EX-10.5 2 loanagm.htm AMENDED & RESTATED LOAN AGMT AMENDED AND RESTATED LOAN AGREEMENT dated as of December 28, 2000 By and Among COMPRESSCO, INC., COMPRESSCO FIELD SERVICES, INC., and HIBERNIA NATIONAL BANK AMENDED AND RESTATED LOAN AGREEMENT
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AMENDED AND RESTATED LOAN AGREEMENT
dated as of
December 28, 2000
By and Among
COMPRESSCO, INC.,
COMPRESSCO FIELD SERVICES, INC.,
and
HIBERNIA NATIONAL BANK
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AMENDED AND RESTATED LOAN AGREEMENT
THIS AMENDED AND RESTATED LOAN AGREEMENT (this "Agreement") dated as of December 28, 2000, by and among COMPRESSCO, INC. (formerly Emerging Alpha Corporation), a Delaware corporation ("Compressco"), COMPRESSCO FIELD SERVICES, INC. (formerly Gas Xxxx, Inc.), an Oklahoma corporation ("Field Services") (Compressco and Field Services, collectively, the "Borrowers"), and HIBERNIA NATIONAL BANK, a national banking association ("Bank").
WHEREAS, Borrowers and Bank have heretofore entered into that certain Loan Agreement dated as of October 29, 1999, as heretofore amended by that certain Modification to Note and Loan Agreement dated as of August 14, 2000, that certain Second Modification to Note and Loan Agreement dated as of September 11, 2000, that certain Third Modification to Note and Loan Agreement dated as of September 21, 2000, that certain Fourth Modification to Note and Loan Agreement dated as of October 16, 2000, that certain Fifth Modification to Promissory Note and Loan Agreement dated as of November 20, 2000 and that certain Sixth Modification to Loan Agreement dated as of December 20, 2000 (said Loan Agreement, as so amended, the "Prior Agreement"), pursuant to which Bank extended Borrowers a revolving line of credit on terms and conditions set forth more fully therein; and
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
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"Account Debtor" shall mean a Person obligated upon a Receivable owed to either of the Borrowers. |
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"Adjusted Net Worth" shall mean, at any time, the Tangible Net Worth of Compressco and its Consolidated Subsidiaries (including Subordinated Debt), less amounts then (a) due to Compressco and its Consolidated Subsidiaries from any shareholder, director, officer, employee or agent of the Borrowers, or (b) due to Compressco and its Consolidated Subsidiaries from any person or entity which is a subsidiary of, or is affiliated with, or related to, the Borrowers or any of their shareholders, directors or officers. |
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"Applicable Margin" shall mean the per annum percentage interest rate to be added to the Base Rate to determine the interest rate applicable to the amounts outstanding under the Revolving Note, as determined in accordance with the following schedule: |
Applicable Period |
Applicable Margin | ||
From the date of this Agreement through 12/31/00: |
+0.5% | ||
Following the end of any fiscal quarter of Borrowers subsequent to the fiscal quarter ending 12/31/00 during which the most recent timely received Compliance Certificate shows full compliance with all Performance Pricing Criteria during such immediately preceding fiscal quarter: |
+0.0% | ||
Following the end of any fiscal quarter of Borrowers subsequent to the fiscal quarter ending 12/31/00 during which the most recent timely received Compliance Certificate shows less than full compliance with all Performance Pricing Criteria during such immediately preceding fiscal quarter, the Applicable Margin shall be determined as follows: |
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a. |
If the Debt to Tangible Net Worth Ratio of Compressco and its Consolidated Subsidiaries as of the end of such immediately preceding fiscal quarter was less than or equal to 3.0 to 1.0: |
+0.5% |
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b. |
If the Debt to Tangible Net Worth Ratio of Compressco and its Consolidated Subsidiaries as of the end of such immediately preceding fiscal quarter was greater than or equal to 3.0 to 1.0: |
+1.0% |
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The Applicable Margin shall be determined by Bank from the quarterly compliance certificate (each being a "Compliance Certificate") most recently required to be delivered to Bank by Borrowers pursuant to Section 8.1(d) hereof. At the commencement of each fiscal quarter subsequent to 12/31/00, the Applicable Margin shall initially continue to be the one in effect for the immediately preceding quarter until receipt of the currently due Compliance Certificate, but shall be adjusted to the beginning of such quarter following the timely receipt of the current Compliance Certificate based upon the results of the Performance Pricing Criteria shown by such Compliance Certificate for such immediately preceding quarter. In the event a Compliance Certificate is not timely delivered, the Applicable Margin shall be adjusted to the beginning of such quarter to 1.0% until received. |
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"Assignment of Leases" shall mean that certain Collateral Assignment of Leases dated of October 29, 1999 granted by Field Services to Bank affecting all right, title and interest in and to its leases of compressors to its customers, and all proceeds thereof, as the same may from time to time be amended, modified or supplemented and in effect. |
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"Agreement" shall mean this Amended and Restated Loan Agreement, as the same may from time to time be amended, modified or supplemented and in effect. |
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"Bank" shall mean Hibernia National Bank, a national banking association. |
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"Bank's Current Revolving Loan Commitment Exposure" shall have the meaning ascribed to such term in Section 2.1 hereof. |
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"Base Rate" shall mean the per annum rate of interest published from time to time in the Wall Street Journal as the "prime rate" or the base rate of interest on corporate loans posted by at least 75% of the nation's 30 largest banks, such rate to be adjusted automatically on and as of the effective date of any change in such rate. |
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"Borrowing Base Amount" shall mean, as determined by Bank from time to time, the lowest of the following amounts (a) $7,500,000.00; (b) the sum of (i) 80% of the aggregate amount of Eligible Receivables (or such lesser percentage as Bank deems appropriate, in its sole discretion, exercising reasonable credit judgment), plus (ii) the lesser of (1) 50% of the aggregate amount of Eligible Inventory consisting of Inventory other than finished compressors (or such lesser percentage as Bank deems appropriate, in its sole discretion, exercising reasonable credit judgment), or (2) $750,000.00, plus (iii) the lesser of (1) $6,500,000.00 or (2) 85% of the Eligible Inventory consisting of finished compressors based on a value of $18,000.00 per finished compressor or such other value as determined pursuant to Section 8.1(h) (or such lesser percentage as Bank deems appropriate, in its sole discretion, exercising reasonable credit judgment); or (c) the sum of (i) $2,500,000.00 plus (ii) the amount of Subordinated Debt issued by Borrowers. Bank shall have the right to make adjustments to advance rates and as to the eligibility of Inventory and Receivables as a result of field examinations of Borrowers' Collateral (using reasonable lending discretion) which Bank shall perform from time to time as deemed necessary by Bank at any time while any Revolving Loans remain outstanding. |
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"Business Day" shall mean a day other than a Saturday, Sunday or legal holiday for commercial banks under the laws of the State of Louisiana or a day on which national banks are authorized to be closed in New Orleans, Louisiana. |
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"Cash Flow" shall mean, for any period, the earnings of such Person(s) before interest, taxes, depreciation and amortization. |
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"Collateral" shall mean any interest in any kind of property or assets pledged, mortgaged or otherwise subject to an Encumbrance in favor of Bank pursuant to the Collateral Documents. |
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"Collateral Documents" shall collectively refer to the Assignment of Leases, the Security Agreements, the Stock Pledge, all related financing statements required by Bank, and any and all other documents in which an Encumbrance is created on any property of the Borrowers or of any third person to secure payment of the Indebtedness of Borrowers or any part thereof. |
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"Compressco" shall mean Compressco, Inc., a Delaware corporation, together with its successors and assigns. |
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"Consolidated Subsidiary" or "Consolidated Subsidiaries" shall mean a Subsidiary or Subsidiaries, respectively, of Compressco, whose financial statements are prepared on a consolidated basis with those of Compressco in accordance with GAAP, and shall specifically include Field Services, Providence and Testing. |
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"Current Assets" shall mean the assets of Compressco and its Consolidated Subsidiaries treated as current assets in accordance with GAAP. |
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"Current Liabilities" shall mean all liabilities of Compressco and its Consolidated Subsidiaries treated as current liabilities in accordance with GAAP, including without limitation, all obligations payable on demand or within one year after the date on which the determination is made, and final maturities and sinking funds payments required to be made within one year after the date on which the determination is made, but excluding all such liabilities or obligations which are renewable or extendible at the option of such Person to a date more than one year from the date of determination. |
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"Current Ratio" shall mean, at any time, the ratio of Current Assets to Current Liabilities. |
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"Debt" shall mean any and all indebtedness, without duplication, excluding the Subordinated Debt, owing from time to time by Borrowers (or any one or more of them) to any Person, including the Bank, direct or indirect, liquidated or contingent, now existing or hereafter arising, including without limitation (i) indebtedness for borrowed money; (ii) the face amounts of all standby and commercial letters of credit and bankers acceptances, matured or unmatured, issued on behalf of Borrowers (or any one or more of them); (iii) guaranties by the Borrowers (or of any one or more of them) of the obligations of any other Person, whether direct or indirect, whether by agreement to purchase the indebtedness of any other Person or by agreement for the furnishing of funds to any other Person through the purchase or lease of goods, supplies or services (or by way of stock purchase, capital contribution, advance or loan) for the purpose of paying or discharging the indebtedness of any other Person, or otherwise; and (iv) the present value of all obligations of the Borrowers (or any one or more of them) for the payment of rent or hire of property of any kind (real or personal) under leases or lease agreements required to be capitalized under GAAP. | |
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"Debt Service Coverage Ratio" shall mean, for any twelve-month period ending on the date of determination of same, the ratio of (1) the earnings of Compressco and its Consolidated Subsidiaries before interest, taxes, depreciation and amortization during such period to (2) the amount of interest expense and current maturities of long-term indebtedness of Compressco and its Consolidated Subsidiaries during such period. | |
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"Default" shall mean an event, which with the giving of notice or the lapse of time (or both) would constitute an Event of Default, hereunder. | |
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"Dollars" and "$" shall mean lawful money of the United States of America. | |
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"Eligible Inventory" shall mean all of the Inventory of Borrowers except: | |
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(a) |
Inventory that is not encumbered by a first priority perfected Encumbrance granted in favor of Bank, where first priority perfection is confirmed by evidence or opinions acceptable to Bank. |
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(b) |
Inventory that is not owned by Borrowers free and clear of all Encumbrances and claims of third parties except for Permitted Encumbrances. |
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(c) |
Inventory that Bank, in its sole discretion, deems obsolete, unsalable, damaged, defective, or unfit for sale or lease or further processing. |
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(d) |
Inventory which Bank, exercising reasonable credit judgment, deems to be unqualified or ineligible. |
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(e) |
Inventory located at a leased location unless a subordination of the landlord's lien has been provided to Bank in form and substance which is satisfactory to Bank. |
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(f) |
Work in progress located with vendors, subcontractors or other third parties for manufacture or service, including without limitation, assembly, painting, testing, and conditioning. |
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(g) |
Inventory or Equipment in transit to or from parties listed in (f) above. |
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"Eligible Receivables" shall mean, at any time, all Receivables, which contain selling terms and conditions reasonably acceptable to Bank. The net amount of any Eligible Receivables against which Borrowers may borrow shall exclude all returns, discounts, credits, and offsets of any nature. Unless otherwise agreed to by Bank in writing, Eligible Receivables do not include: | |
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(a) |
Receivables that are not encumbered by a first priority perfected Encumbrance granted in favor of Bank, where first priority perfection is confirmed by evidence or opinions acceptable to Bank. |
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(b) |
Receivables that are not free and clear of all Encumbrances and claims of third parties, except for Permitted Encumbrances. |
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(c) |
Receivables that have not been paid in full within the earlier of (i) three (3) times ordinary invoice terms from the invoice date, or (ii) ninety (90) days from the invoice date. |
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(d) |
Receivables of any Account Debtor with more than fifty percent (50%) aggregate Receivables owed being due and payable for more than the lesser of (i) three (3) times ordinary invoice terms from the invoice date, or (ii) ninety (90) days from the invoice date, unless Bank, upon request of Borrowers and in its sole discretion, agrees to allow inclusion of the Receivables from any particular Account Debtor for a particular month as Eligible Receivables. |
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(e) |
Receivables due from any single Account Debtor (including all subsidiaries and affiliates of an Account Debtor) in excess of twenty-five percent (25%) of either Borrower's total otherwise Eligible Receivables, unless Bank, upon request of Borrowers and in its reasonable discretion, agrees to allow inclusion of the excess Receivables (or a portion thereof) from any such Account Debtor for a particular month as Eligible Receivables. |
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(f) |
Receivables with respect to which the Account Debtor is a shareholder, a director, an officer, an employee, or an agent of either Borrower. |
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(g) |
Receivables with respect to which the Account Debtor is a Subsidiary of, or affiliated with or related to either Borrower or its shareholders, directors, or officers. |
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(h) |
Receivables with respect to which goods are placed on consignment, guaranteed sale, or other terms by reason of which the payment by the Account Debtor may be conditional. |
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(i) |
Receivables with respect to which the Account Debtor is a resident of, or incorporated in, a jurisdiction located outside of the United States, except to the extent such Receivables are supported by insurance, bonds or other assurances satisfactory to Bank. |
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(j) |
Receivables with respect to which either Borrower is or may become liable to the Account Debtor for goods sold or services rendered by the Account Debtor to such Borrower. |
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(k) |
Receivables which are subject to dispute, counterclaim, or setoff. |
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(l) |
Receivables with respect to which the goods have not been shipped or delivered, or the services have not been rendered, to the Account Debtor. |
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(m) |
Receivables which Bank, exercising reasonable credit judgment, deems to be ineligible for any reasonable reason. |
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(n) |
Receivables of any Account Debtor who has filed or has had filed against it a petition in bankruptcy or an application for relief under any provision of any state or federal bankruptcy, insolvency, or debtor-in-relief acts; or who has had appointed a trustee, custodian, or receiver for the assets of such Account Debtor; or who has made an assignment for the benefit of creditors or has become insolvent or fails generally to pay its debts (including its payrolls) as such debts become due. |
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(o) |
Receivables with respect to which the Account Debtor is the United States government or any department or agency of the United States, unless encumbered by a first priority perfected Security Interest granted in favor of Bank, acknowledged by the appropriate governmental agency and where first priority perfection is confirmed by evidence or opinions acceptable to Bank. |
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(p) |
Receivables arising pursuant to a bonded contract. |
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"Encumbrances" shall mean individually, collectively and interchangeably any and all presently existing and/or future mortgages, liens, privileges, servitudes, rights-of-way and other contractual and/or statutory security interests and rights of every nature and kind that, now and/or in the future may affect the property of either Borrower or any part or parts thereof. | |
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"Environmental Laws" shall mean the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499 ("XXXX"), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act, 49 U.S.C. Section 6901, et seq., the Louisiana Environmental Affairs Act, La. R.S. 30:2001 et seq., or other applicable Governmental Requirements or regulations adopted pursuant to any of the foregoing. |
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"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time. |
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"Equipment" shall mean all machinery, equipment, furniture and fixtures, now owned or hereafter acquired by either Borrower, or in which either Borrower now has or hereafter may acquire any right, title or interest, and any and all additions, substitutions and replacements thereof, wherever located, together with all attachments, components, parts, products, equipment and accessories installed therein or affixed thereto, including, but not limited to, all equipment as defined in Section 9-109(2) of the UCC, and all fixtures as defined in Section 9-313(1)(a) of the UCC. |
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"Event of Default" shall mean individually, collectively and interchangeably any of the Events of Default set forth below in Section 10.1 hereof. |
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"Field Services" shall mean Compressco Field Services, Inc., an Oklahoma corporation, together with its successors and assigns. |
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"Funded Debt" shall mean, at any time, the sum of all interest-bearing Debt of Compressco and its Consolidated Subsidiaries. |
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"Funded Debt to Cash Flow Ratio" shall mean, as of the end of each fiscal quarter of Compressco and its Consolidated Subsidiaries (including Field Services), the ratio of (1) the amount of Funded Debt of Compressco and its Consolidated Subsidiaries at the end of such fiscal quarter, to (2) the amount of Cash Flow of Compressco and its Consolidated Subsidiaries for the immediately preceding twelve-month period ending as of the end of the such fiscal quarter. |
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"GAAP" shall mean, at any time, accounting principles generally accepted in the United States as then in effect. |
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"General Intangibles" shall mean all general intangibles, as defined in Section 9-106 of the UCC, of the Borrowers, whether now owned or hereafter acquired, and shall include, without limitation (i) all contractual rights and obligations or indebtedness owing to Borrowers (other than Receivables) from whatever source arising (including, without limitation, all rights of the Borrowers under leases of compressors or other Inventory or Equipment of Borrowers to third parties); (ii) all things and actions, rights represented by judgments and claims arising out of tort and other claims related to the Collateral, including the right to assert and otherwise be the proper party of interest to commence and prosecute actions; (iii) all goodwill, patents, patent licenses, trademarks, trademark licenses, trade names, service marks, trade secrets, rights and intellectual property, copyrights, permits and licenses; (iv) all rights or claims in respect of refunds for taxes paid; and (v) all deposit accounts of Borrowers. |
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"Governmental Requirement" shall mean any applicable state, federal or local law, statute, ordinance, code, rule, regulation, order or decree. |
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"Guaranties" shall mean (i) that certain Commercial Guaranty of Providence, dated of even date herewith, (ii) that certain guaranty of Testing, dated of even date herewith, and (iii) that certain Commercial Guaranty of Xxxxxx Xxxx Xxxxxx III dated October 29, 1999, as confirmed of even date herewith, together with any other guaranties of any Person which guarantee payment of any part of the Indebtedness, as any of such guaranties may be amended and from time to time in effect. |
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"Guarantors" shall mean, collectively, Providence, Testing, and Xxxxxx Xxxx Xxxxxx III, together with any other Persons who may from time to time guarantee payment of any part of the Indebtedness. |
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"Indebtedness" shall mean, at any time, the indebtedness of Borrowers without duplication, evidenced by the Revolving Note executed by Borrowers pursuant to this Agreement, in principal, interest, costs, expenses and reasonable attorneys' fees and all other fees and charges, together with all commitment fees and other indebtedness and costs and expenses for which Borrowers (or either one of them) are responsible under this Agreement or under any of the Related Documents. In addition, the word "Indebtedness" also includes any and all other loans, extensions of credit, obligations, debts and liabilities, plus interest thereon, of Borrowers (or either one of them) that may now and in the future be owed to or incurred in favor of Bank, as well as all claims by Bank against Borrowers, whether existing now or later; whether they are voluntary or involuntary, due or to become due, direct or indirect or by way of assignment, determined or undetermined, absolute or contingent, liquidated or unliquidated; whether Borrowers may be liable individually or jointly with others, of every nature and kind whatsoever, in principal, interest, costs, expenses and reasonable attorneys' fees and all other fees and charges; whether Borrowers may be obligated as principal obligor, guarantor, surety, accommodation party or otherwise. |
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"Inventory" shall mean all inventory, as defined in Section 9-109(4) of the UCC, of Borrowers, whether now owned or hereafter acquired by Borrowers, wherever located, and shall include all of Borrowers' raw materials, work in process, finished goods, merchandise, parts and supplies, of every kind and description, and goods held for sale or lease or furnished under contracts of service in which Borrowers now have or hereafter acquire any right, whether held by Borrowers or others, and all documents of title, warehouse receipts, bills of lading, and all other documents of every type covering all or any part of the foregoing. Inventory includes inventory temporarily out of the custody or possession of Borrowers and all returns on Receivables. |
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"Investment Property" shall all investment property of Borrowers, whether now owned or hereafter acquired, consisting of certificated and uncertificated securities, securities entitlements, securities accounts, commodity contracts and commodity accounts (as each of said items are defined in Section 9-115 of the UCC and in La. R. S. 10:8-102). |
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"Letters of Credit" shall have the meaning assigned to that term in Section 3.1 hereof, and shall also include any and all such Letters of Credit issued by Bank for the account of Borrowers (or either of them) prior to the date of this Agreement which remain outstanding as of the date of this Agreement. |
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"Letter of Credit Application" shall have the meaning assigned to that term in Section 3.1 hereof. |
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"Letter of Credit Commission" shall have the meaning assigned to that term in Section 3.3 hereof. |
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"Letter of Credit Obligations" shall have the meaning assigned to that term in Section 3.4 hereof. |
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"Loan Documents" shall mean this Agreement, the Revolving Note, the Collateral Documents and any other Related Documents. |
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"Dominion Account" shall have the meaning ascribed to such term in Section 8.15 hereof. |
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"Material Adverse Change" shall mean, with respect to either of the Borrowers, an event which causes a material adverse effect on the business, assets, operations or condition (financial or otherwise) of either such Borrower, or which otherwise changes in a materially adverse way any other material facts, circumstances or conditions which Borrowers have represented to Bank and Bank has in good faith relied upon or utilized in making the Revolving Loan Commitment hereunder. |
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"Performance Pricing Criteria" shall mean the following criteria, all of which must be met for the immediately preceding fiscal quarter of Borrowers for the Applicable Margin to be adjusted to 0.0% for the succeeding fiscal quarter: |
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1. Compressco and its Consolidated Subsidiaries shall have received injections of new equity or Subordinated Debt from November 20, 2000, as determined and certified by Bank in its sole discretion; and |
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2. Compressco and its Consolidated Subsidiaries shall maintain a Tangible Net Worth of (i) greater than or equal to $7,800,000.00 at December 31, 2000, (ii) greater than or equal to $8,000,000.00 at Xxxxx 00, 0000, (xxx) greater than or equal to $8,500,000.00 at June 30, 2001, (iv) greater than or equal to $9,000,000.00 at September 30, 2001, and (v) greater than or equal to $10,000,000.00 at December 31, 2001 and thereafter; and |
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3. Compressco and its Consolidated Subsidiaries shall maintain a ratio not to exceed Debt to Tangible Net Worth including the $5,000,000.00 injection required in 1 above plus profits of Compressco and its Consolidated Subsidiaries of (i) .45 to 1.0 at Xxxxxxxx 00, 0000, (xx) .82 to 1.0 at Xxxxx 00, 0000, (xxx) 1.10 to 1.0 at June 30, 2001, (iv) 1.27 to 1.0 at September 30, 2001, and (v) 1.36 to 1.0 at December 31, 2001 and all times thereafter. |
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"Permitted Encumbrances" shall have the meaning ascribed to such term in Section 9.4 hereof. |
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"Person" shall mean an individual or a corporation, partnership, trust, joint venture, incorporated or unincorporated association, joint stock company, government, or an agency or political subdivision thereof, or other entity of any kind. |
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"Providence" shall mean Providence Natural Gas, Inc., an Oklahoma corporation, together with its successors and assigns. |
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"Receivables" shall mean, with respect to Borrowers, all accounts (as such term is defined in Section 9-106 of the UCC) of Borrowers, and shall include all trade accounts, other receivables, or other rights to payment for goods sold or leased by or services rendered by Borrowers (or a third party grantor acceptable to Bank). |
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"Related Documents" shall mean and include individually, collectively, interchangeably and without limitation all promissory notes, credit agreements, loan agreements, guaranties, security agreements, mortgages, collateral mortgages, deeds of trust, and all other instruments and documents, whether now or hereafter existing, executed in connection with the Indebtedness. |
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"Revolving Loan Commitment" means the agreement by Bank to Borrowers to make Revolving Loans in accordance with the provisions of Article II hereof. |
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"Revolving Loans" shall mean loans made by Bank under the Revolving Note to Borrowers in accordance with and subject to the terms of the Revolving Loan Commitment. |
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"Revolving Note" shall mean that certain promissory note made by Borrowers, as co-makers, dated of even date herewith, payable to the order of Bank in principal amount of $7,500,000.00, as said Revolving Note is more fully described in Section 2.1 hereof, together with any and all extensions, renewals, modifications and substitutions therefor. |
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"Security Agreements" shall mean, collectively, (i) that certain Commercial Security Agreement dated October 29, 1999 by Compressco (then known as Emerging Alpha Corporation) in favor of Bank, affecting, without limitation, all of Compressco's Receivables, Inventory, Investment Property, Equipment, General Intangibles and deposit accounts and other funds on deposit with Bank, as the same may be amended or modified from time to time, and (ii) that certain Commercial Security Agreement dated October 29, 1999 by Field Services (then known as Gas Xxxx, Inc.) in favor of Bank, affecting, without limitation, all of Field Services's Receivables, Inventory, Investment Property, Equipment, General Intangibles and deposit accounts and other funds on deposit with Bank, as the same may be amended or modified from time to time. |
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"Solvent" shall mean, when used with respect to any Person on a particular day, that on such date (i) the fair value of the property of such Person is greater than the total amount of liabilities, including without limitation, contingent liabilities, of such person, (ii) the present fair salable value of the assets of such person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (iii) such Person is able to realize upon its assets and pay its debts and other liabilities, contingent obligations and other commitments as they mature in the ordinary course of business, (iv) such Person does not intend to, and does not believe that it will, incur debts and liabilities beyond such Person's ability to pay as such debts and liabilities mature, and (v) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person's property would constitute unreasonably small capital after giving due consideration to the prevailing practice in the industry in which such person is engaged. In computing the amount of contingent liabilities at any time, it is intended that such liabilities will be computed at the amount which, in light of all of the facts and circumstances existing at such time, represents the amount that can be reasonably expected to become an actual or matured liability. |
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"Subordinated Debt" shall mean the 13% Subordinated Notes dated December 22, 2000 issued by Compressco, and the obligations of Compressco thereunder, and additional obligations of Compressco containing similar terms issued thereafter which shall be subordinated in payment to the Indebtedness by its terms. |
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"Subsidiaries" shall mean at any date, with respect to any Person, all the corporations of which such Person at such date, directly or indirectly, owns 50% or more of the outstanding capital stock (excluding directors' qualifying shares), and "Subsidiary" means any one of the Subsidiaries. |
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"Stock Pledge" shall mean that certain Pledge and Security Agreement dated October 29, 1999, by Compressco in favor of Bank, affecting all outstanding shares of stock of Field Services and certain other collateral more fully described therein, as the same may be amended or modified from time to time. |
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"Tangible Net Worth" shall mean, at any time, the amount of the total assets of such Person, excluding intangible assets (i.e., patents, copyrights, trademarks, trade names, franchises, goodwill, organizational expenses, and similar intangible expenses, but including leaseholds and leasehold improvements), less the amount of the total Debt of such Person. |
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"Termination Date" shall mean, with respect to Bank's Revolving Loan Commitment, the earlier to occur of (a) December 27, 2003, or (b) the earlier date of termination of the Revolving Loan Commitment pursuant to Article X hereof or of the termination of Bank's obligation to issue Letters of Credit under the terms of Article X hereof. |
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"Testing" shall mean Compressco Testing, LLC, an Oklahoma limited liability company, together with its successors and assigns. |
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"UCC" shall mean the Uniform Commercial Code, Commercial Laws-Secured Transactions (La. R.S. 10:9-101 et seq.) in the State of Louisiana, as amended from time to time, provided that if by reason of mandatory provisions of law, the perfection or effect of perfection or non-perfection of the Bank's Encumbrances against the Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of Louisiana, "UCC" means the Uniform Commercial Code as in effect in such other jurisdiction. |
ARTICLE II
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Section 2.2. Manner and Notice of Borrowing Under the Revolving Loan Commitment. Requests for advances under the Revolving Loan Commitment, other than daily fundings under controlled disbursement, shall be made by Borrowers in writing to Bank and include certificates required under Section 8.1(e) of this Agreement. Requests for advances must be received by not later than 12:00 a.m. (Central Time) on the date of the proposed advance.
Section 2.3. Payment of the Revolving Note Under the Revolving Loan Commitment. Interest on the unpaid principal balance of the Revolving Note shall be payable monthly in arrears on the first day of each month, commencing February 1, 2001, and on the first day of each month thereafter until the Revolving Note is paid in full. All principal shall be payable in a single installment due on the Termination Date; subject to, however, the mandatory prepayment requirement set forth above in Section 2.1 hereof which requires Borrowers to prepay the Revolving Loans under the Revolving Note in the event, at any time and from time to time, the Bank's Current Revolving Loan Commitment Exposure exceeds the Borrowing Base Amount then in effect (or which, at the option of Bank, requires that Borrowers post cash collateral or other collateral acceptable to Bank in its sole discretion, to secure such deficiency in its Borrowing Base Amount). Borrowers hereby authorize Bank to debit their checking accounts maintained with Bank to pay interest due on the Revolving Note on each interest payment date and to credit all proceeds of their Receivables received in the Dominion Account when collected (or earlier, if Bank in its sole discretion allows such funds to be available to Borrowers prior to the date on which any checks or other instruments given in payment of Receivables are actually collected) towards payment of the Revolving Loans outstanding under the Revolving Note.
Section 2.4. Proceeds of Dominion Account. Borrowers have executed an agreement with Bank, pursuant to which all checks, drafts and other instruments evidencing payment of Borrowers' Receivables shall be delivered to Bank and deposited into Borrowers' Dominion Account more fully described in Section 8.15 hereof. Borrowers authorize Bank to apply, from time to time, at Borrower's request, the proceeds of their Receivables actually collected (or, at the sole discretion of Bank, amounts which have been received but not yet collected) by the Bank from the Dominion Account to reduce in whole or in part the outstanding principal balance of the Revolving Loans due under the Revolving Note. Such payments will adjust for loan availability, bookkeeping and interest purposes on the second day after deposit.
15
ARTICLE III
16
Section 3.4. Letter of Credit Obligations. Borrowers agree unconditionally to pay Bank on demand in United States currency at Bank's principal office in New Orleans, Louisiana, the amount required to pay (a) any and all drafts drawn and any and all demands made or purported to be made under any Letter of Credit, (b) any and all costs, charges, fees and/or expenses incurred or paid by Bank in connection with any Letter of Credit, (c) interest on such amounts described above under (a) and (b) as hereinafter provided, and (d) a fee equal to one-eighth of one percent (0.125%) of the amount of each such draft drawn and demand made or purported to be made under any Letter of Credit (the "Letter of Credit Obligations"). In the event of any drafts drawn and any and all demands made under any Letter of Credit are payable in foreign currency, Borrowers agree to make the aforementioned payment to Bank in United States currency at Bank's selling rate for cable transfers to the place of payment of such draft on the date of such payment. Such obligation of Borrowers shall be deemed a Letter of Credit Obligation hereunder. Borrowers further agree to comply with any and all governmental currency exchange regulations or requirements now or hereafter applicable to such Letter of Credit or to any drafts related thereto. Borrowers further authorize Bank, at its option, to compensate itself by applying any part or all of the balance of any deposit account or certificate of deposit which Borrowers may maintain with Bank, at any time, whether or not the deposit is mature, and/or any and all monies or property or interest of any kind now or hereafter in Bank's hands, or in transit to or from Bank, and belonging to Borrowers, to the payment, in whole or in part, of the amount of any draft and all interest, costs and reasonable attorney's fees which Borrowers may owe Bank pursuant to this Agreement. In the event a Letter of Credit Obligation is not paid when demanded by Bank, Borrowers agree to pay to Bank on demand a sum equal to the amount of the Letter of Credit Obligation, plus interest thereon from the date the Letter of Credit Obligation is demanded by Bank until paid at the Base Rate plus 1.5%. A payment shall not be deemed made until funds therefor have been actually collected and made available to Bank. Upon the occurrence of an Event of Default hereunder, Borrowers agree to pay to Bank on demand a sum equal to the aggregate unfunded amounts of all Letters of Credit outstanding, together with interest thereon (such obligation of Borrower shall be deemed a Letter of Credit Obligation as such term is used herein). Upon the occurrence of such Event of Default, Bank may exercise its right of offset and compensation set forth above in this paragraph. Any amount which Bank offsets or which Borrowers may pay to Bank in excess of drafts actually drawn on any outstanding Letters of Credit shall be held by Bank in pledge to secure the payment of future drafts until Bank's obligation to make Revolving Loans have been terminated, all Indebtedness has been paid in full, and no further Letters of Credit are outstanding.
17
ARTICLE IV
18
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(1) subject the Bank to any tax, levy, impost, duty, charge, fee, deduction or withholding of any nature with respect to this Agreement, the other Related Documents or the Indebtedness (other than taxes based upon or measured by the revenue, income or profits of the Bank), or |
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(2) materially change the basis of taxation (except for changes in taxes on revenue, income or profits) of payments to the Bank of the principal of or the interest on the Indebtedness of any other amounts payable to the Bank under this Agreement or the other Related Documents, or |
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(3) impose or increase or render applicable (other than to the extent specifically provided for elsewhere in this Agreement) any special deposit, reserve, assessment, liquidity, capital adequacy or other similar requirements (whether or not having the force of law) against assets held by, or deposits in or for the account of, or loans by, or commitments of an office of the Bank, or |
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(4) impose on the Bank any other conditions or requirements with respect to this Loan Agreement, the other Related Documents, the Indebtedness, or any class of loans of which the Indebtedness forms a part, and the result of any of the foregoing is |
19
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(i) to increase the cost to the Bank of making, funding, issuing, renewing, extending or maintaining the Indebtedness, or |
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(ii) to reduce the amount of principal, interest or other amount payable to the Bank hereunder on account of such the Indebtedness, or |
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(iii) to require the Bank to make any payment or to forego any interest or other sum payable hereunder, the amount of which payment or foregone interest or other sum is calculated by reference to the gross amount of any sum receivable or deemed received by the Bank from Borrowers hereunder, |
then, and in each such case, Borrowers will, upon demand made by the Bank at any time and from time to time and as often as the occasion therefor may arise, pay to the Bank such additional amounts as will be sufficient to compensate the Bank for such additional cost, reduction, payment or foregoing receipt of interest or others sum payable hereunder.
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(a) Borrowers shall pay Bank upon the execution of this Agreement an origination fee in the amount of $25,000.00 for the Revolving Loan Commitment, which fee has been fully earned by Bank regardless of whether the Revolving Loans are ever funded.
(b) Borrowers shall pay Bank for the costs (including hourly rates of personnel and out-of-pocket expenses) of performing field examinations of the Collateral to be initially conducted on a quarterly basis, plus a monthly asset based lending monitoring fee of $1,000.00 per month due at the beginning of each month during the term of this commencing February 1, 2001.
(c) Borrowers shall pay to Bank an unused facility fee on the daily average unused portion of the Revolving Loan Commitment [the "unused portion" being the amount by which the maximum dollar amount of the Revolving Note ($7,500,000.00) exceeds the outstanding principal balance due under the Revolving Note plus the combined amount of all Letters of Credit outstanding] from the date of this Agreement through the Termination Date, at the rate of 0.375% per annum, payable for each three (3) calendar month period (each calendar quarter), in arrears, fifteen (15) days after last day of each calendar quarter. The first unused facility fee payment is due on January 15, 2001, covering the period beginning on the date of this Agreement through December 31, 2000.
(d) The following prepayment penalties shall be immediately due and payable by Borrowers to Bank if Borrowers shall terminate or refinance the Revolving Loans with another financial institution prior to the Termination Date: (i) 2% of the amount of the outstanding Revolving Loans prepaid upon the refinancing of the Revolving Loans or the termination of this Agreement prior to December 31, 2001; and (ii) 1% of the amount of the outstanding Revolving Loans prepaid upon the refinancing of the Revolving Loans or the termination of this Agreement prior to December 31, 2002. No prepayment penalty shall apply if Borrowers terminate this Agreement or refinance the Revolving Loans with another financial institution after December 31, 2002.
ARTICLE V
Section 5.1. Security. The Indebtedness shall be secured by the following:
(a) the Assignment of Leases;
(b) the Security Agreements;
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(c) the Stock Pledge;
(d) the Guaranties; and,
(e) such other Collateral Documents now or hereafter granted by any Person as security for any part of the Indebtedness.
Section 5.2. Deleted.
ARTICLE VI
(a) Borrowers shall have executed and delivered to Bank this Agreement, the Collateral Documents, the Revolving Note and all other documents required by this Agreement, all in form and substance and in such number of counterparts as may be required by Bank;
(b) Xxxxxx Xxxx Xxxxxx III, shall have executed and delivered to Bank a confirmation acceptable to Bank of that certain Guaranty dated as of October 29, 1999 of the Indebtedness and all other present and future Debt of Borrowers to Bank.
(c) Providence shall have executed and delivered to Bank its unlimited in solido Guaranty of the Indebtedness an all other present and future Debt of Borrowers to Bank.
(d) Testing shall have executed and delivered to Bank its unlimited in solido Guaranty of the Indebtedness an all other present and future Debt of Borrowers to Bank.
(e) The representations and warranties of Borrowers and Guarantors as set forth herein, or any Related Document furnished to Bank in connection herewith, shall be and remain true and correct;
(f) Bank shall have received a favorable legal opinion of counsel to Borrowers and Guarantors in scope and substance reasonably satisfactory to Bank;
(g) Bank shall have received certified resolutions of Borrowers authorizing the Revolving Loans and the execution and delivery of all documents contemplated hereby and by corporate and limited liability company Guarantors authorizing the Guaranties;
(h) Bank shall have received all fees, charges and expenses which are due and payable as specified in this Agreement or any Related Document;
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(i) No Default or Event of Default shall exist or shall result from the making of a Revolving Loan;
(j) Borrowers shall have each provided Bank with all financial statements, reports and certificates required by this Agreement (including an initial borrowing base certificate of Borrowers);
(k) Bank's counsel shall have reviewed the corporate structure and articles of incorporation of Borrowers and Guarantors, and shall be reasonably satisfied with the validity, due authorization and enforceability of all Related Documents;
(l) There shall have been no change to the corporate structure and ownership of Borrowers or Guarantors than from (i) what has been previously represented to Bank or (ii) has been approved by Bank in writing;
(m) Bank shall have received evidence reasonably acceptable to Bank and its counsel that its Encumbrances affecting the Collateral shall have a first priority position, subject only to Permitted Encumbrances;
(n) Bank shall have received evidence that all other policies of insurance required by this Agreement and the Collateral Documents are in full force and effect,
(o) Bank, at its option and for its sole benefit, shall have conducted an audit of each Borrowers' payment records, ledger sheets, and computer tapes or disks kept to record payment information, and of Borrowers' other books, records, and operations, and Bank shall be reasonably satisfied as to their condition.
(p) Compressco shall have delivered all outstanding and issued shares of stock of Field Services to Bank, together with stock powers and Reg. U statements which Bank may reasonably require, pursuant to the terms of the Stock Pledge.
(q) There shall have occurred no Material Adverse Change.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
Borrowers represent and warrant to Bank as follows:
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all Related Documents. Field Services is a corporation duly created, validly existing and in good standing under the laws of the State of Oklahoma, and is duly qualified and in good standing as a foreign corporation in all other jurisdictions where the failure to qualify would have an adverse effect upon its ability to perform its obligations under this Agreement and all Related Documents. Borrowers have the power to enter into this Agreement, issue the Revolving Note, mortgage and grant security interests in the Collateral in the manner and for the purpose contemplated by the Collateral Documents. Borrowers have the corporate power to perform their obligations hereunder and under this Agreement and of the Related Documents. The making and performance by Borrowers of this Agreement and of the Related Documents have been duly authorized by all necessary corporate action (including all necessary shareholder action), and do not and will not violate any provision of any law, rule, regulation, order, writ, judgment, decree, determination or award presently in effect having applicability to Borrowers or the articles of incorporation of Borrowers. The making and performance by Borrowers of this Agreement and the Related Documents do not and will not result in a breach of or constitute a default under any indenture or loan or credit agreement or any other agreement or instrument to which either Borrower is a party or by which it may be bound or affected, or result in, or require, the creation or imposition of any mortgage, deed of trust, pledge, lien, security interest or other charge or encumbrance of any nature (other than as contemplated this Agreement and by the Related Documents) upon or with respect to any of the properties now owned or hereafter acquired by such Borrower, and neither Borrower is in default under or in violation of any such order, writ, judgment, decree, determination, award, indenture, agreement or instrument. This Agreement and each of the Related Documents to which either Borrower is a party constitutes legal, valid and binding obligations of each such Borrower, enforceable in accordance with its terms, except to the extent that the enforceability of such instruments may be subject to the effect of applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' rights generally, or the effect of general equity principles.
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Section 7.12. Regulations X, T and U. Neither Borrower is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulations X, T and U of the Board of Governors of the Federal Reserve System), and none of the proceeds of the Revolving Loans will be used for the purpose of purchasing or carrying such margin stock.
Section 7.13. Location of Borrowers' Offices, Records and Inventory and Equipment. The chief place of business of Borrowers, and the office where Borrowers keeps their records concerning the Collateral, and the present locations of Borrowers' Inventory (other than Inventory out on lease) and Equipment, are as follows:
00
Xxxxx xx Xxxxxxxx/Xxxxxxx Location |
Inventory and Equipment Locations |
Compressco - 0000 X.X. 0xx Xxxxxxxx Xxxx, XX 00000 |
0000 X.X. 0xx Xxxxxxxx Xxxx, XX 00000 (Add Inventory Locations) |
Field Services - 0000 XX 0xx Xxxxxxxx Xxxx, XX 00000 |
0000 XX 0xx Xxxxxxxx Xxxx, XX 00000 |
Additional Inventory and Equipment Locations | |
Folks Auto Machine 000 X.X. 00xx Xxxxxx Xxxxxx, XX 00000 |
Xxxxxxxxxx Automatics, Inc. 000 X.X. 0xx Xxxxxx Xxxxxxxx Xxxx, XX 00000 |
Compresso Field Services, Inc. 000 Xxxxx Xxxx Xxxxxxxx Xxxx, XX 00000 |
Providence Natural Gas, Inc. 000 Xxxxx Xxxxxxxx Xxxxx 0000 Xxxxxxxx Xxxx, XX 00000 |
Compresso Field Services, Inc. 0000 Xxxxx Xxxxx Xxxxxxxxxx, XX 00000 |
Xxxxx Xxx Hwy 000 Xxxxx 000 Xxxxx Xxxxxx, XX |
Xxxxxx Xxxxx Xxxxx Oil Company Xxxxxx, XX 00000 |
Xxxx Xxxxxx 0000 Xxxxxxxx Xxxxxx Xxxxxxxx, XX 00000 |
Xxxxxx Xxxxxx 0000 Xxxxxx Xxxxx, XX 00000 |
J & K Services 0000 X.X. 00xx Xxxxxx Xxxxxxxx , XX 00000 |
Xxxxx Xxxxxx 0000 X.X. 00xx Xxxxxx Xxxxxxxx Xxxx, XX 00000 |
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ARTICLE VIII
In addition to the covenants contained in the Collateral Documents, which covenants are hereby ratified and confirmed by Borrowers, Borrowers covenant and agree as follows:
Section 8.1. Financial Statements. Borrowers will furnish or cause to be furnished to Bank:
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(a) |
within twenty (20) days following the end of each month, financial statements consisting of a balance sheet of each Borrower as of the end of such month, and statements of income and statements of cash flow of each Borrower for such month and for the fiscal year through such month, all certified by the chief financial officer of each Borrower as having been prepared in accordance with GAAP consistently applied; |
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(b) |
as soon as available and in any event within ninety (90) days following the close of each fiscal year of Borrowers, unqualified audited consolidated and consolidating financial statements of Compressco and its Consolidated Subsidiaries consisting of a balance sheet as of the end of such fiscal year and statements of income, and statement of cash flow for such fiscal year, setting forth in each case in comparative form the corresponding figures for the preceding fiscal year, certified by independent public accountants of recognized standing acceptable to Bank, together with the 10-K or equivalent report submitted by Compressco to the Securities and Exchange Commission for such period; |
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(c) |
within thirty days (30) of the filing of same, copies of all Forms 1120 and all schedules and attachments thereto as submitted annually to the Internal Revenue Service by Compressco and its Consolidated Subsidiaries; |
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(d) |
within thirty (30) days of the end of each fiscal quarter, a compliance certificate signed by the chief financial officer of each Borrower, certifying that said officer has reviewed this Agreement and to the best of his or her knowledge no Default or Event of Default has occurred, or if such Default or Event of Default has occurred, specifying the nature and extent thereof, and that all financial covenants in this Agreement have been met, and providing a computation of all financial covenants contained herein, including specifically those needed to determine Borrower's compliance with all Performance Pricing Criteria; |
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(e) |
with each request for a Revolving Loan or for the issuance of a Letter of Credit, but in any event not less than weekly, a borrowing base certificate showing each Borrower's total Receivables, leased compressor equipment, Inventory, minus ineligibles, total Eligible Receivables and Eligible Inventory, usage and availability, in form and substance acceptable to Bank, with such borrowing base certificate to be certified by the chief financial officers of Borrowers; |
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(f) |
within twenty (20) days following the end of each calendar month, a detailed aging of each Borrower's Receivables and accounts payable aged by invoice date, together with a certificate executed by the chief financial officer of each Borrower, identifying the amount of Eligible Receivables, Eligible Inventory, and accounts payable of each such Borrower as of the end of such month, together with a collateral location report and a lease status report relating to leased Inventory of Borrowers as of the end of such month, all in such form and containing such representations and warranties as Bank may reasonably require; |
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(g) |
Within 365 days following the end of each calendar year, the personal financial statements of Xxxxxx Xxxx Xxxxxx, III, signed by Xx. Xxxxxx and submitted pursuant to fully completed forms of personal financial statements provided by Bank, together with his federal tax returns and all schedules thereto, within fifteen (15) days of the filing of same; |
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(h) |
on a bi-annual basis, commencing on the second anniversary date of the date of this Agreement, a third-party collateral appraisal prepared by a reputable appraisal service firm approved by Bank, which is addressed to Bank; |
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(i) |
such other necessary financial information concerning Borrowers and Guarantors as Bank may reasonably request from time to time. |
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Borrowers agree to provide Bank with certificates of insurance of such policies of insurance acceptable to Bank. Borrowers further agree to promptly furnish Bank with copies of all renewal notices and, if requested by Bank, with copies of receipts for paid premium. Borrowers shall provide Bank with certificates of insurance acceptable to Bank for all renewal or replacement policies of insurance no later than fifteen (15) days before any such existing policy or policies should expire. If Borrowers' insurance policies required hereunder and renewals thereof are held by another person, Borrowers agrees to certificates of insurance acceptable to Bank covering the same to Bank within the time periods required above.
Each Borrower shall give notice to Bank as soon as reasonably possible and in no event more than five (5) Business Days after it receives any compliance orders, environmental citations, or other notices from any governmental entity relating to any environmental condition relating to its properties or elsewhere for which it may have legal responsibility with a full description thereof. Each Borrower agrees to take any and all reasonable steps, and to perform any and all reasonable actions necessary or appropriate to promptly comply with any such citations, compliance orders or Environmental Laws requiring either such Borrower to remove, treat or dispose of such hazardous materials, wastes or conditions at the sole expense of such Borrower, to provide Bank with satisfactory evidence of such compliance; provided, however, that nothing contained herein shall preclude Borrowers from contesting any such compliance orders or citations if such contest is made in good faith, appropriate reserves are established for the payment for the cost of compliance therewith, and Bank's security interest in any such property affected thereby (or the priority thereof) is not jeopardized.
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Regardless of whether any Event of Default hereunder shall have occurred and be continuing, Borrowers (i) release and waive any present or future claims against Bank for indemnity or contribution in the event either Borrower becomes liable for remediation costs under and Environmental Laws, and (ii) agree to defend, indemnify and hold harmless Bank from any and all liabilities (including strict liability), actions, demands, penalties, losses, costs or expenses (including, without limitation, reasonable attorneys fees and remedial costs), suits, administrative orders, agency demand letters, costs of any settlement or judgment and claims of any and every kind whatsoever which may now or in the future (whether before or after the termination of this Agreement) be paid, incurred, or suffered by, or asserted against Bank by any person or entity or governmental agency for, with respect to, or as a direct or indirect result of, the presence on or under, or the escape, seepage, leakage, spillage, discharge, emission, or release from or onto the property of Borrowers of any hazardous materials, wastes or conditions regulated by any Environmental Laws, contamination resulting therefrom, or arising out of, or resulting from, the environmental condition of such property or the applicability of any Environmental Laws relating to hazardous materials (including, without limitation, CERCLA or any so called federal, state or local "super fund" or "super lien" laws, statute, ordinance, code, rule, regulation, order or decree) regardless of whether or not caused by or within the control of Bank. The covenants and indemnities contained in this Section 8.8 shall survive termination of this Agreement.
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(a) |
Compressco and its Consolidated Subsidiaries shall maintain a Funded Debt to Cash Flow Ratio of less than or equal to 3.0 to 1.0 as of the end of each fiscal quarter. |
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(b) |
Compressco and its Consolidated Subsidiaries shall maintain a Debt Service Coverage Ratio of greater than or equal to 1.25 to 1.0 as of the end of each fiscal quarter. |
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(c) |
Compressco and its Consolidated Subsidiaries shall maintain a ratio of Debt to Adjusted Net Worth of less than or equal to 1.25 to 1.0 as of the end of each fiscal quarter. |
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ARTICLE IX
In addition to the negative covenants contained in the Collateral Documents, which covenants are hereby ratified and confirmed by Borrowers, Borrowers covenant and agree as follows:
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(a) |
Encumbrances for taxes, assessments, or other governmental charges not yet due or which are being contested in good faith by appropriate action promptly initiated and diligently conducted, if such reserves as shall be required by GAAP shall have been made therefor. |
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(b) |
Encumbrances of landlords, vendors, carriers, warehousemen, mechanics, laborers and materialmen arising by law in the ordinary course of business for sums either not yet due or being contested in good faith by appropriate action promptly initiated and diligently conducted, if such reserve as shall be required by generally accepted accounting principles shall have been made therefor. |
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(c) |
Inchoate liens arising under ERISA to secure the contingent liabilities, if any, permitted by this Agreement. |
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(d) |
The pledge of the Collateral and any other liens in favor of the Bank to secure the Indebtedness of the Borrowers to the Bank. |
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(e) |
Liens which, as of the date hereof, have been disclosed to and approved by Bank in writing. |
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Section 9.5. Debts, Guaranties and Other Obligations. Borrowers will not incur, create, assume or in any manner become or be liable in respect of any indebtedness, direct or contingent, except for:
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(a) |
The Indebtedness to the Bank under this Agreement; |
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(b) |
The Subordinated Debt; |
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(c) |
Trade payables or non-material operating leases from time to time incurred in the ordinary course of business; and |
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(d) |
Taxes, assessments or other government charges which are not yet due or are being contested in good faith by appropriate action promptly initiated and diligently conducted, if such reserve as shall be required by generally accepted accounting principles shall have been made therefor. |
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Section 9.10. Major Vendors and Collateral Locations. Borrowers will not allow Equipment or Inventory in an aggregate amount not to exceed $50,000.000 to be maintained, repaired, stored or warehoused for more than seven days in locations other than those shown in Section 7.13 to this Agreement.
ARTICLE X
Default under the Indebtedness. Should Borrowers default in the payment of principal or interest under the Indebtedness.
Default under this Agreement. Should Borrowers violate or fail to comply fully with any of the terms and conditions of, or default under, this Agreement, and such default not be cured within thirty days of the occurrence thereof (provided, however, that no cure period shall be available for a default in the obligation to comply with negative covenants contained herein or to maintain insurance coverages required hereby).
Default Under Other Agreements. Should any event of default occur or exist under any of the Related Documents or should either Borrower, any Guarantor violate, or fail to comply fully with, any terms and conditions of any of the Collateral Documents or Related Documents, and such default not be cured within thirty days of the occurrence thereof (provided, however, that no cure period shall be available for a default in the obligation to comply with negative covenants contained therein or to maintain insurance coverages affecting the Collateral required thereby).
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(a) |
Filing by either Borrower or any Guarantor of a voluntary petition or any answer seeking reorganization, arrangement, readjustment of its debts or for any other relief under any applicable bankruptcy act or law, or under any other insolvency act or law, now or hereafter existing, or any action by either Borrower or any Guarantor consenting to, approving of, or acquiescing in, any such petition or proceeding; the application by either Borrower or any Guarantor for, or the appointment by consent or acquiescence of, a receiver or trustee of either Borrower or of any Guarantor for all or a substantial part of its property; the making by either Borrower or by any Guarantor of an assignment for the benefit of creditors; the inability of either Borrower or any Guarantor or the admission by either Borrower or any Guarantor in writing, of its inability to pay its debts as they mature (the term "acquiescence" means the failure to file a petition or motion in opposition to such petition or proceeding or to vacate or discharge any order, judgment or decree providing for such appointment within sixty (60) days after the appointment of a receiver or trustee); or |
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(b) |
Filing of an involuntary petition against either Borrower or any Guarantor in bankruptcy or seeking reorganization, arrangement, readjustment of its debts or for any other relief under any applicable bankruptcy act or law, or under any other insolvency act or law, now or hereafter existing and such petition remains undismissed or unanswered for a period of sixty (60) days from such filing; or the insolvency appointment of a receiver or trustee of either Borrower or of any Guarantor for all or a substantial part of its property and such appointment remains unvacated or unopposed for a period of sixty (60) days from such appointment, execution or similar process against any substantial part of the property of either Borrower or of any Guarantor and such warrant remains unbonded or undismissed for a period of sixty (60) days from notice to such Borrower or such Guarantor of its issuance. |
Death or Incapacity of Individual Guarantors. Should any individual Guarantor die or become incapacitated or interdicted.
False Statements. Should any representation or warranty of either Borrower or any Guarantor made in connection with the Indebtedness prove to be incorrect or misleading in any material respect when made or reaffirmed.
Material Adverse Change. Should a Material Adverse Change with respect to either Borrower or any Guarantor occur at any time and not be cured within ten days of the occurrence thereof.
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Upon the occurrence of an Event of Default, all commitments of Bank under this Agreement will terminate immediately (including any obligation to make any further Revolving Loans), and, at Bank's option, the Revolving Note and all Indebtedness of Borrowers will become immediately due and payable, all without notice of any kind to Borrowers, except that in the case of type described in the "Insolvency" subsection above, such acceleration shall be automatic and not optional.
Upon the occurrence of an Event of Default, Bank may increase the rate of interest borne by the Revolving Note to the default rate of interest provided for under the Revolving Note, proceed to realize upon the Collateral under the terms of the Collateral Documents, and/or exercise any other rights which it has by law or contract (which rights shall be cumulative in nature).
ARTICLE XI
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If to Bank: | |
Hibernia National Bank P. O. Xxx 00000 Xxx Xxxxxxx, XX 00000 Attention: Manager-Asset Based Lending Department | ||
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With copy to: | |
Wm. Xxxxx Xxxxxxx, Esq. Xxxxxx & Xxxxx 000 Xxxxxxx Xxxxxx Xxxxx 0000 Xxx Xxxxxxx, XX 00000 | ||
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If to Borrowers: | |
Compressco, Inc. 0000 X.X. 0xx Xxxxxxxx Xxxx, XX 00000 Attention: Mr. Xxxx XxXxxxx |
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Section 11.7. Governing Law. This Agreement and the Revolving Note shall be deemed to be contracts made under the laws of the State of Louisiana and for all purposes shall be construed in accordance with the laws of said State.
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EACH OF THE BORROWERS AND THE BANK EACH FURTHER REPRESENTS THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS AGREEMENT AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.
(b) EACH BORROWER HEREBY IRREVOCABLY CONSENTS TO THE JURISDICTION OF THE STATE COURTS OF LOUISIANA AND THE FEDERAL COURTS IN LOUISIANA AND AGREES THAT ANY ACTION OR PROCEEDING ARISING OUT OF OR BROUGHT TO ENFORCE THE PROVISIONS OF THE REVOLVING NOTE, THIS AGREEMENT AND/OR THE COLLATERAL DOCUMENTS MAY BE BROUGHT IN ANY COURT HAVING SUBJECT MATTER JURISDICTION.
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COMPRESSCO, INC.
By:___________________________________ Xxxxx X. Xxxxxxx, Chief Financial Officer
COMPRESSCO FIELD SERVICES, INC.
By:___________________________ Xxxxx X. Xxxxxxx, Chief Financial Officer
HIBERNIA NATIONAL BANK
By:___________________________ Xxxxxx X. Xxxx, Assistant Vice President |
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