1
EXHIBIT 10.41
PARTICIPATION AGREEMENT
among
UNIVERSAL COMPRESSION, INC.
as Lessee
UNIVERSAL COMPRESSION HOLDINGS, INC.
as Guarantor
WILMINGTON TRUST COMPANY,
not in its individual capacity but as Trustee of
UNIVERSAL COMPRESSION TRUST (2000-1)
under the Trust Agreement dated as of May __, 2000,
as Lessor
WILMINGTON TRUST COMPANY,
in its individual capacity,
as Trust Company
DEUTSCHE BANK AG, NEW YORK BRANCH and the
financial institutions listed on the signature pages
hereof
or that may hereafter become party hereto,
as Certificate Holders
BANKERS TRUST COMPANY
as Administrative Agent
BANKERS TRUST COMPANY
as Collateral Agent
and
the other financial institutions listed
on the signature pages hereof or that may
hereafter become party hereto as Lenders
May __, 2000
--------------------------------
UNIVERSAL COMPRESSION, INC.
NATURAL GAS COMPRESSOR EQUIPMENT
FINANCING FACILITY
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TABLE OF CONTENTS
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1. Definitions and Usage....................................................................................2
2. Representations and Warranties...........................................................................2
2.1. Lessee Representations and Warranties...........................................................2
2.2. Further Lessee Representations and Warranties...................................................4
2.3. Guarantor Representations and Warranties........................................................5
2.4. Lessor Representations and Warranties For Benefit of All Parties...............................12
2.5. Lessor Representations and Warranties For Benefit of Lenders, Certificate Holders, the
Administrative Agent and the Collateral Agent..................................................13
2.6. Further Lessor Representations and Warranties For Benefit of Lenders, Certificate
Holders, the Administrative Agent and the Collateral Agent.....................................14
2.7. Trust Company Representations and Warranties...................................................14
2.8. Warranty Disclaimers...........................................................................16
3. Conditions Precedent....................................................................................17
3.1. Lessor Conditions..............................................................................17
(a) Conditions Precedent to the Closing Date..............................................17
(b) Conditions Precedent to each Funding Date.............................................18
(c) Lessor Conditions to the Funding Date for each Sale/Leaseback.........................20
(d) Lessor Conditions to the First Funding Date for an Item of Equipment to be
Assembled.............................................................................20
(e) Lessor Conditions to each Funding Date for an Item of Equipment to be Assembled.......20
(f) Lessor Conditions for Final Funding Date for an Assembled Item of Equipment...........21
3.2. Lender Conditions..............................................................................21
(a) Lender Conditions on the Closing Date.................................................21
(b) Lender Conditions for each Funding Date...............................................22
3.3. Certificate Holders Conditions.................................................................23
(a) Certificate Holder Conditions on the Closing Date.....................................23
(b) Certificate Holder Conditions for each Funding Date...................................24
4. Commitments.............................................................................................25
4.1. Certificate Holder Commitments.................................................................25
4.2. Lender Commitment..............................................................................25
4.3. Lessor Commitment to Purchase..................................................................26
4.4. Lessor Commitment to Reimburse Component Costs.................................................26
4.5. Lessor and Administrative Agent Acceptance of Equipment........................................26
(i)
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4.6. Lease Agreement Supplements....................................................................26
4.7. Rights in Equipment............................................................................26
4.8. Funding Dates..................................................................................26
5. Selection of Lease Payment Period.......................................................................27
6. Default Purchase Options and Cure Rights................................................................27
6.1. Right to Cure Certain Lease Events of Default..................................................27
6.2. Certificate Holders Default Purchase Option....................................................28
7. Security................................................................................................29
7.1. Security Interest..............................................................................29
7.2. Further Assurances.............................................................................30
7.3. Termination....................................................................................31
7.4. Other Security.................................................................................31
7.5. Power of Attorney..............................................................................31
7.6. Assignment of Rights...........................................................................32
7.7. Transfer of the Collateral by the Collateral Agent.............................................32
7.8. No Segregation of Monies; No Interest..........................................................32
7.9. Distribution of Moneys.........................................................................32
(a) Scheduled and End of Term Payments........................................................32
(b) Partial Prepayments.......................................................................33
7.10. Payments after a Loan Event of Default.........................................................33
7.11. Application of Certain Other Payments..........................................................34
7.12. Other Payments.................................................................................34
7.13. Retention of Amounts by the Collateral Agent...................................................34
7.14. Conflicts......................................................................................34
8. Guaranty................................................................................................34
9. Covenants...............................................................................................36
9.1. Lessor Covenants...............................................................................36
9.2. Trust Company Covenants........................................................................38
9.3. Certificate Holders Covenants..................................................................38
9.4. Lender and Collateral Agent Covenant...........................................................39
9.5. Lessee and Guarantor Covenants.................................................................39
(a) Information Covenants.................................................................39
(b) Books, Records and Inspections........................................................41
(c) Compliance with Statutes, etc.........................................................41
(d) Compliance with Environmental Laws....................................................41
(e) ERISA.................................................................................42
(f) Performance of Obligations............................................................44
(g) Payment of Taxes......................................................................44
(h) Liens.................................................................................44
(ii)
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(i) Consolidation, Merger, Purchase or Sale of Assets, etc................................46
(j) Dividends.............................................................................49
(k) Indebtedness..........................................................................50
(l) Transactions with Affiliates..........................................................51
(m) Consolidated Adjusted EBITDAR to Total Interest Expense...............................52
(n) Maximum Leverage Ratio................................................................53
(o) Maximum Senior Secured Leverage Ratio.................................................54
(p) Business..............................................................................56
(q) Public Utility Holding Company........................................................56
(r) Special Purpose Corporation...........................................................57
(s) Corporate Existence, etc..............................................................58
(t) Punctual Payment......................................................................59
(u) Perfection and Maintenance of Security Interest.......................................59
(v) Default and Cross Default on Material Debt............................................59
(w) Change in Corporate Offices...........................................................59
(x) Use of ERISA Assets...................................................................59
(y) Payment of Administrative Fee.........................................................59
9.6. Covenant of Lenders, Lessor, the Administrative Agent, Collateral Agent, Trust Company
and Certificate Holders........................................................................61
10. Indemnities.............................................................................................62
10.1. Lessee General Indemnification.................................................................62
10.2. Exceptions to Lessee's General Indemnification.................................................64
10.3. Tax Indemnity..................................................................................65
10.3.1. General Indemnity.....................................................................65
10.3.2. Exceptions to Tax Indemnity...........................................................65
10.3.3. Payment of Taxes......................................................................66
10.3.4. Tax Filings...........................................................................67
10.3.5. Withholdings..........................................................................67
10.3.6. Tax Contests..........................................................................68
10.3.7. Tax Indemnification for Loan Recharacterization.......................................70
10.3.8. Special Tax Indemnity.................................................................71
10.4. Increased Costs, Illegality, etc...............................................................71
10.5. Lessee Indemnity...............................................................................73
10.6. Survival.......................................................................................73
11. Administrative Agent and Collateral Agent...............................................................73
11.1. Authorization and Action of Administrative Agent...............................................73
11.2. Delegation of Duties...........................................................................75
11.3. Agent's Reliance, etc..........................................................................75
11.4. Administrative Agent, Collateral Agent and Affiliates..........................................75
11.5. Lender and Certificate Holder Credit Decision..................................................75
11.6. Indemnification................................................................................76
11.7. Successor Administrative Agent and Collateral Agent; Termination of Agency.....................77
(iii)
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11.8. Registration of Notes and Certificates.........................................................77
11.9. Administrative Agency Fee......................................................................77
12. Miscellaneous...........................................................................................78
12.1. Expenses.......................................................................................78
12.2. Amendments.....................................................................................78
12.3. GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL.........................79
12.4. Notices........................................................................................80
12.5. Interests in the Equipment.....................................................................81
12.6. Descriptive Headings, etc......................................................................82
12.7. Benefit of Agreement; Assignment...............................................................82
12.8. Execution and Effectiveness....................................................................85
12.9. Confidentiality................................................................................85
12.10. Survival.......................................................................................85
12.11. Severability...................................................................................85
12.12. No Broker......................................................................................85
12.13. Performance by Lenders and Certificate Holders; Replacement of Lenders; Replacement of
Certificate Holders............................................................................86
12.14. Limited Recourse Against Certificate Holders and Trust Company.................................87
12.15. Concerning Lessor..............................................................................87
12.16. Currency Indemnity.............................................................................88
12.17. Consent and Agreement of Lessee and Guarantor..................................................88
(iv)
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EXHIBITS AND SCHEDULES
SCHEDULE 1 Description of Equipment
SCHEDULE 2 Pricing Grid
SCHEDULE 3 Lender Commitments
SCHEDULE 4 Lenders' and Certificate Holders' Notice Addresses, Payment
Instructions and Responsible Officers
SCHEDULE 5 Liens
SCHEDULE 6 Indebtedness
SCHEDULE 7 Subsidiaries
SCHEDULE 8 Insurance
SCHEDULE 9 ERISA Plans
EXHIBIT A [Form of] Xxxx of Sale and Receipt
EXHIBIT B-1 [Form of] Certificate of Sale/Leaseback Equipment Relating to
Lease Agreement Supplement No. __
EXHIBIT B-2 [Form of] Certificate of Equipment for Items of Equipment to
Be Assembled Relating to Lease Supplement No. __
EXHIBIT C [Form of] Funding Notice and Instructions re Funds on Funding
Date
EXHIBIT D [Form of] Completion Certificate
(v)
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This PARTICIPATION AGREEMENT, dated as of May __, 2000 (together with all
amendments and supplements hereto, this "Agreement") is among UNIVERSAL
COMPRESSION, INC., a Texas corporation (together with its successors and
permitted assigns, "Lessee"), UNIVERSAL COMPRESSION HOLDINGS, INC., a Delaware
corporation (together with its successors and permitted assigns, "Guarantor"),
WILMINGTON TRUST COMPANY, a Delaware banking corporation, not in its individual
capacity but solely as Trustee of UNIVERSAL COMPRESSION TRUST (2000-1) under the
Trust Agreement dated as of May __, 2000 (the "Lessor") and in its individual
capacity, but only where so specified (together with its successors and
permitted assigns, "Trust Company"), DEUTSCHE BANK AG, NEW YORK BRANCH, and the
financial institutions listed on the signature pages hereof or that may
thereafter become party hereto as Certificate Holders (each a "Certificate
Holder" and collectively the "Certificate Holders"), BANKERS TRUST COMPANY, as
Administrative Agent (in such capacity, together with its successors and
permitted assigns in such capacity, the "Administrative Agent") and BANKERS
TRUST COMPANY, as Collateral Agent (in such capacity, together with its
successors and permitted assigns in such capacity, the "Collateral Agent") and
each of the financial institutions listed on the signature pages hereof or that
may hereafter become party hereto as lenders (the "Lenders").
W I T N E S S E T H:
WHEREAS, Lessor has agreed to acquire certain natural gas compressor
equipment from Lessee and pursuant to the Assembly Agency Agreement of even date
herewith between Lessor and Lessee (the "Assembly Agency Agreement"), Lessee and
Lessor have agreed that Lessee will act as Assembly Agent and supervise the
acquisition, construction and assembly of additional natural gas compressor
equipment on behalf of Lessor;
WHEREAS, Lessor has agreed to lease to Lessee such natural gas compressor
equipment pursuant to a Master Equipment Lease Agreement of even date herewith
between Lessee and Lessor (the "Lease Agreement");
WHEREAS, Lenders have agreed to make a loan or loans to Lessor subject to
the conditions, restrictions and limitations in this Agreement and in the Loan
Agreement dated as of May ___, 2000, among Lessor, the Lenders, the Collateral
Agent and the Administrative Agent (the "Loan Agreement"), for the purpose of
financing Lessor's acquisition of the natural gas compressor equipment to be
leased under the Lease Agreement;
WHEREAS, Lessee is a subsidiary of Guarantor, and to induce Lessor to lease
the natural gas compressor equipment to Lessee and to induce Lenders to make a
loan or loans to Lessor, Guarantor has agreed to guarantee certain of Lessee's
obligations under the Operative Documents;
WHEREAS, to induce Lenders to make a loan or loans to Lessor, Lessor has
agreed to provide Collateral Agent on behalf of Lenders certain security in
accordance with the terms of the Loan Agreement;
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NOW, THEREFORE, in consideration of the premises and mutual agreements
contained herein, the parties hereto agree as follows:
1. Definitions and Usage.
Unless the context otherwise requires, capitalized terms used herein and
not otherwise defined herein shall have the meanings set forth or referred to in
Appendix A.
2. Representations and Warranties.
2.1. Lessee Representations and Warranties. Lessee hereby represents and
warrants as of the date hereof and on each Funding Date for the benefit of each
other party hereto that:
(a) Lessee (i) is a duly organized and validly existing corporation in good
standing under the laws of the jurisdiction of its incorporation, (ii) has the
corporate power and authority to own its property and assets and to transact the
business in which it is engaged and presently proposes to engage and (iii) is
duly qualified and is authorized to do business and is in good standing in each
jurisdiction where the ownership, leasing or operation of its property or the
conduct of its business requires such qualifications except for failures to be
so qualified which, individually or in the aggregate, could not reasonably be
expected to have a material adverse effect on Lessee's ability to perform its
obligations under the Operative Documents or on the business, operations,
property, assets, liabilities, condition (financial or otherwise) or prospects
of Guarantor and its Subsidiaries taken as a whole.
(b) Lessee has the corporate power and authority to execute, deliver and
perform the terms and provisions of each of the Operative Documents to which it
is party and has taken all necessary corporate action to authorize the
execution, delivery and performance by it of each of such Operative Documents.
Lessee has duly executed and delivered each of the Operative Documents to which
it is party, and each of such Operative Documents constitutes its legal, valid
and binding obligation enforceable in accordance with its terms, except to the
extent that the enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws generally affecting
creditors' rights and by equitable principles (regardless of whether enforcement
is sought in equity or at law).
(c) Neither the leasing of the Equipment, the execution, delivery or
performance by Lessee of the Operative Documents to which it is a party, nor
compliance by it with the terms and provisions thereof, (i) will contravene any
provision of any law, statute, rule or regulation or any order, writ, injunction
or decree of any court or governmental instrumentality, (ii) will, after giving
effect to any waivers, conflict with or result in any material breach of any of
the terms, covenants, conditions or provisions of, or constitute a default
under, or result in the creation or imposition of (or the obligation to create
or impose) any Lien (other than Permitted Liens) upon any of the property or
assets of Lessee pursuant to the terms of any indenture, mortgage, deed of
1trust, credit agreement or loan agreement, or any other material agreement,
contract or instrument, to which Lessee is a party or by which it or any of its
property
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or assets is bound or to which it may be subject or (iii) will violate any
provision of the Certificate of Incorporation or By-Laws of Lessee.
(d) No order, consent, approval, license, authorization or validation of,
or filing, recording or registration with (other than the filing of the Lessee
Financing Statements and except as have otherwise been obtained or made on or
prior to the Closing Date), or exemption by, any governmental or public body or
authority, or any subdivision thereof, is required to authorize, or is required
in connection with, (i) the execution, delivery and performance by Lessee of any
Operative Document to which it is a party or (ii) the legality, validity,
binding effect or enforceability against Lessee of any such Operative Document.
(e) There is no action, suit or other proceeding pending or, to the best
knowledge of Lessee's, threatened, (i) with respect to the Revolver or the
transaction contemplated herein or (ii) that could reasonably be expected to
materially and adversely affect the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of Lessee and its
Subsidiaries taken as a whole.
(f) No Lease Default has occurred and is continuing.
(g) All representations and warranties of Lessee (or its predecessors in
interest) set forth in the other Operative Documents were true and correct in
all material respects at the time as of which such representations and
warranties were made (or deemed made) and shall be true and correct in all
material respects as of each Funding Date as if such representations and
warranties were made on and as of such date, unless stated to relate to a
specific earlier date, in which case such representations and warranties shall
be true and correct in all material respects as of such earlier date.
(h) Lessee's chief executive office is located at 0000 Xxxxxxxxxx Xxxx,
Xxxxxxx, Xxxxx 00000 and its principal place of business is located at
[ ].(1)
(i) Tax Registration. The transaction contemplated hereby (i) is not
required to be registered pursuant to Code Section 6111 or any regulation
promulgated thereunder or (ii) was properly and timely registered in accordance
with Code Section 6111 and any regulations promulgated thereunder and the
correct registration number was provided to the parties hereto.
2.2. Further Lessee Representations and Warranties. Lessee hereby
represents and warrants as of each Funding Date for the benefit of each other
party hereto that:
(a) For each Item of Equipment sold by Lessee to Lessor, immediately prior
to giving effect to the sale thereof to Lessor, Lessee has good and marketable
title to such Item of Equipment.
------------------------
1 SRZ to provide.
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(b) For each Component sold by Lessee to Lessor or purchased by Lessee on
behalf of Lessor in accordance with the Assembly Agency Agreement, at the time
of such sale or purchase and on the Funding Date for such Component, Lessor has
good and marketable title to such Component.
(c) On the last Funding Date for the reimbursement of the Component Costs
for an Item of Equipment assembled by Lessee on behalf of Lessor in accordance
with the Assembly Agency Agreement, Lessor has good and marketable title to such
Item of Equipment.
(d) There are no Liens other than Permitted Liens and Lessor Liens on any
Item of Equipment, any Component, the proceeds of any Item of Equipment or
Component or the insurance required under the Lease Agreement.
(e) Each Item of Equipment is personal property and not a fixture attached
to realty under Applicable Law, and each Item of Equipment has permanently
affixed thereto the serial number or other identification number set forth
therefor on the Lease Agreement Supplement for such Item.
(f) For each Item of Equipment, Lessor and the Collateral Agent shall be
entitled to all of the rights and benefits and priorities provided to a holder
of a perfected first priority Lien under Applicable Law, and on each Funding
Date, all recordations and filings shall have been accomplished in each
jurisdiction as may be required by law to establish and perfect Lessor's and the
Collateral Agent's respective rights in and to such Lessee Collateral or Lessor
Collateral, as the case may be, and any giving of notice or any other action to
such end required by Applicable Law has been given or taken.
(g) The provisions of this Agreement are effective to create in favor of
the Collateral Agent for the benefit of the Lenders a legal, valid and
enforceable security interest in all right, title and interest in the Lessor
Collateral, and the filing of the financing statements executed by Lessor as
debtor with the Secretary of State for the state of Delaware perfects such
security interest in the Lessor Collateral, subject to no Liens other than
Permitted Liens and Lessor Liens and the Collateral Agent shall be entitled to
all of the rights, benefits, and priorities provided to a holder of liens of
such type under Applicable Law.
(h) Lessee has delivered to Lessor a true, correct and complete Certificate
of Equipment for each Item of Equipment.
(i) With respect to Items of Equipment assembled by Lessee on behalf of
Lessor pursuant to the Assembly Agency Agreement, payment in full has been made
by or on behalf of Lessee or Lessor to the vendor of the natural gas engine, the
compressor and the air cooler for such Item of Equipment.
(j) Each Item of Equipment sold by Lessee to Lessor (other than Items for
which Lessee has delivered to Lessor and the Administrative Agent at least five
(5) Business Days prior to such funding an Appraisal confirming that the fair
market value of such Item is
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greater that or equal to the Acquisition Cost therefor) at the time of such sale
shall have a Date of Manufacture or a Date of Overhaul no earlier than five (5)
years prior to such Funding Date.
(k) Each Item of Equipment bears a plaque stating "This Equipment is leased
by Universal Compression, Inc. from Universal Compression Trust (2000-1) and is
subject to a security interest in favor of Bankers Trust Company for the benefit
of the Lenders to Universal Compression Trust (2000-1)".
(l) Each Item of Equipment, other than Items of Equipment made subject to
the Lease Agreement prior to such Funding Date, is in proper working order.
(m) No Event of Loss or event which with the passage of time would become
an Event of Loss has occurred with respect to any Item of Equipment or any
Component funded on such Funding Date.
(n) As of the Closing Date, and as of each Funding Date, (i) no Item of
Equipment is intended by Lessee to be "equipment used in farming operations" or
"mobile goods" as such terms are used in Sections 9-401 and 9-103(3),
respectively of the New York Uniform Commercial Code or any correlative
provision of any other applicable state's Uniform Commercial Code and, (ii) no
Item of Equipment shall be "goods covered by a certificate of title issued under
a statute of this state or of another jurisdiction under the law of which
indication of a security interest on the certificate is required as a condition
of perfection" within the meaning of Section 9-103 of the New York Uniform
Commercial Code or any correlative provision of any other applicable state's
Uniform Commercial Code.
2.3. Guarantor Representations and Warranties. Guarantor hereby represents
and warrants as of the date hereof and on each Funding Date for the benefit of
each party hereto that:
(a) Guarantor (i) is a duly organized and validly existing corporation in
good standing under the laws of the jurisdiction of its incorporation, (ii) has
the corporate power and authority to own its property and assets and to transact
the business in which it is engaged and presently proposes to engage and (iii)
is duly qualified and is authorized to do business and is in good standing in
each jurisdiction where the ownership, leasing or operation of its property or
the conduct of its business requires such qualifications except for failures to
be so qualified which, individually or in the aggregate, could not reasonably be
expected to have a material adverse effect on the business, operations,
property, assets, liabilities, condition (financial or otherwise) or prospects
of Guarantor and its Subsidiaries taken as a whole.
(b) Guarantor has the corporate power and authority to execute, deliver and
perform the terms and provisions of each of the Operative Documents to which it
is party and has taken all necessary corporate action to authorize the
execution, delivery and performance by it of each of such Operative Documents.
Guarantor has duly executed and delivered each of the Operative Documents to
which it is party, and each of such Operative Documents constitutes its legal,
valid and binding obligation enforceable in accordance with its terms, except to
the extent that the enforceability thereof may be limited by applicable
bankruptcy, insolvency,
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reorganization, moratorium or other similar laws generally affecting creditors'
rights and by equitable principles (regardless of whether enforcement is sought
in equity or at law).
(c) Neither the execution, delivery or performance by Guarantor of the
Operative Documents to which it is a party, nor compliance by it with the terms
and provisions thereof, (i) will contravene any provision of any law, statute,
rule or regulation or any order, writ, injunction or decree of any court or
governmental instrumentality, (ii) will, after giving effect to any waivers,
conflict with or result in any material breach of any of the terms, covenants,
conditions or provisions of, or constitute a default under, or result in the
creation or imposition of (or the obligation to create or impose) any Lien
(other than Permitted Liens) upon any of the property or assets of Guarantor or
any of its Subsidiaries pursuant to the terms of any indenture, mortgage, deed
of trust, credit agreement or loan agreement, or any other material agreement,
contract or instrument, to which Guarantor or any of its Subsidiaries is a party
or by which it or any of its property or assets is bound or to which it may be
subject or (iii) will violate any provision of the Certificate of Incorporation
or By-Laws of Guarantor or any of its Subsidiaries.
(d) No order, consent, approval, license, authorization or validation of,
or filing, recording or registration with (except as have otherwise been
obtained or made on or prior to the Closing Date), or exemption by, any
governmental or public body or authority, or any subdivision thereof, is
required to authorize, or is required in connection with, (i) the execution,
delivery and performance by Guarantor of any Operative Document to which it is a
party or (ii) the legality, validity, binding effect or enforceability against
Guarantor of any such Operative Document.
(e) The audited consolidated balance sheets of Guarantor and its
Subsidiaries for the fiscal years ended on March 31, 1999 and March 31, 2000 and
the related statements of income, cash flows and shareholders' equity of
Guarantor and its Subsidiaries for the fiscal years ended on such dates, which
annual financial statements have been examined by Deloitte & Touche LLP,
certified public accountants, who delivered an unqualified opinion with respect
thereto and copies of which have heretofore been delivered to each Lender,
Certificate Holder and the Administrative Agent, present fairly in all material
respects the financial position of Guarantor and its Subsidiaries at the date of
such balance sheets and the results of the operations of Guarantor and its
Subsidiaries for the periods covered thereby. All of the foregoing historical
financial statements have been prepared in accordance with generally accepted
accounting principles consistently applied. The pro forma consolidated financial
statements of Guarantor and its Subsidiaries as of March 31, 2000, in each case
after giving effect to the Guarantor IPO, the Repurchase and the transactions
contemplated by the Operative Documents, copies of which have been furnished to
the Lenders, the Certificate Holders and the Administrative Agent prior to the
date hereof, present fairly in all material respects the pro forma consolidated
financial position of Guarantor and its Subsidiaries as of March 31, 2000. After
giving effect to the Guarantor IPO, the Repurchase, the Revolver and the
transactions contemplated by the Operative Documents, since March 31, 2000,
there has been no material adverse change in the business, operations, property,
assets, liabilities, condition (financial or otherwise) or prospects of Lessee
or of Guarantors and its Subsidiaries taken as a whole.
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(f) On and as of the Closing Date and after giving effect to the Guarantor
IPO, the Repurchase, the Revolver and the transactions contemplated by the
Operative Documents and to all Indebtedness (including any Loans) being incurred
or assumed and Liens created by Lessee and Guarantor in connection therewith (i)
the sum of the assets, at a fair valuation, of each of Lessee on a stand-alone
basis and of Guarantor and its Subsidiaries taken as a whole will exceed its
debts; (ii) each of Lessee on a stand-alone basis and Guarantor and its
Subsidiaries taken as a whole has not incurred and does not intend to incur, and
does not believe that it will incur, debts beyond its ability to pay such debts
as such debts mature; and (iii) each of Lessee on a stand-alone basis and
Guarantor and its Subsidiaries taken as a whole will have sufficient capital
with which to conduct its business. For purposes of this Section 2.3(f), "debt"
means any liability on a claim, and "claim" means (A) right to payment, whether
or not such a right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured,
or unsecured or (B) right to an equitable remedy for breach of performance if
such breach gives rise to a payment, whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed,
undisputed, secured or unsecured. The amount of contingent liabilities at any
time shall be computed as the amount that, in the light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability.
(g) Except as fully disclosed in the financial statements delivered
pursuant to Section 2.3(e) or the Operative Documents, there are as of the date
hereof no liabilities or obligations with respect to Guarantor or any of its
Subsidiaries of any nature whatsoever (whether absolute, accrued, contingent or
otherwise and whether or not due) which, either individually or in aggregate,
could reasonably be expected to be material to Lessee or to Guarantor and its
Subsidiaries taken as a whole. As of the date hereof, neither Guarantor nor
Lessee knows of any basis for the assertion against it or any of its
Subsidiaries of any liability or obligation of any nature whatsoever that is not
fully disclosed in the financial statements delivered pursuant to Section 2.3(e)
or the Operative Documents which, either individually or in the aggregate, could
reasonably be expected to be material to the Lessee or to Guarantor and its
Subsidiaries taken as a whole.
(h) On and as of the date hereof, the Projections delivered to the
Administrative Agent, the Certificate Holders and the Lenders prior to the date
hereof have been prepared in good faith and are based on reasonable assumptions,
and there are no statements or conclusions in the Projections which are based
upon or include information known to Guarantor or Lessee to be misleading in any
material respect or which fail to take into account material information known
to Guarantor or Lessee regarding the matters reported therein. On the date
hereof, Guarantor and Lessee believe that the Projections are reasonable and
attainable, it being recognized by Lessor and the Lenders, however, that
projections as to future events are not to be viewed as facts and that the
actual results during the period or periods covered by the Projections may
differ from the projected results and that the differences may be material.
(i) There is no action, suit or other proceeding now pending or, to the
best knowledge of Guarantor, threatened (i) with respect to the Guarantor IPO,
the Repurchase, the Revolver or the transaction contemplated herein or (ii) that
could reasonably be expected to
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materially and adversely affect the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of Guarantor and
its Subsidiaries taken as a whole.
(j) All factual information (taken as a whole) furnished by Guarantor in
writing to the Administrative Agent (including, without limitation, all
information contained in the Operative Documents) for purposes of or in
connection with this Participation Agreement, or any transaction contemplated
herein or therein is, and all other such factual information (taken as a whole)
hereafter furnished by Guarantor in writing to the Administrative Agent, Lessor
or any Lender will be, true and accurate in all material respects on the date as
of which such information is dated or certified and not incomplete by omitting
to state any fact necessary to make such information (taken as a whole) not
misleading in any material respect at such time in light of the circumstances
under which such information was provided.
(k) Guarantor and each of its Subsidiaries have timely filed or caused to
be timely filed with the appropriate taxing authority, all Federal, state and
other returns, statements, forms and reports for taxes, domestic and foreign
(the "Returns") required to be filed by or with respect to the income,
properties or operations of Guarantor and/or any of its Subsidiaries. The
Returns accurately reflect all material liability for taxes of Guarantor and its
Subsidiaries for the periods covered thereby. Guarantor and each of its
Subsidiaries have paid all taxes payable by them other than taxes contested in
good faith and for which adequate reserves have been established in accordance
with GAAP. Except as disclosed in the financial statements referred to in
Section 2.3(e), as of the date hereof, there is no action, suit, proceeding,
investigation, audit, or claim now pending or, to the knowledge of Guarantor and
Lessee, threatened by any authority regarding any taxes relating to Guarantor or
any of its Subsidiaries. As of the Closing Date, neither Guarantor nor any of
its Subsidiaries has entered into an agreement or waiver or been requested to
enter into an agreement or waiver extending any statute of limitations relating
to the payment or collection of U.S. Federal income taxes of Guarantor or any of
its Subsidiaries or is aware of any agreement or waiver extending any statute of
limitations relating to the payment or collection of other taxes of Guarantor or
any of its Subsidiaries. None of Guarantor or any of its Subsidiaries has
provided, with respect to itself or property held by it, any consent under
Section 341 of the Code.
(l) Except as set forth on Schedule 9, each Plan (and each related trust,
insurance contract or fund) is in substantial compliance with its terms and with
all applicable laws, including, without limitation, ERISA and the Code; each
Plan (and each related trust, if any) which is intended to be qualified under
Section 401(a) of the Code has received a determination letter from the Internal
Revenue Service to the effect that it meets the requirements of Sections 401(a)
and 501(a) of the Code; no Reportable Event has occurred; to the best knowledge
of Guarantor and Lessee, each Plan which is a multiemployer plan (as defined in
Section 4001(a)(3) of ERISA) is in substantial compliance with its terms and
with all applicable laws, including, without limitation, ERISA and the Code; no
Plan which is a multiemployer plan (as defined in Section 4001(a)(3) of ERISA)
is insolvent or in reorganization; no Plan which is subject to Title IV of ERISA
has an Unfunded Current Liability; no Plan which is subject to Section 412 of
the Code or Section 302 of ERISA has an accumulated funding deficiency, within
the meaning of such sections of the Code or ERISA, or has applied for or
received a waiver of an accumulated funding deficiency or an extension of any
amortization period, within the meaning
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of Section 412 of the Code or Section 303 or 304 of ERISA; to the best knowledge
of Guarantor and the Lessee, no Plan which is a multiemployer plan (as defined
in Section 4001(a)(3) of ERISA) has an Unfunded Current Liability; all
contributions required to be made with respect to a Plan have been timely made,
neither Guarantor nor any Subsidiary of Guarantor nor any ERISA Affiliate has
incurred any material liability (including any indirect, contingent or secondary
liability) to or on account of a Plan pursuant to Section 409, 502(i), 502(l),
515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29),
4971 or 4975 of the Code or expects to incur any such liability under any of the
foregoing sections with respect to any Plan; no condition exists which presents
a material risk to Guarantor or any Subsidiary of Guarantor or any ERISA
Affiliate of incurring a liability to or on account of a Plan pursuant to the
foregoing provisions of ERISA and the Code; no proceedings have been instituted
to terminate or appoint a trustee to administer any Plan which is subject to
Title IV of ERISA; no action, suit, proceeding, hearing, audit or investigation
with respect to the administration, operation or the investment of assets of any
Plan (other than routine claims for benefits) is pending, to the best knowledge
of Guarantor and the Lessee, expected or threatened; to the best knowledge of
Guarantor, using actuarial assumptions and computation methods consistent with
Part 1 of subtitle E of Title IV of ERISA, the aggregate liabilities of
Guarantor and its Subsidiaries and its ERISA Affiliates to all Plans which are
multiemployer plans (as defined in Section 4001(a)(3) of ERISA) in the event of
a complete withdrawal therefrom, as of the close of the most recent fiscal year
of each such Plan ended prior to the date of the most recent funding, would not
exceed $50,000; no lien imposed under the Code or ERISA on the assets of
Guarantor or any Subsidiary of Guarantor or any ERISA Affiliate exists or is
likely to arise on account of any Plan; and Guarantor and its Subsidiaries may
cease contributions to or terminate any employee benefit plan maintained by any
of them without incurring any material liability.
(m) Each Foreign Pension Plan has been maintained in substantial compliance
with its terms and with the requirements of any and all applicable laws,
statutes, rules, regulations and orders and has been maintained, where required,
in good standing with applicable regulatory authorities. All contributions
required to be made with respect to a Foreign Pension Plan have been timely
made. Neither Guarantor nor any of its Subsidiaries has incurred any obligation
in connection with the termination of or withdrawal from any Foreign Pension
Plan. The present value of the accrued benefit liabilities (whether or not
vested) under each Foreign Pension Plan, determined as of the end of Guarantor's
most recently ended fiscal year on the basis of actuarial assumptions, each of
which is reasonable, did not exceed the current value of the assets of such
Foreign Pension Plan allocable to such benefit liabilities.
(n) All representations and warranties of Guarantor (or its predecessors in
interest) set forth in the other Operative Documents were true and correct in
all material respects at the time as of which such representations and
warranties were made (or deemed made) and shall be true and correct in all
material respects as of each Funding Date as if such representations and
warranties were made on and as of such date, unless stated to relate to a
specific earlier date, in which case such representations and warranties shall
be true and correct in all material respects as of such earlier date.
(o) Guarantor and each of its Subsidiaries have good and marketable title
to all material properties owned by them, including all property owned by them,
including all
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property reflected in the balance sheets referred to in Section 2.3(e) (except
as sold or otherwise disposed of since the date of such balance sheet in the
ordinary course of business), free and clear of all Liens, other than (i) as
referred to in the balance sheet or in the notes thereto or (ii) Permitted
Guarantor Liens.
(p) On the Closing Date and after giving effect to the transactions
contemplated hereby, (i) the authorized capital stock of Guarantor shall consist
of (a) 200,000,000 shares of common stock, $.01 par value per share, of which
12,707,769 shares shall be issued and 12,695,861 shall be outstanding, (b)
50,000,000 shares of Series A preferred stock, none of which shall be issued and
outstanding and (c) 6,000 shares of Class A non-voting common stock, $.01 par
value per share, none of which shall be issued and outstanding and (ii) the
authorized capital stock of Lessee shall consist of 5,000 shares of common
stock, $10 par value per share, of which 4,900 shall be issued and outstanding,
all of the shares of which shall be issued and outstanding and owned by
Guarantor. All such outstanding shares of common stock have been duly and
validly issued, are fully paid and nonassessable and are free of preemptive
rights. Neither Guarantor nor Lessee has outstanding any securities convertible
into or exchangeable for its capital stock or outstanding any rights to
subscribe for or to purchase, or any options for the purchase of, or any
agreements providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating to, its capital stock.
(q) As of the date hereof, Guarantor has no Subsidiaries other than those
Subsidiaries listed on Schedule 7 hereto. Schedule 7 correctly sets forth, as of
the Closing Date, the percentage ownership (direct and indirect) of Lessee in
each class of capital stock of each of its Subsidiaries and also identifies the
direct owner thereof.
(r) Each of Guarantor and its Subsidiaries is in compliance with all
applicable statutes, regulations and orders of, and all applicable restrictions
imposed by, all governmental bodies, domestic or foreign, in respect of the
conduct of its business and the ownership of its property (including applicable
statutes, regulations, orders and restrictions relating to environmental
standards and controls), except such noncompliances as could not, individually
or in the aggregate, reasonably be expected to have a material adverse effect on
Lessee's or Guarantor's ability to perform its obligations under the Operative
Documents or on the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of Guarantor and its
Subsidiaries taken as a whole.
(s) Neither Guarantor nor any of its Subsidiaries is an "investment
company" or a company "controlled" by an "investment company," within the
meaning of the Investment Company Act of 1940, as amended.
(t) Neither Guarantor nor any of its Subsidiaries is a "holding company,"
or a "subsidiary company" of a "holding company," or an "affiliate" of a
"holding company" or of a "subsidiary company" of a "holding company" within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
(u) Guarantor and each of its Subsidiaries have complied in all material
respects with, and are in compliance in all material respects with, all
applicable Environmental
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Laws and the requirements of any permits issued under such Environmental Laws.
There are no pending, past or threatened Environmental Claims against Guarantor
or any of its Subsidiaries (including any such claim arising out of the
ownership or operation by Guarantor or any of its Subsidiaries of any Real
Property no longer owned by Guarantor or any of its Subsidiaries) or any Real
Property owned or operated by Guarantor or any of its Subsidiaries. There are no
facts, circumstances, conditions or occurrences with respect to any Real
Property owned or operated by Guarantor or any of its Subsidiaries or any
business or operations of Guarantor or any of its Subsidiaries (including any
Real Property formerly owned or operated by Guarantor or any of its Subsidiaries
but no longer owned by Guarantor or any of its Subsidiaries or any business or
operations thereof) or any property adjoining or in the vicinity of any such
Real Property that could reasonably be expected (i) to form the basis of an
Environmental Claim against Guarantor or any of its Subsidiaries or any Real
Property owned or operated by Guarantor or any of its Subsidiaries, or (ii) to
cause any Real Property owned or operated by Guarantor or any of its
Subsidiaries to be subject to any restrictions on the ownership, occupancy or
transferability of such Real Property by Guarantor or any of its Subsidiaries
under any applicable Environmental Law.
(v) Hazardous Materials have not at any time been generated, used, treated
or stored on, or transported to or from, any Real Property owned or operated by
Guarantor or any of its Subsidiaries except in a manner so as not to give rise
to an Environmental Claim. Hazardous Materials have not at any time been
Released on or from any Real Property owned or operated by Guarantor or any of
its Subsidiaries.
(w) Notwithstanding anything to the contrary in this Section 2.3(v), the
representations made in this Section 2.3 shall not be untrue unless the
aggregate effect of all violations, claims, restrictions, failures and
noncompliances of the types described above could reasonably be expected to have
a material adverse effect on the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of Guarantor and
its Subsidiaries taken as a whole.
(x) Neither Guarantor nor any of its Subsidiaries is engaged in any unfair
labor practice that could reasonably be expected to have a material adverse
effect on Guarantor and its Subsidiaries taken as a whole. There is (i) no
unfair labor practice complaint pending against Guarantor or any of its
Subsidiaries or, to the best knowledge of Guarantor or Lessee, threatened
against any of them, before the National Labor Relations Board, and no
significant grievance or significant arbitration proceeding arising out of or
under any collective bargaining agreement is so pending against Guarantor or any
of its Subsidiaries or, to the best knowledge of Guarantor or Lessee, threatened
against any of them, (ii) no strike, labor dispute, slowdown or stoppage pending
against Guarantor or any of its Subsidiaries or, to the best knowledge of
Guarantor or Lessee, threatened against Guarantor or any of its Subsidiaries and
(iii) to the best knowledge of Guarantor or Lessee, no union representation
question existing with respect to the employees of Guarantor or any of its
Subsidiaries, except (with respect to any matter specified in clause (i), (ii)
or (iii) above, either individually or in the aggregate) such as could not
reasonably be expected to have a material adverse effect on the business,
operations, property, assets, liabilities, condition (financial or otherwise) or
prospects of Guarantor and its Subsidiaries taken as a whole.
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(y) Each of Guarantor and its Subsidiaries owns all the patents,
trademarks, permits, service marks, trade names, copyrights, licenses,
franchises and formulas, or rights with respect to the foregoing, and has
obtained assignments of all leases and other rights of whatever nature,
necessary for the present conduct of its business, without any known conflict
with the rights of others which, or the failure to obtain which, as the case may
be, would result in a material adverse effect on the business, operations,
property, assets, liabilities, condition (financial or otherwise) or prospects
of Guarantor and its Subsidiaries taken as a whole.
(z) Schedule 6 sets forth a true and complete list of all Indebtedness
(including Contingent Obligations) of Guarantor and its Subsidiaries as of the
date hereof and which is to remain outstanding after such date (excluding the
Loans and the Lessee Senior Discount Notes, the "Existing Indebtedness"), in
each case showing the aggregate principal amount thereof and the name of the
respective borrower and any other entity which directly or indirectly guaranteed
such debt.
(aa) At the time of consummation thereof, all material consents and
approvals of, and filings and registrations with, and all other actions in
respect of, all governmental agencies, authorities or instrumentalities required
in order to make or consummate the Guarantor IPO and the Repurchase, in each
case, to the extent then required have been obtained, given, filed or taken and
are or will be in full force and effect (or effective judicial relief with
respect thereto has been obtained). All applicable waiting periods with respect
thereto have or, prior to the time when required, will have, expired without, in
all such cases, any action being taken by any competent authority which
restrains, prevents, or imposes material adverse conditions upon the Guarantor
IPO or the Repurchase. Additionally, there does not exist any judgment, order or
injunction prohibiting or imposing material adverse conditions upon the
Guarantor IPO or the Repurchase. All actions taken by Guarantor pursuant to or
in furtherance of the Guarantor IPO or the Repurchase, as the case may be, have
been taken in compliance with the Revolver and all applicable laws except to the
extent consented to by the administrative agent thereto.
(bb) Schedule 8 sets forth a true and complete listing of all insurance
maintained by Guarantor and its Subsidiaries as of the date hereof, and with the
amounts insured (and any deductibles) set forth therein.
2.4. Lessor Representations and Warranties For Benefit of All Parties.
Lessor hereby represents and warrants as of the date hereof and on each Funding
Date for the benefit of each party hereto that:
(a) Lessor is a trustee acting on behalf of a trust duly established and
validly existing under the laws of the State of Delaware, has full power,
authority and legal right under such laws to execute, deliver and perform its
obligations under the Operative Documents to which it is a party.
(b) The leasing and financing of the Equipment, the execution and delivery
of the Operative Documents and the other related instruments, documents and
agreements to which it is a party, and the compliance by Lessor with the terms
hereof and thereof and the payments and performance by Lessor of any of its
obligations hereunder and thereunder (i) have been duly
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and legally authorized by all necessary action on the part of Lessor, (ii) are
not in contravention of, and will not result in a violation or breach of, any of
the terms of Lessor's declaration of trust and related trust instruments, and
(iii) will not violate or constitute a breach of any provision of law, any order
of any court or other agency of government, or any indenture, agreement or other
instrument to which Lessor is a party, or by or under which Lessor or any of
Lessor's property is bound, or be in conflict with, result in a breach of, or
constitute (with due notice and/or lapse of time) a default under any such
indenture, agreement or instrument, or result in the creation or imposition of
any Lien, other than Permitted Liens, upon any of Lessor's property or assets
and (iv) will not require, on the part of Lessor, the consent or approval of,
the giving of notice to, the registration with, or the taking of any other
action in respect of, any United States federal, state or local governmental or
public commission, board, authority or agency except for filings, if any, made
pursuant to any notice reporting requirement applicable to it.
(c) Each Operative Document to which it is a party has been executed by the
duly authorized officer or officers of Lessor and delivered to the other parties
thereto and constitutes, or when executed by the duly authorized officer or
officers of Lessor and delivered to the other parties thereto, will constitute,
the legal, valid and binding obligation of Lessor, enforceable in accordance
with its terms except as limited by any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights from time to time in effect and by general principles of
equity including those applicable to the enforceability of the remedy of
specific performance.
(d) There is no action, suit or other proceeding now pending or, to
Lessor's knowledge, threatened, against or affecting Lessor, in any court or
before any regulatory commission, board or other administrative governmental
agency (i) which will materially and adversely affect the interest of Lessee in
any Item of Equipment or any Operative Document, or the interest of the
Collateral Agent in any such Item or any Operative Document, or (ii) that could
reasonably be expected to materially and adversely affect the business,
operations, property, assets, liabilities, condition (financial or otherwise) or
prospects of Lessor.
(e) There is no tax, levy, impost, deduction, charge or withholding which
may be imposed on or asserted against the Lessor Collateral or any part thereof
or any interest therein, or against any Lender, the Administrative Agent or the
Collateral Agent under the laws of the State of ____ either (i) on or by virtue
of the execution or delivery of Operative Documents or any other document
contemplated thereby, or (ii) on any payment to be made by Lessor pursuant to
the Loan Documents or any other document contemplated thereby to which Lessor is
a party.
(f) Lessor has no indebtedness or other liabilities, whether contingent or
otherwise, other than its obligations under and as contemplated by the Operative
Documents.
(g) No Loan Default or Loan Event of Default not caused by a Lease Default
or Lease Event of Default has occurred and is continuing.
2.5. Lessor Representations and Warranties For Benefit of Lenders,
Certificate Holders, the Administrative Agent and the Collateral Agent. Lessor
hereby represents and
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warrants as of the date hereof and on each Funding Date for the benefit of each
Lender, each Certificate Holder, the Administrative Agent and the Collateral
Agent that:
(a) No Lease Default or Lease Event of Default of which it has knowledge
has occurred and is continuing.
(b) Lessor's chief executive office and principal place of business is
located at Xxxxxx Square North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx
and Lessor's records with respect to the transactions contemplated by the
Operative Documents are located at such address.
(c) Lessor is duly qualified and is authorized to do business and is in
good standing in each jurisdiction where ownership, leasing or operation of its
property or the conduct of its business requires such qualifications except for
failures to be so qualified which, individually or in the aggregate, could not
reasonably be expected to have a material adverse effect on Lessor's ability to
perform its obligations or exercise its rights under the Operative Documents or
on the business, property, assets, liabilities, condition (financial or
otherwise) or prospects of Lessor.
2.6. Further Lessor Representations and Warranties For Benefit of Lenders,
Certificate Holders, the Administrative Agent and the Collateral Agent. Lessor
hereby represents and warrants as of each Funding Date for the benefit of each
Lender, each Certificate Holder, the Administrative Agent and the Collateral
Agent (and with respect to Section 2.6(a), Lessee) that:
(a) After giving effect to each Xxxx of Sale therefor, Lessor has good and
marketable title to each Item of Equipment (including the parts and components
thereof) and the Lessor Collateral is free and clear of all Liens other than
Permitted Liens.
(b) The provisions of this Agreement and the Loan Agreement are effective
to create in favor of Collateral Agent for the benefit of the Lenders a legal,
valid and enforceable security interest in all right, title and interest of the
Lessor in the Lessor Collateral, and the filing of the financing statements
executed by Lessor as debtor and filed with the Secretary of State for the state
of Delaware perfect such security interest in the Lessor Collateral, subject to
no Liens other than Permitted Liens and the Collateral Agent shall be entitled
to all of the rights, benefits, and priorities provided to a holder of liens of
such type under Applicable Law.
2.7. Trust Company Representations and Warranties. Trust Company hereby
represents and warrants as of the date hereof, and each Funding Date for the
benefit of each of the parties hereto that:
(a) Trust Company is a Delaware banking corporation, duly organized,
validly existing and in good standing under the laws of the state of Delaware,
and has full power, authority and legal right under such laws to execute,
deliver and perform its obligations under this Agreement and the Trust
Agreement.
(b) Each of the Trust Agreement and (to the extent of the covenants,
agreements, representations and warranties of Trust Company in its individual
capacity contained
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herein) this Agreement has been duly executed and delivered by Trust Company,
and (assuming due authorization, execution and delivery of the Trust Agreement
by Certificate Holders) the Trust Agreement and (to the extent of the covenants,
agreements, representations and warranties of Trust Company in its individual
capacity contained herein) this Agreement constitute a legal, valid and binding
obligation of Trust Company, enforceable against Trust Company in accordance
with its terms.
(c) Neither the execution or delivery by Trust Company of the Trust
Agreement or this Agreement nor the performance by Trust Company of its
obligations hereunder or thereunder (i) conflicts or will conflict with or
violate in any respect any applicable United States federal law governing the
banking or trust powers of Trust Company or any [jurisdiction] law applicable to
or binding upon Trust Company or any of its Affiliates, or any of their
respective properties, (ii) conflicts or will conflict with or violate Trust
Company's articles of association or by-laws, (iii) conflicts or will conflict
with, or contravene, violate or result in a breach of, any indenture, mortgage,
loan agreement, lease or any other material agreement or material instrument to
which Trust Company or any of its Affiliates is a party or by which any of their
respective properties is bound, (iv) results or will result in the creation or
imposition of any Lien (other than Permitted Liens) on the Lessor Collateral, or
(v) requires or will require, on the part of Trust Company or any Affiliate of
Trust Company, the consent or approval of, the giving of notice to, the
registration with, or the taking of any other action in respect of, any
Governmental Entity governing the banking or trust powers of Trust Company,
except for filings, if any, made pursuant to any notice reporting requirement
applicable to it; provided that no representation is made as to any laws, rules
or regulations applicable to the particular nature of the Lessor Collateral or
the use thereof.
(d) Trust Company is not in breach of any covenants or agreements made by
it in the Trust Agreement or by it in its individual capacity in this Agreement.
(e) Trust Company's chief executive office is located at
[________________], and Trust Company's records with respect to the transactions
contemplated by the Operative Documents are located at such address.
(f) There is no action, suit or other proceeding now pending or, to Trust
Company's knowledge, threatened, against or affecting Trust Company, in any
court or before any regulatory commission, board or other administrative
governmental agency (i) which will materially and adversely affect the rights of
any other party hereto in any Operative Document or the right, title or interest
of Lessor to any Item of Equipment, or the interest of the Collateral Agent in
any Item of Equipment or any other Lessor Collateral or (ii) that could
reasonably be expected to materially and adversely affect the business,
operations, property, assets, liabilities, condition (financial or otherwise) or
prospects of Trust Company.
(g) Trust Company has not assigned or transferred any of its right, title
or interest in or under the Operative Documents except in accordance therewith.
(h) No Loan Event of Default attributable to Trust Company has occurred and
is continuing.
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(i) There are no Lessor Liens attributable to Trust Company on the Trust
Estate or any part thereof, and the execution, delivery and performance by Trust
Company of the Operative Documents to which it is a party will not subject the
Trust Estate to any Lessor Liens attributable to it.
(j) Except for Taxes based upon the income of any Person, there are no
Taxes payable by Trust Company in Delaware in connection with the execution,
delivery, consummation or recordation of the Operative Documents, upon or with
respect to the Trust Estate, or in connection with the consummation of the
transactions contemplated hereby or by the other Operative Documents solely
because the principal place of business of the Trust Company is in Delaware
(k) Neither the Trust Company nor any Person authorized by it to act on its
behalf has offered or sold any interest in the Trust Estate or the Certificates,
or in any similar security relating to the transaction contemplated by the
Operative Documents, or in any security the offering of which for the purposes
of the Securities Act would be deemed to be part of the same offering as the
offering thereof, or solicited any offer to acquire any of the same from, any
Person other than the parties hereto.
(l) Trust Company is not an "investment company" or a company "controlled"
by an "investment company," within the meaning of the Investment Company Act of
1940, as amended.
2.8. Warranty Disclaimers. EACH OF LESSOR, EACH CERTIFICATE HOLDER, EACH
LENDER, THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT AS APPLICABLE DEMISE,
LEASE AND FINANCE THE ITEMS OF EQUIPMENT HEREUNDER AS-IS AND WHERE-IS WITH ALL
FAULTS IF ANY AND IN WHATEVER CONDITION THEY MAY BE IN AND EXPRESSLY DISCLAIMS
AND MAKES NO REPRESENTATION OR WARRANTY, EITHER EXPRESSED OR IMPLIED, AS TO THE
DESIGN, CONDITION, QUALITY, CAPACITY, MERCHANTABILITY, DURABILITY, SUITABILITY
OR ITS FITNESS FOR ANY PARTICULAR PURPOSE, OR QUALIFICATION FOR ANY PARTICULAR
TRADE OR ANY OTHER MATTER CONCERNING, THE ITEMS OF EQUIPMENT. LESSEE HEREBY
WAIVES ANY CLAIM (INCLUDING ANY CLAIM BASED ON STRICT OR ABSOLUTE LIABILITY IN
TORT OR INFRINGEMENT) IT MIGHT HAVE AGAINST LESSOR, ANY CERTIFICATE HOLDER, ANY
LENDER, THE TRUST COMPANY, THE ADMINISTRATIVE AGENT OR COLLATERAL AGENT FOR ANY
LOSS, DAMAGE (INCLUDING INCIDENTAL OR CONSEQUENTIAL DAMAGE) OR EXPENSE CAUSED BY
ANY ITEM OF EQUIPMENT EXCEPT TO THE EXTENT CAUSED BY SUCH PARTY'S GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OR BY LESSEE'S LOSS OF USE THEREOF FOR ANY
REASON WHATSOEVER. LESSOR HEREBY WAIVES ANY CLAIM (INCLUDING ANY CLAIM BASED ON
STRICT OR ABSOLUTE LIABILITY IN TORT OR INFRINGEMENT) IT MIGHT HAVE AGAINST ANY
CERTIFICATE HOLDER, ANY LENDER, THE TRUST COMPANY, THE ADMINISTRATIVE AGENT OR
COLLATERAL AGENT FOR ANY LOSS, DAMAGE (INCLUDING INCIDENTAL OR CONSEQUENTIAL
DAMAGE) OR EXPENSE CAUSED BY ANY ITEM OF EQUIPMENT EXCEPT TO THE EXTENT
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CAUSED BY SUCH PARTY'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OR BY LESSOR'S
LOSS OF USE THEREOF FOR ANY REASON WHATSOEVER.
3. Conditions Precedent.
3.1. Lessor Conditions.
(a) Conditions Precedent to the Closing Date. Lessor shall have no
obligation to acquire any Item of Equipment and subject it to the Lease
Agreement unless on the Closing Date each of the following conditions are
fulfilled:
(i) Lessor shall have received this Agreement, the Lease Agreement, the
Assembly Agency Agreement, the Loan Agreement and the Trust Agreement, and
the Administrative Agent shall have received the Administrative Agent Fee
Letter, in each case duly authorized, executed and delivered by each other
party thereto.
(ii) Lessor shall have received from Lessee, in form and substance
satisfactory to Lessor, resolutions of the boards of directors of Lessee or
other written evidence of appropriate corporate action, and the certificate
of incorporation and by-laws, each certified as of the Closing Date by the
secretary of Lessee, duly authorizing the execution, delivery and performance
of this Agreement, the Lease Agreement, the Assembly Agency Agreement and
each other document to be delivered in connection therewith to which it is a
party, together with an incumbency certificate as to the person or persons
authorized to execute and deliver such documents on behalf of Lessee.
(iii) Lessor shall have received from Guarantor, in form and substance
satisfactory to Lessor, resolutions of the boards of directors of Guarantor
or other written evidence of appropriate corporate action, and the
certificate of incorporation and by-laws, each certified by the secretary of
Guarantor as of the Closing Date, duly authorizing the execution, delivery
and performance of the Participation Agreement and each other document to be
delivered in connection therewith to which it is a party, together with an
incumbency certificate as to the person or persons authorized to execute and
deliver such documents on behalf of Guarantor.
(iv) Lessor shall have received written opinions of Xxxxxxx Xxxx & Xxxxx
LLP, counsel to Lessee and Guarantor, dated the Closing Date and addressed to
Lessor, each Lender, each Certificate Holder, the Administrative Agent and
the Collateral Agent in form attached hereto as Exhibit E-1.
(v) Lessor shall have received a written opinion of Xxxxxxx Banner, Esq.,
in-house counsel to Lessee and Guarantor, dated the Closing Date and
addressed to Lessor, each Lender, each Certificate Holder, the Administrative
Agent and the Collateral Agent in form attached hereto as Exhibit E-2.
(vi) Lessee shall have delivered good standing certificates dated within
five (5) days of the Closing Date from the state in which the Lessee is
incorporated and Guarantor
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shall have delivered a good standing certificate dated within five (5) days
of the Closing Date from the state in which Guarantor is incorporated.
(vii) The Administrative Agent and Lessor shall have received an Appraisal
for all equipment sold by Lessee to Lessor on the Closing Date.
(viii) The Administrative Agent shall have received the administrative fee
due on the Closing Date described in Section 11.9 and all other fees set
forth in the [Commitment Letter].
(b) Conditions Precedent to each Funding Date. In addition to the
conditions in Section 3.1(a), Lessor shall have no obligation to purchase any
Component or acquire any Item of Equipment and lease it back to Lessee on a
Funding Date (including on the Closing Date if applicable) unless on such
Funding Date the following conditions are fulfilled:
(i) There shall exist no Lease Default or Lease Event of Default and all
representations and warranties of Lessee and Guarantor contained herein and
in the other Operative Documents shall be true and correct in all material
respects with the same effect as though such representations and warranties
had been made on and as of such Funding Date except to the extent made as of
an earlier date.
(ii) Such Item of Equipment conforms to the requirements set forth in
Schedule 1 hereto.
(iii) Such Component or Item of Equipment is free of all Liens other than
Permitted Liens and Lessor Liens.
(iv) The Acquisition Cost of such Component or such Item of Equipment when
added to the total Acquisition Cost of all Items of Equipment theretofore
financed hereunder and all Equipment to be financed on the same Funding Date,
is less than or equal to the Maximum Acquisition Cost.
(v) Lessor and the Administrative Agent shall have received at least three
(3) Business Days prior to the date the Funding Notice for such funding is
due, a Certificate of Equipment with respect to such Component or Item, duly
executed by the Lessee.
(vi) All licenses, registrations, permits, consents and approvals required
by Applicable Laws or by any Governmental Entity (A) in connection with
Lessor's rights and interests in such Item of Equipment to the extent such
licenses, registrations, permits, consents or approvals are required because
of the nature of the Equipment and (B) in connection with the delivery,
acquisition, assembly, use and operation of such Item of Equipment shall have
been obtained to the satisfaction of Lessor.
(vii) Lessee shall have paid all of the reasonable costs and expenses
incurred by Trust Company, Lessor, Deutsche Bank as Lender and Certificate
Holder, the Administrative Agent and the Collateral Agent (including
attorneys' fees), and required to be paid by Lessee under the Operative
Documents (including those in relation to the
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negotiation, preparation and execution of the Operative Documents to be
executed and delivered on or before such Funding Date) and all fees and
amounts due on or before such Funding Date, including those set forth in the
Administrative Agent Fee Letter, in each case invoiced at least one day prior
to such Funding Date.
(viii) Lessor shall have received the proceeds of the Loans contemplated by
the relevant Funding Notice.
(ix) Lessor shall have received from the Certificate Holders an amount
equal to the aggregate Equity Components of such Components and/or Items of
Equipment.
(x) The Administrative Agent shall have received at least three (3) LIBOR
Banking Days before the Funding Date a Funding Notice executed and delivered
by Lessee.
(xi) Lessor, Certificate Holders, the Administrative Agent and the
Collateral Agent shall have received an insurance certificate in form and
substance satisfactory to the Administrative Agent confirming that such Item
of Equipment is insured in accordance with the provisions of Section 20 of
the Lease Agreement.
(xii) Lessee shall have delivered to the Administrative Agent and Lessor a
Lease Agreement Supplement for such Component or Item of Equipment.
(xiii) Lessee shall have executed and delivered to the Administrative Agent
copies of the Lessee Financing Statements for such Components or Items of
Equipment with evidence reasonably acceptable to Lessor that such have been
recorded in the state in which such Item of Equipment is located and, if the
law of such state requires financing statements to be filed in one or more
local jurisdictions within such state, in such local jurisdiction.
(xiv) At any time prior to such Funding Date, Lessor shall have received
opinions of special counsel to Lessee addressed to the Administrative Agent,
the Collateral Agent, and the Lenders in form and substance reasonably
satisfactory to Lessor and the Administrative Agent with respect to the
perfection of the interests of Lessor in Equipment located in the state in
which such Item is located.
(xv) The Administrative Agent and Lessor shall have received at any time
prior to such Funding Date lien searches reasonably acceptable to them in
form and substance in the name of Lessee and Guarantor searching the Uniform
Commercial Code records of, with respect to Guarantor, the state of Texas,
and with respect to Lessee, each state in which an Item of Equipment, and in
states that require filings in local jurisdictions in order to perfect a
security interest in an Item of Equipment, each such local jurisdiction, each
indicating that, after the filing of those UCC release or termination
statements, if any, executed and delivered by Lessee and all other relevant
Persons to the Lessor and the Administrative Agent on or before the Closing
Date, the representations set forth in
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Sections 2.2(d) and 2.3(o) will be accurate and complete in all respects to
the extent determinable from such searches.
(xvi) Lessor shall have received such other confirmatory assignments,
conveyances, financing and continuation statements, transfer endorsements,
powers of attorney, notes, reports and other assurances or instruments other
than estoppel certificates or other agreements, certificates or other
documents to be delivered by any Sublessee or other Person (other than an
Affiliate of Lessee) in possession of any Item of Equipment and take such
further actions which Lessor may reasonably request to perfect, preserve or
protect Lessor's security interest granted hereunder or which Lessor
reasonably deems necessary or advisable in order to obtain the full benefits
of the Liens created or intended to be created under the Lease Agreement, in
form and substance satisfactory to Lessor, as Lessor may reasonably request
in writing at least five (5) Business Days before such Funding Date.
(c) Lessor Conditions to the Funding Date for each Sale/Leaseback. In
addition to the conditions in Section 3.1(a) and (b), for each Item of Equipment
Lessee proposes to sell to Lessor, Lessor shall have no obligation to acquire
such Item of Equipment and lease it back to Lessee on a Funding Date (including
the Closing Date if applicable) unless Lessee shall have executed and delivered
to Lessor a Xxxx of Sale for such Item.
(d) Lessor Conditions to the First Funding Date for an Item of Equipment to
be Assembled. In addition to the conditions in Section 3.1(a) and (b), for each
Item of Equipment to be assembled by Lessee for Lessor pursuant to the Assembly
Agency Agreement, Lessor shall have no obligation to reimburse Lessee for the
cost of any Component for such Item of Equipment and lease it back to Lessee
unless Lessee shall have delivered to Lessor and the Administrative Agent at
least twenty (20) days prior to such first Funding Date, a Budget for such Item
reasonably acceptable to Lessor and the Administrative Agent.
(e) Lessor Conditions to each Funding Date for an Item of Equipment to be
Assembled. In addition to the conditions in Section 3.1(a), (b) and (d), for
each Item of Equipment to be assembled by Lessee for Lessor pursuant to the
Assembly Agency Agreement, Lessor shall have no obligation to reimburse Lessee
for the cost of any Component for such Item of Equipment and lease it back to
Lessee unless on the Funding Date (including the Closing Date if applicable) for
such reimbursement the following conditions are fulfilled:
(i) The amount to be reimbursed for each Component is, subject to the
Budget Parameters, equal to or less than the amount set forth in the Budget
for such Item of Equipment.
(ii) For each Component that is a natural gas engine, compressor or air
cooler, Lessee shall have delivered to Lessor at least three (3) Business
Days prior to the date the Funding Notice is due for such Funding Date a Xxxx
of Sale, invoice or purchase order evidencing Lessor's ownership of such
Component in form and substance reasonably satisfactory to Lessor.
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(iii) Lessee shall have executed and delivered to Lessor a Certificate of
Equipment for Items of Equipment to be assembled in the form of Exhibit B-2
for such Item at least ten (10) days before such Funding Date.
(iv) After the initial Funding Date, Lessee shall have delivered to Lessor
an amended and restated Lease Agreement Supplement for such Item, which
amended and restated Lease Agreement Supplement shall include the total
Acquisition Cost and Casualty Loss Value for such Item as of such Funding
Date.
(f) Lessor Conditions for Final Funding Date for an Assembled Item of
Equipment. In addition to the conditions in Section 3.1(a), (b), (d) and (e),
for each Item to be assembled by Lessee for Lessor pursuant to the Assembly
Agency Agreement, Lessor shall have no obligation to reimburse Lessee for the
remaining cost of any Component for such Item of Equipment and lease it back to
Lessee unless on the Funding Date for such final reimbursement Lessee shall have
delivered to Lessor a Completion Certificate for such Item of Equipment in the
form of Exhibit D.
Each leasing of an Item of Equipment by Lessee hereunder shall constitute a
representation and warranty by Lessee as of the date such leasing commences that
the conditions contained in Section 3.1 have been satisfied.
3.2. Lender Conditions.
(a) Lender Conditions on the Closing Date. No Lender shall have any
obligation to make a Loan for the reimbursement of the cost of any Component or
the acquisition of any Item of Equipment hereunder unless on the Closing Date
each of the following conditions are fulfilled:
(i) Such Lender shall have received original counterparts (unless otherwise
specified) in each case duly authorized, executed and delivered by each other
party thereto in form and substance satisfactory to such Lender and in full
force and effect of this Agreement, the Loan Agreement and its Note and
copies of the Trust Agreement, the Lease Agreement, and the Assembly Agency
Agreement.
(ii) Such Lender shall have received from Trust Company, in form and
substance satisfactory to such Lender, the certificate of incorporation and
by-laws, each certified as of the Closing Date by the secretary of Trust
Company, duly authorizing the execution, delivery and performance of this
Agreement, the Lease Agreement, the Assembly Agency Agreement and each other
document to be delivered in connection therewith to which it is a party,
together with an incumbency certificate as to the person or persons
authorized to execute and deliver such documents on behalf of Trust Company.
(iii) Such Lender shall have received written opinions of counsel to Lessor
and Trust Company dated the Closing Date and addressed to each Lender, each
Certificate
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Holder, the Administrative Agent, and the Collateral Agent, in the form
attached hereto as Exhibit E-3.
(b) Lender Conditions for each Funding Date. No Lender shall have any
obligation to make a Loan for the reimbursement of the cost of any Component or
the acquisition of any Item of Equipment hereunder unless on the Funding Date
therefor each of the following conditions are fulfilled:
(i) The conditions precedent to Lessor's obligation to lease such Item of
Equipment in accordance with the terms hereof (except for the condition
precedent set forth in Section 3.1(b)(viii)) shall have been satisfied,
without waiver or modification (except as consented to by Majority Lenders),
and such Lender shall have received copies of all documents and opinions with
respect thereto.
(ii) Such Lender shall have received, in each case duly authorized,
executed and delivered by each other party thereto in form and substance
satisfactory to such Lender and in full force and effect, copies of the
Lessor Financing Statements for such Item of Equipment with evidence
reasonably acceptable to Lessor that such have been recorded in the state in
which such Item of Equipment is located and, if the law of such state
requires financing statements to be filed in local jurisdictions within such
state, in such local jurisdiction and, in a timely manner, the Funding Notice
for such Funding Date.
(iii) There shall exist no Loan Default or Loan Event of Default and all
representations and warranties of Lessor contained herein and in the other
Operative Documents shall be true and correct with the same effect as though
such representations and warranties had been made on and as of such Funding
Date except to the extent made as of an earlier date.
(iv) On and as of the Funding Date, after giving effect to the Loan to be
made on such date, the aggregate of the original principal amounts of all
Loans made by such Lender do not exceed such Lender's Lender Commitment.
(v) At any time prior to such Funding Date, Lender shall have received
opinions of counsel addressed to the Administrative Agent, the Collateral
Agent, and the Lenders in form and substance reasonably satisfactory to the
Administrative Agent with respect to the perfection of its interest in
Equipment in the state in which such Item of Equipment is located.
(vi) Each Lender shall have received such other confirmatory assignments,
conveyances, financing and continuation statements, transfer endorsements,
powers of attorney, notes, reports and other assurances or instruments other
than estoppel certificates or other agreements, certificates or other
documents to be delivered by any Sublessee or other Person (other than an
Affiliate of Lessee) in possession of any Item of Equipment and take such
further actions which Majority Lenders may reasonably request to perfect,
preserve or protect the Collateral Agent's security interest granted
hereunder or which Majority Lenders reasonably deem necessary or advisable in
order to obtain the
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full benefits of the Liens created or intended to be created hereunder, in
form and substance satisfactory to Majority Lenders as Majority Lenders may
reasonably request in writing at least five (5) Business Days before such
Funding Date.
Each borrowing by Lessor under the Loan Agreement shall constitute a
representation and warranty by Lessor as of the date of the Funding Date for
such borrowing such that the conditions contained in this Section 3.2 have been
satisfied.
3.3. Certificate Holders Conditions
(a) Certificate Holder Conditions on the Closing Date. No Certificate
Holder shall have any obligation to make an Equity Contribution for the
reimbursement of the cost of any Component or the acquisition of any Item of
Equipment hereunder unless on the Closing Date each of the following conditions
are fulfilled:
(i) Such Certificate Holder shall have original counterparts (unless
otherwise specified) in each case duly authorized, executed and delivered by
each other party thereto in full force and effect of this Agreement, the
Trust Agreement and its Certificate and the copies of the Loan Agreement, the
Lease Agreement, the Assembly Agency Agreement and the Notes.
(ii) Such Certificate Holder shall have received from Trust Company, in
form and substance satisfactory to such Certificate Holder, the certificate
of incorporation and by-laws, each certified as of the Closing Date by the
secretary of Trust Company, duly authorizing the execution, delivery and
performance of this Agreement, the Lease Agreement, the Assembly Agency
Agreement and each other document to be delivered in connection therewith to
which it is a party, together with an incumbency certificate as to the person
or persons authorized to execute and deliver such documents on behalf of
Trust Company.
(iii) Such Certificate Holder shall have received written opinions of
counsel to Lessor and Trust Company dated the Closing Date and addressed to
each Lender, each Certificate Holder, the Administrative Agent and the
Collateral Agent, in the form attached hereto as Exhibit E-3.
(b) Certificate Holder Conditions for each Funding Date. No Certificate
Holder shall have any obligation to make an Equity Contribution for the
reimbursement of the cost of any Component or the acquisition of any Item of
Equipment hereunder unless on the Funding Date therefor each of the following
conditions are fulfilled:
(i) The conditions precedent to Lessor's obligation to lease such Item of
Equipment in accordance with the terms hereof (except for the condition
precedent set forth in Section 3.1(b)(ix)) shall have been satisfied, without
waiver or modification (except as consented to by Majority Certificate
Holders), and such Certificate Holder shall have received copies of all
documents and opinions with respect thereto and any
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other evidence of satisfaction of such conditions as Certificate Holder may
reasonably request.
(ii) There shall exist no Loan Default or Loan Event of Default (other than
a Loan Default or Loan Event of Default resulting from any act or omission by
such Certificate Holder) and all representations and warranties of Trust
Company contained herein and in the other Operative Documents shall be true
and correct with the same effect as though such representations and
warranties had been made on and as of such Funding Date.(2)
(iii) On and as of the Funding Date, after giving effect to the Equity
Contributions to be made on such date, the aggregate of all Equity
Contributions made by such Certificate Holder does not exceed such
Certificate Holder's Certificate Holder Commitment.
4. Commitments.
4.1. Certificate Holder Commitments. Subject to and upon the terms and
conditions set forth in Section 3 herein set forth for the benefit of
Certificate Holders and Lessor, each Certificate Holder agrees to make multiple
equity contributions to Lessor during the Commitment Period in an aggregate
amount up to the amount of its Certificate Holder's Commitment (each such
contribution, an "Equity Contribution"). The aggregate of the Equity
Contributions to be made on any Funding Date shall be equal to three (3) percent
of the total Acquisition Costs funded on such date. Each party hereto agrees
that, except as provided below, no Certificate Holder shall be required to make
any Equity Contribution hereunder in an amount in excess of its Pro Rata Share
of the Equity Components to be funded on any Funding Date. Each Certificate
Holder's obligation hereunder is several, such that the failure of any
Certificate Holder to make an Equity Contribution or satisfy any other
obligation shall not relieve any other Certificate Holder of its obligations
hereunder, and if any Certificate Holder shall fail to make an Equity
Contribution hereunder each other Certificate Holder shall make an additional
Equity Contribution in an amount equal to its Pro Rata Share of the Equity
Contribution that was to have been made by the defaulting Certificate Holder,
provided that the maximum aggregate amount of Equity Contributions that any
Certificate Holder shall be obligated to make shall not exceed its Certificate
Holder Commitment. Any Equity Contribution made by another Certificate Holder of
a portion of an Equity Contribution to have been made by a defaulting
Certificate Holder shall not relieve such defaulting Certificate Holder of its
obligations hereunder. If the conditions to the obligations of any Certificate
Holder specified in Section 3.3 have not been fulfilled or waived by it on or
before the last day of the Commitment Period, such Certificate Holder shall be
relieved of all further obligations to make new Equity Contributions under the
Operative Documents after the last day of the Commitment Period.
----------
(2) Open business issue (Lessee taking risk of Trust Company default).
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4.2. Lender Commitment. Subject to and upon the terms and conditions set
forth in Section 3 for the benefit of Lenders, each Lender agrees to make
multiple, non-revolving loans to Lessor during the Commitment Period in an
aggregate principal amount up to the amount of its Lender Commitment (each such
advance, a "Loan"). The aggregate of all Loans to be made by Lenders on each
Funding Date shall be in an amount of at least $4,850,000 (except the last Loans
funded prior to the termination of the Commitment Period, which Loans shall not
be subject to a minimum) and shall be equal to 97 percent of the total
Acquisition Costs funded on such date. Each party hereto agrees that, except as
provided below, no Lender shall be required to make any Loan hereunder in an
amount in excess of its Pro Rata Share of the Debt Components to be funded on
any Funding Date. Each Lender's obligation hereunder is several, such that the
failure of any Lender to make a Loan or satisfy any other obligation shall not
relieve any other Lender of its obligations hereunder, and if any Lender shall
fail to make a Loan hereunder each other Lender shall make an additional Loan in
an amount equal to its Pro Rata Share of the Loan that was to have been made by
the defaulting Lender, provided that the maximum aggregate amount of Loans that
any Lender shall be obligated to make shall not exceed its Lender Commitment.
Any Loan made by another Lender of a portion of a Loan to have been made by a
defaulting Lender shall not relieve such defaulting Lender of its obligations
hereunder. If the conditions to the obligations of any Lender specified in
Section 3.2 have not been fulfilled or waived by it on or before the last day of
the Commitment Period, such Lender shall be relieved of all further obligations
to make new Loans under the Operative Documents after the last day of the
Commitment Period. Nothing in this Section 4.2 shall operate to relieve Lessor,
Lessee or Guarantor from their respective obligations under the Operative
Documents or to waive any Lender's rights against Lessor, Lessee or Guarantor.
4.3. Lessor Commitment to Purchase. Subject to and upon the terms and
conditions herein set forth for the benefit of Lessor, Lessee may sell to Lessor
during the Commitment Period and in such event Lessor agrees to buy for the
Acquisition Cost thereof and lease back to Lessee on the Funding Date therefor
certain natural gas compressor equipment. The natural gas compressor equipment
to be sold by Lessee to Lessor pursuant to this Agreement shall include only
natural gas compressor equipment of the type(s) described on Schedule 1 hereto
or as may be specifically approved by Lessor, the Majority Certificate Holders
and the Majority Lenders, provided that the aggregate of the Acquisition Costs
of all Items of Equipment purchased by Lessor from Lessee and all Items of
Equipment assembled by Lessee on behalf of Lessor in accordance with the
Assembly Agency Agreement shall not exceed the Maximum Acquisition Cost.
4.4. Lessor Commitment to Reimburse Component Costs. Subject to and upon
the terms and conditions set forth herein and in the Assembly Agency Agreement
for the benefit of Lessor, Lessor shall reimburse Lessee for the Acquisition
Cost of each Item of Equipment assembled by Lessee on behalf of Lessor in
accordance with the Assembly Agency Agreement, provided the aggregate of such
Acquisition Costs of all Items of Equipment and the Items of Equipment purchased
by Lessor from Lessee shall not exceed the Maximum Acquisition Cost.
4.5. Lessor and Administrative Agent Acceptance of Equipment. Lessor and
Administrative Agent shall be deemed to have found acceptable each Item of
Equipment identified on the Certificate of Equipment therefor in accordance with
Section 3.1(b)(ii) and each
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Budget delivered in accordance with Section 3.1(d) unless Lessor or
Administrative Agent shall have reasonably objected to such Item of Equipment or
Budget in a written notice to Lessee at least four (4) LIBOR Banking Days prior
to the proposed Funding Date for such Item.(3)
4.6. Lease Agreement Supplements. Upon the sale and leaseback of an Item of
Equipment in accordance with Section 4.3 or upon acquisition by Lessor of an
Item of Equipment or a Component thereof in accordance with the Assembly Agency
Agreement Lessee shall execute and deliver to Lessor a Lease Agreement
Supplement for such Item of Equipment or Component which Lease Agreement
Supplement upon satisfaction of the conditions precedent in Section 3.1 shall
thereafter be executed by Lessor and a signed counterpart provided to Lessee.
Upon execution and delivery by Lessee of such Lease Agreement Supplement, such
Item of Equipment or Component shall automatically become in accordance with
this Section 4.6 subject to the Lease Agreement and an "Item of Equipment"
thereunder.
4.7. Rights in Equipment. Upon the execution and delivery by Lessee of
Lease Agreement Supplement relating to an Item of Equipment and satisfaction of
the other applicable conditions precedent set forth in Section 3, Lessor shall
have good and marketable title to such Item of Equipment subject only to
Permitted Liens and Lessor Liens and shall be obligated to pay or reimburse
Lessee in full for the Acquisition Cost of such Item of Equipment in accordance
with the provisions of this Agreement and the Assembly Agency Agreement,
provided that nothing in this Section 4.7 shall affect in any manner the
respective rights and obligations of Lessor and Lessee under the Lease Agreement
or shall reduce or diminish any claim or remedy for damages which Lessor or
Lessee might assert for any breach or violation of the terms of the Lease
Agreement or of this Agreement.
4.8. Funding Dates. From time to time on any Funding Date, and in any event
no later than the last date of the Interim Term, Lessee may request payment from
Lessor of amounts owed by Lessor to Lessee in connection with the sale and
leaseback of Items of Equipment in accordance with the terms hereof and of the
Lease Agreement and in accordance with Lessor's reimbursement obligations
hereunder and under the Assembly Agency Agreement. The Funding Notices delivered
by Lessee for any Funding Date other than the last Funding Date shall in the
aggregate request payment in an amount at least equal to $5,000,000, the last
Funding Date not being subject to a minimum, and shall specify the proposed
Funding Date. Lessee may request payment or reimbursement of Acquisition Costs
in an aggregate amount not to exceed the excess of the Maximum Acquisition Cost
over the aggregate Acquisition Costs of all Items of Equipment previously leased
by Lessor. Lessee represents and agrees that all payments for which
reimbursement will be so requested by it will represent amounts which have been
incurred or paid by Lessee on its own account or as agent for Lessor under the
Assembly Agency Agreement and for which it has not received and will not receive
any commission, allowance, rebate or other profit. If the conditions in Section
3.1 are satisfied or waived and the Lenders and
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(3) Open business issue.
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Certificate Holders make available to Lessor the funds necessary to pay or
reimburse Acquisition Costs on or before 2:00 p.m. (New York time) on a Business
Day, Lessor shall make available to Lessee on the same Business Day the amount
of Acquisition Costs to be paid or reimbursed to Lessee in immediately available
funds. If such funds are not available until after 2:00 p.m. (New York time) on
a Business Day, Lessor shall make available to Lessee on the next succeeding
Business Day the amount of the Acquisition Costs to be paid or reimbursed in
immediately available funds; provided, however, the Funding Date shall be deemed
to be the previous Business Day on which the funding was to have occurred.
Payment of amounts on account of the Acquisition Cost of Items of Equipment
shall be made by wire transfer to the account of the Lessee identified on the
signature page hereto (or such other bank or account maintained in the United
States as Lessee shall designate in writing to Lessor, each Certificate Holder,
each Lender and Administrative Agent no later than 11:00 a.m. (New York time) on
the Business Day preceding the Funding Date).
4.9 Adjustment of Acquisition Cost. If the Appraisal due six (6) Business
Days before the Basic Term Commencement Date in accordance with Section 14 of
the Lease shows a fair market value of any Item of Equipment, as of the date of
such Appraisal, in excess of the Acquisition Cost of such Item, then, subject to
satisfaction of the conditions in Section 3, Lessor shall pay to Lessee on the
Basic Term Commencement Date as a supplement to the Acquisition Cost paid under
Section 4.3 or the reimbursement amount paid under Section 4.4 for such Item of
Equipment (and the Certificate Holders and Lenders will make Equity
Contributions and Loans, respectively, on a pro rata basis in accordance with,
and subject to, their Commitments) in the amount of such excess. In the event
that any such payment is made, and as a condition thereto, Lessee shall deliver
to Lessor an amended and restated Lease Agreement Supplement reflecting the
Acquisition Cost for such Item, as supplemented.
5. Selection of Lease Payment Period.
Provided no Event of Default shall have occurred and is continuing, Lessee
shall at least three (3) LIBOR Banking Days prior to each Funding Date and each
Payment Date deliver to the Administrative Agent written notice of its election
to have both the Equity Rate and the Debt Rate for all Loans and Equity
Contributions for the Lease Payment Period following such Payment Date be based
on one-month, two-month or three-month LIBOR provided that (a) there shall be no
more than [_____] different Lease Payment Periods at any one time, (b)
commencing with the Basic Term Commencement Date and thereafter throughout the
Term, all Loans shall have the same Lease Payment Periods and (c) Lessee shall
not make an election that would cause the new Payment Date resulting from such
election to be later than the last day of the Basic Term. If Lessee fails to
provide such notice of election, Lessee shall be deemed to have elected a
one-month LIBOR based Equity Rate and Debt Rate. At any time while a Lease Event
of Default exists, the Equity Rate and Debt Rate after each Payment Date shall
be based on one-month LIBOR.
6. Default Purchase Options and Cure Rights.
6.1. Right to Cure Certain Lease Events of Default. If Lessee shall fail to
make any Lease Payment or Availability Fee due on any Payment Date when the same
shall have become
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due, and if such failure of Lessee to make such Lease Payment or Availability
Fee shall not constitute the third consecutive such failure, then Lessor, any
Lender, Lenders, Certificate Holder or Certificate Holders (the "Curing Party")
may (but is not obligated to) pay to the Collateral Agent for the benefit of the
Lenders, at any time prior to the earlier of the expiration of ten (10) Business
Days after the Curing Party shall have received notice from the Administrative
Agent of the failure of Lessee to make such Lease Payment or Availability Fee,
an amount equal to the principal of and interest on the Notes then due by reason
of the failure of Lessee to pay such Lease Payment or Availability Fee
(otherwise than by declaration of acceleration) on such Payment Date, and such
payment by the Curing Party shall be deemed to have cured any Loan Event of
Default which arose or would have arisen from such failure of Lessee.
If Lessee shall fail to make any payment of Supplemental Payment when the
same shall become due or otherwise fail to perform any obligation other than the
payment of a Lease Payment under the Lease or any other Operative Document,
which failure can be cured by the payment of money, then a Curing Party may (but
is not obligated to) make such payment or perform such obligation through the
payment of money at any time prior to the expiration of ten (10) Business Days
after such Curing Party shall have received notice of the occurrence of any such
failure, and such payment or performance by such Curing Party shall be deemed to
have cured any Loan Event of Default which arose or would have arise from such
failure of Lessee.
Upon such payment or performance by a Curing Party who is a Lender or a
Certificate Holder, such Curing Party shall (to the extent of such payment made
by it and the costs and expenses incurred in connection with such payments and
performance thereof together with interest thereon) be subrogated to the rights
of, in the case of a Curing Party who is a Lender, the other Lenders and, in the
case of a Curing Party who is a Certificate Holder, the other Certificate
Holders, to receive from Lessee the Lease Payment or Supplemental Payment, as
the case may be, paid by such Curing Party. If the Collateral Agent shall
thereafter receive from Lessee such Lease Payment, Availability Fee or
Supplemental Payment, the Collateral Agent shall forthwith remit such payment to
such Curing Party in reimbursement for the funds so advanced by it.
Until the expiration of the period during which the Curing Party shall be
entitled to exercise rights under paragraph (a) or (b) of this Section 6.1 with
respect to any failure by Lessee referred to therein, neither the Administrative
Agent, the Collateral Agent nor any Lender shall take or commence any action it
would otherwise be entitled to take or commence under the Operative Documents as
a result of such failure by Lessee.
6.2. Certificate Holders Default Purchase Option. For so long as a Lease
Event of Default has occurred and is continuing and Lenders have accelerated the
Loans or are seeking to exercise substantial remedies under the Lease Agreement
with respect to their interest in the Equipment, each Certificate Holder
(individually or, if more than one Certificate Holder wishes to exercise the
right, together with all such Certificate Holders) shall have the right, and is
hereby granted the option (the "Certificate Holders Option") to purchase, or at
the option of such Certificate Holder, to designate a third party to purchase,
from all but not less than all of the Lenders and each Lender hereby agrees to
sell to such Certificate Holder or its designee all but not less than all of its
right, title and interest in the Loans and the Notes, at a purchase price equal
to the aggregate of all amounts then owing to such Lender under the Operative
Documents plus
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any costs incurred in connection with the sale, including but not limited to
Breakage Costs and attorneys fees (the "Purchase Option Price") and to assign
all of such Lender's rights, remedies and security interests with respect to the
Loans and Notes under the Operative Documents to such purchasing Certificate
Holder or Certificate Holders or its designee or their designees. In order to
exercise the Certificate Holders Option, each such Certificate Holder shall
deliver to each Lender, each other Certificate Holder and the Collateral Agent
irrevocable written notice of such election (the "Option Notice") and shall pay
the Purchase Option Price (or in the case of more than one Certificate Holder
has given notice of its election to exercise the Certificate Holders Option, its
pro rata share (in relation to the aggregate of its Equity Contributions and the
aggregate Equity Contributions of all Certificate Holders exercising such
option) of the Purchase Option Price) in immediately available funds on or
before the second Business Day after delivery of the Option Notice in accordance
herewith. Each Lender agrees that any participation, assignment, sale or other
transfer of all or any part of its interest in the Loan or any Note shall be
subject to the Certificate Holders Option and Lender and the Collateral Agent
agree that they will not take any action with respect to the Equipment during
the period after Lender and the Collateral Agent receive the Option Notice and
prior to the third Business Day thereafter without the consent of the
Certificate Holders.
7. Security.
7.1. Security Interest. For valuable consideration, and to secure the due
payment and performance of all principal of, interest on the Loans, the Loan
Availability Fee and any interest due thereon, Breakage Costs, if any, and all
indebtedness and other liabilities and obligations, whether now existing or
hereafter arising (including any obligations to indemnify, reimburse or pay
costs and/or expenses) of Lessor to Lenders, the Administrative Agent and the
Collateral Agent arising out of or in any way connected with the Operative
Documents and all instruments, agreements and documents executed, issued and
delivered pursuant thereto (collectively, the "Secured Obligations"), Lessor
hereby assigns, conveys, mortgages, pledges, hypothecates, transfers and sets
over to the Collateral Agent, and its successors and assigns, and grants to the
Collateral Agent, and its successors and permitted assigns, a first Lien on and
security interest in the rights, title and interest of Lessor now held or
hereafter acquired in and to the following, except for Excepted Payments with
respect thereto (collectively, the "Lessor Collateral"):
(a) the Items of Equipment;
(b) all Subleases pertaining to the Items of Equipment;
(c) any Xxxx of Sale and all warranties (including, without limitation,
warranties of title, merchantability, fitness for a particular purpose, quality
and freedom from defects) and rights of recourse against manufacturers,
assemblers, sellers and others in connection with the Items of Equipment;
(d) this Agreement, the Lease Agreement, the Security Documents and all
Lease Payments, Availability Fees and Supplemental Payments payable under the
Lease Agreement and all other sums payable thereunder;
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(e) all accounts, contract rights, general intangibles and all other
property rights of any nature whatsoever arising out of or in connection with
the Lease Agreement or the Items of Equipment, including, without limitation,
Lease Payments, Availability Fees, Supplemental Payments and Lessee Collateral
and any other payments due and to become due under the Lease Agreement and the
Subleases whether as repayments, reimbursements, contractual obligations,
indemnities, damages or otherwise;
(f) all claims, rights, powers, or privileges and remedies of Lessor under
the Lease Agreement;
(g) all rights of Lessor under this Agreement and the Lease Agreement to
make determinations to exercise any election (including, but not limited to,
election of remedies) or option or to give or receive any notice, consent,
waiver or approval, together with full power and authority to demand, receive,
enforce, collect or receipt for any of the foregoing or any property which is
the subject of this Agreement or the Lease Agreement, to enforce or execute any
checks, or other instruments or orders, to file any claims and to take any
action which (in the opinion of the Collateral Agent) may be necessary or
advisable in connection with any of the foregoing; provided, however, the
Collateral Agent agrees for the benefit of Lessor that so long as no Loan Event
of Default has occurred and is continuing, it will not exercise any of the
rights assigned to it under clauses (f) and (g) of this Section 7, other than
the right to receive amounts due under the Lease Agreement and Section 9 of this
Agreement, without the prior written consent of Lessor;
(h) all moneys now or hereafter paid or required to be paid to Lenders
pursuant to any Operative Document; and
(i) all proceeds of Lessor Collateral including, without limitation, all
rentals, income and profits in respect of the Items of Equipment, whether under
the Lease Agreement or otherwise, all credits granted by any manufacturer or
vendor with respect to the return of any Item of Equipment and the proceeds of
any insurance payable with respect to the Items of Equipment.
7.2. Further Assurances. For each Item of Equipment, Lessor will, at
Lessee's expense, make, execute, endorse, acknowledge, file and/or deliver to
the Collateral Agent from time to time such confirmatory assignments,
conveyances, financing and continuation statements, transfer endorsements,
powers of attorney, replacement notes, reports and other assurances or
instruments and take such further actions which the Administrative Agent may
reasonably request to perfect, preserve or protect the Collateral Agent's
security interest granted hereunder or which the Collateral Agent deems
necessary or advisable in order to obtain the full benefits of the Liens created
or intended to be created hereunder, and will take such other actions reasonably
requested by the Collateral Agent to effectuate the intent of the Operative
Documents. To the extent permitted by Applicable Law, Lessor authorizes the
Collateral Agent to file any such financing and continuation statements without
the signature of Lessor and Lessor will pay all applicable filing fees and
related expenses.
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7.3. Termination. Upon the full and final discharge and satisfaction (i) of
Lessor's obligations with respect to all amounts owed under the Operative
Documents, (ii) with respect to amounts owed under Sections 2.7.1 and 2.7.2 of
the Loan Agreement in relation to the loss or sale of any Item of Equipment and
(iii) with respect to any Item of Equipment replaced in accordance with Section
13 of the Lease Agreement, unless in the case of clauses (ii) or (iii) a Lease
Event of Default shall have occurred and be continuing the obligation to
purchase such Item of Equipment, the provisions of this Section 7 shall
terminate with respect to all Lessor Collateral or such Items of Equipment (as
applicable) and all right, title and interest of the Collateral Agent in and to
all Lessor Collateral or such Items of Equipment (as applicable) and the
proceeds thereof shall revert to Lessor. Following payment or substitution in
accordance with the foregoing sentence, Lessor's obligations to Lenders, the
Administrative Agent and the Collateral Agent in and to all Items of Equipment
or such Items of Equipment (as applicable) shall revert to Lessor. If such
discharge and satisfaction or substitution in clause (ii) or (iii) of Section 13
of the Lease Agreement shall be made during the occurrence and continuance of a
Lease Event of Default, the foregoing discharge shall be made only following
satisfaction of all of Lessee's obligations under Section 24 of the Lease
Agreement. The Collateral Agent shall, at Lessor's expense, execute and deliver
any evidence of such release as Lessor may reasonably require and furnish to the
Collateral Agent.
7.4. Other Security. To the extent that the obligations of Lessor under any
Operative Document are now or hereafter secured by property other than Lessor
Collateral or by the guarantee, endorsement or property of any other Person,
then the Collateral Agent shall have the right in its sole discretion to pursue,
relinquish, subordinate, modify or take any other action with respect thereto,
without in any way modifying or affecting any of the Collateral Agent's rights
and remedies hereunder.
7.5. Power of Attorney. Lessor irrevocably authorizes the Collateral Agent
and does hereby make, constitute and appoint the Collateral Agent and any
officer of the Collateral Agent, with full power of substitution, as Lessor's
true and lawful attorney-in-fact, with power, in its own name or in the name of
Lessor, to endorse any notes, checks, drafts, money orders, or other instruments
of payment (including payments payable under or in respect of any policy of
insurance) in respect of Lessor Collateral that may come into possession of the
Collateral Agent; to sign and endorse any invoice, freight or express xxxx, xxxx
of lading, storage or warehouse receipts, drafts against debtors, assignments,
verifications and notices in connection with accounts, and other documents
relating to Lessor Collateral; to pay or discharge Taxes, Liens, security
interests or other encumbrances at any time levied or placed on or threatened
against Lessor Collateral; to demand, collect, receipt for, compromise, settle
and xxx for monies due in respect of Lessor Collateral; and generally, to do, at
the Collateral Agent's option and at Lessor's expense, at any time, or from time
to time, all acts and things which the Collateral Agent deems necessary to
protect, preserve and realize upon Lessor Collateral and the Collateral Agent's
security interests therein and in order to effect the intent of the Operative
Documents all as fully and effectually as Lessor might or could do; and Lessor
hereby ratifies all that said attorney shall lawfully do or cause to be done by
virtue hereof. This power of attorney shall be coupled with an interest and
irrevocable for the term of this Agreement and thereafter as long as any of the
obligations of Lessor under any Operative Document shall be outstanding. The
powers conferred on the Collateral Agent hereunder are solely to protect its
interest in Lessor Collateral and shall
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not impose any duty upon the Collateral Agent to exercise any such powers. The
Collateral Agent shall be accountable only for amounts that it actually receives
as a result of the exercise of such powers and neither it nor any of its
officers, directors or employees shall be responsible to Lessor for any act or
failure to act, except for its own gross negligence or willful misconduct.
7.6. Assignment of Rights. Lessor agrees that the assignments herein are
irrevocable and it will not, while said assignment is in effect or thereafter
until Lessor has received from the Collateral Agent notice of the termination
thereof, take any action as Lessor under the Lease Agreement or otherwise which
is inconsistent with this Agreement or make any other assignment, designation or
direction inconsistent herewith and that any assignment, designation or
direction inconsistent herewith shall be void. Lessor and the Collateral Agent
agree that the following are, without limitation, rights, powers, privileges,
options, and benefits exclusively assigned by Lessor hereunder: (i) the right to
make claim for, receive, collect and receipt for (and to apply the same to the
payment of the principal of, Breakage Costs, if any, and interest on the Notes)
all rents, income, revenues, issues, profits, insurance proceeds, condemnation
awards, payments of Casualty Loss Value and other sums payable or receivable
under this Agreement and the Lease Agreement or pursuant hereto or thereto, (ii)
the right to make all waivers and agreements, to give and receive all notices
and other instruments in its capacity as Lessor under the Operative Documents
and to take all action upon the happening of Lease Event of Default, including
the commencement, conduct and consummation of proceedings at law or in equity as
shall be permitted under any provision of the Lease Agreement or by law, and
(iii) the right to do all other things which Lessor is or may become entitled to
do under the Lease Agreement.
7.7. Transfer of the Collateral by the Collateral Agent. The Collateral
Agent or any Lender may be a transferee of Lessor Collateral or of any part
thereof or of any interest therein at any sale thereof, whether pursuant to
foreclosure or power of sale or otherwise hereunder, and may apply upon the
transfer price the indebtedness secured hereby owing to such transfer, to the
extent of such transferee's distributive share of the transfer price to the
extent permitted by Applicable Law. Any such transferee shall, upon any such
transfer, acquire title to the properties so transferred, free of the Lien of
this Agreement.
7.8. No Segregation of Monies; No Interest. Any monies paid to or retained
by the Collateral Agent pursuant to any provision hereof and not then required
to be distributed to any party as provided in this Section 7 need not be
segregated in any manner except to the extent required by law, and may be
deposited under such general conditions as may be prescribed by law, without
interest.
7.9. Distribution of Moneys. Except as may be otherwise provided in this
Section 7 and for so long as no Loan Event of Default has occurred and is
continuing, all moneys received by the Collateral Agent shall be applied in
accordance with this Section 7.9:
(a) Scheduled and End of Term Payments. Provided no Loan Event of Default
has occurred and is continuing, moneys received by the Collateral Agent
constituting Lease Payments or any end of term payment under Sections 28 or 29
of the Lease Agreement, Loan Availability Fees or Supplemental Payments under
the Lease Agreement other than constituting
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Casualty Loss Value or proceeds of a sale under Section 28.5 of the Lease
Agreement (including the payment of interest on any such overdue amount), shall
be applied:
First, to each Lender on a pari passu basis in accordance with clauses
first through fifth of Section 2.8 of the Loan and Security Agreement;
Second, to each Lender on a pari passu basis so much of such funds as shall
be required to pay in full any principal amount then due on the Loans;
Third, to each other Lessor Indemnified Person on a pari passu basis, all
amounts then due such Person hereunder; and
Fourth, the balance, if any, of such payment remaining thereafter shall be
distributed to Lessor for disposition according to the terms of the Operative
Documents.
(b) Partial Prepayments. Provided no Loan Event of Default has occurred and
is continuing, moneys received by the Collateral Agent constituting Casualty
Loss Value (including any insurance proceeds or condemnation awards in respect
of the subject Event of Loss which are payable to the Collateral Agent pursuant
to the provisions of the Lease Agreement) and constituting proceeds of the sale
of any Item of Equipment pursuant to Section 28.5 of the Lease Agreement shall
be applied on the date received:
First, to each Lender on a pari passu basis in accordance with clauses
first through fifth of Section 2.8 of the Loan and Security Agreement;
Second, to each Lender and to Lessor on a pari passu basis (based on the
aggregate of the outstanding principal balance of each Lender's Notes and the
Equity Component less any amounts previously distributed to Lessor under this
Section 5A.9(b)) so much of such funds as shall be required to pay in full
any principal amount then due on the Loans; and
Third, the balance, if any, of such payment remaining thereafter shall be
distributed to Borrower for disposition according to the terms of the
Operative Documents.
7.10. Payments after a Loan Event of Default. All payments received and all
amounts held or realized by the Collateral Agent (including any amounts realized
by the Collateral Agent from the exercise of any remedies) after any Loan Event
of Default, and all payments or amounts then held or thereafter received by the
Collateral Agent hereunder or under the Operative Documents, shall, so long as
such Loan Event of Default continues and shall not have been waived in writing
by Majority Lenders, be applied on the date received:
First, so much of such payments or amounts held or realized by the
Collateral Agent as shall be required to reimburse the Collateral Agent for
any expenses not reimbursed by Lessor in connection with the collection or
distribution of such amounts held or realized by the Collateral Agent or in
connection with the expenses incurred in enforcing its remedies hereunder and
preserving Lessor Collateral including, without
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limitation, those expenses contemplated under Section 9.1 of this Agreement,
shall be retained by the Collateral Agent;
Second, to each Lender on a pari passu basis in accordance with clauses
first through sixth of Section 2.8 of the Loan and Security Agreement;
Third, to each other Lessor Indemnified Person on a pari passu basis, all
amounts then owed such Person hereunder; and
Fourth, the balance, if any, of such payments or amounts remaining
thereafter shall be distributed to Lessor for disposition according to the
terms of the Operative Documents.
7.11. Application of Certain Other Payments. Any payments received by any
Lender for which provision as to the application thereof is made in the
Operative Documents but not elsewhere in this Agreement shall be applied
forthwith to the purpose for which such payment was made in accordance with the
terms of the Operative Documents.
7.12. Other Payments. Except as otherwise provided in Sections 7.9 and
7.10, (a) any payments received by the Collateral Agent for which no provision
as to the application thereof is made in the Operative Documents, or elsewhere
in this Section 7, and (b) all payments received and amounts realized by the
Collateral Agent with respect to Lessor Collateral (including, without
limitation, all amounts realized upon the sale, release or other disposition of
Lessor Collateral upon foreclosure of this Agreement), to the extent received or
realized at any time after payment in full of the amounts set forth in clauses
first through sixth of Section 2.8 of the Loan and Security Agreement for each
Lender shall be paid to Lessor or its designee.
7.13. Retention of Amounts by the Collateral Agent. If at the time of
receipt by the Collateral Agent of any payment or amount which would otherwise
be distributable to Lessor, there shall have occurred and be continuing a Loan
Default or a Loan Event of Default, the Collateral Agent shall not distribute
any such amount to Lessor or its designee and shall hold it as security for
Lessor's obligations to Lenders under the Operative Documents until such time as
there shall not be continuing such Loan Default or Loan Event of Default.
7.14. Conflicts. If any provision of this Section 7 conflicts with any
provision contained in any other Operative Document, such provision contained in
this Section 7 shall prevail.
8. Guaranty.
For the benefit of each other party hereto (each a "Guaranty Party"),
guarantor irrevocably and unconditionally guarantees the full and prompt payment
when due (whether by acceleration or otherwise) of Lease Payments, Availability
Fees, Supplemental Payments and any interest due thereon and of all obligations
and liabilities (including, without limitation, indemnities, fees and interest
thereon) of Lessee now existing or hereafter incurred under, arising out of or
in connection with this Agreement or any other Operative Document and the due
performance and compliance with the terms of the Lease Agreement and the
Operative
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Documents by Lessee (all such payments, interest, obligations and liabilities,
collectively, the "Guaranteed Obligations"). All payments by Guarantor under
this guaranty shall be made on the same basis as payments by Lessee under the
Operative Documents. Guarantor hereby waives notice of acceptance of this
guaranty and notice of any liability to which it may apply, and waives
presentment, demand of payment, protest, notice of dishonor or nonpayment of any
such liability, suit or taking of other action by an Guaranty Party against, and
any other notice to, any party liable theron (including such Guarantor or any
other guarantor). Any Guaranty Party may at any time and from time to time
without the consent of, or notice to Guarantor, without incurring responsibility
to Guarantor and without impairing or releasing the obligations of Guarantor
hereunder, upon or without any terms or conditions and in whole or in part:
(a) change the manner, place or terms of payment of, and/or change or
extend the time of payment of, renew or alter, any of the Guaranteed Obliations,
any security therefor, or any liability incurred directly or indirectly in
respect therof, and the guaranty herein made shall apply to the Guaranteed
Obligations as so changed, extended, renewed or altered;
(b) sell, exchange, release, surrender, realize upon or otherwise deal with
in any manner and in any order any property by whomsoever at any time pledged or
mortgaged to secure, or howsoever securing, the Guaranteed Obligations or any
liabilite is (including any of those hereunder) incurred directly or indirectly
in respect thereof or hereof, and/or any offset there against;
(c) exercise or refrain from exercising any rights against Lessee or others
or otherwise act or refrain from acting;
(d) settle or compromise any of the Guaranteed Obligations, any security
therefor or any liability (including any of those hereunder) incurred directly
or indirectly in respect thereof or hereof;
(e) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of Lessee to any Guaranty Party regardless of what
liabilities or liabilities of Lessee remain unpaid; and/or
(f) consent to or waive any breach of, or any act, omission or default
under, any of the Operative Documents or otherwise amend, modify or supplement
any of the Operative Documents or any of such other instruments or agreements.
The obligations of Guarantor under this Section 8 are absolute and
unconditional and shall remain in full force and effect without regard to, and
shall not be released, suspended, discharged, terminated or otherwise affected
by, any circumstance or ocurrence whatsoever, including,without limitation (i)
any action or inaction by any Guaranty Party; or (ii) any invalidity,
irregularity or unenforceability of all or part of the Guaranteed Obligations or
of any security therefor. The obligations under this Section 8 are primary
obligations of Guarantor. If and to the extent that Guarantor makes any payment
to any Guaranty Party or to any other Person pursuant to or in respect of this
Section 8, any claim which Guarantor may have against Lessee
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by reason thereof shall be subject and subordinate to the prior payment in full
of the Guaranteed Obligations.
The obligations under this Section 8 are continuing and all liabilities to
which they apply or may apply under the terms hereof shall be conclusively
presumed to have been created in reliance hereon. No failure or delay on the
part of any Guaranty Party in exercising any right, power or privilege hereunder
and no course of dealing between Guarantor, any Guaranty Party or the holder of
any Note or Certificate shall operate as a waiver thereof; nor shall any single
or partial exercise of any right, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The rights, powers and remedies herein expressly provided are
cumulative and not exclusive of any rights, powers and remedies which any
Guaranty Party or the holder of any Note or Certificate would otherwise have. No
notice to or demand on Guarantor in any case shall entitle Guarantor to any
other further notice or demand in similar or other circumstances or constitute a
waiver of the rights of any Guaranty Party or the holder of any Note or
Certificate to any other or further action in any circumstances without notice
or demand.
The guaranty shall continue to be effective, or be reinstated, as the case
may be, if at any time payment, or any part thereof, or of any of the Guaranteed
Obligations is rescinded or must otherwise be restored or returned by the
Guaranty Parties upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of Lessee or Guarantor, or upon or as a result of the appointment
of a receiver, intervenor, or conservator of, or trustee or similar officer for,
Lessee Guarantor or any substantial part of its property, all as though such
payment or principal or interest or otherwise and whether by Lessee or others
(including Guarantor), with respect to any of the Guaranteed Obligations shall
if the statute of limitations in favor of Guarantor against any Guaranty Party
or the holder of any Note or Certificate shall have commenced to run, toll to
the extent permitted by Applicable Law the running of such statute of
limitations, and if the period of such statute of limitations shall have
expired, prevent the operation of such statute of limitations.
9. Covenants.
9.1. Lessor Covenants.Lessor covenants for the benefit of each other party
hereto (unless each shall have otherwise waived in writing compliance herewith)
during the term of this Agreement as follows:
(a) It shall take all actions as are required to keep the representations
and warranties made by it in Section 2.5 (except, in the case of clause (b) of
Section 2.5, if the location of such office shall change, Lessor shall provide
each other party hereto with not less than ten (10) days' prior written notice
of such change), true and correct in all material respects (but without regard
to the date when such representations and warranties were made or are expressed
to be effective) until such time as all of the obligations secured hereby have
been paid in full.
(b) It shall obtain and maintain, or cause to be obtained or maintained, in
full force and effect, any authorization, approval, license, or consent of any
governmental or judicial authority including those which may be or become
necessary in order for Lenders, the Collateral
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Xxxxx, Xxxxxx and Certificate Holders to obtain the full benefits of this
Agreement and all rights and remedies granted or to be granted herein.
(c) The proceeds of each Loan shall be used solely to finance Lessor's
acquisitions of Items of Equipment in accordance with the terms of this
Agreement and the Assembly Agency Agreement and for costs related to such
transactions. No part of the proceeds of any Loan will be used to purchase or
carry any Margin Stock or to extend credit for the purpose of purchasing or
carrying any Margin Stock. Neither the making of any Loan nor the use of the
proceeds thereof will violate or be inconsistent with the provisions of
Regulation T, U or X of the Board of Governors of the Federal Reserve System.
(d) It shall comply in all material respects with all Applicable Laws,
rules, regulations and orders of any jurisdiction, such compliance to include
paying when due all Taxes imposed upon it or upon its property by any
Governmental Entity except to the extent contested in good faith and for which
adequate reserves have been segregated.
(e) It shall promptly take, and maintain the effectiveness of, all action
of the type referred to in clause (b) of Section 2.4 or otherwise that may, from
time to time, be necessary or appropriate under Applicable Law in connection
with the performance by Lessor of its obligations under the Operative Documents,
or the taking of any action hereby or thereby contemplated, or necessary for the
legality, validity, binding effect or enforceability of the Operative Documents,
or for the making of any payment or the transfer or remittance of any funds by
Lessor under the Operative Documents.
(f) It shall duly pay and discharge (i) immediately upon the attachment
thereof all Liens other than Permitted Liens on any Lessor Collateral, (ii) as
and when due, all of its indebtedness and others obligations before the time
that any Lien attaches unless and only to the extent that any such amounts are
not yet due and payable or the validity thereof is being contested in good faith
by appropriate proceedings so long as such proceedings do not involve any
material danger of the sale, forfeiture or loss of the Items of Equipment or any
interest therein and Lessor maintains appropriate reserves with respect thereto
or has made adequate provision for the payment thereof, in accordance with
generally accepted accounting principles and approved by the Majority Lenders
and (iii) all Taxes imposed upon or against it or its property or assets, or
upon any property leased by it, prior to the date on which penalties attach
thereto.
(g) It shall keep at all times books of record and account in which full,
true and correct entries will be made of all dealings or transactions in
relation to its business and affairs, and provide or cause to be provided
adequate protection against loss or damage to such books of record and account.
(h) It shall not operate in a manner that would result in an actual,
constructive or substantive consolidation with Certificate Holders, any other
Person other than Lessee, and in such connection Lessor shall observe all trust
formalities, maintain records separately and independently from those of
Certificate Holders or other Person and enter into any transactions with
Certificate Holders only on an arm's-length contractual basis.
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(i) It shall not without the consent of all Lenders (i) enter into any
business other than its acquisition, leasing, financing and sale of the
Equipment, (ii) create, incur, assume or permit to exist any Indebtedness,
except as expressly permitted by this Agreement, (iii) enter into, or be a party
to, any transaction with any Person, except the transactions set forth in the
Operative Documents and as expressly permitted thereby, or (iv) make any
investment in, guarantee the obligations of, or make or advance money to any
Person, through the direct or indirect lending of money, holding of securities
or otherwise except the transactions set forth in the Operative Documents and as
expressly permitted thereby.
(j) It shall not wind up, liquidate or dissolve its affairs or enter into
any transaction of merger or consolidation, or convey, sell, lease
(substantially as a whole), or otherwise dispose of (whether in one or in a
series of transactions) its assets except as expressly permitted by this
Agreement.
(k) It shall notify Lessee of any Loan Event of Default except any such
Loan Event of Default caused by or related to a Lease Event of Default.
(l) It shall not claim ownership of any Item of Equipment on any Federal,
state, local or foreign tax return or filing.
9.2. Trust Company Covenants. Trust Company covenants and agrees for the
benefit of each other party hereto (unless each party shall have otherwise
waived in writing compliance herewith) during the term of this Agreement as
follows:
(a) It shall perform all of its obligations set forth in the Trust
Agreement and shall not amend, modify, consent to any change to the terms or
otherwise alter the Trust Agreement in any manner without the consent of each of
the other parties hereto.
(b) It shall not, so long as no Lease Event of Default has occurred and is
continuing, take or cause to be taken any action contrary to Lessee's or any
Sublessee's right to quiet enjoyment of, and the continuing possession, use and
operation of, the Equipment during the Term.
(c) It shall (i) not cause or permit to exist any Lien attributable to it
with respect to the Items of Equipment or any other portion of the Trust Estate
other than Permitted Liens, (ii) promptly, at its own expense, take such action
as may be necessary duly to discharge any Lien attributable to it, and (iii)
make restitution to the Trust Estate for any actual diminution of the assets of
the Trust Estate resulting from any Liens attributable to it.
(d) It shall not change the location of its principal office to a location
outside of Wilmington, Delaware without providing at least ten (10) days advance
written notice thereof.
9.3. Certificate Holders Covenants. Each Certificate Holder covenants and
agrees for the benefit of each party hereto (unless each party hereto shall have
otherwise waived in writing compliance herewith) during the term of this
Agreement as follows:
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(a) It shall maintain its existence as a corporation in good standing under
the laws of the state or country of its organization.
(b) It shall perform all of its obligations set forth in the Trust
Agreement and shall not amend, modify, consent to any change to the terms or
otherwise alter the Trust Agreement in any manner without the consent of Lessee,
Guarantor, Administrative Agent, Collateral Agent, Majority Lenders and Majority
Certificate Holders.
(c) It shall not, so long as no Lease Event of Default has occurred and is
continuing or the Lease Agreement has not otherwise been terminated, take or
cause to be taken any action contrary to Lessee's or any Sublessee's right to
quiet enjoyment of, and the continuing possession, use and operation of, the
Equipment during the Term of the Lease Agreement.
(d) It shall (i) not cause or permit to exist any Lien attributable to it
with respect to the Items of Equipment or any other portion of the Trust Estate
other than Permitted Liens, (ii) promptly, at its own expense, take such action
as may be necessary duly to discharge any Lien attributable to it, and (iii)
make restitution to the Trust Estate for any actual diminution of the assets of
the Trust Estate resulting from any Liens attributable to it.
9.4. Lender and Collateral Agent Covenant. Each Lender and the Collateral
Agent hereby covenants and agrees, for the benefit of Lessor and Lessee, that so
long as no Lease Event of Default has occurred and is continuing or the Lease
Agreement has not otherwise been terminated, it shall not take or cause to be
taken any action contrary to Lessee's or any Sublessee's right to quiet
enjoyment of, and the continuing possession, use and operation of, the Equipment
during the Term.
9.5. Lessee and Guarantor Covenants. Each of Guarantor and Lessee, as
applicable, covenants and agrees for the benefit of Lessor, Certificate Holders,
each Lender, the Administrative Agent and the Collateral Agent (unless each such
Person shall otherwise waive in writing compliance herewith) that on the Closing
Date therefor and thereafter during the remaining term of this Agreement as
follows:
(a) Information Covenants. Guarantor will furnish to the Administrative
Agent:
(i) Monthly Reports. Within 45 days after the end of each fiscal month of
Guarantor, the consolidated balance sheets of Guarantor and its Subsidiaries
on a consolidated basis and Lessee and its Consolidated Subsidiaries on a
stand-alone basis as at the end of such month and the related consolidated
statements of income and retained earnings and statement of cash flows for
such month and for the elapsed portion of the fiscal year ended with the last
day of such month, in each case accompanied by an abbreviated discussion of
the operating results in such preceding fiscal month.
(ii) Quarterly Financial Statements. Within 45 days after the close of the
first three quarterly accounting periods in each fiscal year of Guarantor,
the consolidated balance sheets of Guarantor and its Subsidiaries on a
consolidated basis and Lessee and
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its Consolidated Subsidiaries on a stand-alone basis as at the end of such
quarterly accounting period and the related consolidated statements of income
and retained earnings and statement of cash flows for such quarterly
accounting period and for the elapsed portion of the fiscal year ended with
the last day of such quarterly accounting period, in each case setting forth
comparative figures for the related periods in the prior fiscal year, all of
which shall be certified by the chief financial officer of Guarantor, subject
to normal year-end audit adjustments.
(iii) Annual Financial Statements. Within 105 days after the close of each
fiscal year of Guarantor, the consolidated balance sheets of Guarantor and
its Subsidiaries on a consolidated basis and Lessee and its Consolidated
Subsidiaries on a stand-alone basis as at the end of such fiscal year and the
related consolidated statements of income and retained earnings and of cash
flows for such fiscal year setting forth comparative figures for the
preceding fiscal year and certified, in the case of the consolidated
financial statements of Guarantor, by Deloitte & Touche LLP or such other
independent certified public accountants of recognized national standing
reasonably acceptable to the Administrative Agent, and in the case of the
other financial statements, certified by the chief financial officer of
Guarantor, together with a report of such accounting firm stating that in the
course of its regular audit of the financial statements of Guarantor and its
Subsidiaries, which audit was conducted in accordance with generally accepted
auditing standards, such accounting firm obtained no knowledge of any Lease
Default, Lease Event of Default, Loan Default or Loan Event of Default which
has occurred and is continuing or, if in the opinion of such accounting firm
such a Lease Default, Lease Event of Default, Loan Default or Loan Event of
Default has occurred and is continuing, a statement as to the nature thereof.
(iv) Management Letters. Promptly after Guarantor' or any of its
Subsidiaries' receipt thereof, a copy of any "management letter" addressed to
the board of directors of Guarantor or such Subsidiary from its certified
public accountants and any internal control memoranda relating thereto.
(v) Budgets. No later than the first day of each fiscal year of Guarantor,
a budget in form satisfactory to the Majority Lenders (including budgeted
statements of income and sources and uses of cash and balance sheets)
prepared by Guarantor for each of the twelve months of such fiscal year
prepared in detail, accompanied by a statement of the Chief Financial Officer
of Guarantor to the effect that, to the best of his knowledge, the budget is
a reasonable estimate for the period covered thereby.
(vi) Certificates of Responsible Officer. At the time of the delivery of
the financial statements provided for in Sections 9.5(a)(ii) and 9.5(a)(iii),
a certificate of a Responsible Officer of Guarantor to the effect that, to
the best of such officer's knowledge, no Lease Default or Lease Event of
Default has occurred and is continuing or, if any Lease Default or Lease
Event of Default has occurred and is continuing, specifying the nature and
extent thereof, which certificate shall set forth in reasonable detail the
calculations required to establish whether the Borrower was in compliance
with the provisions
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of Sections 9.5(k), (m), (n) and (o), inclusive, at the end of such fiscal
quarter or year, as the case may be.
(vii) Notice of Default or Litigation. Promptly, and in any event within
three Business Days after a Responsible Officer of Guarantor or Lessee
obtains knowledge thereof, notice of (i) the occurrence of any event which
constitutes a Lease Default or Lease Event of Default and (ii) any litigation
or governmental investigation or proceeding pending (x) against Guarantor or
any of its Subsidiaries which could reasonably be expected to materially and
adversely affect the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of Guarantor or any of its
Subsidiaries or (y) with respect to the Guarantor IPO, the Repurchase, the
Revolver or any Operative Document.
(viii) Other Information. From time to time, such other information or
documents (financial or otherwise) with respect to Guarantor or its
Subsidiaries as any Lender or Certificate Holder may reasonably request.
(b) Books, Records and Inspections. Guarantor will, and will cause each of
its Subsidiaries to, keep proper books of record and account in which full, true
and correct entries in conformity with generally accepted accounting principles
and all requirements of law shall be made of all dealings and transactions in
relation to its business and activities. Guarantor will, and will cause each of
its Subsidiaries to, permit upon two Business Days' prior notice officers and
designated representatives of the Administrative Agent or the Majority Lenders
to visit and inspect, under guidance of officers of Guarantor or such
Subsidiary, any of the properties of Guarantor or such Subsidiary, and to
examine the books of account of Guarantor or such Subsidiary and discuss the
affairs, finances and accounts of Guarantor or such Subsidiary with, and be
advised as to the same by, its and their officers and independent accountants,
all at such reasonable times and intervals and to such reasonable extent as the
Administrative Agent or the Majority Lenders may reasonably request, all such
inspections to be subject to any binding confidentiality agreement for the
benefit of a third party that prohibits the foregoing. Guarantor will, and will
cause each of its Subsidiaries to, permit officers and designated
representatives of the Administrative Agent to conduct, at Guarantor's expense,
an annual audit of the accounts receivable and inventories of Guarantor and its
Subsidiaries.
(c) Compliance with Statutes, etc. Guarantor will, and will cause each of
its Subsidiaries to, comply with all applicable statutes, regulations and orders
of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property, except such noncompliances as could not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of Guarantor and its Subsidiaries taken as a whole.
(d) Compliance with Environmental Laws. (i) Guarantor will comply, and will
cause each of its Subsidiaries to comply, in all material respects with all
Environmental Laws applicable to the ownership or use of its Real Property now
or hereafter owned or operated by Guarantor or any of its Subsidiaries (except
such noncompliances as could not, individually or
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in the aggregate, reasonably be expected to have a material adverse effect on
the business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of Guarantor and its Subsidiaries taken as a whole),
will promptly pay or cause to be paid all costs and expenses incurred in
connection with such compliance, and will keep or cause to be kept all such Real
Property free and clear of any Liens imposed pursuant to such Environmental
Laws. Neither Guarantor nor any of its Subsidiaries will generate, use, treat,
store, release or dispose of, or permit the generation, use, treatment, storage,
release or disposal of Hazardous Materials on any Real Property now or hereafter
owned or operated by Guarantor or any of its Subsidiaries, or transport or
permit the transportation of Hazardous Materials to or from any such Real
Property, except for Hazardous Materials generated, used, treated, stored,
released or disposed of at any such Real Properties in compliance in all
material respects with all applicable Environmental Laws and reasonably required
in connection with the operation, use and maintenance of the business or
operations of Guarantor or any of its Subsidiaries.
(ii) At the written request of the Administrative Agent, the Majority
Lenders or the Majority Certificate Holders, which request shall specify in
reasonable detail the basis therefor, at any time and from time to time,
Guarantor will provide, at Guarantor's sole cost and expense, an environmental
site assessment report concerning any Real Property owned or operated by
Guarantor and its Subsidiaries, prepared by an environmental consulting firm
reasonably satisfactory to the Administrative Agent, indicating the presence or
absence of Hazardous Materials and the potential cost of any removal or remedial
action in connection with any Hazardous Materials on such Real Property,
provided that in no event shall such request be made more often that once every
three years for any particular Real Property unless (i) the Obligations have
been declared due and payable pursuant to Section 23 of the Lease Agreement or
Section 6.1 of the Loan Agreement; (ii) the Lenders or Certificate Holders
receive notice under Section 9.5(d) of any event for which notice is required to
be delivered for any such Real Property or any business or operations of
Guarantor or any of its Subsidiaries; or (iii) a Lease Default or a Lease Event
of Default then exists. If Guarantor or Lessee fails to provide the same within
ninety (90) days after such request was made, the Administrative Agent may order
the same, the cost of which shall be borne by Lessee, and Guarantor and Lessee
shall grant and hereby grant to the Administrative Agent, the Lenders, the
Certificate Holders and their agents access to such Real Property and
specifically grant the Administrative Agent, the Lenders and the Certificate
Holders an irrevocable non-exclusive license to undertake such an assessment,
all at Guarantor's expense.
[(e) ERISA. As soon as possible and, in any event, within ten (10) business
days after Guarantor, any Subsidiary of Guarantor or any ERISA Affiliate knows
or has reason to know of the occurrence of any of the following, Guarantor will
deliver to each of the Lenders a certificate of the chief financial officer of
Guarantor setting forth the full details as to such occurrence and the action,
if any, that Guarantor, such Subsidiary or such ERISA Affiliate is required or
proposes to take, together with any notices required or proposed to be given to
or filed with or by Guarantor, the Subsidiary, the ERISA Affiliate, the PBGC, a
Plan participant or the Plan administrator with respect thereto: (i) that a
Reportable Event has occurred (except to the extent that Guarantor has
previously delivered to the Lenders a certificate and notices (if any)
concerning such event pursuant to the next clause hereof); (ii) that a
contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan
subject to Title IV of ERISA is subject to the
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advance reporting requirement of PBGC Regulation Section 4043.61 (without regard
to subparagraph (b)(1) thereof), and an event described in subsection .62, .63,
.64, .65, .66, .67 or .68 of PBGC Regulation Section 4043 is reasonably expected
to occur with respect to such Plan within the following 30 days; (iii) that an
accumulated funding deficiency, within the meaning of Section 412 of the Code or
Section 302 of ERISA, has been incurred or an application may be or has been
made for a waiver or modification of the minimum funding standard (including any
required installment payments) or an extension of any amortization period under
Section 412 of the Code or Section 303 or 304 of ERISA with respect to a Plan;
(iv) that any contribution required to be made with respect to a Plan or Foreign
Pension Plan has not been timely made; (v) that a Plan which is subject to Title
IV of ERISA has been or may be terminated, reorganized, partitioned or declared
insolvent under Title IV of ERISA; (vi) that a Plan has an Unfunded Current
Liability; (vii) that proceedings may be or have been instituted to terminate or
appoint a trustee to administer a Plan which is subject to Title IV of ERISA;
(viii) that a proceeding has been instituted pursuant to Section 515 of ERISA to
collect a delinquent contribution to a Plan; (ix) that Guarantor or any
Subsidiary of Guarantor will or may incur any liability (including any indirect,
contingent, or secondary liability) to or on account of the termination of or
withdrawal from a Plan under Section 4062, 4063, 4064, 4069, 4201, 4204 or 4212
of ERISA or with respect to a Plan under Section 401(a)(29), 4971, 4975 or 4980
of the Code or Section 409, 502(i) or 502(l) of ERISA or with respect to a group
health plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the
Code) under Section 4980B of the Code; or (x) that Guarantor or any Subsidiary
of Guarantor may incur any material liability pursuant to any employee welfare
benefit plan (as defined in Section 3(1) of ERISA) that provides benefits to
retired employees or other former employees (other than as required by Section
601 of ERISA) or any Plan or any Foreign Pension Plan in addition to the
liability that existed on the Effective Date pursuant to any such plan or plans.
Guarantor will deliver to each of the Lenders copies of any records, documents
or other information that must be furnished to the PBGC with respect to any Plan
pursuant to Section 4010 of ERISA. Guarantor will also deliver to each of the
Lenders a complete copy of the annual report (on Internal Revenue Service Form
5500-series) of each Plan which is subject to Title IV of ERISA (including, to
the extent required, the related financial and actuarial statements and opinions
and other supporting statements, certifications, schedules and information)
required to be filed with the Internal Revenue Service. In addition to any
certificates or notices delivered to the Lenders pursuant to the first sentence
hereof, copies of annual reports and any records, documents or other information
required to be furnished to the PBGC, and any material notices received by
Guarantor, any Subsidiary of Guarantor or any ERISA Affiliate with respect to
any Plan or Foreign Pension Plan shall be delivered to the Lenders no later than
twenty (20) days after the date such annual report has been filed with the
Internal Revenue Service or such records, documents and/or information has been
furnished to the PBGC or such notice has been received by Guarantor, the
Subsidiary or the ERISA Affiliate, as applicable.(4)
----------
(4) Under ERISA review.
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(f) Performance of Obligations. Guarantor will, and will cause each of its
Subsidiaries to, perform all of its obligations under the terms of each
mortgage, indenture, security agreement and other debt instrument by which it is
bound, except such non-performances as could not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of Guarantor and its Subsidiaries taken as a whole.
(g) Payment of Taxes. Guarantor will pay and discharge or cause to be paid
and discharged, and will cause each of its Subsidiaries to pay and discharge,
all lawful claims, taxes, assessments and governmental charges or levies imposed
upon it or upon its income or profits, or upon any properties belonging to it,
in each case on a timely basis; provided that neither Guarantor nor any of its
Subsidiaries shall be required to pay any such tax, assessment, charge, levy or
claim which is being contested in good faith and by proper proceedings if it has
maintained adequate reserves with respect thereto in accordance with GAAP.
(h) Liens. Guarantor will not, and will not permit any of its Subsidiaries
to, create, incur, assume or suffer to exist any Lien upon or with respect to
any property or assets (real or personal, tangible or intangible) of Guarantor
or any of its Subsidiaries, whether now owned or hereafter acquired, or sell any
such property or assets subject to an understanding or agreement, contingent or
otherwise, to repurchase such property or assets (including sales of accounts
receivable with recourse to Guarantor or any of its Subsidiaries), or assign any
right to receive income or permit the filing of any financing statement under
the UCC or any other similar notice of Lien under any similar recording or
notice statute; provided that the provisions of this Section 6.5(h) shall not
prevent the creation, incurrence, assumption or existence of the following
(Liens described below are herein referred to as "Permitted Guarantor Liens"):
(i) inchoate Liens for taxes, assessments or governmental charges or levies
not yet due or Liens for taxes, assessments or governmental charges or levies
being contested in good faith and by appropriate proceedings for which
adequate reserves have been established in accordance with generally accepted
accounting principles;
(ii) Liens in respect of property or assets of Guarantor or any of its
Subsidiaries imposed by law, which were incurred in the ordinary course of
business and do not secure Indebtedness for borrowed money, such as
carriers', warehousemen's, materialmen's and mechanics' liens and other
similar Liens arising in the ordinary course of business, and (x) which do
not in the aggregate materially detract from the value of Guarantor's or such
Subsidiary's property or assets or materially impair the use thereof in the
operation of the business of Guarantor's or such Subsidiary or (y) which are
being contested in good faith by appropriate proceedings, which proceedings
have the effect of preventing the forfeiture or sale of the property or
assets subject to any such Lien;
(iii) Liens in existence on the Closing Date which are listed, and the
property subject thereto described, in Schedule 5, but only to the respective
date, if any, set forth in such Schedule 5 for the removal and termination of
any such Liens, plus renewals and extensions of such Liens to the extent set
forth on Schedule 5, provided that (x) the aggregate principal amount of the
Indebtedness, if any, secured by such Liens does not
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increase from that amount outstanding at the time of any such renewal or
extension and (y) any such renewal or extension does not encumber any
additional assets or properties of Guarantor or any of its Subsidiaries;
(iv) Permitted Encumbrances;
(v) Liens created pursuant to the Security Documents;
(vi) leases or subleases granted to other Persons not materially
interfering with the conduct of the business of Guarantor and its
Subsidiaries taken as a whole;
(vii) Liens (including precautionary UCC filings) upon assets of Lessee or
its Subsidiaries subject to Capitalized Lease Obligations to the extent
permitted by Section 9.5(k)(v) and the other provisions of this Agreement,
provided that (x) such Liens secure only the payment of such Capitalized
Lease Obligations and (y) the Liens do not encumber any other asset of
Guarantor or any Subsidiary of Guarantor;
(viii) Liens placed upon inventory, equipment or other property acquired,
constructed or held by Lessee or any of its Subsidiaries in the ordinary
course of business to secure Indebtedness incurred to finance the
acquisition, construction or improvement thereof, provided that (x) the
aggregate outstanding principal amount of all Indebtedness secured by the
Liens permitted by this clause (viii) and the Indebtedness permitted by
Section 9.5(k)(v) shall not at any time exceed $15,000,000 and (y) such Liens
do not encumber any other asset of Lessee or such Subsidiary;
(ix) easements, rights-of-way, restrictions, encroachments and other
similar charges or encumbrances, and minor title deficiencies, in each case
not securing Indebtedness and not materially interfering with the conduct of
the business of Guarantor and its Subsidiaries taken as a whole;
(x) Liens on assets of a Foreign Subsidiary of Lessee securing Indebtedness
permitted to be incurred by such Foreign Subsidiary under this Agreement;
(xi) Liens arising out of judgments or awards in respect of which Guarantor
or any of its Subsidiaries shall in good faith be prosecuting an appeal or
proceedings for review in respect of which there shall have been secured a
subsisting stay of execution pending such appeal or proceedings, provided
that the aggregate amount of all such judgments or awards (and any cash and
the fair market value of any property subject to such Liens) does not exceed
$1,000,000 at any time outstanding;
(xii) statutory and common law landlords' liens under leases to which
Guarantor or any of its Subsidiaries is a party;
(xiii) Liens incurred in the ordinary course of business in connection with
workers compensation claims, unemployment insurance and social security
benefits and Liens securing the performance of bids, tenders, leases and
contracts in the ordinary course of business, provided that the aggregate
outstanding amount of obligations secured by Liens
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permitted by this clause (xiii) (and the value of all cash and property
encumbered by Liens permitted pursuant to this clause (xiii)) shall not at
any time exceed $5,000,000; and
(xiv) Liens securing Indebtedness permitted pursuant to Section
9.5(k)(xvii).
(i) Consolidation, Merger, Purchase or Sale of Assets, etc. Guarantor will
not, and will not permit any of its Subsidiaries to, wind up, liquidate or
dissolve its affairs or enter into any transaction of merger or consolidation,
or convey, sell, lease or otherwise dispose of (or agree to do any of the
foregoing at any future time) all or any part of its property or assets, or
enter into any sale-leaseback transactions, or purchase or otherwise acquire (in
one or a series of related transactions) any part of the property or assets
(other than purchases or other acquisitions of inventory, materials and
equipment in the ordinary course of business) of any Person, except that:
(i) Capital Expenditures by Lessee and its Subsidiaries shall be permitted
to the extent not in violation of Section 9.07 of the Revolver;
(ii) each of Lessee and its Subsidiaries may in the ordinary course of
business sell or otherwise dispose of any assets which, in the reasonable
judgment of such Person, are obsolete, worn out or otherwise no longer useful
in the conduct of such Person's business, provided that the proceeds of all
assets subject to sales or other dispositions pursuant to this clause (ii)
shall not exceed $5,000,000 in any fiscal year of Lessee;
(iii) investments may be made to the extent permitted by Section 9.05 of
the Revolver;
(iv) each of Lessee and its Subsidiaries may lease (as lessee) real or
personal property to the extent permitted by Section 9.5(k) (so long as any
such lease does not create a Capitalized Lease Obligation except to the
extent permitted by Section 9.5(k));
(v) each of Lessee and its Subsidiaries may make sales or Leases of
inventory or equipment in the ordinary course of business;
(vi) any Subsidiary of Lessee may be merged or consolidated with or into
Lessee or any other Wholly-Owned Domestic Subsidiary of Lessee or be
liquidated, wound up or dissolved, or all or substantially all of its
business, property or assets may be conveyed, sold, leased, transferred or
otherwise disposed of, in one transaction or a series of transactions, to
Lessee or any other Wholly-Owned Domestic Subsidiary of Lessee;
(vii) the transactions contemplated herein (including all sales of assets
during the Interim Term) shall be permitted;
(viii) each of Lessee and its Subsidiaries may acquire all or substantially
all of the assets of the any Person (or all or substantially all of the
assets of a product line or division of any Person) or 100% of the capital
stock of any Person the merger with the Lessee or a Subsidiary of the Lessee
or by stock purchase (any such acquisition permitted
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by this clause (viii), a "Permitted Acquisition"), so long as (i) no Lease
Default, Lease Event of Default, Loan Default or Loan Event of Default then
exists or would result therefrom, (ii) each of the representations and
warranties contained in Sections 2.1 and 2.2 of this Participation Agreement
shall be true and correct in all material respects both before and after
giving effect to such Permitted Acquisition, (iii) any Liens or Indebtedness
assumed or issued in connection with such acquisition are otherwise permitted
under Section 9.5(h) or 9.5(k), as the case may be, (iv) the only
consideration paid by Lessee or any Subsidiary in connection with any
Permitted Acquisition consists solely of cash, common stock of Guarantor
and/or Qualified Preferred Stock of Guarantor and its Subsidiaries would have
been in compliance with the financial covenants set forth in Section 9.5(m)
through 9.5(o), inclusive, for the Test Period then most recently ended prior
to the date of the consummation of such Permitted Acquisition, in each case
with such financial covenants to be determined on a pro forma basis (subject
to the methodology to give effect to such pro forma adjustments being
satisfactory to the Administrative Agent) as if such Permitted Acquisition
had been consummated on the first day of such Test Period (and assuming that
any Indebtedness incurred, issued or assumed in connection therewith had been
incurred, issued or assumed on the first day of, and had remained outstanding
throughout, such Test Period), (vi) the sum of (A) the aggregate cash
consideration paid in connection with all Permitted Acquisitions (including,
without limitation, any earn-out, non-compete or deferred compensation
arrangements, the aggregate principal amount of any Indebtedness assumed in
connection therewith and the fair market value of any capital stock of
Guarantor issued in connection therewith) shall not exceed (I) $75,000,000
for any single transaction (or series of related transactions), (II) in the
event such consideration consists of cash and assumed Indebtedness (including
Capitalized Leased Obligations), $10,000,000 in any fiscal year (and
$50,000,000 in the aggregate) (excluding any portion of such consideration
which is treated as, or involves the acquisition of assets which is treated
as, a Capital Expenditure under Section 9.07 of the Revolver), and (z) to the
extent that such consideration consists solely of common stock of Guarantor
and/or Qualified Preferred Stock of Guarantor, $150,000,000, (vii) the
incurrence, issuance or assumption of Operating Lease Obligations are
permitted under Section 9.5(h)(vii), (viii) after giving effect to any
Permitted Acquisition, the Unutilized Commitment (as defined in the Revolver)
is at least $5,000,000, and (ix) the assets or Person acquired pursuant to
each such Permitted Acquisition are employed or engaged, as the case may be,
in a Permitted Business;
(ix) any Foreign Subsidiary may be merged with and into, or be dissolved or
liquidated into, or transfer any of its assets to, any Foreign Subsidiary or
Foreign Join Venture so long as at least 65% of the total combined voting
power of all classes of capital stock of all first-tier Foreign Subsidiaries
and all of the capital stock owned by Guarantor or any of its Subsidiaries of
any first-tier Foreign Joint Venture is pledged pursuant to the Pledge
Agreement (unless, (A) in the case of Foreign Subsidiaries, the
Administrative Agent reasonably determines that such pledge shall result in
regulatory or economic disadvantages and (B) additionally, in the case of
Foreign Joint Ventures, the organizational documents thereof prohibit such
Pledge)
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(x) the assets of any Foreign Subsidiary or Foreign Joint Venture may be
transferred to Lessee or any of its Domestic Subsidiaries and any Foreign
Subsidiary or Foreign Joint Venture may be merged with and into, or be
dissolved or liquidated into, Lessee or any of its Domestic Subsidiaries so
long as Lessee or such Domestic Subsidiary is the surviving corporation of
any such merger, dissolution or liquidation;
(xi) Lessee or any of its Domestic Subsidiaries may transfer to one or more
Foreign Subsidiaries or Foreign Joint Venture those assets theretofore
transferred to Lessee or such Domestic Subsidiary by a Foreign Subsidiary or
Foreign Joint Venture (whether by merger, liquidation, dissolution or
otherwise) pursuant to clause (x) of this Section 9.5(i);
(xii) each of Lessee and its Subsidiaries may enter into sale and leaseback
transactions with respect to their inventory, equipment and Real Property, in
which Lessee or any of its Subsidiaries acts as seller of the inventory,
equipment or Real Property that is the subject of the transaction, so long as
(v) no Lease Default, Lease Event of Default, Loan Default or Loan Event of
Default then exists or would result therefrom, (w) each such sale and
leaseback transaction is in an arm's-length transaction and Lessee or the
respective Subsidiary receives at least fair market value (as determined in
good faith by Lessee or such Subsidiary, as the case may be), (x) the total
consideration received by Lessee or such Subsidiary is cash and is paid at
the time of the closing of such sale, (y) the Net Sale Proceeds therefrom are
applied and/or reinvested as (and to the extent) required by Section 4.02(b)
of the Revolver and (z) the Capitalized Lease Obligations and/or Operating
Lease Obligations are otherwise permitted under this Agreement;
(xiii) so long as (x) no Lease Default, Lease Event of Default, Loan
Default or Loan Event of Default then exists or would result therefrom and
(y) Lessee shall be in compliance with the financial covenants contained in
Sections 9.5(m) through 9.5(o), inclusive, with such covenants to be
calculated on a pro forma basis, Lessee may, and may permit its Subsidiaries
to, exchange (for reasonably equivalent value, a portion thereof which may
include cash) any inventory, equipment and other assets (each such
transaction an "Asset Swap"), provided that (A) the sum of (1) the total
value of all assets to be swapped in any fiscal year of Lessee and (2) the
total value of assets sold in accordance with Section 9.5(i)(xiv) in such
fiscal year shall not exceed in the aggregate 10% of the total value of all
assets of Lessee and its Subsidiaries as of the end of the most recently
ended fiscal year, (B) that the disposition and acquisition of the subject
inventory, equipment or other assets occur within 60 days of one another and
(C) that any such cash proceeds received by Lessee or any of its Subsidiaries
in connection with any such Asset Swap shall be applied and/or reinvested as
(and to the extent) required by Section 4.02(b) of the Revolver;
(xiv) each of Lessee and its Subsidiaries may sell assets, so long as (v)
no Lease Default, Lease Event of Default, Loan Default or Loan Event of
Default then exists or would result therefrom, (w) each sale is in an arm's
length transaction and Lessee or the respective Subsidiary receives at least
fair market value (as determined in good faith by
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Lessee or such Subsidiary, as the case may be), (x) the total consideration
received by Lessee or such Subsidiary is at least 75% cash and is paid at the
time of the closing of such sale, (y) the Net Sale Proceeds therefrom are
applied and/or reinvested as (and to the extent) required by Section 4.02(b)
of the Revolver and (z) the aggregate amount of the proceeds received from
all assets sold pursuant to this clause (xiv) plus the total value of the
assets swapped pursuant to Section 9.5(i)(xiii) in any fiscal year of Lessee
does not exceed 10% of the total value of all assets of Lessee and its
Subsidiaries as of the end of the most recently ended fiscal year of Lessee;
and
(xv) any of Guarantor and its Subsidiaries may enter into agreements to
effectuate any transaction otherwise prohibited by this Section 9.5(i) so
long as the consummation of any such agreement is conditioned upon obtaining
the consent of the Majority Lenders or repaying the Obligations in full
(other than obligations under Sections 10.4 and 12.1).
(j) Dividends. Guarantor shall not, and will not permit any of its
Subsidiaries to, authorize, declare or pay any Dividends with respect to
Guarantor or any of its Subsidiaries, except that:
(i) (x) any Domestic Subsidiary of Lessee may pay Dividends to Lessee or
any Wholly-Owned Subsidiary of Lessee and (y) any Foreign Subsidiary of
Lessee may pay Dividends so long as any such Dividends paid by a Foreign
Subsidiary of Lessee that is not a Wholly-Owned Subsidiary are paid on a pro
rata basis to such Foreign Subsidiary's shareholders generally (based on the
relative holdings of the equity interest or interests in the Foreign
Subsidiary paying such Dividends and taking into account the relative
preferences, if any, of the various classes of equity interests in such
Foreign Subsidiary);
(ii) so long as there shall exist no Lease Default or Lease Event of
Default (both before and after giving effect to the payment thereof) Lessee
may pay cash Dividends to Guarantor, so long as such proceeds are promptly
used by Guarantor to pay (x) corporate overhead costs, directors' fees and
other expenses (including, without limitation, the fees and expenses
permitted pursuant to Section 9.5(l)(vi)), provided that the aggregate amount
of cash Dividends paid during the respective fiscal year pursuant to this
clause (ii), together with the amount of any outstanding loans and advances
made during the respective fiscal year by Lessee pursuant to Section 9.05(vi)
of the Revolver (without reduction for any writedowns or write-offs thereof),
shall not during any fiscal year of Lessee exceed $1,000,000 or (y) franchise
taxes and federal, state and local income taxes and interest and penalties
with respect thereto, if any, payable by Guarantor (provided that any refund
shall be promptly returned by Guarantor to Lessee); and
(iii) so long as there shall exist no Lease Default or Lease Event of
Default (both before and after giving effect to the payment thereof) Lessee
may pay cash Dividends to Guarantor so long as the proceeds thereof are
immediately used by Guarantor to purchase shares of common stock or options
to purchase shares of common stock of Guarantor held by former employees of
Lessee following the termination of their employment by Lessee or any of its
Subsidiaries, provided that the aggregate amount of cash Dividends paid
pursuant to this clause (iii) shall (x) be funded with life insurance
proceeds received
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by Lessee under life insurance policies maintained with respect to such
employee or (y) to the extent not funded as described in preceding clause
(x), not during any fiscal year of Lessee exceed $3,000,000.
(k) Indebtedness. Guarantor will not, and will not permit any of its
Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(i) Indebtedness incurred pursuant to this Agreement and the other
Operative Documents;
(ii) Existing Indebtedness outstanding on the Closing Date and listed on
Schedule 6, without giving effect to any subsequent extensions, renewal or
refinancing thereof except to the extent set forth on Schedule 6, provided
that the aggregate principal amount of Indebtedness to be extended, renewed
or refinanced does not increase from that amount outstanding at the time of
any such extension, renewal or refinancing;
(iii) Indebtedness with respect to surety bonds, appeal bonds or customs
bonds required in the ordinary course of business or in connection with the
enforcement of rights or claims of Lessee or any of its Subsidiaries or in
connection with judgments that do not result in a Lease Default or Lease
Event of Default, provided that the aggregate outstanding amount of all such
surety bonds, appeal bonds and customs bonds permitted by this clause (iii)
shall not at any time exceed $5,000,000;
(iv) Indebtedness under Interest Rate Protection Agreements on terms
acceptable to the Administrative Agent;
(v) Indebtedness evidenced by Capitalized Lease Obligations to the extent
permitted pursuant to Section 9.07 of the Revolver, provided that in no event
shall the aggregate principal amount of Capitalized Lease Obligations and
Purchase Money Indebtedness permitted by this clause (v) exceed $15,000,000
at any time outstanding;
(vi) Indebtedness of Lessee and the Guarantor evidenced by Lessee Senior
Discount Notes outstanding on the Closing Date (and guarantees thereof) plus
the amount of interest on such Lessee Senior Discount Notes paid in kind or
through accretion or capitalization;
(vii) accrued expenses and current trade accounts payable incurred in the
ordinary course of business and unsecured guarantees of Lessee or any of its
Subsidiaries of such trade accounts payable, and obligations under trade
letters of credit incurred by Lessee or such Subsidiary in the ordinary
course of business, which are to be repaid in full not more than one year
after the date on which such Indebtedness is originally incurred to finance
the purchase of goods by Lessee or such Subsidiary;
(viii) Indebtedness of Lessee under any Other Hedging Agreement which is
entered into to protect Lessee against fluctuations in currency values so
long as such Other Hedging Agreements are for bona fide business purposes and
are not speculative;
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(ix) Indebtedness of Lessee not to exceed $3,000,000 at any time
outstanding and secured by insurance cancellation premiums relating to
insurance maintained by Lessee in the ordinary course of business;
(x) intercompany Indebtedness among Lessee and its Subsidiaries to the
extent permitted by Section 9.05 of the Revolver;
(xi) (A) unsecured guarantees by Guarantor of Indebtedness, Operating Lease
Obligations or other obligations of its Domestic Subsidiaries that are
permitted to be incurred hereunder and (B) guarantees by Foreign Subsidiaries
of Indebtedness, Operating Lease Obligations or other obligations of other
Foreign Subsidiaries of the Borrower that are permitted to be incurred
hereunder;
(xii) Indebtedness of any Foreign Subsidiary of Lessee the proceeds of
which Indebtedness are used for such Foreign Subsidiary's and/or its Foreign
Subsidiaries' working capital and general corporate purposes (the "Foreign
Subsidiary Indebtedness");
(xiii) Indebtedness consisting of Capitalized Lease Obligations, Purchase
Money Indebtedness or other Indebtedness which does not constitute debt for
borrower money of a Subsidiary acquired pursuant to a Permitted Acquisition
(or such Indebtedness assumed at the time of a Permitted Acquisition of an
asset securing such Indebtedness), provided that such Indebtedness was not
incurred in connection with, or in anticipation or contemplation of, such
Permitted Acquisition;
(xiv) Indebtedness of Lessee and its Subsidiaries consisting of letters of
credit and reimbursement obligations with respect thereto, including renewals
or extensions thereof, so long as the aggregate stated amount of such letters
of credit at any time outstanding does not exceed $17,500,000 (such amount to
be reduced by the aggregate principal amount of all outstanding Letters of
Credit issued under the Revolver); and
(xv) Indebtedness of Lessee and its Subsidiaries to the extent not
permitted by the foregoing clauses of this Section 9.5(k) not to exceed
$20,000,000 in aggregate principal amount at any time outstanding.
(l) Transactions with Affiliates. Guarantor will not, and will not permit
any of its Subsidiaries to, enter into any transaction or series of related
transactions, whether or not in the ordinary course of business, with any
Affiliate of Guarantor or any of its Subsidiaries, other than in the ordinary
course of business and on terms and conditions substantially as favorable to
Guarantor or such Subsidiary as would reasonably be obtained by Guarantor or
such Subsidiary at that time in a comparable arm's-length transaction with a
Person other than an Affiliate, except that (i) Dividends may be paid to the
extent provided in Section 9.5(j), (ii) loans may be made and other transactions
may be entered into by Guarantor and its Subsidiaries to the extent permitted by
Section 9.05 of the Revolver, (iii) customary fees may be paid to directors of
Guarantor and its Subsidiaries, (iv) options to purchase common stock of
Guarantor may be granted to officers and directors of Guarantor and its
Subsidiaries in the ordinary course of business, (v) Guarantor and its
Subsidiaries may enter into employment arrangements with their
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respective officers in the ordinary course of business and (vii) Guarantor or
its Subsidiaries may pay directors' fees to the directors of Guarantor or any of
its Subsidiaries in an aggregate amount for all such Persons not to exceed
$500,000 per year. Except as specifically provided above, no management or
similar fees shall be paid or payable by Guarantor or any of its Subsidiaries to
any Person other than customary investment banking, financing and similar fees
arising in connection with transactions after the date hereof.
(m) Consolidated EBITDAR to Total Interest Expense. Guarantor will not
permit the ratio of (i) Consolidated EBITDAR to (ii) the sum of Total Interest
Expense plus all lease expenses for such Test Period associated with the
transaction contemplated herein for any Test Period ending on the last day of a
fiscal quarter set forth below to be less than the ratio set forth opposite such
fiscal quarter below:
Period Ratio
------ -----
June 30, 2000 ____:1.00
September 30, 2000 ____:1.00
December 31, 2000 ____:1.00
March 31, 2001 ____:1.00
June 30, 2001 ____:1.00
September 30, 2001 ____:1.00
December 31, 2001 ____:1.00
March 31, 2002 ____:1.00
June 30, 2002 ____:1.00
September 30, 2002 ____:1.00
December 31, 2002 ____:1.00
March 31, 2003 ____:1.00
June 30, 2003 ____:1.00
September 30, 2003 ____:1.00
December 31, 2003 ____:1.00
March 31, 2004 ____:1.00
June 30, 2004 and the last day of each ____:1.00.
fiscal quarter thereafter
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(n) Maximum Leverage Ratio. Guarantor will not permit the Leverage Ratio at
any time during a period set forth below to be greater than the ratio set forth
opposite such period below:
Period Ratio
------ -----
Date hereof ____:1.00
Through and including June 30, 2000
July 1, 2000 ____:1.00
Through and including September 30, 2000
October 1, 2000 ____:1.00
Through and including December 31, 2000
January 1, 2001 ____:1.00
Through and including March 31, 2001
April 1, 2001 ____:1.00
Through and including June 30, 2001
July 1, 2001 ____:1.00
Through and including September 30, 2001
October 1, 2001 ____:1.00
Through and including December 31, 2001
January 1, 2002 ____:1.00
Through and including March 31, 2002
April 1, 2002 ____:1.00
Through and including June 30, 2002
July 1, 2002 ____:1.00
Through and including September 30, 2002
October 1, 2002 ____:1.00
Through and including December 31, 2002
January 1, 2003 ____:1.00
Through and including March 31, 2003
April 1, 2003 ____:1.00
Through and including June 30, 2003
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Period Ratio
------ -----
July 1, 2003 ____:1.00
Through and including September 30, 2003
October 1, 2003 ____:1.00
Through and including December 31, 2003
January 1, 2004 ____:1.00
Through and including March 31, 2004
April 1, 2004 ____:1.00
Through and including June 30, 2004
July 1, 2004 ____:1.00
Through and including September 30, 2004
October 1, 2004 ____:1.00
Through and including December 31, 2004
January 1, 2005 ____:1.00.
Through and including March 31, 2005
(o) Maximum Senior Secured Leverage Ratio. Guarantor will not permit the
Senior Secured Leverage Ratio at any time during a period set forth below to be
greater than the ratio set forth opposite such period below:
Period Ratio
------ -----
Date hereof ____:1.00
Through and including June 30, 2000
July 1, 2000 ____:1.00
Through and including September 30, 2000
October 1, 2000 ____:1.00
Through and including December 31, 2000
January 1, 2001 ____:1.00
Through and including March 31, 2001
April 1, 2001 ____:1.00
Through and including June 30, 2001
July 1, 2001 ____:1.00
Through and including September 30, 2001
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Period Ratio
------ -----
October 1, 2001 ____:1.00
Through and including December 31, 2001
January 1, 2002 ____:1.00
Through and including March 31, 2002
April 1, 2002 ____:1.00
Through and including June 30, 2002
July 1, 2002 ____:1.00
Through and including September 30, 2002
October 1, 2002 ____:1.00
Through and including December 31, 2002
January 1, 2003 ____:1.00
Through and including March 31, 2003
April 1, 2003 ____:1.00
Through and including June 30, 2003
July 1, 2003 ____:1.00
Through and including September 30, 2003
October 1, 2003 ____:1.00
Through and including December 31, 2003
January 1, 2004 ____:1.00
Through and including March 31, 2004
April 1, 2004 ____:1.00
Through and including June 30, 2004
July 1, 2004 ____:1.00
Through and including September 30, 2004
October 1, 2004 ____:1.00
Through and including December 31, 2004
January 1, 2005 ____:1.00.
Through and including Xxxxx 00, 0000
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00
(x) Business. Guarantor will not, and will not permit any of its
Subsidiaries to, engage (directly or indirectly) in any business, taken as a
whole, that is substantially different from the business in which Guarantor or
such Subsidiary is engaged on the date hereof.
(q) Advances, Investments and Loans. Guarantor will not, and will not
permit any of its Subsidiaries to, directly or indirectly, lend money or credit
or make advances to any Person, or purchase or acquire any stock, obligations or
securities of, or any other interest in, or make any capital contribution to,
any other Person, or purchase or own a futures contract or otherwise become
liable for the purchase or sale of currency or other commodities at a future
date in the nature of a futures contract, or hold any cash or Cash Equivalents,
except that the following shall be permitted:
(i) the Borrower and its Subsidiaries may acquire and hold accounts
receivable, trade receivables, prepaid expenses and similar items owing to
any of them, if created or acquired in the ordinary course of business;
(ii) Lessee and its Subsidiaries may acquire and hold cash and Cash
Equivalents;
(iii) non-cash consideration received by Guarantor or any of its
Subsidiaries in connection with any asset sale to the extent permitted by
Section 9.02;
(iv) Lessee and its Subsidiaries may receive and hold investments in
connection with the bankruptcy or reorganization of suppliers and customers
and in settlement of delinquent obligations of, and other disputes with,
customers and suppliers arising in the ordinary course of business;
(v) Lessee and its Subsidiaries may make payroll advances in the ordinary
course of business;
(vi) so long as no Lease Default or Lease Event of Default then exists
(both before and after giving effect to the payment thereof), Lessee may make
loans to Guarantor to enable Guarantor to pay the amounts described in
Sections 9.5(j)(ii) and 9.5(j)(iii), in an aggregate amount not to exceed in
any fiscal year $1,000,000 less any amounts paid pursuant to Sections
9.5(j)(ii) and 9.5(j)(iii) during such fiscal year;
(vii) Lessee and its Subsidiaries may hold the investments held by them on
the Closing Date and as set forth on Schedule IX in the Revolver;
(viii) Lessee and its Subsidiaries may enter into, invest in and make loans
and advances to (x) corporations, associations, partnerships, business trusts
and other business entities organized in the United States, any State thereof
or Canada which would not, after the respective investment, be a Subsidiary
of Guarantor (each a "Domestic Joint Venture"), provided that (i) neither
Guarantor nor any of its Subsidiaries is liable for any Indebtedness or other
obligations of any nature whatsoever (whether absolute, accrued, contingent
or otherwise and whether or not due) of any such Joint Venture and (ii) the
net aggregate amount of all such investments and loans in Domestic Joint
Ventures shall at
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no time exceed $10,000,000 in any fiscal year of Lessee (and $25,000,000 in the
aggregate);
(ix) Guarantor and its Subsidiaries may make loans and advances in the
ordinary course of business to their respective employees so long as the
aggregate principal amount thereof at any time outstanding (determined
without regard to any write-downs or write-offs of such loans and advances)
shall not exceed $500,000;
(x) Lessee may enter into Interest Protection Agreements or Other Hedging
Agreements to the extent permitted by Section 9.5(k)(iv) and (ix);
(xi) Lessee may make intercompany loans and advances between or among one
another (collectively, "Intercompany Loans") or equity investments, so long
as (x) no such Intercompany Loan shall be evidenced by a promissory note or
other instrument except an Intercompany Note that is pledged to the
Collateral Agent pursuant to the Pledge Agreement and (y) the net aggregate
amount of all such investments in Subsidiary Guarantors which are not Wholly
Owned Subsidiaries of Lessee shall not exceed $20,000,000 in any fiscal year
of Lessee (and $60,000,000 in the aggregate);
(xii) Lessee and its Subsidiaries may effect Permitted Acquisitions in
accordance with the requirements of Section 9.5(i)(viii); and
(xiii) Lessee and its Subsidiaries may enter into, invest in (including by
transferring assets) and make loans and advances to (x) Foreign Joint
Ventures and (y) Foreign Subsidiaries, provided that (i) neither Guarantor
nor any of its Subsidiaries is liable for any Indebtedness or other
obligations of any nature whatsoever (whether absolute, accrued, contingent
or otherwise and whether or not due) of any such Foreign Joint Venture or
Foreign Subsidiary and (ii) the net aggregate amount of all such investments
and loans in Foreign Joint Ventures and Foreign Subsidiaries shall at no time
exceed $20,000,000 (using the fair market value of property other than cash)
in any fiscal year of Lessee (and $60,000,000 in the aggregate); provided
that no more than $30,000,000 in the aggregate shall be invested in Foreign
Joint Venture and Foreign Subsidiaries located or operating in Restricted
Countries (it being understood that, for purposes of this clause (xiii), the
amounts set forth above in this clause (xiii) shall be net of cash payments
of principal in the case of loans and cash equity returns (whether as a
dividend or redemption) in the case of equity investments, in each case which
are received from a non-U.S. Person constituting a joint venture existing on
the Closing Date and which is listed on Schedule IX of the Revolver).
(r) Capital Expenditures. (i) Guarantor will not, and will not permit any
of its Subsidiaries to, make any Capital Expenditures, except that (A) Lessee
and its Subsidiaries may make Capital Expenditures in its fiscal year ending
March 31, 2001 and March 31, 2002 and (B) during any fiscal year of Lessee set
forth below, Lessee and its Subsidiaries may make Capital Expenditures so long
as the aggregate amount of such Capital Expenditures does not exceed in any such
fiscal year, the amount set forth opposite such fiscal year below:
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Fiscal Year Ending Amount
------------------ ------
March 31, 2003 $ 125,000,000
March 31, 2004 $ 80,000,000
March 31, 2005 $ 80,000,000
(ii) In addition to the foregoing, to the extent that the amount of Capital
Expenditures made by Lessee and its Subsidiaries during any fiscal year of
Lessee set forth in the table in clause (i)(B) of this Section 9.5(r)
(exclusive, however, of Capital Expenditures made pursuant to Sections
9.5(r)(iii), (iv) and (v)) is less than the amount applicable to the respective
fiscal year as set forth in such table (and without increasing any such amount
set forth in such table by the amount of any additional amounts permitted to be
spent in such fiscal year pursuant to this sentence), such amount may be carried
forward and utilized to make Capital Expenditures in excess of the amount
permitted in clause (i)(B) above in the following fiscal year; provided that the
aggregate amount expended on Capital Expenditures in any fiscal year set forth
in such table shall not exceed 125% of the amount permitted to be made in such
fiscal year as set forth in clause (i)(B) of this Section 9.5(r).
(iii) In addition to the foregoing, the amount of Net Sale Proceeds
received by Lessee or any of its Subsidiaries from any Asset Sale, or sale of
assets permitted pursuant to Section 9.5(i)(vii), may be reinvested in
replacement assets within 18 months following the date of such Asset Sale or
sale of assets to the extent such Net Sale Proceeds are not required to be
applied pursuant to Section 4.02(b) of the Revolver, and, to the extent so
reinvested, shall not count as Capital Expenditures for purposes of determining
compliance with clauses (a) and (b) of this Section 9.5(r).
(iv) In addition to the foregoing, Lessee and its Subsidiaries may make
Capital Expenditures with the proceeds of any issuance of equity by Guarantor.
(v) In addition to the foregoing, Lessee and its Subsidiaries may make
Capital Expenditures in an amount equal to the amount by which Consolidated
EBITDA for any fiscal year of Lessee exceeded Consolidated EBITDA for such
fiscal year as set forth in the Projections.
(vi) Notwithstanding anything above in this Section 9.5(r) to the contrary,
in no event may Lessee or any of its Subsidiaries make Capital Expenditures
pursuant to any single transaction (or series of related transactions) which
exceeds $75,000,000 (subject to any additional restrictions or limitations set
forth in Section 9.5(i)(viii)).
(s) Public Utility Holding Company. Guarantor will not, and will not permit
any of its Subsidiaries to directly or indirectly own, control or hold with
power to vote and "voting security" of an "electric utility company" or a "gas
utility company" or a "holding company" holding any "voting security" of either
the foregoing, as such terms are defined in the Public Utility Holding Company
Act of 1935.
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(t) Special Purpose Corporation. (i) Guarantor shall not engage in any
business activities other than the ownership of the capital stock of Lessee, the
issuance of Qualified Preferred Stock, and the execution, delivery and
performance of the Operative Documents and the Revolver. In no event shall
Guarantor be permitted to incur or suffer to exist any Indebtedness on, or
create or suffer to exist any Liens on, its assets; provided that Guarantor may
engage in any necessary activity with respect to (A) the maintenance of its
corporate or trust existence and compliance with applicable law, (B) accounting,
legal, public relations, investor relations, financial or management activities
(including the employment of employees, counsel, accountants, consultants,
bankers, advisors or other professionals in connection with any of the foregoing
activities), and (C) entering into, performing its obligations and exercising
its rights under the Operative Documents, the Revolver and the other agreements
permitted by the Operative Documents to which it is a party.
(ii) Guarantor shall have no Subsidiaries other than Lessee and Lessee's
Subsidiaries.
(u) Corporate Existence, etc. Each of Lessee and Guarantor shall do or
cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence, rights and powers and its power and authority to
perform its obligations under the Operative Documents, including, without
limitation, any necessary qualification or licensing in any foreign
jurisdiction, except where the failure to be so qualified would not have a
material adverse effect.
(v) End of Fiscal Years; Fiscal Quarters. Guarantor shall cause (i) each of
its, and each of its Subsidiaries', fiscal years and fourth fiscal quarter to
end on March 31 of each year, and (ii) each of its, and each of its
Subsidiaries', first three fiscal quarters to end on June 30, September 30 and
December 31 of each year.
(w) Punctual Payment. Lessee shall duly and punctually pay or cause to be
paid all Lease Payments, Supplemental Payments, Availability Fees, and all other
fees and other amounts from time to time owing by it hereunder and under the
other Operative Documents, all in accordance with the terms of this Agreement
and the other Operative Documents.
(x) Perfection and Maintenance of Security Interest. Lessee, at its
expense, shall, as soon as possible, but in any event no later than the 10th day
after any request, make, execute, endorse, acknowledge, file and/or deliver to
Collateral Agent from time to time such confirmatory assignments, conveyances,
financing and continuation statements, transfer endorsements, powers of
attorney, notes, reports and other assurances or instruments and take such
further actions which Administrative Agent may reasonably request to perfect,
preserve or protect Collateral Agent's or Lessor's security interest in the
Collateral granted in the Lease Agreement and herein, or which Administrative
Agent reasonably deems necessary or advisable to obtain the full benefits of the
Liens created or intended to be created therein and herein.
(y) Default and Cross Default on Material Debt. Lessee agrees that if a
Lease Default or a Lease Event of Default shall occur, or if Lessee or any of
its Subsidiaries (i) fails to make (whether as primary obligor or as guarantor
or other surety) any principal payment of or
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interest or premium, if any, on any Indebtedness (other than the obligations
under the Operative Documents) beyond any period of grace provided with respect
thereto (not to exceed 30 days), provided that the aggregate amount of all
Indebtedness as to which such a payment default shall occur and be continuing is
equal to or exceeds $10,000,000, or (ii) fails to duly observe, perform or
comply with any agreement with any Person or any term or condition of any
instrument, if such failure, either individually or in the aggregate, shall have
caused or shall have the ability to cause the acceleration of the payment in
Indebtedness with an aggregate face amount which is equal to exceeds
$10,000,000, Lessee shall promptly notify the Administrative Agent thereof.
(z) Change in Corporate Offices. Each of Lessee and Guarantor shall provide
the Collateral Agent, the Administrative Agent, each Certificate Holder and each
Lender thirty (30) days advance written notice of any change in the location of
its executive offices, principal place of business or any change in the States
in which it does business, or change of its name.
(aa) Use of ERISA Assets. At no time shall Guarantor or Lessee use or
attempt to use any assets which would be deemed to be "plan assets" under the
"plan asset regulations" promulgated pursuant to ERISA to satisfy any or all
obligations under the Operative Documents.
(bb) Payment of Administrative Fee. During the term of this Agreement,
Lessee shall pay, or cause to be paid, all of the fees set forth in the
Administrative Agent Fee Letter.
(cc) Maintenance of Property; Insurance. (i) Guarantor will, and will cause
each of its Subsidiaries to, (A) keep all property necessary to the business of
Guarantor and its Subsidiaries taken as a whole in reasonably good working order
and condition, (B) maintain insurance on all such property in at least such
amounts and against at least such risks as is consistent and in accordance with
industry practice, and (C) furnish to the Administrative Agent, the Majority
Lenders or the Majority Certificate Holders, upon written request, full
information as to the insurance carried. At any time that Guarantor or any
Subsidiary of Guarantor fails to maintain insurance (other than property or
business interruption insurance) at the levels maintained on the Closing Date,
Guarantor will, or will cause one of its Subsidiaries to, notify the
Administrative Agent, the Majority Lenders and the Majority Certificate Holders
in writing within three (3) Business Days thereof and, if thereafter notified by
the Majority Lenders and the Majority Certificate Holders to do so, Guarantor or
any such Subsidiary, as the case may be, shall obtain such insurance at such
levels to the extent such insurance is reasonably available. In addition to the
requirements of the immediately preceding sentence, Guarantor and Lessee will at
all times cause property and business interruption insurance of the type
maintained on the Closing Date to be maintained (with the same scope of coverage
as on the Closing Date) at levels which are at least as great as the respective
amounts maintained on the Closing Date.
(ii) Guarantor will, and will cause its Subsidiaries to, at all times keep
its insured property insured in favor of the Collateral Agent, and all policies
or certificates (or certified copies thereof) with respect to such insurance
(and any other insurance maintained by Guarantor and/or its Subsidiaries) (A)
shall be endorsed to the Collateral Agent's reasonable satisfaction for the
benefit of the Collateral Agent (including, without limitation, by naming the
Collateral Agent as loss payee and/or additional insured), (B) shall state that
such insurance
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policies shall not be canceled or revised without 30 days' prior written notice
thereof by the respective insurer to the Collateral Agent, (C) shall provide
that the respective insurers irrevocably waive any and all rights of subrogation
with respect to the Collateral Agent and the Lenders, (D) shall, except in the
case of public liability insurance, workers' compensation and cargo insurance,
provide that any losses shall be payable notwithstanding (I) any act or neglect
of Guarantor or any of its Subsidiaries, (II) the occupation or use of the
properties for purposes more hazardous than those permitted by the terms of the
respective policy if such coverage is obtainable at commercially reasonable
rates and is of the kind from time to time customarily insured against by
Persons owning or using similar property and in such amounts as are customary,
(III) any foreclosure or other proceeding relating to the insured properties or
(IV) any change in the title to or ownership or possession of the insured
properties and (E) shall be deposited with the Collateral Agent. If Guarantor or
any of its Subsidiaries shall fail to insure its property in accordance with
this Section 9.5(cc)(ii), or if Guarantor or any of its Subsidiaries shall fail
to so endorse and deposit all policies or certificates with respect thereto, the
Collateral Agent shall have the right (but shall be under no obligation), upon
ten (10) Business Days' prior notice to Lessee, to procure such insurance and
Lessee agrees to reimburse the Collateral Agent for all costs and expenses of
procuring such insurance.
(iii) The foregoing requirements of this Section 9.5(cc) shall not apply to
any equipment or inventory of Guarantor and its Subsidiaries which is subject to
an Equipment Financing Transaction, so long as Guarantor and its Subsidiaries
are in material compliance with any similar requirements imposed by the terms of
such Equipment Financing Transaction.
(dd) Corporate Franchises. Guarantor will, and will cause each of its
Subsidiaries to, do or cause to be done, all things necessary to preserve and
keep in full force and effect its existence and its material rights, franchises,
licenses and patents; provided, however, that nothing in this Section 9.5(dd)
shall prevent (i) transactions in accordance with Section 9.5(i) or (ii) the
withdrawal by Guarantor or any of its Subsidiaries of its qualification as a
foreign corporation in any jurisdiction where such withdrawal could not
reasonably be expected to have a material adverse effect on the business,
operations, property, assets, liabilities, condition (financial or otherwise) or
prospects of Guarantor and its Subsidiaries taken as a whole.
(dd) Tax Registration. The transaction contemplated hereby (i) is not
required to be registered pursuant to Code Section 6111 or any regulation
promulgated thereunder or (ii) was properly and timely registered in accordance
with Code Section 6111 and any regulations promulgated thereunder and the
correct registration number was provided to the parties hereto provided, that
the parties hereto agree to provide Lessee, at Lessee's written request, with
any information not deemed confidential by such Person that is necessary for
Lessee to so register the transaction.
9.6. Covenant of Lenders, Lessor, the Administrative Agent, Collateral
Agent, Trust Company and Certificate Holders. If Lessor, Lender, the
Administrative Agent, the Collateral Agent, Trust Company or any Certificate
Holder is not a U.S. Person, it shall provide, to Lessee and to any other party
making payments to it under the Operative Documents, on the initial Funding Date
(or, if later at the time it becomes Lessor, Lender, Administrative Agent,
Collateral Agent or Certificate Holder hereunder, as the case may be) and at
such times as may be
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necessary thereafter under Applicable Law as in effect on the Closing Date
(including Treasury regulations promulgated under Section 1441 of the Code
presently scheduled as of the Closing Date to go into effect on January 1, 2001)
and at such other times as shall be reasonably requested by Lessee or any other
party making payments to it under the Operative Documents, a fully completed
Internal Revenue Service Form W-8 or successor form (including an Internal
Revenue Service Form W-8 as specified in Treasury Regulations section
1.1441-4(a) presently scheduled as of the Closing Date to go into effect on
January 1, 2001) upon which Lessee or such other party can rely establishing
that all payments to each such Person under the Operative Documents can be made
free and clear of any requirement to withhold any federal income tax therefrom;
provided, however, that each such Person shall not be required to provide such
forms if, solely as a result of a change after the Closing Date in Applicable
Law as in effect on the Closing Date (or such later date) (but not including as
a change for this purpose, the coming into effect of Treasury Regulations
Section 1.1441-4(a) in the form scheduled as of the Closing Date to go into
effect on January 1, 2001 including any changes made thereto prior to coming
into effect that do not alter the substantive effect or application of such
forms referenced in such regulations), such Person is not legally entitled to
deliver such form. In the event of a failure to provide any form as required
under this Section 9.6 by any Lender, Lessor, the Administrative Agent, the
Collateral Agent, Trust Company, or any Certificate Holder, the relevant party
shall be entitled to withhold from any payment made pursuant to the Operative
Documents to such Person the appropriate amount of federal income tax,
notwithstanding the provisions of the Operative Documents to the contrary and
provided further, that Lessee shall not have any indemnity obligation to such
Person pursuant to Section 10.3.5 hereof to the extent related to such failure.
10. Indemnities.
10.1. Lessee General Indemnification. Lessee hereby assumes liability for,
and does hereby agree to indemnify, protect, save, defend, and hold harmless
each Lessee Indemnified Person on an After-Tax Basis, from and against any and
all obligations, fees, liabilities, losses, damages, penalties, claims, demands,
actions, suits, judgments and related costs and expenses, including reasonable
legal fees and expenses, of every kind and nature whatsoever, imposed on,
incurred by, or asserted against such Lessee Indemnified Person (collectively,
"Losses"), which relates in any way to or arises in any way out of (a) the
manufacture, construction, ordering, transfer, acceptance or rejection,
ownership, transfer of ownership, titling or re-titling, registration or
re-registration, delivery, leasing, subleasing, possession, use, operation,
maintenance, storage, removal, redelivery, repossession, mortgaging, granting of
any interest in, transfer of title to, acquisition, sale or other application or
disposition, disposition of licensing, documentation, of any Item of Equipment,
or any part thereof, including, without limitation, any of such as may arise
from (i) loss or damage to any property or death or injury to any Persons, (ii)
patent or latent defects in any Items of Equipment (whether or not discoverable
by Lessee or any Lessee Indemnified Person), (iii) any claims based on strict
liability in tort or negligence, (iv) any claims related to the release of any
substance into the environment and (v) any claims based on patent, trademark,
trade name or copyright infringement, or (b) the Operative Documents or the
transactions contemplated hereby or thereby, or (c) any failure on the part of
Lessee or Guarantor to perform or comply with any Applicable Law, any of the
terms of any Operative Document to which it is a party or any
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instrument referred to or contemplated hereby or thereby or the nonconformity of
any Equipment with Applicable Law, or (d) reliance on any representation or
warranty made or deemed made by Lessee or Guarantor or any of their respective
officers under or in connection with any Operative Document which shall have
been false or incorrect in any material respect when made or deemed made or
delivered, or (e) any repayment to Lessee by the Lessor, Administrative Agent,
Collateral Agent, any Certificate Holder or any Lender of any amount previously
distributed hereunder which amount the Administrative Agent, Collateral Agent or
any Lender is required to repay, or (f) any investigation, litigation or
proceeding related to any Operative Document or the use of proceeds of Loans or
Equity Contributions or the ownership of the Notes or Certificates or in respect
of the Lease Agreement, or (g) the failure to vest or maintain vested in Lessor
and Collateral Agent or to transfer to Lessor or Collateral Agent an undivided
security interest in the Lessee Collateral or the Lessor Collateral,
respectively, including collections free and clear of Liens to the extent
required by the Operative Documents. Lessee shall be subrogated to an Lessee
Indemnified Person's rights in any matter with respect to which Lessee has
actually reimbursed such Lessee Indemnified Person for amounts expended by it or
has actually paid such amounts directly pursuant to this Section 10.1. In case
any claim, action, suit or proceeding is made or brought against any Lessee
Indemnified Person in connection with any claim indemnified against hereunder,
Lessee Indemnified Person will, promptly after receipt of notice of such claim
or the commencement of such action, suit or proceeding, notify Lessee thereof,
enclosing a copy of all papers served upon such Lessee Indemnified Person, but
failure to give such notice or to enclose such papers shall not relieve Lessee
from any liability hereunder unless such failure materially and adversely
affects Lessee's defense of such claim resulting in a material increase in
liability of Lessee in respect of such claim or preventing it from reducing
liability therefor, in which case Lessee shall not be required to indemnify such
Lessee Indemnified Person for the amount by which such liability was increased
or not reduced for failure to give such notice. Provided no Lease Event of
Default has occurred, Lessee will be entitled to participate in, and assume the
defense of, such claim, action, suit or proceeding, or cause the same to be
resisted or defended by counsel selected by Lessee and reasonably acceptable to
Lessor; provided that such claim, action, suit or proceeding does not involve
material risk of loss or forfeiture of title to the Equipment (unless Lessee
shall have posted a bond or other security satisfactory to Lessor in respect of
such risk) or any material risk of civil or criminal penalty being assessed
against any Lessee Indemnified Person and, upon such Lessee Indemnified Person's
request, Lessee will at its expense, resist and defend such claim, action, suit
or proceeding, or cause the same to be resisted or defended by counsel selected
by Lessee and reasonably acceptable to Lessor. After notice from Lessee to such
Lessee Indemnified Person of Lessee's election to so assume the defense of such
claim, action, suit or proceeding, Lessee will not be liable to such Lessee
Indemnified Person for any costs and expenses of any settlement of such claim,
action, suit or proceeding effected by such Lessee Indemnified Person without
the prior written consent of Lessee (which consent will not be unreasonably
withheld). Such Lessee Indemnified Person may participate at its own expense in
any such claim, action, suit or proceeding controlled by Lessee pursuant hereto;
provided such participation does not, in the opinion of independent counsel
appointed by Lessee, interfere with such control) and such participation will
not constitute a waiver of the indemnification provided in this Section 10. In
the event of any failure by Lessee to satisfy its obligations under this Section
10.1, Lessee shall pay all reasonable costs and expenses (including, without
limitation, attorney's fees and
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expenses) incurred by such Lessee Indemnified Person in connection with such
action, suit or proceeding. Additionally, if outside counsel to such Lessee
Indemnified Person determines that a conflict of interest exists between such
Lessee Indemnified Person and Lessee regarding any Loss indemnified hereunder,
Lessee agrees to pay the reasonable fees and expenses of separate counsel for
and as selected by such Lessee Indemnified Person. The provisions of this
Section 10.1, and the obligations of Lessee under this Section 10.1, shall apply
from the date of the execution of any of this Agreement notwithstanding that the
Term may not have commenced with respect to any Item of Equipment, and shall
survive and continue in full force and effect notwithstanding the expiration or
earlier termination of this Agreement, the Lease Agreement or any other
Operative Document in whole or in part, including the expiration of termination
of the Term with respect to any Item of Equipment, and are expressly made for
the benefit of, and shall be enforceable by, each Lessee Indemnified Person.
10.2. Exceptions to Lessee's General Indemnification. Notwithstanding the
terms of Section 10.1, Lessee shall not be required to indemnify any Lessee
Indemnified Person under Section 10.1 for any of the following: (i) any Loss to
the extent resulting from the willful misconduct or gross negligence of such
Lessee Indemnified Person (it being understood that Lessee shall be required to
indemnify an Lessee Indemnified Person even if the ordinary (but not gross)
negligence of such Lessee Indemnified Person caused or contributed to such
Loss), (ii) any Loss resulting from Lessor Liens attributable to such Lessee
Indemnified Person, (iii) any Loss to the extent attributable to acts or events
occurring after the end of the Term, if any, so long as no Lease Event of
Default shall have occurred and be continuing and the Equipment has either been
purchased or redelivered in accordance with the terms of Section 6.1, 28.2,
28.3, 28.4 or 28.5 of the Lease Agreement, (iv) any Loss (other than a Loss
arising from a Loan Event of Default attributable to a Lease Event of Default)
arising from a breach by such Lessee Indemnified Person of any agreement entered
into in connection with the assignment or participation of any interest of such
Lessee Indemnified Person under the Lease Agreement or the other Operative
Documents, (v) any Loss to the extent arising or resulting from the failure of
such Lessee Indemnified Person to comply with laws applicable to banks or their
affiliates generally or the failure of such Lessee Indemnified Person to file
any material notice, report, filing or other document required by any
Governmental Entity regulating banks or their affiliates in connection with such
Lessee Indemnified Person's execution of, and participation in the transactions
contemplated by, the Operative Documents except to the extent resulting from the
acts or omissions or any Lessee or Guarantor, (vi) any other expense or Loss to
the extent expressly provided under any of the Operative Documents to be paid or
borne by such Lessee Indemnified Person at its own expense, (vii) any Loss to
the extent resulting from the offer, sale, disposition or transfer by such
Lessee Indemnified Person of all or part of its interest in the Operative
Documents, other than a Loss arising after the occurrence of a Lease Event of
Default, (viii) any Loss that is a Tax, (ix) any Loss to the extent resulting
from any business, transaction or other activity in which such Lessee
Indemnified Person is engaged, which has no relation to the transactions
contemplated hereby or by any of the Operative Documents, (x) any Loss resulting
from a Loan Event of Default not attributable to a Lease Event of Default, (xi)
any Loss which is an ordinary and usual operating or overhead expense of such
Lessee Indemnified Person except expenses incurred relating to an Lease Event of
Default and (xii) any Loss arising under ERISA or Section 4975 of the Code (i)
as a result of Loans or funds advanced by the Lenders or
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Certificate Holders being deemed to be "plan assets" under the "plan asset
regulations" promulgated pursuant to ERISA or (ii) as a result of a violation of
Section 406(b) of ERISA or Section 4975(c)(1) (E) or (F) of the Code by Lenders
or Certificate Holders. Section 10.1.1 shall be construed as an indemnity only
and not a guaranty of residual value of the Items.
10.3. Tax Indemnity.
10.3.1. General Indemnity. Subject to the other provisions of this
Section 10.3, Lessee agrees to pay, defend and indemnify and hold Lessor, Trust
Company, Lenders, the Administrative Agent, Collateral Agent and Certificate
Holders and their respective Affiliates, successors and assigns (including any
consolidated or combined group of which any such Person is a member) (each a
"Tax Indemnitee") harmless on an After-Tax Basis from any and all Federal,
state, local and foreign taxes, fees, withholdings, levies, imposts, duties,
assessments, penalties and charges of any kind and nature whatsoever, together
with any penalties, fines or interest thereon (herein called "Taxes") howsoever
imposed, whether levied or imposed upon or asserted against a Tax Indemnitee,
Lessee, any Item of Equipment, or any part thereof, by any federal, state or
local government or taxing authority in the United States, or by any taxing
authority of a foreign country or subdivision thereof, upon or with respect to
(a) the Items of Equipment, any Item of Equipment or any part thereof, (b) the
manufacture, construction, ordering, transfer, ownership, transfer of ownership,
titling or re-titling, registration or re-registration, delivery, leasing,
subleasing, possession, use, operation, maintenance, storage, removal, return,
mortgaging, granting of any interest in, transfers of title to, acquisition,
sale or other disposition of licensing, documentation, repossession, sale or
other acquisition or disposition of the Items of Equipment, any Item of
Equipment or any part thereof, (c) the revenues, rent, receipts or earnings
arising from any Item of Equipment or any part thereof, (d) any Operative
Document, (e) any Lease Payment, Availability Fee or Supplemental Payment or any
payment made to a Lender by Lessor, Lessee, Certificate Holders or Trust Company
pursuant to the Operative Documents, or (f) otherwise in respect of the
Operative Documents or any thereof or any transaction or transactions
contemplated hereby or thereby.
10.3.2. Exceptions to Tax Indemnity. Notwithstanding anything to the
contrary in Section 10.3.1, the following shall be excluded from the indemnity
provided under Section 10.3.1: (a) Taxes (other than Taxes that are, or are in
the nature of, sales, use, rental, value added, transfer or property taxes) that
are imposed on a Tax Indemnitee by the United States federal government that are
based on or measured by the gross or net income or gross or net receipts, taxes
based on capital gains and minimum taxes and any and all withholding Taxes
(which, for the avoidance of doubt, are dealt with in Section 10.3.5 hereof) of
such Person; provided, that this clause (a) shall not be interpreted to prevent
a payment from being made hereunder on an After-Tax Basis if such payment is
otherwise required to be so made; (b) Taxes (other than Taxes that are, or are
in the nature of, sales, use, rental, value added, transfer or property taxes)
that are imposed on any Tax Indemnitee (other than Lessor or the Trust) by any
state, local or foreign jurisdiction or taxing authority within any state or
local or foreign jurisdiction and that are net income taxes, or are franchise
taxes, any gross income or gross receipts taxes imposed in lieu of a net income
tax, taxes based on capital gains and minimum taxes and any and all withholding
Taxes (which, for the avoidance of doubt, are dealt with in Section 10.3.5
hereof) of such Person; provided that such Taxes shall not be excluded under
this
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clause (b) to the extent such Taxes would have been imposed had the location,
possession or use of any Equipment in, the location or the operation of Lessee,
Lessor or Guarantor in, or Lessor's, Lessee's or Guarantor's making payments
under the Operative Documents from, the jurisdiction imposing such Taxes been
the sole connection between such Tax Indemnitee and the jurisdiction imposing
such Taxes, unless, however, such Tax Indemnitee would have been subject to tax
in such jurisdiction absent the transactions contemplated by the Operative
Documents; provided further, that this clause (b) shall not be interpreted to
prevent a payment from being made on an After-Tax Basis if such payment is
otherwise required to be so made; (c) provided that all amounts due from Lessee
under the Operative Documents have been paid, any Tax to the extent it relates
to any act, event or omission that occurs after the termination of the Lease
Agreement and, if required, redelivery or sale of an Item of Equipment in
accordance with the terms of the Lease Agreement (but not any Tax that is
imposed with respect to such termination, redelivery or sale or to any period
prior to such termination, redelivery or sale); (d) any Taxes which are imposed
on a Tax Indemnitee as a result of the gross negligence or willful misconduct of
such Tax Indemnitee itself, as determined by a court of competent jurisdiction
(as opposed to gross negligence or willful misconduct imputed to such Tax
Indemnitee), but not Taxes imposed as a result of ordinary negligence of such
Tax Indemnitee; (e) Taxes imposed on, or increased (under Applicable Law in
effect on the date of the transfer) as a result of a voluntary transfer by the
Tax Indemnitee or any transfer as a result of the bankruptcy of such Tax
Indemnitee not caused by a an Event of Default under Section 23(a) of the Lease
Agreement of any Item of Equipment or interest therein or any interest in or
arising under any Operative Document or any transactions contemplated thereby
other than any such transfer required by law or by the Operative Document,
occurring pursuant to the exercise of remedies during the continuance of a Lease
Event of Default or requested by Lessee; (f) with respect to Lessor or the
Trust; any Tax that results from or would not have been imposed but for the
breach or inaccuracy of any representation set forth in Section 2.4 or 2.7
hereof, as the case may be; (g) any Tax to the extent resulting in whole or in
part from the failure of any Tax Indemnitee to file a return that is proper and
timely unless such failure results from the failure of Lessee to perform its
obligations under Section 7.3.4 hereof; and (h) any Tax that results from or
would not have imposed but for the failure of any Tax Indemnitee, at Lessee's
sole cost, to provide any form, certificate or other document reasonably
requested by, prepared by and timely provided to such Tax Indemnitee by Lessee,
legally able to be provided by such Tax Indemnitee and necessary to avoid the
imposition of such Tax provided that such Tax Indemnitee reasonably determines
that to so provide such form, certificate or other document would have no
adverse effect on it.
10.3.3. Payment of Taxes. Subject to the terms of Section 10.3.6,
Lessee agrees to pay or cause to be paid all Taxes indemnified pursuant to
Section 10.3.1 directly to the taxing authorities where feasible and otherwise
to the Tax Indemnitee, as appropriate, and Lessee shall at its own expense, upon
such Tax Indemnitee's reasonable request, furnish to such Tax Indemnitee copies
of official receipts or other reasonably satisfactory evidence of such payment.
In the case of Taxes for which no contest is conducted pursuant to Section
10.3.6 and which Lessee pays directly to the taxing authorities, Lessee shall
pay such Taxes prior to the latest time permitted by the relevant taxing
authority for timely payment. In the case of Taxes for which a Lessee reimburses
a Tax Indemnitee, Lessee shall do so within thirty (30) days after receipt by
Lessee of demand by such Tax Indemnitee describing in reasonable detail the
nature of the Tax
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and the basis for the demand (including without limitation the computation of
the amount payable), accompanied by receipts or other reasonable evidence of
payment of the Tax in respect of such demand. In the case of Taxes for which a
contest is conducted pursuant to Section 10.3.6 Lessee agrees to pay such Taxes
or reimburse such Tax Indemnitee for such Taxes, to the extent not previously
paid or reimbursed pursuant to Section 10.3.1, prior to the latest time
permitted by the relevant taxing authority for timely payment after conclusion
of all contests hereunder.
At Lessee's written request, the amount of any indemnification payment by
Lessee pursuant to Section 10.3.1 shall be verified and certified by the
independent public accounting firm regularly engaged by such Tax Indemnitee. The
fees and expenses of such independent public accounting firm shall be paid by
Lessee unless such verification shall result in an adjustment in Lessee's favor
of five percent (5%) or more of the payment as computed by the Tax Indemnitee,
in which case such fee shall be paid by the Tax Indemnitee.
10.3.4. Tax Filings. Lessee shall be responsible for preparing and
filing any real and personal property or ad valorem tax returns in respect of
the Equipment. In the case of any other report, statement or tax return that
shall be required to be made with respect to any Taxes which are indemnified by
Lessee pursuant to Section 10.3.1, Lessee, at its sole cost and expense, shall
notify the relevant Tax Indemnitee of such requirement and (except if such Tax
Indemnitee notifies Lessee that such Tax Indemnitee intends to prepare and file
such report or return) (a) to the extent required or permitted by and consistent
with filing requirements in the applicable jurisdiction, make and file in
Lessee's name such return, statement or report and (b) in the case of any other
such return, statement or report required to be made in the name of such Tax
Indemnitee, advise such Tax Indemnitee of such fact and prepare such return,
statement or report for filing by such Tax Indemnitee or, where such return,
statement or report shall be required to reflect items in addition to any
obligations of Lessee under or arising out of Section 10.3.1, provide such Tax
Indemnitee at Lessee's expense with information sufficient to permit such
return, statement or report to be properly made with respect to any obligations
of Lessee under or arising out of Section 10.3.1. Such Tax Indemnitee shall,
upon Lessee's request and at Lessee's expense, provide any data not deemed
confidential by such Tax Indemnitee maintained by such Tax Indemnitee (and not
otherwise available to or within the control of Lessee) with respect to the
Equipment which Lessee may reasonably require to prepare any required Tax
returns or reports.
10.3.5. Withholdings. As between Lessee on one hand, and Lessor,
Certificate Holders, Administrative Agent, the Collateral Agent, and each Lender
(each a "Withholding Party") on the other hand, Lessee shall be responsible for,
and Lessee shall indemnify and hold harmless each Withholding Party on an After
Tax Basis against, any obligation for United States or foreign withholding taxes
or similar levies, imposts, charges, fees, deductions or withholdings
(collectively, "Withholdings") imposed in respect of any part of the Lease
Payments or Availability Fees payable by such Lessee to Lessor, any amounts
payable by Lessor to Certificate Holders, the interest payable on the Notes, the
Loan Availability Fees or with respect to any other payments under the Operative
Documents (all such payments being referred to herein as "Exempt Payments" to be
made without deduction, withholding or set off) (and, if any Withholding Party
receives a demand for such payment from any taxing authority or a Withholding is
otherwise required with respect to any Exempt Payment, Lessee shall discharge
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such demand on behalf of such Withholding Party); provided, however, that the
obligation of Lessee under this Section 10.3.5 shall not apply to any
Withholdings that would not have been imposed but for such Withholding Party's
failure to comply with Section 9.6.
If a Tax Indemnitee or a Withholding Party or any Affiliate with whom such
Tax Indemnitee or a Withholding Party files a consolidated tax return (or
equivalent) subsequently receives the benefit in any country of a tax credit,
deduction or other allowance or reduction resulting from Taxes or Losses with
respect to which it or an Affiliate has received a payment of an indemnity
amount from Lessee under Section 10.1 or 10.3, such Person will pay to Lessee
such part of that benefit as in the sole discretion of such Person will leave it
(after such payment) in a position no more and no less favorable than it would
have been in if no additional payment had been required to be paid, provided
always that (i) such Person will determine in its sole discretion, exercised in
good faith, the amount and allocation of any such benefit and of the date on
which it is received and of any After-Tax Basis calculation required with
respect to payments to or from it, (ii) such Person will have the absolute
discretion as to the order and manner in which it employs or claims tax credits
and allowances available to it and (iii) such Person will not be obliged to
disclose to Lessee any information regarding its tax affairs or tax
computations.
10.3.6. Tax Contests. If a claim is made in writing against any Tax
Indemnitee for any Taxes which Lessee is required to pay or indemnify against
pursuant to Section 10.3.1, such Tax Indemnitee shall promptly notify Lessee in
writing, provided that, without prejudice to any rights or claims for damages
Lessee may have as a result of such failure, the failure to so notify Lessee
will not reduce Lessee's obligation under Section 10.3 except if such failure
precludes the contest of such claim. Subject to the next sentence, if requested
by Lessee in writing within 30 days after receipt by Lessee of a notice
described in the preceding sentence, such Tax Indemnitee and, if required or
appropriate to prosecute such contest, any other Tax Indemnitee, shall permit
such Lessee, to contest in the name of Lessee, and if such contest by such
Lessee in the name of such Lessee is not permissible or allowed, shall, at the
request of Lessee, permit such Lessee to contest in the name of the Tax
Indemnitee and, if such contest by Lessee in the name of the Tax Indemnitee is
not permissible or allowed, shall, at the request of Lessee diligently contest
in good faith (including pursuing all administrative and judicial appeals) the
validity, applicability or amount of such Taxes in appropriate administrative or
judicial proceedings; provided that (1) prior to taking such action Lessee shall
have agreed to pay and shall have provided an undertaking reasonably acceptable
to such Tax Indemnitee with respect thereto or shall have paid each Tax
Indemnitee that is engaged in such contest in a satisfactory manner for all
out-of-pocket costs and expenses which such Tax Indemnitee may incur in
connection with contesting such claim, including, without limitation, all
reasonable legal and accountant's fees and disbursements and costs of
administrative and judicial proceedings, and the amount of any interest or
penalties which may be payable as a result of contesting such claim, (2) if such
contest is to be initiated by the payment of, and the claiming of a refund for,
such Taxes (such election to be within the sole discretion of Lessee), Lessee
shall have advanced such Tax Indemnitee sufficient funds (on an interest-free
basis and on an After-Tax Basis) to make such payment, (3) any action to be
taken will not result in a material risk of sale, forfeiture or loss of the
Lessor's title to, or the Lessor's or Collateral Agent's interest in, any Item
of Equipment unless Lessee shall have made provision against such risk in a
manner acceptable to such Tax Indemnitee in its sole discretion, (4) such Tax
Indemnitee shall not have determined, based on an
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opinion of such Tax Indemnitee's counsel, that such action is reasonably likely
to result in adverse consequences to the future tax liability of such Tax
Indemnitee not indemnified to such Tax Indemnitee's satisfaction and (5) Lessee
shall have delivered to such Tax Indemnitee a written acknowledgment of its
liability hereunder for such Taxes, provided that such acknowledgment shall not
be binding on such Lessee if the contest of such Taxes is resolved through a
written opinion of an adjudicator stating a basis for such resolution that
demonstrates Lessee has no liability to such Tax Indemnitee hereunder for such
Taxes and provided further, that such Lessee shall have no right to contest in
the name of a Tax Indemnitee, and such Tax Indemnitee shall itself contest, if
the contest involves issues with respect to which Lessee would not be required
to indemnify such Tax Indemnitee hereunder and which cannot be severed by
reasonable efforts of such Tax Indemnitee from all issues with respect to which
Lessee would be liable hereunder or the severance of which would adversely
affect the position of such Tax Indemnitee, and in any such contest such Tax
Indemnitee may in its sole discretion select the forum for such contest and
determine the manner in which such contest shall be conducted, but shall consult
with Lessee and its counsel in good faith with respect to such Lessee's
interests with respect to contest. If a claim for Taxes is made in writing
against any Tax Indemnitee and such Tax Indemnitee complies with its obligations
under this Section 10.3.6, Lessee and such Tax Indemnitee shall, for purposes of
determining the amount, if any, payable to such Tax Indemnitee under Section
10.3, be bound by the results of any contest under this Section 10.3.6 (or by
the final written assessment by the relevant taxing authority, if Lessee elect
not to contest under this Section 10.3.6) as to the amount of Tax due to the
relevant taxing jurisdiction, the validity and applicability of such Tax, and
any stated reason as to the basis for the imposition of such Tax contained in
the final determination with respect to such contest. If any Tax Indemnitee
shall determine in its sole discretion that it has either obtained a refund of
or been granted a credit, deduction or other allowance or reduction against
Taxes for which Lessee is not obligated to indemnify such Tax Indemnitee
hereunder for amounts corresponding to all or any part of any Taxes which Lessee
shall have paid to any Tax Indemnitee or for which Lessee shall have reimbursed
any Tax Indemnitee hereunder, such Tax Indemnitee shall, provided that no Event
of Default shall have occurred and be continuing, pay to Lessee an amount which
is equal to the sum of the amount of such refund or credit, deduction or other
allowance or reduction, plus any interest received (or credited against Taxes
for which Lessee is not obligated to indemnify such Tax Indemnitee hereunder) on
such refund fairly attributable to any Taxes paid by such Lessee or with funds
provided by Lessee prior to the receipt of such refund, reduced by any Taxes
incurred by such Tax Indemnitee by reason of the receipt or accrual of such
refund and interest, and increased by any tax benefit realized by Tax Indemnitee
as a result of any payment by such Tax Indemnitee made pursuant to this sentence
so as to return such Tax Indemnitee to the same net after-tax position it would
have been in if the Taxes so refunded or credited had not been imposed; provided
further that a Tax Indemnitee shall not be obligated to pay any Lessee an amount
in excess of all amounts of Taxes (and additional amounts described in Section
10.3) previously paid by Lessee pursuant to Section 10.3 to such Tax Indemnitee,
provided further, however, that such Tax Indemnitee shall pay any amounts that
it is not required to pay to Lessee solely by reason of the foregoing proviso at
such time as Lessee shall have made any additional payments to such Indemnitee
pursuant to Section 10.3 hereof equal to such amounts, and if an Event of
Default shall have occurred and be continuing, such Tax Indemnitee shall have
the option of applying the amount otherwise due any Lessee pursuant to this
sentence against Lessee
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obligations under any Operative Document or of holding such amount as security
for Lessee full performance of such obligations until the earlier of (i) the
Maturity Date of all Loans or (ii) the curing of such Event of Default, after
which such Tax Indemnitee shall pay such amount to Lessee. Any Tax Indemnitee
shall be entitled to settle any claim that is the subject of a contest hereunder
without the consent of the Lessee provided that, in so doing, such Tax
Indemnitee shall waive any rights to indemnification by the Lessee with respect
to such settled claim and any other claim the contest of which would be
precluded as a result of such settlement hereunder and shall repay to Lessee any
amounts advanced to pay such contested Taxes with interest actually received in
respect thereof and release any undertaking required hereunder.
10.3.7. Tax Indemnification for Loan Recharacterization. Each Tax
Indemnitee has entered into the transactions contemplated by the Operative
Documents on the assumption that the Loans are properly characterized for
Federal, State and local income tax purposes as debt (the "Assumed
Characterization"). If for any reason (and notwithstanding anything to the
contrary contained in the Operative Documents and without regard to Section
10.3.2 hereof), any Tax Indemnitee shall suffer any adverse Federal, State or
local income tax consequences as a result of any challenge to the Assumed
Characterization (a "Tax Loss"), Lessee will pay to such Tax Indemnitee an
amount sufficient to reimburse such Tax Indemnitee, on an After-Tax Basis, for
the additional Federal, State and local income taxes payable by (or not
refundable to) such Tax Indemnitee from time to time as a result of such Tax
Loss plus all interest, penalties, fines and additions to tax payable by such
Tax Indemnitee as a result of such Tax Loss. If, subsequent to such Tax
Indemnitee's receipt of any indemnity pursuant to this Section 10.3.7, such Tax
Indemnitee shall actually realize any Federal, State or local income tax savings
that would not have been realized but for such Tax Loss (as determined by such
Tax Indemnitee in its sole discretion), then, provided no Lease Event of Default
shall have occurred and be continuing and provided that Lessee shall have agreed
to indemnify such Tax Indemnitee in a manner satisfactory to such Tax Indemnitee
for any loss or disallowance of such income tax savings, such Tax Indemnitee
shall pay to the Lessee an amount equal to the sum of (x) such Federal, State
and local income tax savings and (y) the amount of any Federal, State or local
income tax savings actually realized by such Tax Indemnitee as the result of any
payment made pursuant to this sentence (as determined by such Tax Indemnitee in
its sole discretion); provided, however, that sum shall not exceed the excess of
the amounts previously paid by Lessee to such Tax Indemnitee pursuant to this
Section 10.3.7 over the amounts previously paid by such Tax Indemnitee to Lessee
pursuant to this Section 10.3.7 with respect to such Tax Loss, with the
remainder of such sum to be carried forward and applied as an offset against
future indemnity payments owed by Lessee to such Tax Indemnitee pursuant to this
Section 10.3.7. In connection with the foregoing, such Tax Indemnitee shall
provide written notice to Lessee of any claim for indemnification under this
Section 10.3.7. Any such claim shall be subject to the contest provisions of
Section 10.3.6 and the verification procedure set forth in Section 10.3.3. Any
payments due to such Tax Indemnitee pursuant to this Section 10.3.7 shall be
paid no later than the date that such Tax Indemnitee shall become obligated to
pay the additional Federal, State or local income taxes resulting from the Tax
Loss, and any payments due to Lessee pursuant to this Section 10.3.7 shall be
paid, provided no Lease Event of Default shall have occurred and be continuing,
within thirty (30) days after the date that such Tax Indemnitee shall realize
the Federal, State or local income tax savings.
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10.3.8. Special Tax Indemnity. The Lessee shall pay and assume all
liability for, and does hereby agree to indemnify any Tax Indemnitee,
Indemnitee, and, in each case, their accountants, lawyers, and other advisors on
an After Tax Basis for any tax, addition to tax, penalty, or other cost as a
result of the breach, inaccuracy or incorrectness of the representation found in
Section [2.1(i)].
10.4. Increased Costs, Illegality, etc. (a) In the event that any Lender or
any Certificate Holder shall have determined (which determination shall, absent
manifest error, be final and conclusive and binding upon all parties hereto but,
with respect to clause (i) below, may be made only by the Administrative Agent):
(i) that by reason of any changes arising after the date of this Agreement
affecting the interbank Eurodollar market, adequate and fair means do not
exist for ascertaining the applicable interest rate on the basis provided for
in the definition of LIBOR Rate; or
(ii) at any time, that such Lender or Certificate Holder shall incur
increased costs or reductions in the amounts received or receivable hereunder
with respect to any Loan or Equity Contribution because of (x) any change
since the date of this Agreement in any applicable law or governmental rule,
regulation, order, guideline or request (whether or not having the force of
law) or in the interpretation or administration thereof and including the
introduction of any new law or governmental rule, regulation, order, guideline
or request, such as, for example, but not limited to: (A) a change in the
basis of taxation of payment to any Lender or any Certificate Holder of the
principal of or interest on the Notes, any payment due on the Certificates or
any other amounts payable to any Lender or any Certificate Holder hereunder
(except for changes in the rate of tax on, or determined by reference to, the
net income or profits of such Lender or such Certificate Holder pursuant to
the laws of the jurisdiction in which it is organized or in which its
principal office or applicable lending office is located or any subdivision
thereof or therein) or (B) a change in official reserve requirements, but, in
all events, excluding reserves required under Regulation D to the extent
included in the computation of the LIBOR Rate and/or (y) other circumstances
since the date of this Agreement affecting such Lender or such Certificate
Holder or the interbank Eurodollar market or the position of such Lender or
such Certificate Holder in such market; or
(iii) at any time, that the making or continuance of any Loan or Equity
Contribution has been made (x) unlawful by any law or governmental rule,
regulation or order, (y) impossible by compliance by any Lender or any
Certificate Holder in good faith with any governmental request (whether or not
having force of law) or (z) impracticable as a result of a contingency
occurring after the date of this Agreement which materially and adversely
affects the interbank Eurodollar market;
then, and in any such event, such Lender or such Certificate Holder (or the
Administrative Agent, in the case of clause (i) above) shall promptly give
notice (by telephone promptly confirmed in writing) to Lessor and Lessee and,
except in the case of clause (i) above, to the Administrative Agent of such
determination (which notice the Administrative Agent shall promptly transmit to
each of the other Lenders and/or each of the other Certificate Holders, as the
case may be).
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Thereafter (x) in the case of clause (i) above, new Loans and Equity
Contributions shall no longer be available until such time as the Administrative
Agent notifies Lessor, Lessee, the Lenders and the Certificate Holders that the
circumstances giving rise to such notice by the Administrative Agent no longer
exist, and any Funding Notice given by Lessee with respect to Loans and Equity
Contributions which have not yet been incurred (including by way of conversion)
shall be deemed rescinded by Lessee, (y) in the case of clause (ii) above,
Lessee shall pay to such Lender or such Certificate Holder, within fifteen (15)
days of such Lender's or such Certificate Holder's written request therefor,
such additional amounts (in the form of an increased rate of, or a different
method of calculating, interest or otherwise as such Lender or such Certificate
Holder reasonably shall determine) as shall be required to compensate such
Lender or Certificate Holder for such increased costs or reductions in amounts
received or receivable hereunder as set forth in such written request as to the
additional amounts owed to such Lender or such Certificate Holder, showing in
reasonable detail the basis for the calculation thereof, submitted to Lessee by
such Lender or such Certificate Holder shall, absent manifest error, be final
and conclusive and binding on all the parties hereto) and (z) in the case of
clause (iii) above, Lessee shall take one of the actions specified in Section
10.4(b) as promptly as possible and, in any event, within the time period
required by law.
(b) At any time that any Loan or Equity Contribution is affected by the
circumstances described in Section 10.4(a)(ii) or (iii), Lessee may (and in the
case of a Loan or Equity Contribution affected by the circumstances described in
Section 10.4(a)(iii) shall) either (x) if the affected Loan or Equity
Contribution is then being made initially, by giving the Administrative Agent
telephonic notice (confirmed in writing) on the same date that Lessee was
notified by the affected Lender, the affected Certificate Holder or the
Administrative Agent pursuant to Section 7.4(a)(ii) or (iii) or (y) if the
affected Loan is then outstanding or the Equity Contribution is not then repaid,
upon at least three LIBOR Banking Days' written notice to the Administrative
Agent, require the affected Lender or the affected Certificate Holder to convert
such Loan into an Alternate Rate Loan or the Equity Rate of the Equity
Contribution to an Alternate Rate-based rate, provided that, if more than one
Lender or Certificate Holder is affected at any time, then all affected Lenders
and affected Certificate Holders must be treated the same pursuant to this
Section 10.4(b).
(c) If at any time after the date of this Agreement any Lender or any
Certificate Holder determines that the introduction of or any change in any
applicable law or governmental rule, regulation, order, guideline, directive or
request (whether or not having the force of law) concerning capital adequacy, or
any change in interpretation or administration thereof by any governmental
authority, central bank or comparable agency, will have the effect of increasing
the amount of capital required or expected to be maintained by such Lender or
such Certificate Holder or any corporation controlling such Lender or such
Certificate Holder based on the existence of such Lender Commitment or such
Certificate Holder Committee, respectively, hereunder or its obligations
hereunder, then Lessee shall pay to such Lender or such Certificate Holder, upon
its written demand therefor, such additional amounts as shall be required to
compensate such Lender or such Certificate Holder or such other corporation for
the increased cost to such Lender or such Certificate Holder or such other
corporation or the reduction in the rate of return to such Lender or such
Certificate Holder or such other corporation as a result of such increase of
capital. In determining such additional amounts, each Lender and each
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Certificate Holder will act reasonably and in good faith and will use averaging
and attribution methods which are reasonable, provided that such Lender's or
such Certificate Holder's determination of compensation owing under this Section
10.4(c) shall, absent manifest error, be final and conclusive and binding on all
the parties hereto. Each Lender and each Certificate Holder, upon determining
that any additional amounts will be payable pursuant to this Section 10.4(c),
will give prompt written notice thereof to Lessee, which notice shall show in
reasonable detail the basis for calculation of such additional amounts.
10.5. Lessee Indemnity. Lessee hereby assumes liability for, and does
hereby agree to indemnify, protect, save, defend, and hold harmless Lessor on an
After-Tax Basis from and against any and all Losses and each Tax Indemnitee
against any and all amounts owed by Lessor under the Loan Agreement to the
extent that there is a Lease Payment corresponding to the Loan payment for which
the indemnity is claimed under Section 10.2 hereof.
10.6. Survival. All obligations provided for in this Section 10 shall
survive the resignation or removal of the Administrative Agent or Collateral
Agent under Section 11.7, the sale of any Item of Equipment, any termination of
the Lease Agreement, the termination of this Agreement, and the payment in full
of the Notes and Certificates.
11. Administrative Agent and Collateral Agent.
11.1. Authorization and Action of Administrative Agent. (a) Lenders and
Certificate Holders hereby appoint and authorize Administrative Agent to take
such action as agent on their behalf and to exercise such powers under this
Agreement and the other Operative Documents as are delegated to Administrative
Agent by the terms hereof and thereof, together with such powers as are
reasonably incidental thereto. The Administrative Agent shall act solely as
agents for the Lenders and Certificate Holders and does not assume nor shall be
deemed to assume any obligation or relationship of trust or agency with any of
Lessee, Lessor, Guarantor or any of their successors or assigns. As to any
matters not expressly provided for by a Operative Document (including
enforcement or collection of the Notes or Certificates), the Administrative
Agent shall not be required nor authorized to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Majority Lenders and the Majority Certificate Holders, and such instructions
shall be binding upon Lenders and Certificate Holders; provided, however, the
Administrative Agent shall not be required to take any action which exposes it
to personal liability or which is contrary to any Operative Document or
Applicable Law. The Administrative Agent agrees to give to Lenders and the
Certificate Holders prompt notice of each notice given to it by Lessor or Lessee
pursuant to the terms of this Agreement; provided, however, the Administrative
Agent shall not be deemed to have any notice of a Loan Default or Loan Event of
Default unless it has received notice of such from another party hereto. The
Administrative Agent may, with the prior consent of the Majority Lenders or the
Majority Certificate Holders, as the case may be, agree to any waiver or
amendment of the Operative Documents (other than Operative Documents to which
such Person is a party) on behalf of Lenders or the Certificate Holders;
provided, however, Administrative Agent will not, without the prior consent of
all Lenders and all Certificate Holders, agree to any waiver or amendment that
would (i) postpone the time or times for payment of any Availability Fee or any
amount payable under this
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Agreement or the Lease Agreement, or (ii) reduce the Lease Payment payable under
this Agreement or the Lease Agreement, or the principal amount of any Lender
Commitment or Certificate Holder Commitment. Administrative Agent will not,
without the prior consent of all Lenders, agree to any waiver or amendment that
would, prior to the payment in full of the Secured Obligations, release all or
substantially all of the Lessor Collateral from the Lien created by the Loan
Documents, other than in accordance with the terms thereof and the other
Operative Document. The Administrative Agent shall pursue its remedies under the
Loan Documents following a Loan Event of Default in accordance with the
instructions of the Majority Lenders. The appointment and authority of the
Administrative Agent hereunder shall terminate upon the indefeasible payment in
full of all amounts owed Lenders, the Administrative Agent and the Collateral
Agent under the Operative Documents.
(b) Lenders hereby appoint and authorize the Collateral Agent to take such
action as agent on their behalf and to exercise such powers under this Agreement
and the other Operative Documents as are delegated to the Collateral Agent by
the terms hereof and thereof, together with such powers as are reasonably
incidental thereto. The Collateral Agent shall act solely as agents for the
Lenders and does not assume nor shall be deemed to assume any obligation or
relationship of trust or agency with any of Lessee, Lessor, Certificate Holders,
Guarantor or any of their successors or assigns. As to any matters not expressly
provided for by a Operative Document (including enforcement or collection of the
Notes), the Collateral Agent shall not be required nor authorized to exercise
any discretion or take any action, but shall be required to act or to refrain
from acting (and shall be fully protected in so acting or refraining from
acting) upon the instructions of the Majority Lenders, and such instructions
shall be binding upon Lenders; provided, however, the Collateral Agent shall not
be required to take any action which exposes it to personal liability or which
is contrary to any Operative Document or Applicable Law. The Collateral Agent
agrees to give to Lenders prompt notice of each notice given to it by Lessor or
Lessee pursuant to the terms of this Agreement; provided however, the Collateral
Agent shall not be deemed to have any notice of a Loan Default or Loan Event of
Default unless it has received notice of such from another party hereto. The
Collateral Agent may, with the prior consent of the Majority Lenders, agree to
any waiver or amendment of the Operative Documents (other than Operative
Documents to which a Lender or Lenders are a party) on behalf of Lenders;
provided, however, Collateral Agent will not, without the prior consent of all
Lenders, agree to any waiver or amendment that would (i) postpone the time or
times for payment of any Availability Fee or any amount payable under this
Agreement or the Lease Agreement, or (ii) reduce the Lease Payment payable under
this Agreement or the Lease Agreement, or the principal amount of any Lender
Commitment. The Collateral Agent will not, without the prior consent of all
Lenders, agree to any waiver or amendment that would, prior to the payment in
full of the Secured Obligations, release all or substantially all of the Lessor
Collateral from the Lien created by the Loan Documents, other than in accordance
with the terms thereof and the other Operative Document. The Collateral Agent
shall pursue its remedies under the Loan Documents following a Loan Event of
Default in accordance with the instructions of the Majority Lenders. The
appointment and authority of the Collateral Agent hereunder shall terminate upon
the indefeasible payment in full of all amounts owed Lenders, the Administrative
Agent and the Collateral Agent under the Operative Documents.
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11.2. Delegation of Duties. The Administrative Agent and the Collateral
Agent may execute any of their duties under these Operative Documents through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. Neither the Administrative
Agent nor the Collateral Agent shall be responsible for the negligence or
misconduct of any agents or attorneys-in-fact selected by it with reasonable
care.
11.3. Agent's Reliance, etc. Neither the Administrative Agent nor the
Collateral Agent nor any of their respective directors, officers, agents or
employees shall be liable for any action taken or omitted by it or them under or
in connection with any Operative Document, except for its or their own gross
negligence or willful misconduct. Without limitation of the generality of the
foregoing, each of the Administrative Agent and the Collateral Agent (i) may
consult with legal counsel (including counsel for Lessee), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted in good faith by it in accordance with the advice of
such counsel, accountants or experts, (ii) makes no warranty or representation
to Lenders (or to Certificate Holders in the case of the Administrative Agent)
and shall not be responsible to Lenders (and to Certificate Holders, in the case
of the Administrative Agent) for any statements, warranties or representations
made in or in connection with any Operative Document, (iii) shall not have any
duty to ascertain or to inquire as to the performance or observance of any of
the terms, covenants or conditions of any Operative Document on the part of
Lessee or Lessor or to inspect the property (including the books and records) of
Lessee or Lessor, (iv) shall not be responsible to Lenders (or to Certificate
Holders, in the case of the Administrative Agent) for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of any
Operative Document or any other instrument or document furnished pursuant
thereto, and (v) shall incur no liability under or in respect of any Operative
Document by acting upon any notice, consent, certificate or other instrument or
writing (which may be by fax, telegram, cable or telex) believed by it to be
genuine and signed or sent by the proper party or parties.
11.4. Administrative Agent, Collateral Agent and Affiliates. With respect
to any Lender Commitment or Certificate Holder Commitment made by it, any Loans
or Equity Contributions made by it, any Note issued to it or any Certificate
held by it, each of the Administrative Agent and the Collateral Agent shall have
the same rights and powers under each Operative Document as any other Lender or
Certificate Holder as the case may be and may exercise the same as though it
were not an agent hereunder. The Administrative Agent and the Collateral Agent
and their respective Affiliates may accept deposits from, lend money to, act as
trustee under indentures of, and generally engage in any kind of business with,
Lessor, Lessee or Guarantor, any of their Affiliates and any Person who may do
business with or own securities of Lessor, Lessee or Guarantor or any such
Affiliate, all as if the Administrative Agent and the Collateral Agent were not
an agent hereunder and without any duty to account therefor to Lenders or
Certificate Holders.
11.5. Lender and Certificate Holder Credit Decision. Each Lender and each
Certificate Holder acknowledges that it has, independently and without reliance
upon the Administrative Agent or, in the case of the Lenders, the Collateral
Agent, and based on the financial statements of Lessor and Guarantor and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement.
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Each Lender and each Certificate Holder also acknowledges that it will,
independently and without reliance upon the Administrative Agent or the
Collateral Agent, as the case may be and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Operative Documents.
11.6. Indemnification. (a) Each Lender agrees to indemnify the
Administrative Agent and the Collateral Agent, (to the extent not reimbursed by
Lessor or Lessee) ratably according to its Pro Rata Share, from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against the
Administrative Agent or the Collateral Agent in any way relating or arising out
of any Operative Document or any action taken or omitted by the Administrative
Agent or the Collateral Agent under any Operative Document in their capacities
as agents for Lenders; provided that Lenders shall not be liable for any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the
Administrative Agent's or the Collateral Agent's gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender agrees to reimburse
the Administrative Agent and the Collateral Agent ratably according to its Pro
Rata Share promptly upon demand for out-of-pocket expenses (including counsel
fees) incurred by the Administrative Agent or the Collateral Agent in connection
with the preparation, execution, delivery, administration, modification,
amendment or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,
any Operative Document in their capacities as agents for Lenders, to the extent
that the Administrative Agent or the Collateral Agent is not reimbursed for such
expenses by Lessor or Lessee. Lessee's indemnity obligations shall not be
reduced by this Section 11.6(a).
(b) Each Certificate Holder agrees to indemnify the Administrative Agent,
(to the extent not reimbursed by Lessor or Lessee) ratably according to its Pro
Rata Share, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by or
asserted against the Administrative Agent in any way relating or arising out of
any Operative Document or any action taken or omitted by the Administrative
Agent under any Operative Document in its capacity as agent for Certificate
Holders; provided that Certificate Holders shall not be liable for any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the
Administrative Agent's gross negligence or willful misconduct. Without
limitation of the foregoing, each Certificate Holder agrees to reimburse the
Administrative Agent ratably according to its Pro Rata Share promptly upon
demand for out-of-pocket expenses (including counsel fees) incurred by the
Administrative Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, any Operative Document in its capacity as
agent for Certificate Holders, to the extent that the Administrative Agent is
not reimbursed for such expenses by Lessor or Lessee. Lessee's indemnity
obligations shall not be reduced by this Section 11.6(b).
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11.7. Successor Administrative Agent and Collateral Agent; Termination of
Agency. The Administrative Agent and the Collateral Agent may resign at any time
by giving at least fifteen (15) days written notice thereof to Lenders, Lessor
and Lessee, and in the case of the Administrative Agent, also to the Certificate
Holders, and the Administrative Agent and Collateral Agent may be removed at any
time with or without cause by the Majority Lenders. Upon any resignation or
removal of the Administrative Agent or Collateral Agent, the Majority Lenders
shall have the right with the consent of Lessee (such consent not to be
unreasonably withheld or delayed) to appoint a successor Administrative Agent
who shall be reasonably acceptable to the Lessee (it being understood and agreed
that any non-defaulting Lender is deemed to be acceptable to the Lessee). If no
successor Administrative Agent or Collateral Agent shall have been so appointed
by the Majority Lenders within 30 days after any such resignation of removal,
the retiring Administrative Agent or the Collateral Agent may, on behalf of
Lenders and the Certificate Holders, as applicable, appoint a successor
Administrative Agent or Collateral Agent which shall be a commercial bank
organized under the laws of the United States of America or of any State thereof
and having a combined capital and surplus of at least $100,000,000. Upon the
acceptance of any appointment as the Administrative Agent or the Collateral
Agent hereunder by a predecessor Administrative Agent or Collateral Agent, such
successor Administrative Agent or Collateral Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring the Administrative Agent or Collateral Agent, and the obligations under
each Operative Document. Any Administrative Agent or Collateral Agent resigning
in accordance with this Section 11.7 shall retain the benefits of Section 11 as
to any actions taken or omitted to be taken by it while it was the
Administrative Agent or Collateral Agent.
11.8. Registration of Notes and Certificates. The Administrative Agent
shall preserve registration books identifying each Lender's and Certificate
Holder's interest in the Notes and Certificates, respectively, and a list of the
names and addresses of the holders of the Notes and of the Certificates, which
register and list shall be available to Lessor, Lessee, Certificate Holders and
Lenders or their respective representatives for inspection (the "Register").
Ownership of the Notes and the Certificates shall be proved by the Note register
and the Certificate register kept by the Administrative Agent. No transfer by
any holder of a Note or Certificate or any portion thereof shall be effective
unless and until such transfer is made upon the registration books maintained by
the Administrative Agent. Prior to due presentment for registration of transfer
of any Note or Certificate, the Administrative Agent, Lessee and Lessor shall
deem and treat the Person in whose name any Note or Certificate is registered as
the absolute owner of such Note or Certificate for the purpose of receiving
payment of Availability Fees, principal of, and Breakage Costs, if any, and
interest on such Note and for all other purposes whatsoever, whether or not such
Note is overdue, and neither the Administrative Agent nor Lessor shall be
affected by any notice to the contrary.
11.9. Administrative Agency Fee. Lessee agrees to pay to the Administrative
Agent in advance on the Closing Date and on each anniversary of the Closing Date
during the Term an annual administrative fee of $35,000.
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12. Miscellaneous.
12.1. Expenses. Lessee agrees to pay within ten (10) Business Days of
written notice thereof the reasonable fees and expenses (initial and ongoing) of
Trust Company for serving as Lessor and shall reimburse Trust Company, Lessor,
Deutsche Bank as a Lender and a Certificate Holder, the Administrative Agent and
Collateral Agent for all of their respective reasonable costs and expenses
(including, without limitation, reasonable counsel fees and disbursements) in
connection with the preparation, execution and delivery of the Operative
Documents and the issuance of the Notes and Certificates and the consummation of
the transactions contemplated thereby. Lessee agrees to pay the reasonable fees
and disbursements of special counsel to Lessor and special counsel to the
Administrative Agent and Collateral Agent in connection with any amendments,
waivers or consents requested by Lessor, Lessee or Guarantor under any Operative
Document. Upon the occurrence and during the continuance of any Lease Event of
Default, Lessee agrees to pay or reimburse each Lender, each Certificate Holder,
Lessor, the Administrative Agent and the Collateral Agent for reasonable costs
and expenses of counsel and of financial advisors as shall have been selected by
such Lender, Certificate Holder, Lessor, Administrative Agent or Collateral
Agent to assist them in connection with such Lease Events of Default.
12.2. Amendments. (a) Neither this Agreement nor any other Operative
Document nor any terms hereof or thereof may be amended, supplemented, waived or
modified without the written agreement and consent of all parties thereto and
Lessee, provided that where the consent of the Lenders or the Certificate
Holders is required, such consent (except as provided below) may be given by the
Majority Lenders or the Majority Certificate Holders, as the case may be, and
any such consent shall be binding on all other Lenders or Certificate Holders,
provided further that no such amendment, modification, waiver or supplement
shall, (i) without the consent of each Lender (A) extend the final scheduled
maturity of any Loan or Note, or reduce the rate or extend the time of payment
of interest thereon or Loan Availability Fees (except (x) in connection with the
waiver of applicability of any post-default increase in interest rates and (y)
that any amendment or modification that is not agreed to by each Lender directly
affected thereby to the financial definitions in this Agreement shall not
constitute a reduction in the rate of interest or fees for purposes of this
clause (A), notwithstanding the fact that such amendment or modification would
otherwise actually result in such a reduction, so long as the primary purpose
(as determined in good faith by Lessee and the Administrative Agent) of the
respective amendment or modification was not to decrease the pricing pursuant to
this Agreement and the other Operative Document), or reduce the principal amount
thereof (except to the extent repaid in cash), (B) release all or substantially
all of the Lessor Collateral (except as expressly provided herein) or (C) reduce
the percentage specified in the definition of Majority Lenders (it being
understood that, with the consent of the Majority Lenders, additional extensions
of credit pursuant to this Agreement may be included in the determination of the
Majority Lenders on substantially the same basis as the extensions of Lender's
Commitments are included on the Closing Date), (ii) without the consent of each
Certificate Holder, (A) extend the final scheduled repayment of any Equity
Contribution, or reduce the rate or extend the time of payment of Equity Return
or Availability Fees (except (x) in connection with the waiver of applicability
of any post-default increase in interest rates and (y) that any amendment or
modification that is not agreed to by each Certificate Holder directly affected
thereby to the
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financial definitions in this Agreement shall not constitute a reduction in the
Equity Rate or Availability Fees for purposes of this clause (A),
notwithstanding the fact that such amendment or modification would otherwise
actually result in such a reduction, so long as the primary purpose (as
determined in good faith by Lessee and the Administrative Agent) of the
respective amendment or modification was not to decrease the pricing pursuant to
this Agreement and the other Operative Documents), or reduce the Equity
Contribution thereof (except to the extent repaid in cash), (B) release all or
substantially all of Lessor's interest in the Equipment (except as expressly
provided herein or in the Lease Agreement) or (C) reduce the percentage
specified in the definition of the Majority Certificate Holders (it being
understood that, with the consent of the Majority Certificate Holders,
additional contributions of equity pursuant to this Agreement may be included in
the determination of the Majority Certificate Holders on substantially the same
basis as the contributions of Certificate Holders' Commitments are included on
the date hereof), (iii) without the consent of each Lender and Certificate
Holder (A) amend, modify or waive any provision of this Section 12.2 (it being
understood that, with the consent of the Majority Lenders or the Majority
Certificate Holders, additional extensions of credit or contributions of equity,
respectively, pursuant to this Agreement or the Loan Agreement may be included
under this Agreement to provide the Lenders or Certificate Holders with
customary similar or additional rights of consent or (B) consent to the
assignment or transfer by Lessee or Lessor of any of its rights and obligations
under the Operative Documents, (iv) without the consent of the Lenders or
Certificate Holders directly affected thereby, (A) increase any Lender's Lender
Commitment or any Certificate Holder's Certificate Holder Commitment (it being
understood that waivers or modifications of conditions precedent, covenants,
Loan Defaults or Loan Events of Default or of a mandatory reduction in the
Lender Commitment or Certificate Holder Commitment shall not constitute an
increase of the Lender Commitment of any Lender or the Certificate Holder
Commitment of any Certificate Holder, (v) without the consent of the
Administrative Agent, amend, modify or waive any provision relating to the
rights or obligations of the Administrative Agent or (vi) without the consent of
the Collateral Agent, amend, modify or waive any provision relating to the
rights or obligations of the Collateral Agent.
(b) If, in connection with any proposed change, waiver, discharge or
termination to any of the provisions of this Agreement or any other Operative
Document, the consent of the Majority Lenders or Majority Certificate Holders is
required and is obtained but the consent of one or more of other Lenders or
Certificate Holders whose consent is required is not obtained, then Lessee shall
have the right to replace each such non-consenting Lender, Lenders, Certificate
Holder or Certificate Holders (so long as all non-consenting Lenders or
Certificate Holders are so replaced) with one or more Replacement Lenders or
Replacement Certificate Holders, as the case may be, pursuant to Section 12.14
so long as at the time of such replacement, each such Replacement Lender or
Replacement Certificate Holder consents to the proposed change, waiver,
discharge or termination, provided that Lessee shall not have the right to
replace a Lender or a Certificate Holder solely as a result of the exercise of
such Lender's or Certificate Holder's rights when the consent of each of the
Lenders or Certificate Holders is required.
12.3. GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY
TRIAL. (a) THIS AGREEMENT AND THE OTHER OPERATIVE DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER
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AND THEREUNDER SHALL, BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW
OF THE STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER OPERATIVE DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE
STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK,
AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF LESSEE, GUARANTOR AND
LESSOR HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH OF
LESSEE, GUARANTOR AND LESSOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING
BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE
PREPAID, TO IT AT ITS ADDRESS SET FORTH IN SECTION 12.4, SUCH SERVICE TO BECOME
EFFECTIVE 30 DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF
ANY PARTY UNDER THIS AGREEMENT, TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED
BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST LESSEE,
GUARANTOR OR LESSOR IN ANY OTHER JURISDICTION.
(b) EACH OF LESSEE, GUARANTOR AND LESSOR HEREBY IRREVOCABLY WAIVES ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF
THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER OPERATIVE DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN
CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD
OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS AGREEMENT, THE OTHER OPERATIVE DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
12.4. Notices. All notifications, notices, demands, requests and other
communications herein provided for or made pursuant hereto shall be in writing
(including telegraphic, telex, telecopier or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered via courier to the
addresses listed below. All such notices and communications shall, when mailed,
telegraphed, telexed, telecopied, or cabled or sent by overnight courier, be
effective when deposited in the mails, delivered to the telegraph company, cable
company or overnight courier, as the case may be, or sent by telex or
telecopier, except that notices and communications to the Administrative Agent,
Lessor and Lessee shall not be effective until received by the Administrative
Agent, Lessor or Lessee, as the case may be. The initial address of the parties
hereto are as follows:
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to Lessee: Universal Compression, Inc.
[______________]
Attention: [______________]
Telephone: [______________]
Telefax: [______________]
to Guarantor: Universal Compression Holdings, Inc.
[______________]
Attention: [______________]
Telephone: [______________]
Telefax: [______________]
Lessor and Trust Company [___________________________]
[________________]
Attention: [______________]
Telephone: [______________]
Telefax: [______________]
Certificate Holders and Lenders: [See Schedule 4 hereto]
Administrative Agent: Bankers Trust Company
[______________]
Attention: [______________]
Telephone: [______________]
Telefax: [______________]
With a copy of all notices and documents delivered in accordance with the Lease
Agreement or Sections 3.1(b)(v), 3.1(b)(xi), 3.1(b)(xiii), 3.2(c), 3.2(d),
3.2(e)(ii), 3.2(e)(iii) or 3.2(f) hereof to:
Deutsche Banc Xxxx Xxxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Director, Corporate Finance
Leasing
Telephone: (000) 000-0000
Telefax: (000) 000-0000
Collateral Agent: Bankers Trust Company
[_______________]
Attention: [______________]
Telephone: [______________]
Telecopy: [______________]
12.5. Interests in the Equipment. The parties hereto intend that (a) for
financial accounting purposes with respect to Lessee, Lessor will be treated as
the owner and the lessor of
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each Item of Equipment and Lessee will be treated as the lessee of each Item of
Equipment and (b) for all federal, state and local income tax purposes, state
sales, use and other transaction tax purposes, (i) the Operative Documents will
be treated as a financing arrangement, (ii) Lessor will be deemed a lender
making loans to Lessee in an amount equal to the sum of the aggregate of the
Equity Components for each Item of Equipment and the outstanding principal
amount of the Loans and (iii) Lessee will be treated as the owner of each Item
of Equipment and will be entitled to all tax benefits ordinarily available to an
owner of equipment like the Equipment for such tax purposes. Lessor shall take
no action inconsistent with the intention of the parties set forth in clause
(b)(iii) of this Section 12.5. Notwithstanding the intentions of the parties
expressed herein, each party hereto acknowledges and agrees that no other party
has made representations or warranties to such party concerning the tax,
accounting or legal characteristics of the Operative Documents and that such
party has obtained and relied upon and agree that they will obtain and rely upon
such tax, accounting and legal advice from their own accountants and counsel
concerning the Operative Documents as they deems appropriate.
12.6. Descriptive Headings, etc. The descriptive headings used in this
Agreement are for convenience only and shall not be deemed to affect the meaning
or construction of any provision hereof.
12.7. Benefit of Agreement; Assignment. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns and in particular any holder from time to time
of any Note. Subject to the following proviso, neither Lessor, Lessee nor any
Certificate Holder or Lender without the prior written consent of each other
party hereto, may assign any or all of its rights or obligations hereunder or
under any other Operative Document to which it is a party; provided, however,
(i) Lessor may at any time transfer or assign any or all of its rights or
obligations hereunder in accordance with the provisions of Section 7 of the
Trust Agreement;
(ii) Any Lender or Certificate Holder may transfer, assign or grant
participations in its rights in the Operative Documents; provided, however,
such Lender shall remain a "Lender" or Certificate Holder a "Certificate
Holder" for all purposes hereunder (and may not transfer or assign all or any
portion of its Commitments hereunder except as provided in clause (iii) below)
and the transferee, assignee or participant, as the case may be, shall not
constitute a "Lender" or a "Certificate Holder" hereunder and, provided
further, that no Lender or Certificate Holder shall transfer or grant any
participation under which the participant shall have rights to approve any
amendment to or waiver of this Agreement or any other Operative Document
except to the extent such amendment or waiver would (A) extend the final
scheduled maturity of any Loan or due date of any repayment of Equity
Contribution which such participant is participating, or reduce the rate or
extend the time of payment of interest, Equity Return or fees thereon (except
in connection with a waiver of applicability of any post-default increase in
interest rates) or reduce the principal amount thereof, or increase the amount
of the participant's participation over the amount thereof then in effect (it
being understood that a waiver of any Loan Default or Loan Event of Default or
of a mandatory reduction in the total Commitment shall not constitute a change
in the terms of such participation, and that an
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increase in any Commitment or Loan shall be permitted without the consent of
any participant if the participant's participation is not increased as a
result thereof), (B) consent to the assignment or transfer by Lessor or Lessee
of any of its rights and obligations under the Operative Documents or (C)
release all or substantially all of the Collateral under all of the Security
Documents (except as expressly provided in the Operative Documents) securing
the Loans in which such participant is participating. In the case of any such
participation, the participant shall not have any rights under any Operative
Documents (the participant's rights against such Lender or Certificate Holder
in respect of such participation to be those set forth in the agreement
executed by such Lender or Certificate Holder in favor of the participant
relating thereto) and all amounts payable by Lessor and Lessee under the
Operative Documents shall be determined as if such Lender or Certificate
Holder had not sold such participation;
(iii) Notwithstanding the foregoing, any Lender or Certificate Holder (or
any Lender or Certificate Holder together with one or more other Lenders or
Certificate Holders) may (A) assign all or a portion of its Lender Commitment
or Certificate Holder Commitment and related outstanding obligations hereunder
to (x) its parent company and/or any affiliate of such Lender or Certificate
Holder which is at least 50% owned by such Lender or Certificate Holder or its
parent company or to one or more Lenders or Certificate Holders or (y) in the
case of any Lender or Certificate Holder that is a fund that invests in loans,
any other fund that invests in loans and is managed or advised by the same
investment advisor of such Lender or Certificate Holder or by an Affiliate of
such investment advisor or (B) assign all, or if less than all, a portion
equal to at least $5,000,000 in the aggregate for the assigning Lender or
assigning Lenders, or $1,000,000 in the aggregate for the assigning
Certificate Holder or Certificate Holders of such Lender or Certificate Holder
Commitment and related outstanding obligations hereunder or under the Loan
Agreement to one or more Eligible Transferees (treating any fund that invests
in loans and any other fund that invests in loans and is managed or advised by
the same investment advisor of such fund or by an Affiliate of such investment
advisor as a single Eligible Transferee), each of which assignees shall become
a party to this Agreement as a Lender or Certificate Holder, and in the case
of a Lender the Loan Agreement as a Lender by execution of an Assignment and
Assumption Agreement, provided that (x) at such time Schedule 3 shall be
deemed modified to reflect the Lender Commitment of such new Lender or
Certificate Holder Commitment of the new Certificate Holder and of the
existing Lenders and Certificate Holders, (y) new Notes or Certificates will
be issued, at Lessee's expense, to such new Lender or Certificate Holder and
to the assigning Lender or Certificate Holder upon the request of such Person,
such new Notes or Certificates to be in conformity with the requirements of
Section 2.3 of the Loan Agreement or Section [__] of the Trust Agreement
respectively (with appropriate modifications) to the extent needed to reflect
the revised Lender Commitments or Certificate Holder Commitment, (z) the
consent of the Administrative Agent, Lessee and Lessor shall be required in
connection with any assignment to an Eligible Transferee pursuant to clause
(B) above (which consents shall not be unreasonably withheld), provided that
the consent of Lessor shall not be required at any time that a Loan Event of
Default has occurred and is continuing and the consent of Lessee shall not be
required at any time that a Lease Event
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of Default has occurred and is continuing, and the consent of the
Administrative Agent shall be required in connection with any assignment of
all or a portion of any Commitment, (y) the Administrative Agent shall receive
for its own account at the time of each such assignment, from the assigning or
assignee Lender or Certificate Holder, the payment of a non-refundable
assignment fee of $3,500 and (z) promptly after such assignment, Lessor and
Lessee shall have received from the Administrative Agent notice of any such
assignment, together with the copy of the Assignment and Assumption Agreement
relating thereto. To the extent of any assignment pursuant to this Section
12.7, the assigning Lender or Certificate Holder shall be relieved of its
obligations hereunder with respect to its assigned Lender Commitments or
Certificate Holder Commitments. At the time of each assignment pursuant to
this Section 12.7 to a Person which is not already a Lender or Certificate
Holder hereunder and which is not a U.S. Person (as such term is defined in
Section 7701(a)(30) of the Code) for Federal income tax purposes, the
respective assignee Lender or Certificate Holder shall, to the extent legally
entitled to do so, provide to Lessor and Lessee in the case of a Lender or
Certificate Holder Commitment described in Section 9.6 of the Participation
Agreement, the forms described in such Section 9.6 of the Participation
Agreement, as the case may be. To the extent that an assignment of all or any
portion of a Lender's Lender Commitments or a Certificate Holder's Certificate
Holder Commitment and related outstanding obligations would, at the time of
such assignment, result in additional increased costs under Sections 10.3 and
10.4 from those that would have been incurred by the respective assigning
Lender or Certificate Holder prior to such assignment, then Lessee shall not
be obligated to pay such incremental additional increased costs (although
Lessee shall be obligated to pay any other increased costs of the type
described above resulting from changes after the date of the respective
assignment);
(iv) Any Certificate Holder may at any time transfer or assign any or all
of its rights or obligations hereunder in accordance with this Section 12.7 of
this Agreement and as provided in Section 11.10 of the Trust Agreement; and
(v) each Lender may transfer or assign any or all of its interest or
obligations hereunder or in the Loan Documents in accordance with Section 7.6
of the Loan Agreement and shall provide written notice to the Administrative
Agent of any assignment or participation by such Lender of any interest it may
have under any Loan Document. In the case of any participations, other than to
which Guarantor otherwise consents, the right of any such participant to
indemnification or other amounts under Section 12 shall be limited to amounts
which would have been due had no such participation been granted.
Notwithstanding any other provision in this Agreement or in the Loan
Agreement, any Lender and any Certificate Holder may at any time create a
security interest in, or pledge, all or any portion of its rights under and
interest in any of the Loan Documents in favor of any Federal Reserve Bank in
accordance with Regulation A of the Federal Reserve Board or U.S. Treasury
Regulation 31 CFR 203.14, and such Federal Reserve Bank may enforce such
pledge or security interest in any manner permitted under Applicable Law.
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12.8. Execution and Effectiveness. This Agreement may be executed in
multiple counterparts, each of which shall be regarded as an original and all of
which shall constitute a single instrument and shall become effective on the
Closing Date when each of the parties hereto shall have signed a copy hereof
(whether the same or different copies).
12.9. Confidentiality. Each of Lessor, Trust Company, each of Certificate
Holder, each Lender, the Administrative Agent and the Collateral Agent agrees
that it will not disclose without Lessee's consent any financial or other
information, excluding such financial or other information that is publicly
available, furnished by Lessee or Guarantor or obtained as a result of any
inspection of the Equipment; such material will not be disseminated except (i)
to the parties hereto, any rating agency, any prospective permitted assignees or
prospective purchasers of the Equipment or their respective officers, directors,
employees, agents, auditors, attorneys and professional consultants who (other
than the rating agencies), agree in writing for the benefit of Lessee and
Guarantor to be bound by the provisions of this Section 12.9 and for proper
reasons consistent with the purposes for which this information is furnished,
need access to such information, (ii) to potential successors and assigns
permitted under Section 12.9 that agree in writing for the benefit of Lessee and
Guarantor to be bound by the provisions of this Section 12.9 and (iii) to such
other parties to whom Lessor, Trust Company, any Certificate Holder, any Lender,
the Administrative Agent or the Collateral Agent may have a duty or legal
obligation of disclosure, including, without limitation, any Governmental Entity
having jurisdiction over Lessor, Trust Company, any Certificate Holder, any
Lender, the Administrative Agent or the Collateral Agent. This confidentiality
provision will survive the expiration or early termination of this Agreement. No
breach of the foregoing covenants by Lessor, any Lender or any other Person,
shall affect or impair the obligations of Lessee and Guarantor to pay Lessor,
Lenders or any other Person any amounts due under the Operative Documents.
12.10. Survival. Each of the representations, warranties, terms, covenants,
agreements and conditions contained in this Agreement shall specifically survive
the execution and delivery of this Agreement and the other Operative Documents
and the making of the Loans and Equity Contributions and shall, unless otherwise
expressly provided therein, continue in full force and effect until the
Availability Fees, Loan Availability Fees, the Loans, together with interest
thereon, the Equity Contribution and the Equity Return and all other sums
payable hereunder or thereunder have been indefeasibly paid in full.
12.11. Severability. The provisions of this Agreement are severable, and if
any section or provision shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision, or part thereof, in such jurisdiction and shall
not in any manner affect such clause or provision in any other jurisdiction, or
any other clause or provision of this Agreement in any jurisdiction.
12.12. No Broker. Each party hereto hereby represents and warrants to the
other parties that no broker other than Deutsche Bank Securities, Inc. (whose
fees shall be paid solely by Lessee) brought about the transactions contemplated
hereby and each party hereby agrees to indemnify (the "Indemnifying Party") and
hold each other party harmless from, any and all other liabilities and costs
(including, without limitation, costs of counsel) to any Person claiming
brokerage commissions or finder's fees as a result of any agreement with the
Indemnifying Party.
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12.13. Performance by Lenders and Certificate Holders; Replacement of
Lenders; Replacement of Certificate Holders.
(a) (x) If any Lender becomes a defaulting lender or otherwise defaults in
its obligations to make Loans, (y) upon the occurrence of an event giving rise
to the operation of Section 10.4 with respect to any Lender which results in
such Lender charging to Lessee increased costs in excess of those being
generally charged by the Lenders or (z) as provided in Section 12.13(c) (below)
in the case of certain refusals by a Lender to consent to certain proposed
changes, waivers, discharges or terminations with respect to this Agreement
which have been approved by the Majority Lenders, Lessee shall have the right,
if no Lease Default or Lease Event of Default then exists, to replace such
Lender (the "Replaced Lender") with one or more other Eligible Transferee or
Transferees, none of whom shall constitute a Defaulting Lender at the time of
such replacement (the "Replacement Lender") reasonably acceptable to the
Administrative Agent, provided that (i) at the time of any replacement pursuant
to this Section 12.13, the Replacement Lender shall enter into one or more
assignments pursuant to Section 12 (and with all fees payable pursuant to this
Section 12.13 to be paid by the Replacement Lender) pursuant to which the
Replacement Lender shall acquire all of the Lender Available Commitment and
outstanding Loans and Notes of the Replaced Lender and, in connection therewith,
shall pay to the Replaced Lender in respect thereof an amount equal to the sum
of (A) an amount equal to the principal of, and all accrued interest on, all
outstanding Loans and Notes of the Replaced Lender, together with all then
unpaid interest with respect thereto at such time and (B) an amount equal to all
accrued, but theretofore unpaid, fees owing to the Replaced Lender and (ii) all
obligations of Lessee owing to the Replaced Lender (other than those
specifically described in clause (i) above in respect of which the assignment
purchase price has been, or is concurrently being, paid) shall be paid in full
to such Replaced Lender concurrently with such replacement. Upon the execution
of the respective assignment agreements, the payment of amounts referred to in
clauses (i) and (ii) above and, if so requested by the Replacement Lender,
delivery to the Replacement Lender of the appropriate Note or Notes executed by
Lessor, the Replacement Lender shall become a Lender hereunder and the other
Operative Documents thereunder and the Replaced Lender shall cease to constitute
a Lender hereunder, except with respect to indemnification provisions under the
Operative Documents, which shall survive as to such Replaced Lender (and to give
effect to the replacement of a defaulting lender with one or more non-defaulting
lenders).
(b) (x) If any Certificate Holder becomes a defaulting Certificate Holder
or otherwise defaults in its obligations to make an Equity Contribution, (y)
upon the occurrence of an event giving rise to the operation of Section 10.4
with respect to any Certificate Holder which results in such Certificate Holder
charging to Lessee increased costs in excess of those being generally charged by
the Certificate Holders in their capacity as lenders in other similar
transactions or (z) as provided in Section 12.2(c) in the case of certain
refusals by a Certificate Holder to consent to certain proposed changes,
waivers, discharges or terminations with respect to this Agreement which have
been approved by the Majority Lenders or the Certificate Holders, as the case
may be, Lessee shall have the right, if no Lease Default or Lease Event of
Default then exists, to replace such Certificate Holder (the "Replaced
Certificate Holder") with one or more other Eligible Transferees, none of whom
shall constitute a defaulting Certificate Holder at the time of such replacement
(collectively, the "Replacement Certificate Holders") reasonably acceptable to
the Administrative Agent, provided that (i) at the time of any replacement
pursuant
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to this Section 12.13, the Replacement Certificate Holder shall enter into one
or more assignments pursuant to Section 12.7 (and with all fees payable pursuant
to this Section 12.13 to be paid by the Replacement Certificate Holder) pursuant
to which the Replacement Certificate Holder shall assume the Replaced
Certificate Holder's Available Commitment and shall acquire the rights with
respect to outstanding Equity Contributions of the Replaced Certificate Holder
and, in connection therewith, shall pay to the Replaced Certificate Holder in
respect thereof an amount equal to the sum of (A) an amount equal to the amount
of the Equity Contribution, and all accrued Equity Rate return on all
outstanding Equity Contributions of the Replaced Certificate Holder, and (B) an
amount equal to all accrued, but theretofore unpaid, fees owing to the Replaced
Certificate Holder and (ii) all obligations of Lessee owing to the Replaced
Certificate Holder (other than those specifically described in clause (i) above
in respect of which the assignment purchase price has been, or is concurrently
being, paid) shall be paid in full to such Replaced Certificate Holder
concurrently with such replacement. Upon the execution of the respective
assignment agreements, the payment of amounts referred to in clauses (i) and
(ii) above, the Replacement Certificate Holder shall become a Certificate Holder
hereunder and under the other Operative Documents and the Replaced Certificate
Holder shall cease to constitute a Certificate Holder hereunder, except with
respect to indemnification provisions under the Operative Documents, which shall
survive as to such Replaced Certificate Holder (and to give effect to the
replacement of a defaulting Certificate Holder with one or more non-defaulting
Certificate Holder).
12.14. Limited Recourse Against Certificate Holders and Trust Company.
Without impairing any of the other rights, powers, privileges, liens or security
interests of the Administrative Agent, any Lender or the Collateral Agent
pursuant to the Loan Documents, except for the Trust Company's or Certificate
Holders's gross negligence, willful misconduct, misrepresentations or fraud and
as expressly provided in this Agreement or any other Loan Document, and subject
to the proviso below, Lenders agree that as between them and the Trust Company
and Certificate Holders, no recourse shall be had with respect to this Agreement
or such other Loan Documents against the Trust Company or Certificate Holders,
or any officer, director, employee, agent or Affiliate thereof for amounts owed
by Lessor under the Loan Documents; and neither the Trust Company nor
Certificate Holders, nor any officer, director, employee, agent or Affiliate
thereof shall have any personal liability for any amounts owed by Lessor under
the Loan Documents; provided, however, that nothing contained in this Section
12.14 or elsewhere shall be construed to (i) prevent recourse to and the
enforcement against the Lessor Collateral of all liabilities, obligations and
undertakings contained in the Loan Documents, (ii) limit, restrict, or impair
the right of the Majority Lenders to accelerate the maturity of the Loan upon
the occurrence of a Loan Event of Default, (iii) prevent the bringing of an
action or obtaining a judgment against Lessor or against the Trust Company or
Certificate Holders for any breach of any of its representations, warranties or
covenants under any of the Operative Documents, or (iv) prevent the bringing of
an action or obtaining of a judgment to foreclose the lien of this Agreement or
Security Documents or otherwise realize upon the Lessor Collateral or the sums
due or to become due under the Lease Agreement or the other Loan Documents to
which any such Person is a party.
12.15. Concerning Lessor. Trust Company is entering into this Lease
Agreement solely in its capacity as Trustee under the Trust Agreement and not in
its individual capacity
-87-
94
(except as expressly stated herein) and in no case shall Trust Company (or any
entity acting as successor Trustee under the Trust Agreement) be personally
liable for or on account of any of the statements, representations, warranties,
covenants or obligations stated to be those of Lessor hereunder; provided,
however, that Trust Company (or any such successor Trustee) shall be personally
liable hereunder for Trust Company Liabilities.
12.16. Currency Indemnity. The obligations of Lessor, Lessee and Guarantor
to make payment in Dollars of any amounts due hereunder or under any Operative
Document shall not be discharged or satisfied by any tender, or any recovery
pursuant to any judgment, which is expressed in or converted into any currency
other than Dollars, except to the extent such tender or recovery shall result in
the actual receipt by the party entitled thereto of the full amount of Dollars
expressed to be payable in respect of any such obligations. The obligations of
Lessor, Lessee and Guarantor to make payment in Dollars as aforesaid shall be
enforceable as an alternative or additional cause of action for the purpose of
recovery in Dollars of the amount, if any, by which such actual receipt shall
fall short of the full amount of Dollars expressed to be payable in respect of
any such obligations, and shall not be affected by judgment being obtained for
any other sums due under this Agreement.
12.17. Consent and Agreement of Lessee and Guarantor. Lessee and Guarantor
hereby consent to the assignment set forth in Section 7. Lessor and the
Collateral Agent hereby instruct, and Lessee and Guarantor agree, that until
further notified by the Collateral Agent, Lessee, Guarantor and Lessor shall pay
all amounts payable under the Operative Documents other than Excepted Payments
to the account of the Collateral Agent or as Collateral Agent or Majority
Lenders may otherwise designate in a written notice to Lessee, Guarantor and
Lessor. If there is any disagreement between the Administrative Agent and Lessor
as to whether any amount is an Excepted Payment, Lessor, Lessee and Guarantor
shall abide by the Administrative Agent's determination with respect to such
amount.
* * *
-88-
95
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective duly authorized officers as of
the date first above written.
UNIVERSAL COMPRESSION, INC.,
as Lessee
By
----------------------------------------
Name
Title
UNIVERSAL COMPRESSION HOLDINGS, INC.,
as Guarantor
By
----------------------------------------
Name
Title
WILMINGTON TRUST COMPANY,
not in its individual capacity, but
solely as Trustee of Universal
Compression Trust (2000-1) under the
Trust Agreement dated as of May __,
2000, as Lessor
By
----------------------------------------
Name
Title
WILMINGTON TRUST COMPANY,
in its individual capacity,
as Trust Company
By
----------------------------------------
Name
Title
DEUTSCHE BANK AG, NEW YORK BRANCH,
as Certificate Holder
By
----------------------------------------
Name
Title
-89-
96
[ ],
as Certificate Holder
By
----------------------------------------
Name
Title
BANKERS TRUST COMPANY,
as Administrative Agent
By
----------------------------------------
Name
Title
BANKERS TRUST COMPANY,
as Collateral Agent
By
----------------------------------------
Name
Title
[Lender]
By
----------------------------------------
Name
Title
-90-
97
SCHEDULE 1
DESCRIPTION OF EQUIPMENT
1. Standard Universal Compression 1200 HP Rental Compressor Package with:
a) Caterpillar 3516 TALE 1400 RPM natural gas engine
b) Ariel JGE4-3 compressor, three stage w/ (2) 15-1/4 & 9-3/4 & 6 cylinders
Acquisition Cost: $[__________]
2. Standard Universal Compression 850 HP Rental Compressor Package with:
a) Caterpillar 3512 TALE 1400 RPM natural gas engine
b) Ariel JGT2-2 compressor, two stage w/ 12-1/2 & 7-1/4 cylinders
Acquisition Cost: $[__________]
3. Standard Universal Compression 1550 HP Rental Compressor Package with:
a) Waukesha L-7044 natural gas engine
b) Ariel JGK4-3 compressor, three stage w/ (2) 15-3/4 & 9-3/4 & 6-1/2
cylinders
Acquisition Cost: $[__________]
4. Standard Universal Compression 750 HP Rental Compressor Package with:
a) Caterpillar 3512 TALE 1200 RPM natural gas engine
b) Ariel AR321 Screw Compressor w/ Gear
Acquisition Cost: $[__________]
5. Any other Item of Equipment as Lessor and Majority Lenders may agree to
include.
Each package includes Air-X-Changer coolers, accessories (e.g., Piping,
vessels, panels & skid materials) and labor.
98
SCHEDULE 2
PRICING GRID
Guarantor
Leverage Ratio(1) Equity Margin LIBOR Availability Fee Rate
----------------- ------------- ------- ---------------------
>5.5:1.0 250bps 275bps 50bps
>5.0:1.0<=5.5:1.0 250bps 250bps 50bps
>4.5:1.0<=5.0:1.0 250bps 225bps 50bps
>4.0:1.0<=4.5:1.0 250bps 200bps 50bps
>3.5:1.0<=4.0:1.0 225bps 175bps 37.5bps
<=3.5:1.0 200bps 150bps 37.5bps
--------------------
1 For each Applicable Margin Period, the Leverage Ratio on the Test Date for
such Applicable Margin Period.
"Applicable Margin Period" means each period which shall commence on a date
on which the financial statements are delivered pursuant to Section
9.5(a)(ii) or (ii), as the case may be, and which shall end on the earlier
of (a) the date of the actual delivery of the next financial statements
pursuant to Section 9.5(a)(ii) or (iii), as the case may be, and (b) the
latest date on which the next financial statements are required to be
delivered pursuant to such Sections, provided that the first Applicable
Margin Period shall commence on the Closing Date.
"Test Date" means, with respect to any Applicable Margin Period, the last
day of the most recent fiscal quarter of the Guarantor ended prior to the
first day of such Applicable Margin Period.
99
SCHEDULE 3
MAXIMUM ACQUISITION COST
$200,000,000
LENDER COMMITMENTS
Aggregate Lender Commitments: $194,000,000
Lender Lender Commitment ($)
------ ---------------------
1.
2.
3.
4.
CERTIFICATE HOLDER COMMITMENTS
Aggregate Certificate Holder Commitments: $6,000,000
Certificate Holder Certificate Holder Commitment ($)
------------------ ---------------------------------
1. Deutsche Bank, AG, New York Branch
2.
3.
4.
100
SCHEDULE 4
LENDERS' AND CERTIFICATE HOLDERS'
NOTICE ADDRESSES, PAYMENT
INSTRUCTIONS AND RESPONSIBLE OFFICERS
Notices and payments shall be sent to each Lender and each Certificate Holder
in accordance with the following unless a Lender or a Certificate Holder
provides written notice otherwise to the Administrative Agent, the
Collateral Agent and Lessee.
[TO COME]
101
SCHEDULE 5
LIENS
102
SCHEDULE 6
INDEBTEDNESS
103
SCHEDULE 7
SUBSIDIARIES
Name State of Incorporation Shareholder(s) Percent Ownership
---- ---------------------- -------------- -----------------
104
SCHEDULE 8
INSURANCE
105
SCHEDULE 9
ERISA PLANS
106
EXHIBIT A
[FORM OF]
XXXX OF SALE AND RECEIPT
Wilmington Trust Company
as Trustee of Universal Compression Trust (2000-1) under the Trust Agreement
dated as of May __, 2000
Ladies and Gentlemen:
We refer to the Participation Agreement, dated as of May __, 2000 (together
with all schedules and exhibits thereto, the "Agreement") relating to the
transfer by us to you of all rights, title and interest in certain Equipment.
Terms used and not otherwise defined herein shall have the respective meaning
given thereto in Appendix A to the Agreement.
We hereby grant, bargain, sell, convey, transfer and set over unto you,
your successors and assigns, all of our right and interest in and to the Items
of Equipment, as more specifically described in Schedule 1 hereto (herein
collectively called the "Items of Equipment").
We hereby warrant and represent to you and your successors and assigns that
we have good and marketable legal and beneficial title to, and good and lawful
right to sell, the Items of Equipment, that the Items of Equipment are free and
clear of any and all claims, liens, security interests and other encumbrances of
any kind or nature whatsoever other than Permitted Liens and that upon the
delivery of this Xxxx of Sale to you, you will have received all rights, title
and interests in the Items of Equipment free and clear of any and all claims,
liens, security interests and other encumbrances of any kind or nature
whatsoever other than Permitted Liens and Lessor Liens. We covenant that we will
defend your interest in the Items of Equipment against the claims and demands of
all persons and will indemnify and hold harmless you and your successors and
assigns from and against any and all losses, damages and expenses, including
reasonable attorneys' fees, incurred by such, resulting from or relating to the
breach by us of any representations or warranties contained herein.
Possession of the Items of Equipment is being retained by us by virtue of a
sale to you and a leaseback of an interest in the Items of Equipment from you.
This Xxxx of Sale is made and given in good faith and not for the purpose of
defrauding creditors or purchasers.
The undersigned hereby transfers, grants, sells, and assigns to Lessor, its
successors and assigns, all of its rights and interest in and on to the various
agreements, contracts, warranties, purchase orders and requisitions relating to
the purchase, procurement, design and assembly of each Item of Equipment.
Notwithstanding the foregoing assignment, Lessor shall not be deemed to have
assumed any liability to any equipment vendor by virtue of the foregoing
transfer (or anything contained in the Participation Agreement or the other
Operative Documents), Lessor's only obligation with respect to any Item of
Equipment hereunder being to lease such Item to Lessee in accordance with the
terms of the Operative Documents.
107
EXHIBIT A
Page 2
IN WITNESS WHEREOF, Seller has caused this Xxxx of Sale to be duly executed
in its name by its duly authorized officer and its corporate seal to be affixed
hereto this ____th day of ___, 200[_].
UNIVERSAL COMPRESSION, INC.
By:
-------------------------------------
Name:
Title:
108
EXHIBIT B-1
[FORM OF] CERTIFICATE OF SALE/LEASEBACK
EQUIPMENT RELATING TO
LEASE AGREEMENT SUPPLEMENT NO. ___
This Certificate of Equipment is executed pursuant to, and
incorporates by reference all of the terms, conditions and provisions of, the
Participation Agreement ("Participation Agreement"), dated as of May __, 2000,
among Universal Compression, Inc. ("Lessee"), Universal Compression Holdings,
Inc., Wilmington Trust Company, a Delaware banking corporation, not in its
individual capacity but solely as Trustee of Universal Compression Trust
(2000-1) and in its individual capacity, but only where so specified,
Certificate Holders and Lenders from time to time party thereto, Bankers Trust
Company, as Administrative Agent, and Bankers Trust Company, as Collateral
Agent. Capitalized terms not otherwise defined herein have the meanings given in
Appendix A to the Participation Agreement.
Lessee hereby certifies that:
(i) each Item of Equipment described in the form of Lease Agreement
Supplement delivered herewith and attached hereto has been selected by,
delivered to, inspected by, accepted by and purchased by it, and is free
and clear of all Liens other than Permitted Liens and Lessor Liens (if any)
and the information contained on such Lease Agreement Supplement is true
and correct; and
(ii) attached hereto as Schedule 1 are the estimates of fair market
value and Residual Value for each Item of Equipment described in the Lease
Agreement Supplement delivered herewith, as set forth in an Appraisal dated
[___________].
Dated:
UNIVERSAL COMPRESSION, INC.
By:
---------------------------------
Name:
Title:
109
EXHIBIT B-1
Page 2
ACKNOWLEDGED AND EQUIPMENT APPROVED/REJECTED BY:
Wilmington Trust Company not in its
individual capacity but solely as Trustee of
Universal Compression Trust (2000-1) under
Trust Agreement dated as of May __, 2000
as Lessor
By:
-----------------------------
Name:
Title:
110
SCHEDULE 1
TO EXHIBIT B-1
Serial Number of Item to Be Assembled: [__________]
- Estimated date of completion
- Components for which costs are being reimbursed:
Manufacturer
Type Serial Number Acquisition Cost ($)
---- ------------- --------------------
111
EXHIBIT B-2
[FORM OF] CERTIFICATE OF EQUIPMENT
FOR ITEMS OF EQUIPMENT TO BE ASSEMBLED
RELATING TO LEASE SUPPLEMENT NO. ___
This Certificate of Equipment for Items of Equipment to be Assembled
pursuant to the Assemble Agency Agreement is executed pursuant to, and
incorporates by reference all of the terms, conditions and provisions of,
the Participation Agreement ("Participation Agreement"), dated as of May
__, 2000 among Universal Compression, Inc. ("Lessee"), Universal
Compression Holdings, Inc., Wilmington Trust Company, not in its individual
capacity but solely as Trustee of Universal Compression Trust (2000-1) and
in its individual capacity, but only where so specified, Lenders and
Certificate Holders from time to time party thereto, Bankers Trust Company,
as Administrative Agent, and Bankers Trust Company, as Collateral Agent.
Capitalized terms not otherwise defined herein have the meanings given in
Appendix A to the Participation Agreement.
Lessee hereby certifies that:
1. For each Item of Equipment to be assembled,
(a) each Item of Equipment described in the form of Lease
Agreement Supplement, delivered herewith and attached hereto
is free and clear of all Liens other than Permitted Liens
and Lessor Liens (if any) and the information contained on
such Lease Agreement Supplement is true and correct; and
(b) the information about the Components set forth on Schedule 1
hereto is true and correct.
2. The funding requested in the Funding Notice dated the date hereof
shall be to reimburse Lessee for monies paid to the vendors of natural gas
engines, compressors or air coolers or for monies paid or obligations
incurred by Lessee with respect to the labor expenses or other parts and
expenses necessary to assemble the Items of Equipment.
112
EXHIBIT B-2
Page 2
Dated:
UNIVERSAL COMPRESSION, INC.
By:
------------------------------------
Name:
Title:
ACKNOWLEDGED AND EQUIPMENT APPROVED/REJECTED BY:
Wilmington Trust Company not in its
individual capacity but solely as Trustee of
Universal Compression Trust (2000-1) under
the Trust Agreement dated as of May __, 2000
as Lessor
By:
----------------------------------------------
Name:
Title:
113
EXHIBIT C
[FORM OF] FUNDING NOTICE AND
INSTRUCTIONS RE FUNDS ON FUNDING DATE
Reference is made to the Participation Agreement ("Participation
Agreement") dated as of May __, 2000 among Universal Compression, Inc.,
Universal Compression Holding, Inc., Wilmington Trust Company, not in its
individual capacity but solely as Trustee of Universal Compression Trust
(2000-1) and in its individual capacity, but only where so specified, Lenders
and Certificate Holders from time to time party thereto, Bankers Trust Company,
as Administrative Agent and Bankers Trust Company, as Collateral Agent
("Collateral Agent"). Capitalized terms used and not otherwise defined herein
shall have the meanings assigned to them in Appendix A to the Participation
Agreement.
1. Universal Compression Inc. (the "Lessee") hereby gives irrevocable
notice to each other party hereto that:
(a) on [___________], a [LIBOR Banking Day], (the "Proposed Funding Date")
we propose to transfer or seek reimbursement with respect to and lease
from Lessor the Equipment identified on Lease Agreement Supplement No.
[___] in accordance with the terms of the Participation Agreement and
Lease Agreement;
(b) the aggregate Acquisition Costs for such Equipment is $[__________];
(c) Lessee requests (i) each Certificate Holder to deposit the amount set
forth therefor on Schedule 1 hereto which in the aggregate is
$[___________] (the "Equity Amount") into [__________] (the
"Collateral Agent Account") before 12:00 noon (New York City time) on
the Proposed Funding Date and (ii) each Lender to make Loans in the
amounts specified on Schedule 1 in the aggregate amount of
$[______________] (the "Debt Amount") and to deposit, or cause to be
deposited, such amounts into the Collateral Agent Account before 12:00
noon (New York City time) on the Proposed Funding Date;
(d) Lessee has selected a [___] month Lease Payment Period in accordance
with Section 5 of the Participating Agreement; and
(e) upon deposit into the Collateral Agent Account of the entire Equity
Amount and the Debt Amount, such proceeds should be wire transferred
to [_________________].
2. Lessee hereby represents and warrants as of the date hereof for the
benefit of each party to the Participation Agreement that:
(a) this Funding Notice complies with all the limitations and conditions
set forth in Section 3.1 of the Participation Agreement;
(b) No Lease Default or Lease Event of Default has occurred; and
114
EXHIBIT C
Page 2
(c) the representations and warranties of Lessee and Guarantor set forth
in Sections 2.1, 2.2 and 2.3 of the Participation Agreement are true
and correct in all material respects as of the date hereof and shall
continue to be true and correct on the Proposed Funding Date,
requested hereby, except to the extent that such representations and
warranties relate solely to an earlier date, in which case such
representations and warranties were true and correct as of such date;
3. The Persons parties to these Instructions hereby inform and instruct the
Collateral Agent as follows:
(a) On the Proposed Funding Date:
(i) Upon satisfaction of the conditions precedent set forth in
Sections 3.1 and 3.3 of the Participation Agreement, each of the
undersigned Certificate Holders shall deposit into the Collateral Agent
Account its Pro Rata Share of the Equity Amount as set forth in Schedule
1 hereto;
(ii) Upon satisfaction of the conditions precedent set forth in
Sections 3.1 and 3.2 of the Participation Agreement each of the
undersigned Lenders shall deposit into the Trust Account its Pro Rata
Share of the Debt Amount as set forth in Schedule 1 hereto; and
(iii) Upon deposit into the Trust Account of all amounts referenced
in clauses (i) and (ii) above and oral instruction from the
Administrative Agent, the Trustee shall release to Lessee from the Trust
Account US $[__________] (the "Acquisition Amount") by wire transfer to
Lessee's account at as described in paragraph 1(g) above.
(b) If you do not receive all of the funds or the instructions
referenced in clause 2(a) by 2:00 p.m. (New York time) on the Proposed
Funding Date, you shall invest such funds until the next Business Day in
accordance with the instructions of the Certificate Holder and Lender that
deposited such funds.
(c) If you do not receive all of the funds or the instruction referenced
in clause 2(a) by 2:00 p.m. (New York time) on the next Business Day after
the Proposed Funding Date you shall return the amounts deposited by the
Certificate Holders and Lenders by wire transfer to the accounts identified
therefor in Schedule 1 hereto.
4. In the event that the closing of the transaction and the transfer of the
Acquisition Amount does not occur by 2:00 p.m. (New York City time) on or before
the next Business Day after the Proposed Funding Date, Lessee agrees for the
benefit of each Person a party hereto that has complied with its obligations
under the Participation Agreement in respect of such closing that it shall
indemnify such Person and hold such Person harmless from any loss (but not lost
profits), cost or expense which such Person may sustain or incur as a result of
such Person having made arrangements in the London Interbank market or otherwise
to fund the Equity
115
EXHIBIT C
Page 3
Amount or the Debt Amount, including any Breakage Costs net of any amounts
earned by such Person or investments made in accordance with Section 2(a)(iv).
5. Sections 12.3, 12.7, 12.8., 12.11, 12.12 and 12.17 of the Participation
Agreement are incorporated herein by reference mutatis mutandis.
By executing these instructions, the Certificate Holders hereby instruct
Lessor to execute, deliver and perform these instructions in accordance
herewith.
UNIVERSAL COMPRESSION, INC.,
as Lessee
By:
---------------------------------
Name:
Title:
DEUTSCHE BANK AG, NEW YORK BRANCH,
as Certificate Holder
By:
---------------------------------
Name:
Title:
[ ],
as Certificate Holder
By:
---------------------------------
Name:
Title:
116
EXHIBIT C
Page 4
[LENDERS]
BANKERS TRUST COMPANY, as
Administrative Agent
By:
---------------------------------
Name:
Title:
BANKERS TRUST COMPANY, as
Collateral Agent
By:
---------------------------------
Name:
Title:
117
EXHIBIT C
Page 5
So Agreed
WILMINGTON TRUST COMPANY, as
Trustee of Universal Compression
Trust (2000-1) under the Trust
Agreement dated as of May __, 2000
By:
---------------------------------
Name:
Title:
118
SCHEDULE 1
TO EXHIBIT C
Pro Rata Share
of Equity Amount
Certificate Holder ($) Account Information
------------------ ---------------- -------------------
Pro Rata Share
of Debt Amount
Lender ($) Account Information
------ -------------- -------------------
119
EXHIBIT D
[FORM OF] COMPLETION CERTIFICATE
Reference is made to the Participation Agreement ("Participation
Agreement") dated as of May __, 2000 among Universal Compression, Inc. (the
"Lessee"), Universal Compression Holding, Inc., Wilmington Trust Company, not in
its individual capacity but solely as Trustee of Universal Compression Trust
(2000-1) and in its individual capacity, but only where so specified, the
Lenders and Certificate Holders from time to time party thereto, Bankers Trust
Company, as Administrative Agent, and Bankers Trust Company, as Collateral
Agent. Capitalized terms used and not otherwise defined herein shall have the
meanings assigned to them in Appendix A to the Participation Agreement.
Lessee, in its capacity as Assembly Agent under the Assembly Agency
Agreement, dated as of May __, 2000 between Lessee and Lessor hereby certifies,
with respect to each Item of Equipment listed on Schedule 1 attached hereto,
that:
(a) the acquisition, construction and assembly of such Item of Equipment
was financed with the proceeds of funds advanced by or on behalf of
Lessor;
(b) such Item of Equipment (i) is fully operational, (ii) has been
completed in accordance with its design specifications, and (iii) is
in compliance with all governmental and environmental regulations;
(c) such Item is free and clear of all liens, encumbrances, and rights of
others (other than Permitted Liens); and
(d) included on Schedule 1 attached hereto are the estimates of fair
market value and Residual Value for each such Item of Equipment.
The undersigned hereby transfers, grants, sells, and assigns to
Lessor, its successors and assigns, all of its rights and interest in and on to
the various agreements, contracts, warranties, purchase orders and requisitions
relating to the purchase, procurement, design and assembly of each Item of
Equipment. Notwithstanding the foregoing assignment, Lessor shall not be deemed
to have assumed any liability to any equipment vendor by virtue of the foregoing
transfer (or anything contained in the Participation Agreement or the other
Operative Documents), Lessor's only obligation with respect to any Item of
Equipment hereunder being to finance such Item and permit Lessee to use such
Item in accordance with the terms of the Operative Documents.
120
EXHIBIT D
Page 2
IN WITNESS WHEREOF, LESSEE has caused this Completion Certificate to be
executed in its name this ______ day of ________, 2000.
UNIVERSAL COMPRESSION, INC.
as Lessee and Assembly Agent
By:
-----------------------------------
Name:
Title:
121
APPENDIX A
UNIVERSAL COMPRESSION, INC.
NATURAL GAS COMPRESSOR EQUIPMENT
FINANCING FACILITY
The definitions stated herein shall equally apply to both the
singular and plural forms of the terms defined. Any agreement defined or
referred to below means such agreement as amended, supplemented or modified from
time to time, and includes all exhibits, supplements and appendices thereto. Any
Person defined or referred to below include its successors, permitted
transferees and assigns. The word "including," when used below or in any
Operative Document, is deemed to be followed by "without limitation," whether or
not such words appear.
"Acquisition Cost" of each Item of Equipment means an amount
equal to the sum of (a) (i) with respect to an Item of Equipment to be assembled
by Lessee on behalf of Lessor in accordance with the Assembly Agency Agreement,
the sum of the aggregate of the actual costs incurred and paid by Lessee on
behalf of Lessor for each Component of such Item or (ii) with respect to an Item
of Equipment purchased by Lessor from Lessee, the amount set forth on Schedule 1
to the Participation Agreement for such type of Item, plus (b) all sales and
excise taxes paid by Lessor on or with respect to the acquisition of such Item
except to the extent Lessee is not required to pay or indemnify with respect to
such Tax under Section 10.3 of the Participation Agreement.
"Adjusted Consolidated Net Income" for any period means
Consolidated Net Income for such period plus, without duplication, the sum of
the amount of all net non-cash charges (including, without limitation,
depreciation, amortization, deferred tax expense and non-cash interest expense)
and net non-cash losses which were included in arriving at Consolidated Net
Income for such period less the sum of the amount of all net non-cash gains
(exclusive of items reflected in Adjusted Working Capital) included in arriving
at Consolidated Net Income for such period.
"Adjusted Consolidated Working Capital" at any time means
Consolidated Current Assets (but excluding therefrom all cash and Cash
Equivalents) less Consolidated Current Liabilities.
"Administrative Agent" means Bankers Trust Company.
"Administrative Agent Fee Letter" means the letter agreement
dated May __, 2000 between Lessee and the Administrative Agent.
"Affected Person" means each of the Lenders and each of the
Certificate Holders.
"Affiliate" means, as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person. For purposes of
122
this definition, "control" of a Person means the power, directly or indirectly,
to direct or cause direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise.
"After-Tax Basis" means in respect of an amount (the "base
amount") with respect to a Person, the base amount supplemented by a future
payment, if necessary, to such Person such that, after reduction for the net
amount of all Taxes (taking into account credits, offsets, deductions or other
benefits actually realized or to be realized by such Person or its Affiliates in
respect of such base amount and such Taxes in the taxable year in which the base
amount is to be paid), if any, imposed on such Person (calculated at the then
maximum marginal rates generally applicable to such Person) in respect of the
sum of the base amount and such future payment shall be equal to the base
amount.
"Alternate Rate" means a variable rate equal to the greater of
(a) the sum of the Federal Funds Rate from time to time in effect and 0.5% and
(b) the rate of interest from time to time announced by Deutsche Bank AG, New
York Branch at its principal office in New York, New York from time to time as
its "prime commercial lending rate" (which rate is a reference rate and does not
necessarily represent the lowest or best rate actually charged to any customer,
and Deutsche Bank AG, New York Branch may make commercial loans or other loans
at rates of interest at, above or below such reference rate), with any per diem
determination based on a 364 or 365 day year, as the case may be.
"Applicable Debt Margin" means the debt margin set forth on
Schedule 2 to the Participation Agreement.
"Applicable Equity Margin" means the equity margin set forth
on Schedule 2.
"Applicable Law" means, with respect to any Person or Item of
Equipment, all existing and future laws, rules, guidelines, regulations
(including proposed, temporary and final income tax regulations), statutes,
treaties, codes, ordinances, permits, certificates, orders and licenses of and
interpretations by any Governmental Entity and judgments, decrees, injunctions,
writs, or orders of any court, arbitrator or other administrative, judicial, or
quasi-judicial tribunal or agency of competent jurisdiction applicable to such
Person of Item of Equipment.
"Appraisal" means, with respect to and Item of Equipment, an
appraisal prepared by the Appraiser at Lessee's expense of such Item of
Equipment conducted by, or in the presence of, the Appraiser, that (i) confirms
that the estimated Equipment Cost for such Item of Equipment is equal to or less
than such Item's fair market value as of a date within fourteen (14) days of the
date the appraisal is delivered to the Administrative Agent and (ii) estimates
the Residual Value, which appraisal shall be based upon a physical inspection to
the extent reasonably deemed necessary by the Appraiser.
"Appraiser" means American Appraisal Associates, Inc., or an
independent expert selected by Lessee and acceptable to the Lessor, the Majority
Certificate Holders, and the Majority Lenders.
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"Assembly Agency Agreement" means the Assembly Agency
Agreement, dated as of May ___, 2000, between Lessee and Lessor.
"Assembly Agent" means Lessee as Assembly Agent under the
Assembly Agency Agreement.
"Assembly Period" means with respect to each Item of
Equipment, the period which begins on the first Funding Date related to such
Item of Equipment and ends on the earlier of (i) the date of issuance of a
Completion Certificate with respect to such Item of Equipment and (ii) the Basic
Term Commencement Date.
"Asset Sale" means any sale, transfer or other disposition by
Guarantor or any of its Subsidiaries to any Person (including by-way-of
redemption by such Person) other than to Guarantor or a Wholly-Owned Subsidiary
of Guarantor of any asset (including, without limitation, any capital stock or
other securities of, or equity interests in, another Person) other than (i)
sales of assets pursuant to the Revolver and (ii) sales of assets which
individually, or together with related sales, do not exceed $500,000 per sale.
"Asset Swap" has the meaning set forth in Section 9.5(h)(xiii)
of the Participation Agreement.
"Assignee" means the Collateral Agent and its successors and
permitted assigns.
"Assignment and Assumption Agreement" for a Lender means the
Assignment and Assumption Agreement substantially in the form of Exhibit B to
the Loan Agreement and for a Certificate Holder means the Assignment and
Assumption Agreement substantially in the form of Exhibit [___] to the Trust
Agreement.
"Assumed Characterization" has the meaning provided in Section
7.3.7 of the Participation Agreement.
"Availability Fee" means the fee payable to Lessor pursuant to
Section 7.3 of the Lease Agreement.
"Availability Fee Rate" means, at any time, the rate then
applicable set forth as such in Schedule 2 to the Participation Agreement
expressed as an annual percentage rate calculated to the seventh decimal place
on an actual/360-day basis.
"Bankruptcy Code" means Title 11 of the United States Code
entitled "Bankruptcy" as now or hereafter in effect or any successor thereto.
"Basic Term" means the period consisting of forty-two (42)
months commencing on the Basic Term Commencement Date and terminating on the
Payment Date that occurs in the last month of such forty-two (42) month period.
"Basic Term Commencement Date" means [November __, 2001].
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"Xxxx of Sale" means a Xxxx of Sale in the form of Exhibit A
to the Participation Agreement to be executed and delivered by Lessee for each
Item of Equipment sold by Lessee to Lessor.
"Borrower" means the Lessor in its capacity as borrower under
the Loan Agreement.
"Breakage Costs" means any amount or amounts as shall
compensate a Lender or Certificate Holder for any reasonable loss (excluding
loss of profit), expense or liabilities incurred after using good faith and
reasonable efforts to minimize such loss, cost or expense by a Lender or
Certificate Holder as a result of a prepayment by Lessor of principal, interest,
Equity Return or Equity Component pursuant to the terms of the Operative
Documents or as a result of a funding that does not occur on a date specified
therefor in a Funding Notice. The amount of the loss, expense or liabilities
shall be determined by the Person seeking such, and notice thereof shall be
provided to Lessee in the form of a certificate of such Person stating that the
calculations set forth therein are in accordance with the terms of the
Participation Agreement and setting forth in reasonable detail the basis for
such calculations, such certificate being conclusive and binding for all
purposes absent manifest error.
"Budget" means with respect of each Item of Equipment to be
assembled by Lessee on behalf of Lessor pursuant to the Assembly Agency
Agreement the budget prepared and certified by the Lessee (a) identifying the
serial number for such Item, (b) describing by type, manufacturer and model
number each of the natural gas engine, compression and air cooler to be included
in such Item (c) setting forth the Lessee's estimates of (i) the cost of each
Component for such Item, and (ii) the fair market value and Residual Value of
such Item upon completion and (d) the estimated completion date.
"Budget Parameters" means for each Component ten (10) percent
above or below the estimated cost for such Component in the Budget therefor
provided that the aggregate of the actual costs of all Components for any Item
of Equipment shall not exceed the aggregate of the estimated costs of all
Components of such Item of Equipment in the Budget therefor delivered to Lessor
in accordance with Section 3.1(d)(i) of the Participation Agreement.
"Business Day" means any day other than a day on which banking
institutions in the State of New York are authorized by law to close.
"Capital Expenditures" means, with respect to any Person,
without duplication, all expenditures by such Person which are capitalized in
accordance with generally accepted accounting principles and the amount of
Capitalized Lease Obligations incurred by such Person.
"Capitalized Lease Obligations" of any Person means all rental
obligations which, under generally accepted accounting principles, are or will
be required to be capitalized on the books of such Person, in each case taken at
the amount thereof accounted for as indebtedness in accordance with such
principles.
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"Casualty Loss Value" of each Item of Equipment means the
amount set forth as such in the Lease Agreement Supplement for such Item.
"Casualty Loss Value Payment Date" for each Item of Equipment
for which an Event of Loss occurs means the Payment Date following the last date
on which the Lessee is to give notice of such Event of Loss in accordance with
Section 19.2 of the Lease Agreement.
"Certificate" has the meaning set forth in Section III of the
Trust Agreement.
"Certificate Holder Available Commitment" means, at any time
during the Commitment Period, for each Certificate Holder the amount equal to
the excess, if any, of such Certificate Holder's Certificate Holder Commitment
less the aggregate of Equity Contributions previously made by such Certificate
Holder; provided that no repayment of any amount to a Certificate Holder shall
increase its Certificate Holder Available Commitment.
"Certificate Holder Commitment" means for each Certificate
Holder the Dollar amount set forth in Schedule 3 to the Participation Agreement
below the term "Certificate Holder Commitment".
"Certificate Holders" means Deutsche Bank AG, New York Branch
and any other Eligible Transferees who from time to time become party to the
Participation Agreement and Trust Agreement as Certificate Holders in accordance
with the terms thereof.
"Certificate Holders Option" has the meaning set forth in
Section 6.2 of the Participation Agreement.
"Certificate of Equipment" means (a) for Items of Equipment to
be sold and leased back, a certificate by Lessee executed by a Responsible
Officer in the form of Exhibit B-1 to the Participation Agreement or (b) for
Items of Equipment to be assembled by Lessee on behalf of Lessor in accordance
with the Assembly Agency Agreement, a certificate by Lessee executed by a
Responsible Officer in the form of Exhibit B-2 to the Participation Agreement.
"Change of Control" means (a) the consummation of any
transaction (including, without limitation, any merger or consolidation) the
result of which is that any "person" (as such term is defined in Section
13(d)(3) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")
or group or related persons, together with Affiliates thereof (other than the
Permitted Investors), becomes the "beneficial owner" (as such term is defined in
Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly, of
more than 35% of the Voting Stock of Guarantor (as determined on a fully diluted
basis and measured by voting power rather than number of shares), provided that
the Permitted Investors "beneficially own" (as such term is defined in Rule
13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly, in the
aggregate a lesser percentage of the Voting Stock of Guarantor than such other
"person" or group of related persons and do not have the right or ability by
voting, contract or otherwise to elect or designate for election a majority of
the Board of Directors of Guarantor or (b) Lessee shall cease to be a direct
Wholly-Owned Subsidiary of Guarantor or (c) a "Change of Control" or similar
event shall occur under the Lessee Senior Note Documents.
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"Closing Date" means the first Funding Date, which shall be a
date during the period from the date of the Participation Agreement through June
30, 2000, and which is mutually agreeable to the parties to the Participation
Agreement.
"Code" means the Internal Revenue Code of 1986, as the same
may be amended from time to time, or any comparable successor law.
"Collateral" means the Lessee Collateral and Lessor
Collateral.
"Collateral Agent" means Bankers Trust Company.
"Commitment Period" means the period commencing on the date of
the Participation Agreement and ending on the Basic Term Commencement Date.
"Completion Certificate" means, with respect to an Item of
Equipment which has been successfully completed a certificate in the form of
Exhibit D to the Participation Agreement delivered by Lessee to Lessor
representing and warranting that such Item of Equipment (a) is fully
operational, (b) has been completed in accordance with its design
specifications, (c) is in compliance with all governmental and environmental
regulations, and (d) is free of all Liens other than Permitted Liens and Lessor
Liens.
"Component" means for each Item of Equipment to be assembled
by Lessee on behalf of Lessor pursuant to the Assembly Agency Agreement each of
the (i) natural gas engine, (ii) compressor, (iii) air cooler, (iv) labor
expenses and (v) all other additional parts and expenses necessary to assemble
such Item of Equipment.
"Consolidated Adjusted EBITDAR" means Consolidated EBITDAR for
any period, adjusted by subtracting therefrom any management fees attributable
to such period pursuant to the CH Management Agreement.
"Consolidated Current Assets" means, at any time, the
consolidated current assets of Guarantor and its Consolidated Subsidiaries.
"Consolidated Current Liabilities" means, at any time, the
consolidated current liabilities of Guarantor and its Consolidated Subsidiaries
at such time, but excluding the current portion of and accrued but unpaid
interest on any Indebtedness under Revolver and any other long-term Indebtedness
which would otherwise be included therein.
"Consolidated Debt" means, at any time, the sum of the
aggregate outstanding principal amount of all Indebtedness for borrowed money,
the amount of any unreimbursed drawings under any letter of credit (which have
been unreimbursed for three or more days) and the principal component of
Capitalized Lease Obligations of Guarantor and its Consolidated Subsidiaries.
"Consolidated EBIT" means, for any period, the Consolidated
Net Income of Guarantor and its Consolidated Subsidiaries, before Consolidated
Net Interest Expense and
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provision for taxes and without giving effect to any extraordinary gains or
losses or gains or losses from sales of assets other than inventory sold in the
ordinary course of business.
"Consolidated EBITDAR" means, for any period, Consolidated
EBIT, adjusted by adding thereto the amount of all amortization of intangibles,
depreciation and rental expense that were deducted in arriving at Consolidated
EBIT for such period.
"Consolidated Net Income" means, for any period, net after tax
income of Guarantor and its Consolidated Subsidiaries.
"Consolidated Net Interest Expense" means, for any period, the
total consolidated interest expense of Guarantor and its Consolidated
Subsidiaries for such period (calculated without regard to any limitations on
the payment thereof) plus, without duplication, that portion of Capitalized
Lease Obligations of Guarantors and its Consolidated Subsidiaries representing
the interest factor for such period, in each case net of the total consolidated
cash interest income of Guarantor and its Consolidated Subsidiaries for such
period.
"Consolidated Subsidiaries" means, as to any Person, all
Subsidiaries of such Person which are consolidated with such Person for
financial reporting purposes in accordance with generally accepted accounting
principles in the United States.
"Contingent Obligation" means, as to any Person, any
obligation of such Person guaranteeing or intended to guarantee any
Indebtedness, leases, dividends or other obligations ("primary obligations") of
any other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of such Person,
whether or not contingent, (a) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (b) to advance or
supply funds (i) for the purchase or payment of any such primary obligation or
(ii) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (c) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (d) otherwise to assure or hold
harmless the holder of such primary obligation against loss in respect thereof;
provided, however, that the term Contingent Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Contingent Obligation shall be deemed to be an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Contingent Obligation is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder) as determined by such
Person in good faith.
"Curing Party" has the meaning set forth in Section 6.1 of the
Participation Agreement.
"Date of Manufacture" with respect to any Item of Equipment,
means the date the manufacturer or vendor thereof sold as new the oldest of the
(a) compressor, (b) natural gas engine and (c) air cooler installed on such Item
of Equipment.
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"Date of Overhaul" with respect to any Item of Equipment,
means the date Lessee or its designee completes [a complete overhaul] of such
Item of Equipment.
"Debt Component" for each Item of Equipment means the dollar
amount of the Acquisition Cost financed by Lenders on the Acceptance Date
therefor, which shall equal 97% of the Acquisition Cost for such Item.
"Debt Rate" for any Lease Payment Period means an interest
rate per annum equal to (a) the one (1), two (2) or three (3) month LIBOR Rate,
as elected for such Lease Payment Period by Lessee pursuant to Section 5 of the
Participation Agreement, plus (b) the Applicable Debt Margin.
"Deficiency" has the meaning set forth in Section 29.1 of the
Lease Agreement.
"Dividend" with respect to any Person means that such Person
has declared or paid a dividend or returned any equity capital to its
stockholders or authorized or made any other distribution, payment or delivery
of property (other than common stock of such Person) or cash to its stockholders
as such, or redeemed, retired, purchased or otherwise acquired, directly or
indirectly, for a consideration any shares of any class of its capital stock
outstanding on or after the Closing Date (or any options or warrants issued by
such Person with respect to its capital stock), or set aside any funds for any
of the foregoing purposes, or shall have permitted any of its Subsidiaries to
purchase or otherwise acquire for a consideration any shares of any class of the
capital stock of such Person outstanding on or after the Closing Date (or any
options or warrants issued by such Person with respect to its capital stock).
Without limiting the foregoing, "Dividends" with respect to any Person shall
also include all payments made or required to be made by such Person with
respect to any stock appreciation rights, plans, equity incentive or achievement
plans or any similar plans or setting aside of any funds for the foregoing
purposes.
"Dollar" means freely transferable, lawful money of the United
States.
"EBITDA Ratio" means, on any date, the ratio of Consolidated
EBIT to Consolidated Interest Expense for the four consecutive fiscal quarters
of Guarantor most recently ended prior to such date.
"Eligible Transferee" means and includes a commercial bank,
financial institution or other "accredited investor" (as defined in Regulation D
of the Securities Act) other than any such Person that is directly involved in a
Permitted Business.
"Environmental Claims" means any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, directives,
claims, liens, notices of noncompliance or violation, investigations or
proceedings relating in any way to any Environmental Law or any permit issued,
or any approval given, under any such Environmental Law (hereafter, "Claims"),
including, without limitation, (a) any and all Claims by governmental or
regulatory authorities for enforcement, cleanup, removal, response, remedial or
other actions or damages pursuant to any applicable Environmental Law, and (b)
any and all Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or
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injunctive relief in connection with alleged injury or threat of injury to
health, safety or the environment due to the presence of Hazardous Materials.
"Environmental Law" means any Federal, state, foreign or local
statute, law, rule, regulation, ordinance, code, guideline, written policy and
rule of common law now or hereafter in effect and in each case as amended, and
any judicial or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment, relating to the environment,
employee health and safety or Hazardous Materials, including, without
limitation, CERCLA; RCRA; the Federal Water Pollution Control Act, 33 U.S.C.
Section 1251 et seq.; the Toxic Substances Control Act, 15 U.S.C. Section 2601
et seq.; the Clean Air Act, 42 U.S.C. Section 7401 et seq.; the Safe Drinking
Water Act, 42 U.S.C. Section 3803 et seq.; the Oil Pollution Act of 1990, 33
U.S.C. Section 2701 et seq.; the Emergency Planning and the Community
Right-to-Know Act of 1986, 42 U.S.C. Section 11001 et seq.; the Hazardous
Material Transportation Act, 49 U.S.C. Section 1801 et seq.; the Occupational
Safety and Health Act, 29 U.S.C. Section 651 et seq.; and any state and local or
foreign counterparts or equivalents, in each case as amended from time to time.
"Equipment" means the equipment described on the Schedule of
Equipment attached to each consecutively numbered Lease Agreement Supplement now
or hereafter made a part of the Lease Agreement together with any tangible
Components thereof, regardless of whether such Equipment has been fully
assembled and all related appliances, parts, accessories, appurtenances,
accessions, additions, improvements, replacements and other equipment or
components of any nature from time to time incorporated or installed therein.
"Equipment Financing Transactions" means any Capitalized
Lease, Operating Lease, Purchase Money Indebtedness, and any sale-leaseback or
other transactions consummated in connection therewith creating Capitalized
Lease Obligations, Operating Lease Obligations or Purchase Money Indebtedness.
"Equity Component" for each Item of Equipment means the
difference between the Acquisition Cost and the Debt Component therefor.
"Equity Contribution" has the meaning set forth in Section 4.1
of the Participation Agreement.
"Equity Rate" for any Lease Payment Period means an interest
rate per annum equal to (a) the one (1), two (2) or three (3) month LIBOR Rate,
as elected for such Lease Payment Period by Lessee pursuant to Section 4A of the
Participation Agreement, plus (b) the Applicable Equity Margin.
"Equity Return" means the amounts paid by Lessor in accordance
with clause (b) of Section 7.1 and clause (b) of Section 7.2 of the Lease
Agreement.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, or any successor statute.
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"ERISA Affiliate" means each person (as defined in Section
3(9) of ERISA) which together with Guarantor or any Subsidiary of Guarantor
would be deemed to be a "single employer" within the meaning of Section 414(b),
(c), (m) or (o) of the Code.
"ERISA Group" means any Subsidiary and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with any Subsidiary, are
treated as a single employer under Section 414 of the Internal Revenue Code.
"Event of Loss" with respect to any Item of Equipment means
(a) the loss of such Item of Equipment or any substantial part thereof, or (b)
the loss of the use of such Item of Equipment due to theft or disappearance for
a period in excess of 45 days during the Term, or existing at the expiration or
earlier termination of the Term, or (c) the destruction, damage beyond repair,
or rendition of such Item of Equipment or any substantial part thereof
permanently unfit for normal use for any reason whatsoever, or (d) the
condemnation, confiscation, seizure, or requisition of use or title to such Item
of Equipment or any substantial part thereof by any Governmental Entity under
the power of eminent domain or otherwise beyond the earlier of fifteen (15) days
and the end of the Basic Term.
"Excepted Payments" means (a) indemnity payments paid or
payable in favor of Trust Company, Certificate Holders, Lenders, Administrative
Agent or Collateral Agent, or their successors or assigns, directors, officers,
employees, affiliates and agents under the Operative Documents, (b) proceeds of
public liability insurance (or government indemnities in lieu thereof) payable
to Trust Company, Certificate Holders, Lenders, Administrative Agent or
Collateral Agent either pursuant to the Lease Agreement or the Participation
Agreement (which shall include proceeds of any self-insurance by Lessee) or
maintained by Lessee, Trust Company, Lessor, Certificate Holders, Lenders,
Administrative Agent or Collateral Agent and not required to be maintained under
the Lease Agreement, (c) costs or expenses paid or payable by Lessee to, or for
the benefit of, Trust Company, Certificate Holders, Lenders, Administrative
Agent or Collateral Agent, (d) all rights of, and payments to, Certificate
Holders under and pursuant to the Trust Agreement after all of the Lessor's
obligations to make all other payments pursuant to the Operative Documents have
been satisfied, (e) where any amount payable to Trust Company, Certificate
Holders, Lenders, Administrative Agent or Collateral Agent is expressed to be
payable on an After-Tax Basis, the increment to the underlying payment
obligation arising by virtue of the operation of the definition of "After-Tax
Basis," (f) any payments in respect of interest to the extent attributable to
payments referred to in clauses (a) through (e) above and otherwise required to
be paid thereon, (g) all rights to receive the amounts referred to in clauses
(a) through (f) above, and (h) the proceeds of enforcement of any right to
receive the proceeds of any amount referred to in clauses (a) through (f) above.
"Exempt Payments" has the meaning set forth in Section 10.3.5
of the Participation Agreement.
"Existing Indebtedness" has the meaning set forth in Section
2.3(z) of the Participation Agreement.
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"Federal Funds Rate" means, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of one percent) equal to
the weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day, provided that (a) if the day for which such rate is to
be determined is not a Business Day, the Federal Funds Rate for such day shall
be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (b) if such rate is not so
published for any day which is a Business Day, the average of the quotations at
approximately 11:00 a.m. (New York time) for such day on such transactions
received by Agent from three federal funds brokers of recognized standing
selected by Agent.
"Financing Statements" means the Lessee Financing Statements
and the Lessor Financing Statements.
"Foreign Pension Plan" means any plan, fund (including,
without limitation, any superannuation fund) or other similar program
established or maintained outside the United States of America by Guarantor or
any one or more of its Subsidiaries primarily for the benefit of employees of
Guarantor or such Subsidiaries residing outside the United States of America,
which plan, fund or other similar program provides, or results in, retirement
income, a deferral of income in contemplation of retirement or payments to be
made upon termination of employment, and which plan is not subject to ERISA or
the Code.
"Foreign Subsidiary" means each Subsidiary of the Borrower
that is incorporated under the laws of any jurisdiction other than the United
States of America, any State thereof, or any territory thereof.
"Funding Date" means the date proposed by Lessee in the
Funding Notice for payment or reimbursement by Lessor in connection with the
sale and leaseback and/or assembly of Items of Equipment, provided each such
date shall be on or before the Basic Term Commencement Date and shall be that
same calendar date each month; provided, however, (a) if any such calendar date
is not a LIBOR Banking Day, then the Funding Date shall be the next LIBOR
Banking Day; and provided, further however, that if the next LIBOR Banking Day
shall occur in the next calendar month, then the Funding Date shall be the
preceding LIBOR Banking Day, and (b) if there is no such corresponding date in
any calendar month, then the Funding Date shall be the last LIBOR Banking Day in
such calendar month..
"Funding Notice" means a Funding Notice and Instructions Re
Funds On Funding Date, in the form of Exhibit C to the Participation Agreement.
"GAAP" means generally accepted accounting principles in the
United States of America in effect from time to time.
"Governmental Entity" means any Federal, state, municipal or
other governmental department, commission, board, bureau, agency, central bank
or instrumentality or any court, in each case whether of the United States or
any foreign country.
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"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Indebtedness
of any other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (a) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness (whether arising by virtue of partnership arrangements, by
agreement to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise) or (b)
entered into for the purpose of assuring in any other manner the holder of such
Indebtedness of the payment thereof or to protect such holder against loss in
respect thereof (in whole or in part), provided that the term Guarantee shall
not include endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding meaning.
"Guaranteed Obligations" has the meaning set forth in Section
8 of the Participation Agreement.
"Guarantor" means Universal Compression Holdings, Inc., a
Delaware corporation.
"Guarantor IPO" means the Qualified Public Equity Offering
described in Section 5.16(a) of the Revolver.
"Guaranty Party" has the meaning set forth in Section 8 of the
Participation Agreement.
"Hazardous Materials" means (a) any petroleum or petroleum
products, radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, transformers or other equipment that
contain dielectric fluid containing levels of polychlorinated biphenyls, and
radon gas; (b) any chemicals, materials or substances defined as or included in
the definition of "hazardous substances," "hazardous waste," "hazardous
materials," "extremely hazardous substances," "restricted hazardous waste,"
"toxic substances," "toxic pollutants," "contaminants," or "pollutants," or
words of similar import, under any applicable Environmental Law; and (c) any
other chemical, material or substance, the Release of which is prohibited,
limited or regulated by any governmental authority.
"Indebtedness" means, as to any Person, without duplication,
(a) all indebtedness (including principal, interest, fees and charges) of such
Person for borrowed money or for the deferred purchase price of property or
services, (b) the maximum amount available to be drawn under all letters of
credit issued for the account of such Person and all unpaid drawings in respect
of such letters of credit, (c) all Indebtedness of the types described in clause
(a), (b), (d), (e), (f) or (g) of this definition secured by any Lien on any
property owned by such Person, whether or not such Indebtedness has been assumed
by such Person (provided, that, if the Person has not assumed or otherwise
become liable in respect of such Indebtedness, such Indebtedness shall be deemed
to be in an amount equal to the lesser of the fair market value of the property
to which such Lien relates as determined in good faith by such Person and the
stated amount of such Indebtedness), (d) Capitalized Lease Obligations, (e) all
obligations of such person to pay a specified purchase price for goods or
services, whether or not delivered or accepted, i.e., take-or-
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pay and similar obligations, (f) all Contingent Obligations of such Person and
(g) all obligations under any Interest Rate Protection Agreement or Other
Hedging Agreement or under any similar type of agreement. Notwithstanding the
foregoing, Indebtedness shall not include trade payables and accrued expenses
incurred by any Person in accordance with customary practices and in the
ordinary course of business of such Person.
"Indemnifying Party" has the meaning set forth in Section
12.12 of the Participation Agreement.
"Interest Rate Protection Agreement" means any interest rate
swap agreement, interest rate cap agreement, interest collar agreement, interest
rate hedging agreement or other similar agreement or arrangement.
"Interim Rent" has the meaning set forth in Section 7.1 of the
Lease Agreement.
"Interim Term" for each Item of Equipment means the period
commencing on the first Funding Date for such Item and ending on the Basic Term
Commencement Date.
"Item of Equipment" or "Item" means any of the items of
Equipment (including any tangible Components thereof regardless of whether such
Item has been fully assembled) separately identified on any of the Schedules of
Equipment attached to the Lease Agreement Supplements now or hereafter made a
part of the Lease Agreement other than those Items purchased pursuant to Section
28 of the Lease Agreement or for which Casualty Loss Value was paid pursuant to
Section 19.2 of the Lease Agreement.
"Lease Agreement" means the Master Equipment Lease Agreement
dated as of May ___, 2000 between Lessee and Lessor and each Lease Agreement
Supplement.
"Lease Agreement Supplement" means a Lease Agreement
Supplement and Security Grant substantially in the form attached to the Lease
Agreement as Exhibit A, to be executed by Lessor and the Lessee.
"Lease Default" means any event, action or condition which
with notice or lapse of time or both would constitute a Lease Event of Default.
"Lease Event of Default" has the meaning set forth in Section
23 of the Lease Agreement.
"Lease Payment" means the amount payable during the Interim
Term pursuant to Section 7.1 of the Lease Agreement, during the Basic Term
pursuant to Section 7.2 of the Lease Agreement, any Deficiency, any end of term
rent adjustment payable in accordance with Section 29.2 of the Lease Agreement
and any payments due under Sections 28.2, 28.4 or 28.5 of the Lease Agreement.
"Lease Payment Period" for each Item of Equipment means (a)
for the Interim Term of such Item, each period for which a payment of Lease
Payment is to be made for such Item during the Interim Term as set forth in
Section 7.1 of the Lease Agreement, and (b) for the
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Basic Term of such Item, each period for which a payment of Lease Payment is to
be made for such Item during the Basic Term thereof as set forth in Section 7.2
of the Lease Agreement.
"Lender Available Commitment" means, at any time during the
Commitment Period, for each Lender an amount equal to the excess, if any, of
such Lender's Lender Commitment less the aggregate of the initial principal
balances of all Loans previously made by such Lender; provided that no repayment
to a Lender of any amount shall increase its Lender Available Commitment.
"Lender Commitment" for each Lender means the Dollar amount
set forth in Schedule 3 to the Participation Agreement below the term "Lender
Commitment."
"Lenders" means [_______] and any other Eligible Transferee
who from time to time becomes a party to the Participation Agreement and Loan
Agreement as a Lender in accordance with the terms thereof and those financial
institutions who are identified in the Participation Agreement and the Loan
Agreement as "Lenders."
"Lessee" means Universal Compression, Inc., a Texas
corporation.
"Lessee Collateral" has the meaning set forth in Section 9 of
the Lease Agreement.
"Lessee Financing Statement" means the financing statements
and any supplement or amendment thereto in form and substance reasonably
acceptable to Lessor and the Administrative Agent appropriately completed and
executed by Lessee for filing in each jurisdiction necessary or desirable (as
reasonably determined by Agent or Lessor) to perfect Lessor's interest in the
Lessee Collateral to the extent the Lease Agreement is a security agreement.
"Lessee Indemnified Person" means each Lessor Indemnified
Person and Lessor, its successors and assigns and each of their respective
Affiliates, officers, directors, employees, beneficiaries, stockholders, agents
and servants.
"Lessee Senior Discount Notes" means the Lessee's 9 7/8%
Senior Discount Notes due 2008, issued pursuant to the Lessee Senior Discount
Note Indenture.
"Lessor" means Wilmington Trust Company, a national banking
association not in its individual capacity but solely as Trustee of Universal
Compression Trust (2000-1).
"Lessor Collateral" has the meaning set forth in Section 7.1
of the Participation Agreement.
"Lessor Financing Statements" means financing statements in
form and substance reasonably acceptable to the Administrative Agent and
appropriately completed and executed by Lessor for filing in each jurisdiction
necessary or desirable (as reasonably determined by the Administrative Agent) to
perfect a security interest in favor of the Collateral Agent in the Lessor
Collateral.
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"Lessor Indemnified Person" means each of Trust Company, Each
Certificate Holder, each Lender, the Administrative Agent and the Collateral
Agent, their successors and assigns and each of their respective Affiliates,
officers, directors, employees, beneficiaries, stockholders, agents and
servants.
"Lessor Lien" means any Lien on or against any Item of
Equipment, the Lease Agreement, or Lessor's interest therein arising as a result
of (a) any claim against Lessor, any Certificate Holder, any Lender, the
Administrative Agent or the Collateral Agent not resulting from the transactions
contemplated by the Operative Documents, (b) any act or omission of Lessor, any
Certificate Holder, any Lender, the Administrative Agent or the Collateral Agent
which is not required or expressly permitted by the Operative Documents or is in
violation of any of the terms of the Operative Documents, (c) any claim against
Lessor, any Certificate Holder, any Lender, Administrative Agent or the
Collateral Agent with respect to Taxes or obligations of such Person against
which Lessee is not required to indemnify such Person pursuant to the
Participation Agreement or the other Operative Documents or (d) any claim
against Lessor, any Certificate Holder, any Lender, the Administrative Agent or
the Collateral Agent arising out of any transfer by Lessor, any Certificate
Holder, any Lender, the Administrative Agent or the Collateral Agent of all or
any portion of the interest of such Person in any Item or the Operative
Documents other than the transfer of interest in or possession of such Item by
such Person pursuant to and in accordance with the Operative Documents or
pursuant to the exercise of any remedy set forth in the Operative Documents.
"Leverage Ratio" means, at any time, the ratio of (i)
Consolidated Debt at such time to (ii) Consolidated EBITDAR for the Test Period
then most recently ended.
"Liability Insurance" has the meaning set forth in Section 20
of the Lease Agreement.
"LIBOR" means, in relation to any period, the rate for
deposits in Dollars for that period which appears on the Telerate Page 3750 as
of 11:00 a.m. London time on the second LIBOR Banking Day before the first day
of the relevant period; provided that if such rate does not appear on the
Telerate Screen Page 3750, LIBOR shall mean the rate determined by Bankers Trust
as its rate (each such determination, absent demonstrable error or bad faith, to
be conclusive and binding on all parties hereto and their assignees) at which
deposits for the relevant period in Dollars are being, have been, or would be
offered or quoted by Bankers Trust to major banks in the applicable interbank
market for Eurodollar deposits at or about 11:00 a.m. (New York time) on such
day.
"LIBOR Banking Day" means any day other than a day on which
banking institutions in New York, New York or London, England are authorized by
law to close.
"LIBOR Rate" for any period means an interest rate per annum
equal to the sum of a fraction expressed as a percentage to the seventh decimal
place the numerator of which is LIBOR for the relevant period and the
denominator of which is equal to 100% minus the Eurodollar Reserve Percentage
for such period with any daily determination based on a 360-day year.
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"Lien" means liens, mortgages, encumbrances, pledges, charges
and security interests of any kind.
"Loan" has the meaning set forth in Section 2.1 of the Loan
Agreement.
"Loan Agreement" means the Loan Agreement, dated as of May
___, 2000, among Wilmington Trust Company, the Administrative Agent, the
Collateral Agent and the Lenders.
"Loan Availability Fee" means the commitment fee payable by
Borrower to Lenders pursuant to Section 2.5.3 of the Loan Agreement.
"Loan Default" means an event, which with the giving of notice
or lapse of time or both, would become a Loan Event of Default.
"Loan Documents" means the Loan Agreement, the Security
Documents and the Notes.
"Loan Event of Default" has the meaning set forth in Section
7.1 of the Loan Agreement.
"Loss, Damages and Destruction" has the meaning set forth in
Section 19 of the Lease Agreement.
"Losses" has the meaning provided in Section 10.1 of the
Participation Agreement.
"Majority Certificate Holders" means non-defaulting
Certificate Holders the sum of whose outstanding Equity Contributions (or, in
the event there are no outstanding Equity Contributions, the sum of whose
Certificate Holder Commitments) represent an amount greater than fifty percent
of the total aggregate Equity Contributions (or Certificate Holder Commitments).
"Majority Lenders" means non-defaulting Lenders the sum of
whose outstanding Loans (or, in the event there are no outstanding Loans, the
sum of whose Lender Commitments) represent an amount greater than fifty percent
of the aggregate outstanding principal balances of the Loans (or Lender
Commitments).
"Material Plan" means, at any time, a Plan or Plans having
aggregate Unfunded Liabilities in excess of $25,000,000.
"Maturity Date" for each Loan means the earlier of (a) the
last day of the Term for the Items of Equipment financed with the proceeds of
such Loan and (b) the date on which such Loan becomes due and payable under the
Loan Agreement.
"Maximum Acquisition Cost" means $200,000,000.
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"Maximum Lessee Risk Amount" for any Item of Equipment on any
date of determination means an amount obtained by multiplying (a) the percentage
set forth as the "Maximum Lessee Risk Percentage" in the Lease Agreement
Supplement for such Item (which percentage will be the maximum amount permitted
in order to allow Lessee to get off balance sheet treatment for the leased
Equipment (approximately 89%)) by (b) the Acquisition Cost for such Item.
"Maximum Lessor Risk Amount" for any Item of Equipment on any
date of determination means an amount obtained by multiplying (a) the percentage
set forth as "Maximum Lessor Risk Percentage" in the Lease Agreement Supplement
for such Item (which percentage will be 100% less the Maximum Lessee Risk
Amount) by (b) the Acquisition Cost for such Item.
"Multiemployer Plan" means, at any time, a multiemployer plan
within the meaning of Section 4001(a)(3) of ERISA either (a) to which any member
of the ERISA Group is then making or accruing an obligation to make
contributions or (b) has at any time within the preceding five plan years been
maintained, or contributed to, by any Person who was at such time a member of
the ERISA Group for employees of any Person who was at such time a member of the
ERISA Group.
"Net Proceeds of Sale" means with respect to each Item of
Equipment sold by Lessor to a third party pursuant to Section 28.3 of the Lease
Agreement, the net amount of the proceeds of sale of such Item, after deducting
from the gross proceeds of such sale (a) all sales taxes and other taxes as may
be applicable to the sale or transfer of such Item, (b) all fees, costs and
expenses of such sale reasonably incurred by Lessor or Lessee and (c) any other
amounts for which, if not paid, Lessor would be liable as a result of such sale
or which, if not paid, would constitute a Lien on such Item.
"Net Sale Proceeds" means for any sale of assets, the gross
cash proceeds (including any cash received by way of deferred payment pursuant
to a promissory note, receivable or otherwise, but only as and when received)
received from such sale of assets, net of the reasonable costs of such sale
(including payments of unassumed liabilities relating to the assets sold and
required payments of any Indebtedness (other than Indebtedness secured pursuant
to the Revolver) which is secured by the respective assets which were sold), and
the taxes paid or payable by Guarantors' consolidated group as a result of such
sale and appropriate amounts to be provided by Guarantors or any of its
Subsidiaries, as the case may be, as a reserve, in accordance with GAAP, against
any liabilities associated with such Asset Sale and retained by Guarantors or
any of its Subsidiaries, after such Asset Sale, including without limitation,
pension and other post-employment benefit liabilities, liabilities related to
environmental matters and liabilities under any indemnification obligations with
such Asset Sale (it being understood, however, that, to the extent such reserves
are released or reduced, an amount equal to such release or reduction shall be
required to be applied as a mandatory repayment or mandatory commitment
reduction in accordance with Sections 3.03 and 4.02 in the Revolver).
"Non-Completion Date" has the meaning set forth in Section
28.5 of the Lease Agreement.
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"Non-U.S. Person" means any Person that is not a U.S. Person.
"Note" has the meaning set forth in Section 2.3 of the Loan
Agreement.
"Notice of Substitution" has the meaning set forth in Section
13(b) of the Lease Agreement.
"Operative Documents" means the Participation Agreement, the
Loan Agreement, the Notes, the Assembly Agency Agreement, all Bills of Sale, the
Funding Notices, the Lease Agreement, all Lease Agreement Supplements, the Trust
Agreement, the Administrative Agent Fee Letter and the Security Documents and in
each case, all exhibits and supplements thereto, in each case as amended and
modified from time to time.
"Option Notice" has the meaning set forth in Section 6.2 of
the Participation Agreement.
"Optional Alteration" has the meaning set forth in Section 12
of the Lease Agreement.
"Other Hedging Agreement" means any foreign exchange contract,
currency swap agreement or other similar agreement or arrangement designed to
protect against the fluctuations in currency values.
"Outstanding Debt Amount" with respect to each Item of
Equipment means the Debt Component therefor less the aggregate of the following
amounts to the extent paid in accordance with the Operative Documents: (i) all
payments paid to Lenders on account of Casualty Loss Value or pursuant to
Section 28.4 or 28.5 of the Lease Agreement used to reduce the principal amount
owing with Notes and (ii) all Deficiency payments and all payments made by the
Lessee to Lessor in accordance with Section 29.2 of the Lease Agreement with
respect to such Item.
"Overdue Rate" means the Debt Rate at the time in effect plus
two (2) percent (200 basis points).
"Participation Agreement" means the Participation Agreement
dated as of May __, 2000 among Lessee, Guarantor, Lessor, Trust Company,
Certificate Holders, Lenders, the Administrative Agent and the Collateral Agent.
"Payment Date" for each Item of Equipment and for each Loan
and Equity Contribution made to finance such Item of Equipment, means the
calendar date corresponding to the Closing Date in the last month of the Lease
Payment Period elected by Lessee for such Item as of the Closing Date and
thereafter the calendar date corresponding to the Closing Date in the last month
of each Lease Payment Period thereafter elected by Lessee for such Item in
accordance with Section 5 of the Participation Agreement; provided, however, (a)
if any such calendar date is not a LIBOR Banking Day, then the Payment Date
shall be the next LIBOR Banking Day; and provided, further however, that if the
next LIBOR Banking Day shall occur in the next calendar month, then the Payment
Date shall be the preceding LIBOR Banking Day, and
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(b) if there is no such corresponding date in any calendar month, then the
Payment Date shall be the last LIBOR Banking Day in such calendar month.
"Payment Date Option Amount" has the meaning set forth in
Section 28.4 of the Lease Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Permitted Acquisition" has the meaning set forth in Section
9.5(i)(viii) of the Participation Agreement.
"Permitted Business" means the business in which Lessee is
engaged on the date of the Participation Agreement and reasonable extensions
thereof.
"Permitted Encumbrance" means, with respect to any mortgaged
property, such exceptions to title as are set forth in the title insurance
policy or title commitment delivered with respect thereto, all of which
exceptions must be acceptable to the Agent in its reasonable discretion.
"Permitted Guarantor Liens" has the meaning set forth in
Section 9.5 of the Participation Agreement.
"Permitted Investors" means (x) Xxxxxx Xxxxxx Partners III
L.P., Xxxxxx Xxxxxx, Inc. and employees, management and directors of, and
persons owning accounts managed by, any of the foregoing and their respective
Affiliates (including, without limitation, Holdings and the Borrower) and (y)
other investors reasonably satisfactory to the Agent and the Required Lenders.
"Permitted Liens" means, as to any Item of Equipment (a) the
respective rights and interests of the parties under the Operative Documents as
provided in the Operative Documents (including any Lien created pursuant to or
expressly permitted by the terms of the Operative Documents), (b) Liens for
Taxes that either are not yet due and payable or are being contested in good
faith, (c) any Sublease, (d) Liens arising by operation of law, materialmen's,
mechanics', workers', repairmen's, employees', carriers', warehousemen's and
other like Liens in connection with any alterations, modifications or
replacements to the extent permitted by Sections 12 and 13 of the Lease
Agreement for amounts that are not more than thirty (30) days past due or are
being diligently contested in good faith by appropriate proceedings, so long as
such proceedings satisfy the conditions for contest proceedings set forth in
Section 10 of the Participation Agreement, (e) Liens arising out of judgments or
awards with respect to which appeals or other proceedings for review are being
prosecuted in good faith and for the payment of which adequate reserves have
been provided as required by GAAP or other appropriate provisions have been
made, and (f) Liens created by Lessee with the written consent of Lessor and any
Assignee.
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint stock company,
trust, trustee(s) of a trust,
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unincorporated organization, or government or Governmental Entity, agency or
political subdivision thereof.
"Plan" means any pension plan as defined in Section 3(2) of
ERISA, which is maintained or contributed to by (or to which there is an
obligation to contribute of) Guarantor or a Subsidiary of Guarantor or an ERISA
Affiliate, and each such plan for the five year period immediately following the
latest date on which Guarantor, or a Subsidiary of Guarantor or an ERISA
Affiliate maintained, contributed to or had an obligation to contribute to such
plan.
"Pro Rata Share" means, with respect to a Lender or a
Certificate Holder and the making of a Loan or Equity Contribution, the ratio of
such Lender's Lender Available Commitment to the aggregate of all Lender
Available Commitments or such Certificate Holder's Certificate Holder Available
Commitment to the aggregate of all Certificate Holder Available Commitments at
the time available and with respect to the payment of indemnified amounts under
Section 10 of the Participation Agreement the ratio of such Lender's outstanding
principal balance under its Loans to the aggregate outstanding principal balance
of all Loans or such Certificate Holder's outstanding Equity Contributions to
the aggregate of all outstanding Equity Contributions.
"Projections" means the projections prepared by Lessee in
connection with the Guarantor IPO, the Repurchase, the Revolver and the
transaction contemplated by the Operative Documents, dated May __, 2000 and
furnished to the Administrative Agent, the Lessor, the Certificate Holders and
the Lenders prior to the Closing Date.
"Property Insurance" has the meaning set forth in Section 20
of the Lease Agreement.
"Prospects" means, at any time, results of future operations
which are reasonably foreseeable based upon the facts and circumstances in
existence at such time.
"Purchase Money Indebtedness" means Indebtedness, the proceeds
of which are used to finance the acquisition, construction or improvement of
inventory, equipment or other property in the ordinary course of business.
"Purchase Option Amount" has the meaning set forth in Section
28.2 of the Lease Agreement.
"Purchase Option Price" has the meaning set forth in Section 5
of the Participation Agreement.
"Qualified Preferred Stock" means the preferred stock of
Guarantor so long as the terms of any such preferred stock (i) do not contain
any mandatory put, redemption, repayment, sinking fund or other similar
provision occurring before February __, 2006 other than any such provision which
is comparable to a provision in the preferred stock of Guarantor outstanding on
the Closing Date, (ii) do not require the cash payment of dividends before
February __, 2006, (iii) do not contain any covenants other than those covenants
of the type (but no more restrictive than
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those) set forth in the preferred stock of Guarantor outstanding on the Closing
Date and (iv) are otherwise reasonably satisfactory to the Administrative Agent.
"Real Property" of any Person means all the right, title and
interest of such Person in and to land, improvements and fixtures, including
Leaseholds.
"Redelivery Location" means, with respect to any Item of
Equipment that is to be returned by Lessee to Lessor, a location or locations
within the United States designated by Lessor; provided that the total number of
Redelivery Locations shall not exceed four (4) locations.
"Register" has the meaning set forth in Section 11.8 of the
Participation Agreement.
"Related Note" means, with respect to any Loan, the Note
therefor, and with respect to any Item of Equipment, any Note or Notes issued by
Lessor to finance or refinance in whole or in part the Debt Component of the
Acquisition Cost therefor.
"Remarketing Period" has the meaning set forth in Section
28.3.1 of the Lease Agreement.
"Replaced Certificate Holder" has the meaning set forth in
Section 12.13 of the Participation Agreement.
"Replaced Lender" has the meaning set forth in Section 12.13
of the Participation Agreement.
"Replacement Certificate Holder" has the meaning set forth in
Section 12.13 of the Participation Agreement.
"Replacement Equipment" has the meaning provided in Section
13(a) of the Lease Agreement.
"Replacement Lender" has the meaning set forth in Section
12.13 of the Participation Agreement.
"Reportable Event" means an event described in Section 4043(c)
of ERISA with respect to a Plan that is subject to Title IV of ERISA other than
those events as to which the 30-day notice period is waived under PBGC
Regulation Section 4043.
"Repurchase" means the use of the proceeds of the Guarantor
IPO to redeem certain of Guarantor's outstanding indebtedness.
"Repurchase Documents" means and include all agreements
governing, or relating to, the Repurchase and the Guarantor IPO.
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"Required Alteration" has the meaning set forth in Section 12
of the Lease Agreement.
"Required Lenders" means non-defaulting Lenders under the
Revolver, the sum of whose outstanding commitments (or after the termination
thereof, outstanding revolving loans and adjusted percentage of outstanding
swingline loans and letter of credit outstandings) represent an amount greater
than fifty percent of the sum of the adjusted total commitment (or after the
termination thereof, the sum of the then total outstanding revolving loans of
non-defaulting lenders, and the aggregate adjusted percentages of all
non-defaulting lenders of the total outstanding swingline loans and letter of
credit outstandings at such time).
"Residual Value" means, for any Item of Equipment, the nominal
dollar value as of the last day of the Basic Term estimated by the Appraiser of
such Item.
"Responsible Officer" means, with respect to any Person, the
chief executive officer, the president, the chief financial officer, the chief
operating officer, the treasurer or the vice president for financial or legal
affairs of such Person.
"Returns" has the meaning set forth in Section 2.3(k) of the
Participation Agreement.
"Revolver" means the Revolving Credit Facility dated as of May
__, 2000, between the Lessee, Deutsche Bank AG, New York Branch as
Administrative Agent (as defined therein) and the lenders that become a party
thereto, and if such agreement is no longer in effect, any other credit
agreement or loan agreement which provides Lessee directly or indirectly, with a
primary source of working capital borrowings and if no such credit agreement or
loan agreement is in effect, then such last credit agreement or loan agreement
as in effect immediately prior to its termination or expiration.
"Secured Obligations" has the meaning set forth in Section 7.1
of the Participation Agreement.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Security Documents" means the Participation Agreement, Lease
Agreement, Lease Agreement Supplements, Lessee Financing Statements and Lessor
Financing Statements.
"Senior Debt" means, with respect to any Person, such Person's
senior, unsecured, long-term debt.
"Senior Secured Consolidated Debt" means all Consolidated Debt
(including any Foreign Subsidiary Indebtedness) which is secured by any of the
assets of Guarantor and its Subsidiaries and which is not by its terms
contractually subordinated to any other Indebtedness of Guarantor and its
Subsidiaries.
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"Senior Secured Leverage Ratio" means, at any time, the ratio
of (i) the sum of (without duplication) (x) Senior Secured Consolidated Debt at
such time plus (y) an amount equal to the residual guaranty value (as determined
by the Administrative Agent acting in its reasonable discretion) in respect of
Operating Lease Obligations at such time to (ii) Consolidated EBITDAR for the
Test Period then most recently ended.
"Significant Subsidiary" means, as to any Person, all
Subsidiaries of such Person other than any Foreign Subsidiary whose assets
represent less than 10% of the total value of all assets owned by such Person
and its Subsidiaries.
"Sublease" has the meaning set forth in Section 17.1 of the
Lease Agreement.
"Sublessee" has the meaning set forth in Section 17.1 of the
Lease Agreement.
"Subsidiary" shall mean, as to any Person, (a) any corporation
more than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Subsidiaries of such Person and (b) any partnership, association, joint
venture or other entity in which such Person and/or one or more Subsidiaries of
such Person has more than a 50% equity interest at the time.
"Supplemental Payments" means all amounts, liabilities and
obligations which Lessee assumes or agrees to pay under the Operative Documents
to Lessor, any Affected Person or any other Person, including payments of
Casualty Loss Value, increased costs, Taxes and indemnities, but excluding Lease
Payments and Availability Fees.
"Tax Indemnitee" has the meaning set forth in Section 10.3.1
of the Participation Agreement.
"Tax Loss" has the meaning provided in Section 10.3.7 of the
Participation Agreement.
"Taxes" has the meaning set forth in Section 10.3.1 of the
Participation Agreement.
"Term" for each Item of Equipment means the period from and
including the first Funding Date therefor and ending on the Termination Date
therefor.
"Termination Date" for each Item of Equipment means the
earliest of (a) the last day of the Basic Term, or (b) if the Lessee exercises
its early transfer option pursuant to Section 28.4 of the Lease Agreement, the
applicable Payment Date so elected by such Lessee, (c) if Lessee is obligated to
purchase such Item in accordance with Section 28.5 of the Lease Agreement, the
first Business Day after the Non-Completion Date and (d) if such Item suffers an
Event of Loss, the Casualty Loss Value Payment Date therefor.
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"Test Period" means each period of four consecutive fiscal
quarters of Guarantor then last ended (in each case taken as one accounting
period).
"Total Interest Expense" means, for any period, the total
consolidated interest expense (net of interest income) of Guarantor and its
Consolidated Subsidiaries for such period (including, without limitation, the
interest expense associated with Capitalized Lease Obligations), provided that
(x) the amortization or write-off of debt issuance costs, commissions, fees and
expenses and (y) the amortization of original issue discounts (exclusive of any
pay-in-kind interest on the Lessee Senior Discount Notes) shall (in each case)
be excluded from Total Interest Expense to the extent same would otherwise have
been included therein.
"Trust" means the trust created by the Trust Agreement.
"Trust Agreement" means that certain Trust Agreement by and
between Trust Company and the Certificate Holders, dated as of May __, 2000.
"Trust Company" means Wilmington Trust Company, a Delaware
banking corporation, in its individual capacity.
"Trust Company Liabilities" has the meaning set forth in
Section 6.11 of the Trust Agreement.
"Trust Estate" means all of the estate, right, title and
interest of Lessor, solely in its capacity as Owner Trustee under the Trust
Agreement, and as Lessor in and to the Participation Agreement and the Lease
Agreement and all documents related hereto and to the Equipment, and all
proceeds thereof, including, without limitation, all Lease Payment, Availability
Fees, insurance proceeds and Supplemental Payments, but excluding any Excepted
Payments.
"Trustee" has the meaning set forth in the preamble to the
Trust Agreement.
"UCC" means the Uniform Commercial Code, as in effect in any
applicable jurisdiction.
"Unfunded Current Liability" of any Plan means the amount, if
any, by which the value of the accumulated plan benefits under the Plan
determined on a plan termination basis in accordance with actuarial assumptions
at such time consistent with those prescribed by the PBGC for purposes of
Section 4044 of ERISA, exceeds the fair market value of all plan assets
allocable to such liabilities under Title IV of ERISA (excluding any accrued but
unpaid contributions).
"U.S. Person" has the meaning set forth in Section 7701(a)(30)
of the Code.
"Voting Stock" of any Person as of any date means the capital
stock of such Person that is at the time entitled to vote in the election of the
Board of Directors of such Person.
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"Wholly-Owned Subsidiary" means, as to any Person, (a) any
corporation 100% of whose capital stock (other than director's qualifying
shares) is at the time owned by such Person and/or one or more Wholly-Owned
Subsidiaries of such Person and (b) any partnership, association, joint venture
or other entity in which such Person and/or one or more Wholly-Owned
Subsidiaries of such Person has a 100% equity interest at such time.
"Withholding Party" has the meaning set forth in Section
10.3.5 of the Participation Agreement.
"Withholdings" has the meaning provided in Section 10.3.5 of
the Participation Agreement.
When used in any Operative Document the words "this
Agreement", "herein", "hereunder", "hereof" or other like words mean and include
such Operative Document and each amendment and supplement thereto, and with
respect to the Lease Agreement, each Lease Agreement Supplement. All references
to sections, schedules and exhibits in any Operative Document are to sections,
schedules and exhibits in or to such Operative Document unless otherwise
specified.
Unless otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with United States generally accepted accounting principles as in
effect from time to time, applied on a basis consistent (except for changes
concurred in by Guarantor's independent public accountants) with the then most
recent audited consolidated financial statements of Guarantor and its
Consolidated Subsidiaries provided that, if either (i) Guarantor notifies
Administrative Agent that Guarantor wishes to eliminate the effect of any change
in generally accepted accounting principles on the operation of any covenant
contained in the Participation Agreement or (ii) the Administrative Agent
notifies Guarantor that it wishes to effect such an elimination, then
Guarantor's compliance with such covenant shall be determined on the basis of
generally accepted accounting principles in effect immediately before the
relevant change in generally accepted accounting principles becomes effective,
until either (A) such notice is withdrawn by the party giving such notice or (B)
such covenant is amended in a manner satisfactory to Guarantor and the
Administrative Agent to reflect such change in generally accepted accounting
principles. All words importing any gender shall be deemed to include the other
gender. All references to statutes are to be construed as including all
statutory provisions consolidating, amending or replacing the statute referred
to. Unless otherwise specified, references to agreements and other contractual
instruments shall be deemed to include all subsequent amendments, modifications
and supplements thereto.
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