreement, no right or remedy described or provided in this Agreement is intended to be exclusive or to preclude a Party from pursuing other rights and remedies to the extent available under this Agreement, at law or in equity.
Section 10.10 Damages. Notwithstanding anything to the contrary in this Agreement, none of the Parties will be liable for, and none of the Parties shall claim or seek to recover, any punitive, special, indirect or consequential damages or damages for lost profits.
Section 10.11 No Reliance. No Commitment Party or any of its Related Parties shall have any duties or obligations to the other Commitment Parties in respect of this Agreement, the Plan or the transactions contemplated hereby or thereby, except those expressly set forth herein. Without limiting the generality of the foregoing, (a) no Commitment Party or any of its Related Parties shall be subject to any fiduciary or other implied duties to the other Commitment Parties, (b) no Commitment Party or any of its Related Parties shall have any duty to take any discretionary action or exercise any discretionary powers on behalf of any other Commitment Party, (c) no Commitment Party or any of its Related Parties shall have any duty to the other Commitment Parties to obtain, through the exercise of diligence or otherwise, to investigate, confirm, or disclose to the other Commitment Parties any information relating to the Company or any of its Subsidiaries that may have been communicated to or obtained by such Commitment Party or any of its Affiliates in any capacity, (d) no Commitment Party may rely, and confirms that it has not relied, on any due diligence investigation that any other Commitment Party or any Person acting on behalf of such other Commitment Party may have conducted with respect to the Company or any of its Affiliates or any of their respective securities, and (e) each Commitment Party acknowledges that no other Commitment Party is acting as a placement agent, initial purchaser, underwriter, broker or finder with respect to its Unsubscribed Shares or Backstop Commitment Percentage of its Backstop Commitment.
Section 10.12 Publicity. At all times prior to the Closing Date or the earlier termination of this Agreement in accordance with its terms, the Company and the Commitment Parties shall consult with each other prior to issuing any press releases (and provide each other a reasonable opportunity to review and comment upon such release) or otherwise making public announcements with respect to the transactions contemplated by this Agreement, it being understood that nothing in this Section 10.12 shall prohibit any Party from filing any motions or other pleadings or documents with the Bankruptcy Court in connection with the Chapter 11 Cases.
Section 10.13 Settlement Discussions. This Agreement and the transactions contemplated herein are part of a proposed settlement of a dispute between the Parties. Nothing herein shall be deemed an admission of any kind. Pursuant to Section 408 of the U.S. Federal Rules of Evidence and any applicable state rules of evidence, this Agreement and all negotiations relating thereto shall not be admissible into evidence in any Legal Proceeding, except to the extent filed with, or disclosed to, the Bankruptcy Court in connection with the Chapter 11 Cases (other than a Legal Proceeding to approve or enforce the terms of this Agreement).
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Section 10.14 No Recourse. Notwithstanding anything that may be expressed or implied in this Agreement, and notwithstanding the fact that certain of the Parties may be partnerships or limited liability companies, each Party covenants, agrees and acknowledges that no recourse under this Agreement or any documents or instruments delivered in connection with this Agreement shall be had against any Partys Affiliates, or any of such Partys Affiliates or respective Related Parties in each case other than the Parties to this Agreement and each of their respective successors and permitted assignees under this Agreement, whether by the enforcement of any assessment or by any legal or equitable proceeding, or by virtue of any applicable Law, it being expressly agreed and acknowledged that no personal liability whatsoever shall attach to, be imposed on or otherwise be incurred by any of the Related Parties, as such, for any obligation or liability of any Party under this Agreement or any documents or instruments delivered in connection herewith for any claim based on, in respect of or by reason of such obligations or liabilities or their creation; provided, however, nothing in this Section 10.14 shall relieve or otherwise limit the liability of any Party hereto or any of their respective successors or permitted assigns for any breach or violation of its obligations under this Agreement or such other documents or instruments. For the avoidance of doubt, prior to the Effective Date, none of the Parties will have any recourse, be entitled to commence any proceeding or make any claim under this Agreement or in connection with the transactions contemplated hereby except against any of the Parties or their respective successors and permitted assigns, as applicable.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the date first above written.
PENN VIRGINIA CORPORATION | ||
By: | /s/ R. Seth Bullock | |
Name: R. Seth Bullock | ||
Title: Chief Restructing Officer |
Anchorage Capital Master Offshore, Ltd. By: Anchorage Capital Group, L.L.C., its investment manager | ||
By: | /s/ Natalie A. Birrell | |
Name: Natalie A. Birrell Title: Chief Operating Officer |
[Signature Page to Backstop Commitment Agreement]
If to Anchorage Capital Master Offshore, Ltd.:
Anchorage Capital Master Offshore, Ltd.
c/o Anchorage Capital Group, L.L.C
610 Broadway, 6th Floor
New York, NY 10012
Attn: Legal; Operations
Email: legal@anchoragecap.com; ops@anchoragecap.com
With a copy to:
Milbank, Tweed, Hadley & McCloy LLP
Attn: Samuel Khalil, Brian Kinney and Bradley Friedman
28 Liberty Street
New York, NY 10005-1413
Tel: (212) 530-5000
Fax: (212) 530-5219
Email: skhalil@milbank.com
bkinney@milbank.com
bfriedman@milbank.com
Raptor Energy, LP By: Anchorage Capital Group, L.L.C., its investment manager | ||
By: | /s/ Natalie A. Birrell | |
Name: Natalie A. Birrell | ||
Title: Chief Operating Officer |
[Signature Page to Backstop Commitment Agreement]
If to Raptor Energy, LP:
Raptor Energy, LP
c/o Anchorage Capital Group, L.L.C
610 Broadway, 6th Floor
New York, NY 10012
Attn: Legal; Operations
Email: legal@anchoragecap.com; ops@anchoragecap.com
With a copy to:
Milbank, Tweed, Hadley & McCloy LLP
Attn: Samuel Khalil, Brian Kinney and Bradley Friedman
28 Liberty Street
New York, NY 10005-1413
Tel: (212) 530-5000
Fax: (212) 530-5219
Email: skhalil@milbank.com
bkinney@milbank.com
bfriedman@milbank.com
Marathon Asset Management, LP, solely on behalf of certain of its affiliated funds and managed accounts | ||
By: | /s/ Peter Coppa | |
Name: PETER COPPA | ||
Title: AUTHORIZED SIGNATORY |
[Signature Page to Backstop Commitment Agreement]
If to Marathon Asset Management:
Marathon Asset Management
c/o Dan Pine
One Bryant Park
38th Floor
New York, NY 10036
With a copy to:
Milbank, Tweed, Hadley & McCloy LLP
Attn: Samuel Khalil, Brian Kinney and Bradley Friedman
28 Liberty Street
New York, NY 10005-1413
Tel: (212) 530-5000
Fax: (212) 530-5219
Email: skhalil@milbank.com
bkinney@milbank.com
bfriedman@milbank.com
Contrarian Capital Management, L.L.C., on behalf of various managed accounts and affiliated entities | ||
By: | /s/ Jon R. Bauer | |
Name: Jon R. Bauer | ||
Title: Managing Member |
If to Contrarian Capital Management, L.L.C.:
Contrarian Capital Management, L.L.C.
Attn: Jon Bauer, Graham Morris, & Josh Weisser
411 West Putnam Avenue, Suite 425
Greenwich, CT 06830
With a copy to:
Milbank, Tweed, Hadley & McCloy LLP
Attn: Samuel Khalil, Brian Kinney and Bradley Friedman
28 Liberty Street
New York, NY 10005-1413
Tel: (212) 530-5000
Fax: (212) 530-5219
Email: skhalil@milbank.com
bkinney@milbank.com
bfriedman@milbank.com
Global Credit Advisers, LLC as investment adviser | ||
By: | /s/ Steven Hornstein | |
Name: Steven Hornstein | ||
Title: Managing Member |
If to Global Credit Advisers:
Global Credit Advisers
c/o Dan Kecskes
101 Park Avenue, 26th Floor
New York, NY 10178
With a copy to:
Milbank, Tweed, Hadley & McCloy LLP
Attn: Samuel Khalil, Brian Kinney and Bradley Friedman
28 Liberty Street
New York, NY 10005-1413
Tel: (212) 530-5000
Fax: (212) 530-5219
Email: skhalil@milbank.com
bkinney@milbank.com
bfriedman@milbank.com
KLS Diversified Asset Management LP | ||
By: | /s/ John Steinhardt | |
Name: John Steinhardt | ||
Title: Managing Partner |
If to KLS Diversified:
KLS Diversified
c/o Michael Hanna
452 5th Avenue
22nd Floor
New York, NY 10018
With a copy to:
Milbank, Tweed, Hadley & McCloy LLP
Attn: Samuel Khalil, Brian Kinney and Bradley Friedman
28 Liberty Street
New York, NY 10005-1413
Tel: (212) 530-5000
Fax: (212) 530-5219
Email: skhalil@milbank.com
bkinney@milbank.com
bfriedman@milbank.com
THE MANGROVE PARTNERS MASTER FUND, LTD., | ||||||
By: MANGROVE PARTNERS, its Investment Manager | ||||||
By: | /s/ Ward Dietrich | |||||
Name: Ward Dietrich | ||||||
Title: Authorized Person |
If to Mangrove Partners:
Mangrove Partners
c/o Mangrove Partners
645 Madison Avenue
14th Floor
New York, NY 10022
212.897.9535
Ops@mangrovepartners.com
With a copy to:
Milbank, Tweed, Hadley & McCloy LLP
Attn: Samuel Khalil, Brian Kinney and Bradley Friedman
28 Liberty Street
New York, NY 10005-1413
Tel: (212) 530-5000
Fax: (212) 530-5219
Email: skhalil@milbank.com
bkinney@milbank.com
bfriedman@milbank.com
Strategic Value Special Situations Offshore Fund III-A, L.P. By: SVP Special Situations III-A LLC, its Investment Manager | ||
By: | /s/ James Dougherty | |
Name: James Dougherty | ||
Title: Fund Chief Financial Officer |
[Signature Page to Backstop Commitment Agreement]
Strategic Value Special Situations Master Fund III, L.P. By: SVP Special Situations III LLC, its Investment Manager | ||
By: | /s/ James Dougherty | |
Name: James Dougherty | ||
Title: Fund Chief Financial Officer |
[Signature Page to Backstop Commitment Agreement]
Strategic Value Master Fund Ltd. By: Strategic Value Partners, LLC, its Investment Manager | ||
By: | /s/ James Dougherty | |
Name: James Dougherty | ||
Title: Fund Chief Financial Officer |
[Signature Page to Backstop Commitment Agreement]
If to Strategic Value Partners:
Strategic Value Partners
c/o General Counsels Office
100 West Putnam Avenue, 2nd Floor
Greenwich, CT 06830
Email: legalnotices @svpglobal.com
Fax: 203-618-3501
With a copy to:
Milbank, Tweed, Hadley & McCloy LLP
Attn: Samuel Khalil, Brian Kinney and Bradley Friedman
28 Liberty Street
New York, NY 10005-1413
Tel: (212) 530-5000
Fax: (212)530-5219
Email: skhalil@milbank.com
bkinney@milbank.com
bfriedman@milbank.com
Recipient: | ||
Certain Funds and Accounts that are Commitment Parties and advised by T. Rowe Price Associates, Inc., severally and not jointly | ||
By: | T. Rowe Price Associates, Inc., as investment adviser | |
By: | /s/ Mark Vaselkiv | |
Name: Mark Vaselkiv | ||
Title: Portfolio Manager |
[Signature Page to Backstop Commitment Agreement]
If to T. Rowe Price Associates, Inc.:
T. Rowe Price Associates, Inc.
c/o Andrew Baek
Vice President, Senior Legal Counsel
100 East Pratt Street
Mail Code BA-1020
Baltimore, MD 21202
Direct: 410-345-2090
Fax: 410-345-6575
With a copy to:
Milbank, Tweed, Hadley & McCloy LLP
Attn: Samuel Khalil, Brian Kinney and Bradley Friedman
28 Liberty Street
New York, NY 10005-1413
Tel: (212) 530-5000
Fax: (212) 530-5219
Email: skhalil@milbank.com
bkinney@milbank.com
bfriedman@milbank.com
Wexford Spectrum Investors LLC | ||
By: | /s/ Dante Domenichelli | |
Name: | Dante Domenichelli | |
Title: | Vice President & Secretary |
[Signature Page to Backstop Commitment Agreement]
Wexford Catalyst Investors LLC | ||
By: | /s/ Dante Domenichelli | |
Name: | Dante Domenichelli | |
Title: | Vice President & Secretary |
[Signature Page to Backstop Commitment Agreement]
Debello Investors LLC | ||
By: | /s/ Dante Domenichelli | |
Name: | Dante Domenichelli | |
Title: | Vice President & Secretary |
[Signature Page to Backstop Commitment Agreement]
If to Wexford Capital LP:
Wexford Capital LP
c/o Daniel J. Weiner and Marc McCarthy
411 West Putnam Avenue
Greenwich, CT 06830
With a copy to:
Milbank, Tweed, Hadley & McCloy LLP
Attn: Samuel Khalil, Brian Kinney and Bradley Friedman
28 Liberty Street
New | York, NY 10005-1413 |
Tel: (212) 530-5000
Fax: (212) 530-5219
Email: skhalil@milbank.com
bkinney@milbank.com
bfriedman@milbank.com
Pine River Baxter Fund Ltd. | ||
By: | Pine River Capital Management L.P. | |
Its: | Investment Manager | |
By: | /s/ Tim OBrien | |
Name: Tim OBrien Title: General Counsel and Co-Chief Operating Officer | ||
Pine River Fixed Income Master Fund Ltd. | ||
By: | Pine River Capital Management L.P. | |
Its: | Investment Manager | |
By: | /s/ Tim OBrien | |
Name: Tim OBrien | ||
Title: General Counsel and Co-Chief Operating Officer |
Pine River Master Fund Ltd. | ||
By: | Pine River Capital Management L.P. | |
Its: | Investment Manager | |
By: | /s/ Tim OBrien | |
Name: Tim OBrien Title: General Counsel and Co-Chief Operating Officer | ||
LMA SPC for and on behalf of MAP 89 Segregated Portfolio | ||
By: | Pine River Capital Management L.P. | |
Its: | Investment Manager | |
By: | /s/ Tim OBrien | |
Name: Tim OBrien | ||
Title: General Counsel and Co-Chief Operating Officer |
If to Pine River Capital Management, L.P.:
c/o Pine River Capital Management L.P.
601 Carlson Parkway, 7th Floor
Minnetonka, MN 55305
Attn: Legal Department
Fax: (612) 238-3301
With a copy to:
Milbank, Tweed, Hadley & McCloy LLP
Attn: Samuel Khalil, Brian Kinney and Bradley Friedman
28 Liberty Street
New York, NY 10005-1413
Tel: (212) 530-5000
Fax: (212) 530-5219
Email: skhalil@milbank.com
bkinney@milbank. com
bfriedman@milbank.com
AMTRUST INTERNATIONAL INSURANCE, LTD. | ||
By: | ./s/ Stephen Unger | |
Name: Stephen Unger | ||
Title: Secretary |
[Signature Page to Backstop Commitment Agreement]
If to AmTrust International Insurance, Ltd.:
AmTrust Financial Services Inc.
c/o Lawrence A. Heller and Harry Schlachter
59 Maiden Lane, 43rd Floor
New York, NY 10038
Email: lawrence.heller@amtrustgroup. com
Email: harry.schlachter@amtrustgroup. com
With a copy to:
Milbank, Tweed, Hadley & McCloy LLP
Attn: Samuel Khalil, Brian Kinney and Bradley Friedman
28 Liberty Street
New York, NY 10005-1413
Tel: (212) 530-5000
Fax: (212) 530-5219
Email: skhalil@milbank.com
bkinney@milbank. com
bfriedman@milbank.com
NAT GEN RE LTD. | ||
By: | /s/ Peter Rendall | |
Name: Peter Rendall | ||
Title: COO and Treasurer |
[Signature Page to Backstop Commitment Agreement]
If to National General:
AmTrust Financial Services Inc.
c/o Jeffrey Weissman, Daron Skipper, and Susan Eylward
59 Maiden Lane, 43rd Floor
New York, NY 10038
Email: Jeffrey.weissmann@ngic.com
Email: susan.eylward@ngic.com
With a copy to:
Milbank, Tweed, Hadley & McCloy LLP
Attn: Samuel Khalil, Brian Kinney and Bradley Friedman
28 Liberty Street
New York, NY 10005-1413
Tel: (212) 530-5000
Fax: (212) 530-5219
Email: skhalil@milbank.com
bkinney@milbank. com
bfriedman@milbank.com
GMO CREDIT OPPORTUNITIES FUND, L.P. | ||
By: | /s/ Tim Lang | |
Name: Tim Lang | ||
Title: Authorized Trader Grantham, Mayo, Van Otterloo & Co. LLC, investment manager of GMO Credit Opportunities Fund, L.P. |
If to Grantham, Mayo, Van Otterloo & Co. LLC:
Grantham, Mayo, Van Otterloo & Co. LLC
c/o Kevin OBrien and Jon Roiter
40 Rowes Wharf
Boston, MA 02110
Phone: 617-346-7518
Fax: 617-849-7243
Email: kevin. obrien@gmo.com
Email: jon.roiter@gmo.com
With a copy to:
Milbank, Tweed, Hadley & McCloy LLP
Attn: Samuel Khalil, Brian Kinney and Bradley Friedman
28 Liberty Street
New York, NY 10005-1413
Tel: (212) 530-5000
Fax: (212) 530-5219
Email: skhalil@milbank.com
bkinney@milbank.com
bfriedman@milbank.com
[COMMITMENT PARTIES] | ||
J.P. MORGAN INVESTMENT MANAGEMENT, INC. AS INVESTMENT ADVISER AND AGENT FOR CERTAIN CLIENT ACCOUNTS | ||
By: | /s/ Alexander P. Sammarco | |
Name: Alexander P. Sammarco | ||
Title: Executive Director |
[COMMITMENT PARTIES] | ||
JP MORGAN CHASE BANK, N.A. AS TRUSTEE FOR CERTAIN CLIENT ACCOUNTS | ||
By: | /s/ Alexander P. Sammarco | |
Name: Alexander P. Sammarco | ||
Title: Executive Director |
If to JP Morgan Asset Management:
J.P. Morgan Asset Management
Attn: Alexander Sammarco
Cc: Jim Shanahan and Laurie Whipkey
8044 Montgomery Road, Suite 555
Cincinnati, Ohio 45236
Phone: 513-699-4417
With a copy to:
Milbank, Tweed, Hadley & McCloy LLP
Attn: Samuel Khalil, Brian Kinney and Bradley Friedman
28 Liberty Street
New York, NY 10005-1413
Tel: (212) 530-5000
Fax: (212) 530-5219
Email: skhalil@milbank.com
bkinney@milbank.com
bfriedman@milbank.com
Exhibit 10.3
Execution Version
DEBTOR-IN-POSSESSION CREDIT AGREEMENT
dated as of
May 11, 2016
among
PENN VIRGINIA HOLDING CORP.,
as Borrower
PENN VIRGINIA CORPORATION,
as Parent
Each Subsidiary of the Parent party hereto as a Guarantor,
The Lenders Party Hereto
and
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as DIP Agent
TABLE OF CONTENTS
Page | ||||||
ARTICLE I DEFINITIONS |
1 | |||||
SECTION 1.01. |
Defined Terms | 1 | ||||
SECTION 1.02. |
Classification of Loans and Borrowings | 28 | ||||
SECTION 1.03. |
Terms Generally | 28 | ||||
SECTION 1.04. |
Accounting Terms; GAAP | 29 | ||||
ARTICLE II THE CREDITS |
29 | |||||
SECTION 2.01. |
Commitments | 29 | ||||
SECTION 2.02. |
Loans and Borrowings | 30 | ||||
SECTION 2.03. |
Requests for Borrowings | 31 | ||||
SECTION 2.04. |
[Reserved] | 31 | ||||
SECTION 2.05. |
[Reserved] | 31 | ||||
SECTION 2.06. |
[Reserved] | 31 | ||||
SECTION 2.07. |
Funding of Borrowings | 31 | ||||
SECTION 2.08. |
Interest Elections | 32 | ||||
SECTION 2.09. |
Termination and Reduction of Commitments | 33 | ||||
SECTION 2.10. |
Repayment of Loans; Evidence of Debt | 34 | ||||
SECTION 2.11. |
Prepayment of Loans | 34 | ||||
SECTION 2.12. |
Fees | 36 | ||||
SECTION 2.13. |
Interest | 37 | ||||
SECTION 2.14. |
Alternate Rate of Interest | 37 | ||||
SECTION 2.15. |
Increased Costs | 38 | ||||
SECTION 2.16. |
Break Funding Payments | 39 | ||||
SECTION 2.17. |
Taxes | 39 | ||||
SECTION 2.18. |
Payments Generally; Pro Rata Treatment; Sharing of Set-offs | 43 | ||||
SECTION 2.19. |
Mitigation Obligations; Replacement of Lenders | 44 | ||||
SECTION 2.20. |
Defaulting Lenders | 45 | ||||
ARTICLE III REPRESENTATIONS AND WARRANTIES |
45 | |||||
SECTION 3.01. |
Existence; Organization; Powers | 45 | ||||
SECTION 3.02. |
Authorization; Enforceability | 45 |
TABLE OF CONTENTS
(continued)
Page | ||||||
SECTION 3.03. |
Governmental Approvals; No Conflicts | 46 | ||||
SECTION 3.04. |
Financial Condition; No Material Adverse Change | 46 | ||||
SECTION 3.05. |
Properties | 47 | ||||
SECTION 3.06. |
Litigation and Environmental Matters | 47 | ||||
SECTION 3.07. |
Compliance with Laws and Agreements | 49 | ||||
SECTION 3.08. |
Investment Company Status | 49 | ||||
SECTION 3.09. |
Taxes | 49 | ||||
SECTION 3.10. |
ERISA | 49 | ||||
SECTION 3.11. |
Disclosure | 49 | ||||
SECTION 3.12. |
Use of Loans | 50 | ||||
SECTION 3.13. |
Subsidiaries | 50 | ||||
SECTION 3.14. |
Jurisdiction of Incorporation or Organization | 50 | ||||
SECTION 3.15. |
Maintenance of Properties | 50 | ||||
SECTION 3.16. |
Insurance | 51 | ||||
SECTION 3.17. |
Gas Imbalances, Prepayments | 51 | ||||
SECTION 3.18. |
Marketing of Production | 51 | ||||
SECTION 3.19. |
Hedging Transactions | 51 | ||||
SECTION 3.20. |
Restriction on Liens | 51 | ||||
SECTION 3.21. |
Intellectual Property | 52 | ||||
SECTION 3.22. |
Material Personal Property | 52 | ||||
SECTION 3.23. |
Business | 52 | ||||
SECTION 3.24. |
[Reserved] | 52 | ||||
SECTION 3.25. |
Licenses, Permits, Etc. | 52 | ||||
SECTION 3.26. |
Fiscal Year | 52 | ||||
SECTION 3.27. |
[Reserved] | 52 | ||||
SECTION 3.28. |
Default under Material Contracts, Assumed Executory Contracts or Assumed Unexpired Leases | 52 | ||||
SECTION 3.29. |
New Material Leases | 53 | ||||
SECTION 3.30. |
Anti-Corruption Laws and Sanctions | 53 | ||||
SECTION 3.31. |
ECP Guarantor | 53 |
-ii-
TABLE OF CONTENTS
(continued)
Page | ||||||
ARTICLE IV CONDITIONS |
53 | |||||
SECTION 4.01. |
Conditions Precedent to Effectiveness | 53 | ||||
SECTION 4.02. |
Conditions Precedent to Interim DIP Loans | 53 | ||||
SECTION 4.03. |
Conditions Precedent to Final DIP Loans | 56 | ||||
SECTION 4.04. |
Conditions Precedent to Conditional DIP Loans | 56 | ||||
SECTION 4.05. |
Conditions Precedent to Lending | 57 | ||||
ARTICLE V AFFIRMATIVE COVENANTS |
57 | |||||
SECTION 5.01. |
Financial Statements; Other Information | 57 | ||||
SECTION 5.02. |
Notices of Material Events | 60 | ||||
SECTION 5.03. |
Existence; Conduct of Business | 61 | ||||
SECTION 5.04. |
Payment of Obligations, Taxes and Material Claims | 61 | ||||
SECTION 5.05. |
Maintenance of Properties; Insurance | 62 | ||||
SECTION 5.06. |
Books and Records; Inspection Rights | 63 | ||||
SECTION 5.07. |
Compliance with Laws | 63 | ||||
SECTION 5.08. |
Use of Proceeds of Loans | 63 | ||||
SECTION 5.09. |
Environmental Matters | 64 | ||||
SECTION 5.10. |
Further Assurances | 65 | ||||
SECTION 5.11. |
Reserve Reports | 65 | ||||
SECTION 5.12. |
Title Information | 66 | ||||
SECTION 5.13. |
ERISA Information and Compliance | 66 | ||||
SECTION 5.14. |
Business of the Borrower | 66 | ||||
SECTION 5.15. |
Permits, Licenses | 66 | ||||
SECTION 5.16. |
Cash Management | 67 | ||||
SECTION 5.17. |
Compliance with Anti-Corruption Laws and Sanctions | 67 | ||||
SECTION 5.18. |
[Reserved] | 67 | ||||
SECTION 5.19. |
[Reserved] | 67 | ||||
SECTION 5.20. |
Post-Closing | 67 | ||||
SECTION 5.21. |
Keepwell | 67 | ||||
SECTION 5.22. |
Budget Compliance and Permitted Variances | 67 |
-iii-
TABLE OF CONTENTS
(continued)
Page | ||||||
ARTICLE VI NEGATIVE COVENANTS |
68 | |||||
SECTION 6.01. |
Indebtedness | 68 | ||||
SECTION 6.02. |
Liens | 69 | ||||
SECTION 6.03. |
Fundamental Changes | 70 | ||||
SECTION 6.04. |
Investments, Loans and Advances | 70 | ||||
SECTION 6.05. |
Hedging Transactions | 71 | ||||
SECTION 6.06. |
Restricted Payments | 72 | ||||
SECTION 6.07. |
Transactions with Affiliates | 72 | ||||
SECTION 6.08. |
Restrictive Agreements | 73 | ||||
SECTION 6.09. |
[Reserved.] | 73 | ||||
SECTION 6.10. |
[Reserved] | 73 | ||||
SECTION 6.11. |
Proceeds of Loans | 73 | ||||
SECTION 6.12. |
ERISA Compliance | 73 | ||||
SECTION 6.13. |
Sale of Properties | 74 | ||||
SECTION 6.14. |
Environmental Matters | 74 | ||||
SECTION 6.15. |
Reserved | 75 | ||||
SECTION 6.16. |
Gas Imbalances, Take-or-Pay or Other Prepayments | 75 | ||||
SECTION 6.17. |
Fiscal Year; Fiscal Quarter | 75 | ||||
SECTION 6.18. |
Repayment of Senior Notes; Amendment of Senior Notes Documents | 75 | ||||
SECTION 6.19. |
Marketing Activities | 75 | ||||
SECTION 6.20. |
Sale or Discount of Receivables | 76 | ||||
SECTION 6.21. |
Limitation on Prepayment of Debt; Amendment of Debt Documents | 76 | ||||
SECTION 6.22. |
Acquisition of Debt | 76 | ||||
SECTION 6.23. |
Additional Collateral for Prepetition Secured Obligations | 76 | ||||
SECTION 6.24. |
Deposit Accounts | 76 | ||||
SECTION 6.25. |
Prepetition Secured Obligations | 77 | ||||
SECTION 6.26. |
Changes to DIP Orders | 77 | ||||
SECTION 6.27. |
Actions Requiring Prior Requisite Lender Consent | 77 | ||||
SECTION 6.28. |
Non-Obligor Entities | 77 |
-iv-
TABLE OF CONTENTS
(continued)
Page | ||||||
ARTICLE VII EVENTS OF DEFAULT; REMEDIES; APPLICATION OF PROCEEDS |
78 | |||||
SECTION 7.01. |
Events of Default | 78 | ||||
SECTION 7.02. |
Rights Upon Default | 81 | ||||
SECTION 7.03. |
Application of Payments | 81 | ||||
ARTICLE VIII THE DIP AGENT |
82 | |||||
SECTION 8.01. |
Appointment; Powers | 82 | ||||
SECTION 8.02. |
Agents as Lenders | 82 | ||||
SECTION 8.03. |
Duties and Obligations of DIP Agent | 83 | ||||
SECTION 8.04. |
Reliance by DIP Agent | 83 | ||||
SECTION 8.05. |
Subagents | 83 | ||||
SECTION 8.06. |
Resignation or Removal of DIP Agent | 84 | ||||
SECTION 8.07. |
No Reliance | 84 | ||||
SECTION 8.08. |
DIP Agent May File Proofs of Claim | 84 | ||||
SECTION 8.09. |
Authority of DIP Agent to Execute Collateral Documents and Release Collateral and Liens | 85 | ||||
ARTICLE IX GUARANTY |
85 | |||||
SECTION 9.01. |
The Guaranty | 85 | ||||
SECTION 9.02. |
Guaranty Unconditional | 86 | ||||
SECTION 9.03. |
Discharge Only Upon Payment In Full; Reinstatement In Certain Circumstances | 87 | ||||
SECTION 9.04. |
Waivers | 87 | ||||
SECTION 9.05. |
Subrogation | 87 | ||||
SECTION 9.06. |
Stay of Acceleration | 87 | ||||
SECTION 9.07. |
Subordination of Indebtedness of any Guarantor to any other Guarantor to the Guaranteed Obligations | 88 | ||||
SECTION 9.08. |
Limitation on Obligations | 88 | ||||
SECTION 9.09. |
Application of Payments | 89 | ||||
SECTION 9.10. |
No Waivers | 89 | ||||
SECTION 9.11. |
No Duty to Advise | 89 |
-v-
TABLE OF CONTENTS
(continued)
Page | ||||||
ARTICLE X SECURITY AGREEMENT |
90 | |||||
SECTION 10.01. |
Grant of Security Interest | 90 | ||||
SECTION 10.02. |
Perfection and Protection of Security Interest | 91 | ||||
SECTION 10.03. |
Delivery of Mortgages | 92 | ||||
SECTION 10.04. |
Title to, Liens on, and Use of Collateral | 92 | ||||
SECTION 10.05. |
Right to Cure | 92 | ||||
SECTION 10.06. |
Power of Attorney | 93 | ||||
SECTION 10.07. |
The DIP Secured Parties Rights, Duties, and Liabilities | 93 | ||||
SECTION 10.08. |
Site Visits, Observations, and Testing | 93 | ||||
SECTION 10.09. |
Rights in Respect of Investment Property | 94 | ||||
SECTION 10.10. |
No Filings Required | 95 | ||||
ARTICLE XI MISCELLANEOUS |
95 | |||||
SECTION 11.01. |
Notices | 95 | ||||
SECTION 11.02. |
Waivers; Amendments | 97 | ||||
SECTION 11.03. |
Expenses; Indemnity; Damage Waiver | 98 | ||||
SECTION 11.04. |
Successors and Assigns | 101 | ||||
SECTION 11.05. |
Survival | 104 | ||||
SECTION 11.06. |
Counterparts; Integration; Effectiveness | 104 | ||||
SECTION 11.07. |
Severability | 105 | ||||
SECTION 11.08. |
Right of Setoff | 105 | ||||
SECTION 11.09. |
Governing Law; Jurisdiction; Consent to Service of Process | 105 | ||||
SECTION 11.10. |
WAIVER OF JURY TRIAL | 106 | ||||
SECTION 11.11. |
Headings | 106 | ||||
SECTION 11.12. |
Confidentiality | 106 | ||||
SECTION 11.13. |
Interest Rate Limitation | 107 | ||||
SECTION 11.14. |
Collateral Matters; Lender Swap Agreements and Lender Party Financial Service Products | 108 | ||||
SECTION 11.15. |
No Third Party Beneficiaries | 109 | ||||
SECTION 11.16. |
Acknowledgment and Consent to Bail-In of EEA Financial Institutions | 109 |
-vi-
TABLE OF CONTENTS
(continued)
Page | ||||||
SECTION 11.17. |
USA PATRIOT Act | 109 | ||||
SECTION 11.18. |
NO ORAL AGREEMENTS | 110 | ||||
SECTION 11.19. |
DIP Orders | 110 |
SCHEDULES:
Schedule 2.01 Commitments
Schedule 3.05 Material Leases
Schedule 3.06 Litigation
Schedule 3.09 Taxes
Schedule 3.13 Subsidiaries
Schedule 3.17 Gas Imbalances
Schedule 3.18 Marketing Contracts
Schedule 3.19 Swap Agreements
Schedule 6.01(b) Outstanding Senior Notes
Schedule 6.01(c) Existing Indebtedness
Schedule 6.02 Existing Liens
Schedule 6.04 Investments
Schedule 6.08 Existing Restrictions
Schedule 9.04 Competitors
EXHIBITS:
Exhibit A Form of Assignment and Assumption
Exhibit B Form of Initial Budget
Exhibit C Form of Note
Exhibit D Compliance Certificate
Exhibit E U.S. Tax Withholding Certificates
-vii-
This DEBTOR-IN-POSSESSION CREDIT AGREEMENT dated as of May 11, 2016, among PENN VIRGINIA HOLDING CORP., as Borrower, PENN VIRGINIA CORPORATION, as Parent, each Subsidiary (as defined below) party hereto, as a Guarantor, LENDERS party hereto, and WELLS FARGO BANK, NATIONAL ASSOCIATION, as administrative agent and collateral agent (in such capacity, including any permitted successor thereto, the DIP Agent).
W I T N E S S E T H:
A. On or about May 12, 2016 (i) the Borrower, the Parent and certain subsidiaries of the Borrower named as Guarantors herein (each a Debtor and, together, the Debtors) will file voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for Eastern District of Virginia (Richmond Division) (the Bankruptcy Court) (the Cases). The date such petitions are filed is referred to herein as the Petition Date.
B. The Borrower has requested that the Lenders make post-petition loans and provide other financial or credit accommodations to the Borrower, and the Lenders have agreed, subject to the conditions set forth herein, to extend a superpriority priming (subject to the Carve Out (as defined herein)) credit facility to the Borrower, comprised of loans in an aggregate principal amount not to exceed $25,000,000.
C. The Borrower, the Parent and the Guarantors desire to secure, among other specified obligations, all of the DIP Obligations (as defined herein) by granting to the DIP Agent, for the benefit of the DIP Secured Parties (as defined herein), a security interest in and Lien on substantially all of the property and assets of the Credit Parties, subject to the limitations described herein and, when entered, the DIP Orders.
D. The Guarantors desire to guarantee, among other specified obligations, all of the DIP Obligations.
E. The Lenders are willing to extend such credit to the Borrower, on the terms and subject to the conditions set forth herein and, when entered, the DIP Orders.
Accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms. As used in this Agreement, the following terms have the meanings specified below:
13-Week Budget means a thirteen-week rolling operating budget and cash flow forecast, in form and substance reasonably acceptable to the DIP Agent, which shall reflect the Borrowers good faith projection of all weekly cash receipts and disbursements in connection with the operation of the Credit Parties and their respective Subsidiaries business during such thirteen-week period, including but not limited to, collections, payroll, capital expenditures and other major cash outlays, as such budget and forecast may be updated from time to time as required under Section 5.01(o).
ABR, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Alternate Base Rate.
Adequate Protection Liens has the meaning ascribed to such term in the Interim Order or, upon entry of the Final DIP Order, in the Final DIP Order, as applicable.
Adequate Protection Payments means the adequate protection payments to the Prepetition Secured Parties pursuant to the terms of the DIP Order
Adjusted LIBO Rate means, with respect to any Borrowing for any Interest Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.
Administrative Questionnaire means an Administrative Questionnaire in a form supplied by the DIP Agent.
Advance Payment Contract means (a) any production payment (whether volumetric or dollar denominated) granted or sold by any Credit Party payable from a specified share of proceeds received from production from specified Oil and Gas Properties, together with all undertakings and obligations in connection therewith, or (b) any contract whereby any Credit Party receives or becomes entitled to receive (either directly or indirectly) any payment (an Advance Payment) as consideration for (i) Hydrocarbons produced or to be produced from Oil and Gas Properties owned by any Credit Party in advance of the delivery of such Hydrocarbons (and regardless of whether such Hydrocarbons are actually produced or actual delivery is required) to or for the account of the purchaser thereof or (ii) a right or option to receive such Hydrocarbons (or a cash payment in lieu of such Hydrocarbons); provided that inclusion of customary and standard take or pay provisions in any gas sales or purchase contract or any other similar contract shall not, in and of itself, cause such gas sales or purchase contract to constitute an Advance Payment Contract for the purposes of this definition.
Affiliate means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.
Aggregate Commitment Amount means, $25,000,000, as reduced from time to time pursuant to the terms hereof.
Aggregate Conditional DIP Commitment Amount means $5,000,000.
Aggregate Final DIP Commitment Amount means $10,000,000.
Aggregate Interim DIP Commitment Amount means $10,000,000.
2
Agreement means this Debtor-in-Possession Credit Agreement, as it may be amended, restated, supplemented or otherwise modified and in effect from time to time.
Alternate Base Rate means, for any day, a fluctuating rate per annum equal to the greatest of (a) the rate of interest in effect for such day as publicly announced from time to time by Wells Fargo Bank as its prime rate, (b) the Federal Funds Effective Rate in effect on such date plus 1/2 of 1.00%, and (c) the Adjusted LIBO Rate for a one month Interest Period for such day (or if such day is not a Business Day, the immediately preceding Business Day) plus 1.00%, provided that, for the avoidance of doubt, the Adjusted LIBO Rate for any day shall be based on the rate appearing on the Reuters Screen LIBOR01 Page (or on any successor or substitute page) at approximately 11:00 a.m. London time on such day (without any rounding). The prime rate is a rate set by Wells Fargo Bank based upon various factors including Wells Fargo Banks costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in such rate announced by Wells Fargo Bank shall take effect at the opening of business on the day specified in the public announcement of such change. Additionally, any change in the Alternate Base Rate due to a change in the Federal Funds Effective Rate or the Adjusted LIBO Rate shall be effective from and including the effective date of such change in the Federal Funds Effective Rate or the Adjusted LIBO Rate, respectively.
Anti-Corruption Laws means all laws, rules, and regulations of any jurisdiction applicable to the Borrower or its Subsidiaries from time to time concerning or relating to bribery or corruption, including, without limitation, the United States Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder.
Anti-Hoarding Condition means, as of any date of determination thereof, the Borrowers Available Cash as set forth in the most recently delivered Approved Budget on a forecast basis, including the proceeds of any outstanding Loans and any Loans proposed to be borrowed at the time of measurement and the application of proceeds therefrom, as of the last Business Day of the immediately following week, shall not exceed $10,000,000.
Applicable Percentage means, with respect to any Lender, the percentage of the Aggregate Commitment Amount represented by such Lenders Commitment Amount; provided that for purposes of Section 2.20 when a Defaulting Lender shall exist, Applicable Percentage shall mean the percentage of the Aggregate Commitment Amount (disregarding any Defaulting Lenders Commitment Amount) represented by such Lenders Commitment Amount. If the Commitments have terminated or expired, the Applicable Percentages shall be determined based upon the Commitment Amounts most recently in effect, giving effect to any assignments and to any Lenders status as a Defaulting Lender at the time of determination.
Approved Budget means each of (i) the Initial Budget and (ii) any 13-Week Budget delivered by the Borrower pursuant to Section 5.01(o) and approved by the Requisite Lenders. Approved Counterparty means, at any time and from time to time, (i) any Person engaged in the business of entering into Swap Agreements for commodity, interest rate or currency risk that has (or the credit support provider of such Person has), at the time the Parent, the Borrower or any Subsidiary enters into a Swap Agreement with such Person, a long term senior unsecured debt credit rating of A- or better from S&P, (ii) any Lender or Affiliate of a Lender or (iii) any other Person designated by the Parent or the Borrower that is acceptable to the DIP Agent.
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Approved 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 of its business and that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.
Approved Petroleum Engineers means any of Wright & Company, Inc., Ryder Scott Company, Netherland Sewell & Associates, Inc., and Miller and Lentz, Ltd., or such other reputable firm(s) of independent petroleum engineers as shall be approved by the Requisite Lenders.
Approved Purposes has the meaning set forth in Section 5.08(a).
Assignment and Assumption means an assignment and assumption entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 11.04), and accepted by the DIP Agent, in the form of Exhibit A or any other form approved by the DIP Agent.
Authorized Officer means, as to any Person, the chief executive officer, the president, the chief financial officer or any executive vice president or vice president of such Person. Unless otherwise specified, all references to an Authorized Officer herein shall mean an Authorized Officer of the Parent.
Available Cash means, as of any date of determination, the aggregate amount of cash and Cash Equivalents, marketable securities, treasury bonds and bills, certificates of deposit, investments in money market funds and commercial paper, in each case, held or owned by (whether directly or indirectly), credited to the account of, or otherwise reflected as an asset on the balance sheet of, the Parent and its consolidated Subsidiaries minus all Excluded Funds.
Availability Period means the period from and including the Closing Date to but excluding the earlier of the Maturity Date and the date of termination of the Commitments.
Avoidance Actions has the meaning set forth in Section 10.01.
Bankruptcy Code means title 11 of the United States Code, 11 U.S.C. §§ 1011532, as may be amended from time to time.
Bankruptcy Court shall have the meaning assigned to such term in the recitals hereto.
Backstop Parties shall have the meaning assigned to Commitment Parties in the BCA.
Bail-In Action means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.
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Bail-In Legislation means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.
BCA means the Backstop Commitment Agreement (as defined in the RSA) as in effect on the date hereof and as modified, amended or supplemented with the consent of the Requisite Lenders.
Beneficial Owner means, with respect to any U.S. Federal withholding Tax, the beneficial owner, for U.S. Federal income tax purposes, to whom such Tax relates.
Board means the Board of Governors of the Federal Reserve System of the United States of America.
Borrower shall have the meaning assigned to such term in the introduction hereto.
Borrowing means Loans of the same Type, made, converted or continued on the same date and, in the case of Eurodollar Loans, as to which a single Interest Period is in effect.
Borrowing Date means the date any Borrowing of Loans is made.
Borrowing Request means a request by the Borrower for a Borrowing in accordance with Section 2.03.
Business Day means any day that is not a Saturday, Sunday or other day on which commercial banks in Dallas, Texas or New York, New York are authorized or required by law to remain closed; provided that, when used in connection with a Eurodollar Loan, the term Business Day shall also exclude any day on which banks are not open for dealings in dollar deposits in the London interbank market.
Capital Lease of any Person means any lease of Property by such Person, as lessee, that would be capitalized on a balance sheet of such Person prepared in accordance with GAAP.
Capital Lease Obligations of any Person means the amount of the obligations of such Person under any Capital Lease, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.
Carry Forward Amount means, with respect to any given line item in the Approved Budget for any given week (except in the case of Professional Fees), the amount (if any) by which the budgeted expenditures as stated in the Approved Budget for the immediately preceding week exceeded the actual expenditures for such immediately preceding week.
Carve Out shall have the meaning assigned to such term in the Interim Order.
Cases shall have the meaning assigned to such term in the recitals hereto.
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Cash Collateral Account means, in respect of the Credit Parties one or more deposit accounts (including, for avoidance of doubt, any lockboxes or similar accounts, any related securities accounts and any accounts holding Cash Equivalents), and with respect to which the DIP Secured Parties shall have a perfected Lien as security for the payment and performance of the DIP Obligations by virtue of, and having the priority set forth in, the DIP Orders.
Cash Collateral means all cash and Cash Equivalents in the Cash Collateral Account.
Cash Equivalents means Permitted Investments described in clauses (a), (b), and (c) of the definition of Permitted Investments.
Casualty Event means any loss, casualty or other insured damage to, or any taking under power of eminent domain or by condemnation or similar proceeding of, any Property or asset of the Parent, the Borrower or any Subsidiary that was included in the most recent Reserve Report.
Change in Control means (a) any Person or two or more Persons acting as a group (as defined in Section 13(d)(3) of the Securities Exchange Act of 1934) shall have acquired beneficial ownership (within the meaning of Rule 13d-3 of the SEC under the Securities Exchange Act of 1934) of 35% or more of the outstanding shares of voting stock of the Parent; (b) individuals who, as of the date hereof, constitute the Board of Directors of the Parent (the Incumbent Board) cease for any reason to constitute at least a majority of the Board of Directors of the Parent; provided, however, that any individual becoming a director of the Parent subsequent to the date hereof whose election, or nomination for election by the Parents shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board, shall be considered as though such individual were a member of the Incumbent Board; or (c) less than 100% of the Equity Interests of the Borrower are owned directly or indirectly by the Parent.
Change in Law means (a) the adoption after the date hereof of any applicable law, rule or regulation (including any applicable law, rule or regulation regarding capital adequacy) or any change therein after the date hereof, (b) any change after the date hereof in the interpretation or administration thereof by any Governmental Authority charged with the interpretation or administration thereof, or compliance with any request or directive (whether or not having the force of law) of any such Governmental Authority, or (c) the compliance, whether commenced prior to or after the date hereof, by any Lender with the requirements (regardless of the date enacted, adopted, promulgated or issued) of (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 Regulations and Supervisory Practices (or any successor similar authority) or the United States financial regulatory authorities, in each case pursuant to Basel III.
Closing Date means the date on which all conditions set forth in Section 4.02 have been satisfied (or waived by all of the Lenders).
Code means the Internal Revenue Code of 1986, as amended from time to time.
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Collateral means all right, title and interest held by any Credit Party in any Property, including the Property described in Section 10.01, but excluding any such Property specifically excluded under this Agreement or the applicable DIP Order.
Collateral Documents means this Agreement, DIP Orders, Guaranty, the Security Agreement, the Mortgages and any and all other agreements, documents or instruments now or hereafter executed and delivered by the Parent, the Borrower or any other Person (including participation or similar agreements between any Lender and any other lender or creditor with respect to any DIP Obligation pursuant to this Agreement) in connection with, or as security for the payment or performance of the DIP Obligations, as such agreements, documents or instruments may be amended, supplemented or restated from time to time and to the extent applicable.
Commitment means, with respect to each Lender, the commitment of such Lender to make Loans, expressed as an amount representing the maximum aggregate amount of such Lenders Loans hereunder; provided that such Lenders Commitment shall never exceed the least of (x) such Lenders Commitment Amount, and (y) such Lenders Applicable Percentage of the Aggregate Commitment Amount, in each case, as such amounts may be adjusted from time to time in accordance with this Agreement.
Commitment Amount means, with respect to each Lender, as applicable, the amount set forth opposite such Lenders name on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender shall have assumed its Commitment (or as set forth opposite such Lenders name on Schedule 2.01, plus (minus) any amounts assumed (assigned) pursuant to an Assignment and Assumption). The amount of each Lenders Commitment Amount as of the Effective Date is set forth on Schedule 2.01.
Committee means an official creditors committee of creditors holding unsecured claims appointed by the Bankruptcy Court in respect of the Cases pursuant to Section 1102(a) of the Bankruptcy Code.
Committee Investigation has the meaning set forth in Section 5.08(b).
Commodity Exchange Act means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.
Company Competitor means any of the Persons set forth on Schedule 9.04 hereto and all readily identifiable Affiliates thereof.
Conditional DIP Loan has the meaning set forth in Section 2.01(a)(iii).
Confirmation Order has the meaning set forth in the definition for Milestones.
Control means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. Controlling and Controlled have meanings correlative thereto.
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Credit Party means any of the Borrower, the Parent or any other Guarantor; Credit Parties means, collectively, all of the Borrower, the Parent and each other Guarantor.
Debtors is defined in the recitals hereto.
Default means (a) any event or condition that constitutes an Event of Default or (b) any Immature Event of Default.
Default Rate has the meaning assigned to such term in Section 2.13(c).
Defaulting Lender means any Lender that has, as determined by the DIP Agent, (a) failed to fund any portion of its Loans within three Business Days of the date required to be funded by it hereunder, (b) notified the Parent, the Borrower, the DIP Agent or any Lender in writing that it does not intend to comply with any of its funding obligations under this Agreement or has made a public statement to the effect that it does not intend to comply with its funding obligations under this Agreement or under other agreements in which it commits to extend credit, (c) failed, within three Business Days after request by the DIP Agent, to confirm that it will comply with the terms of this Agreement relating to its obligations to fund prospective Loans, (d) otherwise failed to pay over to the DIP Agent or any other Lender any other amount required to be paid by it hereunder within three Business Days of the date when due, unless the subject of a good faith dispute, or (e) (i) become or is insolvent or has a parent company that has become or is insolvent, (ii) become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business 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 or has a parent company that has become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business 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, or (iii) become the subject of a Bail-In Action; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a governmental authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such governmental authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender.
DIP Agent shall have the meaning assigned to such term in the introduction hereto.
DIP Loans means, collectively the Interim DIP Loans, the Final DIP Loans and the Conditional Dip Loans.
DIP Obligations means all obligations or liabilities of every nature of any Credit Party from time to time owed to the DIP Agent, the Lenders or any of them under any Loan Document, in each case, whether for principal, interest, funding indemnification amounts, fees, expenses, indemnification or otherwise; and Lender Swap Obligations; provided that the definition of DIP Obligations shall not include Excluded Swap Obligations.
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DIP Orders means the Interim Order and the Final DIP Order, as applicable.
DIP Secured Parties means, collectively, the DIP Agent, the Lenders and the Lender Swap Counterparties.
Discharge of DIP Obligations means (a) the indefeasible payment in full in cash of all DIP Obligations (other than (i) contingent indemnity obligations for which no claim for payment has been made (which indemnity obligations continue to survive as expressly provided in this Agreement or in any other Loan Document) and (ii) Lender Swap Obligations as to which arrangements reasonably satisfactory to the applicable Lender Swap Counterparty in its reasonable discretion have been made (it being agreed and understood that the arrangements contemplated under the Exit Facility (as defined in the RSA) as set forth in the Exit Facility Term Sheet (as defined in the RSA) are reasonably satisfactory to each of the Lender Swap Counterparties)), (b) termination or expiration of all Commitments, (c) termination of this Agreement other than indemnity and reimbursement obligations which expressly survive the termination hereof, and (d) termination of all Lender Swap Agreements other than Lender Swap Agreements as to which arrangements reasonably satisfactory to the applicable Lender Swap Counterparty in its reasonable discretion have been made (it being agreed and understood that the arrangements contemplated under the Exit Facility (as defined in the RSA) as set forth in the Exit Facility Term Sheet (as defined in the RSA) are reasonably satisfactory to each of the Lender Swap Counterparties).
Disclosure Statement means the Disclosure Statement for the Joint Chapter 11 Plan of Reorganization of Penn Virginia Corporation and its Debtor Affiliates, dated as of May 12, 2016, as may be amended, supplemented, or modified from time to time, including all exhibits and schedules thereto and references therein that relate to the Plan of Reorganization, that is prepared and distributed in accordance with the Bankruptcy Code, and any other applicable law, in each case, in form and substance reasonably satisfactory to the Requisite Lenders.
dollars or $ refers to lawful money of the United States of America.
Domestic Subsidiary means any Subsidiary organized under the laws of any jurisdiction within the United States of America (including territories thereof).
EEA Financial Institution means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent;
EEA Member Country means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.
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EEA Resolution Authority means any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.
Effective Date means May 11, 2016.
Environmental Laws means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, release or threatened release of any Hazardous Material or health and safety matters.
Environmental Liability means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Parent or any of its Subsidiaries directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.
Equity Interests means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such equity interest.
ERISA means the Employee Retirement Income Security Act of 1974, as amended from time to time.
ERISA Affiliate means any trade or business (whether or not incorporated) that, together with the Borrower, the Parent or any other Subsidiary, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.
ERISA Event means (a) any reportable event, as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day notice period is waived); (b) the existence with respect to any Plan of an accumulated funding deficiency (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by the Parent or any ERISA Affiliate of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by the Parent or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the Parent or any ERISA Affiliate of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by the Parent or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Parent or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.
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EU Bail-In Legislation Schedule means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.
Eurodollar, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Adjusted LIBO Rate.
Event of Default has the meaning assigned to such term in Section 7.01.
Excluded Funds means (a) accounts designated solely for payroll or employee benefits, (b) trust accounts held exclusively for the payment of taxes of any Credit Party, (c) suspense or trust accounts held exclusively for royalty and working interest payments owing to third parties, (d) cash collateral accounts to secure Pcards and Epayables not in excess of $120,000 in the aggregate and (e) cash collateral accounts to secure payment of utilities not in excess of $100,000 in the aggregate.
Excluded Swap Obligation means, with respect to any Credit Party, any Swap Obligation if, and to the extent that, all or a portion of the liability of such Credit Party with respect to, or the grant by such Credit Party of a security interest to secure, such Swap Obligation (or any Guarantee thereof or other agreement or undertaking agreeing to guaranty, repay, indemnify or otherwise be liable therefor) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) (a) by virtue of such Credit Partys failure for any reason to constitute an eligible contract participant as defined in the Commodity Exchange Act and the regulations thereunder at the time the guaranty obligation or other liability of such Credit Party or the grant of such security interest becomes or would become effective with respect to such Swap Obligation or (b) in the case of a Swap Obligation required to be cleared pursuant to section 2(h) of the Commodity Exchange Act (or any successor provision thereto), because such Credit Party is a financial entity, as defined in section 2(h)(7)(C)(i) the Commodity Exchange Act (or any successor provision thereto), at the time the guaranty obligation or other liability of such Credit Party becomes or would become effective with respect to such related Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such guaranty obligation or other liability or security interest is or becomes illegal.
Excluded Taxes means, with respect to any Recipient of any payment to be made by or on account of any obligation of the Borrower or any other Credit Party hereunder or under any Loan Document, any of the following Taxes: (a) income or franchise Taxes imposed on (or measured by) its net income by the United States of America, or by the jurisdiction under the laws of which such Recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located, (b) Other Connection Taxes, (c) any branch profits Taxes imposed by the United States of America or any similar Tax
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imposed by any other jurisdiction in which the Borrower is located, (d) in the case of a Foreign Lender (other than an assignee pursuant to a request by the Borrower under Section 2.19(b)), any withholding Taxes resulting from any law in effect on such date such Foreign Lender becomes a party to this Agreement (or designates a new lending office) or is attributable to such Foreign Lenders failure to comply with Section 2.17(f), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from the Borrower with respect to such withholding Taxes pursuant to Section 2.17(a) and (e) any Taxes imposed under FATCA.
Fair Market Value means, with respect to any Property, the cash value that a Person that is not an Affiliate of the Parent would pay in an arms-length transaction to purchase the specified Property.
FATCA means Sections 1471 through 1474 of the Code, as of the date of this Agreement (and any amended or successor versions thereof that are substantively comparable and not materially more onerous to comply with) and any regulations or official interpretations thereof, any agreement entered into pursuant to Section 1471(b)(1) of the Code and any applicable intergovernmental agreements that implement or modify the foregoing (together with any law or guidance implementing such agreements).
Federal Funds Effective Rate means, for any day, the greater of (a) the weighted average (rounded upwards, if necessary, to the next 1/100 of 1.00%) 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 that is a Business Day, the average (rounded upwards, if necessary, to the next 1/100 of 1.00%) of the quotations for such day for such transactions received by the DIP Agent from three Federal funds brokers of recognized standing selected by it and (b) 0.00%.
Fee Letter means the agent fee letter agreement, dated the date hereof by and among Wells Fargo Bank, National Association, the Parent and the Borrower.
Final DIP Loan has the meaning set forth in Section 2.01(a)(ii).
Final DIP Order means the Final Order entered by the Bankruptcy Court authorizing the Debtors to (a) obtain post-petition secured financing pursuant to this Agreement, (b) use cash collateral during the pendency of the Cases, and (c) granting certain related relief, as the same may be amended, modified or supplemented from time to time with the prior written consent of the Requisite Lenders.
Final DIP Order Date means the date the Bankruptcy Court issues the Final DIP Order.
Final Hedge Order means the order entered by the Bankruptcy Court (i) authorizing the Debtors to (a) enter into and perform under new hedging arrangements with certain of the Lenders and their Affiliates, (b) honor, pay, or otherwise satisfy all obligations, liabilities, and indebtedness of the Debtors arising under such new hedging arrangements, (c) pledge and transfer collateral in the form of Liens, and (d) grant superpriority claims; and (ii) granting certain related relief.
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Final Order means, as applicable, an order or judgment of the Bankruptcy Court or other court of competent jurisdiction with respect to the relevant subject matter that has not been reversed, stayed, modified, or amended, and as to which the time to appeal or seek certiorari has expired and no appeal or petition for certiorari has been timely taken, or as to which any appeal that has been taken or any petition for certiorari that has been or may be filed has been resolved by the highest court to which the order or judgment could be appealed or from which certiorari could be sought or the new trial, reargument, or rehearing shall have been denied, resulted in no modification of such order, or has otherwise been dismissed with prejudice.
Flood Insurance Laws means, to the extent applicable to any Credit Party, the Lenders, the DIP Agent or any Collateral, the National Flood Insurance Act of 1968 and the Flood Disaster Protection Act of 1973, the National Flood Insurance Reform Act of 1994, the Biggert-Waters Flood Insurance Reform Act of 2012 and the regulations issued in connection therewith by the Office of the Controller of the Currency, the Federal Reserve Board and other Governmental Authorities, each as it may be amended, reformed or otherwise modified from time to time.
Foreign Lender means a Lender that is not a U.S. Person.
GAAP means generally accepted accounting principles in the United States of America.
Granite Wash Sale has the meaning set forth in Section 6.13.
Granite Wash Excess Amount has the meaning in Section 2.01(b).
Governmental Authority means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.
Governmental Requirement means any law, statute, code, ordinance, order, determination, rule, regulation, judgment, decree, injunction, franchise, permit, certificate, license, authorization or other directive or requirement, including, without limitation, Environmental Laws, energy regulations and occupational, safety and health standards or controls, of any Governmental Authority.
Guarantee of or by any Person (the guarantor) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the primary obligor) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase
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of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business.
Guarantor means each of the Parent and each Subsidiary that executes this Agreement as a Guarantor or otherwise guarantees the DIP Obligations as of the Effective Date or thereafter, and its successors and assigns.
Guaranty means the terms set forth in Article IX.
Hazardous Materials means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.
Highest Lawful Rate means, on any day, the maximum nonusurious rate of interest permitted for that day by applicable law.
Hydrocarbon Interests means all rights, titles, interests and estates now or hereafter acquired in and to oil and gas leases, oil, gas and mineral leases, or other liquid or gaseous hydrocarbon leases, mineral fee interests, overriding royalty and royalty interests, net profit interests and production payment interests, including any reserved or residual interests of whatever nature.
Hydrocarbons means oil, gas, casinghead gas, drip gasoline, natural gasoline, condensate, distillate, liquid hydrocarbons, gaseous hydrocarbons and all products refined or separated therefrom.
Immature Event of Default means any event or condition which, upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.
Indebtedness means, for any Person (without duplication): (i) all obligations of such Person for borrowed money or evidenced by bonds, bankers acceptances, debentures, notes or other similar instruments, other than surety or other bonds; (ii) all obligations of such Person (whether contingent or otherwise) in respect of letters of credit, surety or other bonds and similar instruments; (iii) all obligations of such Person (other than for borrowed money) to pay the deferred purchase price of Property or services (but excluding, other than for purposes of Section 6.01, accounts payable incurred in the ordinary course of business that are not more than 90 days past due unless contested in good faith by appropriate proceedings and for which adequate reserves under GAAP have been established therefor, and any guaranties by the Parent, the Borrower or any Subsidiary of such accounts payable); (iv) all Capital Lease Obligations; (v) all obligations under Synthetic Leases; (vi) all Indebtedness (as described in the other clauses of this definition) of others secured by a Lien on any asset of such Person, whether or not such
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Indebtedness is assumed by such Person; (vii) all Indebtedness (as described in the other clauses of this definition) of others guaranteed by such Person or in which such Person otherwise assures a creditor against loss of the debtor to the extent of the lesser of the amount of such Indebtedness and the maximum stated amount of such guarantee or assurance against loss; (viii) all obligations or undertakings of such Person to maintain or cause to be maintained the financial position or covenants of others or to purchase the Indebtedness or Property of others; (ix) all obligations to deliver Hydrocarbons in consideration of advance payments (other than customary and standard take or pay provisions in any gas sales or purchase contract or any other similar contract), including, without limitation, obligations under Advance Payment Contracts; and (x) any Indebtedness of a partnership for which such Person is liable either by agreement or because of a Governmental Requirement but only to the extent of such liability.
Indemnified Taxes means Taxes other than Excluded Taxes.
Indemnitee has the meaning assigned to such term in Section 11.03(b).
Information has the meaning assigned to such term in Section 11.12(a).
Initial Budget means the 13-Week Budget prepared by the Borrower and furnished to the Lenders on the Effective Date in the form of Exhibit B, which weekly cash budget includes detail on a line item basis as to (a) operational expenses, (b) general and administrative expenses (not to include Professional Fees), (c) Professional Fees (it being agreed and understood that the DIP Agent and Requisite Lenders shall not have approval rights over the Professional Fees; provided, however, the DIP Agent and Requisite Lenders reserve any right they may have under the Bankruptcy Code or other applicable law to object to any Professional Fees during the Cases), (d) interest accrued under this Agreement, and (e) Adequate Protection Payments, which has been certified by Authorized Officer of the Borrower as having been prepared in good faith based upon assumptions believed by the Borrower and the Credit Parties to be reasonable at the time made. The Initial Budget includes no capital expenditures other than maintenance and completion needs and in no event new drilling or related expenditures.
Interest Election Request means a request by the Borrower to convert or continue a Borrowing in accordance with Section 2.08.
Interest Payment Date means (a) with respect to any ABR Loan, the last day of each calendar month, and (b) with respect to any Eurodollar Loan, the last day of each 30 day period of the Interest Period applicable to the Borrowing of which such Loan is a part.
Interest Period means, with respect to any Eurodollar Borrowing, the period commencing on the date of such Borrowing and ending on the numerically corresponding day in the calendar month that is one month thereafter; provided that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless, in the case of a Eurodollar Borrowing only, such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day and (ii) any Interest Period pertaining to a Eurodollar Borrowing that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest
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Period) shall end on the last Business Day of the last calendar month of such Interest Period. For purposes hereof, the date of a Eurodollar Borrowing initially shall be the date on which such Eurodollar Borrowing is made and thereafter shall be the effective date of the most recent conversion or continuation of such Eurodollar Borrowing.
Interim DIP Loan has the meaning set forth in Section 2.01(a)(i).
Interim Order means the interim order entered by the Bankruptcy Court (i) authorizing, on an interim basis, the Debtors to (a) obtain post-petition secured financing pursuant to this Agreement and (b) use cash collateral during the pendency of the Cases, and (ii) granting certain related relief, as the same may be amended, modified or supplemented from time to time with the prior written consent of the Requisite Lenders.
Investigation Period has the meaning set forth in Section 5.08(b).
Investment means, for any Person: (i) the acquisition (whether for cash, Property, services or securities or otherwise) of Equity Interests of any other Person (including, without limitation, any short sale or any sale of any securities at a time when such securities are not owned by the Person entering into such short sale), (ii) the making of any advance, loan or other extension of credit to, any other Person (including the purchase of Property from another Person subject to an understanding or agreement, contingent or otherwise, to resell such Property to such Person, but excluding any such advance, loan or extension of credit having a term not exceeding 90 days representing the purchase price of inventory or supplies sold by such Person in the ordinary course of business) or (iii) the entering into of any guarantee of, or other contingent obligation with respect to, Indebtedness or other liability of any other Person and (without duplication) any amount committed to be advanced, lent or extended to such Person.
IRS means the United States Internal Revenue Service.
Lender Party Financial Service Products has the meaning given thereto in the Prepetition Credit Agreement.
Lender Swap Agreement means any Swap Agreement between or among any Credit Party and any Lender Swap Counterparty, including Swap Agreements on terms to be agreed between such applicable Lender Swap Counterparty and a Credit Party entered into following entry of the Final Hedge Order. It is contemplated that Lender Swap Agreements entered into prior to the confirmation of a reorganization plan by a Lender Swap Counterparty that also is a Lender under the Exit Facility will continue to be secured by the same security in the same collateral granted in connection with the Exit Facility.
Lender Swap Counterparty means any counterparty to any Swap Agreement with any Credit Party and that is Lender or Affiliate of any Lender or was a Lender or an Affiliate of a Lender at the time such Lender Swap Agreement was entered into.
Lender Swap Obligation means, with respect to any Credit Party, any obligation to pay or perform under any agreement, contract or transaction that constitutes a Lender Swap Agreement; provided that, if a Lender Swap Counterparty ceases to be a Lender or an Affiliate of a Lender under this Agreement, obligations owing to such Lender Swap Counterparty under Lender Swap Agreements shall be Lender Swap Obligations only to the extent such obligations
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arise from transactions entered into prior to the date such Lender Swap Counterparty ceased to be a Lender or an Affiliate of a Lender, without giving effect to any extension, increases, or modifications (including blending) thereof which are made after such Lender Swap Counterparty ceases to be a Lender or an Affiliate of a Lender under this Agreement.
Lenders means the Persons listed on Schedule 2.01 and any other Person that shall have become a party hereto pursuant to an Assignment and Assumption, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption.
LIBO Rate means, with respect to any Eurodollar Borrowing for any Interest Period, the rate appearing on Reuters Screen LIBOR01 Page1 (or on any successor or substitute page of such Service, or any successor to or substitute for such Service, providing rate quotations comparable to those currently provided on such page of such Service, as determined by the DIP Agent from time to time for purposes of providing quotations of interest rates applicable to dollar deposits in the London interbank market) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, as the rate for dollar deposits with a maturity comparable to such Interest Period. In the event that such rate is not available at such time for any reason, then the LIBO Rate with respect to such Eurodollar Borrowing for such Interest Period shall be the rate at which dollar deposits of $5,000,000 and for a maturity comparable to such Interest Period are offered by the principal London office of the DIP Agent in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period. Notwithstanding the foregoing, in any event, LIBO Rate shall not be less than 0.00% for any determination.
Lien means, with respect to any Property, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such Property (including but not limited to any production payments and the like payable out of Oil and Gas Properties), (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such Property and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.
Lienholder Motion means the Debtors Motion for Entry of Interim and Final Orders (I) Authorizing the Payment of (A) Operating Expenses, (B) Joint Interest Billings, (C) Marketing Expenses, (D) Shipping and Warehousing Claims, and (E) 503(b)(9) Claims, (II) Confirming Administrative Expense Priority of Outstanding Orders, and (III) Granting Related Relief dated on or about May 12, 2016.
Loan Documents means this Agreement, each Borrowing Request, each Collateral Document, the Fee Letter, any promissory notes issued pursuant to Section 2.10, all applications, all instruments, certificates and agreements now or hereafter executed or delivered to the DIP Agent or any Lender pursuant to any of the foregoing, and all amendments, modifications, renewals, extensions, increases and rearrangements of, and substitutions for, any of the foregoing; provided that Loan Documents shall not include any Swap Agreement.
Loans means the DIP Loans.
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material adverse change mean any event, development or circumstance that has had or could reasonably be expected to have a Material Adverse Effect.
Material Adverse Effect means a material adverse effect on (i) the business, Property, condition (financial or otherwise) or results of operations of the Parent, the Borrower and the Subsidiaries taken as a whole, (ii) the ability of the Parent, the Borrower and the Subsidiaries taken as a whole to timely perform their obligations under the Loan Documents to which each is a party, or (iii) the legality, validity or enforceability of any of the Loan Documents or the rights, benefits or remedies of the DIP Agent or the Lenders thereunder; provided that, Material Adverse Effect shall expressly exclude (i) any matters (A) publically disclosed prior to the date hereof, (B) disclosed in writing to the DIP Agent prior to the date hereof in connection herewith (including any schedules or exhibits hereto) or otherwise disclosed in any other Loan Document, or (C) disclosed in writing pursuant to the confidentiality agreements entered into between certain Lenders and the Borrower prior to the date hereof, (ii) the effect of filing the Cases and any action required to be taken under the Loan Documents, the Interim Order or the Final DIP Order, (iii) the direct effect of any action taken by the DIP Agent or the Lenders with respect to the Loans or with respect to the Credit Parties (including through such Persons participation in the Cases), (iv) the effect of any changes in applicable laws or accounting rules or in the United States or foreign economies or securities, commodities or financial markets, or (v) the effects of any events or circumstances affecting the Credit Parties industry generally that do not affect the Credit Parties business disproportionately.
Material Indebtedness means Indebtedness (other than the Prepetition Obligations) of any one or more of the Parent, the Borrower or any Subsidiary in an aggregate principal amount exceeding $5,000,000.
Material Swap Obligations means obligations in respect of one or more Swap Agreements of any one or more of the Parent, the Borrower or any Subsidiary in an aggregate amount exceeding $5,000,000. For purposes of determining Material Swap Obligations, the obligations of the Parent, the Borrower or any Subsidiary in respect of any Swap Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Parent, the Borrower or such Subsidiary would be required to pay if such Swap Agreement were terminated on the date of determination.
Maturity Date means the earliest of (i) the Scheduled Maturity Date, (ii) the consummation of a sale of all or substantially all of the assets of the Credit Parties pursuant to Section 363 of the Bankruptcy Code or otherwise; (iii) the effective date of a plan of reorganization or liquidation in the Cases; (iv) the date of filing or support by the Borrower of a plan of reorganization that does not provide for the Discharge of DIP Obligations; (v) the entry of an order by the Bankruptcy Court (x) approving the appointment of a bankruptcy trustee or examiner with expanded powers beyond those set forth in section 1106(a)(3) and (4) of the Bankruptcy Code, (y) dismissing any of the Cases, or (z) converting any of the Cases to a case under Chapter 7 of the Bankruptcy Code; (vi) the date of termination of the Lenders commitments and the acceleration of any outstanding extensions of credit, in each case, under this Agreement.
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Milestones means the following milestones relating to the Cases:
(a) The Petition Date shall occur no later than 8:00 a.m. New York City time on May 12, 2016;
(b) No later than three days after the Petition Date (or such later date as the Requisite Lenders may agree in writing to the Borrower), the Credit Parties shall have filed with the Bankruptcy Court (i) the Plan of Reorganization and Disclosure Statement, and (ii) a motion seeking entry of an order approving the Debtors assumption of the RSA and the BCA (the Approval Motion);
(c) No later than three days after the Petition Date (or such later date as the Requisite Lenders may agree in writing to the Borrower), the Bankruptcy Court shall have entered the Interim Order;
(d) No later than 15 days after the Petition Date (or such later date as the Requisite Lenders may agree in writing to the Borrower), the Debtors shall have filed with the Bankruptcy Court (i) a motion to establish a bar date for filing proofs of claim and (ii) the schedules of assets and liabilities and statements of financial affairs of each Debtor;
(e) No later than 30 days after the Petition Date (or such later date as the Requisite Lenders may agree in writing to the Borrower), (i) the Bankruptcy Court shall have entered the Final DIP Order, (ii) the Bankruptcy Court shall have entered a Final Order granting the Approval Motion, and (iii) the Debtors shall have delivered a proposal with regard to the treatment of material contracts to the Majority Consenting Noteholders (as defined in the RSA);
(f) No later than 45 days after the Petition Date (or such later date as the Requisite Lenders may agree in writing to the Borrower), the Bankruptcy Court shall have entered an order (the Disclosure Statement Order) approving the adequacy of the Disclosure Statement and related solicitation procedures (including the Rights Offering Procedures (as defined in the RSA));
(g) No later than 45 days after the entry of the Disclosure Statement Order (or such later date as the Requisite Lenders may agree in writing to the Borrower), the Bankruptcy Court shall commence a hearing to confirm the Plan of Reorganization (the Confirmation Hearing);
(h) No later than five days after the commencement of the Confirmation Hearing (or such later date as the Requisite Lenders may agree in writing to the Borrower), the Bankruptcy Court shall have entered an order (the Confirmation Order) confirming the Plan of Reorganization; and
(i) No later than 25 days after the entry of the Confirmation Order (or such later date as the Requisite Lenders may agree in writing to the Borrower), the Debtors shall have consummated the transactions contemplated by the Plan of Reorganization.
Moodys means Moodys Investors Service, Inc.
Mortgage means each mortgage or deed of trust executed and delivered by any Credit Party and each mortgage supplement after execution and delivery of such mortgage supplement, in each case, as amended, supplemented, restated or otherwise modified from time to time in accordance with the terms of this Agreement and the other Loan Documents.
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Multiemployer Plan means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.
Net Cash Proceeds means, with respect to any asset sale, transfer or other disposition or series of related asset sales, transfers or other dispositions, the positive difference, if any, of (a) the sum of cash and Cash Equivalents directly or indirectly received in connection with such transaction, but only as and when so received, minus (b) the sum of (i) if applicable, the principal amount of any Indebtedness that is secured by such asset (if any) and that is required to be repaid in connection with the sale thereof (other than the Loans) and (ii) the reasonable out-of-pocket expenses incurred by the Parent, the Borrower or such Subsidiary in connection with such transaction (including reasonable brokers fees or commissions, legal fees, transfer or sales taxes).
Non-Primed Excepted Liens means (x) valid, perfected and unavoidable liens in existence as of the Petition Date or (y) valid and unavoidable liens in existence for amounts outstanding as of the Petition Date that are perfected after the Petition Date as permitted by Section 546(b) of the Bankruptcy Code, but in each case under the foregoing clause (x) and (y), only to the extent such valid, perfected and unavoidable liens are senior by operation of law in priority to the Prepetition Liens.
OFAC means the U.S. Department of the Treasurys Office of Foreign Assets Control.
Oil and Gas Properties means Hydrocarbon Interests; the Properties now or hereafter pooled or unitized with Hydrocarbon Interests; all presently existing or future unitization, pooling agreements and declarations of pooled units and the units created thereby (including without limitation all units created under orders, regulations and rules of any Governmental Authority) that may affect all or any portion of the Hydrocarbon Interests; all operating agreements, contracts and other agreements, including production sharing contracts and agreements that relate to any of the Hydrocarbon Interests or the production, sale, purchase, exchange or processing of Hydrocarbons from or attributable to such Hydrocarbon Interests; all Hydrocarbons in and under and that may be produced and saved or attributable to the Hydrocarbon Interests, including all oil in tanks, the lands covered thereby and all rents, issues, profits, proceeds, products, revenues and other incomes from or attributable to the Hydrocarbon Interests; all tenements, hereditaments, appurtenances and Properties in any manner appertaining, belonging, affixed or incidental to the Hydrocarbon Interests; and all Properties, rights, titles, interests and estates described or referred to above, including any and all Property, real or personal, now owned or hereinafter acquired and situated upon, used, held for use or useful in connection with the operating, working or development of any of such Hydrocarbon Interests or Property (excluding drilling rigs, automotive equipment, rental equipment or other personal Property which may be on such premises for the purpose of drilling a well or for other similar temporary uses) and including any and all oil wells, gas wells, injection wells or other wells, buildings, structures, fuel separators, liquid extraction plants, plant compressors, pumps, pumping units, field gathering systems, tanks and tank batteries, fixtures, valves, fittings, machinery and parts, engines, boilers, meters, apparatus, equipment, appliances, tools, implements, cables, wires, towers, casing, tubing and rods, surface leases, rights-of-way, easements and servitudes together with all additions, substitutions, replacements, accessions and attachments to any and all of the foregoing.
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Organizational Documents means (a) with respect to any corporation, its certificate or articles of incorporation or organization, as amended, and its bylaws, as amended, (b) with respect to any limited partnership, its certificate of limited partnership, as amended, and its partnership agreement, as amended, (c) with respect to any general partnership, its partnership agreement, as amended, (d) with respect to any limited liability company, its certificate of formation or articles of organization, as amended, and its limited liability company agreement or operating agreement, as amended, and (e) with respect to any other type of Person, any certificate, document or agreement comparable to any of the foregoing.
Other Connection Taxes means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Taxes (other than a connection arising from such Recipient having executed, delivered, enforced, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, or engaged in any other transaction pursuant to, or enforced, any Loan Document, or having sold or assigned an interest in any Loan Document).
Other Taxes means any present or future stamp, court, documentary intangible, recording, filing, excise, property or similar other Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, or from the registration, receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment under Section 2.19(b)).
Parent means Penn Virginia Corporation, a Virginia corporation.
Participant has the meaning set forth in Section 11.04(c).
Participant Register has the meaning assigned to such term in Section 11.04(c).
Patriot Act has the meaning set forth in Section 11.17.
PBGC means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.
Permitted Investments means: (a) direct obligations of the United States or any agency thereof, or obligations guaranteed by the United States or any agency thereof, in each case maturing within one year from the date of creation thereof; (b) commercial paper maturing within one year from the date of creation thereof rated in the investment grade by S&P or Moodys; (c) deposits maturing within one year from the date of creation thereof with, including certificates of deposit issued by, any Lender or any office located in the United States of any other bank or trust company which is organized under the laws of the United States or any state thereof, has capital, surplus and undivided profits aggregating at least $100,000,000 (as of the date of such Lenders or bank or trust companys most recent financial reports) and has a short term deposit rating of no lower than A2 or P2, as such rating is set forth from time to time, by
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S&P or Moodys, respectively; (d) fully collateralized repurchase agreements with a term of not more than seven days for securities described in clause (a) above and entered into with a Lender, an Affiliate of a Lender or a financial institution satisfying the criteria described in clause (c) above; and (e) deposits in money market funds investing exclusively in Investments described in the foregoing clauses (a), (b), (c) and (d).
Permitted Liens means: (i) Liens for taxes, assessments or other governmental charges or levies which are not delinquent or that are being contested in good faith by appropriate action and for which adequate reserves have been maintained in accordance with GAAP; (ii) Liens in connection with workers compensation, unemployment insurance or other social security, old age pension or public liability obligations that are not delinquent or that are being contested in good faith by appropriate action and for which adequate reserves have been maintained in accordance with GAAP; (iii) operators, vendors, carriers, warehousemens, repairmens, mechanics, suppliers, workers, materialmens, construction or other like Liens arising by operation of law in the ordinary course of business or incident to the exploration, development, operation and maintenance of Oil and Gas Properties or statutory landlords liens, including lessee or operator obligations under statutes, governmental regulations or instruments related to the ownership, exploration and production of oil, gas and minerals on private, state, federal or foreign lands or waters, each of which (x) is in respect of obligations that have not been outstanding more than 60 days, (y) that are being contested in good faith by appropriate proceedings and for which adequate reserves have been maintained in accordance with GAAP, or (z) solely as to Liens in effect prior to the Effective Date, is of the type set forth in the Lienholder Motion; (iv) Liens that (a) arise in the ordinary course of business under operating agreements, joint venture agreements, oil and gas partnership agreements, oil and gas leases, farm-out agreements, division orders, contracts for the sale, transportation or exchange of oil and natural gas, unitization and pooling declarations and agreements, area of mutual interest agreements, overriding royalty agreements, marketing agreements, processing agreements, net profits agreements, development agreements, gas balancing or deferred production agreements, injection, repressuring and recycling agreements, salt water or other disposal agreements, seismic or other geophysical permits or agreements, and other agreements that are usual and customary in the oil and gas business and (b) are for claims that (x) are not delinquent, (y) are being contested in good faith by appropriate proceedings and as to which the Parent, the Borrower or any Subsidiary shall have set aside on its books such reserves as may be required pursuant to GAAP, or (z) solely as to Liens in effect prior to the Effective Date, is of the type set forth in the Lienholder Motion; provided that any such Lien referred to in this clause does not materially impair the use of the Property covered by such Lien for the purposes for which such Property is held by the Borrower or any Subsidiary or materially impair the value of such Property, taken as a whole; (v) Liens reserved in oil and gas mineral leases, or created by statute, to secure royalty, net profits interests, bonus payments, rental payments or other payments out of or with respect to the production, transportation or processing of Hydrocarbons, and compliance with the terms of such Hydrocarbon Interests, provided that such Liens secure claims that (x) are not delinquent, (y) are being contested in good faith by appropriate proceedings and as to which the Parent, the Borrower or the applicable Subsidiary shall have set aside on its books such reserves as may be required pursuant to GAAP, or (z) solely as to Liens in effect prior to the Effective Date, is of the type set forth in the Lienholder Motion; (vi) Liens arising solely by virtue of any statutory or common law provision relating to bankers liens, rights of set-off or similar rights and remedies and burdening only deposit accounts or other funds maintained with a creditor depository
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institution, provided that (a) no such deposit account is a dedicated cash collateral account or is subject to restrictions against access by the depositor in excess of those set forth by regulations promulgated by the Board, and (b) no such deposit account is intended by the Parent, the Borrower or any Subsidiaries to provide collateral to the depository institution; (vii) all other non-consensual defects in title (which might otherwise constitute Liens) arising in the ordinary course of the Parents, the Borrowers or such Subsidiarys business or incidental to the ownership of their respective Properties; provided that no such Liens shall secure the payment of Indebtedness or shall, in the aggregate, materially detract from the value or marketability of the Property subject thereto or materially impair the use or operation thereof in the operation of the business of the Parent, the Borrower or such Subsidiary; (viii) encumbrances (other than to secure the payment of borrowed money or the deferred purchase price of Property or services), easements, restrictions, servitudes, permits, conditions, covenants, exceptions or reservations in any Property of the Parent, the Borrower or any Subsidiary for the purpose of roads, pipelines, transmission lines, transportation lines, distribution lines for the removal of gas, oil, coal or other minerals or timber, and other like purposes, or for the joint or common use of real estate, rights of way, facilities and equipment, and defects, irregularities, zoning restrictions and deficiencies in title of any Property that in the aggregate do not materially impair the use of such Property for the purposes of which such Property is held by the Parent, the Borrower or any Subsidiary or materially impair the value of such Property subject thereto; (ix) Liens on cash or securities pledged to secure performance of surety and appeal bonds, government contracts, performance and return of money bonds, bids, trade contracts, leases, statutory obligations, regulatory obligations and other obligations of a like nature incurred in the ordinary course of business; (x) judgment Liens not giving rise to an Event of Default, provided that (a) any appropriate legal proceedings which may have been duly initiated for the review of such judgment shall not have been finally terminated or the period within which such proceeding may be initiated shall not have expired and (b) no action to enforce such Lien has been commenced; and (xi) Non-Primed Excepted Liens.
Permitted Variance has the meaning set forth in Section 5.22.
Person means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.
Petition Date has the meaning assigned to such term in the recitals hereto.
Plan means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Parent or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an employer as defined in Section 3(5) of ERISA.
Plan Filing Date shall mean the date upon which the Plan of Reorganization and related Disclosure Statement is filed with the Bankruptcy Court.
Plan of Reorganization means the Joint Chapter 11 Plan of Reorganization of Penn Virginia Corporation and its Debtor Affiliates, dated on or about May 12, 2016, as may be amended, supplemented, or modified from time to time, including all exhibits and schedules thereto, that is prepared and distributed in accordance with the Bankruptcy Code, and any other applicable law, in any event, in form and substance reasonably satisfactory to the Requisite Lenders.
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Prepetition Agent means Wells Fargo Bank, National Association, in its capacity as administrative agent under the Prepetition Credit Agreement, or any successor in such capacity.
Prepetition Collateral means all of the existing and after-acquired assets with respect to which the Prepetition Agent on behalf of the Prepetition Secured Parties has first priority liens securing the Prepetition Secured Obligations under the Prepetition Secured Facilities (including cash collateral).
Prepetition Credit Agreement shall mean the Credit Agreement dated as of September 28, 2012, among the Borrower, Parent, the lenders parties thereto, and Wells Fargo Bank, National Association, as administrative agent, as amended, restated, supplemented or otherwise modified prior to the Petition Date.
Prepetition Lenders shall mean the Lenders as defined in the Prepetition Credit Agreement.
Prepetition Liens shall mean the Liens securing the Prepetition Secured Obligations.
Prepetition Secured Obligations means the Secured Obligations as defined in the Prepetition Credit Agreement.
Prepetition Secured Facilities shall mean (i) the credit facility extended by the Prepetition Lenders to the Borrower under the Prepetition Credit Agreement, (ii) the Lender Party Swap Agreements (as defined in the Prepetition Credit Agreement), and (iii) the Lender Party Financial Service Products.
Prepetition Secured Parties shall mean the holders of Prepetition Secured Obligations.
Professional Fees means attorneys fees and the fees of any other professionals.
Property of a Person means any and all property, whether real, personal, tangible, intangible or mixed, of such Person, or other assets owned, leased or operated by such Person.
Qualified ECP Obligor means, in respect of any Swap Obligation, each Credit Party that has total assets exceeding $10,000,000 at the time the relevant guaranty obligation or other liability or grant of the relevant security interest becomes or would become effective with respect to such Swap Obligation or such other person as constitutes an eligible contract participant under the Commodity Exchange Act or any regulations promulgated thereunder and can cause another person to qualify as an eligible contract participant at such time by entering into a keepwell under section 1a(18)(A)(v)(II) of the Commodity Exchange Act.
Recipient means, as applicable, (a) the DIP Agent, and (b) any Lender.
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Redemption means the repurchase, redemption, prepayment, repayment or defeasance (or the segregation of funds with respect to any of the foregoing) of the Senior Notes. Redeem has the correlative meaning thereto.
Register has the meaning set forth in Section 11.04(b)(iv).
Related Parties means, with respect to any specified Person, such Persons Affiliates and the respective directors, officers, employees, agents and advisors of such Person and such Persons Affiliates.
Remedies Notice has the meaning set forth in Section 7.02
Requisite Lenders means, at any time, Lenders having in the aggregate more than 50% of the Aggregate Commitment Amount, or, if the Commitments to make Loans have been terminated pursuant to Article VII, Lenders holding more than 50% of the aggregate unpaid principal amount of the outstanding Loans; provided that the Commitment of, and the portion of the Loans held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of the Requisite Lenders.
Reserve Report means a report, in form and substance reasonably satisfactory to the DIP Agent, setting forth, as of each December 31 or June 30 (or such other date in the event of an unscheduled redetermination) the oil and gas reserves attributable to the Oil and Gas Properties of the Borrower and the Guarantors, together with a projection of the rate of production and future net income, taxes, operating expenses and capital expenditures with respect thereto as of such date, based upon the pricing assumptions consistent with SEC reporting requirements at the time.
Restricted Payment means any dividend or other distribution (whether in cash, securities or other Property) with respect to any Equity Interests in the Parent, the Borrower or any Subsidiary, or any payment (whether in cash, securities or other Property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Equity Interests in the Parent, the Borrower or any Subsidiary, or any option, warrant or other right to acquire any Equity Interests in the Parent, the Borrower or any Subsidiary.
RSA means the Restructuring Support Agreement dated as of May 10, 2016, among Parent, the Borrower, certain Affiliates thereof named therein, certain holders of the Senior Notes, the DIP Agent, the Lenders, the Prepetition Agent and the Prepetition Lenders party thereto, and all exhibits thereto, as amended in accordance with the terms thereof.
S&P means Standard & Poors Ratings Group, a division of The McGraw Hill Corporation.
Safe Harbor Provisions means sections 362(b)(6) and (17), and sections 546(e) and (g), 555, 556, 559, 560, 561 and 562 of the United States Bankruptcy Code.
Sanctions means economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by the U.S. government (including those administered by OFAC), the European Union, Her Majestys Treasury, or other relevant sanctions authority.
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Sanctioned Country means at any time, a country or territory which is itself the subject or target of any Sanctions.
Sanctioned Person means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by OFAC, the U.S. Department of State, the United Nations Security Council, the European Union, Her Majestys Treasury, or other relevant sanctions authority, (b) any Person operating, organized or resident in a Sanctioned Country or (c) any Person owned or controlled by any such Person or Persons described in clauses (a) and (b).
Security Agreement means the terms set forth in Article X.
Scheduled Maturity Date means the date 150 days after the Petition Date; provided, that such date may be extended as agreed in writing by the Credit Parties and each Lender for an additional period not to exceed three (3) months without further approval of the Bankruptcy Court; and provided further, if the Credit Parties have entered into an asset purchase agreement with a third party for a sale of substantially all of its assets pursuant to Section 363 of the Bankruptcy Code, and the Bankruptcy Court has entered an order approving bidding procedures for an auction with a stalking-horse bidder, prior to the then effective Scheduled Maturity Date, such date may be extended as agreed in writing by the Credit Parties and the Supermajority Lenders for an additional period not to exceed three (3) months without further approval of the Bankruptcy Court.
SEC means the Securities and Exchange Commission or any successor Governmental Authority.
Senior Notes means, collectively, (a) the 7.250% Senior Notes due 2019 and (b) the 8.500% Senior Notes due 2020, in each case issued pursuant to the Senior Notes Indenture.
Senior Notes Documents means, as applicable, both individually and collectively any Senior Notes and the Senior Notes Indenture.
Senior Noteholders means, collectively, the holders of either series of Senior Notes at any given time.
Senior Notes Indenture means that certain Senior Indenture, dated as of June 15, 2009, among Parent, each of the guarantors party thereto, and Wells Fargo Bank, National Association, as indenture trustee, as amended, restated, supplemented or otherwise modified prior to the Effective Date.
Stated Rate has the meaning assigned to such term in Section 11.13.
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Statutory Reserve Rate means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one, minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves), expressed as a decimal established by the Board to which the DIP Agent is subject, with respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred to as Eurocurrency Liabilities in Regulation D of the Board). Such reserve percentages shall include those imposed pursuant to such Regulation D. Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D or any comparable regulation. The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.
Subsidiary means, with respect to any Person (the parent) at any date, any corporation, limited liability company, partnership, association or other entity of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held by the parent or one or more Subsidiaries of the parent or by the parent and one or more Subsidiaries of the parent. Unless otherwise expressly provided, all references herein to a Subsidiary shall mean a Subsidiary of the Parent.
Supermajority Lenders means, at any time, Lenders having in the aggregate more than 66 2/3% of the Aggregate Commitment Amount, or, if the Commitments to make Loans have been terminated pursuant to Article VII, Lenders holding more than 66 2/3% of the aggregate unpaid principal amount of the outstanding Loans; provided that the Commitment of, and the portion of the Loans held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of the Supermajority Lenders.
Swap Agreement means any agreement, contract or transaction that constitutes a swap within the meaning of section 1a(47) of the Commodity Exchange Act or any other agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of the Parent, the Borrower or the Subsidiaries shall be a Swap Agreement.
Swap Obligation means, with respect to any Debtor, any obligation to pay or perform under any agreement, contract or transaction that constitutes a Swap Agreement.
Synthetic Leases means, in respect of any Person, all leases that shall have been, or should have been, in accordance with GAAP, treated as operating leases on the financial statements of the Person liable (whether contingently or otherwise) for the payment of rent thereunder and which were properly treated as indebtedness for borrowed money for purposes of U.S. federal income taxes, if the lessee in respect thereof is obligated to either purchase for an amount in excess of, or pay upon early termination an amount in excess of, 85% of the residual value of the Property subject to such operating lease upon expiration or early termination of such lease.
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Taxes means any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority.
Type, when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.
Unused Commitment means, with respect to each Lender at any time, such Lenders Commitment at such time, minus the amount of Loans funded prior to such time by such Lender.
U.S. Person means a United States person within the meaning of Section 7701(a)(30) of the Code.
U.S. Tax Certificate has the meaning assigned to such term in Section 2.17(f)(ii)(D)(2).
Withdrawal Liability means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.
Weekly Draw Date means the first Business Day following each Weekly Test Date commencing with the first such day on or after the date the Final DIP Loan has been made.
Weekly Test Date means the fourth Business Day of each calendar week.
Withholding Agent means the Borrower or the DIP Agent.
Write-Down and Conversion Powers means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.
SECTION 1.02. Classification of Loans and Borrowings. For purposes of this Agreement, Loans may be classified and referred to by Type (e.g., a Eurodollar Loan or ABR Loan).
SECTION 1.03. Terms Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words include, includes and including shall be deemed to be followed by the phrase without limitation. The word will shall be construed to have the same meaning and effect as the word shall. Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, supplemented or otherwise modified (subject to any restrictions on such amendments, restatements, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Persons successors and assigns, (c) the words herein, hereof and hereunder, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections,
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Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, (e) the words asset and property shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights, and (f) any definition or reference to any applicable law, including, without limitation, the Code, the Commodity Exchange Act, ERISA, the Exchange Act, the PATRIOT Act, the Securities Act of 1933, the Uniform Commercial Code, the Investment Company Act of 1940, the Interstate Commerce Act, the Trading with the Enemy Act of the United States or any of the foreign assets control regulations of the United States Treasury Department, shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such applicable law.
SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that, if the Parent or the Borrower notifies the DIP Agent that the Parent or the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision (or if the DIP Agent notifies the Parent or the Borrower that the Requisite Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith. Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made, without giving effect to any election under Financial Accounting Standards Board Accounting Standards Codification 825 (or any other Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of the Borrower or any Subsidiary at fair value, as defined therein.
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments.
(a) Subject to the terms and conditions of this Agreement and the DIP Orders and relying upon the representations and warranties herein set forth, each Lender agrees, severally and not jointly, to make Loans to the Borrower during the Availability Period; provided, however, that the aggregate principal amount of all Loans actually funded by such Lender shall not exceed such Lenders Commitment, and the aggregate amount of all Loans funded by the Lenders shall not exceed the Aggregate Commitment Amount:
(i) Interim DIP Loan. Subject to satisfaction of the conditions set forth in Section 4.02, in a single initial Borrowing to be made on a Business Day following the Interim Order Date and not to exceed the Aggregate Interim DIP Commitment Amount (the Interim DIP Loan), and the amount of each Lenders Interim DIP Loan as part of the initial Borrowing shall equal its Applicable Percentage of such Borrowing.
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(ii) Final DIP Loan. Subject to satisfaction of the conditions set forth in Section 4.03, in a single Borrowing to be made on a Business Day following the Final Order Date and not to exceed the Aggregate Final DIP Commitment Amount plus any unfunded portion of the Aggregate Interim DIP Commitment Amount (collectively, the Final DIP Loan), and the amount of each Lenders Final DIP Loan as part of the second Borrowing shall equal its Applicable Percentage of such Borrowing.
(iii) Conditional DIP Loans. Subject to satisfaction of the conditions set forth in Section 4.04, in multiple Borrowings from time to time during the period after the Final DIP Loan is made through the Maturity Date, in amounts not to exceed the Aggregate Conditional DIP Commitment Amount plus any unfunded portion of the Aggregate Interim DIP Commitment Amount plus any unfunded portion of the Aggregate Final DIP Commitment Amount (the Conditional DIP Loans and each a Conditional DIP Loan) (it being agreed that after giving effect to any Borrowing of the Interim DIP Loan, the Final DIP Loan and the Conditional DIP Loans, the aggregate outstanding amount of all Loans funded by the Lenders shall not exceed the Aggregate Commitment Amount); provided that the amount of each such Borrowing of a Conditional DIP Loan shall not exceed the lesser of (i) the aggregate Unused Commitments on such Weekly Draw Date and (ii) the maximum amount that (if funded) would permit the Borrower to be in pro forma compliance with the Anti-Hoarding Condition.
(b) Reborrowing of Loans Prepaid. The principal amount of any Loans repaid or prepaid may not be reborrowed; provided, however, that solely in the event that the Granite Wash Sale is consummated with Net Cash Proceeds in excess of $8,000,000 in the aggregate (such excess, the Granite Wash Excess Amount) and the Borrower has prepaid the Loans in accordance with Section 2.11(a), subject to the terms and conditions of this Agreement (including Section 4.04), an amount equal to the Granite Wash Excess Amount may be reborrowed on any subsequent Weekly Draw Date as a new Borrowing of Conditional DIP Loans (it being agreed that the Granite Wash Excess Amount shall be excluded from the aggregate amount of Loans previously advanced in order to determine the amount available for Borrowing on such date of reborrowing).
SECTION 2.02. Loans and Borrowings.
(a) Each Loan shall be made as part of a Borrowing consisting of Loans made by the Lenders ratably in accordance with their respective Commitments. The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder; provided that the Commitments of the Lenders are several and no Lender shall be responsible for any other Lenders failure to make Loans as required.
(b) Subject to Section 2.14, each Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request in accordance herewith. Each Lender at its option may, subject to Section 2.19(a), make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan; provided that any exercise of such option shall not affect the obligation of the Borrower to repay such Loan in accordance with the terms of this Agreement.
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(c) At the commencement of each Interest Period for any Eurodollar Borrowing, such Borrowing shall be in an aggregate amount that is an integral multiple of $500,000 and not less than $1,000,000. At the time that each ABR Borrowing is made, such Borrowing shall be in an aggregate amount that is an integral multiple of $100,000 and not less than $500,000. Borrowings of more than one Type may be outstanding at the same time; provided that there shall not at any time be more than a total of ten (10) Eurodollar Borrowings outstanding.
Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled to request, or to elect to convert or continue, any Borrowing if the Interest Period requested with respect thereto would end after the Maturity Date.
SECTION 2.03. Requests for Borrowings. To request a Borrowing, the Borrower shall notify the DIP Agent of such request by telephone (a) in the case of a Eurodollar Borrowing, not later than 12:00 noon, New York City time, three (3) Business Days (or such shorter time period as agreed to by the DIP Agent in its reasonable discretion) before the date of the proposed Borrowing or (b) in the case of an ABR Borrowing, not later than 12:00 noon, New York City time, on the date of the proposed Borrowing. Each such telephonic Borrowing Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the DIP Agent of a written Borrowing Request in a form approved by the DIP Agent and signed by the Borrower. Each such telephonic and written Borrowing Request shall specify the following information in compliance with Section 2.02:
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day;
(iii) whether such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing; and
(iv) the location and number of the Borrowers account to which funds are to be disbursed, which shall comply with the requirements of Section 2.07.
If no election as to the Type of Borrowing is specified, then the requested Borrowing shall be an ABR Borrowing. Promptly following receipt of a Borrowing Request in accordance with this Section, the DIP Agent shall advise each Lender of the details thereof and of the amount of such Lender s Loan to be made as part of the requested Borrowing.
SECTION 2.04. [Reserved].
SECTION 2.05. [Reserved].
SECTION 2.06. [Reserved].
SECTION 2.07. Funding of Borrowings.
(a) Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds by 1:00 p.m., New York City time, to the account of the DIP Agent most recently designated by it for such purpose by notice to the Lenders. The DIP Agent will make such Loans available to the Borrower by promptly crediting the amounts so received, in like funds, to an account of the Borrower maintained with the DIP Agent designated by the Borrower in the applicable Borrowing Request.
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(b) Unless the DIP Agent shall have received written notice from a Lender prior to the proposed date of any Eurodollar Borrowing or prior to 1:00 p.m., New York City time, on the date any proposed ABR Borrowing, as applicable, that such Lender will not make available to the DIP Agent such Lenders share of such Borrowing, the DIP Agent may assume that such Lender has made such share available on such date in accordance with paragraph (a) of this Section and may, in reliance upon such assumption, make available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the DIP Agent, then the applicable Lender and the Borrower severally agree to pay to the DIP Agent forthwith within two (2) Business Days after demand therefor such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the DIP Agent, at (i) in the case of such Lender, the greater of the Federal Funds Effective Rate and a rate determined by the DIP Agent in accordance with banking industry rules on interbank compensation or (ii) in the case of the Borrower, the interest rate applicable to ABR Loans. If such Lender pays such amount to the DIP Agent, then such amount shall constitute such Lenders Loan included in such Borrowing.
SECTION 2.08. Interest Elections.
(a) Each Borrowing initially shall be of the Type specified in the applicable Borrowing Request. Thereafter, the Borrower may elect to convert such Borrowing to a different Type or to continue such Borrowing as provided in this Section. The Borrower may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing.
(b) To make an election pursuant to this Section, the Borrower shall notify the DIP Agent of such election by telephone by the time that a Borrowing Request would be required under Section 2.03 if the Borrower were requesting a Borrowing of the Type resulting from such election to be made on the effective date of such election. Each such telephonic Interest Election Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the DIP Agent of a written Interest Election Request in a form approved by the DIP Agent and signed by the Borrower.
(c) Each telephonic and written Interest Election Request shall specify the following information in compliance with Section 2.02:
(i) the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (ii) and (iii) below shall be specified for each resulting Borrowing);
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(ii) the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day; and
(iii) with respect to any Borrowing, whether the resulting Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing.
(d) Promptly following receipt of an Interest Election Request, the DIP Agent shall advise each Lender of the details thereof and of such Lenders portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest Election Request with respect to a Eurodollar Borrowing prior to the end of the Interest Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing shall be converted to an ABR Borrowing. Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is continuing and the DIP Agent, at the request of the Requisite Lenders, so notifies the Borrower, then, so long as an Event of Default is continuing (i) no outstanding Borrowing may be converted to or continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the Interest Period applicable thereto.
SECTION 2.09. Termination and Reduction of Commitments.
(a) Unless previously terminated, each Lenders Commitment shall reduce on the date of each Borrowing by an amount equal to the Loan made by such Lender as part of such Borrowing and shall terminate on the Maturity Date.
(b) The Borrower may at any time terminate, or at any time prior to the date the Final DIP Loan are funded, reduce, the Commitments; provided that (i) each reduction of the Commitments shall be in an amount that is an integral multiple of $500,000 and not less than $1,000,000 and (ii) the Borrower shall not terminate or reduce the Commitments if, after giving effect to any concurrent prepayment of the Loans in accordance with Section 2.11, the outstanding principal amount of the Loans would exceed the total Commitments, as so reduced.
(c) The Borrower shall notify the DIP Agent of any election to terminate or reduce the Commitments under paragraph (b) of this Section at least one (1) Business Day prior to the effective date of such termination or reduction, specifying such election and the effective date thereof. Promptly following receipt of any notice, the DIP Agent shall advise the Lenders of the contents thereof. Each notice delivered by the Borrower pursuant to this Section shall be irrevocable; provided that a notice of termination of the Commitments delivered by the Borrower may state that such notice is conditioned upon the effectiveness of other credit facilities, in which case such notice may be revoked by the Borrower (by notice to the DIP Agent on or prior to the specified effective date) if such condition is not satisfied. Any termination or reduction of the Commitments shall be permanent. Each reduction of the Commitments shall be made ratably among the Lenders in accordance with their respective Commitments.
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SECTION 2.10. Repayment of Loans; Evidence of Debt.
(a) The Borrower hereby unconditionally promises to pay to the DIP Agent for the account of each Lender the then unpaid principal amount of each Loan on the Maturity Date.
(b) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.
(c) The DIP Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the Type thereof and the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder and (iii) the amount of any sum received by the DIP Agent hereunder for the account of the Lenders and each Lenders share thereof.
(d) The entries made in the accounts maintained pursuant to paragraphs (b) or (c) of this Section shall be prima facie evidence of the existence and amounts of the obligations recorded therein absent manifest error; provided that the failure of any Lender or the DIP Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrower to repay the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans made by it be evidenced by a promissory note in the form of Exhibit C. In such event, the Borrower shall prepare, execute and deliver to such Lender a promissory note payable to such Lender (or, if requested by such Lender, to such Lender and its registered assigns) and in a form approved by the DIP Agent. Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 11.04) be represented by one or more promissory notes in such form payable to the order of the payee named therein (or, if such promissory note is a registered note, to such payee and its registered assigns).
SECTION 2.11. Prepayment of Loans.
(a) Mandatory Prepayments. The Borrower shall prepay the outstanding principal amount of the Loans:
(i) in an amount equal to 100% of the Net Cash Proceeds received by any Credit Party from asset sales or series of related asset sales (other than (x) Net Cash Proceeds in an amount not to exceed $250,000 in the aggregate since the date hereof and (y) ordinary course sales of Hydrocarbons and sales of immaterial or damaged equipment no longer used or useful in the business, or asset sales between Credit Parties) within one Business Day after receipt of such Net Cash Proceeds; provided that no prepayment shall be required in connection with such asset sale only to the extent (x) the Net Cash Proceeds thereof are reinvested by the Person receiving such proceeds in the business of such Person within ninety (90) days following receipt thereof and such expenditure is provided in the Approved Budget, (y) at the time such reinvestment occurs no Event of Default shall then be in existence, and (z) such asset sale is not the Granite Wash Sale.
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(ii) in an amount equal to 100% of insurance and condemnation proceeds (net of any actual and reasonable documented costs incurred by the Borrower or any of its Subsidiaries in connection with the adjustment or settlement of any claims of the Borrower or such Subsidiary in respect thereof) received by any Credit Party (other (x) proceeds in an amount not to exceed $250,000 in the aggregate since the date hereof and (y) than the approximate $1,000,000 in insurance proceeds expected to be received on account of a Casualty Event that occurred in 2014) within one Business Day after receipt of such proceeds; provided that no prepayment shall be required in connection with such insurance or condemnation proceeds only to the extent (x) the proceeds thereof are reinvested by the Person receiving such proceeds in the business of such Person within ninety (90) days following receipt thereof and such expenditure is provided in the Approved Budget, and (y) at the time such reinvestment occurs no Event of Default shall then be in existence; (iii) in an amount equal to 100% of cash proceeds (net of any actual and reasonable documented costs incurred by the Borrower or any of its Subsidiaries in connection with such issuance) received by any Credit Party from the issuance of any post-petition Indebtedness (other than Indebtedness permitted under Section 6.01) or Equity Interests (other than any issuance or sale of the Equity Interests of a Subsidiary to its parent entity or another Credit Party) by any Credit Party within one Business Day after receipt of such Net Cash Proceeds; and (iv) in an amount equal to 100% of the proceeds resulting from monthly settlement payments under any Swap Agreements or the termination, liquidation or unwinding of any Swap Agreement immediately upon receipt of such proceeds.
(b) Optional Prepayment of Loans. The Borrower shall have the right at any time and from time to time to prepay any Borrowing in whole or in part, without premium or penalty, but subject to the requirements of Section 2.09(b) and Section 2.16. The Borrower shall notify the DIP Agent by telephone (confirmed by telecopy) of any optional prepayment (i) in the case of a Eurodollar Borrowing, not later than 12:00 noon, New York City time, three Business Days before the date of prepayment or (ii) in the case of prepayment of any ABR Borrowings, not later than 12:00 noon New York City time, on the date of such prepayment. Such notice shall be irrevocable and shall specify the prepayment date and the principal amount of the Borrowings or portion thereof to be prepaid; provided that, if a notice of prepayment is given in connection with a conditional notice of termination of the Commitments as contemplated by Section 2.09, then such notice of prepayment may be revoked if such notice of termination is revoked in accordance with Section 2.09. Promptly following receipt of any such notice of prepayment, the DIP Agent shall advise the Lenders of the contents thereof. Each partial prepayment of any Borrowings shall be in an amount that would be permitted in the case of an advance of a Borrowing of the same Type as provided in Section 2.02. Each prepayment of a Borrowing shall be applied ratably to the Loans included in the prepaid Borrowing. Prepayments shall be accompanied by accrued interest to the extent required by Section 2.13 and any amount payable under Section 2.16.
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(c) Application of Proceeds of Prepayments. Prepayments made in accordance with Section 2.11(a) or Section 2.11(b) of this Section shall be applied in the following order: first, at all times, to the prepayment of the outstanding principal amount of the Loans and any other amounts then due and payable under this Agreement until paid in full; second, at any time after the Final DIP Order Date, to the outstanding Obligations (as defined in the Prepetition Credit Agreement) in the order specified in the Prepetition Credit Agreement, until paid in full. Each prepayment of the Loans under this Section shall be accompanied by accrued interest to the date of such prepayment on the amount prepaid.
SECTION 2.12. Fees.
(a) Subject to the provisions of Section 2.20, the Borrower agrees to pay to the DIP Agent, for the account of each Lender (excluding any Defaulting Lenders), an unused commitment fee (the Unused Commitment Fee) equal to 0.50% multiplied by the daily average of each such Lenders Unused Commitment (it being agreed that in the event the Net Cash Proceeds of the Granite Wash Sale are used to repay the Loans, then for purposes of the Unused Commitment Fee, the Unused Commitment of any Lender shall be increased by the Granite Wash Excess Amount, if any). Such Unused Commitment Fee shall be calculated on the basis of a year consisting of 365 days (or 366 days in a leap year) and shall be payable in arrears on the last day of each calendar month and on the Maturity Date for any period then ending for which the Unused Commitment Fee shall not have been previously paid. In the event the Commitments terminate on any date other than the last day of a calendar month, the Borrower agrees to pay to the DIP Agent, for the account of each Lender (excluding any Defaulting Lenders), on the date of such termination, each such Lenders Unused Commitment Fee due for the period from the last day of the immediately preceding calendar month to the date such termination occurs.
(b) The Borrower agrees to pay to the DIP Agent, for the account of each Lender (excluding any Defaulting Lenders) a closing fee (the Closing Fee) of 0.50% of the principal amount of each Loan advanced by such Lender, such fee to be earned and due and payable on the date each such Loan is advanced (it being agreed that in the event the Net Cash Proceeds of the Granite Wash Sale equal to the Granite Wash Excess Amount is used to repay the Loans which are then readvanced, this fee shall not be payable with respect to the readvanced Loans).
(c) Upon any extension of the Maturity Date with the consent of all Lenders, the Borrower agrees to pay to the DIP Agent, for the account of each Lender (excluding any Defaulting Lenders) an extension fee equal to (i) for any extension not exceeding three (3) months, 0.25% per annum of the aggregate principal amount of the Loans made by such Lender, (ii) for any extension exceeding three (3) months but not exceeding six (6) months, 0.50% per annum of the aggregate principal amount of the Loans made by such Lender, and (iii) for any extension exceeding six (6) months, 1.00% per annum of the aggregate principal amount of the Loans made by such Lender, in each case such fees earned and payable upon the effective date of such extension.
(d) The Borrower agrees to pay to the DIP Agent, for its own account, fees payable in the amounts and at the times separately agreed to in the Fee Letter.
(e) All fees payable to the Lenders hereunder shall be paid on the dates due, in immediately available funds, to the DIP Agent for distribution, in the case of Unused Commitment Fees, to the Lenders. Fees paid shall not be refundable under any circumstances, except in the case of any overpayment due to erroneous calculation or invoicing thereof.
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SECTION 2.13. Interest.
(a) The Loans comprising each ABR Borrowing shall bear interest at the Alternate Base Rate plus 5.00%.
(b) Eurodollar Loans shall bear interest at the Adjusted LIBO Rate per annum for the Interest Period in effect for such Borrowing plus 6.00%.
(c) Notwithstanding the foregoing, during the continuance of an Event of Default, each Borrowing shall bear interest at a rate per annum equal to interest rate in effect from time to time pursuant to clause (a) or (b) above, as applicable, plus 2.00% per annum (the Default Rate).
(d) Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan and upon termination of the Commitments; provided that (i) interest accrued pursuant to paragraph (c) of this Section shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan, accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of any conversion of any Eurodollar Loan prior to the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on the effective date of such conversion.
(e) All interest hereunder shall be computed on the basis of a year of 360 days, except that interest computed by reference to the Alternate Base Rate at times when the Alternate Base Rate is based on Well Fargo Banks prime rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day). The applicable Alternate Base Rate, Adjusted LIBO Rate or LIBO Rate shall be determined by the DIP Agent, and such determination shall be conclusive absent manifest error.
SECTION 2.14. Alternate Rate of Interest. If prior to the commencement of any Interest Period for a Eurodollar Borrowing:
(a) the DIP Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means do not exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period; or
(b) the DIP Agent is advised by the Requisite Lenders that the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period will not adequately and fairly reflect the cost to such Lenders (or Lender) of making or maintaining their Loans (or its Loan) included in such Borrowing for such Interest Period;
then the DIP Agent shall give notice thereof to the Borrower and the Lenders by telephone or telecopy as promptly as practicable thereafter and, until the DIP Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, (i) any Interest Election Request that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective, and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR Borrowing.
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SECTION 2.15. Increased Costs.
(a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit or similar requirement (including any compulsory loan requirement, insurance charge or other assessment) against assets of, deposits with or for the account of, or credit extended by, any Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate); or
(ii) impose on any Lender or the London interbank market any other condition, cost or expense affecting this Agreement or Loans made by such Lender;
and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Loan (or of maintaining its obligation to make any such Loan) or to increase the cost to such Lender or to reduce the amount of any sum received or receivable by such Lender hereunder (whether of principal, interest or otherwise), then the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender for such additional costs incurred or reduction suffered.
(b) If any Lender determines that any Change in Law regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lenders capital or on the capital of such Lenders holding company, if any, as a consequence of this Agreement or the Loans made by such Lender to a level below that which such Lender or such Lenders holding company could have achieved but for such Change in Law (taking into consideration such Lenders policies and the policies of such Lenders holding company with respect to capital adequacy), then from time to time the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender or such Lenders holding company for any such reduction suffered.
(c) A certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 Business Days after receipt thereof.
(d) Failure or delay on the part of any Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lenders right to demand such compensation; provided that the Borrower shall not be required to compensate a Lender pursuant to this Section for any increased costs or reductions incurred more than 270 days prior to the date that such Lender notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lenders intention to claim compensation therefor; provided, further, that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 270-day period referred to above shall be extended to include the period of retroactive effect thereof.
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SECTION 2.16. Break Funding Payments. In the event of (a) the payment of any principal of any Eurodollar 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 Eurodollar Loan other than on the last day of the Interest Period applicable thereto, (c) the failure to borrow, convert, continue or prepay any Eurodollar Loan on the date specified in any notice delivered pursuant hereto (regardless of whether such notice may be revoked under Section 2.11(b) and is revoked in accordance therewith) or (d) the assignment of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower pursuant to Section 2.05 or Section 2.19, then, in any such event, the Borrower shall compensate each Lender for the loss, cost and expense attributable to such event. In the case of a Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to include an amount determined by such Lender to be the excess, if any, of (i) the amount of interest which would have accrued on the principal amount of such Loan had such event not occurred, at the Adjusted LIBO Rate that would have been applicable to such Loan, for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period for such Loan), over (ii) the amount of interest that would accrue on such principal amount for such period at the interest rate which such Lender would bid were it to bid, at the commencement of such period, for dollar deposits of a comparable amount and period from other banks in the eurodollar market. A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.
SECTION 2.17. Taxes.
(a) General.Each payment by any Credit Party under any Loan Document shall be made without withholding for any Taxes, unless such withholding is required by law. If any Withholding Agent determines, in its sole discretion exercised in good faith, that it is so required to withhold Taxes, then such Withholding Agent may so withhold and shall timely pay the full amount of withheld Taxes to the relevant Governmental Authority in accordance with applicable law. If such Taxes are Indemnified Taxes, then the amount payable by any Credit Party shall be increased as necessary so that net of such withholding (including withholding applicable to additional amounts payable under this Section) the applicable Recipient receives the amount it would have received had no such withholding been made.
(b) Payment of Other Taxes by the Borrower. The Borrower shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.
(c) Evidence of Payment. As soon as practicable after any payment of Indemnified Taxes by any Credit Party to a Governmental Authority, the Borrower shall deliver to the DIP Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the DIP Agent.
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(d) Indemnification by the Borrower and the Parent. The Borrower and the Parent shall jointly and severally indemnify each Recipient for any Indemnified Taxes that are paid or payable by such Recipient in connection with any Loan Document (including amounts paid or payable under this Section 2.17(d)) and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. The indemnity under this Section 2.17(d) shall be paid within 10 days after the Recipient delivers to the Borrower a certificate stating the amount of any Indemnified Taxes so paid or payable by such Recipient or Beneficial Owner and describing the basis for the indemnification claim. Such certificate shall be conclusive of the amount so paid or payable absent manifest error. Such Recipient shall deliver a copy of such certificate to the DIP Agent.
(e) Indemnification by the Lenders. Each Lender shall severally indemnify the DIP Agent for any Taxes (but, in the case of any Indemnified Taxes, only to the extent that any Credit Party has not already indemnified the DIP Agent for such Indemnified Taxes and without limiting the obligation of the Borrower and the Parent to do so) attributable to such Lender that are paid or payable by the DIP Agent in connection with any Loan Document and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. The indemnity under this Section 2.17(e) shall be paid within 10 days after the DIP Agent or the applicable Credit Party (as applicable) delivers to the applicable Lender a certificate stating the amount of Taxes so paid or payable by the DIP Agent or the Borrower (as applicable). Such certificate shall be conclusive of the amount so paid or payable absent manifest error.
(f) Status of Lenders.
(i) Any Lender that is entitled to an exemption from, or reduction of, any applicable withholding Tax with respect to any payments under any Loan Document shall deliver to the Borrower and the DIP Agent, at the time or times prescribed by applicable law or reasonably requested by the Borrower or the DIP Agent, such properly completed and executed documentation prescribed by applicable law or reasonably requested by the Borrower or the DIP Agent as will permit such payments to be made without, or at a reduced rate of, withholding. In addition, any Lender, if requested by the Borrower or the DIP Agent, shall deliver such other documentation prescribed by law or reasonably requested by the Borrower or the DIP Agent as will enable the Borrower or the DIP Agent to determine whether or not such Lender is subject to any withholding (including backup withholding) or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences and except as otherwise required by applicable law, the completion, execution and submission of such documentation (other than such documentation set forth in Section 2.17(f)(ii)(A) through (E) below) shall not be required if in the Lenders judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender. Upon the reasonable request of such Borrower or the DIP Agent, any Lender shall update any form or certification previously delivered pursuant to this Section 2.17(f). If any form or certification previously delivered pursuant to this Section expires or becomes obsolete or inaccurate in any respect with respect to a Lender, such Lender shall promptly (and in any event within 10 days after such expiration, obsolescence or inaccuracy) notify such Borrower and the DIP Agent in writing of such expiration, obsolescence or inaccuracy and update the form or certification if it is legally eligible to do so.
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(ii) Without limiting the generality of the foregoing, if the Borrower is a U.S. Person, any Lender with respect to such Borrower shall, if it is legally eligible to do so, deliver to such Borrower and the DIP Agent (in such number of copies reasonably requested by such Borrower and the DIP Agent) on or prior to the date on which such Lender becomes a party hereto, duly completed and executed copies of whichever of the following is applicable:
(A) in the case of a Lender that is a U.S. Person, IRS Form W-9 certifying that such Lender is exempt from U.S. Federal backup withholding tax;
(B) in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party (1) with respect to payments of interest under any Loan Document, IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, establishing an exemption from, or reduction of, U.S. Federal withholding Tax pursuant to the interest article of such tax treaty and (2) with respect to any other applicable payments under this Agreement, IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, establishing an exemption from, or reduction of, U.S. Federal withholding Tax pursuant to the business profits or other income article of such tax treaty;
(C) in the case of a Foreign Lender for whom payments under this Agreement constitute income that is effectively connected with such Lenders conduct of a trade or business in the United States, IRS Form W-8ECI;
(D) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code both (1) IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, and (2) a certificate substantially in the form of Exhibit E (a U.S. Tax Certificate) to the effect that such Lender is not (a) a bank within the meaning of Section 881(c)(3)(A) of the Code, (b) a 10 percent shareholder of the Borrower within the meaning of Section 881(c)(3)(B) of the Code (c) a controlled foreign corporation described in Section 881(c)(3)(C) of the Code and (d) conducting a trade or business in the United States with which the relevant interest payments are effectively connected;
(E) in the case of a Foreign Lender that is not the Beneficial Owner of payments made under this Agreement (including a partnership or a participating Lender) (1) an IRS Form W-8IMY on behalf of itself and (2) the relevant forms prescribed in clauses (A), (B), (C), (D) and (F) of this paragraph (f)(ii) that would be required of each such Beneficial Owner or partner of such partnership if such Beneficial Owner or partner were a Lender; provided, however, that if the Lender is a partnership and one or more of its partners are claiming the exemption for portfolio interest under Section 881(c) of the Code, such Lender may provide a U.S. Tax Certificate on behalf of such partners; or
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(F) any other form prescribed by law as a basis for claiming exemption from, or a reduction of, U.S. Federal withholding Tax together with such supplementary documentation necessary to enable the Borrower or the DIP Agent to determine the amount of Tax (if any) required by law to be withheld.
(iii) If a payment made to a Lender under any Loan Document would be subject to U.S. Federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Withholding Agent, at the time or times prescribed by law and at such time or times reasonably requested by the Withholding Agent, such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Withholding Agent as may be necessary for the Withholding Agent to comply with its obligations under FATCA, to determine that such Lender has or has not complied with such Lenders obligations under FATCA and, as necessary, to determine the amount to deduct and withhold from such payment. Solely for purposes of this Section 2.17(f)(iii), FATCA shall include any amendments made to FATCA after the date of this Agreement.
(g) Treatment of Certain Refunds. If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified or Other Taxes paid by the Borrower pursuant to this Section 2.17 (including additional amounts paid pursuant to this Section 2.17), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made, or such Other Taxes paid, under this Section with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including any Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid such indemnified party pursuant to the previous sentence (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything herein to the contrary in this Section 2.17(g), in no event will any indemnified party be required to pay any amount to any indemnifying party pursuant to this Section 2.17(g) to the extent that such payment would place such indemnified party in a less favorable position (on a net after-Tax basis) than such indemnified party would have been in if the indemnification payments or additional amounts giving rise to such refund had never been paid. This Section 2.17(g) shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes which it deems confidential) to the indemnifying party or any other Person.
(h) Survival. Each partys obligations under this Section 2.17 shall survive any assignment of rights by, or the replacement of, a Lender, and the Discharge of DIP Obligations.
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SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of Set-offs.
(a) The Borrower shall make each payment required to be made by it hereunder (whether of principal, interest, or fees, or of amounts payable under Section 2.15, 2.16 or 2.17, or otherwise) prior to 12:00 noon, Dallas, Texas time, on the date when due, in immediately available funds, without set-off or counterclaim. Any amounts received after such time on any date may, in the discretion of the DIP Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made to the DIP Agent at its offices as set forth in Section 11.01(a), except that payments pursuant to Sections 2.15, 2.16, 2.17 and 9.03 shall be made directly to the Persons entitled thereto. The DIP Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof. If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension. All payments hereunder shall be made in dollars.
(b) Subject to Section 7.03, if at any time insufficient funds are received by and available to the DIP Agent to pay fully all amounts of principal, interest and fees then due hereunder, such funds shall be applied (i) first, towards payment of interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and (ii) second, towards payment of principal then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal then due to such parties.
(c) If any Lender shall, by exercising any right of set-off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Loans and accrued interest thereon than the proportion received by any other Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Loans of other Lenders to the extent necessary so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans; provided that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans to any assignee or participant, other than to the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall apply). The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.
(d) Unless the DIP Agent shall have received notice from the Borrower prior to the date on which any payment is due to the DIP Agent for the account of the Lenders hereunder that the Borrower will not make such payment, the DIP Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders the amount due. In such event, if the Borrower has not in
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fact made such payment, then each of the Lenders severally agrees to repay to the DIP Agent forthwith on demand the amount so distributed to such Lender with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the DIP Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the DIP Agent in accordance with banking industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.06(d) or (e), 2.07(b), 2.18(d) or 11.03, then the DIP Agent may, in its discretion and notwithstanding any contrary provision hereof, (i) apply any amounts thereafter received by the DIP Agent for the account of such Lender and for the benefit of the DIP Agent to satisfy such Lenders obligations under such Sections until all such unsatisfied obligations are fully paid and/or (ii) hold any such amounts in a segregated account over which the DIP Agent shall have exclusive control as cash collateral for, and application to, any future funding obligations of such Lender under such Sections; in the case of each of (i) and (ii) above, in any order as determined by the DIP Agent in its discretion.
SECTION 2.19. Mitigation Obligations; Replacement of Lenders.
(a) If any Lender requests compensation under Section 2.15, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.15 or 2.17, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.
(b) If any Lender requests compensation under Section 2.15, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, or if any Lender becomes a Defaulting Lender, or if any Lender fails to execute an amendment or waiver with respect to the Loan Documents that is executed by the Supermajority Lenders, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the DIP Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 11.04), all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that (i) the Borrower shall have received the prior written consent of the DIP Agent, which consent shall not unreasonably be withheld, (ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts) and (iii) in the case of any such assignment resulting from a claim for compensation under Section 2.15 or payments required to be made pursuant to Section 2.17, such assignment will result in a reduction in such compensation or payments. A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.
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SECTION 2.20. Defaulting Lenders. Notwithstanding any provision of this Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply for so long as such Lender is a Defaulting Lender:
(a) fees shall cease to accrue on the unfunded portion of the Commitment of such Defaulting Lender pursuant to Section 2.12(a); and
(b) the Commitment and Loans of such Defaulting Lender shall not be included in determining whether all Lenders, the Requisite Lenders or the Supermajority Lenders have taken or may take any action hereunder (including any consent to any amendment, waiver or other modification pursuant to Section 11.02); provided that (i) such Defaulting Lenders Commitment may not be increased or extended without its consent and (ii) the principal amount of, or interest or fees payable on, Loans may not be reduced or excused or the scheduled date of payment may not be postponed as to such Defaulting Lender without such Defaulting Lenders consent.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each of the Parent, the Borrower and each Subsidiary party hereto hereby represents and warrants to the Lenders that:
SECTION 3.01. Existence; Organization; Powers. The Parent, the Borrower and each Subsidiary: (a) is duly organized or formed, legally existing and in good standing, if applicable, under the laws of the jurisdiction of its formation, except as to any Subsidiary where the failure to so exist or remain in good standing could not reasonably be expected to have a Material Adverse Effect, (b) has all requisite power and authority, and has all material governmental licenses, authorizations, consents and approvals necessary to own its assets and carry on its business as now being or as proposed to be conducted, except where failure to have such power could not reasonably be expected to have a Material Adverse Effect, and (c) is qualified to do business in all jurisdictions in which the nature of the business conducted by it makes such qualification necessary and where failure so to qualify could reasonably be expected to have a Material Adverse Effect.
SECTION 3.02. Authorization; Enforceability. Subject to entry and the terms of the DIP Orders, the Parent, the Borrower and each Subsidiary have all necessary power and authority to execute, deliver and perform its obligations under this Agreement and the Loan Documents to which it is a party. Subject to entry and the terms of the DIP Orders, the execution, delivery and performance by the Parent, the Borrower and each Subsidiary of this Agreement and the Loan Documents to which it is a party have been duly authorized by all necessary corporate, limited liability company or partnership action, and this Agreement and the Loan Documents constitute the legal, valid and binding obligations of the Parent, the Borrower and each Subsidiary party thereto, enforceable in accordance with their terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting the rights of creditors generally and general principles of equity, regardless of whether considered in a proceeding in equity or at law.
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SECTION 3.03. Governmental Approvals; No Conflicts. Subject to entry of the DIP Orders, no authorizations, approvals or consents of, and no filings or registrations with, any Governmental Authority (other than the DIP Orders) or any third Person are necessary for the execution, delivery or performance by the Parent, the Borrower or any Subsidiary of this Agreement or the Loan Documents or for the validity or enforceability thereof, except for those third party approvals or consents which, if not made or obtained, would not cause a Default or Event of Default hereunder, could not reasonably be expected to have a Material Adverse Effect and do not have an adverse effect on the enforceability of the Loan Documents. Subject to entry of the DIP Orders, neither the execution and delivery of this Agreement or any Loan Document, nor compliance with the terms and provisions hereof or thereof, will conflict with or result in a breach of, or require any consent that has not been obtained as of the Closing Date under, the respective Organizational Documents of the Parent, the Borrower or any Subsidiary, any Governmental Requirement, or any other material agreement or instrument to which the Parent, the Borrower or any Subsidiary is a party or by which it is bound or to which it or its Properties are subject (in each case except for agreements and instruments subject to the Automatic Stay or Safe Harbor Provisions), or result in the creation or imposition of any Lien upon any of the revenues or assets of the Parent, the Borrower or any Subsidiary other than the Liens created by the Loan Documents, the DIP Orders or expressly permitted hereby.
SECTION 3.04. Financial Condition; No Material Adverse Change.
(a) The Parent has heretofore furnished to the DIP Agent and the Lenders its consolidated balance sheet, and the related consolidated or condensed consolidated, as applicable, statements of income, cash flows and shareholders equity of the Parent and its Subsidiaries (a) as of and for the fiscal year ended December 31, 2015, audited by KPMG LLP, independent certified public accountants, and (b) as of and for the fiscal quarter ended March 31, 2016, certified by an Authorized Officer that such financial statements present fairly in all material respects, the financial condition and results of operations of the Parent and its Subsidiaries as of such dates and for such periods. Such financial statements were prepared in accordance with GAAP applied on a consistent basis. Since the date of the audited financial statements of the Parent that have most recently been delivered pursuant to Section 5.01(a), there has been no material adverse change.
(b) Except as disclosed to the DIP Agent in writing, none of the Parent, the Borrower or any Subsidiary has any material contingent liabilities, material liabilities for taxes, unusual and material forward or long-term commitments or material unrealized or anticipated losses from any unfavorable commitments, except as referred to or reflected or provided for in the consolidated balance sheets of the Parent or as otherwise disclosed to the Lenders or their advisors in writing.
(c) Each Credit Party has disclosed to the Lenders in writing any and all facts that, in the reasonable good faith judgment of such Credit Party, could reasonably be expected to result in a Material Adverse Effect.
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SECTION 3.05. Properties.
(a) Each of the Parent, the Borrower and the Subsidiaries has good and defensible title to its material Oil and Gas Properties and good title to its material personal Properties, in each case, free and clear of all Liens except Liens permitted by Section 6.02. As of the date of delivery of each Reserve Report pursuant to Section 5.11, after giving full effect to Liens permitted by Section 6.02, the Parent, the Borrower or any Subsidiary, as applicable, specified as the owner owns the net interests in production attributable to the Hydrocarbon Interests as reflected in the most recently delivered Reserve Report, and the ownership of such Properties shall not in any material respect obligate the Parent, the Borrower or such Subsidiary to bear the costs and expenses relating to the maintenance, development and operations of each such Property in an amount in excess of the working interest of each Property set forth in the most recently delivered Reserve Report that is not offset by a corresponding proportionate increase in the Parents, the Borrowers or such Subsidiarys net revenue interest in such Property.
(b) Except as set forth on Schedule 3.05, all material leases and agreements necessary for the conduct of the business of the Parent, the Borrower and the Subsidiaries are valid and subsisting, in full force and effect, and there exists no default or event or circumstance that with the giving of notice or the passage of time or both would give rise to a default under any such lease or leases, except as could not reasonably be expected to have a Material Adverse Effect.
(c) The rights, Properties and other assets presently owned, leased or licensed by the Parent, the Borrower and the Subsidiaries, including, without limitation, all easements and rights of way, include all rights, Properties and other assets necessary to permit the Parent, the Borrower and the Subsidiaries to conduct their business in all material respects in the same manner as such business has been conducted prior to the date hereof.
(d) All of the assets and Properties of the Parent, the Borrower and the Subsidiaries that are reasonably necessary for the operation of their business are in good working condition and are maintained in accordance with prudent business standards.
SECTION 3.06. Litigation and Environmental Matters.
(a) Other than the Cases or except as set forth on Schedule 3.06, there are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to the knowledge of the Parent or the Borrower, threatened in writing against the Parent, the Borrower or any of the Subsidiaries or any of their respective properties (i) as to which there is a reasonable possibility of an adverse determination and that, if adversely determined, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect or (ii) that involve this Agreement or the other Loan Documents, and in each case, which are not subject to the Automatic Stay.
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(b) Except as could not be reasonably expected to have a Material Adverse Effect (or with respect to (iii), (iv) and (v) below, where the failure to take such actions could not be reasonably expected to have a Material Adverse Effect):
(i) neither any Property of the Parent, the Borrower or any Subsidiary, nor the operations conducted thereon, violate any order or requirement of any court or Governmental Authority or any Environmental Laws;
(ii) no Property of the Parent, the Borrower or any Subsidiary nor the operations currently conducted thereon or, to the knowledge of the Parent or the Borrower, by any prior owner or operator of such Property or operation, are in violation of or subject to any existing, pending or threatened action, suit, investigation, inquiry or proceeding by or before any court or Governmental Authority (except the Cases) or to any remedial obligations under Environmental Laws;
(iii) all notices, permits, licenses or similar authorizations, if any, required to be obtained or filed in connection with the operation or use of any and all Property of the Parent, the Borrower and each Subsidiary, including, without limitation, past or present treatment, storage, disposal or release of a hazardous substance or solid waste into the environment, have been duly obtained or filed, and the Parent, the Borrower and each Subsidiary are in compliance with the terms and conditions of all such notices, permits, licenses and similar authorizations;
(iv) all hazardous substances, solid waste and oil and gas exploration and production wastes, if any, generated at any and all Property of the Parent, the Borrower or any Subsidiary have in the past been transported, treated and disposed of in accordance with Environmental Laws and so as not to pose an imminent and substantial endangerment to public health or welfare or the environment, and, to the knowledge of the Parent or the Borrower, all such transport carriers and treatment and disposal facilities have been and are operating in compliance with Environmental Laws and so as not to pose an imminent and substantial endangerment to public health or welfare or the environment, and are not the subject of any existing, pending or threatened action, investigation or inquiry by any Governmental Authority in connection with any Environmental Laws;
(v) the Parent, the Borrower or a Subsidiary has taken all steps reasonably necessary to determine and have determined that no hazardous substances, solid waste or oil and gas exploration and production wastes have been disposed of or otherwise released, and there has been no threatened release of any hazardous substances on or to any Property of the Parent, the Borrower or any Subsidiary, except in compliance with Environmental Laws and so as not to pose an imminent and substantial endangerment to public health or welfare or the environment;
(vi) to the extent applicable, all Property of the Parent, the Borrower and each Subsidiary currently satisfies all design, operation and equipment requirements imposed by the Oil Pollution Act of 1990 and neither the Parent nor the Borrower has any reason to believe that such Property, to the extent subject thereto, will not be able to maintain compliance with the requirements thereof during the term of this Agreement; and
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(c) none of the Parent, the Borrower or any Subsidiary has any known material contingent liability in connection with any release or threatened release of any oil, hazardous substance or solid waste into the environment.
SECTION 3.07. Compliance with Laws and Agreements. None of the Parent, the Borrower or any Subsidiary has violated any applicable Governmental Requirement binding upon it or its Properties or failed to obtain any license, permit, franchise or other governmental authorization necessary for the ownership of any of its Properties or the conduct of its business, which violation or failure would have (in the event such violation or failure were asserted by any Person through appropriate action) a Material Adverse Effect. No Default hereunder has occurred and is continuing.
SECTION 3.08. Investment Company Status. None of the Parent, the Borrower or any Subsidiary is an investment company or a company controlled by an investment company, within the meaning of the Investment Company Act of 1940, as amended.
SECTION 3.09. Taxes. Except as set forth on Schedule 3.09, each of the Parent, the Borrower and the Subsidiaries has filed all U.S. Federal income Tax returns and all other tax returns that are required to be filed by it and has paid all material Taxes due pursuant to such returns or pursuant to any assessment received by the Parent, the Borrower or any Subsidiary, except any such Taxes that are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves are being maintained in accordance with GAAP. The charges, accruals and reserves on the books of the Parent, the Borrower and the Subsidiaries in respect of Taxes and other governmental charges are, in the opinion of the Parent, adequate. No Tax lien has been filed and, to the knowledge of the Parent or the Borrower, no claim is being asserted with respect to any such Tax or other such governmental charge.
SECTION 3.10. ERISA. No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect. The present value of all accumulated benefit obligations under each Plan (based on the assumptions used for purposes of Financial Accounting Standards Board Accounting Standards Codification 715) did not, as of the date of the most recent financial statements reflecting such amounts, exceed by more than $2,000,000 the fair market value of the assets of such Plan, and the present value of all accumulated benefit obligations of all underfunded Plans (based on the assumptions used for purposes of Financial Accounting Standards Board Accounting Standards Codification 715) did not, as of the date of the most recent financial statements reflecting such amounts, exceed by more than $2,000,000 the fair market value of the assets of all such underfunded Plans.
SECTION 3.11. Disclosure. The Parent and the Borrower have disclosed to the Lenders all agreements, instruments and corporate or other restrictions to which either of them or any of the Subsidiaries is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. No written reports, financial statements, certificates or other written information furnished by or on behalf of the Parent or the Borrower to the DIP Agent or any Lender in connection with the negotiation of this Agreement or delivered hereunder (as modified or supplemented by other information so
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furnished) (other than information of a general industry nature or constituting projections, projected financial information, forward looking information or prospect information) contains, when taken as a whole, any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that, with respect to projections, projected financial information, forward looking information or prospect information, the Parent and the Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time. To the knowledge of the Parent, the Borrower and each Subsidiary, there is no fact peculiar to the Parent, the Borrower or any Subsidiary that has a Material Adverse Effect or in the future is reasonably likely to have (so far as the Parent or the Borrower can now foresee) a Material Adverse Effect and that has not been set forth in this Agreement or the other documents, certificates and statements furnished to the DIP Agent by or on behalf of the Parent, the Borrower or any Subsidiary prior to, or on, the date hereof in connection with the transactions contemplated hereby. There are no statements or conclusions in any Reserve Report which are based upon or include misleading information or fail to take into account material information regarding the matters reported therein, it being understood that each Reserve Report is necessarily based upon professional opinions, estimates and projections and that neither the Parent nor the Borrower warrants that such opinions, estimates and projections will ultimately prove to have been accurate. No representation or warranty is made with respect to any Oil and Gas Properties to which no proved Hydrocarbon Interests are properly attributed.
SECTION 3.12. Use of Loans. Each Credit Party will use the proceeds of the Loans and any Cash Collateral solely for Approved Purposes. No Credit Party is engaged principally, or as one of its important activities, in the business of extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying margin stock (within the meaning of Regulation U or X of the Board). No part of the proceeds of any Loan will be used for any purpose which violates the provisions of Regulations T, U or X of the Board.
SECTION 3.13. Subsidiaries. Except as set forth on Schedule 3.13 or as disclosed in writing to the DIP Agent (which shall promptly furnish a copy to the Lenders) that shall be a supplement to Schedule 3.13, no Debtor has any Subsidiary other than those listed on Schedule 3.13.
SECTION 3.14. Jurisdiction of Incorporation or Organization. The jurisdiction of organization, name as listed in the public records of its jurisdiction of organization and location of the principal place of business or, if it has more than one place of business, the chief executive office of each Debtor is set forth on Schedule 3.13.
SECTION 3.15. Maintenance of Properties. Except for such acts or failures to act as could not be reasonably expected to have a Material Adverse Effect, the Oil and Gas Properties (and properties unitized therewith) have been maintained, operated and developed in a good and workmanlike manner and in conformity with all applicable laws and all rules, regulations and orders of all duly constituted authorities having jurisdiction and in conformity with the provisions of all leases, subleases or other contracts comprising a part of the Hydrocarbon Interests and other contracts and agreements forming a part of the Oil and Gas Properties; specifically in this connection, except for those as could not be reasonably expected to have a Material Adverse Effect, (i) after the date hereof, no Oil and Gas Property is subject to
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having allowable production reduced below the full and regular allowable (including the maximum permissible tolerance) because of any overproduction (whether or not the same was permissible at the time) prior to the date hereof and (ii) none of the wells comprising a part of the Oil and Gas Properties (or properties unitized therewith) owned by the Parent, the Borrower or any of the Subsidiaries is deviated from the vertical more than the maximum permitted by applicable laws, regulations, rules and orders, and such wells are, in fact, bottomed under and are producing from, and the well bores are wholly within, the Oil and Gas Properties (or in the case of wells located on properties unitized therewith, such unitized properties) owned by the Parent, the Borrower or any of the Subsidiaries.
SECTION 3.16. Insurance. The Parent or the Borrower has, and has caused all of the Subsidiaries to have, (i) all insurance policies sufficient for the compliance by each of them with all material Governmental Requirements and all material agreements and (ii) insurance coverage in at least amounts and against such risk (including, without limitation, public liability) that are usually insured against by companies similarly situated and engaged in the same or a similar business for the assets and operations of the Parent, the Borrower and the Subsidiaries. The DIP Agent has been named as additional insureds in respect of such liability insurance policies.
SECTION 3.17. Gas Imbalances, Prepayments. Except as set forth on Schedule 3.17 or as disclosed in writing to the DIP Agent and the Lenders in connection with the most recently delivered Reserve Report, on a net basis there are no gas imbalances, take or pay or other prepayments that would require the Parent, the Borrower or any of the Subsidiaries to deliver Hydrocarbons produced from their respective Oil and Gas Properties at some future time without then or thereafter receiving full payment therefor exceeding two Bcf of gas (or its equivalent) in the aggregate on a net basis.
SECTION 3.18. Marketing of Production. Except for contracts listed and in effect on the date hereof on Schedule 3.18, and thereafter either disclosed in writing to the DIP Agent or included in the most recently delivered Reserve Report (with respect to all of which contracts the Parent and the Borrower represent that they or the Subsidiaries are receiving a price for all production sold thereunder that is computed substantially in accordance with the terms of the relevant contract and are not having deliveries curtailed substantially below the subject Propertys delivery capacity), no material agreements exist that are not cancelable on 60 days notice or less without penalty or detriment for the sale of production from the Parents, the Borrowers or the Subsidiaries Hydrocarbons (including, without limitation, calls on or other rights to purchase, production, whether or not the same are currently being exercised) and that (a) pertain to the sale of production at a fixed price and (b) have a maturity or expiry date of longer than six (6) months from the date hereof.
SECTION 3.19. Hedging Transactions. Except for Lender Swap Agreements, no Debtor is party to any Swap Agreements as of the date hereof.
SECTION 3.20. Restriction on Liens. None of the Parent, the Borrower or any of the Subsidiaries is a party to any material agreement or arrangement (other than instruments creating Liens permitted by Section 6.02, but then only on the Property subject of such Lien), or subject to any order, judgment, writ or decree other than pursuant to the DIP Orders, that restricts or purports to restrict its ability to grant Liens to the DIP Agent and the Lenders on or in respect of their respective assets or Properties to secure the DIP Obligations.
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SECTION 3.21. Intellectual Property. The Parent, the Borrower and the Subsidiaries either own or have valid licenses or other rights to use all databases, geological data, geophysical data, engineering data, maps, interpretations and other technical information used in their business as presently conducted, subject to the limitations contained in the agreements governing the use of the same, which limitations are customary for companies engaged in the business of the exploration and production of Hydrocarbons, with such exceptions as could not reasonably be expected to have a Material Adverse Effect.
SECTION 3.22. Material Personal Property. All pipelines, wells, gas processing plants, platforms and other material improvements, fixtures and equipment owned in whole or in part by the Parent, the Borrower or any of the Subsidiaries that are necessary to conduct normal operations are being maintained in a state adequate to conduct normal operations, and with respect to such of the foregoing which are operated by the Parent, the Borrower or any of the Subsidiaries, in a manner consistent with the Parents, the Borrowers or the Subsidiaries past practices (other than those the failure of which to maintain in accordance with this Section 3.22 could not reasonably be expected to have a Material Adverse Effect).
SECTION 3.23. Business. The Parent, the Borrower and the Subsidiaries have not conducted and are not conducting any business other than businesses relating to the acquisition, exploration, development, financing, ownership, operation, production, maintenance, storage, transportation, gathering, processing and marketing of Hydrocarbons, Hydrocarbon Interests and the Oil and Gas Properties and related activities.
SECTION 3.24. [Reserved].
SECTION 3.25. Licenses, Permits, Etc. Subject to the entry of the DIP Orders, the Borrower, the Parent and each of the Subsidiaries possess such valid franchises, certificates of convenience and necessity, operating rights, licenses, permits, consents, authorizations, exemptions and orders of Governmental Authorities, as are necessary to carry on their business as now conducted and as proposed to be conducted, except to the extent a failure to obtain any such item could not reasonably be expected to have a Material Adverse Effect.
SECTION 3.26. Fiscal Year. The fiscal year of the Parent and the Borrower is January 1 through December 31.
SECTION 3.27. [Reserved].
SECTION 3.28. Default under Material Contracts, Assumed Executory Contracts or Assumed Unexpired Leases. Except as could not reasonably be expected to have a Material Adverse Effect, no default has occurred under (i) any material contractual obligation arising after commencement of the Cases, or (ii) any executory contract or unexpired lease of any Credit Party assumed pursuant to the Bankruptcy Code.
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SECTION 3.29. New Material Leases. Subject to the entry and terms of the DIP Order, no Credit Party has entered into any material lease for which Liens are not available to secure the DIP Obligations.
SECTION 3.30. Anti-Corruption Laws and Sanctions. None of (a) the Parent, the Borrower or any Subsidiary or any of their respective directors, officers, employees or, to the knowledge of any Credit Party, affiliates, or (b) to the knowledge of any Credit Party, any agent or representative of the Borrower, the Parent or any Subsidiary that will act in any capacity in connection with or benefit from the credit facility established hereby, (i) is a Sanctioned Person or currently the subject or target of any Sanctions or (ii) has taken any action, directly or indirectly, that would result in a violation by such Persons of any Anti-Corruption Laws.
SECTION 3.31. ECP Guarantor. As of the Closing Date and as of the effective date of each Lender Swap Agreement (it being agreed and understood that the representation in this Section 3.31 shall be made as of such dates), each of the Borrower and the Parent is an eligible contract participant within the meaning of Section 1(a)(18) of the Commodity Exchange Act.
ARTICLE IV
CONDITIONS
SECTION 4.01. Conditions Precedent to Effectiveness. This Agreement shall not become effective until the date on which each of the following conditions is satisfied, which such conditions shall be the sole and exclusive conditions to the effectiveness of this Agreement:
(a) Credit Agreement. The DIP Agent shall have received from each party hereto either (i) a counterpart of this Agreement signed on behalf of such party or (ii) written evidence satisfactory to the DIP Agent (which may include telecopy transmission of a signed signature page of this Agreement) that such party has signed a counterpart of this Agreement
SECTION 4.02. Conditions Precedent to Interim DIP Loan. The obligations of the Lenders to make the Interim DIP Loan shall not become effective until the date on which each of the following conditions is satisfied (or waived by each Lender), which such conditions shall be the sole and exclusive conditions to the availability of the Interim DIP Loan:
(a) Credit Agreement. The DIP Agent shall have received from each party hereto either (i) a counterpart of this Agreement signed on behalf of such party or (ii) written evidence satisfactory to the DIP Agent (which may include telecopy transmission of a signed signature page of this Agreement) that such party has signed a counterpart of this Agreement.
(b) Loan Documents. The DIP Agent (or its counsel) shall have received the following documents: (A) Uniform Commercial Code financing statements for each of the Credit Parties, required by law or reasonably requested by the DIP Agent; and (B) any promissory notes requested by a Lender pursuant to Section 2.10 payable to the order of each such requesting Lender duly executed and completed by the Borrower.
(c) Reserved.
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(d) Organizational Documents. The DIP Agent shall have received a certificate of an Authorized Officer of each Credit Party dated as of the Closing Date, on which the DIP Agent and the Lenders may conclusively rely until the DIP Agent receives notice in writing from the Parent or the Borrower to the contrary, certifying:
(i) that attached to each such certificate are (1) a true and complete copy of the Organizational Documents of such Credit Party, as the case may be, as in effect on the date of such certificate and (2) a true and complete copy of a certificate from the Governmental Authority of the state of such entitys organization certifying that such entity is duly organized and validly existing in such jurisdiction;
(ii) that attached to such certificate is a true and complete copy of resolutions duly adopted by the board of directors of such Credit Party, as applicable, authorizing the execution, delivery and performance of each of the Loan Documents to which such Credit Party is or is intended to be a party; and
(iii) as to the incumbency and specimen signature of each officer of such Credit Party (1) who is authorized to execute the Loan Documents to which such Credit Party is or is intended to be a party and (2) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby.
(e) Qualification and Good Standing. The DIP Agent shall have received certificates of the appropriate state agencies with respect to the existence and good standing of the Parent, the Borrower and each Guarantor in the jurisdiction of its organization.
(f) Legal Opinions. The DIP Agent shall have received (a) a written legal opinion addressed to the DIP Agent and the Lenders in form and substance reasonably satisfactory to the DIP Agent from Kirkland & Ellis LLP, special New York counsel to the Credit Parties and (b) a written legal opinion addressed to the DIP Agent and the Lenders in form and substance reasonably satisfactory to the DIP Agent from Kutak Rock LLP, special Virginia counsel to the Credit Parties. The Credit Parties hereby request each such counsel to deliver such opinion.
(g) UCC and Lien Searches. The DIP Agent shall have received appropriate UCC search certificates for the Parent, the Borrower and each other Guarantor in its jurisdiction of organization, and any other jurisdiction reasonably requested by the DIP Agent, reflecting no prior Liens or security interests encumbering the Collateral other than those being assigned or released on or prior to the Closing Date and those permitted by Section 6.02.
(h) Financial Statements. The DIP Agent shall have received the financial statements described in Section 3.04(a).
(i) Initial Budget. The DIP Agent shall have received the Initial Budget in form and substance satisfactory to the Lenders.
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(j) Fees and Expenses. The DIP Agent and the Lenders shall have received all fees and expenses due and payable to the DIP Secured Parties and the Prepetition Secured Parties on or prior to the Closing Date to the extent invoiced at least two (2) Business Days prior to the Closing Date, including, to the extent invoiced, reimbursement or payment of all reasonable out-of-pocket expenses (including reasonable fees, charges and disbursements of counsel) required to be reimbursed or paid by any Credit Party hereunder or under any other Loan Document.
(k) Required Documentation. At least five (5) Business Days prior to the Closing Date, the DIP Agent shall have received all documentation and other information with respect to the Borrower and the Guarantors, requested in writing by the DIP Agent and required by bank regulatory authorities under applicable know-your-customer and anti-money laundering rules and regulations, including the U.S. Patriot Act.
(l) Bankruptcy Related Conditions.
(i) the Credit Parties have filed the Cases with the Bankruptcy Court on the Petition Date;
(ii) none of the Cases shall have been dismissed or converted to a Chapter 7 case.
(iii) no trustee under Chapter 7 or Chapter 11 of the Bankruptcy Code or examiner with enlarged powers beyond those set forth in section 1106(a)(3) and (4) of the Bankruptcy Code shall have been appointed in the Case.
(iv) the Bankruptcy Court shall have entered the Interim Order in form and substance reasonably satisfactory to the Lenders, the Prepetition Agent and the Borrower within three (3) Business Days after the Petition Date; all material governmental and third party consents and approvals necessary in connection with this Agreement and the transactions contemplated hereby shall have been obtained;
(v) the making of the Interim DIP Loan shall not violate any requirement of law in any material respect and shall not be enjoined, temporarily, preliminarily or permanently;
(vi) the RSA and BCA shall not have terminated and shall be in full force and effect; and
(vii) All first day orders entered in the Cases at the time of commencement of the Cases (including a cash management order) shall be reasonably satisfactory in form and substance to the DIP Agent in its sole discretion.
(m) Conditions Applicable to all Loans. Each of the conditions in Section 4.05 have been satisfied (or waived by the Requisite Lenders).
The DIP Agent shall notify the Borrower and the Lenders of the Closing Date, and such notice shall be conclusive and binding.
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SECTION 4.03. Conditions Precedent to Final DIP Loan. The obligation of the Lenders to make the Final DIP Loan shall be subject solely to satisfaction (or waiver by each Lender) of the following conditions:
(a) Each of the conditions set forth in Section 4.05 shall have been satisfied (or waived by each Lender).
(b) The DIP Agent shall have received a certified copy of the Final DIP Order, which Final DIP Order (i) shall have been entered on the docket of the Bankruptcy Court, and (ii) shall be in full force and effect and shall not have been vacated, stayed, reversed, modified or amended in any respect without the written consent of the Requisite Lenders.
(c) Both before and after giving effect to such Loans, the Anti-Hoarding Condition shall be satisfied.
Each Borrowing of Final DIP Loan shall be deemed to constitute a representation and warranty by the Borrower on the date thereof as to the matters specified in paragraphs (a) through (c) of this Section.
SECTION 4.04. Conditions Precedent to Conditional DIP Loans. The obligation of the Lenders to make any Conditional DIP Loan on any Weekly Draw Date as requested by the Borrower shall be subject solely to satisfaction (or waiver by each Lender) of the following conditions:
(a) Each of the conditions set forth in Section 4.05 shall have been satisfied (or waived by each Lender) and the Final DIP Loan shall have been made.
(b) The Final DIP Order is in full force and effect and shall not have been stayed, reversed, or vacated.
(c) Both before and after giving effect to such Loans, the Anti-Hoarding Condition shall be satisfied.
(d) The Borrower shall have delivered a certificate to the DIP Agent declaring that the value of the Collateral subject to a valid cash collateral order entered by the Bankruptcy Court, and reasonably acceptable to the DIP Secured Parties, shall not be less than the sum of (a) the outstanding aggregate principal amount of the Loans, (b) the outstanding aggregate principal amount of the Prepetition Secured Obligations and (c) any interest, fees or other amounts due in connection therewith, or any other claims of the DIP Secured Parties or Prepetition Secured Parties against the Borrower or any of the Guarantors.
Each Borrowing of Conditional DIP Loans shall be deemed to constitute a representation and warranty by the Borrower on the date thereof as to the matters specified in paragraphs (a) through (d) of this Section.
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SECTION 4.05. Conditions Precedent to Lending. The obligation of each Lender to make a Loan on the occasion of any Borrowing is subject to the satisfaction (or waiver by the Requisite Lenders) of the following conditions:
(a) At the time of and immediately after giving effect to such Borrowing, the representations and warranties of the Parent, the Borrower and the Guarantors set forth in this Agreement and in the other Loan Documents shall be true and correct in all material respects (or, to the extent that a particular representation or warranty is qualified as to materiality, such representation or warranty shall be true and correct in all respects), in each case, on and as of the date of such Borrowing except to the extent any such representations and warranties are expressly limited to an earlier date, in which case, such representations and warranties shall be true and correct in all material respects (or, to the extent that a particular representation or warranty is qualified as to materiality, such representation or warranty shall be true and correct in all respects), in each case, as of such specified earlier date.
(b) At the time of and immediately after giving effect to such Borrowing, no Default shall have occurred and be continuing.
(c) At the time of and immediately after giving effect to such Borrowing no event, development or circumstance has occurred or shall then exist that has resulted in, or could reasonably be expected to have, a Material Adverse Effect.
(d) The making of such Loan, would not conflict with, or cause any Lender to violate or exceed, any applicable Governmental Requirement and no litigation shall be pending or, to the knowledge of any party hereto, threatened in writing, which does or, with respect to any threatened litigation, seeks to, enjoin, prohibit or restrain the making or repayment of any Loan, or the consummation of the transactions contemplated by this Agreement or any other Loan Document.
(e) The receipt by the DIP Agent of a Borrowing Request in accordance with Section 2.03.
Each Borrowing shall be deemed to constitute a representation and warranty by the Borrower on the date thereof as to the matters specified in paragraphs (a) through (e) of this Section.
ARTICLE V
AFFIRMATIVE COVENANTS
Until the Discharge of the DIP Obligations, the Parent, the Borrower and the Subsidiaries party hereto hereby covenant and agree with the Lenders that:
SECTION 5.01. Financial Statements; Other Information. The Parent or the Borrower, as applicable, will furnish to the DIP Agent, each Lender and, so long as the RSA is in effect, the Senior Noteholders:
(a) as soon as available and in any event within 120 days after the end of each fiscal year of the Parent (commencing with fiscal year 2016), the audited consolidated statements of income, shareholders equity, changes in financial position and cash flow of the Parent and its Subsidiaries, and the related audited consolidated balance sheets of the Parent and its Subsidiaries as at the end of such fiscal year, setting forth in each case in comparative form the corresponding figures for the preceding fiscal year, and accompanied by either (x) with respect
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to any audited financial statements, the related opinion of independent public accountants of recognized national standing acceptable to the DIP Agent which opinion shall state that such financial statements fairly present, in all material respects, the consolidated financial condition and results of operations of the Parent and its Subsidiaries as at the end of, and for, such fiscal year and that such financial statements have been prepared in accordance with GAAP except for such changes in such principles with which the independent public accountants shall have concurred, or (y) with respect to any unaudited financial statements, the certificate of an Authorized Officer, which certificate shall state that such financial statements fairly present, in all material respects, the consolidated financial condition and results of operations of the Parent and its Subsidiaries in accordance with GAAP, as at the end of, and for, such period;
(b) as soon as available and in any event within 60 days after the end of each of the first three fiscal quarters of each fiscal year of the Parent, condensed consolidated statements of income, shareholders equity, changes in financial position and cash flow of the Parent and its Subsidiaries for such period and for the period from the beginning of the respective fiscal year to the end of such period, and the related condensed consolidated balance sheets as at the end of such period, setting forth in each case in comparative form the corresponding figures for the corresponding period in the preceding fiscal year, accompanied by the certificate of an Authorized Officer, which certificate shall state that such financial statements fairly present, in all material respects, the consolidated financial condition and results of operations of the Parent and its Subsidiaries in accordance with GAAP, as at the end of, and for, such period (subject to normal year-end audit adjustments);
(c) as soon as available and in any event within 35 days after the end of each calendar month, consolidated statements of income, shareholders equity, changes in financial position and cash flow of the Parent and its Subsidiaries for such period, and the related consolidated balance sheet as at the end of such period, accompanied by the certificate of an Authorized Officer, which certificate shall state that such financial statements fairly present, in all material respects, the consolidated financial condition and results of operations of the Parent and its Subsidiaries in accordance with GAAP, as at the end of, and for, such period (subject to normal year-end audit adjustments);
(d) at the time it furnishes each set of financial statements under Sections 5.01(a), (b) and (c) above, a certificate substantially in the form of Exhibit C executed by an Authorized Officer certifying as to the matters set forth therein and stating that no Event of Default has occurred and is continuing (or, if any Event of Default has occurred and is continuing, describing the same in reasonable detail);
(e) promptly upon receipt thereof, a copy of each other report or letter submitted to the Parent, the Borrower or any of the Subsidiaries by independent accountants in connection with any annual, interim or special audit made by them of the books of the Parent, the Borrower or any Subsidiary, and a copy of any response by the Parent, the Borrower or any such Subsidiary, or the Board of Directors of the Parent, the Borrower or any such Subsidiary, to such letter or report;
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(f) promptly upon its becoming available, each financial statement, report, notice or proxy statement sent by the Parent to shareholders generally and each Form 10-K, Form 10-Q, registration statement or prospectus filed by the Parent with any securities exchange or the SEC;
(g) promptly after the furnishing thereof, copies of any financial statement, report or notice (other than ministerial notices) furnished to any Person pursuant to the terms of any preferred stock designation, indenture (including the Senior Notes Indenture), loan or credit or other similar agreement in respect of Indebtedness in excess of $10,000,000, other than this Agreement and not otherwise required to be furnished to the Lenders pursuant to any other provision of this Section 5.01;
(h) promptly following the written request from the DIP Agent thereof, a list of all Persons purchasing Hydrocarbons from the Parent, the Borrower or any Subsidiary accounting for at least 80% in the aggregate of the revenues resulting from the sale of all Hydrocarbons in the six-month period prior to the as of date of the most recently delivered Reserve Report;
(i) together with the delivery of the financial information to be supplied under Sections 5.01(a) and (b), a report, in form and substance satisfactory to the DIP Agent, setting forth as of the last Business Day of such fiscal quarter or fiscal year, a true and complete list of all Swap Agreements (including commodity price swap agreements, forward agreements or contracts of sale which provide for prepayment for deferred shipment or delivery of oil, gas or other commodities) of the Parent, the Borrower and each Subsidiary (and, with respect to each Subsidiary that is a Credit Party, indicating whether such Credit Party is or is not a Qualified ECP Obligor as of the date of the delivery of such report), the material terms thereof (including the type, term, effective date, termination date and notional amounts or volumes), the net mark to market value therefor, any new credit support agreements relating thereto not listed on Schedule 3.19, any margin required or supplied under any credit support document, and the counterparty to each such agreement;
(j) concurrently with any delivery of financial statements under Section 5.01(a), a certificate of insurance coverage from each insurer or its authorized agent or broker with respect to the insurance required by Section 5.05, in form and substance satisfactory to the DIP Agent, and, if requested by the DIP Agent or any Lender, all copies of the applicable policies;
(k) prompt written notice (and in any event within 30 days prior thereto) of any change in (i) any Credit Partys corporate name, (ii) the location of any Credit Partys chief executive office or principal place of business, (iii) the Credit Partys identity or corporate structure or in the jurisdiction in which such Person is incorporated or formed, (iv) any Credit Partys jurisdiction of organization or such Credit Partys organizational identification number in such jurisdiction of organization and (v) any Credit Partys federal taxpayer identification number;
(l) promptly, but in any event, by the time specified in any of Section 6.13, as applicable, written notice of the transactions, events or circumstances described in such Section for which notice is required to be given;
(m) [Reserved];
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(n) promptly following any request therefor, such other information regarding the operations, business affairs and financial condition of the Parent, the Borrower or any Subsidiary, or compliance with the terms of this Agreement, as the DIP Agent or any Lender may reasonably request;
(o) as soon as available and in any event (i) on the fourth Business Day of each fourth week, commencing with June 9, 2016, a 13-Week Budget in form and substance reasonably acceptable to the Requisite Lenders and the DIP Agent which shall reflect Borrowers good faith projection of all weekly cash receipts and disbursements in connection with the operation of the Credit Parties and their respective Subsidiaries business during such thirteen-week period, including but not limited to, (x) the ad valorem, severance and production taxes and lease operating expenses attributable Oil and Gas Properties and incurred for such thirteen week period (including transportation, gathering and marketing costs) and all categories of applicable expenses, and (y) other capital expenditures, collections, payroll, and other material cash outlays, and (ii) on the fourth Business Day of each week, commencing with May 19, 2016, a variance report comparing the Credit Parties actual receipts and disbursements for such thirteen-week period with the projected receipts and disbursements for the weeks appearing in such period as reflected in the most recently delivered 13-Week Budget; and
(p) solely to the DIP Agent, within three (3) Business Days of receiving written notice thereof by the Parent, the Borrower or any Subsidiary, copies of all Lien filings of the type described in clause (i), (ii), (iii), (iv), and (v) of the definition of Permitted Liens regardless of whether such Lien is a Permitted Lien (which written notice may be by electronic mail to bryan.m.mcdavid@wellsfargo.com with a copy to stephanie.song@bracewelllaw.com or such other email addresses notified to the Borrower from time to time by the DIP Agent).
Documents required to be delivered pursuant to Section 5.01(a), (b) or (e) (to the extent any such documents are included in materials otherwise filed with the SEC) shall be deemed to be delivered hereunder upon such filing with the SEC on the date of such filing. The Parent shall deliver to the Prepetition Agent all financial reporting and other reports and notices delivered by the Parent in connection with this Agreement.
SECTION 5.02. Notices of Material Events. The Parent or the Borrower, as applicable, will furnish to the DIP Agent, each Lender and, so long as the RSA is in effect, the Senior Noteholders prompt written notice of the following:
(a) the occurrence of any Default;
(b) the commencement of any legal or arbitral proceedings, and of all proceedings before any Governmental Authority filed against the Parent, the Borrower or any Subsidiary, except proceedings that, if adversely determined, could not reasonably be expected to result in liability not fully covered by insurance, subject to normal deductibles, in excess of $10,000,000 (whether individually or in the aggregate);
(c) in the event the amount of contested taxes or claims not previously disclosed in the financial statements delivered under Section 5.01(a) and Section 5.01(b) above exceeds $10,000,000 in the aggregate at any one time, prompt written notice from an Authorized Officer describing such circumstances, in detail satisfactory to the DIP Agent;
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(d) prompt written notice, and in any event within three Business Days, of the occurrence of any Casualty Event to Oil and Gas Properties subject to any Mortgage or the commencement of any action or proceeding for the taking of any Oil and Gas Properties subject to any Mortgage with a value exceeding $10,000,000 under power of eminent domain or by condemnation, nationalization or similar proceeding;
(e) the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, could reasonably be expected to result in liability of the Parent, the Borrower and the Subsidiaries in an aggregate amount exceeding $10,000,000;
(f) any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect; and
(g) if any Credit Party ceases to be a Qualified ECP Obligor.
Each notice delivered under this Section shall be accompanied by a statement of an Authorized Officer of the Parent (or the Borrower, if applicable) setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.
SECTION 5.03. Existence; Conduct of Business. Subject to the DIP Orders, each of the Parent and the Borrower will, and will cause each of the Subsidiaries to, do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and the rights, licenses, permits, privileges and franchises material to the conduct of their business, except where the failure to so preserve, renew or keep could not reasonably be expected to have a Material Adverse Effect; provided that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section 6.03.
SECTION 5.04. Payment of Obligations, Taxes and Material Claims. Subject to the DIP Orders, each of the Parent and the Borrower will, and will cause each of the Subsidiaries to, pay the DIP Obligations according to the terms set forth in this Agreement, the Loan Documents and the Lender Swap Agreements and do and perform every act and discharge all of the obligations to be performed and discharged by them under this Agreement and the Loan Documents, at the time or times and in the manner specified. Subject to the DIP Orders, the Parent and the Borrower will, and will cause each of the Subsidiaries to, pay (a) all taxes imposed upon it or any of its assets or with respect to any of its franchises, business, income or profits before any material penalty or interest accrues thereon and (b) all material claims (including, without limitation, claims for labor, services, materials and supplies) for sums that have become due and payable and that by law have or might become a Lien (other than Liens permitted pursuant to Section 6.02) on any of its assets; provided, however, that no payment of taxes or claims shall be required if (i) the amount, applicability or validity thereof is currently being contested in good faith by appropriate action promptly initiated and diligently conducted in accordance with good business practices and no Oil and Gas Property subject to any Mortgage with a value in excess of $10,000,000 is subject to levy or execution, (ii) the Parent, as and to the extent required in accordance with GAAP, shall have set aside on its books reserves (segregated to the extent required by GAAP) deemed by it to be adequate with respect thereto or (iii) the failure to make payment could not reasonably be expected to result in a Material Adverse Effect.
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SECTION 5.05. Maintenance of Properties; Insurance.
(a) Each of the Parent and the Borrower will, and will cause each of the Subsidiaries to: (i) except as permitted in Section 6.03, preserve and maintain its existence and all of its material rights, privileges and franchises and maintain, if necessary, its qualification to do business in each other jurisdiction in which its Oil and Gas Properties is located or the ownership of its Properties requires such qualification, except where the failure to so qualify could not reasonably be expected to have a Material Adverse Effect; (ii) keep books of record and account in accordance with GAAP; (iii) comply with all Governmental Requirements if failure to comply with such requirements could reasonably be expected to have a Material Adverse Effect; and (iv) keep, or cause to be kept, insured by financially sound and reputable insurers all Property of a character usually insured by Persons engaged in the same or similar business similarly situated against loss or damage of the kinds and in the amounts customarily insured against by such Persons and carry such other insurance against risks as is usually carried by such Persons. The loss payable clauses or provisions in such insurance policy or policies insuring any of the Collateral shall (x) be endorsed in favor of and made payable to the DIP Agent as its interests may appear and naming the DIP Agent and the Lenders as additional insureds, (y) provide that the insurer will endeavor to give at least 10 days prior notice of any cancellation to the DIP Agent, and (z) designate the DIP Agent as lenders loss payee. Waiver of subrogation shall apply in favor of the DIP Agent in connection with any general liability insurance policy of any Credit Party.
(b) Each of the Parent and the Borrower will, and will cause each of the Subsidiaries to, operate its Properties or cause such Properties to be operated in a careful and efficient manner in accordance with the practices of the industry and in compliance with all applicable contracts and agreements and in compliance with all Governmental Requirements, including, without limitation, applicable Environmental Laws and all applicable laws, rules and regulations of every other Governmental Authority from time to time constituted to regulate the development and operation of its Oil and Gas Properties and the production and sale of Hydrocarbons and other minerals therefrom, except, in each case, where the failure to comply could not reasonably be expected to have a Material Adverse Effect.
(c) Each of the Parent and the Borrower will, and will cause each of the Subsidiaries to, at its own respective expense, do or cause to be done all things reasonably necessary to preserve and keep in good repair, working order and efficiency (ordinary wear and tear excepted) all of its material Oil and Gas Properties and other material Properties, including, without limitation, all equipment, machinery and facilities, and from time to time will make all the reasonably necessary repairs, renewals and replacements so that at all times the state and condition of its material Oil and Gas Properties and other material Properties will be preserved and maintained, except to the extent such failure to so preserve and keep could not reasonably be expected to have a Material Adverse Effect. Each of the Parent and the Borrower will, and will cause each of the Subsidiaries to, promptly: (a) pay and discharge, or make reasonable and customary efforts to cause to be paid and discharged, all delay rentals, royalties, expenses and
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indebtedness accruing under the leases or other agreements affecting or pertaining to its Oil and Gas Properties and will do all other things necessary to keep unimpaired their rights with respect thereto and prevent any forfeiture thereof or default thereunder, and (b) perform or make reasonable and customary efforts to cause to be performed, in accordance with industry standards, the obligations required by each and all of the assignments, deeds, leases, sub-leases, contracts and agreements affecting its interests in its Oil and Gas Properties and other material Properties, except in each case of clauses (a) and (b) to the extent such failure could not reasonably be expected to have a Material Adverse Effect and except for dispositions permitted by Section 6.13. Each of the Parent and the Borrower will, and will cause each of the Subsidiaries to, operate its Oil and Gas Properties and other material Properties or cause or make reasonable and customary efforts to cause such Oil and Gas Properties and other material Properties to be operated in accordance with the practices of the industry and in material compliance with all applicable contracts and agreements and in compliance in all material respects with all Governmental Requirements, except where the failure to do so could not reasonably be expected to result in a Material Adverse Effect. To the extent that none of the Parent, the Borrower or any Subsidiary is the operator of such Property, the Parent and the Borrower shall use reasonable efforts to cause the operator to comply with this Section 5.05(c).
SECTION 5.06. Books and Records; Inspection Rights. Each of the Parent and the Borrower will, and will cause each of the Subsidiaries to, keep proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to its business and activities. Each of the Parent and the Borrower will, and will cause each of the Subsidiaries to, permit any representatives designated by the DIP Agent or any Lender, upon reasonable prior notice, to visit and inspect its properties, to examine and make extracts from its books and records and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times and as often as reasonably requested.
SECTION 5.07. Compliance with Laws. Each of the Parent and the Borrower will, and will cause each of the Subsidiaries to, comply with all laws, rules, regulations and orders of any Governmental Authority applicable to it or its Property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.
SECTION 5.08. Use of Proceeds of Loans.
(a) The proceeds of the Initial DIP Loan, Final DIP Loan and the Conditional DIP Loans will be used by the Borrower only for the following purposes: (i) to pay certain costs, fees and expenses related to the Cases, including Professional Fees, (ii) to pay Adequate Protection Payments and (iii) to fund the working capital needs, capital improvements and expenditures of the Credit Parties during the Cases, in each case in accordance with an Approved Budget, in each case including the Permitted Variances (collectively the Approved Purposes).
(b) Proceeds of the Loans shall not be used (i) to permit the Borrower, any Guarantor or any of their representatives to challenge or otherwise contest or institute any proceeding to determine (x) the validity, perfection or priority of security interests in favor of any of the Lenders or the Prepetition Secured Parties, or (y) the enforceability of the obligations of the
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Borrower or any Guarantor under this Agreement or the Prepetition Credit Agreement, (ii) to investigate, commence, prosecute or defend any claim, motion, proceeding or cause of action against any of the Lenders or the Prepetition Secured Parties, each in such capacity, and their respective agents, attorneys, advisors or representatives, including, without limitation, any lender liability claims or subordination claims, or (iii) to fund acquisitions, capital expenditures, capital leases, or any other expenditure other than as set forth in the Approved Budget or the Carve-Out; provided, however that this provision shall not restrict the use of up to $50,000 (or such greater amount as set forth in the DIP Orders) by any Official Committee of Unsecured Creditors appointed in the Cases (the Committee) for legal fees incurred during a challenge period commencing the date of the appointment of the Committee and expiring 60 calendar days after such appointment (or such earlier or later date provided for in the DIP Orders) (the Investigation Period) solely for the purpose of investigating the liens and claims of the Prepetition Secured Parties pursuant to the Prepetition Secured Facilities and related documents (the Committee Investigation). (c) No part of the proceeds of any Loan will be used, whether directly or indirectly, for any purpose that entails a violation of any of the Regulations of the Board, including Regulations T, U and X.
(d) The Borrower will not request any Borrowing, and neither the Borrower nor the Parent shall use, and each shall ensure that its Subsidiaries and its or their respective directors, officers, employees and agents shall not use, the proceeds of any Borrowing (i) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws, (ii) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country, or (iii) in any manner that would result in the violation of any Sanctions applicable to any party hereto.
SECTION 5.09. Environmental Matters.
(a) Each of the Parent and the Borrower will, and will cause each Subsidiary to, establish and implement such procedures as may be reasonably necessary to continuously determine and assure that any failure of the following could not reasonably be expected to have a Material Adverse Effect: (a) all Property of the Parent, the Borrower and the Subsidiaries and the operations conducted thereon and other activities of the Parent, the Borrower and the Subsidiaries are in compliance with and do not violate the requirements of any Environmental Laws, (b) no oil, oil and gas production or exploration wastes, Hazardous Materials or solid wastes are disposed of or otherwise released on or to any Property owned by any such party except in compliance with Environmental Laws, (c) no Hazardous Material will be released on or to any such Property in a quantity equal to or exceeding that quantity which requires reporting pursuant to Section 103 of the Comprehensive Environmental, Response, Compensation, and Liability Act of 1980, as amended, and (d) no oil, oil and gas exploration and production wastes or Hazardous Materials or solid wastes are released on or to any such Property so as to pose an imminent and substantial endangerment to public health or welfare or the environment.
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(b) The Parent or the Borrower will promptly notify the DIP Agent and the Lenders in writing of any written threatened action, investigation or inquiry (including written notices thereof) by any Governmental Authority against the Parent, the Borrower or any of the Subsidiaries or their Properties of which the Parent or the Borrower has knowledge in connection with any Environmental Laws (excluding routine testing and corrective action) if the Parent or the Borrower reasonably anticipates that such action will result in liability, not fully covered by insurance, subject to normal deductibles (whether individually or in the aggregate) in excess of $10,000,000.
SECTION 5.10. Further Assurances. The Parent and the Borrower will, at their expense, and will cause each Subsidiary to, promptly execute and deliver to the DIP Agent all such other documents, agreements and instruments reasonably requested by the DIP Agent to comply with, cure any defects or accomplish the covenants and agreements of the Parent, the Borrower or any Subsidiary, as the case may be, in this Agreement or any other Loan Document, or to further evidence and more fully describe the Collateral, or to correct any omissions in this Agreement or any other Loan Document, or to state more fully the security obligations set out herein or in any of the Collateral Documents, or to perfect, protect or preserve any Liens created pursuant to any of the Collateral Documents or the priority thereof, or to make any recordings, file any notices or obtain any consents, all as may be reasonably necessary or appropriate in connection therewith.
SECTION 5.11. Reserve Reports.
(a) On or before April 1 and October 1 of each year (commencing October 1, 2016), the Parent or the Borrower shall furnish to the DIP Agent and the Lenders a Reserve Report. The Reserve Report as of December 31 of each year shall be prepared (x) by one or more Approved Petroleum Engineers or (y) by or under the supervision of the Manager of Engineering of the Parent (who shall have the Approved Petroleum Engineer certify such Reserve Report to be true and accurate and to have been substantially prepared in accordance with the procedures used in the immediately preceding December 31 Reserve Report) and audited by one or more Approved Petroleum Engineers. The June 30 Reserve Report of each year shall be prepared by or under the supervision of the Manager of Engineering of the Parent, who shall certify such Reserve Report to be true and accurate and to have been substantially prepared in accordance with the procedures used in the immediately preceding December 31 Reserve Report.
(b) [Reserved]
(c) With the delivery of each Reserve Report, the Parent or the Borrower shall provide to the DIP Agent and the Lenders, a certificate from an Authorized Officer certifying that, to his knowledge (after reasonable inquiry) and in all material respects: (i) the information contained in the Reserve Report and any other information delivered in connection therewith is true and correct, (ii) the Parent, the Borrower or the Subsidiaries owns good and defensible title to the Oil and Gas Properties evaluated in such Reserve Report and such Properties are free of all Liens except for Liens permitted by Section 6.02, (c) except as set forth on an exhibit to the certificate, on a net basis there are no gas imbalances, take or pay or other prepayments with respect to the Oil and Gas Properties evaluated in such Reserve Report which would require the Parent, the Borrower or any Subsidiary to deliver Hydrocarbons produced from such Oil and Gas Properties at some future time without then or thereafter receiving full payment therefor, and (d) none of such Oil and Gas Properties have been sold since the date of the last Reserve Report except as set forth on an exhibit to the certificate, which certificate shall list the Oil and Gas Properties sold and in such detail as reasonably required by the Requisite Lenders.
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SECTION 5.12. Title Information. Upon reasonable request by the DIP Agent, the Parent or the Borrower will promptly deliver or make available title information in form and substance reasonably acceptable to the DIP Agent covering the Oil and Gas Properties evaluated by a Reserve Report which were not evaluated under any previous Reserve Report but only to the extent that the satisfactory title information previously reviewed by the DIP Agent does not cover at least 80% of the total value of the proved Oil and Gas Properties evaluated by such Reserve Report, including such new Oil and Gas Properties.
SECTION 5.13. ERISA Information and Compliance. As soon as available, and in any event, within 10 days after the Parent or the Borrower obtains knowledge of any of the following, the Parent or the Borrower will furnish and will cause each ERISA Affiliate to promptly furnish to the DIP Agent with sufficient copies to the Lenders (a) a written notice signed by an Authorized Officer describing the occurrence of any ERISA Event or of any material prohibited transaction, as described in section 406 of ERISA or in section 4975 of the Code, in connection with any Plan or any trust created thereunder, and specifying what action the Parent, the Borrower or the ERISA Affiliate is taking or proposes to take with respect thereto, and, when known, any action taken or proposed by the Internal Revenue Service, the Department of Labor or the PBGC with respect thereto, (b) copies of any notice of the PBGCs intention to terminate or to have a trustee appointed to administer any Plan and (c) a written notice of the Parents, the Borrowers or an ERISA Affiliates participation in a Multiemployer Plan. With respect to each Plan (other than a Multiemployer Plan), the Parent or the Borrower will, and will cause each ERISA Affiliate to, (i) satisfy in full and in a timely manner, without incurring any material late payment or underpayment charge or penalty and without giving rise to any Lien, all of the contribution and funding requirements of section 412 of the Code (determined without regard to subsections (d), (e), (f) and (k) thereof) and of section 302 of ERISA (determined without regard to sections 303, 304 and 306 of ERISA), and (ii) pay, or cause to be paid, to the PBGC in a timely manner, without incurring any material late payment or underpayment charge or penalty, all premiums required pursuant to sections 4006 and 4007 of ERISA.
SECTION 5.14. Business of the Borrower. The primary business of the Parent, the Borrower and the Subsidiaries is and will continue to be the acquisition, exploration, development, financing, ownership, operation, production, maintenance, storage, transportation, gathering, processing and marketing of Hydrocarbons, Hydrocarbon Interests and Oil and Gas Properties and related activities.
SECTION 5.15. Permits, Licenses. Each of the Parent and the Borrower shall, and shall cause each Subsidiary to, maintain all material patents, copyrights, trademarks, service marks and trade names necessary to conduct its business, including, without limitation all consents, permits, licensees and agreements material to its Oil and Gas Properties, except as could not reasonably be expected to have a Material Adverse Effect.
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SECTION 5.16. Cash Management.The Borrower and Guarantors shall use a cash management system that is the same as or substantially similar to its pre-petition cash management system; provided, however, that the Borrower shall only be allowed to withdraw or transfer from its accounts amounts necessary to fund expenses of the Credit Parties for the immediately following week as set forth in the Budget. Any material changes from such prepetition cash management system must be acceptable to the Requisite Lenders in their reasonable discretion.
SECTION 5.17. Compliance with Anti-Corruption Laws and Sanctions. The Parent and the Borrower will maintain in effect and enforce policies and procedures designed to ensure compliance by the Parent, the Borrower, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions.
SECTION 5.18. [Reserved].
SECTION 5.19. [Reserved].
SECTION 5.20. Post-Closing. Within 30 days of the earlier of (i) the Closing Date and (ii) entry of the Final DIP Order (as such date may be extended in DIP Agents sole discretion), the DIP Agent shall have received endorsements naming the DIP Agent as an additional insured and loss payee under all insurance policies to be maintained with respect to the properties of the Borrower and the Guarantors forming part of the Collateral.
SECTION 5.21. Keepwell. Subject to the Final DIP Order, the Borrower hereby absolutely, unconditionally and irrevocably undertakes to provide such funds or other support as may be needed from time to time by each other Credit Party to honor all of its obligations under any Guaranty or any Lender Swap Agreement in respect of Lender Swap Obligations (provided that the Borrower shall only be liable under this Section 5.21 for the maximum amount of such liability that can be hereby incurred without rendering its obligations under this Section 5.21 or otherwise under the Loan Documents voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount). The obligations of the Borrower under this Section 5.21 shall remain in full force and effect until the DIP Obligations have been repaid in full and the Commitments and this Agreement have terminated. The Borrower intends that this Section 5.21 constitute, and this Section 5.21 shall be deemed to constitute, a keepwell, support, or other agreement for the benefit of each other Credit Party for all purposes of section 1a(18)(A)(v)(II) of the Commodity Exchange Act.
SECTION 5.22. Budget Compliance and Permitted Variances. Subject to the Permitted Variance and any Carry Forward Amount, the Borrower shall not make expenditures or permit any Subsidiary to make expenditures in excess of the amounts set forth in the Approved Budget for any period (other than Professional Fees to the extent approved by the Bankruptcy Court). The Budget shall be tested weekly on the Weekly Test Date on a cumulative basis for any portion of the Budget period then ended.
The Credit Parties shall deliver to the Lenders on each Weekly Test Date a variance report for the then-ended Budget period comparing actual disbursements (Actual Cumulative Disbursements) for such period to cumulative disbursements (Budgeted Cumulative Disbursements) in each case, other than Professional Fees, respectively, for such period as forecast in the Approved Budget, which variance report shall include, inter alia, the then current aged accounts payable listing and the then current AFE vs. Actual report for all capital expenditure projects in excess of $1,000,000.
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Actual Cumulative Disbursements (other than disbursements on account of Professional Fees) for such period may not vary as tested on May 19, 2016, and on each Weekly Test Date thereafter, from Budgeted Cumulative Disbursements (other than disbursements on account of Professional Fees) as reflected in the most recently delivered Approved Budget by more than 20% or by such greater amount as agreed upon by the Requisite Lenders (the Permitted Variance). The Permitted Variance shall not be included in any Carry Forward Amount.
The monthly line item for Professional Fees shall be on an accrual basis in the full amount of estimated Professional Fees, even though not payable under the Bankruptcy Code until allowed (including allowed on a monthly and/or interim basis).
ARTICLE VI
NEGATIVE COVENANTS
Until the Discharge of DIP Obligations, the Parent, the Borrower and the Subsidiaries party hereto covenant and agree with the Lenders that:
SECTION 6.01. Indebtedness. The Parent and the Borrower will not, and will not permit any Subsidiary to, create, incur, assume or permit to exist any Indebtedness, except:
(a) (i) the DIP Obligations arising under this Agreement, any other Loan Document or any Lender Swap Agreement or any guaranty of or suretyship arrangement for the DIP Obligations arising under any Loan Document or any Lender Swap Agreement, and (ii) the Prepetition Secured Obligations;
(b) Indebtedness under the Senior Notes outstanding on the date hereof listed on Schedule 6.01(b);
(c) Indebtedness of the Parent, the Borrower or any Subsidiary existing on the date hereof (other than Indebtedness under Senior Notes) that is listed on Schedule 6.01(c), and any refinancings, renewals or extensions (but not increases) thereof;
(d) Indebtedness under Capital Leases (as required to be reported on the consolidated financial statements of the Parent pursuant to GAAP) not to exceed $15,000,000; provided that no new Capital Leases may be entered into on or after the date hereof;
(e) Indebtedness associated with bonds or surety obligations required by Governmental Requirements in connection with the operation of the Oil and Gas Properties;
(f) unsecured intercompany Indebtedness between Credit Parties; provided, further, that any such Indebtedness shall be subordinated to the DIP Obligations on terms set forth in the Guaranty;
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(g) endorsements of negotiable instruments for collection in the ordinary course of business;
(h) other Indebtedness (not included under subsections (a) through (g) of this Section 6.01) not to exceed $1,000,000 in the aggregate at any one time outstanding;
(i) accounts payable incurred in the ordinary course of business prior to the date hereof; and
(j) accounts payable incurred in the ordinary course of business on or after the date hereof that are no more than 30 days past due unless being contested in good faith by appropriate proceedings by obligor.
SECTION 6.02. Liens. The Parent and the Borrower will not, and will not permit any Subsidiary to, create, incur, assume or permit to exist any Lien on any of its Properties (now owned or hereafter acquired), except:
(a) Liens securing the payment of any DIP Obligations;
(b) Permitted Liens;
(c) Liens securing leases giving rise to Indebtedness allowed under Section 6.01(d) but only on the Property under lease;
(d) Liens securing the payment of the obligations under the Prepetition Secured Facilities in existence on the date hereof and Adequate Protection Liens thereon;
(e) Liens disclosed on Schedule 6.02;
(f) any Lien arising out of the refinancing, extension, renewal or refunding of any Indebtedness secured by any Lien permitted by any of the foregoing clauses in this Section 6.02; provided that any such Indebtedness is not increased beyond the amount thereof outstanding on the date hereof (other than increases associated with the capitalization of refinancing costs) and is not secured by any additional assets;
(g) Liens (i) of a collection bank arising under Section 4-210 of the UCC on items in the course of collection and (ii) in favor of banking institutions arising as a matter of law encumbering deposits (including the right of set-off) and which are within the general parameters customary in the banking industry;
(h) Liens arising under the DIP Orders; and
(i) additional Liens upon Property created after the date hereof which do not secure debt for borrowed money (other than Pcards and Epayables) or obligations under Swap Agreements, provided that (i) the aggregate obligations secured thereby and incurred on or after the date hereof shall not exceed $1,000,000 in the aggregate at any one time outstanding, and (ii) if such Liens encumber cash collateral, the aggregate amount of cash on deposit shall not exceed $1,000,000. provided that, in any event, no Liens encumbering any Property of any Credit Party shall secure Swap Obligations other than Lender Swap Obligations.
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SECTION 6.03. Fundamental Changes.
(a) Other than in connection with the commencement of the Cases, each of the Parent and the Borrower will not, and will not permit any Subsidiary to, merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or sell, transfer, lease or otherwise dispose of (in one transaction or in a series of transactions) all or substantially all of its assets, or all or substantially all of the stock of any of the Subsidiaries (in each case, whether now owned or hereafter acquired), except as permitted pursuant to Section 6.13, or liquidate or dissolve, except that, if at the time thereof and immediately after giving effect thereto no Default shall have occurred and be continuing, (i) any Person may merge into the Parent or the Borrower in a transaction in which the Parent or the Borrower, respectively, is the surviving Person, (ii) any Person may merge into any Guarantor in a transaction in which the surviving entity is wholly-owned, directly or indirectly, by the Borrower and such surviving entity is such Guarantor or expressly assumes in writing (in form and substance satisfactory to the DIP Agent) all obligations of such Guarantor under the Loan Documents, (iii) any Subsidiary may sell, transfer, lease or otherwise dispose of its assets to the Parent, the Borrower or another Credit Party and (iv) any Subsidiary (other than the Borrower) may liquidate or dissolve if the Parent or the Borrower determines in good faith that such liquidation or dissolution is in the best interests of the Parent and the Borrower and is not materially disadvantageous to the Lenders; provided that any such merger involving a Person that is not a wholly-owned Subsidiary immediately prior to such merger shall not be permitted unless also permitted by Section 6.04.
(b) The Parent and the Borrower will not, and will not permit any Subsidiary to, engage to any material extent in any business other than businesses of the type conducted by the Parent, the Borrower and the Subsidiaries on the date of execution of this Agreement and businesses reasonably related thereto. From and after the date hereof, the Parent and the Borrower will not, and will not permit any Subsidiary to, acquire or make any other expenditures (whether such expenditure is capital, operating or otherwise) in or related to any Oil and Gas Properties not located within the geographical boundaries of the United States or form or acquire any Subsidiary organized under any jurisdiction outside of the United States.
SECTION 6.04. Investments, Loans and Advances. No Debtor shall make or permit to remain outstanding any loans or advances to or Investments in any Person, except that the foregoing restriction shall not apply to: (a) Permitted Investments; (c) accounts receivable arising in the ordinary course of business; (d) Investments made by any Debtor in or to another Debtor; (e) Investments in direct ownership interests in additional Oil and Gas Properties and gas gathering systems related thereto or related to farm-out, farm-in, joint operating, joint venture or area of mutual interest agreements, gathering systems, pipelines or other similar arrangements that are usual and customary in the oil and gas exploration and production business; (f) Investments reflected in the financial statements delivered pursuant to Section 3.04(a) or that are disclosed to the Lenders on Schedule 6.04, which in any event, were made prior to the date hereof; and (g) other Investments not to exceed $500,000 in the aggregate at any time outstanding.
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SECTION 6.05. Hedging Transactions.
(a) No Debtor shall enter into any Swap Agreement (or any trade or transaction thereunder) except for the Swap Agreements:
(i) Subject to Section 6.05(b), Swap Agreements with an Approved Counterparty (or trade or transactions thereunder) in respect of commodities entered into not for speculative purposes the notional volumes for which (when aggregated with other commodity Swap Agreements then in effect, other than puts, floors and basis differential swaps on volumes already hedged pursuant to other Swap Agreements) do not exceed, as of the date the latest hedging trade or transaction is entered into under a Swap Agreement,
(A) for the 12-month period from the date such hedging trade or transaction is created, (x) 85% of the reasonably anticipated production of natural gas, (y) 85% of the reasonably anticipated production of oil and (z) 85% of the reasonably anticipated production of natural gas liquids and condensate, in each case, from the Credit Parties proved, developed producing Hydrocarbon Interests as set forth on the most recent Reserve Report,
(B) for the 12-month period commencing with the first anniversary of the date such hedging trade or transaction is created, (x) 85%of the reasonably anticipated production of natural gas, (y) 85% of the reasonably anticipated production of oil and (z) 85% of the reasonably anticipated production of natural gas liquids and condensate, in each case, from the Credit Parties proved, developed producing Hydrocarbon Interests as set forth on the most recent Reserve Report,
(C) for the 12-month period commencing with the second anniversary of the date such hedging trade or transaction is created, (x) 85% of the reasonably anticipated production of natural gas, (y) 85% of the reasonably anticipated production of oil and (z) 85% of the reasonably anticipated production of natural gas liquids and condensate, in each case, from the Credit Parties proved, developed producing Hydrocarbon Interests as set forth on the most recent Reserve Report, and
(D) for the 12-month period commencing with the third anniversary of the date such hedging trade or transaction is created, (x) 85% of the reasonably anticipated production of natural gas, (y) 85% of the reasonably anticipated production of oil and (z) 85% of the reasonably anticipated production of natural gas liquids and condensate, in each case, from the Credit Parties proved developed producing Hydrocarbon Interests as set forth on the most recent Reserve Report;
provided, that (x) (without duplication) the Credit Parties shall be permitted to enter into Swap Agreements (or hedging trades or transaction thereunder) with respect to reasonably anticipated production of natural gas liquids and condensate by entering into Swap Agreements (or hedging trades or transaction thereunder) for oil on a conversion/equivalency basis where each volume unit of oil equals two volume units of natural gas liquids or condensate; and
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(y) Swap Agreements (or trades or transactions thereunder) with respect to the interest rate on any Indebtedness with one or more Approved Counterparties provided that the aggregate notional principal amount of all Indebtedness that is the subject of all such Swap Agreements (or trades or transactions thereunder) does not exceed the outstanding principal amount of Indebtedness for borrowed money.
(b) If, after the end of any calendar quarter, commencing with the calendar quarter ending September 30, 2016, the Parent or the Borrower determines that the aggregate volume of all commodity hedging trades or transactions for which settlement payments were calculated in such calendar quarter (other than puts, floors and basis differential swaps on volumes already hedged pursuant to other Swap Agreements (or trades or transactions thereunder)) exceeded 90% of actual production of Hydrocarbons in such calendar quarter, then the Parent and the Borrower shall promptly notify the DIP Agent of such determination and shall, within 30 days of such determination, terminate, create off-setting positions, allocate volumes to other production for which the Borrower or any of its Subsidiaries is marketing, or otherwise unwind existing Swap Agreements (or trades or transactions thereunder) such that, at such time, future hedging volumes will not exceed 100% of reasonably anticipated projected production for the then-current and any succeeding calendar quarters.
(c) For purposes of entering into or maintaining a Swap Agreement (or trades or transactions thereunder) under Section 6.05(a)(i) and Section 6.05(b), respectively, forecasts of reasonably anticipated production of Hydrocarbon Interests as set forth on the most recent Reserve Report shall be revised to account for any increase or decrease therein anticipated because of information obtained by Parent, the Borrower or any other Credit Party subsequent to the publication of such Reserve Report including the Borrowers or any other Credit Partys internal forecasts of production decline rates for existing wells and additions to or deletions from anticipated future production from new wells and acquisitions coming on stream or failing to come on stream.
SECTION 6.06. Restricted Payments. The Parent will not directly or indirectly declare or pay or incur any liability to pay, and the Parent will not permit the Borrower or any Subsidiary to declare or pay or incur any liability to pay, directly or indirectly, any Restricted Payment, provided that any Credit Party may pay dividends or make distributions to any other Credit Party.
SECTION 6.07. Transactions with Affiliates. The Parent and the Borrower will not, and will not permit any Subsidiary to, sell, lease or otherwise transfer any Property or assets to, or purchase, lease or otherwise acquire any Property or assets from, or otherwise engage in any other transactions with, any of its Affiliates (other than the Parent, the Borrower and the Guarantors), except (a) on terms and conditions not less favorable to any Credit Party than could be obtained on an arms-length basis from unrelated third parties, (b) transactions between or among Credit Parties not involving any other Affiliate and (c) any payments permitted by Section 6.06.
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SECTION 6.08. Restrictive Agreements. The Parent and the Borrower will not, and will not permit any Subsidiary to, directly or indirectly, enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon (a) the ability of any Credit Party to create, incur or permit to exist any Lien upon any of its Property or assets or (b) the ability of any Subsidiary to pay dividends or other distributions to the Borrower or the ability of the Borrower or any Subsidiary to pay dividends or other distributions to the Parent, in each case, with respect to any shares of its capital stock or to make or repay loans or advances to the Parent or the Borrower or any Subsidiary or to Guarantee Indebtedness of the Parent, the Borrower or any Subsidiary; provided that (i) the foregoing shall not apply to restrictions and conditions imposed by law, by this Agreement, the Senior Notes Documents or the Prepetition Credit Agreement, (ii) the foregoing shall not apply to restrictions and conditions existing on the date hereof identified on Schedule 6.08 (but shall apply to any extension or renewal of, or any amendment or modification expanding the scope of, any such restriction or condition), (iii) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to the sale of a subsidiary pending such sale, provided that such restrictions and conditions apply only to the subsidiary that is to be sold and such sale is permitted hereunder, (iv) clause (a) of the foregoing shall not apply to restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the Property or assets securing such Indebtedness and (v) clause (a) of the foregoing shall not apply to customary provisions in leases and other contracts restricting the assignment thereof.
SECTION 6.09. [Reserved.]
SECTION 6.10. [Reserved].
SECTION 6.11. Proceeds of Loans. The Parent and the Borrower will not permit the proceeds of the Loans to be used for any purpose other than Approved Purposes. No Credit Party and no Person acting on behalf of any Credit Party has taken or will take any action which might cause any of the Loan Documents to violate Regulation T, U or X or any other regulation of the Board or to violate Section 7 of the Securities Exchange Act of 1934 or any rule or regulation thereunder, in each case as now in effect or as the same may hereinafter be in effect. If requested by the DIP Agent, the Borrower will furnish to the DIP Agent and each Lender a statement to the foregoing effect in conformity with the requirements of FR Form U-1 or such other form referred to in Regulation U, Regulation T or Regulation X of the Board, as the case may be.
SECTION 6.12. ERISA Compliance. The Parent and the Borrower will not at any time: (a) engage in, or permit any ERISA Affiliate to engage in, any transaction in connection with which the Parent, the Borrower or any ERISA Affiliate could be subjected to either a material civil penalty assessed pursuant to section 502(c), (i) or (l) of ERISA or a material tax imposed by Chapter 43 of Subtitle D of the Code with respect to a Plan; (b) terminate, or permit any ERISA Affiliate to terminate, any Plan in a manner, or take any other action with respect to any Plan, that could result in any liability to the Parent, the Borrower or any ERISA Affiliate to the PBGC that could reasonably be expected to have a Material Adverse Effect; (c) fail to make, or permit any ERISA Affiliate to fail to make, full payment when due of all amounts which, under the provisions of any Plan, agreement relating thereto or applicable law, the Parent, the
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Borrower or any ERISA Affiliate is required to pay as contributions thereto if such failure could reasonably be expected to have a Material Adverse Effect; (d) permit to exist, or allow any ERISA Affiliate to permit to exist, any accumulated funding deficiency within the meaning of Section 302 of ERISA or section 412 of the Code, whether or not waived, with respect to any Plan that exceeds $2,000,000; (e) except as provided in Section 6.12(g), permit, or allow any ERISA Affiliate to permit, the actuarial present value of the benefit liabilities under any Plan maintained by the Parent or any ERISA Affiliate which is regulated under Title IV of ERISA to exceed the current value of the assets (computed on a plan termination basis in accordance with Title IV of ERISA) of such Plan allocable to such benefit liabilities by more than $2,000,000, with the term actuarial present value of the benefit liabilities having the meaning specified in section 4041 of ERISA; (f) contribute to or assume an obligation to contribute to, or permit any Subsidiary or ERISA Affiliate to contribute to or assume an obligation to contribute to, any Multiemployer Plan if such action could reasonably be expected to have a Material Adverse Effect; (g) acquire, or permit any ERISA Affiliate to acquire, an interest in any Person that causes such Person to become an ERISA Affiliate with respect to the Parent or any ERISA Affiliate if such Person sponsors, maintains or contributes to, or at any time in the six-year period preceding such acquisition has sponsored, maintained or contributed to, (i) any Multiemployer Plan if the funding status of such Multiemployer Plan is such that a total or partial withdrawal from it by such Person could reasonably be expected to have a Material Adverse Effect or (ii) any other Plan that is subject to Title IV of ERISA under which the actuarial present value of the benefit liabilities under such Plan exceeds the current value of the assets (computed on a plan termination basis in accordance with Title IV of ERISA) of such Plan allocable to such benefit liabilities by an amount in excess of $2,000,000; (h) incur, or permit any ERISA Affiliate to incur, a liability to or on account of a Plan under sections 515, 4062, 4063, 4064, 4201 or 4204 of ERISA in excess of $2,000,000; or (i) amend, or permit any ERISA Affiliate to amend, a Plan resulting in an increase in current liability such that the Borrower or any ERISA Affiliate is required to provide security to such Plan under section 401(a)(29) of the Code.
SECTION 6.13. Sale of Properties. No Debtor will sell, assign, farm-out, convey or otherwise transfer any Property or any interest in any Property except for (a) the sale of Hydrocarbons in the ordinary course of business; (b) other than during the pendency of the Cases, farmouts of undeveloped acreage and assignments in connection with such farmouts; (c) the sale or transfer of equipment that is no longer necessary for the business of the Debtors or is replaced by equipment of at least comparable value and use; (d) Casualty Events and dispositions resulting from the exercise of eminent domain, condemnation or nationalization which result in the prepayment of the Loans as provided in Section 2.11(a); (e) the sale of Oil and Gas Properties located in Granite Wash play located in Texas and Oklahoma, whether in one transaction or in a series of related transactions (Granite Wash Sale) so long as the Net Cash Proceeds resulting from such sale are applied as set forth in Section 2.11(a); and (f) the sale of Oil and Gas Properties located in Pennsylvania, whether in one transaction or in a series of transactions so long as the Net Cash Proceeds resulting from such sale are applied as set forth in Section 2.11(a).
SECTION 6.14. Environmental Matters. The Debtors shall not cause or permit any of its Property to be in violation of, or do anything or permit anything to be done which will subject any such Property to any remedial obligations under, any Environmental Laws, assuming
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disclosure to the applicable Governmental Authority of all relevant facts, conditions and circumstances, if any, pertaining to such Property where such violations or remedial obligations could reasonably be expected to result in an Environmental Liability to any Debtor or any subsidiary of a Debtor in excess of $5,000,000, individually or in the aggregate.
SECTION 6.15. Reserved.
SECTION 6.16. Gas Imbalances, Take-or-Pay or Other Prepayments. The Debtors will not allow gas imbalances, take-or-pay or other prepayments with respect to the Oil and Gas Properties of the Debtors that would require any Debtor to deliver Hydrocarbons produced on Oil and Gas Properties at some future time without then or thereafter receiving full payment therefor in excess of two Bcf of gas (or its equivalent) in the aggregate on a net basis for the Debtors.
SECTION 6.17. Fiscal Year; Fiscal Quarter. The Parent and the Borrower shall not, and shall not permit any Subsidiaries to, change its fiscal year or any of its fiscal quarters.
SECTION 6.18. Repayment of Senior Notes; Amendment of Senior Notes Documents. The Parent will not, and will not permit the Borrower or any Subsidiary to: (i) call, make or offer to make any optional or voluntary Redemption of, or otherwise optionally or voluntarily Redeem, any of the Senior Notes; or (ii) amend, modify, waive or otherwise change, consent or agree to any amendment, modification, waiver or other change to, any of the terms of any Senior Notes Documents if the effect thereof would be to shorten its maturity or average life or increase the amount of any payment of principal thereof or increase the rate or shorten any period for payment of interest thereon, in each case, other than pursuant to the Plan of Reorganization and approved by the Bankruptcy Court pursuant to a Final Order; provided that the foregoing shall not prohibit the execution of supplemental indentures to add guarantors if required by the terms of the Senior Notes Indenture.
SECTION 6.19. Marketing Activities. The Parent and the Borrower will not, and will not permit any of the Subsidiaries to, engage in marketing activities for any Hydrocarbons or enter into any contracts related thereto other than (a) contracts for the sale of Hydrocarbons scheduled or reasonably estimated to be produced from their proved Oil and Gas Properties during the period of such contract, (b) contracts for the sale of Hydrocarbons scheduled or reasonably estimated to be produced from proved Oil and Gas Properties of third parties during the period of such contract associated with the Oil and Gas Properties of the Parent, the Borrower and the Subsidiaries that the Parent, the Borrower or one of the Subsidiaries has the right to market pursuant to joint operating agreements, unitization agreements or other similar contracts that are usual and customary in the oil and gas business and (c) other contracts for the purchase and/or sale of Hydrocarbons of third parties (i) that have generally offsetting provisions (i.e. corresponding pricing mechanics, delivery dates and points and volumes) such that no position is taken and (ii) for which appropriate credit support has been taken to alleviate the material credit risks of the counterparty thereto.
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SECTION 6.20. Sale or Discount of Receivables. Except for receivables obtained by the Parent, the Borrower or any Subsidiary out of the ordinary course of business or the settlement of joint interest billing accounts in the ordinary course of business or discounts granted to settle collection of accounts receivable or the sale of defaulted accounts arising in the ordinary course of business in connection with the compromise or collection thereof and not in connection with any financing transaction, the Parent and the Borrower will not, and will not permit any Subsidiary to, discount or sell (with or without recourse) any of its notes receivable or accounts receivable.
SECTION 6.21. Limitation on Prepayment of Debt; Amendment of Debt Documents. Subject to Section 6.18 and except as otherwise permitted by the DIP Orders or approved by the Bankruptcy Court pursuant to a Final Order, the Parent and the Borrower will not, and will not permit any of their respective Subsidiaries to:
(a) (i) make any payment or prepayment of principal of, or premium or interest on, any Indebtedness (A) other than on the stated, scheduled date for such payment of principal or interest set forth in the applicable agreement governing such Indebtedness or as contemplated herein, or (B) that would violate the terms of this Agreement, the DIP Orders or the applicable agreement governing such Indebtedness, or (ii) make any deposit (including the payment of amounts into a sinking fund or other similar fund) for any of the foregoing purposes;
(b) amend, modify or otherwise change, or consent or agree to any amendment, modification or other change to, or enter into any additional or supplemental agreement that has the effect or consequence of amending, modifying or otherwise changing, any of the terms of any prepetition Indebtedness that could have an adverse effect on the Lenders.
SECTION 6.22. Acquisition of Debt. The Parent and the Borrower shall not, and shall not permit any of their respective Subsidiaries or Affiliates to, purchase or otherwise acquire, directly or indirectly, any Indebtedness of any Person, provided that the foregoing shall not prohibit the Borrower or any other Credit Party from making any payments in respect of such Indebtedness to the holders of such Indebtedness to the extent any such payment is otherwise permitted hereunder and under the DIP Orders.
SECTION 6.23. Additional Collateral for Prepetition Secured Obligations. The Parent and the Borrower will not, and will not permit their respective Subsidiaries to, grant a Lien on any property or asset to secure the Prepetition Secured Facilities (other than pursuant to the DIP Orders) or provide any additional guaranty or other credit enhancement in favor of the Prepetition Agent or any Prepetition Secured Parties in connection with the Prepetition Secured Obligations without first (i) giving prior written notice thereof to the DIP Agent (which the Borrower and the Parent shall endeavor to provide at least 15 days prior to such Lien being granted), (ii) to the extent not already covered thereby, granting to the DIP Agent to secure the DIP Obligations a first-priority, perfected Lien (subject to Liens permitted under Section 6.02) on such same property or assets in form and substance reasonably satisfactory to the DIP Agent, and (iii) providing the same guaranty or other credit enhancement in favor of the DIP Agent in connection with the DIP Obligations.
SECTION 6.24. Deposit Accounts. The Parent and the Borrower will not, and will not permit any Credit Party to, maintain any deposit account with any Person that is not a Lender; provided that, the requirements of this Section 6.24 shall not apply to deposit accounts that are designated solely as accounts for, and are used solely for, (a) employee benefits, (b) taxes, (c) payroll funding, or (d) petty cash, which in the case of petty cash accounts, in an amount not to exceed $250,000, in the aggregate (which petty cash account at PNC Bank, N.A. may not have originally been designated as a petty cash account).
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SECTION 6.25. Prepetition Secured Obligations. Until the Discharge of DIP Obligations, the Parent and the Borrower will not, and will not permit any Credit Party to, use the proceeds of the Loans or cash collateral to pay Prepetition Secured Obligations, except as permitted by the DIP Orders or this Agreement.
SECTION 6.26. Changes to DIP Orders. Without the consent of the Requisite Lenders, none of the Debtors shall file a motion (or support any motion) seeking to amend or otherwise modify any DIP Order.
SECTION 6.27. Actions Requiring Prior Requisite Lender Consent. Without the consent of the Requisite Lenders, the Parent and the Borrower will not, and will not permit any Credit Party to, (i) enter into any settlements with respect to the assumption, assumption and assignment or rejection of any executory contracts or unexpired leases under the Bankruptcy Code, or fail to consult with the Lenders with respect to any such assumption or such assumption and assignment or such rejection before the motion therefore is entered by the Bankruptcy Court, regardless of whether any settlement is contemplated); (ii) make any motion to the Bankruptcy Court to authorize any actions or transactions (including authorization to sell assets) under Section 363 of the Bankruptcy Code (except for assets sales that are permitted under the Loan Documents), (iii) make any motions to approve any compromise or settlement under Rule 9019, or (iv) file with the Bankruptcy Court any plan of reorganization or liquidation and related disclosure statement.
SECTION 6.28. Non-Obligor Entities. Notwithstanding anything to the contrary contained herein, the Parent and the Borrower will not, and will not permit any Credit Party to, (a) create, assume, incur or suffer to exist any Lien on or in respect of any of its Property for the benefit of any Subsidiary that is not a Credit Party, (b) sell, assign, pledge, or otherwise transfer any of its Properties to any Subsidiary that is not a Credit Party, or (c) make or permit to exist any loans, advances, or capital contributions to, or make any investment in, or purchase or commit to purchase any stock or other securities or evidences of indebtedness of or interests in, any Subsidiary that is not a Credit Party or in any Properties of any Subsidiary that is not a Credit Party other than, without duplication, the loans, advances, capital contributions, investments, and commitments made prior to the date hereof in any Subsidiary that is not a Credit Party; provided that, the respective amounts of such loans, advances, capital contributions, investments, and commitments shall not be increased (other than by appreciation).
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ARTICLE VII
EVENTS OF DEFAULT; REMEDIES; APPLICATION OF PROCEEDS
SECTION 7.01. Events of Default. If any of the following events (Events of Default) shall occur:
(a) (i) any Credit Party shall fail to pay principal when due under this Agreement or (ii) shall fail to pay any other amount when due under the Loan Documents to the DIP Secured Parties (including, without limitation, any payment of interest or fees), and such failure continues for three (3) Business Days;
(b) any representation or warranty made or deemed made by or on behalf of the Parent, the Borrower or any Subsidiary in or in connection with this Agreement or any amendment or modification hereof or waiver hereunder, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with this Agreement or any amendment or modification hereof or waiver hereunder, shall prove to have been incorrect in any material respect when made or deemed made;
(c) the Parent, the Borrower or any Subsidiary shall fail to observe or perform any covenant, condition or agreement contained in Section 5.02(a), 5.03 (with respect to either the Parents or the Borrowers existence), 5.08, or 5.22 or in Article VI;
(d) the Parent, the Borrower or any Subsidiary shall fail to observe or perform any covenant, condition or agreement contained in this Agreement (other than those specified in clause (a), (b) or (c) of this Section), and such failure shall continue unremedied for a period of (i) in the case of any failure to deliver the Budget when due under Section 5.01(o), one (1) Business Day, (ii) in the case of any other reporting requirement in Section 5.01, five (5) Business Days, and (iii) in the case of any other agreement, ten (10) Business Days, in each case after notice thereof from the DIP Agent to the Parent or the Borrower (which notice will be given at the request of any Lender);
(e) the Parent, the Borrower or any Subsidiary shall fail to make any payment (whether of principal or interest and regardless of amount) in respect of any Material Indebtedness or any Material Swap Obligation, when and as the same shall become due and payable, which is not stayed by the filing of the voluntary petition to commence the Cases and is otherwise permitted to be paid under this Agreement and by the DIP Orders;
(f) (i) any event or condition occurs that results in any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits (with or without the giving of notice, the lapse of time or both) the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity which is not stayed by the filing of the voluntary petition to commence the Cases, or (ii) a default or early termination event shall occur and be continuing under any Swap Agreement of the Borrower or any Subsidiary which results in Material Swap Obligations being due by the Borrower or such Subsidiary, and such Material Swap Obligations are not paid when due or within three Business Days thereafter which is not stayed by the filing of the voluntary petition to commence the Cases; provided that this clause (f) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness;
(g) any Debtor files, or support a motion that has been filed, to reject the RSA;
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(h) a judgment or judgments for the payment of money in excess of $5,000,000 (net of any amount payable because of insurance) in the aggregate shall be rendered by a court against the Parent, the Borrower or any Subsidiary and the same shall not be discharged (or provision shall not be made for such discharge), or a stay of execution thereof shall not be in effect (including the Automatic Stay under the Cases), within 30 days from the date of entry thereof and the Parent, the Borrower or such Subsidiary, as applicable, shall not, within such period of 30 days, or such longer period during which execution of the same shall have been stayed, appeal in good faith therefrom and cause the execution thereof to be stayed during such appeal;
(i) an ERISA Event shall have occurred that, in the opinion of the Requisite Lenders, when taken together with all other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect;
(j) any material provisions of the Loan Documents after delivery thereof shall for any reason, except to the extent permitted by the terms thereof, cease to be in full force and effect and valid, binding and enforceable in accordance with their terms against the Parent, the Borrower or a Guarantor party thereto;
(k) the Collateral Documents cease to create a valid and perfected Lien of the priority described herein and in the DIP Orders on any material portion of the Collateral purported to be covered thereby, except to the extent permitted by the terms of this Agreement, or the Borrower or any Subsidiary or any of their Affiliates shall so state in writing;
(l) any Change in Control occurs;
(m) an order shall be entered dismissing a Case or converting a Case to a case under Chapter 7 of the United States Bankruptcy Code;
(n) an order shall be entered terminating or reducing the Credit Parties exclusivity period for proposing a Plan of Reorganization;
(o) an order with respect to any of the Cases shall be entered appointing, or any Credit Party shall file an application for an order with respect to any of the Cases seeking the appointment of, in either case without the prior written consent of the Requisite Lenders, (i) a trustee under Section 1104 of the United States Bankruptcy Code or (ii) an examiner or any other Person with enlarged powers relating to the operation of the business of any Credit Party (i.e., powers beyond those set forth in Sections 1104(d) and 1106(a)(3) and (4) of the United States Bankruptcy Code) under Section 1106(b)(3) and 1106(b)(4) of the United States Bankruptcy Code;
(p) an order shall be entered that is not stayed pending appeal granting relief from the Automatic Stay to any creditor of a Credit Party with respect to any claim against any property that, when taken together with all other claims with respect to which orders entered on the docket of the Bankruptcy Court that are not stayed pending appeal granting relief from the Automatic Stay with respect to the Credit Parties Collateral, exceeds $1,000,000;
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(q) an order shall be entered with respect to the Case or Cases, without the prior written consent of the Requisite Lenders, (i) to revoke, reverse, stay, vacate or otherwise modify the DIP Orders or this Agreement in a manner adverse to any DIP Secured Party or in a manner inconsistent with the Loan Documents or any Lender Swap Agreement, (ii) to permit any administrative expense or any claim (now existing or hereafter arising, of any kind or nature whatsoever) to have administrative priority equal or superior to the priority of the DIP Secured Parties in respect of the DIP Obligations, or the Prepetition Secured Parties in respect of the Prepetition Secured Obligations, in each case other than the Carve-Out and the Non-Primed Excepted Liens (to the extent, and only to the extent, set forth in the DIP Orders), (iii) to terminate or deny use of cash collateral by the Credit Parties, or (iv) to grant or permit the grant of a lien that is equal in priority with or senior to the Liens securing the DIP Obligations or the Prepetition Secured Obligations other than the Carve-Out and the Non-Primed Excepted Liens (to the extent, and only to the extent, set forth in the DIP Orders);
(r) an order shall be entered by the Bankruptcy Court confirming a plan of reorganization or liquidation in any of the Cases which does not (i) contain a provision for the Discharge of DIP Obligations on or before the effective date of such plan or plans upon entry thereof, or is not otherwise acceptable to the Lenders, and (ii) provide for the continuation of the Liens and security interests granted to the DIP Agent for the benefit of the DIP Secured Parties and priorities until such plan effective date;
(s) failure of the Credit Parties to comply with the DIP Orders in any material respect;
(t) any payment of or granting of adequate protection with respect to Prepetition Secured Obligations (other than the reimbursement of reasonable and documented out-of-pocket fees and expenses and customary indemnities as set forth in the RSA or the BCA, and other than as contemplated and permitted by the Loan Documents or otherwise approved by the Requisite Lenders and the Bankruptcy Court pursuant to the DIP Orders);
(u) any material portion of the Collateral purported to be covered thereby, ceases to be, or otherwise fails to be, covered by any Lien or super-priority claim granted with respect to this Agreement, the Interim Order or the Final DIP Order to be valid, perfected and enforceable in all respects with the priority described herein;
(v) an application for an order described in clause (r) above shall be made by (i) a Credit Party or (ii) a Person other than a Credit Party and such application is not contested on a timely basis, by the Credit Parties in good faith, in each case, other than any such application made in contemplation of the Discharge of DIP Obligations, provided that concurrently therewith the Discharge of DIP Obligations occurs; or
(w) the commencement of any adversary proceeding, contested matter or other action by any Credit Party asserting in writing any claims or defenses against any of the Prepetition Agent or the Prepetition Secured Parties with respect to the obligations of any Credit Party thereunder or the Liens granted to Prepetition Agent or Prepetition Secured Parties to secure the Prepetition Secured Obligations, except as permitted under the Interim Order or the Final DIP Order;
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(x) the termination of the RSA or any agreement attached as an exhibit thereto, including the BCA, either in whole or in part, or any modification, amendment or supplement of the RSA, including the exhibits thereto (including the BCA), without the prior written consent of the Requisite Lenders;
(y) any party to the RSA or BCA fails to comply with any of its obligations thereunder and such noncompliance gives the Consenting RBL Lenders (as defined in the RSA) a right to terminate the RSA; or
(cc) failure to timely comply with any of the Milestones; except to the extent such Milestone is extended to a later date with the consent of the Requisite Lenders (or the consent of the Supermajority Lenders with respect to the Petition Date occurring on a date later than May 12, 2016 at 8:00 a.m. New York City time).
SECTION 7.02. Rights Upon Default. Upon the occurrence and continuation of any Event of Default, the DIP Agent may, and at the request of the Requisite Lenders shall, by notice to the Borrower, take either or both of the following actions, at the same or different times: (i) terminate the Commitments, and thereupon the Commitments shall terminate immediately, and (ii) upon five (5) Business Days written notice to the Credit Parties from DIP Agent, acting on instruction of the Requisite Lenders in their sole and absolute discretion (such notice, a Remedies Notice), the automatic stay of Section 362 of the Bankruptcy Code shall be automatically vacated without further order of the Bankruptcy Court, without the need for filing any motion for relief from the automatic stay or any other pleading, for the limited purpose of permitting the DIP Agent, on behalf of the DIP Secured Parties, to do any of the following: (A) enforce any and all liens and security interests created pursuant to any of the Loan Documents or any other document purporting to create a lien in favor of the Lenders (or otherwise foreclose on the Collateral), including, without limitation assuming control over the use of cash in any cash collateral accounts; (B) enforce all rights under the Guaranties; (C) charge the Default Rate of interest on the Loans; (D) declare the Loans and other Obligations to be due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by each Credit Party, and (v) exercise any and all of its or their other rights and remedies (whether as a secured creditor or otherwise) under the Loan Documents and under applicable law (including, but not limited to, the Bankruptcy Code and the Uniform Commercial Code as in effect from time to time in any applicable jurisdiction). In connection with any sale of any of the Credit Parties assets under section 363 of the Bankruptcy Code, a Chapter 11 plan of reorganization, or any equivalent thereof under any other law, the DIP Agent, at the direction of the Requisite Lenders, shall have the absolute right to credit bid any portion, up to the full amount, of all DIP Obligations. For the avoidance of doubt, it is understood and agreed that the Remedies Notice is a one-time requirement and is not required to be delivered with each exercise of remedies.
In the case of the occurrence of an Event of Default, the DIP Agent and the Lenders will have all other rights and remedies available at law and equity and as provided in the DIP Orders.
SECTION 7.03. Application of Payments. Any amount received by the DIP Agent from the exercise of any rights or remedies hereunder or under any of the Collateral Documents shall be applied by the DIP Agent to payment of the DIP Obligations in the following order unless a court of competent jurisdiction shall otherwise direct:
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(a) FIRST, to payment of all reasonable costs and expenses of the DIP Agent incurred in connection with the collection and enforcement of the DIP Obligations or of any security interest granted to the DIP Agent in connection with any collateral securing the DIP Obligations;
(b) SECOND, to payment of that portion of the DIP Obligations constituting accrued and unpaid interest and fees, pro rata among the DIP Secured Parties in accordance with the amount of such accrued and unpaid interest and fees owing to each of them;
(c) THIRD, to payment of that portion of the DIP Obligations constituting obligations and liabilities of the Credit Parties with respect to principal on the Loans and the other DIP Obligations, including Lender Swap Obligations, pro rata among the DIP Secured Parties in accordance with their respective shares of the aggregate amount of the principal of the DIP Obligations;
(d) FOURTH, to payment of all other DIP Obligations, pro rata among the DIP Secured Parties in accordance with their respective shares of the aggregate amount of such DIP Obligations; and
(e) FIFTH, any surplus thereafter remaining shall be paid to the Borrower or the other Debtors as ordered by the Bankruptcy Court.
Notwithstanding the foregoing, amounts received from the Borrower or any other Credit Party that is not an eligible contract participant under the Commodity Exchange Act or any regulations promulgated thereunder shall not be applied to any Excluded Swap Obligations (it being understood, that in the event that any amount is applied to DIP Obligations other than Excluded Swap Obligations as a result of this paragraph, the DIP Agent shall make such adjustments as it determines are appropriate to distributions pursuant to clause (c) above from amounts received from eligible contract participants under the Commodity Exchange Act or any regulations promulgated thereunder to ensure, as nearly as possible, that the proportional aggregate recoveries with respect to DIP Obligations described in clause (c) above by the holders of any Excluded Swap Obligations are the same as the proportional aggregate recoveries with respect to other DIP Obligations pursuant to clause (c) above).
ARTICLE VIII
THE DIP AGENT
SECTION 8.01. Appointment; Powers. Each of the Lenders hereby irrevocably appoints the DIP Agent as its agent and authorizes the DIP Agent to take such actions on its behalf and to exercise such powers as are delegated to the DIP Agent by the terms hereof, together with such actions and powers as are reasonably incidental thereto.
SECTION 8.02. Agents as Lenders. The bank serving as the DIP Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the DIP Agent, and such bank and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with the Parent, the Borrower or any Subsidiary or other Affiliate thereof as if it were not the DIP Agent hereunder.
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SECTION 8.03. Duties and Obligations of DIP Agent. The DIP Agent shall not have any duties or obligations except those expressly set forth herein. Without limiting the generality of the foregoing, (a) the DIP Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing, (b) the DIP Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby that the DIP Agent is required to exercise in writing as directed by the Requisite Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 11.02), and (c) except as expressly set forth herein, the DIP Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Parent, the Borrower or any of its Subsidiaries that is communicated to or obtained by the bank serving as DIP Agent or any of its Affiliates in any capacity. The DIP Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Requisite Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 11.02) or in the absence of its own gross negligence or willful misconduct (IT BEING THE INTENTION OF THE PARTIES HERETO THAT THE DIP AGENT BE INDEMNIFIED IN THE CASE OF ITS OWN NEGLIGENCE (OTHER THAN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT), REGARDLESS OF WHETHER SUCH NEGLIGENCE IS SOLE OR CONTRIBUTORY, ACTIVE OR PASSIVE, IMPUTED, JOINT OR TECHNICAL). The DIP Agent shall be deemed not to have knowledge of any Default unless and until written notice thereof is given to the DIP Agent by the Parent, the Borrower or a Lender, and the DIP Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement, (ii) the contents of any certificate, report or other document delivered hereunder or in connection herewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement or any other agreement, instrument or document or (v) the satisfaction of any condition set forth in Article IV or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the DIP Agent.
SECTION 8.04. Reliance by DIP Agent. The DIP Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed or sent by the proper Person. The DIP Agent also may rely upon any statement made to it orally or by telephone and believed by it to be made by the proper Person, and shall not incur any liability for relying thereon. The DIP Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.
SECTION 8.05. Subagents. The DIP Agent may perform any and all its duties and exercise its rights and powers by or through any one or more sub-agents appointed by the DIP Agent. The DIP Agent and any such sub-agent may perform any and all its duties and exercise
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its rights and powers through their respective Related Parties. The exculpatory provisions of the preceding paragraphs shall apply to any such sub-agent and to the Related Parties of the DIP Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as DIP Agent.
SECTION 8.06. Resignation or Removal of DIP Agent. Subject to the appointment and acceptance of a successor DIP Agent as provided in this paragraph, the DIP Agent may resign at any time by notifying the Lenders and the Borrower. Upon any such resignation, the Requisite Lenders shall have the right, in consultation with the Borrower, to appoint a successor. If no successor shall have been so appointed by the Requisite Lenders and shall have accepted such appointment within 30 days after the retiring DIP Agent gives notice of its resignation, then the retiring DIP Agent may, on behalf of the Lenders, appoint a successor DIP Agent which shall be a bank with an office in New York, New York, or an Affiliate of any such bank. Upon the acceptance of its appointment as DIP Agent hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring DIP Agent, and the retiring DIP Agent shall be discharged from its duties and obligations hereunder. The fees payable by the Borrower to a successor DIP Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the DIP Agents resignation hereunder, the provisions of this Article and Section 11.03 shall continue in effect for the benefit of such retiring DIP Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while it was acting as DIP Agent.
SECTION 8.07. No Reliance. Each Lender acknowledges that it has, independently and without reliance upon the DIP Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the DIP Agent or any other Lender and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any related agreement or any document furnished hereunder or thereunder. In this regard, each Lender acknowledges that Bracewell LLP is acting in this transaction as special counsel to the DIP Agent only. Each other party hereto will consult with its own legal counsel to the extent that it deems necessary in connection with this Agreement and the other Loan Documents and the matters contemplated herein and therein.
SECTION 8.08. DIP Agent May File Proofs of Claim. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Borrower, the Parent or any of its Subsidiaries, the DIP Agent (irrespective of whether the principal of any Loan shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the DIP Agent shall have made any demand on the Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans and all other Indebtedness that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the
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Lenders and the DIP Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders and the DIP Agent and their respective agents and counsel and all other amounts due the Lenders and the DIP Agent under Section 11.03) allowed in such judicial proceeding; and
(b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender to make such payments to the DIP Agent and, in the event that the DIP Agent shall consent to the making of such payments directly to the Lenders, to pay to the DIP Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the DIP Agent and its agents and counsel, and any other amounts due the DIP Agent under Section 11.03.
Nothing contained herein shall be deemed to authorize the DIP Agent to authorize or consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment or composition affecting the Indebtedness or the rights of any Lender or to authorize the DIP Agent to vote in respect of the claim of any Lender in any such proceeding.
SECTION 8.09. Authority of DIP Agent to Execute Collateral Documents and Release Collateral and Liens. Each Lender hereby empower and authorize the DIP Agent to execute and deliver to the Debtors on their behalf the Collateral Documents and all related financing statements and any financing statements, agreements, documents or instruments as shall be necessary or appropriate to effect the purposes of the Collateral Documents. Each Lender hereby authorizes the DIP Agent to release any Collateral that is permitted to be sold or released pursuant to the terms of the Loan Documents. Each Lender hereby authorizes the DIP Agent to execute and deliver to the Borrower, at the Borrowers sole cost and expense, any and all releases of Liens, termination statements, assignments or other documents reasonably requested by the Borrower in connection with any sale or other disposition of Property to the extent such sale or other disposition is permitted by the terms of Section 6.13 or is otherwise authorized by the terms of the Loan Documents.
ARTICLE IX
GUARANTY
SECTION 9.01. The Guaranty. Subject to Section 9.08 hereof, each of the Parent and each Subsidiary of the Parent party hereto hereby absolutely, unconditionally and irrevocably guarantees, as primary obligor and not as surety, the full and punctual payment when due (whether at stated maturity, upon acceleration, early termination, demand, declaration or otherwise, and at all times thereafter), and performance of, the DIP Obligations, including but not limited to, any and all obligations owed to any Lender Swap Counterparty under each Lender Swap Agreement now or hereafter existing and all renewals, rearrangements, increases, extensions for any period, substitutions, modifications, amendments or supplements in whole or in part of any of the DIP Obligations, including, without limitation, any such DIP Obligations incurred or accrued during the pendency of any bankruptcy, insolvency, receivership or other
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similar proceeding, whether or not allowed or allowable in such proceeding (including all such amounts that would become due but for the operation of the automatic stay under Section 362(a) of the United States Bankruptcy Code, 11 U.S.C. §362(a), and the operation of Sections 502(b) and 506(b) of the United States Bankruptcy Code, 11 U.S.C. §502(b) and §506(b)) (collectively, the Guaranteed Obligations). Upon failure by any Credit Party to pay when due any such amount, each of the Guarantors agrees that it shall forthwith on demand pay to the DIP Agent for the benefit of the Lenders and, if applicable, their Affiliates, the amount not so paid at the place and in the manner specified in this Agreement, any other Loan Document, any Lender Swap Agreement, as the case may be. This Guaranty is a guaranty of payment and not of collection. Each of the Guarantors waives any right to require the DIP Secured Parties to sue the Borrower, any other guarantor, or any other Person obligated for all or any part of the Guaranteed Obligations, or otherwise to enforce its payment against any collateral securing all or any part of the Guaranteed Obligations.
SECTION 9.02. Guaranty Unconditional. Subject to Section 9.08 hereof, the obligations of each of the Guarantors hereunder shall be unconditional, absolute and irrevocable and, without limiting the generality of the foregoing, shall not be released, discharged or otherwise affected by:
(a) any extension, renewal, settlement, compromise, waiver or release in respect of any of the Guaranteed Obligations, by operation of law or otherwise, or any obligation of any other guarantor of any of the Guaranteed Obligations, or any default, failure or delay, willful or otherwise, in the payment or performance of the Guaranteed Obligations;
(b) any modification or amendment of or supplement to this Agreement, any other Loan Document, or any Lender Swap Agreement;
(c) any addition, release, non-perfection or invalidity of any direct or indirect security for any obligation of the Borrower under this Agreement, any other Loan Document, any Lender Swap Agreement, or any obligations of any other guarantor of any of the Guaranteed Obligations, or any action or failure to act by the DIP Agent, any Lender or any Affiliate of any Lender with respect to any collateral securing all or any part of the Guaranteed Obligations;
(d) any change in the corporate existence, structure or ownership of the Borrower or any other guarantor of any of the Guaranteed Obligations, or any insolvency, bankruptcy, reorganization or other similar proceeding affecting the Borrower, or any other guarantor of the Guaranteed Obligations, or its assets or any resulting release or discharge of any obligation of the Borrower, or any other guarantor of any of the Guaranteed Obligations;
(e) the existence of any claim, setoff or other rights which the Guarantors may have at any time against the Borrower, any other guarantor of any of the Guaranteed Obligations, the DIP Agent, any Lender or any other Person, whether in connection herewith or any unrelated transactions;
(f) any invalidity or unenforceability relating to or against the Borrower, or any other guarantor of any of the Guaranteed Obligations, for any reason related to this Agreement, any other Loan Document, any Lender Swap Agreement, or any provision of applicable law or
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regulation purporting to prohibit the payment by the Borrower, or any other guarantor of the Guaranteed Obligations, of the principal of or interest on any Loan or any other amount payable by the Borrower under this Agreement, any other Loan Document, or any Lender Swap Agreement; or (g) any other act or omission to act or delay of any kind by the Borrower, any other guarantor of the Guaranteed Obligations, the DIP Agent, any Lender or any other Person or any other circumstance whatsoever that might, but for the provisions of this paragraph, constitute a legal or equitable discharge of any Guarantors obligations hereunder.
SECTION 9.03. Discharge Only Upon Payment In Full; Reinstatement In Certain Circumstances. Each of the Guarantors obligations hereunder shall remain in full force and effect until the Discharge of DIP Obligations has occurred. If at any time any payment of the principal of or interest on any Loan or any other amount payable by the Borrower or any other party under this Agreement, any Lender Swap Agreement, or any other Loan Document is rescinded or must be otherwise restored or returned upon the insolvency, bankruptcy or reorganization of the Borrower or otherwise, each of the Guarantors obligations hereunder with respect to such payment shall be reinstated as though such payment had been due but not made at such time.
SECTION 9.04. Waivers. Each Guarantor irrevocably waives acceptance hereof, diligence, promptness, presentment, demand, protest and, to the fullest extent permitted by applicable law, any notice not provided for herein, as well as any requirement that at any time any action be taken by any Person against the Borrower, any other guarantor of any of the Guaranteed Obligations, or any other Person.
SECTION 9.05. Subrogation. Each Guarantor hereby agrees not to assert any right, claim or cause of action, including, without limitation, a claim for subrogation, reimbursement, indemnification or otherwise, against any other Guarantor arising out of or by reason of this Guaranty or the obligations hereunder, including, without limitation, the payment or securing or purchasing of any of the Guaranteed Obligations by any of the Guarantors unless and until the Discharge of DIP Obligations has occurred. If any amount shall be paid to any Guarantor in violation of the preceding sentence and the Discharge of DIP Obligations has not occurred, such amount shall be deemed to have been paid to such Guarantor for the benefit of, and held in trust for, the DIP Agent for the benefit of the Lenders, and shall forthwith be paid to the DIP Agent to be credited and applied upon the Guaranteed Obligations, whether matured or unmatured; otherwise it shall be returned to remitter. Each Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by this Agreement, any other Loan Documents, each Lender Swap Agreement and that the waiver set forth in this Section 9.05 is knowingly made in contemplation of such benefits.
SECTION 9.06. Stay of Acceleration. If acceleration of the time for payment of any of the Guaranteed Obligations is stayed upon the insolvency, bankruptcy or reorganization of the Borrower, all such amounts otherwise subject to acceleration under the terms of this Agreement, any other Loan Document, any Lender Swap Agreement shall nonetheless be payable by each of the Guarantors hereunder forthwith on demand by the DIP Agent made at the written request of the Requisite Lenders.
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SECTION 9.07. Subordination of Indebtedness of any Guarantor to any other Guarantor to the Guaranteed Obligations. Each Guarantor agrees that:
(a) Any indebtedness of the Borrower or any Guarantor now or hereafter owed to any Guarantor or any other Guarantor, respectively, is hereby subordinated to the Guaranteed Obligations pursuant to the provisions of this Section 9.07.
(b) Upon the occurrence and during the continuance of an Event of Default, if the DIP Agent so requests, any such indebtedness of the Borrower or any Guarantor now or hereafter owed to any Guarantor or any other Guarantor, respectively, shall be collected, enforced and received by such Guarantor as trustee for the DIP Secured Parties and shall be paid over to the DIP Agent for the benefit of the DIP Secured Parties in kind on account of the Guaranteed Obligations, but without reducing or affecting in any manner the obligations of any Guarantor under the other provisions of this Guaranty. Notwithstanding the foregoing, the term indebtedness as used in this Section 9.07 shall not include amounts owed by the Borrower or any Guarantor to any Guarantor or any other Guarantor, respectively, for payments made by a Guarantor for taxes, payroll obligations, third-party royalty obligations and operating expenses incurred in the ordinary course of business.
(c) Upon the occurrence and during the continuance of an Event of Default, should any Guarantor fail to collect or enforce any such indebtedness of the Borrower or any Guarantor now or hereafter owed to such Guarantor or any other Guarantor and pay the proceeds thereof to the DIP Agent, the DIP Agent as each Guarantors attorney-in-fact may do such acts and sign such documents in such Guarantors name as the DIP Agent considers necessary or desirable to effect such collection, enforcement and/or payment.
SECTION 9.08. Limitation on Obligations.
(a) The provisions of this Guaranty are severable, and in any action or proceeding involving any state corporate law, or any state, federal or foreign bankruptcy, insolvency, reorganization or other law affecting the rights of creditors generally, if the obligations of any Guarantor under this Guaranty would otherwise be held or determined to be avoidable, invalid or unenforceable on account of the amount of such Guarantors liability under this Guaranty, then, notwithstanding any other provision of this Guaranty to the contrary, the amount of such liability shall, without any further action by the Guarantors, the DIP Agent or any Lender, be automatically limited and reduced to the highest amount that is valid and enforceable as determined in such action or proceeding (such highest amount determined hereunder being the relevant Guarantors Maximum Liability). This Section 9.08(a) with respect to the Maximum Liability of the Guarantors is intended solely to preserve the rights of the DIP Secured Parties hereunder to the maximum extent not subject to avoidance under applicable law, and no Guarantor or any other person or entity shall have any right or claim under this Section 9.08(a) with respect to the Maximum Liability, except to the extent necessary so that the obligations of the Guarantor hereunder shall not be rendered voidable under applicable law.
(b) Each Guarantor agrees that the Guaranteed Obligations may at any time and from time to time exceed the Maximum Liability of each Guarantor, and may exceed the aggregate Maximum Liability of all other Guarantors, without impairing this Guaranty or affecting the rights and remedies of the DIP Secured Parties hereunder. Nothing in this Section 9.08(b) shall be construed to increase any Guarantors obligations hereunder beyond its Maximum Liability.
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(c) In the event any Guarantor (a Paying Guarantor) shall make any payment or payments under this Guaranty or shall suffer any loss as a result of any realization upon any collateral granted by it to secure its obligations under this Guaranty, each other Guarantor (each a Non-Paying Guarantor) shall contribute to such Paying Guarantor an amount equal to such Non-Paying Guarantors Pro Rata Share of such payment or payments made, or losses suffered, by such Paying Guarantor. For the purposes hereof, each Non-Paying Guarantors Pro Rata Share with respect to any such payment or loss by a Paying Guarantor shall be determined as of the date on which such payment or loss was made by reference to the ratio of (i) such Non-Paying Guarantors Maximum Liability as of such date (without giving effect to any right to receive, or obligation to make, any contribution hereunder) or, if such Non-Paying Guarantors Maximum Liability has not been determined, the aggregate amount of all monies received by such Non-Paying Guarantor from the Borrower after the date hereof (whether by loan, capital infusion or by other means) to (ii) the aggregate Maximum Liability of all Guarantors hereunder (including such Paying Guarantor) as of such date (without giving effect to any right to receive, or obligation to make, any contribution hereunder), or to the extent that a Maximum Liability has not been determined for any Guarantors, the aggregate amount of all monies received by such Guarantors from the Borrower after the date hereof (whether by loan, capital infusion or by other means). Nothing in this Section 9.08(c) shall affect any Guarantors several liability for the entire amount of the Guaranteed Obligations (up to such Guarantors Maximum Liability). Each of the Guarantors covenants and agrees that its right to receive any contribution under this Guaranty from a Non-Paying Guarantor shall be subordinate and junior in right of payment to all the Guaranteed Obligations. The provisions of this Section 9.08(c) are for the benefit of both the DIP Secured Parties and the Guarantors and may be enforced by any one, or more, or all of them in accordance with the terms hereof.
SECTION 9.09. Application of Payments. All payments held by the DIP Agent or received by the DIP Agent or any DIP Secured Party hereunder shall be applied by the DIP Agent or such DIP Secured Party to payment of the Guaranteed Obligations in the order set forth in Section 7.03.
SECTION 9.10. No Waivers. No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies provided in this Guaranty, this Agreement, any other Loan Document, any Lender Swap Agreement shall be cumulative and not exclusive of any rights or remedies provided by law.
SECTION 9.11. No Duty to Advise. Each of the Guarantors assumes all responsibility for being and keeping itself informed of each other Guarantors financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations and the nature, scope and extent of the risks that each of the Guarantors assumes and incurs under this Guaranty, and agrees that neither the DIP Agent nor any DIP Secured Party has any duty to advise any of the Guarantors of information known to it regarding those circumstances or risks.
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ARTICLE X
SECURITY AGREEMENT
SECTION 10.01. Grant of Security Interest.
(a) To secure the prompt payment and performance in full of all of the DIP Obligations, upon authorization by the Bankruptcy Court under any of the DIP Orders, including as pursuant to sections 364(c)(2), 364(c)(3) and 364(d)(1) of the Bankruptcy Code, each Credit Party hereby pledges, hypothecates, assigns, charges, mortgages, delivers, and transfers to the DIP Agent, for the ratable benefit of each DIP Secured Party, and hereby grants to the DIP Agent, for the ratable benefit of each DIP Secured Party, a continuing security interest in all of such Credit Partys right, title and interest in, to and under, all of the following, whether now owned or hereafter acquired by such Credit Party, and wherever located and whether now owned or hereafter existing or arising:
(i) all accounts;
(ii) all contract rights;
(iii) all chattel paper;
(iv) all documents;
(v) all instruments;
(vi) all supporting obligations and letter-of-credit rights;
(vii) all general intangibles (including payment intangibles, intercompany accounts, intellectual property and software);
(viii) all inventory and other goods;
(ix) all motor vehicles, equipment and fixtures, including the Plants;
(x) all investment property, financial assets and all securities accounts;
(xi) all money, cash, cash equivalents, securities, and other property of any kind;
(xii) the Cash Collateral Accounts and all other deposit accounts;
(xiii) all notes, and all documents of title;
(xiv) all books, records, and other property related to or referring to any of the foregoing, including books, records, account ledgers, data processing records, computer software and other property, and general intangibles at any time evidencing or relating to any of the foregoing;
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(xv) all commercial tort claims;
(xvi) all real property owned or leased by such Credit Party;
(xvii) all other personal property of such Credit Property;
(xviii) all accessions to, substitutions for, and replacements, products, and proceeds of any of the foregoing, including, but not limited to, dividends or distributions on investment property, rents, profits, income and benefits, proceeds of any insurance policies, claims against third parties, and condemnation or requisition payments with respect to all or any of the foregoing; and
(xix) any and all proceeds of any of the foregoing.
Notwithstanding anything herein to the contrary, in no event shall the Collateral (or any component term thereof) include or be deemed to include (a) any enclosed structure (having two walls and a roof) or manufactured mobile home (Building), (b) any claims and causes of action of the Credit Parties under sections 544, 545, 547, 548, 549 and 550 of the Bankruptcy Code, or any other avoidance actions under the Bankruptcy Code or other applicable law (Avoidance Actions), but shall include, subject only to entry of the Final DIP Order, any proceeds of, or property recovered in connection with, any successful Avoidance Action (whether by judgment, settlement or otherwise, and unencumbered or not), (c) any claims and causes of action against any directors or officers of the Credit Parties, but including, subject only to entry of the Final DIP Order, any proceeds of, or property recovered in connection with, any successful claims and causes of action against any directors or officers of the Credit Parties or (d) any intent-to-use trademark applications of any Credit Party.
(b) Subject to the Carve Out, pursuant to Bankruptcy Code Section 364(c)(1) the DIP Agent and the DIP Secured Parties have been granted a super-priority administrative claim over any and all administrative claims of the type specified in Bankruptcy Code Section 503(b) and 507(b).
SECTION 10.02. Perfection and Protection of Security Interest.
(a) Notwithstanding the perfection of any security interest granted hereunder pursuant to the order of the Bankruptcy Court under the applicable DIP Order, each Credit Party shall, as applicable, at such Credit Partys expense, perform all steps reasonably requested by the DIP Agent at any time to perfect, maintain, protect, and enforce the Liens granted to the DIP Agent, including: upon request by the DIP Agent, delivering to the DIP Agent (who shall hold on behalf of the other DIP Secured Parties) (1) the originals of all certificated investment property, instruments, documents, and chattel paper, and all other Collateral of which the Requisite Lenders reasonably determine the DIP Agent should have physical possession in order to perfect and protect the DIP Agents security interest therein, duly pledged, endorsed, or assigned to the DIP Agent without restriction, (2) certificates of title (excluding deeds for real estate) covering any portion of the Collateral for which certificates of title have been issued and (3) all letters of credit on which such Credit Party is named beneficiary.
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(b) To the fullest extent permitted by applicable law, the DIP Agent may file one or more financing statements disclosing the Liens on the Collateral granted to the DIP Agent.
(c) To the extent any Credit Party owns any investment property, such Credit Party agrees as follows with respect to such investment property:
(i) All cash dividends, cash distributions, and other cash or cash equivalents in respect of such investment property at any time payable or deliverable to such Credit Party shall be deposited into the Cash Collateral Account; and
(ii) Such Credit Party will not acknowledge any transfer or encumbrance in respect of such investment property to or in favor of any Person other than the DIP Agent or a Person designated by the DIP Agent in writing.
(d) To the extent the Equity Interest of any Subsidiary of a Credit Party is in certificated form, upon the DIP Agents reasonable request, such Credit Party shall deliver all certificates or instruments at any time representing or evidencing such Equity Interest in such Subsidiary to the DIP Agent, and shall be in suitable form for transfer by delivery, or shall be accompanied by instruments of transfer or assignment, duly executed in blank, all in form and substance satisfactory to the DIP Agent. The DIP Agent shall have the right, at any time, after the occurrence and during the continuance of an Event of Default, to transfer to or to register in the name of the DIP Agent or its nominee any Equity Interest in such Subsidiary. In addition, the DIP Agent shall have the right at any time to exchange certificates or instruments representing or evidencing Equity Interest of such Subsidiaries for certificates or instruments of smaller or larger denominations.
SECTION 10.03. Delivery of Mortgages. Upon reasonable request from the DIP Agent, the applicable Credit Party shall deliver Mortgages with respect to any such Property reasonably requested in a form reasonably satisfactory to the DIP Agent necessary to create or record a Lien on the applicable Property and other real estate in the appropriate jurisdiction.
SECTION 10.04. Title to, Liens on, and Use of Collateral. Each Credit Party represents and warrants to the DIP Agent and the DIP Secured Parties and agrees with the DIP Secured Parties that: (a) all of the Collateral owned by such Credit Party is and will (subject to dispositions permitted hereunder) continue to be owned by such Credit Party free and clear of all Liens whatsoever, except for the Liens permitted under Section 6.02, (b) the Liens granted to the DIP Agent in the Collateral will not be junior in priority to any Lien other than the Carve Out and the Non-Primed Excepted Liens (to the extent, and only to the extent, set forth in the DIP Orders), and (c) such Credit Party will use, store, and maintain the Collateral owned by such Credit Party consistent with past practice. The inclusion of proceeds in the Collateral shall not be deemed to constitute any DIP Secured Partys consent to any sale or other disposition of the Collateral except as expressly permitted herein.
SECTION 10.05. Right to Cure. Upon the occurrence and during the continuance of an Event of Default and upon delivery of the Remedies Notice in accordance with Section 7.02 (including the five (5) Business Days prior delivery time period required thereunder), the DIP Agent shall have the right to, at the written direction of the Requisite Lenders, pay any
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amount or do any act required of any Credit Party hereunder or under any other Loan Document (other than in respect of principal, interest or fees on the Loans) in order to preserve, protect, maintain, or enforce the DIP Obligations, the Collateral, or the Liens granted to the DIP Agent therein, and which any Credit Party fails to pay or do, including payment of any judgment against any Credit Party, any insurance premium, any warehouse charge, any finishing or processing charge, any landlords or bailees claim, and any other obligation secured by a Lien upon or with respect to the Collateral; provided that neither the DIP Agent nor the DIP Secured Parties shall pay any amount (i) being contested in good faith by appropriate proceedings and for which adequate reserves have been maintained in accordance with GAAP or (ii) in respect of any Lien permitted under Section 6.02. All payments that the DIP Agent makes under this Section 10.05 and all out-of-pocket costs and expenses that the DIP Agent pays or incurs in connection with any reasonable action taken by it hereunder shall be considered part of the DIP Obligations and shall bear interest until repaid at the rate set forth in Section 2.7(c). Any payment made or other action taken by the DIP Agent under this Section 10.05 shall be without prejudice to any right to assert an Event of Default hereunder and to proceed thereafter as herein provided.
SECTION 10.06. Power of Attorney. Upon the occurrence of and during the continuance of an Event of Default and upon delivery of the Remedies Notice in accordance with Section 7.02 (including the five (5) Business Days prior delivery time period required thereunder), each Credit Party hereby appoints the DIP Agent and the DIP Agents designee(s) as such Credit Partys attorney to sign such Credit Partys name on any invoice, bill of lading, warehouse receipt, or other document of title relating to any Collateral, on drafts against customers, on assignments of accounts, on notices of assignment, financing statements, and other public records and to file any such financing statements permitted under this Agreement by electronic means with or without a signature as authorized or required by applicable law or filing procedure. Each Credit Party ratifies and approves all acts of such attorney. This power, being coupled with an interest, is irrevocable until the Discharge of DIP Obligations.
SECTION 10.07. The DIP Secured Parties Rights, Duties, and Liabilities. The Credit Parties assume all responsibility and liability arising from or relating to the use, sale, or other disposition of the Collateral. The DIP Obligations shall not be affected by any failure of any DIP Secured Party to take any steps to perfect the Liens granted to the DIP Agent or to collect or realize upon the Collateral, nor shall loss of or damage to the Collateral release any Credit Party from any of the DIP Obligations.
SECTION 10.08. Site Visits, Observations, and Testing. The DIP Secured Parties and their representatives will have the right at any commercially reasonable time, and upon reasonable advance notice to the applicable Credit Party to enter and visit the Properties of any Credit Party constituting or containing Collateral for the purposes of observing or inspecting such Collateral. The DIP Agent may examine, audit and make copies of any and all of the Credit Parties books and records and the Collateral and discuss the Credit Parties affairs with executive officers or managers of any Credit Party. No site visit, observation, or inspection by the DIP Agent will result in a waiver of any Default or Event of Default or impose any liability on the DIP Secured Parties other than for damages incurred as a result of the gross negligence or willful misconduct by the DIP Secured Parties as determined by a final, non-appealable order of a court of competent jurisdiction. The DIP Agent will make reasonable efforts to avoid interfering with any use of such Properties or any other property in exercising any rights provided hereunder.
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SECTION 10.09. Rights in Respect of Investment Property. During the existence of an Event of Default and upon delivery of the Remedies Notice in accordance with Section 7.02 (including the five (5) Business Days prior delivery time period required thereunder), subject to any order of the Bankruptcy Court and the Bankruptcy Code, (i) the DIP Agent may, or at the direction of the Requisite Lenders shall, upon written notice to the relevant Credit Party, transfer or register in the name of the DIP Agent or any of its nominees, for the benefit of the DIP Secured Parties, any or all of the Collateral consisting of investment property, the proceeds thereof (in cash or otherwise), and all liens, security, rights, remedies, and claims of any Credit Party with respect thereto (collectively, the Pledged Collateral) held by the DIP Agent hereunder, and the DIP Agent or its nominee may thereafter, after written notice to the applicable Credit Party, exercise all voting and corporate rights at any meeting of any corporation, partnership, or other business entity issuing any of the Pledged Collateral and any and all rights of conversion, exchange, subscription, or any other rights, privileges, or options pertaining to any of the Pledged Collateral as if it were the absolute owner thereof, including the right to exchange at its discretion any and all of the Pledged Collateral upon the merger, consolidation, reorganization, recapitalization, or other readjustment of any corporation, partnership, or other business entity issuing any of such Pledged Collateral or upon the exercise by any such issuer or the DIP Agent of any right, privilege, or option pertaining to any of the Pledged Collateral, and in connection therewith, to deposit and deliver any and all of the Pledged Collateral with any committee, depositary, transfer agent, registrar, or other designated agency upon such terms and conditions as it may determine, all without liability except to account for property actually received by it, but the DIP Agent shall have no duty to exercise any of the aforesaid rights, privileges, or options, and the DIP Agent shall not be responsible for any failure to do so or delay in so doing, (ii) to the extent permitted under any requirements of law, after the DIP Agents giving of the notice specified in clause (i) of this Section 10.09, all rights of any Credit Party to exercise the voting and other consensual rights which it would otherwise be entitled to exercise and to receive the dividends, interest, and other distributions which it would otherwise be authorized to receive and retain thereunder shall be suspended until such Event of Default shall no longer exist, and all such rights shall, until such Event of Default shall no longer exist, thereupon become vested in the DIP Agent which shall thereupon have the sole right to exercise such voting and other consensual rights and to receive and hold as Pledged Collateral such dividends, interest, and other distributions, (iii) all dividends, interest, and other distributions which are received by any Credit Party contrary to the provisions of this Section 10.09 shall be received in trust for the benefit of the DIP Agent, shall be forthwith deposited into the Cash Collateral Accounts as Collateral in the same form as so received (with any necessary endorsement), and (iv) each Credit Party shall execute and deliver (or cause to be executed and delivered) to the DIP Agent all such proxies and other instruments as the DIP Agent or a Lender may request for the purpose of enabling the DIP Agent to exercise the voting and other rights which it is entitled to exercise pursuant to this Section 10.09 and to receive the dividends, interest, and other distributions which it is entitled to receive and retain pursuant to this Section 10.09.
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SECTION 10.10. No Filings Required. No Filings Required. Notwithstanding anything to the contrary contained herein, (a) the Liens and security interests referred to herein shall be deemed valid and perfected by entry of the DIP Order and (b) the DIP Agent shall not be required to file any financing statements, mortgages, notices of Lien or similar instruments in any jurisdiction or filing office or to take any other action in order to validate or perfect the Lien and security interest granted by or pursuant to this Agreement, any other Loan Document or the DIP Order.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Notices.
(a) Except in the case of notices and other communications expressly permitted to be given by telephone (and subject to paragraph (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy, as follows:
(i) | if to any Credit Party, to: |
at c/o Penn Virginia Corporation
Four Radnor Corporate Center
Suite 200, 100 Matsonford Road
Radnor, Pennsylvania 19087
Attention : Steven A. Hartman and Nancy M. Snyder (Telecopy No. (610) 687-3688)
with a copy (which copy shall not constitute notice hereunder), to:
Kirkland & Ellis LLP
600 Travis Street, Suite 3300
Houston, Texas 77002
Attention: Mary Kogut
Telephone: (713) 835-3650
Electronic Mail: mary.kogut@kirkland.com
and
Kirkland & Ellis LLP
600 Travis Street, Suite 3300
Houston, Texas 77002
Attention: Brian Schartz
Telephone: (713) 835-3755
Electronic Mail: brian.schartz@kirkland.com
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(ii) | if to the DIP Agent (for payments, Borrowing Requests and all other notices to the DIP Agent) to: |
Wells Fargo Bank, National Association
1000 Louisiana Street, 9th Floor
MAC T0002-090
Houston, TX 77002
Attention: Bryan McDavid
Telephone: (713) 652-5874
Electronic Mail: bryan.m.mcdavid@wellsfargo.com
with a copy (other than for payments or Borrowing Requests, but in any event, which copy shall not constitute notice hereunder), to:
Bracewell LLP
711 Louisiana, Suite 2300
Houston, Texas 77002
Attention: Stephanie Song
Telephone: (713) 221-1542
Electronic Mail: stephanie.song@bracewelllaw.com
Bracewell LLP
CityPlace I, 34th Floor
185 Asylum Street
Hartford, Connecticut 06103-3458
Attention: Kurt Mayr
Telephone: (860) 256-8534
Electronic Mail: kurt.mayr@bracewelllaw.com
and
Bracewell LLP
CityPlace I, 34th Floor
185 Asylum Street
Hartford, Connecticut 06103-3458
Attention: David Lawton
Telephone: (860) 256-8544
Electronic Mail: david.lawton@bracewelllaw.com
(iii) | if to the Senior Noteholders, to: |
Milbank, Tweed, Hadley & McCloy LLP
28 Liberty Street
New York, New York 10005
Attention: Dennis Dunne
Telephone: (212) 530-5770
Electronic Mail: ddunne@milbank.com
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Milbank, Tweed, Hadley & McCloy LLP
28 Liberty Street
New York, New York 10005
Attention: Samuel Khalil
Telephone: (212) 530-5015
Electronic Mail: skhalil@milbank.com
and
Milbank, Tweed, Hadley & McCloy LLP
601 S. Figueroa Street, 30th Floor
Los Angeles, California 90017
Attention: Eric R. Reimer
Telephone: (213) 892-4477
Electronic Mail: ereimer@milbank.com
(iv) if to any other Lender, to it at its address (or telecopy number) set forth in its Administrative Questionnaire.
(b) Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communications pursuant to procedures approved by the DIP Agent; provided that the foregoing shall not apply to notices pursuant to Article II unless otherwise agreed by the DIP Agent and the applicable Lender. The DIP Agent or the Borrower (on its behalf and on behalf of any and all other Credit Parties) may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.
(c) Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto. All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 11.02. Waivers; Amendments.
(a) No failure or delay by the DIP Agent or any Lender in exercising any right or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the DIP Agent and the Lenders hereunder are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of this Agreement or consent to any departure by any Credit Party therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan shall not be construed as a waiver of any Default, regardless of whether the DIP Agent or any Lender may have had notice or knowledge of such Default at the time.
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(b) Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Borrower and the Requisite Lenders or by the Borrower and the DIP Agent with the consent of the Requisite Lenders; provided that no such agreement shall (i) increase the Commitment of any Lender without the written consent of such Lender, (ii) reduce the principal amount of any Loan or reduce the rate of interest thereon (provided that the Requisite Lenders can waive the increased 2.00% of the Default Rate), or reduce any fees payable hereunder, without the written consent of each Lender affected thereby, (iii) postpone the scheduled date of payment of the principal amount of any Loan, or any interest thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment, without the written consent of each Lender affected thereby, (iv) change Section 2.18(b) or (c) or Section 7.03 in a manner that would alter the pro rata sharing of payments required thereby, without the written consent of each Lender, (v) change any of the provisions of this Section or the definition of Requisite Lenders or Supermajority Lenders or any other provision hereof specifying the number or percentage of Lenders required to waive, amend or modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender, (vi) release any Credit Party from its obligations under the Loan Documents or release all or substantially all of the Collateral for the DIP Obligations arising under this Agreement, except in connection with any sales, transfers, leases, dispositions or other transactions permitted by Section 6.03 or Section 6.13, without the prior written consent of each Lender, (vii) change Section 7.03, this clause (vii), Section 11.14, the definition of Discharge of DIP Obligations or any definition referenced therein in any manner adverse to a DIP Secured Party without the written consent of such DIP Secured Party, or (viii) change any of the provisions of the Loan Documents that materially, adversely and disproportionately affect (x) a Lender Swap Counterparty as compared to the other DIP Secured Parties or (y) the Lender Swap Counterparties as compared to the Lenders, without the written consent of such Lender Swap Counterparty or the Lender Swap Counterparties, respectively; provided, further, that no such agreement shall (x) amend, modify or otherwise affect the rights or duties of the DIP Agent hereunder without the prior written consent of the DIP Agent or (y) release any of the Collateral, except in connection with any sales, transfers, leases, dispositions or other transactions permitted by Section 6.03 or Section 6.13, without the written consent of the DIP Agent (it being acknowledged by the Credit Parties that the DIP Agent may condition such consent on the Credit Parties having assigned, novated, terminated, unwound or otherwise obtained a release from any obligations or liabilities under Swap Agreements (or with respect to projected production of Hydrocarbons hedged thereunder) attributable to the Collateral to be released. Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except that the Commitment of such Lender may not be increased or extended without the consent of such Lender.
SECTION 11.03. Expenses; Indemnity; Damage Waiver. (a) Each Credit Party shall pay all reasonable and documented out-of-pocket expenses incurred by the DIP Agent, each Lender, and each Lender Swap Counterparty, (in the case of legal or consultancy fees, disbursements, charges and expenses, limited to: (i) all reasonable fees, disbursements, charges and expenses of Bracewell LLP, McGuireWoods LLP, and Opportune, LLP and one local counsel in each necessary jurisdiction for the DIP Agent, the Lenders and the Lender Swap Counterparties taken as a whole, and in the case of an actual or perceived conflict of interest, one additional counsel in each relevant jurisdiction to the affected parties similarly situated taken as a whole, and other reasonable legal or consultancy fees, expenses and disbursements of the DIP
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Agent in its sole discretion and (ii) as reasonably needed, all reasonable legal or consultancy fees, disbursements, charges and expenses of the Lenders and Lender Swap Counterparties with the prior written consent of the Borrower (such consent not be unreasonably withheld)) in connection with the discussion, negotiation, preparation, execution and delivery of any documents in connection with any proposed financing of the Borrower, including the Lender Swap Agreements, the Loan Documents and the funding of all Loans under this Agreement, such costs and expenses including due diligence, syndication of this Agreement (including printing, distribution and bank meeting) transportation, duplication, messenger, audit, insurance, appraisal and consultant costs and expenses, and all search, filing and recording fees, incurred or sustained by the DIP Agent, the Lenders or the Lender Swap Counterparties in connection with the Lender Swap Agreements, this Agreement, the other Loan Documents or the transactions contemplated hereby or thereby, the administration of this Agreement and any amendments, modifications or waivers of any provision of the Lender Swap Agreements, the Loan Documents or the transactions contemplated thereby or hereby (whether or not the transactions contemplated thereby or hereby shall be consummated), or in connection with the interpretation, enforcement or protection of any of their rights and remedies under the Lender Swap Agreements or the Loan Documents including its rights under this Section, or in connection with the Loans made hereunder, including all such reasonable and documented out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans.
(b) EACH CREDIT PARTY SHALL INDEMNIFY THE DIP AGENT EACH LENDER, EACH LENDER SWAP COUNTERPARTY AND EACH RELATED PARTY OF ANY OF THE FOREGOING PERSONS (EACH SUCH PERSON BEING CALLED AN INDEMNITEE), AGAINST, AND HOLD EACH INDEMNITEE HARMLESS FROM, ANY AND ALL LOSSES, CLAIMS, DAMAGES, LIABILITIES AND RELATED EXPENSES, INCLUDING THE REASONABLE FEES, CHARGES AND DISBURSEMENTS OF ANY COUNSEL FOR ANY INDEMNITEE, INCURRED BY OR ASSERTED AGAINST ANY INDEMNITEE ARISING OUT OF, IN CONNECTION WITH OR AS A RESULT OF (I) THE EXECUTION OR DELIVERY OF THIS AGREEMENT OR ANY AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY (INCLUDING THE LENDER SWAP AGREEMENTS), THE PERFORMANCE BY THE PARTIES HERETO OF THEIR RESPECTIVE OBLIGATIONS HEREUNDER OR THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY, (II) ANY LOAN OR THE USE OF THE PROCEEDS THEREFROM , (III) ANY ACTUAL OR ALLEGED PRESENCE OR RELEASE OF HAZARDOUS MATERIALS ON OR FROM ANY PROPERTY OWNED OR OPERATED BY ANY OF THE DEBTORS, OR ANY ENVIRONMENTAL LIABILITY RELATED IN ANY WAY TO THE DEBTORS, OR (IV) ANY ACTUAL OR PROSPECTIVE CLAIM, LITIGATION, INVESTIGATION OR PROCEEDING RELATING TO ANY OF THE FOREGOING, WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY AND REGARDLESS OF WHETHER ANY INDEMNITEE IS A PARTY THERETO; PROVIDED THAT SUCH INDEMNITY SHALL NOT, AS TO ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH LOSSES, CLAIMS, DAMAGES, LIABILITIES OR RELATED EXPENSES ARE DETERMINED BY A COURT OF COMPETENT JURISDICTION BY FINAL AND NONAPPEALABLE JUDGMENT (A) TO HAVE RESULTED FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNITEE (IT BEING ACKNOWLEDGED AND AGREED THAT IT IS THE INTENTION OF THE PARTIES HERETO THAT THE INDEMNITEES BE
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INDEMNIFIED IN THE CASE OF THEIR OWN NEGLIGENCE (OTHER THAN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT), REGARDLESS OF WHETHER SUCH NEGLIGENCE IS SOLE OR CONTRIBUTORY, ACTIVE OR PASSIVE, IMPUTED, JOINT OR TECHNICAL); (B) TO HAVE RESULTED FROM A CLAIM BROUGHT BY THE BORROWER AGAINST ANY INDEMNITEE OF ANY MATERIAL BREACH IN BAD FAITH OF SUCH INDEMNITEES FUNDING OBLIGATIONS UNDER ANY LOAN DOCUMENTS, OR (C) TO BE A DISPUTE SOLELY BY OR AMONGST INDEMNITEES (OTHER THAN THE DIP AGENT IN ITS ROLE AS SUCH) TO THE EXTENT SUCH DISPUTE DOES NOT INVOLVE AND IS NOT RELATED TO ANY ACT, OMISSION OR REPRESENTATION ON THE PART OF, OR ANY INFORMATION PROVIDED BY OR ON BEHALF OF, THE BORROWER, ANY GUARANTOR OR AFFILIATES THEREOF. IN THE CASE OF AN INVESTIGATION, LITIGATION OR OTHER PROCEEDING TO WHICH THE INDEMNITY IN THIS PARAGRAPH APPLIES, SUCH INDEMNITY SHALL BE EFFECTIVE WHETHER OR NOT SUCH INVESTIGATION, LITIGATION OR PROCEEDING IS BROUGHT BY THE BORROWER, ANY OF ITS DIRECTORS, SECURITY-HOLDERS OR CREDITORS, AN INDEMNITEE OR ANY OTHER PERSON, OR AN INDEMNITEE IS OTHERWISE A PARTY THERETO AND WHETHER OR NOT THE TRANSACTIONS CONTEMPLATED HEREBY ARE CONSUMMATED. FOR THE AVOIDANCE OF DOUBT, UNDER NO CIRCUMSTANCES SHALL THE BORROWER BE LIABLE FOR SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES SUFFERED OR INCURRED BY ANY INDEMNITEE. To the extent that any Credit Party fails to pay any amount required to be paid by it to the DIP Agent under paragraph (a) or (b) of this Section, each Lender severally agrees to pay to the DIP Agent such Lenders Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the DIP Agent in its capacity as such.
(c) To the extent permitted by applicable law, no party hereto shall assert, and each hereby waives, any claim against any Indemnitee or any party hereto, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with or as a result of this Agreement or any agreement or instrument contemplated hereby, any Loan or the use of the proceeds thereof. For the avoidance of doubt, the parties hereto acknowledge and agree that a claim for indemnity under Section 11.03(b), to the extent covered thereby, is a claim of direct or actual damages and nothing contained in the foregoing sentence shall limit the Credit Parties indemnification obligations to the extent such special, indirect, consequential or punitive damages are included in any third party claim in connection with which such Indemnitee is otherwise entitled to indemnification hereunder.
(d) All amounts due under this Section shall be payable promptly after written demand therefor.
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SECTION 11.04. Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that (i) no Credit Party may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by a Credit Party without such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby Participants (to the extent provided in paragraph (c) of this Section) and, to the extent expressly contemplated hereby, the Related Parties of each of the DIP Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.
(b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld) of:
(A) the Borrower, provided that no consent of the Borrower shall be required for an assignment to a Lender, an Affiliate of a Lender, an Approved Fund or, if an Event of Default has occurred and is continuing, any other assignee; and
(B) the DIP Agent, provided that no consent of the DIP Agent shall be required for an assignment of any Commitment to an assignee that is a Lender with a Commitment immediately prior to giving effect to such assignment
provided, however, that no Lender may assign all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it) to the Parent or any Affiliate of the Parent or any natural person (or any company, investment vehicle or trust for, or owned and operated for the primary benefit of, a natural person or relative(s) thereof), in each case, without the consent of all of the Lenders; and provided further that under no circumstance may any Lender assign all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it) to (x) any Company Competitor or (y) any Person that is not a party to the RSA, unless, with respect to this clause (y), either (A) concurrently with such assignment such Person becomes a party to the RSA or (B) the RSA is no longer in effect at the time of such assignment (and any such assignment in violation of this proviso shall be null and void).
(ii) Assignments shall be subject to the following additional conditions:
(A) except in the case of an assignment to a Lender or an Affiliate of a Lender, the amount of the Commitment Amount of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the DIP Agent) shall not be less than $5,000,000 unless each of the Borrower and the DIP Agent otherwise consent, provided that no such consent of the Borrower shall be required if an Event of Default has occurred and is continuing;
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(B) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lenders rights and obligations under this Agreement;
(C) the parties to each assignment shall execute and deliver to the DIP Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500; and
(D) the assignee, if it shall not be a Lender, shall deliver to the DIP Agent an Administrative Questionnaire in which the assignee designates one or more individuals to whom all syndicate-level information (which may contain material non-public information about the Credit Parties and their related parties or their respective securities) will be made available and who may receive such information in accordance with the assignees compliance procedures and applicable laws, including Federal and state securities laws.
(iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) of this Section, from and after the effective date specified in each Assignment and Assumption the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lenders rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.15, 2.16 and 2.17 (with respect to amounts accruing during the period such Lender was a party hereto and for which such Lender was entitled to reimbursement or indemnity) and Section 11.03). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 11.04 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (c) of this Section. If the consent of the Borrower to an assignment is required hereunder (including a consent to an assignment that does not meet the minimum assignment thresholds specified in this Section), the Borrower shall be deemed to have given its consent ten days after the date notice thereof has been delivered by the assigning Lender (through the DIP Agent) unless such consent is expressly refused by the Borrower prior to such tenth day.
(iv) The DIP Agent, acting for this purpose as a non-fiduciary agent of the Borrower, shall maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the Register). The entries in the Register shall be conclusive, and the Borrower, the DIP Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.
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(v) Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an assignee, the assignees completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of this Section and any written consent to such assignment required by paragraph (b) of this Section, the DIP Agent shall accept such Assignment and Assumption and record the information contained therein in the Register; provided that if either the assigning Lender or the assignee shall have failed to make any payment required to be made by it pursuant to Section 2.07(b), 2.18(d) or 11.03, the DIP Agent shall have no obligation to accept such Assignment and Assumption and record the information therein in the Register unless and until such payment shall have been made in full, together with all accrued interest thereon. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.
(c) Any Lender may, without the consent of any Credit Party or the DIP Agent sell participations to one or more banks or other entities (a Participant), other than the Borrower or any Affiliate of the Borrower or any natural person (or any company, investment vehicle or trust for, or owned and operated for the primary benefit of, a natural person or relative(s) thereof), in all or a portion of such Lenders rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans owing to it); provided that (A) such Lenders obligations under this Agreement shall remain unchanged, (B) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (C) the Credit Parties, the DIP Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lenders rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the first proviso to Section 11.02(b) that affects such Participant. The Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.15, 2.16 and 2.17 (subject to the requirements and limitations therein, including the requirements under Section 2.17(f) (it being understood that the documentation required under Section 2.17(f) shall be delivered to the participating Lender)) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section; provided that such Participant (A) agrees to be subject to the provisions of Sections 2.18 and 2.19 as if it were an assignee under paragraph (b) of this Section; and (B) shall not be entitled to receive any greater payment under Sections 2.15 or 2.17, with respect to any participation, than its participating Lender would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 11.08 as though it were a Lender, provided that such Participant agrees to be subject to Section 2.18(c) as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent
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of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participants interest in the Loans or other obligations under this Agreement (the Participant Register); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register to any Person (including the identity of any Participant or any information relating to a Participants interest in any Commitments, Loans, or its other obligations under any this Agreement or any other Loan Document) except to the extent that such disclosure is necessary to establish that such Commitment, Loan, or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.
(d) Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including without limitation any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.
SECTION 11.05. Survival. All covenants, agreements, representations and warranties made by the Credit Parties herein and in the certificates or other instruments delivered in connection with or pursuant to this Agreement shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement and the making of any Loans, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the DIP Agent or any Lender may have had notice or knowledge of any 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 and unpaid and so long as the Commitments have not expired or terminated. The provisions of Sections 2.15, 2.16, 2.17 and 11.03 and Article VIII shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Commitments or the termination of this Agreement or any provision hereof.
SECTION 11.06. Counterparts; Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement, the other Loan Documents and any separate letter agreements with respect to fees payable to the DIP Agent constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the DIP Agent and when the DIP Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Delivery of an executed counterpart of a signature page of this Agreement by telecopy or other electronic transmission shall be effective as delivery of a manually executed counterpart of this Agreement.
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SECTION 11.07. Severability. Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.
SECTION 11.08. Right of Setoff. If an Event of Default shall have occurred and be continuing and upon delivery of the Remedies Notice in accordance with Section 7.02 (including the five (5) Business Days prior delivery time period required thereunder), each Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other obligations at any time owing by such Lender or Affiliate to or for the credit or the account of any Credit Party against any of and all the obligations of any Credit Party now or hereafter existing under this Agreement or any other Loan Document held by such Lender, irrespective of whether or not such Lender shall have made any demand under this Agreement or any other Loan Document and although such obligations may be unmatured. The rights of each Lender under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender may have.
SECTION 11.09. Governing Law; Jurisdiction; Consent to Service of Process.
(a) THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK) EXCEPT TO THE EXTENT THE LAW OF THE STATE OF NEW YORK IS SUPERSEDED BY THE BANKRUPTCY CODE.
(b) EACH CREDIT PARTY HEREBY IRREVOCABLY SUBMITS TO THE NON EXCLUSIVE JURISDICTION OF THE BANKRUPTCY COURT, OR, TO THE EXTENT THE BANKRUPTCY COURT DOES NOT HAVE (OR ABSTAINS FROM EXERCISING) JURISDICTION, TO ANY UNITED STATES FEDERAL OR ANY NEW YORK STATE COURT SITTING IN NEW YORK COUNTY, NEW YORK, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS, AND EACH CREDIT PARTY HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE DIP AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST ANY CREDIT PARTY IN THE COURTS OF ANY OTHER JURISDICTION.
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(c) Each Credit Party hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in any court referred to in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 11.01. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law.
SECTION 11.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 11.11. Headings. Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.
SECTION 11.12. Confidentiality.
(a) Each of the DIP Agent and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (i) to its and its Affiliates directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that (A) the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential and (B) in any event, any subsequent disclosure by its or its Affiliates directors, officers or employees shall be deemed to be, and treated as if it were, a disclosure by, as applicable, the DIP Agent or such Lender), (ii) to the extent requested by any regulatory or self-regulatory authority, (iii) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (iv) to any other party to this Agreement, (v) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or the enforcement of rights hereunder, (vi) subject to an agreement containing provisions substantially the same as those of this Section, to (x) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (y) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to any Credit Party and its obligations, (vii) with the consent of the Borrower or (viii) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to the DIP Agent or any Lender on a nonconfidential basis from a source other than Credit Parties. For the purposes of this Section,
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Information means all information received from the Parent or the Borrower relating to any Credit Party or their respective businesses, other than any such information that is available to the DIP Agent or any Lender on a nonconfidential basis prior to disclosure by any Credit Party. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.
(b) EACH LENDER ACKNOWLEDGES THAT INFORMATION AS DEFINED IN SECTION 11.12(a) FURNISHED TO IT PURSUANT TO THIS AGREEMENT MAY INCLUDE MATERIAL NON-PUBLIC INFORMATION CONCERNING THE PARENT, THE BORROWER AND ITS RELATED PARTIES OR THEIR RESPECTIVE SECURITIES AND CONFIRMS THAT IT HAS DEVELOPED COMPLIANCE PROCEDURES REGARDING THE USE OF MATERIAL NON-PUBLIC INFORMATION AND THAT IT WILL HANDLE SUCH MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH THOSE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.
(c) ALL INFORMATION, INCLUDING REQUESTS FOR WAIVERS AND AMENDMENTS, FURNISHED BY ANY CREDIT PARTY OR THE DIP AGENT PURSUANT TO, OR IN THE COURSE OF ADMINISTERING, THIS AGREEMENT WILL BE SYNDICATE-LEVEL INFORMATION, WHICH MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION ABOUT THE PARENT, THE BORROWER, THE CREDIT PARTIES AND THEIR RELATED PARTIES OR THEIR RESPECTIVE SECURITIES. ACCORDINGLY, EACH LENDER REPRESENTS TO THE BORROWER AND THE DIP AGENT THAT IT HAS IDENTIFIED IN ITS ADMINISTRATIVE QUESTIONNAIRE A CREDIT CONTACT WHO MAY RECEIVE INFORMATION THAT MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH ITS COMPLIANCE PROCEDURES AND APPLICABLE LAW.
SECTION 11.13. Interest Rate Limitation. Each Credit Party, the DIP Agent and the Lenders intend to strictly comply with all applicable laws, including applicable usury laws. Accordingly, the provisions of this Section 11.13 shall govern and control over every other provision of this Agreement or any other Loan Document that conflicts or is inconsistent with this Section 11.13, even if such provision declares that it controls. As used in this Section 11.13, the term interest includes the aggregate of all charges, fees, benefits or other compensation which constitute interest under applicable law, provided that, to the maximum extent permitted by applicable law, (a) any non-principal payment shall be characterized as an expense or as compensation for something other than the use, forbearance or detention of money and not as interest, and (b) all interest at any time contracted for, reserved, charged or received shall be amortized, prorated, allocated and spread, in equal parts during the full term of the DIP Obligations. In no event shall any Credit Party or any other Person be obligated to pay, or any Lender have any right or privilege to reserve, receive or retain, (i) any interest in excess of the maximum amount of nonusurious interest permitted under the applicable laws (if any) of the United States or of any other applicable state or (ii) total interest in excess of the amount which such Lender could lawfully have contracted for, reserved, received, retained or charged had the
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interest been calculated for the full term of the DIP Obligations at the Highest Lawful Rate. On each day, if any, that the interest rate (the Stated Rate) called for under this Agreement or any other Loan Document exceeds the Highest Lawful Rate, the rate at which interest shall accrue shall automatically be fixed by operation of this sentence at the Highest Lawful Rate for that day, and shall remain fixed at the Highest Lawful Rate for each day thereafter until the total amount of interest accrued equals the total amount of interest which would have accrued if there were no such ceiling rate as is imposed by this sentence. Thereafter, interest shall accrue at the Stated Rate unless and until the Stated Rate again exceeds the Highest Lawful Rate when the provisions of the immediately preceding sentence shall again automatically operate to limit the interest accrual rate. The daily interest rates to be used in calculating interest at the Highest Lawful Rate shall be determined by dividing the applicable Highest Lawful Rate per annum by the number of days in the calendar year for which such calculation is being made. None of the terms and provisions contained in this Agreement or in any other Loan Document that directly or indirectly relate to interest shall ever be construed without reference to this Section 11.13, or be construed to create a contract to pay for the use, forbearance or detention of money at an interest rate in excess of the Highest Lawful Rate. If the term of any Obligation is shortened by reason of acceleration of maturity as a result of any Event of Default or by any other cause, or by reason of any required or permitted prepayment, and if for that (or any other) reason any Lender at any time, including but not limited to, the stated maturity, is owed or receives (and/or has received) interest in excess of interest calculated at the Highest Lawful Rate, then and in any such event all of any such excess interest shall be canceled automatically as of the date of such acceleration, prepayment or other event which produces the excess, and, if such excess interest has been paid to such Lender, it shall be credited pro tanto against the then-outstanding principal balance of the Borrowers obligations to such Lender, effective as of the date or dates when the event occurs which causes it to be excess interest, until such excess is exhausted or all of such principal has been fully paid and satisfied, whichever occurs first, and any remaining balance of such excess shall be promptly refunded to its payor.
SECTION 11.14. Collateral Matters; Lender Swap Agreements and Lender Party Financial Service Products. The benefit of the Collateral Documents and of the provisions of this Agreement relating to the Collateral shall also extend to, secure and be available on a pro rata basis to each Lender Swap Counterparty with respect to any obligations of any Debtor arising under such Lender Swap Agreement but only to the extent such obligations arise from transactions entered into prior to the date such Lender Swap Counterparty ceases to be a Lender or an Affiliate of a Lender, without giving effect to any extension, increases, or modifications (including blending) thereof which are made after such Lender Swap Counterparty ceases to be a Lender or an Affiliate of a Lender under this Agreement; provided that, with respect to any Lender Swap Agreement that remains secured after the counterparty thereto is no longer a Lender or an Affiliate of a Lender or the Discharge of DIP Obligations has occurred, the provisions of Article VIII shall also continue to apply to such counterparty in consideration of its benefits hereunder and each such counterparty shall, if requested by the DIP Agent, promptly execute and deliver to the DIP Agent all such other documents, agreements and instruments reasonably requested by the DIP Agent to evidence the continued applicability of the provisions of Article VIII. Notwithstanding the foregoing and other than as expressly provided herein, no Lender or Affiliate of a Lender (or former Lender or Affiliate of a former Lender) shall have any voting or consent right under this Agreement or any Collateral Document as a result of the existence of obligations owed to it under a Lender Swap Agreement that is secured by any Collateral Document.
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SECTION 11.15. No Third Party Beneficiaries. This Agreement, the other Loan Documents, and the agreement of the Lenders to make Loans hereunder are solely for the benefit of the Parent and the Borrower, and no other Person (including, without limitation, any Subsidiary of the Borrower, any obligor, contractor, subcontractor, supplier or materialman) shall have any rights, claims, remedies or privileges hereunder or under any other Loan Document against the DIP Agent, any other Agent, or any Lender for any reason whatsoever. There are no third party beneficiaries.
SECTION 11.16. Acknowledgment and Consent to Bail-In of EEA Financial Institutions. Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any EEA Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the Write-Down and Conversion Powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:
(a) the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and
(b) the effects of any Bail-in Action on any such liability, including, if applicable:
(i) a reduction in full or in part or cancellation of any such liability;
(ii) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Credit Document; or
(iii) the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of any EEA
SECTION 11.17. USA PATRIOT Act. Each Lender that is subject to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the Patriot Act) hereby notifies the Parent, the Borrower and the Guarantors that pursuant to the requirements of the Patriot Act, it is required to obtain, verify and record information that identifies the Parent, the Borrower and the Guarantors, which information includes the name and address of the Parent, the Borrower and the Guarantors and other information that will allow such Lender to identify the Parent, the Borrower and the Guarantors in accordance with the Patriot Act.
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SECTION 11.18. NO ORAL AGREEMENTS. THE LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
SECTION 11.19. DIP Orders. In the case of any conflict or inconsistency between the terms of this Agreement and the DIP Orders, the terms of the DIP Orders shall govern and control.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.
PENN VIRGINIA HOLDING CORP., as Borrower | ||||
By: | /s/ Steven A. Hartman | |||
Name: Steven A. Hartman | ||||
Title: Senior Vice President and | ||||
Chief Financial Officer | ||||
PENN VIRGINIA CORPORATION, as Parent | ||||
By: | /s/ Steven A. Hartman | |||
Name: Steven A. Hartman | ||||
Title: Senior Vice President and | ||||
Chief Financial Officer | ||||
SUBSIDIARIES | ||||
PENN VIRGINIA OIL & GAS CORPORATION, as a Guarantor | ||||
By: | /s/ Steven A. Hartman | |||
Name: Steven A. Hartman | ||||
Title: Senior Vice President and | ||||
Chief Financial Officer | ||||
PENN VIRGINIA OIL & GAS GP LLC, as a Guarantor | ||||
By: | /s/ Steven A. Hartman | |||
Name: Steven A. Hartman | ||||
Title: Senior Vice President and | ||||
Chief Financial Officer | ||||
PENN VIRGINIA OIL & GAS LP LLC, as a Guarantor | ||||
By: | /s/ Steven A. Hartman | |||
Name: Steven A. Hartman | ||||
Title: Senior Vice President and | ||||
Chief Financial Officer |
Signature Page to DIP Credit Agreement
PENN VIRGINIA OIL & GAS, L.P., as a Guarantor | ||||
by: Penn Virginia Oil & Gas GP LLC, its General Partner | ||||
By: | /s/ Steven A. Hartman | |||
Name: Steven A. Hartman | ||||
Title: Senior Vice President and | ||||
Chief Financial Officer | ||||
PENN VIRGINIA MC CORPORATION, as a Guarantor | ||||
By: | /s/ Steven A. Hartman | |||
Name: Steven A. Hartman | ||||
Title: Senior Vice President and | ||||
Chief Financial Officer | ||||
PENN VIRGINIA MC ENERGY L.L.C., as a Guarantor | ||||
By: | /s/ Steven A. Hartman | |||
Name: Steven A. Hartman | ||||
Title: Senior Vice President and | ||||
Chief Financial Officer | ||||
PENN VIRGINIA MC OPERATING COMPANY L.L.C., as a Guarantor | ||||
By: | /s/ Steven A. Hartman | |||
Name: Steven A. Hartman | ||||
Title: Senior Vice President and | ||||
Chief Financial Officer |
Signature Page to DIP Credit Agreement
WELLS FARGO BANK, NATIONAL ASSOCIATION, as DIP Agent and a Lender | ||
By: | /s/ Bryan M. McDavid | |
Name: | Bryan M. McDavid | |
Title: | Director |
Debtor-In-Possession Credit Agreement (Penn Virginia Holding Corp.)
ROYAL BANK OF CANADA, as a Lender | ||
By: | /s/ Mark Lumpkin, Jr. | |
Name: | Mark Lumpkin, Jr. | |
Title: | Authorized Signatory |
Debtor-In-Possession Credit Agreement (Penn Virginia Holding Corp.)
BANK OF AMERICA, N.A., as a Lender | ||
By: | /s/ Edna Aguilar Mitchell | |
Name: | Edna Aguilar Mitchell | |
Title: | Director |
Debtor-In-Possession Credit Agreement (Penn Virginia Holding Corp.)
THE BANK OF NOVA SCOTIA, as a Lender | ||
By: | /s/ Alan Dawson | |
Name: | Alan Dawson | |
Title: | Director |
Debtor-In-Possession Credit Agreement (Penn Virginia Holding Corp.)
CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as a Lender | ||
By: | /s/ Didier Siffer | |
Name: | Didier Siffer | |
Title: | Authorized Signatory | |
By: | /s/ Laura Katherine Schembri | |
Name: | Laura Katherine Schembri | |
Title: | Authorized Signatory |
Debtor-In-Possession Credit Agreement (Penn Virginia Holding Corp.)
BRANCH BANKING AND TRUST COMPANY, as a Lender | ||
By: | /s/ David A. White | |
Name: | David A. White | |
Title: | Senior Vice President |
Debtor-In-Possession Credit Agreement (Penn Virginia Holding Corp.)
BARCLAYS BANK PLC, as a Lender | ||
By: | /s/ Vanessa Kurbatskiy | |
Name: | Vanessa Kurbatskiy | |
Title: | Vice President |
Debtor-In-Possession Credit Agreement (Penn Virginia Holding Corp.)
COMERICA BANK, as a Lender | ||
By: | /s/ Barry Carroll | |
Name: | Barry Carroll | |
Title: | Vice President |
Debtor-In-Possession Credit Agreement (Penn Virginia Holding Corp.)
SOCIÉTÉ GÉNÉRALE, as a Lender | ||
By: | /s/ Max Sonnonstine | |
Name: | Max Sonnonstine | |
Title: | Director |
Debtor-In-Possession Credit Agreement (Penn Virginia Holding Corp.)
CAPITAL ONE, NATIONAL ASSOCIATION, as a Lender | ||
By: | /s/ Laurel Varney | |
Name: | Laurel Varney | |
Title: | Vice President |
Debtor-In-Possession Credit Agreement (Penn Virginia Holding Corp.)
SUNTRUST BANK, as a Lender | ||
By: | /s/ William S. Krueger | |
Name: | William S. Krueger | |
Title: | First Vice President |
Debtor-In-Possession Credit Agreement (Penn Virginia Holding Corp.)
SANTANDER BANK, N.A., as a Lender | ||
By: | /s/ Mark Connelly | |
Name: | Mark Connelly | |
Title: | Senior Vice President |
By: | /s/ David ODriscoll | |
Name: | David ODriscoll | |
Title: | Senior Vice President |
Debtor-In-Possession Credit Agreement (Penn Virginia Holding Corp.)
Schedule 2.01
Commitments
Commitment | Applicable | |||||||
Lender |
Amount | Percentage | ||||||
Wells Fargo Bank, National Association |
$ | 3,687,500.00 | 14.750000000 | % | ||||
Royal Bank of Canada |
$ | 3,687,500.00 | 14.750000000 | % | ||||
Bank of America, N.A. |
$ | 2,562,500.00 | 10.250000000 | % | ||||
The Bank of Nova Scotia |
$ | 2,562,500.00 | 10.250000000 | % | ||||
Credit Suisse AG, Cayman Islands Branch |
$ | 2,187,500.00 | 8.750000000 | % | ||||
Branch Banking and Trust Company |
$ | 1,562,500.00 | 6.250000000 | % | ||||
Barclays Bank PLC |
$ | 1,562,500.00 | 6.250000000 | % | ||||
Comerica Bank |
$ | 1,562,500.00 | 6.250000000 | % | ||||
Société Générale |
$ | 1,562,500.00 | 6.250000000 | % | ||||
Capital One, National Association |
$ | 1,562,500.00 | 6.250000000 | % | ||||
SunTrust Bank |
$ | 1,250,000.00 | 5.000000000 | % | ||||
Santander Bank, N.A. |
$ | 1,250,000.00 | 5.000000000 | % | ||||
|
|
|
|
|||||
Total: |
$ | 25,000,000.00 | 100.000000000 | % | ||||
|
|
|
|
Exhibit 10.4
EXECUTION VERSION
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (Agreement) is entered into as of this 9th day of May, 2016 (the Effective Date), by and between Penn Virginia Corporation, a Virginia corporation (the Company), and Steven A. Hartman, an individual (the Executive).
WHEREAS, the Executive is currently employed as the Senior Vice President and Chief Financial Officer; and
WHEREAS, the Company and the Executive desire to enter into this Agreement to set out the terms and conditions for the continued employment relationship of the Executive with the Company.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, the parties hereto agree as follows:
1. Employment Agreement. On the terms and conditions set forth in this Agreement, the Company agrees to continue to employ the Executive and the Executive agrees to continue to be employed by the Company for the Term set forth in Section 2 and in the positions and with the duties set forth in Section 3. Terms used herein with initial capitalization not otherwise defined are defined in Section 25.
2. Term. The term of the Executives employment under this Agreement shall commence on the Effective Date and continue until the eighteen (18)-month anniversary of the Effective Date, unless the Executives employment hereunder is terminated earlier in accordance with Section 8 hereof, subject to Section 9 hereof. The period of time between the Effective Date and the termination of the Executives employment hereunder shall be referred to herein as the Term.
3. Position and Duties. During the Term, the Executive shall continue to serve as the Senior Vice President and Chief Financial Officer of the Company. In such capacities, the Executive shall have the same duties, responsibilities and authorities as he currently has. The Executive shall devote the Executives reasonable best efforts and full business time to the performance of the Executives duties hereunder and the advancement of the business and affairs of the Company and shall be subject to, and shall comply in all material respects with, the policies of the Company and the Company Affiliates applicable to the Executive; provided that the Executive shall be entitled (i) to serve as a member of the board of directors of other companies, with the consent of the Companys board of directors (the Board), (ii) to serve on civic, charitable, educational, religious, public interest or public service boards, and (iii) to manage the Executives personal and family investments, in each case, to the extent such activities do not materially interfere with the performance of the Executives duties and responsibilities hereunder.
4. Place of Performance. During the Term, the Executive shall be based at the Companys executive offices in Houston, Texas.
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5. Compensation and Benefits.
(a) Base Salary. During the Term, the Company shall pay to the Executive a base salary (the Base Salary) at the rate of $250,000 per calendar year, less applicable deductions. The Base Salary shall be reviewed for increase by the Board no less frequently than annually and may be increased in the discretion of the Board, and any such adjusted Base Salary shall constitute the Base Salary for purposes of this Agreement. The Base Salary shall be paid in substantially equal installments in accordance with the Companys regular payroll procedures.
(b) Emergence Equity Award. Within thirty (30) days of the Companys emergence from bankruptcy (the Emergence) pursuant to a Plan (as defined in the Restructuring Support Agreement dated as of May 9, 2016) and subject to the Executives employment with the Company as of the date of the Emergence (the Emergence Date), the Company shall grant to the Executive a restricted stock (or economic equivalent) equity award with a grant date fair value equal to $600,000 as of the Emergence Date, based on the Company value provided in the Plan (the Emergence Equity Award). The Emergence Equity Award shall vest in three equal installments (each, an Installment) on each of the first three anniversaries of the Emergence Date (each, a Vesting Date), based solely on the Executives continued employment with the Company as of the applicable Vesting Date. In the event that the Executive is terminated by the Company without Cause or resigns for Good Reason, in each case, before the Emergence Equity Award has fully vested, the Installment scheduled to vest on the next Vesting Date shall vest as of the Executives date of termination. The Emergence Equity Award may be subject to additional terms and conditions established by the Board that are consistent with the terms of this Agreement and set forth in the corresponding award agreement; provided that such terms and conditions will be consistent with the terms and conditions of equity awards granted to similarly situated executives.
(c) Long Term Incentive Plan. In addition to the Emergence Equity Award, the Executive shall be eligible to receive equity and other long-term incentive awards under any applicable plan adopted by the Company during the Term for which employees are generally eligible. The level of the Executives participation in any such plan shall be determined in the sole discretion of the Board from time to time.
(d) Vacation; Benefits. During the Term, the Executive shall be eligible for four weeks of paid vacation annually, which shall be accrued and used in accordance with the applicable policies of the Company. During the Term, the Executive shall be eligible to participate in such medical, dental, life insurance, retirement and other plans as the Company may have or establish from time to time on terms and conditions applicable to other senior executives of the Company generally. The foregoing, however, shall not be construed to require the Company to establish any such plans or to prevent the modification or termination of such plans once established.
(e) Relocation. The Company shall provide the Executive with market relocation assistance in connection with his relocation to the Houston, Texas area by September 30, 2016.
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6. Expenses. The Company shall reimburse the Executive promptly for all expenses reasonably incurred by the Executive in the performance of his duties in accordance with policies which may be adopted from time to time by the Company following presentation by the Executive of an itemized account, including reasonable substantiation, of such expenses.
7. Confidentiality and Non-Disclosure Agreement. The Company and the Executive acknowledge and agree that during the Executives employment with the Company, the Executive will have access to and may assist in developing Confidential Information and will occupy a position of trust and confidence with respect to the affairs and business of the Company and the Company Affiliates. The Executive agrees that the following obligations are necessary to preserve the confidential and proprietary nature of Confidential Information and to protect the Company and the Company Affiliates against harmful solicitation of employees and customers, harmful competition and other actions by the Executive that would result in serious adverse consequences for the Company and the Company Affiliates:
(a) Non-Disclosure. During and after the Executives employment with the Company, the Executive will not use, disclose, copy or transfer any Confidential Information other than as authorized in writing by the Company or for normal and customary use in the Companys business, as determined reasonably and in good faith by the Company. Anything herein to the contrary notwithstanding, the provisions of this Section 7(a) shall not apply (i) when disclosure is required by law or by any court, arbitrator, mediator or administrative or legislative body (including any committee thereof) with actual or apparent jurisdiction to order the Executive to disclose or make accessible any information, provided that prior to any such disclosure the Executive shall provide the Company with reasonable notice of the requirements to disclose and an opportunity to object to such disclosure and the Executive shall cooperate with the Company in filing such objection; or (ii) as to information that becomes generally known to the public or within the relevant trade or industry other than due to the Executives violation of this Section 7(a).
(b) Materials. The Executive will use Confidential Information only for normal and customary use in the Companys business, as determined reasonably and in good faith by the Company. The Executive will return to the Company all Confidential Information and copies thereof and all other property of the Company or any Company Affiliate at any time upon the request of the Company and in any event immediately after termination of Executives employment. The Executive agrees to identify and return to the Company any copies of any Confidential Information after the Executive ceases to be employed by the Company.
(c) Conflicting Obligations and Rights. The Executive agrees to inform the Company of any apparent conflicts between the Executives work for the Company and any obligations the Executive may have to preserve the confidentiality of anothers proprietary information or related materials before using the same on the Companys behalf. The Company shall receive such disclosures in confidence and consistent with the objectives of avoiding any conflict of obligations and rights or the appearance of any conflict of interest.
(d) Enforcement. The Executive acknowledges that in the event of any breach or threatened breach of this Section 7, the business interests of the Company and the Company Affiliates will be irreparably injured, the full extent of the damages to the Company and the Company Affiliates will be impossible to ascertain, monetary damages will not be an adequate remedy for the Company and the Company Affiliates, and the Company will be entitled to enforce this Agreement by a temporary, preliminary and/or permanent injunction or other
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equitable relief, without the necessity of posting bond or security, which the Executive expressly waives. The Executive understands that the Company may waive some of the requirements expressed in this Agreement, but that such a waiver to be effective must be made in writing and should not in any way be deemed a waiver of the Companys right to enforce any other requirements or provisions of this Agreement. The Executive agrees that each of the Executives obligations specified in this Agreement is a separate and independent covenant and that the unenforceability of any of them shall not preclude the enforcement of any other covenants in this Agreement.
8. Termination of Employment.
(a) Permitted Terminations. The Executives employment hereunder may be terminated during the Term under the following circumstances:
(i) Death. The Executives employment hereunder shall terminate upon the Executives death;
(ii) By the Company. The Company may terminate the Executives employment:
(A) Disability. If the Executive shall have been substantially unable to perform the Executives material duties hereunder by reason of illness, physical or mental disability or other similar incapacity, which inability shall continue for one hundred eighty (180) consecutive days or two hundred seventy (270) days in any twenty four (24)-month period (a Disability) (provided, that until such termination, the Executive shall continue to receive his compensation and benefits hereunder, reduced by any benefits payable to him under any disability insurance policy or plan applicable to him); or
(B) Cause. For Cause or without Cause;
(iii) By the Executive. The Executive may terminate his employment for any reason or for no reason.
(b) Expiration of Term. Following the expiration of the Term, in the event the Executive continues the Executives employment or service with the Company, the Executives employment or service will be entirely at-will and, subject to Section 14, will not be covered by this Agreement (except for the applicable restrictive covenant provisions, which are intended to survive expiration of the Agreement in all cases).
(c) Termination. Any termination of the Executives employment by the Company or the Executive (other than because of the Executives death and other than a termination upon the expiration of the Term) shall be communicated by written Notice of Termination to the other party hereto in accordance with Section 12 hereof. For purposes of this Agreement, a Notice of Termination shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon, if any, and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executives employment under the provision so indicated. Termination of the Executives employment shall take effect on the Date of Termination. The Executive agrees, in the event of any dispute under Section 8(a)(ii)(A) as to whether a Disability exists, and if requested by the Company, to submit
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to a physical examination by a licensed physician selected by mutual consent of the Company and the Executive, the cost of such examination to be paid by the Company. The written medical opinion of such physician shall be conclusive and binding upon each of the parties hereto as to whether a Disability exists and the date when such Disability arose. This Section shall be interpreted and applied so as to comply with the provisions of the Americans with Disabilities Act and any applicable state or local laws.
(d) Effect of Termination. Upon any termination of the Executives employment with the Company, and its subsidiaries, the Executive shall resign from, and shall be considered to have simultaneously resigned from, all positions with the Company and all of its subsidiaries.
9. Compensation Upon Termination.
(a) Death. If the Executives employment is terminated during the Term as a result of the Executives death, this Agreement shall terminate without further notice or any action required by the Company or the Executives legal representatives. Upon the Executives death, the Company shall pay or provide to the Executives representative or estate all Accrued Benefits, if any, to which the Executive is entitled. Except as set forth herein, the Company shall have no further obligation to the Executive (or the Executives legal representatives or estate) under this Agreement.
(b) Disability. If the Company terminates the Executives employment during the Term, because of the Executives Disability pursuant to Section 8(a)(ii)(A), the Company shall pay to the Executive all Accrued Benefits, if any, to which the Executive is entitled. Except as set forth herein, the Company shall have no further obligations to the Executive (or the Executives legal representatives) under this Agreement.
(c) Termination by the Company for Cause or by the Executive without Good Reason. If, during the Term, the Company terminates the Executives employment for Cause pursuant to Section 8(a)(ii)(B) or the Executive terminates his employment without Good Reason, the Company shall pay to the Executive all Accrued Benefits, if any, to which the Executive is entitled. Except as set forth herein, the Company shall have no further obligations to the Executive under this Agreement.
(d) Termination by the Company without Cause or by the Executive with Good Reason. Subject to Section 9(e), if the Company terminates the Executives employment during the Term without Cause (and not due to the Executives death or Disability) or if the Executive terminates his employment hereunder with Good Reason (either, a Qualifying Termination), the Company shall pay the Executive (or the Executives estate, if the Executive dies after such termination and execution of the release but before receiving such amount) (A) all Accrued Benefits, if any, to which the Executive is entitled and (B) continued payments of the Executives Base Salary in accordance with the Companys payroll policies in effect on the Date of Termination for the (i) eighteen (18)-month period commencing upon the Executives Date of Termination, if the termination occurs before the six (6)-month anniversary of the Emergence, or (ii) the twelve (12)-month period commencing upon the Executives Date of Termination, if the termination occurs on or after the six (6)-month anniversary of the Emergence.
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(e) Liquidated Damages. The parties acknowledge and agree that damages that will result to the Executive for termination by the Company of the Executives employment without Cause or by the Executive for Good Reason shall be extremely difficult or impossible to establish or prove, and agree that the amounts payable to the Executive under Section 9(d) (the Severance Payments) shall constitute liquidated damages for any such termination. The Executive agrees that, except for such other payments and benefits to which the Executive may be entitled as expressly provided by the terms of this Agreement or any other applicable benefit plan or compensation arrangement (including equity-related awards), such liquidated damages shall be in lieu of all other claims that the Executive may make by reason of any such termination of his employment. Any and all amounts payable and benefits or additional rights provided pursuant to this Agreement beyond the Accrued Benefits shall only be payable if the Executive delivers to the Company and does not revoke a general release of claims in favor of the Company in substantially the form attached on Exhibit B hereto. Such release must be executed and delivered (and no longer subject to revocation, if applicable) within sixty (60) days following the Executives Date of Termination. The Company shall deliver to the Executive the appropriate form of release of claims for the Executive to execute within five (5) business days of the Date of Termination.
(f) Certain Payment Delays. Notwithstanding anything to the foregoing set forth herein, to the extent that the payment of any amount described in Section 9(d) constitutes nonqualified deferred compensation for purposes of Code Section 409A (as defined in Section 24 hereof), any such payment scheduled to occur during the first sixty (60) days following the termination of employment shall not be paid until the first regularly scheduled pay period following the sixtieth (60th) day following such termination and shall include payment of any amount that was otherwise scheduled to be paid prior thereto.
(g) No Offset. In the event of termination of his employment, the Executive shall be under no obligation to seek other employment and there shall be no offset against amounts due to him on account of any remuneration or benefits provided by any subsequent employment he may obtain. The Companys obligation to make any payment pursuant to, and otherwise to perform its obligations under, this Agreement shall not be affected by any offset, counterclaim or other right that the Company or its affiliates may have against him for any reason.
10. Indemnification. During the Term and thereafter, the Company agrees to indemnify and hold the Executive and the Executives heirs and representatives harmless, to the maximum extent permitted by law, against any and all damages, costs, liabilities, losses and expenses (including reasonable attorneys fees) as a result of any claim or proceeding (whether civil, criminal, administrative or investigative), or any threatened claim or proceeding (whether civil, criminal, administrative or investigative), against the Executive that arises out of or relates to the Executives service as an officer, director or employee, as the case may be, of the Company, or the Executives service in any such capacity or similar capacity with an affiliate of the Company or other entity at the request of the Company, both prior to and after the Effective Date, and to advance to the Executive or the Executives heirs or representatives such expenses on the same terms and conditions applicable to officers or directors of the Company. During the Term and thereafter, the Company also shall provide the Executive with coverage under its current directors and officers liability policy to the same extent that it provides such coverage to its other executive officers. This Section 10 shall continue in effect after the termination of the Executives employment or the termination of this Agreement.
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11. Attorneys Fees. In the event of any controversy, dispute or claim which arises out of or relates to this Agreement, any other agreement or arrangement between the Executive and the Company, the Executives employment with the Company, or the termination thereof, each party shall bear its own expense in respect of for any and all costs and expenses (including without limitation attorneys fees and other charges of counsel) incurred by the Company or the Executive (or any of his beneficiaries) in connection with such controversy, dispute or claim.
12. Notices. All notices, demands, requests, or other communications which may be or are required to be given or made by any party to any other party pursuant to this Agreement shall be in writing and shall be hand delivered, mailed by first-class registered or certified mail, return receipt requested, postage prepaid, delivered by overnight air courier, or transmitted by facsimile transmission addressed as follows:
(i) If to the Company:
Penn Virginia Corporation
Four Radnor Corporate Center
Suite 200
100 Matsonford Road
Radnor, PA 19087
Attention: Edward B. Cloues, II
(ii) If to the Executive:
At the address last shown on the Companys Records
Each party may designate by notice in writing a new address to which any notice, demand, request or communication may thereafter be so given, served or sent. Each notice, demand, request, or communication that shall be given or made in the manner described above shall be deemed sufficiently given or made for all purposes at such time as it is delivered to the addressee (with the return receipt, the delivery receipt, confirmation of facsimile transmission or the affidavit of messenger being deemed conclusive but not exclusive evidence of such delivery) or at such time as delivery is refused by the addressee upon presentation.
13. Severability. The invalidity or unenforceability of any one or more provisions of this Agreement, including, without limitation, Section 7, shall not affect the validity or enforceability of the other provisions of this Agreement, which shall remain in full force and effect.
14. Survival. It is the express intention and agreement of the parties hereto that the provisions of Sections 7, 9, 10, 11, 12, 13, 15, 16, 17, 19, 20, 21, 23, 24 and 25 hereof and this Section 14 shall survive the termination of employment of the Executive. In addition, all obligations of the Company to make payments hereunder shall survive any termination of this Agreement on the terms and conditions set forth herein.
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15. Assignment. The rights and obligations of the parties to this Agreement shall not be assignable or delegable, except that (i) in the event of the Executives death, the personal representative or legatees or distributees of the Executives estate, as the case may be, shall have the right to receive any amount owing and unpaid to the Executive hereunder and (ii) the rights and obligations of the Company hereunder shall be assignable and delegable in connection with any subsequent merger, consolidation, sale of all or substantially all of the assets or equity interests of the Company or similar transaction involving the Company or a successor corporation. The Company shall require any successor to the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.
16. Binding Effect. Subject to any provisions hereof restricting assignment, this Agreement shall be binding upon the parties hereto and shall inure to the benefit of the parties and their respective heirs, devisees, executors, administrators, legal representatives, successors and assigns.
17. Amendment; Waiver. This Agreement shall not be amended, altered or modified except by an instrument in writing duly executed by the party against whom enforcement is sought. Neither the waiver by either of the parties hereto of a breach of or a default under any of the provisions of this Agreement, nor the failure of either of the parties, on one or more occasions, to enforce any of the provisions of this Agreement or to exercise any right or privilege hereunder, shall thereafter be construed as a waiver of any subsequent breach or default of a similar nature, or as a waiver of any such provisions, rights or privileges hereunder.
18. Headings. Section and subsection headings contained in this Agreement are inserted for convenience of reference only, shall not be deemed to be a part of this Agreement for any purpose, and shall not in any way define or affect the meaning, construction or scope of any of the provisions hereof.
19. Governing Law. This Agreement, the rights and obligations of the parties hereto, and any claims or disputes relating thereto, shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia (but not including any choice of law rule thereof that would cause the laws of another jurisdiction to apply).
20. Dispute Resolution. Each of the parties hereto irrevocably and unconditionally (a) WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDING RELATING TO THIS AGREEMENT OR THE EXECUTIVES EMPLOYMENT BY THE COMPANY OR ANY COMPANY AFFILIATE, or for the recognition and enforcement of any judgment in respect thereof (a Proceeding) whether such Proceeding is based on contract, tort or otherwise; (b) agrees that service of process in any such Proceeding may be effected by mailing a copy of such process by registered or certified mail (or any substantially similar form of mail), postage prepaid, to such party at his or its address as provided in Section 12; and (c) agrees that nothing in this Agreement shall affect the right to effect service of process in any other manner permitted by applicable law.
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21. Entire Agreement; Advice of Counsel. This Agreement constitutes the entire agreement between the parties respecting the employment of the Executive, there being no representations, warranties or commitments except as set forth herein and supersedes and replaces all other existing agreements related to the subject matter hereof, including, without limitation, the Amended and Restated Executive Change of Control Severance Agreement, dated as of December 20, 2012. The Executive acknowledges that, in connection with his entry into this Agreement, he was advised by an attorney of his choice on the terms and conditions of this Agreement, including, without limitation, on the application of Code Section 409A (as defined below) on the payments and benefits payable or to be paid to the Executive hereunder.
22. Counterparts. This Agreement may be executed in two counterparts, each of which shall be an original and all of which shall be deemed to constitute one and the same instrument.
23. Withholding. The Company may withhold from any benefit payment under this Agreement all federal, state, city or other taxes as shall be required pursuant to any law or governmental regulation or ruling.
24. Section 409A.
(a) The intent of the parties is that payments and benefits under this Agreement are exempt from or comply with Internal Revenue Code Section 409A and the regulations and guidance promulgated thereunder (collectively Code Section 409A) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be exempt from or in compliance therewith. If the Executive notifies the Company (with specificity as to the reason therefor) that the Executive believes that any provision of this Agreement (or of any award of compensation, including equity compensation or benefits) would cause the Executive to incur any additional tax or interest under Code Section 409A and the Company concurs with such belief or the Company (without any obligation whatsoever to do so) independently makes such determination, the Company shall, after consulting with the Executive, reform such provision to attempt to comply with or exempt from Code Section 409A through good faith modifications to the minimum extent reasonably appropriate to conform with Code Section 409A. To the extent that any provision hereof is modified in order to comply with or be exempt from Code Section 409A, such modification shall be made in good faith and shall, to the maximum extent reasonably possible, maintain the original intent and economic benefit to the Executive and the Company of the applicable provision without violating the provisions of Code Section 409A. For the sake of clarity, the Company does not hereby agree to indemnify the Executive for liabilities incurred as a result of Code Section 409A.
(b) A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment unless such termination is also a separation from service within the meaning of Code Section 409A and, for purposes of any such provision of this Agreement, references to a termination, termination of employment or like terms shall mean separation from service. If the Executive is deemed on the date of termination to be a specified employee within the meaning of that term under Code Section 409A(a)(2)(B), then with regard to any payment or the provision of any benefit that is considered deferred compensation under Code Section 409A payable on account of a separation from service, such payment or benefit shall be made or provided at the date which is the earlier of (A) the expiration of the six (6)-month period measured from the date of such separation from service of the Executive, and (B) the date of the Executives death, to the extent required under
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Code Section 409A. Upon the expiration of the foregoing delay period, all payments and benefits delayed pursuant to this Section 24(b) (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to the Executive in a lump sum, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.
(c) To the extent that reimbursements or other in-kind benefits under this Agreement constitute nonqualified deferred compensation for purposes of Code Section 409A, (A) all expenses or other reimbursements hereunder shall be made on or prior to the last day of the taxable year following the taxable year in which such expenses were incurred by the Executive, (B) any right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, and (C) no such reimbursement, expenses eligible for reimbursement, or in-kind benefits provided in any taxable year shall in any way affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year.
(d) For purposes of Code Section 409A, the Executives right to receive any installment payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments. Whenever a payment under this Agreement specifies a payment period with reference to a number of days, the actual date of payment within the specified period shall be within the sole discretion of the Company.
(e) Notwithstanding any other provision of this Agreement to the contrary, in no event shall any payment under this Agreement that constitutes nonqualified deferred compensation for purposes of Code Section 409A be subject to offset by any other amount unless otherwise permitted by Code Section 409A.
25. Release.
(a) Effective upon the Emergence under the Plan and receipt of the Plan Release (as defined below), the Executive will provide the Company with a customary general release of claims, which will exclude: (i) rights of the Executive arising under, or preserved by, this Agreement; and (b) rights to indemnification the Executive has or may have under the by-laws or certificate of incorporation of any member of the Companys affiliated group or as an insured under any directors and officers liability insurance policy now or previously in force. As part of such release and upon the Emergence under the Plan and receipt of the Plan Release (as defined below), the Executives outstanding performance-based restricted stock unit and restricted stock unit awards will be cancelled as of the Petition Date (as defined in the Plan) without payment of any consideration therefor and without any further action on the part of any party.
(b) The Company agrees to use its commercially reasonable efforts to obtain approval of the Plan containing a customary release (the Plan Release) of all claims against the Executive and his successors and assigns (collectively, the Executive Released Parties). Notwithstanding the terms of the Plan Release, the Plan Release shall be deemed to exclude claims arising out of or attributable to the Executives fraud.
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26. Definitions.
Accrued Benefits means (i) any unpaid Base Salary through the Date of Termination; (ii) any accrued and unpaid vacation and/or sick days; (iii) any amounts or benefits owing to the Executive or to the Executives beneficiaries under the then applicable benefit plans of the Company (excluding any severance plan, program, agreement or arrangement); and (iv) any amounts owing to the Executive for reimbursement of expenses properly incurred by the Executive prior to the Date of Termination and which are reimbursable in accordance with Section 6. Amounts payable under (A) clauses (i) and (ii) shall be paid promptly after the Date of Termination, (B) clause (iii) shall be paid in accordance with the terms and conditions of the applicable plan, program or arrangement and (C) clause (iv) shall be paid in accordance with the terms of the applicable expense policy.
Cause means the Executives (i) willful and continued failure to substantially perform the Executives duties with the Company or any Company Affiliate (other than any such failure resulting from the Executives Disability), (ii) conviction of a felony, (iii) willful engagement in gross misconduct materially and demonstrably injurious to the Company or any Company Affiliate or (iv) commission of one or more significant acts of dishonesty as regards the Company or any Company Affiliate.
Company Affiliate means any entity controlled by, in control of, or under common control with, the Company.
Confidential Information means all non-public information concerning trade secrets, know-how, software, developments, inventions, processes, technology, designs, financial data, strategic business plans or any proprietary or confidential information, documents or materials in any form or media, including any of the foregoing relating to research, operations, finances, current and proposed products and services, vendors, customers, advertising and marketing, and other non-public, proprietary, and confidential information of the Company or the Company Affiliates. Notwithstanding anything to the contrary contained herein, the general skills, knowledge and experience gained during the Executives employment with the Company, information publicly available (except as a result of the Executives wrongful disclosure of such information) or generally known within the industry or trade in which the Company competes and information or knowledge possessed by the Executive prior to his employment by the Company, shall not be considered Confidential Information.
Date of Termination means (i) if the Executives employment is terminated by the Executives death, the date of the Executives death; (ii) if the Executives employment is terminated because of the Executives Disability pursuant to Section 8(a)(ii)(A), thirty (30) days after Notice of Termination, provided that the Executive shall not have returned to the performance of the Executives duties on a full-time basis during such thirty (30)-day period; (iii) if the Executives employment is terminated during the Term by the Company pursuant to Section 8(a)(ii)(B) or by the Executive pursuant to Section 8(a)(iii), the date specified in the Notice of Termination; provided that if the Executive is voluntarily terminating the Executives employment without Good Reason, such date shall not be less than fifteen (15) business days after the Notice of Termination; (iv) if the Executives employment is terminated during the Term other than pursuant to Section 8(a), the date on which Notice of Termination is given; or (v) if the Executives employment is terminated pursuant to Section 8(b), the last day of the Term.
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Good Reason means, unless otherwise agreed to in writing by the Executive, (i) a reduction in the Executives authority, duties, titles, status or responsibilities from those in effect as of the Effective Date or the assignment to the Executive of duties or responsibilities inconsistent in any respect with those in effect as of the Effective Date, but excluding any act or omission by the Company that is immaterial, isolated, insubstantial and inadvertent and which was not taken in bad faith by the Company and is remedied by the Company promptly after receipt of notice thereof given by the Executive; provided, however, that the Company ceasing to be a publicly traded Company in connection with the Emergence shall not constitute Good Reason; (ii) a material breach of this Agreement by the Company; (iii) the Companys failure to obtain a written agreement from any successors or assigns of the Company to assume and perform this Agreement; or (iv) the relocation by more than one hundred (100) miles of the Companys office at which the Executive is based pursuant to this Agreement or the Company requiring the Executive to be based at any office other than the Companys office at which the Executive is based pursuant to this Agreement, if the new office location is more than fifty (50) miles away from the original office location (for the avoidance of doubt, the Executives relocation to Houston, Texas pursuant to this Agreement shall not constitute Good Reason, provided that the Company pays the Executives relocation expenses pursuant to Section 5(e)). The Executive shall give the Company notice within ninety (90) days following an act or omission to act by the Company constituting Good Reason hereunder of the Executives intent to resign for Good Reason, and the Company shall have thirty (30) days from the date of such notice to cure the circumstances or events giving rise to the Executives right to resign for Good Reason, if capable of being cured, so as to eliminate the existence of Good Reason for the Executives resignation. In the event the Company does not cure such circumstances or events, then unless the Executive terminates his employment upon the expiration of the foregoing thirty (30)-day cure period, the Executives continued employment after the expiration of such thirty (30)-day cure period shall constitute the Executives consent to, and waiver of the Executives rights with respect to, such act or failure to act.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the undersigned have duly executed and delivered this Agreement, or have caused this Agreement to be duly executed and delivered on their behalf.
PENN VIRGINIA CORPORATION | ||
By: | /s/ R. Seth Bullock | |
Name: | R. Seth Bullock | |
Title: | Chief Restructuring Officer | |
STEVEN A. HARTMAN | ||
/s/ Steven A. Hartman |
Employment Agreement Signature Page
EXHIBIT B
GENERAL RELEASE
I, Steven A. Hartman, in consideration of and subject to the performance by Penn Virginia Corporation, a Virginia corporation (together with its subsidiaries, the Company), of its obligations under the Employment Agreement, dated as of May 9, 2016 (the Agreement), do hereby release and forever discharge as of the date hereof the Company and its respective affiliates and subsidiaries and all present, former and future directors, officers, agents, representatives, employees, successors and assigns of the Company and its respective affiliates and subsidiaries and direct or indirect owners (collectively, the Released Parties) to the extent provided below. Terms used herein but not otherwise defined shall have the meanings given to them in the Agreement.
1. | I understand that any payments or benefits paid or granted to me under Section 9 of the Agreement represent, in part, consideration for signing this General Release and are not salary, wages or benefits to which I was already entitled. I understand and agree that I will not receive the payments and benefits specified in Section 9 of the Agreement unless I execute this General Release and do not revoke this General Release within the time period permitted hereafter or breach this General Release. Such payments and benefits will not be considered compensation for purposes of any employee benefit plan, program, policy or arrangement maintained or hereafter established by the Company or its affiliates. |
2. | Except as provided in paragraph 4 below and except for the provisions of the Agreement which expressly survive the termination of my employment with the Company I knowingly and voluntarily (for myself, my heirs, executors, administrators and assigns) release and forever discharge the Company and the other Released Parties from any and all claims, suits, controversies, actions, causes of action, cross-claims, counter-claims, demands, debts, compensatory damages, liquidated damages, punitive or exemplary damages, other damages, claims for costs and attorneys fees, or liabilities of any nature whatsoever in law and in equity, both past and present (through the date this General Release becomes effective and enforceable) and whether known or unknown, suspected, or claimed against the Company or any of the Released Parties which I, my spouse, or any of my heirs, executors, administrators or assigns, may have, which arise out of or are connected with my employment with, or my separation or termination from, the Company (including, but not limited to, any allegation, claim or violation, arising under: Title VII of the Civil Rights Act of 1964, as amended; the Civil Rights Act of 1991; the Age Discrimination in Employment Act of 1967, as amended (including the Older Workers Benefit Protection Act); the Equal Pay Act of 1963, as amended; the Americans with Disabilities Act of 1990; the Family and Medical Leave Act of 1993; the Worker Adjustment Retraining and Notification Act; the Employee Retirement Income Security Act of 1974; any applicable Executive Order Programs; the Fair Labor Standards Act; or their state or local counterparts; or under any other federal, state or local civil or human rights law, or under any other local, state, or federal law, regulation or ordinance; or under any public policy, contract or tort, or under common law; or arising under any policies, practices or procedures of the Company; or any claim for wrongful discharge, breach of contract, infliction of emotional distress, defamation; or any claim for costs, fees, or other expenses, including attorneys fees incurred in these matters) (all of the foregoing collectively referred to herein as the Claims). |
3. | I represent that I have made no assignment or transfer of any right, claim, demand, cause of action, or other matter covered by paragraph 2 above. |
4. | I agree that this General Release does not waive or release any rights or claims that I may have under the Age Discrimination in Employment Act of 1967 which arise after the date I execute this General Release. I acknowledge and agree that my separation from employment with the Company in compliance with the terms of the Agreement shall not serve as the basis for any claim or action (including, without limitation, any claim under the Age Discrimination in Employment Act of 1967). |
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5. | I agree that I hereby waive all rights to sue or obtain equitable, remedial or punitive relief from any or all Released Parties of any kind whatsoever, including, without limitation, reinstatement, back pay, front pay, and any form of injunctive relief. Notwithstanding the above, I further acknowledge that I am not waiving and am not being required to waive any right that cannot be waived under law, including the right to file an administrative charge or participate in an administrative investigation or proceeding; provided, however, that I disclaim and waive any right to share or participate in any monetary award resulting from the prosecution of such charge or investigation or proceeding. Additionally, I am not waiving any right to the Accrued Benefits or claims for indemnity or contribution. |
6. | In signing this General Release, I acknowledge and intend that it shall be effective as a bar to each and every one of the Claims hereinabove mentioned or implied. I expressly consent that this General Release shall be given full force and effect according to each and all of its express terms and provisions, including those relating to unknown and unsuspected Claims (notwithstanding any state or local statute that expressly limits the effectiveness of a general release of unknown, unsuspected and unanticipated Claims), if any, as well as those relating to any other Claims hereinabove mentioned or implied. I acknowledge and agree that this waiver is an essential and material term of this General Release and that without such waiver the Company would not have agreed to the terms of the Agreement. I further agree that in the event I should bring a Claim seeking damages against the Company, or in the event I should seek to recover against the Company in any Claim brought by a governmental agency on my behalf, this General Release shall serve as a complete defense to such Claims to the maximum extent permitted by law. I further agree that I am not aware of any pending claim of the type described in paragraph 2 as of the execution of this General Release. |
7. | I agree that neither this General Release, nor the furnishing of the consideration for this General Release, shall be deemed or construed at any time to be an admission by the Company, any Released Party or myself of any improper or unlawful conduct. |
8. | I agree that I will forfeit all amounts payable by the Company pursuant to the Agreement if I challenge the validity of this General Release. I also agree that if I violate this General Release by suing the Company or the other Released Parties, I will pay all costs and expenses of defending against the suit incurred by the Released Parties, including reasonable attorneys fees, and return all payments received by me pursuant to the Agreement on or after the termination of my employment. |
9. | I agree that this General Release and the Agreement are confidential and agree not to disclose any information regarding the terms of this General Release or the Agreement, except to my immediate family and any tax, legal or other counsel I have consulted regarding the meaning or effect hereof or as required by law, and I will instruct each of the foregoing not to disclose the same to anyone. The Company agrees to disclose any such information only to any tax, legal or other counsel of the Company as required by law. |
10. | Any non-disclosure provision in this General Release does not prohibit or restrict me (or my attorney) from responding to any inquiry about this General Release or its underlying facts and circumstances by the Securities and Exchange Commission (SEC), the National Association of Securities Dealers, Inc. (NASD), any other self-regulatory organization or governmental entity. |
11. | I hereby acknowledge that Sections 7, 9, 10, 11, 12, 13, 14, 15, 16, 17, 19, 20, 21, 23, 24 and 25 of the Agreement shall survive my execution of this General Release. |
12. | I represent that I am not aware of any claim by me other than the claims that are released by this General Release. I acknowledge that I may hereafter discover claims or facts in addition to or different than those which I now know or believe to exist with respect to the subject matter of the release set forth in paragraph 2 above and which, if known or suspected at the time of entering into this General Release, may have materially affected this General Release and my decision to enter into it. |
13. | Notwithstanding anything in this General Release to the contrary, this General Release shall not relinquish, diminish, or in any way affect any rights or claims arising out of any breach by the Company or by any Released Party of the Agreement after the date hereof. |
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14. | Whenever possible, each provision of this General Release shall be interpreted in, such manner as to be effective and valid under applicable law, but if any provision of this General Release is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or any other jurisdiction, but this General Release shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein. |
BY SIGNING THIS GENERAL RELEASE, I REPRESENT AND AGREE THAT:
(i) | I HAVE READ IT CAREFULLY; |
(ii) | I UNDERSTAND ALL OF ITS TERMS AND KNOW THAT I AM GIVING UP IMPORTANT RIGHTS, INCLUDING BUT NOT LIMITED TO, RIGHTS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED; TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS AMENDED; THE EQUAL PAY ACT OF 1963; THE AMERICANS WITH DISABILITIES ACT OF 1990; AND THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED; |
(iii) | I VOLUNTARILY CONSENT TO EVERYTHING IN IT; |
(iv) | I HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING IT AND I HAVE DONE SO OR, AFTER CAREFUL READING AND CONSIDERATION I HAVE CHOSEN NOT TO DO SO OF MY OWN VOLITION; |
(v) | I HAVE HAD AT LEAST [21][45] DAYS FROM THE DATE OF MY RECEIPT OF THIS RELEASE TO CONSIDER IT AND THE CHANGES MADE SINCE MY RECEIPT OF THIS RELEASE ARE NOT MATERIAL OR WERE MADE AT MY REQUEST AND WILL NOT RESTART THE REQUIRED [21][45]-DAY PERIOD; |
(vi) | I UNDERSTAND THAT I HAVE SEVEN (7) DAYS AFTER THE EXECUTION OF THIS RELEASE TO REVOKE IT AND THAT THIS RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE REVOCATION PERIOD HAS EXPIRED; |
(vii) | I HAVE SIGNED THIS GENERAL RELEASE KNOWINGLY AND VOLUNTARILY AND WITH THE ADVICE OF ANY COUNSEL RETAINED TO ADVISE ME WITH RESPECT TO IT; AND |
(viii) | I AGREE THAT THE PROVISIONS OF THIS GENERAL RELEASE MAY NOT BE AMENDED, WAIVED, CHANGED OR MODIFIED EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY AN AUTHORIZED REPRESENTATIVE OF THE COMPANY AND BY ME. |
SIGNED: |
DATE: ________ __, ____ |
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Exhibit 10.5
EXECUTION VERSION
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (Agreement) is entered into as of this 9th day of May, 2016 (the Effective Date), by and between Penn Virginia Corporation, a Virginia corporation (the Company), and John A. Brooks, an individual (the Executive).
WHEREAS, the Executive is currently employed as the Executive Vice President and Chief Operations Officer; and
WHEREAS, the Company and the Executive desire to enter into this Agreement to set out the terms and conditions for the continued employment relationship of the Executive with the Company.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, the parties hereto agree as follows:
1. Employment Agreement. On the terms and conditions set forth in this Agreement, the Company agrees to continue to employ the Executive and the Executive agrees to continue to be employed by the Company for the Term set forth in Section 2 and in the positions and with the duties set forth in Section 3. Terms used herein with initial capitalization not otherwise defined are defined in Section 26.
2. Term. The term of employment under this Agreement shall commence on the Effective Date and continue until the five (5)-month anniversary of the Effective Date (the Term).
3. Position and Duties. During the Term, the Executive shall continue to serve as the Executive Vice President and Chief Operations Officer of the Company. In such capacities, the Executive shall have the same duties, responsibilities and authorities as he currently has. The Executive shall devote the Executives reasonable best efforts and full business time to the performance of the Executives duties hereunder and the advancement of the business and affairs of the Company and shall be subject to, and shall comply in all material respects with, the policies of the Company and the Company Affiliates applicable to the Executive; provided that the Executive shall be entitled (i) to serve as a member of the board of directors of other companies, with the consent of the Companys board of directors (the Board), (ii) to serve on civic, charitable, educational, religious, public interest or public service boards, and (iii) to manage the Executives personal and family investments, in each case, to the extent such activities do not materially interfere with the performance of the Executives duties and responsibilities hereunder.
4. Place of Performance. During the Term, the Executive shall be based at the Companys executive offices in Houston, Texas.
5. Compensation and Benefits.
(a) Base Salary. During the Term, the Company shall pay to the Executive a base salary (the Base Salary) at the rate of $385,000 per calendar year, less applicable deductions. The Base Salary shall be reviewed for increase by the Board no less frequently than
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annually and may be increased in the discretion of the Board, and any such adjusted Base Salary shall constitute the Base Salary for purposes of this Agreement. The Base Salary shall be paid in substantially equal installments in accordance with the Companys regular payroll procedures.
(b) Emergence Bonus. The Executive shall be paid $500,000, if the Companys emergence from bankruptcy (the Emergence) pursuant to a Plan (as defined in the Restructuring Support Agreement dated as of May 9, 2016) occurs on or before October 31, 2016 (a Qualifying Emergence) and either (i) the Executive remains employed with the Company through the Qualifying Emergence or (ii) the Executive was terminated by the Company without Cause before the Qualifying Emergence. The Emergence Bonus, if any, will be paid within fifteen (15) days following the date of the Qualifying Emergence. For the avoidance of doubt, no Emergence Bonus will be payable if a Qualifying Emergence does not occur.
(c) Vacation; Benefits. During the Term, the Executive shall be eligible for the same number of paid vacation days as the number for which he is currently eligible, which shall be accrued and used in accordance with the applicable policies of the Company. During the Term, the Executive shall be eligible to participate in such medical, dental, life insurance, retirement and other plans as the Company may have or establish from time to time on terms and conditions applicable to other senior executives of the Company generally. The foregoing, however, shall not be construed to require the Company to establish any such plans or to prevent the modification or termination of such plans once established.
6. Expenses. The Company shall reimburse the Executive promptly for all expenses reasonably incurred by the Executive in the performance of his duties in accordance with policies which may be adopted from time to time by the Company following presentation by the Executive of an itemized account, including reasonable substantiation, of such expenses.
7. Confidentiality and Non-Disclosure Agreement. The Company and the Executive acknowledge and agree that during the Executives employment with the Company, the Executive will have access to and may assist in developing Confidential Information and will occupy a position of trust and confidence with respect to the affairs and business of the Company and the Company Affiliates. The Executive agrees that the following obligations are necessary to preserve the confidential and proprietary nature of Confidential Information and to protect the Company and the Company Affiliates against harmful solicitation of employees and customers, harmful competition and other actions by the Executive that would result in serious adverse consequences for the Company and the Company Affiliates:
(a) Non-Disclosure. During and after the Executives employment with the Company, the Executive will not use, disclose, copy or transfer any Confidential Information other than as authorized in writing by the Company or for normal and customary use in the Companys business, as determined reasonably and in good faith by the Company. Anything herein to the contrary notwithstanding, the provisions of this Section 7(a) shall not apply (i) when disclosure is required by law or by any court, arbitrator, mediator or administrative or legislative body (including any committee thereof) with actual or apparent jurisdiction to order the Executive to disclose or make accessible any information, provided that prior to any such disclosure the Executive shall provide the Company with reasonable notice of the requirements to disclose and an opportunity to object to such disclosure and the Executive shall cooperate with the Company in filing such objection; or (ii) as to information that becomes generally known to the public or within the relevant trade or industry other than due to the Executives violation of this Section 7(a).
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(b) Materials. The Executive will use Confidential Information only for normal and customary use in the Companys business, as determined reasonably and in good faith by the Company. The Executive will return to the Company all Confidential Information and copies thereof and all other property of the Company or any Company Affiliate at any time upon the request of the Company and in any event immediately after termination of Executives employment. The Executive agrees to identify and return to the Company any copies of any Confidential Information after the Executive ceases to be employed by the Company.
(c) Conflicting Obligations and Rights. The Executive agrees to inform the Company of any apparent conflicts between the Executives work for the Company and any obligations the Executive may have to preserve the confidentiality of anothers proprietary information or related materials before using the same on the Companys behalf. The Company shall receive such disclosures in confidence and consistent with the objectives of avoiding any conflict of obligations and rights or the appearance of any conflict of interest.
(d) Enforcement. The Executive acknowledges that in the event of any breach or threatened breach of this Section 7, the business interests of the Company and the Company Affiliates will be irreparably injured, the full extent of the damages to the Company and the Company Affiliates will be impossible to ascertain, monetary damages will not be an adequate remedy for the Company and the Company Affiliates, and the Company will be entitled to enforce this Agreement by a temporary, preliminary and/or permanent injunction or other equitable relief, without the necessity of posting bond or security, which the Executive expressly waives. The Executive understands that the Company may waive some of the requirements expressed in this Agreement, but that such a waiver to be effective must be made in writing and should not in any way be deemed a waiver of the Companys right to enforce any other requirements or provisions of this Agreement. The Executive agrees that each of the Executives obligations specified in this Agreement is a separate and independent covenant and that the unenforceability of any of them shall not preclude the enforcement of any other covenants in this Agreement.
8. Termination of Employment.
(a) Permitted Terminations. The Executives employment hereunder may be terminated during the Term under the following circumstances:
(i) Death. The Executives employment hereunder shall terminate upon the Executives death;
(ii) By the Company. The Company may terminate the Executives employment with or without Cause; and
(iii) By the Executive. The Executive may terminate his employment for any reason or for no reason.
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(b) Expiration of Term. Following the expiration of the Term, in the event the Executive continues the Executives employment or service with the Company, the Executives employment or service will be entirely at-will and, subject to Section 14, will not be covered by this Agreement (except for the applicable restrictive covenant provisions, which are intended to survive expiration of the Agreement in all cases).
(c) Termination. Any termination of the Executives employment by the Company or the Executive (other than because of the Executives death and other than a termination upon the expiration of the Term) shall be communicated by written Notice of Termination to the other party hereto in accordance with Section 12 hereof. For purposes of this Agreement, a Notice of Termination shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon, if any, and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executives employment under the provision so indicated. Termination of the Executives employment shall take effect on the Date of Termination.
(d) Effect of Termination. Upon any termination of the Executives employment with the Company, and its subsidiaries, the Executive shall resign from, and shall be considered to have simultaneously resigned from, all positions with the Company and all of its subsidiaries.
9. Compensation Upon Termination.
(a) Death. If the Executives employment is terminated during the Term as a result of the Executives death, this Agreement shall terminate without further notice or any action required by the Company or the Executives legal representatives. Upon the Executives death, the Company shall pay or provide to the Executives representative or estate (i) any unpaid Base Salary due from the Date of Termination through the end of Term and (ii) all Accrued Benefits, if any, to which the Executive is entitled. Additionally, the Company shall pay or provide to the Executives representative or estate the Emergence Bonus, within fifteen (15) days of the Qualifying Emergence, provided that the Qualifying Emergence occurs. Except as set forth herein, the Company shall have no further obligation to the Executive (or the Executives legal representatives or estate) under this Agreement.
(b) Termination by the Company for Cause or by the Executive for Any or No Reason. If, during the Term, the Company terminates the Executives employment for Cause pursuant to Section 8(a)(ii) or the Executive terminates his employment for any or no reason pursuant to Section 8(a)(iii), the Company shall pay to the Executive all Accrued Benefits, if any, to which the Executive is entitled. Except as set forth herein, the Company shall have no further obligations to the Executive under this Agreement.
10. Indemnification. During the Term and thereafter, the Company agrees to indemnify and hold the Executive and the Executives heirs and representatives harmless, to the maximum extent permitted by law, against any and all damages, costs, liabilities, losses and expenses (including reasonable attorneys fees) as a result of any claim or proceeding (whether civil, criminal, administrative or investigative), or any threatened claim or proceeding (whether civil, criminal, administrative or investigative), against the Executive that arises out of or relates to the Executives service as an officer, director or employee, as the case may be, of the
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Company, or the Executives service in any such capacity or similar capacity with an affiliate of the Company or other entity at the request of the Company, both prior to and after the Effective Date, and to advance to the Executive or the Executives heirs or representatives such expenses on the same terms and conditions applicable to officers or directors of the Company. During the Term and thereafter, the Company also shall provide the Executive with coverage under its current directors and officers liability policy to the same extent that it provides such coverage to its other executive officers. This Section 10 shall continue in effect after the termination of the Executives employment or the termination of this Agreement.
11. Attorneys Fees. In the event of any controversy, dispute or claim which arises out of or relates to this Agreement, any other agreement or arrangement between the Executive and the Company, the Executives employment with the Company, or the termination thereof, each party shall bear its own expense in respect of for any and all costs and expenses (including without limitation attorneys fees and other charges of counsel) incurred by the Company or the Executive (or any of his beneficiaries) in connection with such controversy, dispute or claim.
12. Notices. All notices, demands, requests, or other communications which may be or are required to be given or made by any party to any other party pursuant to this Agreement shall be in writing and shall be hand delivered, mailed by first-class registered or certified mail, return receipt requested, postage prepaid, delivered by overnight air courier, or transmitted by facsimile transmission addressed as follows:
(i) If to the Company:
Penn Virginia Corporation
Four Radnor Corporate Center
Suite 200
100 Matsonford Road
Radnor, PA 19087
Attention: Edward B. Cloues, II
(ii) If to the Executive:
At the address last shown on the Companys Records
Each party may designate by notice in writing a new address to which any notice, demand, request or communication may thereafter be so given, served or sent. Each notice, demand, request, or communication that shall be given or made in the manner described above shall be deemed sufficiently given or made for all purposes at such time as it is delivered to the addressee (with the return receipt, the delivery receipt, confirmation of facsimile transmission or the affidavit of messenger being deemed conclusive but not exclusive evidence of such delivery) or at such time as delivery is refused by the addressee upon presentation.
13. Severability. The invalidity or unenforceability of any one or more provisions of this Agreement, including, without limitation, Section 7, shall not affect the validity or enforceability of the other provisions of this Agreement, which shall remain in full force and effect.
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14. Survival. It is the express intention and agreement of the parties hereto that the provisions of Sections 7, 9, 10 11, 12, 13, 15, 16, 17, 19, 20, 21, 23, 24 and 25 hereof and this Section 14 shall survive the termination of employment of the Executive. In addition, all obligations of the Company to make payments hereunder shall survive any termination of this Agreement on the terms and conditions set forth herein.
15. Assignment. The rights and obligations of the parties to this Agreement shall not be assignable or delegable, except that (i) in the event of the Executives death, the personal representative or legatees or distributees of the Executives estate, as the case may be, shall have the right to receive any amount owing and unpaid to the Executive hereunder and (ii) the rights and obligations of the Company hereunder shall be assignable and delegable in connection with any subsequent merger, consolidation, sale of all or substantially all of the assets or equity interests of the Company or similar transaction involving the Company or a successor corporation. The Company shall require any successor to the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.
16. Binding Effect. Subject to any provisions hereof restricting assignment, this Agreement shall be binding upon the parties hereto and shall inure to the benefit of the parties and their respective heirs, devisees, executors, administrators, legal representatives, successors and assigns.
17. Amendment; Waiver. This Agreement shall not be amended, altered or modified except by an instrument in writing duly executed by the party against whom enforcement is sought. Neither the waiver by either of the parties hereto of a breach of or a default under any of the provisions of this Agreement, nor the failure of either of the parties, on one or more occasions, to enforce any of the provisions of this Agreement or to exercise any right or privilege hereunder, shall thereafter be construed as a waiver of any subsequent breach or default of a similar nature, or as a waiver of any such provisions, rights or privileges hereunder.
18. Headings. Section and subsection headings contained in this Agreement are inserted for convenience of reference only, shall not be deemed to be a part of this Agreement for any purpose, and shall not in any way define or affect the meaning, construction or scope of any of the provisions hereof.
19. Governing Law. This Agreement, the rights and obligations of the parties hereto, and any claims or disputes relating thereto, shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia (but not including any choice of law rule thereof that would cause the laws of another jurisdiction to apply).
20. Dispute Resolution. Each of the parties hereto irrevocably and unconditionally (a) WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDING RELATING TO THIS AGREEMENT OR THE EXECUTIVES EMPLOYMENT BY THE COMPANY OR ANY COMPANY AFFILIATE, or for the recognition and enforcement of any judgment in respect thereof (a Proceeding) whether such Proceeding is based on contract, tort or otherwise; (b) agrees that service of process in any such Proceeding may be effected by mailing a copy of such process by registered or certified mail (or any substantially similar form of mail), postage prepaid, to such party at his or its address as provided in Section 12; and (c) agrees that nothing in this Agreement shall affect the right to effect service of process in any other manner permitted by applicable law.
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21. Entire Agreement; Advice of Counsel. This Agreement constitutes the entire agreement between the parties respecting the employment of the Executive, there being no representations, warranties or commitments except as set forth herein and supersedes and replaces all other existing agreements related to the subject matter hereof, including, without limitation, the Amended and Restated Executive Change of Control Severance Agreement, dated as of December 20, 2012. The Executive acknowledges that, in connection with his entry into this Agreement, he was advised by an attorney of his choice on the terms and conditions of this Agreement, including, without limitation, on the application of Code Section 409A (as defined below) on the payments and benefits payable or to be paid to the Executive hereunder.
22. Counterparts. This Agreement may be executed in two counterparts, each of which shall be an original and all of which shall be deemed to constitute one and the same instrument.
23. Withholding. The Company may withhold from any benefit payment under this Agreement all federal, state, city or other taxes as shall be required pursuant to any law or governmental regulation or ruling.
24. Section 409A.
(a) The intent of the parties is that payments and benefits under this Agreement are exempt from or comply with Internal Revenue Code Section 409A and the regulations and guidance promulgated thereunder (collectively Code Section 409A) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be exempt from or in compliance therewith. If the Executive notifies the Company (with specificity as to the reason therefor) that the Executive believes that any provision of this Agreement (or of any award of compensation, including equity compensation or benefits) would cause the Executive to incur any additional tax or interest under Code Section 409A and the Company concurs with such belief or the Company (without any obligation whatsoever to do so) independently makes such determination, the Company shall, after consulting with the Executive, reform such provision to attempt to comply with or exempt from Code Section 409A through good faith modifications to the minimum extent reasonably appropriate to conform with Code Section 409A. To the extent that any provision hereof is modified in order to comply with or be exempt from Code Section 409A, such modification shall be made in good faith and shall, to the maximum extent reasonably possible, maintain the original intent and economic benefit to the Executive and the Company of the applicable provision without violating the provisions of Code Section 409A. For the sake of clarity, the Company does not hereby agree to indemnify the Executive for liabilities incurred as a result of Code Section 409A.
(b) A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment unless such termination is also a separation from service within the meaning of Code Section 409A and, for purposes of any such provision of this Agreement, references to a termination, termination of employment or like terms shall mean separation from service. If the Executive is deemed on the date of
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termination to be a specified employee within the meaning of that term under Code Section 409A(a)(2)(B), then with regard to any payment or the provision of any benefit that is considered deferred compensation under Code Section 409A payable on account of a separation from service, such payment or benefit shall be made or provided at the date which is the earlier of (A) the expiration of the six (6)-month period measured from the date of such separation from service of the Executive, and (B) the date of the Executives death, to the extent required under Code Section 409A. Upon the expiration of the foregoing delay period, all payments and benefits delayed pursuant to this Section 24(b) (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to the Executive in a lump sum and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.
(c) To the extent that reimbursements or other in-kind benefits under this Agreement constitute nonqualified deferred compensation for purposes of Code Section 409A, (A) all expenses or other reimbursements hereunder shall be made on or prior to the last day of the taxable year following the taxable year in which such expenses were incurred by the Executive, (B) any right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, and (C) no such reimbursement, expenses eligible for reimbursement, or in-kind benefits provided in any taxable year shall in any way affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year.
(d) For purposes of Code Section 409A, the Executives right to receive any installment payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments. Whenever a payment under this Agreement specifies a payment period with reference to a number of days, the actual date of payment within the specified period shall be within the sole discretion of the Company.
(e) Notwithstanding any other provision of this Agreement to the contrary, in no event shall any payment under this Agreement that constitutes nonqualified deferred compensation for purposes of Code Section 409A be subject to offset by any other amount unless otherwise permitted by Code Section 409A.
25. Release.
(a) Effective upon the Emergence under the Plan and receipt of the Plan Release (as defined below), the Executive will provide the Company with a customary general release of claims, which will exclude: (i) rights of the Executive arising under, or preserved by, this Agreement; and (b) rights to indemnification the Executive has or may have under the by-laws or certificate of incorporation of any member of the Companys affiliated group or as an insured under any directors and officers liability insurance policy now or previously in force. As part of such release and upon the Emergence under the Plan and receipt of the Plan Release (as defined below), the Executives outstanding performance-based restricted stock unit and restricted stock unit awards and outstanding SERP entitlements will be cancelled as of the Petition Date (as defined in the Plan) without payment of any consideration therefor and without any further action on the part of any party.
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(b) The Company agrees to use its commercially reasonable efforts to obtain approval of the Plan containing a customary release (the Plan Release) of all claims against the Executive and his successors and assigns (collectively, the Executive Released Parties). Notwithstanding the terms of the Plan Release, the Plan Release shall be deemed to exclude claims arising out of or attributable to the Executives fraud.
26. Definitions.
Accrued Benefits means (i) any unpaid Base Salary through the Date of Termination; (ii) any accrued and unpaid vacation and/or sick days; (iii) any amounts or benefits owing to the Executive or to the Executives beneficiaries under the then applicable benefit plans of the Company (excluding any severance plan, program, agreement or arrangement); and (iv) any amounts owing to the Executive for reimbursement of expenses properly incurred by the Executive prior to the Date of Termination and which are reimbursable in accordance with Section 6. Amounts payable under (A) clauses (i) and (ii) shall be paid promptly after the Date of Termination, (B) clause (iii) shall be paid in accordance with the terms and conditions of the applicable plan, program or arrangement and (C) clause (iv) shall be paid in accordance with the terms of the applicable expense policy.
Cause means the Executives (i) willful and continued failure to substantially perform the Executives duties with the Company or any Company Affiliate (other than any such failure resulting from the Executives disability), (ii) conviction of a felony, (iii) willful engagement in gross misconduct materially and demonstrably injurious to the Company or any Company Affiliate or (iv) commission of one or more significant acts of dishonesty as regards the Company or any Company Affiliate.
Company Affiliate means any entity controlled by, in control of, or under common control with, the Company.
Confidential Information means all non-public information concerning trade secrets, know-how, software, developments, inventions, processes, technology, designs, financial data, strategic business plans or any proprietary or confidential information, documents or materials in any form or media, including any of the foregoing relating to research, operations, finances, current and proposed products and services, vendors, customers, advertising and marketing, and other non-public, proprietary, and confidential information of the Company or the Company Affiliates. Notwithstanding anything to the contrary contained herein, the general skills, knowledge and experience gained during the Executives employment with the Company, information publicly available (except as a result of the Executives wrongful disclosure of such information) or generally known within the industry or trade in which the Company competes and information or knowledge possessed by the Executive prior to his employment by the Company, shall not be considered Confidential Information.
Date of Termination means (i) if the Executives employment is terminated by the Executives death, the date of the Executives death; (ii) if the Executives employment is terminated during the Term by the Company pursuant to Section 8(a)(ii) or by the Executive pursuant to Section 8(a)(iii), the date specified in the Notice of Termination; or (iii) if the Executives employment is terminated pursuant to Section 8(b), the last day of the Term.
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IN WITNESS WHEREOF, the undersigned have duly executed and delivered this Agreement, or have caused this Agreement to be duly executed and delivered on their behalf.
PENN VIRGINIA CORPORATION | ||
By: | /s/ R. Seth Bullock | |
Name: | R. Seth Bullock | |
Title: | Chief Restructuring Officer | |
JOHN A. BROOKS | ||
/s/ John A. Brooks |
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Exhibit 10.6
EXECUTION VERSION
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (Agreement) is entered into as of this 9th day of May, 2016 (the Effective Date), by and between Penn Virginia Corporation, a Virginia corporation (the Company), and Nancy M. Snyder, an individual (the Executive).
WHEREAS, the Executive is currently employed as the Executive Vice President, Chief Administrative Officer, General Counsel and Corporate Secretary; and
WHEREAS, the Company and the Executive desire to enter into this Agreement to set out the terms and conditions for the continued employment relationship of the Executive with the Company.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, the parties hereto agree as follows:
1. Employment Agreement. On the terms and conditions set forth in this Agreement, the Company agrees to continue to employ the Executive and the Executive agrees to continue to be employed by the Company for the Term set forth in Section 2 and in the positions and with the duties set forth in Section 3. Terms used herein with initial capitalization not otherwise defined are defined in Section 25.
2. Term. The term of employment under this Agreement shall commence on the Effective Date and continue until the five (5)-month anniversary of the Effective Date (the Term).
3. Position and Duties. During the Term, the Executive shall continue to serve as the Executive Vice President, Chief Administrative Officer, General Counsel and Corporate Secretary of the Company. In such capacities, the Executive shall have the same duties, responsibilities and authorities as she currently has. The Executive shall devote the Executives reasonable best efforts and full business time to the performance of the Executives duties hereunder and the advancement of the business and affairs of the Company and shall be subject to, and shall comply in all material respects with, the policies of the Company and the Company Affiliates applicable to the Executive; provided that the Executive shall be entitled (i) to serve as a member of the board of directors of SunCoke Energy Partners, L.P. and, with the consent of the Companys board of directors (the Board), other companies, (ii) to serve on civic, charitable, educational, religious, public interest or public service boards, and (iii) to manage the Executives personal and family investments, in each case, to the extent such activities do not materially interfere with the performance of the Executives duties and responsibilities hereunder.
4. Place of Performance. During the Term, the Executive shall be based at the Companys executive offices in Radnor, Pennsylvania.
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5. Compensation and Benefits.
(a) Base Salary. During the Term, the Company shall pay to the Executive a base salary (the Base Salary) at the rate of $335,000 per calendar year, less applicable deductions. The Base Salary shall be reviewed for increase by the Board no less frequently than annually and may be increased in the discretion of the Board, and any such adjusted Base Salary shall constitute the Base Salary for purposes of this Agreement. The Base Salary shall be paid in substantially equal installments in accordance with the Companys regular payroll procedures.
(b) Emergence Bonus. The Executive shall be paid $500,000 if the Companys emergence from bankruptcy (the Emergence) pursuant to a Plan (as defined in the Restructuring Support Agreement dated as of May 9, 2016) occurs on or before October 31, 2016 (a Qualifying Emergence) and either (i) the Executive remains employed with the Company through the Qualifying Emergence or (ii) the Executive was terminated by the Company without Cause before the Qualifying Emergence. The Emergence Bonus, if any, will be paid within fifteen (15) days following the date of the Qualifying Emergence. For the avoidance of doubt, no Emergence Bonus will be payable if a Qualifying Emergence does not occur.
(c) Post-Emergence Consulting. Upon the later of the expiration of the Term or the Emergence (the Consulting Commencement Date), the Company will enter into a non-exclusive consulting agreement with the Executive, substantially in the form attached hereto as Exhibit B (the Consulting Agreement), provided that as of the Consulting Commencement Date, the Executives employment with the Company has not been terminated by the Company for Cause or due to her death, disability or voluntary resignation.
(d) Vacation; Benefits. During the Term, the Executive shall be eligible for the same number of paid vacation days as the number for which she is currently eligible, which shall be accrued and used in accordance with the applicable policies of the Company. During the Term, the Executive shall be eligible to participate in such medical, dental, life insurance, retirement and other plans as the Company may have or establish from time to time on terms and conditions applicable to other senior executives of the Company generally. The foregoing, however, shall not be construed to require the Company to establish any such plans or to prevent the modification or termination of such plans once established.
6. Expenses. The Company shall reimburse the Executive promptly for all expenses reasonably incurred by the Executive in the performance of her duties in accordance with policies which may be adopted from time to time by the Company following presentation by the Executive of an itemized account, including reasonable substantiation, of such expenses.
7. Confidentiality and Non-Disclosure Agreement. The Company and the Executive acknowledge and agree that during the Executives employment with the Company, the Executive will have access to and may assist in developing Confidential Information and will occupy a position of trust and confidence with respect to the affairs and business of the Company and the Company Affiliates. The Executive agrees that the following obligations are necessary to preserve the confidential and proprietary nature of Confidential Information and to protect the Company and the Company Affiliates against harmful solicitation of employees and customers, harmful competition and other actions by the Executive that would result in serious adverse consequences for the Company and the Company Affiliates:
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(a) Non-Disclosure. During and after the Executives employment with the Company, the Executive will not use, disclose, copy or transfer any Confidential Information other than as authorized in writing by the Company or for normal and customary use in the Companys business, as determined reasonably and in good faith by the Company. Anything herein to the contrary notwithstanding, the provisions of this Section 7(a) shall not apply (i) when disclosure is required by law or by any court, arbitrator, mediator or administrative or legislative body (including any committee thereof) with actual or apparent jurisdiction to order the Executive to disclose or make accessible any information, provided that prior to any such disclosure the Executive shall provide the Company with reasonable notice of the requirements to disclose and an opportunity to object to such disclosure and the Executive shall cooperate with the Company in filing such objection; or (ii) as to information that becomes generally known to the public or within the relevant trade or industry other than due to the Executives violation of this Section 7(a).
(b) Materials. The Executive will use Confidential Information only for normal and customary use in the Companys business, as determined reasonably and in good faith by the Company. The Executive will return to the Company all Confidential Information and copies thereof and all other property of the Company or any Company Affiliate at any time upon the request of the Company and in any event immediately after termination of Executives employment. The Executive agrees to identify and return to the Company any copies of any Confidential Information after the Executive ceases to be employed by the Company.
(c) Conflicting Obligations and Rights. The Executive agrees to inform the Company of any apparent conflicts between the Executives work for the Company and any obligations the Executive may have to preserve the confidentiality of anothers proprietary information or related materials before using the same on the Companys behalf. The Company shall receive such disclosures in confidence and consistent with the objectives of avoiding any conflict of obligations and rights or the appearance of any conflict of interest.
(d) Enforcement. The Executive acknowledges that in the event of any breach or threatened breach of this Section 7, the business interests of the Company and the Company Affiliates will be irreparably injured, the full extent of the damages to the Company and the Company Affiliates will be impossible to ascertain, monetary damages will not be an adequate remedy for the Company and the Company Affiliates, and the Company will be entitled to enforce this Agreement by a temporary, preliminary and/or permanent injunction or other equitable relief, without the necessity of posting bond or security, which the Executive expressly waives. The Executive understands that the Company may waive some of the requirements expressed in this Agreement, but that such a waiver to be effective must be made in writing and should not in any way be deemed a waiver of the Companys right to enforce any other requirements or provisions of this Agreement. The Executive agrees that each of the Executives obligations specified in this Agreement is a separate and independent covenant and that the unenforceability of any of them shall not preclude the enforcement of any other covenants in this Agreement.
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8. Termination of Employment.
(a) Permitted Terminations. The Executives employment hereunder may be terminated during the Term under the following circumstances:
(i) Death. The Executives employment hereunder shall terminate upon the Executives death;
(ii) By the Company. The Company may terminate the Executives employment with or without Cause; and
(iii) By the Executive. The Executive may terminate her employment for any reason or for no reason.
(b) Expiration of Term. Following the expiration of the Term, in the event the Executive continues the Executives employment or service with the Company, the Executives employment or service will be entirely at-will and, subject to Section 14, will not be covered by this Agreement (except for the applicable restrictive covenant provisions, which are intended to survive expiration of the Agreement in all cases).
(c) Termination. Any termination of the Executives employment by the Company or the Executive (other than because of the Executives death and other than a termination upon the expiration of the Term) shall be communicated by written Notice of Termination to the other party hereto in accordance with Section 12 hereof. For purposes of this Agreement, a Notice of Termination shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon, if any, and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executives employment under the provision so indicated. Termination of the Executives employment shall take effect on the Date of Termination.
(d) Effect of Termination. Upon any termination of the Executives employment with the Company, and its subsidiaries, the Executive shall resign from, and shall be considered to have simultaneously resigned from, all positions with the Company and all of its subsidiaries.
9. Compensation Upon Termination.
(a) Death. If the Executives employment is terminated during the Term as a result of the Executives death, this Agreement shall terminate without further notice or any action required by the Company or the Executives legal representatives. Upon the Executives death, the Company shall pay or provide to the Executives representative or estate (i) any unpaid Base Salary due from the Date of Termination through the end of Term and (ii) all Accrued Benefits, if any, to which the Executive is entitled. Additionally, the Company shall pay or provide to the Executives representative or estate the Emergence Bonus, within fifteen (15) days of the Qualifying Emergence, provided that the Qualifying Emergence occurs. Except as set forth herein, the Company shall have no further obligation to the Executive (or the Executives legal representatives or estate) under this Agreement.
(b) Termination by the Company for Cause or by the Executive for Any or No Reason. If, during the Term, the Company terminates the Executives employment for Cause pursuant to Section 8(a)(ii) or the Executive terminates her employment for any or no reason pursuant to Section 8(a)(iii), the Company shall pay to the Executive all Accrued Benefits, if any, to which the Executive is entitled. Except as set forth herein, the Company shall have no further obligations to the Executive under this Agreement.
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10. Indemnification. During the Term and thereafter, the Company agrees to indemnify and hold the Executive and the Executives heirs and representatives harmless, to the maximum extent permitted by law, against any and all damages, costs, liabilities, losses and expenses (including reasonable attorneys fees) as a result of any claim or proceeding (whether civil, criminal, administrative or investigative), or any threatened claim or proceeding (whether civil, criminal, administrative or investigative), against the Executive that arises out of or relates to the Executives service as an officer, director or employee, as the case may be, of the Company, or the Executives service in any such capacity or similar capacity with an affiliate of the Company or other entity at the request of the Company, both prior to and after the Effective Date, and to advance to the Executive or the Executives heirs or representatives such expenses on the same terms and conditions applicable to officers or directors of the Company. During the Term and thereafter, the Company also shall provide the Executive with coverage under its current directors and officers liability policy to the same extent that it provides such coverage to its other executive officers. This Section 10 shall continue in effect after the termination of the Executives employment or the termination of this Agreement.
11. Attorneys Fees. In the event of any controversy, dispute or claim which arises out of or relates to this Agreement, any other agreement or arrangement between the Executive and the Company, the Executives employment with the Company, or the termination thereof, each party shall bear its own expense in respect of for any and all costs and expenses (including without limitation attorneys fees and other charges of counsel) incurred by the Company or the Executive (or any of his beneficiaries) in connection with such controversy, dispute or claim.
12. Notices. All notices, demands, requests, or other communications which may be or are required to be given or made by any party to any other party pursuant to this Agreement shall be in writing and shall be hand delivered, mailed by first-class registered or certified mail, return receipt requested, postage prepaid, delivered by overnight air courier, or transmitted by facsimile transmission addressed as follows:
(i) If to the Company:
Penn Virginia Corporation
Four Radnor Corporate Center
Suite 200
100 Matsonford Road
Radnor, PA 19087
Attention: Edward B. Cloues, II
(ii) If to the Executive:
At the address last shown on the Companys Records
Each party may designate by notice in writing a new address to which any notice, demand, request or communication may thereafter be so given, served or sent. Each notice, demand, request, or communication that shall be given or made in the manner described above shall be deemed sufficiently given or made for all purposes at such time as it is delivered to the addressee (with the return receipt, the delivery receipt, confirmation of facsimile transmission or the affidavit of messenger being deemed conclusive but not exclusive evidence of such delivery) or at such time as delivery is refused by the addressee upon presentation.
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13. Severability. The invalidity or unenforceability of any one or more provisions of this Agreement, including, without limitation, Section 7, shall not affect the validity or enforceability of the other provisions of this Agreement, which shall remain in full force and effect.
14. Survival. It is the express intention and agreement of the parties hereto that the provisions of Sections 7, 9, 10, 11, 12, 13, 15, 16, 17, 19, 20, 21, 23, 24 and 25 hereof and this Section 14 shall survive the termination of employment of the Executive. In addition, all obligations of the Company to make payments hereunder shall survive any termination of this Agreement on the terms and conditions set forth herein.
15. Assignment. The rights and obligations of the parties to this Agreement shall not be assignable or delegable, except that (i) in the event of the Executives death, the personal representative or legatees or distributees of the Executives estate, as the case may be, shall have the right to receive any amount owing and unpaid to the Executive hereunder and (ii) the rights and obligations of the Company hereunder shall be assignable and delegable in connection with any subsequent merger, consolidation, sale of all or substantially all of the assets or equity interests of the Company or similar transaction involving the Company or a successor corporation. The Company shall require any successor to the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.
16. Binding Effect. Subject to any provisions hereof restricting assignment, this Agreement shall be binding upon the parties hereto and shall inure to the benefit of the parties and their respective heirs, devisees, executors, administrators, legal representatives, successors and assigns.
17. Amendment; Waiver. This Agreement shall not be amended, altered or modified except by an instrument in writing duly executed by the party against whom enforcement is sought. Neither the waiver by either of the parties hereto of a breach of or a default under any of the provisions of this Agreement, nor the failure of either of the parties, on one or more occasions, to enforce any of the provisions of this Agreement or to exercise any right or privilege hereunder, shall thereafter be construed as a waiver of any subsequent breach or default of a similar nature, or as a waiver of any such provisions, rights or privileges hereunder.
18. Headings. Section and subsection headings contained in this Agreement are inserted for convenience of reference only, shall not be deemed to be a part of this Agreement for any purpose, and shall not in any way define or affect the meaning, construction or scope of any of the provisions hereof.
19. Governing Law. This Agreement, the rights and obligations of the parties hereto, and any claims or disputes relating thereto, shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia (but not including any choice of law rule thereof that would cause the laws of another jurisdiction to apply).
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20. Dispute Resolution. Each of the parties hereto irrevocably and unconditionally (a) WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDING RELATING TO THIS AGREEMENT OR THE EXECUTIVES EMPLOYMENT BY THE COMPANY OR ANY COMPANY AFFILIATE, or for the recognition and enforcement of any judgment in respect thereof (a Proceeding) whether such Proceeding is based on contract, tort or otherwise; (b) agrees that service of process in any such Proceeding may be effected by mailing a copy of such process by registered or certified mail (or any substantially similar form of mail), postage prepaid, to such party at his or its address as provided in Section 12; and (c) agrees that nothing in this Agreement shall affect the right to effect service of process in any other manner permitted by applicable law.
21. Entire Agreement; Advice of Counsel. This Agreement constitutes the entire agreement between the parties respecting the employment of the Executive, there being no representations, warranties or commitments except as set forth herein and supersedes and replaces all other existing agreements related to the subject matter hereof, including, without limitation, the Amended and Restated Executive Change of Control Severance Agreement, dated as of December 20, 2012. The Executive acknowledges that, in connection with her entry into this Agreement, she was advised by an attorney of her choice on the terms and conditions of this Agreement, including, without limitation, on the application of Code Section 409A (as defined below) on the payments and benefits payable or to be paid to the Executive hereunder.
22. Counterparts. This Agreement may be executed in two counterparts, each of which shall be an original and all of which shall be deemed to constitute one and the same instrument.
23. Withholding. The Company may withhold from any benefit payment under this Agreement all federal, state, city or other taxes as shall be required pursuant to any law or governmental regulation or ruling.
24. Section 409A.
(a) The intent of the parties is that payments and benefits under this Agreement are exempt from or comply with Internal Revenue Code Section 409A and the regulations and guidance promulgated thereunder (collectively Code Section 409A) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be exempt from or in compliance therewith. If the Executive notifies the Company (with specificity as to the reason therefor) that the Executive believes that any provision of this Agreement (or of any award of compensation, including equity compensation or benefits) would cause the Executive to incur any additional tax or interest under Code Section 409A and the Company concurs with such belief or the Company (without any obligation whatsoever to do so) independently makes such determination, the Company shall, after consulting with the Executive, reform such provision to attempt to comply with or exempt from Code Section 409A through good faith modifications to the minimum extent reasonably appropriate to conform with Code Section 409A. To the extent that any provision hereof is modified in order to comply with or be exempt from Code Section 409A, such modification shall be made in good faith and shall, to the maximum extent reasonably possible, maintain the original intent and economic benefit to the Executive and the Company of the applicable provision without violating the provisions of Code Section 409A. For the sake of clarity, the Company does not hereby agree to indemnify the Executive for liabilities incurred as a result of Code Section 409A.
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(b) A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment unless such termination is also a separation from service within the meaning of Code Section 409A and, for purposes of any such provision of this Agreement, references to a termination, termination of employment or like terms shall mean separation from service. If the Executive is deemed on the date of termination to be a specified employee within the meaning of that term under Code Section 409A(a)(2)(B), then with regard to any payment or the provision of any benefit that is considered deferred compensation under Code Section 409A payable on account of a separation from service, such payment or benefit shall be made or provided at the date which is the earlier of (A) the expiration of the six (6)-month period measured from the date of such separation from service of the Executive, and (B) the date of the Executives death, to the extent required under Code Section 409A. Upon the expiration of the foregoing delay period, all payments and benefits delayed pursuant to this Section 24(b) (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to the Executive in a lump sum, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.
(c) To the extent that reimbursements or other in-kind benefits under this Agreement constitute nonqualified deferred compensation for purposes of Code Section 409A, (A) all expenses or other reimbursements hereunder shall be made on or prior to the last day of the taxable year following the taxable year in which such expenses were incurred by the Executive, (B) any right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, and (C) no such reimbursement, expenses eligible for reimbursement, or in-kind benefits provided in any taxable year shall in any way affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year.
(d) For purposes of Code Section 409A, the Executives right to receive any installment payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments. Whenever a payment under this Agreement specifies a payment period with reference to a number of days, the actual date of payment within the specified period shall be within the sole discretion of the Company.
(e) Notwithstanding any other provision of this Agreement to the contrary, in no event shall any payment under this Agreement that constitutes nonqualified deferred compensation for purposes of Code Section 409A be subject to offset by any other amount unless otherwise permitted by Code Section 409A.
25. Release.
(a) Effective upon the Emergence under the Plan and receipt of the Plan Release (as defined below), the Executive will provide the Company with a customary general release of claims, which will exclude: (i) rights of the Executive arising under, or preserved by, this Agreement; and (b) rights to indemnification the Executive has or may have under the by-
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laws or certificate of incorporation of any member of the Companys affiliated group or as an insured under any directors and officers liability insurance policy now or previously in force. As part of such release and upon the Emergence under the Plan and receipt of the Plan Release (as defined below), the Executives outstanding performance-based restricted stock unit and restricted stock unit awards and outstanding SERP entitlements will be cancelled as of the Petition Date (as defined in the Plan) without payment of any consideration therefor and without any further action on the part of any party.
(b) The Company agrees to use its commercially reasonable efforts to obtain approval of the Plan containing a customary release (the Plan Release) of all claims against the Executive and her successors and assigns (collectively, the Executive Released Parties). Notwithstanding the terms of the Plan Release, the Plan Release shall be deemed to exclude claims arising out of or attributable to the Executives fraud.
26. Definitions.
Accrued Benefits means (i) any unpaid Base Salary through the Date of Termination; (ii) any accrued and unpaid vacation and/or sick days; (iii) any amounts or benefits owing to the Executive or to the Executives beneficiaries under the then applicable benefit plans of the Company (excluding any severance plan, program, agreement or arrangement); and (iv) any amounts owing to the Executive for reimbursement of expenses properly incurred by the Executive prior to the Date of Termination and which are reimbursable in accordance with Section 6. Amounts payable under (A) clauses (i) and (ii) shall be paid promptly after the Date of Termination, (B) clause (iii) shall be paid in accordance with the terms and conditions of the applicable plan, program or arrangement and (C) clause (iv) shall be paid in accordance with the terms of the applicable expense policy.
Cause means the Executives (i) willful and continued failure to substantially perform the Executives duties with the Company or any Company Affiliate (other than any such failure resulting from the Executives disability), (ii) conviction of a felony, (iii) willful engagement in gross misconduct materially and demonstrably injurious to the Company or any Company Affiliate or (iv) commission of one or more significant acts of dishonesty as regards the Company or any Company Affiliate.
Company Affiliate means any entity controlled by, in control of, or under common control with, the Company.
Confidential Information means all non-public information concerning trade secrets, know-how, software, developments, inventions, processes, technology, designs, financial data, strategic business plans or any proprietary or confidential information, documents or materials in any form or media, including any of the foregoing relating to research, operations, finances, current and proposed products and services, vendors, customers, advertising and marketing, and other non-public, proprietary, and confidential information of the Company or the Company Affiliates. Notwithstanding anything to the contrary contained herein, the general skills, knowledge and experience gained during the Executives employment with the Company, information publicly available (except as a result of the Executives wrongful disclosure of such information) or generally known within the industry or trade in which the Company competes and information or knowledge possessed by the Executive prior to her employment by the Company, shall not be considered Confidential Information.
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Date of Termination means (i) if the Executives employment is terminated by the Executives death, the date of the Executives death; (ii) if the Executives employment is terminated during the Term by the Company pursuant to Section 8(a)(ii) or by the Executive pursuant to Section 8(a)(iii), the date specified in the Notice of Termination; or (iii) if the Executives employment is terminated pursuant to Section 8(b), the last day of the Term.
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IN WITNESS WHEREOF, the undersigned have duly executed and delivered this Agreement, or have caused this Agreement to be duly executed and delivered on their behalf.
PENN VIRGINIA CORPORATION | ||
By: | /s/ R. Seth Bullock | |
Name: | R. Seth Bullock | |
Title: | Chief Restructuring Officer | |
NANCY M. SNYDER | ||
/s/ Nancy M. Snyder |
Employment Agreement Signature Page
FINAL VERSION
EXHIBIT A
FORM OF CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (this Agreement), dated as of [], by and between Penn Virginia Corporation, a Virginia corporation (the Company), and Nancy M. Snyder (the Consultant). For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
1. | Consulting Period. The Company shall retain the Consultant pursuant to the terms of this Agreement, and the Consultant shall provide the Services (as defined in Section 2 hereof) for a twelve (12)-month term beginning on [], 20 1 and ending on [], 20 (the Consulting Period). |
2. | Services. During the Consulting Period, the Company hereby retains the Consultant to perform such services as are reasonable in light of the Consultants skills, knowledge and experience and as the Company may reasonably request from time to time (the Services), and the Consultant agrees to make herself reasonably available to perform the Services. The Consultant may perform the Services at a location of her choosing. |
3. | Consulting Fees; Business Expenses; Professional Liability Insurance. The Company agrees to pay the Consultant, as compensation for the Services, a consulting fee equal to $15,000 per month (pro-rated for any partial months) (the Fee), which shall accrue and be payable on a monthly basis, with each monthly payment to the Consultant to be paid as soon as administratively practicable following the first business day of the month to which the payment relates, but in no event later than five (5) days following such first business day. Upon termination of this Agreement by the Company other than for cause (which shall be defined as the Consultants failure to cure a material breach of this Agreement within fifteen (15) days of the Companys written notice identifying such breach), the Company agrees to pay the Consultant that amount of Fees equal to (x) $180,000 minus (y) the amount of Fees paid to the Consultant prior to such termination. In addition, upon presentation of appropriate documentation, the Consultant will be reimbursed, in accordance with the Companys expense reimbursement policy, for all reasonable business expenses (inclusive of expenses associated with any necessary business travel) incurred during the Consulting Period in connection with the Consultants performance of the Services, provided that Consultant shall be required to get prior consent for any expenses that could exceed $1,000. |
4. | Independent Contractor Status. Both parties agree that (and neither party shall act inconsistently with the understanding that) the Consultant is an independent contractor and that nothing contained in this Agreement shall be deemed or interpreted to constitute the Consultant as a partner, agent, joint-venturer or employee of the Company, nor shall either party have any authority to bind the other. The Consultant agrees that she shall be responsible for all taxes associated with the performance of the Services and shall not be entitled to any employee benefits from the Company. The Consultant agrees to provide a completed Internal Revenue Service Form W-9 (or other requested tax documentation) upon commencement of the Consulting Period. In addition, the Consultant represents that she is fully licensed, where required, or otherwise authorized to perform the Services, and the Consultant agrees to abide by all laws and regulations in performing the Services. |
1 | NTD: Consulting Commencement Date is intended to be the later of the expiration of the Consultants Employment Agreement term or the Emergence, so long as the Consultants employment has not terminated prior to such time due to cause, voluntary resignation or death or disability. |
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5. | Confidentiality. The Company and the Consultant acknowledge and agree that during the Consulting Period, the Consultant will have access to and may assist in developing Confidential Information and will occupy a position of trust and confidence with respect to the affairs and business of the Company and its affiliates. The Consultant agrees that the following obligations are necessary to preserve the confidential and proprietary nature of Confidential Information and to protect the Company and its affiliates against harmful solicitation of employees and customers, harmful competition and other actions by the Consultant that would result in serious adverse consequences for the Company and its affiliates: |
(a) Non-Disclosure. During and after the Consulting Period, the Consultant will not use, disclose, copy or transfer any Confidential Information other than as authorized in writing by the Company or within the scope of the Consultants duties with the Company as determined reasonably and in good faith by the Consultant. Anything herein to the contrary notwithstanding, the provisions of this Section 5(a) shall not apply (i) when disclosure is required by law or by any court, arbitrator, mediator or administrative or legislative body (including any committee thereof) with actual or apparent jurisdiction to order the Consultant to disclose or make accessible any information, provided that prior to any such disclosure the Consultant shall provide the Company with reasonable notice of the requirements to disclose and an opportunity to object to such disclosure and the Consultant shall cooperate with the Company in filing such objection; or (ii) as to information that becomes generally known to the public or within the relevant trade or industry other than due to the Consultants violation of this Section 5(a).
(b) Materials. The Consultant will use Confidential Information only for normal and customary use in the Companys business, as determined reasonably and in good faith by the Company. The Consultant will return to the Company all Confidential Information and copies thereof and all other property of the Company or its affiliates at any time upon the request of the Company and in any event immediately after termination of the Consulting Period. The Consultant agrees to identify and return to the Company any copies of any Confidential Information after the Consulting Period. Anything to the contrary notwithstanding, nothing in this Section 5 shall prevent the Consultant from retaining a home computer (provided all Confidential Information has been removed), papers and other materials of a personal nature, including diaries, calendars and Rolodexes, information relating to her compensation or relating to reimbursement of expenses, information that may be needed for tax purposes, and copies of plans, programs and agreements relating to the Services.
(c) Conflicting Obligations and Rights. The Consultant agrees to inform the Company of any apparent conflicts between the Consultants work for the Company and any obligations the Consultant may have to preserve the confidentiality of anothers proprietary information or related materials before using the same on the Companys behalf. The Company shall receive such disclosures in confidence and consistent with the objectives of avoiding any conflict of obligations and rights or the appearance of any conflict of interest.
(d) Enforcement. The Consultant acknowledges that in the event of any breach or threatened breach of this Section 5, the business interests of the Company and its affiliates will be irreparably injured, the full extent of the damages to the Company and its affiliates will be impossible to ascertain, monetary damages will not be an adequate remedy for the Company and its affiliates, and the Company will be entitled to enforce this Agreement by a temporary, preliminary and/or permanent injunction or other equitable relief, without the necessity of posting
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bond or security, which the Consultant expressly waives. The Consultant understands that the Company may waive some of the requirements expressed in this Agreement, but that such a waiver to be effective must be made in writing and should not in any way be deemed a waiver of the Companys right to enforce any other requirements or provisions of this Agreement. The Consultant agrees that each of the Consultants obligations specified in this Agreement is a separate and independent covenant and that the unenforceability of any of them shall not preclude the enforcement of any other covenants in this Agreement.
(e) Confidential Information means all non-public information concerning trade secrets, know-how, software, developments, inventions, processes, technology, designs, financial data, strategic business plans or any proprietary or confidential information, documents or materials in any form or media, including any of the foregoing relating to research, operations, finances, current and proposed products and services, vendors, customers, advertising and marketing, and other non-public, proprietary, and confidential information of the Company or its affiliates. Notwithstanding anything to the contrary contained herein, the general skills, knowledge and experience gained during the Consultants employment with or services to the Company, information publicly available or generally known within the industry or trade in which the Company competes and information, or knowledge possessed by the Consultant prior to her employment with or services to the Company, shall not be considered Confidential Information.
6. | Governing Law and Jurisdiction. This Agreement shall be governed by and construed and enforced in accordance with the laws of the Commonwealth of Virginia without regard to the choice of law principles thereof. Each party consents to the exclusive jurisdiction of the courts located in the County of Henrico, Virginia for all disputes arising under this Agreement. |
7. | Assignment. This Agreement is personal to each of the parties hereto. Neither party may assign or delegate any rights or obligations hereunder without the express written consent of the other party. |
8. | Notices. For purposes of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given (i) on the date of delivery, if delivered by hand, (ii) on the date of transmission, if delivered by confirmed facsimile or electronic mail, (iii) on the first business day following the date of deposit, if delivered by guaranteed overnight delivery service, or (iv) on the fourth business day following the date delivered or mailed by United States registered or certified mail, return receipt requested, postage prepaid, addressed as follows: |
If to the Consultant: | Nancy M. Snyder, at the most recent address on the Companys file. | |||
If to the Company: | Penn Virginia Corporation Four Radnor Corporate Center Suite 200 100 Matsonford Road Radnor, PA 19087 Attention: [] |
or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.
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9. | Severability. To the extent that any provision of this Agreement shall be invalid or unenforceable, it shall be considered deleted herefrom and the remainder of such provision and of this Agreement shall be unaffected and shall continue in full force and effect. |
10. | Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument, including by electronic transmission. |
11. | Miscellaneous. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by both parties hereto. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. This Agreement represents the entire agreement and understanding between the parties hereto with respect to the subject matter hereof, supersedes any and all other agreements, verbal or otherwise, between the parties hereto concerning such subject matter, including, without limitation, the Employment Agreement between the Company and the Consultant, effective as of May 9, 2016 (the Employment Agreement) (except for those provisions of the Employment Agreement that survive pursuant to Section 14 of the Employment Agreement). No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement. |
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the date first written above.
PENN VIRGINIA CORP. |
By: |
Name: |
Title: |
CONSULTANT |
|
Nancy M. Snyder |
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