CREDIT AGREEMENT
dated as of June 30, 2003
among
COMPRESSCO, INC.
and
COMPRESSCO FIELD SERVICES, INC.;
The Lenders From Time to Time Party Hereto,
and
COMERICA BANK,
as Agent
Table of Contents
Page
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ARTICLE I Definitions..........................................................................1
SECTION 1.01 Defined Terms...................................................................1
SECTION 1.02 Classification of Loans and Borrowings.........................................15
SECTION 1.03 Terms Generally................................................................15
SECTION 1.04 Accounting Terms; GAAP.........................................................16
ARTICLE II The Credits........................................................................16
SECTION 2.01 Commitments....................................................................16
SECTION 2.02 Loans and Borrowings...........................................................16
SECTION 2.03 Requests for Borrowings........................................................17
SECTION 2.04 Letters of Credit..............................................................18
SECTION 2.05 Funding of Borrowings..........................................................22
SECTION 2.06 Interest Elections.............................................................22
SECTION 2.07 Termination and Reduction of Commitments.......................................23
SECTION 2.08 Repayment of Loans; Evidence of Debt...........................................24
SECTION 2.09 Prepayment of Loans............................................................25
SECTION 2.10 Fees...........................................................................25
SECTION 2.11 Interest.......................................................................26
SECTION 2.12 Alternate Rate of Interest.....................................................26
SECTION 2.13 Increased Costs................................................................27
SECTION 2.14 Break Funding Payments.........................................................28
SECTION 2.15 Taxes..........................................................................29
SECTION 2.16 Payments Generally; Pro Rata Treatment; Sharing of Set-offs....................30
SECTION 2.17 Mitigation Obligations; Replacement of Lenders.................................31
SECTION 2.18 Defaulting Lender..............................................................32
SECTION 2.19 Obligations Joint..............................................................33
ARTICLE III Representations and Warranties....................................................33
SECTION 3.01 Organization; Powers...........................................................33
SECTION 3.02 Authorization; Enforceability..................................................33
SECTION 3.03 Governmental Approvals; No Conflicts...........................................34
SECTION 3.04 Financial Condition............................................................34
SECTION 3.05 Properties.....................................................................34
SECTION 3.06 Litigation and Environmental Matters...........................................35
SECTION 3.07 Compliance with Laws and Agreements............................................35
SECTION 3.08 Investment and Holding Company Status..........................................35
SECTION 3.09 Taxes..........................................................................35
SECTION 3.10 ERISA..........................................................................35
SECTION 3.11 Disclosure.....................................................................35
ARTICLE IV Conditions.........................................................................36
SECTION 4.01 Effective Date..............................................................36
SECTION 4.02 Each Credit Event...........................................................37
(i)
Table of Contents
(continued)
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ARTICLE V Affirmative Covenants...............................................................37
SECTION 5.01 Financial Statements and Other Information.....................................37
SECTION 5.02 Notices of Material Events.....................................................38
SECTION 5.03 Existence; Conduct of Business.................................................39
SECTION 5.04 Payment of Obligations.........................................................39
SECTION 5.05 Maintenance of Properties; Insurance...........................................39
SECTION 5.06 Books and Records; Inspection Rights...........................................39
SECTION 5.07 Compliance with Laws...........................................................40
SECTION 5.08 Use of Proceeds and Letters of Credit..........................................40
SECTION 5.09 Financial Covenants............................................................40
ARTICLE VI Negative Covenants.................................................................40
SECTION 6.01 Indebtedness...................................................................40
SECTION 6.02 Liens..........................................................................41
SECTION 6.03 Fundamental Changes............................................................41
SECTION 6.04 Transactions with Affiliates...................................................42
SECTION 6.05 Restrictive Agreements.........................................................42
SECTION 6.06 Restrictions on Dividends......................................................42
SECTION 6.07 Subordinated Debt..............................................................42
SECTION 6.08 Loans and Investments..........................................................43
ARTICLE VII Events of Default.................................................................43
ARTICLE VIII The Agent........................................................................45
ARTICLE IX Miscellaneous......................................................................47
SECTION 9.01 Notices........................................................................47
SECTION 9.02 Waivers; Amendments............................................................47
SECTION 9.03 Expenses; Indemnity; Damage Waiver.............................................48
SECTION 9.04 Successors and Assigns.........................................................49
SECTION 9.05 Survival.......................................................................52
SECTION 9.06 Counterparts; Integration; Effectiveness.......................................53
SECTION 9.07 Severability...................................................................53
SECTION 9.08 Right of Setoff................................................................53
SECTION 9.09 Governing Law; Jurisdiction; Consent to Service of Process.....................53
SECTION 9.10 WAIVER OF JURY TRIAL...........................................................54
SECTION 9.11 Headings.......................................................................54
SECTION 9.12 Confidentiality................................................................54
SECTION 9.13 Interest Rate Limitation.......................................................55
(ii)
Table of Contents
Schedule 1.01 - Applicable Margin
Schedule 2.01 - Commitments
Schedule 6.01 - Existing Indebtedness
Schedule 6.02 - Existing Liens
Schedule 6.05 - Existing Restrictive Agreements
Exhibit A - Assignment and Assumption
Exhibit B - Note
Exhibit C - Certificate of No Default
Exhibit D - Borrowing Base Report
Exhibit E - Borrowing Request
(iii)
CREDIT AGREEMENT
CREDIT AGREEMENT (as amended, modified, restated, supplemented and in
effect from time to time, herein called this "Agreement") dated as of June 30,
2003, is among COMPRESSCO, INC. (the "Parent"), a Delaware corporation;
COMPRESSCO FIELD SERVICES, INC. ("Field Services"), an Oklahoma corporation; the
Lenders, as such term is hereinafter defined, and COMERICA BANK, as Agent for
the Lenders.
ARTICLE I
Definitions
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The parties hereto agree as follows:
SECTION 1.01 Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.
"Accounts" shall have the meaning assigned to it in the Texas Business
and Commerce Code in force on the date hereof.
"Adjusted LIBO Rate" means, with respect to any Eurodollar Borrowing
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest
Period multiplied by (b) the Statutory Reserve Rate.
"Administrative Questionnaire" means an Administrative Questionnaire in
a form supplied by the Agent.
"Affiliate" means, with respect to a specified Person, another Person
that directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"Agent" means Comerica Bank, in its capacity as agent for the Lenders
hereunder, and its successors in that capacity.
"Alternate Base Rate" means, for any day, a rate per annum equal to the
greater of (a) the Federal Funds Effective Rate in effect on such day plus 1/2
of 1% or (b) the Prime Rate in effect on such day. Any change in the Alternate
Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate
shall be effective from and including the effective date of such change in the
Prime Rate or the Federal Funds Effective Rate, respectively.
"Applicable Margin" means, for any day with respect to any ABR Loan or
Eurodollar Loan or with respect to the commitment fees payable hereunder, as the
case may be, the applicable margin per annum set forth on Schedule 1.01 under
the caption "ABR Applicable Margin", "Adjusted LIBO Applicable Margin" or
"Commitment Fee", as the case may be, based upon the Leverage Ratio of the
Parent as reflected in the most recent financial statements of the Parent
delivered to the Agent; but if the Borrowers have failed to deliver such
financial statements as required by this Agreement, then until such financial
statements are delivered then it shall be presumed for purposes of this
definition that the Applicable Margin is the greatest number shown on Schedule
1.01 under each of such captions. Each change in the Applicable Margin shall
apply during the period commencing on the effective date of such change and
ending on the date immediately preceding the effective date of the next such
change.
"Applicable Percentage" means, with respect to any Lender, the
percentage of the total Commitments represented by such Lender's Commitment. If
the Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon the Commitments most recently in effect, giving effect to
any assignments.
"Approved Fund" has the meaning assigned to such term in Section 9.04.
"Assignment and Assumption" means an assignment and assumption entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 9.04), and accepted by the Agent, in the form of Exhibit A
or any other form approved by the Agent.
"Available Commitment" means, as of any date, the lesser of (a) the
aggregate Commitments and (b) the Borrowing Base, in each case as of such date.
With respect to any Lender, its Available Commitment on any date is equal to its
pro rata share of the Commitments on such date times the aggregate Available
Commitment on such date.
"Board" means the Board of Governors of the Federal Reserve System of
the United States of America and any successor entity performing similar
functions.
"Borrower" means either the Parent or Field Services. The term
"Borrowers" means the Parent and Field Services.
"Borrowing" means Loans of the same Type made, converted or continued
on the same date and, in the case of Eurodollar Loans, as to which a single
Interest Period is in effect.
"Borrowing Base" means, as of any date, the sum of (a) 85% of Eligible
Receivables; (b) 50% of Eligible Inventory, and (c) 80% of the Collateral Value
of the Compressors.
"Borrowing Request" means a request by the Borrowers for a Borrowing in
accordance with Section 2.03.
"Business Day" means any day that is not a Saturday, Sunday or other
day on which national banks in New York City or Houston, Texas are authorized or
required by law to remain closed; but, when used in connection with a Eurodollar
Loan, the term "Business Day" shall also exclude any day on which banks are not
open for dealings in Dollar deposits in the London interbank market.
"Capital Expenditures" means, for any period, expenditures by a Person
which are properly classified as fixed or capital assets (other than
Compressors) in accordance with GAAP (including the capital portion of lease
payments made in respect of Capital Lease Obligations), reduced for (a) proceeds
from disposal of fixed or capital assets and (b) proceeds from insurance
policies to replace capital equipment damaged or destroyed.
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"Capital Lease Obligations" means, as to any Person, the obligations of
such Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) real and/or personal property which obligations are
required to be classified and accounted for as a capital lease on a balance
sheet of such Person under GAAP and, for purposes of this Agreement, the amount
of such obligations shall be the capitalized amount thereof, determined in
accordance with GAAP. Capital Lease Obligations shall not include the interest
component of any applicable rental payment.
"Ceiling Rate" means, on any day, the maximum nonusurious rate of
interest permitted for that day by whichever of applicable federal or Texas (or
any jurisdiction whose usury laws are deemed to apply to the Notes or any other
Loan Documents despite the intention and desire of the parties to apply the
usury laws of the State of Texas) laws permits the higher interest rate, stated
as a rate per annum. On each day, if any, that the Texas Finance Code
establishes the Ceiling Rate, the Ceiling Rate shall be the "weekly ceiling" (as
defined in the Texas Finance Code) for that day. Without notice to either
Borrower or any other Person, the Ceiling Rate shall automatically fluctuate
upward and downward as and in the amount by which such maximum nonusurious rate
of interest permitted by applicable law fluctuates.
"Change in Control" means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the Securities
and Exchange Commission thereunder as in effect on the date hereof), of Equity
Interests representing more than 50% of the aggregate ordinary voting power
represented by the issued and outstanding Equity Interests of the Parent; (b)
occupation of a majority of the seats (other than vacant seats) on the board of
directors of the Parent by Persons who were neither (1) nominated by the board
of directors of the Parent nor (2) appointed by directors so nominated; or (c)
the acquisition of direct or indirect Control of the Parent by any Person or
group.
"Change in Law" means (a) the adoption of any law, rule or regulation
after the date of this Agreement; (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement; or (c) compliance by any Lender or the Issuing
Bank (or, for purposes of Section 2.13(b), by any lending office of such Lender
or by such Lender's or the Issuing Bank's holding company, if any) with any
request, guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.
"Change of Management" means the occurrence of all of the following:
(a) any or all of (1) Xxxx X. Xxxxxx, chairman; (2) Xxxxxx Xxxx
Xxxxxx III, president and chief executive officer; (3) Xxxxxxx X. Xxxxxx, chief
operation officer, or (4) Xxxx XxXxxxx, chief financial officer, in each case
each of the Parent, no longer occupies his office, or no longer has all of the
principal responsibilities or performs all of the principal duties and functions
of his office as it exists on the date hereof;
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(b) 60 days have elapsed since the occurrence of the event
described in clause (a) above; and
(c) such Person (Xx. Xxxxxx, Xx. Xxxxxx, Xx. Xxxxxx or Xx.
XxXxxxx) has not been replaced by, or his duties have not been assigned to,
another Person whom the Agent has reasonably declared (in writing) to be
acceptable to the Agent.
"CLO" has the meaning assigned to such term in Section 9.04.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral Value" means, with respect to the Compressors, the lesser
of (a) the net book value of the Compressors, as determined in accordance with
GAAP, or (b) the most recent "orderly liquidation value" of the Compressors as
determined by an appraiser reasonably satisfactory to the Agent.
"Commitment" means with respect to each Lender, the commitment of such
Lender to make Loans and to acquire participations in Letters of Credit issued
at the request of the Borrowers, expressed as an amount representing the maximum
aggregate amount of such Lender's Revolving Exposure hereunder, as such
commitment may be (a) reduced from time to time pursuant to Section 2.07 and (b)
reduced or increased from time to time pursuant to assignments by or to such
Lender pursuant to Section 9.04. The initial amount of each Lender's Commitment
is set forth on Schedule 2.01, or in the Assignment and Assumption pursuant to
which such Lender shall have assumed its Commitment, as applicable. The
aggregate amount of the Lenders' Commitments is $17,500,000 as of the date
hereof.
"Compressors" means compressors owned by the Borrowers and their
Material Subsidiaries and held for lease to third parties.
"Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
"Current Receivables" means all Accounts meeting all of the following
criteria as of the date of any determination of Current Receivables: (a) the
Account shall be (1) due and payable not more than 120 days from the date of the
invoice or agreement evidencing same and (2) billed within 30 days after the
shipment of the goods or rendering of services giving rise to the Account; (b)
the Account shall arise from the performance of services by the obligee of the
Account which have been fully and satisfactorily performed, or from the absolute
sale of goods by the obligee of the Account in which such obligee had the sole
and complete ownership, and the goods have been shipped and delivered to the
Account debtor, evidencing which such obligee has possession of shipping
documents and/or evidence of shipping, delivery or customer pick-up; (c) the
Account is not subject to set-off, counterclaim, defense, allowance or
adjustment other than discounts for prompt payment shown on the invoice, or to
dispute, objection or complaint by the Account debtor concerning its liability
on the Account, and the goods, the sale of which gave rise to the Account, have
not been returned, rejected, lost or damaged, and (d) the Account arose in the
ordinary course of business of the obligee thereon, and no notice of bankruptcy
or insolvency of the Account debtor has been received by the obligee of such
Account.
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"Default" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Dollars" or "$" refers to lawful money of the United States of
America.
"EBITDA" shall mean, without duplication, for any period (a) Net Income
plus (b) the sum of (1) Interest Expense for such period; (2) income taxes
deducted in determining such net income; (3) depreciation, depletion and
obsolescence of property; and (4) other non-cash expenses and intangibles
(including, without limitation, deferred financing costs and debt discount)
deducted in determining such net income minus (c) non-cash income, in each case,
determined in accordance with GAAP.
"Effective Date" means the first date on which the conditions specified
in Section 4.01 are satisfied (or waived in accordance with Section 9.02).
"Eligible Inventory" means Inventory subject to a perfected first
priority Lien under the Security Documents, not including (a) obsolete
Inventory; (b) Inventory which is off-site or has been consigned to others; (c)
the leased parts Inventory, and (d) work in process, all determined in
accordance with GAAP.
"Eligible Receivables" means all Current Receivables which are (a) not
past due more than 90 days and (b) subject to a perfected first priority Lien
under the Security Documents, excluding (1) all Accounts with respect to any
Account debtor which is not (x) an individual living in the United States or
Canada; (y) an entity organized under the laws of the United States, one of its
States, Canada or one of its Provinces, or (z) a Person with substantial
Property in the United States or Canada unless (with respect to this clause (1))
such Account is (A) backed by a letter of credit acceptable to the Agent; (B)
insured in a manner acceptable to the Agent, or (C) specifically approved by the
Agent; (2) any Account owing by a Borrower or a Subsidiary of a Borrower; (3)
all Accounts of an Account debtor if 25% or more (in dollar amount) of such
Accounts are outstanding more than 120 days after the date of the respective
invoices generating such Accounts; (4) those Accounts which are obligations of
the United States and its instrumentalities, unless such Account has been
specifically assigned to the Agent pursuant to a document in form and substance
satisfactory to the Agent, and (5) Accounts of an Account debtor and its
Affiliates which exceed 25% of all Current Receivables.
"Environmental Laws" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources or the management, release or threatened release of any Hazardous
Material.
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of a Borrower or any Material Subsidiary directly or
indirectly resulting from or based upon (a) violation of any Environmental Law;
-5-
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials; (c) exposure to any Hazardous Materials;
(d) the release or threatened release of any Hazardous Materials into the
environment; or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"Equipment" shall have the meaning assigned to it in the Texas Business
and Commerce Code in force on the date hereof.
"Equity Interests" means shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person, and any
warrants, options or other rights entitling the holder thereof to purchase or
acquire any such equity interest.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with a Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in Section
4043 of ERISA or the regulations issued thereunder with respect to a Plan (other
than an event for which the 30 day notice period is waived); (b) the existence
with respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by a Borrower or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by a Borrower or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by a
Borrower or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the
receipt by a Borrower or any ERISA Affiliate of any notice, or the receipt by
any Multiemployer Plan from a Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.
"Eurodollar" means, when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
"Eurodollar Office" means, with respect to any Lender, the office or
offices of such Lender which shall be making or maintaining the Eurodollar
Borrowing of such Lender hereunder. A Eurodollar Office of any Lender may be, at
the option of such Lender, either a domestic or foreign office.
-6-
"Event of Default" has the meaning assigned to such term in Article
VII.
"Excluded Taxes" means, with respect to the Agent, any Lender, the
Issuing Bank or any other recipient of any payment to be made by or on account
of any obligation of a Borrower hereunder, (a) income or franchise taxes imposed
on (or measured by) its net income by the United States of America, or by the
jurisdiction under the laws of which such recipient is organized or in which its
principal office is located or, in the case of any Lender, in which its
applicable lending office is located; (b) any branch profits taxes imposed by
the United States of America or any similar tax imposed by any other
jurisdiction in which the applicable Borrower is located; and (c) in the case of
a Foreign Lender (other than an assignee pursuant to a request by a Borrower
under Section 2.17(b)), any withholding tax that is imposed on amounts payable
to such Foreign Lender at the time such Foreign Lender becomes a party to this
Agreement (or designates a new lending office) or is attributable to such
Foreign Lender's failure to comply with Section 2.15(e), except to the extent
that such Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new lending office (or assignment), to receive additional
amounts from the applicable Borrower with respect to such withholding tax
pursuant to Section 2.15(a).
"Federal Funds Effective Rate" means, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by the Agent.
"Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or controller of the applicable Borrower.
"Foreign Lender" means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrowers are located. For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"Funded Debt" means (a) Indebtedness for borrowed money plus (b)
Capital Lease Obligations minus (c) the Subordinated Debt.
"GAAP" means generally accepted accounting principles in the United
States of America.
"Governmental Authority" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
-7-
"Guarantee" of or by any Person (the "guarantor") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the "primary obligor") in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof; (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof; (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation; or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; but the term Guarantee shall not include endorsements for collection
or deposit in the ordinary course of business.
"Guaranties" means all of the Guaranties executed by the Material
Subsidiaries, to the Agent and guaranteeing the Obligations.
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Indebtedness" shall mean and include with respect to any Person (a)
all items which in accordance with GAAP would be included on the liability side
of a balance sheet of such Person on the date as of which Indebtedness is to be
determined (excluding capital stock, surplus, surplus reserves and deferred
credits); (b) all Guarantees, letter of credit contingent reimbursement
obligations, endorsements and other contingent obligations in respect of, or any
obligations to purchase or otherwise acquire, Indebtedness of others, and (c)
all Indebtedness secured by any Lien existing on any interest of such Person in
property owned subject to such Lien whether or not the Indebtedness secured
thereby shall have been assumed; but the term Indebtedness shall not mean or
include any Indebtedness in respect of which monies sufficient to pay and
discharge the same in full (either on the expressed date of maturity thereof or
on such earlier date as such Indebtedness may be duly called for redemption and
payment) shall be deposited, in a manner and with a depository, agency or
trustee reasonably acceptable to the Agent, in trust for the payment thereof.
"Indebtedness" shall not include trade payables and expense accruals incurred in
the ordinary course of the applicable Person's business if such payables have
not remained unpaid for a period of 90 days after the same became due. Expenses
which are classified as "operating lease expenses" under GAAP shall not
constitute "Indebtedness" under this Agreement.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Interest Coverage Ratio" means, on any date, the ratio of (a) the
difference of (1) EBITDA minus (2) Capital Expenditures to (b) Interest Expense,
in each case for the 12 months then ending
"Interest Election Request" means a request by a Borrower to convert or
continue a Loan in accordance with Section 2.06.
-8-
"Interest Expense" shall mean, for any period, the sum of (a) the cash
interest payments by an obligor made or accrued in accordance with GAAP during
such period in connection with all of its interest-bearing Indebtedness and (b)
the interest component of any Capital Lease Obligations.
"Interest Payment Date" means (a) with respect to any ABR Loan, the
first day of each January, April, July and October, and (b) with respect to any
Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing
of which such Loan is a part and, in the case of a Eurodollar Borrowing with an
Interest Period of more than three months' duration, each day before the last
day of such Interest Period that occurs at intervals of three months' duration
after the first day of such Interest Period.
"Interest Period" means with respect to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two or three months
thereafter, as the Borrowers may elect; but (1) if any Interest Period would end
on a day other than a Business Day, such Interest Period shall be extended to
the next succeeding Business Day unless such next succeeding Business Day would
fall in the next calendar month, in which case such Interest Period shall end on
the next preceding Business Day, and (2) any Interest Period that commences on
the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of such Interest
Period) shall end on the last Business Day of the last calendar month of such
Interest Period. For purposes hereof, the date of a Borrowing initially shall be
the date on which such Borrowing is made and thereafter shall be the effective
date of the most recent conversion or continuation of such Borrowing.
"Inventory" shall have the meaning assigned to it in the Texas Business
and Commerce Code in force on the date hereof; but the Compressors shall not be
included in Inventory.
"Investment" means the purchase or other acquisition of any securities
or Indebtedness of, or the making of any loan, advance, transfer of Property or
capital contribution to, or the incurring of any liability, contingently or
otherwise, in respect of the Indebtedness of, any Person.
"Issuing Bank" means Comerica Bank (or any other Lender which agrees to
issue any Letter of Credit upon request by a Borrower), in its capacity as the
issuer of Letters of Credit hereunder, and its successors in such capacity as
provided in Section 2.04(i). The Issuing Bank may, in its discretion, arrange
for one or more Letters of Credit to be issued by Affiliates of the Issuing
Bank, in which case the term "Issuing Bank" shall include any such Affiliate
with respect to Letters of Credit issued by such Affiliate.
"LC Disbursement" means a payment made by the Issuing Bank pursuant to
a Letter of Credit.
"LC Exposure" means, at any time, the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit at such time plus (b) the aggregate
amount of all LC Disbursements that have not yet been reimbursed by or on behalf
of the Borrowers at such time. The LC Exposure of any Lender at any time shall
be its Applicable Percentage of the total LC Exposure at such time.
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"Lenders" means the Persons listed on Schedule 2.01 and any other
Person that shall have become a party hereto pursuant to an Assignment and
Assumption, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Assumption.
"Letter of Credit" means any letter of credit issued pursuant to this
Agreement.
"Leverage Ratio" means, on any date, the ratio of (a) the Funded Debt
of the Parent and its Subsidiaries on such date to (b) the EBITDA of the Parent
and its Subsidiaries for the 12 months then ending.
"LIBO Rate" means, with respect to any Eurodollar Borrowing for any
Interest Period: (a) a rate per annum equal to the offered rate for deposits in
Dollars for a period equal or comparable to such Interest Period which appears
on Page BBAM of the Bloomberg Financial Markets Information Service as of 11:00
a.m. two Business Days before the first day of such Interest Period, or (b) in
the event the rate referenced in the preceding subsection (a) does not appear on
such page or service or such page or service shall cease to be available, the
rate per annum equal to the rate determined by the Agent as the offered rate on
such other page or other service that displays an average British Bankers
Association Interest Settlement Rate for deposits in Dollars (for delivery on
the first day of such Interest Period) with a term equivalent to such Interest
Period, determined as of approximately 11:00 a.m. (London time) two Business
Days before the first day of such Interest Period, or (c) in the event the rates
referenced in the preceding subsections (a) and (b) are not available, the rate
per annum determined by the Agent (in its reasonable discretion) as the rate of
interest at which Dollar deposits (for delivery on the first day of such
Interest Period) in same day funds in the approximate amount of the applicable
Eurodollar Borrowing and with a term equivalent to such Interest Period would be
offered by the Agent's Eurodollar Office to major banks in the offshore Dollar
market at their request at approximately 11:00 a.m. two Business Days before the
first day of such Interest Period.
"Lien" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset; (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset; and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"Loan" means a Loan made pursuant to Section 2.01.
"Loan Documents" means, collectively, this Agreement, the Notes, the
Notice of Entire Agreement, the Guaranties, the Security Documents, all
instruments, certificates and agreements now or hereafter executed or delivered
to the Agent or any Lender pursuant to any of the foregoing or in connection
with the obligations of the Borrowers under this Agreement and the other Loan
Documents or any commitment regarding such obligations, and all amendments,
modifications, renewals, extensions, increases and rearrangements of, and
substitutions for, any of the foregoing.
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"Loans" means the loans made by the Lenders to the Borrowers pursuant
to this Agreement.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, property or condition (financial or otherwise) of the Parent
and its Subsidiaries, taken as a whole; (b) the validity or enforceability
against the Borrowers of any of the Loan Documents; or (c) the rights of or
benefits available to the Agent or the Lenders under any Loan Document.
"Material Indebtedness" means Indebtedness (other than the Loans and
Letters of Credit), or obligations in respect of one or more Swap Agreements, of
either Borrower or any of their Subsidiaries in an aggregate principal amount
exceeding $250,000. For purposes of determining Material Indebtedness, the
"principal amount" of the obligations in respect of any Swap Agreement at any
time shall be the maximum aggregate amount (giving effect to any netting
agreements) that would be required to be paid if such Swap Agreement was
terminated at such time.
"Material Subsidiary" means Field Services and each other Subsidiary of
the Parent with assets comprising 5% or more of the aggregate fair market value
of all assets of the Parent and its Subsidiaries on a consolidated basis or with
a tangible net worth comprising 5% or more of the tangible net worth of the
Parent and its Subsidiaries on a consolidated basis.
"Maturity Date" means the earlier of (a) three years from the date
hereof or (b) 45 days before the maturity (whether by the passage of time or the
occurrence of an event which causes the principal thereof to become due) of the
Subordinated Debt.
"Multiemployer Plan" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"Net Income" means gross revenues and other proper income credits, less
all proper income charges, including taxes on income, all determined in
accordance with GAAP; but there shall not be included in such revenues (a) any
income representing the excess of equity in any Subsidiary at the date of
acquisition over the investment in such Subsidiary; (b) any equity in the
undistributed earnings of any Person which is not a Subsidiary; (c) any earnings
of any Subsidiary for any period before the date such Subsidiary was acquired;
(d) any gains resulting from the write-up of assets; (e) any proceeds of any
life insurance policy, or (f) any gain which is classified as "extraordinary" in
accordance with GAAP; and provided further, that capital gains may be included
in revenues only to the extent of capital losses. Net Income shall be determined
on a consolidated basis.
"Notes" shall have the meaning assigned to such term in Section
2.02(a).
"Notice of Entire Agreement" means a notice of entire agreement
executed by Borrowers and the Agent, as the same may from time to time be
amended, modified, supplemented or restated.
"Obligations" means, as at any date of determination thereof, the sum
of the following: (a) the aggregate principal amount of Loans outstanding
hereunder, plus (b) the aggregate amount of the LC Exposure.
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"Other Taxes" means any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made under any Loan Document or from the execution, delivery or
enforcement of, or otherwise with respect to, any Loan Document.
"Participant" has the meaning set forth in Section 9.04.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes that are not yet due or are
being contested in compliance with the provisions of this Agreement;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens imposed by law, arising in the ordinary course
of business and securing obligations that are not overdue by more than 30 days
or are being contested in compliance with Section 5.04;
(c) Liens, pledges and deposits made in the ordinary course of
business in compliance with workers' compensation, unemployment insurance and
other social security laws or regulations;
(d) deposits to secure insurance obligations and the performance
of bids, trade contracts, leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature, in each case in
the ordinary course of business;
(e) judgment and similar liens in respect of judgments that do
not constitute an Event of Default under this Agreement;
(f) easements, zoning restrictions, rights-of-way and similar
encumbrances and restrictions on real property imposed by law or arising in the
ordinary course of business that do not secure any monetary obligations and do
not materially detract from the value of the affected property or interfere with
the ordinary conduct of business of a Borrower or any of its Subsidiaries;
(g) Liens arising from Swap Agreements; and
(h) the Liens created by the Security Documents;
but the term "Permitted Encumbrances" shall not include any Lien securing Funded
Debt other than the Obligations.
"Permitted Investment Securities" means (a) readily marketable
securities issued or fully guaranteed by the United States of America; (b)
commercial paper rated "Prime 1" by Xxxxx'x Investors Service, Inc. or "A 1" by
Standard and Poor's Ratings Group, with maturities of not more than 180 days;
(c) certificates of deposit or repurchase certificates issued by financial
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institutions acceptable to the Agent, all of the foregoing not having a maturity
of more than one year from the date of issuance thereof; (d) cash and cash
equivalents, and (e) securities received in settlement of liabilities created in
the ordinary course of business.
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which a Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Prime Rate" means, on any day, the prime rate of Comerica Bank in
effect for that day at the principal offices of Comerica Bank in Houston, Texas.
The Prime Rate is a reference rate and does not necessarily represent the lowest
or best rate or a favored rate, and Agent and each Lender disclaims any
statement, representation or warranty to the contrary. The Agent or any Lender
may make commercial loans or other loans at rates of interest at, above or below
the Prime Rate.
"Register" has the meaning set forth in Section 9.04.
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"Required Lenders" means, at any time, Lenders having Revolving
Exposures and unused Commitments representing more than 66-2/3% of the sum of
the total Revolving Exposures and unused Commitments at such time.
"Required Tangible Net Worth" means, on any date, the sum of (a)
$10,000,000; (b) 50% of Net Income for each month beginning after June 30, 2003
and ending on or before such date (but if Net Income for any month in such
period is negative, then the Net Income for such month shall be disregarded for
purposes of this clause), and (c) 75% of the net cash proceeds realized by the
Parent from the sale of its Equity Interests after the date hereof (not
including (x) price paid to exercise rights under warrants for Equity Interests
issued by the Parent, if and to the extent such amounts are used directly to
repay the Subordinated Debt, and (y) any conversion of the Subordinated Debt
into Equity Interests).
"Revolving Availability Period" means the period from and including the
Effective Date to but excluding the earlier of the Maturity Date and the date of
termination of the applicable Commitment.
"Revolving Exposure" means with respect to any Lender at any time, the
sum of the outstanding principal amount of such Lender's Loans and its LC
Exposure at such time.
"Security Agreements" means the security agreements, in form and
substance satisfactory to the Agent, in favor of the Agent in connection with
the Obligations, covering the Accounts, Equipment, Inventory and patent rights
of the Borrowers and the Material Subsidiaries therein described and securing
without limitation, the Obligations.
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"Security Documents" means this Agreement, the Security Agreements, the
Guaranties and any and all other agreements, deeds of trust, mortgages, chattel
mortgages, security agreements, pledges, guaranties, assignments of production
or proceeds of production, assignments of income, assignments of contract
rights, assignments of partnership interest, assignments of royalty interests,
assignments of performance, completion or surety bonds, standby agreements,
subordination agreements, undertakings and other instruments and Financing
Statements now or hereafter executed and delivered by any Person (other than
solely by a Lender and/or any other creditor participating in the Obligations or
any collateral or security therefor) in connection with, or as security for the
payment or performance of, all or any part of the Obligations..
"Statutory Reserve Rate" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Agent is subject, for eurocurrency funding
(currently referred to as "Eurocurrency Liabilities" in Regulation D of the
Board). Such reserve percentages shall include those imposed pursuant to such
Regulation D. Eurodollar Loans shall be deemed to constitute eurocurrency
funding and to be subject to such reserve requirements without benefit of or
credit for proration, exemptions or offsets that may be available from time to
time to any Lender under such Regulation D or any comparable regulation. The
Statutory Reserve Rate shall be adjusted automatically on and as of the
effective date of any change in any reserve percentage.
"Subordinated Debt" means (a) the Indebtedness evidenced by the
Parent's 10% Subordinated Promissory Notes in the aggregate original principal
amount of $5,550,000 and (b) any other Indebtedness which has been subordinated
to the Obligations on terms (including interest rate and stated maturity)
acceptable to the Agent..
"Subsidiary" means, with respect to any Person (the "parent") at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or, in the
case of a partnership, more than 50% of the general partnership interests are,
as of such date, owned, Controlled or held, or (b) that is, as of such date,
otherwise Controlled, by the parent or one or more Subsidiaries of the parent or
by the parent and one or more Subsidiaries of the parent.
"Swap Agreement" means any agreement with respect to any swap, forward,
future or derivative transaction or option or similar agreement involving, or
settled by reference to, one or more rates, currencies, commodities, equity or
debt instruments or securities, or economic, financial or pricing indices or
measures of economic, financial or pricing risk or value or any similar
transaction or any combination of these transactions.
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"Tangible Net Worth" means total assets (valued at cost less normal
depreciation), less (1) all intangibles and (2) all liabilities (including
contingent and indirect liabilities) other than the Subordinated Debt, all
determined in accordance with Generally Accepted Accounting Principles. The term
"intangibles" shall include, without limitation, (a) deferred charges; (b) the
amount of any write-up in the book value of any assets contained in any balance
sheet resulting from revaluation thereof or any write-up in excess of the cost
of such assets acquired, and (c) the aggregate of all amounts appearing on the
assets side of any such balance sheet for franchises, licenses, permits,
patents, patent applications, copyrights, trademarks, trade names, goodwill,
treasury stock, experimental or organizational expenses and other like
intangibles. The term "liabilities" shall include, without limitation, (x)
Indebtedness (but not the Subordinated Debt) and (y) deferred liabilities.
Tangible Net Worth shall be determined on a consolidated basis.
"Taxes" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Transactions" means (a) the execution, delivery and performance by
each Borrower and material subsidiary of the Loan Documents to which it is to be
a party, the borrowing of Loans, the use of the proceeds thereof and the
issuance of Letters of Credit hereunder and (b) the execution, delivery and
performance by the Borrowers and the material subsidiaries of each other
document and instrument required to satisfy the conditions precedent to the
initial Loan hereunder.
"Type" means, when used in reference to any Loan or Borrowing, refers
to whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate
Base Rate.
"Utilization Rate" means, on any day, the ratio of (a) the number of
all compressors of the Parent and the Material Subsidiaries then leased to third
parties divided by (b) the total number of compressors of the Parent and the
Material Subsidiaries, in each case as of such day.
"Withdrawal Liability" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02 Classification of Loans and Borrowings. For purposes of
this Agreement, Loans may be classified and referred to by Type (e.g., a
"Eurodollar Loan"). Borrowings also may be classified and referred to by Type
(e.g., a "Eurodollar Borrowing").
SECTION 1.03 Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
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amendments, supplements or modifications set forth herein); (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns; (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof; (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights. Unless otherwise
expressly stated, all references to time are references to Houston, Texas time.
SECTION 1.04 Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; but if a
Borrower notifies the Agent that such Borrower requests an amendment to any
provision hereof to eliminate the effect of any change occurring after the date
hereof in GAAP or in the application thereof on the operation of such provision
(or if the Agent notifies the Borrowers that the Required Lenders request an
amendment to any provision hereof for such purpose), regardless of whether any
such notice is given before or after such change in GAAP or in the application
thereof, then such provision shall be interpreted on the basis of GAAP as in
effect and applied immediately before such change shall have become effective
until such notice shall have been withdrawn or such provision amended in
accordance herewith.
ARTICLE II
The Credits
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SECTION 2.01 Commitments.
(a) Subject to the terms and conditions set forth herein, each
Lender severally agrees to make Loans to the Borrowers from time to time during
the Revolving Availability Period in an aggregate principal amount that will not
result in such Lender's Revolving Exposure exceeding such Lender's Available
Commitment. Within the foregoing limits and subject to the terms and conditions
set forth herein, the Borrowers may borrow, prepay and reborrow Loans.
(b) The Borrowers, the Agent and the Lenders agree pursuant to
Chapter 346 ("Chapter 346") of the Texas Finance Code, that Chapter 346 (which
relates to open-end line of credit Loan accounts) shall not apply to this
Agreement, the Notes or any Loan and that neither the Notes nor any Loan shall
be governed by Chapter 346 or subject to its provisions in any manner
whatsoever.
SECTION 2.02 Loans and Borrowings.
(a) Each Loan shall be made as part of a Borrowing consisting of
Loans of the same Type made by the Lenders ratably in accordance with their
respective Commitments. The failure of any Lender to make any Loan required to
be made by it shall not relieve any other Lender of its obligations hereunder;
but the Commitments of the Lenders are several and no Lender shall be
responsible for any other Lender's failure to make Loans as required. The Loans
made by each Lender shall be evidenced by a single Note of the Borrowers in
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substantially the form of Exhibit B payable to the order of such Lender and in a
principal amount equal to the applicable Commitment of such Lender, and
otherwise duly completed (such notes, together with all renewals, extensions,
modifications and replacements thereof and substitutions therefor, being herein
called a "Note" and collectively called the "Notes"). Each Lender is hereby
authorized by the Borrowers to endorse on the schedule (or a continuation
thereof) that may be attached to the Note of such Lender, to the extent
applicable, the date, amount, type of and the applicable period of interest for
each Loan made by such Lender to Borrowers hereunder, and the amount of each
payment or prepayment of principal of such Loan received by such Lender; but any
failure by such Lender to make any such endorsement shall not affect the
obligations of the Borrowers under such Note or hereunder in respect of such
Loan.
(b) Subject to Section 2.12, each Loan shall be comprised
entirely of ABR Loans or Eurodollar Loans as the Borrowers may request in
accordance herewith. Each Lender at its option may make any Eurodollar Loan by
causing any domestic or foreign branch or Affiliate of such Lender to make such
Loan; but that any exercise of such option shall not affect the obligation of
the Borrowers to repay such Loan in accordance with the terms of this Agreement
or otherwise result in an increased cost to the Borrowers.
(c) At the commencement of each Interest Period for any
Eurodollar Borrowing, such Borrowing shall be in an aggregate amount that is
equal to $100,000 or an increment of $25,000 in excess thereof. At the time that
each ABR Loan is made, such Borrowing shall be in an aggregate amount of at
least $100,000; but an ABR Loan may be in an aggregate amount that is equal to
the entire unused balance of the total Commitments, or that is required to
finance the reimbursement of an LC Disbursement as contemplated by Section
2.04(e). Borrowings of more than one Type may be outstanding at the same time;
but there shall not at any time be more than a total of six Eurodollar
Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, the
Borrowers shall not be entitled to request, or to elect to convert or continue,
any Borrowing if the Interest Period requested with respect thereto would end
after the Maturity Date.
SECTION 2.03 Requests for Borrowings. To request a Loan, the
Borrowers shall notify the Agent of such request by telephone (a) in the case of
a Eurodollar Borrowing, not later than noon three Business Days before the date
of the proposed Borrowing and (b) in the case of an ABR Borrowing, not later
than 11:00 a.m. on the date of the proposed Borrowing; but any such notice of an
ABR Loan to finance the reimbursement of an LC Disbursement as contemplated by
Section 2.04(e) may be given not later than 11:00 a.m. on the date of the
proposed Borrowing. Each such telephonic Borrowing Request shall be irrevocable
and shall be confirmed by hand delivery or telecopy to the Agent on the same day
as the telephonic request of a written Borrowing Request signed by the Borrowers
and substantially in the form of Exhibit E or another form approved by the
Agent. Each such telephonic and written Borrowing Request shall specify the
following information in compliance with Section 2.02:
(1) the aggregate amount of such Borrowing;
(2) the date of such Borrowing, which shall be a
Business Day;
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(3) whether such Borrowing is to be an ABR Borrowing or
a Eurodollar Borrowing;
(4) in the case of a Eurodollar Borrowing, the initial
Interest Period to be applicable thereto, which shall be a period contemplated
by the definition of the term "Interest Period"; and
(5) the location and number of the applicable Borrower's
account to which funds are to be disbursed, which shall comply with the
requirements of Section 2.05.
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Loan, then the Borrowers shall be deemed to
have selected an Interest Period of one month's duration. Promptly following
receipt of a Borrowing Request in accordance with this Section, the Agent shall
advise each Lender of the details thereof and of the amount of such Lender's
Loan to be made as part of the requested Borrowing. Notwithstanding the
foregoing, the Borrowers acknowledge that the Borrowers shall bear all risk of
loss resulting from disbursements made upon telephonic request.
SECTION 2.04 Letters of Credit.
(a) General. Subject to the terms and conditions set forth
herein, Borrower may request the issuance of Letters of Credit for its own
account, in a form reasonably acceptable to the Agent and the Issuing Bank, at
any time and from time to time during the Revolving Availability Period. In the
event of any inconsistency between the terms and conditions of this Agreement
and the terms and conditions of any form of letter of credit application or
other agreement submitted by the applicable Borrower to, or entered into by the
applicable Borrower with, the Issuing Bank relating to any Letter of Credit, the
terms and conditions of this Agreement shall control.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the applicable
Borrower shall hand deliver or telecopy (or transmit by electronic
communication, if arrangements for doing so have been approved by the Issuing
Bank) to the Issuing Bank and the Agent (reasonably in advance of the requested
date of issuance, amendment, renewal or extension) a notice requesting the
issuance of a Letter of Credit, or identifying the Letter of Credit to be
amended, renewed or extended, and specifying the date of issuance, amendment,
renewal or extension (which shall be a Business Day), the date on which such
Letter of Credit is to expire (which shall comply with paragraph (c) of this
Section), the amount of such Letter of Credit, the name and address of the
beneficiary thereof and such other information as shall be necessary to prepare,
amend, renew or extend such Letter of Credit. If requested by the Issuing Bank,
the applicable Borrower also shall submit a letter of credit application on the
Issuing Bank's standard form in connection with any request for a Letter of
Credit. A Letter of Credit shall be issued, amended, renewed or extended only if
(and upon issuance, amendment, renewal or extension of each Letter of Credit the
applicable Borrower shall be deemed to represent and warrant that), after giving
effect to such issuance, amendment, renewal or extension (1) the LC Exposure
shall not exceed $1,000,000 and (2) the total Revolving Exposures shall not
exceed the total Commitments.
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(c) Expiration Date. Each Letter of Credit shall expire at or
before the close of business on the earlier of (1) the date one year after the
date of the issuance of such Letter of Credit (or, in the case of any renewal or
extension thereof, one year after such renewal or extension) and (2) the date
that is five Business Days before the Maturity Date; but any Letter of Credit
with a one-year tenor may provide for the renewal thereof for additional
one-year periods (which shall in no event extend beyond the date referred to in
clause (2) above).
(d) Participations. By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the Issuing Bank or the Lenders, the Issuing Bank
hereby grants to each Lender, and each Lender hereby acquires from the Issuing
Bank, a participation in such Letter of Credit equal to such Lender's Applicable
Percentage of the aggregate amount available to be drawn under such Letter of
Credit. In consideration and in furtherance of the foregoing, each Lender hereby
absolutely and unconditionally agrees to pay to the Agent, for the account of
the Issuing Bank, such Lender's Applicable Percentage of each LC Disbursement
made by the Issuing Bank and not reimbursed by the applicable Borrower on the
date due as provided in paragraph (e) of this Section, or of any reimbursement
payment required to be refunded to the applicable Borrower for any reason. Each
Lender acknowledges and agrees that its obligation to acquire participations
pursuant to this paragraph in respect of Letters of Credit is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including any amendment, renewal or extension of any Letter of Credit or the
occurrence and continuance of a Default or reduction or termination of the
Commitments, and that each such payment shall be made without any offset,
abatement, withholding or reduction whatsoever.
(e) Reimbursement. If the Issuing Bank shall make any LC
Disbursement in respect of a Letter of Credit, the applicable Borrower shall
reimburse such LC Disbursement by paying to the Agent an amount equal to such LC
Disbursement not later than 1:00 p.m. on the date that such LC Disbursement is
made, if the applicable Borrower shall have received notice of such LC
Disbursement before 11:00 a.m. on such date, or, if such notice has not been
received by the applicable Borrower before such time on such date, then not
later than 1:00 p.m. on (1) the Business Day that the applicable Borrower
receives such notice, if such notice is received before 11:00 a.m. on the day of
receipt, or (2) the Business Day immediately following the day that the
applicable Borrower receives such notice, if such notice is not received before
such time on the day of receipt; but the applicable Borrower may, subject to the
conditions to borrowing set forth herein, request in accordance with Section
2.02 or 2.18 that such payment be financed with an ABR Loan in an equivalent
amount and, to the extent so financed, the applicable Borrower's obligation to
make such payment shall be discharged and replaced by the resulting ABR Loan. If
the applicable Borrower fails to make such payment when due, the Agent shall
notify each Lender of the applicable LC Disbursement, the payment then due from
the applicable Borrower in respect thereof and such Lender's Applicable
Percentage thereof. Promptly following receipt of such notice, each Lender shall
pay to the Agent its Applicable Percentage of the payment then due from the
applicable Borrower, in the same manner as provided in Section 2.05 with respect
to Loans made by such Lender (and Section 2.05 shall apply, mutatis mutandis, to
the payment obligations of the Lenders), and the Agent shall promptly pay to the
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Issuing Bank the amounts so received by it from the Lenders. Promptly following
receipt by the Agent of any payment from the applicable Borrower pursuant to
this paragraph, the Agent shall distribute such payment to the Issuing Bank or,
to the extent that Lenders have made payments pursuant to this paragraph to
reimburse the Issuing Bank, then to such Lenders and the Issuing Bank as their
interests may appear. Any payment made by a Lender pursuant to this paragraph to
reimburse the Issuing Bank for any LC Disbursement (other than the funding of
ABR Loans as contemplated above) shall not constitute a Loan and shall not
relieve the applicable Borrower of its obligation to reimburse such LC
Disbursement.
(f) Obligations Absolute. The applicable Borrower's obligation to
reimburse LC Disbursements as provided in paragraph (e) of this Section shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (1) any lack of validity or enforceability of any
Letter of Credit or this Agreement, or any term or provision therein; (2) any
draft or other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect; (3) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, or (4) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the applicable Borrower's obligations
hereunder. None of the Agent, the Lenders or the Issuing Bank, nor any of their
Related Parties, shall have any liability or responsibility by reason of or in
connection with the issuance or transfer of any Letter of Credit or any payment
or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the
Issuing Bank; but the foregoing shall not be construed to excuse the Issuing
Bank from liability to the applicable Borrower to the extent of any direct
damages (as opposed to consequential damages, claims in respect of which are
hereby waived by the Borrowers to the extent permitted by applicable law)
suffered by the applicable Borrower that are caused by the Issuing Bank's
failure to exercise care when determining whether drafts and other documents
presented under a Letter of Credit comply with the terms thereof. The parties
hereto expressly agree that, in the absence of gross negligence or willful
misconduct on the part of the Issuing Bank (as finally determined by a court of
competent jurisdiction), the Issuing Bank shall be deemed to have exercised care
in each such determination. In furtherance of the foregoing and without limiting
the generality thereof, the parties agree that, with respect to documents
presented which appear on their face to be in substantial compliance with the
terms of a Letter of Credit, the Issuing Bank may, in its sole discretion,
either accept and make payment upon such documents without responsibility for
further investigation, regardless of any notice or information to the contrary,
or refuse to accept and make payment upon such documents if such documents are
not in strict compliance with the terms of such Letter of Credit.
(g) Disbursement Procedures. The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The Issuing Bank shall promptly
notify the Agent and the applicable Borrower by telephone (confirmed by
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telecopy) of such demand for payment and whether the Issuing Bank has made or
will make an LC Disbursement thereunder; but any failure to give or delay in
giving such notice shall not relieve the applicable Borrower of its obligation
to reimburse the Issuing Bank and the Lenders with respect to any such LC
Disbursement.
(h) Interim Interest. If the Issuing Bank shall make any LC
Disbursement, then, unless the applicable Borrower shall reimburse such LC
Disbursement in full on the date such LC Disbursement is made, the unpaid amount
thereof shall bear interest, for each day from and including the date such LC
Disbursement is made to but excluding the date that the applicable Borrower
reimburses such LC Disbursement, at the rate per annum then applicable to ABR
Loans; but if the applicable Borrower fails to reimburse such LC Disbursement
when due pursuant to paragraph (e) of this Section, then Section 2.11(c) shall
apply. Interest accrued pursuant to this paragraph shall be for the account of
the Issuing Bank, except that interest accrued on and after the date of payment
by any Lender pursuant to paragraph (e) of this Section to reimburse the Issuing
Bank shall be for the account of such Lender to the extent of such payment.
(i) Replacement of the Issuing Bank. The Issuing Bank may be
replaced at any time by written agreement among the Borrowers, the Agent, the
replaced Issuing Bank and the successor Issuing Bank. The Agent shall notify the
Lenders of any such replacement of the Issuing Bank. From and after the
effective date of any such replacement, (1) the successor Issuing Bank shall
have all the rights and obligations of the Issuing Bank under this Agreement
with respect to Letters of Credit to be issued thereafter and (2) references
herein to the term "Issuing Bank" shall be deemed to refer to such successor or
to any previous Issuing Bank, or to such successor and all previous Issuing
Banks, as the context shall require. After the replacement of an Issuing Bank
hereunder, the replaced Issuing Bank shall remain a party hereto and shall
continue to have all the rights and obligations of an Issuing Bank under this
Agreement with respect to Letters of Credit issued by it before such
replacement, but shall not be required to issue additional Letters of Credit.
(j) Cash Collateralization. If any Event of Default shall occur
and be continuing, on the Business Day that a Borrower receives notice from the
Agent or the Required Lenders (or, if the maturity of the Loans has been
accelerated, Lenders with LC Exposure representing greater than 66-2/3% of the
total LC Exposure) demanding the deposit of cash collateral pursuant to this
paragraph, such Borrower shall deposit in an account with the Agent, in the name
of the Agent and for the benefit of the Lenders, an amount in cash equal to the
LC Exposure attributable to such Borrower as of such date plus any accrued and
unpaid interest thereon; but the obligation to deposit such cash collateral
shall become effective immediately, and such deposit shall become immediately
due and payable, without demand or other notice of any kind, upon the occurrence
of any Event of Default described in clause (h) or (i) of Article VII. Each such
deposit shall be held by the Agent as collateral for the payment and performance
of the obligations of the applicable Borrower under this Agreement. The Agent
shall have exclusive dominion and control, including the exclusive right of
withdrawal, over such account. Other than any interest earned on the investment
of such deposits, which investments shall be made at the option and sole
discretion of the Agent and at the applicable Borrower's risk and expense, such
deposits shall not bear interest. Interest or profits, if any, on such
investments shall accumulate in such account. Moneys in such account shall be
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applied by the Agent to reimburse the Issuing Bank for LC Disbursements for
which it has not been reimbursed and, to the extent not so applied, shall be
held for the satisfaction of the reimbursement obligations of the applicable
Borrower for the LC Exposure at such time or, if the maturity of the Loans has
been accelerated (but subject to the consent of Lenders with LC Exposure
representing greater than 66-2/3% of the total LC Exposure), be applied to
satisfy other obligations of the applicable Borrower under this Agreement.
SECTION 2.05 Funding of Borrowings.
(a) Each Lender shall make each Loan to be made by it hereunder
on the proposed date thereof by wire transfer of immediately available funds by
1:00 p.m. to the account of the Agent most recently designated by it for such
purpose by notice to the Lenders. The Agent will make such Loans available to
the Borrowers by promptly crediting the amounts so received, in like funds, to
an account of the Borrowers maintained with the Agent and designated by the
Borrowers in the applicable Borrowing Request; but ABR Loans made to finance the
reimbursement of an LC Disbursement as provided in Section 2.04(e) shall be
remitted by the Agent to the Issuing Bank.
(b) Unless the Agent shall have received notice from a Lender
before the proposed date of any Borrowing that such Lender will not make
available to the Agent such Lender's share of such Borrowing, the Agent may
assume that such Lender has made such share available on such date in accordance
with paragraph (a) of this Section and may, in reliance upon such assumption,
make available to the Borrowers a corresponding amount. If a Lender has not in
fact made its share of the applicable Borrowing available to the Agent, then the
applicable Lender and the Borrowers severally agree to pay to the Agent
forthwith on demand such corresponding amount with interest thereon, for each
day from and including the date such amount is made available to the Borrowers
to but excluding the date of payment to the Agent, at (1) in the case of such
Lender, the greater of the Federal Funds Effective Rate and a rate determined by
the Agent in accordance with banking industry rules on interbank compensation
until the second Business Day after the date such amount was made available to
the Borrowers and thereafter at the Alternate Base Rate (in each case not to
exceed the Ceiling Rate); or (2) in the case of the Borrowers, the interest rate
applicable to ABR Loans. If such Lender pays such amount to the Agent, then such
amount shall constitute such Lender's Loan included in such Borrowing.
SECTION 2.06 Interest Elections.
(a) Each Loan initially shall be of the Type specified in the
applicable Borrowing Request and, in the case of a Eurodollar Borrowing, shall
have an initial Interest Period as specified in such Borrowing Request.
Thereafter, the Borrowers may elect to convert such Borrowing to a different
Type or to continue such Borrowing and, in the case of a Eurodollar Borrowing,
may elect Interest Periods therefor, all as provided in this Section. The
Borrowers may elect different options with respect to different portions of the
affected Borrowing, in which case each such portion shall be allocated ratably
among the Lenders holding the Loans comprising such Borrowing, and the Loans
comprising each such portion shall be considered a separate Borrowing.
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(b) To make an election pursuant to this Section, the Borrowers
shall notify the Agent of such election by telephone by the time that a
Borrowing Request would be required under Section 2.03 if the Borrowers were
requesting a Loan of the Type resulting from such election to be made on the
effective date of such election. Each such telephonic Interest Election Request
shall be irrevocable and shall be confirmed by hand delivery or telecopy to the
Agent on the same day as such telephonic request of a written Interest Election
Request in a form approved by the Agent and signed by the applicable Borrower.
(c) Each telephonic and written Interest Election Request shall
specify the following information:
(1) the Borrowing to which such Interest Election
Request applies and, if different options are being elected with respect to
different portions thereof, the portions thereof to be allocated to each
resulting Borrowing (in which case the information to be specified pursuant to
clauses (3) and (4) below shall be specified for each resulting Borrowing);
(2) the effective date of the election made pursuant to
such Interest Election Request, which shall be a Business Day;
(3) whether the resulting Borrowing is to be an ABR
Borrowing or a Eurodollar Borrowing; and
(4) if the resulting Borrowing is a Eurodollar
Borrowing, the Interest Period to be applicable thereto after giving effect to
such election, which shall be a period contemplated by the definition of the
term "Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the applicable Borrower shall be deemed to
have selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request,
the Agent shall advise each Lender of the details thereof and of such Lender's
portion of each resulting Borrowing.
(e) If the Borrowers fail to deliver a timely Interest Election
Request with respect to a Eurodollar Borrowing before the end of the Interest
Period applicable thereto, then, unless such Borrowing is repaid as provided
herein, at the end of such Interest Period such Borrowing shall be converted to
an ABR Borrowing. Notwithstanding any contrary provision hereof, if an Event of
Default has occurred and is continuing and the Agent, at the request of the
Required Lenders, so notifies the Borrowers, then, so long as an Event of
Default is continuing (1) no outstanding Borrowing may be converted to or
continued as a Eurodollar Borrowing and (2) unless repaid, each Eurodollar
Borrowing shall be converted to an ABR Borrowing at the end of the Interest
Period applicable thereto.
SECTION 2.07 Termination and Reduction of Commitments.
(a) Unless previously terminated, the Commitments shall terminate
on the Maturity Date.
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(b) The Borrowers may at any time terminate, or from time to time
reduce, the Commitments; but (1) each reduction of the Commitments shall be in
an amount that is an integral multiple of $500,000; (2) the Borrowers shall not
terminate or reduce the Commitments if, after giving effect to any concurrent
prepayment of the applicable Loans in accordance with Section 2.09, the sum of
the Revolving Exposures would exceed the total Commitments.
(c) The Borrowers shall notify the Agent of any election to
terminate or reduce the Commitments under paragraph (b) of this Section, at
least three Business Days before the effective date of such termination or
reduction, specifying such election and the effective date thereof. Promptly
following receipt of any notice, the Agent shall advise the Lenders of the
contents thereof. Each notice delivered by the Borrowers pursuant to this
Section shall be irrevocable; but a notice of termination of the Commitments
delivered by the Borrowers may state that such notice is conditioned upon the
effectiveness of other credit facilities, in which case such notice may be
revoked by the Borrowers (by notice to the Agent on or before the specified
effective date) if such condition is not satisfied. Any termination or reduction
of the Commitments shall be permanent. Each reduction of the Commitments shall
be made ratably among the Lenders in accordance with their respective
Commitments.
(d) If the Borrowers reduce or terminate the Commitments (1)
before the first anniversary of this Agreement, they shall pay the Agent for the
account of the Lenders, a fee equal to 1% of the Commitments so reduced or
terminated and (2) on or after the first anniversary of this Agreement but
before the second anniversary of this Agreement, they shall pay to the Agent,
for the account of the Lenders, a fee equal to 1/2% of the Commitments so
reduced or terminated; in each case, the reduction or termination of the
Commitments shall be contingent upon receipt of such fee.
SECTION 2.08 Repayment of Loans; Evidence of Debt.
(a) The Borrowers hereby jointly, severally and unconditionally
promise to pay to the Agent for the account of each Lender the then unpaid
principal amount of each Loan of such Lender on the Maturity Date.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Borrowers to
such Lender resulting from each Loan made by such Lender, including the amounts
of principal and interest payable and paid to such Lender from time to time
hereunder.
(c) The Agent shall maintain accounts in which it shall record
(1) the amount of each Loan made hereunder, the Type thereof and the Interest
Period applicable thereto; (2) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder;
and (3) the amount of any sum received by the Agent hereunder for the account of
the Lenders and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) and (c) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; but the failure of
any Lender or the Agent to maintain such accounts or any error therein shall not
in any manner affect the obligation of the Borrowers to repay the Loans in
accordance with the terms of this Agreement.
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SECTION 2.09 Prepayment of Loans.
(a) The Borrowers shall have the right at any time and from time
to time to prepay any Borrowing in whole or in part, subject to the requirements
of this Section.
(b) The Borrowers shall notify the Agent by telephone (confirmed
by telecopy) of any prepayment hereunder (1) in the case of prepayment of a
Eurodollar Loan, not later than 12:00 noon three Business Days before the date
of prepayment; or (2) in the case of prepayment of an ABR Loan, not later than
12:00 noon one Business Day before the date of prepayment. Each such notice
shall be irrevocable and shall specify the prepayment date, the principal amount
of each Borrowing or portion thereof to be prepaid; but if a notice of optional
prepayment is given in connection with a conditional notice of termination of
the Commitments as contemplated by Section 2.07, then such notice of prepayment
may be revoked if such notice of termination is revoked in accordance with
Section 2.07. Promptly following receipt of any such notice, the Agent shall
advise the Lenders of the contents thereof. Each partial prepayment of any
Borrowing shall be in an amount equal to $100,000 or an increment of $25,000 in
excess thereof.
(c) Notwithstanding the foregoing provisions of this Section, if
the aggregate Revolving Exposure ever exceeds the aggregate Available
Commitment, then a prepayment on the Loans shall be immediately due and payable
in the amount of such excess (or the aggregate amount of the Loans, if less).
SECTION 2.10 Fees.
(a) The Borrowers jointly and severally agree to pay to the Agent
for the account of each Lender a commitment fee, which shall accrue at the
Applicable Margin on the average daily unused amount of the Commitment of such
Lender during the period from and including the date hereof to but excluding the
date on which such Commitment terminates. Accrued commitment fees shall be
payable in arrears on the first day of January, April, July and October of each
year and on the date on which the applicable Commitments terminate, commencing
on the first such date to occur after the date hereof. All commitment fees shall
be computed on the basis of a year of 360 days and shall be payable for the
actual number of days elapsed (including the first day but excluding the last
day).
(b) Each Borrower requesting a Letter of Credit hereunder agrees
to pay (1) to the Agent for the account of each Lender a participation fee with
respect to its participation in each Letters of Credit requested by such
Borrower, which shall accrue at the same Applicable Margin as used to determine
the interest rate applicable to Eurodollar Loans on the average daily amount of
such Lender's applicable LC Exposure (excluding any portion thereof attributable
to applicable unreimbursed LC Disbursements) during the period from and
including the date of issuance of such Letter of Credit to but excluding its
expiring date, such participation fee to be due and payable on the date of
issuance of such Letter of Credit and every six months thereafter (but the
aggregated of all participation fees paid upon the issuance of any Letter of
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Credit shall be at least $750); and (2) to the Issuing Bank its standard fees
with respect to the amendment, renewal or extension of any Letter of Credit or
processing of drawings thereunder. All participation fees shall be computed on
the basis of a year of 360 days and shall be payable for the actual number of
days elapsed (including the first day but excluding the last day).
(c) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Agent (or to the Issuing Bank, in the case
of fees payable to it) for distribution, in the case of commitment fees and
participation fees, to the Lenders entitled thereto. Fees paid shall not be
refundable under any circumstances, absent manifest error in the calculation or
assessment of such fees.
SECTION 2.11 Interest.
(a) The Loans comprising each ABR Borrowing shall bear interest
at the lesser of (1) the Alternate Base Rate plus the Applicable Margin or (2)
the Ceiling Rate.
(b) The Loans comprising each Eurodollar Borrowing shall bear
interest at the lesser of (1) the Adjusted LIBO Rate for the Interest Period in
effect for such Borrowing plus the Applicable Margin or (2) the Ceiling Rate.
(c) Notwithstanding the foregoing, if any principal of or
interest on any Loan or any fee or other amount payable by either Borrower
hereunder is not paid when due, whether at stated maturity, upon acceleration or
otherwise, such overdue amount shall bear interest, after as well as before
judgment, at a rate per annum equal to the lesser of (1) the Ceiling Rate or (2)
in the case of overdue principal of any Loan, 2% plus the rate otherwise
applicable to such Loan as provided in the preceding paragraphs of this Section
or in the case of any other amount, 2% plus the rate applicable to ABR Loans as
provided in paragraph (a) of this Section.
(d) Accrued interest on each Loan shall be payable in arrears on
each Interest Payment Date for such Loan and upon termination of the
Commitments; but (1) interest accrued pursuant to paragraph (c) of this Section
shall be payable on demand; (2) in the event of any repayment or prepayment of
any Loan (other than a prepayment of an ABR Loan before the end of the Revolving
Availability Period), accrued interest on the principal amount repaid or prepaid
shall be payable on the date of such repayment or prepayment; and (3) in the
event of any conversion of any Eurodollar Loan before the end of the current
Interest Period therefor, accrued interest on such Loan shall be payable on the
effective date of such conversion.
(e) All interest hereunder shall be computed on the basis of a
year of 360 days, except that interest computed by reference to the Prime Rate
shall be computed on the basis of a year of 365 days (or 366 days in a leap
year), and in each case shall be payable for the actual number of days elapsed
(including the first day but excluding the last day). The applicable Alternate
Base Rate or Adjusted LIBO Rate shall be determined by the Agent, and such
determination shall be conclusive absent manifest error.
SECTION 2.12 Alternate Rate of Interest. If before the commencement of
any Interest Period for a Eurodollar Borrowing:
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(a) the Agent determines (which determination shall be conclusive
absent manifest error) that adequate and reasonable means do not exist for
ascertaining the Adjusted LIBO Rate for such Interest Period; or
(b) the Agent is advised by the Required Lenders that the
Adjusted LIBO Rate for such Interest Period will not adequately and fairly
reflect the cost to such Lenders (or Lender) of making or maintaining their
Loans (or its Loan) included in such Borrowing for such Interest Period;
then the Agent shall give notice thereof to the Borrowers and the Lenders by
telephone or telecopy as promptly as practicable thereafter and, until the Agent
notifies the Borrowers and the Lenders that the circumstances giving rise to
such notice no longer exist, (1) any Interest Election Request that requests the
conversion of any Borrowing to, or continuation of any Borrowing as, a
Eurodollar Borrowing shall be ineffective and (2) if any Borrowing Request
requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR
Borrowing; but if the circumstances giving rise to such notice affect only one
Type of Borrowings, then the other Type of Borrowings shall be permitted.
SECTION 2.13 Increased Costs.
(a) If any Change in Law shall:
(1) impose, modify or deem applicable any reserve,
special deposit or similar requirement against assets of, deposits with or for
the account of, or credit extended by, any Lender (except any such reserve
requirement reflected in the Adjusted LIBO Rate) or the Issuing Bank; or
(2) impose on any Lender or the Issuing Bank or the
London interbank market any other condition affecting this Agreement or
Eurodollar Loans made by such Lender or any Letter of Credit or participation
therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or the
Issuing Bank of participating in, issuing or maintaining any Letter of Credit or
to reduce the amount of any sum received or receivable by such Lender or the
Issuing Bank hereunder (whether of principal, interest or otherwise), then the
Borrowers will pay to such Lender or the Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or the Issuing Bank,
as the case may be, for such additional costs incurred or reduction suffered.
(b) If any Lender or the Issuing Bank determines that any Change
in Law regarding capital requirements has or would have the effect of reducing
the rate of return on such Lender's or the Issuing Bank's capital or on the
capital of such Lender's or the Issuing Bank's holding company, if any, as a
consequence of this Agreement or the Loans made by, or participations in Letters
of Credit held by, such Lender, or the Letters of Credit issued by the Issuing
Bank, to a level below that which such Lender or the Issuing Bank or such
Lender's or the Issuing Bank's holding company could have achieved but for such
Change in Law (taking into consideration such Lender's or the Issuing Bank's
policies and the policies of such Lender's or the Issuing Bank's holding company
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with respect to capital adequacy), then from time to time the applicable
Borrower will pay to such Lender or the Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or the Issuing Bank
or such Lender's or the Issuing Bank's holding company for any such reduction
suffered.
(c) A certificate of a Lender or the Issuing Bank setting forth
the amount or amounts necessary to compensate such Lender or the Issuing Bank or
its holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section shall be delivered to the Borrowers and shall be conclusive absent
manifest error. The Borrowers shall pay such Lender or the Issuing Bank, as the
case may be, the amount shown as due on any such certificate within ten days
after receipt thereof.
(d) Failure or delay on the part of any Lender or the Issuing
Bank to demand compensation pursuant to this Section shall not constitute a
waiver of such Lender's or the Issuing Bank's right to demand such compensation;
but neither Borrower shall be required to compensate a Lender or the Issuing
Bank pursuant to this Section for any increased costs or reductions incurred
more than 180 days before the date that such Lender or the Issuing Bank, as the
case may be, notifies the applicable Borrower of the Change in Law giving rise
to such increased costs or reductions and of such Lender's or the Issuing Bank's
intention to claim compensation therefor; provided further that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then
the 180-day period referred to above shall be extended to include the period of
retroactive effect thereof.
SECTION 2.14 Break Funding Payments. In the event of (a) the payment
of any principal of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default); (b) the conversion of any Eurodollar Loan other than on the last day
of the Interest Period applicable thereto; (c) the failure to borrow, convert,
continue or prepay any Eurodollar Loan on the date specified in any notice
delivered pursuant hereto (regardless of whether such notice may be revoked and
is revoked in accordance with the terms of this Agreement), or (d) the
assignment of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto as a result of a request by a Borrower pursuant to
Section 2.17, then, in any such event, the Borrowers shall compensate each
Lender for the loss, cost and expense attributable to such event. Such loss,
cost or expense to any Lender shall be deemed to include an amount determined by
such Lender to be the excess, if any, of (x) the amount of interest which would
have accrued on the principal amount of such Loan had such event not occurred,
at the Adjusted LIBO Rate that would have been applicable to such Loan, for the
period from the date of such event to the last day of the then current Interest
Period therefor (or, in the case of a failure to borrow, convert or continue,
for the period that would have been the Interest Period for such Loan), over (y)
the amount of interest which would accrue on such principal amount for such
period at the interest rate which such Lender would bid were it to bid, at the
commencement of such period, for Dollar deposits of a comparable amount and
period from other banks in the eurodollar market. A certificate of any Lender
setting forth any amount or amounts that such Lender is entitled to receive
pursuant to this Section shall be delivered to the Borrowers and shall be
conclusive, absent manifest error. The Borrowers shall pay such Lender the
amount shown as due on any such certificate within ten days after receipt
thereof.
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SECTION 2.15 Taxes.
(a) Any and all payments by or on account of any obligation of
either Borrower hereunder or under any other Loan Document shall be made free
and clear of and without deduction for any Indemnified Taxes or Other Taxes; but
if Borrower shall be required to deduct any Indemnified Taxes or Other Taxes
from such payments, then (1) the sum payable shall be increased as necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Agent, Lender or Issuing Bank
(as the case may be) receives an amount equal to the sum it would have received
had no such deductions been made; (2) the Borrowers shall make such deductions;
and (3) the Borrowers shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.
(b) In addition, each Borrower shall pay any applicable Other
Taxes to the relevant Governmental Authority in accordance with applicable law.
(c) Each Borrower shall indemnify the Agent, each Lender and the
Issuing Bank, within ten days after written demand therefor, for the full amount
of any applicable Indemnified Taxes or applicable Other Taxes paid by the Agent,
such Lender or the Issuing Bank, as the case may be, on or with respect to any
payment by or on account of any obligation of either Borrower hereunder or under
any other Loan Document (including Indemnified Taxes or Other Taxes imposed or
asserted on or attributable to amounts payable under this Section) and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. A
certificate as to the amount of such payment or liability delivered to the
applicable Borrower by a Lender or the Issuing Bank, or by the Agent on its own
behalf or on behalf of a Lender or the Issuing Bank, shall be conclusive absent
manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes
or Other Taxes by either Borrower to a Governmental Authority, such Borrower
shall deliver to the Agent the original or a certified copy of a receipt issued
by such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Agent.
(e) Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which the
Borrowers are located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Borrowers (with a
copy to the Agent), at the time or times prescribed by applicable law, such
properly completed and executed documentation prescribed by applicable law or
reasonably requested by the Borrowers as will permit such payments to be made
without withholding or at a reduced rate.
(f) If the Agent or a Lender determines, in its sole discretion,
that it has received a refund of any Taxes or Other Taxes or "gross-up" payment
as to which it has been indemnified by a Borrower or with respect to which a
Borrower has paid additional amounts pursuant to this Section, it shall pay over
such refund to the applicable Borrower (but only to the extent of indemnity
payments made, or additional amounts paid, by the applicable Borrower under this
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Section with respect to the Taxes or Other Taxes giving rise to such refund),
net of all out-of-pocket expenses of the Agent or such Lender and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund); but the applicable Borrower, upon the request of
the Agent or such Lender, agrees to repay the amount paid over to such Borrower
(plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) to the Agent or such Lender in the event the Agent or
such Lender is required to repay such refund to such Governmental Authority.
This Section shall not be construed to require the Agent or any Lender to make
available its tax returns (or any other information relating to its taxes which
it deems confidential) to either Borrower or any other Person.
SECTION 2.16 Payments Generally; Pro Rata Treatment; Sharing of
Set-offs.
(a) Each Borrower shall make each payment required to be made by
it hereunder or under any other Loan Document (whether of principal, interest,
fees or reimbursement of LC Disbursements, or of amounts payable under Section
2.13, 2.14 or 2.15, or otherwise) before the time expressly required hereunder
or under such other Loan Document for such payment (or, if no such time is
expressly required, before 1:00 p.m.), on the date when due, in immediately
available funds, without set off, deduction or counterclaim. Any amounts payable
to the Agent that are received after such time on any date may, in the
discretion of the Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Agent at its offices at One Shell Plaza, 910 Louisiana
Street, Suite 410, Houston, Xxxxxx Xxxxxx, Xxxxx 00000 except payments to be
made directly to the Issuing Bank as expressly provided herein and except that
payments pursuant to Sections 2.13, 2.14, 2.15 and 9.03 shall be made directly
to the Persons entitled thereto and payments pursuant to other Loan Documents
shall be made to the Persons specified therein. The Agent shall distribute any
such payments received by it for the account of any other Person to the
appropriate recipient promptly following receipt thereof. If any payment under
any Loan Document shall be due on a day that is not a Business Day, the date for
payment shall be extended to the next succeeding Business Day, and, in the case
of any payment accruing interest, interest thereon shall be payable for the
period of such extension. All payments under each Loan Document shall be made in
Dollars.
(b) If at any time insufficient funds are received by and
available to the Agent to pay fully all amounts of principal, unreimbursed LC
Disbursements, interest and fees then due hereunder, such funds shall be applied
(1) first, towards payment of interest and fees then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of interest
and fees then due to such parties, and (2) second, towards payment of principal
and unreimbursed LC Disbursements then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal and unreimbursed LC
Disbursements then due to such parties.
(c) If any Lender shall, by exercising any right of set off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Loans or participations in LC Disbursements, resulting in
such Lender receiving payment of a greater proportion of the aggregate amount of
its Loans and participations in LC Disbursements and accrued interest thereon
than the proportion received by any other Lender, then the Lender receiving such
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greater proportion shall purchase (for cash at face value) participations in the
Loans and participations in LC Disbursements of other Lenders to the extent
necessary so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Loans and participations in LC
Disbursements; but (1) if any such participations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations
shall be rescinded and the purchase price restored to the extent of such
recovery, without interest, and (2) the provisions of this paragraph shall not
be construed to apply to any payment made by either Borrower pursuant to and in
accordance with the express terms of this Agreement or any payment obtained by a
Lender as consideration for the assignment of or sale of a participation in any
of its Loans or participations in LC Disbursements to any assignee or
participant, other than to a Borrower or any of their Subsidiaries or any of
their Affiliates (as to which the provisions of this paragraph shall apply).
Each Lender agrees that it will not exercise any right of set-off or
counterclaim or otherwise obtain payment in respect of any Obligation owed to it
other than principal of and interest accruing on the Loans and participations in
the LC Disbursements, unless all of the outstanding principal of and accrued
interest on the Loans and LC Disbursements have been paid in full. Each Borrower
consents to the foregoing and agrees, to the extent it may effectively do so
under applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against the applicable Borrower rights of
set-off and counterclaim with respect to such participation as fully as if such
Lender were a direct creditor of the applicable Borrower in the amount of such
participation.
(d) Unless the Agent shall have received notice from a Borrower
before the date on which any payment is due to the Agent for the account of the
Lenders or the Issuing Bank hereunder that such Borrower will not make such
payment, the Agent may assume that such Borrower has made such payment on such
date in accordance herewith and may, without obligation, in reliance upon such
assumption, distribute to the Lenders or the Issuing Bank, as the case may be,
the amount due. If the applicable Borrower has not in fact made such payment
when due, then each of the Lenders or the Issuing Bank, as the case may be,
severally agrees to repay to the Agent forthwith on demand the amount so
distributed to such Lender or Issuing Bank with interest thereon, for each day
from and including the date such amount is distributed to it to but excluding
the date of payment to the Agent, at the greater of the Federal Funds Effective
Rate and a rate determined by the Agent in accordance with banking industry
practices on interbank compensation.
(e) If any Lender shall fail to make any payment required to be
made by it pursuant to this Agreement, then the Agent may, in its discretion
(notwithstanding any contrary provision hereof), apply any amounts thereafter
received by the Agent for the account of such Lender to satisfy such Lender's
obligations hereunder until all such unsatisfied obligations are fully paid.
SECTION 2.17 Mitigation Obligations; Replacement of Lenders.
(a) If any Lender requests compensation under Section 2.13, or if
a Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.15,
then such Lender shall use reasonable efforts to designate a different lending
office for funding or booking its Loans hereunder or to assign its rights and
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obligations hereunder to another of its offices, branches or Affiliates, if, in
the judgment of such Lender, such designation or assignment (1) would eliminate
or reduce amounts payable pursuant to Section 2.13 or 2.15, as the case may be,
in the future and (2) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Borrowers
hereby agree to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.
(b) If any Lender requests compensation under Section 2.13, or if
a Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.15,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Borrowers may, at their sole expense and effort, upon notice to such Lender and
the Agent, require such Lender to assign and delegate, without recourse (in
accordance with and subject to the restrictions contained in Section 9.04,
including Section 9.04(f)), all its interests, rights and obligations under this
Agreement to an assignee that shall assume such obligations (which assignee may
be another Lender, if a Lender accepts such assignment); but (1) the applicable
Borrower shall have received the prior written consent of the Agent, which
consent shall not unreasonably be withheld; (2) such assignor Lender shall have
received payment of an amount equal to the outstanding principal of its Loans
and participations in LC Disbursements, accrued interest thereon, accrued fees
and all other amounts payable to it hereunder, from the assignee (to the extent
of such outstanding principal and accrued interest and fees) or the Borrowers
(in the case of all other amounts); and (3) in the case of any such assignment
resulting from a claim for compensation under Section 2.13 or payments required
to be made pursuant to Section 2.15, such assignment will result in a reduction
in such compensation or payments. A Lender shall not be required to make any
such assignment and delegation if, prior thereto, as a result of a waiver by
such Lender or otherwise, the circumstances entitling the Borrowers to require
such assignment and delegation cease to apply.
SECTION 2.18 Defaulting Lender.
(a) Notwithstanding anything to the contrary contained herein, in
the event any Lender (x) has refused (which refusal constitutes a breach by such
Lender of its obligations under this Agreement) to make available its portion of
any Loan or (y) notifies either the Agent or either Borrower that such Lender
does not intend to make available its portion of any Loan (if the actual refusal
would constitute a breach by such Lender of its obligations under this
Agreement) (each, a "Lender Default"), all rights and obligations hereunder of
such Lender (a "Defaulting Lender") as to which a Lender Default is in effect
and of the other parties hereto shall be modified to the extent of the express
provisions of this Section while such Lender Default remains in effect.
(b) Loans shall be made pro rata by Lenders (the "Non-Defaulting
Lenders") which are not Defaulting Lenders (based on their respective
Commitments) and no Commitment of any Lender or any pro rata share of any Loans
required to be advanced by any Lender shall be increased as a result of such
Lender Default. Amounts received in respect of principal of any type of Loans
shall be applied to reduce the applicable Loans of each Lender pro rata based on
the aggregate of the outstanding Loans of that type of all Lenders at the time
of such application; but such amount shall not be applied to any Loans of a
Defaulting Lender at any time when, and to the extent that, the aggregate amount
of Loans of any Non-Defaulting Lender exceeds such Non-Defaulting Lender's
Commitment of all Loans then outstanding.
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(c) A Defaulting Lender shall not be entitled to give
instructions to the Agent or to approve, disapprove, consent to or vote on any
matters relating to this Agreement and the other Loan Documents. All amendments,
waivers and other modifications of this Agreement and the other Loan Documents
may be made without regard to a Defaulting Lender and, for purposes of the
definition of "Required Lenders," a Defaulting Lender shall be deemed not to be
a Lender and not to have Loans outstanding.
(d) Other than as expressly set forth in this Section, the rights
and obligations of a Defaulting Lender (including the obligation to indemnify
the Agent) and the other parties hereto shall remain unchanged. Nothing in this
Section shall (1) be deemed to release any Defaulting Lender from its
obligations under this Agreement and the other Loan Documents; (2) alter such
obligations; (3) operate as a waiver of any default by such Defaulting Lender
hereunder; or (4) prejudice any rights which either Borrower, the Agent or any
Lender may have against any Defaulting Lender as a result of any default by such
Defaulting Lender hereunder.
(e) In the event a Defaulting Lender retroactively cures to the
satisfaction of the Agent the breach which caused a Lender to become a
Defaulting Lender, such Defaulting Lender shall no longer be a Defaulting Lender
and shall be treated as a Lender under this Agreement and the other Loan
Documents.
SECTION 2.19 Obligations Joint. The obligations of the Borrowers
under the Loan Documents are joint and several. In particular, while one
Borrower may request the issuance of a Letter of Credit and execute a letter of
credit application or agreement in connection therewith, the obligations of the
Borrowers with respect to such Letter of credit are joint and several. If it is
at any time determined that either Borrower is liable as a guarantor (and not as
a co-obligor or co-borrower) with respect to any portion of the Obligations
(with respect to such Borrower, its "Guaranteed Obligations"), such Borrower
herby waives (a) all suretyship defenses to such Guaranteed Obligations, except
the defense of payment in full, and (b) all rights of subrogations until all of
the Obligations have been paid in full.
ARTICLE III
Representations and Warranties
------------------------------
The Borrowers represent and warrant to the Lenders that:
SECTION 3.01 Organization; Powers. Each of the Borrowers and their
Material Subsidiaries (a) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization; (b) has all
requisite power and authority to carry on its business as now conducted; and (c)
except where the failure to do so would not reasonably be expected to result in
a Material Adverse Effect, is qualified to do business in, and is in good
standing in, every jurisdiction where such qualification is required.
SECTION 3.02 Authorization; Enforceability. The Transactions to be
entered into by each Borrower are within such Borrower's powers and have been
duly authorized by all necessary action. This Agreement has been duly executed
and delivered by the Borrowers and constitutes, and each other Loan Document to
which any
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Borrower or any material subsidiary is to be a party, when executed and
delivered by such Borrower or Material Subsidiary, will constitute, a legal,
valid and binding obligation of such Borrower or Material Subsidiary,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors' rights
generally and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law.
SECTION 3.03 Governmental Approvals; No Conflicts. The Transactions
(a) do not require any material consent or approval of, registration or filing
with, or any other action by, any Governmental Authority, except such as have
been obtained or made and are in full force and effect; (b) will not violate any
applicable law or regulation or the charter, by-laws or other organizational
documents of any Borrower or any of their Material Subsidiaries or any order of
any Governmental Authority; (c) will not violate or result in a default under
any material indenture, agreement or other instrument binding upon either
Borrower or any of their Material Subsidiaries or their assets, or give rise to
a right thereunder to require any payment to be made by either Borrower or any
of their Material Subsidiaries; and (d) except as expressly contemplated by the
Security Documents, will not result in the creation or imposition of any Lien on
any asset of either Borrower or any of their Material Subsidiaries.
SECTION 3.04 Financial Condition. The Parent has heretofore furnished
its consolidated balance sheet and statements of operations, stockholders'
equity and cash flows as of and for the fiscal years ended December 31, 2001 and
December 31, 2002, reported on by Ernst & Young, independent public accountants,
to the Agent. The Parent has also furnished its consolidated balance sheet and
statements of operations and cash flows as of and for the fiscal quarter ended
March 31, 2003, certified by the chief financial officer of the Parent, to the
Agent. Such financial statements present fairly, in all material respects, the
financial position and results of operations and cash flows of the Parent and
its consolidated Subsidiaries as of such dates and for such periods in
accordance with GAAP, subject to year-end audit adjustments and the absence of
footnotes in the case of the March 31, 2003 statements referred to above. Since
December 31, 2002, there has been no material adverse change in the business,
assets, operations, prospects or condition, financial or otherwise, of the
Parent and its Subsidiaries, taken as a whole.
SECTION 3.05 Properties.
(a) Each of the Borrowers and their Material Subsidiaries has
good title to, or valid leasehold interests in, all its real and personal
property material to its business, except for minor defects in title that do not
interfere with its ability to conduct its business as currently conducted or to
use such properties for their intended purposes.
(b) Each of the Borrowers and their Material Subsidiaries owns,
or is licensed to use, all trademarks, tradenames, copyrights, patents and other
intellectual property material to its business, and the use thereof by the
Borrowers and their Material Subsidiaries does not infringe upon the rights of
any other Person.
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SECTION 3.06 Litigation and Environmental Matters.
(a) There are no actions, suits or proceedings by or before any
arbitrator or Governmental Authority pending against or, to the knowledge of
Borrower, threatened against or affecting Borrower or any of their Material
Subsidiaries (1) as to which, in the reasonable judgment of the Borrowers, there
is a reasonable possibility of an adverse determination and that, if adversely
determined, could reasonably be expected to result in a Material Adverse Effect
or (2) that involve any of the Loan Documents or the Transactions.
(b) None of the Borrowers or their Material Subsidiaries (1) has
failed to comply with any Environmental Law or to obtain, maintain or comply
with any permit, license or other approval required under any Environmental Law;
(2) has become subject to any Environmental Liability; (3) has received notice
of any claim with respect to any Environmental Liability; or (4) knows of any
basis for any Environmental Liability.
SECTION 3.07 Compliance with Laws and Agreements. Each of the
Borrowers and their Material Subsidiaries is in compliance with all material
laws, regulations and orders of any Governmental Authority applicable to it or
its property and all indentures, agreements and other instruments binding upon
it or its property. No Default has occurred and is continuing.
SECTION 3.08 Investment and Holding Company Status. None of the
Borrowers or their Material Subsidiaries is (a) an "investment company" as
defined in, or subject to regulation under, the Investment Company Act of 1940
or (b) a "holding company" as defined in, or subject to regulation under, the
Public Utility Holding Company Act of 1935.
SECTION 3.09 Taxes. Each of the Borrowers and their Material
Subsidiaries has timely filed or caused to be filed all Tax returns and reports
required to have been filed and has paid or caused to be paid all Taxes required
to have been paid by it, except Taxes that are being contested in good faith by
appropriate proceedings and for which the applicable Borrower or Material
Subsidiary, as applicable, has set aside on its books adequate reserves.
SECTION 3.10 ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed the fair
market value of the assets of such Plan, and the present value of all
accumulated benefit obligations of all underfunded Plans (based on the
assumptions used for purposes of Statement of Financial Accounting Standards No.
87) did not, as of the date of the most recent financial statements reflecting
such amounts, exceed the fair market value of the assets of all such underfunded
Plans, in each of such cases so as to cause a Material Adverse Effect.
SECTION 3.11 Disclosure. Each of the Borrowers has disclosed to the
Lenders all agreements, instruments and corporate or other restrictions to which
such Borrower or any of its Material Subsidiaries is subject, and all other
matters known to the Borrowers, that could reasonably be expected to result in a
Material Adverse Effect. None of the reports, financial statements, certificates
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or other information furnished by or on behalf of either Borrower to the Agent
or any Lender in connection with the negotiation of this Agreement or any other
Loan Document or delivered hereunder or thereunder (as modified or supplemented
by other information so furnished) contains any material misstatement of fact or
omits to state any material fact necessary to make the statements therein, taken
as a whole, in the light of the circumstances under which they were made, not
misleading.
ARTICLE IV
Conditions
----------
SECTION 4.01 Effective Date. The obligations of the Lenders to make
Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not
become effective until the date on which each of the following conditions is
satisfied (or waived in accordance with Section 9.02):
(a) The Agent (or its counsel) shall have received from each
party hereto either (1) counterparts of this Agreement signed on behalf of such
party or (2) written evidence satisfactory to the Agent (which may include
telecopy transmission of a signed signature page of this Agreement) that such
party has signed counterparts of this Agreement.
(b) The Agent (or its counsel) shall have received from the
Borrowers an original of each applicable Note, signed on behalf of the
Borrowers.
(c) The Agent (or its counsel) shall have received from Borrowers
and from each other party to the Loan Documents (other than the Notes) either
(1) counterparts of each applicable Loan Document signed on behalf of such party
or (2) written evidence satisfactory to the Agent (which may include telecopy
transmission of a signed signature page of the applicable Loan Document) that
such party has signed counterparts of such Loan Document.
(d) The Agent shall have received written opinions (addressed to
the Agent and the Lenders and dated the Effective Date) of counsel for the
Borrowers, in form and substance satisfactory to the Agent and its counsel,
covering such other matters relating to the Borrowers, the Material
Subsidiaries, the Loan Documents and the Transactions as the Required Lenders
shall reasonably request.
(e) The Agent shall have received such documents and certificates
as the Agent or its counsel may reasonably request relating to the organization,
existence and good standing of each Borrower, each Material Subsidiary, the
authorization of the Transactions and any other legal matters relating to the
Borrowers, the Material Subsidiaries, the Loan Documents or the Transactions,
all in form and substance satisfactory to the Agent and its counsel.
(f) The Agent shall have received a certificate, dated the
Effective Date and signed by the President, a Vice President or a Financial
Officer of each Borrower, confirming compliance with the conditions set forth in
paragraphs (a), (b) and (c) of Section 4.02.
(g) The Agent shall have received all fees and other amounts due
and payable on or before the Effective Date, including, to the extent invoiced,
reimbursement or payment of all out of pocket expenses (including fees, charges
and disbursements of counsel) required to be reimbursed or paid by either
Borrower hereunder or under any other Loan Document.
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(h) The Agent shall have received evidence satisfactory to it
that the existing credit facilities of the Borrowers (under a credit agreement
dated as of December 28, 2000, as amended) shall have been terminated.
(i) The Agent shall have received an appraisal, in form and
substance satisfactory to the Agent, of the Compressors by an appraiser
satisfactory to the Agent.
The Agent shall notify the Borrowers and the Lenders of the Effective Date, and
such notice shall be conclusive and binding.
SECTION 4.02 Each Credit Event. The obligation of each Lender to make
a Loan on the occasion of any Borrowing, and of the Issuing Bank to issue,
amend, renew or extend any Letter of Credit, is subject to receipt of the
request therefor in accordance herewith and to the satisfaction of the following
conditions:
(a) The representations and warranties of each Borrower and the
Material Subsidiaries set forth in the Loan Documents shall be true and correct
in all material respects on and as of the date of such Borrowing or the date of
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable.
(b) At the time of and immediately after giving effect to such
Borrowing or the issuance, amendment, renewal or extension of such Letter of
Credit, as applicable, no Default shall have occurred and be continuing and
there shall have occurred no event which would be reasonably likely to have a
Material Adverse Effect.
(c) At the time of such Borrowing, the Utilization Rate is at
least 70%.
Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in paragraphs (a) and
(b) of this Section.
ARTICLE V
Affirmative Covenants
---------------------
Until the Commitments have expired or been terminated and the principal
of and interest on each Loan and all fees payable hereunder shall have been paid
in full and all Letters of Credit shall have expired or terminated and all LC
Disbursements shall have been reimbursed, the Borrowers covenant and agree with
the Lenders that:
SECTION 5.01 Financial Statements and Other Information. The Borrowers
will furnish to the Agent and each Lender:
(a) within 90 days after the end of each fiscal year, (1) the
Parent's audited consolidated balance sheet and related statements of
operations, stockholders' equity and cash flows as of the end of and for such
year, setting forth in each case in comparative form the figures for the
previous fiscal year, all reported on by public accountants of recognized
national standing (without a "going concern" or like qualification or exception
and without any qualification or exception as to the scope of such audit) to the
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effect that such consolidated financial statements present fairly in all
material respects the financial condition and results of operations of the
Parent and its consolidated Subsidiaries on a consolidated basis in accordance
with GAAP consistently applied, and (2) Parent's financial projections (in
format similar to those previously presented to the Agent) of the Parent for its
current fiscal year;
(b) concurrently with any delivery of financial statements under
clause (a)(1) above, a certificate of the accounting firm that reported on such
financial statements stating whether they obtained knowledge during the course
of their examination of such financial statements of any Default (which
certificate may be limited to the extent required by accounting rules or
guidelines);
(c) within 30 days after the end of each month, the Parent's
unaudited (1) consolidated balance sheets as of the end of such month; (2)
related statements of operations for such month and the fiscal year to date, and
(3) related statements of cash flows for the month then ended and the fiscal
year to date, in each case setting forth in comparative form the figures for the
corresponding period of the previous fiscal year. The monthly financial
statements shall be accompanied by (x) an ageing of accounts receivable and
accounts payable of the Parent and its Subsidiaries and (y) an inventory report,
each as of month-end and in format similar to those previously presented to the
Agent, and (z) a Borrowing Base Report substantially in the form of Exhibit D or
such other format as the Agent may require. The monthly financial statements
shall be accompanied by a Certificate of No Default substantially in the form of
Exhibit C and, if any change in GAAP or in the application thereof has occurred
since the date of the audited financial statements referred to in Section 3.04
which affects the financial statements accompanying such certificate, a
statement specifying the effect of such change on such financial statements;
(d) promptly after the same become publicly available, copies of
each Form 10-Q and Form 10-K filed by the Parent with the Securities and
Exchange Commission or with any Governmental Authority succeeding to any or all
of the functions of said Commission;
(e) within 30 days after the Agent's request therefor (and the
Agent may make such request once during every calendar year [and at any time an
Event of Default has occurred and is continuing]), a desktop appraisal of the
Compressor Inventory, to be made by an appraiser reasonably acceptable to the
Agent and at the Borrower's expense; and
(f) promptly following any request therefore, such other
information regarding the operations, business affairs and financial condition
of either Borrower or any of their Subsidiaries, or compliance with the terms of
this Agreement, as the Agent or any Lender may reasonably request.
SECTION 5.02 Notices of Material Events. The Borrowers will, promptly
after becoming aware of the same, furnish to the Agent and each Lender written
notice of the following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding
by or before any arbitrator or Governmental Authority against or affecting
either Borrower or any of their Affiliates that, if adversely determined, could
reasonably be expected to result in a Material Adverse Effect;
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(c) the occurrence of any ERISA Event that, alone or together
with any other ERISA Events that have occurred, results in, or could reasonably
be expected to result in, a Material Adverse Effect; or
(d) any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement
setting forth the details of the event or development requiring such notice and
any action taken or proposed to be taken with respect thereto.
SECTION 5.03 Existence; Conduct of Business. The Borrowers will, and
will cause each of their Subsidiaries to, do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges and franchises material
to the conduct of its business; but the foregoing shall not prohibit any merger,
consolidation, liquidation or dissolution permitted under Section 6.03.
SECTION 5.04 Payment of Obligations. The Borrowers will, and will
cause each of their Subsidiaries to, pay its obligations, including Tax
liabilities before the same shall become delinquent or in default, except where
(a) the validity or amount thereof is being contested in good faith by
appropriate proceedings; (b) a Borrower or its applicable Subsidiary has set
aside on its books adequate reserves with respect thereto in accordance with
GAAP, and (c) the failure to make payment pending such contest could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 5.05 Maintenance of Properties; Insurance. Each Borrower
will, and will cause each of its Subsidiaries to, (a) keep and maintain all
property material to the conduct of its business in good working order and
condition, ordinary wear and tear excepted, and (b) maintain, with financially
sound and reputable insurance companies, insurance in such amounts and against
such risks as are customarily maintained by companies engaged in the same or
similar businesses operating in the same or similar locations.
SECTION 5.06 Books and Records; Inspection Rights. Each Borrower
will, and will cause each of its Subsidiaries to, keep proper books of record
and account in which full, true and correct entries are made of all dealings and
transactions in relation to its business and activities. Each Borrower will, and
will cause each of its Subsidiaries to, permit any representatives designated by
the Agent or any Lender, upon reasonable prior notice to the Borrowers, to (a)
visit and inspect its properties; (b) examine and make extracts from its books
and records, and (c) discuss its affairs, finances and condition with its
officers and independent accountants, all at such reasonable times and as often
as reasonably requested. Not in limitation of the foregoing, the Agent shall
have the right without hindrance or delay to conduct field examinations to
inspect or appraise the property subject to the Security Documents once each
calendar year (and at any time an Event of Default has occurred and is
continuing) and to inspect, audit and copy the books, records, journals,
correspondence and other records and data of the Borrowers and the Material
Subsidiaries relating thereto or to their business. The Borrowers jointly and
severally agree to pay the Agent's customary fees and disbursements relating to
such field examinations.
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SECTION 5.07 Compliance with Laws. Each Borrower will, and will cause
each of its Subsidiaries to, comply with all laws, rules, regulations and orders
of any Governmental Authority applicable to it or its property (including ERISA
and Environmental Laws), except where the failure to do so, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 5.08 Use of Proceeds and Letters of Credit. The proceeds of
the Loans will be used only to refinance existing Indebtedness and for other
working capital needs and general corporate purposes, including capital
expenditures relating to the Compressors. No part of the proceeds of any Loan
will be used, whether directly or indirectly, for any purpose that entails a
violation of any of the Regulations of the Board, including Regulations T, U and
X.
SECTION 5.09 Financial Covenants. The Parent will have and maintain,
on a consolidated basis and as of the end of each calendar month:
(a) Leverage Ratio--a Leverage Ratio of no more than 2.50 to 1;
(b) Interest Coverage Ratio--an Interest Coverage Ratio of at
least 3.00 to 1;
(c) Tangible Net Worth--a Tangible Net Worth at least equal to
the Required Tangible Net Worth as of such date.
ARTICLE VI
Negative Covenants
------------------
Until the Commitments have expired or terminated and the principal of
and interest on each Loan and all fees payable hereunder have been paid in full
and all Letters of Credit have expired or terminated and all LC Disbursements
shall have been reimbursed, the Borrowers covenant and agree with the Lenders
that:
SECTION 6.01 Indebtedness. The Borrowers will not, and will not
permit any Subsidiary of the Parent to, create, incur, assume or permit to exist
any Indebtedness, except:
(a) Indebtedness created hereunder;
(b) Indebtedness existing on the date hereof and set forth in
Schedule 6.01, all Indebtedness issuable under the instruments and documents set
forth in Schedule 6.01 and extensions, renewals and replacements of any such
Indebtedness that do not increase the outstanding principal amount thereof;
(c) Indebtedness of the Parent of any of its Subsidiaries to any
Parent or any other such Subsidiary; and
(d) Indebtedness arising under Swap Agreements which have been
entered into for bona fide hedging purposes and not for speculative purposes.
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SECTION 6.02 Liens. The Borrowers will not, and will not permit any
of their Subsidiaries to, create, incur, assume or permit to exist any Lien on
any property or asset now owned or hereafter acquired by it, or assign or sell
any income or revenues (including accounts receivable) or rights in respect of
any thereof, except:
(a) Permitted Encumbrances;
(b) any Lien on any property or asset of a Borrower or any of
their Subsidiaries existing on the date hereof and set forth in Schedule 6.02;
but (1) such Lien shall not apply to any other property or asset of a Borrower
or any of their Subsidiaries (other than proceeds of such property or asset) and
(2) such Lien shall secure only those obligations which it secures on the date
hereof and extensions, renewals and replacements thereof that do not increase
the outstanding principal amount thereof;
(c) any Lien existing on any property or asset before the
acquisition thereof by a Borrower or any of their Subsidiaries or existing on
any property or asset of any Person that becomes a Subsidiary of a Borrower
after the date hereof before the time such Person becomes a Subsidiary of a
Borrower, if (1) such Lien is not created in contemplation of or in connection
with such acquisition or such Person becoming a Subsidiary of a Borrower, as the
case may be; (2) such Lien shall not apply to any other property or assets of a
Borrower or any Subsidiary of a Borrower (other than proceeds of such property
or asset), and (3) such Lien shall secure only those obligations which it
secures on the date of such acquisition or the date such Person becomes a
Subsidiary of a Borrower, as the case may be and extensions, renewals and
replacements thereof that do not increase the outstanding principal amount
thereof; and
(d) Liens on fixed or capital assets acquired, constructed or
improved by a Borrower or any of their Subsidiaries, if (1) such Liens secure
Indebtedness permitted by Section 6.01, (2) such Liens and the Indebtedness
secured thereby are incurred before or within 90 days after such acquisition or
the completion of such construction or improvement; (3) the Indebtedness secured
thereby does not exceed the cost of acquiring, constructing or improving such
fixed or capital assets, and (4) such Liens shall not apply to any other
property or assets of a Borrower or any of their Subsidiaries (other than
proceeds of such property or asset).
SECTION 6.03 Fundamental Changes.
(a) The Borrowers will not, and will not permit any of their
Subsidiaries to (1) merge into or consolidate with any other Person; (2) permit
any other Person to merge into or consolidate with it; (3) sell, transfer, lease
or otherwise dispose of (in one transaction or in a series of transactions) a
line of business or all or substantially all of its assets, or all or
substantially all of the Equity Interests issued by any of their Subsidiaries
(in each case, whether now owned or hereafter acquired); (4) acquire (in one
transaction or a series of transactions) a line of business or all or
substantially all of a Person's assets, or all or substantially all of the
Equity Interests issued by any Person, or (5) liquidate or dissolve, except
that, so long as at the time thereof and immediately after giving effect thereto
no Default shall have occurred and be continuing, (A) any Subsidiary of a
Borrower may merge into the Parent in a transaction in which the Parent is the
surviving corporation; (B) any Subsidiary of a Borrower (other than Field
Services) may merge into any other Subsidiary of a Borrower in a transaction in
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which the surviving entity is a Subsidiary of a Borrower; (C) any Subsidiary of
a Borrower may sell, transfer, lease or otherwise dispose of its assets to a
Borrower or to another Subsidiary of a Borrower, and (D) any Subsidiary of a
Borrower (other than Field Services) may liquidate or dissolve if the Parent
determines in good faith that such liquidation or dissolution is in the best
interests of the Parent and is not materially disadvantageous to the Lenders.
(b) The Borrowers will not, and will not permit any of their
Subsidiaries to, engage to any material extent in any business other than
businesses of the type conducted by the Borrowers and their Subsidiaries on the
date of execution of this Agreement and businesses reasonably related thereto.
SECTION 6.04 Transactions with Affiliates. The Borrowers will not,
and will not permit any of their Subsidiaries to, sell, lease or otherwise
transfer any property or assets to, or purchase, lease or otherwise acquire any
property or assets from, or otherwise engage in any other transactions with, any
of its Affiliates, except (a) in the ordinary course of business at prices and
on terms and conditions not less favorable to the applicable Borrower or the
applicable Subsidiary than could be obtained on an arm's-length basis from
unrelated third parties and (b) transactions between or among a Borrower and its
wholly owned Subsidiaries not involving any other Affiliate.
SECTION 6.05 Restrictive Agreements. The Borrowers will not, and will
not permit any of their Subsidiaries to, directly or indirectly, enter into,
incur or permit to exist any agreement or other arrangement that prohibits,
restricts or imposes any condition upon (a) the ability of a Borrower or any
Subsidiary of a Borrower to create, incur or permit to exist any Lien upon any
of its property or assets, or (b) the ability of any Subsidiary of a Borrower to
pay dividends or other distributions with respect to any shares of its capital
stock or to make or repay loans or advances to a Borrower or any other
Subsidiary of a Borrower or to Guarantee Indebtedness of a Borrower or any other
Subsidiary of a Borrower; but (1) the foregoing shall not apply to restrictions
and conditions imposed by law or by this Agreement; (2) the foregoing shall not
apply to restrictions and conditions existing on the date hereof identified on
Schedule 6.05 (but shall apply to any extension or renewal of, or any amendment
or modification expanding the scope of, any such restriction or condition); (3)
the foregoing shall not apply to customary restrictions and conditions contained
in agreements relating to the sale of a Subsidiary of a Borrower pending such
sale, if such restrictions and conditions apply only to the Subsidiary of a
Borrower that is to be sold and such sale is permitted hereunder; (4) clause (a)
of the foregoing shall not apply to restrictions or conditions imposed by any
agreement relating to secured Indebtedness permitted by this Agreement if such
restrictions or conditions apply only to the property or assets securing such
Indebtedness, and (5) clause (a) of the foregoing shall not apply to customary
provisions in leases and other contracts restricting the assignment thereof.
SECTION 6.06 Restrictions on Dividends. So long as there shall be any
outstanding Revolving Exposure, the Parent will not make distributions to the
owners of its Equity Interests as such.
SECTION 6.07 Subordinated Debt. The Parent will not agree to any
modification (other than any extension of the stated maturity or any decrease in
the interest rate accruing thereon) of the terms of the Subordinated Debt, it
being acknowledged that a holder's exercise of rights set forth therein to
convert the
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Subordinated Debt to Equity Interests issued by the Parent does not constitute a
modification of the terms of the Subordinated Debt; but the Parent may permit
the repayment of the Subordinated Debt directly with the price paid for the
exercise of warrants for Equity Interests issued by the Parent so long as no
Default or Event of Default has occurred and is continuing.
SECTION 6.08 Loans and Investments. The Borrowers will not, and will
not permit their Subsidiaries to, make any loan, advance, extension of credit or
capital contribution to, or make any Investment in, any Person, or make any
commitment to make any such extension of credit or Investment, except (a) Equity
Interests issued by Subsidiaries as in effect on the date hereof; (b) Permitted
Investment Securities, and (c) travel advances in the ordinary course of
business to officers and employees.
ARTICLE VII
Events of Default
-----------------
If any of the following events ("Events of Default") shall occur:
(a) either Borrower shall fail to pay any principal of or
interest on any Loan, any reimbursement obligation in respect of any LC
Disbursement or any fee payable under this Agreement when and as the same shall
become due and payable, whether at the due date thereof or at a date fixed for
prepayment thereof or otherwise;
(b) either Borrower shall fail to pay any other amount (other
than an amount referred to in clause (a) of this Article) payable under this
Agreement or any other Loan Document, when and as the same shall become due and
payable, and such failure shall continue unremedied for a period of five
Business Days;
(c) any representation or warranty made or deemed made by or on
behalf of either Borrower in or in connection with any Loan Document or any
amendment or modification thereof or waiver thereunder, or in any report,
certificate, financial statement or other document furnished pursuant to or in
connection with any Loan Document or any amendment or modification thereof or
waiver thereunder, shall prove to have been materially incorrect when made or
deemed made;
(d) either Borrower shall fail to observe or perform any
covenant, condition or agreement contained in Sections 5.01 or 5.09 or in
Article VI;
(e) either Borrower shall fail to observe or perform any
covenant, condition or agreement contained in any Loan Document (other than
those specified in clause (a), (b) or (d) of this Article), and such failure
shall continue unremedied for a period of five Business Days after the earlier
of (1) such Borrower becoming aware of such failure and (2) notice thereof from
the Agent to such Borrower (which notice will be given at the request of any
Lender);
(f) any event or condition occurs that enables or permits (with
or without the giving of notice, the lapse of time or both) the holder or
holders of any Material Indebtedness or any trustee or agent on its or their
behalf to cause any such Material Indebtedness to become due, or to require the
prepayment, repurchase, redemption or defeasance thereof, before its scheduled
maturity;
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(g) any event or condition occurs that results in any Material
Indebtedness becoming due before its scheduled maturity (other than the
voluntary prepayment, repurchase, redemption or defeasance thereof);
(h) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (1) liquidation, reorganization or
other relief in respect of either Borrower or any of their Material Subsidiaries
or the debts, or of a substantial part of the assets, of any of them under any
Federal, state or foreign bankruptcy, insolvency, receivership or similar law
now or hereafter in effect or (2) the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for either Borrower or
any of their Material Subsidiaries or for a substantial part of the assets of
any of them, and, in any such case, such proceeding or petition shall continue
undismissed for 60 days or an order or decree approving or ordering any of the
foregoing shall be entered;
(i) any Borrower or any of their Material Subsidiaries shall (1)
voluntarily commence any proceeding or file any petition seeking liquidation,
reorganization or other relief under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect; (2) consent
to the institution of, or fail to contest in a timely and appropriate manner,
any proceeding or petition described in clause (h) of this Article; (3) apply
for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for any Borrower or any of their
Material Subsidiaries or for a substantial part of its assets; (4) file an
answer admitting the material allegations of a petition filed against it in any
such proceeding, (v) make a general assignment for the benefit of creditors, or
(6) take any action for the purpose of effecting any of the foregoing;
(j) either Borrower or any of their Material Subsidiaries shall
become unable, admit in writing its inability or fail generally to pay its debts
as they become due;
(k) a judgment for the payment of money (exclusive of amounts
covered by insurance) shall be rendered against either Borrower or any of their
Material Subsidiaries and the same shall remain undischarged for a period of 45
consecutive days during which execution shall not be effectively stayed, or any
action shall be legally taken by a judgment creditor to attach or levy upon any
assets of either Borrower or any of their Material Subsidiaries to enforce any
such judgment;
(l) an ERISA Event shall have occurred; or
(m) a Change in Control or a Change of Management shall occur;
then, and in every such event (other than an event described in clause (h) or
(i) of this Article), and at any time thereafter during the continuance of such
event, the Agent may, and at the request of the Required Lenders shall, by
notice to the Borrowers, take either or both of the following actions, at the
same or different times: (1) terminate the Commitments, and thereupon the
Commitments shall terminate immediately, and (2) declare the Loans then
outstanding to be due and payable in whole (or in part, in which case any
principal not so declared to be due and payable may thereafter be declared to be
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due and payable), and thereupon the principal of the Loans so declared to be due
and payable, together with accrued interest thereon and all fees and other
obligations of the Borrowers accrued hereunder, shall become due and payable
immediately, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrowers; and in case of any event
described in clause (h) or (i) of this Article, the Commitments shall
automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and all fees and other obligations of the
Borrowers accrued hereunder, shall automatically become due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrowers.
ARTICLE VIII
The Agent
---------
Each of the Lenders and the Issuing Bank hereby irrevocably appoints
the Agent as its agent and authorizes the Agent to take such actions on its
behalf and to exercise such powers as are delegated to the Agent by the terms of
the Loan Documents, together with such actions and powers as are reasonably
incidental thereto.
The bank serving as the Agent hereunder shall have the same rights and
powers in its capacity as a Lender as any other Lender and may exercise the same
as though it were not the Agent, and such bank and its Affiliates may accept
deposits from, lend money to and generally engage in any kind of business with
any Borrower or any of their Subsidiaries or any of their other Affiliates as if
it were not the Agent hereunder.
The Agent shall not have any duties or obligations except those
expressly set forth in the Loan Documents. Without limiting the generality of
the foregoing, (a) the Agent shall not be subject to any fiduciary or other
implied duties, regardless of whether a Default has occurred and is continuing;
(b) the Agent shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated by the Loan Documents that the Agent is required to
exercise in writing by the Required Lenders (or such other number or percentage
of the Lenders as shall be necessary under the circumstances as provided in
Section 9.02), and (c) except as expressly set forth in the Loan Documents, the
Agent shall not have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to either Borrower or any of their
Subsidiaries that is communicated to or obtained by the bank serving as Agent or
any of its Affiliates in any capacity. The Agent shall not be liable for any
action taken or not taken by it with the consent or at the request of the
Required Lenders (or such other number or percentage of the Lenders as shall be
necessary under the circumstances as provided in Section 9.02) or in the absence
of its own gross negligence or willful misconduct, BUT REGARDLESS OF THE
PRESENCE OF ORDINARY NEGLIGENCE. The Agent shall not be deemed to have knowledge
of any Default unless and until written notice thereof is given to the immediate
officers of the Agent responsible for this Agreement by a Borrower or a Lender
and is called a "notice of default", and the Agent shall not be responsible for
or have any duty to ascertain or inquire into (1) any statement, warranty or
representation made in or in connection with any Loan Document; (2) the contents
of any certificate, report or other document delivered thereunder or in
connection therewith; (3) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth in any Loan Document; (4) the
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validity, enforceability, effectiveness or genuineness of any Loan Document or
any other agreement, instrument or document, or (5) the satisfaction of any
condition set forth in Article IV or elsewhere in any Loan Document, other than
to confirm receipt of items expressly required to be delivered to the Agent.
The Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Agent also may rely
upon any statement made to it orally or by telephone and believed by it to be
made by the proper Person, and shall not incur any liability for relying
thereon. The Agent may consult with legal counsel (who may be counsel for a
Borrower), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.
The Agent may perform any and all its duties and exercise its rights
and powers by or through any one or more sub-agents appointed by the Agent. The
Agent and any such sub-agent may perform any and all its duties and exercise its
rights and powers through their respective Related Parties. The exculpatory
provisions of the preceding paragraphs shall apply to any such sub-agent and to
the Related Parties of the Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Agent.
Subject to the appointment and acceptance of a successor Agent as
provided in this paragraph, the Agent may (and, in the event (x) neither the
Agent nor any Affiliate, as a Lender, has any Revolving Exposure or unused
Commitment and (y) the Required Lenders so request, the Agent shall) resign at
any time by notifying the Lenders, the Issuing Bank and the Borrowers. Upon any
such resignation, the Required Lenders shall have the right to appoint a
successor, with the prior written consent of the Borrowers (unless an Event of
Default shall have occurred which is continuing, in which event the Borrowers'
consent shall not be required). If no successor shall have been so appointed by
the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Agent gives notice of its resignation, then the retiring
Agent may, on behalf of the Lenders and the Issuing Bank, appoint a successor
Agent which shall be a bank with a net worth of at least $100,000,000. Upon the
acceptance of its appointment as Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Agent, and the retiring Agent shall be discharged from
its duties and obligations hereunder. The fees, if any, payable by the Borrowers
to a successor Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Borrowers and such successor. After the
Agent's resignation hereunder, the provisions of this Article and Section 9.03
shall continue in effect for the benefit of such retiring Agent, its sub agents
and their respective Related Parties in respect of any actions taken or omitted
to be taken by any of them while it was acting as Agent.
Each Lender acknowledges that it has, independently and without
reliance upon the Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Agent or any other Lender and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any other Loan Document or related agreement
or any document furnished hereunder or thereunder.
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ARTICLE IX
Miscellaneous
-------------
SECTION 9.01 Notices.
(a) Except in the case of notices and other communications
expressly permitted to be given by telephone (and subject to paragraph (b)
below), all notices and other communications provided for herein shall be in
writing and shall be delivered by hand or overnight courier service, mailed by
certified or registered mail or sent by telecopy, as follows:
(1) if to a Borrower, to 0000 XX 00xx Xxxxxx, Xxxxxxxx
Xxxx, Xxxxxxxx 00000-0000, Attention: Xxxx XxXxxxx (Telecopy No. (405)
677-0761);
(2) if to the Agent, to Comerica Bank, One Shell Plaza,
000 Xxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000, Attention: Xxxx X. Xxxx
(Telecopy No. (000) 000-0000); and
(3) if to any other Lender, to it at its address (or
telecopy number) set forth in its Administrative Questionnaire.
(b) Notices and other communications to the Lenders hereunder may
be delivered or furnished by electronic communications pursuant to procedures
approved by the Agent; but the foregoing shall not apply to notices pursuant to
Article II unless otherwise agreed by the Agent and the applicable Lender. The
Agent or a Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; but approval of such procedures may be limited to
particular notices or communications.
(c) Any party hereto may change its address or telecopy number
for notices and other communications hereunder by notice to the other parties
hereto. All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt.
SECTION 9.02 Waivers; Amendments.
(a) No failure or delay by the Agent, the Issuing Bank or any
Lender in exercising any right or power hereunder or under any other Loan
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of
the Agent, the Issuing Bank and the Lenders hereunder and under the other Loan
Documents are cumulative and are not exclusive of any rights or remedies that
they would otherwise have. No waiver of any provision of any Loan Document or
consent to any departure by any Borrower therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) of this Section,
and then such waiver or consent shall be effective only in the specific instance
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and for the purpose for which given. Without limiting the generality of the
foregoing, the making of a Loan or issuance of a Letter of Credit shall not be
construed as a waiver of any Default, regardless of whether the Agent, any
Lender or the Issuing Bank may have had notice or knowledge of such Default at
the time.
(b) Neither this Agreement nor any other Loan Document nor any
provision hereof or thereof may be waived, amended or modified except, in the
case of this Agreement, pursuant to an agreement or agreements in writing
entered into by the Borrowers and the Required Lenders or, in the case of any
other Loan Document, pursuant to an agreement or agreements in writing entered
into by the Agent and the Borrowers that are parties thereto, in each case with
the consent of the Required Lenders; but no such agreement shall (1) increase
the Commitment of any Lender without the written consent of such Lender; (2)
reduce the principal amount of any Loan or LC Disbursement or reduce the rate of
interest thereon, or reduce any fees payable hereunder, without the written
consent of each Lender affected thereby; (3) postpone the scheduled date of
payment of the principal amount of any Loan or LC Disbursement, or any interest
thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse
any such payment, or postpone the scheduled date of expiration of any
Commitment, without the written consent of each Lender affected thereby; (4)
change Section 2.16(b) or (c) in a manner that would alter the pro rata sharing
of payments required thereby or change Section 2.07(e) in a manner that would
alter the pro rata treatment required thereby, without the written consent of
each Lender; (5) change any of the provisions of this Section or the definition
of "Required Lenders" or any other provision of any Loan Document specifying the
number or percentage of Lenders required to waive, amend or modify any rights
thereunder or make any determination or grant any consent thereunder, without
the written consent of each Lender, or (6) terminate or modify any indemnity
provided to a Lender hereunder or under any other Loan Document without the
written consent of such Lender; provided further that no such agreement shall
amend, modify or otherwise affect the rights or duties of the Agent or the
Issuing Bank without the express prior written consent of the Agent or the
Issuing Bank, as the case may be.
SECTION 9.03 Expenses; Indemnity; Damage Waiver.
(a) The Borrowers shall pay (1) all reasonable out of pocket
expenses incurred by the Agent and its Affiliates, including the reasonable
fees, charges and disbursements of counsel for the Agent, in connection with the
syndication of the credit facilities provided for herein, the preparation and
administration of the Loan Documents or any amendments, modifications or waivers
of the provisions thereof (whether or not the transactions contemplated hereby
or thereby shall be consummated); (2) all reasonable out of-pocket expenses
incurred by the Issuing Bank in connection with the issuance, amendment, renewal
or extension of any Letter of Credit or any demand for payment thereunder, and
(3) all out-of-pocket expenses incurred by the Agent, the Issuing Bank or any
Lender, including the fees, charges and disbursements of any counsel for the
Agent, the Issuing Bank or any Lender, in connection with the enforcement or
protection of its rights in connection with the Loan Documents, including its
rights under this Section, or in connection with the Loans made or Letters of
Credit issued hereunder, including all such out-of pocket expenses incurred
during any workout, restructuring or negotiations in respect of such Loans or
Letters of Credit.
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(b) The Borrowers shall indemnify the Agent, the Issuing Bank and
each Lender, and each Related Party of any of the foregoing Persons (each such
Person being called an "Indemnitee") against, and hold each Indemnitee harmless
from, any and all losses, claims, damages, liabilities and related expenses,
including the fees, charges and disbursements of any counsel for any Indemnitee,
incurred by or asserted against any Indemnitee arising out of, in connection
with, or as a result of (1) the execution or delivery of any Loan Document or
any other agreement or instrument contemplated hereby, the performance by the
parties to the Loan Documents of their respective obligations thereunder or the
consummation of the Transactions or any other transactions contemplated hereby
or the enforcement of any obligations hereunder or under any of the other Loan
Documents; (2) any Loan or Letter of Credit or the use of the proceeds therefrom
(including any refusal by the Issuing Bank to honor a demand for payment under a
Letter of Credit if the documents presented in connection with such demand do
not strictly comply with the terms of such Letter of Credit); (3) any actual or
alleged presence or release of Hazardous Materials on or from any property
currently or formerly owned or operated by any Borrower or any of their
Subsidiaries, or any Environmental Liability related in any way to any Borrower
or any of their Subsidiaries, or (4) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory and regardless of whether
any Indemnitee is a party thereto; but such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses resulted from the gross negligence or willful
misconduct of such Indemnitee (or any of its Related Parties), BUT THE PRESENCE
OF ORDINARY NEGLIGENCE SHALL NOT AFFECT THE AVAILABILITY OF SUCH INDEMNITY.
(c) To the extent that any Borrower fails to pay any amount
required to be paid by it to the Agent or the Issuing Bank under paragraph (a)
or (b) of this Section, each Lender severally agrees to pay to the Agent or the
Issuing Bank, as the case may be, such Lender's pro rata share (determined as of
the time that the applicable unreimbursed expense or indemnity payment is
sought) of such unpaid amount; if the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred by
or asserted against the Agent or the Issuing Bank in its capacity as such. For
purposes hereof, a Lender's "pro rata share" shall be determined based upon
(without duplication) its share of the sum of the total Revolving Exposures and
unused Commitments at the time.
(d) To the extent permitted by applicable law, neither Borrower
nor any of their Subsidiaries shall assert, and each hereby waives, any claim
against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement or any
agreement or instrument contemplated hereby, the Transactions, any Loan or
Letter of Credit or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable not later
than three Business Days after written demand therefor.
SECTION 9.04 Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns permitted hereby (including any Affiliate of the Issuing Bank that
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issues any Letter of Credit), except that (1) no Borrower may assign or
otherwise transfer any of its rights or obligations hereunder without the prior
written consent of each Lender (and any attempted assignment or transfer by any
Borrower without such consent shall be null and void) and (2) no Lender may
assign or otherwise transfer its rights or obligations hereunder except in
accordance with this Section. Nothing in this Agreement, expressed or implied,
shall be construed to confer upon any Person (other than the parties hereto,
their respective successors and assigns permitted hereby (including any
Affiliate of the Issuing Bank that issues any Letter of Credit), Participants
(to the extent provided in paragraph (c) of this Section) and, to the extent
expressly contemplated hereby, the Related Parties of each of the Agent, the
Issuing Bank and the Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.
(b) (1) Subject to the conditions set forth in paragraph
(b)(2) below, any Lender may assign to one or more assignees all or a portion of
its rights and obligations under this Agreement (including all or a portion of
its Commitment and the Loans at the time owing to it) with the prior written
consent (such consent not to be unreasonably withheld or delayed) of (A) the
Borrowers, but no consent of any Borrower shall be required for an assignment to
a Lender, an Affiliate of a Lender, an Approved Fund (as defined below) or, if
an Event of Default has occurred and is continuing, any other assignee; and (B)
the Agent, but no consent of the Agent shall be required for an assignment to an
assignee that is a Lender immediately before giving effect to such assignment or
an Affiliate of such a Lender.
(2) Assignments shall be subject to the following
additional conditions: (A) except in the case of an assignment to a Lender or an
Affiliate of a Lender or an assignment of the entire remaining amount of the
assigning Lender's Commitment, neither the amount of the Commitment retained by
the assigning Lender nor the amount of the Commitment being assigned (in each
case, determined as of the date the Assignment and Assumption with respect to
such assignment is delivered to the Agent) shall be less than $5,000,000 unless
the Borrowers and the Agent otherwise consent, but no such consent of either
Borrower shall be required if an Event of Default has occurred and is
continuing; (B) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and obligations under
this Agreement; (C) the parties to each assignment shall execute and deliver to
the Agent an Assignment and Assumption, together with a processing and
recordation fee of $3,000; (D) the assignee, if it shall not already be a
Lender, shall deliver to the Agent an Administrative Questionnaire, and (E) in
the case of an assignment to a CLO (as defined below), the assigning Lender
shall retain the sole right to approve any amendment, modification or waiver of
any provision of this Agreement, but the Assignment and Assumption between such
Lender and such CLO may provide that such Lender will not, without the consent
of such CLO, agree to any amendment, modification or waiver described in the
first proviso to Section 9.02(b) that affects such CLO.
For the purposes of this Section 9.04(b), the terms "Approved Fund" and "CLO"
have the following meanings:
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"Approved Fund" means (a) a CLO and (b) with respect to any
Lender that is a fund which invests in bank loans and similar
extensions of credit, any other fund that invests in bank loans and
similar extensions of credit and is managed by the same investment
advisor as such Lender or by an Affiliate of such investment advisor.
"CLO" means any entity (whether a corporation, partnership, trust
or otherwise) that is engaged in making, purchasing, holding or
otherwise investing in bank loans and similar extensions of credit in
the ordinary course of its business and is administered or managed by a
Lender or an Affiliate of such Lender.
(3) Subject to acceptance and recording thereof pursuant
to paragraph (b)(4) of this Section, from and after the effective date specified
in each Assignment and Assumption the assignee thereunder shall be a party
hereto and, to the extent of the interest assigned by such Assignment and
Assumption, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Assumption, be released from its obligations
under this Agreement (and, in the case of an Assignment and Assumption covering
all of the assigning Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.14, 2.15, 2.16 and 9.03). Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this Section shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
paragraph (e) of this Section.
(4) The Agent, acting for this purpose as an agent of
the Borrowers, shall maintain at one of its offices a copy of each Assignment
and Assumption delivered to it and a register for the recordation of the names
and addresses of the Lenders, and the Commitment of, and principal amount of the
Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof
from time to time (the "Register"). The entries in the Register shall be
conclusive, absent manifest error, and the Borrowers, the Agent, the Issuing
Bank and the Lenders may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrowers, the Issuing Bank and any Lender, at
any reasonable time and from time to time upon reasonable prior notice.
(5) Upon its receipt of a duly completed Assignment and
Assumption executed by an assigning Lender and an assignee, the assignee's
completed Administrative Questionnaire (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in paragraph
(b) of this Section and any written consent to such assignment required by
paragraph (b) of this Section, the Agent shall accept such Assignment and
Assumption and record the information contained therein in the Register. No
assignment shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this paragraph.
(c) (1) Any Lender may, without the consent of any Borrower,
the Agent or the Issuing Bank, sell participations to one or more banks or other
entities (a "Participant") in all or a portion of such Lender's rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Loans owing to it); but (A) such Lender's obligations under this
Agreement shall remain unchanged; (B) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
and (C) the Borrowers, the Agent, the Issuing Bank and the other Lenders shall
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continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement. Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this
Agreement; but such agreement or instrument may provide that such Lender will
not, without the consent of the Participant, agree to any amendment,
modification or waiver described in the first proviso to Section 9.02(b) that
affects such Participant. Subject to paragraph (c)(2) of this Section, the
Borrowers agree that each Participant shall be entitled to the benefits of
Sections 2.13, 2.14 and 2.15 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this Section.
To the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 9.08 as though it were a Lender, provided such Participant
agrees to be subject to Section 2.16(c) as though it were a Lender.
(d) A Participant shall not be entitled to receive any greater
payment under Section 2.13 or 2.15 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrowers' prior written consent. A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 2.15 unless
the Borrowers are notified of the participation sold to such Participant and
such Participant agrees, for the benefit of the Borrowers, to comply with
Section 2.15(e) as though it were a Lender.
(e) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; but no such pledge or
assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.
SECTION 9.05 Survival. All covenants, agreements, representations and
warranties made by the Borrowers and their Subsidiaries in the Loan Documents
and in the certificates or other instruments delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the other parties hereto and shall survive the
execution and delivery of the Loan Documents and the making of any Loans and
issuance of any Letters of Credit, regardless of any investigation made by any
such other party or on its behalf and notwithstanding that the Agent, the
Issuing Bank or any Lender may have had notice or knowledge of any Default or
incorrect representation or warranty at the time any credit is extended
hereunder, and shall continue in full force and effect as long as the principal
of or any accrued interest on any Loan or any fee or any other amount payable
under this Agreement is outstanding and unpaid or any Letter of Credit is
outstanding and so long as the Commitments have not expired or terminated. The
provisions of Sections 2.13, 2.14, 2.15 and 9.03 and Article VIII shall survive
and remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Loans, the expiration or
termination of the Letters of Credit and the Commitments or the termination of
this Agreement or any provision hereof.
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SECTION 9.06 Counterparts; Integration; Effectiveness. This Agreement
may be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement and the other
Loan Documents constitute the entire contract among the parties relating to the
subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except
as provided in Section 4.01, this Agreement shall become effective when it shall
have been executed by the Agent and when the Agent shall have received
counterparts hereof which, when taken together, bear the signatures of each of
the other parties hereto, and thereafter shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
Delivery of an executed counterpart of a signature page of this Agreement by
telecopy shall be effective as delivery of a manually executed counterpart of
this Agreement.
SECTION 9.07 Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 9.08 Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender and each of its Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other obligations at any time
owing by such Lender or Affiliate to or for the credit or the account of either
Borrower against any of and all the obligations of such Borrower now or
hereafter existing under this Agreement held by such Lender, irrespective of
whether or not such Lender shall have made any demand under this Agreement and
although such obligations may be unmatured. The rights of each Lender under this
Section are in addition to other rights and remedies (including other rights of
setoff) which such Lender may have.
SECTION 9.09 Governing Law; Jurisdiction; Consent to Service of
Process.
(a) This Agreement shall be construed in accordance with and
governed by the law of the State of Texas.
(b) Each Borrower hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of the District
Courts of Xxxxxx County, Texas and of the United States District Court of the
Southern District of Texas, Houston Division in any action or proceeding arising
out of or relating to any Loan Document, or for recognition or enforcement of
any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such Texas or, to the extent permitted
by law, in such Federal court. Each of the parties hereto agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement or any other Loan Document shall
affect any right that the Agent, the Issuing Bank or any Lender may otherwise
have to bring any action or proceeding relating to this Agreement or any other
Loan Document against either Borrower or its properties in the courts of any
jurisdiction.
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(c) Each Borrower hereby irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection which
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any other Loan
Document in any court referred to in paragraph (b) of this Section. Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service
of process in the manner provided for notices in Section 9.01. Nothing in this
Agreement or any other Loan Document will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.
SECTION 9.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
SECTION 9.11 Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 9.12 Confidentiality. Each of the Agent, the Issuing Bank and
the Lenders agrees to maintain the confidentiality of the Information (as
defined below), except that Information may be disclosed (a) to its and its
Affiliates' directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential)' (b) to the
extent required by any regulatory authority; (c) to the extent required in the
opinion of legal counsel by applicable laws or regulations or by any subpoena or
similar legal process; (d) to any other party to this Agreement; (e) in
connection with the exercise of any remedies hereunder or any suit, action or
proceeding relating to this Agreement or the enforcement of rights hereunder;
(f) subject to an agreement containing provisions substantially the same as
those of this Section, to (1) any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or obligations
under this Agreement or (2) any actual or prospective counterparty (or its
advisors) to any swap or derivative
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transaction relating to either Borrower and its obligations; (g) with the
consent of the Borrower, or (h) to the extent such Information (1) becomes
publicly available other than as a result of a breach of this Section or (2) is
disclosed to the Agent, the Issuing Bank or any Lender on a nonconfidential
basis by a source other than the Borrowers. For the purposes of this Section,
"Information" means all information received from either Borrower relating to
either Borrower or its business, other than (x) any such information that is
known to the Agent, the Issuing Bank or any Lender on a nonconfidential basis
before disclosure by the applicable Borrower and (y) any information with
respect to the "tax treatment" and "tax structure" (in each case, within the
meaning of Treasury Regulation 1.6011-4) of the Transactions and all materials
of any kind (including opinions or other tax analyses) that are provided to any
Person relating to such tax treatment or tax structure (but with respect to any
material that in either case contains the tax treatment or tax structure of any
Transaction, this clause shall apply only to such portions of such material that
relate to the tax treatment or tax structure of the Transactions), and any
Person may disclose without limitation of any kind any information with respect
to the tax treatment and tax structure of the Transactions. Any Person required
to maintain the confidentiality of Information as provided in this Section shall
be considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.
SECTION 9.13 Interest Rate Limitation. Borrowers and the Lenders
intend to strictly comply with all applicable federal and Texas laws, including
applicable usury laws (or the usury laws of any jurisdiction whose usury laws
are deemed to apply to the Notes or any other Loan Documents despite the
intention and desire of the parties to apply the usury laws of the State of
Texas). Accordingly, the provisions of this Section shall govern and control
over every other provision of this Agreement or any other Loan Document which
conflicts or is inconsistent with this Section, even if such provision declares
that it controls. As used in this Section, the term "interest" includes the
aggregate of all charges, fees, benefits or other compensation which constitute
interest under applicable law; but, to the maximum extent permitted by
applicable law, (a) any non-principal payment shall be characterized as an
expense or as compensation for something other than the use, forbearance or
detention of money and not as interest, and (b) all interest at any time
contracted for, reserved, charged or received shall be amortized, prorated,
allocated and spread, using the actuarial method, during the full term of the
Notes. In no event shall either Borrower or any other Person be obligated to
pay, or any Lender have any right or privilege to reserve, receive or retain,
(x) any interest in excess of the maximum amount of nonusurious interest
permitted under the laws of the State of Texas or the applicable laws (if any)
of the United States or of any other jurisdiction, or (y) total interest in
excess of the amount which such Lender could lawfully have contracted for,
reserved, received, retained or charged had the interest been calculated for the
full term of the Notes at the Ceiling Rate. The daily interest rates to be used
in calculating interest at the Ceiling Rate shall be determined by dividing the
applicable Ceiling Rate per annum by the number of days in the calendar year for
which such calculation is being made. None of the terms and provisions contained
in this Agreement or in any other Loan Document (including Article VII hereof)
which directly or indirectly relate to interest shall ever be construed without
reference to this Section, or be construed to create a contract to pay for the
use, forbearance or detention of money at any interest rate in excess of the
Ceiling Rate. If the term of any Note is shortened by reason of acceleration or
maturity as a result of any Default or by any other cause, or by reason of any
required or permitted prepayment, and if
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for that (or any other) reason any Lender at any time, including but not limited
to, the stated maturity, is owed or receives (and/or has received) interest in
excess of interest calculated at the Ceiling Rate, then and in any such event
all of any such excess interest shall be canceled automatically as of the date
of such acceleration, prepayment or other event which produces the excess, and,
if such excess interest has been paid to such Lender, it shall be credited pro
tanto against the then-outstanding principal balance of the applicable
Borrower's obligations to such Lender, effective as of the date or dates when
the event occurs which causes it to be excess interest, until such excess is
exhausted or all of such principal has been fully paid and satisfied, whichever
occurs first, and any remaining balance of such excess shall be promptly
refunded to its payor.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
COMPRESSCO, INC.,
a Delaware corporation
By: /s/ Xxxx XxXxxxx
---------------------------------
Name: Xxxx XxXxxxx
-------------------------------
Title: Chief Financial Officer
------------------------------
COMPRESSCO FIELD SERVICES, INC.,
an Oklahoma corporation
By: /s/ Xxxx XxXxxxx
---------------------------------
Name: Xxxx XxXxxxx
-------------------------------
Title: Chief Financial Officer
------------------------------
[unnumbered signature page to Compressco Credit Agreement]
COMERICA BANK,
as Agent and as a Lender
By: /s/ Authorized Officer
---------------------------------
Authorized Officer
[unnumbered signature page to Compressco Credit Agreement]
