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EXHIBIT 10.1
PARTICIPATION AGREEMENT
among
UNIVERSAL COMPRESSION, INC.
as Lessee
UNIVERSAL COMPRESSION HOLDINGS, INC.
as Guarantor
WILMINGTON TRUST COMPANY,
not in its individual capacity but as Trustee of
UNIVERSAL COMPRESSION TRUST (2000-1)
under the Trust Agreement dated as of May 25, 2000,
as Lessor
WILMINGTON TRUST COMPANY,
in its individual capacity,
as Trust Company
DEUTSCHE BANK AG, NEW YORK BRANCH and
the financial institutions listed on the signature
pages hereof
or that may hereafter become party hereto,
as Certificate Holders
BANKERS TRUST COMPANY
as Administrative Agent
BANKERS TRUST COMPANY
as Collateral Agent
and
the other financial institutions listed
on the signature pages hereof or that may
hereafter become party hereto as Lenders
May 30, 2000
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UNIVERSAL COMPRESSION, INC.
NATURAL GAS COMPRESSOR EQUIPMENT
FINANCING FACILITY
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TABLE OF CONTENTS
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1. Definitions and Usage....................................................................................2
2. Representations and Warranties...........................................................................2
2.1. Lessee Representations and Warranties...........................................................2
2.2. Further Lessee Representations and Warranties...................................................3
2.3. Guarantor Representations and Warranties........................................................5
2.4. Lessor Representations and Warranties For Benefit of All Parties...............................12
2.5. Lessor Representations and Warranties For Benefit of Lenders, Certificate
Holders, the Administrative Agent and the Collateral Agent.....................................14
2.6. Further Lessor Representations and Warranties For Benefit of Lenders,
Certificate Holders, the Administrative Agent and the Collateral Agent.........................14
2.7. Trust Company Representations and Warranties...................................................15
2.8. Representations and Warranties of Deutsche Bank in its capacity as a
Certificate Holder.............................................................................16
2.9. Lenders and Certificate Holders Representations and Warranties.................................18
2.10. Warranty Disclaimers...........................................................................18
3. Conditions Precedent....................................................................................18
3.1. Lessor Conditions..............................................................................18
(a) Conditions Precedent to the Closing Date..............................................18
(b) Conditions Precedent to each Funding Date.............................................19
(c) Lessor Conditions to the Funding Date for each Sale/Leaseback.........................22
(d) Lessor Conditions to the First Funding Date for an Item of
Equipment to be Assembled.............................................................22
(e) Lessor Conditions to each Funding Date for an Item of Equipment to
be Assembled..........................................................................22
(f) Lessor Conditions for Final Funding Date for an Assembled Item of
Equipment.............................................................................23
3.2. Lender Conditions..............................................................................23
(a) Lender Conditions on the Closing Date.................................................23
(b) Lender Conditions for each Funding Date...............................................23
3.3. Certificate Holders Conditions.................................................................25
(a) Certificate Holder Conditions on the Closing Date.....................................25
(b) Certificate Holder Conditions for each Funding Date...................................25
4. Commitments and Fundings................................................................................26
4.1. Certificate Holder Commitments.................................................................26
4.2. Lender Commitments.............................................................................26
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4.3. Lessor Commitment to Purchase..................................................................27
4.4. Lessor Commitment to Reimburse Component Costs.................................................27
4.5. Amendment of Master Budget.....................................................................27
4.6. Lease Agreement Supplements....................................................................27
4.7. Rights in Equipment............................................................................27
4.8. Funding Dates..................................................................................28
4.9. Adjustment of Acquisition Cost.................................................................28
4.10. Funding Escrow.................................................................................29
4.11. Administrative Agent Funding...................................................................30
5. Selection of Lease Payment Period.......................................................................30
6. Default Purchase Options and Cure Rights................................................................31
6.1. Right to Cure Certain Lease Events of Default..................................................31
6.2. Certificate Holders Default Purchase Option....................................................31
6.3. Lessee Cure Right..............................................................................32
7. Security................................................................................................33
7.1. Security Interest..............................................................................33
7.2. Further Assurances.............................................................................34
7.3. Termination....................................................................................34
7.4. Other Security.................................................................................35
7.5. Power of Attorney..............................................................................35
7.6. Assignment of Rights...........................................................................35
7.7. Transfer of the Collateral by the Collateral Agent.............................................36
7.8. No Segregation of Monies; No Interest..........................................................36
7.9. Distribution of Moneys.........................................................................36
(a) Scheduled and End of Term Payments........................................................36
(b) Partial Prepayments.......................................................................37
7.10. Payments after a Loan Event of Default.........................................................37
7.11. Application of Certain Other Payments..........................................................38
7.12. Other Payments.................................................................................38
7.13. Retention of Amounts by the Collateral Agent...................................................38
7.14. Conflicts......................................................................................38
8. Guaranty................................................................................................38
9. Covenants...............................................................................................40
9.1. Lessor Covenants...............................................................................40
9.2. Trust Company Covenants........................................................................42
9.3. Certificate Holders Covenants..................................................................42
9.4. Lender and Collateral Agent Covenant...........................................................43
9.5. Lessee and Guarantor Covenants.................................................................43
(a) Information Covenants.................................................................43
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(b) Books, Records and Inspections........................................................45
(c) Compliance with Statutes, etc.........................................................45
(d) Compliance with Environmental Laws....................................................45
(e) ERISA.................................................................................46
(f) Performance of Obligations............................................................47
(g) Payment of Taxes......................................................................47
(h) Liens.................................................................................48
(i) Consolidation, Merger, Purchase or Sale of Assets, etc................................50
(j) Dividends.............................................................................53
(k) Indebtedness..........................................................................54
(l) Transactions with Affiliates..........................................................55
(m) Consolidated EBITDAR to Total Interest Expense........................................56
(n) Maximum Leverage Ratio................................................................57
(o) Maximum Senior Secured Leverage Ratio.................................................58
(p) Business..............................................................................60
(q) Advances, Investments and Loans.......................................................60
(r) Capital Expenditures..................................................................62
(s) Public Utility Holding Company........................................................63
(t) Special Purpose Corporation...........................................................64
(u) End of Fiscal Years; Fiscal Quarters..................................................64
(v) Punctual Payment......................................................................64
(w) Perfection and Maintenance of Security Interest.......................................64
(x) Default and Cross Default on Material Debt............................................64
(y) Change in Corporate Offices...........................................................65
(z) Use of ERISA Assets...................................................................65
(aa) Payment of Fees.......................................................................65
(bb) Maintenance of Property; Insurance....................................................65
(cc) Corporate Franchises..................................................................66
9.6. Covenant of Lenders, Lessor, the Administrative Agent, Collateral Agent,
Trust Company and Certificate Holders..........................................................66
10. Indemnities.............................................................................................67
10.1. Lessee General Indemnification.................................................................67
10.2. Exceptions to Lessee's General Indemnification.................................................68
10.3. Tax Indemnity..................................................................................69
10.3.1. General Indemnity.....................................................................69
10.3.2. Exceptions to Tax Indemnity...........................................................70
10.3.3. Payment of Taxes......................................................................71
10.3.4. Tax Filings...........................................................................72
10.3.5. Withholdings..........................................................................72
10.3.6. Tax Contests..........................................................................73
10.3.7. Special Tax Indemnity.................................................................74
10.4. Increased Costs, Illegality, etc...............................................................75
10.5. Lessee Indemnity...............................................................................77
10.6. Survival.......................................................................................77
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11. Administrative Agent and Collateral Agent...............................................................77
11.1. Authorization and Action of Administrative Agent...............................................77
11.2. Delegation of Duties...........................................................................79
11.3. Agent's Reliance, etc..........................................................................79
11.4. Administrative Agent, Collateral Agent and Affiliates..........................................80
11.5. Lender and Certificate Holder Credit Decision..................................................80
11.6. Indemnification................................................................................80
11.7. Successor Administrative Agent and Collateral Agent; Termination of Agency.....................81
11.8. Registration of Notes and Certificates.........................................................81
12. Miscellaneous...........................................................................................82
12.1. Expenses.......................................................................................82
12.2. Amendments.....................................................................................82
12.3. GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL.........................84
12.4. Notices........................................................................................85
12.5. Interests in the Equipment.....................................................................87
12.6. Descriptive Headings, etc......................................................................87
12.7. Benefit of Agreement; Assignment...............................................................88
12.8. Execution and Effectiveness....................................................................90
12.9. Confidentiality................................................................................90
12.10. Survival.......................................................................................91
12.11. Severability...................................................................................91
12.12. No Broker......................................................................................91
12.13. Performance by Lenders and Certificate Holders; Replacement of Lenders;
Replacement of Certificate Holders.............................................................91
12.14. Limited Recourse Against Certificate Holders and Trust Company.................................93
12.15. Concerning Lessor..............................................................................93
12.16. Consent and Agreement of Lessee and Guarantor..................................................94
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APPENDICES, EXHIBITS AND SCHEDULES
APPENDIX A Definitions
SCHEDULE 1 Description of Equipment
SCHEDULE 2 Pricing Grid
SCHEDULE 3 Lender Commitments and Certificate Holders Commitments
SCHEDULE 4 Lenders' and Certificate Holders' Notice Addresses, Payment
Instructions and Responsible Officers
SCHEDULE 5 Liens
SCHEDULE 6 Indebtedness
SCHEDULE 7 Subsidiaries
SCHEDULE 8 Insurance
SCHEDULE 9 ERISA Plans
SCHEDULE 10 Existing Investments
EXHIBIT A [Form of] Xxxx of Sale and Receipt
EXHIBIT B-1 [Form of] Certificate of Sale/Leaseback Equipment Relating to
Lease Agreement Supplement No. __
EXHIBIT B-2 [Form of] Certificate of Equipment for Items of
Equipment to Be Assembled Relating to Lease
Supplement No. __
EXHIBIT C [Form of] Funding Notice and Instructions re Funds on Funding Date
EXHIBIT D [Form of] Completion Certificate
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This PARTICIPATION AGREEMENT, dated as of May 30, 2000 (together with
all amendments and supplements hereto, this "Agreement") is among UNIVERSAL
COMPRESSION, INC., a Texas corporation (together with its successors and
permitted assigns, "Lessee"), UNIVERSAL COMPRESSION HOLDINGS, INC., a Delaware
corporation (together with its successors and permitted assigns, "Guarantor"),
WILMINGTON TRUST COMPANY, a Delaware banking corporation, not in its individual
capacity but solely as Trustee of UNIVERSAL COMPRESSION TRUST (2000-1) under the
Trust Agreement dated as of May 25, 2000 (the "Lessor") and in its individual
capacity, but only where so specified (together with its successors and
permitted assigns, "Trust Company"), DEUTSCHE BANK AG, NEW YORK BRANCH, and the
financial institutions listed on the signature pages hereof or that may
thereafter become party hereto as Certificate Holders (each a "Certificate
Holder" and collectively the "Certificate Holders"), BANKERS TRUST COMPANY, as
Administrative Agent (in such capacity, together with its successors and
permitted assigns in such capacity, the "Administrative Agent") and BANKERS
TRUST COMPANY, as Collateral Agent (in such capacity, together with its
successors and permitted assigns in such capacity, the "Collateral Agent") and
each of the financial institutions listed on the signature pages hereof or that
may hereafter become party hereto as lenders (the "Lenders").
W I T N E S S E T H:
WHEREAS, Lessor has agreed to acquire certain natural gas compressor
equipment from Lessee and pursuant to the Assembly Agency Agreement of even date
herewith between Lessor and Lessee (the "Assembly Agency Agreement"), Lessee and
Lessor have agreed that Lessee will act as Assembly Agent and supervise the
acquisition, construction and assembly of additional natural gas compressor
equipment on behalf of Lessor;
WHEREAS, Lessor has agreed to lease to Lessee such natural gas
compressor equipment pursuant to a Master Equipment Lease Agreement of even date
herewith between Lessee and Lessor (the "Lease Agreement");
WHEREAS, Lenders have agreed to make a loan or loans to Lessor subject
to the conditions, restrictions and limitations in this Agreement and in the
Loan Agreement dated as of May 30, 2000, among Lessor, the Lenders, the
Collateral Agent and the Administrative Agent (the "Loan Agreement"), for the
purpose of financing Lessor's acquisition of the natural gas compressor
equipment to be leased under the Lease Agreement;
WHEREAS, Lessee is a subsidiary of Guarantor, and to induce Lessor to
lease the natural gas compressor equipment to Lessee and to induce Lenders to
make a loan or loans to Lessor, Guarantor has agreed to guarantee certain of
Lessee's obligations under the Operative Documents;
WHEREAS, to induce Lenders to make a loan or loans to Lessor, Lessor
has agreed to provide Collateral Agent on behalf of Lenders certain security in
accordance with the terms of the Loan Agreement;
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NOW, THEREFORE, in consideration of the premises and mutual agreements
contained herein, the parties hereto agree as follows:
1. Definitions and Usage.
Unless the context otherwise requires, capitalized terms used herein
and not otherwise defined herein shall have the meanings set forth or referred
to in Appendix A.
2. Representations and Warranties.
2.1. Lessee Representations and Warranties. Lessee hereby represents
and warrants as of the date hereof and on each Funding Date for the benefit of
each other party hereto that:
(a) Lessee (i) is a duly organized and validly existing corporation in
good standing under the laws of the jurisdiction of its incorporation, (ii) has
the corporate power and authority to own its property and assets and to transact
the business in which it is engaged and presently proposes to engage and (iii)
is duly qualified and is authorized to do business and is in good standing in
each jurisdiction where the ownership, leasing or operation of its property or
the conduct of its business requires such qualifications except for failures to
be so qualified which, individually or in the aggregate, could not reasonably be
expected to have a material adverse effect on Lessee's ability to perform its
obligations under the Operative Documents or on the business, operations,
property, assets, liabilities, condition (financial or otherwise) or prospects
of Guarantor and its Subsidiaries taken as a whole.
(b) Lessee has the corporate power and authority to execute, deliver
and perform the terms and provisions of each of the Operative Documents to which
it is party and has taken all necessary corporate action to authorize the
execution, delivery and performance by it of each of such Operative Documents.
Lessee has duly executed and delivered each of the Operative Documents to which
it is party, and each of such Operative Documents constitutes its legal, valid
and binding obligation enforceable in accordance with its terms, except to the
extent that the enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws generally affecting
creditors' rights and by equitable principles (regardless of whether enforcement
is sought in equity or at law).
(c) Neither the leasing of the Equipment, the execution, delivery or
performance by Lessee of the Operative Documents to which it is a party, nor
compliance by it with the terms and provisions thereof, (i) will contravene any
provision of any law, statute, rule or regulation or any order, writ, injunction
or decree of any court or governmental instrumentality, (ii) will, after giving
effect to any waivers, conflict with or result in any material breach of any of
the terms, covenants, conditions or provisions of, or constitute a default
under, or result in the creation or imposition of (or the obligation to create
or impose) any Lien (other than Permitted Liens) upon any of the property or
assets of Lessee pursuant to the terms of any indenture, mortgage, deed of
trust, credit agreement or loan agreement, or any other material agreement,
contract or instrument, to which Lessee is a party or by which it or any of its
property or assets is bound or to
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which it may be subject or (iii) will violate any provision of the Certificate
of Incorporation or By-Laws of Lessee.
(d) No order, consent, approval, license, authorization or validation
of, or filing, recording or registration with (other than the filing of the
Lessee Financing Statements and except as have otherwise been obtained or made
on or prior to the Closing Date), or exemption by, any governmental or public
body or authority, or any subdivision thereof, is required to authorize, or is
required in connection with, (i) the execution, delivery and performance by
Lessee of any Operative Document to which it is a party or (ii) the legality,
validity, binding effect or enforceability against Lessee of any such Operative
Document.
(e) There is no action, suit or other proceeding pending or, to the
best knowledge of Lessee, threatened, (i) with respect to the Revolver or the
transaction contemplated herein or (ii) that could reasonably be expected to
materially and adversely affect the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of Lessee and its
Subsidiaries taken as a whole.
(f) No Lease Default has occurred and is continuing.
(g) All representations and warranties of Lessee (or its predecessors
in interest) set forth in the other Operative Documents were true and correct in
all material respects at the time as of which such representations and
warranties were made (or deemed made) and shall be true and correct in all
material respects as of each Funding Date as if such representations and
warranties were made on and as of such date, unless stated to relate to a
specific earlier date, in which case such representations and warranties shall
be true and correct in all material respects as of such earlier date.
(h) Lessee's chief executive office and its principal place of business
are located at 0000 Xxxxxxxxxx Xxxx, Xxxxxxx, Xxxxx 00000.
(i) Tax Registration. The transaction contemplated hereby (i) is not
required to be registered pursuant to Code Section 6111(d) or any regulation
promulgated thereunder or (ii) was properly and timely registered in accordance
with Code Section 6111(d) and any regulations promulgated thereunder as of the
Closing Date and the correct registration number was (or will be within 10
Business Days of receipt by Lessee) provided to the Certificate Holders and
Lenders identified in the Operative Documents on the Closing Date by name and
address. Each party hereto hereby agrees to provide to Lessee promptly after
written request therefor any information requested by Lessee on or prior to the
Closing Date and necessary for Lessee to register the transaction.
2.2. Further Lessee Representations and Warranties. Lessee hereby
represents and warrants as of each Funding Date for the benefit of each other
party hereto that:
(a) For each Item of Equipment sold by Lessee to Lessor, immediately
prior to giving effect to the sale thereof to Lessor, Lessee has good and
marketable title to such Item of Equipment.
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(b) For each Component sold by Lessee to Lessor or purchased by Lessee
on behalf of Lessor in accordance with the Assembly Agency Agreement, at the
time of such sale or purchase and on the Funding Date for such Component, Lessor
has good and marketable title to such Component, such Component has not been
previously used and, with respect to any Component that is a natural gas driver,
compressor or air cooler, payment in full has been made by or on behalf of
Lessee or Lessor to the vendor of such Component.
(c) On the last Funding Date for the reimbursement of the Component
Costs for an Item of Equipment assembled by Lessee on behalf of Lessor in
accordance with the Assembly Agency Agreement, Lessor has good and marketable
title to such Item of Equipment.
(d) There are no Liens other than Permitted Liens and Lessor Liens on
any Item of Equipment, any Component, the proceeds of any Item of Equipment or
Component or the insurance required under the Lease Agreement.
(e) Each Item of Equipment is personal property and not a fixture
attached to realty under Applicable Law, and each Item of Equipment has
permanently affixed thereto the serial number or other identification number set
forth therefor on the Lease Agreement Supplement for such Item.
(f) For each Item of Equipment, Lessor and the Collateral Agent shall
be entitled to all of the rights and benefits and priorities provided to a
holder of a perfected first priority Lien under Applicable Law, and on each
Funding Date, all recordations and filings shall have been accomplished in each
jurisdiction as may be required by law to establish and perfect Lessor's and the
Collateral Agent's respective rights in and to such Lessee Collateral or Lessor
Collateral, as the case may be, and any giving of notice or any other action to
such end required by Applicable Law has been given or taken.
(g) The provisions of this Agreement are effective to create in favor
of the Collateral Agent for the benefit of the Lenders a legal, valid and
enforceable security interest in all right, title and interest of the Lessor in
the Lessor Collateral, and, in reliance on the accuracy of the representation
and warranty of the Lessor in Section 2.5(b), the filing of the financing
statements executed by Lessor as debtor with the Secretary of State for the
State of Delaware and in the applicable filing office(s) in each state in which
Items of Equipment are located perfects such security interest in the Lessor
Collateral, subject to no Liens other than Permitted Liens and Lessor Liens, and
the Collateral Agent shall be entitled to all of the rights, benefits, and
priorities provided to a holder of liens of such type under Applicable Law.
(h) Lessee has delivered to Lessor a true, correct and complete
Certificate of Equipment for each Item of Equipment.
(i) Each Item of Equipment sold by Lessee to Lessor on such Funding
Date (other than Items for which Lessee has delivered to Lessor and the
Administrative Agent at least five (5) Business Days prior to such funding an
Appraisal confirming that each of the fair market value and Residual Value
(estimated in good faith by Lessee) of such Item is greater than or
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equal to the Acquisition Cost therefor) at the time of such sale has a Date of
Manufacture or a Date of Overhaul no earlier than five (5) years prior to such
Funding Date.
(j) Each Item of Equipment is in compliance with identification xxxx
requirements of Section 15 of the Lease Agreement.
(k) Each Item of Equipment, other than Items of Equipment made subject
to the Lease Agreement prior to such Funding Date, is in proper working order.
(l) No Event of Loss or event which with the passage of time would
become an Event of Loss has occurred with respect to any Item of Equipment or
any Component funded on such Funding Date.
(m) As of the Closing Date, and as of each Funding Date, (i) no Item of
Equipment is intended by Lessee to be "equipment used in farming operations" as
such terms are used in Section 9-401 of the New York Uniform Commercial Code or
any correlative provision of any other applicable state's Uniform Commercial
Code and, (ii) no Item of Equipment shall be "goods covered by a certificate of
title issued under a statute of this state or of another jurisdiction under the
law of which indication of a security interest on the certificate is required as
a condition of perfection" within the meaning of Section 9-103 of the New York
Uniform Commercial Code or any correlative provision of any other applicable
state's Uniform Commercial Code.
2.3. Guarantor Representations and Warranties. Guarantor hereby
represents and warrants as of the date hereof and on each Funding Date for the
benefit of each party hereto that:
(a) Guarantor (i) is a duly organized and validly existing corporation
in good standing under the laws of the jurisdiction of its incorporation, (ii)
has the corporate power and authority to own its property and assets and to
transact the business in which it is engaged and presently proposes to engage
and (iii) is duly qualified and authorized to do business and is in good
standing in each jurisdiction where the ownership, leasing or operation of its
property or the conduct of its business requires such qualifications except for
failures to be so qualified which, individually or in the aggregate, could not
reasonably be expected to have a material adverse effect on the business,
operations, property, assets, liabilities, condition (financial or otherwise) or
prospects of Guarantor and its Subsidiaries taken as a whole.
(b) Guarantor has the corporate power and authority to execute, deliver
and perform the terms and provisions of each of the Operative Documents to which
it is party and has taken all necessary corporate action to authorize the
execution, delivery and performance by it of each of such Operative Documents.
Guarantor has duly executed and delivered each of the Operative Documents to
which it is party, and each of such Operative Documents constitutes its legal,
valid and binding obligation enforceable in accordance with its terms, except to
the extent that the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
generally affecting creditors' rights and by equitable principles (regardless of
whether enforcement is sought in equity or at law).
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(c) Neither the execution, delivery or performance by Guarantor of the
Operative Documents to which it is a party, nor compliance by it with the terms
and provisions thereof, (i) will contravene any provision of any law, statute,
rule or regulation or any order, writ, injunction or decree of any court or
governmental instrumentality, (ii) will, after giving effect to any waivers,
conflict with or result in any material breach of any of the terms, covenants,
conditions or provisions of, or constitute a default under, or result in the
creation or imposition of (or the obligation to create or impose) any Lien
(other than Permitted Liens) upon any of the property or assets of Guarantor or
any of its Subsidiaries pursuant to the terms of any indenture, mortgage, deed
of trust, credit agreement or loan agreement, or any other material agreement,
contract or instrument, to which Guarantor or any of its Subsidiaries is a party
or by which it or any of its property or assets is bound or to which it may be
subject or (iii) will violate any provision of the Certificate of Incorporation
or By-Laws of Guarantor or any of its Subsidiaries.
(d) No order, consent, approval, license, authorization or validation
of, or filing, recording or registration with (except as have otherwise been
obtained or made on or prior to the Closing Date), or exemption by, any
governmental or public body or authority, or any subdivision thereof, is
required to authorize, or is required in connection with, (i) the execution,
delivery and performance by Guarantor of any Operative Document to which it is a
party or (ii) the legality, validity, binding effect or enforceability against
Guarantor of any such Operative Document.
(e) The audited consolidated balance sheets of Guarantor and its
Subsidiaries for the fiscal years ended on March 31, 1999 and March 31, 2000 and
the related statements of income, cash flows and shareholders' equity of
Guarantor and its Subsidiaries for the fiscal years ended on such dates, which
annual financial statements have been examined by Deloitte & Touche LLP,
certified public accountants, who delivered an unqualified opinion with respect
thereto and copies of which have heretofore been delivered to each Lender,
Certificate Holder and the Administrative Agent, present fairly in all material
respects the financial position of Guarantor and its Subsidiaries at the date of
such balance sheets and the results of the operations of Guarantor and its
Subsidiaries for the periods covered thereby. All of the foregoing historical
financial statements have been prepared in accordance with generally accepted
accounting principles consistently applied. The pro forma consolidated financial
statements of Guarantor and its Subsidiaries as of March 31, 2000 (as contained
in amendment No. 2 to the Registration Statement filed on Form S-1 with the
Securities and Exchange Commission with respect to the Guarantor IPO), in each
case after giving effect to the Guarantor IPO, the Repurchase and the
transaction contemplated by the Operative Documents, copies of which have been
furnished to the Lenders, the Certificate Holders and the Administrative Agent
prior to the Closing Date, present fairly in all material respects the pro forma
consolidated financial position of Guarantor and its Subsidiaries as of March
31, 2000. After giving effect to the Guarantor IPO, the Repurchase, the Revolver
and the transaction contemplated by the Operative Documents, since March 31,
2000, there has been no material adverse change in the business, operations,
property, assets, liabilities, condition (financial or otherwise) or prospects
of Lessee or of Guarantor and its Subsidiaries taken as a whole.
(f) On and as of the Closing Date and after giving effect to the
Guarantor IPO, the Repurchase, the Revolver and the transactions contemplated by
the Operative Documents and
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to all Indebtedness (including any Loans) being incurred or assumed and Liens
created by Lessee and Guarantor in connection therewith (i) the sum of the
assets, at a fair valuation, of each of Lessee on a stand-alone basis and of
Guarantor and its Subsidiaries taken as a whole will exceed its debts; (ii) each
of Lessee on a stand-alone basis and Guarantor and its Subsidiaries taken as a
whole has not incurred and does not intend to incur, and does not believe that
it will incur, debts beyond its ability to pay such debts as such debts mature;
and (iii) each of Lessee on a stand-alone basis and Guarantor and its
Subsidiaries taken as a whole will have sufficient capital with which to conduct
its business. For purposes of this Section 2.3(f), "debt" means any liability on
a claim, and "claim" means (A) right to payment, whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured, or unsecured or (B)
right to an equitable remedy for breach of performance if such breach gives rise
to a payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured. The amount of contingent liabilities at any time shall be computed
as the amount that, in the light of all the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.
(g) Except as fully disclosed in the financial statements delivered
pursuant to Section 2.3(e) or the Operative Documents, there are as of the date
hereof no liabilities or obligations with respect to Guarantor or any of its
Subsidiaries of any nature whatsoever (whether absolute, accrued, contingent or
otherwise and whether or not due) which, either individually or in aggregate,
could reasonably be expected to be material to Lessee or to Guarantor and its
Subsidiaries taken as a whole. As of the date hereof, neither Guarantor nor
Lessee knows of any basis for the assertion against it or any of its
Subsidiaries of any liability or obligation of any nature whatsoever that is not
fully disclosed in the financial statements delivered pursuant to Section 2.3(e)
or the Operative Documents which, either individually or in the aggregate, could
reasonably be expected to be material to the Lessee or to Guarantor and its
Subsidiaries taken as a whole.
(h) On and as of the date hereof, the Projections delivered to the
Administrative Agent, the Certificate Holders and the Lenders prior to the date
hereof have been prepared in good faith and are based on reasonable assumptions,
and there are no statements or conclusions in the Projections which are based
upon or include information known to Guarantor or Lessee to be misleading in any
material respect or which fail to take into account material information known
to Guarantor or Lessee regarding the matters reported therein. On the date
hereof, Guarantor and Lessee believe that the Projections are reasonable and
attainable, it being recognized by Lessor and the Lenders, however, that
projections as to future events are not to be viewed as facts and that the
actual results during the period or periods covered by the Projections may
differ from the projected results and that the differences may be material.
(i) There is no action, suit or other proceeding now pending or, to the
best knowledge of Guarantor, threatened (i) with respect to the Guarantor IPO,
the Repurchase, the Revolver or the transaction contemplated herein or (ii) that
could reasonably be expected to materially and adversely affect the business,
operations, property, assets, liabilities, condition (financial or otherwise) or
prospects of Guarantor and its Subsidiaries taken as a whole.
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(j) All factual information (taken as a whole) furnished by Guarantor
in writing to the Administrative Agent (including, without limitation, all
information contained in the Operative Documents) for purposes of or in
connection with this Participation Agreement, or any transaction contemplated
herein or therein is, and all other such factual information (taken as a whole)
hereafter furnished by Guarantor in writing to the Administrative Agent, Lessor
or any Lender will be, true and accurate in all material respects on the date as
of which such information is dated or certified and not incomplete by omitting
to state any fact necessary to make such information (taken as a whole) not
misleading in any material respect at such time in light of the circumstances
under which such information was provided.
(k) Guarantor and each of its Subsidiaries have timely filed or caused
to be timely filed with the appropriate taxing authority, all Federal, state and
other returns, statements, forms and reports for taxes, domestic and foreign
(the "Returns") required to be filed by or with respect to the income,
properties or operations of Guarantor and/or any of its Subsidiaries. The
Returns accurately reflect all material liability for taxes of Guarantor and its
Subsidiaries for the periods covered thereby. Guarantor and each of its
Subsidiaries have paid all taxes payable by them other than taxes contested in
good faith and for which adequate reserves have been established in accordance
with GAAP. Except as disclosed in the financial statements referred to in
Section 2.3(e), as of the date hereof, there is no action, suit, proceeding,
investigation, audit, or claim now pending or, to the knowledge of Guarantor and
Lessee, threatened by any authority regarding any taxes relating to Guarantor or
any of its Subsidiaries. As of the Closing Date, neither Guarantor nor any of
its Subsidiaries has entered into an agreement or waiver or been requested to
enter into an agreement or waiver extending any statute of limitations relating
to the payment or collection of U.S. Federal income taxes of Guarantor or any of
its Subsidiaries or is aware of any agreement or waiver extending any statute of
limitations relating to the payment or collection of other taxes of Guarantor or
any of its Subsidiaries. None of Guarantor or any of its Subsidiaries has
provided, with respect to itself or property held by it, any consent under
Section 341 of the Code.
(l) Except as set forth on Schedule 9, each Plan (and each related
trust, insurance contract or fund) is in substantial compliance with its terms
and with all applicable laws, including, without limitation, ERISA and the Code;
each Plan (and each related trust, if any) which is intended to be qualified
under Section 401(a) of the Code has received a determination letter from the
Internal Revenue Service to the effect that it meets the requirements of
Sections 401(a) and 501(a) of the Code; no Reportable Event has occurred; to the
best knowledge of Guarantor and Lessee, each Plan which is a multiemployer plan
(as defined in Section 4001(a)(3) of ERISA) is in substantial compliance with
its terms and with all applicable laws, including, without limitation, ERISA and
the Code; no Plan which is a multiemployer plan (as defined in Section
4001(a)(3) of ERISA) is insolvent or in reorganization; no Plan which is subject
to Title IV of ERISA has an Unfunded Current Liability; no Plan which is subject
to Section 412 of the Code or Section 302 of ERISA has an accumulated funding
deficiency, within the meaning of such sections of the Code or ERISA, or has
applied for or received a waiver of an accumulated funding deficiency or an
extension of any amortization period, within the meaning of Section 412 of the
Code or Section 303 or 304 of ERISA; to the best knowledge of Guarantor and the
Lessee, no Plan which is a multiemployer plan (as defined in Section 4001(a)(3)
of ERISA) has an Unfunded Current Liability; all contributions required to be
made with respect to a Plan have
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been timely made, neither Guarantor nor any Subsidiary of Guarantor nor any
ERISA Affiliate has incurred any material liability (including any indirect,
contingent or secondary liability) to or on account of a Plan pursuant to
Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of
ERISA or Section 401(a)(29), 4971 or 4975 of the Code or expects to incur any
such liability under any of the foregoing sections with respect to any Plan; no
condition exists which presents a material risk to Guarantor or any Subsidiary
of Guarantor or any ERISA Affiliate of incurring a liability to or on account of
a Plan pursuant to the foregoing provisions of ERISA and the Code; no
proceedings have been instituted to terminate or appoint a trustee to administer
any Plan which is subject to Title IV of ERISA; no action, suit, proceeding,
hearing, audit or investigation with respect to the administration, operation or
the investment of assets of any Plan (other than routine claims for benefits) is
pending, to the best knowledge of Guarantor and the Lessee, expected or
threatened; to the best knowledge of Guarantor, using actuarial assumptions and
computation methods consistent with Part 1 of subtitle E of Title IV of ERISA,
the aggregate liabilities of Guarantor and its Subsidiaries and its ERISA
Affiliates to all Plans which are multiemployer plans (as defined in Section
4001(a)(3) of ERISA) in the event of a complete withdrawal therefrom, as of the
close of the most recent fiscal year of each such Plan ended prior to the date
of the most recent funding, would not exceed $50,000; no lien imposed under the
Code or ERISA on the assets of Guarantor or any Subsidiary of Guarantor or any
ERISA Affiliate exists or is likely to arise on account of any Plan; and
Guarantor and its Subsidiaries may cease contributions to or terminate any
employee benefit plan maintained by any of them without incurring any material
liability.
(m) Each Foreign Pension Plan has been maintained in substantial
compliance with its terms and with the requirements of any and all applicable
laws, statutes, rules, regulations and orders and has been maintained, where
required, in good standing with applicable regulatory authorities. All
contributions required to be made with respect to a Foreign Pension Plan have
been timely made. Neither Guarantor nor any of its Subsidiaries has incurred any
obligation in connection with the termination of or withdrawal from any Foreign
Pension Plan. The present value of the accrued benefit liabilities (whether or
not vested) under each Foreign Pension Plan, determined as of the end of
Guarantor's most recently ended fiscal year on the basis of actuarial
assumptions, each of which is reasonable, did not exceed the current value of
the assets of such Foreign Pension Plan allocable to such benefit liabilities.
(n) Assuming the accuracy at all times of the representation and
warranty of each Lender and Certificate Holder in Section 2.9 of this Agreement,
the execution and delivery of this Agreement will be exempt from, or will not
involve any transaction which is subject to, the prohibitions of either Section
406 of ERISA or Section 4975 of the Code and will not involve any transaction in
connection with which a penalty could be imposed under Section 502(i) of ERISA
or a tax could be imposed pursuant to Section 4975 of the Code.
(o) All representations and warranties of Guarantor (or its
predecessors in interest) set forth in the other Operative Documents were true
and correct in all material respects at the time as of which such
representations and warranties were made (or deemed made) and shall be true and
correct in all material respects as of each Funding Date as if such
representations and warranties were made on and as of such date, unless stated
to relate to a
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specific earlier date, in which case such representations and warranties shall
be true and correct in all material respects as of such earlier date.
(p) Guarantor and each of its Subsidiaries have good and marketable
title to all material properties owned by them, including all property owned by
them, including all property reflected in the balance sheets referred to in
Section 2.3(e) (except as sold or otherwise disposed of since the date of such
balance sheet in the ordinary course of business), free and clear of all Liens,
other than (i) as referred to in the balance sheet or in the notes thereto or
(ii) Permitted Guarantor Liens.
(q) On the Closing Date and after giving effect to the transactions
contemplated hereby, (i) the authorized capital stock of Guarantor shall consist
of (a) 200,000,000 shares of common stock, $.01 par value per share, of which
12,707,769 shares shall be issued and 12,695,861 shall be outstanding and (b)
50,000,000 shares of preferred stock, none of which shall be issued and
outstanding and (ii) the authorized capital stock of Lessee shall consist of
5,000 shares of common stock, $10 par value per share, of which 4,900 shall be
issued and outstanding, all of the shares of which shall be owned by Guarantor.
All such outstanding shares of common stock have been duly and validly issued,
are fully paid and nonassessable and are free of preemptive rights. Neither
Guarantor nor Lessee has outstanding any securities convertible into or
exchangeable for its capital stock or outstanding any rights to subscribe for or
to purchase, or any options for the purchase of, or any agreements providing for
the issuance (contingent or otherwise) of, or any calls, commitments or claims
of any character relating to, its capital stock.
(r) As of the date hereof, Guarantor has no Subsidiaries other than
those Subsidiaries listed on Schedule 7 hereto. Schedule 7 correctly sets forth,
as of the Closing Date, the percentage ownership (direct and indirect) of Lessee
in each class of capital stock of each of its Subsidiaries and also identifies
the direct owner thereof.
(s) Each of Guarantor and its Subsidiaries is in compliance with all
applicable statutes, regulations and orders of, and all applicable restrictions
imposed by, all governmental bodies, domestic or foreign, in respect of the
conduct of its business and the ownership of its property (including applicable
statutes, regulations, orders and restrictions relating to environmental
standards and controls), except such noncompliances as could not, individually
or in the aggregate, reasonably be expected to have a material adverse effect on
Lessee's or Guarantor's ability to perform its obligations under the Operative
Documents or on the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of Guarantor and its
Subsidiaries taken as a whole.
(t) Neither Guarantor nor any of its Subsidiaries is an "investment
company" or a company "controlled" by an "investment company," within the
meaning of the Investment Company Act of 1940, as amended.
(u) Neither Guarantor nor any of its Subsidiaries is a "holding
company," or a "subsidiary company" of a "holding company," or an "affiliate" of
a "holding company" or of a "subsidiary company" of a "holding company" within
the meaning of the Public Utility Holding Company Act of 1935, as amended.
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(v) (i) Guarantor and each of its Subsidiaries have complied in all
material respects with, and are in compliance in all material respects
with, all applicable Environmental Laws and the requirements of any permits
issued under such Environmental Laws. There are no pending, past or
threatened Environmental Claims against Guarantor or any of its
Subsidiaries (including any such claim arising out of the ownership or
operation by Guarantor or any of its Subsidiaries of any Real Property no
longer owned by Guarantor or any of its Subsidiaries) or any Real Property
owned or operated by Guarantor or any of its Subsidiaries. There are no
facts, circumstances, conditions or occurrences with respect to any Real
Property owned or operated by Guarantor or any of its Subsidiaries or any
business or operations of Guarantor or any of its Subsidiaries (including
any Real Property formerly owned or operated by Guarantor or any of its
Subsidiaries but no longer owned by Guarantor or any of its Subsidiaries or
any business or operations thereof) or any property adjoining or in the
vicinity of any such Real Property that could reasonably be expected (i) to
form the basis of an Environmental Claim against Guarantor or any of its
Subsidiaries or any Real Property owned or operated by Guarantor or any of
its Subsidiaries, or (ii) to cause any Real Property owned or operated by
Guarantor or any of its Subsidiaries to be subject to any restrictions on
the ownership, occupancy or transferability of such Real Property by
Guarantor or any of its Subsidiaries under any applicable Environmental
Law.
(ii) Hazardous Materials have not at any time been generated, used,
treated or stored on, or transported to or from, any Real Property owned or
operated by Guarantor or any of its Subsidiaries except in a manner so as
not to give rise to an Environmental Claim. Hazardous Materials have not at
any time been Released on or from any Real Property owned or operated by
Guarantor or any of its Subsidiaries.
(iii) Notwithstanding anything to the contrary in this Section 2.3(v),
the representations made in this Section 2.3(v) shall not be untrue unless
the aggregate effect of all violations, claims, restrictions, failures and
noncompliances of the types described above could reasonably be expected to
have a material adverse effect on the business, operations, property,
assets, liabilities, condition (financial or otherwise) or prospects of
Guarantor and its Subsidiaries taken as a whole.
(w) Neither Guarantor nor any of its Subsidiaries is engaged in any
unfair labor practice that could reasonably be expected to have a material
adverse effect on Guarantor and its Subsidiaries taken as a whole. There is (i)
no unfair labor practice complaint pending against Guarantor or any of its
Subsidiaries or, to the best knowledge of Guarantor or Lessee, threatened
against any of them, before the National Labor Relations Board, and no
significant grievance or significant arbitration proceeding arising out of or
under any collective bargaining agreement is so pending against Guarantor or any
of its Subsidiaries or, to the best knowledge of Guarantor or Lessee, threatened
against any of them, (ii) no strike, labor dispute, slowdown or stoppage pending
against Guarantor or any of its Subsidiaries or, to the best knowledge of
Guarantor or Lessee, threatened against Guarantor or any of its Subsidiaries and
(iii) to the best knowledge of Guarantor or Lessee, no union representation
question existing with respect to the employees of Guarantor or any of its
Subsidiaries, except (with respect to any matter specified in clause (i), (ii)
or (iii) above, either individually or in the aggregate) such as could not
reasonably be expected to have a material adverse effect on the business,
operations, property, assets,
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liabilities, condition (financial or otherwise) or prospects of Guarantor and
its Subsidiaries taken as a whole.
(x) Each of Guarantor and its Subsidiaries owns all the patents,
trademarks, permits, service marks, trade names, copyrights, licenses,
franchises and formulas, or rights with respect to the foregoing, and has
obtained assignments of all leases and other rights of whatever nature,
necessary for the present conduct of its business, without any known conflict
with the rights of others which, or the failure to obtain which, as the case may
be, would result in a material adverse effect on the business, operations,
property, assets, liabilities, condition (financial or otherwise) or prospects
of Guarantor and its Subsidiaries taken as a whole.
(y) Schedule 6 sets forth a true and complete list of all Indebtedness
(including Contingent Obligations) of Guarantor and its Subsidiaries as of the
date hereof and which is to remain outstanding after such date (excluding the
Loans and the Lessee Senior Discount Notes, the "Existing Indebtedness"), in
each case showing the aggregate principal amount thereof and the name of the
respective borrower and any other entity which directly or indirectly guaranteed
such debt.
(z) At the time of consummation thereof, all material consents and
approvals of, and filings and registrations with, and all other actions in
respect of, all governmental agencies, authorities or instrumentalities required
in order to make or consummate the Guarantor IPO and the Repurchase, in each
case, to the extent then required have been obtained, given, filed or taken and
are or will be in full force and effect (or effective judicial relief with
respect thereto has been obtained). All applicable waiting periods with respect
thereto have or, prior to the time when required, will have, expired without, in
all such cases, any action being taken by any competent authority which
restrains, prevents, or imposes material adverse conditions upon the Guarantor
IPO or the Repurchase. Additionally, there does not exist any judgment, order or
injunction prohibiting or imposing material adverse conditions upon the
Guarantor IPO or the Repurchase. All actions taken by Guarantor pursuant to or
in furtherance of the Guarantor IPO or the Repurchase, as the case may be, have
been taken in compliance with the Revolver and all applicable laws except to the
extent consented to by the Administrative Agent and the Majority Lenders
thereto.
(aa) Schedule 8 sets forth a true and complete listing of all insurance
maintained by Guarantor and its Subsidiaries as of the date hereof, and with the
amounts insured (and any deductibles) set forth therein.
2.4. Lessor Representations and Warranties For Benefit of All Parties.
Lessor hereby represents and warrants as of the date hereof and on each Funding
Date for the benefit of each party hereto that:
(a) Lessor is a trustee acting on behalf of a trust duly established
and validly existing under the laws of the State of Delaware, has full power,
authority and legal right under such laws to execute, deliver and perform its
obligations under the Operative Documents to which it is a party.
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(b) The leasing and financing of the Equipment, the execution and
delivery of the Operative Documents and the other related instruments, documents
and agreements to which it is a party, and the compliance by Lessor with the
terms hereof and thereof and the payments and performance by Lessor of any of
its obligations hereunder and thereunder (i) have been duly and legally
authorized by all necessary action on the part of Lessor, (ii) are not in
contravention of, and will not result in a violation or breach of, any of the
terms of Lessor's declaration of trust and related trust instruments, and (iii)
will not violate or constitute a breach of any provision of law, any order of
any court or other agency of government, or any indenture, agreement or other
instrument to which Lessor is a party, or by or under which Lessor or any of
Lessor's property is bound, or be in conflict with, result in a breach of, or
constitute (with due notice and/or lapse of time) a default under any such
indenture, agreement or instrument, or result in the creation or imposition of
any Lien, other than Permitted Liens, upon any of Lessor's property or assets
and (iv) will not require, on the part of Lessor, the consent or approval of,
the giving of notice to, the registration with, or the taking of any other
action in respect of, any United States federal, state or local governmental or
public commission, board, authority or agency except for filings, if any, made
pursuant to any notice reporting requirement applicable to it.
(c) Each Operative Document to which it is a party has been executed by
the duly authorized officer or officers of Lessor and delivered to the other
parties thereto and constitutes, or when executed by the duly authorized officer
or officers of Lessor and delivered to the other parties thereto, will
constitute, the legal, valid and binding obligation of Lessor, enforceable in
accordance with its terms except as limited by any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights from time to time in effect and by general principles of
equity including those applicable to the enforceability of the remedy of
specific performance.
(d) There is no action, suit or other proceeding now pending or, to
Lessor's knowledge, threatened, against or affecting Lessor, in any court or
before any regulatory commission, board or other administrative governmental
agency (i) which will materially and adversely affect the interest of Lessee in
any Item of Equipment or any Operative Document, or the interest of the
Collateral Agent in any such Item or any Operative Document, or (ii) that could
reasonably be expected to materially and adversely affect the business,
operations, property, assets, liabilities, condition (financial or otherwise) or
prospects of Lessor.
(e) There is no tax, levy, impost, deduction, charge or withholding
which may be imposed on or asserted against the Lessor Collateral or any part
thereof or any interest therein, or against any Lender, the Administrative Agent
or the Collateral Agent either (i) on or by virtue of the execution or delivery
of Operative Documents or any other document contemplated thereby, or (ii) on
any payment to be made by Lessor pursuant to the Loan Documents or any other
document contemplated thereby to which Lessor is a party.
(f) Lessor has no indebtedness or other liabilities, whether contingent
or otherwise, other than its obligations under and as contemplated by the
Operative Documents.
(g) No Loan Default or Loan Event of Default not caused by a Lease
Default or Lease Event of Default has occurred and is continuing.
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(h) Neither Lessor nor any Person authorized by Lessor to act on its
behalf has offered or sold any interest in the Certificates, or in any similar
security relating to the transactions contemplated by the Operative Documents,
or in any security the offering of which for the purposes of the Securities Act
of 1933 would be deemed to be part of the same offering as the offering thereof,
or solicited any offer to acquire any of the same from, any Person other than
the parties hereto and not more than 18 other institutional investors, and
neither Lessor nor any Person authorized by Lessor to act on its behalf will
take any action which would subject the issuance or sale of any interest in the
Trust Estate or the Certificates or in any similar security relating to the
Equipment to the provisions of Section 5 of the Securities Act of 1933 or
require the qualification of any Operative Document under the Trust Indenture
Act of 1939, as amended.
2.5. Lessor Representations and Warranties For Benefit of Lenders,
Certificate Holders, the Administrative Agent and the Collateral Agent. Lessor
hereby represents and warrants as of the date hereof and on each Funding Date
for the benefit of each Lender, each Certificate Holder, the Administrative
Agent and the Collateral Agent that:
(a) No Lease Default or Lease Event of Default of which it has
knowledge has occurred and is continuing.
(b) Lessor's chief executive office and principal place of business is
located at Xxxxxx Square North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx
and Lessor's records with respect to the transactions contemplated by the
Operative Documents are located at such address.
(c) Lessor is duly qualified and is authorized to do business and is in
good standing in each jurisdiction where ownership, leasing or operation of its
property or the conduct of its business requires such qualifications except for
failures to be so qualified which, individually or in the aggregate, could not
reasonably be expected to have a material adverse effect on Lessor's ability to
perform its obligations or exercise its rights under the Operative Documents or
on the business, property, assets, liabilities, condition (financial or
otherwise) or prospects of Lessor.
2.6. Further Lessor Representations and Warranties For Benefit of
Lenders, Certificate Holders, the Administrative Agent and the Collateral Agent.
Lessor hereby represents and warrants as of each Funding Date for the benefit of
each Lender, each Certificate Holder, the Administrative Agent and the
Collateral Agent (and with respect to Section 2.6(a), Lessee) that:
(a) After giving effect to each Xxxx of Sale therefor, Lessor has good
and marketable title to each Item of Equipment (including the parts and
components thereof) and the Lessor Collateral is free and clear of all Liens
other than Permitted Liens.
(b) The provisions of this Agreement are effective to create in favor
of the Collateral Agent for the benefit of the Lenders a legal, valid and
enforceable security interest in all right, title and interest of the Lessor in
the Lessor Collateral, and, in reliance on the accuracy of the representation
and warranty of the Lessor in Section 2.5(b), the filing of the financing
statements executed by Lessor as debtor with the Secretary of State for the
State of Delaware and
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in the applicable filing office(s) in each state in which Items of Equipment are
located perfects such security interest in the Lessor Collateral, subject to no
Liens other than Permitted Liens and Lessor Liens and the Collateral Agent shall
be entitled to all of the rights, benefits, and priorities provided to a holder
of liens of such type under Applicable Law.
2.7. Trust Company Representations and Warranties. Trust Company hereby
represents and warrants as of the date hereof, and each Funding Date for the
benefit of each of the parties hereto that:
(a) Trust Company is a Delaware banking corporation, duly organized,
validly existing and in good standing under the laws of the State of Delaware,
and has full power, authority and legal right under such laws to execute,
deliver and perform its obligations under this Agreement and the Trust
Agreement.
(b) Each of the Trust Agreement and (to the extent of the covenants,
agreements, representations and warranties of Trust Company in its individual
capacity contained herein) this Agreement has been duly executed and delivered
by Trust Company, and (assuming due authorization, execution and delivery of the
Trust Agreement by Certificate Holders) the Trust Agreement and (to the extent
of the covenants, agreements, representations and warranties of Trust Company in
its individual capacity contained herein) this Agreement constitute a legal,
valid and binding obligation of Trust Company, enforceable against Trust Company
in accordance with its terms.
(c) Neither the execution or delivery by Trust Company of the Trust
Agreement or this Agreement nor the performance by Trust Company of its
obligations hereunder or thereunder (i) conflicts or will conflict with or
violate in any respect any applicable United States federal law governing the
banking or trust powers of Trust Company or any State of Delaware or United
States federal law governing the banking or trust powers of Trust Company or any
of its Affiliates, or any of their respective properties, (ii) conflicts or will
conflict with or violate Trust Company's articles of association or by-laws,
(iii) conflicts or will conflict with, or contravene, violate or result in a
breach of, any indenture, mortgage, loan agreement, lease or any other material
agreement or material instrument to which Trust Company or any of its Affiliates
is a party or by which any of their respective properties is bound, (iv) results
or will result in the creation or imposition of any Lien (other than Permitted
Liens) on the Lessor Collateral, or (v) requires or will require, on the part of
Trust Company or any Affiliate of Trust Company, the consent or approval of, the
giving of notice to, the registration with, or the taking of any other action in
respect of, any Governmental Entity governing the banking or trust powers of
Trust Company, except for filings, if any, made pursuant to any notice reporting
requirement applicable to it; provided that no representation is made as to any
laws, rules or regulations applicable to the particular nature of the Lessor
Collateral or the use thereof.
(d) Trust Company is not in breach of any covenants or agreements made
by it in the Trust Agreement or by it in its individual capacity in this
Agreement.
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(e) Trust Company's chief executive office is located in Wilmington,
Delaware, and Trust Company's records with respect to the transactions
contemplated by the Operative Documents are located at such address.
(f) There is no action, suit or other proceeding now pending or, to
Trust Company's knowledge, threatened, against or affecting Trust Company, in
any court or before any regulatory commission, board or other administrative
governmental agency (i) which will materially and adversely affect the rights of
any other party hereto in any Operative Document or the right, title or interest
of Lessor to any Item of Equipment, or the interest of the Collateral Agent in
any Item of Equipment or any other Lessor Collateral or (ii) that could
reasonably be expected to materially and adversely affect the business,
operations, property, assets, liabilities, condition (financial or otherwise) or
prospects of Trust Company.
(g) Trust Company has not assigned or transferred any of its right,
title or interest in or under the Operative Documents except in accordance
therewith.
(h) No Loan Event of Default attributable to Trust Company has occurred
and is continuing.
(i) There are no Lessor Liens attributable to Trust Company on the
Trust Estate or any part thereof, and the execution, delivery and performance by
Trust Company of the Operative Documents to which it is a party will not subject
the Trust Estate to any Lessor Liens attributable to it.
(j) Except for Taxes based upon the income of any Person, there are no
Taxes payable by Trust Company in Delaware in connection with the execution,
delivery, consummation or recordation of the Operative Documents, upon or with
respect to the Trust Estate, or in connection with the consummation of the
transactions contemplated hereby or by the other Operative Documents solely
because the principal place of business of the Trust Company is in Delaware
(k) Neither the Trust Company nor any Person authorized by it to act on
its behalf has offered or sold any interest in the Trust Estate or the
Certificates, or in any similar security relating to the transaction
contemplated by the Operative Documents, or in any security the offering of
which for the purposes of the Securities Act would be deemed to be part of the
same offering as the offering thereof, or solicited any offer to acquire any of
the same from, any Person other than the parties hereto.
(l) Trust Company is not an "investment company" or a company
"controlled" by an "investment company," within the meaning of the Investment
Company Act of 1940, as amended.
2.8. Representations and Warranties of Deutsche Bank in its capacity as
a Certificate Holder. Deutsche Bank, in its capacity as a Certificate Holder,
represents and warrants that as of the date hereof and on each Funding Date for
the benefit of each other party hereto that:
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(a) It is a New York branch of a German bank duly organized under the
laws of the Federal Republic of Germany, has full corporate power and authority
and legal right under such laws to execute, deliver and perform its obligations
under the Operative Documents to which it is a party and is qualified to do
business in, is in good standing in all material respects in, each jurisdiction
in which the nature of its business makes such qualification necessary, except
where failure to be so qualified and in good standing would not have a material
adverse effect on its ability to perform its obligations under the Operative
Documents to which it is a party.
(b) The execution and delivery of the Operative Documents and the other
related instruments, documents and agreements to which it is a party, and the
compliance by it with the terms hereof and thereof and the payments and
performance by it of any of its obligations hereunder and thereunder (i) have
been duly and legally authorized by all necessary corporate action on its part,
(ii) are not in contravention of, and will not result in a violation or breach
of, any of the terms of its certificate of incorporation (or equivalent
document), its by-laws or any provisions relating to its capital stock, (iii)
will not violate or constitute a breach of any provision of law, any order of
any court or other agency of government, or any indenture, agreement or other
instrument to which it is a party, or by or under which it is bound, or be in
conflict with, result in a breach of, or constitute (with due notice and/or
lapse of time) a default under any such indenture, agreement or instrument, or
result in the creation or imposition of any Lien upon any of its property or
assets and (iv) will not require, on its part or any Affiliate's part thereof,
the consent or approval of, the giving of notice to, the registration with, or
the taking of any other action in respect of, any United State federal, state or
local governmental or public commission, board, authority or agency except for
filings, if any, made pursuant to any notice reporting requirement applicable to
it.
(c) Each Operative Document to which it is a party has been executed by
its duly authorized officer or officers and delivered to the other parties
thereto and constitutes, or when executed by its duly authorized officer or
officers and delivered to the other parties thereto, such Operative Documents
will constitute, legal, valid and binding obligations enforceable in accordance
with their terms except as limited by any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights from time to time in effect and by general principles of
equity including those applicable to the enforceability of the remedy of
specific performance;
(d) It is not in breach of any covenants or agreements made by it in
the Trust Agreement or in this Agreement;
(e) There are no actions, suits or proceedings pending or, to the best
of its knowledge, threatened before any court or by or before any other
Government Entity, or any arbitrator, which either individually or in the
aggregate, would have a material adverse effect on the Lessor Collateral or on
the right, power and authority of its ability to perform its obligations under
any Operative Document to which it is a party.
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(f) There are no Lessor Liens attributable to it on the Trust Estate or
on any part thereof, and the execution, delivery and performance by it of the
Operative Documents to which it is a party will not subject the Trust Estate to
any Lessor Liens attributable to it.
2.9. Lenders and Certificate Holders Representations and Warranties.
Each of the Lenders and the Certificate Holders hereby represents and warrants
as of the date hereof, the Closing Date and on each Funding Date for the benefit
of the each party hereto that it has not used and shall not use the assets of an
"employee benefit plan" as defined in Section 3(3) of ERISA or a "plan" as
defined in Section 4975(e) of the Code to fund any Loan or make any Equity
Contribution or other payment under the Operative Documents.
2.10. Warranty Disclaimers. EACH OF LESSOR, EACH CERTIFICATE HOLDER,
EACH LENDER, THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT AS APPLICABLE
DEMISE, LEASE AND FINANCE THE ITEMS OF EQUIPMENT HEREUNDER AS-IS AND WHERE-IS
WITH ALL FAULTS IF ANY AND IN WHATEVER CONDITION THEY MAY BE IN AND EXPRESSLY
DISCLAIMS AND MAKES NO REPRESENTATION OR WARRANTY, EITHER EXPRESSED OR IMPLIED,
AS TO THE DESIGN, CONDITION, QUALITY, CAPACITY, MERCHANTABILITY, DURABILITY,
SUITABILITY OR ITS FITNESS FOR ANY PARTICULAR PURPOSE, OR QUALIFICATION FOR ANY
PARTICULAR TRADE OR ANY OTHER MATTER CONCERNING, THE ITEMS OF EQUIPMENT. LESSEE
HEREBY WAIVES ANY CLAIM (INCLUDING ANY CLAIM BASED ON STRICT OR ABSOLUTE
LIABILITY IN TORT OR INFRINGEMENT) IT MIGHT HAVE AGAINST LESSOR, ANY CERTIFICATE
HOLDER, ANY LENDER, THE TRUST COMPANY, THE ADMINISTRATIVE AGENT OR COLLATERAL
AGENT FOR ANY LOSS, DAMAGE (INCLUDING INCIDENTAL OR CONSEQUENTIAL DAMAGE) OR
EXPENSE CAUSED BY ANY ITEM OF EQUIPMENT EXCEPT TO THE EXTENT CAUSED BY SUCH
PARTY'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OR BY LESSEE'S LOSS OF USE
THEREOF FOR ANY REASON WHATSOEVER. LESSOR HEREBY WAIVES ANY CLAIM (INCLUDING ANY
CLAIM BASED ON STRICT OR ABSOLUTE LIABILITY IN TORT OR INFRINGEMENT) IT MIGHT
HAVE AGAINST ANY CERTIFICATE HOLDER, ANY LENDER, THE TRUST COMPANY, THE
ADMINISTRATIVE AGENT OR COLLATERAL AGENT FOR ANY LOSS, DAMAGE (INCLUDING
INCIDENTAL OR CONSEQUENTIAL DAMAGE) OR EXPENSE CAUSED BY ANY ITEM OF EQUIPMENT
EXCEPT TO THE EXTENT CAUSED BY SUCH PARTY'S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OR BY LESSOR'S LOSS OF USE THEREOF FOR ANY REASON WHATSOEVER.
3. Conditions Precedent.
3.1. Lessor Conditions.
(a) Conditions Precedent to the Closing Date. Lessor shall have no
obligation to acquire any Item of Equipment and subject it to the Lease
Agreement unless on the Closing Date each of the following conditions are
fulfilled:
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(i) Lessor shall have received this Agreement, the Lease Agreement,
the Assembly Agency Agreement, the Loan Agreement and the Trust Agreement,
in each case duly authorized, executed and delivered by each other party
thereto.
(ii) Lessor shall have received from Lessee, in form and substance
satisfactory to Lessor, resolutions of the boards of directors of Lessee or
other written evidence of appropriate corporate action, and the certificate
of incorporation and by-laws, each certified as of the Closing Date by the
secretary of Lessee, duly authorizing the execution, delivery and
performance of this Agreement, the Lease Agreement, the Assembly Agency
Agreement and each other document to be delivered in connection therewith
to which it is a party, together with an incumbency certificate as to the
person or persons authorized to execute and deliver such documents on
behalf of Lessee.
(iii) Lessor shall have received from Guarantor, in form and substance
satisfactory to Lessor, resolutions of the boards of directors of Guarantor
or other written evidence of appropriate corporate action, and the
certificate of incorporation and by-laws, each certified by the secretary
of Guarantor as of the Closing Date, duly authorizing the execution,
delivery and performance of the Participation Agreement and each other
document to be delivered in connection therewith to which it is a party,
together with an incumbency certificate as to the person or persons
authorized to execute and deliver such documents on behalf of Guarantor.
(iv) Lessor shall have received written opinions of Xxxxxxx Xxxx &
Xxxxx LLP, counsel to Lessee and Guarantor, dated the Closing Date and
addressed to Lessor, each Lender, each Certificate Holder, the
Administrative Agent and the Collateral Agent in form attached hereto as
Exhibit E-1.
(v) Lessor shall have received a written opinion of Xxxxxxx Banner,
Esq., in-house counsel to Lessee and Guarantor, dated the Closing Date and
addressed to Lessor, each Lender, each Certificate Holder, the
Administrative Agent and the Collateral Agent in form attached hereto as
Exhibit E-2.
(vi) Lessee shall have delivered good standing certificates dated
within five (5) days of the Closing Date from the state in which the Lessee
is incorporated and Guarantor shall have delivered a good standing
certificate dated within five (5) days of the Closing Date from the state
in which Guarantor is incorporated.
(vii) The Administrative Agent and Lessor shall have received an
Appraisal for all Equipment sold by Lessee to Lessor on the Closing Date.
(viii) The Administrative Agent shall have received the administrative
fee and all other fees as set forth in the letter agreement dated May 22,
2000 between the Administrative Agent and Lessee.
(b) Conditions Precedent to each Funding Date. In addition to the
conditions in Section 3.1(a), Lessor shall have no obligation to purchase any
Component or acquire any Item
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of Equipment and lease it back to Lessee on a Funding Date (including on the
Closing Date if applicable) unless on such Funding Date the following conditions
are fulfilled:
(i) There shall exist no Lease Default or Lease Event of Default and
all representations and warranties of Lessee and Guarantor contained herein
and in the other Operative Documents shall be true and correct in all
material respects with the same effect as though such representations and
warranties had been made on and as of such Funding Date except to the
extent made as of an earlier date.
(ii) Such Item of Equipment conforms to the requirements set forth in
Schedule 1 hereto.
(iii) Such Component or Item of Equipment is free of all Liens other
than Permitted Liens and Lessor Liens.
(iv) The Acquisition Cost of such Component or such Item of Equipment
when added to the total Acquisition Cost of all Items of Equipment
theretofore financed hereunder and all Equipment to be financed on the same
Funding Date, is less than or equal to the Maximum Acquisition Cost.
(v) Lessor and the Administrative Agent shall have received at least
three (3) Business Days prior to the date the Funding Notice for such
funding is due, a Certificate of Equipment with respect to such Component
or Item, duly executed by the Lessee.
(vi) All licenses, registrations, permits, consents and approvals
required by Applicable Laws or by any Governmental Entity (A) in connection
with Lessor's rights and interests in such Item of Equipment to the extent
such licenses, registrations, permits, consents or approvals are required
because of the nature of the Equipment and (B) in connection with the
delivery, acquisition, assembly, use and operation of such Item of
Equipment shall have been obtained to the satisfaction of Lessor.
(vii) Lessee shall have paid all of the reasonable costs and expenses
incurred by Trust Company, Lessor, Deutsche Bank as Lender and Certificate
Holder, the Administrative Agent and the Collateral Agent (including
attorneys' fees), and required to be paid by Lessee under the Operative
Documents (including those in relation to the negotiation, preparation and
execution of the Operative Documents to be executed and delivered on or
before such Funding Date), in each case invoiced at least one day prior to
such Funding Date.
(viii) Lessor shall have received the proceeds of the Loans
contemplated by the relevant Funding Notice.
(ix) Lessor shall have received from the Certificate Holders an amount
equal to the aggregate Equity Components of such Components and/or Items of
Equipment.
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(x) The Administrative Agent shall have received at least three (3)
LIBOR Banking Days before the Funding Date a Funding Notice executed and
delivered by Lessee.
(xi) Lessor, Certificate Holders, the Administrative Agent and the
Collateral Agent shall have received an insurance certificate in form and
substance satisfactory to the Administrative Agent confirming that such
Item of Equipment is insured in accordance with the provisions of Section
20 of the Lease Agreement.
(xii) Lessee shall have delivered to the Administrative Agent and
Lessor a Lease Agreement Supplement for such Component or Item of
Equipment.
(xiii) Lessee shall have executed and delivered to the Administrative
Agent copies of the Lessee Financing Statements for such Components or
Items of Equipment with evidence reasonably acceptable to Lessor that such
have been recorded in the state in which such Item of Equipment is located
and, if the law of such state requires financing statements to be filed in
one or more local jurisdictions within such state, in such local
jurisdiction.
(xiv) The Administrative Agent and Lessor shall have received at any
time prior to such Funding Date opinions of special counsel to Lessee
addressed to the Administrative Agent, the Collateral Agent, and the
Lenders in form and substance reasonably satisfactory to Lessor and the
Administrative Agent with respect to the perfection of the interests of
Lessor in Equipment located in the state in which such Item is located.
(xv) The Administrative Agent and Lessor shall have received at any
time prior to such Funding Date lien searches reasonably acceptable to them
in form and substance in the name of Lessee and Guarantor searching the
Uniform Commercial Code records of, with respect to Guarantor, the State of
Texas, and with respect to Lessee, each state in which an Item of
Equipment, and in states that require filings in local jurisdictions in
order to perfect a security interest in an Item of Equipment, each such
local jurisdiction, each indicating that, after the filing of those UCC
release or termination statements, if any, executed and delivered by Lessee
and all other relevant Persons to the Lessor and the Administrative Agent
on or before the Closing Date, the representations set forth in Sections
2.2(d) and 2.3(p) will be accurate and complete in all respects to the
extent determinable from such searches.
(xvi) Lessor shall have received such other confirmatory assignments,
conveyances, financing and continuation statements, transfer endorsements
and other assurances or instruments other than estoppel certificates or
other agreements, certificates or other documents to be delivered by any
Sublessee or other Person (other than an Affiliate of Lessee) which Lessor
may reasonably request to perfect, preserve or protect Lessor's security
interest granted under Section 9 of the Lease Agreement, in form and
substance satisfactory to Lessor, as Lessor may reasonably request in
writing at least five (5) Business Days before such Funding Date.
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(c) Lessor Conditions to the Funding Date for each Sale/Leaseback. In
addition to the conditions in Section 3.1(a) and (b), for each Item of Equipment
Lessee proposes to sell to Lessor, Lessor shall have no obligation to acquire
such Item of Equipment and lease it back to Lessee on a Funding Date (including
the Closing Date if applicable) unless Lessee shall have executed and delivered
to Lessor a Xxxx of Sale for such Item.
(d) Lessor Conditions to the First Funding Date for an Item of
Equipment to be Assembled. In addition to the conditions in Section 3.1(a) and
(b), for each Item of Equipment to be assembled by Lessee for Lessor pursuant to
the Assembly Agency Agreement, Lessor shall have no obligation to reimburse
Lessee for the cost of any Component for such Item of Equipment and lease it
back to Lessee until the following conditions are fulfilled:
(i) Lessee shall have delivered to Lessor and the Administrative Agent
at least 30 days prior to such Funding Date a Master Budget that includes
estimated costs for each Component for Equipment of the same type as such
Item.
(ii) Lessee shall have delivered to Lessor and the Administrative
Agent at least 20 days prior to such Funding Date a Budget for such Item
and the estimated cost for each Component in such Budget shall be no
greater than 110% of the estimated cost for such Component in the Master
Budget.
(e) Lessor Conditions to each Funding Date for an Item of Equipment to
be Assembled. In addition to the conditions in Section 3.1(a), (b) and (d), for
each Item of Equipment to be assembled by Lessee for Lessor pursuant to the
Assembly Agency Agreement, Lessor shall have no obligation to reimburse Lessee
for the cost of any Component for such Item of Equipment and lease it back to
Lessee unless on the Funding Date (including the Closing Date if applicable) for
such reimbursement the following conditions are fulfilled:
(i) The amount to be reimbursed for each Component is, subject to the
Budget Parameters, equal to or less than the amount set forth in the Budget
for such Item of Equipment.
(ii) For each Component that is a natural gas driver, compressor or
air cooler, Lessee shall have delivered to Lessor at least three (3)
Business Days prior to the date the Funding Notice is due for such Funding
Date a Xxxx of Sale, invoice or purchase order evidencing Lessor's
ownership of such Component in form and substance reasonably satisfactory
to Lessor.
(iii) Except on the final Funding Date for an Item of Equipment, the
amount to be reimbursed shall be for the acquisition of the natural gas
driver, compressor or the air cooler for such Item.
(iv) Lessee shall have executed and delivered to Lessor a Certificate
of Equipment for Items of Equipment to be assembled in the form of Exhibit
B-2 for such Item at least three (3) Business Days prior to the date the
Funding Notice for such funding is due.
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(v) After the initial Funding Date, Lessee shall have delivered to
Lessor an amended and restated Lease Agreement Supplement for such Item,
which amended and restated Lease Agreement Supplement shall include the
total Acquisition Cost and Casualty Loss Value for such Item as of such
Funding Date.
(f) Lessor Conditions for Final Funding Date for an Assembled Item of
Equipment. In addition to the conditions in Section 3.1(a), (b), (d) and (e),
for each Item to be assembled by Lessee for Lessor pursuant to the Assembly
Agency Agreement, Lessor shall have no obligation to reimburse Lessee for the
remaining cost of any Component for such Item of Equipment and lease it back to
Lessee unless on the Funding Date for such final reimbursement Lessee shall have
delivered to Lessor a Completion Certificate for such Item of Equipment in the
form of Exhibit D.
Each leasing of an Item of Equipment by Lessee hereunder shall
constitute a representation and warranty by Lessee as of the date such leasing
commences that the conditions contained in Section 3.1 have been satisfied.
3.2. Lender Conditions.
(a) Lender Conditions on the Closing Date. No Lender shall have any
obligation to make a Loan for the reimbursement of the cost of any Component or
the acquisition of any Item of Equipment hereunder unless on the Closing Date
each of the following conditions are fulfilled:
(i) Such Lender shall have received original counterparts (unless
otherwise specified) in each case duly authorized, executed and delivered
by each other party thereto in form and substance satisfactory to such
Lender and in full force and effect of this Agreement, the Loan Agreement
and its Note and copies of the Trust Agreement, the Lease Agreement, and
the Assembly Agency Agreement.
(ii) Such Lender shall have received from Trust Company, in form and
substance satisfactory to such Lender, the certificate of incorporation and
by-laws, each certified as of the Closing Date by the secretary of Trust
Company, duly authorizing the execution, delivery and performance of this
Agreement, the Lease Agreement, the Assembly Agency Agreement and each
other document to be delivered in connection therewith to which it is a
party, together with an incumbency certificate as to the person or persons
authorized to execute and deliver such documents on behalf of Trust
Company.
(iii) Such Lender shall have received written opinions of counsel to
Lessor and Trust Company dated the Closing Date and addressed to each
Lender, each Certificate Holder, the Administrative Agent, and the
Collateral Agent, in the form attached hereto as Exhibit E-3.
(b) Lender Conditions for each Funding Date. No Lender shall have any
obligation to make a Loan for the reimbursement of the cost of any Component or
the acquisition
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of any Item of Equipment hereunder unless on the Funding Date therefor each of
the following conditions are fulfilled:
(i) The conditions precedent to Lessor's obligation to lease such Item
of Equipment in accordance with the terms hereof (except for the condition
precedent set forth in Section 3.1(b)(viii)) shall have been satisfied,
without waiver or modification (except as consented to by Majority
Lenders), and such Lender shall have received copies of all documents and
opinions with respect thereto.
(ii) The Administrative Agent shall have received, in each case duly
authorized, executed and delivered by Lessor in form and substance
satisfactory to the Administrative Agent and in full force and effect,
copies of the Lessor Financing Statements for such Item of Equipment with
evidence reasonably acceptable to the Administrative Agent that such have
been recorded in the state in which such Item of Equipment is located and,
if the law of such state requires financing statements to be filed in local
jurisdictions within such state, in such local jurisdiction.
(iii) There shall exist no Loan Default or Loan Event of Default and
all representations and warranties of Lessor contained herein and in the
other Operative Documents shall be true and correct with the same effect as
though such representations and warranties had been made on and as of such
Funding Date except to the extent made as of an earlier date.
(iv) On and as of the Funding Date, after giving effect to the Loan to
be made on such date, the aggregate of the original principal amounts of
all Loans made by such Lender do not exceed such Lender's Lender
Commitment.
(v) At any time prior to such Funding Date, the Administrative Agent
shall have received opinions of counsel addressed to the Administrative
Agent, the Collateral Agent, and the Lenders in form and substance
reasonably satisfactory to the Administrative Agent with respect to the
perfection of its interest in Equipment in the state in which such Item of
Equipment is located.
(vi) The Administrative Agent shall have received such other
confirmatory assignments, conveyances, financing and continuation
statements, transfer endorsements and other assurances or instruments other
than estoppel certificates or other agreements, certificates or other
documents to be delivered by any Sublessee or other Person (other than an
Affiliate of Lessee) which Majority Lenders may reasonably request to
perfect, preserve or protect the Collateral Agent's security interest
granted hereunder, in form and substance satisfactory to Majority Lenders
as Majority Lenders may reasonably request in writing at least five (5)
Business Days before such Funding Date.
Each borrowing by Lessor under the Loan Agreement shall constitute a
representation and warranty by Lessor to such Lender as of the date of the
Funding Date for such borrowing such that the conditions contained in this
Section 3.2 have been satisfied.
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3.3. Certificate Holders Conditions
(a) Certificate Holder Conditions on the Closing Date. No Certificate
Holder shall have any obligation to make an Equity Contribution for the
reimbursement of the cost of any Component or the acquisition of any Item of
Equipment hereunder unless on the Closing Date each of the following conditions
are fulfilled:
(i) Such Certificate Holder shall have original counterparts (unless
otherwise specified) in each case duly authorized, executed and delivered
by each other party thereto in full force and effect of this Agreement, the
Trust Agreement and its Certificate and the copies of the Loan Agreement,
the Lease Agreement, the Assembly Agency Agreement and the Notes.
(ii) Such Certificate Holder shall have received from Trust Company,
in form and substance satisfactory to such Certificate Holder, the
certificate of incorporation, by-laws and the resolution of the board
approving of the transaction contemplated herein, each certified as of the
Closing Date by the secretary of Trust Company, duly authorizing the
execution, delivery and performance of this Agreement, the Lease Agreement,
the Assembly Agency Agreement and each other document to be delivered in
connection therewith to which it is a party, together with an incumbency
certificate as to the person or persons authorized to execute and deliver
such documents on behalf of Trust Company.
(iii) Such Certificate Holder shall have received written opinions of
counsel to Lessor and Trust Company dated the Closing Date and addressed to
each Lender, each Certificate Holder, the Administrative Agent and the
Collateral Agent, in the form attached hereto as Exhibit E-3.
(b) Certificate Holder Conditions for each Funding Date. No Certificate
Holder shall have any obligation to make an Equity Contribution for the
reimbursement of the cost of any Component or the acquisition of any Item of
Equipment hereunder unless on the Funding Date therefor each of the following
conditions are fulfilled:
(i) The conditions precedent to Lessor's obligation to lease such Item
of Equipment in accordance with the terms hereof (except for the condition
precedent set forth in Section 3.1(b)(ix)) shall have been satisfied,
without waiver or modification (except as consented to by Majority
Certificate Holders), and such Certificate Holder shall have received
copies of all documents and opinions with respect thereto and any other
evidence of satisfaction of such conditions as Certificate Holder may
reasonably request.
(ii) There shall exist no Loan Default or Loan Event of Default (other
than a Loan Default or Loan Event of Default resulting from any act or
omission by such Certificate Holder) and all representations and warranties
of Trust Company contained herein and in the other Operative Documents
shall be true and correct with the same
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effect as though such representations and warranties had been made on and
as of such Funding Date.
(iii) On and as of the Funding Date, after giving effect to the Equity
Contributions to be made on such date, the aggregate of all Equity
Contributions made by such Certificate Holder does not exceed such
Certificate Holder's Certificate Holder Commitment.
4. Commitments and Fundings.
4.1. Certificate Holder Commitments. Subject to and upon the terms and
conditions set forth in Section 3 herein set forth for the benefit of
Certificate Holders and Lessor, each Certificate Holder agrees to make multiple
equity contributions to Lessor during the Commitment Period in an aggregate
amount up to the amount of its Certificate Holder's Commitment (each such
contribution, an "Equity Contribution"). The aggregate of the Equity
Contributions to be made on any Funding Date shall be equal to three (3) percent
of the total Acquisition Costs funded on such date. Each party hereto agrees
that, except as provided below, no Certificate Holder shall be required to make
any Equity Contribution hereunder in an amount in excess of its Pro Rata Share
of the Equity Components to be funded on any Funding Date. Each Certificate
Holder's obligation hereunder is several, such that the failure of any
Certificate Holder to make an Equity Contribution or satisfy any other
obligation shall not relieve any other Certificate Holder of its obligations
hereunder, and if any Certificate Holder shall fail to make an Equity
Contribution hereunder each other Certificate Holder shall make an additional
Equity Contribution in an amount equal to its Pro Rata Share of the Equity
Contribution that was to have been made by the defaulting Certificate Holder,
provided that the maximum aggregate amount of Equity Contributions that any
Certificate Holder shall be obligated to make shall not exceed its Certificate
Holder Commitment. Any Equity Contribution made by another Certificate Holder of
a portion of an Equity Contribution to have been made by a defaulting
Certificate Holder shall not relieve such defaulting Certificate Holder of its
obligations hereunder. If the conditions to the obligations of any Certificate
Holder specified in Section 3.3 have not been fulfilled or waived by it on or
before the last day of the Commitment Period, such Certificate Holder shall be
relieved of all further obligations to make new Equity Contributions under the
Operative Documents after the last day of the Commitment Period.
4.2. Lender Commitments. Subject to and upon the terms and conditions
set forth in Section 3 for the benefit of Lenders, each Lender agrees to make
multiple, non-revolving loans to Lessor during the Commitment Period in an
aggregate principal amount up to the amount of its Lender Commitment (each such
advance, a "Loan"). The aggregate of all Loans to be made by Lenders on each
Funding Date shall be in an amount of at least $4,850,000 (except the last Loans
funded prior to the termination of the Commitment Period, which Loans shall not
be subject to a minimum) and shall be equal to 97 percent of the total
Acquisition Costs funded on such date. Each party hereto agrees that, except as
provided below, no Lender shall be required to make any Loan hereunder in an
amount in excess of its Pro Rata Share of the Debt Components to be funded on
any Funding Date. Each Lender's obligation hereunder is several, such that the
failure of any Lender to make a Loan or satisfy any other obligation shall not
relieve any other Lender of its obligations hereunder, and if any Lender shall
fail to make a Loan
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hereunder each other Lender shall make an additional Loan in an amount equal to
its Pro Rata Share of the Loan that was to have been made by the defaulting
Lender, provided that the maximum aggregate amount of Loans that any Lender
shall be obligated to make shall not exceed its Lender Commitment. Any Loan made
by another Lender of a portion of a Loan to have been made by a defaulting
Lender shall not relieve such defaulting Lender of its obligations hereunder. If
the conditions to the obligations of any Lender specified in Section 3.2 have
not been fulfilled or waived by it on or before the last day of the Commitment
Period, such Lender shall be relieved of all further obligations to make new
Loans under the Operative Documents after the last day of the Commitment Period.
Nothing in this Section 4.2 shall operate to relieve Lessor, Lessee or Guarantor
from their respective obligations under the Operative Documents or to waive any
Lender's rights against Lessor, Lessee or Guarantor.
4.3. Lessor Commitment to Purchase. Subject to and upon the terms and
conditions herein set forth for the benefit of Lessor, Lessee may sell to Lessor
during the Commitment Period and in such event Lessor agrees to buy for the
Acquisition Cost thereof and lease back to Lessee on the Funding Date therefor
certain natural gas compressor equipment. The natural gas compressor equipment
to be sold by Lessee to Lessor pursuant to this Agreement shall include only
natural gas compressor equipment of the type(s) described on Schedule 1 hereto,
provided that the aggregate of the Acquisition Costs of all Items of Equipment
purchased by Lessor from Lessee and all Items of Equipment assembled by Lessee
on behalf of Lessor in accordance with the Assembly Agency Agreement shall not
exceed the Maximum Acquisition Cost.
4.4. Lessor Commitment to Reimburse Component Costs. Subject to and
upon the terms and conditions set forth herein and in the Assembly Agency
Agreement for the benefit of Lessor, Lessor shall reimburse Lessee for the
Acquisition Cost of each Item of Equipment assembled by Lessee on behalf of
Lessor in accordance with the Assembly Agency Agreement, provided the aggregate
of such Acquisition Costs of all Items of Equipment and the Items of Equipment
purchased by Lessor from Lessee shall not exceed the Maximum Acquisition Cost.
4.5. Amendment of Master Budget. Lessee may from time to time amend and
supplement the Master Budget with the prior written consent of the Majority
Certificate Holders and the Majority Lenders (such consent not to be
unreasonably withheld or delayed)
4.6. Lease Agreement Supplements. Upon the sale and leaseback of an
Item of Equipment in accordance with Section 4.3 or upon acquisition by Lessor
of an Item of Equipment or a Component thereof in accordance with the Assembly
Agency Agreement Lessee shall execute and deliver to Lessor a Lease Agreement
Supplement for such Item of Equipment or Component which Lease Agreement
Supplement upon satisfaction of the conditions precedent in Section 3.1 shall
thereafter be executed by Lessor and a signed counterpart provided to Lessee.
Upon execution and delivery by Lessee of such Lease Agreement Supplement, such
Item of Equipment or Component shall automatically become in accordance with
this Section 4.6 subject to the Lease Agreement and an "Item of Equipment"
thereunder.
4.7. Rights in Equipment. Upon the execution and delivery by Lessee of
Lease Agreement Supplement relating to an Item of Equipment and satisfaction of
the other applicable
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conditions precedent set forth in Section 3, Lessor shall have good and
marketable title to such Item of Equipment subject only to Permitted Liens and
Lessor Liens and shall be obligated to pay or reimburse Lessee in full for the
Acquisition Cost of such Item of Equipment in accordance with the provisions of
this Agreement and the Assembly Agency Agreement, provided that nothing in this
Section 4.7 shall affect in any manner the respective rights and obligations of
Lessor and Lessee under the Lease Agreement or shall reduce or diminish any
claim or remedy for damages which Lessor or Lessee might assert for any breach
or violation of the terms of the Lease Agreement or of this Agreement.
4.8. Funding Dates. From time to time on any Funding Date, and in any
event no later than the last date of the Interim Term, Lessee may request
payment from Lessor of amounts owed by Lessor to Lessee in connection with the
sale and leaseback of Items of Equipment in accordance with the terms hereof and
of the Lease Agreement and in accordance with Lessor's reimbursement obligations
hereunder and under the Assembly Agency Agreement. The Funding Notices delivered
by Lessee for any Funding Date other than the last Funding Date shall in the
aggregate request payment in an amount at least equal to $5,000,000, the last
Funding Date not being subject to a minimum, and shall specify the proposed
Funding Date. Lessee may request payment or reimbursement of Acquisition Costs
in an aggregate amount not to exceed the excess of the Maximum Acquisition Cost
over the aggregate Acquisition Costs of all Items of Equipment previously leased
by Lessor. Lessee represents and agrees that all payments for which
reimbursement will be so requested by it will represent amounts which have been
incurred or paid by Lessee on its own account or as agent for Lessor under the
Assembly Agency Agreement and for which it has not received and will not receive
any commission, allowance, rebate or other profit. If the conditions in Section
3.1 are satisfied or waived and the Lenders and Certificate Holders make
available to Lessor the funds necessary to pay or reimburse Acquisition Costs on
or before 2:00 p.m. (New York time) on a Business Day, Lessor shall make
available to Lessee on the same Business Day the amount of Acquisition Costs to
be paid or reimbursed to Lessee in immediately available funds. If such funds
are not available until after 2:00 p.m. (New York time) on a Business Day,
Lessor shall make available to Lessee on the next succeeding Business Day the
amount of the Acquisition Costs to be paid or reimbursed in immediately
available funds; provided, however, the Funding Date shall be deemed to be the
previous Business Day on which the funding was to have occurred. Payment of
amounts on account of the Acquisition Cost of Items of Equipment shall be made
by wire transfer to the account of the Lessee identified on the signature page
hereto (or such other bank or account maintained in the United States as Lessee
shall designate in writing to Lessor, each Certificate Holder, each Lender and
Administrative Agent no later than 11:00 a.m. (New York time) on the Business
Day preceding the Funding Date).
4.9. Adjustment of Acquisition Cost. If the Appraisal due six (6)
Business Days before the Basic Term Commencement Date in accordance with Section
14 of the Lease shows a fair market value of any Item of Equipment, as of the
date of such Appraisal, in excess of the Acquisition Cost of such Item, then,
subject to satisfaction of the conditions in Section 3, Lessor shall pay to
Lessee on the Basic Term Commencement Date as a supplement to the Acquisition
Cost paid under Section 4.3 or the reimbursement amount paid under Section 4.4
for such Item of Equipment (and the Certificate Holders and Lenders will make
Equity Contributions and Loans, respectively, on a pro rata basis in accordance
with, and subject to, their
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Commitments) in the amount of such excess. In the event that any such payment is
made, and as a condition thereto, Lessee shall deliver to Lessor an amended and
restated Lease Agreement Supplement reflecting the Acquisition Cost for such
Item, as supplemented.
4.10. Funding Escrow. Each party hereto hereby informs and instructs
the Collateral Agent on each proposed Funding Date as follows:
(a) Upon satisfaction of the conditions precedent set forth in
Sections 3.1 and 3.3, each of the Certificate Holders shall deposit into
the Collateral Agent Account its Pro Rata Share of the Equity Amount set
forth in the Funding Notice for such funding;
(b) Upon satisfaction of the conditions precedent set forth in
Sections 3.1 and 3.2 of this Participation Agreement each of Lenders shall
deposit into the Collateral Agent Account its Pro Rata Share of the Debt
Amount set forth in the Funding Notice for such funding; and
(c) Upon deposit into the Collateral Agent Account of all amounts
referenced in clauses (i) and (ii) above and written instruction from the
Administrative Agent, the Collateral Agent shall release to Lessee from the
Collateral Agent Account aggregate of the amounts referenced in clauses (a)
and (b) above (the "Acquisition Amount") by wire transfer to Lessee's
account as described in the Funding Notice.
(d) If Collateral Agent does not receive all of the funds or the
instructions referenced in the Funding Notice from the Lenders and
Certificate Holders or from the Administrative Agent in accordance with
Section 4.11 by 2:00 p.m. (New York time) on the proposed Funding Date, it
shall invest such funds until the next Business Day in accordance with the
instructions of each of the Certificate Holders and Lenders that deposited
such funds or in the case of any amounts advanced by the Administrative
Agent pursuant to Section 4.11, in accordance with the instructions of the
Administrative Agent.
(e) If Collateral Agent does not receive all of the funds or the
instructions referenced in clause (c) above from the Lenders and
Certificate Holders or from the Administrative Agent in accordance with
Section 4.11 by 2:00 p.m. (New York time) on the next Business Day after
the proposed Funding Date it shall return the amounts deposited by each of
the Certificate Holders, Lenders and the Administrative Agent, if any, by
wire transfer to such accounts as each may specify in writing.
(f) In the event that the closing of the transaction and the transfer
of the Acquisition Amount does not occur by 2:00 p.m. (New York City time)
on or before the next Business Day after the proposed Funding Date, Lessee
agrees for the benefit of each Person a party hereto that has complied with
its obligations hereunder in respect of such closing that it shall
indemnify such Person and hold such Person harmless from any loss (but not
lost profits), cost or expense which such Person sustains or incurs as a
result of such Person having made arrangements in the London Interbank
market or otherwise to fund the Loan or the Equity Contribution, including
any Breakage Costs, net of any amounts earned by such Person or investments
made in accordance with clause (d) above.
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4.11. Administrative Agent Funding. Unless the Administrative Agent
shall have been notified by any Lender or Certificate Holder prior to any
Funding Date that such Lender or Certificate Holder does not intend to make
available to the Administrative Agent such Lender's portion of the Loan or such
Certificate Holder's portion of the Equity Contribution to be made on such date,
the Administrative Agent may assume that such Lender or such Certificate Holder
has made such amount available to the Administrative Agent on such Funding Date
and the Administrative Agent may, in reliance upon such assumption, make
available to Lessee such corresponding amount. If such corresponding amount is
not in fact made available to the Administrative Agent by such Lender or
Certificate Holder, the Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender or Certificate Holder. If such
Lender or such Certificate Holder does not pay such corresponding amount
forthwith upon the Administrative Agent's demand therefor, the Administrative
Agent shall promptly notify Lessee and Lessee shall immediately pay such
corresponding amount to the Administrative Agent. The Administrative Agent shall
also be entitled to recover on demand from such Lender, such Certificate Holder
or Lessee, as the case may be, interest on such corresponding amount in respect
of each day from the date such corresponding amount was made available by the
Administrative Agent to Lessee until the date such corresponding amount is
recovered by the Administrative Agent, a rate per annum equal to (a) if
recovered from such Lender or such Certificate Holder, at the overnight Federal
Funds Rate and (b) if recovered from Lessee, the Equity Rate of interest
selected for the funding as determined pursuant to Section 5. Nothing in this
Section 4.10 shall be deemed to relieve any Lender or any Certificate Holder
from its obligation to make Loans or Equity Contributions hereunder or to
prejudice any rights which Lessee may have against any Lender or Certificate
Holder as a result of any failure by such Lender or such Certificate Holder to
make Loans or Equity Contributions hereunder.
5. Selection of Lease Payment Period.
Provided no Lease Event of Default shall have occurred and is
continuing, Lessee shall at least three (3) LIBOR Banking Days prior to each
Funding Date and each Payment Date deliver to the Administrative Agent written
notice of its election to have both the Applicable Equity Rate and the
Applicable Debt Rate for all Loans and Equity Contributions which are to be made
on such Funding Date or for all Loans and Equity Contributions which were
previously made and for which the then applicable Lease Payment Period ends on
such Payment Date, as the case may be, for the Lease Payment Period following
such date be based on one-month, two-month or three-month LIBOR. All Loans and
Equity Contributions made on the same Funding Date shall have the same Lease
Payment Period, and Loans and Equity Contributions made on different Funding
Dates may have different Lease Payment Periods, provided that (a) there shall be
no more than five (5) different Lease Payment Periods at any one time, (b)
commencing with the Basic Term Commencement Date and thereafter throughout the
Term, all Items of Equipment and all Loans shall have the same Lease Payment
Periods and (c) Lessee shall not make an election that would cause the new
Payment Date resulting from such election to be later than the last day of the
Basic Term. If Lessee fails to provide such notice of election, Lessee shall be
deemed to have elected a one-month LIBOR based Applicable Equity Rate and
Applicable Debt Rate. At any time while a Lease Event of Default exists, the
Applicable Equity Rate and Applicable Debt Rate after each Payment Date shall be
based on one-month LIBOR.
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6. Default Purchase Options and Cure Rights.
6.1. Right to Cure Certain Lease Events of Default. If Lessee shall
fail to make any Lease Payment or Availability Fee due on any Payment Date when
the same shall have become due, and if such failure of Lessee to make such Lease
Payment or Availability Fee shall not constitute the third consecutive such
failure, then Lessor, any Lender, Lenders, Certificate Holder or Certificate
Holders (the "Curing Party") may (but is not obligated to) pay to the Collateral
Agent for the benefit of the Lenders, at any time prior to the earlier of the
expiration of ten (10) Business Days after the Curing Party shall have received
notice from the Administrative Agent of the failure of Lessee to make such Lease
Payment or Availability Fee, an amount equal to the principal of and interest on
the Notes then due by reason of the failure of Lessee to pay such Lease Payment
or Availability Fee (otherwise than by declaration of acceleration) on such
Payment Date, and such payment by the Curing Party shall be deemed to have cured
any Loan Event of Default which arose or would have arisen from such failure of
Lessee.
If Lessee shall fail to make any Supplemental Payment when the same
shall become due, or otherwise fail to perform any of its obligations (other
than the payment of a Lease Payment under the Lease Agreement) under any
Operative Document to which it is a party, which failure shall continue until
such time as such failure shall constitute a Lease Event of Default upon notice
to Lessee and can be cured by the payment of money, then a Curing Party may (but
is not obligated to) make such payment or perform such obligation through the
payment of money at any time prior to the expiration of ten (10) Business Days
after such Curing Party shall have received notice of the occurrence of any such
failure, and such payment or performance by such Curing Party shall be deemed to
have cured any Loan Event of Default which arose or would have arise from such
failure of Lessee.
Upon such payment or performance by a Curing Party who is a Lender or a
Certificate Holder, such Curing Party shall (to the extent of such payment made
by it and the costs and expenses incurred in connection with such payments and
performance thereof together with interest thereon) be subrogated to the rights
of, in the case of a Curing Party who is a Lender, the other Lenders and, in the
case of a Curing Party who is a Certificate Holder, the other Certificate
Holders, to receive from Lessee the Lease Payment or Supplemental Payment, as
the case may be, paid by such Curing Party. If the Collateral Agent shall
thereafter receive from Lessee such Lease Payment, Availability Fee or
Supplemental Payment, the Collateral Agent shall forthwith remit such payment to
such Curing Party in reimbursement for the funds so advanced by it.
Until the expiration of the period during which the Curing Party shall
be entitled to exercise rights under paragraph (a) or (b) of this Section 6.1
with respect to any failure by Lessee referred to therein, neither the
Administrative Agent, the Collateral Agent nor any Lender shall take or commence
any action it would otherwise be entitled to take or commence under the
Operative Documents as a result of such failure by Lessee.
6.2. Certificate Holders Default Purchase Option. For so long as a
Lease Event of Default has occurred and is continuing and Lenders have
accelerated the Loans or are seeking to exercise substantial remedies under the
Lease Agreement with respect to their interest in the Equipment, each
Certificate Holder (individually or, if more than one Certificate Holder wishes
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to exercise the right, together with all such Certificate Holders) shall have
the right, and is hereby granted the option (the "Certificate Holders Option")
to purchase, or at the option of such Certificate Holder, to designate a third
party to purchase, from all but not less than all of the Lenders and each Lender
hereby agrees to sell to such Certificate Holder or its designee all but not
less than all of its right, title and interest in the Loans and the Notes, at a
purchase price equal to the aggregate of all amounts then owing to such Lender
under the Operative Documents plus any costs incurred in connection with the
sale, including but not limited to Breakage Costs and attorneys fees (the
"Purchase Option Price") and to assign all of such Lender's rights, remedies and
security interests with respect to the Loans and Notes under the Operative
Documents to such purchasing Certificate Holder or Certificate Holders or its
designee or their designees. In order to exercise the Certificate Holders
Option, each such Certificate Holder shall deliver to each Lender, each other
Certificate Holder and the Collateral Agent irrevocable written notice of such
election (the "Option Notice") and shall pay the Purchase Option Price (or in
the case of more than one Certificate Holder has given notice of its election to
exercise the Certificate Holders Option, its pro rata share (in relation to the
aggregate of its Equity Contributions and the aggregate Equity Contributions of
all Certificate Holders exercising such option) of the Purchase Option Price) in
immediately available funds on or before the second Business Day after delivery
of the Option Notice in accordance herewith. Each Lender agrees that any
participation, assignment, sale or other transfer of all or any part of its
interest in the Loan or any Note shall be subject to the Certificate Holders
Option and Lender and the Collateral Agent agree that they will not take any
action with respect to the Equipment during the period after Lender and the
Collateral Agent receive the Option Notice and prior to the third Business Day
thereafter without the consent of the Certificate Holders.
6.3. Lessee Cure Right. Notwithstanding anything to the contrary
contained in this Agreement or any of the other Operative Documents, each of the
Trust Company, Lessor, the Certificate Holders, the Administrative Agent, the
Collateral Agent and the Lenders (collectively, the "Financing Parties") hereby
agrees with and for the benefit of Lessee as follows:
(a) Lessee shall have the right to satisfy any conditions precedent set
forth in Section 3.2 or 3.3 in the event that the Trust Company, Lessor or any
of the Certificate Holders, as the case may be, fails to do so on a timely
basis, to the extent such condition precedent may be satisfied by a party other
than Trust Company, Lessor, or Certificate Holder, as the case may be, and to
the extent it may be satisfied without violating any law, court order or
contractual obligation applicable thereto.
(b) Lessee shall have the right, in place of Lessor, to cure, to the
extent capable of cure by a party other than Lessor, any Loan Default or Loan
Event of Default.
(c) Copies of all notices from a Lender, the Administrative Agent or
the Collateral Agent to Lessor hereunder or under the Loan Agreement shall be
sent to Lessee and no such notice shall be effective for any purpose hereunder
or thereunder unless sent to Lessee.
(d) Lessor will, promptly upon becoming aware of any Loan Default or
Loan Event of Default, other than a Loan Default or Loan Event of Default
arising from a Lease
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Default or Lease Event of Default, notify Lessee of the occurrence of such Loan
Default or Loan Event of Default.
(e) Each payment by Lessee or Guarantor to Lessor under the Lease
Agreement or any other Operative Document shall be deemed to constitute a
payment to the Administrative Agent, the Lenders and the Certificate Holders, as
the case may be, or any corresponding payment obligations owing by Lessor to any
of the Administrative Agent, the Lenders or the Certificate Holders under any of
the Operative Documents solely for the purpose of determining amounts owed by
Lessee under the Operative Documents.
7. Security.
7.1. Security Interest. For valuable consideration, and to secure the
due payment and performance of all principal of, interest on the Loans, the Loan
Availability Fee and any interest due thereon, Breakage Costs, if any, and all
indebtedness and other liabilities and obligations, whether now existing or
hereafter arising (including any obligations to indemnify, reimburse or pay
costs and/or expenses) of Lessor to Lenders, the Administrative Agent and the
Collateral Agent arising out of or in any way connected with the Operative
Documents and all instruments, agreements and documents executed, issued and
delivered pursuant thereto (collectively, the "Secured Obligations"), Lessor
hereby assigns, conveys, mortgages, pledges, hypothecates, transfers and sets
over to the Collateral Agent, and its successors and assigns, and grants to the
Collateral Agent, and its successors and permitted assigns, a first Lien on and
security interest in the rights, title and interest of Lessor now held or
hereafter acquired in and to the following, except for Excepted Payments with
respect thereto (collectively, the "Lessor Collateral"):
(a) the Items of Equipment;
(b) all Subleases pertaining to the Items of Equipment;
(c) any Xxxx of Sale and all warranties (including, without
limitation, warranties of title, merchantability, fitness for a particular
purpose, quality and freedom from defects) and rights of recourse against
manufacturers, assemblers, sellers and others in connection with the Items
of Equipment;
(d) the Assembly Agency Agreement, the Security Documents and all
Lease Payments, Availability Fees and Supplemental Payments payable under
the Lease Agreement and all other sums payable thereunder;
(e) all accounts, contract rights, general intangibles and all other
property rights of any nature whatsoever arising out of or in connection
with the Lease Agreement or the Items of Equipment, including, without
limitation, Lease Payments, Availability Fees, Supplemental Payments and
Lessee Collateral and any other payments due and to become due under the
Lease Agreement and the Subleases whether as repayments, reimbursements,
contractual obligations, indemnities, damages or otherwise;
(f) all claims, rights, powers, or privileges and remedies of Lessor
under the Lease Agreement;
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(g) all rights of Lessor under this Agreement and the Lease Agreement
to make determinations to exercise any election (including, but not limited
to, election of remedies) or option or to give or receive any notice,
consent, waiver or approval, together with full power and authority to
demand, receive, enforce, collect or receipt for any of the foregoing or
any property which is the subject of this Agreement or the Lease Agreement,
to enforce or execute any checks, or other instruments or orders, to file
any claims and to take any action which (in the opinion of the Collateral
Agent) may be necessary or advisable in connection with any of the
foregoing; provided, however, the Collateral Agent agrees for the benefit
of Lessor that so long as no Loan Event of Default has occurred and is
continuing, it will not exercise any of the rights assigned to it under
clauses (f) and (g) of this Section 7, other than the right to receive
amounts due under the Lease Agreement and Section 9 of this Agreement,
without the prior written consent of Lessor;
(h) all moneys now or hereafter paid or required to be paid to Lenders
pursuant to any Operative Document; and
(i) all proceeds of Lessor Collateral including, without limitation,
all rentals, income and profits in respect of the Items of Equipment,
whether under the Lease Agreement or otherwise, all credits granted by any
manufacturer or vendor with respect to the return of any Item of Equipment
and the proceeds of any insurance payable with respect to the Items of
Equipment.
7.2. Further Assurances. For each Item of Equipment, Lessor will, at
Lessee's expense, make, execute, endorse, acknowledge, file and/or deliver to
the Collateral Agent from time to time such confirmatory assignments,
conveyances, financing and continuation statements, transfer endorsements and
other assurances or instruments other than estoppel certificates or other
agreements, certificates and other documents to be delivered by any Sublessee or
other Person (other than an Affiliate of Lessee) which the Administrative Agent
may reasonably request to perfect, preserve or protect the Collateral Agent's
security interest granted hereunder. To the extent permitted by Applicable Law,
Lessor authorizes the Collateral Agent to file any such financing and
continuation statements without the signature of Lessor and Lessor will pay all
applicable filing fees and related expenses.
7.3. Termination. Upon the full and final discharge and satisfaction of
Lessor's obligations with respect to (i) all amounts owed under the Operative
Documents, (ii) amounts owed under Sections 2.6.1 and 2.6.2 of the Loan
Agreement in relation to the loss or sale of any Item of Equipment and (iii) any
Item of Equipment replaced in accordance with Section 13 of the Lease Agreement,
unless in the case of clause (ii) or (iii) a Lease Event of Default shall have
occurred and be continuing, the provisions of this Section 7 shall terminate
with respect to all Lessor Collateral or such Items of Equipment (as applicable)
and all right, title and interest of the Collateral Agent in and to all Lessor
Collateral or such Items of Equipment (as applicable) and the proceeds thereof
shall revert to Lessor. Following payment or substitution in accordance with the
foregoing sentence, Lessor's obligations to Lenders, the Administrative Agent
and the Collateral Agent in and to all Items of Equipment or such Items of
Equipment (as applicable) shall terminate. Upon the occurrence and during the
continuation of a Lease Event of Default, the foregoing discharge shall be made
only following satisfaction of all of Lessee's
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obligations to purchase the Items of Equipment under Section 24 of the Lease
Agreement. The Collateral Agent shall, at Lessor's expense, execute and deliver
any evidence of such release as Lessor may reasonably require and furnish to the
Collateral Agent.
7.4. Other Security. To the extent that the obligations of Lessor under
any Operative Document are now or hereafter secured by property other than
Lessor Collateral or by the guarantee, endorsement or property of any other
Person, then at the written request of the Administrative Agent, and in
accordance with its written instructions, the Collateral Agent shall have the
right to pursue, relinquish, subordinate, modify or take any other action with
respect thereto, without in any way modifying or affecting any of the Collateral
Agent's rights and remedies hereunder.
7.5. Power of Attorney. Lessor irrevocably authorizes the Collateral
Agent and does hereby make, constitute and appoint the Collateral Agent and any
officer of the Collateral Agent, with full power of substitution, as Lessor's
true and lawful attorney-in-fact, with power, in its own name or in the name of
Lessor, to endorse any notes, checks, drafts, money orders, or other instruments
of payment (including payments payable under or in respect of any policy of
insurance) in respect of Lessor Collateral that may come into possession of the
Collateral Agent; to sign and endorse any invoice, freight or express xxxx, xxxx
of lading, storage or warehouse receipts, drafts against debtors, assignments,
verifications and notices in connection with accounts, and other documents
relating to Lessor Collateral; to pay or discharge Taxes, Liens, security
interests or other encumbrances at any time levied or placed on or threatened
against Lessor Collateral; to demand, collect, receipt for, compromise, settle
and xxx for monies due in respect of Lessor Collateral; and generally, to do, at
the Collateral Agent's option and at Lessor's expense, at any time, or from time
to time, all acts and things which the Collateral Agent deems necessary to
protect, preserve and realize upon Lessor Collateral and the Collateral Agent's
security interests therein and in order to effect the intent of the Operative
Documents all as fully and effectually as Lessor might or could do; and Lessor
hereby ratifies all that said attorney shall lawfully do or cause to be done by
virtue hereof. This power of attorney shall be coupled with an interest and
irrevocable for the term of this Agreement and thereafter as long as any of the
obligations of Lessor under any Operative Document shall be outstanding. The
powers conferred on the Collateral Agent hereunder are solely to protect the
security interest in Lessor Collateral and shall not impose any duty upon the
Collateral Agent to exercise any such powers. The Collateral Agent shall be
accountable only for amounts that it actually receives as a result of the
exercise of such powers and neither it nor any of its officers, directors or
employees shall be responsible to Lessor for any act or failure to act, except
for its own gross negligence or willful misconduct.
7.6. Assignment of Rights. Lessor agrees that the assignments herein
are irrevocable and it will not, while said assignment is in effect or
thereafter until Lessor has received from the Administrative Agent notice of the
termination thereof, take any action as Lessor under the Lease Agreement or
otherwise which is inconsistent with this Agreement or make any other
assignment, designation or direction inconsistent herewith and that any
assignment, designation or direction inconsistent herewith shall be void. Lessor
and the Administrative Agent agree that the following are, without limitation,
rights, powers, privileges, options, and benefits exclusively assigned by Lessor
hereunder: (i) the right to make claim for,
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receive, collect and receipt for (and to apply the same to the payment of the
principal of, Breakage Costs, if any, and interest on the Notes) all rents,
income, revenues, issues, profits, insurance proceeds, condemnation awards,
payments of Casualty Loss Value and other sums payable or receivable under this
Agreement and the Lease Agreement or pursuant hereto or thereto, (ii) the right
to make all waivers and agreements, to give and receive all notices and other
instruments in its capacity as Lessor under the Operative Documents and to take
all action upon the happening of Lease Event of Default, including the
commencement, conduct and consummation of proceedings at law or in equity as
shall be permitted under any provision of the Lease Agreement or by law, and
(iii) the right to do all other things which Lessor is or may become entitled to
do under the Lease Agreement.
7.7. Transfer of the Collateral by the Collateral Agent. The Collateral
Agent or any Lender may be a transferee of Lessor Collateral or of any part
thereof or of any interest therein at any sale thereof, whether pursuant to
foreclosure or power of sale or otherwise hereunder, and may apply upon the
transfer price the indebtedness secured hereby owing to such transfer, to the
extent of such transferee's distributive share of the transfer price to the
extent permitted by Applicable Law. Any such transferee shall, upon any such
transfer, acquire title to the properties so transferred, free of the Lien of
this Agreement.
7.8. No Segregation of Monies; No Interest. Any monies paid to or
retained by the Collateral Agent pursuant to any provision hereof and not then
required to be distributed to any party as provided in this Section 7 need not
be segregated in any manner except to the extent required by law, and may be
deposited under such general conditions as may be prescribed by law, without
interest.
7.9. Distribution of Moneys. Except as may be otherwise provided in
this Section 7 and for so long as no Loan Event of Default has occurred and is
continuing, all moneys received by the Collateral Agent shall be applied in
accordance with this Section 7.9:
(a) Scheduled and End of Term Payments. Provided no Loan Event of
Default has occurred and is continuing, moneys received by the Collateral Agent
constituting Lease Payments or any end of term payment under Section 28 or 29 of
the Lease Agreement, Loan Availability Fees or Supplemental Payments under the
Lease Agreement other than constituting payment of Casualty Loss Value with
respect to an Event of Loss or proceeds of a sale under Section 28.5 of the
Lease Agreement (including the payment of interest on any such overdue amount),
shall be applied (as determined by the Administrative Agent in accordance with
Section 2.4.5 of the Loan Agreement):
First, to each Lender on a pari passu basis in accordance with clauses
first through fifth of Section 2.7 of the Loan Agreement;
Second, to each other Lessor Indemnified Person other than the
Certificate Holders on a pari passu basis, all amounts then due such Person
hereunder;
Third, to Lessor all amounts then due Lessor under Section 10;
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Fourth, to the Certificate Holders on a pari passu basis, for all
amounts then due the Certificate Holders; and
Fifth, the balance, if any, of such payment remaining thereafter shall
be distributed to Lessee.
(b) Partial Prepayments. Provided no Loan Event of Default has occurred
and is continuing, moneys received by the Collateral Agent constituting payment
of Casualty Loss Value with respect to an Event of Loss (including any insurance
proceeds or condemnation awards in respect of the subject Event of Loss which
are payable to the Collateral Agent pursuant to the provisions of the Lease
Agreement) or constituting proceeds of the sale of any Item of Equipment
pursuant to Section 28.5 of the Lease Agreement shall be applied on the date
received (as determined by the Administrative Agent in accordance with Section
2.4.5 of the Loan Agreement):
First, to each Lender on a pari passu basis in accordance with clauses
first through fourth of Section 2.7 of the Loan Agreement;
Second, to each Lender and to Lessor on a pari passu basis (based on
the aggregate of the outstanding principal balance of each Lender's Notes
and the Equity Component less any amounts previously distributed to Lessor
under this Section 7.9(b)) so much of such funds as shall be required to
pay in full any principal amount then due on the Loans; and
Third, to each other party hereto in accordance with clauses second
through fifth of Section 7.9(a).
7.10. Payments after a Loan Event of Default. All payments received and
all amounts held or realized by the Collateral Agent (including any amounts
realized by the Collateral Agent from the exercise of any remedies) after the
occurrence and during the continuance of a Loan Event of Default, and all
payments or amounts then held or thereafter received by the Collateral Agent
hereunder or under the Operative Documents, shall, so long as such Loan Event of
Default continues and shall not have been waived in writing by Majority Lenders,
be applied on the date received:
First, so much of such payments or amounts held or realized by the
Collateral Agent as shall be required to reimburse the Collateral Agent and
the Administrative Agent for any expenses not reimbursed by Lessor in
connection with the collection or distribution of such amounts held or
realized by the Collateral Agent or in connection with the expenses
incurred in enforcing its remedies hereunder and preserving Lessor
Collateral including, without limitation, those expenses contemplated under
Section 12.1 of this Agreement, shall be retained by the Collateral Agent
or paid to the Administrative Agent, as the case may be; and
Second, in accordance with clauses first through fifth of Section
7.9(a).
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7.11. Application of Certain Other Payments. Any payments received by
any Lender for which provision as to the application thereof is made in this
Agreement, the Loan Agreement or the Notes shall be applied forthwith to the
purpose for which such payment was made in accordance with the terms of this
Agreement, the Loan Agreement or the Notes.
7.12. Other Payments. Except as otherwise provided in Sections 7.9 and
7.10, (a) any payments received by the Collateral Agent for which no provision
as to the application thereof is made in the Operative Documents, or elsewhere
in this Section 7, and (b) all payments received and amounts realized by the
Collateral Agent with respect to Lessor Collateral (including, without
limitation, all amounts realized upon the sale, release or other disposition of
Lessor Collateral upon foreclosure of this Agreement), to the extent received or
realized at any time after payment in full of the amounts set forth in clauses
first through fifth of Section 2.7 of the Loan Agreement for each Lender shall
be paid to Lessor or its designee.
7.13. Retention of Amounts by the Collateral Agent. If at the time of
receipt by the Collateral Agent of any payment or amount which would otherwise
be distributable to Lessor, there shall have occurred and be continuing a Loan
Default or a Loan Event of Default, the Collateral Agent shall not distribute
any such amount to Lessor or its designee and shall hold it as security for
Lessor's obligations to Lenders under the Operative Documents until such time as
there shall not be continuing such Loan Default or Loan Event of Default.
7.14. Conflicts. If any provision of this Section 7 conflicts with any
provision contained in any other Operative Document, such provision contained in
this Section 7 shall prevail.
8. Guaranty.
For the benefit of each other party hereto (each a "Guaranty Party"),
Guarantor irrevocably and unconditionally guarantees the full and prompt payment
when due (whether by acceleration or otherwise) of Lease Payments, Availability
Fees, Supplemental Payments and any interest due thereon and of all obligations
and liabilities (including, without limitation, indemnities, fees and interest
thereon) of Lessee now existing or hereafter incurred under, arising out of or
in connection with this Agreement or any other Operative Document and the due
performance and compliance by Lessee with the terms of the Lease Agreement and
the Operative Documents binding on Lessee (all such payments, interest,
obligations and liabilities, collectively, the "Guaranteed Obligations"). All
payments by Guarantor under this guaranty shall be made on the same basis as
payments by Lessee under the Operative Documents. Guarantor hereby waives notice
of acceptance of this guaranty and notice of any liability to which it may
apply, and waives presentment, demand of payment, protest, notice of dishonor or
nonpayment of any such liability, suit or taking of other action by an Guaranty
Party against, and any other notice to, any party liable thereon (including such
Guarantor or any other guarantor). Any Guaranty Party may at any time and from
time to time unless otherwise prohibited under the Operative Documents without
the consent of, or notice to Guarantor, without incurring responsibility to
Guarantor and without impairing or releasing the obligations of Guarantor
hereunder, upon or without any terms or conditions and in whole or in part:
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(a) change the manner, place or terms of payment of, and/or change or
extend the time of payment of, renew or alter, any of the Guaranteed
Obligations, any security therefor, or any liability incurred directly or
indirectly in respect thereof, and the guaranty herein made shall apply to the
Guaranteed Obligations as so changed, extended, renewed or altered;
(b) sell, exchange, release, surrender, realize upon or otherwise deal
with in any manner and in any order any property by whomsoever at any time
pledged or mortgaged to secure, or howsoever securing, the Guaranteed
Obligations or any liabilities (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and/or any offset there
against;
(c) exercise or refrain from exercising any rights against Lessee or
others or otherwise act or refrain from acting;
(d) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof;
(e) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of Lessee to any Guaranty Party regardless of what
liabilities or liabilities of Lessee remain unpaid; and/or
(f) consent to or waive any breach of, or any act, omission or default
under, any of the Operative Documents or otherwise amend, modify or supplement
any of the Operative Documents or any of such other instruments or agreements.
The obligations of Guarantor under this Section 8 are absolute and
unconditional and shall remain in full force and effect without regard to, and
shall not be released, suspended, discharged, terminated or otherwise affected
by, any circumstance or occurrence whatsoever, including,without limitation
(i) any action or inaction by any Guaranty Party; or (ii) any invalidity,
irregularity or unenforceability of all or part of the Guaranteed Obligations or
of any security therefor. The obligations under this Section 8 are primary
obligations of Guarantor. If and to the extent that Guarantor makes any payment
to any Guaranty Party or to any other Person pursuant to or in respect of this
Section 8, any claim which Guarantor may have against Lessee by reason thereof
shall be subject and subordinate to the prior payment in full of the Guaranteed
Obligations.
The obligations under this Section 8 are continuing and all liabilities
to which they apply or may apply under the terms hereof shall be conclusively
presumed to have been created in reliance hereon. No failure or delay on the
part of any Guaranty Party in exercising any right, power or privilege hereunder
and no course of dealing between Guarantor, any Guaranty Party or the holder of
any Note or Certificate shall operate as a waiver thereof; nor shall any single
or partial exercise of any right, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The rights, powers and remedies herein expressly provided are
cumulative and not exclusive of any rights, powers and remedies which any
Guaranty Party or the holder of any Note or Certificate would otherwise
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have. No notice to or demand on Guarantor in any case shall entitle Guarantor to
any other further notice or demand in similar or other circumstances or
constitute a waiver of the rights of any Guaranty Party or the holder of any
Note or Certificate to any other or further action in any circumstances without
notice or demand.
This guaranty shall continue to be effective, or be reinstated, as the
case may be, if at any time payment, or any part thereof, or of any of the
Guaranteed Obligations is rescinded or must otherwise be restored or returned by
the Guaranty Parties upon the insolvency, bankruptcy, dissolution, liquidation
or reorganization of Lessee or Guarantor, or upon or as a result of the
appointment of a receiver, intervenor, or conservator of, or trustee or similar
officer for, Lessee or Guarantor or any substantial part of its property, all as
though such payment had not been made and any statute of limitations in favor of
Guarantor against any Guaranty Party relating to any such amount to be restored
or returned shall be tolled, or deemed to have been tolled, to the extent
permitted by law, during the period from the date such payment was made to such
Guaranty Party until the date such Guaranty Party so restores or returns such
amount.
9. Covenants.
9.1. Lessor Covenants. Lessor covenants for the benefit of each other
party hereto (unless each shall have otherwise waived in writing compliance
herewith) during the term of this Agreement as follows:
(a) It shall take all actions as are required to keep the
representations and warranties made by it in Section 2.5 (except, in the case of
clause (b) of Section 2.5, if the location of such office shall change, Lessor
shall provide each other party hereto with not less than ten (10) days' prior
written notice of such change), true and correct in all material respects (but
without regard to the date when such representations and warranties were made or
are expressed to be effective) until such time as all of the obligations secured
hereby have been paid in full.
(b) It shall obtain and maintain, or cause to be obtained or
maintained, in full force and effect, any authorization, approval, license, or
consent of any governmental or judicial authority including those which may be
or become necessary in order for Lenders, the Collateral Agent, Lessee and
Certificate Holders to obtain the full benefits of this Agreement and all rights
and remedies granted or to be granted herein.
(c) The proceeds of each Loan shall be used solely to finance Lessor's
acquisitions of Items of Equipment in accordance with the terms of this
Agreement and the Assembly Agency Agreement and for costs related to such
transactions. No part of the proceeds of any Loan will be used to purchase or
carry any Margin Stock or to extend credit for the purpose of purchasing or
carrying any Margin Stock. Neither the making of any Loan nor the use of the
proceeds thereof will violate or be inconsistent with the provisions of
Regulation T, U or X of the Board of Governors of the Federal Reserve System.
(d) It shall comply in all material respects with all Applicable Laws,
rules, regulations and orders of any jurisdiction, such compliance to include
paying when due all Taxes
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imposed upon it or upon its property by any Governmental Entity except to the
extent contested in good faith and for which adequate reserves have been
segregated.
(e) It shall promptly take, and maintain the effectiveness of, all
action of the type referred to in clause (b) of Section 2.4 or otherwise that
may, from time to time, be necessary or appropriate under Applicable Law in
connection with the performance by Lessor of its obligations under the Operative
Documents, or the taking of any action hereby or thereby contemplated, or
necessary for the legality, validity, binding effect or enforceability of the
Operative Documents, or for the making of any payment or the transfer or
remittance of any funds by Lessor under the Operative Documents.
(f) It shall duly pay and discharge (i) immediately upon the attachment
thereof all Liens other than Permitted Liens on any Lessor Collateral, (ii) as
and when due, all of its indebtedness and others obligations before the time
that any Lien attaches unless and only to the extent that any such amounts are
not yet due and payable or the validity thereof is being contested in good faith
by appropriate proceedings so long as such proceedings do not involve any
material danger of the sale, forfeiture or loss of the Items of Equipment or any
interest therein and Lessor maintains appropriate reserves with respect thereto
or has made adequate provision for the payment thereof, in accordance with
generally accepted accounting principles and approved by the Majority Lenders
and (iii) all Taxes imposed upon or against it or its property or assets, or
upon any property leased by it, prior to the date on which penalties attach
thereto.
(g) It shall keep at all times books of record and account in which
full, true and correct entries will be made of all dealings or transactions in
relation to its business and affairs, and provide or cause to be provided
adequate protection against loss or damage to such books of record and account.
(h) It shall not operate in a manner that would result in an actual,
constructive or substantive consolidation with Certificate Holders, any other
Person other than Lessee, and in such connection Lessor shall observe all trust
formalities, maintain records separately and independently from those of
Certificate Holders or other Person and enter into any transactions with
Certificate Holders only on an arm's-length contractual basis.
(i) It shall not without the consent of all Lenders (i) enter into any
business other than its acquisition, leasing, financing and sale of the
Equipment, (ii) create, incur, assume or permit to exist any Indebtedness,
except as expressly permitted by this Agreement, (iii) enter into, or be a party
to, any transaction with any Person, except the transactions set forth in the
Operative Documents and as expressly permitted thereby, or (iv) make any
investment in, guarantee the obligations of, or make or advance money to any
Person, through the direct or indirect lending of money, holding of securities
or otherwise except the transactions set forth in the Operative Documents and as
expressly permitted thereby.
(j) It shall not wind up, liquidate or dissolve its affairs or enter
into any transaction of merger or consolidation, or convey, sell, lease
(substantially as a whole), or
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otherwise dispose of (whether in one or in a series of transactions) its assets
except as expressly permitted by this Agreement.
(k) It shall notify Lessee of any Loan Event of Default except any such
Loan Event of Default caused by or related to a Lease Event of Default.
(l) It shall not claim ownership of any Item of Equipment on any
Federal, state, local or foreign tax return or filing.
9.2. Trust Company Covenants. Trust Company covenants and agrees for
the benefit of each other party hereto (unless each party shall have otherwise
waived in writing compliance herewith) during the term of this Agreement as
follows:
(a) It shall perform all of its obligations set forth in the Trust
Agreement and shall not amend, modify, consent to any change to the terms or
otherwise alter the Trust Agreement in any manner without the consent of each of
the other parties hereto.
(b) It shall not, so long as no Lease Event of Default has occurred and
is continuing, take or cause to be taken any action contrary to Lessee's or any
Sublessee's right to quiet enjoyment of, and the continuing possession, use and
operation of, the Equipment during the Term.
(c) It shall (i) not cause or permit to exist any Lien attributable to
it with respect to the Items of Equipment or any other portion of the Trust
Estate other than Permitted Liens, (ii) promptly, at its own expense, take such
action as may be necessary duly to discharge any Lien attributable to it, and
(iii) make restitution to the Trust Estate for any actual diminution of the
assets of the Trust Estate resulting from any Liens attributable to it.
(d) It shall not change the location of its principal office to a
location outside of Wilmington, Delaware without providing at least ten (10)
days advance written notice thereof.
9.3. Certificate Holders Covenants. Each Certificate Holder covenants
and agrees for the benefit of each party hereto (unless each party hereto shall
have otherwise waived in writing compliance herewith) during the term of this
Agreement as follows:
(a) It shall maintain its existence as a corporation in good standing
under the laws of the state or country of its organization.
(b) It shall perform all of its obligations set forth in the Trust
Agreement and shall not amend, modify, consent to any change to the terms or
otherwise alter the Trust Agreement in any manner without the consent of Lessee,
Guarantor, Administrative Agent, Collateral Agent, Majority Lenders and Majority
Certificate Holders.
(c) It shall not remove, or cause to be removed, the Trustee or
appoint, or cause to be appointed, a successor Trustee or a Co-Trustee without
the written consent of the Administrative Agent and, provided no Lease Event of
Default has occurred and is continuing,
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the written consent of Lessee (which consents, in any case, shall not be
unreasonably withheld or delayed).
(d) It shall not, so long as no Lease Event of Default has occurred and
is continuing or the Lease Agreement has not otherwise been terminated, take or
cause to be taken any action contrary to Lessee's or any Sublessee's right to
quiet enjoyment of, and the continuing possession, use and operation of, the
Equipment during the Term of the Lease Agreement.
(e) It shall (i) not cause or permit to exist any Lien attributable to
it with respect to the Items of Equipment or any other portion of the Trust
Estate other than Permitted Liens, (ii) promptly, at its own expense, take such
action as may be necessary duly to discharge any Lien attributable to it, and
(iii) make restitution to the Trust Estate for any actual diminution of the
assets of the Trust Estate resulting from any Liens attributable to it.
9.4. Lender and Collateral Agent Covenant. Each Lender and the
Collateral Agent hereby covenants and agrees, for the benefit of Lessor and
Lessee, that so long as no Lease Event of Default has occurred and is continuing
or the Lease Agreement has not otherwise been terminated, it shall not take or
cause to be taken any action contrary to Lessee's or any Sublessee's right to
quiet enjoyment of, and the continuing possession, use and operation of, the
Equipment during the Term.
9.5. Lessee and Guarantor Covenants. Each of Guarantor and Lessee, as
applicable, covenants and agrees for the benefit of Lessor, Certificate Holders,
each Lender, the Administrative Agent and the Collateral Agent (unless each such
Person shall otherwise waive in writing compliance herewith) that on the Closing
Date therefor and thereafter during the remaining term of this Agreement as
follows:
(a) Information Covenants. Guarantor will furnish to the Administrative
Agent, Lenders and Certificate Holders:
(i) Monthly Reports. Within 45 days after the end of each fiscal month
of Guarantor, the consolidated balance sheets of Guarantor and its
Subsidiaries on a consolidated basis and Lessee and its Consolidated
Subsidiaries on a stand-alone basis as at the end of such month and the
related consolidated statements of income and retained earnings and
statement of cash flows for such month and for the elapsed portion of the
fiscal year ended with the last day of such month, in each case accompanied
by an abbreviated discussion of the operating results in such preceding
fiscal month.
(ii) Quarterly Financial Statements. Within 45 days after the close of
the first three quarterly accounting periods in each fiscal year of
Guarantor, the consolidated balance sheets of Guarantor and its
Subsidiaries on a consolidated basis and Lessee and its Consolidated
Subsidiaries on a stand-alone basis as at the end of such quarterly
accounting period and the related consolidated statements of income and
retained earnings and statement of cash flows for such quarterly accounting
period and for the elapsed portion of the fiscal year ended with the last
day of such quarterly accounting period, in each case setting forth
comparative figures for the related periods in the prior
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fiscal year, all of which shall be certified by the chief financial officer
of Guarantor, subject to normal year-end audit adjustments.
(iii) Annual Financial Statements. Within 105 days after the close of
each fiscal year of Guarantor, the consolidated balance sheets of Guarantor
and its Subsidiaries on a consolidated basis and Lessee and its
Consolidated Subsidiaries on a stand-alone basis as at the end of such
fiscal year and the related consolidated statements of income and retained
earnings and of cash flows for such fiscal year setting forth comparative
figures for the preceding fiscal year and certified, in the case of the
consolidated financial statements of Guarantor, by Deloitte & Touche LLP or
such other independent certified public accountants of recognized national
standing reasonably acceptable to the Administrative Agent, and in the case
of the other financial statements, certified by the chief financial officer
of Guarantor, together with a report of such accounting firm stating that
in the course of its regular audit of the financial statements of Guarantor
and its Subsidiaries, which audit was conducted in accordance with
generally accepted auditing standards, such accounting firm obtained no
knowledge of any Lease Default or Lease Event of Default, which has
occurred and is continuing or, if in the opinion of such accounting firm
such a Lease Default or Lease Event of Default has occurred and is
continuing, a statement as to the nature thereof.
(iv) Management Letters. Promptly after Guarantor or any of its
Subsidiaries' receipt thereof, a copy of any "management letter" addressed
to the board of directors of Guarantor or such Subsidiary from its
certified public accountants and any internal control memoranda relating
thereto.
(v) Budgets. No later than the first day of each fiscal year of
Guarantor, a budget in form satisfactory to the Majority Lenders (including
budgeted statements of income and sources and uses of cash and balance
sheets) prepared by Guarantor for each of the twelve months of such fiscal
year prepared in detail, accompanied by a statement of the Chief Financial
Officer of Guarantor to the effect that, to the best of his knowledge, the
budget is a reasonable estimate for the period covered thereby.
(vi) Certificates of Responsible Officer. At the time of the delivery
of the financial statements provided for in Sections 9.5(a)(ii) and
9.5(a)(iii), a certificate of a Responsible Officer of Guarantor to the
effect that, to the best of such officer's knowledge, no Lease Default or
Lease Event of Default has occurred and is continuing or, if any Lease
Default or Lease Event of Default has occurred and is continuing,
specifying the nature and extent thereof, which certificate shall set forth
in reasonable detail the calculations required to establish whether the
Lessee was in compliance with the provisions of Sections 9.5(k), (m), (n),
(o), (q) and (r) (but with respect to Section 9.5(r) only to the extent
delivered with the financial statements required by Section 9.5(a)(iii)),
inclusive, at the end of such fiscal quarter or year, as the case may be.
(vii) Notice of Default or Litigation. Promptly, and in any event
within three Business Days after a Responsible Officer of Guarantor or
Lessee obtains knowledge thereof, notice of (i) the occurrence of any event
which constitutes a Lease Default or
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Lease Event of Default and (ii) any litigation or governmental
investigation or proceeding pending (x) against Guarantor or any of its
Subsidiaries which could reasonably be expected to materially and adversely
affect the business, operations, property, assets, liabilities, condition
(financial or otherwise) or prospects of Guarantor or any of its
Subsidiaries or (y) with respect to the Guarantor IPO, the Repurchase, the
Revolver or any Operative Document.
(viii) Other Information. From time to time, such other information or
documents (financial or otherwise) with respect to Guarantor or its
Subsidiaries as any Lender or Certificate Holder may reasonably request.
(b) Books, Records and Inspections. Guarantor will, and will cause each
of its Subsidiaries to, keep proper books of record and account in which full,
true and correct entries in conformity with generally accepted accounting
principles and all requirements of law shall be made of all dealings and
transactions in relation to its business and activities. Guarantor will, and
will cause each of its Subsidiaries to, permit upon two Business Days' prior
notice officers and designated representatives of the Administrative Agent or
the Majority Lenders to visit and inspect, under guidance of officers of
Guarantor or such Subsidiary, any of the properties of Guarantor or such
Subsidiary, and to examine the books of account of Guarantor or such Subsidiary
and discuss the affairs, finances and accounts of Guarantor or such Subsidiary
with, and be advised as to the same by, its and their officers and independent
accountants, all at such reasonable times and intervals and to such reasonable
extent as the Administrative Agent or the Majority Lenders may reasonably
request, all such inspections to be subject to any binding confidentiality
agreement for the benefit of a third party that prohibits the foregoing.
Guarantor will, and will cause each of its Subsidiaries to, permit officers and
designated representatives of the Administrative Agent to conduct, at
Guarantor's expense, an annual audit of the accounts receivable and inventories
of Guarantor and its Subsidiaries.
(c) Compliance with Statutes, etc. Guarantor will, and will cause each
of its Subsidiaries to, comply with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property, except such noncompliances as could not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of Guarantor and its Subsidiaries taken as a whole.
(d) Compliance with Environmental Laws. (i) Guarantor will comply, and
will cause each of its Subsidiaries to comply, in all material respects with all
Environmental Laws applicable to the ownership or use of its Real Property now
or hereafter owned or operated by Guarantor or any of its Subsidiaries (except
such noncompliances as could not, individually or in the aggregate, reasonably
be expected to have a material adverse effect on the business, operations,
property, assets, liabilities, condition (financial or otherwise) or prospects
of Guarantor and its Subsidiaries taken as a whole), will promptly pay or cause
to be paid all costs and expenses incurred in connection with such compliance,
and will keep or cause to be kept all such Real Property free and clear of any
Liens imposed pursuant to such Environmental Laws. Neither Guarantor nor any of
its Subsidiaries will generate, use, treat, store, release or dispose of, or
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permit the generation, use, treatment, storage, release or disposal of Hazardous
Materials on any Real Property now or hereafter owned or operated by Guarantor
or any of its Subsidiaries, or transport or permit the transportation of
Hazardous Materials to or from any such Real Property, except for Hazardous
Materials generated, used, treated, stored, released or disposed of at any such
Real Properties in compliance in all material respects with all applicable
Environmental Laws and reasonably required in connection with the operation, use
and maintenance of the business or operations of Guarantor or any of its
Subsidiaries.
(ii) At the written reasonable request of the Administrative Agent or
the Majority Lenders, which request shall specify in reasonable detail the basis
therefor, at any time and from time to time, Guarantor will provide, at
Guarantor's sole cost and expense, an environmental site assessment report
concerning any Real Property owned or operated by Guarantor and its
Subsidiaries, prepared by an environmental consulting firm reasonably
satisfactory to the Administrative Agent, indicating the presence or absence of
Hazardous Materials and the potential cost of any removal or remedial action in
connection with any Hazardous Materials on such Real Property, provided that in
no event shall such request be made more often than once every three years for
any particular Real Property unless (i) the Obligations have been declared due
and payable pursuant to Section 23 of the Lease Agreement or Section 6.1 of the
Loan Agreement; (ii) the Lenders or Certificate Holders receive notice under
Section 9.5(d) of any event for which notice is required to be delivered for any
such Real Property or any business or operations of Guarantor or any of its
Subsidiaries; or (iii) a Lease Default or a Lease Event of Default then exists.
If Guarantor or Lessee fails to provide the same within ninety (90) days after
such request was made, the Administrative Agent may order the same, the cost of
which shall be borne by Lessee, and Guarantor and Lessee shall grant and hereby
grant to the Administrative Agent, the Lenders, the Certificate Holders and
their agents access to such Real Property and specifically grant the
Administrative Agent, the Lenders and the Certificate Holders an irrevocable
non-exclusive license to undertake such an assessment, all at Guarantor's
expense.
(e) ERISA. As soon as possible and, in any event, within ten (10)
business days after Guarantor, any Subsidiary of Guarantor or any ERISA
Affiliate knows or has reason to know of the occurrence of any of the following,
Guarantor will deliver to each of the Lenders a certificate of the chief
financial officer of Guarantor setting forth the full details as to such
occurrence and the action, if any, that Guarantor, such Subsidiary or such ERISA
Affiliate is required or proposes to take, together with any notices required or
proposed to be given to or filed with or by Guarantor, the Subsidiary, the ERISA
Affiliate, the PBGC, a Plan participant or the Plan administrator with respect
thereto: (i) that a Reportable Event has occurred (except to the extent that
Guarantor has previously delivered to the Lenders a certificate and notices (if
any) concerning such event pursuant to the next clause hereof); (ii) that a
contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan
subject to Title IV of ERISA is subject to the advance reporting requirement of
PBGC Regulation Section 4043.61 (without regard to subparagraph (b)(1) thereof),
and an event described in subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC
Regulation Section 4043 is reasonably expected to occur with respect to such
Plan within the following 30 days; (iii) that an accumulated funding deficiency,
within the meaning of Section 412 of the Code or Section 302 of ERISA, has been
incurred or an application may be or has been made for a waiver or modification
of the minimum funding standard (including any
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required installment payments) or an extension of any amortization period under
Section 412 of the Code or Section 303 or 304 of ERISA with respect to a Plan;
(iv) that any contribution required to be made with respect to a Plan or Foreign
Pension Plan has not been timely made; (v) that a Plan which is subject to Title
IV of ERISA has been or may be terminated, reorganized, partitioned or declared
insolvent under Title IV of ERISA; (vi) that a Plan has an Unfunded Current
Liability; (vii) that proceedings may be or have been instituted to terminate or
appoint a trustee to administer a Plan which is subject to Title IV of ERISA;
(viii) that a proceeding has been instituted pursuant to Section 515 of ERISA to
collect a delinquent contribution to a Plan; (ix) that Guarantor or any
Subsidiary of Guarantor will or may incur any liability (including any indirect,
contingent, or secondary liability) to or on account of the termination of or
withdrawal from a Plan under Section 4062, 4063, 4064, 4069, 4201, 4204 or 4212
of ERISA or with respect to a Plan under Section 401(a)(29), 4971, 4975 or 4980
of the Code or Section 409, 502(i) or 502(l) of ERISA or with respect to a group
health plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the
Code) under Section 4980B of the Code; or (x) that Guarantor or any Subsidiary
of Guarantor may incur any material liability pursuant to any employee welfare
benefit plan (as defined in Section 3(1) of ERISA) that provides benefits to
retired employees or other former employees (other than as required by Section
601 of ERISA) or any Plan or any Foreign Pension Plan in addition to the
liability that existed on the Effective Date pursuant to any such plan or plans.
Guarantor will deliver to each of the Lenders copies of any records, documents
or other information that must be furnished to the PBGC with respect to any Plan
pursuant to Section 4010 of ERISA. Guarantor will also deliver to each of the
Lenders a complete copy of the annual report (on Internal Revenue Service Form
5500-series) of each Plan which is subject to Title IV of ERISA (including, to
the extent required, the related financial and actuarial statements and opinions
and other supporting statements, certifications, schedules and information)
required to be filed with the Internal Revenue Service. In addition to any
certificates or notices delivered to the Lenders pursuant to the first sentence
hereof, copies of annual reports and any records, documents or other information
required to be furnished to the PBGC, and any material notices received by
Guarantor, any Subsidiary of Guarantor or any ERISA Affiliate with respect to
any Plan or Foreign Pension Plan shall be delivered to the Lenders no later than
twenty (20) days after the date such annual report has been filed with the
Internal Revenue Service or such records, documents and/or information has been
furnished to the PBGC or such notice has been received by Guarantor, the
Subsidiary or the ERISA Affiliate, as applicable.
(f) Performance of Obligations. Guarantor will, and will cause each of
its Subsidiaries to, perform all of its obligations under the terms of each
mortgage, indenture, security agreement and other debt instrument by which it is
bound, except such non-performances as could not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of Guarantor and its Subsidiaries taken as a whole.
(g) Payment of Taxes. Guarantor will pay and discharge or cause to be
paid and discharged, and will cause each of its Subsidiaries to pay and
discharge, all lawful claims, taxes, assessments and governmental charges or
levies imposed upon it or upon its income or profits, or upon any properties
belonging to it, in each case on a timely basis; provided that neither Guarantor
nor any of its Subsidiaries shall be required to pay any such tax, assessment,
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charge, levy or claim which is being contested in good faith and by proper
proceedings if it has maintained adequate reserves with respect thereto in
accordance with GAAP.
(h) Liens. Guarantor will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets (real or personal, tangible or intangible) of
Guarantor or any of its Subsidiaries, whether now owned or hereafter acquired,
or sell any such property or assets subject to an understanding or agreement,
contingent or otherwise, to repurchase such property or assets (including sales
of accounts receivable with recourse to Guarantor or any of its Subsidiaries),
or assign any right to receive income or permit the filing of any financing
statement under the UCC or any other similar notice of Lien under any similar
recording or notice statute; provided that the provisions of this Section 9.5(h)
shall not prevent the creation, incurrence, assumption or existence of the
following (Liens described below are herein referred to as "Permitted Guarantor
Liens"):
(i) inchoate Liens for taxes, assessments or governmental charges or
levies not yet due or Liens for taxes, assessments or governmental charges
or levies being contested in good faith and by appropriate proceedings for
which adequate reserves have been established in accordance with generally
accepted accounting principles;
(ii) Liens in respect of property or assets of Guarantor or any of its
Subsidiaries imposed by law, which were incurred in the ordinary course of
business and do not secure Indebtedness for borrowed money, such as
carriers', warehousemen's, materialmen's and mechanics' liens and other
similar Liens arising in the ordinary course of business, and (x) which do
not in the aggregate materially detract from the value of Guarantor's or
such Subsidiary's property or assets or materially impair the use thereof
in the operation of the business of Guarantor's or such Subsidiary or (y)
which are being contested in good faith by appropriate proceedings, which
proceedings have the effect of preventing the forfeiture or sale of the
property or assets subject to any such Lien;
(iii) Liens in existence on the Closing Date which are listed, and the
property subject thereto described, in Schedule 5, but only to the
respective date, if any, set forth in such Schedule 5 for the removal and
termination of any such Liens, plus renewals and extensions of such Liens
to the extent set forth on Schedule 5, provided that (x) the aggregate
principal amount of the Indebtedness, if any, secured by such Liens does
not increase from that amount outstanding at the time of any such renewal
or extension and (y) any such renewal or extension does not encumber any
additional assets or properties of Guarantor or any of its Subsidiaries;
(iv) Permitted Encumbrances;
(v) Liens created pursuant to the "Security Documents" (as defined in
the Revolver) or the Security Documents;
(vi) leases or subleases granted to other Persons not materially
interfering with the conduct of the business of Guarantor and its
Subsidiaries taken as a whole;
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(vii) Liens (including precautionary UCC filings) upon assets of
Lessee its Subsidiaries subject to Equipment Financing Transactions to the
extent permitted by Section 9.5(k)(v) and the provisions of this Agreement,
provided that (x) such Liens secure only the payment of such obligations
under Equipment Financing Transactions, (y) if such obligations constitute
Operating Lease Obligations, the Attributable Indebtedness in respect
thereof shall not exceed $170,000,000 at any time and (z) such Liens do not
encumber any other asset of Guarantor or any Subsidiary of Guarantor;
(viii) Liens securing Indebtedness permitted pursuant to Section
9.5(k)(xv);
(ix) easements, rights-of-way, restrictions, encroachments and other
similar charges or encumbrances, and minor title deficiencies, in each case
not securing Indebtedness and not materially interfering with the conduct
of the business of Guarantor and its Subsidiaries taken as a whole;
(x) Liens on assets of a Foreign Subsidiary of Lessee securing
Indebtedness permitted to be incurred by such Foreign Subsidiary under this
Agreement;
(xi) Liens arising out of judgments or awards in respect of which
Guarantor or any of its Subsidiaries shall in good faith be prosecuting an
appeal or proceedings for review in respect of which there shall have been
secured a subsisting stay of execution pending such appeal or proceedings,
provided that the aggregate amount of all such judgments or awards (and any
cash and the fair market value of any property subject to such Liens) does
not exceed $1,000,000 at any time outstanding;
(xii) statutory and common law landlords' liens under leases to which
Guarantor or any of its Subsidiaries is a party;
(xiii) Liens incurred in the ordinary course of business in connection
with workers compensation claims, unemployment insurance and social
security benefits and Liens securing the performance of bids, tenders,
leases and contracts in the ordinary course of business, provided that the
aggregate outstanding amount of obligations secured by Liens permitted by
this clause (xiii) (and the value of all cash and property encumbered by
Liens permitted pursuant to this clause (xiii)) shall not at any time
exceed $5,000,000;
(xiv) Liens securing Indebtedness permitted pursuant to Section
9.5(k)(xiv);
(xv) Liens existing on property or assets acquired pursuant to a
Permitted Acquisition, or on property or assets of a Subsidiary of Lessee
in existence at the time such Subsidiary is acquired pursuant to a
Permitted Acquisition, provided that (x) any Indebtedness that is secured
by such Liens is otherwise permitted under Section 9.5(k)(xiii) and (y)
such Liens are not incurred in connection with, or in contemplation or
anticipation of, any such acquisition and do not attach to any asset of
Guarantor or any other asset of Lessee or any of its Subsidiaries; and
(xvi) Liens existing on property or assets of a new Domestic
Subsidiary of Lessee in existence at the time such Domestic Subsidiary is
acquired pursuant to an investment
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made under Section 9.5(q)(xii), provided that (x) any Indebtedness that is
secured by such Liens is otherwise permitted under Section 9.4(k)(xiii) and
(y) such Liens are not incurred in connection with, or in contemplation or
anticipation of, any such acquisition and do not attach to any asset of
Guarantor or Lessee or other asset of any Subsidiary of Lessee.
(i) Consolidation, Merger, Purchase or Sale of Assets, etc. Guarantor
will not, and will not permit any of its Subsidiaries to, wind up, liquidate or
dissolve its affairs or enter into any transaction of merger or consolidation,
or convey, sell, lease or otherwise dispose of (or agree to do any of the
foregoing at any future time) all or any part of its property or assets, or
enter into any sale-leaseback transactions, or purchase or otherwise acquire (in
one or a series of related transactions) any part of the property or assets
(other than purchases or other acquisitions of inventory, materials and
equipment in the ordinary course of business) of any Person, except that:
(i) Capital Expenditures by Lessee and its Subsidiaries shall be
permitted to the extent not in violation of Section 9.5(r);
(ii) each of Lessee and its Subsidiaries may in the ordinary course of
business sell or otherwise dispose of any assets which, in the reasonable
judgment of such Person, are obsolete, worn out or otherwise no longer
useful in the conduct of such Person's business, provided that the proceeds
of all assets subject to sales or other dispositions pursuant to this
clause (ii) shall not exceed $5,000,000 in any fiscal year of Lessee;
(iii) investments may be made to the extent permitted by Section
9.5(q);
(iv) each of Lessee and its Subsidiaries may lease (as lessee) real or
personal property to the extent permitted by Section 9.5(k) (so long as any
such lease does not create a Capitalized Lease Obligation except to the
extent permitted by Section 9.5(k));
(v) each of Lessee and its Subsidiaries may make sales or leases of
inventory or equipment in the ordinary course of business;
(vi) any Subsidiary of Lessee may be merged or consolidated with or
into Lessee or any other Wholly-Owned Domestic Subsidiary of Lessee or be
liquidated, wound up or dissolved, or all or substantially all of its
business, property or assets may be conveyed, sold, leased, transferred or
otherwise disposed of, in one transaction or a series of transactions, to
Lessee or any other Wholly-Owned Domestic Subsidiary of Lessee;
(vii) any disposition of assets required to effectuate Equipment
Finance Transactions otherwise permitted hereby shall be permitted;
(viii) each of Lessee and its Subsidiaries may acquire all or
substantially all of the assets of any Person (or all or substantially all
of the assets of a product line or division of any Person) or 100% of the
capital stock of any Person, through merger with the Lessee or a Subsidiary
of the Lessee or by stock purchase (any such acquisition permitted by this
clause (viii), a "Permitted Acquisition"), so long as (i) no Lease Default
or Lease Event of Default then exists or would result therefrom, (ii) each
of the representations and
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warranties contained in Sections 2.1 and 2.2 of this Participation
Agreement shall be true and correct in all material respects both before
and after giving effect to such Permitted Acquisition, (iii) any Liens or
Indebtedness or Operating Lease Obligations incurred, assumed or issued in
connection with such acquisition are otherwise permitted under Section
9.5(h) or 9.5(k), as the case may be, (iv) the only consideration paid by
Lessee or any Subsidiary in connection with any Permitted Acquisition
consists solely of cash, assumed Indebtedness (including Capitalized Lease
Obligations) and/or Operating Lease Obligations, the issuance of unsecured
Indebtedness to the extent permitted under Section 9.5(k)(xv), common stock
of Guarantor and/or Qualified Preferred Stock of Guarantor, (v) Guarantor
and its Subsidiaries would have been in compliance with the financial
covenants set forth in Section 9.5(m) through 9.5(o), inclusive, and
9.5(r), for the Test Period then most recently ended prior to the date of
the consummation of such Permitted Acquisition, in each case with such
financial covenants to be determined on a pro forma basis (subject to the
methodology to give effect to such pro forma adjustments being satisfactory
to the "Administrative Agent" (as defined in the Revolver) as if such
Permitted Acquisition had been consummated on the first day of such Test
Period (and assuming that any Indebtedness incurred, issued or assumed in
connection therewith had been incurred, issued or assumed on the first day
of, and had remained outstanding throughout, such Test Period), (vi) the
sum of (A) the aggregate consideration paid in connection with all
Permitted Acquisitions (including, without limitation, any earn-out,
non-compete or deferred compensation arrangements, the aggregate principal
amount of any Indebtedness assumed in connection therewith and the fair
market value of any capital stock of Guarantor issued in connection
therewith) shall not exceed (I) $75,000,000 in any fiscal year of
Guarantor, (II) in the event such consideration consists of cash and
assumed Indebtedness (including Capitalized Leased Obligations),
$10,000,000 in any fiscal year (and $50,000,000 in the aggregate)
(excluding any portion of such consideration which is treated as, or
involves the acquisition of assets which is treated as, a Capital
Expenditure under Section 9.5(r), and (z) to the extent that such
consideration consists solely of common stock of Guarantor and/or Qualified
Preferred Stock of Guarantor, $200,000,000, (vii) after giving effect to
any Permitted Acquisition, the Unutilized Commitment (as defined in the
Revolver) is at least $5,000,000, and (viii) the assets or Person acquired
pursuant to each such Permitted Acquisition are employed or engaged, as the
case may be, in a Permitted Business;
(ix) any Foreign Subsidiary may be merged with and into, or be
dissolved or liquidated into, or transfer any of its assets to, any Foreign
Subsidiary or Foreign Joint Venture so long as at least 65% of the total
combined voting power of all classes of capital stock of all first-tier
Foreign Subsidiaries and all of the capital stock owned by Guarantor or any
of its Subsidiaries of any first-tier Foreign Joint Venture is pledged
pursuant to the Pledge Agreement (unless, (A) in the case of Foreign
Subsidiaries, the "Administrative Agent" (as defined in the Revolver)
reasonably determines that such pledge shall result in regulatory or
economic disadvantages and (B) additionally, in the case of Foreign Joint
Ventures, the organizational documents thereof prohibit such Pledge)
(x) the assets of any Foreign Subsidiary or Foreign Joint Venture may
be transferred to Lessee or any of its Domestic Subsidiaries and any
Foreign Subsidiary or
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Foreign Joint Venture may be merged with and into, or be dissolved or
liquidated into, Lessee or any of its Domestic Subsidiaries so long as
Lessee or such Domestic Subsidiary is the surviving corporation of any such
merger, dissolution or liquidation;
(xi) Lessee or any of its Domestic Subsidiaries may transfer to one or
more Foreign Subsidiaries or Foreign Joint Venture those assets theretofore
transferred to Lessee or such Domestic Subsidiary by a Foreign Subsidiary
or Foreign Joint Venture (whether by merger, liquidation, dissolution or
otherwise) pursuant to clause (x) of this Section 9.5(i);
(xii) each of Lessee and its Subsidiaries may enter into sale and
leaseback transactions with respect to their inventory, equipment and Real
Property, in which Lessee or any of its Subsidiaries acts as seller of the
inventory, equipment or Real Property that is the subject of the
transaction, so long as (v) no Lease Default or Lease Event of Default then
exists or would result therefrom, (w) each such sale and leaseback
transaction is in an arm's-length transaction and Lessee or the respective
Subsidiary receives at least fair market value (as determined in good faith
by Lessee or such Subsidiary, as the case may be), (x) the total
consideration received by Lessee or such Subsidiary is cash and is paid at
the time of the closing of such sale, (y) the Net Sale Proceeds therefrom
are applied and/or reinvested as (and to the extent) required by Section
4.02(b) of the Revolver and (z) the Capitalized Lease Obligations and/or
Operating Lease Obligations are otherwise permitted under this Agreement;
(xiii) so long as (x) no Lease Default or Lease Event of Default then
exists or would result therefrom and (y) Lessee shall be in compliance with
the financial covenants contained in Sections 9.5(m) through 9.5(o),
inclusive, and 9.5(r), with such covenants to be calculated on a pro forma
basis, Lessee may, and may permit its Subsidiaries to, exchange (for
reasonably equivalent value, a portion thereof which may include cash) any
inventory, equipment and other assets (each such transaction an "Asset
Swap"), provided that (A) the sum of (1) the total value of all assets to
be swapped in any fiscal year of Lessee and (2) the total value of assets
sold in accordance with Section 9.5(i)(xiv) in such fiscal year shall not
exceed in the aggregate 10% of the total value of all assets of Lessee and
its Subsidiaries as of the end of the most recently ended fiscal year, (B)
that the disposition and acquisition of the subject inventory, equipment or
other assets occur within 60 days of one another and (C) that any such cash
proceeds received by Lessee or any of its Subsidiaries in connection with
any such Asset Swap shall be applied and/or reinvested as (and to the
extent) required by Section 4.02(b) of the Revolver;
(xiv) each of Lessee and its Subsidiaries may sell assets, so long as
(v) no Lease Default or Lease Event of Default then exists or would result
therefrom, (w) each sale is in an arm's length transaction and Lessee or
the respective Subsidiary receives at least fair market value (as
determined in good faith by Lessee or such Subsidiary, as the case may be),
(x) the total consideration received by Lessee or such Subsidiary is at
least 75% cash and is paid at the time of the closing of such sale, (y) the
Net Sale Proceeds therefrom are applied and/or reinvested as (and to the
extent) required by Section 4.02(b) of the Revolver and (z) the aggregate
amount of the proceeds received from all assets sold
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pursuant to this clause (xiv) plus the total value of the assets swapped
pursuant to Section 9.5(i)(xiii) in any fiscal year of Lessee does not
exceed 10% of the total value of all assets of Lessee and its Subsidiaries
as of the end of the most recently ended fiscal year of Lessee; and
(xv) any of Guarantor and its Subsidiaries may enter into agreements
to effectuate any transaction otherwise prohibited by this Section 9.5(i)
so long as the consummation of any such agreement is conditioned upon
obtaining the consent of the Majority Lenders or repaying the Obligations
in full (other than obligations under Sections 10.4 and 12.1).
(j) Dividends. Guarantor shall not, and will not permit any of its
Subsidiaries to, authorize, declare or pay any Dividends with respect to
Guarantor or any of its Subsidiaries, except that:
(i) (x) any Subsidiary of Lessee may pay Dividends to Lessee or any
Wholly-Owned Subsidiary of Lessee and (y) any non-Wholly-Owned Subsidiary
of Lessee may pay cash Dividends to its shareholders generally so long as
Lessee or its respective Subsidiary, which owns the equity interest in the
Subsidiary paying such Dividends receives at least its proportionate share
thereof (based on the relative holdings of the equity interest in the
Subsidiary paying such Dividends and taking into account the relative
preferences, if any, of the various classes of equity interests of such
Subsidiary), provided that no non-Wholly-Owned Subsidiary of Lessee which
is a Subsidiary Guarantor (as defined in the Revolver) may pay any
Dividends pursuant to this clause (y) at any time that a Lease Default or
Lease Event of Default has occurred and is continuing;
(ii) so long as there shall exist no Lease Default or Lease Event of
Default (both before and after giving effect to the payment thereof) Lessee
may pay cash Dividends to Guarantor, so long as such proceeds are promptly
used by Guarantor to pay (x) corporate overhead costs, directors' fees and
other expenses (including, without limitation, the fees and expenses
permitted pursuant to Section 9.5(l)(iii)), provided that the aggregate
amount of cash Dividends paid during the respective fiscal year pursuant to
this clause (ii), together with the amount of any outstanding loans and
advances made during the respective fiscal year by Lessee pursuant to
Section 9.5(q)(vi) (without reduction for any writedowns or write-offs
thereof), shall not during any fiscal year of Lessee exceed $1,000,000 or
(y) franchise taxes and federal, state and local income taxes and interest
and penalties with respect thereto, if any, payable by Guarantor (provided
that any refund shall be promptly returned by Guarantor to Lessee); and
(iii) so long as there shall exist no Lease Default or Lease Event of
Default (both before and after giving effect to the payment thereof) Lessee
may pay cash Dividends to Guarantor so long as the proceeds thereof are
immediately used by Guarantor to purchase shares of common stock or options
to purchase shares of common stock of Guarantor held by former employees of
Lessee following the termination of their employment by Lessee or any of
its Subsidiaries, provided that the aggregate amount of cash Dividends paid
pursuant to this clause (iii) shall (x) be funded with life insurance
proceeds received by Lessee under life insurance policies maintained with
respect to such employee or (y) to
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the extent not funded as described in preceding clause (x), not during any
fiscal year of Lessee exceed $3,000,000.
(k) Indebtedness. Guarantor will not, and will not permit any of its
Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(i) Indebtedness incurred pursuant to this Agreement and the other
Operative Documents;
(ii) Existing Indebtedness outstanding on the Closing Date and listed
on Schedule 6, without giving effect to any subsequent extensions, renewal
or refinancing thereof except to the extent set forth on Schedule 6,
provided that the aggregate principal amount of Indebtedness to be
extended, renewed or refinanced does not increase from that amount
outstanding at the time of any such extension, renewal or refinancing;
(iii) Indebtedness with respect to surety bonds, appeal bonds or
customs bonds required in the ordinary course of business or in connection
with the enforcement of rights or claims of Lessee or any of its
Subsidiaries or in connection with judgments that do not result in a Lease
Default or Lease Event of Default, provided that the aggregate outstanding
amount of all such surety bonds, appeal bonds and customs bonds permitted
by this clause (iii) shall not at any time exceed $5,000,000;
(iv) Indebtedness under Interest Rate Protection Agreements on terms
acceptable to the "Administrative Agent" (as defined in the Revolver);
(v) Indebtedness evidenced by Capitalized Lease Obligations to the
extent permitted pursuant to Section 9.5(r), provided that in no event
shall the aggregate principal amount of Capitalized Lease Obligations and
Purchase Money Indebtedness permitted by this clause (v) exceed $15,000,000
at any time outstanding;
(vi) Indebtedness of Lessee and its Subsidiaries evidenced by Lessee
Senior Discount Notes outstanding on the Closing Date (and guarantees
thereof) plus the amount of interest on such Lessee Senior Discount Notes
paid in kind or through accretion or capitalization;
(vii) accrued expenses and current trade accounts payable incurred in
the ordinary course of business and unsecured guarantees of Lessee or any
of its Subsidiaries of such trade accounts payable, and obligations under
trade letters of credit incurred by Lessee or such Subsidiary in the
ordinary course of business, which are to be repaid in full not more than
one year after the date on which such Indebtedness is originally incurred
to finance the purchase of goods by Lessee or such Subsidiary;
(viii) Indebtedness of Lessee under any Other Hedging Agreement which
is entered into to protect Lessee against fluctuations in currency values
so long as such Other Hedging Agreements are for bona fide business
purposes and are not speculative;
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(ix) Indebtedness of Lessee not to exceed $3,000,000 at any time
outstanding and secured by insurance cancellation premiums relating to
insurance maintained by Lessee in the ordinary course of business;
(x) intercompany Indebtedness among Lessee and its Subsidiaries to the
extent permitted by Section 9.5(q);
(xi) (A) unsecured guarantees by Guarantor of Indebtedness, Operating
Lease Obligations or other obligations of its Domestic Subsidiaries that
are permitted to be incurred hereunder, (B) guarantees by Foreign
Subsidiaries of Indebtedness, Operating Lease Obligations or other
obligations of other Foreign Subsidiaries of the Borrower that are
permitted to be incurred hereunder and (C) unsecured performance guarantees
by Guarantor and its Subsidiaries of their respective Subsidiaries',
Domestic Joint Ventures' and Foreign Joint Ventures' service, supply or
other similar contracts so long as (A) any such contract and the
performance guaranty given in respect thereof are entered into in the
ordinary course of business and (B) in no event shall any such guaranty
guarantee the payment of any Indebtedness of such Subsidiary, Domestic
Joint Venture or Foreign Joint Venture.
(xii) Indebtedness of any Foreign Subsidiary of Lessee the proceeds of
which Indebtedness are used for such Foreign Subsidiary's and/or its
Foreign Subsidiaries' working capital and general corporate purposes (the
"Foreign Subsidiary Indebtedness");
(xiii) Indebtedness consisting of Capitalized Lease Obligations,
Purchase Money Indebtedness or other Indebtedness which does not constitute
debt for borrowed money of a Subsidiary acquired pursuant to a Permitted
Acquisition (or such Indebtedness was assumed at the time of a Permitted
Acquisition of an asset securing such Indebtedness) or an investment in a
Domestic Subsidiary acquired pursuant to Section 9.5(q)(xii) or (xiv),
provided that such Indebtedness was not incurred in connection with, or in
anticipation or contemplation of, such Permitted Acquisition or such
investment;
(xiv) Indebtedness of Lessee and its Subsidiaries consisting of
letters of credit and reimbursement obligations with respect thereto,
including renewals or extensions thereof, so long as the aggregate stated
amount of such letters of credit at any time outstanding does not exceed
$17,500,000 (such amount to be reduced by the aggregate principal amount of
all outstanding Letters of Credit issued under the Revolver); and
(xv) Indebtedness of Lessee and its Subsidiaries to the extent not
permitted by the foregoing clauses of this Section 9.5(k) not to exceed
$20,000,000 in aggregate principal amount at any time outstanding.
(l) Transactions with Affiliates. Guarantor will not, and will not
permit any of its Subsidiaries to, enter into any transaction or series of
related transactions, whether or not in the ordinary course of business, with
any Affiliate of Guarantor or any of its Subsidiaries, other than in the
ordinary course of business and on terms and conditions substantially as
favorable to Guarantor or such Subsidiary as would reasonably be obtained by
Guarantor or such Subsidiary
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at that time in a comparable arm's-length transaction with a Person other than
an Affiliate, except that (i) Dividends may be paid to the extent provided in
Section 9.5(j), (ii) loans may be made and other transactions may be entered
into by Guarantor and its Subsidiaries to the extent permitted by Section
9.5(q), (iii) customary fees may be paid to directors of Guarantor and its
Subsidiaries, (iv) options to purchase common stock of Guarantor may be granted
to officers and directors of Guarantor and its Subsidiaries in the ordinary
course of business, (v) Guarantor and its Subsidiaries may enter into employment
arrangements with their respective officers in the ordinary course of business,
(vi) customary payments to the directors of Guarantor and its Subsidiaries in
the ordinary course of business and (vii) Guarantor or its Subsidiaries may pay
directors' fees to the directors of Guarantor or any of its Subsidiaries in an
aggregate amount for all such Persons not to exceed $500,000 per year. Except as
specifically provided above, no management or similar fees shall be paid or
payable by Guarantor or any of its Subsidiaries to any Person other than
customary investment banking, financing and similar fees arising in connection
with transactions after the date hereof.
(m) Consolidated EBITDAR to Total Interest Expense. Guarantor will not
permit the ratio of (i) Consolidated EBITDAR to (ii) the sum of Total Interest
Expense plus all lease expenses for such Test Period associated with the
transaction contemplated herein for any Test Period ending on the last day of a
fiscal quarter set forth below to be less than the ratio set forth opposite such
fiscal quarter below:
Period Ratio
------ ---------
June 30, 2000 2.00:1.00
September 30, 2000 2.00:1.00
December 31, 2000 2.00:1.00
March 31, 2001 2.15:1.00
June 30, 2001 2.15:1.00
September 30, 2001 2.20:1.00
December 31, 2001 2.20:1.00
March 31, 2002 2.30:1.00
June 30, 2002 2.30:1.00
September 30, 2002 2.35:1.00
December 31, 2002 2.35:1.00
March 31, 2003 2.40:1.00
June 30, 2003 2.40:1.00
September 30, 2003 2.45:1.00
December 31, 2003 2.45:1.00
March 31, 2004 2.50:1.00
June 30, 2004 and the last day of 2.50:1.00.
each fiscal quarter thereafter
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(n) Maximum Leverage Ratio. Guarantor will not permit the Leverage
Ratio at any time during a period set forth below to be greater than the ratio
set forth opposite such period below:
Period Ratio
------ ---------
Date hereof 5.75:1.00
Through and including June 30, 2000
July 1, 2000 5.75:1.00
Through and including September 30, 2000
October 1, 2000 5.75:1.00
Through and including December 31, 2000
January 1, 2001 5.50:1.00
Through and including March 31, 2001
April 1, 2001 5.50:1.00
Through and including June 30, 2001
July 1, 2001 5.35:1.00
Through and including September 30, 2001
October 1, 2001 5.35:1.00
Through and including December 31, 2001
January 1, 2002 5.25:1.00
Through and including March 31, 2002
April 1, 2002 5.25:1.00
Through and including June 30, 2002
July 1, 2002 5.15:1.00
Through and including September 30, 2002
October 1, 2002 5.15:1.00
Through and including December 31, 2002
January 1, 2003 4.75:1.00
Through and including March 31, 2003
April 1, 2003 4.75:1.00
Through and including June 30, 2003
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Period Ratio
------ ---------
July 1, 2003 4.50:1.00
Through and including September 30, 2003
October 1, 2003 4.50:1.00
Through and including December 31, 2003
January 1, 2004 4.25:1.00
Through and including March 31, 2004
April 1, 2004 4.25:1.00
Through and including June 30, 2004
July 1, 2004 4.00:1.00
Through and including September 30, 2004
October 1, 2004 4.00:1.00
Through and including December 31, 2004
January 1, 2005 3.75:1.00.
Through and including March 31, 2005
(o) Maximum Senior Secured Leverage Ratio. Guarantor will not permit
the Senior Secured Leverage Ratio at any time during a period set forth below to
be greater than the ratio set forth opposite such period below:
Period Ratio
------ ---------
Date hereof 3.75:1.00
Through and including June 30, 2000
July 1, 2000 3.75:1.00
Through and including September 30, 2000
October 1, 2000 3.75:1.00
Through and including December 31, 2000
January 1, 2001 3.00:1.00
Through and including March 31, 2001
April 1, 2001 3.00:1.00
Through and including June 30, 2001
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Period Ratio
------ ---------
July 1, 2001 2.85:1.00
Through and including September 30, 2001
October 1, 2001 2.85:1.00
Through and including December 31, 2001
January 1, 2002 2.75:1.00
Through and including March 31, 2002
April 1, 2002 2.75:1.00
Through and including June 30, 2002
July 1, 2002 2.65:1.00
Through and including September 30, 2002
October 1, 2002 2.65:1.00
Through and including December 31, 2002
January 1, 2003 2.50:1.00
Through and including March 31, 2003
April 1, 2003 2.50:1.00
Through and including June 30, 2003
July 1, 2003 2.35:1.00
Through and including September 30, 2003
October 1, 2003 2.35:1.00
Through and including December 31, 2003
January 1, 2004 2.25:1.00
Through and including March 31, 2004
April 1, 2004 2.25:1.00
Through and including June 30, 2004
July 1, 2004 2.25:1.00
Through and including September 30, 2004
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Period Ratio
------ ---------
October 1, 2004 2.25:1.00
Through and including December 31, 2004
January 1, 2005 2.25:1.00.
Through and including Xxxxx 00, 0000
(x) Business. Lessee will not, and will not permit any of its
Subsidiaries to, engage (directly or indirectly) in any business other than the
business in which Lessee or such Subsidiary is engaged on the date hereof and
reasonable extensions thereof and businesses ancillary thereto.
(q) Advances, Investments and Loans. Guarantor will not, and will not
permit any of its Subsidiaries to, directly or indirectly, lend money or credit
or make advances to any Person, or purchase or acquire any stock, obligations or
securities of, or any other interest in, or make any capital contribution to,
any other Person, or purchase or own a futures contract or otherwise become
liable for the purchase or sale of currency or other commodities at a future
date in the nature of a futures contract, or hold any cash or Cash Equivalents,
except that the following shall be permitted:
(i) Lessee and its Subsidiaries may acquire and hold accounts
receivable, trade receivables, prepaid expenses and similar items owing to
any of them, if created or acquired in the ordinary course of business;
(ii) Lessee and its Subsidiaries may acquire and hold cash and Cash
Equivalents;
(iii) non-cash consideration received by Guarantor or any of its
Subsidiaries in connection with any asset sale to the extent permitted by
Section 9.5(i);
(iv) Lessee and its Subsidiaries may receive and hold investments in
connection with the bankruptcy or reorganization of suppliers and customers
and in settlement of delinquent obligations of, and other disputes with,
customers and suppliers arising in the ordinary course of business;
(v) Lessee and its Subsidiaries may make payroll advances in the
ordinary course of business;
(vi) so long as no Lease Default or Lease Event of Default then exists
(both before and after giving effect to the payment thereof), Lessee may
make loans to Guarantor to enable Guarantor to pay the amounts described in
Sections 9.5(j)(ii) and 9.5(j)(iii), in an aggregate amount not to exceed
in any fiscal year $1,000,000 less any amounts paid pursuant to Sections
9.5(j)(ii) and 9.5(j)(iii) during such fiscal year;
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(vii) Lessee and its Subsidiaries may hold the investments held by
them on the Closing Date and as set forth on Schedule 10;
(viii) Lessee and its Subsidiaries may enter into, invest in and make
loans and advances to (x) corporations, associations, partnerships,
business trusts and other business entities organized in the United States,
any state thereof or Canada which would not, after the respective
investment, be a Subsidiary of Guarantor (each a "Domestic Joint Venture"),
provided that (i) neither Guarantor nor any of its Subsidiaries is liable
for any Indebtedness or other obligations of any nature whatsoever (whether
absolute, accrued, contingent or otherwise and whether or not due) of any
such Domestic Joint Venture (other than unsecured performance guarantees of
any such Domestic Joint Venture's service, supply or other similar
contracts so long as (A) any such contract and the performance guaranty
given in respect thereof are entered into in the ordinary course of
business and (B) in no event shall any such guaranty the payment of any
Indebtedness of such Domestic Joint Venture) and (ii) the net aggregate
amount of all such investments and loans in Domestic Joint Ventures shall
at no time exceed $10,000,000 in any fiscal year of Lessee (and $25,000,000
in the aggregate);
(ix) Guarantor and its Subsidiaries may make loans and advances in the
ordinary course of business to their respective employees so long as the
aggregate principal amount thereof at any time outstanding (determined
without regard to any write-downs or write-offs of such loans and advances)
shall not exceed $500,000;
(x) Lessee may enter into Interest Protection Agreements or Other
Hedging Agreements to the extent permitted by Section 9.5(k)(iv) and (ix);
(xi) Lessee may make intercompany loans and advances between or among
one another (together with the intercompany loans and advances made
pursuant to Section 9.5(q)(xii), collectively, "Intercompany Loans") or
equity investments, so long as (x) no such Intercompany Loan shall be
evidenced by a promissory note or other instrument except an Intercompany
Note that is pledged to the Collateral Agent pursuant to the Pledge
Agreement;
(xii) Lessee and the Subsidiary Guarantors may make intercompany loans
and advances to, or equity investments in, a non-Wholly Owned Domestic
Subsidiary that is a Subsidiary Guarantor (or that upon the making of any
equity investment will become such a Subsidiary Guarantor unless, pursuant
to Section 8.11(d) of the Revolver, such non-Wholly Owned Domestic
Subsidiary is not required to become a Subsidiary Guarantor) so long as (x)
no such Intercompany Loan shall be evidenced by a promissory note or other
instrument except an Intercompany Note that is pledged to the Collateral
Agent pursuant to the Pledge Agreement and (y) the net aggregate amount of
all such investments made pursuant to this clause (xii) shall not exceed
$20,000,000 in any fiscal year of Lessee (and $60,000,000 in the
aggregate);
(xiii) Lessee and its Subsidiaries may effect Permitted Acquisitions
in accordance with the requirements of Section 9.5(i)(viii); and
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(xiv) Lessee and its Subsidiaries may enter into, invest in (including
by transferring assets) and make loans and advances to (x) Foreign Joint
Ventures and (y) Foreign Subsidiaries, provided that (i) neither Guarantor
nor any of its Subsidiaries is liable for any Indebtedness or other
obligations of any nature whatsoever (whether absolute, accrued, contingent
or otherwise and whether or not due) of any such Foreign Joint Venture or
Foreign Subsidiary (other than unsecured performance guarantees of any such
Foreign Joint Venture's or Foreign Subsidiary's service, supply or other
similar contracts so long as (A) any such contract and the performance
guaranty given in respect thereof are entered into in the ordinary course
of business and (B) in no event shall any such guaranty guarantee the
payment of any Indebtedness of such Foreign Joint Venture or Foreign
Subsidiary), (ii) all such Foreign Joint Ventures and Foreign Subsidiaries
are located or operated only in a Permitted Country and (iii) the net
aggregate amount of all such investments and loans in Foreign Joint
Ventures and Foreign Subsidiaries shall at no time exceed $20,000,000
(using the fair market value of property other than cash) in any fiscal
year of Lessee (and $60,000,000 in the aggregate); provided that no more
than $30,000,000 in the aggregate shall be invested in Foreign Joint
Venture and Foreign Subsidiaries located or operating in Restricted
Countries (it being understood that, for purposes of this clause (xiv), the
amounts set forth above in this clause (xiv) shall be increased by the
amount of any cash payments of principal in the case of loans and cash
equity returns (whether as a dividend or redemption) in the case of equity
investments, in each case which are received after the Closing Date from a
non-U.S. Person constituting a Foreign Joint Venture or a Foreign
Subsidiary otherwise permitted under this Section 9.5(q)).
(r) Capital Expenditures. (i) Guarantor will not, and will not permit
any of its Subsidiaries to, make any Capital Expenditures, except that (A)
Lessee and its Subsidiaries may make Capital Expenditures in its fiscal years
ending March 31, 2001 and March 31, 2002 and (B) during any fiscal year of
Lessee set forth below, Lessee and its Subsidiaries may make Capital
Expenditures so long as the aggregate amount of such Capital Expenditures does
not exceed in any such fiscal year, the amount set forth opposite such fiscal
year below:
Fiscal Year Ending Amount
------------------ ------------
March 31, 2003 $125,000,000
March 31, 2004 $ 80,000,000
March 31, 2005 $ 80,000,000
(ii)(A) In addition to the foregoing, to the extent that the amount of
Capital Expenditures made by Lessee and its Subsidiaries during any fiscal year
of Lessee set forth in the table in clause (i)(B) of this Section
9.5(r)(exclusive, however, of Capital Expenditures made pursuant to Sections
9.5(r)(iii), (iv), (v) and (vi)) is less than the amount applicable to the
respective fiscal year as set forth in such table (and without increasing any
such amount set forth in such table by the amount of any additional amounts
permitted to be spent in such fiscal year pursuant to this sentence), such
amount may be carried forward and utilized to make Capital Expenditures in
excess of the amount permitted in clause (i)(B) above in the following fiscal
year; provided that the aggregate amount expended on Capital Expenditures in any
fiscal year set
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forth in such table shall not exceed 125% of the amount permitted to be made in
such fiscal year as set forth in clause (i)(B) of this Section 9.5(r).
(B) In addition to the foregoing, to the extent that the amount of
Capital Expenditures made by Lessee and its Subsidiaries during the period from
April 1, 2000 through March 31, 2002 (exclusive, however, of Capital
Expenditures made pursuant to Sections 9.5(r)(iii), (iv), and (v)) is less than
$218,500,000, such amount may be carried forward and thereafter utilized to make
additional Capital Expenditures.
(iii) In addition to the foregoing, the amount of Net Sale Proceeds
received by Lessee or any of its Subsidiaries from any Asset Sale, or sale of
assets permitted pursuant to Section 9.5(i)(vii), may be reinvested in
replacement assets within 18 months following the date of such Asset Sale or
sale of assets to the extent such Net Sale Proceeds are not required to be
applied pursuant to Section 4.02(b) of the Revolver, and, to the extent so
reinvested, shall not count as Capital Expenditures for purposes of determining
compliance with clauses (i) and (ii) of this Section 9.5(r).
(iv) In addition to the foregoing, Lessee and its Subsidiaries may make
Capital Expenditures with (A) the cash proceeds of any issuance of equity by
Guarantor (other than the first $100,000,000 of gross cash proceeds received
from the Guarantor IPO) and (B) common stock of Guarantor or Qualified Preferred
Stock of Guarantor.
(v) In addition to the foregoing, Lessee and its Subsidiaries may make
Capital Expenditures in an amount equal to the amount by which Consolidated
EBITDA for any fiscal year of Lessee exceeded Consolidated EBITDA for such
fiscal year as set forth in the Projections.
(vi) In addition to the foregoing, during Lessee's fiscal years ending
March 31, 2003, 2004 and 2005, Lessee and its Subsidiaries may make additional
Capital Expenditures constituting Permitted Acquisitions or investments made
pursuant to Section 9.5(q)(xii) and (xiv) so long as the aggregate amount
thereof during such fiscal years does not exceed $20,000,000, $35,000,000 and
$50,000,000, respectively.
(vii) Notwithstanding anything above in this Section 9.5(r) to the
contrary, in no event may Lessee or any of its Subsidiaries make Capital
Expenditures pursuant to any single transaction (or series of related
transactions) which exceeds $75,000,000 (subject to any additional restrictions
or limitations set forth in Section 9.5(i)(viii)). In addition, nothing in this
Section 9.5(r) shall permit either (A) a Permitted Acquisition that is not
otherwise permitted under Section 9.5(i)(viii) or (B) an investment that is not
otherwise permitted under Section 9.5(q)(xii) or (xiv).
(s) Public Utility Holding Company. Guarantor will not, and will not
permit any of its Subsidiaries to directly or indirectly own, control or hold
with power to vote any "voting security" of an "electric utility company" or a
"gas utility company" or a "holding company" holding any "voting security" of
either the foregoing, as such terms are defined in the Public Utility Holding
Company Act of 1935.
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(t) Special Purpose Corporation. (i) Guarantor shall not engage in any
business activities other than the ownership of the capital stock of Lessee, the
issuance of Qualified Preferred Stock, and the execution, delivery and
performance of the Operative Documents and the Revolver. In no event shall
Guarantor be permitted to incur or suffer to exist any Indebtedness on, or
create or suffer to exist any Liens on, its assets; provided that Guarantor may
engage in any necessary activity with respect to (A) the maintenance of its
corporate or trust existence and compliance with applicable law, (B) accounting,
legal, public relations, investor relations, financial or management activities
(including the employment of employees, counsel, accountants, consultants,
bankers, advisors or other professionals in connection with any of the foregoing
activities), and (C) entering into, performing its obligations and exercising
its rights under the Operative Documents, the Revolver and the other agreements
permitted by the Operative Documents to which it is a party.
(ii) Guarantor shall have no Subsidiaries other than Lessee and
Lessee's Subsidiaries.
(u) End of Fiscal Years; Fiscal Quarters. Guarantor shall cause (i)
each of its fiscal years and fourth fiscal quarter to end on March 31 of each
year, and (ii) each of its first three fiscal quarters to end on June 30,
September 30 and December 31 of each year.
(v) Punctual Payment. Lessee shall duly and punctually pay or cause to
be paid all Lease Payments, Supplemental Payments, Availability Fees, and all
other fees and other amounts from time to time owing by it hereunder and under
the other Operative Documents, all in accordance with the terms of this
Agreement and the other Operative Documents.
(w) Perfection and Maintenance of Security Interest. Lessee, at its
expense, shall, as soon as possible, but in any event no later than the 10th day
after any request, make, execute, endorse, acknowledge, file and/or deliver to
Collateral Agent from time to time such confirmatory assignments, conveyances,
financing and continuation statements, transfer endorsements and other
assurances or instruments and take such further actions which Administrative
Agent may reasonably request to perfect, preserve or protect Collateral Agent's
or Lessor's security interest in the Collateral granted in the Lease Agreement
and herein, or which Administrative Agent reasonably deems necessary or
advisable to obtain the full benefits of the Liens created or intended to be
created therein and herein.
(x) Default and Cross Default on Material Debt. Lessee agrees that if a
Lease Default or a Lease Event of Default shall occur, or if Lessee or any of
its Subsidiaries (i) fails to make (whether as primary obligor or as guarantor
or other surety) any principal payment of or interest or premium, if any, on any
Indebtedness (other than the obligations under the Operative Documents) beyond
any period of grace provided with respect thereto (not to exceed 30 days),
provided that the aggregate amount of all Indebtedness as to which such a
payment default shall occur and be continuing is equal to or exceeds
$10,000,000, or (ii) fails to duly observe, perform or comply with any agreement
with any Person or any term or condition of any instrument, if such failure,
either individually or in the aggregate, shall have caused or shall have the
ability to cause the acceleration of the payment in Indebtedness with an
aggregate face amount which is equal to exceeds $10,000,000, Lessee shall
promptly notify the Administrative Agent thereof.
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(y) Change in Corporate Offices. Each of Lessee and Guarantor shall
provide the Collateral Agent, the Administrative Agent, each Certificate Holder
and each Lender thirty (30) days advance written notice of any change in the
location of its executive offices, principal place of business or any change in
the States in which it does business, or change of its name.
(z) Use of ERISA Assets. At no time shall Guarantor or Lessee use or
attempt to use any assets which would be deemed to be "plan assets" under the
"plan asset regulations" promulgated pursuant to ERISA to satisfy any or all
obligations under the Operative Documents.
(aa) Payment of Fees. During the term of this Agreement, Lessee shall
pay, or cause to be paid, all of the fees set forth in the letter agreement
dated May 22, 2000 between Lessee and Administrative Agent.
(bb) Maintenance of Property; Insurance. (i) Guarantor will, and will
cause each of its Subsidiaries to, (A) keep all property necessary to the
business of Guarantor and its Subsidiaries taken as a whole in reasonably good
working order and condition, (B) maintain insurance on all such property in at
least such amounts and against at least such risks as is consistent and in
accordance with industry practice, and (C) furnish to the Administrative Agent
or the Majority Lenders, upon written request, full information as to the
insurance carried. At any time that Guarantor or any Subsidiary of Guarantor
fails to maintain insurance (other than property or business interruption
insurance) at the levels maintained on the Closing Date, Guarantor will, or will
cause one of its Subsidiaries to, notify the Administrative Agent and the
Majority Lenders in writing within three (3) Business Days thereof and, if
thereafter notified by the Majority Lenders to do so, Guarantor or any such
Subsidiary, as the case may be, shall obtain such insurance at such levels to
the extent such insurance is reasonably available. In addition to the
requirements of the immediately preceding sentence, Guarantor and Lessee will at
all times cause liability and business interruption insurance of the type
maintained on the Closing Date to be maintained (with the same scope of coverage
as on the Closing Date) at levels which are at least as great as the respective
amounts maintained on the Closing Date.
(ii) Guarantor will, and will cause its Subsidiaries to, at all times
keep its insured property insured in favor of the Collateral Agent, and all
policies or certificates (or certified copies thereof) with respect to any
property insurance, general liability and, within ten Business Days after the
date hereof, political risk insurance (A) shall be endorsed to the Collateral
Agent's reasonable satisfaction for the benefit of the Collateral Agent
(including, without limitation, by naming the Collateral Agent as loss payee
and/or additional insured), (B) shall state that such insurance policies shall
not be canceled or revised without 30 days' prior written notice thereof by the
respective insurer to the Collateral Agent, (C) shall provide that the
respective insurers irrevocably waive any and all rights of subrogation with
respect to the Collateral Agent and the Lenders, (D) shall, except in the case
of public liability insurance, workers' compensation and cargo insurance,
provide that any losses shall be payable notwithstanding (I) any act or neglect
of Guarantor or any of its Subsidiaries, (II) the occupation or use of the
properties for purposes more hazardous than those permitted by the terms of the
respective policy if such coverage is obtainable at commercially reasonable
rates and is of the kind from time to time customarily insured against by
Persons owning or using similar property and in such amounts as are customary,
(III) any foreclosure or other proceeding relating to the
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insured properties or (IV) any change in the title to or ownership or possession
of the insured properties and (E) shall be deposited with the Collateral Agent.
If Guarantor or any of its Subsidiaries shall fail to insure its property in
accordance with this Section 9.5(bb)(ii), or if Guarantor or any of its
Subsidiaries shall fail to so endorse and deposit all policies or certificates
with respect thereto, the Collateral Agent shall have the right (but shall be
under no obligation), upon ten (10) Business Days' prior notice to Lessee, to
procure such insurance and Lessee agrees to reimburse the Collateral Agent for
all costs and expenses of procuring such insurance.
(iii) The foregoing requirements of this Section 9.5(bb) shall not
apply to any equipment or inventory of Guarantor and its Subsidiaries which is
subject to an Equipment Financing Transaction, so long as Guarantor and its
Subsidiaries are in material compliance with any similar requirements imposed by
the terms of such Equipment Financing Transaction.
(cc) Corporate Franchises. Guarantor will, and will cause each of its
Subsidiaries to, do or cause to be done, all things necessary to preserve and
keep in full force and effect its existence and its material rights, franchises,
licenses and patents; provided, however, that nothing in this Section 9.5(cc)
shall prevent (i) transactions in accordance with Section 9.5(i) or (ii) the
withdrawal by Guarantor or any of its Subsidiaries of its qualification as a
foreign corporation in any jurisdiction where such withdrawal could not
reasonably be expected to have a material adverse effect on the business,
operations, property, assets, liabilities, condition (financial or otherwise) or
prospects of Guarantor and its Subsidiaries taken as a whole.
9.6. Covenant of Lenders, Lessor, the Administrative Agent, Collateral
Agent, Trust Company and Certificate Holders. If Lessor, Lender, the
Administrative Agent, the Collateral Agent, Trust Company or any Certificate
Holder is not a U.S. Person, it shall provide, to Lessee and to any other party
making payments to it under the Operative Documents, on the initial Funding Date
(or, if later at the time it becomes Lessor, Lender, Administrative Agent,
Collateral Agent or Certificate Holder hereunder, as the case may be) and at
such times as may be necessary thereafter under Applicable Law as in effect on
the Closing Date (including Treasury regulations promulgated under Section 1441
of the Code presently scheduled as of the Closing Date to go into effect on
January 1, 2001) and at such other times as shall be reasonably requested by
Lessee or any other party making payments to it under the Operative Documents, a
fully completed Internal Revenue Service Form W-8 or successor form (including
an Internal Revenue Service Form W-8 as specified in Treasury Regulations
section 1.1441-4(a) presently scheduled as of the Closing Date to go into effect
on January 1, 2001) upon which Lessee or such other party can rely establishing
that all payments to each such Person under the Operative Documents can be made
free and clear of any requirement to withhold any federal income tax therefrom;
provided, however, that each such Person shall not be required to provide such
forms if, solely as a result of a change after the Closing Date in Applicable
Law as in effect on the Closing Date (or such later date) (but not including as
a change for this purpose, the coming into effect of Treasury Regulations
Section 1.1441-4(a) in the form scheduled as of the Closing Date to go into
effect on January 1, 2001 including any changes made thereto prior to coming
into effect that do not alter the substantive effect or application of such
forms referenced in such regulations), such Person is not legally entitled to
deliver such form. In the event of a failure to provide any form as required
under this Section 9.6 by any Lender, Lessor, the Administrative Agent, the
Collateral Agent, Trust Company, or any Certificate Holder, the relevant party
shall be
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entitled to withhold from any payment made pursuant to the Operative Documents
to such Person the appropriate amount of federal income tax, notwithstanding the
provisions of the Operative Documents to the contrary and provided further, that
Lessee shall not have any indemnity obligation to such Person pursuant to
Section 10.3.5 hereof to the extent related to such failure.
10. Indemnities.
10.1. Lessee General Indemnification. Lessee hereby assumes liability
for, and does hereby agree to indemnify, protect, save, defend, and hold
harmless each Lessee Indemnified Person on an After-Tax Basis, from and against
any and all obligations, fees, liabilities, losses, damages, penalties, claims,
demands, actions, suits, judgments and related costs and expenses, including
reasonable legal fees and expenses, of every kind and nature whatsoever, imposed
on, incurred by, or asserted against such Lessee Indemnified Person
(collectively, "Losses"), which relate in any way to or arise in any way out of
(a) the manufacture, construction, ordering, transfer, acceptance or rejection,
ownership, transfer of ownership, titling or re-titling, registration or
re-registration, delivery, leasing, subleasing, possession, use, operation,
maintenance, storage, removal, redelivery, repossession, mortgaging, granting of
any interest in, transfer of title to, acquisition, sale or other application or
disposition, disposition of licensing, documentation, of any Item of Equipment,
or any part thereof, including, without limitation, any of such as may arise
from (i) loss or damage to any property or death or injury to any Persons, (ii)
patent or latent defects in any Items of Equipment (whether or not discoverable
by Lessee or any Lessee Indemnified Person), (iii) any claims based on strict
liability in tort or negligence, (iv) any claims related to the release of any
substance into the environment and (v) any claims based on patent, trademark,
trade name or copyright infringement, or (b) the Operative Documents or the
transactions contemplated hereby or thereby, or (c) any failure on the part of
Lessee or Guarantor to perform or comply with any Applicable Law, any of the
terms of any Operative Document to which it is a party or any instrument
referred to or contemplated hereby or thereby or the nonconformity of any
Equipment with Applicable Law, or (d) reliance on any representation or warranty
made or deemed made by Lessee or Guarantor or any of their respective officers
under or in connection with any Operative Document which shall have been false
or incorrect in any material respect when made or deemed made or delivered, or
(e) any repayment to Lessee by the Lessor, Administrative Agent, Collateral
Agent, any Certificate Holder or any Lender of any amount previously distributed
hereunder which amount the Administrative Agent, Collateral Agent or any Lender
is required to repay, or (f) any investigation, litigation or proceeding related
to any Operative Document or the use of proceeds of Loans or Equity
Contributions or the ownership of the Notes or Certificates or in respect of the
Lease Agreement, or (g) the failure to vest or maintain vested in Lessor and
Collateral Agent or to transfer to Lessor or Collateral Agent an undivided
security interest in the Lessee Collateral or the Lessor Collateral,
respectively, including collections free and clear of Liens to the extent
required by the Operative Documents. Lessee shall be subrogated to a Lessee
Indemnified Person's rights in any matter with respect to which Lessee has
actually reimbursed such Lessee Indemnified Person for amounts expended by it or
has actually paid such amounts directly pursuant to this Section 10.1. In case
any claim, action, suit or proceeding is made or brought against any Lessee
Indemnified Person in connection with any claim indemnified against hereunder,
Lessee Indemnified Person will, promptly after receipt of notice of such claim
or the
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commencement of such action, suit or proceeding, notify Lessee thereof,
enclosing a copy of all papers served upon such Lessee Indemnified Person, but
failure to give such notice or to enclose such papers shall not relieve Lessee
from any liability hereunder unless such failure materially and adversely
affects Lessee's defense of such claim resulting in a material increase in
liability of Lessee in respect of such claim or preventing it from reducing
liability therefor, in which case Lessee shall not be required to indemnify such
Lessee Indemnified Person for the amount by which such liability was increased
or not reduced for failure to give such notice. Provided no Lease Event of
Default has occurred, Lessee will be entitled to participate in, and assume the
defense of, such claim, action, suit or proceeding, or cause the same to be
resisted or defended by counsel selected by Lessee and reasonably acceptable to
Lessor; provided, however, if such claim, action, suit or proceeding involves
any material risk of loss or forfeiture of title to the Equipment (unless Lessee
shall have posted a bond or other security reasonably satisfactory to Lessor in
respect of such risk) or any material risk of criminal penalty being assessed
against any Lessee Indemnified Person, upon such Lessee Indemnified Person's
request, Lessee will at its expense, cause such claim, action, suit or
proceeding to be resisted or defended by counsel selected by such Lessee
Indemnified Person and reasonably acceptable to Lessee. After notice from Lessee
to such Lessee Indemnified Person of Lessee's election to so assume the defense
of such claim, action, suit or proceeding, Lessee will not be liable to such
Lessee Indemnified Person for any costs and expenses of any settlement of such
claim, action, suit or proceeding effected by such Lessee Indemnified Person
without the prior written consent of Lessee (which consent will not be
unreasonably withheld). Such Lessee Indemnified Person may participate at its
own expense in any such claim, action, suit or proceeding controlled by Lessee
pursuant hereto; provided such participation does not, in the opinion of
independent counsel appointed by Lessee, interfere with such control) and such
participation will not constitute a waiver of the indemnification provided in
this Section 10. In the event of any failure by Lessee to satisfy its
obligations under this Section 10.1, Lessee shall pay all reasonable costs and
expenses (including, without limitation, attorney's fees and expenses) incurred
by such Lessee Indemnified Person in connection with such action, suit or
proceeding. Additionally, if outside counsel to such Lessee Indemnified Person
determines that a conflict of interest exists between such Lessee Indemnified
Person and Lessee regarding any Loss indemnified hereunder, Lessee agrees to pay
the reasonable fees and expenses of separate counsel for and as selected by such
Lessee Indemnified Person. The provisions of this Section 10.1, and the
obligations of Lessee under this Section 10.1, shall apply from the date of the
execution of this Agreement notwithstanding that the Term may not have commenced
with respect to any Item of Equipment, and shall survive and continue in full
force and effect notwithstanding the expiration or earlier termination of this
Agreement, the Lease Agreement or any other Operative Document in whole or in
part, including the expiration of termination of the Term with respect to any
Item of Equipment, and are expressly made for the benefit of, and shall be
enforceable by, each Lessee Indemnified Person.
10.2. Exceptions to Lessee's General Indemnification. Notwithstanding
the terms of Section 10.1, Lessee shall not be required to indemnify any Lessee
Indemnified Person under Section 10.1 for any of the following: (i) any Loss to
the extent resulting from the willful misconduct or gross negligence of such
Lessee Indemnified Person (it being understood that Lessee shall be required to
indemnify any Lessee Indemnified Person even if the ordinary (but not gross)
negligence of such Lessee Indemnified Person caused or contributed to such
Loss), (ii)
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any Loss resulting from Lessor Liens attributable to such Lessee Indemnified
Person, (iii) any Loss to the extent attributable to acts or events occurring
after the end of the Term, if any, so long as no Lease Event of Default shall
have occurred and be continuing and the Equipment has either been purchased or
redelivered in accordance with the terms of Section 6.1, 28.2, 28.3, 28.4 or
28.5 of the Lease Agreement, (iv) any Loss (other than a Loss arising from a
Loan Event of Default attributable to a Lease Event of Default) arising from a
breach by such Lessee Indemnified Person of any agreement entered into in
connection with the assignment or participation of any interest of such Lessee
Indemnified Person under the Lease Agreement or the other Operative Documents,
(v) any Loss to the extent arising or resulting from the failure of such Lessee
Indemnified Person to comply with laws applicable to banks or their affiliates
generally or the failure of such Lessee Indemnified Person to file any material
notice, report, filing or other document required by any Governmental Entity
regulating banks or their affiliates in connection with such Lessee Indemnified
Person's execution of, and participation in the transactions contemplated by,
the Operative Documents except to the extent resulting from the acts or
omissions of Lessee or Guarantor, (vi) any other expense or Loss to the extent
expressly provided under any of the Operative Documents to be paid or borne by
such Lessee Indemnified Person at its own expense, (vii) any Loss to the extent
resulting from the offer, sale, disposition or transfer by such Lessee
Indemnified Person of all or part of its interest in the Operative Documents,
other than a Loss arising as a result of the occurrence of a Lease Event of
Default, (viii) any Loss that is a Tax or based on a Tax, (ix) any Loss to the
extent resulting from any business, transaction or other activity in which such
Lessee Indemnified Person is engaged, which has no relation to the transactions
contemplated hereby or by any of the Operative Documents, (x) any Loss resulting
from a Loan Event of Default not attributable to a Lease Event of Default, (xi)
any Loss which is an ordinary and usual operating or overhead expense of such
Lessee Indemnified Person except expenses incurred relating to an Lease Event of
Default, (xii) any Loss in connection with any dispute between or among Lessee
Indemnified Persons other than Losses caused by a Lease Event of Default and
(xiii) any Loss arising under Section 406(a) of ERISA or Section 4975 of the
Code (i) as a result of Loans or funds advanced by the Lenders or Certificate
Holders being deemed to be "plan assets" under the "plan asset regulations"
promulgated pursuant to ERISA or (ii) as a result of a violation of Section
406(b) of ERISA or Section 4975(c)(1) (E) or (F) of the Code by Lenders or
Certificate Holders; provided that Lenders or Certificate Holders not making
such advancement of such Loan or Equity Contribution, or violating such section
of sections of the Code or ERISA shall continue to be indemnified by the Lessee.
Section 10.1.1 shall be construed as an indemnity only and not a guaranty of
residual value of the Items.
10.3. Tax Indemnity.
10.3.1. General Indemnity. Subject to the other provisions of
this Section 10.3, Lessee agrees to pay, defend and indemnify and hold Lessor,
Trust Company, Lenders, the Administrative Agent, Collateral Agent and
Certificate Holders and their respective Affiliates, successors and assigns
(including any consolidated or combined group of which any such Person is a
member) (each a "Tax Indemnitee") harmless on an After-Tax Basis from any and
all Federal, state, local and foreign taxes, excise taxes, fees, withholdings,
levies, documentary stamps imposts, duties, assessments, penalties and charges
of any kind and nature whatsoever, together with any penalties, fines or
interest thereon (herein called "Taxes") howsoever
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imposed, whether levied or imposed upon or asserted against a Tax Indemnitee,
Lessee, any Item of Equipment, or any part thereof, by any federal, state or
local government or taxing authority in the United States, or by any taxing
authority of a foreign country or subdivision thereof, upon or with respect to
(a) the Items of Equipment, any Item of Equipment or any part thereof, (b) the
manufacture, construction, ordering, transfer, ownership, transfer of ownership,
titling or re-titling, registration or re-registration, delivery, leasing,
subleasing, possession, use, operation, maintenance, storage, removal, return,
mortgaging, granting of any interest in, transfers of title to, acquisition,
sale or other disposition of licensing, documentation, repossession, sale or
other acquisition or disposition of the Items of Equipment, any Item of
Equipment or any part thereof, (c) the revenues, rent, receipts or earnings
arising from any Item of Equipment or any part thereof, (d) any Operative
Document, (e) any Lease Payment, Availability Fee or Supplemental Payment or any
payment made to a Lender by Lessor, Lessee, Certificate Holders or Trust Company
pursuant to the Operative Documents, or (f) otherwise in respect of the
Operative Documents or any thereof or any transaction or transactions
contemplated hereby or thereby.
10.3.2. Exceptions to Tax Indemnity. Notwithstanding anything
to the contrary in Section 10.3.1, the following shall be excluded from the
indemnity provided under Section 10.3.1: (a) Taxes (other than Taxes that are,
or are in the nature of, sales, use, rental, value added, transfer or property
taxes) that are imposed on a Tax Indemnitee by the United States federal
government that are based on or measured by the gross or net income or gross or
net receipts, taxes based on capital gains and minimum taxes and any and all
withholding Taxes (which, for the avoidance of doubt, are dealt with in Section
10.3.5 hereof) of such Person; provided, that this clause (a) shall not be
interpreted to prevent a payment from being made hereunder on an After-Tax Basis
if such payment is otherwise required to be so made; (b) Taxes (other than Taxes
that are, or are in the nature of, sales, use, rental, value added, transfer or
property taxes) that are imposed on any Tax Indemnitee (other than Lessor or the
Trust) by any state, local or foreign jurisdiction or taxing authority within
any state or local or foreign jurisdiction and that are net income taxes, or are
franchise taxes, any gross income or gross receipts taxes imposed in lieu of a
net income tax, taxes based on capital gains and minimum taxes and any and all
withholding Taxes (which, for the avoidance of doubt, are dealt with in Section
10.3.5 hereof) of such Person; provided that such Taxes shall not be excluded
under this clause (b) to the extent such Taxes would have been imposed had the
location, possession or use of any Equipment in, the location or the operation
of Lessee, Lessor or Guarantor in, or Lessor's, Lessee's or Guarantor's making
payments under the Operative Documents from, the jurisdiction imposing such
Taxes been the sole connection between such Tax Indemnitee and the jurisdiction
imposing such Taxes, unless, however, such Tax Indemnitee would have been
subject to tax in such jurisdiction absent the transactions contemplated by the
Operative Documents; provided further, that this clause (b) shall not be
interpreted to prevent a payment from being made on an After-Tax Basis if such
payment is otherwise required to be so made; (c) provided that all amounts due
from Lessee under the Operative Documents have been paid, any Tax to the extent
it relates to any act, event or omission that occurs after the termination of
the Lease Agreement and, if required, redelivery or sale of an Item of Equipment
in accordance with the terms of the Lease Agreement (but not any Tax that is
imposed with respect to such termination, redelivery or sale or to any period
prior to such termination, redelivery or sale); (d) any Taxes which are imposed
on a Tax Indemnitee as a result of the gross negligence or willful misconduct of
such Tax
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Indemnitee itself, as determined by a court of competent jurisdiction (as
opposed to gross negligence or willful misconduct imputed to such Tax
Indemnitee), but not Taxes imposed as a result of ordinary negligence of such
Tax Indemnitee; (e) Taxes imposed on, or increased (under Applicable Law in
effect on the date of the transfer) as a result of a voluntary transfer by the
Tax Indemnitee or any transfer as a result of the bankruptcy of such Tax
Indemnitee not caused by a an Event of Default under Section 23(a) of the Lease
Agreement of any Item of Equipment or interest therein or any interest in or
arising under any Operative Document or any transactions contemplated thereby
other than any such transfer required by law or by the Operative Document,
occurring pursuant to the exercise of remedies during the continuance of a Lease
Event of Default or requested by Lessee; (f) with respect to Lessor or the
Trust, any Tax that results from or would not have been imposed but for the
breach or inaccuracy of any representation set forth in Section 2.4 or 2.7
hereof, as the case may be; (g) any Tax to the extent resulting in whole or in
part from the failure of any Tax Indemnitee to file a return that is proper and
timely unless such failure results from the failure of Lessee to perform its
obligations under Section 7.3.4 hereof; and (h) any Tax that results from or
would not have imposed but for the failure of any Tax Indemnitee, at Lessee's
sole cost, to provide any form, certificate or other document reasonably
requested by, prepared by and timely provided to such Tax Indemnitee by Lessee,
legally able to be provided by such Tax Indemnitee and necessary to avoid the
imposition of such Tax provided that such Tax Indemnitee reasonably determines
that to so provide such form, certificate or other document would have no
adverse effect on it.
10.3.3. Payment of Taxes. Subject to the terms of Section
10.3.6, Lessee agrees to pay or cause to be paid all Taxes indemnified pursuant
to Section 10.3.1 directly to the taxing authorities where feasible and
otherwise to the Tax Indemnitee, as appropriate, and Lessee shall at its own
expense, upon such Tax Indemnitee's reasonable request, furnish to such Tax
Indemnitee copies of official receipts or other reasonably satisfactory evidence
of such payment. In the case of Taxes for which no contest is conducted pursuant
to Section 10.3.6 and which Lessee pays directly to the taxing authorities,
Lessee shall pay such Taxes prior to the latest time permitted by the relevant
taxing authority for timely payment. In the case of Taxes for which a Lessee
reimburses a Tax Indemnitee, Lessee shall do so within thirty (30) days after
receipt by Lessee of demand by such Tax Indemnitee describing in reasonable
detail the nature of the Tax and the basis for the demand (including without
limitation the computation of the amount payable), accompanied by receipts or
other reasonable evidence of payment of the Tax in respect of such demand. In
the case of Taxes for which a contest is conducted pursuant to Section 10.3.6
Lessee agrees to pay such Taxes or reimburse such Tax Indemnitee for such Taxes,
to the extent not previously paid or reimbursed pursuant to Section 10.3.1,
prior to the latest time permitted by the relevant taxing authority for timely
payment after conclusion of all contests hereunder.
At Lessee's written request, the amount of any indemnification payment
by Lessee pursuant to Section 10.3.1 shall be verified and certified by the
independent public accounting firm regularly engaged by such Tax Indemnitee. The
fees and expenses of such independent public accounting firm shall be paid by
Lessee unless such verification shall result in an adjustment in Lessee's favor
of five percent (5%) or more of the payment as computed by the Tax Indemnitee,
in which case such fee shall be paid by the Tax Indemnitee.
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10.3.4. Tax Filings. Lessee shall be responsible for preparing
and filing any real and personal property or ad valorem tax returns in respect
of the Equipment. In the case of any other report, statement or tax return that
shall be required to be made with respect to any Taxes which are indemnified by
Lessee pursuant to Section 10.3.1, Lessee, at its sole cost and expense, shall
notify the relevant Tax Indemnitee of such requirement and (except if such Tax
Indemnitee notifies Lessee that such Tax Indemnitee intends to prepare and file
such report or return) (a) to the extent required or permitted by and consistent
with filing requirements in the applicable jurisdiction, make and file in
Lessee's name such return, statement or report and (b) in the case of any other
such return, statement or report required to be made in the name of such Tax
Indemnitee, advise such Tax Indemnitee of such fact and prepare such return,
statement or report for filing by such Tax Indemnitee or, where such return,
statement or report shall be required to reflect items in addition to any
obligations of Lessee under or arising out of Section 10.3.1, provide such Tax
Indemnitee at Lessee's expense with information sufficient to permit such
return, statement or report to be properly made with respect to any obligations
of Lessee under or arising out of Section 10.3.1. Such Tax Indemnitee shall,
upon Lessee's request and at Lessee's expense, provide any data not deemed
confidential by such Tax Indemnitee maintained by such Tax Indemnitee (and not
otherwise available to or within the control of Lessee) with respect to the
Equipment which Lessee may reasonably require to prepare any required Tax
returns or reports.
10.3.5. Withholdings. As between Lessee on one hand, and
Lessor, Certificate Holders, Administrative Agent, the Collateral Agent, and
each Lender (each a "Withholding Party") on the other hand, Lessee shall be
responsible for, and Lessee shall indemnify and hold harmless each Withholding
Party on an After Tax Basis against, any obligation for United States or foreign
withholding taxes or similar levies, imposts, charges, fees, deductions or
withholdings (collectively, "Withholdings") imposed in respect of any part of
the Lease Payments or Availability Fees payable by such Lessee to Lessor, any
amounts payable by Lessor to Certificate Holders, the interest payable on the
Notes, the Loan Availability Fees or with respect to any other payments under
the Operative Documents (all such payments being referred to herein as "Exempt
Payments" to be made without deduction, withholding or set off) (and, if any
Withholding Party receives a demand for such payment from any taxing authority
or a Withholding is otherwise required with respect to any Exempt Payment,
Lessee shall discharge such demand on behalf of such Withholding Party);
provided, however, that the obligation of Lessee under this Section 10.3.5 shall
not apply to any Withholdings that would not have been imposed but for such
Withholding Party's failure to comply with Section 9.6.
If a Tax Indemnitee or a Withholding Party or any Affiliate with whom
such Tax Indemnitee or a Withholding Party files a consolidated tax return (or
equivalent) subsequently receives the benefit in any country of a tax credit,
deduction or other allowance or reduction resulting from Taxes or Losses with
respect to which it or an Affiliate has received a payment of an indemnity
amount from Lessee under Section 10.1 or 10.3, such Person will pay to Lessee
such part of that benefit as in the sole discretion of such Person will leave it
(after such payment) in a position no more and no less favorable than it would
have been in if no additional payment had been required to be paid, provided
always that (i) such Person will determine in its sole discretion, exercised in
good faith, the amount and allocation of any such benefit and of the date on
which it is received and of any After-Tax Basis calculation required with
respect to payments
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to or from it, (ii) such Person will have the absolute discretion as to the
order and manner in which it employs or claims tax credits and allowances
available to it and (iii) such Person will not be obliged to disclose to Lessee
any information regarding its tax affairs or tax computations.
10.3.6. Tax Contests. If a claim is made in writing against
any Tax Indemnitee for any Taxes which Lessee is required to pay or indemnify
against pursuant to Section 10.3.1, such Tax Indemnitee shall promptly notify
Lessee in writing, provided that, without prejudice to any rights or claims for
damages Lessee may have as a result of such failure, the failure to so notify
Lessee will not reduce Lessee's obligation under Section 10.3 except if such
failure precludes the contest of such claim. Subject to the next sentence, if
requested by Lessee in writing within 30 days after receipt by Lessee of a
notice described in the preceding sentence, such Tax Indemnitee and, if required
or appropriate to prosecute such contest, any other Tax Indemnitee, shall permit
such Lessee, to contest in the name of Lessee, and if such contest by such
Lessee in the name of such Lessee is not permissible or allowed, shall, at the
request of Lessee, permit such Lessee to contest in the name of the Tax
Indemnitee and, if such contest by Lessee in the name of the Tax Indemnitee is
not permissible or allowed, shall, at the request of Lessee diligently contest
in good faith (including pursuing all administrative and judicial appeals) the
validity, applicability or amount of such Taxes in appropriate administrative or
judicial proceedings; provided that (1) prior to taking such action Lessee shall
have agreed to pay and shall have provided an undertaking reasonably acceptable
to such Tax Indemnitee with respect thereto or shall have paid each Tax
Indemnitee that is engaged in such contest in a satisfactory manner for all
out-of-pocket costs and expenses which such Tax Indemnitee may incur in
connection with contesting such claim, including, without limitation, all
reasonable legal and accountant's fees and disbursements and costs of
administrative and judicial proceedings, and the amount of any interest or
penalties which may be payable as a result of contesting such claim, (2) if such
contest is to be initiated by the payment of, and the claiming of a refund for,
such Taxes (such election to be within the sole discretion of Lessee), Lessee
shall have advanced such Tax Indemnitee sufficient funds (on an interest-free
basis and on an After-Tax Basis) to make such payment, (3) any action to be
taken will not result in a material risk of sale, forfeiture or loss of the
Lessor's title to, or the Lessor's or Collateral Agent's interest in, any Item
of Equipment unless Lessee shall have made provision against such risk in a
manner acceptable to such Tax Indemnitee in its sole discretion, (4) such Tax
Indemnitee shall not have determined, based on an opinion of such Tax
Indemnitee's counsel, that such action is reasonably likely to result in adverse
consequences to the future tax liability of such Tax Indemnitee not indemnified
to such Tax Indemnitee's satisfaction and (5) Lessee shall have delivered to
such Tax Indemnitee a written acknowledgment of its liability hereunder for such
Taxes, provided that such acknowledgment shall not be binding on such Lessee if
the contest of such Taxes is resolved through a written opinion of an
adjudicator stating a basis for such resolution that demonstrates Lessee has no
liability to such Tax Indemnitee hereunder for such Taxes and provided further,
that such Lessee shall have no right to contest in the name of a Tax Indemnitee,
and such Tax Indemnitee shall itself contest, if the contest involves issues
with respect to which Lessee would not be required to indemnify such Tax
Indemnitee hereunder and which cannot be severed by reasonable efforts of such
Tax Indemnitee from all issues with respect to which Lessee would be liable
hereunder or the severance of which would adversely affect the position of such
Tax Indemnitee, and in any such contest such Tax Indemnitee may in its sole
discretion select the
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forum for such contest and determine the manner in which such contest shall be
conducted, but shall consult with Lessee and its counsel in good faith with
respect to such Lessee's interests with respect to contest. If a claim for Taxes
is made in writing against any Tax Indemnitee and such Tax Indemnitee complies
with its obligations under this Section 10.3.6, Lessee and such Tax Indemnitee
shall, for purposes of determining the amount, if any, payable to such Tax
Indemnitee under Section 10.3, be bound by the results of any contest under this
Section 10.3.6 (or by the final written assessment by the relevant taxing
authority, if Lessee elect not to contest under this Section 10.3.6) as to the
amount of Tax due to the relevant taxing jurisdiction, the validity and
applicability of such Tax, and any stated reason as to the basis for the
imposition of such Tax contained in the final determination with respect to such
contest. If any Tax Indemnitee shall determine in its sole discretion that it
has either obtained a refund of or been granted a credit, deduction or other
allowance or reduction against Taxes for which Lessee is not obligated to
indemnify such Tax Indemnitee hereunder for amounts corresponding to all or any
part of any Taxes which Lessee shall have paid to any Tax Indemnitee or for
which Lessee shall have reimbursed any Tax Indemnitee hereunder, such Tax
Indemnitee shall, provided that no Event of Default shall have occurred and be
continuing, pay to Lessee an amount which is equal to the sum of the amount of
such refund or credit, deduction or other allowance or reduction, plus any
interest received (or credited against Taxes for which Lessee is not obligated
to indemnify such Tax Indemnitee hereunder) on such refund fairly attributable
to any Taxes paid by such Lessee or with funds provided by Lessee prior to the
receipt of such refund, reduced by any Taxes incurred by such Tax Indemnitee by
reason of the receipt or accrual of such refund and interest, and increased by
any tax benefit realized by Tax Indemnitee as a result of any payment by such
Tax Indemnitee made pursuant to this sentence so as to return such Tax
Indemnitee to the same net after-tax position it would have been in if the Taxes
so refunded or credited had not been imposed; provided further, that a Tax
Indemnitee shall not be obligated to pay any Lessee an amount in excess of all
amounts of Taxes (and additional amounts described in Section 10.3) previously
paid by Lessee pursuant to Section 10.3 to such Tax Indemnitee, provided
further, however, that such Tax Indemnitee shall pay any amounts that it is not
required to pay to Lessee solely by reason of the foregoing proviso at such time
as Lessee shall have made any additional payments to such Indemnitee pursuant to
Section 10.3 hereof equal to such amounts, and if an Event of Default shall have
occurred and be continuing, such Tax Indemnitee shall have the option of
applying the amount otherwise due any Lessee pursuant to this sentence against
Lessee obligations under any Operative Document or of holding such amount as
security for Lessee full performance of such obligations until the earlier of
(i) the Maturity Date of all Loans or (ii) the curing of such Event of Default,
after which such Tax Indemnitee shall pay such amount to Lessee. Any Tax
Indemnitee shall be entitled to settle any claim that is the subject of a
contest hereunder without the consent of the Lessee provided that, in so doing,
such Tax Indemnitee shall waive any rights to indemnification by the Lessee with
respect to such settled claim and any other claim the contest of which would be
precluded as a result of such settlement hereunder and shall repay to Lessee any
amounts advanced to pay such contested Taxes with interest actually received in
respect thereof and release any undertaking required hereunder.
10.3.7. Special Tax Indemnity. The Lessee shall pay and assume
all liability for, and does hereby agree to indemnify each Certificate Holder
and each Lender on an After Tax Basis for any tax, addition to tax, penalty, or
other cost as a result of the breach,
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inaccuracy or incorrectness of the representation found in Section 2.1(i).
Notwithstanding anything to the contrary in this Section 10.3.7, Lessee shall
not be obligated to indemnify any Tax Indemnitee pursuant to this Section 10.3.7
in respect of any tax, penalty, or other cost that results from or would not
have occurred by for any failure by such Tax Indemnitee to provide the
information requested by Lessee in accordance with Section 2.1(i). Any claim
under this Section 10.3.7 shall be subject to the contest provisions of Section
10.3.6 (applied as if such claim were in respect of a Tax indemnified by Lessee
under Section 10.3.1) and the verification provisions of Section 10.3.3 (applied
as if the amount to be paid under this Section 10.3.7 was a payment required
under Section 10.3.1 hereof).
10.4. Increased Costs, Illegality, etc. (a) In the event that any
Lender or any Certificate Holder shall have determined (which determination
shall, absent manifest error, be final and conclusive and binding upon all
parties hereto but, with respect to clause (i) below, may be made only by the
Administrative Agent):
(i) that by reason of any changes arising after the date of this
Agreement affecting the interbank Eurodollar market, adequate and fair
means do not exist for ascertaining the applicable interest rate on the
basis provided for in the definition of LIBOR Rate; or
(ii) at any time, that such Lender or Certificate Holder shall incur
increased costs or reductions in the amounts received or receivable
hereunder with respect to any Loan or Equity Contribution because of (x)
any change since the date of this Agreement in any applicable law or
governmental rule, regulation, order, guideline or request (whether or not
having the force of law) or in the interpretation or administration thereof
and including the introduction of any new law or governmental rule,
regulation, order, guideline or request, such as, for example, but not
limited to: (A) a change in the basis of taxation of payment to any Lender
or any Certificate Holder of the principal of or interest on the Notes, any
payment due on the Certificates or any other amounts payable to any Lender
or any Certificate Holder hereunder (except for changes in the rate of tax
on, or determined by reference to, the net income or profits of such Lender
or such Certificate Holder pursuant to the laws of the jurisdiction in
which it is organized or in which its principal office or applicable
lending office is located or any subdivision thereof or therein) or (B) a
change in official reserve requirements, but, in all events, excluding
reserves required under Regulation D to the extent included in the
computation of the LIBOR Rate and/or (y) other circumstances since the date
of this Agreement affecting such Lender or such Certificate Holder or the
interbank Eurodollar market or the position of such Lender or such
Certificate Holder in such market; or
(iii) at any time, that the making or continuance of any Loan or
Equity Contribution has been made (x) unlawful by any law or governmental
rule, regulation or order, (y) impossible by compliance by any Lender or
any Certificate Holder in good faith with any governmental request (whether
or not having force of law) or (z) impracticable as a result of a
contingency occurring after the date of this Agreement which materially and
adversely affects the interbank Eurodollar market;
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then, and in any such event, such Lender or such Certificate Holder (or the
Administrative Agent, in the case of clause (i) above) shall promptly give
notice (by telephone promptly confirmed in writing) to Lessor and Lessee and,
except in the case of clause (i) above, to the Administrative Agent of such
determination (which notice the Administrative Agent shall promptly transmit to
each of the other Lenders and/or each of the other Certificate Holders, as the
case may be). Thereafter (x) in the case of clause (i) above, new Loans and
Equity Contributions shall no longer be available until such time as the
Administrative Agent notifies Lessor, Lessee, the Lenders and the Certificate
Holders that the circumstances giving rise to such notice by the Administrative
Agent no longer exist, and any Funding Notice given by Lessee with respect to
Loans and Equity Contributions which have not yet been incurred (including by
way of conversion) shall be deemed rescinded by Lessee, (y) in the case of
clause (ii) above, Lessee shall pay to such Lender or such Certificate Holder,
within fifteen (15) days of such Lender's or such Certificate Holder's written
request therefor, such additional amounts (in the form of an increased rate of,
or a different method of calculating, interest or otherwise as such Lender or
such Certificate Holder reasonably shall determine) as shall be required to
compensate such Lender or Certificate Holder for such increased costs or
reductions in amounts received or receivable hereunder as set forth in such
written request as to the additional amounts owed to such Lender or such
Certificate Holder, showing in reasonable detail the basis for the calculation
thereof, submitted to Lessee by such Lender or such Certificate Holder shall,
absent manifest error, be final and conclusive and binding on all the parties
hereto) and (z) in the case of clause (iii) above, Lessee shall take one of the
actions specified in Section 10.4(b) as promptly as possible and, in any event,
within the time period required by law.
(b) At any time that any Loan or Equity Contribution is affected by the
circumstances described in Section 10.4(a)(ii) or (iii), Lessee may (and in the
case of a Loan or Equity Contribution affected by the circumstances described in
Section 10.4(a)(iii) shall) either (x) if the affected Loan or Equity
Contribution is then being made initially, by giving the Administrative Agent
telephonic notice (confirmed in writing) on the same date that Lessee was
notified by the affected Lender, the affected Certificate Holder or the
Administrative Agent pursuant to Section 7.4(a)(ii) or (iii) or (y) if the
affected Loan is then outstanding or the Equity Contribution is not then repaid,
upon at least three LIBOR Banking Days' written notice to the Administrative
Agent, require the affected Lender or the affected Certificate Holder to convert
the Applicable Debt Rates to the sum of the Alternative Rate plus the Applicable
Debt Margin or the Applicable Equity Rate to the sum of the Alternative Rate
plus the Applicable Equity Margin, as the case may be, provided that, if more
than one Lender or Certificate Holder is affected at any time, then all affected
Lenders and affected Certificate Holders must be treated the same pursuant to
this Section 10.4(b).
(c) If any Lender or Certificate Holder incurs any Breakage Costs as a
result of the occurrence of any of the events set forth in clause (iii) of
Section 10.4(b), or if at any time after the date of this Agreement any Lender
or any Certificate Holder determines that the introduction of or any change in
any applicable law or governmental rule, regulation, order, guideline, directive
or request (whether or not having the force of law) concerning capital adequacy,
or any change in interpretation or administration thereof by any governmental
authority, central bank or comparable agency, will have the effect of increasing
the amount of capital required or expected to be maintained by such Lender or
such Certificate Holder or any
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corporation controlling such Lender or such Certificate Holder based on the
existence of such Lender Commitment or such Certificate Holder Committee,
respectively, hereunder or its obligations hereunder, then Lessee shall pay to
such Lender or such Certificate Holder, upon its written demand therefor, such
Breakage Costs or additional amounts as shall be required to compensate such
Lender or such Certificate Holder or such other corporation for the increased
cost to such Lender or such Certificate Holder or such other corporation or the
reduction in the rate of return to such Lender or such Certificate Holder or
such other corporation as a result of such increase of capital. In determining
such additional amounts, each Lender and each Certificate Holder will act
reasonably and in good faith and will use averaging and attribution methods
which are reasonable, provided that such Lender's or such Certificate Holder's
determination of Breakage Costs or compensation owing under this Section 10.4(c)
shall, absent manifest error, be final and conclusive and binding on all the
parties hereto. Each Lender and each Certificate Holder, upon determining that
any Breakage Costs or additional amounts will be payable pursuant to this
Section 10.4(c), will give prompt written notice thereof to Lessee, which notice
shall show in reasonable detail the basis for calculation of such additional
amounts.
10.5. Lessee Indemnity. Lessee hereby assumes liability for, and does
hereby agree to indemnify, protect, save, defend, and hold harmless Lessor on an
After-Tax Basis from and against any and all Losses and each Tax Indemnitee
against any and all amounts owed by Lessor under the Loan Agreement to the
extent that there is a Lease Payment corresponding to the Loan payment for which
the indemnity is claimed under Section 10.2 hereof.
10.6. Survival. All obligations provided for in this Section 10 shall
survive the resignation or removal of the Administrative Agent or Collateral
Agent under Section 11.7, the sale of any Item of Equipment, any termination of
the Lease Agreement, the termination of this Agreement, and the payment in full
of the Notes and Certificates.
11. Administrative Agent and Collateral Agent.
11.1. Authorization and Action of Administrative Agent. (a) Lenders and
Certificate Holders hereby appoint and authorize Administrative Agent to take
such action as agent on their behalf and to exercise such powers under this
Agreement and the other Operative Documents as are delegated to Administrative
Agent by the terms hereof and thereof, together with such powers as are
reasonably incidental thereto. The Administrative Agent shall act solely as
agents for the Lenders and Certificate Holders and does not assume nor shall be
deemed to assume any obligation or relationship of trust or agency with any of
Lessee, Lessor, Guarantor or any of their successors or assigns. As to any
matters not expressly provided for by a Operative Document (including
enforcement or collection of the Notes or Certificates), the Administrative
Agent shall not be required nor authorized to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Majority Lenders and the Majority Certificate Holders, and such instructions
shall be binding upon Lenders and Certificate Holders; provided, however, the
Administrative Agent shall not be required to take any action which exposes it
to personal liability or which is contrary to any Operative Document or
Applicable Law. The Administrative Agent agrees to give to Lenders and the
Certificate Holders prompt notice of each notice given to it by Lessor or Lessee
pursuant to the terms of this Agreement; provided, however, the
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Administrative Agent shall not be deemed to have any notice of a Loan Default or
Loan Event of Default unless it has received notice of such from another party
hereto. The Administrative Agent may, with the prior consent of the Majority
Lenders or the Majority Certificate Holders, as the case may be, agree to any
waiver or amendment of the Operative Documents (other than Operative Documents
to which such Person is a party) on behalf of Lenders or the Certificate
Holders; provided, however, Administrative Agent will not, without the prior
consent of all Lenders and all Certificate Holders, agree to any waiver or
amendment that would (i) postpone the time or times for payment of any
Availability Fee or any amount payable under this Agreement or the Lease
Agreement, or (ii) reduce the Lease Payment payable under this Agreement or the
Lease Agreement, or the principal amount of any Lender Commitment or Certificate
Holder Commitment. Administrative Agent will not, without the prior consent of
all Lenders, agree to any waiver or amendment that would, prior to the payment
in full of the Secured Obligations, release all or substantially all of the
Lessor Collateral from the Lien created by the Loan Documents, other than in
accordance with the terms thereof and the other Operative Document. The
Administrative Agent shall pursue its remedies under the Loan Documents
following a Loan Event of Default in accordance with the instructions of the
Majority Lenders provided, however, the Administrative Agent shall be under no
obligation to pursue such remedies unless such Majority Lenders have offered to
the Administrative Agent security or indemnity satisfactory to it as to the
terms, coverage, duration, amount or otherwise with respect to the costs,
expenses and liabilities that may be incurred by it in compliance with such
written instructions, requests or directions. The appointment and authority of
the Administrative Agent hereunder shall terminate upon the indefeasible payment
in full of all amounts owed Lenders, the Administrative Agent and the Collateral
Agent under the Operative Documents.
(b) Lenders hereby appoint and authorize the Collateral Agent to take
such action as agent on their behalf and to exercise such powers under this
Agreement and the other Operative Documents as are delegated to the Collateral
Agent by the terms hereof and thereof, together with such powers as are
reasonably incidental thereto. The Collateral Agent shall act solely as agents
for the Lenders and does not assume nor shall be deemed to assume any obligation
or relationship of trust or agency with any of Lessee, Lessor, Certificate
Holders, Guarantor or any of their successors or assigns. As to any matters not
expressly provided for by a Operative Document (including enforcement or
collection of the Notes), the Collateral Agent shall not be required nor
authorized to exercise any discretion or take any action, but shall be required
to act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Majority Lenders, and such
instructions shall be binding upon Lenders; provided, however, the Collateral
Agent shall not be required to take any action which exposes it to personal
liability or which is contrary to any Operative Document or Applicable Law. The
Collateral Agent agrees to give to Lenders prompt notice of each notice given to
it by Lessor or Lessee pursuant to the terms of this Agreement; provided,
however, the Collateral Agent shall not be deemed to have any notice of a Loan
Default or Loan Event of Default unless it has received notice of such from
another party hereto. The Collateral Agent may, with the prior consent of the
Majority Lenders, agree to any waiver or amendment of the Operative Documents
(other than Operative Documents to which a Lender or Lenders are a party) on
behalf of Lenders; provided, however, Collateral Agent will not, without the
prior consent of all Lenders, agree to any waiver or amendment that would (i)
postpone the time or times for payment of any
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Availability Fee or any amount payable under this Agreement or the Lease
Agreement, or (ii) reduce the Lease Payment payable under this Agreement or the
Lease Agreement, or the principal amount of any Lender Commitment. The
Collateral Agent will not, without the prior consent of all Lenders, agree to
any waiver or amendment that would, prior to the payment in full of the Secured
Obligations, release all or substantially all of the Lessor Collateral from the
Lien created by the Loan Documents, other than in accordance with the terms
thereof and the other Operative Document. The Collateral Agent shall pursue its
remedies under the Loan Documents following a Loan Event of Default in
accordance with the instructions of the Majority Lenders; provided, however, the
Collateral Agent shall be under no obligation to pursue such remedies unless
such Majority Lenders have offered to the Collateral Agent security or indemnity
satisfactory to it as to the terms, coverage, duration, amount or otherwise with
respect to the costs, expenses and liabilities that may be incurred by it in
compliance with such written instructions, requests or directions. The
appointment and authority of the Collateral Agent hereunder shall terminate upon
the indefeasible payment in full of all amounts owed Lenders, the Administrative
Agent and the Collateral Agent under the Operative Documents.
11.2. Delegation of Duties. The Administrative Agent and the Collateral
Agent may execute any of their duties under these Operative Documents through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. Neither the Administrative
Agent nor the Collateral Agent shall be responsible for the negligence or
misconduct of any agents or attorneys-in-fact selected by it with reasonable
care.
11.3. Agent's Reliance, etc. Neither the Administrative Agent nor the
Collateral Agent nor any of their respective directors, officers, agents or
employees shall be liable for any action taken or omitted by it or them under or
in connection with any Operative Document, except for its or their own gross
negligence or willful misconduct. Without limitation of the generality of the
foregoing, each of the Administrative Agent and the Collateral Agent (i) may
consult with legal counsel (including counsel for Lessee), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted in good faith by it in accordance with the advice of
such counsel, accountants or experts, (ii) makes no warranty or representation
to Lenders (or to Certificate Holders in the case of the Administrative Agent)
and shall not be responsible to Lenders (and to Certificate Holders, in the case
of the Administrative Agent) for any statements, warranties or representations
made in or in connection with any Operative Document, (iii) shall not have any
duty to ascertain or to inquire as to the performance or observance of any of
the terms, covenants or conditions of any Operative Document on the part of
Lessee or Lessor or to inspect the property (including the books and records) of
Lessee or Lessor, (iv) shall not be responsible to Lenders (or to Certificate
Holders, in the case of the Administrative Agent) for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of any
Operative Document or any other instrument or document furnished pursuant
thereto, and (v) shall incur no liability under or in respect of any Operative
Document by acting upon any notice, consent, certificate or other instrument or
writing (which may be by fax, telegram, cable or telex) believed by it to be
genuine and signed or sent by the proper party or parties. The permissive right
of the Administrative Agent and the Collateral Agent to take the actions
permitted by this Agreement shall not be construed as an obligation or duty to
do so.
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11.4. Administrative Agent, Collateral Agent and Affiliates. With
respect to any Lender Commitment or Certificate Holder Commitment made by it,
any Loans or Equity Contributions made by it, any Note issued to it or any
Certificate held by it, each of the Administrative Agent and the Collateral
Agent shall have the same rights and powers under each Operative Document as any
other Lender or Certificate Holder as the case may be and may exercise the same
as though it were not an agent hereunder. The Administrative Agent and the
Collateral Agent and their respective Affiliates may accept deposits from, lend
money to, act as trustee under indentures of, and generally engage in any kind
of business with, Lessor, Lessee or Guarantor, any of their Affiliates and any
Person who may do business with or own securities of Lessor, Lessee or Guarantor
or any such Affiliate, all as if the Administrative Agent and the Collateral
Agent were not an agent hereunder and without any duty to account therefor to
Lenders or Certificate Holders.
11.5. Lender and Certificate Holder Credit Decision. Each Lender and
each Certificate Holder acknowledges that it has, independently and without
reliance upon the Administrative Agent or, in the case of the Lenders, the
Collateral Agent, and based on the financial statements of Lessor and Guarantor
and such other documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Lender and
each Certificate Holder also acknowledges that it will, independently and
without reliance upon the Administrative Agent or the Collateral Agent, as the
case may be and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Operative Documents.
11.6. Indemnification. (a) Each Lender agrees to indemnify the
Administrative Agent and the Collateral Agent, (to the extent not reimbursed by
Lessor or Lessee) ratably according to its Pro Rata Share, from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against the
Administrative Agent or the Collateral Agent in any way relating or arising out
of any Operative Document or any action taken or omitted by the Administrative
Agent or the Collateral Agent under any Operative Document in their capacities
as agents for Lenders; provided that Lenders shall not be liable for any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the
Administrative Agent's or the Collateral Agent's gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender agrees to reimburse
the Administrative Agent and the Collateral Agent ratably according to its Pro
Rata Share promptly upon demand for out-of-pocket expenses (including counsel
fees) incurred by the Administrative Agent or the Collateral Agent in connection
with the preparation, execution, delivery, administration, modification,
amendment or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,
any Operative Document in their capacities as agents for Lenders, to the extent
that the Administrative Agent or the Collateral Agent is not reimbursed for such
expenses by Lessor or Lessee. Lessee's indemnity obligations shall not be
reduced by this Section 11.6(a).
(b) Each Certificate Holder agrees to indemnify the Administrative
Agent, (to the extent not reimbursed by Lessor or Lessee) ratably according to
its Pro Rata Share, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by or asserted against the Administrative Agent in any way relating or arising
out of any Operative Document or any action taken or omitted by the
Administrative Agent under any Operative Document in its capacity as agent for
Certificate Holders; provided that Certificate Holders shall not be liable for
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits,
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costs, expenses or disbursements resulting from the Administrative Agent's gross
negligence or willful misconduct. Without limitation of the foregoing, each
Certificate Holder agrees to reimburse the Administrative Agent ratably
according to its Pro Rata Share promptly upon demand for out-of-pocket expenses
(including counsel fees) incurred by the Administrative Agent in connection with
the preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, any Operative
Document in its capacity as agent for Certificate Holders, to the extent that
the Administrative Agent is not reimbursed for such expenses by Lessor or
Lessee. Lessee's indemnity obligations shall not be reduced by this Section
11.6(b).
11.7. Successor Administrative Agent and Collateral Agent; Termination
of Agency. The Administrative Agent and the Collateral Agent may resign at any
time by giving at least fifteen (15) days written notice thereof to Lenders,
Lessor and Lessee, and in the case of the Administrative Agent, also to the
Certificate Holders, and the Administrative Agent and Collateral Agent may be
removed at any time with or without cause by the Majority Lenders. Upon any
resignation or removal of the Administrative Agent or Collateral Agent, the
Majority Lenders shall have the right with the consent of Lessee (such consent
not to be unreasonably withheld or delayed) to appoint a successor
Administrative Agent who shall be reasonably acceptable to the Lessee (it being
understood and agreed that any non-defaulting Lender is deemed to be acceptable
to the Lessee). If no successor Administrative Agent or Collateral Agent shall
have been so appointed by the Majority Lenders within 30 days after any such
resignation of removal, the retiring Administrative Agent or the Collateral
Agent may, on behalf of Lenders and the Certificate Holders, as applicable,
appoint a successor Administrative Agent or Collateral Agent which shall be a
commercial bank organized under the laws of the United States of America or of
any State thereof and having a combined capital and surplus of at least
$100,000,000. Upon the acceptance of any appointment as the Administrative Agent
or the Collateral Agent hereunder by a predecessor Administrative Agent or
Collateral Agent, such successor Administrative Agent or Collateral Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring the Administrative Agent or Collateral Agent, and the
obligations under each Operative Document. Any Administrative Agent or
Collateral Agent resigning in accordance with this Section 11.7 shall retain the
benefits of Section 11 as to any actions taken or omitted to be taken by it
while it was the Administrative Agent or Collateral Agent.
11.8. Registration of Notes and Certificates. The Administrative Agent
shall preserve registration books identifying each Lender's and Certificate
Holder's interest in the Notes and Certificates, respectively, and a list of the
names and addresses of the holders of the Notes and of the Certificates, which
register and list shall be available to Lessor, Lessee, Certificate Holders and
Lenders or their respective representatives for inspection (the "Register").
Ownership of the Notes and the Certificates shall be proved by the Note register
and
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the Certificate register kept by the Administrative Agent. No transfer by any
holder of a Note or Certificate or any portion thereof shall be effective
unless and until such transfer is made upon the registration books maintained by
the Administrative Agent. Prior to due presentment for registration of transfer
of any Note or Certificate, the Administrative Agent, Lessee and Lessor shall
deem and treat the Person in whose name any Note or Certificate is registered as
the absolute owner of such Note or Certificate for the purpose of receiving
payment of Availability Fees, principal of, and Breakage Costs, if any, and
interest on such Note and for all other purposes whatsoever, whether or not such
Note is overdue, and neither the Administrative Agent nor Lessor shall be
affected by any notice to the contrary.
12. Miscellaneous.
12.1. Expenses. Lessee agrees to pay within ten (10) Business Days of
written notice thereof the reasonable fees and expenses (initial and ongoing) of
Trust Company for serving as Lessor and shall reimburse Trust Company, Lessor,
Deutsche Bank as a Lender and a Certificate Holder, the Administrative Agent and
Collateral Agent for all of their respective reasonable costs and expenses
(including, without limitation, reasonable counsel fees and disbursements) in
connection with the preparation, execution and delivery of the Operative
Documents and the issuance of the Notes and Certificates and the consummation of
the transactions contemplated thereby. Lessee agrees to pay the reasonable fees
and disbursements of special counsel to Lessor and special counsel to the
Administrative Agent and Collateral Agent in connection with any amendments,
waivers or consents requested by Lessor, Lessee or Guarantor under any Operative
Document. Upon the occurrence and during the continuance of any Lease Event of
Default, Lessee agrees to pay or reimburse each Lender, each Certificate Holder,
Lessor, the Administrative Agent and the Collateral Agent for reasonable costs
and expenses of counsel and of financial advisors as shall have been selected by
such Lender, Certificate Holder, Lessor, Administrative Agent or Collateral
Agent to assist them in connection with such Lease Event of Default.
12.2. Amendments. (a) Neither this Agreement nor any other Operative
Document nor any terms hereof or thereof may be amended, supplemented, waived or
modified without the written agreement and consent of all parties thereto and
Lessee, provided that where the consent of the Lenders or the Certificate
Holders is required, such consent (except as provided below) may be given by the
Majority Lenders or the Majority Certificate Holders, as the case may be, and
any such consent shall be binding on all other Lenders or Certificate Holders,
provided further, that no such amendment, modification, waiver or supplement
shall, (i) without the consent of each Lender (A) extend the final scheduled
maturity of any Loan or Note, or reduce the rate or extend the time of payment
of interest thereon or Loan Availability Fees (except (x) in connection with the
waiver of applicability of any post-default increase in interest rates and (y)
that any amendment or modification that is not agreed to by each Lender directly
affected thereby to the financial definitions in this Agreement shall not
constitute a reduction in the rate of interest or fees for purposes of this
clause (A), notwithstanding the fact that such amendment or modification would
otherwise actually result in such a reduction, so long as the primary purpose
(as determined in good faith by Lessee and the Administrative Agent) of the
respective amendment or modification was not to decrease the pricing pursuant to
this Agreement and the other Operative Document), or reduce the principal amount
thereof (except to
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the extent repaid in cash), (B) release all or substantially all of the Lessor
Collateral (except as expressly provided herein) or (C) reduce the percentage
specified in the definition of Majority Lenders (it being understood that, with
the consent of the Majority Lenders, additional extensions of credit pursuant to
this Agreement may be included in the determination of the Majority Lenders on
substantially the same basis as the extensions of Lenders' Commitments are
included on the Closing Date), (ii) without the consent of each Certificate
Holder, (A) extend the final scheduled repayment of any Equity Contribution, or
reduce the rate or extend the time of payment of Equity Return or Availability
Fees (except (x) in connection with the waiver of applicability of any
post-default increase in interest rates and (y) that any amendment or
modification that is not agreed to by each Certificate Holder directly affected
thereby to the financial definitions in this Agreement shall not constitute a
reduction in the Applicable Equity Rate or Availability Fees for purposes of
this clause (A), notwithstanding the fact that such amendment or modification
would otherwise actually result in such a reduction, so long as the primary
purpose (as determined in good faith by Lessee and the Administrative Agent) of
the respective amendment or modification was not to decrease the pricing
pursuant to this Agreement and the other Operative Documents), or reduce the
Equity Contribution thereof (except to the extent repaid in cash), (B) release
all or substantially all of Lessor's interest in the Equipment (except as
expressly provided herein or in the Lease Agreement) or (C) reduce the
percentage specified in the definition of the Majority Certificate Holders (it
being understood that, with the consent of the Majority Certificate Holders,
additional contributions of equity pursuant to this Agreement may be included in
the determination of the Majority Certificate Holders on substantially the same
basis as the contributions of Certificate Holders' Commitments are included on
the date hereof), (iii) without the consent of each Lender and Certificate
Holder (A) amend, modify or waive any provision of this Section 12.2 (it being
understood that, with the consent of the Majority Lenders or the Majority
Certificate Holders, additional extensions of credit or contributions of equity,
respectively, pursuant to this Agreement or the Loan Agreement may be included
under this Agreement to provide the Lenders or Certificate Holders with
customary similar or additional rights of consent or (B) consent to the
assignment or transfer by Lessee or Lessor of any of its rights and obligations
under the Operative Documents, (iv) without the consent of the Lenders or
Certificate Holders directly affected thereby, (A) increase any Lender's Lender
Commitment or any Certificate Holder's Certificate Holder Commitment (it being
understood that waivers or modifications of conditions precedent, covenants,
Loan Defaults or Loan Events of Default or of a mandatory reduction in the
Lender Commitment or Certificate Holder Commitment shall not constitute an
increase of the Lender Commitment of any Lender or the Certificate Holder
Commitment of any Certificate Holder, (v) without the consent of the
Administrative Agent, amend, modify or waive any provision relating to the
rights or obligations of the Administrative Agent or (vi) without the consent of
the Collateral Agent, amend, modify or waive any provision relating to the
rights or obligations of the Collateral Agent.
(b) If, in connection with any proposed change, waiver, discharge or
termination to any of the provisions of this Agreement or any other Operative
Document, the consent of the Majority Lenders or Majority Certificate Holders is
required and is obtained but the consent of one or more of other Lenders or
Certificate Holders whose consent is required is not obtained, then Lessee shall
have the right to replace each such non-consenting Lender, Lenders,
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Certificate Holder or Certificate Holders (so long as all non-consenting Lenders
or Certificate Holders are so replaced) with one or more Replacement Lenders or
Replacement Certificate Holders, as the case may be, pursuant to Section 12.14
so long as at the time of such replacement, each such Replacement Lender or
Replacement Certificate Holder consents to the proposed change, waiver,
discharge or termination, provided that Lessee shall not have the right to
replace a Lender or a Certificate Holder solely as a result of the exercise of
such Lender's or Certificate Holder's rights when the consent of each of the
Lenders or Certificate Holders is required.
12.3. GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY
TRIAL. (a) THIS AGREEMENT AND THE OTHER OPERATIVE DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL, BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER OPERATIVE
DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED
STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF
THIS AGREEMENT, EACH OF GUARANTOR AND LESSEE HEREBY IRREVOCABLY ACCEPTS FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
JURISDICTION OF THE AFORESAID COURTS. EACH OF GUARANTOR AND LESSEE HEREBY
IRREVOCABLY DESIGNATES, APPOINTS AND EMPOWERS CT CORPORATION SYSTEM, WITH
OFFICES ON THE DATE HEREOF AT 000 XXXXXX XXXXXX, XXX XXXX, XXX XXXX 000000 AS
ITS DESIGNEE, APPOINTEE AND AGENT TO RECEIVE, ACCEPT AND ACKNOWLEDGE FOR AND ON
ITS BEHALF, AND IN RESPECT OF ITS PROPERTY, SERVICE OF ANY AND ALL LEGAL
PROCESS, SUMMONS, NOTICES AND DOCUMENTS WHICH MAY BE SERVED IN ANY SUCH ACTION
OR PROCEEDING. IF FOR ANY REASON SUCH DESIGNEE, APPOINTEE AND AGENT SHALL CEASE
TO BE AVAILABLE TO ACT AS SUCH, EACH OF GUARANTOR AND LESSEE AGREES TO DESIGNATE
A NEW DESIGNEE, APPOINTEE AND AGENT IN NEW YORK CITY ON THE TERMS AND FOR THE
PURPOSES OF THIS PROVISION SATISFACTORY TO THE AGENT UNDER THIS AGREEMENT. EACH
OF THE PARTIES HERETO FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT
OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO
SUCH PARTY HEREUNDER AT ITS ADDRESS SET FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH
SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL
AFFECT THE RIGHT OF ANY PARTY TO THIS AGREEMENT, TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED
AGAINST ANY OTHER PARTY IN ANY OTHER JURISDICTION.
(b) EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE
AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER
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OPERATIVE DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND
HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH
COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS AGREEMENT, THE OTHER OPERATIVE DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
12.4. Notices. All notifications, notices, demands, requests and other
communications herein provided for or made pursuant hereto shall be in writing
(including telegraphic, telex, telecopier or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered via courier to the
addresses listed below. All such notices and communications shall, when mailed,
telegraphed, telexed, telecopied, or cabled or sent by overnight courier, be
effective when deposited in the mails, delivered to the telegraph company, cable
company or overnight courier, as the case may be, or sent by telex or
telecopier, except that notices and communications to the Administrative Agent,
Lessor and Lessee shall not be effective until received by the Administrative
Agent, Lessor or Lessee, as the case may be. The initial address of the parties
hereto are as follows:
to Lessee: Universal Compression, Inc.
0000 Xxxxxxxxxx Xxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. XxxxXxxxxx
Senior Vice President & Chief Financial Officer
Telephone: (000) 000-0000
Telefax: (000) 000-0000
with a copy to
Xxxxxxx X. Banner
Senior Vice President & General Counsel
Universal Compression, Inc.
0000 Xxxxxxxxxx Xxxx
Xxxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Telefax: (000) 000-0000
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to Guarantor: Universal Compression Holdings, Inc.
0000 Xxxxxxxxxx Xxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. XxxxXxxxxx
Senior Vice President & Chief Financial Officer
Telephone: (000) 000-0000
Telefax: (000) 000-0000
with a copy to
Xxxxxxx X. Banner
Senior Vice President & General Counsel
Universal Compression, Inc.
0000 Xxxxxxxxxx Xxxx
Xxxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Telefax: (000) 000-0000
Lessor and Trust Company Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Corporate Trust Administration
Telephone: (000) 000-0000
Telefax: (000) 000-0000
with a copy to
Universal Compression, Inc.
0000 Xxxxxxxxxx Xxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. XxxxXxxxxx
Senior Vice President & Chief Financial Officer
Telephone: (000) 000-0000
Telefax: (000) 000-0000
Certificate Holders and Lenders: See Schedule 4 hereto
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Administrative Agent: Bankers Trust Company
000 Xxxxxxx Xxxxxx, M.S. 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxxxx
Telephone: (000) 000-0000
Telefax: (000) 000-0000
With a copy of all notices and documents delivered in accordance with the Lease
Agreement or Sections 3.1(b)(v), 3.1(b)(xi), 3.1(b)(xiii), 3.2(c), 3.2(d),
3.2(e)(ii), 3.2(e)(iii) or 3.2(f) hereof to:
Deutsche Banc Xxxx Xxxxx
00 Xxxx 00xx Xxxxxx, Mail Stop 1411
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxxxxx, Xx., Director
Global Asset Finance and Leasing
Telephone: (000) 000-0000
Telefax: (000) 000-0000
Collateral Agent: Bankers Trust Company
000 Xxxxxxx Xxxxxx, X.X. 0000
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telefax: (000) 000-0000
12.5. Interests in the Equipment. The parties hereto intend that (a)
for financial accounting purposes with respect to Lessee, Lessor will be treated
as the owner and the lessor of each Item of Equipment and Lessee will be treated
as the lessee of each Item of Equipment and (b) for all federal, state and local
income tax purposes, state sales, use and other transaction tax purposes, (i)
the Operative Documents will be treated as a financing arrangement, (ii) Lessor
will be deemed a lender making loans to Lessee in an amount equal to the sum of
the aggregate of the Equity Components for each Item of Equipment and the
outstanding principal amount of the Loans and (iii) Lessee will be treated as
the owner of each Item of Equipment and will be entitled to all tax benefits
ordinarily available to an owner of equipment like the Equipment for such tax
purposes. Lessor shall take no action inconsistent with the intention of the
parties set forth in clause (b)(iii) of this Section 12.5. Notwithstanding the
intentions of the parties expressed herein, each party hereto acknowledges and
agrees that no other party has made representations or warranties to such party
concerning the tax, accounting or legal characteristics of the Operative
Documents and that such party has obtained and relied upon and agree that they
will obtain and rely upon such tax, accounting and legal advice from their own
accountants and counsel concerning the Operative Documents as they deems
appropriate.
12.6. Descriptive Headings, etc. The descriptive headings used in this
Agreement are for convenience only and shall not be deemed to affect the meaning
or construction of any provision hereof.
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12.7. Benefit of Agreement; Assignment. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns and in particular any holder from time to time
of any Note. Subject to the following proviso, neither Lessor, Lessee nor any
Certificate Holder or Lender without the prior written consent of each other
party hereto, may assign any or all of its rights or obligations hereunder or
under any other Operative Document to which it is a party; provided, however,
(i) Lessor may at any time transfer or assign any or all of its rights
or obligations hereunder in accordance with the provisions of Section 5.9
of the Trust Agreement;
(ii) Any Lender or Certificate Holder may transfer, assign or grant
participations in its rights in the Operative Documents; provided, however,
such Lender shall remain a "Lender" or Certificate Holder a "Certificate
Holder" for all purposes hereunder (and may not transfer or assign all or
any portion of its Commitments hereunder except as provided in clause (iii)
below) and the transferee, assignee or participant, as the case may be,
shall not constitute a "Lender" or a "Certificate Holder" hereunder and,
provided further, that no Lender or Certificate Holder shall transfer or
grant any participation under which the participant shall have rights to
approve any amendment to or waiver of this Agreement or any other Operative
Document except to the extent such amendment or waiver would (A) extend the
final scheduled maturity of any Loan or due date of any repayment of Equity
Contribution which such participant is participating, or reduce the rate or
extend the time of payment of interest, Equity Return or fees thereon
(except in connection with a waiver of applicability of any post-default
increase in interest rates) or reduce the principal amount thereof, or
increase the amount of the participant's participation over the amount
thereof then in effect (it being understood that a waiver of any Loan
Default or Loan Event of Default or of a mandatory reduction in the total
Commitment shall not constitute a change in the terms of such
participation, and that an increase in any Commitment or Loan shall be
permitted without the consent of any participant if the participant's
participation is not increased as a result thereof), (B) consent to the
assignment or transfer by Lessor or Lessee of any of its rights and
obligations under the Operative Documents or (C) release all or
substantially all of the Collateral under all of the Security Documents
(except as expressly provided in the Operative Documents) securing the
Loans in which such participant is participating. In the case of any such
participation, the participant shall not have any rights under any
Operative Documents (the participant's rights against such Lender or
Certificate Holder in respect of such participation to be those set forth
in the agreement executed by such Lender or Certificate Holder in favor of
the participant relating thereto) and all amounts payable by Lessor and
Lessee under the Operative Documents shall be determined as if such Lender
or Certificate Holder had not sold such participation;
(iii) Notwithstanding the foregoing, any Lender or Certificate Holder
(or any Lender or Certificate Holder together with one or more other
Lenders or Certificate Holders) may (A) assign all or a portion of its
Lender Commitment or Certificate Holder Commitment and related outstanding
obligations hereunder to (x) its parent company and/or any affiliate of
such Lender or Certificate Holder which is at least 50% owned by
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such Lender or Certificate Holder or its parent company or to one or more
Lenders or Certificate Holders or (y) in the case of any Lender or
Certificate Holder that is a fund that invests in loans, any other fund
that invests in loans and is managed or advised by the same investment
advisor of such Lender or Certificate Holder or by an Affiliate of such
investment advisor or (B) assign all, or if less than all, a portion equal
to at least $5,000,000 in the aggregate for the assigning Lender or
assigning Lenders, or $1,000,000 in the aggregate for the assigning
Certificate Holder or Certificate Holders of such Lender or Certificate
Holder Commitment and related outstanding obligations hereunder or under
the Loan Agreement to one or more Eligible Transferees (treating any fund
that invests in loans and any other fund that invests in loans and is
managed or advised by the same investment advisor of such fund or by an
Affiliate of such investment advisor as a single Eligible Transferee), each
of which assignees shall become a party to this Agreement as a Lender or
Certificate Holder, and in the case of a Lender the Loan Agreement as a
Lender by execution of an Assignment and Assumption Agreement, provided
that (x) at such time Schedule 3 shall be deemed modified to reflect the
Lender Commitment of such new Lender or Certificate Holder Commitment of
the new Certificate Holder and of the existing Lenders and Certificate
Holders, (y) new Notes or Certificates will be issued, at Lessee's expense,
to such new Lender or Certificate Holder and to the assigning Lender or
Certificate Holder upon the request of such Person, such new Notes or
Certificates to be in conformity with the requirements of Section 2.3 of
the Loan Agreement or Article III of the Trust Agreement respectively (with
appropriate modifications) to the extent needed to reflect the revised
Lender Commitments or Certificate Holder Commitment, (z) the consent of the
Administrative Agent, Lessee and Lessor shall be required in connection
with any assignment to an Eligible Transferee pursuant to clause (B) above
(which consents shall not be unreasonably withheld), provided that the
consent of Lessor shall not be required at any time that a Loan Event of
Default has occurred and is continuing and the consent of Lessee shall not
be required at any time that a Lease Event of Default has occurred and is
continuing, and the consent of the Administrative Agent shall be required
in connection with any assignment of all or a portion of any Commitment,
(y) the Administrative Agent shall receive for its own account at the time
of each such assignment, from the assigning or assignee Lender or
Certificate Holder, the payment of a non-refundable assignment fee of
$3,500 and (z) promptly after such assignment, Lessor and Lessee shall have
received from the Administrative Agent notice of any such assignment,
together with the copy of the Assignment and Assumption Agreement relating
thereto. To the extent of any assignment pursuant to this Section 12.7, the
assigning Lender or Certificate Holder shall be relieved of its obligations
hereunder with respect to its assigned Lender Commitments or Certificate
Holder Commitments. At the time of each assignment pursuant to this Section
12.7 to a Person which is not already a Lender or Certificate Holder
hereunder and which is not a U.S. Person (as such term is defined in
Section 7701(a)(30) of the Code) for Federal income tax purposes, the
respective assignee Lender or Certificate Holder shall, to the extent
legally entitled to do so, provide to Lessor and Lessee in the case of a
Lender or Certificate Holder Commitment described in Section 9.6 of the
Participation Agreement, the forms described in such Section 9.6 of the
Participation Agreement, as the case may be. To the extent that an
assignment of all or any portion of a Lender's Lender
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Commitments or a Certificate Holder's Certificate Holder Commitment and
related outstanding obligations would, at the time of such assignment,
result in additional increased costs under Sections 10.3 and 10.4 from
those that would have been incurred by the respective assigning Lender or
Certificate Holder prior to such assignment, then Lessee shall not be
obligated to pay such incremental additional increased costs (although
Lessee shall be obligated to pay any other increased costs of the type
described above resulting from changes after the date of the respective
assignment);
(iv) each Certificate Holder and Lender shall provide written notice
to the Administrative Agent of any assignment or participation by such
Certificate Holder or Lender of any interest it may have under any
Operative Document. In the case of any participations, other than to which
Guarantor otherwise consents, the right of any such participant to
indemnification or other amounts under Section 10 shall be limited to
amounts which would have been due had no such participation been granted.
Notwithstanding any other provision in this Agreement, the Trust
Agreement or in the Loan Agreement, any Lender and any Certificate Holder
may at any time create a security interest in, or pledge, all or any
portion of its rights under and interest in any of the Loan Documents or
the Trust Agreement in favor of any Federal Reserve Bank in accordance with
Regulation A of the Federal Reserve Board or U.S. Treasury Regulation 31
CFR 203.14, and such Federal Reserve Bank may enforce such pledge or
security interest in any manner permitted under Applicable Law.
12.8. Execution and Effectiveness. This Agreement may be executed in
multiple counterparts, each of which shall be regarded as an original and all of
which shall constitute a single instrument and shall become effective on the
Closing Date when each of the parties hereto shall have signed a copy hereof
(whether the same or different copies).
12.9. Confidentiality. Each of Lessor, Trust Company, each of
Certificate Holder, each Lender, the Administrative Agent and the Collateral
Agent agrees that it will not disclose without Lessee's consent any financial or
other information, excluding such financial or other information that is
publicly available, furnished by Lessee or Guarantor or obtained as a result of
any inspection of the Equipment; such material will not be disseminated except
(i) to the parties hereto, any rating agency, any prospective permitted
assignees or prospective purchasers of the Equipment or their respective
officers, directors, employees, agents, auditors, attorneys and professional
consultants who (other than the rating agencies), agree in writing for the
benefit of Lessee and Guarantor to be bound by the provisions of this Section
12.9 and for proper reasons consistent with the purposes for which this
information is furnished, need access to such information, (ii) to potential
successors and assigns permitted under Section 12.9 that agree in writing for
the benefit of Lessee and Guarantor to be bound by the provisions of this
Section 12.9 and (iii) to such other parties to whom Lessor, Trust Company, any
Certificate Holder, any Lender, the Administrative Agent or the Collateral Agent
may have a duty or legal obligation of disclosure, including, without
limitation, any Governmental Entity having jurisdiction over Lessor, Trust
Company, any Certificate Holder, any Lender, the Administrative Agent or the
Collateral Agent. This confidentiality provision will survive the expiration or
early termination of this Agreement. No breach of the foregoing covenants by
Lessor, any Lender or any other
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Person, shall affect or impair the obligations of Lessee and Guarantor to pay
Lessor, Lenders or any other Person any amounts due under the Operative
Documents.
12.10. Survival. Each of the representations, warranties, terms,
covenants, agreements and conditions contained in this Agreement shall
specifically survive the execution and delivery of this Agreement and the other
Operative Documents and the making of the Loans and Equity Contributions and
shall, unless otherwise expressly provided therein, continue in full force and
effect until the Availability Fees, Loan Availability Fees, the Loans, together
with interest thereon, the Equity Contribution and the Equity Return and all
other sums payable hereunder or thereunder have been indefeasibly paid in full.
12.11. Severability. The provisions of this Agreement are severable,
and if any section or provision shall be held invalid or unenforceable in whole
or in part in any jurisdiction, then such invalidity or unenforceability shall
affect only such clause or provision, or part thereof, in such jurisdiction and
shall not in any manner affect such clause or provision in any other
jurisdiction, or any other clause or provision of this Agreement in any
jurisdiction.
12.12. No Broker. Each party hereto hereby represents and warrants to
the other parties that no broker other than Deutsche Bank Securities, Inc.
(whose fees shall be paid solely by Lessee) brought about the transactions
contemplated hereby and each party hereby agrees to indemnify (the "Indemnifying
Party") and hold each other party harmless from, any and all other liabilities
and costs (including, without limitation, costs of counsel) to any Person
claiming brokerage commissions or finder's fees as a result of any agreement
with the Indemnifying Party.
12.13. Performance by Lenders and Certificate Holders; Replacement of
Lenders; Replacement of Certificate Holders.
(a) (x) If any Lender breaches its obligation to make a Loan (a
"Defaulting Lender"), (y) upon the occurrence of an event giving rise to the
operation of Section 10.4 with respect to any Lender which results in such
Lender charging to Lessee increased costs in excess of those being generally
charged by the Lenders or (z) as provided in Section 12.13(c) (below) in the
case of certain refusals by a Lender to consent to certain proposed changes,
waivers, discharges or terminations with respect to this Agreement which have
been approved by the Majority Lenders, Lessee shall have the right, if no Lease
Default or Lease Event of Default then exists, to replace such Lender (the
"Replaced Lender") with one or more other Eligible Transferee or Transferees,
none of whom shall constitute a Defaulting Lender at the time of such
replacement (the "Replacement Lender") reasonably acceptable to the
Administrative Agent, provided that (i) at the time of any replacement pursuant
to this Section 12.13, the Replacement Lender shall enter into one or more
assignments pursuant to Section 12 (and with all fees payable pursuant to this
Section 12.13 to be paid by the Replacement Lender) pursuant to which the
Replacement Lender shall acquire all of the Lender Available Commitment and
outstanding Loans and Notes of the Replaced Lender and, in connection therewith,
shall pay to the Replaced Lender in respect thereof an amount equal to the sum
of (A) an amount equal to the principal of, and all accrued interest on, all
outstanding Loans and Notes of the Replaced Lender, together with all then
unpaid interest with respect thereto at such time and (B) an amount equal to all
accrued, but theretofore unpaid, fees owing to the Replaced Lender and (ii) all
obligations of
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Lessee owing to the Replaced Lender (other than those specifically described in
clause (i) above in respect of which the assignment purchase price has been, or
is concurrently being, paid) shall be paid in full to such Replaced Lender
concurrently with such replacement. Upon the execution of the respective
assignment agreements, the payment of amounts referred to in clauses (i) and
(ii) above and, if so requested by the Replacement Lender, delivery to the
Replacement Lender of the appropriate Note or Notes executed by Lessor, the
Replacement Lender shall become a Lender hereunder and the other Operative
Documents thereunder and the Replaced Lender shall cease to constitute a Lender
hereunder, except with respect to indemnification provisions under the Operative
Documents, which shall survive as to such Replaced Lender (and to give effect to
the replacement of a defaulting lender with one or more non-defaulting lenders).
(b) (x) If any Certificate Holder breaches its obligation to make an
Equity Contribution (a "Defaulting Certificate Holder"), (y) upon the occurrence
of an event giving rise to the operation of Section 10.4 with respect to any
Certificate Holder which results in such Certificate Holder charging to Lessee
increased costs in excess of those being generally charged by the Certificate
Holders in their capacity as lenders in other similar transactions or (z) as
provided in Section 12.2(b) in the case of certain refusals by a Certificate
Holder to consent to certain proposed changes, waivers, discharges or
terminations with respect to this Agreement which have been approved by the
Majority Lenders or the Certificate Holders, as the case may be, Lessee shall
have the right, if no Lease Default or Lease Event of Default then exists, to
replace such Certificate Holder (the "Replaced Certificate Holder") with one or
more other Eligible Transferees, none of whom shall constitute a defaulting
Certificate Holder at the time of such replacement (collectively, the
"Replacement Certificate Holders") reasonably acceptable to the Administrative
Agent, provided that (i) at the time of any replacement pursuant to this Section
12.13, the Replacement Certificate Holder shall enter into one or more
assignments pursuant to Section 12.7 (and with all fees payable pursuant to this
Section 12.13 to be paid by the Replacement Certificate Holder) pursuant to
which the Replacement Certificate Holder shall assume the Replaced Certificate
Holder's Available Commitment and shall acquire the rights with respect to
outstanding Equity Contributions of the Replaced Certificate Holder and, in
connection therewith, shall pay to the Replaced Certificate Holder in respect
thereof an amount equal to the sum of (A) an amount equal to the amount of the
Equity Contribution, and all accrued Applicable Equity Rate return on all
outstanding Equity Contributions of the Replaced Certificate Holder, and (B) an
amount equal to all accrued, but theretofore unpaid, fees owing to the Replaced
Certificate Holder and (ii) all obligations of Lessee owing to the Replaced
Certificate Holder (other than those specifically described in clause (i) above
in respect of which the assignment purchase price has been, or is concurrently
being, paid) shall be paid in full to such Replaced Certificate Holder
concurrently with such replacement. Upon the execution of the respective
assignment agreements, the payment of amounts referred to in clauses (i) and
(ii) above, the Replacement Certificate Holder shall become a Certificate Holder
hereunder and under the other Operative Documents and the Replaced Certificate
Holder shall cease to constitute a Certificate Holder hereunder, except with
respect to indemnification provisions under the Operative Documents, which shall
survive as to such Replaced Certificate Holder (and to give effect to the
replacement of a defaulting Certificate Holder with one or more non-defaulting
Certificate Holder).
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12.14. Limited Recourse Against Certificate Holders and Trust Company.
Without impairing any of the other rights, powers, privileges, liens or security
interests of the Administrative Agent, any Lender or the Collateral Agent
pursuant to the Loan Documents, except for the Trust Company's or Certificate
Holders's gross negligence, willful misconduct, misrepresentations or fraud and
as expressly provided in this Agreement or any other Loan Document, and subject
to the proviso below, Lenders agree that as between them and the Trust Company
and Certificate Holders, no recourse shall be had with respect to this Agreement
or such other Loan Documents against the Trust Company or Certificate Holders,
or any officer, director, employee, agent or Affiliate thereof for amounts owed
by Lessor under the Loan Documents; and neither the Trust Company nor
Certificate Holders, nor any officer, director, employee, agent or Affiliate
thereof shall have any personal liability for any amounts owed by Lessor under
the Loan Documents; provided, however, that nothing contained in this Section
12.14 or elsewhere shall be construed to (i) prevent recourse to and the
enforcement against the Lessor Collateral of all liabilities, obligations and
undertakings contained in the Loan Documents, (ii) limit, restrict, or impair
the right of the Majority Lenders to accelerate the maturity of the Loans upon
the occurrence of a Loan Event of Default, (iii) prevent the bringing of an
action or obtaining a judgment against Lessor or against the Trust Company or
Certificate Holders for any breach of any of its representations, warranties or
covenants under any of the Operative Documents, or (iv) prevent the bringing of
an action or obtaining of a judgment to foreclose the lien of this Agreement or
Security Documents or otherwise realize upon the Lessor Collateral or the sums
due or to become due under the Lease Agreement or the other Loan Documents to
which any such Person is a party.
12.15. Concerning Lessor. Trust Company is entering into this Lease
Agreement solely in its capacity as Trustee under the Trust Agreement and not in
its individual capacity (except as expressly stated herein) and in no case shall
Trust Company (or any entity acting as successor Trustee under the Trust
Agreement) be personally liable for or on account of any of the statements,
representations, warranties, covenants or obligations stated to be those of
Lessor hereunder; provided, however, that Trust Company (or any such successor
Trustee) shall be personally liable hereunder for any claims or liabilities
resulting from or arising out of the following:
(i) the willful misconduct or gross negligence of Trust Company;
(ii) the liabilities that may result from the breach or inaccuracy of
any of Trust Company's representations, warranties or agreements made in
its individual capacity in Section 2.7 hereof or elsewhere in the Operative
Documents or any document delivered in connection therewith;
(iii) any failure by Trust Company to perform the obligations
expressly undertaken in its individual capacity in any Operative Documents
or any document delivered in connection therewith;
(iv) taxes based on or measured by any fees, commissions or
compensation received by Trust Company for acting as trustee in connection
with any of the transactions contemplated by the Operative Documents; or
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(v) any failure by Trust Company to use ordinary care in the receipt
and disbursement of funds actually received by it in accordance with the
terms of the Operative Documents.
12.16. Consent and Agreement of Lessee and Guarantor. Lessee and
Guarantor hereby consent to the assignment set forth in Section 7. Lessor and
the Collateral Agent hereby instruct, and Lessee and Guarantor agree, that until
further notified by the Collateral Agent, Lessee, Guarantor and Lessor shall pay
all amounts payable under the Operative Documents other than Excepted Payments
to the account of the Collateral Agent or as Collateral Agent or Majority
Lenders may otherwise designate in a written notice to Lessee, Guarantor and
Lessor. If there is any disagreement between the Administrative Agent and Lessor
as to whether any amount is an Excepted Payment, Lessor, Lessee and Guarantor
shall abide by the Administrative Agent's determination with respect to such
amount.
* * *
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective duly authorized officers as of
the date first above written.
UNIVERSAL COMPRESSION, INC.,
as Lessee
By: /s/ XXXXXXX X. XXXXXXXXXX
----------------------------------------
Name: Xxxxxxx X. XxxxXxxxxx
Title: Chief Financial Officer
UNIVERSAL COMPRESSION HOLDINGS, INC.,
as Guarantor
By: /s/ XXXXXXX X. XXXXXXXXXX
----------------------------------------
Name: Xxxxxxx X. XxxxXxxxxx
Title: Chief Financial Officer
WILMINGTON TRUST COMPANY,
not in its individual
capacity, but solely as
Trustee of Universal
Compression Trust
(2000-1) under the Trust
Agreement dated as of
May 25, 2000, as Lessor
By: /s/ XXXXXX X. XXXXX, XX.
----------------------------------------
Name: Xxxxxx X. Xxxxx, Xx.
Title: Financial Services Officer
WILMINGTON TRUST COMPANY,
in its individual capacity,
as Trust Company
By: /s/ XXXXXX X. XXXXX, XX.
----------------------------------------
Name: Xxxxxx X. Xxxxx, Xx.
Title: Financial Services Officer
DEUTSCHE BANK AG, NEW YORK BRANCH,
as a Certificate Holder
By: /s/ XXXXXX XXXXXXXXX, XX.
----------------------------------------
Name: Xxxxxx Xxxxxxxxx, Xx.
Title: Director
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By: /s/ XXXXX XXXXX
----------------------------------------
Name: Xxxxx Xxxxx
Title: Vice President
BANKERS TRUST COMPANY,
as Administrative Agent
By: /s/ XXXXXX X. XXXXXXXXXX
----------------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Director
BANKERS TRUST COMPANY,
as Collateral Agent
By: /s/ XXXXXX X. XXXXXXXXXX
----------------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Director
BANKERS TRUST COMPANY
as a Lender
By: /s/ XXXXXX X. XXXXXXXXXX
----------------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Director
BANK ONE, N.A.
as a Lender
By: /s/ XXXXXXX X. XXXXXX
----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
FIRST UNION NATIONAL BANK
as a Lender
By: /s/ XXXXXX X. XXXXXXXXX
----------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Senior Vice President
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APPENDIX A
UNIVERSAL COMPRESSION, INC.
NATURAL GAS COMPRESSOR EQUIPMENT
FINANCING FACILITY
The definitions stated herein shall equally apply to both the
singular and plural forms of the terms defined. Any agreement defined or
referred to below means such agreement as amended, supplemented or modified from
time to time, and includes all exhibits, supplements and appendices thereto. Any
Person defined or referred to below includes its successors, permitted
transferees and assigns. The word "including," when used below or in any
Operative Document, is deemed to be followed by "without limitation," whether or
not such words appear.
"Acquisition Cost" of each Item of Equipment means an amount
equal to the sum of (a)(i) with respect to an Item of Equipment to be assembled
by Lessee on behalf of Lessor in accordance with the Assembly Agency Agreement,
the sum of the aggregate of the actual costs incurred and paid by Lessee on
behalf of Lessor for each Component of such Item (ii) with respect to an Item of
Equipment purchased by Lessor from Lessee on the Closing Date, the fair market
value of such Item as set forth in an Appraisal delivered to Lessor and the
Administrative Agent prior to the Closing Date or (iii) with respect to an Item
of Equipment purchased by Lessor from Lessee other than on the Closing Date, the
amount equal to the product of the horse power rating for such Item and the
"Horse Power Multiplier" set forth on Schedule 1 to the Participation Agreement
for such type of Item, plus (b) all sales and excise taxes paid by Lessor on or
with respect to the acquisition of such Item except to the extent Lessee is not
required to pay or indemnify with respect to such Tax under Section 10.3 of the
Participation Agreement.
"Adjusted Consolidated Net Income" for any period means
Consolidated Net Income for such period plus, without duplication, the sum of
the amount of all net non-cash charges (including, without limitation,
depreciation, amortization, deferred tax expense and non-cash interest expense)
and net non-cash losses which were included in arriving at Consolidated Net
Income for such period less the sum of the amount of all net non-cash gains
(exclusive of items reflected in Adjusted Working Capital) included in arriving
at Consolidated Net Income for such period.
"Adjusted Consolidated Working Capital" at any time means
Consolidated Current Assets (but excluding therefrom all cash and Cash
Equivalents) less Consolidated Current Liabilities.
"Administrative Agent" means Bankers Trust Company.
"Affected Person" means each of the Lenders and each of the
Certificate Holders.
"Affiliate" means, as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person. For purposes of
104
this definition, "control" of a Person means the power, directly or indirectly,
to direct or cause direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise;
provided, however, that under no circumstances shall the Trust Company be deemed
to be an Affiliate of the Administrative Agent, any Certificate Holder or the
Trustee, nor the Administrative Agent, any Certificate Holder or the Trustee be
deemed to be an Affiliate of the Trust Company.
"After-Tax Basis" means in respect of an amount (the "base
amount") with respect to a Person, (i) the base amount supplemented by (ii) an
additional payment, if necessary, to such Person such that, after reduction (but
not below zero) for the net amount of all Taxes (taking into account credits,
offsets, deductions or other benefits realized or to be realized by such Person
or its Affiliates in respect of such base amount and such Taxes, calculated
assuming that such credits reduce such taxes, and any deductions or other
benefits reduce income that would otherwise be subject to such tax, at the
then-maximum marginal rate generally applicable to such Person), if any, imposed
on such Person (calculated at the then maximum marginal rates generally
applicable to such Person) in respect of the sum of the base amount and such
additional payment shall be equal to the base amount.
"Alternate Rate" means a variable rate equal to the greater of
(a) the sum of the Federal Funds Rate from time to time in effect and 0.5% and
(b) the rate of interest from time to time announced by Deutsche Bank AG, New
York Branch at its principal office in New York, New York from time to time as
its "prime commercial lending rate" (which rate is a reference rate and does not
necessarily represent the lowest or best rate actually charged to any customer,
and Deutsche Bank AG, New York Branch may make commercial loans or other loans
at rates of interest at, above or below such reference rate), with any per diem
determination based on a 364 or 365-day year, as the case may be.
"Applicable Debt Margin" means the debt margin set forth on
Schedule 2 to the Participation Agreement; provided that, for the first 180 days
after the Closing Date, in no event shall the Applicable Debt Margin be less
than 275 basis points.
"Applicable Debt Rate" for any Lease Payment Period with
respect to a Loan, means, subject to Section 10.4(b) of the Participation
Agreement, an interest rate per annum equal to (a) the one (1), two (2) or three
(3) month LIBOR Rate, as elected for such Lease Payment Period by Lessee
pursuant to Section 5 of the Participation Agreement, plus (b) the Applicable
Debt Margin.
"Applicable Equity Margin" means the equity margin set forth
on Schedule 2 to the Participation Agreement; provided that, for the first 180
days after the Closing Date, in no event shall the Applicable Equity Margin be
less than 475 basis points.
"Applicable Equity Rate" for any Lease Payment Period with
respect to an Equity Contribution means, subject to Section 10.4(b) of the
Participation Agreement, an interest rate per annum equal to (a) the one (1),
two (2) or three (3) month LIBOR Rate, as elected for such Lease Payment Period
by Lessee pursuant to Section 5 of the Participation Agreement, plus (b) the
Applicable Equity Margin.
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"Applicable Law" means, with respect to any Person or Item of
Equipment, all existing and future laws, rules, guidelines, regulations
(including proposed, temporary and final income tax regulations), statutes,
treaties, codes, ordinances, permits, certificates, orders and licenses of and
interpretations by any Governmental Entity and judgments, decrees, injunctions,
writs, or orders of any court, arbitrator or other administrative, judicial, or
quasi-judicial tribunal or agency of competent jurisdiction applicable to such
Person of Item of Equipment.
"Appraisal" means, with respect to and Item of Equipment, an
appraisal prepared by the Appraiser at Lessee's expense of such Item of
Equipment conducted by, or in the presence of, the Appraiser, that (i) confirms
that the estimated Acquisition Cost for such Item of Equipment is equal to or
less than such Item's fair market value as of a date within fourteen (14) days
of the date the appraisal is delivered to the Administrative Agent and (ii)
estimates the Residual Value, which appraisal shall be based upon a physical
inspection to the extent reasonably deemed necessary by the Appraiser.
"Appraiser" means American Appraisal Associates, Inc., or an
independent expert selected by Lessee and acceptable to the Lessor, the Majority
Certificate Holders, and the Majority Lenders.
"Assembly Agency Agreement" means the Assembly Agency
Agreement, dated as of May 30, 2000, between Lessee and Lessor.
"Assembly Agent" means Lessee as Assembly Agent under the
Assembly Agency Agreement.
"Assembly Period" means with respect to each Item of
Equipment, the period which begins on the first Funding Date related to such
Item of Equipment and ends on the earlier of (i) the date of issuance of a
Completion Certificate with respect to such Item of Equipment and (ii) the Basic
Term Commencement Date.
"Asset Sale" means any sale, transfer or other disposition by
Guarantor or any of its Subsidiaries to any Person (including by-way-of
redemption by such Person) other than to Guarantor or a Wholly-Owned Subsidiary
of Guarantor of any asset (including, without limitation, any capital stock or
other securities of, or equity interests in, another Person) other than (i)
sales of assets pursuant to the Revolver and (ii) sales of assets which
individually, or together with related sales, do not exceed $500,000 per sale.
"Asset Swap" has the meaning set forth in Section 9.5(i)(xiii)
of the Participation Agreement.
"Assignee" means the Collateral Agent and its successors and
permitted assigns.
"Assignment and Assumption Agreement" for a Lender means the
Assignment and Assumption Agreement substantially in the form of Exhibit B to
the Loan Agreement and for a Certificate Holder means the Assignment and
Assumption Agreement substantially in the form of Exhibit B to the Trust
Agreement.
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"Attributable Indebtedness" shall mean, at any time, with
respect to Operating Lease Obligations (including the transaction contemplated
under the Operative Documents or any similar lease), 85% of the aggregate
outstanding Operating Lease Obligations (other than the portion thereof
attributable to interest) under the operating lease for such Operating Lease
Obligations.
"Availability Fee" means the fee payable to Lessor pursuant to
Section 7.3 of the Lease Agreement.
"Availability Fee Rate" means, at any time, the rate then
applicable set forth as such in Schedule 2 to the Participation Agreement
expressed as an annual percentage rate calculated to the seventh decimal place
on an actual/360-day basis.
"Bankruptcy Code" means Title 11 of the United States Code
entitled "Bankruptcy" as now or hereafter in effect or any successor thereto.
"Basic Term" means the period consisting of forty-two (42)
months commencing on the Basic Term Commencement Date and terminating on the
Payment Date that occurs in the last month of such forty-two (42) month period.
"Basic Term Commencement Date" means November 30, 2001.
"Xxxx of Sale" means a Xxxx of Sale in the form of Exhibit A
to the Participation Agreement to be executed and delivered by Lessee for each
Item of Equipment sold by Lessee to Lessor.
"Borrower" means the Lessor in its capacity as borrower under
the Loan Agreement.
"Breakage Costs" means any amount or amounts as shall
compensate a Lender or Certificate Holder for any reasonable loss (excluding
loss of profit), expense or liabilities incurred after using good faith and
reasonable efforts to minimize such loss, cost or expense by a Lender or
Certificate Holder as a result of a prepayment by Lessor of principal, interest,
Equity Return or Equity Component pursuant to the terms of the Operative
Documents or as a result of a funding that does not occur on a date specified
therefor in a Funding Notice. The amount of the loss, expense or liabilities
shall be determined by the Person seeking such, and notice thereof shall be
provided to Lessee in the form of a certificate of such Person stating that the
calculations set forth therein are in accordance with the terms of the
Participation Agreement and setting forth in reasonable detail the basis for
such calculations, such certificate being conclusive and binding for all
purposes absent manifest error.
"Budget" means with respect of each Item of Equipment to be
assembled by Lessee on behalf of Lessor pursuant to the Assembly Agency
Agreement the budget prepared and certified by the Lessee (a) identifying the
serial number for such Item, (b) describing by type, manufacturer, model number
and serial number (where available) each of the natural gas driver, compressor
and air cooler to be included in such Item, (c) setting forth the Lessee's good
faith
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estimates of (i) the cost of each Component for such Item, and (ii) the fair
market value and Residual Value of such Item upon completion and (d) the
estimated completion date.
"Budget Parameters" means for each Component ten (10) percent
above or below the estimated cost for such Component in the Budget therefor
provided that the aggregate of the actual costs of all Components for any Item
of Equipment shall not exceed the aggregate of the estimated costs of all
Components of such Item of Equipment in the Budget therefor delivered to Lessor
in accordance with Section 3.1(d)(ii) of the Participation Agreement.
"Business Day" means any day other than a day on which banking
institutions in the State of New York or Delaware are authorized by law to
close.
"Capital Expenditures" means, for any period, without
duplication, (i) expenditures (including, without limitation, the aggregate
amount of Capitalized Lease Obligations incurred during such period) made by
Lessee and its Subsidiaries to acquire or construct fixed assets, plant and
equipment (including renewals, improvements, replacements and capitalized lease
repairs) during such period which would be reflected as additions to property,
plant or equipment on a consolidated balance sheet of Lessee and its
Subsidiaries prepared in accordance with GAAP and (ii) that portion of a
Permitted Acquisition made during such period which is attributable to the
acquisition of fixed assets, plant and equipment and which would be reflected as
additions to property, plant, or equipment on a consolidated balance sheet of
Lessee and its Subsidiaries prepared in accordance with GAAP.
"Capitalized Lease Obligations" of any Person means all rental
obligations which, under generally accepted accounting principles, are or will
be required to be capitalized on the books of such Person, in each case taken at
the amount thereof accounted for as indebtedness in accordance with such
principles.
"Casualty Loss Value" of each Item of Equipment means the
amount set forth as such in the Lease Agreement Supplement for such Item which
amount shall be equal to the Acquisition Cost of such Item.
"Casualty Loss Value Payment Date" for each Item of Equipment
for which an Event of Loss occurs means the Payment Date following the sixtieth
(60th) day after the date of the Event of Loss.
"Certificate" has the meaning set forth in Section 3.1 of the
Trust Agreement.
"Certificate Holder Available Commitment" means, at any time
during the Commitment Period, for each Certificate Holder the amount equal to
the excess, if any, of such Certificate Holder's Certificate Holder Commitment
less the aggregate of Equity Contributions previously made by such Certificate
Holder; provided that no repayment of any amount to a Certificate Holder shall
increase its Certificate Holder Available Commitment.
"Certificate Holder Commitment" means for each Certificate
Holder the Dollar amount set forth in Schedule 3 to the Participation Agreement
below the term "Certificate Holder Commitment".
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"Certificate Holders" means Deutsche Bank AG, New York Branch
and any other Eligible Transferees who from time to time become party to the
Participation Agreement and Trust Agreement as Certificate Holders in accordance
with the terms thereof.
"Certificate Holders Option" has the meaning set forth in
Section 6.2 of the Participation Agreement.
"Certificate of Equipment" means (a) for Items of Equipment to
be sold and leased back, a certificate by Lessee executed by a Responsible
Officer in the form of Exhibit B-1 to the Participation Agreement or (b) for
Items of Equipment to be assembled by Lessee on behalf of Lessor in accordance
with the Assembly Agency Agreement, a certificate by Lessee executed by a
Responsible Officer in the form of Exhibit B-2 to the Participation Agreement.
"Change of Control" means (a)(i) the consummation of any
transaction (including, without limitation, any merger or consolidation) the
result of which is that any "person" (as such term is defined in Section
13(d)(3) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")
or group or related persons, together with Affiliates thereof (other than the
Permitted Investors), becomes the "beneficial owner" (as such term is defined in
Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly, of
40% or more of the Voting Stock of Guarantor (as determined on a fully diluted
basis and measured by voting power rather than number of shares), or (ii) the
Board of Directors of Guarantor shall not consist of a majority of Continuing
Directors, or (b) Lessee shall cease to be a direct Wholly-Owned Subsidiary of
Guarantor or (c) a "Change of Control" or similar event shall occur under the
Lessee Senior Note Documents.
"Closing Date" means the first Funding Date, which shall be a
date during the period from the date of the Participation Agreement through June
30, 2000, and which is mutually agreeable to the parties to the Participation
Agreement.
"Code" means the Internal Revenue Code of 1986, as the same
may be amended from time to time, and the regulations promulgated and rulings
issued thereunder. Section references to the Code are to the Code, as in effect
at the date the Participation Agreement and any subsequent provisions of the
Code, amendment thereof, supplement thereto or substituted therefor.
"Collateral" means the Lessee Collateral and Lessor
Collateral.
"Collateral Agent" means Bankers Trust Company.
"Collateral Agent Account" means such account as the
Collateral Agent shall designate from time to time pursuant to Section 4.10 of
the Participation Agreement by notice to each of the other parties.
"Commitment Period" means the period commencing on the date of
the Participation Agreement and ending on the Basic Term Commencement Date.
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"Completion Certificate" means, with respect to an Item of
Equipment which has been successfully completed a certificate in the form of
Exhibit D to the Participation Agreement delivered by Lessee to Lessor
representing and warranting that such Item of Equipment (a) is fully
operational, (b) has been completed in accordance with its design
specifications, (c) is in compliance with all governmental and environmental
regulations, and (d) is free of all Liens other than Permitted Liens and Lessor
Liens.
"Component" means for each Item of Equipment to be assembled
by Lessee on behalf of Lessor pursuant to the Assembly Agency Agreement each of
the (i) natural gas driver, (ii) compressor, (iii) air cooler, (iv) labor
expenses and (v) all other additional parts and expenses necessary to assemble
such Item of Equipment.
"Consolidated Current Assets" means, at any time, the
consolidated current assets of Guarantor and its Consolidated Subsidiaries.
"Consolidated Current Liabilities" means, at any time, the
consolidated current liabilities of Guarantor and its Consolidated Subsidiaries
at such time, but excluding the current portion of and accrued but unpaid
interest on any Indebtedness under Revolver and any other long-term Indebtedness
which would otherwise be included therein.
"Consolidated Debt" means, at any time, the sum of the
aggregate outstanding principal amount of all Indebtedness for borrowed money,
the amount of any unreimbursed drawings under any letter of credit (which have
been unreimbursed for three or more days) and the principal component of
Capitalized Lease Obligations of Guarantor and its Consolidated Subsidiaries.
"Consolidated EBIT" means, for any period, the Consolidated
Net Income of Guarantor and its Consolidated Subsidiaries, before Consolidated
Net Interest Expense and provision for taxes and without giving effect to any
extraordinary gains or losses or gains or losses from sales of assets other than
inventory sold in the ordinary course of business.
"Consolidated EBITDAR" means, for any period, Consolidated
EBIT, adjusted by adding thereto the amount of all amortization of intangibles,
depreciation and rental expense that were deducted in arriving at Consolidated
EBIT for such period.
"Consolidated Net Income" means, for any period, net after tax
income of Guarantor and its Consolidated Subsidiaries for such period (after
deduction for minority interests), provided that the net income of any
Subsidiary of Lessee shall be excluded to the extent that the declaration or
payment of cash dividends or similar distributions by that Subsidiary of that
net income is not at the date of determination permitted by operation of its
charter or any agreement or instrument applicable to such Subsidiary (other than
restrictions permitted by clause (vi) or (ix) of Section 9.12 of the Revolver).
"Consolidated Net Interest Expense" means, for any period, the
total consolidated cash interest expense of Guarantor and its Consolidated
Subsidiaries for such period (calculated without regard to any limitations on
the payment thereof) plus, without duplication, that portion
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of Capitalized Lease Obligations of Guarantors and its Consolidated Subsidiaries
representing the interest factor for such period, in each case net of the total
consolidated cash interest income of Guarantor and its Consolidated Subsidiaries
for such period.
"Consolidated Subsidiaries" means, as to any Person, all
Subsidiaries of such Person which are consolidated with such Person for
financial reporting purposes in accordance with generally accepted accounting
principles in the United States.
"Contingent Obligation" means, as to any Person, any
obligation of such Person guaranteeing or intended to guarantee any
Indebtedness, leases, dividends or other obligations ("primary obligations") of
any other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of such Person,
whether or not contingent, (a) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (b) to advance or
supply funds (i) for the purchase or payment of any such primary obligation or
(ii) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (c) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (d) otherwise to assure or hold
harmless the holder of such primary obligation against loss in respect thereof;
provided, however, that the term Contingent Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Contingent Obligation shall be deemed to be an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Contingent Obligation is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder) as determined by such
Person in good faith.
"Continuing Directors" means the directors of Guarantor on the
Closing Date (after giving effect to the Guarantor IPO) and each other director
of Guarantor if such other director's nomination or election to the Board of
Directors of Guarantor is recommended by a majority of the then Continuing
Directors.
"Curing Party" has the meaning set forth in Section 6.1 of the
Participation Agreement.
"Date of Manufacture" with respect to any Item of Equipment,
means the date the manufacturer or vendor thereof sold as new the oldest of the
(a) compressor, (b) natural gas driver and (c) air cooler installed on such Item
of Equipment.
"Date of Overhaul" with respect to any Item of Equipment,
means the date Lessee or its designee completes a complete overhaul of such Item
of Equipment.
"Debt Component" for each Item of Equipment means the dollar
amount of the Acquisition Cost financed by Lenders on the Acceptance Date
therefor, which shall equal 97% of the Acquisition Cost for such Item.
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"Deficiency" has the meaning set forth in Section 29.1 of the
Lease Agreement.
"Defaulting Certificate Holder" has the meaning set forth in
Section 12.13(b) of the Participation Agreement.
"Defaulting Lender" has the meaning set forth in Section
12.13(a) of the Participation Agreement.
"Dividend" with respect to any Person means that such Person
has declared or paid a dividend or returned any equity capital to its
stockholders or authorized or made any other distribution, payment or delivery
of property (other than common stock of such Person) or cash to its stockholders
as such, or redeemed, retired, purchased or otherwise acquired, directly or
indirectly, for a consideration any shares of any class of its capital stock
outstanding on or after the Closing Date (or any options or warrants issued by
such Person with respect to its capital stock), or set aside any funds for any
of the foregoing purposes, or shall have permitted any of its Subsidiaries to
purchase or otherwise acquire for a consideration any shares of any class of the
capital stock of such Person outstanding on or after the Closing Date (or any
options or warrants issued by such Person with respect to its capital stock).
Without limiting the foregoing, "Dividends" with respect to any Person shall
also include all payments made or required to be made by such Person with
respect to any stock appreciation rights, plans, equity incentive or achievement
plans or any similar plans or setting aside of any funds for the foregoing
purposes.
"Dollar" means freely transferable, lawful money of the United
States.
"Domestic Joint Venture" has the meaning set forth in Section
9.5(q)(viii) of the Participation Agreement.
"EBITDA Ratio" means, on any date, the ratio of Consolidated
EBIT to Consolidated Interest Expense for the four consecutive fiscal quarters
of Guarantor most recently ended prior to such date.
"Eligible Transferee" means and includes a commercial bank,
financial institution or other "accredited investor" (as defined in Regulation D
of the Securities Act) other than any such Person that is directly involved in a
Permitted Business.
"Environmental Claims" means any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, directives,
claims, liens, notices of noncompliance or violation, investigations or
proceedings relating in any way to any Environmental Law or any permit issued,
or any approval given, under any such Environmental Law (hereafter, "Claims"),
including, without limitation, (a) any and all Claims by governmental or
regulatory authorities for enforcement, cleanup, removal, response, remedial or
other actions or damages pursuant to any applicable Environmental Law, and (b)
any and all Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief in connection
with alleged injury or threat of injury to health, safety or the environment due
to the presence of Hazardous Materials.
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"Environmental Law" means any Federal, state, foreign or local
statute, law, rule, regulation, ordinance, code, guideline, written policy and
rule of common law now or hereafter in effect and in each case as amended, and
any judicial or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment, relating to the environment,
employee health and safety or Hazardous Materials, including, without
limitation, CERCLA; RCRA; the Federal Water Pollution Control Act, 33 U.S.C.
Section 1251 et seq.; the Toxic Substances Control Act, 15 U.S.C. Section 2601
et seq.; the Clean Air Act, 42 U.S.C. Section 7401 et seq.; the Safe Drinking
Water Act, 42 U.S.C. Section 3803 et seq.; the Oil Pollution Act of 1990, 33
U.S.C. Section 2701 et seq.; the Emergency Planning and the Community
Right-to-Know Act of 1986, 42 U.S.C. Section 11001 et seq.; the Hazardous
Material Transportation Act, 49 U.S.C. Section 1801 et seq.; the Occupational
Safety and Health Act, 29 U.S.C. Section 651 et seq.; and any state and local or
foreign counterparts or equivalents, in each case as amended from time to time.
"Equipment" means the equipment described on the Schedule of
Equipment attached to each consecutively numbered Lease Agreement Supplement now
or hereafter made a part of the Lease Agreement together with any tangible
Components thereof, regardless of whether such Equipment has been fully
assembled and all related appliances, parts, accessories, appurtenances,
accessions, additions, improvements, replacements and other equipment or
components of any nature from time to time incorporated or installed therein.
"Equipment Financing Transactions" means any Capitalized
Lease, Operating Lease, Purchase Money Indebtedness, and any sale-leaseback or
other transactions consummated in connection therewith creating Capitalized
Lease Obligations, Operating Lease Obligations or Purchase Money Indebtedness.
"Equity Component" for each Item of Equipment means the
difference between the Acquisition Cost and the Debt Component therefor.
"Equity Contribution" has the meaning set forth in Section 4.1
of the Participation Agreement.
"Equity Return" means the amounts paid by Lessee in accordance
with clause (b) of Section 7.1 and clause (b) of Section 7.2 of the Lease
Agreement.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and the regulations promulgated and rulings issued thereunder.
Section references to ERISA are to ERISA, as in effect at the date of the
Participation Agreement and any subsequent provisions of ERISA, amendment
thereof, supplemented thereto or substituted therefor.
"ERISA Affiliate" means each person (as defined in Section
3(9) of ERISA) which together with Guarantor or any Subsidiary of Guarantor
would be deemed to be a "single employer" within the meaning of Section 414(b),
(c), (m) or (o) of the Code.
"Event of Loss" with respect to any Item of Equipment means
(a) the loss of such Item of Equipment or any substantial part thereof, or (b)
the loss of the use of such Item of Equipment due to theft or disappearance for
a period in excess of 45 days during the Term, or
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existing at the expiration or earlier termination of the Term, or (c) the
destruction, damage beyond repair, or rendition of such Item of Equipment or any
substantial part thereof permanently unfit for normal use for any reason
whatsoever, or (d) the condemnation, confiscation, seizure, or requisition of
use or title to such Item of Equipment or any substantial part thereof by any
Governmental Entity under the power of eminent domain or otherwise beyond the
earlier of fifteen (15) days and the end of the Basic Term.
"Excepted Payments" means (a) indemnity payments paid or
payable in favor of Trust Company, Certificate Holders, Lenders, Administrative
Agent or Collateral Agent, or their successors or assigns, directors, officers,
employees, affiliates and agents under the Operative Documents, (b) proceeds of
public liability insurance (or government indemnities in lieu thereof) payable
to Trust Company, Certificate Holders, Lenders, Administrative Agent or
Collateral Agent either pursuant to the Lease Agreement or the Participation
Agreement (which shall include proceeds of any self-insurance by Lessee) or
maintained by Lessee, Trust Company, Lessor, Certificate Holders, Lenders,
Administrative Agent or Collateral Agent and not required to be maintained under
the Lease Agreement, (c) costs or expenses paid or payable by Lessee to, or for
the benefit of, Trust Company, Certificate Holders, Lenders, Administrative
Agent or Collateral Agent, (d) all rights of, and payments to, Certificate
Holders under and pursuant to the Trust Agreement after all of the Lessor's
obligations to make all other payments pursuant to the Operative Documents have
been satisfied, (e) where any amount payable to Trust Company, Certificate
Holders, Lenders, Administrative Agent or Collateral Agent is expressed to be
payable on an After-Tax Basis, the increment to the underlying payment
obligation arising by virtue of the operation of the definition of "After-Tax
Basis," (f) any payments in respect of interest to the extent attributable to
payments referred to in clauses (a) through (e) above and otherwise required to
be paid thereon, (g) all rights to receive the amounts referred to in clauses
(a) through (f) above, and (h) the proceeds of enforcement of any right to
receive the proceeds of any amount referred to in clauses (a) through (f) above.
"Exempt Payments" has the meaning set forth in Section 10.3.5
of the Participation Agreement.
"Existing Indebtedness" has the meaning set forth in Section
2.3(x) of the Participation Agreement.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of one percent) equal to
the weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day, provided that (a) if the day for which such rate is to
be determined 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 such rate is not so
published for any day which is a Business Day, the average of the quotations at
approximately 11:00 a.m. (New York time) for such day on such transactions
received by Agent from three federal funds brokers of recognized standing
selected by Agent.
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"Financing Statements" means the Lessee Financing Statements
and the Lessor Financing Statements.
"Foreign Joint Venture" means any joint venture that involves
a corporation, association, partnership, business trust or other business entity
that is incorporated under the laws of any jurisdiction other than the United
States of America, any State thereof, any territory thereof or Canada.
"Foreign Pension Plan" means any plan, fund (including,
without limitation, any superannuation fund) or other similar program
established or maintained outside the United States of America by Guarantor or
any one or more of its Subsidiaries primarily for the benefit of employees of
Guarantor or such Subsidiaries residing outside the United States of America,
which plan, fund or other similar program provides, or results in, retirement
income, a deferral of income in contemplation of retirement or payments to be
made upon termination of employment, and which plan is not subject to ERISA or
the Code.
"Foreign Subsidiary" means each Subsidiary of the Borrower
that is incorporated under the laws of any jurisdiction other than the United
States of America, any State thereof, or any territory thereof.
"Funding Date" means the date proposed by Lessee in the
Funding Notice for payment or reimbursement by Lessor in connection with the
sale and leaseback and/or assembly of Items of Equipment, provided each such
date shall be on or before the Basic Term Commencement Date and shall be that
same calendar date each month; provided, however, (a) if any such calendar date
is not a LIBOR Banking Day, then the Funding Date shall be the next LIBOR
Banking Day; and provided, further however, that if the next LIBOR Banking Day
shall occur in the next calendar month, then the Funding Date shall be the
preceding LIBOR Banking Day, and (b) if there is no such corresponding date in
any calendar month, then the Funding Date shall be the last LIBOR Banking Day in
such calendar month.
"Funding Notice" means a Funding Notice and Instructions Re
Funds On Funding Date, in the form of Exhibit C to the Participation Agreement.
"GAAP" means generally accepted accounting principles in the
United States of America in effect from time to time.
"Governmental Entity" means any Federal, state, municipal or
other governmental department, commission, board, bureau, agency, central bank
or instrumentality or any court, in each case whether of the United States or
any foreign country.
"Guaranteed Obligations" has the meaning set forth in Section
8 of the Participation Agreement.
"Guarantor" means Universal Compression Holdings, Inc., a
Delaware corporation.
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"Guarantor IPO" means the Qualified Public Equity Offering
described in Section 5.17(a) of the Revolver.
"Guaranty Party" has the meaning set forth in Section 8 of the
Participation Agreement.
"Hazardous Materials" means (a) any petroleum or petroleum
products, radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, transformers or other equipment that
contain dielectric fluid containing levels of polychlorinated biphenyls, and
radon gas; (b) any chemicals, materials or substances defined as or included in
the definition of "hazardous substances," "hazardous waste," "hazardous
materials," "extremely hazardous substances," "restricted hazardous waste,"
"toxic substances," "toxic pollutants," "contaminants," or "pollutants," or
words of similar import, under any applicable Environmental Law; and (c) any
other chemical, material or substance, the Release of which is prohibited,
limited or regulated by any governmental authority.
"Indebtedness" means, as to any Person, without duplication,
(a) all indebtedness (including principal, interest, fees and charges) of such
Person for borrowed money or for the deferred purchase price of property or
services, (b) the maximum amount available to be drawn under all letters of
credit issued for the account of such Person and all unpaid drawings in respect
of such letters of credit, (c) all Indebtedness of the types described in clause
(a), (b), (d), (e), (f) or (g) of this definition secured by any Lien on any
property owned by such Person, whether or not such Indebtedness has been assumed
by such Person (provided, that, if the Person has not assumed or otherwise
become liable in respect of such Indebtedness, such Indebtedness shall be deemed
to be in an amount equal to the lesser of the fair market value of the property
to which such Lien relates as determined in good faith by such Person and the
stated amount of such Indebtedness), (d) Capitalized Lease Obligations, (e) all
obligations of such person to pay a specified purchase price for goods or
services, whether or not delivered or accepted, i.e., take-or-pay and similar
obligations, (f) all Contingent Obligations of such Person and (g) all
obligations under any Interest Rate Protection Agreement or Other Hedging
Agreement or under any similar type of agreement. Notwithstanding the foregoing,
Indebtedness shall not include trade payables and accrued expenses incurred by
any Person in accordance with customary practices and in the ordinary course of
business of such Person.
"Indemnifying Party" has the meaning set forth in Section
12.12 of the Participation Agreement.
"Intercompany Loan" has the meaning set forth in Section
9.5(q)(xi) of the Participation Agreement.
"Interest Rate Protection Agreement" means any interest rate
swap agreement, interest rate cap agreement, interest collar agreement, interest
rate hedging agreement or other similar agreement or arrangement.
"Interim Rent" has the meaning set forth in Section 7.1 of the
Lease Agreement.
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"Interim Term" for each Item of Equipment means the period
commencing on the first Funding Date for such Item and ending on the Basic Term
Commencement Date.
"Item of Equipment" or "Item" means any of the items of
Equipment (including any tangible Components thereof regardless of whether such
Item has been fully assembled) separately identified on any of the Schedules of
Equipment attached to the Lease Agreement Supplements now or hereafter made a
part of the Lease Agreement other than those Items purchased pursuant to Section
28 of the Lease Agreement or for which Casualty Loss Value was paid pursuant to
Section 19.2 of the Lease Agreement.
"Lease Agreement" means the Master Equipment Lease Agreement
dated as of May 30, 2000 between Lessee and Lessor and each Lease Agreement
Supplement.
"Lease Agreement Supplement" means a Lease Agreement
Supplement and Security Grant substantially in the form attached to the Lease
Agreement as Exhibit A, to be executed by Lessor and the Lessee.
"Lease Default" means any event, action or condition which
with notice or lapse of time or both would constitute a Lease Event of Default.
"Lease Event of Default" has the meaning set forth in Section
23 of the Lease Agreement.
"Lease Payment" means the amount payable during the Interim
Term pursuant to Section 7.1 of the Lease Agreement, during the Basic Term
pursuant to Section 7.2 of the Lease Agreement, any Deficiency, any end of term
rent adjustment payable in accordance with Section 29.2 of the Lease Agreement
and any payments due under Sections 28.2, 28.4 or 28.5 of the Lease Agreement.
"Lease Payment Period" for each Item of Equipment means (a)
for the Interim Term of such Item, each period for which a payment of Lease
Payment is to be made for such Item during the Interim Term as set forth in
Section 7.1 of the Lease Agreement, and (b) for the Basic Term of such Item,
each period for which a payment of Lease Payment is to be made for such Item
during the Basic Term thereof as set forth in Section 7.2 of the Lease
Agreement.
"Leasehold" of any Person means all the right, title and
interest of such Person as lessee or licensee in, to and under leases or
licenses of land, improvements and/or fixtures.
"Lender Available Commitment" means, at any time during the
Commitment Period, for each Lender an amount equal to the excess, if any, of
such Lender's Lender Commitment less the aggregate of the initial principal
balances of all Loans previously made by such Lender; provided that no repayment
to a Lender of any amount shall increase its Lender Available Commitment.
"Lender Commitment" for each Lender means the Dollar amount
set forth in Schedule 3 to the Participation Agreement below the term "Lender
Commitment."
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"Lenders" means Bankers Trust Company, Bank One, N.A., First
Union National Bank and any other Eligible Transferee who from time to time
becomes a party to the Participation Agreement and Loan Agreement as a Lender in
accordance with the terms thereof and those financial institutions who are
identified in the Participation Agreement and the Loan Agreement as "Lenders."
"Lessee" means Universal Compression, Inc., a Texas
corporation.
"Lessee Collateral" has the meaning set forth in Section 9 of
the Lease Agreement.
"Lessee Financing Statement" means the financing statements
and any supplement or amendment thereto in form and substance reasonably
acceptable to Lessor and the Administrative Agent appropriately completed and
executed by Lessee for filing in each jurisdiction necessary or desirable (as
reasonably determined by Agent or Lessor) to perfect Lessor's interest in the
Lessee Collateral to the extent the Lease Agreement is a security agreement.
"Lessee Indemnified Person" means each Lessor Indemnified
Person and Lessor, its successors and assigns and each of their respective
Affiliates, officers, directors, employees, beneficiaries, stockholders, agents
and servants.
"Lessee Senior Discount Notes" means the Lessee's 9 7/8%
Senior Discount Notes due 2008, issued pursuant to the Lessee Senior Discount
Note Indenture dated as of February 20, 1998, between Lessee and the United
States Trust Company of New York, as Trustee.
"Lessor" means Wilmington Trust Company, a Delaware banking
corporation not in its individual capacity but solely as Trustee of Universal
Compression Trust (2000-1).
"Lessor Collateral" has the meaning set forth in Section 7.1
of the Participation Agreement.
"Lessor Financing Statements" means financing statements in
form and substance reasonably acceptable to the Administrative Agent and
appropriately completed and executed by Lessor for filing in each jurisdiction
necessary or desirable (as reasonably determined by the Administrative Agent) to
perfect a security interest in favor of the Collateral Agent in the Lessor
Collateral.
"Lessor Indemnified Person" means each of Trust Company, each
Certificate Holder, each Lender, the Administrative Agent and the Collateral
Agent, their successors and assigns and each of their respective Affiliates,
officers, directors, employees, beneficiaries, stockholders, agents and
servants.
"Lessor Lien" means any Lien on or against any Item of
Equipment, the Lease Agreement, or Lessor's interest therein arising as a result
of (a) any claim against Lessor, any Certificate Holder, any Lender, the
Administrative Agent or the Collateral Agent not resulting from the transactions
contemplated by the Operative Documents, (b) any act or omission of
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Lessor, any Certificate Holder, any Lender, the Administrative Agent or the
Collateral Agent which is not required or expressly permitted by the Operative
Documents or is in violation of any of the terms of the Operative Documents, (c)
any claim against Lessor, any Certificate Holder, any Lender, Administrative
Agent or the Collateral Agent with respect to Taxes or obligations of such
Person against which Lessee is not required to indemnify such Person pursuant to
the Participation Agreement or the other Operative Documents or (d) any claim
against Lessor, any Certificate Holder, any Lender, the Administrative Agent or
the Collateral Agent arising out of any transfer by Lessor, any Certificate
Holder, any Lender, the Administrative Agent or the Collateral Agent of all or
any portion of the interest of such Person in any Item or the Operative
Documents other than the transfer of interest in or possession of such Item by
such Person pursuant to and in accordance with the Operative Documents or
pursuant to the exercise of any remedy set forth in the Operative Documents.
"Leverage Ratio" means, at any time, the ratio of (i)
Consolidated Debt at such time to (ii) Consolidated EBITDAR for the Test Period
then most recently ended.
"Liability Insurance" has the meaning set forth in Section 20
of the Lease Agreement.
"LIBOR" means (a) the offered quotation to first-class banks
in the New York interbank Eurodollar market by Bankers Trust Company for Dollar
deposits of amounts in immediately available funds comparable to the outstanding
principal amount of the Loans of Bankers Trust Company with maturities
comparable to the applicable Lease Payment Period applicable for such Loan or
Equity Contribution commencing two LIBOR Banking Days thereafter as of 10:00
A.M. (New York time) on the date which is two LIBOR Banking Days prior to the
commencement of such Lease Payment Period, divided (and rounded off to the
nearest 1/16 of 1%) by (b) a percentage equal to 100% minus the then stated
maximum rate of all reserve requirements (including, without limitation, any
marginal, emergency, supplemental, special or other reserves required by
applicable law) applicable to any member bank of the Federal Reserve System in
respect of Eurocurrency funding or liabilities as defined in Regulation D (or
any successor category of liabilities under Regulation D).
"LIBOR Banking Day" means any day other than a day on which
banking institutions in New York, New York or London, England are authorized by
law to close.
"LIBOR Rate" for any period means an interest rate per annum
equal to the sum of a fraction expressed as a percentage to the seventh decimal
place the numerator of which is LIBOR for the relevant period and the
denominator of which is equal to 100% minus the Eurodollar Reserve Percentage
for such period with any daily determination based on a 360-day year.
"Lien" means liens, mortgages, encumbrances, pledges, charges
and security interests of any kind.
"Loan" has the meaning set forth in Section 2.1 of the Loan
Agreement.
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"Loan Agreement" means the Loan Agreement, dated as of May 30,
2000, among Wilmington Trust Company, the Administrative Agent, the Collateral
Agent and the Lenders.
"Loan Availability Fee" means the commitment fee payable by
Borrower to Lenders pursuant to Section 2.4.3 of the Loan Agreement.
"Loan Default" means an event, which with the giving of notice
or lapse of time or both, would become a Loan Event of Default.
"Loan Documents" means the Loan Agreement, the Security
Documents and the Notes.
"Loan Event of Default" has the meaning set forth in Section
6.1 of the Loan Agreement.
"Loss, Damage and Destruction" has the meaning set forth in
Section 19 of the Lease Agreement.
"Losses" has the meaning provided in Section 10.1 of the
Participation Agreement.
"Majority Certificate Holders" means non-defaulting
Certificate Holders the sum of whose outstanding Equity Contributions (or, in
the event there are no outstanding Equity Contributions, the sum of whose
Certificate Holder Commitments) represent an amount greater than fifty percent
of the total aggregate Equity Contributions (or Certificate Holder Commitments).
"Majority Lenders" means non-defaulting Lenders the sum of
whose outstanding Loans (or, in the event there are no outstanding Loans, the
sum of whose Lender Commitments) represent an amount greater than fifty percent
of the aggregate outstanding principal balances of the Loans (or Lender
Commitments).
"Master Budget" means the budget prepared and certified by
Lessee reasonably acceptable to Lessor and Administrative Agent and setting
forth Lessee's good faith estimate of the cost of each Component for each type
of Item of Equipment identified on Schedule 1 to the Participation Agreement.
"Maturity Date" for each Loan means the earlier of (a) the
last day of the Term for the Items of Equipment financed with the proceeds of
such Loan and (b) the date on which such Loan becomes due and payable under the
Loan Agreement.
"Maximum Acquisition Cost" means $200,000,000.
"Maximum Lessee Risk Amount" for any Item of Equipment on any
date of determination means an amount obtained by multiplying (a) the percentage
set forth as the "Maximum Lessee Risk Percentage" in the Lease Agreement
Supplement for such Item (which percentage will be the maximum amount permitted
in order to allow Lessee to get off balance sheet
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treatment for the leased Equipment (approximately 89%)) by (b) the Acquisition
Cost for such Item.
"Maximum Lessor Risk Amount" for any Item of Equipment on any
date of determination means an amount obtained by multiplying (a) the percentage
set forth as "Maximum Lessor Risk Percentage" in the Lease Agreement Supplement
for such Item (which percentage will be 100% less the Maximum Lessee Risk
Amount) by (b) the Acquisition Cost for such Item.
"Net Proceeds of Sale" means with respect to each Item of
Equipment sold by Lessor to a third party pursuant to Section 28.3 of the Lease
Agreement or by Lessor as referenced in Section 29.2 of the Lease Agreement, the
net amount of the proceeds of sale of such Item, after deducting from the gross
proceeds of such sale (a) all sales taxes and other taxes as may be applicable
to the sale or transfer of such Item, (b) all fees, costs and expenses of such
sale reasonably incurred by Lessor or Lessee in the case of a sale on the
Termination Date or by Lessor in the case of a sale after the Termination Date
and (c) any other amounts for which, if not paid, Lessor would be liable as a
result of such sale or which, if not paid, would constitute a Lien on such Item.
"Net Sale Proceeds" means for any sale of assets, the gross
cash proceeds (including any cash received by way of deferred payment pursuant
to a promissory note, receivable or otherwise, but only as and when received)
received from such sale of assets, net of the reasonable costs of such sale
(including payments of unassumed liabilities relating to the assets sold and
required payments of any Indebtedness (other than Indebtedness secured pursuant
to the Revolver) which is secured by the respective assets which were sold), and
the taxes paid or payable by Guarantors' consolidated group as a result of such
sale and appropriate amounts to be provided by Guarantors or any of its
Subsidiaries, as the case may be, as a reserve, in accordance with GAAP, against
any liabilities associated with such Asset Sale and retained by Guarantors or
any of its Subsidiaries, after such Asset Sale, including without limitation,
pension and other post-employment benefit liabilities, liabilities related to
environmental matters and liabilities under any indemnification obligations with
such Asset Sale (it being understood, however, that, to the extent such reserves
are released or reduced, an amount equal to such release or reduction shall be
required to be applied as a mandatory repayment or mandatory commitment
reduction in accordance with Sections 3.03 and 4.02 in the Revolver).
"Non-Completion Date" has the meaning set forth in Section
28.5 of the Lease Agreement.
"Non-U.S. Person" means any Person that is not a U.S. Person.
"Note" has the meaning set forth in Section 2.3 of the Loan
Agreement.
"Notice of Substitution" has the meaning set forth in Section
13(b) of the Lease Agreement.
"Operative Documents" means the Participation Agreement, the
Loan Agreement, the Notes, the Assembly Agency Agreement, all Bills of Sale, the
Funding Notices, the Lease
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Agreement, all Lease Agreement Supplements, the Trust Agreement, the Security
Documents and the letter agreement dated May 22, 2000 between the Administrative
Agent and Lessee concerning the Applicable Equity Rate and Applicable Debt Rate
as of the Closing Date and in each case, all exhibits and supplements thereto,
in each case as amended and modified from time to time.
"Option Notice" has the meaning set forth in Section 6.2 of
the Participation Agreement.
"Optional Alteration" has the meaning set forth in Section 12
of the Lease Agreement.
"Other Hedging Agreement" means any foreign exchange contract,
currency swap agreement or other similar agreement or arrangement designed to
protect against the fluctuations in currency values.
"Outstanding Debt Amount" with respect to each Item of
Equipment means the Debt Component therefor less the aggregate of the following
amounts to the extent paid in accordance with the Operative Documents: (i) all
payments paid to Lenders on account of Casualty Loss Value or pursuant to
Section 28.4 or 28.5 of the Lease Agreement used to reduce the principal amount
owing with Notes and (ii) all Deficiency payments and all payments made by the
Lessee to Lessor in accordance with Section 29.2 of the Lease Agreement with
respect to such Item.
"Overdue Rate" with respect to any amount due any party to the
Participation Agreement other than a Certificate Holder means the highest
Applicable Debt Rate at the time in effect plus two (2) percent (200 basis
points) and with respect to any amount due a Certificate Holder means the
highest Applicable Equity Rate at the time in effect plus two (2) percent (200
basis points).
"Participation Agreement" means the Participation Agreement
dated as of May 30, 2000 among Lessee, Guarantor, Lessor, Trust Company,
Certificate Holders, Lenders, the Administrative Agent and the Collateral Agent.
"Payment Date" for each Item of Equipment and for each Loan
and Equity Contribution made to finance such Item of Equipment, means the
calendar date corresponding to the Closing Date in the last month of the Lease
Payment Period elected by Lessee for such Item as of the Closing Date and
thereafter the calendar date corresponding to the Closing Date in the last month
of each Lease Payment Period thereafter elected by Lessee for such Item in
accordance with Section 5 of the Participation Agreement; provided, however, (a)
if any such calendar date is not a LIBOR Banking Day, then the Payment Date
shall be the next LIBOR Banking Day; and provided, further, however, that if the
next LIBOR Banking Day shall occur in the next calendar month, then the Payment
Date shall be the preceding LIBOR Banking Day, and (b) if there is no such
corresponding date in any calendar month, then the Payment Date shall be the
last LIBOR Banking Day in such calendar month.
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"Payment Date Option Amount" has the meaning set forth in
Section 28.4 of the Lease Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation or
established pursuant to Section 4002 of ERISA, or any successor thereto.
"Permitted Acquisition" has the meaning set forth in Section
9.5(i)(viii) of the Participation Agreement.
"Permitted Business" means the business in which Lessee is
engaged on the Closing Date and reasonable extensions thereof.
"Permitted Countries" means Argentina, Bolivia, Brazil, Chile,
Colombia, Mexico, Panama, Paraguay, Peru, Uruguay, Venezuela, Australia,
Bangladesh, Cambodia, India, Indonesia, Malaysia, Myanmar, New Zealand,
Pakistan, Thailand, Vietnam and Cayman.
"Permitted Encumbrance" means, with respect to any mortgaged
property, such exceptions to title as are set forth in the title insurance
policy or title commitment delivered with respect thereto, all of which
exceptions must be acceptable to the Agent in its reasonable discretion.
"Permitted Guarantor Liens" has the meaning set forth in
Section 9.5(h) of the Participation Agreement.
"Permitted Investors" means (x) Xxxxxx Xxxxxx Partners III
L.P., Xxxxxx Xxxxxx, Inc. and employees, management and directors of, and
persons owning accounts managed by, any of the foregoing and their respective
Affiliates (including, without limitation, Guarantor and Lessee) and (y) other
investors reasonably satisfactory to the "Administrative Agent" (as defined in
the Revolver) and the Required Lenders.
"Permitted Liens" means, as to any Item of Equipment (a) the
respective rights and interests of the parties under the Operative Documents as
provided in the Operative Documents (including any Lien created pursuant to or
expressly permitted by the terms of the Operative Documents), (b) Liens for
Taxes that either are not yet due and payable or are being contested in good
faith, (c) any Sublease, (d) Liens arising by operation of law, materialmen's,
mechanics', workers', repairmen's, employees', carriers', warehousemen's and
other like Liens in connection with any alterations, modifications or
replacements to the extent permitted by Sections 12 and 13 of the Lease
Agreement for amounts that are not more than thirty (30) days past due or are
being diligently contested in good faith by appropriate proceedings, so long as
such proceedings satisfy the conditions for contest proceedings set forth in
Section 10 of the Participation Agreement, (e) Liens arising out of judgments or
awards with respect to which appeals or other proceedings for review are being
prosecuted in good faith and for the payment of which adequate reserves have
been provided as required by GAAP or other appropriate provisions have been
made, and (f) Liens created by Lessee with the written consent of Lessor and any
Assignee.
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"Person" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint stock company,
trust, trustee(s) of a trust, unincorporated organization, or government or
Governmental Entity, agency or political subdivision thereof.
"Plan" means any pension plan as defined in Section 3(2) of
ERISA, which is maintained or contributed to by (or to which there is an
obligation to contribute of) Guarantor or a Subsidiary of Guarantor or an ERISA
Affiliate, and each such plan for the five year period immediately following the
latest date on which Guarantor, or a Subsidiary of Guarantor or an ERISA
Affiliate maintained, contributed to or had an obligation to contribute to such
plan.
"Pro Rata Share" means, with respect to a Lender or a
Certificate Holder and the making of a Loan or Equity Contribution, the ratio of
such Lender's Lender Available Commitment to the aggregate of all Lender
Available Commitments or such Certificate Holder's Certificate Holder Available
Commitment to the aggregate of all Certificate Holder Available Commitments at
the time available and with respect to the payment of indemnified amounts under
Section 10 of the Participation Agreement the ratio of such Lender's outstanding
principal balance under its Loans to the aggregate outstanding principal balance
of all Loans or such Certificate Holder's outstanding Equity Contributions to
the aggregate of all outstanding Equity Contributions.
"Projections" means the projections prepared by Lessee in
connection with the Guarantor IPO, the Repurchase, the Revolver and the
transaction contemplated by the Operative Documents, dated May 30, 2000 and
furnished to the Administrative Agent, the Lessor, the Certificate Holders and
the Lenders prior to the Closing Date.
"Property Insurance" has the meaning set forth in Section 20
of the Lease Agreement.
"Purchase Money Indebtedness" means Indebtedness, the proceeds
of which are used to finance the acquisition, construction or improvement of
inventory, equipment or other property in the ordinary course of business.
"Purchase Option Amount" has the meaning set forth in Section
28.2 of the Lease Agreement.
"Purchase Option Price" has the meaning set forth in Section
6.2 of the Participation Agreement.
"Qualified Preferred Stock" means the preferred stock of
Guarantor so long as the terms of any such preferred stock (i) do not contain
any mandatory put, redemption, repayment, sinking fund or other similar
provision occurring before February 28, 2006 other than any such provision which
is comparable to a provision in the preferred stock of Guarantor outstanding on
the Closing Date, (ii) do not require the cash payment of dividends before
February 28, 2006, (iii) do not contain any covenants other than those covenants
of the type (but no more restrictive than
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those) set forth in the preferred stock of Guarantor outstanding on the Closing
Date and (iv) are otherwise reasonably satisfactory to the Administrative Agent.
"Real Property" of any Person means all the right, title and
interest of such Person in and to land, improvements and fixtures, including
Leaseholds.
"Redelivery Location" means, with respect to any Item of
Equipment that is to be returned by Lessee to Lessor, a location or locations
within the United States designated by Lessor; provided that the total number of
Redelivery Locations shall not exceed four (4) locations.
"Register" has the meaning set forth in Section 11.8 of the
Participation Agreement.
"Related Note" means, with respect to any Loan, the Note
therefor, and with respect to any Item of Equipment, any Note or Notes issued by
Lessor to finance or refinance in whole or in part the Debt Component of the
Acquisition Cost therefor.
"Remarketing Period" has the meaning set forth in Section
28.3.1 of the Lease Agreement.
"Replaced Certificate Holder" has the meaning set forth in
Section 12.13 of the Participation Agreement.
"Replaced Lender" has the meaning set forth in Section 12.13
of the Participation Agreement.
"Replacement Certificate Holder" has the meaning set forth in
Section 12.13 of the Participation Agreement.
"Replacement Equipment" has the meaning provided in Section
13(a) of the Lease Agreement.
"Replacement Lender" has the meaning set forth in Section
12.13 of the Participation Agreement.
"Reportable Event" means an event described in Section 4043(c)
of ERISA with respect to a Plan that is subject to Title IV of ERISA other than
those events as to which the 30-day notice period is waived under PBGC
Regulation Section 4043.
"Repurchase" means the use of the proceeds of the Guarantor
IPO to redeem certain of Guarantor's outstanding indebtedness.
"Repurchase Documents" means and include all agreements
governing, or relating to, the Repurchase and the Guarantor IPO.
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"Required Alteration" has the meaning set forth in Section 12
of the Lease Agreement.
"Required Lenders" means non-defaulting Lenders under the
Revolver, the sum of whose outstanding commitments (or after the termination
thereof, outstanding revolving loans and adjusted percentage of outstanding
swingline loans and letter of credit outstandings) represent an amount greater
than fifty percent of the sum of the adjusted total commitment (or after the
termination thereof, the sum of the then total outstanding revolving loans of
non-defaulting lenders, and the aggregate adjusted percentages of all
non-defaulting lenders of the total outstanding swingline loans and letter of
credit outstandings at such time).
"Residual Value" means, for any Item of Equipment, the
estimated fair market value of such Item as of the last day of the Basic Term
with consideration given to the effects of inflation or deflation measured from
the date on which such value is determined, assuming such Item is in good
condition and will continue to be maintained in good operating condition with
normal preventive maintenance, and assuming the market for used equipment of the
same nature on the last day of the Basic Term will not reflect unusual
conditions of supply and demand.
"Responsible Officer" means, with respect to any Person other
than the Trustee and the Trust Company, the chief executive officer, the
president, the chief financial officer, the chief operating officer, the
treasurer or the vice president for financial or legal affairs of such Person,
and with respect to the Trustee and the Trust Company, an officer in the
Corporate Trust Administration Department of the Trust Company with
responsibility for this transaction.
"Restricted Countries" mean Bolivia, Colombia, Venezuela,
Bangladesh, Cambodia, Indonesia, Malaysia, Myanmar, Pakistan and Vietnam;
provided that a Restricted Country shall cease to be a Restricted Country with
respect to any Investment in the event that Lessee has obtained (and maintains
in full force and effect) political risk insurance in amounts, and on terms and
conditions, reasonably satisfactory to the Administrative Agent.
"Returns" has the meaning set forth in Section 2.3(k) of the
Participation Agreement.
"Revolver" means the Revolving Credit Facility dated as of May
30, 2000, between the Lessee, Deutsche Bank AG, New York Branch as
Administrative Agent (as defined therein) and the lenders that become a party
thereto, and if such agreement is no longer in effect, any other credit
agreement or loan agreement which provides Lessee directly or indirectly, with a
primary source of working capital borrowings and if no such credit agreement or
loan agreement is in effect, then such last credit agreement or loan agreement
as in effect immediately prior to its termination or expiration.
"Secured Obligations" has the meaning set forth in Section 7.1
of the Participation Agreement.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
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"Security Documents" means the Participation Agreement, Lease
Agreement, Lease Agreement Supplements, Lessee Financing Statements and Lessor
Financing Statements.
"Senior Secured Consolidated Debt" means all Consolidated Debt
(including any Foreign Subsidiary Indebtedness) which is secured by any of the
assets of Guarantor and its Subsidiaries and which is not by its terms
contractually subordinated to any other Indebtedness of Guarantor and its
Subsidiaries.
"Senior Secured Leverage Ratio" means, at any time, the ratio
of (i) the sum of (without duplication) (x) Senior Secured Consolidated Debt at
such time plus (y) an amount equal to the residual guaranty value (as determined
by the Administrative Agent acting in its reasonable discretion) in respect of
Operating Lease Obligations at such time to (ii) Consolidated EBITDAR for the
Test Period then most recently ended.
"Significant Subsidiary" means, as to any Person, all
Subsidiaries of such Person other than any Foreign Subsidiary whose assets
represent less than 10% of the total value of all assets owned by such Person
and its Subsidiaries.
"Sublease" has the meaning set forth in Section 17.1 of the
Lease Agreement.
"Sublessee" has the meaning set forth in Section 17.1 of the
Lease Agreement.
"Subsidiary" shall mean, as to any Person, (a) any corporation
more than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Subsidiaries of such Person and (b) any partnership, association, joint
venture or other entity in which such Person and/or one or more Subsidiaries of
such Person has more than a 50% equity interest at the time.
"Supplemental Payments" means all amounts, liabilities and
obligations which Lessee assumes or agrees to pay under the Operative Documents
to Lessor, any Affected Person or any other Person, including payments of
Casualty Loss Value, increased costs, Taxes and indemnities, but excluding Lease
Payments and Availability Fees.
"Tax Indemnitee" has the meaning set forth in Section 10.3.1
of the Participation Agreement.
"Taxes" has the meaning set forth in Section 10.3.1 of the
Participation Agreement.
"Term" for each Item of Equipment means the period from and
including the first Funding Date therefor and ending on the Termination Date
therefor.
"Termination Date" for each Item of Equipment means the
earliest of (a) the last day of the Basic Term, or (b) if the Lessee exercises
its early transfer option pursuant to Section
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28.4 of the Lease Agreement, the applicable Payment Date so elected by such
Lessee, (c) if Lessee is obligated to purchase such Item in accordance with
Section 28.5 of the Lease Agreement, the first Business Day after the
Non-Completion Date and (d) if such Item suffers an Event of Loss, the Casualty
Loss Value Payment Date therefor.
"Test Period" means each period of four consecutive fiscal
quarters of Guarantor then last ended (in each case taken as one accounting
period).
"Total Interest Expense" means, for any period, the total
consolidated cash interest expense (net of cash interest income) of Guarantor
and its Consolidated Subsidiaries for such period (including, without
limitation, the interest expense associated with Capitalized Lease Obligations).
"Trust" means the trust created by the Trust Agreement.
"Trust Agreement" means that certain Trust Agreement by and
between Trust Company and the Certificate Holders, dated as of May 25, 2000.
"Trust Company" means Wilmington Trust Company, a Delaware
banking corporation, in its individual capacity.
"Trust Estate" means all of the estate, right, title and
interest of Lessor, solely in its capacity as Owner Trustee under the Trust
Agreement, and as Lessor in and to the Participation Agreement and the Lease
Agreement and all documents related hereto and to the Equipment, and all
proceeds thereof, including, without limitation, all Lease Payment, Availability
Fees, insurance proceeds and Supplemental Payments, but excluding any Excepted
Payments.
"Trustee" has the meaning set forth in the preamble to the
Trust Agreement.
"UCC" means the Uniform Commercial Code, as in effect in any
applicable jurisdiction.
"Unfunded Current Liability" of any Plan means the amount, if
any, by which the value of the accumulated plan benefits under the Plan
determined on a plan termination basis in accordance with actuarial assumptions
at such time consistent with those prescribed by the PBGC for purposes of
Section 4044 of ERISA, exceeds the fair market value of all plan assets
allocable to such liabilities under Title IV of ERISA (excluding any accrued but
unpaid contributions).
"U.S. Person" has the meaning set forth in Section 7701(a)(30)
of the Code.
"Voting Stock" of any Person as of any date means the capital
stock of such Person that is at the time entitled to vote in the election of the
Board of Directors of such Person.
"Wholly-Owned Subsidiary" means, as to any Person, (a) any
corporation 100% of whose capital stock (other than director's qualifying
shares) is at the time owned by such
-25-
128
Person and/or one or more Wholly-Owned Subsidiaries of such Person and (b) any
partnership, association, joint venture or other entity in which such Person
and/or one or more Wholly-Owned Subsidiaries of such Person has a 100% equity
interest at such time.
"Withholding Party" has the meaning set forth in Section
10.3.5 of the Participation Agreement.
"Withholdings" has the meaning provided in Section 10.3.5 of
the Participation Agreement.
When used in any Operative Document the words "this
Agreement", "herein", "hereunder", "hereof" or other like words mean and include
such Operative Document and each amendment and supplement thereto, and with
respect to the Lease Agreement, each Lease Agreement Supplement. All references
to sections, schedules and exhibits in any Operative Document are to sections,
schedules and exhibits in or to such Operative Document unless otherwise
specified.
Unless otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with United States generally accepted accounting principles as in
effect from time to time, applied on a basis consistent (except for changes
concurred in by Guarantor's independent public accountants) with the then most
recent audited consolidated financial statements of Guarantor and its
Consolidated Subsidiaries provided that, if either (i) Guarantor notifies
Administrative Agent that Guarantor wishes to eliminate the effect of any change
in generally accepted accounting principles on the operation of any covenant
contained in the Participation Agreement or (ii) the Administrative Agent
notifies Guarantor that it wishes to effect such an elimination, then
Guarantor's compliance with such covenant shall be determined on the basis of
generally accepted accounting principles in effect immediately before the
relevant change in generally accepted accounting principles becomes effective,
until either (A) such notice is withdrawn by the party giving such notice or (B)
such covenant is amended in a manner satisfactory to Guarantor and the
Administrative Agent to reflect such change in generally accepted accounting
principles. All words importing any gender shall be deemed to include the other
gender. All references to statutes are to be construed as including all
statutory provisions consolidating, amending or replacing the statute referred
to. Unless otherwise specified, references to agreements and other contractual
instruments shall be deemed to include all subsequent amendments, modifications
and supplements thereto.
-26-
129
SCHEDULE 1
to
PARTICIPATION AGREEMENT
DESCRIPTION OF EQUIPMENT
1) Standard Universal Compression 50 - 60 HP Rental Compressor Package with:
a) Natural Gas Driver
i) Waukesha ("WA") VRG310 or VRG330, or
ii) Ajax ("AJ") DPC60
b) Compressor
i) Gemini ("GM") MPD or M302, 2 or 3 stage, or
ii) Ariel JPG1 2 Stage, or
iii) Ajax DPC60 2 stage
Range of Acquisition Costs $67,500 to $81,000
Horse Power Multiplier $1,350
2) Standard Universal Compression 80 - 140 HP Rental Compressor Package with:
a) Natural Gas Driver
i) Caterpillar ("CT") G3304NA or G3306NA or G3306TA, or
ii) Waukesha F817, or
iii) Ajax XXX00, XXX00, XXX000, DPC115, or DPC 140
b) Compressor
i) Xxxxxx XXX, XXX, X000, xx X000, 2 or 3 stage
ii) Ariel ("AR") JGP2, JGM2, or JGA2, 2 and 3 stage
iii) Ajax XXX00, XXX00, XXX000, DPC115, or DPC 140 2 stage
Range of Acquisition Costs $80,000 to $140,000
Horse Power Multiplier $1,000
3) Standard Universal Compression 160 - 600 HP Rental Compressor Package with:
a) Natural Gas Driver
i) Ajax DPC180, DPC230, DPC280, DPC300, DPC360,
DPC540LE, DPC600LE, DPC2802, or DPC 2803,
ii) Caterpillar X0000XX, X0000XX, G3508TALE, G342NA,
G342TA, X000XX, X000XX, X000XX, xx X000XX
b) Compressor
i) Ajax DPC180, DPC230, DPC280, DPC300, DPC360,
DPC540LE, DPC600LE, DPC2802, or DPC 2803 2 stage,
or
ii) Ariel JGA2, JGR2, JGE2, JGJ2, or JG4, 2 and 3 stage
130
Schedule 1
to
Participation Agreement
Page 2
Range of Acquisition Costs $128,000 to $480,000
Horse Power Multiplier $800
4) Standard Universal Compression 750 - 1,000 HP Rental Compressor Package with:
a) Natural Gas Driver
i) Caterpillar G3512TALE or G3516TALE
b) Compressor
i) Ariel JGK2 or JGT2, 2 stage
ii) Ariel JGE4 or JGK4, 2 or 3 stage
Range of Acquisition Costs $450,000 to $600,000
Horse Power Multiplier $600
5) Standard Universal Compression 1200 - 1300 HP Rental Compressor Package with:
a) Natural Gas Driver
i) Xxxxxxxxxxx X0000XXXX, or
ii) Waukesha 7042GL/GSI
b) Compressor
i) Ariel JGE4 or JGK4, 2 or 3 stage
Range of Acquisition Costs $600,000 to $650,000
Horse Power Multiplier $500
6) Any other Item of Equipment as Lessor and Majority Lenders may agree in their
sole discretion to include.
Each package includes air coolers, accessories (e.g., Piping, vessels, panels &
skid materials), and labor.
131
SCHEDULE 2
----------
PRICING GRID
------------
Guarantor
Leverage Ratio(1) Equity Margin Debt Margin Availability Fee Rate
----------------- ------------- ----------- ---------------------
>5.5:1.0 525bps 325bps 50bps
>5.0:1.0<=5.5:1.0 500bps 300bps 50bps
>4.5:1.0<=5.0:1.0 475bps 275bps 50bps
>4.0:1.0<=4.5:1.0 450bps 250bps 50bps
>3.5:1.0<=4.0:1.0 425bps 225bps 37.5bps
<=3.5:1.0 400bps 200bps 37.5bps
----------
1 For each Applicable Margin Period, the Leverage Ratio on the Test Date for
such Applicable Margin Period.
"Applicable Margin Period" means each period which shall commence on a date
on which the financial statements are delivered pursuant to Section
9.5(a)(ii) or (i), as the case may be, and which shall end on the earlier
of (a) the date of the actual delivery of the next financial statements
pursuant to Section 9.5(a)(ii) or (iii), as the case may be, and (b) the
latest date on which the next financial statements are required to be
delivered pursuant to such Sections, provided that the first Applicable
Margin Period shall commence on the Closing Date.
"Test Date" means, with respect to any Applicable Margin Period, the last
day of the most recent fiscal quarter of the Guarantor ended prior to the
first day of such Applicable Margin Period.
132
SCHEDULE 3
MAXIMUM ACQUISITION COST
$200,000,000
LENDER COMMITMENTS
Aggregate Lender Commitments: $194,000,000
Lender Lender Commitment ($)
------ ---------------------
1. Bankers Trust Company $114,000,000
2. First Union National Bank $ 40,000,000
3. Bank One, N.A. $ 40,000,000
CERTIFICATE HOLDER COMMITMENTS
Aggregate Certificate Holder Commitments: $6,000,000
Certificate Holder Certificate Holder Commitment ($)
------------------ ---------------------------------
1. Deutsche Bank AG, New York Branch $6,000,000
133
SCHEDULE 4
LENDERS' AND CERTIFICATE HOLDERS'
NOTICE ADDRESSES, PAYMENT
INSTRUCTIONS AND RESPONSIBLE OFFICERS
Notices and payments shall be sent to each Lender and each Certificate
Holder in accordance with the following unless a Lender or a Certificate
Holder provides written notice otherwise to the Administrative Agent, the
Collateral Agent and Lessee.
Lender Addresses
------------------------- ------------------------------------------
Bankers Trust Company 000 Xxxxxxx Xxxxxx
M.S. 0000
Xxx Xxxx, Xxx Xxxx 00000
Attn.: Xxxxxx Xxxxxxxxxx
Tel: (212) 000- 0000
Fax: (212) 000- 0000
First Union National Bank 000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxx Wateroff
Tel: (000) 000-0000
Fax: (000) 000-0000
Bank One, N.A. 000 Xx. Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxx, Xx.
Tel: (000) 000-0000
Fax: (000) 000-0000
Certificate Holder Addresses
------------------ ---------
Deutsche Bank AG, New York Branch 00 Xxxx 00xx Xxxxxx, Mail Stop 1411
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxxxxx, Xx., Director
Global Asset Finance and Leasing
Tel: (000) 000-0000
Fax: (000) 000-0000
134
SCHEDULE 5
LIENS
1. Liens created pursuant to the Revolver.
2. Equipment Lease, securing collateral consisting of commercial ice machines
and ice bins in favor of Xxxxxxxxxxx Incorporated, filed with the Secretary
of State of Texas on June 15, 1998 and July 10, 1998 (# 122137, 140501).
3. Equipment purchase/consignment securing collateral consisting of all goods
sold or consigned by Kaeser Compressors, Inc. to Universal Compression,
Inc., and all proceeds derived therefrom in favor of Kaeser Compressors,
Inc., filed with the Secretary of State of Texas on August 20, 1998
(#169345)
4. Master Lease Agreement dated as of July 19, 1999 between GE Capital Fleet
Services and Universal Compression, Inc. securing collateral consisting of
certain vehicles as more fully described in the agreement.
5. Lease Agreement dated as of July 19, 1999 between Societe Generale
Financial Services and Universal Compression International, Ltd. and
related documents securing collateral consisting of equipment described in
Schedule A to the agreement.
All such Liens may be renewed or extended
135
SCHEDULE 6
INDEBTEDNESS
DEBT AGREEMENTS
Aggregate
Document Principal Amount Obligor(s)
----------------------------------------------- ---------------------------- ------------------------------------
Revolver $50,000,000 Lessee (borrower)
(permitted)
Guarantor (guarantor)
Universal Compression
International, Inc. (guarantor)
Lease Agreement dated as of July 19, 1999 to be paid off promptly Lessee (grantor), Universal
between Societe Generale Financial following the Effective Date Compression International, Ltd.
Corporation as lessor and Universal and prior to any borrowing (lessee), Uniwhale de Colombia EU
Compression International, Ltd. as lessee and under the Credit Agreement (sublessee) and Uniwhale Ltd.
related documents (joint venturer)
Master Lease Agreement dated as of July 19, $5,000,000 Lessee (lessee)
1999 between GE Capital Fleet Services and
Universal Compression, Inc.
Contingent Obligations
----------------------
Document Obligor(s)
----------------------------------------------- ---------------------------- ------------------------------------
Purchase Price Adjustment Lessee, Guarantor
Agreement dated as of September 18,
1997 among Holdings, the Lessee
and Tidewater Inc.
Acuerdo dated as of November 23, Lessee
1998 between Empresa Colombiana
de Gas - ECOGAS and Lessee.
Miscellaneous performance bonds, Lessee, Guarantor,
performance guaranties and similar Subsidiaries
Contingent Obligations none of
which constitute Indebtedness for
borrowed money and all of which
are permitted under Section 9.5(k)
All such Indebtedness may be extended, renewed or refinanced.
136
SCHEDULE 7
SUBSIDIARIES
===============================================================================================================
Name Borrower Percentage Direct Owner
Ownership
---------------------------------------------------------------------------------------------------------------
Universal Compression
International, Inc. 100% Universal Compression, Inc.
---------------------------------------------------------------------------------------------------------------
Universal Compression Universal Compression International, Inc.
International, Ltd. 100%
---------------------------------------------------------------------------------------------------------------
Universal Compression Finance
Company, Ltd. 100% Universal Compression International, Ltd.
---------------------------------------------------------------------------------------------------------------
Universal Compression of Colombia, Ltd. 100% Universal Compression International, Ltd.
---------------------------------------------------------------------------------------------------------------
Uniwhale, Ltd. 75% 50% Universal Compression of Colombia, Ltd.;
25% Universal Compression International, Ltd.
---------------------------------------------------------------------------------------------------------------
Universal Compression de Venezuela
Unicom, C.A. 100% Universal Compression, Inc.*
---------------------------------------------------------------------------------------------------------------
Universal Compression PTY Ltd. 100% Universal Compression, Inc.*
---------------------------------------------------------------------------------------------------------------
Universal Compression de
Mexico, S.A. de C.V. 100% 99% Universal Compression International, Inc.;
1% Universal Compression, Inc.
---------------------------------------------------------------------------------------------------------------
Spectrum Rotary Compression, Inc. 100% Universal Compression, Inc.
===============================================================================================================
* To be dividended to Universal Compression International, Inc. or Universal
Compression International, Ltd.
137
SCHEDULE 8
INSURANCE
See Attached
138
SCHEDULE 9
ERISA Plans
None.
139
SCHEDULE 10
EXISTING INVESTMENTS
Currently, existing net investment does not exceed $30,000,000.
Includes Argentina, Colombia, Venezuela, Australia, Mexico and Cayman Islands.
Net investment in restricted countries is approximately $14 million, subject to
further review of Administrative Agent.
140
EXHIBIT A
[FORM OF]
XXXX OF SALE AND RECEIPT
Wilmington Trust Company
as Trustee of Universal Compression Trust (2000-1) under the Trust Agreement
dated as of May 25, 2000
Ladies and Gentlemen:
We refer to the Participation Agreement, dated as of May 30, 2000
(together with all schedules and exhibits thereto, the "Agreement") relating to
the transfer by us to you of all rights, title and interest in certain
Equipment. Terms used and not otherwise defined herein shall have the respective
meaning given thereto in Appendix A to the Agreement.
We hereby grant, bargain, sell, convey, transfer and set over unto you,
your successors and assigns, all of our right and interest in and to the Items
of Equipment, as more specifically described in Schedule 1 hereto (herein
collectively called the "Items of Equipment").
We hereby warrant and represent to you and your successors and assigns
that we have good and marketable legal and beneficial title to, and good and
lawful right to sell, the Items of Equipment, that the Items of Equipment are
free and clear of any and all claims, liens, security interests and other
encumbrances of any kind or nature whatsoever other than Permitted Liens and
that upon the delivery of this Xxxx of Sale to you, you will have received all
rights, title and interests in the Items of Equipment free and clear of any and
all claims, liens, security interests and other encumbrances of any kind or
nature whatsoever other than Permitted Liens and Lessor Liens. We covenant that
we will defend your interest in the Items of Equipment against the claims and
demands of all persons and will indemnify and hold harmless you and your
successors and assigns from and against any and all losses, damages and
expenses, including reasonable attorneys' fees, incurred by such, resulting from
or relating to the breach by us of any representations or warranties contained
herein.
Possession of the Items of Equipment is being retained by us by virtue
of a sale to you and a leaseback of an interest in the Items of Equipment from
you. This Xxxx of Sale is made and given in good faith and not for the purpose
of defrauding creditors or purchasers.
The undersigned hereby transfers, grants, sells, and assigns to Lessor,
its successors and assigns, all of its rights and interest in and on to the
various agreements, contracts, warranties, purchase orders and requisitions
relating to the purchase, procurement, design and assembly of each Item of
Equipment. Notwithstanding the foregoing assignment, Lessor shall not be deemed
to have assumed any liability to any equipment vendor by virtue of the foregoing
transfer (or anything contained in the Participation Agreement or the other
Operative Documents), Lessor's only obligation with respect to any Item of
Equipment hereunder being to lease such Item to Lessee in accordance with the
terms of the Operative Documents.
141
Exhibit A
Page 2
IN WITNESS WHEREOF, Seller has caused this Xxxx of Sale to be duly
executed in its name by its duly authorized officer and its corporate seal to be
affixed hereto this ____th day of ___, 200[ ].
UNIVERSAL COMPRESSION, INC.
By:
-----------------------------------
Name:
Title:
142
EXHIBIT B-1
[FORM OF] CERTIFICATE OF SALE/LEASEBACK
EQUIPMENT RELATING TO
LEASE AGREEMENT SUPPLEMENT NO. ___
This Certificate of Equipment is executed pursuant to, and incorporates
by reference all of the terms, conditions and provisions of, the Participation
Agreement ("Participation Agreement"), dated as of May 30, 2000, among Universal
Compression, Inc. ("Lessee"), Universal Compression Holdings, Inc., Wilmington
Trust Company, a Delaware banking corporation, not in its individual capacity
but solely as Trustee of Universal Compression Trust (2000-1) and in its
individual capacity, but only where so specified, Certificate Holders and
Lenders from time to time party thereto, Bankers Trust Company, as
Administrative Agent, and Bankers Trust Company, as Collateral Agent.
Capitalized terms not otherwise defined herein have the meanings given in
Appendix A to the Participation Agreement.
Lessee hereby certifies that each Item of Equipment described in
Schedule 1 to the form of Lease Agreement Supplement, such schedule
delivered herewith and attached hereto, has been selected by, delivered
to, inspected by, accepted by and purchased by it, is free and clear of
all Liens other than Permitted Liens and Lessor Liens (if any), and the
information contained on Schedule 1 to such Lease Agreement Supplement
is true and correct.
Dated:
UNIVERSAL COMPRESSION, INC.
By:
---------------------------------
Name:
Title:
ACKNOWLEDGED AND EQUIPMENT APPROVED/REJECTED BY:
Wilmington Trust Company not in its
individual capacity but solely as Trustee of
Universal Compression Trust (2000-1) under
Trust Agreement dated as of May 25, 2000
as Lessor
By:
-------------------------------
Name:
Title:
143
EXHIBIT B-2
[FORM OF] CERTIFICATE OF EQUIPMENT
FOR ITEMS OF EQUIPMENT TO BE ASSEMBLED
RELATING TO LEASE SUPPLEMENT NO.
This Certificate of Equipment for Items of Equipment to be Assembled
pursuant to the Assembly Agency Agreement is executed pursuant to, and
incorporates by reference all of the terms, conditions and provisions of, the
Participation Agreement ("Participation Agreement"), dated as of May 30, 2000
among Universal Compression, Inc. ("Lessee"), Universal Compression Holdings,
Inc., Wilmington Trust Company, not in its individual capacity but solely as
Trustee of Universal Compression Trust (2000-1) and in its individual capacity,
but only where so specified, Lenders and Certificate Holders from time to time
party thereto, Bankers Trust Company, as Administrative Agent, and Bankers Trust
Company, as Collateral Agent. Capitalized terms not otherwise defined herein
have the meanings given in Appendix A to the Participation Agreement.
Lessee hereby certifies that:
1. For each Item of Equipment to be assembled,
(a) each Item of Equipment described in Schedule 1 to the
form of Lease Agreement Supplement, such schedule
delivered herewith and attached hereto, is free and
clear of all Liens other than Permitted Liens and
Lessor Liens (if any) and the information contained
in Schedule 1 to such Lease Agreement Supplement is
true and correct; and
(b) the information about the Components set forth on
Schedule 1 hereto is true and correct.
2. The funding requested in the Funding Notice with respect to the
Items of Equipment described in Schedule 1 to the form of Lease Agreement
Supplement, such schedule attached hereto, shall be to reimburse Lessee for
monies paid to the vendors of natural gas drivers, compressors or air
coolers or for monies paid or obligations incurred by Lessee with respect
to the labor expenses or other parts and expenses necessary to assemble the
Items of Equipment.
144
Exhibit B-2
Page 2
Dated:
UNIVERSAL COMPRESSION, INC.
By:
----------------------------
Name:
Title:
ACKNOWLEDGED AND EQUIPMENT APPROVED/REJECTED BY:
Wilmington Trust Company not in its
individual capacity but solely as Trustee of Universal Compression Trust
(2000-1) under the Trust Agreement dated as of May 25, 2000 as Lessor
By:
----------------------------
Name:
Title:
145
SCHEDULE 1
TO EXHIBIT B-2
Serial Number of Item to Be Assembled: [__________]
- Estimated date of completion
- Components for which costs are being reimbursed:
Manufacturer
Type Serial Number Acquisition Cost ($)
---- ------------- --------------------
146
EXHIBIT C
[FORM OF] FUNDING NOTICE AND
INSTRUCTIONS RE FUNDS ON FUNDING DATE
Reference is made to the Participation Agreement ("Participation
Agreement") dated as of May 30, 2000 among Universal Compression, Inc.,
Universal Compression Holding, Inc., Wilmington Trust Company, not in its
individual capacity but solely as Trustee of Universal Compression Trust
(2000-1) and in its individual capacity, but only where so specified, Lenders
and Certificate Holders from time to time party thereto, Bankers Trust Company,
as Administrative Agent and Bankers Trust Company, as Collateral Agent
("Collateral Agent"). Capitalized terms used and not otherwise defined herein
shall have the meanings assigned to them in Appendix A to the Participation
Agreement.
1. Universal Compression Inc. (the "Lessee") hereby gives irrevocable
notice to each other party hereto that:
(a) on [___________], a [LIBOR Banking Day], (the "Proposed
Funding Date") we propose to transfer or seek reimbursement
with respect to and lease from Lessor the Equipment identified
on Lease Agreement Supplement No. [___] in accordance with the
terms of the Participation Agreement and Lease Agreement;
(b) the aggregate Acquisition Costs for such Equipment is
$[__________];
(c) Lessee requests (i) the Certificate Holders to deposit
$[___________] (the "Equity Amount") into the Collateral Agent
Account before 12:00 noon (New York City time) on the Proposed
Funding Date and (ii) the Lenders to make Loans in the
aggregate amount of $[______________] (the "Debt Amount") and
to deposit, or cause to be deposited, such amount into the
Collateral Agent Account before 12:00 noon (New York City
time) on the Proposed Funding Date;
(d) Lessee has selected a [___] month Lease Payment Period in
accordance with Section 5 of the Participating Agreement; and
(e) upon deposit into the Collateral Agent Account of the entire
Equity Amount and the Debt Amount, such proceeds should be
wire transferred to [____________].
2. Lessee hereby represents and warrants as of the date hereof for the
benefit of each party to the Participation Agreement that:
(a) this Funding Notice complies with all the limitations and
conditions set forth in Section 3.1 of the Participation
Agreement;
(b) No Lease Default or Lease Event of Default has occurred; and
(c) the representations and warranties of Lessee and Guarantor set
forth in Sections 2.1, 2.2 and 2.3 of the Participation
Agreement are true and correct in all material respects as of
the date hereof and shall continue to be true and correct on
the
147
Exhibit C
Page 2
Proposed Funding Date, requested hereby, except to the extent
that such representations and warranties relate solely to an
earlier date, in which case such representations and
warranties were true and correct as of such date;
UNIVERSAL COMPRESSION, INC.,
as Lessee
By:
----------------------------------
Name:
Title:
148
EXHIBIT D
[FORM OF] COMPLETION CERTIFICATE
Reference is made to the Participation Agreement ("Participation
Agreement") dated as of May 30, 2000 among Universal Compression, Inc. (the
"Lessee"), Universal Compression Holding, Inc., Wilmington Trust Company, not in
its individual capacity but solely as Trustee of Universal Compression Trust
(2000-1) and in its individual capacity, but only where so specified, the
Lenders and Certificate Holders from time to time party thereto, Bankers Trust
Company, as Administrative Agent, and Bankers Trust Company, as Collateral
Agent. Capitalized terms used and not otherwise defined herein shall have the
meanings assigned to them in Appendix A to the Participation Agreement.
Lessee, in its capacity as Assembly Agent under the Assembly Agency
Agreement, dated as of May 30, 2000 between Lessee and Lessor hereby certifies,
with respect to each Item of Equipment listed on Schedule 1 attached hereto,
that:
(a) the acquisition, construction and assembly of such Item of
Equipment was financed with the proceeds of funds advanced by
or on behalf of Lessor;
(b) such Item of Equipment (i) is fully operational, (ii) has been
completed in accordance with its design specifications, and
(iii) is in compliance with all governmental and environmental
regulations;
(c) such Item is free and clear of all liens, encumbrances, and
rights of others (other than Permitted Liens and Lessor Liens,
if any); and
(d) included on Schedule 1 attached hereto are the estimates of
fair market value and Residual Value for each such Item of
Equipment.
The undersigned hereby transfers, grants, sells, and assigns
to Lessor, its successors and assigns, all of its rights and interest in and on
to the various agreements, contracts, warranties, purchase orders and
requisitions relating to the purchase, procurement, design and assembly of each
Item of Equipment. Notwithstanding the foregoing assignment, Lessor shall not be
deemed to have assumed any liability to any equipment vendor by virtue of the
foregoing transfer (or anything contained in the Participation Agreement or the
other Operative Documents), Lessor's only obligation with respect to any Item of
Equipment hereunder being to finance such Item and permit Lessee to use such
Item in accordance with the terms of the Operative Documents.
149
Exhibit D
Page 2
IN WITNESS WHEREOF, LESSEE has caused this Completion Certificate to be
executed in its name this ______ day of ________, 2000.
UNIVERSAL COMPRESSION, INC.
as Lessee and Assembly Agent
By:
-----------------------------
Name:
Title:
