SECOND AMENDED AND RESTATED CREDIT AGREEMENTLoan Agreement |
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QUEST EASTERN RESOURCE, LLC | QUEST ENERGY SERVICE, LLC | QUEST MERGERSUB, INC | QUEST OIL & GAS, LLC | QUEST RESOURCE CORPORATION | ROYAL BANK OF CANADA. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here. |
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EXECUTION
A PORTION OF THIS EXHIBIT HAS BEEN OMITTED BASED UPON A REQUEST FOR CONFIDENTIAL TREATMENT AND SUCH PORTION HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
SECOND AMENDED AND RESTATED CREDIT AGREEMENT Originally dated as of November 15, 2007 Originally Amended and Restated as of July 11, 2008
among QUEST RESOURCE CORPORATION as the Borrower, ROYAL BANK OF CANADA , as Administrative Agent and Collateral Agent and The Lenders Party Hereto
$28,250,000.00 ORIGINAL TERM LOAN $8,000,000.00 REVOLVING OIL & GAS DEVELOPMENT LOAN $862,785.96 INTEREST DEFERRAL NOTE $282,500.00 PIK NOTE $25,000.00 SECOND PIK NOTE RBC CAPITAL MARKETS As Lead Arranger and Sole Bookrunner
Dated as of September 11, 2009
TABLE OF CONTENTS
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SCHEDULES
EXHIBITS
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SECOND AMENDED AND RESTATED CREDIT AGREEMENT THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT is entered into as of September 11, 2009, among QUEST RESOURCE CORPORATION a Nevada corporation (the “ Borrower ”), each lender from time to time party hereto (collectively, the “ Lenders ” and individually, “ Lender ”), and ROYAL BANK OF CANADA, as Administrative Agent and Collateral Agent. PRELIMINARY STATEMENTS A. The Borrower, Royal Bank of Canada, as administrative agent and collateral agent, and Royal Bank of Canada, as sole lender, entered into a Credit Agreement dated as of November 15, 2007 providing for an aggregate revolving credit facility of $50,000,000 (as amended, the “ Original Credit Agreement ”). B. The Original Credit Agreement was amended and restated in its entirety by an Amended and Restated Credit Agreement dated as of July 11, 2008 among the Borrower, Royal Bank of Canada, as administrative agent and collateral agent, and Royal Bank of Canada, as sole lender(as amended, the “ First Amended and Restated Credit Agreement ” ) . Pursuant to the First Amended and Restated Credit Agreement the outstanding balance of $35,000,000.00 owing under the Original Credit Agreement was converted to a $35,000,000.00 term loan with a maturity date of July 11, 2010. C. In connection with the Fourth Amendment to the First Amended and Restated Credit Agreement, in lieu of paying the 1% amendment fee payable in connection therewith, the Borrower issued to Royal Bank of Canada, as Lender, a $282,500.00 note dated May 29, 2009 with a maturity date of July 11, 2010. D. In connection with the Fifth Amendment to the First Amended and Restated Credit Agreement, in lieu of paying a $25,000.00 amendment fee in connection therewith, the Borrower issued to Royal Bank of Canada, as Lender, a $25,000.00 note dated June 30, 2009 with a maturity date of July 11, 2010. Additionally, in lieu of paying interest accrued on the indebtedness outstanding under the First Amended and Restated Credit Agreement on June 30, 2009, the Borrower issued to Royal Bank of Canada, as Lender, a $862,785.96 note dated June 30, 2009 with a maturity date of September 30, 2009. E. The Borrower has requested that Royal Bank of Canada, as sole lender, agree to advance up to $8,000,000.00 to fund development costs associated with the Borrower's Phase I Oil and Gas Properties, general and administrative expenses, working capital and other corporate purposes and Royal Bank of Canada, subject to the terms and conditions set forth herein, has agreed to provide the requested $8,000,000.00 development loan, to renew and rearrange the Outstanding Amount of the Term Loan ($28,250,000.00) and in furtherance thereof the parties have agreed to amend and restate the First Amended and Restated Credit Agreement in its entirety. NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the parties hereto hereby agree that the First Amended and Restated Credit Agreement is amended and restated in its entirety to read as follows:
ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS
As used in this Agreement, the terms defined in the introductory paragraph hereof shall have the meanings therein indicated and the following terms shall have the meanings set forth below: Additional PIK Interest means interest that accrues and is payable on each Interest Payment Date on each Loan that the Borrower elects not to pay in cash but to pay via a "payment-in-kind" or Additional PIK Loan made by Lenders to Borrower, which shall be added to the outstanding principal balance of the respective Loan, and shall thereafter accrue interest thereon at a rate equal to the rate payable on the respective Loan from time to time as provided herein, but in no event to exceed the Maximum Rate. Additional PIK Loan means the additional "payment-in-kind" loan advance made by Lenders to Borrower automatically in the event Borrower does not pay accrued interest payable on the Original Term Loan, the Interest Deferral Loan, the PIK Loan or the Second PIK Loan on any Interest Payment Date, which Additional PIK Loan shall be added to the outstanding principal balance of the respective Loan, and shall thereafter accrue interest thereon at a rate equal to the rate payable on the respective Loan from time to time as provided herein, but in no event to exceed the Maximum Rate. Adjusted Base Rate means the Base Rate plus ten percent (10%) per annum, but in no event to exceed the Maximum Rate. Administrative Agent means Royal Bank of Canada in its capacity as administrative agent under any of the Loan Documents, or any successor administrative agent. Administrative Agent's Office means the Administrative Agent's address and, as appropriate, account as set forth on Schedule 10.02 , or such other address or account as the Administrative Agent may from time to time notify to the Borrower and the Lenders. Administrative Details Form means the Administrative Details Reply Form furnished by a Lender to the Administrative Agent in connection with this Agreement. Affiliate means, as to any Person, any other Person directly or indirectly controlling, controlled by, or under direct or indirect common control with, such Person. A Person shall be deemed to be controlled by any other Person if such other Person possesses, directly or indirectly, power to direct or cause the direction of the management and policies of such Person whether by contract or otherwise. Agent-Related Persons means the Administrative Agent (including any successor administrative agent), the Collateral Agent (including any successor collateral agent) and their respective Affiliates (including the officers, directors, employees, agents and attorneys-in-fact of such Person). Aggregate Revolving O&G Development Loan Commitment means collectively the Revolving O&G Development Loan Commitments of all the Lenders which Revolving O&G Development Loan Commitment collectively for all Lenders shall be an amount (subject to increase, reduction or cancellation as herein provided) up to $5,600,000.00 through November 30, 2009; provided if no Event of Default
shall have occurred and be continuing on November 30, 2009, the Revolving O&G Development Loan Commitment will be automatically increased to an amount not exceeding $8,000,000.00 . Agreement means this Second Amended and Restated Credit Agreement. Approved Budgets means the Approved Capital and Operating Budget and the Approved General and Administrative Budget. Approved Capital and Operating Budget means Borrower's budget, as approved by Administrative Agent and set forth on Schedule 6.12, as such Schedule 6.12 may be changed to accelerate expenditures for Value Enhancing CapEx or to provide for such other changes as may be approved by the Administrative Agent, in each case pursuant to Section 6.01(c) , for conducting Approved Development Activities on the Phase I Oil and Gas Properties (including Mandatory CapEx and Value Enhancing CapEx for the 4 wells identified on Schedule 6.12 ). Schedule 6.12 shall set forth, by well, projected Mandatory CapEx and Value Enhancing CapEx related to the operation and development of the Phase I Oil and Gas Properties. Approved Development Activities means, subject to prudent industry standards, drilling, geological and geophysical investigations and evaluations and related activities on the Phase I Oil and Gas Properties, in accordance with Schedule 6.12 (as revised from time to time pursuant to Section 6.01(c) to reflect the acceleration of expenditures for, or other changes to, Value Enhancing CapEx as may be approved by the Administrative Agent), (i) in order to bring into production Proved Reserves and other reserves, and (ii) in order to further explore and/or develop the Hydrocarbons. Certain Approved Development Activities have been approved in the initial Schedule 6.12 ; depending upon the success of these initial Approved Development Activities, Administrative Agent may approve the acceleration of expenditures for, or other changes to, Value Enhancing CapEx, in an updated Schedule 6.12 delivered to and approved by the Administrative Agent pursuant to Section 6.01(c) . Approved Fund means any Fund that is administered or managed by a Lender, an Affiliate of a Lender, or an entity or an Affiliate of an entity that administers or manages a Lender. Approved General and Administrative Budget means Borrower's budget, as approved by Administrative Agent and set forth on Schedule 6.12, as such Schedule 6.12 may be changed pursuant to Section 6.01(c) , for general and administrative expenses. Approved Hedge Counterparty means BP Corporation North America, Inc. or any of its Affiliates or any other Person designated by the Administrative Agent in writing to be an Approved Hedge Counterparty that enters into an Approved Hedge Counterparty Swap Contract. Approved Hedge Counterparty Swap Contract means any Swap Contract entered into by an Approved Hedge Counterparty with the Borrower. Arranger means RBC Capital Markets in its capacity as lead arranger and sole bookrunner. Assignment and Assumption means an Assignment and Assumption substantially in the form of Exhibit D .
Attorney Costs means and includes the reasonable fees and disbursements of any law firm or other external counsel and the reasonable allocated cost of internal legal services and disbursements of internal counsel. Attributable Indebtedness means, on any date, (a) in respect of any Capital Lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of the remaining lease payments under the relevant lease that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease were accounted for as a capital lease. Authorizations means all filings, recordings, and registrations with, and all validations or exemptions, approvals, orders, authorizations, consents, franchises, licenses, certificates, and permits from, any Governmental Authority. Available Cash means Cash Equivalents excluding: (i) all outstanding checks and other uncleared items; (ii) Cash Equivalents pledged to secure letter of credit reimbursement obligations to the extent provided herein; and (iii) other amounts that are being held for the benefit of third parties (including, without limitation, amounts being held in suspense, amounts payable to royalty and working interest owners, amounts payable for gathering, compression, treating and transportation services and Swap Contract settlements). Base Rate means for any day a fluctuating rate per annum equal to the greater of (a) the Federal Funds Rate plus one-half of one percent (0.5%) and (b) the Prime Rate for such day. Any change in the Base Rate due to a change in the Prime Rate or Federal Funds Rate shall be effective automatically and without notice to Borrower or the Lenders on the effective date of such change in the Prime Rate or Federal Funds Rate, respectively. Board means the Board of Governors of the Federal Reserve System of the United States. Borrower has the meaning specified in the introductory paragraph hereto. Borrower Affiliate means each of the QRC Subsidiaries. Borrowing means a borrowing of Revolving O&G Development Loans pursuant to Section 2.02 . Borrowing Notice means a notice of Borrowing, which, if in writing, shall be substantially in the form of Exhibit A-1 . Business Day means any day other than a Saturday, Sunday, or other day on which commercial banks are authorized to close under the Laws of New York, or are in fact closed. Capital Expenditure by a Person means an expenditure (determined in accordance with GAAP) for any fixed asset owned by such Person for use in the operations of such Person having a useful life of more than one year, or any improvements or additions thereto and with respect to the development of the Phase I Oil and Gas Properties means Mandatory CapEx and Value Enhancing CapEx.
Capital Lease means any capital lease or sublease which should be capitalized on a balance sheet in accordance with GAAP. Cash Collateralize means to pledge and deposit with or deliver to the Administrative Agent or Collateral Agent, for the benefit of the L/C Issuer and the Lenders and their Affiliates, as collateral for the L/C Obligations, cash and deposit account balances pursuant to documentation in form and substance satisfactory to the Administrative Agent and the L/C Issuer (which documents hereby are consented to by the Lenders). Cash Equivalents means:
(b) direct general obligations, or obligations of, or obligations fully and unconditionally guaranteed as to the timely payment of principal and interest by, the United States or any agency or instrumentality thereof having remaining maturities of not more than thirteen (13) months, but excluding any such securities whose terms do not provide for payment of a fixed dollar amount upon maturity or call for redemptions; (c) certificates of deposit and eurodollar-time deposits with remaining maturities of thirteen (13) months or less, bankers acceptances with remaining maturities not exceeding one hundred eighty (180) days, overnight bank deposits and other similar short term instruments, in each case with any domestic commercial bank having capital and surplus in excess of $250,000,000 and having a rating of at least “A2” by Moody's or at least “A” by S&P; (d) repurchase obligations with a remaining term of not more than thirteen (13) months for underlying securities of the types described in (b) and (c) above entered into with any financial institution meeting the qualifications in (c) above; (e) commercial paper (having remaining maturities of not more than two hundred seventy (270) days) of any Person rated “P-1” or better by Moody's or “A-1” or the equivalent by S&P; (f) money market funds that (i) comply with the criteria set forth in SEC Rule 2a-7 under the Investment Company Act of 1940, as amended, (ii) are rated AAA by S&P or Aaa by Moody’s and (iii) have portfolio assets of at least $5,000,000,000; and (g) money market mutual or similar funds having assets in excess of $100,000,000, at least 95% of the assets of which are comprised of assets specified in clause (a) through (f) above, except that with respect to the maturities of the assets included in such funds the requirements of clauses (a) through (f) shall not be applied to the individual assets included in such funds but to the weighted-average maturity of all assets included in such funds. Change in Law means (a) the adoption of any law, rule or regulation after the date of this Agreement, (b) any change in any law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the date of this Agreement or (c) compliance by any Lender (or, for purposes of Section 3.04(b) , by any Lending Office of such Lender or by such Lender's holding
company) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement. Change of Control means the acquisition by any Person, or two or more Persons acting in concert, of beneficial ownership (within the meaning of Rule 13d-3 of the SEC under the Securities Exchange Act of 1934) of 50% or more of the outstanding shares of Voting Stock of Borrower; provided, however , that the following shall not be deemed a Change of Control: (i) a merger of Borrower into another entity in which the other entity is the survivor if Borrower's stockholders of record as constituted immediately prior to such acquisition hold more than 50% of the outstanding shares of Voting Stock of the surviving entity; (ii) actions taken to effect the Recombination and the Recombination itself; and (iii) any Equity Offering. Code means the Internal Revenue Code of 1986. Collateral means all property and interests in property and proceeds thereof now owned or hereafter acquired by the Borrower and its Subsidiaries (other than the Excluded MLP Entities and Excluded Recombination Entities) in or upon which a Lien now or hereafter exists in favor of the Secured Parties, or the Administrative Agent or Collateral Agent on behalf of the Secured Parties, including, but not limited to substantially all of the Oil and Gas Properties and personal property (including stock and other equity interests) of the Borrower and its respective Subsidiaries (other than the Excluded MLP Entities and Excluded Recombination Entities), whether under this Agreement, the Collateral Documents, or under any other document executed by any Borrower Affiliate (other than the Excluded MLP Entities and Excluded Recombination Entities) and delivered to the Administrative Agent, Collateral Agent or any Secured Party. For the avoidance of doubt, the ORRI is not Collateral. Collateral Agent means Royal Bank of Canada in its capacity as collateral agent under any of the Loan Documents, or any successor collateral agent. Collateral Documents means (a) each Guaranty, Mortgage and Security Agreement, and all other security agreements, deeds of trust, mortgages, chattel mortgages, assignments, pledges, guaranties, extension agreements and other similar agreements or instruments executed by the Borrower, or any other Loan Party for the benefit of the Secured Parties now or hereafter delivered to the Secured Parties, the Administrative Agent or the Collateral Agent pursuant to or in connection with the transactions contemplated hereby, and all financing statements (or comparable documents now or hereafter filed in accordance with the Uniform Commercial Code or comparable Law) against the Borrower or any QRC Subsidiary as debtor in favor of the Secured Parties, the Administrative Agent or the Collateral Agent for the benefit of the Secured Parties, as secured party, to secure or guarantee the payment of any part of the Obligations or the performance of any other duties and obligations of Borrower under the Loan Documents or the Lender Hedging Agreements or Approved Hedge Counterparty Swap Contracts, whenever made or delivered, and (b) any amendments, supplements, modifications, renewals, replacements, consolidations, substitutions, restatements, continuations, and extensions of any of the foregoing. Compensation Period has the meaning set forth in Section 2.11(e)(ii) . Compliance Certificate means a certificate substantially in the form of Exhibit C .
Consolidated EBITDA means, for any period, for the Borrower and the QRC Subsidiaries on a consolidated basis, an amount equal to the sum of (i) Consolidated Net Income, (ii) Consolidated Interest Charges, (iii) the amount of taxes, based on or measured by income, used or included in the determination of such Consolidated Net Income, (iv) the amount of depreciation, depletion and amortization expense deducted in determining such Consolidated Net Income, (v) merger and acquisition costs required to be expensed under FAS 141(R), (vi) fees and expenses of the internal investigation and forensic accounting investigation relating to the misappropriation of funds by Jerry D. Cash, David Grose and Brent Mueller, which shall be capped at $1,500,000 for purposes of this definition, and (vii) other non-cash charges and expenses deducted in the determination of such Consolidated Net Income, including, without limitation, non-cash charges and expenses relating to Swap Contracts or resulting from accounting convention changes, of the Borrower and the QRC Subsidiaries on a consolidated basis, all determined in accordance with GAAP. Consolidated Funded Debt means, as of any date of determination, for the Borrower and the QRC Subsidiaries on a consolidated basis, the sum of (a) the outstanding principal amount of all obligations and liabilities, whether current or long-term, for borrowed money (including Obligations hereunder), (b) all reimbursement obligations relating to letters of credit that have been drawn and remain unreimbursed, (c) Attributable Indebtedness pertaining to Capital Leases, (d) Attributable Indebtedness pertaining to Synthetic Lease Obligations, and (e) without duplication, all Guaranty Obligations with respect to Indebtedness of the type specified in subsections (a) through (d) above. Consolidated Interest Charges means, for any period, for the Borrower and the QRC Subsidiaries on a consolidated basis, the sum of (a) all interest, premium payments, fees, charges and related expenses of the Borrower and the QRC Subsidiaries in connection with Indebtedness (net of interest rate Swap Contract settlements (including capitalized interest)), to the extent treated as interest in accordance with GAAP, and (b) the portion of rent expense of the Borrower and the QRC Subsidiaries with respect to such period under Capital Leases that is treated as interest in accordance with GAAP. Consolidated Net Income means, for any period, for the Borrower and the QRC Subsidiaries on a consolidated basis, the net income or net loss of the Borrower and the QRC Subsidiaries from continuing operations, provided that there shall be excluded from such net income (to the extent otherwise included therein): (a) the income (or loss) of any entity other than a QRC Subsidiary in which the Borrower or a QRC Subsidiary has an ownership interest, except to the extent that any such income has been actually received by the Borrower or such QRC Subsidiary in the form of cash dividends or similar cash distributions (including cash distributions actually received by Borrower or any QRC Subsidiary from QMLP and QELP in respect of general partner interest, limited partner interest and incentive distribution rights); (b) net extraordinary gains and losses (other than, in the case of losses, losses resulting from charges against net income to establish or increase reserves for potential environmental liabilities), (c) any gains or losses attributable to non-cash write-ups or write-downs of assets, (d) proceeds of any insurance on property, plant or equipment other than business interruption insurance, (e) any gain or loss, net of taxes, on the sale, retirement or other disposition of assets (including the capital stock or other equity ownership of any other Person, but excluding the sale of inventories in the ordinary course of business), and (f) the cumulative effect of a change in accounting principles. Contractual Obligation means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.
Credit Extension means each of the following: (a) a Borrowing and (b) an L/C Credit Extension. Debt Issuance means the issuance by the Borrower or any Subsidiary (other than the Excluded MLP Entities and Excluded Recombination Entities) of any Indebtedness listed in clause (a) of such definition other than Indebtedness permitted under Section 7.04 . Debtor Relief Laws means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally. Default means any event that, with the giving of any notice, the passage of time, or both, would be an Event of Default. Default Rate means an interest rate equal to (a) the Adjusted Base Rate plus (b) 2% per annum, to the fullest extent permitted by applicable Laws. Defaulting Lender means any Lender that (a) has failed to fund any portion of the Revolving O&G Development Loans required to be funded by it under this Agreement within one Business Day of the date required to be funded by it under this Agreement, (b) has otherwise failed to pay over to Administrative Agent or any other Lender any other amount required to be paid by it under this Agreement within one Business Day of the date when due, unless the subject of a good faith dispute, or (c) has been deemed insolvent or become the subject of a bankruptcy or insolvency proceeding. Disposition or Dispose means the sale, transfer, license or other disposition (including any sale and leaseback transaction) of any property (including stock, partnership and other equity interests but excluding sale of inventory in the ordinary course of business) by any Person of property owned by such Person, including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith. For the avoidance of doubt, a Restricted Payment is not a Disposition. Dollar and $ means lawful money of the United States. Eligible Assignee means (a) a Lender, (b) an Affiliate of a Lender, (c) an Approved Fund, and (d) any other Person (other than a natural Person) approved by the Administrative Agent and, unless an Event of Default has occurred and is continuing, the Borrower (the Borrower’s approval not to be unreasonably withheld, conditioned or delayed); provided that notwithstanding the foregoing, “Eligible Assignee” shall not include the Borrower, or any of its Affiliates or Subsidiaries. Environmental Law means any applicable Law that relates to (a) the condition or protection of air, groundwater, surface water, soil, or other environmental media, (b) the environment, including natural resources or any activity which affects the environment, (c) the regulation of any pollutants, contaminants, wastes, substances, and Hazardous Substances, including, without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. §9601 et seq.) (“ CERCLA ”), the Clean Air Act (42 U.S.C. § 7401 et seq.), the Federal Water Pollution Control Act, as amended by the Clean Water Act (33 U.S.C. § 1251 et seq.), the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. § 136 et seq.), the Emergency Planning and Community Right to Know Act of
1986 (42 U.S.C. § 1100 1 et seq.), the Hazardous Materials Transportation Act (49 U.S.C. § 1801 et seq.), the National Environmental Policy Act of 1969 (42 U.S.C. § 4321 et seq.), the Oil Pollution Act (33 U.S.C. § 2701 et seq.), the Resource Conservation and Recovery Act (42 U.S.C. § 6901 et seq.), the Rivers and Harbors Act (33 U.S.C. §401 et seq.), the Safe Drinking Water Act (42 U.S.C. § 201 and § 300f et seq.), the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976 and the Hazardous and Solid Waste Amendments of 1984 (42 U.S.C. § 6901 et seq.), the Toxic Substances Control Act (15 U.S.C. § 2601 et seq.), and analogous state and local Laws, as any of the foregoing may have been and may be amended or supplemented from time to time, and any analogous enacted or adopted Law, or (d) the Release or threatened Release of Hazardous Substances. Equity Offering means a private or public sale of common or preferred stock in the Borrower (or any other sale to the public of equity interest in the Borrower including from debt convertible into equity of the Borrower), excluding proceeds from the exercise of director and employee stock options. ERISA means the Employee Retirement Income Security Act of 1974 and any regulations issued pursuant thereto. ERISA Affiliate means any trade or business (whether or not incorporated) under common control with the Borrower within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions of this Agreement relating to obligations imposed under Section 412 of the Code). ERISA Event means (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Plan amendment as a termination under Sections 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or condition which might reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the imposition of any liability under Title IV of ERISA, other than PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate. Event of Default means any of the events or circumstances specified in Article VIII . Evergreen Letter of Credit has the meaning specified in Section 2.14(b)(iii) . Excluded Assets means any contracts, agreements or permits as to which the granting of a security interest in same would cause a default, termination or penalty thereunder or under any applicable requirement of a Governmental Authority. Excluded MLP Entities means collectively QMLPGP, QMLP and each of their Subsidiaries, QELPGP, QELP and each of their Subsidiaries.
Excluded Recombination Entities means collectively each of New Quest Holdings Corp., a Delaware corporation, Quest Resource Acquisition Corp., a Delaware corporation, Quest Energy Acquisition, LLC, a Delaware limited liability company, Quest Midstream Holdings Corp., a Delaware corporation, and Quest Midstream Acquisition, LLC, a Delaware limited liability company. Facility Fee Reduction Conditions means the following conditions precedent to the proportionate reduction in the $2,000,000.00 facility fee contemplated by Section 2.08(a) : (i) repayment by the Borrower in full in cash of the outstanding principal owing in connection with the Revolving O&G Development Loan; (ii) termination by the Borrower of the Aggregate Revolving O&G Development Loan Commitment; (iii) the outstanding amount of Original Term Loan Principal Debt at the time of payment of the facility fee is not in excess of the amount of Original Term Loan Principal Debt that would have been outstanding if the Original Term Loan Principal Debt had been reduced by $1,500,000.00 on the last Business Day of each March, June, September and December commencing September 30, 2008; (iv) payment by the Borrower in full in cash of all Additional PIK Interest owing in connection with the Original Term Loan; and (v) repayment by the Borrower in full in cash of the outstanding principal and accrued interest (including Additional PIK Interest) owing in connection with the Interest Deferral Note, PIK Note and Second PIK Note. Federal Funds Rate means, for any day, the rate per annum (rounded upwards to the nearest 1/100 of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate charged to the Administrative Agent on such day on such transactions as determined by the Administrative Agent. First Amended and Restated Credit Agreement has the meaning set forth in the Preliminary Statement B. Foreign Lender means any Lender that is organized under the laws of a jurisdiction other than that in which the Borrower is resident for tax purposes. For purposes of this definition, the United States, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction. Fund means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business. GAAP means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board and the Public Company Accounting Oversights Board or such other principles as may be approved by a significant segment of the accounting profession, that are applicable to the circumstances as of the date of determination, consistently applied.
Governmental Authority means any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, administrative tribunal, central bank or other legal entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government. Guarantors means any Person and every present and future Subsidiary of Borrower (other than the Excluded MLP Entities and Excluded Recombination Entities) which undertakes to be liable for all or any part of the Obligations by execution of a Guaranty, or otherwise. Guaranty means a Guaranty now or hereafter made by any Guarantor in favor of the Administrative Agent on behalf of the Lenders, including any Subsidiary Guaranty, each in form and substance acceptable to the Administrative Agent. Guaranty Obligation means, as to any Person, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other payment obligation of another Person (the “ primary obligor ”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other payment obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other payment obligation of the payment of such Indebtedness or other payment obligation, (iii) 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 payment obligation, or (iv) entered into for the purpose of assuring in any other manner the obligees in respect of such Indebtedness or other payment obligation of the payment thereof or to protect such obligees against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness or other payment obligation of any other Person, whether or not such Indebtedness or other payment obligation is assumed by such Person; provided, however , that the term “ Guaranty Obligation ” shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The amount of any Guaranty Obligation shall be deemed to be the lesser of (a) an amount equal to the stated or determinable outstanding amount of the related primary obligation and (b) the maximum amount for which such guaranteeing Person may be liable pursuant to the terms of the instrument embodying such Guaranty Obligation, unless the outstanding amount of such primary obligation and the maximum amount for which such guaranteeing Person may be liable are not stated or determinable, in which case the amount of such Guaranty Obligation shall be the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. Hazardous Substance means any substance that poses a threat to, or is regulated to protect, human health, safety, public welfare, or the environment, including without limitation: (a) any “hazardous substance,” “pollutant” or “contaminant,” and any “petroleum” or “natural gas liquids” as those terms are defined or used under Section 101 of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended ( 42 U.S.C. §§ 9601 et seq.) ( CERCLA ), (b) “solid waste” as defined by the federal Solid Waste Disposal Act (42 U. S.C. § § 6901 et seq.), (c) asbestos or a material containing asbestos, (d) any material that contains lead or lead-based paint, (e) any item or equipment that contains or is contaminated by polychlorinated biphenyls, (f) any radioactive material, (g) urea formaldehyde, (h) putrescible materials, (i) infectious materials, (j) toxic microorganisms, including mold, or (k) any substance the presence or Release of which requires reporting, investigation or remediation under any Environmental Law.
Honor Date has the meaning set forth in Section 2.14(c)(i) . Hydrocarbons means crude oil, condensate, natural gas, natural gas liquids, coal bed methane and other hydrocarbons and all products refined or separated therefrom. Indebtedness means, as to any Person at a particular time, all of the following: (a) all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments; (b) the face amount of all letters of credit (including standby and commercial), banker's acceptances, surety bonds, and similar instruments issued for the account of such Person, and, without duplication, all drafts drawn and unpaid thereunder; (c) whether or not so included as liabilities in accordance with GAAP, all obligations of such Person to pay the deferred purchase price of property or services, other than trade accounts payable in the ordinary course of business not overdue by more than 90 days, and Indebtedness of others (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person, whether or not such Indebtedness shall have been assumed by such Person or is limited in recourse; (d) all obligations of such Person under conditional sales or other title retention agreements relating to property acquired by such Person; (e) Capital Leases and Synthetic Lease Obligations of such Person; and (f) all Guaranty Obligations of such Person in respect of any of the foregoing. For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture in which such Person is a general partner, unless such Indebtedness is expressly made non-recourse to such Person except for customary exceptions acceptable to the Required Lenders. The amount of any Capital Lease or Synthetic Lease Obligation as of any date shall be deemed to be the amount of Attributable Indebtedness in respect thereof as of such date. In addition, the determination of Indebtedness of the Borrower and/or the QRC Subsidiaries shall be made on a consolidated basis without taking into account any Indebtedness owed by any such Person to any other such Person. Indemnified Liabilities has the meaning set forth in Section 10.05 . Indemnitees has the meaning set forth in Section 10.05 . Interest Coverage Ratio means for any relevant period and as of any determination date, as calculated based on the quarterly compliance certificate most recently delivered pursuant to Section 6.02(a) for the Borrower and the QRC Subsidiaries, the ratio of (a) Consolidated EBITDA for the four (4) fiscal quarters ending on the applicable determination date to (b) Consolidated Interest Charges for the four (4) fiscal quarters ending on the applicable determination date.
Interest Deferral Loan means that certain loan from Royal Bank of Canada in the original principal amount of $862,785.96 evidencing interest payable as of June 30, 2009 on the Original Term Loan Principal Debt outstanding under the First Amended and Restated Credit Agreement. Interest Deferral Loan Principal Debt means, on any date of determination, the aggregate unpaid principal balance of the Interest Deferral Loan. Interest Deferral Note means that certain promissory note of the Borrower dated June 30, 2009, in the original principal amount of $862,785.96 evidencing the obligation of Borrower to pay the amount of deferred interest due and payable on the Original Term Loan Principal Debt outstanding under the First Amended and Restated Credit Agreement on June 30, 2009, payable to the order of Royal Bank of Canada, as renewed pursuant to that certain Renewal Interest Deferral Note of even date herewith in the original principal amount of $862,785.96 in substantially the form of Exhibit B-4 , together with all future renewals and extensions of all or any part thereof. Interest Payment Date means, as to the Original Term Loan, Interest Deferral Loan, PIK Loan and Second PIK Loan, the last Business Day of each March, June, September and December and the applicable Maturity Date. Investment means, as to any Person, any acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of capital stock or other securities of another Person, (b) a loan, advance or capital contribution to, guaranty of Indebtedness of, or purchase or other acquisition of any other Indebtedness or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute a business unit. For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment, less all returns of principal or equity thereon, and shall, if made by the transfer or exchange of property other than cash be deemed to have been made in an amount equal to the fair market value of such property. IRS means the United States Internal Revenue Service. ISDA means the International Swaps and Derivatives Association, Inc. JOA means, collectively, each joint operating agreement to which Borrower or any QRC Subsidiary is a party with respect to any of its Oil and Gas Properties. Laws means, collectively, all applicable international, foreign, federal, state and local statutes, treaties, rules, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, licenses, authorizations and permits of, any Governmental Authority. L/C Advance means, with respect to each Lender, such Lender's participation in any L/C Borrowing.
L/C Borrowing means an extension of credit resulting from a drawing under any Letter of Credit which has not been reimbursed on the date when made or refinanced as a Borrowing. L/C Credit Extension means, with respect to any Letter of Credit, the issuance thereof or extension of the expiry date thereof, or the renewal or increase of the amount thereof. L/C Issuer means Royal Bank of Canada in its capacity as issuer of Letters of Credit hereunder, or any successor issuer of Letters of Credit hereunder which is a Lender or an Affiliate of a Lender. L/C Obligations means, as at any date of determination, the aggregate undrawn face amount of all outstanding Letters of Credit plus the aggregate of all Unreimbursed Amounts, including all L/C Borrowings. Leases means oil and gas leases and all oil, gas and mineral leases constituting any part of the Oil and Gas Properties. Lender and Lenders have the meanings specified in the introductory paragraph hereto. Lender Hedging Agreement means a Swap Contract between the Borrower and any of the QRC Subsidiaries and a Lender or an Affiliate of a Lender. Lending Office means, as to any Lender, the office or offices of such Lender set forth on its Administrative Details Form, or such other office or offices as a Lender may from time to time notify the Borrower and the Administrative Agent. Letter of Credit means any standby letter of credit issued hereunder. Letter of Credit Application means an application and agreement for the issuance or amendment of a letter of credit in the form from time to time in use by the L/C Issuer. Letter of Credit Expiration Date means July 6, 2010. Letter of Credit Sublimit means an amount equal to the lesser of (i) the Aggregate Revolving O&G Development Loan Commitment and (ii) $500,000.00 Leverage Ratio means, for the Borrower and the QRC Subsidiaries on a consolidated basis, the ratio, as calculated based on the quarterly compliance certificate most recently delivered pursuant to Section 6.02(a) , of (a) Consolidated Funded Debt as of the determination date to (b) Consolidated EBITDA for the four (4) fiscal quarters ending on the applicable determination date. Lien means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement of any kind or nature whatsoever to secure or provide for payment of any obligation of any Person (including any conditional sale or other title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, and the filing of any financing statement under the Uniform Commercial Code or comparable Laws of any jurisdiction, other
than any financing statement filed as a notice filing), including the interest of a purchaser of accounts receivable. Loan Documents means this Agreement, the Original Term Loan Note, the Interest Deferral Note, the PIK Note, the Second PIK Note, the Revolving O&G Development Loan Note, the ORRI Conveyance, each of the Collateral Documents, each Borrowing Notice, each Letter of Credit Application, each Compliance Certificate, the Guaranties, and each other agreement, document or instrument delivered by any Loan Party from time to time in connection with this Agreement and the Notes. Loan Party means each of the Borrower, each Guarantor, and each other entity that is an Affiliate of the Borrower that executes one or more Loan Documents, but specifically excluding the Excluded MLP Entities and Excluded Recombination Entities. Loans means collectively the Original Term Loan, the Revolving O&G Development Loan, the Interest Deferral Loan, the PIK Loan, the Second PIK Loan and each Additional PIK Loan, and Loan means any of the foregoing individually. Mandatory CapEx means mandatory Capital Expenditures for the Approved Development Activities as set forth in Schedule 6.12 and approved by the Administrative Agent. Marketable Title means good and indefeasible title, free and clear of all Liens other than Permitted Liens. Margin Regulations means Regulations U, T and X of the Board. Material Acquisition means any acquisition of property or series of related acquisitions of property that involves the payment of consideration (including, without limitation, the issuance of equity) by the Borrower and the QRC Subsidiaries in excess of $1,000,000. Material Adverse Effect means: (a) a material adverse change in, or a material adverse effect upon, the operations, business, properties or financial condition of the Borrower and the QRC Subsidiaries taken as a whole; (b) a material adverse effect on the ability of any Loan Party to perform its obligations under the Loan Documents to which it is a party; or (c) a material adverse effect upon the legality, validity, binding effect or enforceability against the Borrower or any other Loan Party of any Loan Documents, except to the extent that any such change or effect arises or results from (A) changes in general economic, capital market, regulatory or political conditions or changes in Law or accounting policies or the interpretation thereof, (B) changes that affect generally the industries in which the Loan Parties are engaged, (C) any change in the trading prices or trading volume of the Borrower's common stock (but not any change or effect underlying such change in prices or volume to the extent such change or effect would otherwise constitute a Material Adverse Effect), (D) any changes or fluctuations in the prices of oil, natural gas or any other commodity, (E) the announcement, pendency or closing of the Recombination Agreement, including any loss of sales or loss of employees or labor disputes or employee strikes, slowdowns, job actions or work stoppages or labor union activities, or (F) any war, act of terrorism, civil unrest, acts of God or similar events occurring after the Restatement Date.
Material Agreements means the following: (i) Omnibus Agreement (QMLP) and (ii) Omnibus Agreement (QELP) and any agreement or agreements entered into in replacement or substitution of any of the forgoing. “ Material Agreement ” means each of such Material Agreements. Material Disposition means any sale, transfer or other disposition of property or series of related sales, transfers or other dispositions of properties that yields gross proceeds to the Borrower or any QRC Subsidiary in excess of $5,000,000. Maturity Date means with respect to the Revolving O&G Development Loans, Interest Deferral Loan, PIK Loan and Second PIK Loan, July 11, 2010 and with respect to the Original Term Loan, January 11, 2012. Maximum Amount and Maximum Rate respectively mean, for each Lender, the maximum non-usurious amount and the maximum non-usurious rate of interest which, under applicable Law, such Lender is permitted to contract for, charge, take, reserve, or receive on the Obligations. Midstream Businesses means gathering, transportation, fractionation, processing, marketing, and storage of natural gas, crude oil, natural gas liquids and other liquid and gaseous hydrocarbons and businesses closely related to the foregoing. Moody’s means Moody’s Investors Service, Inc. Mortgaged Properties means collectively all the Mortgaged Property as defined in the Mortgages and Mortgaged Property individually means any one of such Mortgaged Properties. Mortgages means the mortgages, deeds of trust, or similar instruments executed by any of the Loan Parties in favor of Administrative Agent or Collateral Agent, for the benefit of the Secured Parties, and all supplements, assignments, amendments, and restatements thereto (or any agreement in substitution therefor) and Mortgage means each of such Mortgages. Multiemployer Plan means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes or is obligated to make contributions, or during the preceding three calendar years, has made or been obligated to make contributions. Net Cash Proceeds means (a) with respect to any Disposition, cash (including any cash received by way of deferred payment as and when received) received by the Borrower or any of the QRC Subsidiaries in connection with and as consideration therefor, on or after the date of consummation of such transaction, after (i) deduction of taxes payable in connection with or as a result of such transaction, and (ii) payment of all brokerage commissions and all other fees and expenses related to such transaction (including, without limitation, attorneys' fees and closing costs incurred in connection with such transaction), (b) with respect to the Debt Issuance or any other Indebtedness refinancing the Loans, proceeds of such Debt Issuance or other refinancing Indebtedness after payment of all cash closing costs and transaction costs, and (c) with respect to any Equity Offering, proceeds of such Equity Offering after payment of underwriting fees and payment of all cash closing costs and transaction costs. Nonrenewal Notice Date has the meaning specified in Section 2.14(b)(iii) .
Notes means collectively the Original Term Loan Note, the Revolving O&G Development Loan Note, the Interest Deferral Note, the PIK Note and the Second PIK Note, and Note means any of the foregoing individually. Obligations means all advances to, and debts, liabilities, obligations (including reimbursement obligations associated with any letter of credit issued by the L/C Issuer for the account of any Loan Party), covenants and duties of, any Loan Party arising under any Loan Document, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest that accrues after the commencement by or against any Loan Party of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding. In addition, all references to the “ Obligations ” in the Collateral Documents and in Sections 2.13 and 10.09 of this Agreement shall, in addition to the foregoing, also include all present and future indebtedness, liabilities, and obligations (and all renewals and extensions thereof or any part thereof) now or hereafter owed to any Lender or any Affiliate of a Lender arising pursuant to any Lender Hedging Agreement or to an Approved Hedge Counterparty arising pursuant to any Approved Hedge Counterparty Swap Contract. Obligor means the Borrower or any other Person (other than the Administrative Agent, Collateral Agent or any Lender) obligated under any Loan Document. Oil and Gas Properties means fee, leasehold or other interests in or under mineral estates or Hydrocarbon leases with respect to properties situated in the United States owned by a Loan Party, including overriding royalty and royalty interests, leasehold estate interests, net profits interests, production payment interests and mineral fee interests, together with contracts executed in connection therewith and all tenements, hereditaments, appurtenances and properties, real or personal, appertaining, belonging, affixed or incidental thereto. Omnibus Agreement (QMLP) means the Omnibus Agreement dated as of December 22, 2006 among the Borrower, QMLPGP, QMLP and Bluestem Pipeline, LLC. Omnibus Agreement (QELP) means the Omnibus Agreement dated as of November 15, 2007 among the Borrower, QELPGP and QELP. Organization Documents means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws; (b) with respect to any limited liability company, the certificate of formation and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation with the secretary of state or other department in the state of its formation, in each case as amended from time to time. Original Credit Agreement has the meaning set forth in the Preliminary Statement A. Original Term Loan Facility means the credit facility as described in and subject to the limitations set forth in Section 2.01 .
Original Term Loan Principal Debt means, on any date of determination, the aggregate unpaid principal balance of the Original Term Loan under the Original Term Loan Facility. Original Term Loan means an extension of credit by the Lenders to the Borrower pursuant to Section 2.01 of the First Amended and Restated Credit Agreement. Original Term Loan Note means that certain promissory note in the original principal amount of $35,000,000.00 dated July 11, 2008, from Borrower payable to the order of Royal Bank of Canada evidencing the Original Term Loan. ORRI means those certain conveyances of overriding royalty interests by Quest Eastern and Quest O&G to the Lenders as of the Restatement Date. ORRI Conveyance means an assignment in the form of Exhibit E pursuant to which a Loan Party conveys to the Lenders an ORRI if required by the terms of this Agreement. Other Taxes has the meaning specified in Section 3.01(b) . Outstanding Amount on any date means (i) with respect to the Original Term Loan, the Original Term Loan Principal Debt, (ii) with respect to the Revolving O&G Development Loan, the Revolving O&G Development Loan Principal Debt, (iii) with respect to the PIK Loan, the aggregate unpaid principal balance of the PIK Loan, (iv) with respect to the Second PIK Loan, the aggregate unpaid principal balance of the Second PIK Loan, (v) with respect to the Interest Deferral Loan, the aggregate unpaid principal balance of the Interest Deferral Loan, (vi) with respect to any L/C Obligations, the amount of such L/C Obligations on such date after giving effect to any L/C Credit Extension occurring on such date and any other changes in the aggregate amount of the L/C Obligations as of such date, including as a result of any reimbursements of outstanding unpaid drawings under any Letters of Credit or any reductions in the maximum amount available for drawing under Letters of Credit taking effect on such date, and (vii) for purposes of Section 2.11(d) with respect to Obligations under a Lender Hedging Agreement or an Approved Hedge Counterparty Swap Contract, the amount then due and payable under such Lender Hedging Agreement or Approved Hedge Counterparty Swap Contract. Participant has the meaning specified in Section 10.07(d) . PBGC means the Pension Benefit Guaranty Corporation. Pension Plan means any “ employee pension benefit plan ” (as such term is defined in Section 3(2)(A) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by the Borrower or any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer plan (as described in Section 4064(a) of ERISA) has made contributions at any time during the immediately preceding five plan years. Permitted Liens means Liens permitted under Section 7.01 as described in such Section.
Person means any individual, trustee, corporation, general partnership, limited partnership, limited liability company, joint stock company, trust, unincorporated organization, bank, business association, firm, joint venture or Governmental Authority. Phase I Oil and Gas Properties means (i) the H-1 Well, H-2A Well and WVCC#5 Well, each located on lands leased pursuant to the Mills Wetzel Lands, Inc. lease covering lands in Wetzel County, West Virginia and (ii) the Gregory Well located on lands leased pursuant to the Kevin Gregory Lease covering lands in Lewis County, West Virginia, said wells and leases comprising the Phase I Oil and Gas Properties to be developed in accordance with Schedule 6.12 . PIK Loan means that certain loan made by Royal Bank of Canada in the original principal amount of $282,500.00 evidencing the obligation of Borrower to repay the one percent (1%) amendment fee earned in full as of May 29, 2009 in connection with the First Amended and Restated Credit Agreement. PIK Loan Principal Debt means, on any date of determination, the aggregate unpaid principal balance of the PIK Loan. PIK Note means that certain promissory note of the Borrower dated May 29, 2009, in the original principal amount of $282,500.00, payable to the order of Royal Bank of Canada, evidencing the obligation of Borrower to repay the one percent (1%) amendment fee earned in full as of May 29, 2009 in connection with the First Amended and Restated Credit Agreement, together with all renewals and extensions of all or any part thereof. PIK Notes collectively means (i) the PIK Note and (ii) the Second PIK Note. Additional PIK Interest on the Original Term Loan, Interest Deferral Loan, PIK Loan and Second PIK Loan shall be evidenced by the respective Note relating to such Loan and shall not be evidenced by a separate note. Plan means any “ employee benefit plan ” (as such term is defined in Section 3(3) of ERISA) established by the Borrower or any ERISA Affiliate. Prime Rate means for any day, the rate of interest in effect for such day as publicly announced from time to time by the Administrative Agent as its “ prime rate. ” Such rate is a rate set by the Administrative Agent based upon various factors including the Administrative Agent's 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. Proved Developed Producing Reserves means Proved Reserves which are categorized as both “ Developed ” and “ Producing ” in the Definitions for Oil and Gas reserves promulgated by the Society of Petroleum Engineers (or any generally recognized successor) as in effect at the time in question. Proved Reserves means Proved Reserves as defined in the Definitions for Oil and Gas reserves promulgated by the Society of Petroleum Engineers (or any generally recognized successor) as in effect at the time in question. PV10 means the present worth of future net revenue, discounted to present value at the simple interest rate of ten percent (10%) per year.
Pro Rata Share with respect to each Lender, at any time, a fraction (expressed as a percentage, carried out to the ninth decimal place), the numerator of which is the amount of Loans of such Lender at such time and the denominator of which is the amount of aggregate Loans at such time. The initial Pro Rata Share of each Lender is set out opposite the name of such Lender on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable. QELP means Quest Energy Partners, L.P., a Delaware limited partnership. QELPGP means Quest Energy GP, LLC, a Delaware limited liability company, and the sole general partner of QELP. QELP Units means common or subordinated units of limited partnership in QELP which may be registered or unregistered under state or federal securities Laws. QMLP means Quest Midstream Partners, L.P., a Delaware limited partnership. QMLPGP means Quest Midstream GP, LLC, a Delaware limited liability company, and the sole general partner of QMLP. QMLP Units means common or subordinated units of limited partnership in QMLP which may be registered or unregistered under state or federal securities Laws. QRC Subsidiary means any Subsidiary of the Borrower other than the Excluded MLP Entities and Excluded Recombination Entities. Quest Eastern means Quest Eastern Resource, LLC, a Delaware limited liability company, f/k/a PetroEdge Resources (WV), LLC. Quest O&G means Quest Oil & Gas, LLC, a Kansas limited liability company. Recombination means the transactions specified in the Recombination Agreement, pursuant to which the equity owners of Borrower, QELP and QMLP will exchange their equity in such entities for equity in New Quest Holdings Corp., a new holding company, which upon the closing of the Recombination will own 100% of the equity in Borrower, QELP and QMLP. Recombination Agreement means that certain Agreement and Plan of Merger, dated as of July 2, 2009, among New Quest Holdings Corp., the Borrower, QMLP, QELP, QMLPGP, QELPGP, Quest Resource Acquisition Corp., Quest Energy Acquisition, LLC, Quest Midstream Holdings Corp. and Quest Midstream Acquisition, LLC, as the same may be amended, modified or waived from time to time in accordance with Section 7.14 , pursuant to which the Recombination will be consummated. Reference Period has the meaning set forth in Section 7.17 . Register has the meaning set forth in Section 10.07(c) . Related Parties means, with respect to any specified Person, such Person's Affiliates and the respective directors, officers, employees, agents and advisors of such Person and such Person's Affiliate.
Release means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, disposal, deposit, dispersal, migrating, or other movement into the air, ground, or surface water, or soil. Reportable Event means any of the events set forth in Section 4043(c) of ERISA , other than events for which the 30 day notice period has been waived. Request for Credit Extension means (a) with respect to a Borrowing of Revolving O&G Development Loans, a Borrowing Notice, and (b) with respect to an L/C Credit Extension, a Letter of Credit Application. Required Lenders means, as of any date of determination, Lenders holding in the aggregate more than 66+2/3% of the combined principal amount of Loans plus the Aggregate Revolving O&G Development Loan Commitment; provided that the portion of any Loan or Aggregate Revolving O&G Development Loan Commitment held or deemed held by any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders. Repayment Notice means a notice of repayment of a Borrowing pursuant to Section 2.04(a) , which, if in writing, shall be substantially in the form of Exhibit A-2 . Reserve Report means a report regarding the Proved Reserves attributable to the Phase I Oil and Gas Properties, using the criteria and parameters required by and acceptable to the SEC and incorporating the present cost of appropriate plugging and abandonment obligations to be incurred in the future, taking into account any plugging and abandonment fund required to be accrued or established by Borrower out of cash flow from the Phase I Oil and Gas Properties covered by such report with respect to such future obligations. Responsible Officer means the president, chief executive officer, executive vice president, senior vice president, vice president, chief financial officer, controller, treasurer or assistant treasurer of a Person. Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership, limited liability company, and/or other action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party. Restatement Date means the date upon which this Agreement has been executed by the Borrower, the Lenders and the Administrative Agent at which time it shall replace, amend and restate the First Amended and Restated Credit Agreement in its entirety. Restricted Payment by a Person means any dividend or other distribution (whether in cash, securities or other property) with respect to any equity interest in such Person, 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 such equity interest or of any option, warrant or other right to acquire any such equity interest. Revolving O&G Development Loan means an extension of revolving credit by the Lenders to the Borrower pursuant to Section 2.02 .
Revolving O&G Development Loan Commitment means, as to each Lender, its obligation to (a) make Revolving O&G Development Loans to Borrower pursuant to Section 2.02 , and (b) purchase participations in L/C Obligations, in an aggregate principal amount at any one time outstanding not to exceed the amount set out opposite such Lender’s name on Schedule 2.01 (which amount is subject to increase, reduction or cancellation as herein provided), or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement. Revolving O&G Development Loan Principal Debt means, on any date of determination, the aggregate unpaid principal balance of the Revolving O&G Development Loan. Revolving O&G Development Loan Note means a revolving promissory note of Borrower in substantially the form of Exhibit B-2 , evidencing the obligation of Borrower to repay the Revolving O&G Development Loans and all renewals and extensions of all or any part thereof. Rights means rights, remedies, powers, privileges, and benefits. S&P means Standard & Poor’s Rating Services, a division of The McGraw-Hill Companies, Inc. SEC means the Securities and Exchange Commission. Second PIK Loan means that certain loan by Royal Bank of Canada in the original principal amount of $25,000.00 evidencing the obligation of Borrower to repay the amendment fee earned in full as of June 30, 2009 in connection with the First Amended and Restated Credit Agreement. Second PIK Loan Principal Debt means, on any date of determination, the aggregate unpaid principal balance of the Second PIK Loan. Second PIK Note means that certain promissory note of the Borrower dated June 30, 2009, in the original principal amount of $25,000.00, payable to Royal Bank of Canada, evidencing the obligation of Borrower to repay the amendment fee earned in full as of June 30, 2009 in connection with the First Amended and Restated Credit Agreement, together with all renewals and extensions of all or any part thereof. Secured Parties means the Lenders party to this Agreement, the Lenders and/or any Affiliate of a Lender party to a Lender Hedging Agreement and an Approved Hedge Counterparty to any Approved Hedge Counterparty Swap Contract. The term “ Secured Parties ” shall include a former Lender or an Affiliate of a former Lender that is party to a Swap Contract with any Loan Party; provided that such former Lender or Affiliate was the Lender or an Affiliate of a Lender at the time it entered into such Swap Contract. Security Agreements means, collectively, the security agreements, or similar instruments, executed by any of the Loan Parties in favor of the Administrative Agent or the Collateral Agent for the benefit of the Secured Parties, in form and substance acceptable to the Administrative Agent, and all supplements, assignments, amendments, and restatements thereto (or any agreement in substitution therefor), and “ Security Agreement ” means each of such Security Agreements.
Subsidiary of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise specified, all references herein to a “ Subsidiary ” or to “ Subsidiaries ” shall refer to a Subsidiary or Subsidiaries of the Borrower (other than the Excluded MLP Entities and Excluded Recombination Entities). Subsidiary Guaranty means any Guaranty made by a Subsidiary of the Borrower in favor of the Administrative Agent on behalf of the Lenders, in form and substance acceptable to the Administrative Agent. Swap Contract means (a) any and all interest rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “ Master Agreement ”), including any such obligations or liabilities under any Master Agreement. Swap Termination Value means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a) the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include any Lender). Synthetic Lease Obligation means the monetary obligation of a Person under (a) a so-called synthetic or tax retention lease, or (b) an agreement for the use or possession of property creating obligations that do not appear on the balance sheet of such Person but which are depreciated for tax purposes by such Person. Taxes has the meaning set forth in Section 3.01(a) . Total Outstandings means the aggregate Outstanding Amount of Loans and all L/C Obligations. Unfunded Pension Liability means the excess of a Pension Plan's benefit liabilities under Section 4001(a)(16) of ERISA, over the current value of that Pension Plan's assets, determined in accordance with
the assumptions used for funding the Pension Plan pursuant to Section 412 of the Code for the applicable plan year. United States or U.S. means the United States of America, its fifty states and the District of Columbia. Unreimbursed Amount has the meaning set forth in Section 2.14(c)(i) . Value Enhancing CapEx means value enhancing Capital Expenditures for the Approved Development Activities as set forth in Schedule 6.12 and approved by the Administrative Agent. Voting Stock means the capital stock (or equivalent thereof) of any class or kind, of a Person, the holders of which are entitled to vote for the election of directors, managers, or other voting members of the governing body of such Person. Wholly-Owned when used in connection with a Person means any Subsidiary of such Person of which all of the issued and outstanding equity interests ( except shares required as directors' qualifying shares) shall be owned by such Person or one or more of its Wholly-Owned Subsidiaries.
(a) The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms. (b) (i) The words “ herein ” and “ hereunder ” and words of similar import when used in any Loan Document shall refer to such Loan Document as a whole and not to any particular provision thereof. (ii) Unless otherwise specified herein, Article, Section, Exhibit and Schedule references are to this Agreement. (iii) The term “ including ” is by way of example and not limitation. (iv) The term “ documents ” includes any and all instruments, documents, agreements, certificates, notices, reports, financial statements and other writings, however evidenced. (c) In the computation of periods of time from a specified date to a later specified date, the word “ from ” means “ from and including ;” the words “ to ” and “ until ” each mean “ to but excluding ;” and the word “ through ” means “ to and including .” (d) Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan Document.
(a) All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data required to be submitted pursuant to this Agreement shall be
prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the audited financial statements, except as otherwise specifically prescribed herein. (b) If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Borrower or the Required Lenders shall so request, the Administrative Agent, the Lenders and the Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders); provided that , until so amended, (a) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (b) the Borrower shall provide to the Administrative Agent and the Lenders financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP. 1.04 Rounding . Any financial ratios required to be maintained by the Borrower pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).
1.05 References to Agreements and Laws . Unless otherwise expressly provided herein, (a) references to agreements (including the Loan Documents) and other contractual instruments shall be deemed to include all subsequent amendments, restatements, extensions, supplements and other modifications thereto, but only to the extent that such amendments, restatements, extensions, supplements and other modifications are not prohibited by any Loan Document; and (b) references to any Law shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such Law.
ARTICLE II. OUTSTANDING LOANS AND REVOLVING O&G DEVELOPMENT LOAN COMMITMENT
(a) Original Term Loan . The Original Term Loan, as evidenced by the Original Term Loan Note, continues to be outstanding as of the Restatement Date. The Borrower and Lenders acknowledge that the amount of the Original Term Loan Principal Debt on the Restatement Date is $28,250,000.00. On and after the Restatement Date, this Agreement will govern the respective rights, duties and obligations of the Borrower, Administrative Agent and Lenders with respect to the Original Term Loan but the Original Term Loan will continue to be evidenced by the Original Term Loan Note and the Original Term Loan shall mature on the applicable Maturity Date. If all or a portion of the Original Term Loan Principal Debt is paid or prepaid, then the amount so paid or prepaid may not be reborrowed. From and after the Restatement Date, interest shall accrue on the Original Term Loan at the Adjusted Base Rate, as further provided in Section 2.07 . (b) Interest Deferral Loan . The Interest Deferral Loan, as evidenced by the Interest Deferral Note, continues to be outstanding as of the Restatement Date. The Borrower and Lenders acknowledge
that the amount of the Interest Deferral Loan on the Restatement Date is $862,785.96. On and after the Restatement Date, this Agreement will govern the respective rights, duties and obligations of the Borrower, Administrative Agent and Lenders with respect to the Interest Deferral Loan but the Interest Deferral Loan will continue to be evidenced by the Interest Deferral Note and the Interest Deferral Loan shall mature on the Maturity Date. If all or a portion of the Interest Deferral Loan is paid or prepaid, then the amount so paid or prepaid may not be reborrowed. From and after the Restatement Date, interest shall accrue on the Interest Deferral Loan at the Adjusted Base Rate, as further provided in Section 2.07 . (c) PIK Loan . The PIK Loan, as evidenced by the PIK Note, continues to be outstanding as of the Restatement Date. The Borrower and Lenders acknowledge that the amount of the PIK Loan on the Restatement Date is $282,500.00. On and after the Restatement Date, this Agreement will govern the respective rights, duties and obligations of the Borrower, Administrative Agent and Lenders with respect to the PIK Loan but the PIK Loan will continue to be evidenced by the PIK Note and the PIK Loan shall mature on the Maturity Date. If all or a portion of the PIK Loan is paid or prepaid, then the amount so paid or prepaid may not be reborrowed. From and after the Restatement Date, interest shall accrue on the PIK Loan at the Adjusted Base Rate, as further provided in Section 2.07 . (d) Second PIK Loan . The Second PIK Loan, as evidenced by the Second PIK Note, continues to be outstanding and as of the Restatement Date. The Borrower and Lenders acknowledge that the amount of the Second PIK Loan on the Restatement Date is $25,000.00. On and after the Restatement Date, this Agreement will govern the respective rights, duties and obligations of the Borrower, Administrative Agent and Lenders with respect to the Second PIK Loan but the Second PIK Loan will continue to be evidenced by the Second PIK Note and the Second PIK Loan shall mature on the Maturity Date. If all or a portion of the Second PIK Loan is paid or prepaid, then the amount so paid or prepaid may not be reborrowed. From and after the Restatement Date, interest shall accrue on the Second PIK Loan at the Adjusted Base Rate, as further provided in Section 2.07 .
Subject to and in reliance upon the terms, conditions, representations, and warranties in the Loan Documents, each Lender severally, but not jointly, agrees to make Revolving O&G Development Loans (each such Revolving O&G Development Loan a “ Revolving O&G Development Loan ”) to Borrower from time to time on any Business Day during the period from the Restatement Date to November 30, 2009 in an aggregate amount not to exceed at any time outstanding the amount of such Lender's Pro Rata Share of $5,600,000 and thereafter, in an aggregate amount not to exceed at any time outstanding the amount of such Lender's Pro Rata Share of the Revolving O&G Development Loan Commitment as set forth on Schedule 2.01 ; provided that, after giving effect to any Borrowing of Revolving O&G Development Loans, (a) the aggregate Outstanding Amount of Revolving O&G Development Loans, plus the Outstanding Amount of all L/C Obligations shall not exceed the Aggregate Revolving O&G Development Loan Commitment as in effect at such time and (b) the Outstanding Amount of Revolving O&G Development Loans of any Lender plus such Lender's Pro Rata Share of the Outstanding Amount of all L/C Obligations shall not exceed such Lender's Revolving O&G Development Loan Commitment. Within the limits of each Lender’s Revolving O&G Development Loan Commitment, and subject to the other terms and conditions hereof, Borrower may borrow under this Section 2.02 , prepay under Section 2.04 , and reborrow under this Section 2.02 . The Revolving O&G Development Loans will be non-interest bearing and therefore interest shall not accrue on Revolving O&G Development Loans.
(a) Each Borrowing of Revolving O&G Development Loans shall be made upon the Borrower's irrevocable notice to the Administrative Agent, which may be given by telephone. Each such notice must be received by the Administrative Agent not later than noon, New York time, (i) two Business Days prior to the requested date of any Borrowing of Revolving O&G Development Loans. Each such telephonic notice must be confirmed promptly by delivery to the Administrative Agent of a written Borrowing Notice, appropriately completed and signed by a Responsible Officer of the Borrower. Each Borrowing of Revolving O&G Development Loans shall be in a principal amount of $25,000 or a whole multiple of $10,000 in excess thereof; provided that any Revolving O&G Development Loan may be in an aggregate amount that is equal to the entire unused balance of the Aggregate Revolving O&G Development Loan Commitment. Each Borrowing Notice (whether telephonic or written) shall specify (i) the requested date of the Borrowing (which shall be a Business Day) and (ii) the principal amount of Revolving O&G Development Loans to be borrowed. (b) Following receipt of a Borrowing Notice, the Administrative Agent shall promptly notify each Lender of its Pro Rata Share of the applicable Borrowing. Each Lender shall make the amount of its Revolving O&G Development Loan available to the Administrative Agent in immediately available funds at the Administrative Agent's Office not later than noon, New York time, on the Business Day specified in the applicable Borrowing Notice. Upon satisfaction of the applicable conditions set forth in Section 4.01 and Section 4.02 , as applicable, the Administrative Agent shall make all funds so received available to the Borrower in like funds as received by the Administrative Agent either by (i) crediting the account of the Borrower on the books of the Administrative Agent with the amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to the Administrative Agent by the Borrower; provided, however , that if, on the date of the Borrowing there are L/C Borrowings outstanding, then the proceeds of such Borrowing shall be applied, first , to the payment in full of any such L/C Borrowings, and second , to the Borrower as provided above.
(a) Optional Prepayments . The Borrower may, upon delivery of a Repayment Notice to the Administrative Agent, at any time or from time to time voluntarily prepay in whole or in part the Original Term Loan, Revolving O&G Development Loan, Interest Deferral Loan, PIK Loan, or Second PIK Loan without premium or penalty; provided that (i) such notice must be received by the Administrative Agent not later than noon, New York time, on the date of prepayment of any such Loan; and (ii) any prepayment of Loans shall be in a principal amount of $25,000 or a whole multiple of $25,000 in excess thereof; provided that any prepayment may be in an aggregate amount that is equal to the entire Outstanding Amount of the Loan being prepaid. Each such notice shall specify the date and amount of such prepayment. The Administrative Agent will promptly notify each Lender of its receipt of each such notice and of such Lender's Pro Rata Share of such prepayment. If such notice is given by the Borrower, the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein. Each optional prepayment shall be applied to the Loans of the Lenders in accordance with their respective Pro Rata Shares, as directed by the Borrower or if no such direction is given, first, to the repayment of any L/C Borrowings, second, to the repayment of the Interest Deferral Loan, third to the repayment of the PIK Note, fourth, to the repayment of the Second PIK Note fifth, to the repayment of the Revolving O&G Development Loan, and sixth , to the repayment of the Original Term Loan; provided that such prepayment of the Revolving O&G Development Loan will not result in or require a corresponding reduction in the Aggregate Revolving O&G Development Loan Commitment. Unless a Default or Event of Default has occurred and is continuing or would arise as a result thereof, any payment or prepayment of the Revolving O&G Development Loan may be reborrowed by Borrower, subject to the terms and conditions hereof.
(i) Dispositions . If any Net Cash Proceeds are received by any Loan Party from one or more Dispositions (including any deferred purchase price therefor but excluding any Disposition permitted by Section 7.07(a) ), the Borrower shall immediately upon receipt of such Net Cash Proceeds repay the Obligations in an aggregate amount equal to 100% of such Net Cash Proceeds as provided in Section 2.04(b)(iv) . (ii) Debt Issuances . Immediately upon receipt by any Loan Party of the Net Cash Proceeds of any Debt Issuance, the Borrower shall repay the Obligations in an aggregate amount equal to 100% of such Net Cash Proceeds as provided in Section 2.04(b)(iv) .
(iii) Insurance Proceeds . If pursuant to Section 6.07(b) any payments in excess of $1,000,000 are received by the Borrower or any QRC Subsidiary in connection with any insurance policy and the Administrative Agent elects to apply any portion of such payment as a mandatory prepayment of the Loans, Borrower shall immediately upon receipt of such insurance proceeds repay the Obligations in an aggregate amount equal to such portion in accordance with Section 6.07(b) as provided in Section 2.04(b)(iv) .
(iv) Application of Mandatory Prepayments . The prepayments provided for in Sections 2.04(b)(i), (ii) and (iii) shall be applied as follows, unless an Event of Default has occurred and is continuing or would arise as a result thereof (whereupon the provisions of Section 2.11(d) shall apply): first , as a repayment of any L/C Borrowing, second, to the repayment of the Interest Deferral Loan, third, to the repayment of the PIK Loan, fourth, to the repayment of the Second PIK Loan, fifth, to the repayment of the Revolving O&G Development Loans until paid in full and sixth, to the repayment of the Original Term Loan; provided that such repayment of the Revolving O&G Development Loan will not result in or require a corresponding reduction in the Aggregate Revolving O&G Development Loan Commitment. (c) Prepayments: Interest/Consequential Loss . All prepayments under this Section 2.04 shall be made together with accrued interest to the date of such prepayment on the principal amount prepaid. 2.05 Reduction or Termination of Aggregate Revolving O&G Development Loan Commitment . The Borrower may, upon notice to the Administrative Agent, terminate the Aggregate Revolving O&G Development Loan Commitment or permanently reduce the Aggregate Revolving O&G Development Loan Commitment to an amount not less than the sum of the Outstanding Amount of the then existing (i) unpaid principal balance of the Revolving O&G Development Loan and (ii) L/C Obligations; provided that (i) any such notice shall be received by the Administrative Agent not later than noon on the date of termination or reduction, and (ii) any such partial reduction shall be in an aggregate amount of $500,000 or any whole multiple of $100,000 in excess thereof. The Administrative Agent shall promptly notify the Lenders of any such notice of reduction or termination. Once reduced in accordance with this Section, the Aggregate Revolving O&G Development Loan Commitment may not be increased. Any reduction of the Aggregate Revolving O&G Development Loan Commitment shall be applied to the Revolving O&G Development Loan Commitment of each Lender according to its Pro Rata Share.
(a) The Borrower shall repay to the Lenders on the applicable Maturity Date the Original Term Loan, the Revolving O&G Development Loan, the Interest Deferral Loan, the PIK Loan and the Second PIK Loan, including all Additional PIK Interest, if any, accrued on each such Loan. (b) The Borrower shall repay to the Lenders the Original Term Loan Principal Debt in quarterly installments on the last Business Day of each March, June, September and December and the Maturity Date, such installments commencing on September 30, 2010, each installment in the amount of $1,500,000, with the remaining Original Term Loan Principal Debt being payable in full on January 11, 2012.
(a) The Original Term Loan, Interest Deferral Loan, PIK Loan and Second PIK Loan shall each bear interest on the outstanding principal amount thereof from the last date any interest was paid or PIKed thereon to but not including the Restatement Date at the rate provided for in the Original Term Loan Note, Interest Deferral Note, PIK Note and Second PIK Note, respectively. From and after the Restatement Date the Original Term Loan, Interest Deferral Loan, PIK Loan and Second PIK Loan shall
bear interest at a per annum rate equal to the Adjusted Base Rate. The Revolving O&G Development Loans will be non-interest bearing and therefore interest shall not accrue on Revolving O&G Development Loans. (b) From and after the Restatement Date, on each Interest Payment Date interest accrued on the Original Term Loan, Interest Deferral Loan, PIK Loan and Second PIK Loan may, at Borrower's election, either be paid in cash or paid via an Additional PIK Loan made by Lenders to Borrower. If paid via an Additional PIK Loan, the amount of such Additional PIK Loan shall be added to the outstanding principal balance of the respective Loan and evidenced by the corresponding Note. Such Additional PIK Loan shall thereafter accrue interest thereon at a rate equal to the rate payable on the respective Loan from time to time as provided herein, but in no event to exceed the Maximum Rate. (c) If any amount payable by Borrower under any Loan Document is not paid when due (after giving effect to any applicable grace periods or the Borrower's ability to elect to pay via Additional PIK Loans pursuant to Section 2.07(b) ), whether at stated maturity by acceleration or otherwise, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate, but in no event to exceed the Maximum Rate. Furthermore, while any Event of Default exists or after acceleration of any Loan (i) the Borrower shall pay interest on the principal amount of all outstanding Obligations at a fluctuating interest rate per annum at all times equal to the Default Rate, but in no event to exceed the Maximum Rate, and (ii) accrued and unpaid interest on past due amounts (including interest on past due interest, to the extent allowed by Law) shall be due and payable upon demand. (d) Interest hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law. (e) If the designated rate applicable to any Loan exceeds the Maximum Rate, the rate of interest on such Loan shall be limited to the Maximum Rate, but any subsequent reductions in such designated rate shall not reduce the rate of interest thereon below the Maximum Rate until the total amount of interest accrued thereon equals the amount of interest which would have accrued thereon if such designated rate had at all times been in effect. In the event that at maturity (stated or by acceleration), or at final payment of the Outstanding Amount of the Loans, the total amount of interest paid or accrued is less than the amount of interest which would have accrued if such designated rates had at all times been in effect, then, at such time and to the extent permitted by Law, the Borrower shall pay an amount equal to the difference between (a) the lesser of the amount of interest which would have accrued if such designated rates had at all times been in effect and the amount of interest which would have accrued if the Maximum Rate had at all times been in effect, and (b) the amount of interest actually paid or accrued on such Outstanding Amount.
(a) Facility Fee . On the Restatement Date, each Lender shall have earned, in accordance with its Pro Rata Share, and the Borrower irrevocably agrees to pay to the Lenders, subject to reduction as set forth in this section, a facility fee in the amount of $2,000,000.00. The facility fee shall be payable on the earlier to occur of (i) the Maturity Date of the Revolving O&G Development Loan and (ii) the date the Facility Fee Reduction Conditions are all satisfied. The facility fee will be subject to a proportionate
reduction upon the satisfaction of the Facility Fee Reduction Conditions. Such reduced facility fee will be equal to the product of $2,000,000.00 multiplied by a fraction, the numerator of which is the actual number of days from the Restatement Date to the date the Facility Fee Reduction Conditions are all satisfied, and the denominator of which is the number of days from the Restatement Date to the Maturity Date of the Revolving O&G Development Loan.
(i) On the Restatement Date, each Lender shall have earned, and each of Quest Eastern and Quest O&G shall assign to such Lender, pursuant to the ORRI Conveyance, such Lender's Pro Rata Share of an ORRI in the Oil and Gas Properties owned by Quest Eastern or Quest O&G equal in the aggregate to two percent (2%) of such Loan Party's working interest (plus royalty interest, if any), proportionately reduced, in its Oil and Gas Properties.
(ii) Each Lender irrevocably agrees to reconvey the ORRI (and any accrued payments owing to such Lender on account of its ORRI) to the grantor thereof if on or before July 11, 2010 the Facility Fee Reduction Conditions are satisfied and the Original Term Loan (including any Additional PIK Interest thereon) is paid in full.
(iii) Each Lender irrevocably agrees to reconvey the ORRI (but not any accrued payments owing to such Lender on account of its ORRI which payments will be due and payable on July 11, 2010) to the grantor thereof if on or before July 11, 2010 the Facility Fee Reduction Conditions are satisfied.
(iv) Any and all payments otherwise payable to the Lenders on account of their ORRI shall be accrued and retained by the respective ORRI Conveyance grantor until the first to occur of the following:
(A) satisfaction of the conditions described in Section 2.08(b)(ii) (in which case the accrued ORRI payments will be reconveyed to the respective grantor by the Lenders);
(B) satisfaction of the conditions described in Section 2.08(b)(iii) (in which case the accrued ORRI payments will be paid to the respective Lenders in accordance with their Pro Rata Shares); and
(C) July 11, 2010 if none of the preceding events have occurred (in which case the accrued ORRI will be paid to the respective Lenders in accordance with their Pro Rata Shares on July 11, 2010 and will thereafter be payable by the respective ORRI Conveyance grantor within the usual and customary period of time for the payment of royalties associated with the sale of Hydrocarbons in the geographic area covered by the ORRI Conveyance).
(v) Each Lender agrees that it will not Dispose of its ORRI before the earliest to occur of the events specified in Sections 2.08(b)(iv)(A) , (B) or (C) .
(vi) Borrower, Quest Eastern and Quest Oil & Gas, on the one hand, and Lenders, on the other hand, each acknowledge and agree that the ORRI is be given to the Lenders in partial compensation of the Lenders' providing the Aggregate Revolving O&G Development Loan Commitment under this Agreement and is not being given for speculative purposes.
2.09 Computation of Interest and Fees . Computation of interest on all Loans and all fees shall be calculated on the basis of a year of 365 or 366 days, as the case may be, and the actual number of days elapsed. Interest shall accrue on each Loan for the day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is paid.
2.10 Evidence of Debt . (a) The Credit Extensions made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by the Administrative Agent in the ordinary course of business. The accounts or records maintained by the Administrative Agent and each Lender shall be conclusive absent manifest error of the amount of the Loans made by the Lenders to the Borrower and the interest and payments thereon. Any failure so to record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrower hereunder to pay any amount owing with respect to the Loans. In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of such Lender shall control absent manifest error. Upon the request of any Lender made through the Administrative Agent, the Loans may be evidenced by one or more promissory notes. Each Lender may attach schedules to its Note(s) and endorse thereon the date, amount and maturity of the applicable Loan and payments with respect thereto.
(b) In addition to the accounts and records referred to in subsection (a), each Lender and the Administrative Agent shall maintain in accordance with its usual practice accounts or records evidencing the purchases and sales by such Lender of participations in Letters of Credit. In the event of any conflict between the accounts and records maintained by the Administrative Agent and the accounts and records of any Lender in respect of such matters, the accounts and records of the Administrative Agent shall control.
(a) Subject to Sections 2.06 and 2.07 , all payments to be made by the Borrower shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff. Except as otherwise expressly provided herein, all payments by the Borrower hereunder shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the Administrative Agent's Office in Dollars and in immediately available funds not later than noon, New York time, on the date specified herein. The Administrative Agent will promptly distribute to each Lender its Pro Rata Share (or other applicable share as provided herein) of such payment in like funds as received by wire transfer to such Lender's Lending Office. All payments received by the Administrative Agent after noon, New York time, shall be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue. (b) If any payment to be made by the Borrower shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected in computing interest or fees, as the case may be.
(c) If no Event of Default exists and if no order of application is otherwise specified in the Loan Documents, payments and prepayments of the Obligations shall be applied first to fees, second to accrued interest then due and payable on the Outstanding Amount of Loans and L/C Obligations, and then to the remaining Obligations in the order and manner as Borrower may direct. (d) If at any time insufficient funds are received by and available to the Administrative Agent to pay fully the Obligations, or if an Event of Default exists, any payment or prepayment shall be applied in the following order: (i) to the payment of enforcement expenses incurred by the Administrative Agent, including Attorney Costs; (ii) to the ratable payment of all fees, expenses and indemnities (including amounts payable under Article III ) for which the Administrative Agent, Lenders or Approved Hedge Counterparty have not been paid or reimbursed in accordance with the Loan Documents or Approved Hedge Counterparty Swap Contract (as used in this Section 2.11(d)(ii) , a “ ratable payment ” for any Lender, the Administrative Agent or Approved Hedge Counterparty shall be, on any date of determination, that proportion which the portion of the total fees, expenses and indemnities owed to such Lender, the Administrative Agent or Approved Hedge Counterparty bears to the total aggregate fees, expenses and indemnities owed to all Lenders, the Administrative Agent and Approved Hedge Counterparty on such date of determination); (iii) to the ratable payment of accrued and unpaid Letter of Credit fees, the Outstanding Amount of L/C Borrowings, accrued and unpaid interest on, and principal of, the Outstanding Amount of Loans and the Outstanding Amount of Obligations under Lender Hedging Agreements or Approved Hedge Counterparty Swap Contracts (it being understood that for purposes of this clause (iii) the Outstanding Amount of Obligations under Lender Hedging Agreements and Approved Hedge Counterparty Swap Contracts refers to payments owing in connection with an Early Termination Date as defined in the 2002 Master Agreement form promulgated by the ISDA (or equivalent type payment obligation if some other form of Swap Contract is in effect)(as used in this Section 2.11(d)(iii) , “ ratable payment ” means for any Lender (or Lender Affiliate, in the case of Lender Hedging Agreements or the Approved Hedge Counterparty, in the case of an Approved Hedge Counterparty Swap Contract), on any date of determination, that proportion which the accrued and unpaid Letter of Credit fees, the Outstanding Amount of L/C Borrowings, accrued and unpaid interest on, and principal of, the Outstanding Amount of Loans and the Outstanding Amount of Obligations under Lender Hedging Agreements owed to such Lender (or Lender Affiliate, in the case of Lender Hedging Agreements or the Approved Hedge Counterparty, in the case of an Approved Hedge Counterparty Swap Contract) bears to the accrued and unpaid Letter of Credit fees, the Outstanding Amount of L/C Borrowings, accrued and unpaid interest on, and principal of, the Outstanding Amount of Loans and the Outstanding Amount of Obligations under Lender Hedging Agreements owed to all Lenders)(or Lender Affiliates, in the case of Lender Hedging Agreements or the Approved Hedge Counterparty, in the case of an Approved Hedge Counterparty Swap Contract)); (iv) to Cash Collateralize the Letters of Credit; and (v) to the payment of the remaining Obligations, if any, in the order and manner the Required Lenders deem appropriate. Subject to Section 2.14(g) , amounts used to Cash Collateralize the aggregate undrawn amount of Letters of Credit pursuant to clause (iv) above shall be applied to satisfy drawings under such Letters of Credit as they occur. If any amount remains on deposit as Cash Collateral after all Letters of Credit have either been fully drawn or expired, such remaining amount shall be applied to the other Obligations, if any, in the order set forth above. (e) Unless the Borrower or any Lender has notified the Administrative Agent prior to the date any payment is required to be made by it to the Administrative Agent hereunder, that the Borrower or such Lender, as the case may be, will not make such payment, the Administrative Agent may assume that the Borrower or such Lender, as the case may be, has timely made such payment and may (but shall
not be so required to), in reliance thereon, make available a corresponding amount to the Person entitled thereto. If and to the extent that such payment was not in fact made to the Administrative Agent in immediately available funds, then: (i) if the Borrower failed to make such payment, each Lender shall forthwith on demand repay to the Administrative Agent the portion of such assumed payment that was made available to such Lender in immediately available funds, together with interest thereon in respect of each day from and including the date such amount was made available by the Administrative Agent to such Lender to the date such amount is repaid to the Administrative Agent in immediately available funds, at the Federal Funds Rate from time to time in effect; and (ii) if any Lender failed to make such payment, such Lender shall forthwith on demand pay to the Administrative Agent the amount thereof in immediately available funds, together with interest thereon for the period from the date such amount was made available by the Administrative Agent to the Borrower to the date such amount is recovered by the Administrative Agent (the “ Compensation Period ”) at a rate per annum equal to the Federal Funds Rate from time to time in effect. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender's Revolving O&G Development Loan, included in the applicable Borrowing. If such Lender does not pay such amount forthwith upon the Administrative Agent's demand therefor, the Administrative Agent may make a demand therefor upon the Borrower, and the Borrower shall pay such amount to the Administrative Agent, together with interest thereon for the Compensation Period at a rate per annum equal to the rate of interest applicable to the applicable Borrowing. Nothing herein shall be deemed to relieve any Lender from its obligation to fulfill its Revolving O&G Development Loan Commitment or to prejudice any rights which the Administrative Agent or the Borrower may have against any Lender as a result of any default by such Lender hereunder. A notice of the Administrative Agent to any Lender with respect to any amount owing under this subsection (e) shall be conclusive, absent manifest error. (f) If any Lender makes available to the Administrative Agent funds for Revolving O&G Development Loans to be made by such Lender as provided in the foregoing provisions of this Article II , and the conditions to the applicable Borrowing set forth in Article IV are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall return such funds (in like funds as received from such Lender) to such Lender, without interest. (g) The obligations of the Lenders hereunder to make Revolving O&G Development Loans are several and not joint. The failure of any Lender to make any Revolving O&G Development Loans on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Revolving O&G Development Loans or purchase its participation. (h) Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner.
2.12 Sharing of Payments . If, other than as expressly provided elsewhere herein, any Lender shall obtain on account of the Loans made by it, or the participations in the L/C Obligations, any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) in excess of its ratable share (or other share contemplated hereunder) thereof, such Lender shall immediately (a) notify the Administrative Agent, of such fact, and (b) purchase from the other Lenders such participations in the Loans made by them, and/or such subparticipations in the participations in L/C Obligations held by them, as shall be necessary to cause such purchasing Lender to share the excess payment in respect of such Loans or such participations, as the case may be, pro rata with each of them; provided, however , that if all or any portion of such excess payment is thereafter recovered from the purchasing Lender, such purchase shall to that extent be rescinded and each other Lender shall repay to the purchasing Lender the purchase price paid therefor, together with an amount equal to such paying Lender's ratable share (according to the proportion of (i) the amount of such paying Lender's required repayment to (ii) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered. The Borrower agrees that any Lender so purchasing a participation from another Lender may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off, but subject to Section 10.09 ) with respect to such participation as fully as if such Lender were the direct creditor of the Borrower in the amount of such participation. The Administrative Agent will keep records (which shall be conclusive and binding in the absence of manifest error) of participations purchased under this Section and will in each case notify the Lenders following any such purchases or repayments. Each Lender that purchases a participation pursuant to this Section shall from and after such purchase have the right to give all notices, requests, demands, directions and other communications under this Agreement with respect to the portion of the Obligations purchased to the same extent as though the purchasing Lender were the original owner of the Obligations purchased.
2.13 Pari Passu Lien Securing Lender Hedging Obligations and Approved Hedge Counterparty Swap Contracts . All Obligations arising under the Loan Documents including, without limitation, Obligations under this Agreement and Obligations under any Lender Hedging Agreement (but not Indebtedness of any Loan Party owing to any non-Lender or non-Lender Affiliate which enters into a Swap Contract with the Borrower or any other Loan Party) or any Approved Hedge Counterparty Swap Contract, shall be secured pari passu by the Collateral. No Lender, any Affiliate of a Lender or Approved Hedge Counterparty shall have any voting rights under any Loan Document as a result of the existence of obligations owed to it under any such Lender Hedging Agreement or Approved Hedge Counterparty Swap Contract, as applicable.
(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees (1) from time to time on any Business Day during the period from the Restatement Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of the Borrower (and such Letters of Credit may be issued for the benefit of the Borrower or any of the QRC Subsidiaries), and to amend or renew Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drafts under the Letters of Credit; and (B) the Lenders severally agree to participate in Letters of Credit issued for the account of the Borrower; provided that the L/C Issuer shall not be obligated to make any L/C Credit Extension with respect to any Letter of Credit, and no Lender shall be obligated to participate in any Letter of Credit, if as of the date of such L/C Credit Extension, (x) the Total Outstandings would exceed the Aggregate Revolving O&G Development Loan Commitment, (y) the aggregate Outstanding Amount of the
Revolving O&G Development Loans of any Lender, plus such Lender's Pro Rata Share of the Outstanding Amount of all L/C Obligations would exceed such Lender's Revolving O&G Development Loan Commitment or (z) the Outstanding Amount of the L/C Obligations would exceed the Letter of Credit Sublimit. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower's ability to obtain Letters of Credit shall be fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Restatement Date, or shall impose upon the L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Restatement Date and which the L/C Issuer in good faith deems material to it; provided, however, if any of the forgoing occur, then the Borrower may, at its sole expense and effort, upon notice to L/C Issuer and Administrative Agent, require the L/C Issuer to resign as L/C Issuer and a new replacement L/C Issuer be appointed, which new replacement L/C Issuer shall be reasonably acceptable to the Administrative Agent; (B) subject to Section 2.14(b)(iii) , the expiry date of such requested Letter of Credit would occur more than twelve months after the date of issuance or last renewal, unless the Required Lenders have approved such expiry date; (C) the expiry date of such requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless the Required Lenders have approved such expiry date; (D) the issuance of such Letter of Credit would violate one or more policies of the L/C Issuer generally applicable to all borrowers; or (E) such Letter of Credit is in a face amount less than $50,000 (unless upon Borrower’s request the L/C Issuer agrees to issue a Letter of Credit for a lesser amount), or is to be used for a purpose other than as described in Section 6.12 or is denominated in a currency other than Dollars. (iii) The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) the L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.
(iv) The L/C Issuer shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and the L/C Issuer shall have all of the benefits and immunities (A) provided to the Administrative Agent in Article IX with respect to any acts taken or omissions suffered by the L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and L/C Issuer documents pertaining to such Letters of Credit as fully as if the term “Administrative Agent” as used in Article IX included the L/C Issuer with respect to such acts or omissions, and (B) as additionally provided herein with respect to the L/C Issuer. (b) Procedures for Issuance and Amendment of Letters of Credit; Evergreen Letters of Credit. (i) Each Letter of Credit shall be issued or amended, as the case may be, upon the request of the Borrower delivered to the L/C Issuer (with a copy to the Administrative Agent) in the form of a Letter of Credit Application, appropriately completed and signed by a Responsible Officer of the Borrower. Such Letter of Credit Application must be received by the L/C Issuer and the Administrative Agent not later than noon, New York time, at least two Business Days (or such later date and time as the L/C Issuer may agree in a particular instance in its sole discretion) prior to the proposed issuance date or date of amendment, as the case may be. In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail reasonably satisfactory to the L/C Issuer: (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; and (G) such other matters as the L/C Issuer may require. In the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall specify in form and detail reasonably satisfactory to the L/C Issuer (A) the Letter of Credit to be amended; (B) the proposed date of amendment thereof (which shall be a Business Day); (C) the nature of the proposed amendment; and (D) such other matters as the L/C Issuer may require. (ii) Promptly after receipt of any Letter of Credit Application, the L/C Issuer will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of such Letter of Credit Application from the Borrower and, if not, the L/C Issuer will provide the Administrative Agent with a copy thereof. Upon receipt by the L/C Issuer of confirmation from the Administrative Agent that the requested issuance or amendment is permitted in accordance with the terms hereof, then, subject to the terms and conditions hereof, the L/C Issuer shall, on the requested date, issue a Letter of Credit for the account of the Borrower or enter into the applicable amendment, as the case may be, in each case in accordance with the L/C Issuer's usual and customary business practices. Immediately upon the issuance of each Letter of Credit, each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the L/C Issuer a participation in such Letter of Credit in an amount equal to the product of such Lender's Pro Rata Share times the amount of such Letter of Credit. (iii) If the Borrower so requests in any applicable Letter of Credit Application, the L/C Issuer may, in its sole and absolute discretion, agree to issue a Letter of Credit that has
automatic renewal provisions (each, an “ Evergreen Letter of Credit ”); provided that any such Evergreen Letter of Credit must permit the L/C Issuer to prevent any such renewal at least once in each twelve-month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a day (the “ Nonrenewal Notice Date ”) in each such twelve-month period to be agreed upon at the time such Letter of Credit is issued. Unless otherwise directed by the L/C Issuer, the Borrower shall not be required to make a specific request to the L/C Issuer for any such renewal. Once an Evergreen Letter of Credit has been issued, the L/C Issuer shall permit the renewal of such Letter of Credit unless the L/C Issuer has received notice on or before the Business Day immediately preceding the Nonrenewal Notice Date from any Lender stating that one or more of the applicable conditions specified in Section 4.02 is not then satisfied or the L/C Issuer would not then be required to issue a replacement Letter of Credit pursuant to this Section 2.14 . (iv) Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to an advising bank with respect thereto or to the beneficiary thereof, the L/C Issuer will also deliver to the Borrower and the Administrative Agent a true and complete copy of such Letter of Credit or amendment.
(i) Upon any drawing under any Letter of Credit, the L/C Issuer shall notify the Borrower and the Administrative Agent thereof. Not later than noon, New York time, on the date of any payment by the L/C Issuer under a Letter of Credit (each such date, an “ Honor Date ”), the Borrower shall reimburse the L/C Issuer through the Administrative Agent in an amount equal to the amount of such drawing. If the Borrower fails to so reimburse the L/C Issuer by such time, the Administrative Agent shall promptly notify each Lender of the Honor Date, the amount of the unreimbursed drawing (the “ Unreimbursed Amount ”), and such Lender's Pro Rata Share thereof. In such event, the Borrower shall be deemed to have requested a Borrowing of a Revolving O&G Development Loan to be disbursed on the Honor Date in an amount equal to the Unreimbursed Amount, without regard to the minimum and multiples specified in Section 2.03 for the principal amount of Revolving O&G Development Loans, but subject to the amount of the unutilized portion of the Aggregate Revolving O&G Development Loan Commitment and the conditions set forth in Section 4.02 (other than the delivery of a Borrowing Notice) and the failure of the Borrower to so reimburse the Administrative Agent shall not be deemed a Default or an Event of Default. Any notice given by the L/C Issuer or the Administrative Agent pursuant to this Section 2.14(c)(i) may be given by telephone if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice. (ii) Each Lender (including the Lender acting as L/C Issuer) shall upon any notice pursuant to Section 2.14(c)(i) make funds available to the Administrative Agent for the account of the L/C Issuer at the Administrative Agent's Office in an amount equal to its Pro Rata Share of the Unreimbursed Amount not later than 11:00 a.m., New York time, on the Business Day specified in such notice by the Administrative Agent, whereupon, subject to the provisions of Section 2.14(c)(iii) , each Lender that so makes funds available shall be deemed to have made a Revolving O&G Development Loan to the Borrower in such amount. The Administrative Agent shall remit the funds so received to the L/C Issuer.
(iii) With respect to any Unreimbursed Amount that is not fully refinanced by a Borrowing of Revolving O&G Development Loans because the conditions set forth in Section 4.02 cannot be satisfied or for any other reason, the Borrower shall be deemed to have incurred from the L/C Issuer an L/C Borrowing in the amount of the Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the Default Rate. In such event, each Lender's payment to the Administrative Agent for the account of the L/C Issuer pursuant to Section 2.14(c) (ii) shall be deemed payment in respect of its participation in such L/C Borrowing and shall constitute an L/C Advance from such Lender in satisfaction of its participation obligation under this Section 2.14 . (iv) Until each Lender funds its Revolving O&G Development Loan or L/C Advance pursuant to this Section 2.14(c) to reimburse the L/C Issuer for any amount drawn under any Letter of Credit, interest in respect of such Lender's Pro Rata Share of such amount shall be solely for the account of the L/C Issuer. (v) Each Lender's obligation to make Revolving O&G Development Loans or L/C Advances to reimburse the L/C Issuer for amounts drawn under Letters of Credit, as contemplated by this Section 2.14(c) , shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any set-off, counterclaim, recoupment, defense or other right which such Lender may have against the L/C Issuer, the Borrower or any other Person for any reason whatsoever; (B) the occurrence or continuance of a Default or Event of Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing. Any such reimbursement shall not relieve or otherwise impair the obligation of the Borrower to reimburse the L/C Issuer for the amount of any payment made by the L/C Issuer under any Letter of Credit, together with interest as provided herein. (vi) If any Lender fails to make available to the Administrative Agent for the account of the L/C Issuer any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.14(c) by the time specified in Section 2.14(c)(ii) , the L/C Issuer shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the L/C Issuer at a rate per annum equal to the Federal Funds Rate from time to time in effect. A certificate of the L/C Issuer submitted to any Lender (through the Administrative Agent) with respect to any amounts owing under this clause (vi) shall be conclusive absent manifest error.
(i) At any time after the L/C Issuer has made a payment under any Letter of Credit and has received from any Lender such Lender's L/C Advance in respect of such payment in accordance with Section 2.14(c) , if the Administrative Agent receives for the account of the L/C Issuer any payment related to such Letter of Credit (whether directly from the Borrower or otherwise, including proceeds of cash Collateral applied thereto by the Administrative Agent), or any payment of interest thereon, the Administrative Agent will distribute to such Lender its Pro Rata Share thereof in the same funds as those received by the Administrative Agent.
(ii) If any payment received by the Administrative Agent for the account of the L/C Issuer pursuant to Section 2.14(c)(i) is required to be returned, each Lender shall pay to the Administrative Agent for the account of the L/C Issuer its Pro Rata Share thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned by such Lender, at a rate per annum equal to the Federal Funds Rate from time to time in effect. (e) Obligations Absolute . The obligation of the Borrower to reimburse the L/C Issuer for each drawing under each Letter of Credit, and to repay each L/C Borrowing and each drawing under a Letter of Credit that is refinanced by a Borrowing of Revolving O&G Development Loans, shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the following: (i) any lack of validity or enforceability of such Letter of Credit, this Agreement, or any other agreement or instrument relating thereto; (ii) the existence of any claim, counterclaim, set-off, defense or other right that the Borrower may have at any time against any beneficiary or any transferee of such Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), the L/C Issuer or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or by such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction; (iii) any draft, demand, certificate or other document presented under such Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under such Letter of Credit; (iv) any payment by the L/C Issuer under such Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of Credit; or any payment made by the L/C Issuer under such Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in connection with any proceeding under any Debtor Relief Law; or (v) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, that might otherwise constitute a defense available to, or a discharge of, the Borrower. The Borrower shall promptly examine a copy of each Letter of Credit and each amendment thereto that is delivered to it and, in the event of any claim of noncompliance with the Borrower's instructions or other irregularity, the Borrower will immediately notify the L/C Issuer. The Borrower shall be conclusively deemed to have waived any such claim against the L/C Issuer and its correspondents unless such notice is given as aforesaid.
(f) Role of L/C Issuer . Each Lender and the Borrower agree that, in paying any drawing under a Letter of Credit, the L/C Issuer shall not have any responsibility to obtain any document (other than any sight draft, certificates and documents expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such document. No Agent-Related Person nor any of the respective correspondents, Participants or assignees of the L/C Issuer shall be liable to any Lender for (i) any action taken or omitted in connection herewith at the request or with the approval of the Lenders or the Required Lenders, as applicable, (ii) any action taken or omitted in the absence of gross negligence or willful misconduct; or (iii) the due execution, effectiveness, validity or enforceability of any document or instrument related to any Letter of Credit or Letter of Credit Application. The Borrower hereby assumes all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided, however , that this assumption is not intended to, and shall not, preclude the Borrower's pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement. No Agent-Related Person, nor any of the respective correspondents, Participants or assignees of the L/C Issuer, shall be liable or responsible for any of the matters described in clauses (i) through (v) of Section 2.14(e) ; provided, however , that anything in such clauses to the contrary notwithstanding, the Borrower may have a claim against the L/C Issuer, and the L/C Issuer may be liable to the Borrower, to the extent, but only to the extent, of any direct, as opposed to consequential or exemplary, damages suffered by the Borrower which the Borrower proves were caused by the L/C Issuer's willful misconduct or gross negligence or the L/C Issuer's willful failure to pay under any Letter of Credit after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit. In furtherance and not in limitation of the foregoing, the L/C Issuer may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary, and the L/C Issuer shall not be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason. (g) Cash Collateral . Upon the request of the Administrative Agent, (i) if the L/C Issuer has honored any full or partial drawing request under any Letter of Credit and such drawing has resulted in an L/C Borrowing, or (ii) if, as of the Letter of Credit Expiration Date, any Letter of Credit may for any reason remain outstanding and partially or wholly undrawn, the Borrower shall immediately Cash Collateralize the then Outstanding Amount of all L/C Obligations (in an amount equal to such Outstanding Amount). The Borrower hereby grants the Administrative Agent, for the benefit of the L/C Issuer and the Lenders, a Lien on all such cash and deposit accounts at the Lenders. (h) Applicability of ISP98 . Unless otherwise expressly agreed by the L/C Issuer and the Borrower when a Letter of Credit is issued, the rules of the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance) shall apply to each Letter of Credit. (i) Letter of Credit Fees . The Borrower shall pay to the Administrative Agent for the account of each Lender in accordance with its Pro Rata Share, a Letter of Credit fee for each Letter of Credit issued equal to four percent (4%) per annum of the actual daily undrawn amount under each Letter of Credit. Such fee for each Letter of Credit shall be due and payable on the last Business Day of each month during the term of this Agreement, commencing with the first such date to occur after the issuance of such Letter of Credit, and on the Letter of Credit Expiration Date.
(j) Fronting Fee and Documentary and Processing Charges Payable to L/C Issuer . The Borrower shall pay directly to the L/C Issuer for its own account a fronting fee in an amount with respect to each Letter of Credit issued equal to the greater of (i) $500 and (ii) ¼ of 1% (25 basis points) calculated on the face amount thereof. In addition, the Borrower shall pay directly to the L/C Issuer for its own account the customary issuance, presentation, amendment and other processing fees, and other standard costs and charges, of the L/C Issuer relating to letters of credit as from time to time in effect. Such fees and charges are due and payable on demand and are nonrefundable. (k) Conflict with Letter of Credit Application . In the event of any conflict between the terms hereof and the terms of any Letter of Credit Application, the terms hereof shall control. (l) Letters of Credit Issued for Borrower or QRC Subsidiaries . Notwithstanding that a Letter of Credit issued or outstanding hereunder is in support of any obligations of, or is for the account of, the Borrower or any of the QRC Subsidiaries, the Borrower shall be obligated to reimburse the L/C Issuer hereunder for any and all drawings under such Letter of Credit. The Borrower hereby acknowledges that the issuance of Letters of Credit in support of any obligation of, or for the account of the Borrower or any of the QRC Subsidiaries inures to the benefit of the Borrower, and that the Borrower's business derives substantial benefits from the businesses of the QRC Subsidiaries.
ARTICLE III. TAXES AND YIELD PROTECTION
(a) Any and all payments by the Borrower to or for the account of the Administrative Agent or any Lender under any Loan Document (other than the ORRI Conveyance, which shall be excluded from the provisions of Article III of this Agreement) shall be made free and clear of and without deduction for any and all present or future taxes, duties, levies, imposts, deductions, assessments, fees, withholdings or similar charges, and all liabilities with respect thereto; excluding , in the case of the Administrative Agent and each Lender, taxes imposed on or measured by its net income (including any franchise taxes imposed on or measured by its net income), by the jurisdiction (or any political subdivision thereof) under the Laws of which the Administrative Agent or such Lender, as the case may be, is organized or maintains its Lending Office (all such non-excluded taxes, duties, levies, imposts, deductions, assessments, fees, withholdings or similar charges, and liabilities being hereinafter referred to as “ Taxes ”). If the Borrower shall be required by any Laws to deduct any Taxes from or in respect of any sum payable under any Loan Document (other than the ORRI Conveyance) to the Administrative Agent or any Lender, (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section), each of the Administrative Agent and such Lender receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable Laws. (b) In addition, the Borrower agrees to pay any and all present or future stamp, mortgage, court or documentary taxes and any other excise or property taxes or charges or similar levies which arise from any payment made under any Loan Document (other than the ORRI Conveyance) or from the
execution, delivery, performance, enforcement or registration of, or otherwise with respect to, any Loan Document (other than the ORRI Conveyance)(hereinafter referred to as “ Other Taxes ”). (c) If the Borrower shall be required to deduct or pay any Taxes or Other Taxes from or in respect of any sum payable under any Loan Document (other than the ORRI Conveyance) to the Administrative Agent or any Lender, the Borrower shall also pay to the Administrative Agent (for the account of such Lender) or to such Lender, at the time interest is paid, such additional amount that such Lender specifies as necessary to preserve the after-tax yield (after factoring in all taxes, including taxes imposed on or measured by net income) such Lender would have received if such Taxes or Other Taxes had not been imposed. (d) The Borrower agrees to indemnify the Administrative Agent and each Lender for (i) the full amount of Taxes and Other Taxes (including any Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts payable under this Section) paid by the Administrative Agent and such Lender, and (ii) amounts payable under Section 3.01(c) and (iii) any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, except to the extent such sums are determined by a court of competent jurisdiction by final and non-appealable judgment to have resulted from the gross negligence or willful misconduct of the Administrative Agent, the L/C Issuer or such Lender, as applicable. Neither the Administrative Agent, the L/C Issuer nor any Lender shall be entitled to receive any payment with respect to any indemnity claim under this Section 3.01 with respect to Taxes or Other Taxes that are incurred or accrued more than 180 days prior to the date such party gives notice and demand with respect thereto to the Borrower. Payment under this subsection (d) shall be made within 30 days after the date such Lender or the Administrative Agent makes a demand therefor. (e) As soon as practicable after any payment of indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to the Administrative 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 Administrative Agent. (f) Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the Law of the jurisdiction in which the Borrower is resident for tax purposes, or any treaty to which such jurisdiction is a party, with respect to payments hereunder or under any other Loan Document shall deliver to the Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable Law or reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation prescribed by applicable Law, or reasonably requested by Borrower, as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable Law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Without limiting the generality of the foregoing, in the event that the Borrower is resident for tax purposes in the United States, any Foreign Lender shall deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the
request of the Borrower or the Administrative Agent, but only if such Foreign Lender is legally entitled to do so), whichever of the following is applicable: (i) duly completed copies of Internal Revenue Service Form W-8BEN claiming eligibility for benefits of an income tax treaty to which the United States is a party;
(iii) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under section 881(c) of the Code, (x) a certificate to the effect that such Foreign Lender is not (A) a "bank" within the meaning of section 881(c)(3)(A) of the Code, (B) a "10 percent shareholder" of the Borrower within the meaning of section 881(c)(3)(B) of the Code, or (C) a "controlled foreign corporation" described in section 881(c)(3)(C) of the Code and (y) duly completed copies of Internal Revenue Service Form W-8BEN; or (iv) any other form prescribed by applicable Law as a basis for claiming exemption from or a reduction in United States Federal withholding tax duly completed together with such supplementary documentation as may be prescribed by applicable Law to permit the Borrower to determine the withholding or deduction required to be made. (g) If the Administrative Agent, any Lender or the L/C Issuer determines, in its sole discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this Section, it shall pay to the Borrower an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent, such Lender or the L/C Issuer, as the case may be, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided that the Borrower, upon the request of the Administrative Agent, such Lender or the L/C Issuer, agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent, such Lender or the L/C Issuer in the event the Administrative Agent, such Lender or the L/C Issuer is required to repay such refund to such Governmental Authority. This subsection shall not be construed to require the Administrative Agent, any Lender or the L/C Issuer to make available its tax returns (or any other information relating to its taxes that it deems confidential) to the Borrower or any other Person.
(a) If any Lender or the L/C Issuer determines that as a result of a Change in Law, or such Lender's or L/C Issuer's compliance therewith, there shall be any increase in the cost to such Lender or L/C Issuer of participating in, issuing or maintaining any Letter of Credit, or a reduction in the amount received or receivable by such Lender or L/C Issuer in connection with any of the foregoing (excluding for purposes of this subsection (a) any such increased costs or reduction in amount resulting from (i)
Taxes or Other Taxes (as to which Section 3.01 shall govern) and (ii) changes in the basis of taxation of overall net income or overall gross income by the United States or any foreign jurisdiction or any political subdivision of either thereof under the Laws of which such Lender or L/C Issuer is organized or has its Lending Office, then from time to time upon demand of such Lender or L/C Issuer (with a copy of such demand to the Administrative Agent), the Borrower shall pay to such Lender or L/C Issuer, as the case may be, such additional amounts as will compensate such Lender or L/C Issuer for such increased cost or reduction. (b) If any Lender determines a Change in Law has the effect of reducing the rate of return on the capital of such Lender or any corporation controlling such Lender as a consequence of such Lender's obligations hereunder (taking into consideration its policies with respect to capital adequacy and such Lender's desired return on capital), then from time to time upon demand of such Lender (with a copy of such demand to the Administrative Agent), the Borrower shall pay to such Lender such additional amounts as will compensate such Lender for such reduction.
(d) Failure or delay on the part of any Lender or the L/C Issuer to demand compensation pursuant to this Section shall not constitute a waiver of such Lender's or the L/C Issuer's right to demand such compensation; provided that the Borrower shall not be required to compensate a Lender or the L/C Issuer pursuant to this Section for any increased costs or reductions incurred more than 180 days prior to the date that such Lender or the L/C Issuer, as the case may be, notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender's or the L/C Issuer's 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 180-day period referred to above shall be extended to include the period of retroactive effect thereof.
3.06 Matters Applicable to all Requests for Compensation . A certificate of the Administrative Agent or any Lender claiming compensation under this Article III and setting forth the additional amount or amounts to be paid to it hereunder shall be conclusive in the absence of manifest error. In determining such amount, the Administrative Agent or such Lender may use any reasonable averaging and attribution methods.
3.07 Survival . All of the Borrower's obligations under this Article III shall survive termination of the Aggregate Revolving O&G Development Loan Commitment and payment in full of all the other Obligations.
3.08 Mitigation Obligations. If any Lender or L/C Issuer requests compensation under Section 3.04 , or if the Borrower is required to pay any additional amount to any Lender, L/C Issuer or any Governmental Authority for the account of any Lender or L/C Issuer, as applicable, pursuant to Section 3.01 , then such Lender or L/C Issuer shall use reasonable efforts to designate a different lending office for funding or booking its Revolving O&G Development Loans or issuing Letters of Credit hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender or L/C Issuer, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 3.01 or Section 3.04 , as the case may be, in the future and (ii) would
not subject such Lender or L/C Issuer to any un-reimbursed cost or expense and would not otherwise be disadvantageous to such Lender or L/C Issuer. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by such Lender or L/C Issuer in connection with any such designation or assignment. ARTICLE IV. CONDITIONS PRECEDENT
4.01 Conditions Precedent . The obligation of the L/C Issuer and each Lender to make its initial Credit Extension hereunder and the effectiveness of this Agreement is subject to the satisfaction of the following conditions precedent:
(a) The Administrative Agent’s receipt of the following, each of which shall be originals or facsimiles (followed promptly by originals) and unless otherwise specified, each properly executed by a Responsible Officer of the signing Loan Party or other Person party thereto, each dated the Restatement Date (or, in the case of certificates of governmental officials, a recent date before the Restatement Date), and each in form and substance reasonably satisfactory to the Administrative Agent and its legal counsel: (i) executed counterparts of this Agreement and amendments to existing Mortgages to reflect that they secure the Loans, sufficient in number for distribution to the Administrative Agent, the Lenders and Borrower; (ii) A Revolving O&G Development Loan Note executed by the Borrower in favor of each Lender requesting a Revolving O&G Development Loan Note in a principal amount equal to such Lender's Revolving O&G Development Loan Commitment;
(iv) such certificates of resolutions or other action, incumbency certificates and/or other certificates of officers of each Loan Party as the Administrative Agent may require to establish the identities of and verify the authority and capacity of each officer thereof authorized to act in connection with this Agreement and the other Loan Documents to which such Loan Party is a party; (v) such evidence as the Administrative Agent may reasonably require to verify that each Loan Party is duly organized or formed, validly existing, and in good standing in the jurisdiction of its organization and is qualified to engage in business in each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification; (vi) a certificate signed by a Responsible Officer of the Borrower certifying (A) that the representations and warranties contained in Article V are true and correct in all respects on and as of the Restatement Date, (B) no Default or Event of Default will exist as of the Restatement Date, (C) that as of the Restatement Date there are no environmental or legal issues affecting any Loan Party or any of the Collateral which could reasonably be expected to have a Material Adverse Effect (other than as set forth in Section 5.17 ), (D) all material governmental and third party approvals necessary or, in the discretion of the Administrative Agent, advisable in
connection with the financing contemplated by this Agreement and the continuing operation of the Borrower and the QRC Subsidiaries has been obtained and is in full force and effect, and (E) no action, suit, investigation or proceeding is pending or, to the knowledge of such Responsible Officer, threatened in any court or before any arbitrator or governmental authority by or against the Borrower, any Guarantor, or any of their respective properties (other than any such actions disclosed on Schedule 5.06 ), that (x) could reasonably be expected to materially and adversely affect the Borrower and the Guarantors, taken as a whole, or (y) seeks to affect or pertains to any transaction contemplated hereby or the ability of the Borrower or any Guarantor to perform its obligations under the Loan Documents;
(viii) copies, each satisfactory to Administrative Agent, of each JOA or other material agreement affecting or concerning the Oil and Gas Properties; and (ix) such other assurances, certificates, documents, consents or opinions as the Administrative Agent reasonably may require. (b) The Administrative Agent's receipt of (i) a reserve report dated as of December 31, 2008 prepared by Cawley, Gillespie & Associates, Inc. covering the Phase I Oil and Gas Properties described therein and (ii) title opinions or other title due diligence with respect to the Phase I Oil and Gas Properties representing at least 80% of the PV10 value of the Proved Reserves included in the Phase I Oil and Gas Properties covered by the foregoing reserve report, each of (i) and (ii) to be in form and substance reasonably satisfactory to the Administrative Agent and with respect to (ii), it being acknowledged that landman title reports on proved but undeveloped Phase I Oil and Gas Properties are satisfactory to the Administrative Agent. (c) A Regulation U Statement of Purpose from the Borrower stating that no proceeds of the Revolving O&G Development Loans have been or will be used to purchase or carry margin stock. (d) An opinion from counsel to each Loan Party, in form and substance reasonably satisfactory to the Administrative Agent and its counsel. (e) The Borrower shall have paid Attorney Costs of the Administrative Agent to the extent invoiced prior to, or on, the Restatement Date. (f) The Administrative Agent’s receipt of Collateral Documents or amendments thereto, executed by each Loan Party that has assets or conducts business, in appropriate form for recording, where necessary, together with: (i) such Lien searches as the Administrative Agent shall have reasonably requested, and such termination statements or other documents as may be necessary to confirm that the Collateral is subject to no other Liens (other than Permitted Liens) in favor of any Persons; (ii) funds sufficient to pay any filing or recording tax or fee in connection with any and all UCC-1 and UCC-3 financing statements and fees associated with the filing of amendments to the Mortgages, including any mortgage tax;
(iii) evidence that the Administrative Agent has been named as loss payee or additional insured under all policies of casualty insurance pertaining to the Collateral and all general liability policies; (iv) certificates evidencing all of the issued and outstanding shares of capital stock, partnership interests, or membership interests pledged pursuant thereto, which certificates shall in each case be accompanied by undated stock powers duly executed in blank, or, if any securities pledged pursuant thereto are uncertificated securities, confirmation and evidence satisfactory to the Administrative Agent that the security interest in such uncertificated securities has been transferred to and perfected by the Administrative Agent for the benefit of the Lenders in accordance with the Uniform Commercial Code; and (v) evidence that all other actions reasonably necessary or, in the opinion of the Administrative Agent or the Lenders, desirable to perfect and protect the first priority Lien created by the Collateral Documents (except to the extent otherwise permitted hereunder), and to enhance the Administrative Agent's ability to pre |
AGREEMENTS / CONTRACTS
CLAUSES
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