EXHIBIT 10.7
SAMPLE
LOAN AGREEMENT
BETWEEN
CHARTER MANAGEMENT, LLC
AND
NATIONAL ENERGY SERVICES COMPANY, INC.
DATED , 2
RELATING TO
LOAN AGREEMENT
THIS LOAN AGREEMENT is made as of the day of , 2 , by and between CHARTER
MANAGEMENT, LCC, an Ohio corporation ("CHARTER"), and NATIONAL ENERGY SERVICES
COMPANY, INC. ("NESC"), as it relates to _______________________, ("Customer").
The parties hereto, intending to be legally bound hereby, agree as follows:
1. Definitions.
Terms which are capitalized but not defined herein shall have the meaning
ascribed such term in the Master Agreement.
"Affiliates" shall have the meaning set forth in rule 12b-2 of the
regulations promulgated under the Securities Exchange Act.
"Customer" shall mean the enity that has purchased services from NESC and
Charter.
"Loan Agreement" shall mean this Loan Agreement, all Appendices and
Schedules attached hereto, and all amendments hereof and supplements hereto.
"Energy Service Agreement" shall refer to the agreement entered into by the
Customer, NESC and Charter.
"Note" shall refer the attached promissory note.
"Loan" shall mean the loan provided to NESC pursuant to this Loan
Agreement.
2. Loan Program
A. Project Loan. Subject to the terms and conditions hereof, the Note (as
hereinafter defined and made a part of this agreement), the Energy
Services Agreement, and the Master Agreement, CHARTER agrees to make
advances to NESC as requested to finance the Project (such advances
being herein after collectively called the "Loan"). The obligation of
NESC to repay to CHARTER the loan shall be evidenced by this Loan
Agreement and the attached promissory note, both executed by NESC.
Interest on the Loan shall accrue and be payable as provided herein,
in the Note and in the Master Agreement.
B. Use of Proceeds. NESC shall use all funds from the Loan to finance the
Project in accordance with the terms of the Master Agreement and the
Energy Services Agreement. In no event shall the funds be used for any
other purpose.
C. Payment of Loan. NESC shall make all payments on the Loan no later
than thirty (30) days following the day on which the related payments
are due to be paid by the Customer under the Energy Service Agreement.
NESC shall make all payments, which it owes no later than noon,
Eastern Standard Time, at Charter's North Ridgeville, Ohio address.
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D. Security. The Loan will be secured by security documents executed in
favor of CHARTER by NESC covering accounts receivable related to the
Customer, the Energy Service Agreement, and other assets of NESC. NESC
agrees to execute in favor of CHARTER, upon CHARTER's request, such
documents in a manner and form acceptable to CHARTER. Failure of NESC
to execute such security documents, and to cooperate with CHARTER in
the filing necessary to perfect any such security interests, shall
constitute a default under this Loan Agreement and the Master
Agreement. CHARTER shall have the right to file this Loan Agreement
and the Energy Service Agreement, to the extent permitted by
applicable law, to evidence its security interests.
3. Books and Records; Reporting Requirements.
CHARTER shall maintain accurate and detailed records of the Loan. CHARTER
may make available upon the reasonable request and at the expense of NESC
analytical reports of the Loan.
4. Representations and Warranties.
A. NESC. NESC represents and warrants to CHARTER that:
I. NESC is a corporation duly organized, legally existing and in good
standing under the laws of the State of Nevada, has the power to own its
own properties and to conduct its business as presently conducted, and is
duly qualified to do business, in each jurisdiction in which such
qualification is required by law;
II. NESC has full power and authority to enter into this Loan
Agreement, to execute and deliver all documents and instruments required
hereunder and thereunder, and to incur and perform the obligations provided
for herein and therein, all of which have been duly authorized by all
necessary corporate action, and no consent or approval of any person,
including, without limitation, the shareholders of NESC and any
governmental authority is required as a condition to the validity or
enforceability hereof or thereof, except for such consents and approvals
that have been previously obtained;
III. This Loan Agreement has been duly executed and delivered by NESC
and constitutes the valid and legally binding obligation of NESC, and is
fully enforceable against NESC in accordance with its terms, subject to
bankruptcy and other laws affecting the rights of creditors generally, and
the exercise of judicial discretion in accordance with general principles
of equity; and
IV. The execution, delivery and performance by NESC of this Loan
Agreement and the transactions contemplated hereby will not violate (A) any
provision of law or any order, rule or regulation of any court or
governmental authority, (B) the corporate charter or bylaws of NESC, or (C)
any instrument, contract, Loan Agreement, indenture or other document or
obligation to which NESC is a party or by which NESC, or any of its
property, is bound, which violation would have a material adverse impact on
the Program, the Loans, or NESC's performance hereunder.
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B. CHARTER. CHARTER represents and warrants to NESC that:
I. CHARTER is duly organized, legally existing and in good standing
under the laws of the State of Ohio, has the power to own its own
properties and to conduct its business, and is duly qualified to do
business, and is in good standing, in each jurisdiction in which such
qualification is required by law;
II. CHARTER has full power and authority to enter into this Loan
Agreement, to execute and deliver all documents and instruments required
hereunder and thereunder, and to incur and perform the obligations provided
for herein and therein, all of which have been duly authorized by all
necessary action, and no consent or approval of any person, including,
without limitation, the members of CHARTER and any governmental authority,
which has not been obtained, is required as a condition to the validity or
enforceability hereof or thereof;
III. This Loan Agreement has been duly executed and delivered by
CHARTER and constitutes, the valid and legally binding obligations of
CHARTER, and is, fully enforceable against CHARTER in accordance with its
terms, subject to bankruptcy and other laws affecting the rights of
creditors generally, and the exercise of judicial discretion in accordance
with general principles of equity; and
IV. The execution, delivery and performance by CHARTER of this Loan
Agreement and the transactions contemplated hereby will not violate (A) any
provision of law or any order, rule or regulation of any court or
governmental authority, (B) the corporate charter or bylaws of CHARTER, or
(C) any instrument, contract, Loan Agreement, indenture or other document
or obligation to which CHARTER is a party or by which CHARTER, or any of
its property, is bound.
5. Compliances.
CHARTER and NESC each covenants and agrees that it will comply with all
applicable federal, state, local and foreign law, rules, regulations and
ordinances in the performance of its obligations under this Loan Agreement.
6. Events of Termination.
A. NESC Events of Termination. The occurrence of any one or more of the
following events shall constitute a "NESC Event of Termination"
hereunder:
I. Any representation herein or hereafter made or supplied to CHARTER
by NESC pursuant to this Loan Agreement shall prove to have been, when made
or supplied, false or misleading in any material respect;
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II. Failure of NESC to observe, comply with or perform any covenant or
condition under this Loan Agreement which remains uncured for a period of
thirty (30) days after written notice of such failure by CHARTER;
III. NESC shall (A) make a general assignment for the benefit of
creditors, whether conditional or unconditional and whether or not such
assignment is filed in any court and whether or not any court assumes
jurisdiction thereof, or (B) become the subject, or permit any of its
property to become the subject, of any bankruptcy, reorganization,
insolvency, readjustment of debt, trusteeship, receivership, dissolution or
liquidation law, statute or proceeding (provided, however, that if any such
proceeding has not been initiated by NESC or conducted with its
acquiescence or approval, no NESC Event of Termination shall exist unless
such proceeding remains undismissed 120 days after the commencement
thereof; or
IV. The termination of the master Loan Agreement due to an incurred
breach by NESC; or
V. The termination of the Energy Service Agreement.
B. CHARTER Events of Termination. The occurrence of any one or more of
the following events shall constitute a "CHARTER Event of Termination"
hereunder:
I. Any representation or information previously, herein or hereafter
made or supplied to NESC by CHARTER pursuant to or in connection with this
Loan Agreement shall prove to have been, when made or supplied, false or
misleading in any material respect;
II. The failure of CHARTER to observe, comply with or perform any
warranty, covenant or condition under this Loan Agreement which remains
uncured for a period of thirty (30) days; or
III. If CHARTER shall (A) make a general assignment for the benefit of
creditors, whether conditional or unconditional and whether or not such
assignment is filed in any court and whether or not any court assumes
jurisdiction thereof, or (B) become the subject, or permit any of its
property to become the subject, of any bankruptcy, reorganization,
insolvency, readjustment of debt, trusteeship, receivership, dissolution or
liquidation law, statute or proceeding (provided, however, that if any such
proceeding has not been initiated by CHARTER or conducted with its
acquiescence or approval, no CHARTER Event of Termination shall exist
unless such proceeding remains undismissed 120 days after the commencement
thereof).
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7. Remedies Upon Event of Termination.
A. NESC Event of Termination. At any time from and after the occurrence
of a NESC Event of Termination, CHARTER may terminate this Loan
Agreement. In addition to the right of termination, CHARTER shall have
all rights and remedies available at law or in equity, which shall be
cumulative and enforceable alternatively, successively or
concurrently; including the right to accelerate all amounts due under
this Loan Agreement, which amounts shall be immediately due and
payable.
B. CHARTER Event of Termination. At any time from and after the
occurrence of a CHARTER Event of Termination, NESC may terminate this
Loan Agreement. In addition to the right of termination, NESC shall
have all rights and remedies available at law or in equity, which
shall be cumulative and enforceable alternatively, successively or
concurrently.
8. Notices.
A. By NESC. NESC covenants and agrees that NESC will: (1) if any report
or information previously or hereafter supplied to CHARTER by NESC
pursuant to or in connection with the Loan Agreement shall, to the
knowledge or belief of NESC, subsequently become inaccurate or
misleading in any material respect, promptly notify CHARTER thereof in
writing; and (2) promptly after learning thereof, notify CHARTER in
writing of (A) any event or circumstance which does or would likely
impair in any way the ability of NESC to perform its obligations under
this Loan Agreement, (B) any change in the business, operations,
business prospects or financial condition of NESC which does or would
likely have an adverse effect on the ability of NESC to perform its
obligations under this Loan Agreement, and (C) the occurrence of any
NESC Event of Termination hereunder.
B. By CHARTER. CHARTER covenants and agrees that CHARTER will: (1) if any
report or information previously or hereafter supplied to NESC by
CHARTER pursuant to or in connection with the Loan Agreement shall, to
the knowledge or belief of CHARTER, subsequently become inaccurate or
misleading in any material respect, promptly notify NESC thereof in
writing; and (2) promptly after learning thereof, notify NESC in
writing of (A) any event or circumstance which does or would likely
impair in any way the ability of CHARTER to perform its obligations
under this Loan Agreement, (B) any change in the business, operations,
business prospects or financial condition of CHARTER which does or
would likely have an adverse effect on the ability of CHARTER to
perform its obligations under this Loan Agreement, and (C) the
occurrence of any CHARTER Event of Termination hereunder.
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9. Not a Joint Venture.
The parties hereto expressly state their understanding and intention that
their relationship shall be one of independent contractors, and that this
Loan Agreement does not and shall not be construed to establish a
partnership, joint venture, or other form of business association between
NESC and CHARTER and/or any other party.
10. Successors and Assigns.
This Loan Agreement shall be binding upon, inure to the benefit of and be
enforceable by each of the parties hereto and their respective successors
and assigns.
11. Marketing Materials.
All public statements, notices, advertisements, circulars and other
marketing materials prepared or issued by either party hereto relating to
any part of this Loan Agreement or the participation of CHARTER or NESC in
the Program must be approved in advance by all parties to this Loan
Agreement, and any such approval shall not be unreasonably withheld or
delayed. NESC shall be solely responsible for the content of any such
information directed to Customers which NESC has reviewed and approved and
which relates to NESC's role in the Program.
12. Confidentiality.
Unless otherwise permitted by this Loan Agreement or agreed by the parties
hereto, NESC and CHARTER agree to refrain from disclosing the terms and
conditions of this Loan Agreement or any part hereof to any third party
except as may be required by law.
13. Limitation of Liability; Indemnities.
Except as may be otherwise provided in this Paragraph, neither party shall
be liable to the other, under this Loan Agreement or otherwise, whether
based in contract, strict liability, tort (including negligence) or
warranty (whether express or implied) for any of the other party's
indirect, incidental, consequential, or special damages of any nature
whatsoever. Notwithstanding the foregoing:
A. CHARTER shall indemnify, defend and hold NESC harmless with respect to
any claims, expenses (including court costs and attorney's fees and
expenses), liability or damages, whether based in contract, strict
liability, tort (including negligence), warranty or otherwise, arising
out of (1) any representation or warranty of CHARTER contained in this
Loan Agreement being false or misleading in any material respect, or
(2) the negligence, fraud or other misconduct of CHARTER, its
employees and agents, and
B. NESC shall indemnify, defend and hold CHARTER harmless with respect to
any claims, expenses (including court costs and attorney's fees and
expenses), liability or damages, whether based in contract, strict
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liability, tort (including negligence), and warranty or otherwise,
arising out of (1) any representation or warranty of NESC contained in
this Loan Agreement being false or misleading in any material respect,
(2) the failure of NESC to comply with any applicable federal, state
or local law, rule, regulation or ordinance, unless such failure was
attributable to the negligence, fraud, or other misconduct of CHARTER,
its employees or agents, or (3) the negligence, fraud or other
misconduct of NESC or any of its employees and agents.
14. Severability.
In the event any provision, or any part or portion of any provision, of
this Loan Agreement shall become or be declared unlawful, invalid, void or
otherwise unenforceable, the rights and obligations of the parties shall be
reduced only as much as is required to remove or cure such
unenforceability.
15. Modification.
No modification or waiver of any provision of this Loan Agreement, and no
consent by any party to any failure of the other party to comply with any
provision of the Loan Agreement, shall in any event be effective unless the
same shall be in writing and signed by the party against whom enforcement
thereof is sought, and then such waiver or consent shall be effective only
in the specific instance and for the purpose for which given.
16. Entirety.
This Loan Agreement contains the entire understanding between CHARTER and
NESC with respect to the subject matter hereof and supersedes any prior or
contemporaneous agreement or understanding between the parties. The parties
shall not be bound by or be liable for any statement, representation,
promise, inducement or understanding of any kind or nature not set forth or
provided for herein.
17. No Waiver.
Failure by CHARTER or NESC to exercise any rights hereunder shall not
operate as a waiver of any such party's right to asset or rely upon any
such right in the future or as consent to any other default.
18. Applicable Law; Jury Trial.
This Loan Agreement shall be construed in accordance with, and governed by,
the internal laws of the State of Ohio, except that conflict-of-laws
provisions shall not be invoked in order to apply the laws of any other
state or jurisdiction. NESC AND CHARTER EACH HEREBY AGREES THAT ANY LEGAL
ACTION OR PROCEEDING BROUGHT BY EITHER PARTY AGAINST THE OTHER PARTY WITH
RESPECT TO THIS LOAN AGREEMENT, OR ANY OF THE LOAN AGREEMENTS, DOCUMENTS OR
INSTRUMENTS DELIVERED OR TO BE DELIVERED IN CONNECTION WITH THIS LOAN
AGREEMENT SHALL BE BROUGHT IN THE COURTS OF THE STATE OF OHIO OR OF THE
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UNITED STATES OF AMERICA FOR THE NORTHERN DISTRICT OF OHIO, AND, BY
EXECUTION AND DELIVERY HEREOF, NESC AND CHARTER EACH ACCEPTS AND CONSENTS
TO, FOR ITSELF AND IN RESPECT TO ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS WITH RESPECT TO
ANY ACTION OR PROCEEDING BROUGHT BY NESC AND/OR CHARTER, AS APPLICABLE.
BOTH NESC AND CHARTER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
ANY AND ALL RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED ON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
LOAN AGREEMENT, OR ANY OTHER DOCUMENTS AND INSTRUMENTS EXECUTED IN
CONNECTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS OF THE PARTIES HERETO.
THIS PROVISION IS A MATERIAL INDUCEMENT FOR NESC TO ENTER INTO THIS LOAN
AGREEMENT.
19. Survival and Merger; Term.
All representations, warranties, covenants, conditions and agreements
contained herein shall survive the execution and delivery hereof. This Loan
Agreement contains the entire agreement of the parties with respect to the
matters covered and the transactions contemplated hereby, and no agreement,
statement or promise made by any party hereto, or by any employee, officer,
agent or attorney of any party hereto, which is not contained herein, shall
be valid or binding. The term of this Loan Agreement shall be ten (10)
years, provided, however, that the Loan Agreement may be terminated sooner
(1) by CHARTER in accordance with the provisions of Paragraph 8(A) hereof
following the occurrence of a NESC Event of Termination, (2) by NESC in
accordance with the provisions of Paragraph 8(B) hereof following the
occurrence of a CHARTER Event of Termination, (3) if such termination is
required by order of any regulatory body having jurisdiction over either
CHARTER or NESC.
20. Notice Procedure.
Notices to the parties concerning this Loan Agreement shall be effective
only when in writing and delivered personally, given by facsimile with
written confirmation copy following, or mailed by first class United States
mail, postage prepaid to the authorized representative or corporate officer
of the other party. Notices sent by mail shall be deemed given and received
upon the earlier of actual delivery in writing or three (3) days after such
shall be deposed in the United States mail, postage prepaid, by registered
or certified mail, return receipt requested, to the address indicated below
(or to such other address as a party shall specify to the other in
writing). When speed of notice is essential, written notice shall be
preceded by other appropriate communication. Notices shall be sent to the
following addresses:
If to NESC:
National Energy Services Corporation
0000 Xxxx Xxxx, Xxxxx 0X
Xxx Xxxxxx Xxxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxx
Phone: 000-000-0000
FAX: 000-000-0000
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And if to CHARTER:
Charter Management, LLC
00000 Xxxxxx Xxxxx Xxxx, Xxxxx 00
Xxxxx Xxxxxxxxxx, XX 00000
Attn: Xxxx X. X'Xxxxx
Phone: 000-000-0000
FAX: 000-000-0000
21. Headings.
Paragraph headings contained herein are inserted for convenience purposes
only and shall have no effect on interpretation or construction of this
Loan Agreement.
22. Counterparts.
This Loan Agreement may be executed in any number of counterparts and by
different parties on separate counterparts, each of which, when so executed
and delivered, shall be an original, but all such counterparts shall
together constitute one and the same agreement.
23. Further Assurances.
To the extent permitted by law, CHARTER and NESC agree that each of them
will, from time to time, execute, acknowledge and deliver, or cause to be
executed, acknowledged or delivered, such supplements hereto and such
further instruments as may be reasonably required or appropriate to further
express the intention of, or to facilitate the performance of, this Loan
Agreement.
IN WITNESS WHEREOF, the parties have caused this Loan Agreement to be executed
by their duly authorized representatives as of the date and year first above
written.
National Energy Services Company, Inc.
By:
-----------------------------------------------------
Xxxx X. Xxxxxx, President
CHARTER MANAGEMENT, LLC
By:
-----------------------------------------------------
Xxxx X. X'Xxxxx, President
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