EXHIBIT 10.20
FOURTH AMENDMENT TO LOAN AGREEMENT
This Fourth Amendment to Loan Agreement (this "Amendment"), dated as of
December 12, 2001, is made and entered into by and among Natural Gas Services
Group, Inc., a Colorado corporation ("Borrower"), Xxxxxxx X. Xxxxxxxx, Xxxxxxx
X. Xxxxxxx, CAV-RDV, LTD., Diamente Investments, L.P., Rotary Gas Systems, Inc.,
NGE Leasing, Inc. and Western National Bank, a national banking association
("Lender").
WITNESSETH:
WHEREAS, Borrower and Lender entered into that certain Loan Agreement,
dated as of September 15, 1999, as amended by that certain First Amendment and
Waiver to Loan Agreement, dated as of March 9, 2001, as further amended by that
certain Second Amendment to Loan Agreement, dated as of March 20, 2001, and as
further amended by that certain Third Amendment and Waiver to Loan Agreement,
dated as of July 25, 2001 (said Loan Agreement, as so amended, the "Agreement"),
providing for, among other things, loans to Borrower evidenced by (i) that
certain Revolving Line of Credit Promissory Note (the "Revolving Note"), dated
September 15, 1999, in the original principal amount of $750,000.00, (ii) that
certain Term A Promissory Note, dated September 15, 1999, in the original
principal amount of $1,500,000.00, and (iii) that certain Term B Promissory
Note, dated March 9, 2001, in the original principal amount of $700,000.00;
WHEREAS, Borrower has requested that Lender (i) renew and extend the
Revolving Note and (ii) provide an additional term loan to Borrower in the
amount of $750,000.00;
WHEREAS, Borrower desires to amend the Agreement to provide for the
renewal of the Revolving Note, the additional term loan and the other matters
set forth herein;
WHEREAS, the Lender is agreeable to the Borrower's requests but only
upon and subject to the terms and provisions which are hereinafter specified.
NOW THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, the parties hereto hereby agree as follows:
SECTION 1. DEFINED TERMS.
In addition to the terms defined in this Amendment, all terms defined
in the Agreement, and not otherwise defined herein, shall have the meaning given
them in the Agreement when used herein.
SECTION 2. AMENDMENTS TO LOAN AGREEMENT.
2.1 Amendment to Definitions. The definitions of "Consolidated Tangible
Net Worth", "Debt","Notes" and "Subordinated Notes" contained in Section 1.1 of
the Agreement are amended to read as follows:
"Consolidated Tangible Net Worth" means at a particular date
(i) the sum of (a) all amounts which would be included under
stockholders' equity, on a consolidated balance sheet of the
Borrower and its Subsidiaries, and (b) the Subordinated Notes
in the outstanding principal amount of $1,250,000.00, less
(ii) the sum of the aggregate book value of Consolidated
Intangible Assets, all determined on a consolidated basis.
"Debt" means, for the Borrower and any Subsidiary, at any
particular date, and without duplication, the sum at such date
of (i) all indebtedness of such person for borrowed money or
for the deferred purchase price of property or services (other
than current trade liabilities incurred in the ordinary course
of business and payable in accordance with customary
practices) for which such person is liable, contingently or
otherwise, as obligor, guarantor or otherwise, or in respect
of which such person otherwise assures a creditor against
loss; (ii) all obligations of such person under leases which
shall have been, or should have been, in accordance with
generally accepted accounting
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principles, recorded as capital leases in respect of which
such person is liable, contingently or otherwise, as obligor,
guarantor or otherwise, or in respect of which obligations
such person otherwise assures a creditor against loss, (iii)
unfunded vested benefits under each ERISA Plan; (iv) all
indebtedness and other liabilities secured by any Lien on any
property owned by such person even though such person has not
assumed or otherwise become liable for payment thereof; (v)
all obligations of such person in respect of letters of
credit, acceptances or similar obligations issued or created
for the account of such person; and (vi) indebtedness of such
person evidenced by a bond, debenture, note or similar
instrument, excluding, however, the Subordinated Notes in the
outstanding principal amount of $1,250,000.00.
"Notes" means the Term A Promissory Note, the Term B
Promissory Note, the Term C Promissory Note and the Revolving
Line of Credit Promissory Note, as further described in
Section 2.1 of this Agreement.
"Subordinated Notes" means the Series A 10% Subordinated Notes
due December 31, 2006 in the aggregate outstanding principal
amount of $1,250,000.00 issued by NGE Leasing, Inc.
2.2 Term Loans. Section 2.1(a) of the Agreement is amended by adding a
new third paragraph at the end of Section 2.1(a), which new paragraph reads in
full as follows:
The Borrower shall execute and deliver to the Lender the Term
C Promissory Note in the form of Exhibit A-2 hereto in the
original principal amount of $750,000.00 (the "Term C
Promissory Note"). Subject to and upon the terms and
conditions of this Agreement, the entire amount of the Term C
Promissory Note will be funded in a single Advance.
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The Term C Promissory Note shall be stated to mature five
years from the date of such note and shall bear interest on
the unpaid principal amount thereof from time to time
outstanding at the applicable interest rate per annum as
provided in the Term C Promissory Note. Principal and interest
on the Term C Promissory Note shall be payable in the manner
and on the dates specified therein.
2.3 Order of Application. Section 2.6 of the Agreement is amended to
read in full as follows:
2.6 Order of Application. Except as otherwise provided in the
Loan Papers, all payments and prepayments on the Obligations,
including proceeds from the exercise of any Rights of Lender
under the Loan Papers, shall be applied to the Obligations in
the following order: (i) first, to reasonable expenses for
which Lender shall not have been reimbursed under the Loan
Papers and then to all amounts to which Lender is entitled to
indemnification under the Loan Papers; (ii) to the accrued
interest on the Note being paid or prepaid; (iii) to the
principal of the Note being paid or prepaid and, with regard
to the Term A Promissory Note, the Term B Promissory Note and
the Term C Promissory Note, applied upon installments of most
remote maturity; and (iv) to the remaining Obligations.
2.4 Initial Advances. Section 3.1(a)(2) of the Agreement is amended to
read as follows:
(2) the Term A Promissory Note, the Term B Promissory Note and
the Term C Promissory Note.
2.5 Purpose of Loan. Section 4.11(a) of the Agreement is amended to
read in full as follows:
(a) with respect to loans made pursuant to and evidenced by
the Term A Promissory Note, for the
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repayment of the indebtedness described on Schedule II hereto,
and with respect to loans made pursuant to and evidenced by
the Term B Promissory Note and the Term C Promissory Note, for
repaying the outstanding principal and accrued and unpaid
interest on the Revolving Line of Credit Promissory Note.
2.6 New Exhibit. There is added to the Agreement a new Exhibit A-2
which is identical to Exhibit A-2 attached to this Amendment.
2.7 Consolidated Tangible Net Worth. Section 6.1(b) of the Agreement is
amended to read in full as follows:
(b) Consolidated Tangible Net Worth. Permit the Consolidated
Tangible Net Worth, as defined herein and calculated pursuant
to Exhibit M hereto, to be less than $3,300,000.00 as of the
end of each month.
2.8 Consolidated Debt to Consolidated Tangible Net Worth. Section
6.1(d) of the Agreement is amended to read in full as follows:
(d) Consolidated Debt to Consolidated Tangible Net Worth
Ratio. Permit the ratio of (i) Consolidated Debt to (ii)
Consolidated Tangible Net Worth, as such terms are defined
herein and calculated pursuant to Exhibit O hereof, to be more
than 3.75 to 1.00 as of the end of each month.
2.9. Exhibit M. Exhibit M to the Agreement is amended to read in full
as set forth in Exhibit M to this Amendment.
SECTION 3. REVOLVING LOANS.
Borrower's repayment of all outstanding principal and accrued and
unpaid interest on the Revolving Note shall not be in extinguishment or
termination of the Revolving Note, and Borrower may continue to borrow, prepay
and reborrow under such note in accordance with and subject to the terms and
conditions of the Agreement and such Revolving Note.
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SECTION 4. REPRESENTATIONS AND WARRANTIES.
To induce Lender to enter into this Amendment, Borrower hereby
represents and warrants to the Lender as follows:
(a) Borrower has the corporate power, authority and legal right to make
and deliver this Amendment and to perform its obligations under the Agreement,
as amended hereby, and has taken all action necessary to authorize the execution
and delivery of this Amendment and the performance of the Agreement as amended
hereby.
(b) This Amendment has been duly executed and delivered on behalf of
Borrower by its duly authorized officer, and this Amendment constitutes a legal,
valid and binding obligation of Borrower, enforceable in accordance with its
terms, except as the enforceability thereof may be limited by applicable
bankruptcy, reorganization, insolvency, moratorium or other laws affecting
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
(c) The proceeds of the loans to be made to Borrower on the date hereof
shall be used by Borrower to repay and refinance all amounts outstanding under
the Revolving Note.
(d) The execution, delivery and performance by Borrower of this
Amendment do not violate or constitute a default under any provision of
applicable law or any agreement binding upon Borrower or the Subsidiaries of
Borrower or result in the creation or imposition of any Lien upon any of the
assets of Borrower or the Subsidiaries of Borrower, except Liens expressly
permitted by the Agreement.
(e) the representations and warranties contained in Article IV of the
Agreement are true and correct on and as of the date hereof as though made on
and as of the hereof.
(f) no Event of Default has occurred and is continuing (before and
after giving effect to this Amendment).
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SECTION 5. RATIFICATION OF SECURITY DOCUMENTS.
Borrower and each Subsidiary (other than Natural Gas Acquisition
Corporation and Hy-Bon Rotary Compression, LLC) hereby (a) ratify and confirm in
all respects (i) the First Amended and Restated Stock Pledge Agreement, dated as
of Xxxxx 0, 0000, (xx) each First Amended and Restated Security Agreement, dated
as of March 9, 2001, and (iii) each Guaranty Agreement, dated as of March 9,
2001 (as any of the same have been amended or restated), to which it is a party,
and (b) acknowledge, understand and agree that (i) all such pledge agreements,
security agreements and guarantees are and shall continue to remain in full
force and effect in accordance with the terms thereof as if reexecuted as of the
date of this Amendment, and that (ii) payment of the Term C Promissory Note is
secured by all such agreements. The amendments contemplated hereby shall not
limit or impair any Bank Liens securing the Obligations, each of which are
hereby ratified, affirmed and extended to secure the Obligations as renewed and
increased pursuant hereto.
SECTION 6. RATIFICATION OF LIMITED GUARANTY AGREEMENTS.
Each of Xxxxxxx X. Xxxxxxxx, Xxxxxxx X. Xxxxxxx, CAV-RDV, LTD. and
Diamente Investments, L.P. (individually, a "Limited Guarantor") executed a
Limited Guaranty Agreement, dated as of March 9, 2001 (each such Limited
Guaranty Agreement being referred to herein as a "Limited Guaranty") in favor of
the Lender. Each Limited Guarantor guaranteed to the Lender the prompt and full
payment of the "Guaranteed Indebtedness" (as defined in each Limited Guaranty).
Each Limited Guarantor acknowledges and agrees that this Amendment and the
transactions contemplated hereby shall not serve as a waiver, modification,
impairment or release of any of such Limited Guarantor's obligations under his
or its Limited Guaranty, all of which are and shall remain in full force and
effect. Each Limited Guarantor reaffirms in all respects the Limited Guaranty to
which such Limited Guarantor is a party, together with all of such Limited
Guarantor's obligations as set forth in his or its Limited Guaranty. Each
Limited Guarantor acknowledges and agrees that there are no claims or offsets
against, or defenses or counterclaims to, the terms and provisions of and the
obligations created and evidenced by such Limited Guarantor's Limited Guaranty.
Each Limited Guarantor acknowledges and consents to the execution, delivery, and
performance of this Amendment by the Lender and the Borrower and the
transactions contemplated hereby, in all respects.
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SECTION 7. CONDITIONS PRECEDENT.
This Amendment, and the Lender's commitment to make additional loans to
the Borrower evidenced by the Term C Promissory Note, shall be effective only
upon satisfaction of the following conditions precedent:
(a) Lender shall have received counterparts of this Amendment duly
executed and delivered by the Borrower and Guarantors;
(b) Lender shall have received the Term C Promissory Note in the form
of Exhibit A-2 hereto, executed and delivered by a duly authorized officer of
Borrower;
(c) Lender shall have received the Revolving Line of Credit Promissory
Note in the form of Exhibit B hereto, executed and delivered by a duly
authorized officer of Borrower;
(d) no Event of Default shall have occurred and be continuing as of the
date of this Amendment, both before and after giving effect to this Amendment;
(e) Lender shall have received a copy of the resolutions, in form and
substance satisfactory to Lender, of the Board of Directors of Borrower
authorizing (i) the execution, delivery and performance of this Amendment, the
Term C Promissory Note, the Revolving Line of Credit Promissory Note and the
other documents to be entered into in connection herewith to which it is a
party, and (ii) the borrowings contemplated hereby, certified by its Secretary
or Assistant Secretary, which certificate shall state that the resolutions
thereby certified have not been amended, modified, revoked or rescinded as of
the date of such certificate and shall be in form and substance satisfactory to
Lender;
(f) Lender shall have received a copy of the resolutions, in form and
substance satisfactory to Lender, of the Board of Directors of Rotary Gas
Systems, Inc. authorizing the execution, delivery and performance of this
Amendment, certified by its Secretary or Assistant Secretary, which
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certificate shall state that the resolutions thereby certified have not been
amended, modified, revoked or rescinded as of the date of such certificate and
shall be in form and substance satisfactory to Lender; and
(g) Lender shall have received a copy of the resolutions, in form and
substance satisfactory to Lender, of the Board of Directors of NGE Leasing, Inc.
authorizing the execution, delivery and performance of this Amendment, certified
by its Secretary or Assistant Secretary, which certificate shall state that the
resolutions thereby certified have not been amended, modified, revoked or
rescinded as of the date of such certificate and shall be in form and substance
satisfactory to Lender;
(h) Lender shall have received a copy of the resolutions, in form and
substance satisfactory to Lender, of the Board of Directors, General Partner or
other governing bodies of each of Diamente Investments, L.P. and CAV-RDV, LTD.
authorizing the execution, delivery and performance of this Amendment, certified
by its Secretary or Assistant Secretary, which certificate shall state that the
resolutions thereby certified have not been amended, modified, revoked or
rescinded as of the date of such certificate and shall be in form and substance
satisfactory to Lender; and
(i) Lender shall have received such other agreements, documents or
instruments as Lender may require.
SECTION 8. NO OTHER AMENDMENTS; RATIFICATION OF LOAN PAPERS.
Except as expressly amended and modified by this Amendment, all of the
provisions and covenants of the Agreement, all exhibits thereto and all other
Loan Papers (as any of the same have been amended) are and shall continue to
remain in full force and effect in accordance with the terms thereof and are
hereby ratified and confirmed by Borrower, the Subsidiaries parties hereto and
the Limited Guarantors as of the date of this Amendment as if the Agreement and
such other Loan Papers were reexecuted as of the date of this Amendment.
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SECTION 9. NO ADDITIONAL COMMITMENTS.
Borrower, Subsidiaries and Guarantors understand, acknowledge and agree
that Lender has not made any commitments, and has no obligation, to renew,
extend, refinance, increase or otherwise modify any of the Notes after the
respective maturity date of each such Note.
SECTION 10. COUNTERPARTS.
This Amendment may be executed by one or more of the parties hereto in
any number of separate counterparts and all of said counterparts taken together
shall be deemed to constitute one and the same instrument.
SECTION 11. GOVERNING LAW.
THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
SECTION 12. GLOBAL AMENDMENT OF LOAN PAPERS.
All of the Loan Papers are hereby modified wherever necessary, and even
though not specifically addressed herein, so as to conform to the amendments to
the Agreement as set forth herein, and Borrower, the Subsidiaries and Guarantors
covenant to observe, comply with and perform each of the terms and provisions of
the Loan Papers to which they are parties, as modified hereby. Each Loan Paper
to which Borrower and the Subsidiaries or any Guarantor is a party is hereby
amended so that any reference in each such Loan Paper to the Agreement shall
mean a reference to the Agreement as amended hereby.
SECTION 13. RELEASE.
The Borrower, Subsidiaries and Guarantors hereby release the Lender and
its officers, directors, shareholders, agents, employees, attorneys, agents and
representatives (collectively, the "Released Parties") from any
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and all (i) damages, claims, liabilities, causes of action, contracts or
controversies of any type, kind, nature, description or character; (ii) debts,
accounts, sums of money, compensation, losses, costs or expense; (iii) breaches
of contract, duty or any other type of relationship (iv) acts of omission,
negligence, misfeasance or malfeasance; and (v) commitments or promises of any
type made prior to the date hereof (the matters described in the preceding
clauses (i) through (v), inclusive, being herein called the "Claims", whether or
not the Claims are now known, unknown, or unforeseen, or are liquidated or
unliquidated, which in any manner arise out of, or relate to, the Notes, this
Amendment, the Agreement or otherwise arising out of facts or events existing or
occurring prior to the date hereof; including, without limitation, any Claims of
the Borrower relating to: (a) the negotiation of the terms of the Term C
Promissory Note, this Amendment or the Agreement; or (b) any action or inaction
of any of the Released Parties with respect to the Notes, this Amendment or the
Agreement.
SECTION 14. FINAL AGREEMENT.
THE AGREEMENT, AS AMENDED BY THIS AMENDMENT, AND THE OTHER LOAN PAPERS
REPRESENT THE ENTIRE AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed and delivered by their respective duly authorized officers as of the
date and year first above written.
BORROWER:
NATURAL GAS SERVICES GROUP, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------------
Xxxxxxx X. Xxxxxxxx, President
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LENDER:
WESTERN NATIONAL BANK
By: /s/ Xxxxx X. Xxxxxx
----------------------------------
Xxxxx X. Xxxxxx, Executive Vice
President
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GUARANTORS:
/s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxxxx
/s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxxx
CAV-RDV, LTD.
By: /s/ Xxxx Xxxxxxxx
-----------------------------------
Xxxx Xxxxxxxx, General
Partner
DIAMENTE INVESTMENTS, L.P.
By: Diamente Management, LLC, its
general partner
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------
Xxxxxxx X. Xxxxxxxx,
President
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SUBSIDIARY GUARANTORS:
ROTARY GAS SYSTEMS, INC.
By: /s/ Xxxxx Xxxxxx
---------------------------------
Xxxxx Xxxxxx, President
NGE LEASING, INC.
By: /s/ Xxxxxxx Xxxxxxxx
---------------------------------
Name: Xxxxxxx Xxxxxxxx
---------------------
Title: President
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FIFTH AMENDMENT TO LOAN AGREEMENT
This Fifth Amendment to Loan Agreement (this "Amendment"), dated as of
April 3, 2002, is made and entered into by and among Natural Gas Services Group,
Inc., a Colorado corporation ("Borrower"), Xxxxxxx X. Xxxxxxxx, Xxxxxxx X.
Xxxxxxx, CAV-RDV, LTD., Diamente Investments, L.P., Rotary Gas Systems, Inc.,
NGE Leasing, Inc. and Western National Bank, a national banking association
("Lender").
WITNESSETH:
WHEREAS, Borrower and Lender entered into that certain Loan Agreement,
dated as of September 15, 1999, as amended by that certain First Amendment and
Waiver to Loan Agreement, dated as of March 9, 2001, as further amended by that
certain Second Amendment to Loan Agreement, dated as of March 20, 2001, as
further amended by that certain Third Amendment and Waiver to Loan Agreement,
dated as of July 25, 2001, and as further amended by that certain Fourth
Amendment to Loan Agreement, dated as of December 12, 2001 (said Loan Agreement,
as so amended, the "Agreement"), providing for, among other things, loans to
Borrower evidenced by (i) that certain Revolving Line of Credit Promissory Note
(the "Revolving Note"), dated December 12, 2001, in the original principal
amount of $750,000.00, (ii) that certain Term A Promissory Note, dated September
15, 1999, in the original principal amount of $1,500,000.00 (the "Term A
Promissory Note"), (iii) that certain Term B Promissory Note, dated March 9,
2001, in the original principal amount of $700,000.00 (the "Term B Promissory
Note"), and (iv) that certain Term C Promissory Note, dated December 12, 2001,
in the original principal amount of $750,000.00 (the "Term C Promissory Note").
WHEREAS, Borrower has requested that Lender (i) renew, rearrange and
consolidate the outstanding indebtedness evidenced by the Term A Promissory
Note, the Term B Promissory Note and the Term C Promissory Note, (ii) provide an
additional term loan to Borrower in the amount of $1,853,340.00 and (iii) renew
and extend the Revolving Note;
WHEREAS, Borrower desires to amend the Agreement to provide for (i) the
renewal, rearrangement and consolidation of the Term A Promissory Note, Term B
Promissory Note and the Term C Promissory Note, (ii) the additional term loan,
(iii) the renewal and extension of the Revolving Note, and (iv) the other
matters set forth herein;
WHEREAS, the Lender is agreeable to the Borrower's requests but only
upon and subject to the terms and provisions which are hereinafter specified.
NOW THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, the parties hereto hereby agree as follows:
SECTION 1. DEFINED TERMS.
In addition to the terms defined in this Amendment, all terms defined
in the Agreement, and not otherwise defined herein, shall have the meaning given
them in the Agreement when used herein.
SECTION 2. AMENDMENTS TO LOAN AGREEMENT.
2.1 Amendment to Definitions. The definitions of "Notes" contained in
Section 1.1 of the Agreement is amended to read as follows:
"Notes" means the Consolidated Term Promissory Note, the
Multiple Advance Term Promissory Note, and the Revolving Line
of Credit Promissory Note, as further described in Section 2.1
of this Agreement, as any of the same may be renewed,
extended, increased or otherwise modified from time to time.
2.2 Term Loans. Section 2.1(a) of the Agreement is amended to read in
it entirety as follows:
The Borrower shall execute and deliver to the Lender the
Consolidated Term Promissory Note in the form of Exhibit A-3
hereto in the original principal amount of $2,146,660.93 (the
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"Consolidated Term Promissory Note"). Principal and interest
on the Consolidated Term Promissory Note will be payable at
the rate, in the manner and on the dates specified therein.
The Borrower shall also execute and deliver to the Lender the
Multiple Advance Term Promissory Note in the form of Exhibit
A-4 hereto in the original principal amount of $1,853,340.00
(the "Multiple Advance Term Promissory Note"). Subject to and
upon the terms and conditions of this Agreement and the
Multiple Advance Term Promissory Note, the Borrower may, at
any time and from time to time until maturity of the Multiple
Advance Term Promissory Note, request one or more Advances and
borrow (without the ability to reborrow amounts prepaid under
the Multiple Advance Term Promissory Note) under the Multiple
Advance Term Promissory Note; provided, however, the
cumulative aggregate principal amount of all Advances under
the Multiple Advance Term Promissory Note shall not exceed
$1,853,340.00. The Multiple Advance Term Promissory Note,
including the loans evidenced thereby, is a multiple advance
term loan facility and shall not be construed as a revolving
line of credit as reborrowings are not permitted. Principal
and interest on the Multiple Advance Term Promissory Note will
be payable at the rate, in the manner and on the dates
specified therein.
2.3 Procedure for Borrowings. Section 2.2(a) of the Agreement is
amended to read as follows:
(a) At the time of the initial Advance under the Multiple
Advance Term Promissory Note or the Revolving Line of Credit
Promissory Note, as the case may be, the conditions set forth
in Section 3.1 of this Agreement shall have been satisfied
and, with respect to each Subsequent Advance under the
Revolving Line of Credit Promissory Note or the
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Multiple Advance Term Promissory Note, the conditions set
forth in Section 3.2 hereof shall have been satisfied at the
time of each such Subsequent Advance. At the time of each
request for a Subsequent Advance under the Revolving Line of
Credit Promissory Note or the Multiple Advance Term Promissory
Note, the Borrower shall simultaneously furnish to the Lender
a written notice of borrowing (dated as of the date of the
request for such Subsequent Advance and otherwise being in
substantially the form attached hereto as Exhibit C)
confirming (i) the amount of the requested Subsequent Advance
and (ii) the absence of any Event of Default at the date of
such request. Each request for a Subsequent Advance under the
Revolving Line of Credit Promissory Note must be in the
minimum amount of $50,000.00 or the unadvanced portion of the
Revolving Line of Credit Promissory Note, whichever is less.
Each request for a Subsequent Advance under the Multiple
Advance Term Promissory Note must be in the minimum amount of
$50,000.00 or the unadvanced portion of the Multiple Advance
Term Promissory Note, whichever is less. Assuming the
satisfaction of the conditions set forth in this Section 2.2,
requests for Subsequent Advances under the Revolving Line of
Credit Promissory Note and the Multiple Advance Term
Promissory Note will be funded on the same Business Day that
Lender receives Borrower's request for each such Subsequent
Advance; provided that Borrower's request is received by the
Lender prior to 12:00 noon on the date of any such request.
2.4 Order of Application. Section 2.6 of the Agreement is amended to
read in full as follows:
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2.6 Order of Application. Except as otherwise provided in the
Loan Papers, all payments and prepayments on the Obligations,
including proceeds from the exercise of any Rights of Lender
under the Loan Papers, shall be applied to the Obligations in
the following order: (i) first, to reasonable expenses for
which Lender shall not have been reimbursed under the Loan
Papers and then to all amounts to which Lender is entitled to
indemnification under the Loan Papers; (ii) to the accrued
interest on the Note being paid or prepaid; (iii) to the
principal of the Note being paid or prepaid and, with regard
to the Consolidated Term Promissory Note, applied upon
installments of most remote maturity; and (iv) to the
remaining Obligations.
2.5 Purpose of Loan. Section 4.11(a) of the Agreement is amended to
read in full as follows:
(a) with respect to loans made pursuant to and evidenced by
the Consolidated Term Promissory Note, in renewal,
rearrangement and consolidation of the Term A Promissory Note,
Term B Promissory Note and the Term C Promissory Note, and
with respect to loans made pursuant to and evidenced by the
Multiple Advance Term Promissory Note for the purchase of
equipment to be used in the construction of natural gas
compressors and for purchasing natural gas compressors.
2.6 Consolidated Debt to Consolidated Tangible Net Worth. Section
6.1(d) of the Agreement is amended to read in full as follows:
(d) Consolidated Debt to Consolidated Tangible Net Worth
Ratio. Permit the ratio of (i) Consolidated Debt to (ii)
Consolidated Tangible Net Worth, as such terms are defined
herein and calculated pursuant to Exhibit O hereof, to be more
than 3.75 to 1.00 as of the end of each month through and
including December 31, 2002, or more
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than 3.00 to 1.00 as of the end of each month after December
31, 2002.
2.7 New Exhibit. There is added to the Agreement a new Exhibit A-3
which is identical to Exhibit A-3 attached to this Amendment, and a new Exhibit
A-4 which is identical to Exhibit A-4 attached to this Amendment.
SECTION 3. REPRESENTATIONS AND WARRANTIES.
To induce Lender to enter into this Amendment, Borrower hereby
represents and warrants to the Lender as follows:
(a) Borrower has the corporate power, authority and legal right (i) to
make and deliver this Amendment, the Consolidated Term Promissory Note and the
Multiple Advance Term Promissory Note; (ii) to perform its obligations under the
Notes and the Agreement, as amended hereby; and (iii) Borrower has taken all
action necessary to authorize the execution and delivery of the Consolidated
Term Promissory Note, the Multiple Advance Term Promissory Note, this Amendment
and the performance of the Agreement, as amended hereby.
(b) This Amendment, the Consolidated Term Promissory Note, and the
Multiple Advance Term Promissory Note have been duly executed and delivered on
behalf of Borrower by its duly authorized officer, and this Amendment, the
Consolidated Term Promissory Note and the Multiple Advance Term Promissory Note
each constitute a legal, valid and binding obligation of Borrower, enforceable
in accordance with its terms, except as the enforceability thereof may be
limited by applicable bankruptcy, reorganization, insolvency, moratorium or
other laws affecting creditors' rights generally and by general equitable
principles (whether enforcement is sought by proceedings in equity or at law).
(c) The execution, delivery and performance by Borrower of this
Amendment and the transactions contemplated hereby do not violate or constitute
a default under any provision of applicable law or any agreement binding upon
Borrower or the Subsidiaries of Borrower or result in the creation or imposition
of any Lien upon any of the assets of Borrower or the Subsidiaries of Borrower,
except Liens expressly permitted by the Agreement.
-6-
(d) the representations and warranties contained in Article IV of the
Agreement are true and correct on and as of the date hereof as though made on
and as of the hereof.
(e) no Event of Default has occurred and is continuing (before and
after giving effect to this Amendment).
SECTION 4. RATIFICATION OF SECURITY DOCUMENTS.
Borrower and each Subsidiary (other than Natural Gas Acquisition
Corporation and Hy-Bon Rotary Compression, LLC) hereby (a) ratify and confirm in
all respects (i) the First Amended and Restated Stock Pledge Agreement, dated as
of Xxxxx 0, 0000, (xx) each First Amended and Restated Security Agreement, dated
as of March 9, 2001, and (iii) each Guaranty Agreement, dated as of March 9,
2001 (as any of the same have been amended or restated), to which it is a party,
and (b) acknowledge, understand and agree that (i) all such pledge agreements,
security agreements and guarantees are and shall continue to remain in full
force and effect in accordance with the terms thereof as if reexecuted as of the
date of this Amendment, and that (ii) payment of the Consolidated Term
Promissory Note, the Multiple Advance Term Promissory Note and the Revolving
Note is secured by all such agreements. The amendments contemplated hereby shall
not limit or impair any Bank Liens securing the Obligations, each of which are
hereby ratified, affirmed and extended to secure the Obligations as renewed and
consolidated and increased pursuant hereto.
SECTION 5. CONDITIONS PRECEDENT.
This Amendment and the Lender's commitment to renew, rearrange and
consolidate the Term A Promissory Note, the Term B Promissory Note and the Term
C Promissory Note, and the Lender's commitment to make additional loans to the
Borrower evidenced by the Multiple Advance Term Promissory Note, shall be
effective only upon satisfaction of the following conditions precedent:
(a) Lender shall have received counterparts of this Amendment duly
executed and delivered by the Borrower and Guarantors;
-7-
(b) Lender shall have received the Consolidated Term Promissory Note in
the form of Exhibit A-3 hereto, executed and delivered by a duly authorized
officer of Borrower;
(c) Lender shall have received the Multiple Advance Term Promissory
Note in the form of Exhibit A-4 hereto, executed and delivered by a duly
authorized officer of Borrower;
(d) Lender shall have received the Revolving Line of Credit Promissory
Note in the form of Exhibit B hereto, executed and delivered by a duly
authorized officer of Borrower;
(e) no Event of Default shall have occurred and be continuing as of the
date of this Amendment, both before and after giving effect to this Amendment;
(f) Lender shall have received a copy of the resolutions, in form and
substance satisfactory to Lender, of the Board of Directors of Borrower
authorizing (i) the execution, delivery and performance of this Amendment, the
Consolidated Term Promissory Note, the Multiple Advance Term Promissory Note and
the other documents to be entered into in connection herewith to which it is a
party, and (ii) the borrowings contemplated hereby, certified by its Secretary
or Assistant Secretary, which certificate shall state that the resolutions
thereby certified have not been amended, modified, revoked or rescinded as of
the date of such certificate and shall be in form and substance satisfactory to
Lender;
(g) Lender shall have received a copy of the resolutions, in form and
substance satisfactory to Lender, of the Board of Directors of Rotary Gas
Systems, Inc. authorizing the execution, delivery and performance of this
Amendment, certified by its Secretary or Assistant Secretary, which certificate
shall state that the resolutions thereby certified have not been amended,
modified, revoked or rescinded as of the date of such certificate and shall be
in form and substance satisfactory to Lender; and
(h) Lender shall have received a copy of the resolutions, in form and
substance satisfactory to Lender, of the Board of Directors of NGE Leasing, Inc.
authorizing the execution, delivery and performance of this Amendment, certified
by its Secretary or Assistant Secretary, which
-8-
certificate shall state that the resolutions thereby certified have not been
amended, modified, revoked or rescinded as of the date of such certificate and
shall be in form and substance satisfactory to Lender;
(i) Lender shall have received a copy of the resolutions, in form and
substance satisfactory to Lender, of the Board of Directors, General Partner or
other governing bodies of each of Diamente Investments, L.P. and CAV-RDV, LTD.
authorizing the execution, delivery and performance of this Amendment, certified
by its Secretary or Assistant Secretary or other authorized officer or partner,
which certificate shall state that the resolutions thereby certified have not
been amended, modified, revoked or rescinded as of the date of such certificate
and shall be in form and substance satisfactory to Lender;
(j) Lender shall have received from each of Xxxxxxx X. Xxxxxxx, Xxxxxxx
X. Xxxxx, CAV-RDV, Ltd. and Xxxxxxx X. Xxxxxxxx and Diamente Investments, L.P. a
Limited Guaranty Agreement in form and substance satisfactory to Lender in its
sole discretion; and
(k) Lender shall have received such other agreements, documents or
instruments as Lender may require.
SECTION 6. NO OTHER AMENDMENTS; RATIFICATION OF LOAN PAPERS.
Except as expressly amended and modified by this Amendment, all of the
provisions and covenants of the Agreement, all exhibits thereto and all other
Loan Papers (as any of the same have been amended) are and shall continue to
remain in full force and effect in accordance with the terms thereof and are
hereby ratified and confirmed by Borrower, the Subsidiaries parties hereto and
the Limited Guarantors as of the date of this Amendment as if the Agreement and
such other Loan Papers were reexecuted as of the date of this Amendment.
SECTION 7. NO ADDITIONAL COMMITMENTS.
Borrower, Subsidiaries and Guarantors understand, acknowledge and agree
that Lender has not made any commitments, and has no obligation, to renew,
extend, refinance, increase or otherwise modify any of the Notes after the
respective maturity date of each such Note.
-9-
SECTION 8. COUNTERPARTS.
This Amendment may be executed by one or more of the parties hereto in
any number of separate counterparts and all of said counterparts taken together
shall be deemed to constitute one and the same instrument.
SECTION 9. GOVERNING LAW.
THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
SECTION 10. GLOBAL AMENDMENT OF LOAN PAPERS.
All of the Loan Papers are hereby modified wherever necessary, and even
though not specifically addressed herein, so as to conform to the amendments to
the Agreement as set forth herein, and Borrower, the Subsidiaries and Guarantors
covenant to observe, comply with and perform each of the terms and provisions of
the Loan Papers to which they are parties, as modified hereby. Each Loan Paper
to which Borrower and the Subsidiaries or any Guarantor is a party is hereby
amended so that any reference in each such Loan Paper to the Agreement shall
mean a reference to the Agreement as amended hereby. Without limiting the
foregoing, each and any reference to the "Term A Promissory Note", "Term B
Promissory Note" and the "Term C Promissory Note" in the Agreement as in effect
prior to the date of this Amendment or any collective reference to such
promissory notes shall mean and refer to the Consolidated Term Promissory Note.
SECTION 11. RELEASE.
The Borrower, Subsidiaries and Guarantors hereby release the Lender and
its officers, directors, shareholders, agents, employees, attorneys, agents and
representatives (collectively, the "Released Parties") from any and all (i)
damages, claims, liabilities, causes of action, contracts or controversies of
any type, kind, nature, description or character; (ii) debts,
-10-
accounts, sums of money, compensation, losses, costs or expense; (iii) breaches
of contract, duty or any other type of relationship (iv) acts of omission,
negligence, misfeasance or malfeasance; and (v) commitments or promises of any
type made prior to the date hereof (the matters described in the preceding
clauses (i) through (v), inclusive, being herein called the "Claims", whether or
not the Claims are now known, unknown, or unforeseen, or are liquidated or
unliquidated, which in any manner arise out of, or relate to, the Notes, this
Amendment, the Agreement or otherwise arising out of facts or events existing or
occurring prior to the date hereof; including, without limitation, any Claims of
the Borrower relating to: (a) the negotiation of the terms of the Consolidated
Term Promissory Note, the Multiple Advance Term Promissory Note, this Amendment
or the Agreement; or (b) any action or inaction of any of the Released Parties
with respect to the Notes, this Amendment or the Agreement.
SECTION 12. FINAL AGREEMENT.
THE AGREEMENT, AS AMENDED BY THIS AMENDMENT, AND THE OTHER LOAN PAPERS
REPRESENT THE ENTIRE AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed and delivered by their respective duly authorized officers as of the
date and year first above written.
BORROWER:
NATURAL GAS SERVICES GROUP, INC.
By: /s/ Xxxxx Xxxxxx
----------------------------------
Xxxxx Xxxxxx, President
-11-
LENDER:
WESTERN NATIONAL BANK
By: /s/ Xxxxx X. Xxxxxx
----------------------------------
Xxxxx X. Xxxxxx, Executive Vice
President
-12-
LIMITED GUARANTORS:
/s/ Xxxxxxx X. Xxxxxxx
-----------------------------------------
Xxxxxxx X. Xxxxxxx, Individually
CAV-RDV, LTD.
By: /s/ Xxxx Xxxxxxxx
-----------------------------------------
Xxxx Xxxxxxxx, General Partner
DIAMENTE INVESTMENTS, L.P.
By: Diamente Management, LLC, its
general partner
By: /s/ Xxxxxxx Xxxxxxxx
-----------------------------------------
Xxxxxxx X. Xxxxxxxx, President
/s/ Xxxxxxx Xxxxxxxx
-----------------------------------------
Xxxxxxx X. Xxxxxxxx, Individually
/s/ Xxxxxxx X. Xxxxx
-----------------------------------------
Xxxxxxx X. Xxxxx, Individually
-13-
SUBSIDIARY GUARANTORS:
ROTARY GAS SYSTEMS, INC.
By: /s/ Xxxxx Xxxxxx
-----------------------------------------
Xxxxx Xxxxxx, President
NGE LEASING, INC.
By: /s/ Xxxxxxx Xxxxxxxx
-----------------------------------------
Xxxxxxx X. Xxxxxxxx, President
-14-
EXHIBIT A-3
CONSOLIDATED TERM PROMISSORY NOTE
$2,146,660.93 April 3, 2002
FOR VALUE RECEIVED, in the manner, on the dates and in the amounts
herein stipulated, NATURAL GAS SERVICES GROUP, INC., a Colorado corporation
("Borrower"), hereby promises and agrees to pay to the order of WESTERN NATIONAL
BANK, a national banking association ("Lender"), in Midland, Midland County,
Texas, the principal sum of Two Million One Hundred Forty Six Thousand Six
Hundred Sixty and 93/100 Dollars ($2,146,660.93) in lawful money of the United
States of America, which shall be legal tender in payment of all debts and dues,
public and private, at the time of payment, together with interest on the unpaid
principal amount hereof from time to time outstanding until maturity at a rate
per annum which shall from day to day be equal to the lesser of (a) one percent
(1.00%) over the Prime Rate (the "Established Rate") in effect from day to day
(calculated on the basis of actual days elapsed, but computed as if each
calendar year consisted of 360 days) or (b) the Highest Lawful Rate. Each change
in the rate of interest charged under this Consolidated Term Promissory Note
(this "Note") shall, subject to the terms hereof, become effective, without
notice to Borrower, upon the effective date of each change in the Prime Rate or
the Highest Lawful Rate, as the case may be. Notwithstanding the foregoing, if
at any time the Established Rate exceeds the Highest Lawful Rate, the rate of
interest on this Note shall be limited to the Highest Lawful Rate, but any
subsequent reductions in the Established Rate shall not reduce the rate of
interest hereon below the Highest Lawful Rate until the total amount of interest
accrued hereon approximately equals the amount of interest which would have
accrued hereon if the Established Rate had at all times been in effect. In the
event that at maturity (stated or by acceleration), or at final payment of this
Note, the total amount of interest paid or accrued hereon is less than the
amount of interest which would have accrued if the Established Rate had at all
times been in effect, then, at such time and to the extent permitted by
applicable laws, Borrower shall pay to Lender an amount equal to the difference
between (a) the lesser of the amount of interest which would
have accrued if the Established Rate had at all times been in effect or the
amount of interest which would have accrued if the Highest Lawful Rate had at
all times been in effect, and (b) the amount of interest actually paid or
accrued on this Note. Interest calculations may be made ten days prior to any
interest install ment due date under this Note, in which event, if there is an
adjustment in the interest rate in accordance with the terms hereof during such
ten- day period, then Borrower shall subsequently, on demand, pay to Lender any
underpayment, or Lender shall pay to Borrower, any overpayment, as the case may
be, as a result of any adjustment during such ten-day period.
This Note is given in renewal, rearrangement and consolidation, but not
extinguishment or novation, of the Term A Promissory Note, Term B Promissory
Note and the Term C Promissory Note, and is the Consolidated Term Promissory
Note referred to in the Loan Agreement, dated as of September 15, 1999, as
amended by that certain First Amendment and Waiver to Loan Agreement, dated as
of March 9, 2001, as further amended by that certain Second Amendment to Loan
Agreement, dated as of March 20, 2001, as further amended by that certain Third
Amendment and Waiver to Loan Agreement, dated as of July 25, 2001, as further
amended by that certain Fourth Amendment to Loan Agreement, dated as of December
12, 2001, and as further amended by that certain Fifth Amendment to Loan
Agreement, dated as of April 3, 2002 (said Loan Agreement, as amended, and as
the same may be further amended, supplemented or otherwise modified from time to
time, the "Loan Agreement"), by and between Borrower and Lender, and is subject
to the terms and conditions thereof. Reference is made to the Loan Agreement for
provisions for the disbursement of funds hereunder and for a further statement
of the rights, remedies, powers, privileges, benefits, duties and obligations of
Borrower and Lender under the Loan Agreement and this Note. Terms used herein
which are defined in the Loan Agreement shall have such defined meanings unless
otherwise defined herein. The holder of this Note shall be entitled to the
benefits of the Loan Agreement.
The principal of this Note shall be due and payable (a) in forty- seven
consecutive monthly installments of $45,746.00 each, with the first such
installment being due and payable on April 15, 2002, and a like installment
being due and payable on the fifteenth day of each succeeding month to and
including February 15, 2006; and (b) one final installment in an amount equal to
all remaining unpaid principal and accrued and unpaid interest on this Note
shall be due and payable on March 15, 2006.
-2-
Interest, computed on the unpaid balance of this Note, shall be due and payable
as it accrues, on the same dates as, but in addition to, the installments of
principal. All payments and prepayments shall be applied first to accrued and
unpaid interest, and the balance to principal. Partial prepayments of principal
shall be applied to the installments of principal thereof in the inverse order
of their maturity. All of the past due principal and accrued interest hereunder
shall, at the option of Lender, bear interest from maturity (stated or by
acceleration) until paid at a rate per annum equal to the Highest Lawful Rate.
This Note is secured as provided in the Loan Agreement and in the other
Loan Papers, to which reference is hereby made for a description of the
properties and assets in which a lien and security interest has been granted,
the nature and extent of the security, the terms and conditions upon which the
liens and security interests were granted and the rights of the holder of this
Note with respect thereto.
Time is of the essence of this Note. Upon the occurrence of any one or
more of the Events of Default specified in the Loan Agreement, all amounts then
remaining unpaid on this Note shall become, or may be declared to be,
immediately due and payable, all as provided therein.
Borrower and any and all co-makers, endorsers, guarantors and sureties
severally waive notice (including, but not limited to, notice of protest, notice
of dishonor, notice of intent to accelerate and notice of acceleration), demand,
presentment for payment, protest, diligence in collecting or bringing suit and
the filing of suit for the purpose of fixing liability, and consent that the
time of payment hereof may be extended and re-extended from time to time without
notice to them or any of them, and each agrees that his, her or its liability on
or with respect to this Note shall not be affected, diminished or impaired by
any (a) release of any security at any time existing for this Note, (b)
substitution for any security at any time existing for this Note, or (c) failure
to perfect (or to maintain perfection of) any lien on or security interest in
any such security, in each case in whole or in part, with or without notice,
before or after maturity.
It is the intention of Borrower and Lender that Lender shall conform
strictly to usury laws applicable to it. Accordingly, if the transactions
contemplated by the Loan Agreement and this Note would be usurious as to Lender
under laws applicable to it (including the laws of the United States of America
and the State of Texas or any other jurisdiction whose
-3-
laws may be mandatorily applicable to Lender notwithstanding the other
provisions of the Loan Agreement and this Note), then, in that event,
notwithstanding anything to the contrary in this Note, the Loan Agreement or any
other Loan Paper or other agreement entered into in connection with or as
security for this Note, (i) the aggregate of all consideration which is
contracted for, taken, reserved, charged or received by Lender under this Note,
the Loan Agreement or any other Loan Paper or agreement entered into in
connection with or as security for this Note shall under no circumstances exceed
the maximum amount allowed by such applicable law, and any excess shall be
credited by Lender on the principal amount of the Obligations to Lender (or, to
the extent that the principal amount of the Obligations shall have been or would
thereby be paid in full, refunded by Lender to the Borrower); and (ii) in the
event that the maturity of this Note is accelerated by reason of an Event of
Default under the Loan Agreement or otherwise, or in the event of any
prepayment, then such consideration that constitutes interest under law
applicable to Lender may never include more than the maximum amount allowed by
such applicable law, and excess interest, if any, provided for in this Note, the
Loan Agreement or otherwise shall be cancelled automatically by Lender as of the
date of such acceleration of prepayment and, if theretofore paid, shall be
credited by Lender on the principal amount of the Obligations (or, to the extent
that the principal amount of such Obligations shall have been or would thereby
be paid in full, refunded by Lender to the Borrower).
To the extent that Texas Finance Code Section 303.002 is relevant to
Lender for the purposes of determining the Highest Lawful Rate, the applicable
rate ceiling under such provisions shall be determined by the indicated (weekly)
rate ceiling from time to time in effect, subject to Lender's right subsequently
to change such method in accordance with applicable law. Notwithstanding
anything to the contrary contained herein or in any of the other Loan Papers, it
is not the intention of the Lender to accelerate the maturity of any interest
that has not accrued at the time of such acceleration or to collect unearned
interest at the time of such acceleration.
-4-
This Note is performable and payable in the County of Midland, State of
Texas, and shall be construed in accordance with, and governed by, the laws of
the State of Texas; provided, however, that the laws pertaining to allowable
rates of interest may, from time to time, be governed by the laws of the United
States of America.
NATURAL GAS SERVICES GROUP, INC.
By: /s/ Xxxxx Xxxxxx
--------------------------------
Xxxxx Xxxxxx, President
-5-
EXHIBIT A-4
MULTIPLE ADVANCE TERM PROMISSORY NOTE
$1,853,340.00 April 3, 2002
FOR VALUE RECEIVED, in the manner, on the dates and in the amounts
herein stipulated, NATURAL GAS SERVICES GROUP, INC., a Colorado corporation
("Borrower"), hereby promises and agrees to pay to the order of WESTERN NATIONAL
BANK, a national banking association ("Lender"), in Midland, Midland County,
Texas, the principal sum of One Million Eight Hundred Fifty Three Thousand Three
Hundred Forty and No/100 Dollars ($1,853,340.00) or, if less, the aggregate
unpaid principal amount outstanding hereunder, in lawful money of the United
States of America, which shall be legal tender in payment of all debts and dues,
public and private, at the time of payment, together with interest on the unpaid
principal amount hereof from time to time outstanding until maturity at a rate
per annum which shall from day to day be equal to the lesser of (a) one percent
(1.00%) over the Prime Rate (the "Established Rate") in effect from day to day
(calculated on the basis of actual days elapsed, but computed as if each
calendar year consisted of 360 days) or (b) the Highest Lawful Rate. Each change
in the rate of interest charged under this Multiple Advance Term Promissory Note
(this "Note") shall, subject to the terms hereof, become effective, without
notice to Borrower, upon the effective date of each change in the Prime Rate or
the Highest Lawful Rate, as the case may be. Notwithstanding the foregoing, if
at any time the Established Rate exceeds the Highest Lawful Rate, the rate of
interest on this Note shall be limited to the Highest Lawful Rate, but any
subsequent reduction in the Established Rate shall not reduce the rate of
interest hereon below the Highest Lawful Rate until the total amount of interest
accrued hereon approxi mately equals the amount of interest which would have
accrued hereon if the Established Rate had at all times been in effect. In the
event that at maturity (stated or by acceleration), or at final payment of this
Note, the total amount of interest paid or accrued hereon is less than the
amount of interest which would have accrued if the Established Rate had at all
times been in effect, then, at such time and to the extent permitted by
applicable laws, Borrower shall pay to Lender an
amount equal to the difference between (a) the lesser of the amount of interest
which would have accrued if the Established Rate had at all times been in effect
or the amount of interest which would have accrued if the Highest Lawful Rate
had at all times been in effect, and (b) the amount of interest actually paid or
accrued on this Note. Interest calculations may be made ten days prior to any
interest installment due date under this Note, in which event, if there is an
adjustment in the interest rate in accordance with the terms hereof during such
ten-day period, then Borrower shall subse quently, on demand, pay to Lender any
underpayment, or Lender shall pay to Borrower, any overpayment, as the case may
be, as a result of any adjustment during such ten-day period.
This Note is the Multiple Advance Term Promissory Note referred to in
the Loan Agreement, dated as of September 15, 1999, as amended by that certain
First Amendment and Waiver to Loan Agreement, dated as of March 9, 2001, as
further amended by that certain Second Amendment to Loan Agreement, dated as of
March 20, 2001, as further amended by that certain Third Amendment and Waiver to
Loan Agreement, dated as of July 25, 2001, as further amended by that certain
Fourth Amendment to Loan Agreement, dated as of December 12, 2001, and as
further amended by that certain Fifth Amendment to Loan Agreement, dated as of
April 3, 2002 (said Loan Agreement, as amended, and as the same may be further
amended, supplemented or otherwise modified from time to time, the "Loan
Agreement"), by and between Borrower and Lender, and is subject to the terms and
conditions thereof. Reference is made to the Loan Agreement for provisions for
the disbursement of funds hereunder and for a further statement of the rights,
remedies, powers, privileges, benefits, duties and obligations of Borrower and
Lender under the Loan Agreement and this Note. Terms used herein which are
defined in the Loan Agreement shall have such defined meanings unless otherwise
defined herein. The holder of this Note shall be entitled to the benefits of the
Loan Agreement.
Subject to the terms hereof and of the Loan Agreement, from
the date of this Note until maturity, the Lender will make Advances and
Subsequent Advances under this Note in accordance with the provisions of the
Loan Agreement. The aggregate principal amount of all such Advances as may be
made by the Lender to the Borrower under this Note shall never exceed One
Million Eight Hundred Fifty Three Thousand Three Hundred Forty and No/100
Dollars ($1,853,340.00).
-2-
Interest on the outstanding principal balance of this Note shall be due
and payable monthly on the fifteenth day of each month, commencing April 15,
2002. The then outstanding principal balance of this Note and all accrued and
unpaid interest shall be due and payable on March 15, 2003. All of the past due
principal and accrued interest hereunder shall, at the option of Lender, bear
interest from maturity (stated or by acceleration) until paid at a rate per
annum equal to the Highest Lawful Rate.
This Note is secured as provided in the Loan Agreement and in the other
Loan Papers, to which reference is hereby made for a description of the
properties and assets in which a lien and security interest has been granted,
the nature and extent of the security, the terms and conditions upon which the
liens and security interests were granted and the rights of the holder of this
Note with respect thereto.
Time is of the essence of this Note. Upon the occurrence of any one or
more of the Events of Default specified in the Loan Agreement, all amounts then
remaining unpaid on this Note shall become, or may be declared to be,
immediately due and payable, all as provided therein.
Borrower and any and all co-makers, endorsers, guarantors and sureties
severally waive notice (including, but not limited to, notice of protest, notice
of dishonor, notice of intent to accelerate and notice of acceleration), demand,
presentment for payment, protest, diligence in collecting or bringing suit and
the filing of suit for the purpose of fixing liability, and consent that the
time of payment hereof may be extended and re-extended from time to time without
notice to them or any of them, and each agrees that his, her or its liability on
or with respect to this Note shall not be affected, diminished or impaired by
any (a) release of any security at any time existing for this Note, (b)
substitution for any security at any time existing for this Note, or (c) failure
to perfect (or to maintain perfection of) any lien on or security interest in
any such security, in each case in whole or in part, with or without notice,
before or after maturity.
It is the intention of Borrower and Lender that Lender shall conform
strictly to usury laws applicable to it. Accordingly, if the transactions
contemplated by the Loan Agreement and this Note would be usurious as to Lender
under laws applicable to it (including the laws of the United States of America
and the State of Texas or any other jurisdiction whose laws may be mandatorily
applicable to Lender notwithstanding the other
-3-
provisions of the Loan Agreement and this Note), then, in that event,
notwithstanding anything to the contrary in this Note, the Loan Agreement or any
other Loan Paper or other agreement entered into in connection with or as
security for this Note, (i) the aggregate of all consideration which is
contracted for, taken, reserved, charged or received by Lender under this Note,
the Loan Agreement or any other Loan Paper or agreement entered into in
connection with or as security for this Note shall under no circumstances exceed
the maximum amount allowed by such applicable law, and any excess shall be
credited by Lender on the principal amount of the Obligations to Lender (or, to
the extent that the principal amount of the Obligations shall have been or would
thereby be paid in full, refunded by Lender to the Borrower); and (ii) in the
event that the maturity of this Note is accelerated by reason of an Event of
Default under the Loan Agreement or otherwise, or in the event of any
prepayment, then such consideration that constitutes interest under law
applicable to Lender may never include more than the maximum amount allowed by
such applicable law, and excess interest, if any, provided for in this Note, the
Loan Agreement or otherwise shall be cancelled automatically by Lender as of the
date of such acceleration of prepayment and, if theretofore paid, shall be
credited by Lender on the principal amount of the Obligations (or, to the extent
that the principal amount of such Obligations shall have been or would thereby
be paid in full, refunded by Lender to the Borrower).
To the extent that Texas Finance Code Section 303.002 is relevant to
Lender for the purposes of determining the Highest Lawful Rate, the applicable
rate ceiling under such provisions shall be determined by the indicated (weekly)
rate ceiling from time to time in effect, subject to Lender's right subsequently
to change such method in accordance with applicable law. Notwithstanding
anything to the contrary contained herein or in any of the other Loan Papers, it
is not the intention of the Lender to accelerate the maturity of any interest
that has not accrued at the time of such acceleration or to collect unearned
interest at the time of such acceleration.
-4-
This Note is performable and payable in the County of Midland, State of
Texas, and shall be construed in accordance with, and governed by, the laws of
the State of Texas; provided, however, that the laws pertaining to allowable
rates of interest may, from time to time, be governed by the laws of the United
States of America.
NATURAL GAS SERVICES GROUP, INC.
By: /s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx, President
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