1
EXECUTION COPY
--------------
EXHIBIT 10.30
================================================================================
$200,000,000
CREDIT AGREEMENT
among
HANOVER COMPRESSOR COMPANY,
THE CHASE MANHATTAN BANK
as ADMINISTRATIVE AGENT,
and
THE SEVERAL LENDERS PARTIES HERETO
Dated as of December 15, 1997
================================================================================
2
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS......................................................................................... 1
1.1 Defined Terms..................................................................................... 1
1.2 Other Definitional Provisions..................................................................... 17
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS..................................................................... 17
2.1 Revolving Credit Commitments...................................................................... 17
2.2 Revolving Credit Notes............................................................................ 17
2.3 Procedure for Revolving Credit Borrowing.......................................................... 18
SECTION 3. INTEREST RATE PROVISIONS, FEES,
3.1 Interest Rates and Payments Dates................................................................. 19
3.2 Commitment Fee; Other Fees and Compensation....................................................... 19
3.3 Termination or Reduction of the Commitments....................................................... 19
3.4 Optional Prepayments and other Repayments......................................................... 20
3.5 Conversion and Continuation Options............................................................... 20
3.6 Minimum Amounts................................................................................... 21
3.7 Computation of Interest and Fees.................................................................. 21
3.8 Inability to Determine Interest Rate.............................................................. 21
3.9 Pro Rata Treatment and Payments................................................................... 22
3.10 Illegality........................................................................................ 23
3.11 Requirements of Law............................................................................... 23
3.12 Taxes............................................................................................. 24
3.13 Indemnity......................................................................................... 25
3.14 Replacement of Lenders............................................................................ 26
SECTION 4. LETTERS OF CREDIT................................................................................... 26
4.1. L/C Commitment.................................................................................... 26
4.2. Procedure for Issuance of Letters of Credit....................................................... 27
4.3. Fees, Commissions and Other Charges............................................................... 27
4.4. L/C Participations................................................................................ 28
-i-
3
4.5. Reimbursement Obligation of HCC.................................................................. 29
4.6. Obligations Absolute............................................................................. 29
4.7. Letter of Credit Payments........................................................................ 30
4.8. Application...................................................................................... 30
SECTION 5. REPRESENTATIONS AND WARRANTIES..................................................................... 30
5.1 Financial Condition.............................................................................. 30
5.2 No Change........................................................................................ 31
5.3 Corporate Existence; Compliance with Law......................................................... 31
5.4 Corporate Power; Authorization; Enforceable Obligations.......................................... 31
5.5 No Legal Bar..................................................................................... 32
5.6 No Material Litigation........................................................................... 32
5.7 No Default....................................................................................... 32
5.8 Ownership of Property; Liens; Leases of Equipment................................................ 32
5.9 Intellectual Property............................................................................ 33
5.10 Taxes............................................................................................ 33
5.11 Federal Regulations.............................................................................. 33
5.12 ERISA............................................................................................ 33
5.13 Investment Company Act; Other Regulations........................................................ 34
5.14 Subsidiaries..................................................................................... 34
5.15 Purpose of Loans................................................................................. 34
5.16 Environmental Matters............................................................................ 34
5.17 Accuracy and Completeness of Information......................................................... 35
SECTION 6. CONDITIONS PRECEDENT............................................................................... 35
6.1 Conditions to the Initial Extensions of Credit................................................... 35
6.2 Conditions to Each Extension of Credit........................................................... 38
SECTION 7. AFFIRMATIVE COVENANTS.............................................................................. 39
7.1 Financial Statements............................................................................. 39
7.2 Certificates; Other Information.................................................................. 40
7.3 Payment of Obligations........................................................................... 41
7.4 Conduct of Business and Maintenance of Existence................................................. 41
7.5 Maintenance of Property; Insurance............................................................... 41
7.6 Inspection of Property; Books and Records; Discussions........................................... 41
7.7 Notices.......................................................................................... 41
7.8 Environmental Laws............................................................................... 42
7.9 Subsequent Guarantees............................................................................ 43
SECTION 8. NEGATIVE COVENANTS................................................................................. 43
8.1 Financial Condition Covenants.................................................................... 43
8.2 Limitation on Indebtedness....................................................................... 44
8.3 Limitation on Liens.............................................................................. 45
8.4 Limitation on Guarantee Obligations.............................................................. 47
8.5 Limitations on Fundamental Changes............................................................... 47
8.6 Limitation on Sale or Lease of Assets............................................................ 48
8.7 Limitation on Leases............................................................................. 49
8.8 Limitation on Dividends.......................................................................... 49
-ii-
4
8.9 Limitation on Derivatives........................................................................ 49
8.10 Limitation on Investments, Loans and Advances.................................................... 49
8.11 Limitation on Optional Payments and Modifications of Debt Instruments............................ 50
8.12 Transactions with Affiliates..................................................................... 51
8.13 Sale and Leaseback............................................................................... 51
8.14 Corporate Documents.............................................................................. 51
8.15 Fiscal Year...................................................................................... 51
8.16 Nature of Business............................................................................... 51
8.17 Unqualified Subsidiaries......................................................................... 51
SECTION 9. EVENTS OF DEFAULT................................................................................... 51
SECTION 10. THE ADMINISTRATIVE AGENT............................................................................ 54
10.1 Appointment...................................................................................... 54
10.2 Delegation of Duties............................................................................. 55
10.3 Exculpatory Provisions........................................................................... 55
10.4 Reliance by Administrative Agent................................................................. 55
10.5 Notice of Default................................................................................ 55
10.6 Non-Reliance on Administrative Agent and Other Lenders........................................... 56
10.7 Indemnification.................................................................................. 56
10.8 Administrative Agent in Its Individual Capacity.................................................. 57
10.9 Successor Administrative Agent................................................................... 57
SECTION 11. MISCELLANEOUS...................................................................................... 57
11.1 Amendments and Waivers........................................................................... 57
11.2 Notices 58
11.3 No Waiver; Cumulative Remedies................................................................... 59
11.4 Survival of Representations and Warranties....................................................... 59
11.5 Payment of Expenses and Taxes.................................................................... 59
11.6 Successors and Assigns; Participations; Purchasing Lenders....................................... 60
11.7 Adjustments; Set-off............................................................................. 63
11.8 Counterparts..................................................................................... 64
11.9 Severability..................................................................................... 64
11.10 Integration...................................................................................... 64
11.11 GOVERNING LAW.................................................................................... 64
11.12 Submission To Jurisdiction; Waivers.............................................................. 64
11.13 Acknowledgements................................................................................. 65
11.14 WAIVERS OF JURY TRIAL............................................................................ 65
11.15 Usury............................................................................................ 65
5
Schedules
Schedule I Lenders and Commitments
Schedule II Subsidiaries
Schedule III Material Transactions
Schedule IV Material Changes
Schedule V Required Consents
Schedule VI Sale and Leaseback Transactions
Schedule VII Forms of Compressor and Production
Equipment Leases
Schedule VIII Intentionally Left Blank
Schedule IX Environmental
Schedule X Existing Indebtedness
Schedule XI Existing Liens
Schedule XII Additional Existing Liens
Schedule XIII Affiliate Transactions
Exhibits
Exhibit A Form of Revolving Credit Note
Exhibit B Subsidiaries' Guarantee
Exhibit C-1 Opinion of Xxxx, Xxxxxx & Xxxxxxxxx
Exhibit C-2 Opinion of Xxxxxx & Xxxxxx
Exhibit D Form of Assignment and Acceptance
-iv-
6
CREDIT AGREEMENT, dated as of December 15, 1997 (this
"Agreement") among Hanover Compressor Company, a Delaware corporation ("HCC"),
the several banks and other financial institutions from time to time parties to
this Agreement (the "Lenders") and The Chase Manhattan Bank, a New York banking
corporation (formerly known as Chemical Bank), as agent for the Lenders
hereunder (in such capacity, the "Administrative Agent").
The parties hereto agree as follows:
1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following
terms shall have the following meanings:
"ABR": for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the greatest of (a) the
Prime Rate in effect on such day, (b) the Base CD Rate in effect on
such day plus 1% and (c) the Federal Funds Effective Rate in effect on
such day plus 1/2 of 1%. For purposes hereof: "Prime Rate" shall mean
the rate of interest per annum publicly announced from time to time by
Chase as its prime rate in effect at its principal office in New York
City (the Prime Rate not being intended to be the lowest rate of
interest charged by Chase in connection with extensions of credit to
debtors); "Base CD Rate" shall mean the sum of (a) the product of (i)
the Three-Month Secondary CD Rate and (ii) a fraction, the numerator of
which is one and the denominator of which is one minus the C/D Reserve
Percentage and (b) the C/D Assessment Rate; "Three-Month Secondary CD
Rate" shall mean, for any day, the secondary market rate for
three-month certificates of deposit reported as being in effect on such
day (or, if such day shall not be a Business Day, the next preceding
Business Day) by the Board of Governors of the Federal Reserve System
(the "Board") through the public information telephone line of the
Federal Reserve Lender of New York (which rate will, under the current
practices of the Board, be published in Federal Reserve Statistical
Release H.15(519) during the week following such day), or, if such rate
shall not be so reported on such day or such next preceding Business
Day, the average of the secondary market quotations for three-month
certificates of deposit of major money center banks in New York City
received at approximately 10:00 A.M., New York City time, on such day
(or, if such day shall not be a Business Day, on the next preceding
Business Day) by the Administrative Agent from three New York City
negotiable certificate of deposit dealers of recognized standing
selected by it; and "Federal Funds Effective Rate" shall mean, for any
day, the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by
federal funds brokers, as published on the next succeeding Business Day
by the Federal Reserve Lender of New York, or, if such rate is not so
published for any day which is a Business Day, the average of the
quotations for the day of such transactions received by the
Administrative Agent from three federal funds brokers of recognized
standing selected by it. If for any reason the Administrative Agent
shall have determined (which determination shall be conclusive absent
manifest error) that it is unable to ascertain the Base CD Rate or the
Federal Funds
7
2
Effective Rate, or both, for any reason, including the inability or
failure of the Administrative Agent to obtain sufficient quotations in
accordance with the terms thereof, the ABR shall be determined without
regard to clause (b) or (c), or both, of the first sentence of this
definition, as appropriate, until the circumstances giving rise to such
inability no longer exist. Any change in the ABR due to a change in the
Prime Rate, the Three-Month Secondary CD Rate or the Federal Funds
Effective Rate shall be effective as of the opening of business on the
effective day of such change in the Prime Rate, the Three-Month
Secondary CD Rate or the Federal Funds Effective Rate, respectively.
"ABR Loans": Loans the rate of interest applicable to which is
based upon the ABR.
"Affiliate": as to any Person, any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is
controlled by, or is under common control with, such Person. For
purposes of this definition, "control" of a Person means the power,
directly or indirectly, either to (a) vote 30% or more of the
securities having ordinary voting power for the election of directors
of such Person or (b) direct or cause the direction of the management
and policies of such Person, whether by contract or otherwise.
"Aggregate Outstanding Extensions of Credit": as to any Lender
at any time, an amount equal to the sum of (a) the aggregate principal
amount of all Loans made by such Lender then outstanding and (b) such
Lender's Commitment Percentage of the L/C Obligations then outstanding.
"Agreement": this Credit Agreement, as amended, supplemented
or otherwise modified from time to time.
"Applicable Commitment Fee Rate": for each day, the rate per
annum set forth below:
(a) if the Applicable Margin Certificate required pursuant to
subsection 7.2(f) for any fiscal quarter of HCC shows that the
Consolidated Indebtedness Ratio on the last day of such fiscal quarter
was less than or equal to 1.0 to 1, then the Commitment Fee for the
fiscal quarter of HCC immediately preceding the date such certificate
is delivered shall be .1875%;
(b) if the Applicable Margin Certificate required pursuant to
subsection 7.2(f) for any fiscal quarter of HCC shows that the
Consolidated Indebtedness Ratio on the last day of such fiscal quarter
was greater than 1.0 to 1 and less than or equal to 2.0 to 1, then the
Commitment Fee for the fiscal quarter of HCC immediately preceding the
date such certificate is delivered shall be .250%;
8
3
(c) if the Applicable Margin Certificate required pursuant to
subsection 7.2(f) for any fiscal quarter of HCC shows that the
Consolidated Indebtedness Ratio on the last day of such fiscal quarter
was greater than 2.0 to 1 and less than or equal to 4.0 to 1, then the
Commitment Fee for the fiscal quarter of HCC immediately preceding the
date such certificate is delivered shall be .300%; and
(d) if the Applicable Margin Certificate required pursuant to
subsection 7.2(f) for any fiscal quarter of HCC shows that the
Consolidated Indebtedness Ratio on the last day of such fiscal quarter
was greater than 4.0 to 1 then the Applicable Margin for the fiscal
quarter of HCC immediately preceding the date such certificate is
delivered shall be .375%;
provided, that if HCC shall fail to deliver the Applicable Margin
Certificate by the end of the fiscal quarter in which it is required,
the Applicable Commitment Fee Rate for the next fiscal quarter shall be
as provided in clause (d) above.
"Applicable Margin": for each Loan, the rate per annum set
forth below:
(a) if the Applicable Margin Certificate required pursuant to
subsection 7.2(f) for any fiscal quarter of HCC shows that the
Consolidated Indebtedness Ratio on the last day of such fiscal quarter
was less than or equal to 1.0 to 1, then the Applicable Margin for the
fiscal quarter of HCC immediately succeeding the date such certificate
is delivered shall be (i) with respect to ABR Loans, 0% and (ii) with
respect to Eurodollar Loans, .500%; and
(b) if the Applicable Margin Certificate required pursuant to
subsection 7.2(f) for any fiscal quarter of HCC shows that the
Consolidated Indebtedness Ratio on the last day of such fiscal quarter
was greater than 1.0 to 1 and less than or equal to 2.0 to 1, then the
Applicable Margin for the fiscal quarter of HCC immediately succeeding
the date such certificate is delivered shall be (i) with respect to ABR
Loans, 0% and (ii) with respect to Eurodollar Loans, .750%;
(c) if the Applicable Margin Certificate required pursuant to
subsection 7.2(f) for any fiscal quarter of HCC shows that the
Consolidated Indebtedness Ratio on the last day of such fiscal quarter
was greater than 2.0 to 1 and less than or equal to 3.0 to 1, then the
Applicable Margin for the fiscal quarter of HCC immediately succeeding
the date such certificate is delivered shall be (i) with respect to ABR
Loans, .250% and (ii) with respect to Eurodollar Loans, 1.000%;
(d) if the Applicable Margin Certificate required pursuant to
subsection 7.2(f) for any fiscal quarter of HCC shows that the
Consolidated Indebtedness Ratio on the last day of such fiscal quarter
was greater than 3.0 to 1 and less than or equal to 4.0 to 1, then the
Applicable Margin for the fiscal quarter of HCC immediately succeeding
the date such
9
4
certificate is delivered shall be (i) with respect to ABR Loans,
.250% and (ii) with respect to Eurodollar Loans, 1.250%; and
(e) if the Applicable Margin Certificate required pursuant to
subsection 7.2(f) for any fiscal quarter of HCC shows that the
Consolidated Indebtedness Ratio on the last day of such fiscal quarter
was greater than 4.0 to 1, then the Applicable Margin for the fiscal
quarter of HCC immediately succeeding the date such certificate is
delivered shall be (i) with respect to ABR Loans, .500% and (ii) with
respect to Eurodollar Loans, 1.500%;
provided, that if HCC shall fail to deliver the Applicable Margin
Certificate by the end of the fiscal quarter in which it is required,
the Applicable Margin for the next fiscal quarter shall be as provided
in clause (e) above.
"Applicable Margin Certificate": as defined in subsection
7.2(f).
"Application": an application, in such form as the Issuing
Lender may specify from time to time, requesting the Issuing Lender to
open a Letter of Credit.
"Available Commitment": as to any Lender, at any time, an
amount equal to the excess, if any, of (a) such Lender's Commitment
over (b) such Lender's Aggregate Outstanding Extensions of Credit.
"benefitted Lender": as defined in subsection 11.7(a).
"Borrowing Date": any Business Day specified in a notice
pursuant to subsection 2.3, as a date on which HCC requests the Lenders
to make Loans hereunder.
"Business Day": a day other than a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or
required by law to close.
"Capital Stock": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person
(other than a corporation) and any and all warrants or options to
purchase any of the foregoing.
"Cash Equivalents": (a) securities with maturities of one year
or less from the date of acquisition issued or fully guaranteed or
insured by the United States Government or any agency thereof, (b)
certificates of deposit and eurodollar time deposits with maturities of
one year or less from the date of acquisition and overnight bank
deposits of any Lender or of any commercial bank having capital and
surplus in excess of $500,000,000, (c) repurchase obligations of any
Lender or of any commercial bank satisfying the requirements of clause
(b) of this definition, having a term of not more than 30 days with
respect to securities issued or fully guaranteed or insured by the
United States Government, (d) commercial paper of a domestic issuer
rated at least A-2 by
10
5
Standard and Poor's Rating Group ("S&P") or P-2 by Xxxxx'x Investors
Services, Inc. ("Moody's"), (e) securities with maturities of one year
or less from the date of acquisition issued or fully guaranteed by any
state, commonwealth or territory of the United States, by any political
subdivision or taxing authority of any political subdivision or taxing
authority of any such state, commonwealth or territory or any foreign
government, the securities of which state, commonwealth, territory,
political subdivision, taxing authority or foreign government (as the
case may be) are rated at least A by S&P or A by Moody's, (f)
securities with maturities of one year or less from the date of
acquisition backed by standby letters of credit issued by any Lender or
any commercial bank satisfying the requirements of clause (b) of this
definition or (g) shares of money market mutual or similar funds which
invest exclusively in assets satisfying the requirements of clauses (a)
through (f) of this definition.
"C/D Assessment Rate": for any day the net annual assessment
rate (rounded upwards, if necessary, to the next 1/100 of 1%)
determined by Chase to be payable on such day to the Federal Deposit
Insurance Corporation or any successor ("FDIC") for FDIC's insuring
time deposits made in Dollars at offices of Chase in the United States.
"C/D Reserve Percentage": for any day as applied to any
calculation of the Base CD Rate, that percentage (expressed as a
decimal) which is in effect on such day, as prescribed by the Board for
determining the maximum reserve requirement for a Depositary
Institution (as defined in Regulation D of the Board) in respect of new
non-personal time deposits in Dollars having a maturity of 30 days or
more.
"Chase": The Chase Manhattan Bank, a New York banking
corporation.
"Closing Date": the date on which all of the conditions
precedent specified in Section 6 shall have been first satisfied.
"Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Commercial Letter of Credit": as defined in subsection
4.1(b)(i)(2).
"Commitment": as to any Lender, the obligation of such Lender
to make Loans to and/or issue or participate in Letters of Credit
issued on behalf of HCC hereunder in an aggregate principal and/or face
amount at any one time outstanding not to exceed the amount set forth
opposite such Lender's name on Schedule I, as such amount may be
reduced from time to time in accordance with the terms of this
Agreement; collectively, as to all of the Lenders, the "Commitments".
"Commitment Percentage": as to any Lender at any time, the
percentage of the aggregate Commitments then constituted by such
Lender's Commitment.
11
6
"Commitment Period": the period from and including the date
hereof to but not including the Final Maturity Date or such earlier
date on which the Commitments shall terminate as provided herein.
"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with HCC within the meaning
of Section 4001(a)(14) of ERISA or is part of a group which includes
HCC and which is treated as a single employer under Section 414 of the
Code.
"Consolidated Capitalization": at a particular date, as to any
Person, the sum of (a) Consolidated Net Worth and (b) the amount of
Consolidated Indebtedness at such date.
"Consolidated Earnings Before Interest and Taxes": for any
period, with respect to any Person, the sum of (a) Consolidated Net
Income for such period, (b) all amounts attributable to provision for
taxes measured by income (to the extent that such amounts have been
deducted in determining Consolidated Net Income for such period) and
(c) Consolidated Interest Expense for such period.
"Consolidated EBITDA": for any period, with respect to any
Person, the sum of (a) Consolidated Earnings Before Interest and Taxes
for such Person for such period plus, (b) all amounts attributable to
depreciation and amortization, determined in accordance with GAAP (to
the extent such amounts have been deducted in determining Consolidated
Earnings Before Interest and Taxes for such period) plus, (c) all
amounts classified as extraordinary charges for such period (to the
extent such amounts have been deducted in determining Consolidated
Earnings Before Interest and Taxes for such period) minus, (d) all
amounts classified as extraordinary income for such period (to the
extent such amounts have been included in determining Consolidated
Earnings Before Interest and Taxes for such period).
"Consolidated Fixed Charges": for any period as to any Person,
such Person's scheduled principal payments on Indebtedness during such
period (other than scheduled principal payments under revolving credit
facilities of such Person during such period resulting from the
maturity of such revolving credit facilities to the extent such
scheduled principal payments have been extended, renewed, rearranged,
or refinanced under revolving credit facilities maturing beyond such
period) plus Consolidated Interest Expense during such period, plus
Consolidated Mandatory Capital Expenditures during such period, plus
scheduled preferred stock dividend payments during such period, if any,
determined on a consolidated basis in accordance with GAAP.
"Consolidated Indebtedness": at a particular date, as to any
Person, all Indebtedness of such Person and its Subsidiaries other than
Indebtedness in respect of Financing Leases, determined on a
consolidated basis in accordance with GAAP at such date.
12
7
"Consolidated Indebtedness Ratio": for any fiscal quarter of
HCC and its Subsidiaries, the ratio of (a) Consolidated Indebtedness
for HCC and its Subsidiaries as of the last day of such fiscal quarter
to (b) Consolidated EBITDA for HCC and its Subsidiaries for the
12-month period ended on the last day of such fiscal quarter as
determined on a consolidated basis in accordance with GAAP.
"Consolidated Interest Expense": for any period, with respect
to any Person, the amount which, in conformity with GAAP, would be set
forth opposite the caption "interest expense" or any like caption
(including, without limitation, imputed interest included in Financing
Lease payments) on a consolidated income statement of such Person and
its Subsidiaries for such period.
"Consolidated Lease Expense": for any period as to any Person,
the aggregate rental obligations of such Person and its Subsidiaries
determined on a consolidated basis payable in respect of such period
under leases of real and/or personal property (net of income from
sub-leases thereof, but including taxes, insurance, maintenance and
similar expenses which the lessee is obligated to pay under the terms
of said leases), whether or not such obligations are reflected as
liabilities or commitments on a consolidated balance sheet of such
Person and its Subsidiaries or in the notes thereto, and whether or not
such leases constitute Financing Leases.
"Consolidated Mandatory Capital Expenditures": for any period
as to any Person, the capital expenditures of such Person made in the
ordinary course of business for the maintenance of equipment which
extends the useful life of such equipment (other than expenditures made
in connection with the initial refurbishing of used equipment acquired
by HCC or its Subsidiaries) and are or should be capitalized on the
balance sheet of such Person determined on a consistent basis in
accordance with GAAP.
"Consolidated Net Income": for any period as to any Person,
the consolidated net income (or loss) of such Person and its
Subsidiaries, determined on a consolidated basis in accordance with
GAAP.
"Consolidated Net Worth": at a particular date, as to any
Person, the amount which would be included under stockholders' equity
on a consolidated balance sheet of such Person and its Subsidiaries
determined on a consolidated basis in accordance with GAAP.
"Consolidated U.S. EBITDA": for any period, with respect to
the U.S. EBITDA Companies, the sum of (a) Consolidated Earnings Before
Interest and Taxes for the U.S. EBITDA Companies for such period, plus,
(b) all amounts attributable to depreciation and amortization,
determined in accordance with GAAP (to the extent such amounts have
been deducted in determining Consolidated Earnings Before Interest and
Taxes of the U.S. EBITDA Companies for such period) plus, (c) all
amounts classified as
13
8
extraordinary charges for such period (to the extent such amounts have
been deducted in determining Consolidated Earnings Before Interest and
Taxes of the U.S. EBITDA Companies for such period) minus, (d) all
amounts classified as extraordinary income for such period (to the
extent such amounts have been included in determining Consolidated
Earnings Before Interest and Taxes of the U.S. EBITDA Companies for
such period).
"Contractual Obligation": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
other undertaking to which such Person is a party or by which it or any
of its property is bound.
"Credit Parties": the collective reference to (i) HCC, HMI,
Hanover/Xxxxx and the Real Estate Subsidiary and (ii) from time to time
any other Subsidiary of HCC upon and for so long as such Subsidiary
guarantees the Loans and other obligations of HCC hereunder and under
the Notes, and which guarantees shall be under documents substantially
similar to the Guarantees executed on the Closing Date.
"Current Ratio": at a particular date, for HCC and its
Subsidiaries the quotient of the consolidated current assets of HCC and
its Subsidiaries at such time, to the consolidated current liabilities
of HCC and its Subsidiaries at such time less the current portion of
long-term debt (all determined in accordance with GAAP at such time).
"Default": any of the events specified in Section 9, whether
or not any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
"Derivatives": any swap, hedge, cap, collar, or similar
arrangement providing for the exchange of risks related to price
changes in any commodity, including money.
"Dollars" and "$": dollars in lawful currency of the United
States of America.
"Environmental Laws": any and all Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances,
codes, decrees or requirements of any Governmental Authority
regulating, relating to or imposing liability or standards of conduct
concerning environmental protection matters, including without
limitation, Hazardous Materials, as now or may at any time hereafter be
in effect.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to
a Eurodollar Loan, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect on
such day (including, without limitation, basic, supplemental, marginal
and emergency reserves under any regulations of the Board of Governors
of the Federal Reserve System or other Governmental Authority having
14
9
jurisdiction with respect thereto) dealing with reserve requirements
prescribed for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of such Board) maintained by
a member bank of such System.
"Eurodollar Base Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate per annum
equal to the rate at which Chase is offered Dollar deposits at or about
10:00 A.M., New York City time, two Business Days prior to the
beginning of such Interest Period in the interbank eurodollar market
where the eurodollar and foreign currency and exchange operations in
respect of its Eurodollar Loans are then being conducted for delivery
on the first day of such Interest Period for the number of days
comprised therein and in an amount comparable to the amount of its
Eurodollar Loan to be outstanding during such Interest Period.
"Eurodollar Loans": Loans the rate of interest applicable to
which is based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, a rate per annum
determined for such day in accordance with the following formula
(rounded upward to the nearest 1/100th of 1%):
Eurodollar Base Rate
------------------------
1.00 - Eurocurrency Reserve Requirements
"Event of Default": any of the events specified in Section 9,
provided that any requirement for the giving of notice, the lapse of
time, or both, or any other condition, has been satisfied.
"Existing Agreement": the Second Amended and Restated Credit
Agreement, dated as of December 19, 1995, as amended prior to the date
hereof, among HCC, the banks party thereto and The Chase Manhattan
Bank, as Agent.
"Final Maturity Date": December 15, 2002.
"Financing Lease": any lease of property, real or personal,
the obligations of the lessee in respect of which are required in
accordance with GAAP to be capitalized on a balance sheet of the
lessee.
"GAAP": generally accepted accounting principles in the United
States of America consistent with those utilized in preparing the
audited financial statements referred to in subsection 6.1.
15
10
"Governmental Authority": any nation or government, any state
or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another
Person (including without limitation, any bank under any letter of
credit) to induce the creation of which the guaranteeing person has
issued a reimbursement, counter indemnity or similar obligation, in
either case guaranteeing or in effect guaranteeing any Indebtedness,
leases, dividends or other obligations (the "primary obligations") of
any other third Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation
of the guaranteeing Person, whether or not contingent, (a) to purchase
any such primary obligation or any property constituting direct or
indirect security therefor, (b) to advance or supply funds (i) for the
purchase or payment of any such primary obligation or (ii) to maintain
working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (c) to
purchase property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the
primary obligor to make payment of such primary obligation or (d)
otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the
term Guarantee Obligation shall not include endorsements of instruments
for deposit or collection in the ordinary course of business. The
amount of any Guarantee Obligation of any guaranteeing person shall be
deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Guarantee Obligation is made and (b) the maximum amount for which such
guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary
obligation and the maximum amount for which such guaranteeing person
may be liable are not stated or determinable, in which case the amount
of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as
determined by HCC, as the case may be, in good faith.
"Guarantees": collectively, the Subsidiaries' Guarantee and
such other guarantees of the Loans and the other obligations of HCC
hereunder.
"Hanover Acquisition": Hanover Acquisition Corp., a Texas
corporation.
"Hanover/Xxxxx": Hanover/Xxxxx, Inc., a Delaware corporation.
"Hazardous Materials": any hazardous materials, hazardous
waste, hazardous constituents, hazardous or toxic substances, petroleum
products (including crude oil or any fraction thereof), defined or
regulated as such in or under any Environmental Law, including, without
limitation, polychlorinated biphenyls.
16
11
"HMI": Hanover Maintech, Inc. (f/k/a Maintech Enterprises,
Inc.), a Texas corporation.
"Indebtedness": of any Person at any date, (a) all
indebtedness of such Person for borrowed money or for the deferred
purchase price of property or services (other than current liabilities
incurred in the ordinary course of business and payable in accordance
with customary trade practices) or which is evidenced by a note, bond,
debenture or similar instrument, (b) all obligations of such Person
under Financing Leases, (c) all obligations of such Person in respect
of acceptances issued or created for the account of such Person, and
(d) all liabilities secured by any Lien (other than any lien of a type
described in subsection 8.3(a) through (j) on any property owned by
such Person even though such Person has not assumed or otherwise become
liable for the payment thereof.
"indemnified liabilities": as defined in subsection 11.5.
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section
4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": as defined in subsection 5.9.
"Interest Payment Date": (a) as to any ABR Loan, the last day
of each March, June, September and December to occur while such Loan is
outstanding, (b) as to any Eurodollar Loan having an Interest Period of
three months or less the last day of such Interest Period, and (c) as
to any Eurodollar Loan having an Interest Period longer than three
months, each day which is three months or a whole multiple thereof,
after the first day of such Interest Period and the last day of such
Interest Period.
"Interest Period": with respect to any Eurodollar Loan:
(a) initially, the period commencing on the borrowing
or conversion date, as the case may be, with respect to such
Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by HCC in its notice of borrowing or
notice of conversion, as the case may be, given with respect
thereto; and
(b) thereafter, each period commencing on the last
day of the next preceding Interest Period applicable to such
Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by HCC by irrevocable notice to the
Administrative Agent not less than three Working Days prior to
the last day of the then current Interest Period with respect
thereto;
provided that, all of the foregoing provisions relating to the
Interest Periods are subject to the following:
17
12
(i) if an Interest Period pertaining to a
Eurodollar Loan would otherwise end on a day that is
not a Working Day, such Interest Period shall be
extended to the next succeeding Working Day unless
the result of such extension would be to carry such
Interest Period into another calendar month in which
event such Interest Period shall end on the
immediately preceding Working Day;
(ii) any Interest Period that would
otherwise extend beyond the Final Maturity Date shall
end on the Final Maturity Date;
(iii) any Interest Period pertaining to a
Eurodollar Loan that begins on the last Working Day
of a calendar month (or on a day for which there is
no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end
on the last Working Day of a calendar month; and
(iv) HCC shall select Interest Periods so as
not to require a payment or prepayment of any
Eurodollar Loan during an Interest Period for such
Loan.
"Investments": as defined in subsection 8.10.
"Issuing Lender": Chase, in its capacity as issuer of any
Letter of Credit.
"L/C Commitment": $25,000,000.
"L/C Fee Payment Date": the last day of each March, June,
September and December.
"L/C Obligations": at any time, an amount equal to the sum of
(a) the aggregate then undrawn and unexpired amount of the then
outstanding Letters of Credit and (b) the aggregate amount of drawings
under Letters of Credit which have not then been reimbursed pursuant to
subsection 4.5(a).
"L/C Participants": the collective reference to all the
Lenders other than the Issuing Lender.
"Letters of Credit": as defined in paragraph 4.1(a).t
"Lien": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), or
preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement,
any Financing Lease
18
13
having substantially the same economic effect as any of the foregoing,
and the filing of any financing statement under the Uniform Commercial
Code or comparable law of any jurisdiction in respect of any of the
foregoing).
"Loan": any loan made by any Lender pursuant to this
Agreement.
"Loan Documents": this Agreement, the Revolving Credit Notes,
the Applications and the Guarantees.
"Majority Lenders": at any time, Lenders the Commitment
Percentages of which aggregate more than 50%.
"Material Adverse Effect": a material adverse effect on (a)
the business, operations, property or condition (financial or
otherwise) of HCC and its Subsidiaries taken as a whole, (b) the
ability of HCC or any of the Subsidiaries of HCC to perform their
respective obligations under this Agreement, the Notes, or the
Guarantees, or (c) the validity or enforceability of this Agreement or
any of the Notes or any Application or the rights or remedies of the
Administrative Agent or the Lenders hereunder or thereunder.
"Material Subsidiary": at any particular date, each Subsidiary
of HCC for which the aggregate value of all assets owned by such
Subsidiary is greater than $5,000,000.
"Multiemployer Plan": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Non-Recourse Indebtedness": Indebtedness (i) as to which
neither HCC nor any of its Qualified Subsidiaries (a) provides any
guarantee or credit support of any kind (including any undertaking,
guarantee, indemnity, agreement or instrument that would constitute
Indebtedness), or (b) is directly or indirectly liable (as guarantor or
otherwise) and (ii) the explicit terms of which provide that there is
no recourse against any of the assets of HCC or its Qualified
Subsidiaries (other than the Capital Stock of an Unqualified
Subsidiary) or that recourse is limited to assets which do not include
the assets of HCC or its Qualified Subsidiaries (other than the Capital
Stock of an Unqualified Subsidiary).
"Note": any note made by HCC to any Lender pursuant to this
Agreement; collectively the "Notes".
"Participant": as defined in subsection 11.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
19
14
"Permitted Business Acquisition": the formation of a new
Subsidiary or any acquisition of all or substantially all the assets
of, or 50% or more of the shares of capital stock, partnership
interests, joint venture interests, limited liability company interests
or other similar equity interests in, or the acquisition of any
compression and/or oil and gas production equipment assets of, a Person
or division or line of business of a Person (or any subsequent
investment made in a Person previously acquired in a Permitted Business
Acquisition), if immediately after giving effect thereto: (a) no
Default or Event of Default shall have occurred and be continuing or
would result therefrom, (b) all transactions related thereto shall be
consummated in accordance with applicable laws, (c) such acquired or
newly formed corporation, partnership, association or other business
entity shall be a Subsidiary and all actions required to be taken, if
any, with respect to such acquired or newly formed Subsidiary under
subsection 7.9 shall have been taken, (d)(i) HCC shall be in
compliance, on a pro forma basis after giving effect to such
acquisition or formation, with the covenants contained in subsection
8.1 recomputed as at the last day of the most recently ended fiscal
quarter of HCC as if such acquisition had occurred on the first day of
each relevant period for testing such compliance, and HCC shall have
delivered to the Administrative Agent an officers' certificate to such
effect, together with all relevant financial information for such
Person or assets and (ii) any acquired or newly formed Subsidiary shall
not be liable for any Indebtedness or Guarantee Obligations (except for
Indebtedness and Guarantee Obligations permitted by subsections 8.2 and
8.4), (e) any acquired or newly formed Subsidiary (including
Subsidiaries thereof) shall not have (except for Indebtedness and
Guarantee Obligations permitted by subsections 8.2 and 8.4) any
material liabilities (contingent or otherwise), including, without
limitation, liabilities under Environmental Laws and liabilities with
respect to any Plan, and the Borrower shall have delivered to the
Administrative Agent a certificate, signed by a Responsible Officer,
that to the best of such officer's knowledge, no such material
liabilities exist.
"Person": an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority or
other entity of whatever nature.
"Plan": at a particular time, any employee benefit plan which
is covered by ERISA and in respect of which HCC, or a Commonly
Controlled Entity is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.
"Properties": as defined in subsection 5.16.
"Purchasing Lenders": as defined in subsection 11.6(c).
"Qualified Subsidiary": each Subsidiary of HCC organized under
a jurisdiction of the United States and having assets located primarily
in the United States.
20
15
"Real Estate Subsidiary": Hanover Land Company, a Texas
corporation.
"Register": as defined in subsection 11.6(d).
"Regulation U": Regulation U of the Board of Governors of the
Federal Reserve System.
"Reimbursement Obligations": the obligation of HCC to
reimburse the Issuing Lender pursuant to subsection 4.5(a) for amounts
drawn under Letters of Credit.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section
4043(b) of ERISA, other than those events as to which the thirty day
notice period is waived by the PBGC.
"Required Lenders": at any time, Lenders the Commitment
Percentages of which aggregate at least 60%.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or
any of its property or to which such Person or any of its property is
subject.
"Responsible Officer": the chief executive officer, president,
the executive vice president, treasurer or secretary of the applicable
Credit Party, or, with respect to financial matters, the chief
financial officer or treasurer of the applicable Credit Party.
"Revolving Credit Loans": as defined in subsection 2.1.
"Revolving Credit Notes": as defined in subsection 2.2.
"Shareholder Subordinated Debt": shall mean all Subordinated
Debt of HCC under the Shareholder Subordinated Loan Agreement.
"Shareholder Subordinated Loan Agreement": shall mean the
Exchange and Subordinated Loan Agreement, dated as of December 23,
1996, between HCC and the lenders parties thereto, as amended,
supplemented or otherwise modified from time to time.
"Single Employer Plan": any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
21
16
"Standby Letter of Credit": as defined in paragraph
4.1(b)(i)(A).
"Subordinated Debt": shall mean, with respect to HCC, the
Shareholder Subordinated Debt and any other unsecured Indebtedness the
terms of which provide that such Indebtedness is subordinate and junior
in right of payment to the payment of all obligations and liabilities
of HCC to the Administrative Agent and the Lenders hereunder; provided,
that prior to an Event of Default, HCC may make regularly scheduled
interest payments in respect of such Indebtedness.
"Subsidiaries' Guarantee": the Subsidiaries' Guarantee made by
Hanover/Xxxxx, HMI and the Real Estate Subsidiary in favor of the
Administrative Agent for the benefit of the Lenders, substantially in
the form of Exhibit B, as amended, supplemented or otherwise modified
from time to time.
"Subsidiary": as to any Person, a corporation, partnership or
other entity of which shares of stock or other ownership interests
having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership of other entity are at the
time owned, or the management of which is otherwise controlled,
directly or indirectly through one or more intermediaries, or both, by
such Person. Unless otherwise qualified, all references to a
"Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a
Subsidiary or Subsidiaries of HCC.
"Tranche": the collective reference to Eurodollar Loans the
Interest Periods with respect to all of which begin on the same date
and end on the same later date (whether or not such Loans shall
originally have been made on the same day).
"Transferee": as defined in subsection 11.6(f).
"Type": as to any Loan, its nature as an ABR Loan or a
Eurodollar Loan.
"Uniform Customs": the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, as the same may be amended, revised or replaced
from time to time.
"Unqualified Subsidiary": any Subsidiary of HCC other than
Qualified Subsidiaries.
"U.S. EBITDA Companies": shall mean HCC and each of its
wholly-owned Subsidiaries which (i) is organized under a jurisdiction
of the United States and (ii) has at least 90% of its assets located in
the United States or which derives at least 90% of its revenues from
the United States, in each case, at the time the applicable calculation
is being made for purposes of subsection 8.1(c).
22
17
"Wartsilla Guaranty Obligation": the obligation of HCC to (i)
guaranty or (ii) participate in the guaranty obligations of Wartsilla
Diesel International, Ltd., OY, and the obligations of Wartsilla
Compression Systems, GmbH.
"Working Day": any Business Day on which dealings in foreign
currencies and exchange between banks may be carried on in London,
England.
1.2 Other Definitional Provisions. (a) Unless otherwise
specified therein, all terms defined in this Agreement shall have the defined
meanings when used in the Notes or any certificate or other document made or
delivered pursuant hereto.
(a) As used herein and in the Notes, and any certificate or
other document made or delivered pursuant hereto, accounting terms relating to
HCC and its Subsidiaries not defined in subsection 1.1 and accounting terms
partly defined in subsection 1.1, to the extent not defined, shall have the
respective meanings given to them under GAAP.
(b) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
subsection, Schedule and Exhibit references are to this Agreement unless
otherwise specified.
(c) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
2. AMOUNT AND TERMS OF
COMMITMENTS
2.1 Revolving Credit Commitments. (a) Subject to the terms and
conditions hereof, each Lender severally agrees to make revolving credit loans
("Revolving Credit Loans") to HCC from time to time during the Commitment Period
in an aggregate principal amount at any one time outstanding which, when added
to such Lender's Commitment Percentage of the then outstanding L/C Obligations,
does not exceed the amount of such Lender's Commitment. During the Commitment
Period, HCC may use the Commitments by borrowing, prepaying the Revolving Credit
Loans in whole or in part, and reborrowing, all in accordance with the terms and
conditions hereof.
(b) The Revolving Credit Loans may from time to time be (i)
Eurodollar Loans, (ii) ABR Loans or (iii) a combination thereof, as determined
by HCC and notified to the Administrative Agent in accordance with subsections
2.3 and 3.5, provided that no Revolving Credit Loan shall be made as a
Eurodollar Loan after the day that is one month prior to the Final Maturity
Date.
23
18
2.2 Revolving Credit Notes. The Revolving Credit Loans made by
each Lender shall be evidenced by a promissory note of HCC, substantially in the
form of Exhibit A with appropriate insertions as to payee, date and principal
amount (each, a "Revolving Credit Note"), payable to the order of such Lender
and in a principal amount equal to the lesser of (a) the amount of the initial
Commitment of such Lender and (b) the aggregate unpaid principal amount of all
Revolving Credit Loans made by such Lender. Each Lender is hereby authorized to
record the date, Type and amount of each Revolving Credit Loan made by such
Lender, each continuation thereof, each conversion of all or a portion thereof
to another Type, the date and amount of each payment or prepayment of principal
thereof and, in the case of Eurodollar Loans, the length of each Interest Period
with respect thereto, on the schedule annexed to and constituting a part of its
Revolving Credit Note and any such recordation shall constitute prima facie
evidence of the accuracy of the information so recorded, absent manifest error,
provided that the failure to make any such recordation (or any error in such
recordation) shall not affect the obligations of HCC hereunder and under such
Revolving Credit Note. Each Revolving Credit Note shall (i) be dated the Closing
Date, (ii) be stated to mature on the Final Maturity Date and (iii) provide for
the payment of interest in accordance with subsection 3.1.
2.3 Procedure for Revolving Credit Borrowing. HCC may borrow
under the Commitments during the Commitment Period on any Working Day, if all or
any part of the requested Revolving Credit Loans are to be initially Eurodollar
Loans, or on any Business Day, otherwise, provided that HCC shall give the
Administrative Agent irrevocable notice (which notice must be received by the
Administrative Agent prior to 11:00 A.M., New York City time, (a) three Working
Days prior to the requested Borrowing Date, if all or any part of the requested
Revolving Credit Loans are to be initially Eurodollar Loans, or (b) one Business
Day prior to the requested Borrowing Date, otherwise), specifying (i) the amount
to be borrowed, (ii) the requested Borrowing Date, (iii) whether the borrowing
is to be of Eurodollar Loans, ABR Loans, or a combination thereof and (iv) if
the borrowing is to be entirely or partly of Eurodollar Loans, the amount of
such Type of Loan and the length of the initial Interest Period therefor. Each
borrowing under the Commitments shall be in an amount equal to (x) in the case
of ABR Loans, $200,000 or a whole multiple of $100,000 in excess thereof (or, if
the then Available Commitments are less than $200,000, such lesser amount) and
(y) in the case of Eurodollar Loans, $500,000 or a whole multiple of $100,000 in
excess thereof. Upon receipt of any such notice from HCC, the Administrative
Agent shall promptly notify each Lender thereof. Each Lender will make the
amount of its pro rata share of each borrowing available to the Administrative
Agent for the account of HCC at the office of the Administrative Agent specified
in subsection 11.2 prior to 12:00 noon, New York City time, on the Borrowing
Date requested by HCC in funds immediately available to the Administrative
Agent. Such borrowing will then be made available to HCC by the Administrative
Agent crediting the account of HCC on the books of such office with the
aggregate of the amounts made available to the Administrative Agent by the
Lenders and in like funds as received by the Administrative Agent.
24
19
3. INTEREST RATE PROVISIONS, FEES,
CONVERSIONS AND PAYMENTS
3.1 Interest Rates and Payments Dates. (a) Each Eurodollar
Loan shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such day
plus the Applicable Margin.
(a) Each ABR Loan shall bear interest at a rate per annum
equal to ABR plus the Applicable Margin.
(b) If all or a portion of (i) the principal amount of any
Loan or (ii) any interest payable thereon shall not be paid when due (whether at
the stated maturity, by acceleration or otherwise), such overdue amount shall
bear interest at a rate per annum which is (x) in the case of overdue principal,
2% above the rate that would otherwise be applicable thereto pursuant to the
foregoing provisions of this subsection or (y) in the case of overdue interest,
to the extent permitted by law, 2% above the rate described in paragraph (b) of
this subsection, in each case from the date of such non-payment until such
amount is paid in full (as well after as before judgment).
(c) Interest shall be payable in arrears on each Interest
Payment Date, provided that interest accruing pursuant to paragraph (c) of this
subsection shall be payable on demand.
3.2 Commitment Fee; Other Fees and Compensation. (a) HCC
agrees to pay to the Administrative Agent for the account of each Lender a
commitment fee for the period from and including the first day of the Commitment
Period to the Final Maturity Date, computed at the rate per annum equal to the
Applicable Commitment Fee Rate on the average daily amount of the Available
Commitment of such Lender during the period for which payment is made. Such
commitment fee shall be payable quarterly in arrears on the last day of each
March, June, September and December and on the Final Maturity Date or such
earlier date as the Commitments shall terminate as provided herein, commencing
on December 31, 1997.
(a) HCC agrees to pay to the Administrative Agent the fees and
other compensation, in the amounts and on the dates specified in the fee letter
separately agreed to between HCC and the Administrative Agent.
3.3 Termination or Reduction of the Commitments. HCC shall
have the right during the Commitment Period, upon not less than five Business
Days' notice to the Administrative Agent by HCC to terminate the Commitments or,
from time to time, to reduce the amount of the Commitments, provided that no
such termination or reduction shall be permitted if, after giving effect thereto
and to any prepayments of the Revolving Credit Loans made on the effective date
thereof, the aggregate principal amount of the Revolving Credit Loans then
outstanding, when added to the then outstanding L/C Obligations, would exceed
the
25
20
Commitments then in effect. Any such reduction shall be in an amount equal to
$100,000 or a whole multiple thereof and shall reduce permanently the
Commitments then in effect.
3.4 Optional Prepayments and other Repayments. (a) HCC may at
any time and from time to time, prepay the Loans, in whole or in part, without
premium or penalty, upon at least three Working Days' irrevocable notice, in the
case of Eurodollar Loans, and one Business Day's irrevocable notice, in the case
of ABR Loans, by HCC to the Administrative Agent, specifying the date and amount
of prepayment and whether the prepayment is of Eurodollar Loans, ABR Loans or a
combination thereof, and if of a combination thereof, the amount allocable to
each. If any such prepayment with respect to a Eurodollar Loan is made on a day
other than the last day of an Interest Period, such prepayment shall be
accompanied by any amounts required to be paid pursuant to subsection 3.13. Upon
receipt of any such notice the Administrative Agent shall promptly notify each
Lender thereof. If any such notice is given, the amount specified in such notice
shall be due and payable on the date specified therein. Partial prepayments
shall be in an aggregate principal amount of $200,000 or a whole multiple of
$100,000 in excess thereof.
(a) HCC shall repay at any time, and there shall be due and
payable at such time, such principal amount (together with accrued interest
thereon), if any, of outstanding Revolving Credit Loans as may be necessary so
that, after such repayment, the aggregate unpaid principal amount of Revolving
Credit Loans does not exceed the Commitments in effect at such time after giving
effect to any reduction in the Commitments pursuant to subsection 3.3.
3.5 Conversion and Continuation Options. (a) HCC may elect
from time to time to convert Eurodollar Loans to ABR Loans by giving the
Administrative Agent at least two Business Days' prior irrevocable notice of
such election, provided that any such conversion of Eurodollar Loans may only be
made on the last day of an Interest Period with respect thereto. HCC may elect
from time to time to convert ABR Loans to Eurodollar Loans by giving the
Administrative Agent at least three Working Days' prior irrevocable notice of
such election. Any such notice of conversion to Eurodollar Loans shall specify
the length of the initial Interest Period or Interest Periods therefor. Upon
receipt of any such notice the Administrative Agent shall promptly notify each
Lender thereof. All or any part of outstanding Eurodollar Loans and ABR Rate
Loans may be converted as provided herein, provided that (i) no Loan may be
converted into a Eurodollar Loan when any Event of Default has occurred and is
continuing and the Administrative Agent has determined that such a conversion is
not appropriate, (ii) any such conversion may only be made if, after giving
effect thereof, subsection 3.6 shall not have been contravened and (iii) no Loan
may be converted into a Eurodollar Loan after the date that is one month prior
to the Final Maturity Date.
(a) Any Eurodollar Loans may be continued as such upon the
expiration of the then current Interest Period with respect thereto by HCC
giving notice to the Administrative Agent, in accordance with the applicable
provisions of the term "Interest Period" set forth in subsection 1.1, of the
length of the next Interest Period to be applicable to such Loans, provided that
no Eurodollar Loan may be continued as such (i) when any Event of Default has
occurred
26
21
and is continuing and the Administrative Agent has determined that such a
continuation is not appropriate, (ii) if, after giving effect thereto,
subsection 3.6 would be contravened or (iii) after the date that is one month
prior to the Final Maturity Date and provided, further, that if HCC shall fail
to give any required notice as described above in this paragraph or if such
continuation is not permitted pursuant to the preceding proviso such Loans shall
be automatically converted to ABR Loans on the last day of such then expiring
Interest Period.
3.6 Minimum Amounts. All borrowings, conversions and
continuations of Loans hereunder and all selections of Interest Periods
hereunder shall be in such amounts and be made pursuant to such elections so
that, after giving effect thereto, the aggregate principal amount of the Loans
comprising each Eurodollar Tranche shall be equal to $500,000 or a whole
multiple of $100,000 in excess thereof.
3.7 Computation of Interest and Fees. (a) Commitment fees and
interest on ABR Loans shall be calculated on the basis of a 365- (or 366-, as
the case may be) day year for the actual days elapsed, and interest on
Eurodollar Loans shall be calculated on the basis of a 360 day year for the
actual days elapsed. The Administrative Agent shall as soon as practicable
notify HCC and the Lenders of each determination of a Eurodollar Rate. Any
change in the interest rate on a Loan resulting from a change in the ABR, the
Eurocurrency Reserve Requirements, the C/D Assessment Rate or the C/D Reserve
Percentage shall become effective as of the opening of business on the day on
which such change becomes effective. The Administrative Agent shall as soon as
practicable notify HCC and the Lenders of the effective date and the amount of
each such change in interest rate.
(a) Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement shall be
conclusive and binding on HCC and the Lenders in the absence of manifest error.
The Administrative Agent shall, at the request of the HCC, deliver to HCC a
statement showing the quotations used by the Administrative Agent in determining
any interest rate pursuant to subsection 3.1(a).
3.8 Inability to Determine Interest Rate. In the event that
prior to the first day of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon HCC absent manifest
error) that, by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate for such Interest Period, or
(b) the Administrative Agent shall have received notice from
the Majority Lenders that the Eurodollar Rate determined or to be
determined for such Interest Period will not adequately and fairly
reflect the costs to such Lenders (as conclusively certified by such
Lenders) of making or maintaining their affected Loans during such
Interest Period,
27
22
the Administrative Agent shall give telex, telecopy or telephonic notice thereof
to HCC and the Lenders as soon as practicable thereafter. If such notice is
given (x) any Eurodollar Loans requested to be made on the first day of such
Interest Period shall be made as ABR Loans, (y) any Loans that were to have been
converted on the first day of such Interest Period to Eurodollar Loans shall be
converted to or continued as ABR Loans and (z) any outstanding Eurodollar Loans
shall be converted, on the first day of such Interest Period, to ABR Loans.
Until such notice has been withdrawn by the Administrative Agent, no further
Eurodollar Loans shall be made or continued as such, nor shall HCC have the
right to convert Loans to Eurodollar Loans.
3.9 Pro Rata Treatment and Payments. (a) Each borrowing by HCC
from the Lenders hereunder, each payment by HCC on account of any commitment fee
hereunder and any reduction of the Commitments of the Lenders shall be made pro
rata according to the respective Commitment Percentages of the Lenders. Each
payment (including each prepayment) by HCC on account of principal of and
interest on the Loans shall be made pro rata according to the respective
outstanding principal amounts of the Loans then held by the Lenders. All
payments (including prepayments) to be made by HCC hereunder and under the
Notes, whether on account of principal, interest, fees or otherwise, shall be
made without set off or counterclaim and shall be made prior to 12:00 Noon, New
York City time, on the due date thereof to the Administrative Agent, for the
account of the Lenders, at the Administrative Agent's office specified in
subsection 11.2 in Dollars and in immediately available funds. The
Administrative Agent shall distribute such payments to the Lenders promptly upon
receipt in like funds as received. If any payment hereunder (other than payments
on the Eurodollar Loans) becomes due and payable on a day other than a Business
Day, such payment shall be extended to the next succeeding Business Day, and,
with respect to payments of principal, interest thereon shall be payable at the
then applicable rate during such extension. If any payment on a Eurodollar Loan
becomes due and payable on a day other than a Working Day, the maturity thereof
shall be extended to the next succeeding Working Day unless the result of such
extension would be to extend such payment into another calendar month, in which
event such payment shall be made on the immediately preceding Working Day.
(a) Unless the Administrative Agent shall have been notified
in writing by any Lender prior to a Borrowing Date that such Lender will not
make the amount that would constitute its Commitment Percentage of the borrowing
on such date available to the Administrative Agent, the Administrative Agent may
assume that such Lender has made such amount available to the Administrative
Agent on such Borrowing Date, and the Administrative Agent may, in reliance upon
such assumption, make available to HCC a corresponding amount. If such amount is
made available to the Administrative Agent on a date after such Borrowing Date,
such Lender shall pay to the Administrative Agent on demand an amount equal to
the product of (i) the daily average Federal funds rate during such period as
quoted by the Administrative Agent, times (ii) the amount of such Lender's
Commitment Percentage of such borrowing, times (iii) a fraction the numerator of
which is the number of days that elapse from and including such Borrowing Date
to the date on which such Lender's Commitment Percentage of such borrowing shall
have become immediately available to the Administrative Agent and the
denominator of which is 360. A certificate of the Administrative Agent submitted
to any Lender
28
23
with respect to any amounts owing under this subsection shall be
conclusive in the absence of manifest error. If such Lender's Commitment
Percentage of such borrowing is not in fact made available to the Administrative
Agent by such Lender within three Business Days of such Borrowing Date, the
Administrative Agent shall be entitled to recover such amount with interest
thereon at the rate per annum applicable to such Loan, on demand, from HCC and
any such payment by HCC shall not constitute a waiver of any right or remedy HCC
may have with respect to any such Lender.
3.10 Illegality. Notwithstanding any other provision herein,
if any change in any Requirement of Law or in the interpretation or application
thereof shall make it unlawful for any Lender to make or maintain Eurodollar
Loans as contemplated by this Agreement, (a) the commitment of such Lender
hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
convert ABR Loans to Eurodollar Loans shall forthwith be canceled and (b) such
Lender's Loans then outstanding as Eurodollar Loans, if any, shall be converted
automatically to ABR Loans on the respective last days of the then current
Interest Periods with respect to such Loans or within such earlier period as
required by law. If any such conversion of a Eurodollar Loan occurs on a day
which is not the last day of the then current Interest Period with respect
thereto, HCC shall pay to such Lender such amounts, if any, as may be required
pursuant to subsection 3.13.
3.11 Requirements of Law. (a) In the event that any change in
any Requirement of Law as in existence on the date hereof or in the
interpretation or application thereof or compliance by any Lender with any
request or directive (whether or not having the force of law) from any central
bank or other Governmental Authority made subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever
with respect to this Agreement, any Note, any Letter of Credit, any
Application or any Eurodollar Loan made by it, or change the basis of
taxation of payments to such Lender in respect thereof (except for
taxes covered by subsection 3.12 and changes in the rate of tax on the
overall net income of such Lender or tax imposed in lieu of net income
taxes);
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, deposits or other liabilities in or for the account of,
advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Lender which is not
otherwise included in the determination of the Eurodollar Rate
hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, HCC shall promptly pay such Lender, upon its
demand, any additional amounts necessary to compensate such Lender for such
29
24
increased cost or reduced amount receivable. If any Lender becomes entitled to
claim any additional amounts pursuant to this subsection, it shall promptly
notify HCC, through the Administrative Agent, by delivery of a certificate
setting forth the amounts due and a description of the event by reason of which
it has become so entitled. A certificate as to any additional amounts payable
pursuant to this subsection submitted by such Lender, through the Administrative
Agent, to HCC shall be conclusive in the absence of manifest error. This
covenant shall survive the termination of this Agreement and the payment of the
Notes and all other amounts payable hereunder.
(b) In the event that any Lender shall have determined that
any change in any Requirement of Law as in existence on the date hereof
regarding capital adequacy or in the interpretation or application thereof or
compliance by such Lender or any corporation controlling such Lender with any
request or directive regarding capital adequacy (whether or not having the force
of law) from any Governmental Authority made subsequent to the date hereof does
or shall have the effect of reducing the rate of return on such Lender's or such
corporation's capital as a consequence of its obligations hereunder or under any
Letter of Credit to a level below that which such Lender or such corporation
could have achieved but for such change or compliance (taking into consideration
such Lender's or such corporation's policies with respect to capital adequacy)
by an amount deemed by such Lender to be material, then from time to time, after
submission by such Lender to HCC (with a copy to the Administrative Agent) of a
written request therefore, HCC shall pay to such Lender such additional amount
or amounts as will compensate such Lender for such reduction.
3.12 Taxes. (a) All payments made by HCC under this Agreement
and the Notes shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now
or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding, in the case of the Administrative Agent and
each Lender, net income taxes and franchise taxes (imposed in lieu of net income
taxes) imposed on the Administrative Agent or such Lender, as the case may be,
as a result of a present or former connection between the jurisdiction of the
government or taxing authority imposing such tax and the Administrative Agent or
such Lender (excluding a connection arising solely from the Administrative Agent
or such Lender having executed, delivered, performed its obligations or received
a payment under, or enforced, this Agreement or the Notes) or any political
subdivision or taxing authority thereof or therein (all such non-excluded taxes,
levies, imposts, duties, charges, fees, deductions and withholdings being
hereinafter called "Taxes"). If any Taxes are required to be withheld from any
amounts payable to the Administrative Agent or any Lender hereunder or under the
Notes, the amounts so payable to the Administrative Agent or such Lender shall
be increased to the extent necessary to yield to the Administrative Agent or
such Lender (after payment of all Taxes) interest or any such other amounts
payable hereunder at the rates or in the amounts specified in this Agreement and
the Notes. Whenever any Taxes are payable by HCC, as promptly as possible
thereafter HCC shall send to the Administrative Agent for its own account or for
the account of such Lender, as the case may be, a certified copy of an original
official receipt received by HCC showing payment thereof. If HCC fails to pay
any
30
25
Taxes when due to the appropriate taxing authority or fails to remit to the
Administrative Agent the required receipts or other required documentary
evidence, HCC shall indemnify the Administrative Agent and the Lenders for any
incremental taxes, interest or penalties that may become payable by the
Administrative Agent or any Lender as a result of any such failure. The
agreements in this subsection shall survive the termination of this Agreement
and the payment of the Notes and all other amounts payable hereunder.
Notwithstanding the foregoing, before making any demand for payment under this
Section 3.12(a) each Lender agrees to use commercially reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions) to
designate a different lender office if the making of such a designation would
avoid the need for, or reduce the amount of, such payments required under this
Section 3.12(a).
(a) Each Lender, including, without limitation, each
Purchasing Lender, that is not incorporated under the laws of the United States
of America or a state thereof agrees that prior to the first Interest Payment
Date or, in the case of a Purchasing Lender, the first Interest Payment Date to
occur subsequent to the date it becomes a party hereto it will deliver to HCC
and the Administrative Agent (i) two duly completed copies of United States
Internal Revenue Service Form 1001 or 4224 or successor applicable form, as the
case may be, and (ii) an Internal Revenue Service Form W-8 or W-9 or successor
applicable form. Each such Lender also agrees to deliver to HCC and the
Administrative Agent two further copies of the said Form 1001 or 4224 and Form
W-8 or W-9, or successor applicable forms or other manner of certification, as
the case may be, on or before the date that any such form expires or becomes
obsolete or after the occurrence of any event requiring a change in the most
recent form previously delivered by it to HCC and such extensions or renewals
thereof as may reasonably be requested by HCC or the Administrative Agent,
unless in any such case an event (including, without limitation, any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Lender from duly completing and delivering any such
form with respect to it and such Lender so advises HCC and the Administrative
Agent. Such Lender shall certify (i) in the case of a Form 1001 or 4224, that it
is entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes and (ii) in the case of a
Form W-8 or W-9, that it is entitled to an exemption from United States backup
withholding tax. Each Lender which fails to provide to HCC in a timely manner
such forms shall reimburse HCC upon demand for any penalties paid by HCC as a
result of any failure of HCC to withhold the required amounts, that are caused
by such Lender's failure to provide the required forms in a timely manner.
3.13 Indemnity. HCC agrees to indemnify each Lender and to
hold each Lender harmless from any reasonable loss or expenses which such Lender
may sustain or incur as a consequence of (a) default by HCC in payment when due
of the principal amount of or interest on any Eurodollar Loan, (b) default by
HCC in making a borrowing of, conversion into or continuation of Eurodollar
Loans after HCC has given a notice requesting the same in accordance with the
provisions of this Agreement, (c) default by HCC in making any prepayment after
HCC has given a notice thereof in accordance with the provisions of this
Agreement or (d) the making of a prepayment of Eurodollar Loans on a day which
is not the last day of an
31
26
Interest Period with respect thereto, including, without limitation, in each
case, any such loss or expense arising from the reemployment of funds obtained
by it or from fees payable to terminate the deposits from which such funds were
obtained. This covenant shall survive the termination of this Agreement and the
payment of the Notes and all other amounts payable hereunder.
3.14 Replacement of Lenders. If any Lender requests
compensation under subsection 3.11, or if HCC is required to pay any additional
amount to any Lender or any Governmental Authority for the account of any Lender
pursuant to subsection 3.12, or if any Lender defaults in its obligation to fund
Loans hereunder, then HCC may, at its sole expense and effort, upon notice to
such Lender and the Administrative Agent, require such Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions
contained in Section 11.6), all its interests, rights and obligations under this
Agreement to an assignee that shall assume such obligations (which assignee may
be another Lender, if a Lender accepts such assignment); provided that (i) HCC
shall have received the prior written consent of the Administrative Agent, which
consent shall not unreasonably be withheld, (ii) such Lender shall have received
payment of an amount equal to the outstanding principal of its Loans and
participations in Letters of Credit, accrued interest thereon, accrued fees and
all other amounts payable to it hereunder, from the assignee (to the extent of
such outstanding principal and accrued interest and fees) or HCC (in the case of
all other amounts) and (iii) in the case of any such assignment resulting from a
claim for compensation under subsection 3.11 or payments required to be made
pursuant to subsection 3.12, such assignment will result in a reduction in such
compensation or payments. A Lender shall not be required to make any such
assignment and delegation if, prior thereto, as a result of a waiver by such
Lender or otherwise, the circumstances entitling HCC to require such assignment
and delegation cease to apply.
4. LETTERS OF CREDIT
4.1 L/C Commitment.
(a) Subject to the terms and conditions hereof, the Issuing
Lender, in reliance on the agreements of the other Lenders set forth in
subsection 4.4(a), agrees to issue letters of credit ("Letters of Credit") for
the account of HCC on any Business Day during the Commitment Period in such form
as may be approved from time to time by the Issuing Lender; provided that the
Issuing Lender shall have no obligation to issue any Letter of Credit if, after
giving effect to such issuance, the L/C Obligations would exceed the L/C
Commitment or the Available Commitment.
(b) Each Letter of Credit shall:
(i) be denominated in Dollars and shall be either (A) a
standby letter of credit issued to support obligations of HCC or its
Subsidiaries (a "Standby Letter of Credit"), or (B) a commercial letter
of credit issued in respect of the purchase of goods or services by
32
27
HCC and its Subsidiaries in the ordinary course of business (a
"Commercial Letter of Credit") and
(ii) expire at or prior to the close of business on the
earlier of (i) the date one year after the date of the issuance of such
Letter of Credit (or, in the case of any renewal or extension thereof,
one year after such renewal or extension) and (ii) the date that is
five Business Days prior to the Termination Date.
(c) Each Letter of Credit shall be subject to the Uniform
Customs and, to the extent not inconsistent therewith, the laws of the State of
New York.
(d) The Issuing Lender shall not at any time be obligated to
issue any Letter of Credit hereunder if such issuance would conflict with, or
cause the Issuing Lender or any L/C Participant to exceed any limits imposed by,
any applicable Requirement of Law.
4.2. Procedure for Issuance of Letters of Credit.
HCC may from time to time request that the Issuing Lender
issue a Letter of Credit by delivering to the Issuing Lender at its address for
notices specified herein an Application therefor, completed to the satisfaction
of the Issuing Lender, and such other certificates, documents and other papers
and information as the Issuing Lender may reasonably request. Upon receipt of
any Application, the Issuing Lender will process such Application and the
certificates, documents and other papers and information delivered to it in
connection therewith in accordance with its customary procedures and shall
promptly issue the Letter of Credit requested thereby (but in no event shall the
Issuing Lender be required to issue any Letter of Credit earlier than three
Business Days after its receipt of the Application therefor and all such other
certificates, documents and other papers and information relating thereto) by
issuing the original of such Letter of Credit to the beneficiary thereof or as
otherwise may be agreed by the Issuing Lender and HCC. The Issuing Lender shall
furnish a copy of such Letter of Credit to HCC promptly following the issuance
thereof.
4.3. Fees, Commissions and Other Charges.
(a) HCC shall pay to the Administrative Agent, for the account
of the Issuing Lender and the L/C Participants, a letter of credit commission
with respect to each Letter of Credit, computed for the period from the date
such Letter of Credit is issued to the date upon which the next such payment is
due hereunder at the rate per annum equal to the Applicable Margin in effect
from time to time for Eurodollar Loans, calculated on the basis of a 365 (or
366-, as the case may be) day year, of the daily aggregate amount available to
be drawn under such Letter of Credit for the period covered by such payment. In
addition, HCC shall pay to the Issuer a fronting fee in the amount equal to
.125% of the face amount of such Letter of Credit. Such commissions shall be
payable in arrears on each L/C Fee Payment Date (and the Termination Date) and
shall be nonrefundable.
33
28
(b) In addition to the foregoing fees and commissions, HCC
shall pay or reimburse the Issuing Lender for such reasonable, normal and
customary costs and expenses as are actually incurred or charged by the Issuing
Lender in issuing, effecting payment under, amending or otherwise administering
any Letter of Credit.
(c) The Administrative Agent shall, promptly following its
receipt thereof, distribute to the Issuing Lender and the L/C Participants all
fees and commissions received by the Administrative Agent for their respective
accounts pursuant to this subsection.
4.4. L/C Participations.
(a) The Issuing Lender irrevocably agrees to grant and hereby
grants to each L/C Participant, and, to induce the Issuing Lender to issue
Letters of Credit hereunder, each L/C Participant irrevocably agrees to accept
and purchase and hereby accepts and purchases from the Issuing Lender, on the
terms and conditions hereinafter stated, for such L/C Participant's own account
and risk an undivided interest equal to such L/C Participant's Commitment
Percentage in the Issuing Lender's obligations and rights under each Letter of
Credit issued hereunder and the amount of each draft paid by the Issuing Lender
thereunder. Each L/C Participant unconditionally and irrevocably agrees with the
Issuing Lender that, if a draft is paid under any Letter of Credit for which the
Issuing Lender is not reimbursed in full by HCC in accordance with the terms of
this Agreement, such L/C Participant shall pay to the Issuing Lender upon demand
at the Issuing Lender's address for notices specified herein an amount equal to
such L/C Participant's Commitment Percentage of the amount of such draft, or any
part thereof, which is not so reimbursed.
(b) If any amount required to be paid by any L/C Participant
to the Issuing Lender pursuant to paragraph 4.4(a) in respect of any
unreimbursed portion of any payment made by the Issuing Lender under any Letter
of Credit is paid to the Issuing Lender within three Business Days after the
date such payment is due, such L/C Participant shall pay to the Issuing Lender
on demand an amount equal to the product of (1) such amount, times (2) the daily
average Federal funds rate, as quoted by the Issuing Lender, during the period
from and including the date such payment is required to the date on which such
payment is immediately available to the Issuing Lender, times (3) a fraction the
numerator of which is the number of days that elapse during such period and the
denominator of which is 360. If any such amount required to be paid by any L/C
Participant pursuant to paragraph 4.4(a) is not in fact made available to the
Issuing Lender by such L/C Participant within three Business Days after the date
such payment is due, the Issuing Lender shall be entitled to recover from such
L/C Participant, on demand, such amount with interest thereon calculated from
such due date at the rate per annum applicable to ABR Loans hereunder. A
certificate of the Issuing Lender submitted to any L/C Participant with respect
to any amounts owing under this subsection shall be conclusive in the absence of
manifest error.
(c) Whenever, at any time after the Issuing Lender has made
payment under any Letter of Credit and has received from any L/C Participant its
pro rata share of such payment in
34
29
accordance with subsection 4.4(a), the Issuing Lender receives any payment
related to such Letter of Credit (whether directly from HCC or otherwise), or
any payment of interest on account thereof, the Issuing Lender will distribute
to such L/C Participant its pro rata share thereof; provided, however, that in
the event that any such payment received by the Issuing Lender shall be required
to be returned by the Issuing Lender, such L/C Participant shall return to the
Issuing Lender the portion thereof previously distributed by the Issuing Lender
to it.
4.5. Reimbursement Obligation of HCC.
(a) HCC agrees to reimburse the Issuing Lender on each date on
which the Issuing Lender notifies HCC of the date and amount of a draft
presented under any Letter of Credit and paid by the Issuing Lender for the
amount of (i) such draft so paid and (ii) any taxes, fees, charges or other
costs or expenses reasonably incurred by the Issuing Lender in connection with
such payment. Each such payment shall be made to the Issuing Lender at its
address for notices specified herein in Dollars and in immediately available
funds.
(b) Interest shall be payable on any and all amounts remaining
unpaid by HCC under this subsection from the date such amounts become payable
(whether at stated maturity, by acceleration or otherwise) until payment in full
at the rate which would be payable on any outstanding ABR Loans which were then
overdue.
(c) Each drawing under any Letter of Credit shall constitute a
request by HCC to the Administrative Agent for a borrowing pursuant to
subsection 2.4 (Procedure for Revolving Credit Borrowing) of ABR Loans in the
amount of such drawing. The Borrowing Date with respect to such borrowing shall
be the date of such drawing.
4.6. Obligations Absolute.
(a) HCC's obligations under this Section 4 shall be absolute
and unconditional under any and all circumstances and irrespective of any
set-off, counterclaim or defense to payment which HCC may have or have had
against the Issuing Lender or any beneficiary of a Letter of Credit.
(b) HCC also agrees with the Issuing Lender that the Issuing
Lender shall not be responsible for, and HCC's Reimbursement Obligations under
subsection 4.5(a) shall not be affected by, among other things, (i) the validity
or genuineness of documents or of any endorsements thereon, even though such
documents shall in fact prove to be invalid, fraudulent or forged, or (ii) any
dispute between or among HCC and any beneficiary of any Letter of Credit or any
other party to which such Letter of Credit may be transferred or (iii) any
claims whatsoever of HCC against any beneficiary of such Letter of Credit or any
such transferee.
(c) The Issuing Lender shall not be liable for any error,
omission, interruption or delay in transmission, dispatch or delivery of any
message or advice, however transmitted, in
35
30
connection with any Letter of Credit, except for errors or omissions caused by
the Issuing Lender's gross negligence or willful misconduct.
(d) HCC agrees that any action taken or omitted by the Issuing
Lender under or in connection with any Letter of Credit or the related drafts or
documents, if done in the absence of gross negligence or willful misconduct and
in accordance with the standards of care specified in the Uniform Commercial
Code of the State of New York, shall be binding on HCC and shall not result in
any liability of the Issuing Lender to HCC.
4.7. Letter of Credit Payments.
If any draft shall be presented for payment under any Letter
of Credit, the Issuing Lender shall promptly notify HCC of the date and amount
thereof. The responsibility of the Issuing Lender to HCC in connection with any
draft presented for payment under any Letter of Credit shall, in addition to any
payment obligation expressly provided for in such Letter of Credit, be limited
to determining that the documents (including each draft) delivered under such
Letter of Credit in connection with such presentment are in conformity with such
Letter of Credit.
4.8. Application.
To the extent that any provision of any Application related to
any Letter of Credit is inconsistent with the provisions of this Section 4, the
provisions of this Section 4 shall apply.
5. REPRESENTATIONS AND
WARRANTIES
To induce the Lenders to enter into this Agreement and to make
the Loans and issue or participate in the Letters of Credit, HCC hereby
represents and warrants to the Administrative Agent and each Lender that:
5.1 Financial Condition. (a) The consolidated balance sheets
of HCC and its consolidated Subsidiaries as at December 31, 1996 and December
31, 1995 and the related consolidated statements of income and of cash flows for
the fiscal year ended on such date, reported on by Price Waterhouse copies of
which have heretofore been furnished to each Lender, present fairly, in all
material respects, the consolidated financial condition of HCC and its
consolidated Subsidiaries as at such dates, and the consolidated results of
their operations and their consolidated cash flows for the fiscal year then
ended. The unaudited consolidated balance sheets of HCC and its consolidated
Subsidiaries as at March 31, 1997 and June 30, 1997, the related unaudited
consolidated statements of income and of cash flows for the three and six month
periods ended on such dates, certified by a Responsible Officer of HCC, copies
of which have heretofore been furnished to each Lender, present fairly, in all
material respects, the consolidated financial condition of HCC, and its
consolidated Subsidiaries as at such dates, and
36
31
the consolidated results of its operations and consolidated cash flows for the
three and six month periods then ended (subject to normal year-end audit
adjustments).
(a) All such financial statements, including the related
schedules and notes thereto, have been prepared in accordance with GAAP applied
consistently throughout the periods involved (except as approved by such
accountants or Responsible Officer, as the case may be, and as disclosed
therein). Other than the Guarantee Obligations permitted under Section 8.4
below, neither HCC nor any of its consolidated Subsidiaries had, at the date of
the most recent balance sheet referred to above, any material Guarantee
Obligation, reasonably foreseeable contingent liability or liability for taxes,
or any long-term lease or unusual forward or long-term commitment, including,
without limitation, any interest rate or foreign currency swap or exchange
transaction, which is not reflected in the foregoing statements or in the notes
thereto. Except as disclosed on Schedule III to this Agreement, during the
period from June 30, 1997 to and including the date hereof there has been no
sale, transfer or other disposition by HCC or any of its consolidated
Subsidiaries of any material part of its business or property and no purchase or
other acquisition of any business or property (including any capital stock of
any other Person) material in relation to the consolidated financial condition
of HCC and its consolidated Subsidiaries at June 30, 1997.
5.2 No Change. Since December 31, 1996 (a) there has been no
development or event nor any prospective development or event, which has had or
would reasonably be expected to have a Material Adverse Effect and (b) except as
disclosed on Schedule IV to this Agreement, as of the date of this Agreement, no
dividends or other distributions have been declared, paid or made upon the
Capital Stock of HCC nor has any of the Capital Stock of HCC been redeemed,
retired, purchased or otherwise acquired for value by HCC or any of its
respective Subsidiaries.
5.3 Corporate Existence; Compliance with Law. Each Credit
Party (a) is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, (b) has the corporate power and
authority, and the legal right, to own and operate its property, to lease the
property it operates as lessee and to conduct the business in which it is
currently engaged, (c) is duly qualified as a foreign corporation and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification, except where the failure to be so qualified would not reasonably
be expected to have a Material Adverse Effect, and (d) is in compliance with all
Requirements of Law except to the extent that the failure to comply therewith
would not, in the aggregate, reasonably be expected to have a Material Adverse
Effect.
5.4 Corporate Power; Authorization; Enforceable Obligations.
Each Credit Party has the corporate power and authority, and the legal right, to
make, deliver and perform the Loan Documents to which it is a party. HCC has the
corporate power and authority, and the legal right, to borrow hereunder and has
taken all necessary corporate action to authorize the borrowings on the terms
and conditions of this Agreement, the Notes and the Applications. Each Credit
Party has taken all necessary corporate action to authorize the execution,
delivery and performance of the Loan Documents to which it is a party. No
consent or authorization of, filing
37
32
with or other act by or in respect of, any Governmental Authority or any other
Person (other than consents or authorizations the failure to obtain would not,
in the aggregate, reasonably be expected to have a Material Adverse Effect) is
required in connection with the borrowings hereunder or with the execution,
delivery, performance, validity or enforceability of this Agreement, the Notes,
the Applications or any of the other Loan Documents. This Agreement has been,
and each Note, each Application and each other Loan Document will be, duly
executed and delivered on behalf of the Credit Parties party thereto. This
Agreement constitutes, and each Note, each Application and each other Loan
Document when executed and delivered will constitute, a legal, valid and binding
obligation of the Credit Parties party thereto enforceable against such Credit
Parties in accordance with their respective terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles (whether enforcement is sought by proceedings in
equity or at law).
5.5 No Legal Bar. The execution, delivery and performance of
this Agreement, the Applications, the Notes and the other Loan Documents, the
borrowings hereunder and the use of the proceeds thereof will not violate any
Requirement of Law or Contractual Obligation of any Credit Party thereto and
will not result in, or require, the creation or imposition of any Lien on any of
their respective properties or revenues pursuant to any such Requirement of Law
or Contractual Obligation, except as contemplated hereby or thereby and except
to the extent any such violation or creation or imposition of a Lien would not
reasonably be expected to have a Material Adverse Effect.
5.6 No Material Litigation. Except as set forth in HCC's Form
10-Q, filed with respect to the period ending June 30, 1997, no litigation,
investigation or proceeding of or before any arbitrator or Governmental
Authority is pending or, to the knowledge of HCC, threatened by or against any
Credit Party or against any of their respective properties or revenues (a) with
respect to this Agreement, the Notes or the other Loan Documents or any of the
transactions contemplated hereby, or (b) which would reasonably be expected to
have a Material Adverse Effect.
5.7 No Default. None of the Credit Parties nor any of their
respective Subsidiaries is in default under or with respect to any of their
respective Contractual Obligations in any respect which if not cured would
reasonably be expected to have a Material Adverse Effect. No Default or Event of
Default has occurred and is continuing.
5.8 Ownership of Property; Liens; Leases of Equipment. Each of
the Credit Parties has good record and marketable title in fee simple (except
for exceptions to title as will not in the aggregate materially interfere with
the present or contemplated use of the property affected thereby) to, or a valid
leasehold interest in, all its real property, and good title to all its other
property, and none of such property is subject to any Lien except as permitted
by subsection 8.3. None of the Equipment or Inventory (as defined in the Uniform
Commercial Code) owned by any Credit Party has been leased by such Credit Party
as lessor, except pursuant to operating leases (which do not constitute
Financing Leases). As used herein, Equipment or
38
33
Inventory leased by a Credit Party under a Financing Lease shall be deemed
"owned" by such Credit Party.
5.9 Intellectual Property. Each Credit Party owns, or is
licensed to use, all trademarks, tradenames, trade secrets, copyrights,
technology, know-how and processes necessary for the conduct of its business as
currently conducted except for those the failure to own or license which would
not reasonably be expected to have a Material Adverse Effect (the "Intellectual
Property"). To the knowledge of HCC, no claim has been asserted and is pending
by any Person challenging or questioning the use of any such Intellectual
Property or the validity or effectiveness of any such Intellectual Property, nor
does HCC know of any valid basis for any such claim, which would reasonably be
expected to have a Material Adverse Effect. The use of such Intellectual
Property by the Credit Parties does not infringe on the rights of any Person,
except for such claims and infringements that, in the aggregate, would not
reasonably be expected to have a Material Adverse Effect.
5.10 Taxes. Each of the Credit Parties has filed or caused to
be filed all tax returns which, to the knowledge of HCC, are required to be
filed and has paid all taxes shown to be due and payable on said returns or on
any assessments made against it or any of its property and all other taxes, fees
or other charges imposed on it or any of its property by any Governmental
Authority (other than any the amount or validity of which are currently being
contested in good faith by appropriate proceedings and with respect to which
reserves in conformity with GAAP have been provided on the books of any of the
Credit Parties, as the case may be); no tax Lien has been filed against the
property of any Credit Party, and, to the knowledge of HCC, no claim is being
asserted, with respect to any such tax, fee or other charge.
5.11 Federal Regulations. No part of the proceeds of any Loans
will be used for "purchasing" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation U of the Board
of Governors of the Federal Reserve System as now and from time to time
hereafter in effect or for any purpose which violates the provisions of the
Regulations of such Board of Governors. If requested by any Lender or the
Administrative Agent, HCC will furnish to the Administrative Agent and each
Lender a statement to the foregoing effect in conformity with the requirements
of FR Form U-1 referred to in said Regulation U.
5.12 ERISA. Neither a Reportable Event nor an "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA) has occurred during the five-year period prior to the date on
which this representation is made or deemed made with respect to any Plan, and
each Plan has complied in all material respects with the applicable provisions
of ERISA and the Code. No termination of a Single Employer Plan has occurred and
no lien in favor of the PBGC or a Plan has arisen during the five-year period
prior to the date as of which this representation is deemed made. The present
value of all accrued benefits under each Single Employer Plan maintained by HCC,
or any Commonly Controlled Entity (based on those assumptions used to fund the
Plans) did not, as of the last annual valuation date prior to the date on which
this representation is made or deemed made, exceed the value of
39
34
the assets of such Plan allocable to such accrued benefits. Neither HCC nor any
Commonly Controlled Entity has had a complete or partial withdrawal from any
Multiemployer Plan, and neither HCC nor any Commonly Controlled Entity would
become subject to any liability under ERISA if HCC or any such Commonly
Controlled Entity were to withdraw completely from all Multiemployer Plans as of
the valuation date most closely preceding the date on which this representation
is made or deemed made. No such Multiemployer Plan is in Reorganization or
Insolvent. The present value (determined using actuarial and other assumptions
which are reasonable in respect of the benefits provided and the employees
participating) of the liability of HCC and each Commonly Controlled Entity for
post retirement benefits to be provided to their current and former employees
under Plans which are welfare benefit plans (as defined in Section 3(1) of
ERISA) does not, in the aggregate, exceed the assets under all such Plans
allocable to such benefits.
5.13 Investment Company Act; Other Regulations. None of the
Credit Parties is an "investment company", or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended. None of the Credit Parties is subject to regulation under any
Federal or State statute or regulation which limits its ability to incur
Indebtedness or change rates or change tariffs. None of the Credit Parties are
"holding companies" or "subsidiary companies" of a "holding company" or a
"subsidiary company" of a "holding company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
5.14 Subsidiaries. As of the Closing Date, HCC has no
Subsidiaries other than as set forth on Schedule II. Except if a Credit Party,
other than cash or Cash Equivalents located in bank accounts at Chase, none of
the assets owned by any Unqualified Subsidiary as of the date hereof are located
within the United States of America or any territory thereof.
5.15 Purpose of Loans. The proceeds of the Loans shall be used
for the working capital and general corporate purposes of HCC and its
Subsidiaries.
5.43 Environmental Matters. Each of the representations and
warranties set forth in paragraphs (a) through (f) of this subsection is true
and correct with respect to each parcel of real property owned or operated by
any of the Credit Parties (the "Properties"), except to the extent that the
facts and circumstances giving rise to any such failure to be so true and
correct would not reasonably be expected to have a Material Adverse Effect:
(a) Except as set forth on Schedule IX, the Properties do not
contain, and have not previously contained, in, on, or under,
including, without limitation, the soil and groundwater thereunder, any
Hazardous Materials in concentrations which violate Environmental Laws.
(b) Except as set forth on Schedule IX, the Properties and all
operations and facilities at the Properties are in compliance with all
Environmental Laws, and there is no Hazardous Materials contamination
or violation of any Environmental Law which would
40
35
reasonably be expected to interfere with the continued operation of any
of the Properties or impair the fair saleable value of any thereof.
(c) Except as set forth on Schedule IX, none of the Credit
Parties has received any complaint, notice of violation, alleged
violation, investigation or advisory action or of potential liability
or of potential responsibility regarding environmental protection
matters or environmental permit compliance with regard to the
Properties, nor is HCC aware that any Governmental Authority is
contemplating delivering to any Credit Party any such notice.
(d) Hazardous Materials have not been generated, treated,
stored, disposed of, at, on or under any of the Properties, nor have
any Hazardous Materials been transferred to any other location, in
violation of any Environmental Laws from the Properties or as a result
of the sale or lease of any equipment or inventory of any Credit Party.
(e) There are no governmental, administrative actions or
judicial proceedings pending or contemplated under any Environmental
Laws to which any Credit Party is or to HCC's knowledge will be named
as a party with respect to the Properties, nor to HCC's knowledge are
there any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other administrative or
judicial requirements outstanding under any Environmental Law with
respect to any of the Properties.
5.17 Accuracy and Completeness of Information. The factual
statements contained in the Loan Documents and each other agreement, instrument,
certificate and document related thereto and any other certificates or documents
furnished or to be furnished to the Administrative Agent or the Lenders by any
Credit Party from time to time in connection with this Agreement (in any case
excluding any of the financial statements referred to in Section 5.1(a) hereof),
taken as a whole, and taking into consideration all corrections or substituted
documents, do not and will not, as of the date when made, contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements contained therein not misleading in light of the
circumstances in which the same were made, all except as otherwise qualified
herein.
6. CONDITIONS PRECEDENT
6.1 Conditions to the Initial Extensions of Credit. The
agreement of each Lender to abide by its obligations under subsection 2.1 and to
make the initial extension of credit requested to be made by it is subject to
the satisfaction, immediately prior to or concurrently therewith on the Closing
Date, of the following conditions precedent:
(a) Agreement, Notes. The Administrative Agent shall have
received (i) this Agreement, executed and delivered by a duly
authorized officer of HCC and duly acknowledged and agreed to by each
of HMI, Hanover/Xxxxx and Hanover Acquisition
41
36
with a counterpart for each Lender and (ii) for the account of each
Lender, a Note conforming to the requirements hereof and executed by a
duly authorized officer of HCC.
(b) Collateral Trust Agreement. The Administrative Agent shall
have received (i) a letter from a Responsible Officer of Joint Energy
Development Investments Limited Partnership, a Delaware limited
partnership ("JEDI"), certifying that the loan agreement, dated as of
December 19, 1995, between HCC, as borrower, JEDI, as agent for the
lenders thereunder and the financial institutions which were lenders
thereunder, shall have been terminated, and all amounts owed thereunder
shall have been paid in full and all collateral shall have been
released and (ii) a letter, pursuant to section 22.2(a)(ii) of the
Collateral Trust Agreement, dated as of December 19, 1995 (the
"Collateral Trust Agreement"), among HCC, Hanover/Xxxxx, HMI, the Real
Estate Subsidiary, Hanover Acquisition and Chase, as collateral trustee
(in such capacity, the "Collateral Trustee"), addressed to HCC and the
Collateral Trustee from the Required Percentage (as defined in the
Collateral Trust Agreement) of Master Debt (as defined in the
Collateral Trust Agreement) authorizing the Collateral Trustee to
release the Collateral (as defined in the Collateral Trust Agreement)
secured under the Collateral Trust Agreement.
(c) Guarantees. The Administrative Agent shall have received,
with a copy for each Lender, the Subsidiaries' Guarantee, executed and
delivered by a duly authorized officer of HMI, Hanover/Xxxxx and the
Real Estate Subsidiary.
(d) Corporate Proceedings of the Credit Parties. The
Administrative Agent shall have received, with a counterpart for each
Lender, a copy of the resolutions, in form and substance satisfactory
to the Administrative Agent, of the Board of Directors of each of the
Credit Parties authorizing (i) the execution, delivery and performance
of the Loan Documents to which it is a party, and (ii) in the case of
HCC, the borrowings contemplated hereunder, certified by the Secretary
or an Assistant Secretary of each such Credit Party as of the Closing
Date, which certificate shall state that the resolutions thereby
certified have not been amended, modified, revoked or rescinded and
shall be in form and substance satisfactory to the Administrative
Agent.
(e) Incumbency Certificates. The Administrative Agent shall
have received, with a copy for each Lender, a certificate of the
Secretary or Assistant Secretary of each Credit Party, dated the
Closing Date, as to the incumbency and signature of each of the
officers signing each of the Loan Documents to which it is a party and
any other certificates or other documents delivered in connection
therewith, together with evidence of the incumbency of such Secretary
or Assistant Secretary.
(f) Corporate Documents. The Administrative Agent shall have
received, with a counterpart for each Lender, true and complete copies
of the certificate of incorporation and by-laws of each of the Credit
Parties, certified as of the Closing Date as complete and correct
copies thereof by the Secretary or an Assistant Secretary of each such
Credit Party.
42
37
(g) No Violation. The consummation of the transactions
contemplated hereby shall not contravene, violate or conflict with, nor
involve the Administrative Agent or any Lender in any violation of, any
Requirement of Law.
(h) Licenses, Permits, etc. All licenses, permits, exemptions,
certificates and other governmental and third party approvals and
consents (including landlords' and other consents) necessary or
advisable in connection with (i) the participation by HCC and its
Subsidiaries in the transactions contemplated by this Agreement or any
of the Loan Documents, (ii) the execution, delivery or performance by
HCC and its Subsidiaries or the validity and enforceability against HCC
and its Subsidiaries of the Loan Documents to which it or they is or
are a party, and (iii) the continuing operations of HCC and its
Subsidiaries shall have been obtained and be in full force and effect
except to the extent that the failure to obtain or maintain in full
force and effect any such license, permit, exemption, certificate,
approval or consent would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on any of the
matters set forth in clauses (i) through (iii) of this subsection
6.1(h), and all applicable waiting periods shall have expired without
any action being taken or to HCC's knowledge threatened by any
competent authority which would restrain, prevent or otherwise
reasonably be expected to impose adverse conditions on the financing
thereof.
(i) Insurance. The Administrative Agent shall have received
evidence satisfactory to it that each Credit Party has obtained the
insurance policies required by subsection 7.5.
(j) Fees and Other Compensation. The Lenders and the
Administrative Agent shall have received the fees and other
compensation to be received on the Closing Date referred to in
subsection 3.2.
(k) Existing Agreement. The Administrative Agent shall have
received evidence, in form and substance satisfactory to it, that no
Loans (as defined in the Existing Agreement) are outstanding on the
Closing Date and all interest, fees, breakage costs and dollar amounts
owing thereunder have been paid in full and the commitments under the
Existing Agreement have been terminated.
(l) Legal Opinions. The Administrative Agent shall have
received, with a counterpart for each Lender, the following executed
legal opinions:
(i) the executed legal opinion of Xxxx,
Gerber & Xxxxxxxxx, counsel to the Credit Parties,
substantially in the form of Exhibit C-1; and
43
38
(ii) the executed legal opinion of Xxxxxx &
Xxxxxx, L.L.P., special counsel to the Credit Parties in the
State of Texas, substantially in the form of Exhibit C-2;
(m) Financial Statements. The Administrative Agent shall have
received, with a copy for each Lender, (i) audited consolidated
financial statements of HCC and its consolidated Subsidiaries for the
two most recent fiscal years ended prior to the Closing Date as to
which such financial statements are available and (ii) unaudited
interim consolidated financial statements of HCC and its consolidated
Subsidiaries for each fiscal month and quarterly period ended
subsequent to the date of the latest financial statements delivered
pursuant to clause (i) of this paragraph as to which such financial
statements are available, in each case, in form and substance
reasonably satisfactory to the Administrative Agent.
6.2 Conditions to Each Extension of Credit. The agreement of
each Lender to make any extension of credit requested to be made by it on any
date (including, without limitation, its initial extension of credit) is subject
to the satisfaction of the following conditions precedent:
(a) Representations and Warranties. Each of the
representations and warranties made by the Credit Parties in or
pursuant to the Loan Documents shall be true and correct in all
material respects on and as of such date as if made on and as of such
date (unless any such representations and warranties specifically refer
to another date).
(b) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the
extensions of credit requested to be made on such date.
(c) Additional Documents. The Administrative Agent shall have
received each additional document, instrument or item of information
reasonably requested by it to further effect the purposes of this
Agreement, including, without limitation, a copy of any debt
instrument, security agreement or other material contract to which any
Credit Party may be a party.
(d) Additional Matters. All corporate and other proceedings,
and all documents, instruments and other legal matters in connection
with the transactions contemplated by this Agreement shall be
reasonably satisfactory in form and substance to the Administrative
Agent, and the Administrative Agent shall have received such other
documents in respect of any aspect or consequence of the transactions
contemplated hereby or thereby as it shall reasonably request to
further effect the purposes of this Agreement.
44
39
Each borrowing by and Letter of Credit issued on behalf of HCC hereunder shall
constitute a representation and warranty by HCC as of the date of such Loan that
the conditions contained in this subsection 6.2 have been satisfied.
7. AFFIRMATIVE COVENANTS
HCC hereby agrees that, so long as the Commitments remain in
effect, any Note or any Letter of Credit remains outstanding and unpaid or any
other amount is owing to any Lender or the Administrative Agent hereunder, HCC
shall and HCC (except in the case of delivery of financial information, reports
and notices) shall cause each of its Subsidiaries to:
7.1 Financial Statements Furnish to each Lender:
(a) as soon as available for distribution to shareholders and
creditors generally, but in any event within 120 days after the end of
each fiscal year of HCC, a copy of the consolidated balance sheet of
HCC and its consolidated Subsidiaries, as at the end of such year and
the related consolidated statements of income and retained earnings and
of cash flows for such year, setting forth in each case in comparative
form the figures for the previous year, reported on without a "going
concern" or like qualification or exception, or qualification arising
out of the scope of the audit, by Price Waterhouse or other independent
certified public accountants of nationally recognized standing not
unacceptable to the Required Lenders;
(b) as soon as available for distribution to shareholders and
creditors generally, but in any event within 90 days after the end of
each fiscal year of HCC, a copy of the unaudited consolidated balance
sheet of HCC and its consolidated Subsidiaries, as at the end of such
year, and the related unaudited consolidated statements of income and
retained earnings and of cash flows for such year, in each case setting
forth in comparative form the figures for the corresponding period of
the previous year and the figures for such period as shown on the
budgets of HCC for such year; and
(c) as soon as available, but in any event not later than 45
days after the end of each of the first three quarterly periods of each
fiscal year of HCC, the unaudited consolidated balance sheet of HCC and
its consolidated Subsidiaries, as at the end of such quarter, and the
related unaudited consolidated statements of income and retained
earnings and of cash flows of HCC and its consolidated Subsidiaries,
for such quarter and the portion of the fiscal year through the end of
such quarter, setting forth in each case in comparative form the
figures for the corresponding period of the previous year, certified by
a Responsible Officer as being fairly stated in all material respects
when considered in relation to the consolidated financial statements of
HCC and its consolidated Subsidiaries, (subject to normal year-end
audit adjustments), and in each case setting forth in comparative form
the figures for such periods as shown on the budgets of such Person for
such year;
45
40
all such financial statements to be complete and correct in all material
respects and to be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
7.2 Certificates; Other Information. Furnish to each Lender:
(a) concurrently with the delivery of the financial statements
referred to in subsection 7.1(a), a certificate of the independent
certified public accountants reporting on such financial statements
stating that in making the examination necessary therefor no knowledge
was obtained of any Default or Event of Default, except as specified in
such certificate;
(b) concurrently with the delivery of the financial statements
referred to in subsections 7.1(a) and 7.1(c), a certificate of a
Responsible Officer stating that, to the best of such Officer's
knowledge, HCC during such period has observed or performed all of its
covenants and other agreements, and satisfied every material condition,
contained in this Agreement, in the Notes and the other Loan Documents
to which it is a party to be observed, performed or satisfied by it,
and that such Officer has obtained no knowledge of any Default or Event
of Default except as specified in such certificate;
(c) not later than 45 days following the end of each fiscal
year of HCC, a copy of the projections by HCC of the operating budget
and cash flow budget of HCC and its Subsidiaries for the succeeding
fiscal year, such projections to be accompanied by a certificate of a
Responsible Officer to the effect that such projections have been
prepared on the basis of reasonable assumptions and that such Officer
has no reason to believe they are incorrect or misleading in any
material respect;
(d) (i) within five days after the same are sent, copies of
all financial statements and reports which HCC, if at such time any
class of such Person's securities are held by the public, sends to its
stockholders generally, or, if otherwise, such financial statements and
reports as are made generally available to the public, and (ii) within
five days after the same are filed, copies of all financial statements
and reports which HCC may make to, or file with, the Securities and
Exchange Commission or any successor or analogous Governmental
Authority;
(e) concurrently with the delivery of the financial statements
referred to in subsections 7.1(b) and (c), a management summary
describing and analyzing the performance of HCC and its Subsidiaries
during the periods covered by such financial statements;
46
41
(f) within 45 days after the end of each quarter in each
fiscal year of HCC, a certificate of the principal financial officer of
HCC showing in detail the computations necessary to calculate the
Applicable Margin (an "Applicable Margin Certificate"); and
(g) promptly, such additional financial and other information
as any Lender may from time to time reasonably request.
7.3 Payment of Obligations. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all its obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of HCC or any Subsidiary of HCC, as the case may be.
7.4 Conduct of Business and Maintenance of Existence. Continue
to engage in business of the same general type as now conducted by it and
preserve, renew and keep in full force and effect its corporate existence and
take all reasonable action to maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of its business except as otherwise
permitted pursuant to subsection 8.5; comply with all Contractual Obligations
and Requirements of Law except to the extent that failure to comply therewith
would not, in the aggregate, reasonably be expected to have a Material Adverse
Effect.
7.5 Maintenance of Property; Insurance. HCC will, and will
cause each of its Subsidiaries to, (a) keep and maintain all property material
to the conduct of its business in good working order and condition, ordinary
wear and tear excepted, and (b) maintain, with financially sound and reputable
insurance companies, insurance in such amounts and against such risks as are
customarily maintained by companies engaged in the same or similar businesses
operating in the same or similar locations.
7.6 Inspection of Property; Books and Records; Discussions.
Keep proper books of records and account in which full, true and correct entries
in conformity with GAAP and all Requirements of Law shall be made of all
dealings and transactions in relation to its business and activities; and permit
representatives of any Lender to visit and inspect any of its properties and
examine and make abstracts from any of its books and records at any reasonable
time and as often as may reasonably be desired and to discuss the business,
operations, properties and financial and other condition of HCC and Subsidiaries
of HCC with officers and employees of HCC and Subsidiaries of HCC and with its
independent certified public accountants; provided, however, that no such visit,
inspection or examination or discussion shall unreasonably disrupt or interfere
with normal operations of HCC or any of its Subsidiaries and any such
representatives of the Administrative Agent and the Lenders shall be accompanied
by a Responsible Officer of HCC. No failure to comply with any request for the
exercise of rights hereunder shall be cause for any Event of Default unless such
request is submitted in writing to HCC with reference to this Section 7.6.
47
42
7.7 Notices. Promptly give notice to the Administrative Agent
and each Lender of:
(a) the occurrence of any Default or Event of Default of which
HCC has actual knowledge;
(b) any (i) default or event of default by HCC or any of its
Subsidiaries under or with respect to any of their respective
Contractual Obligations in any respect which, if not cured, would
reasonably be expected to have a Material Adverse Effect, or to HCC's
knowledge any default or event of default by any third party under or
with respect to any Contractual Obligation of said third party with HCC
or any of its Subsidiaries in a respect which, if not cured, would
reasonably be expected to have a Material Adverse Effect (ii)
litigation, investigation or proceeding of which HCC has actual
knowledge which may exist at any time between HCC or any Subsidiary of
HCC and any Governmental Authority, which in either case, if not cured
or if adversely determined, as the case may be, would reasonably be
expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting HCC or any
Subsidiary of HCC of which HCC has actual knowledge in which the amount
involved is $5,000,000 or more and not covered by insurance or in which
injunctive or similar relief is sought and which if adversely
determined would reasonably be expected to have a Material Adverse
Effect;
(d) the following events, as soon as possible and in any event
within 30 days after HCC has actual knowledge thereof: (i) the
occurrence or expected occurrence of any Reportable Event with respect
to any Plan, or any withdrawal from, or the termination, Reorganization
or Insolvency of any Multiemployer Plan or (ii) the institution of
proceedings or the taking of any other action by the PBGC or HCC, any
Commonly Controlled Entity with respect to the termination of any
Single Employer Plan; and
(e) a development or event which has had or would reasonably
be expected to have a Material Adverse Effect.
Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action HCC proposes to take with respect thereto.
7.8 Environmental Laws.
(a) Comply in all material respects with, and undertake all
reasonable efforts to ensure compliance by all tenants and subtenants,
if any, with, all Environmental Laws and obtain and comply in all
material respects with and maintain, and undertake all reasonable
efforts to ensure that all tenants and subtenants obtain and comply
with and maintain, any and all licenses, approvals, registrations or
permits required by
48
43
Environmental Laws, and upon discovery of any non-compliance or
suspected non-compliance, undertake all reasonable efforts to attain
full compliance;
(b) Conduct and complete all investigations, studies, sampling
and testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with
all lawful orders and directives of all Governmental Authorities
respecting Environmental Laws, except to the extent that the failure to
so conduct, complete or take such actions, or to comply with such
orders and directives, would not in the aggregate reasonably be
expected to have a Material Adverse Effect; and
(c) Defend, indemnify and hold harmless the Administrative
Agent and the Lenders, and their respective employees, agents, officers
and directors, from and against any claims, demands, penalties, fines,
liabilities, settlements, damages, costs and expenses of whatever kind
or nature known or unknown, contingent or otherwise, arising out of, or
in any way relating to the violation of or noncompliance with any
Environmental Laws applicable to the real property owned or operated by
HCC or any Subsidiary of HCC, or any orders, requirements or demands of
Governmental Authorities related thereto, including, without
limitation, reasonable attorney's and consultant's fees, investigation
and laboratory fees, court costs and litigation expenses, except to the
extent that any of the foregoing arise out of the gross negligence or
willful misconduct of the party seeking indemnification therefor.
(d) Maintain a program to identify and promote substantial
compliance with and to minimize prudently any liabilities or potential
liabilities under any Environmental Law that may affect HCC or any of
its Qualified Subsidiaries.
7.9 Subsequent Guarantees. HCC shall cause each Qualified
Subsidiary of HCC for which the aggregate value of all assets owned by such
Qualified Subsidiary is or becomes greater than $5,000,000, to execute an
amendment to the Subsidiaries' Guarantee, substantially in the form of Exhibit A
to the Subsidiaries' Guarantee within 90 days after the date on which such
Qualified Subsidiary's assets attain an aggregate value in excess of $5,000,000;
provided, however, that if during such 90-day period the aggregate value of such
Qualified Subsidiary's assets is or becomes $5,000,000 or less, such Qualified
Subsidiary shall not be required to become a party to the Subsidiaries'
Guarantee.
8. NEGATIVE COVENANTS
HCC hereby agrees that, so long as the Commitments remain in
effect, any Note or any Letter of Credit remains outstanding and unpaid or any
other amount is owing to any Lender or the Administrative Agent hereunder, HCC
shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly:
49
44
8.1 Financial Condition Covenants. (a) Maintenance of
Consolidated Indebtedness to Consolidated Capitalization. Permit the ratio
(expressed as a percentage) of Consolidated Indebtedness to Consolidated
Capitalization of HCC and its Subsidiaries as at the end of any of HCC's fiscal
quarters to be greater than .65 to 1.0.
(a) Current Ratio. Permit the Current Ratio of HCC and its
Subsidiaries at the end of any of HCC's fiscal quarters to be less than 1.0 to
1.0.
(b) Consolidated U.S. EBITDA to Consolidated Indebtedness.
Permit the ratio of Consolidated U.S. EBITDA to Consolidated Indebtedness for
the four consecutive fiscal quarters of HCC most recently ended to be less than
1.0 to 4.5.
(c) Interest Coverage Ratio. Permit the ratio of Consolidated
EBITDA to Consolidated Interest Expense for the period of four consecutive
fiscal quarters of HCC most recently ended to be less than 2.5 to 1.0.
8.2 Limitation on Indebtedness. Create, incur, assume or
suffer to exist any Indebtedness, except:
(a) Indebtedness in respect of the Loans, the Notes and other
obligations of the Credit Parties under this Agreement and the other
Loan Documents;
(b) Indebtedness of HCC to any of its Subsidiaries and of any
such Subsidiary which is a Credit Party to HCC or any other Subsidiary
of HCC;
(c) Indebtedness outstanding on the Closing Date and listed on
Schedule X and all extensions, renewals, replacements, refinancings and
modifications thereof permitted hereunder;
(d) Indebtedness of HCC or any of its Subsidiaries in an
aggregate amount not to exceed $10,000,000 at any time outstanding
which is recourse only to the assets of HCC or any Subsidiaries
acquired or financed with the proceeds of such Indebtedness;
(e) Indebtedness in respect of Financing Leases provided that,
after giving effect thereto, subsection 8.7 is not contravened;
(f) Indebtedness in respect of Subordinated Debt, the terms
and conditions of which have been approved in writing by the Required
Lenders and all extensions, renewals, replacements, refinancings and
modifications thereof permitted hereunder;
(g) Indebtedness of Unqualified Subsidiaries of HCC; provided
that any such Indebtedness is Non-Recourse Indebtedness;
50
45
(h) Indebtedness of a Person which becomes a Subsidiary after
the date hereof in an aggregate principal amount not exceeding as to
HCC and its Subsidiaries $10,000,000 at any time outstanding, provided
that (i) such indebtedness existed at the time such Person became a
Subsidiary and was not created in anticipation thereof and (ii)
immediately after giving effect to the acquisition of such Person by
HCC or any of its Subsidiaries no Default or Event of Default shall
have occurred and be continuing; and
(i) Indebtedness not contemplated by clauses (a)-(h) above not
exceeding $5,000,000 in the aggregate at any time outstanding.
8.3 Limitation on Liens. Create, incur, assume or suffer to
exist any Lien upon any of its property, assets or revenues, whether now owned
or hereafter acquired, except for:
(a) Liens for taxes not yet due or which are being contested
in good faith by appropriate proceedings, provided that adequate
reserves with respect thereto are maintained on the books of HCC or any
Subsidiary of HCC, as the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business which are not overdue for a period of more than 60 days or
which are being contested in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation and deposits securing liability to insurance carriers under
insurance or self insurance arrangements;
(d) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not in any case
materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of HCC
or any of its Subsidiaries;
(f) leases or subleases granted to third Persons not
interfering in any material respect with the business of HCC or any of
its Subsidiaries;
(g) Liens arising from UCC financing statements regarding
leases permitted by this Agreement;
(h) any interest or title of a lessor or sublessor under any
lease permitted by this Agreement;
51
46
(i) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of custom duties in connection
with the importation of goods so long as such Liens attach only to the
imported goods;
(j) Liens arising out of consignment or similar arrangements
for the sale of goods entered into by HCC or any of its Subsidiaries in
the ordinary course of business;
(k) Liens created pursuant to Financing Leases permitted
pursuant to Section 8.2(e);
(l) Liens in existence on the Closing Date listed on Schedule
XI, securing Indebtedness permitted by subsection 8.2(c), provided that
no such Lien is spread to cover any additional property after the
Closing Date and that the amount of Indebtedness secured thereby is not
increased;
(m) Liens on (i) natural gas compressors and related
equipment, and usual accessories and improvements and proceeds thereof,
and (ii) oil and gas production equipment, in each case, the
acquisition of which were financed with the proceeds of the
Indebtedness permitted by subsection 8.2(e) and which secures only such
Indebtedness, provided that any such Lien is placed upon such natural
gas compressor or related equipment or such oil and gas production
equipment at the time of the acquisition of such natural gas
compressors or related equipment or such oil and gas production
equipment by HCC or any of its Subsidiaries and the Lien extends to no
other property, and provided, further, that no such Lien is spread to
cover any additional property after the date such Lien attaches and
that the amount of Indebtedness secured thereby is not increased;
(n) Liens on assets of HCC, HMI, Hanover/Xxxxx and the Real
Estate Subsidiary listed on Schedule XII, provided that no such Lien is
spread to cover any additional property after the Closing Date and that
the amount of Indebtedness secured thereby is not increased;
(o) Liens on the assets of Unqualified Subsidiaries of HCC
securing Indebtedness of such Unqualified Subsidiaries permitted under
Section 8.2(g);
(p) Liens securing Derivatives entered into by HCC and its
Subsidiaries which are permitted hereunder;
(q) Liens securing Indebtedness of HCC or any Subsidiary
permitted under subsection 8.2(d) so long as such Liens attach only to
the assets acquired or financed pursuant to such subsection;
52
47
(r) Liens on the property or assets of a Person which becomes
a Subsidiary after the date hereof securing Indebtedness permitted by
subsection 8.2(h), provided that (i) such Liens existed at the time
such Person became a Subsidiary and were not created in anticipation
thereof, (ii) any such Lien is not spread to cover any property or
assets of such Person after the time such Person becomes a Subsidiary,
and (iii) the amount of Indebtedness secured thereby is not increased;
and
(s) Liens not otherwise permitted in clauses (a)-(r) above
securing Indebtedness not exceeding $2,500,000 in the aggregate.
8.4 Limitation on Guarantee Obligations. Create, incur, assume
or suffer to exist any Guarantee Obligation except:
(a) the Guarantees;
(b) the Wartsilla Guaranty Obligation;
(c) up to $5,000,000 in the aggregate of Guarantee Obligations
of HCC or any of its Subsidiaries in connection with indebtedness
incurred by customers of HCC or any of its Subsidiaries; provided, that
the proceeds of any such indebtedness shall be used by such customers
to purchase natural gas compressors or oil and gas production equipment
from HCC or any of its Subsidiaries; and
(d) Guarantee Obligations (in respect of obligations not
constituting Indebtedness) arising under agreements entered into by HCC
or any Subsidiary in the ordinary course of business; and
(e) guarantees in respect of Indebtedness (other than
Subordinated Debt) permitted under this Agreement.
8.5 Limitations on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially all of its property, business or
assets, or make any material change in its present method of conducting
business, except:
(a) any Qualified Subsidiary may be merged or consolidated
with or into HCC or any other Qualified Subsidiary; provided, that HCC
or a Qualified Subsidiary shall be the continuing or surviving
corporation;
(b) HCC or any Qualified Subsidiary may be merged or
consolidated with any other Person organized under a jurisdiction of
the United States with assets held primarily in the United States;
provided, that HCC or such Qualified Subsidiary shall be the continuing
or surviving corporation; the Administrative Agent is provided with
written
53
48
notice, and after giving effect thereto no Default or Event of Default
would exist or reasonably be expected to be caused thereby;
(c) any Qualified Subsidiary may sell, lease, assign, transfer
or otherwise dispose of any or all of its assets to HCC or any
Qualified Subsidiary; and
(d) any Unqualified Subsidiary may be merged or consolidated
with or into any other Person and/or may sell, lease, assign, transfer
or otherwise dispose of any of its assets (upon voluntary liquidation
or otherwise) to any other Person provided that, if merged or
consolidated with or into a Qualified Subsidiary, the Qualified
Subsidiary will remain as a "Qualified Subsidiary" after the merger.
8.6 Limitation on Sale or Lease of Assets. Convey, sell,
lease, assign, transfer or otherwise dispose of any of its property, business or
assets (including, without limitation, receivables and leasehold interests),
whether now owned or hereafter acquired, except:
(a) obsolete or worn out property disposed of in the ordinary
course of business, provided that the aggregate value of obsolete or
worn out natural gas compressors and oil and gas production equipment
disposed of in the ordinary course of business does not exceed
$5,000,000 during any fiscal year of HCC;
(b) the sale of inventory in the ordinary course of business,
provided that if such inventory is comprised of natural gas compressors
or oil and gas production equipment, such natural gas compressors or
oil and gas production equipment were never part of the natural gas
compressors or oil and gas production equipment leased or held for
lease by HCC or any of its Subsidiaries;
(c) the lease by HCC or any of its Subsidiaries as lessor of
natural gas compressors and oil and gas production equipment in the
ordinary course of business under operating leases (which do not
constitute Financing Leases);
(d) the sale or discount without recourse of defaulted
accounts receivable arising in the ordinary course of business in
connection with the compromise or collection thereof;
(e) as permitted by subsection 8.5;
(f) the sale of natural gas compressors and oil and gas
production equipment, other than disposals and sales covered by clauses
(a) and (b) above, provided that the fair market value of natural gas
compressors and oil and gas production equipment sold during the term
of this Agreement does not exceed ten percent of the aggregate fair
market value of all natural gas compressors and oil and gas production
equipment owned
54
49
by HCC and its Qualified Subsidiaries; provided further that if the
proceeds are reinvested in natural gas compressors or oil and gas
production equipment to be owned by HCC or its Qualified Subsidiaries
within nine months after the sale of the assets which produced such
proceeds, such proceeds shall not be included for purposes of this
covenant; and
(g) the lease by the Real Estate Subsidiary as lessor of real
estate properties to HCC or any Qualified Subsidiary of HCC for use by
HCC or such Qualified Subsidiary as the site of its offices and
facilities.
8.7 Limitation on Leases. Permit Consolidated Lease Expense
for any fiscal year of HCC to exceed $10,000,000.
8.8 Limitation on Dividends. Declare or pay any dividend
(other than dividends payable solely in common stock of such Person) on, or make
any payment on account of, or set apart assets for a sinking or other analogous
fund for, the purchase, redemption, defeasance, retirement or other acquisition
of, any shares of any class of Capital Stock of such Person or any warrants or
options to purchase any such Stock, whether now or hereafter outstanding, or
make any other distribution in respect thereof, either directly or indirectly,
whether in cash or property or in obligations of HCC or any Subsidiary of HCC,
except that if no Default or Event of Default exists or would reasonably be
expected to be caused thereby (i) Subsidiaries of HCC may declare and pay
dividends to HCC and other shareholders of such Subsidiaries, (ii) HCC may
repurchase or redeem shares of HCC common stock from its employees and former
employees so long as the aggregate amount of all such repurchases since the date
of this Agreement does not exceed $2,500,000, (iii) HCC may make open market
repurchases of shares of HCC common stock so long as the aggregate amount of all
such repurchases during the term of this Agreement does not exceed $25,000,000,
(iv) HCC may declare or pay dividends on and make mandatory stock repurchases
(pursuant to the terms of the applicable certificate of designation) of its
preferred stock, if any, and (v) HCC may declare or pay dividends on shares of
HCC common stock, provided that the aggregate amount of such declarations or
payments pursuant to this clause (v) above does not exceed 25% of the
Consolidated Net Income of HCC for the period (taken as one accounting period)
from the beginning of the first fiscal quarter commencing after the Closing Date
to the end of HCC's most recently ended fiscal quarter for which financial
statements have been delivered to the Administrative Agent and the Lenders
pursuant to subsection 7.1 at or prior to the time of such declaration or
payment.
8.9 Limitation on Derivatives. Enter into or assume any
obligations with respect to any Derivatives except for Derivatives used by HCC
or any of its Subsidiaries in reducing the interest rate risk exposure of HCC
and its Subsidiaries which have been provided by a Lender under this Agreement;
provided, that the aggregate notional amounts of such Derivatives shall not
exceed the aggregate amount of loans outstanding hereunder.
8.10 Limitation on Investments, Loans and Advances. Make any
advance, loan, extension of credit or capital contribution to, or purchase any
stock, bonds, notes, debentures or other securities of or any assets
constituting a business unit of, or make any other investment in (all of the
foregoing being herein collectively referred to as "Investments"), any Person,
except:
55
50
(a) extensions of trade credit in the ordinary course of
business;
(b) Investments in Cash Equivalents;
(c) loans and advances to employees of such Person or its
Subsidiaries for travel, entertainment and relocation expenses in the
ordinary course of business in an aggregate amount for HCC and its
Subsidiaries not to exceed $250,000 at any one time outstanding;
(d) Investments by HCC in its Subsidiaries which are or become
Credit Parties and investments by such Subsidiaries which are or become
Credit Parties in HCC and in other Subsidiaries of HCC which are or
become Credit Parties;
(e) Investments by HCC in the Real Estate Subsidiary in an
aggregate amount not to exceed $5,000,000 plus amounts necessary to
maintain and operate the real property and improvements thereon owned
by the Real Estate Subsidiary;
(f) Investments in Unqualified Subsidiaries of HCC;
(g) Investments constituting Permitted Business Acquisitions
so long as, after giving effect to the consummation of the transactions
contemplated by each Permitted Business Acquisition and the Loans to be
made and the Letters of Credit to be issued hereunder in connection
therewith, the sum of (i) the cash and Cash Equivalents then held by
HCC and (ii) an amount equal to the difference between (A) the
aggregate Commitments in effect at such time and (B) the Aggregate
Outstanding extensions of Credit of all the Lenders at such time,
equals at least $20,000,000;
(h) Investments or acquisitions by HCC or its Subsidiaries in
up to 50% of the shares of capital stock, partnership interests, joint
venture interests, limited liability company interests or other similar
equity interests in, a Person (other than a Subsidiary), provided that
the aggregate amount of all such investments or acquisitions does not
exceed $25,000,000 in any fiscal year; and
(i) Loans to employees, officers and directors of HCC and its
Subsidiaries to acquire shares of capital stock of HCC not to exceed
$11,000,000 with respect to such loans made on or prior to the date
hereof and not to exceed an additional $5,000,000 with respect to such
loans made after the date hereof.
8.11 Limitation on Optional Payments and Modifications of Debt
Instruments. (i) Make any optional payment or prepayment on or redemption of any
portion of the Shareholder Subordinated Debt or (ii) with respect to any
Indebtedness other than the Shareholder Subordinated Debt, (a) make any optional
payment or prepayment in excess of $10,000,000 during any calendar year (other
than prepayments covered by the proviso below) on or redemption of any
Indebtedness (other than Indebtedness pursuant to this Agreement and as
56
51
provided for in the proviso below) or (b) amend, modify or change, or consent or
agree to any amendment, modification or change to any of the terms of any such
Indebtedness (other than any such amendment, modification or change which would
extend the maturity or reduce the amount of any payment of principal thereof or
which would reduce the rate or extend the date for payment of interest thereon,
or any amendment or waiver which would render the terms of such Indebtedness
less restrictive).
8.12 Transactions with Affiliates. Except for transactions of
a type set forth on Schedule XIII, enter into any transaction, including,
without limitation, any purchase, sale, lease or exchange of property or the
rendering of any service, with any Affiliate unless such transaction is
otherwise permitted under this Agreement, is in the ordinary course of HCC's or
such Subsidiary's business and is upon fair and reasonable terms no less
favorable to HCC or such Subsidiary, as the case may be, than it would obtain in
a comparable arm's length transaction with a Person not an Affiliate.
8.13 Sale and Leaseback. Except for the transactions of a type
set forth on Schedule VI, enter into any arrangement with any Person where HCC
or any of the Subsidiaries of HCC is the lessee of real or personal property
which has been or is to be sold or transferred by HCC or such Subsidiary to such
Person or to any other Person to whom funds have been or are to be advanced by
such Person on the security of such property or rental obligations of HCC or
such Subsidiary, except that HCC and its Subsidiaries may enter into Financing
Leases as lessee for natural gas compressors and oil and gas production
equipment if after giving effect thereto subsection 8.2 is not contravened.
8.14 Corporate Documents. Amend its Certificate of
Incorporation in any way adverse to the interests of the Administrative Agent
and the Lenders.
8.15 Fiscal Year. Permit the fiscal year of HCC to end on a
day other than December 31.
8.16 Nature of Business. Engage in any business other than (a)
the leasing, maintenance, purchase, sale and operation of natural gas compressor
units and oil and gas production equipment, (b) the design, engineering and
fabrication of natural gas compressor units, (c) the design, engineering and
fabrication of oil and gas production equipment, (d) the provision of contract
compression and related services and (e) any activities related thereto which
are consistent with past practice and conducted in the ordinary course of
business.
8.17 Unqualified Subsidiaries. Permit any Unqualified
Subsidiary to directly or indirectly own any assets (other than cash or Cash
Equivalents located in bank accounts at Chase) which are located in the United
States of America or any territory thereof.
57
52
9. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) HCC shall fail to pay any principal of any Note or any
Reimbursement Obligation when due in accordance with the terms thereof
or hereof; or HCC shall fail to pay any interest on any Note, or any
other amount payable hereunder, within five days after any such
interest or other amount becomes due in accordance with the terms
thereof or hereof; or
(b) Any representation or warranty made or deemed made by any
Credit Party herein or in any other Loan Document or which is contained
in any certificate, document or financial or other statement furnished
at any time under or in connection with this Agreement or any other
Loan Document shall prove to have been incorrect in any material
respect on or as of the date made or deemed made; or
(c) HCC shall default in the observance or performance of any
agreement contained in Section 8 of this Agreement; or
(d) HCC shall default in the observance or performance of any
other agreement contained in this Agreement (other than as provided in
paragraphs (a) through (c) of this Section 9) and such default shall
continue unremedied for a period of 30 days; or
(e) The Subsidiaries' Guarantee shall, at any time, cease to
be in full force and effect (unless released by the Administrative
Agent) or shall be declared null and void, or the validity or
enforceability thereof shall be contested by any Credit Party; or
(f) HCC or any of the Subsidiaries of HCC shall (i) default in
any payment of principal of or interest of any Indebtedness (other than
the Notes) or in the payment of any Guarantee Obligation, in excess of
$5,000,000 in the aggregate, beyond the period of grace (not to exceed
30 days), if any, provided in the instrument or agreement under which
such Indebtedness or Guarantee Obligation was created; or (ii) default
in the observance or performance of any other agreement or condition
relating to any such Indebtedness or Guarantee Obligation in excess of
$5,000,000 or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such Guarantee
Obligation (or a trustee or agent on behalf of such holder or holders
or beneficiary or beneficiaries) to cause, with the giving of notice if
required, such Indebtedness to become due prior to its stated maturity
or such Guarantee Obligation to become payable; or
58
53
(g) (i) HCC or any Material Subsidiary shall commence any
case, proceeding or other action (A) under any existing or future law
of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an
order for relief entered with respect to it, or seeking to adjudicate
it a bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or other
relief with respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian or other similar official for it or for
all or any substantial part of its assets, or any of HCC or any
Material Subsidiary shall make a general assignment for the benefit of
its creditors; or (ii) there shall be commenced against any of HCC or
any Material Subsidiary any case, proceeding or other action of a
nature referred to in clause (i) above which (A) results in the entry
of an order for relief or any such adjudication or appointment or (B)
remains undismissed, undischarged or unbonded for a period of 60 days;
or (iii) there shall be commenced against any of HCC or any Material
Subsidiary any case, proceeding or other action seeking issuance of a
warrant of attachment, execution, distraint or similar process against
all or any substantial part of its assets which results in the entry of
an order for any such relief which shall not have been vacated,
discharged, or stayed or bonded pending appeal within 60 days from the
entry thereof; or (iv) any of HCC or any Material Subsidiary shall take
any action for the purpose of effecting its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or
(iii) above; or (v) any of HCC or any Material Subsidiary shall
generally not, or shall admit in writing its inability to, pay its
debts as they become due;
(h) (i) Any Person shall engage in any non-exempt "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the
Code) involving any Plan, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist
with respect to any Plan or any lien shall arise on the assets of HCC
or any Commonly Controlled Entity in favor of PBGC or a Plan, (iii) a
Reportable Event shall occur with respect to, or proceedings shall
commence to have a trustee appointed, or a trustee shall be appointed,
to administer or to terminate, any Single Employer Plan, which
Reportable Event or commencement of proceedings or appointment of a
trustee is, in the reasonable opinion of the Required Lenders, likely
to result in the termination of such Plan for purposes of Title IV of
ERISA, (iv) any Single Employer Plan shall terminate for purposes of
Title IV of ERISA, (v) HCC or any Commonly Controlled Entity shall, or
in the reasonable opinion of the Required Lenders is likely to, incur
any liability in connection with a withdrawal from, or the Insolvency
or Reorganization of, a Multiemployer Plan or (vi) any other event or
condition shall occur or exist, with respect to a Plan; and in each
case in clauses (i) through (vi) above, such event or condition,
together with all other such events or conditions, if any, could
subject HCC or any of its Subsidiaries to any tax, penalty or other
liabilities in the aggregate material in relation to the business,
operations, property or financial or other condition of HCC and its
Subsidiaries taken as a whole; or
(i) One or more judgments or decrees shall be entered against
HCC or any of the Subsidiaries of HCC involving in the aggregate a
liability (not paid or fully covered by
59
54
insurance) of $5,000,000 or more and all such judgments or decrees
shall not have been vacated, discharged, stayed or bonded pending
appeal within 60 days from the entry thereof; or
(j) If at any time, HCC or any of the Subsidiaries of HCC
shall become liable for remediation and/or environmental compliance
expenses and/or fines, penalties or other charges which, in the
aggregate, are in excess of $5,000,000;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (g) above with respect to HCC the Commitments
shall immediately terminate automatically and the Loans hereunder (with accrued
interest thereon) and all other amounts owing under this Agreement (including,
without limitation, all amounts of L/C Obligations, whether or not the
beneficiaries of the then outstanding Letters of Credit shall have presented the
documents required thereunder) and the Notes shall immediately become due and
payable, and (B) if such event is any other Event of Default, either or both of
the following actions may be taken: (i) with the consent of the Required
Lenders, the Administrative Agent may, or upon the request of the Required
Lenders, the Administrative Agent shall, by notice to HCC declare the
Commitments to be terminated forthwith, whereupon the Commitments shall
immediately terminate; and (ii) with the consent of the Required Lenders, the
Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice of default to HCC declare the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement (including, without limitation, all amounts of L/C Obligations,
whether or not the beneficiaries of the then outstanding Letters of Credit shall
have presented the documents required thereunder) and the Notes to be due and
payable forthwith, whereupon the same shall immediately become due and payable.
With respect to all Letters of Credit with respect to which presentment for
honor shall not have occurred at the time of an acceleration pursuant to the
preceding sentence, HCC shall at such time deposit in a cash collateral account
opened by the Administrative Agent an amount equal to the aggregate then undrawn
and unexpired amount of such Letters of Credit. HCC hereby grants to the
Administrative Agent, for the benefit of the Issuing Lender and the L/C
Participants, a security interest in such cash collateral to secure all
obligations of HCC under this Agreement and the other Loan Documents. Amounts
held in such cash collateral account shall be applied by the Administrative
Agent first to the payment of drafts drawn under such Letters of Credit. HCC
shall execute and deliver to the Administrative Agent, for the account of the
Issuing Lender and the L/C Participants, such further documents and instruments
as the Administrative Agent may request to evidence the creation and perfection
of the within security interest in such cash collateral account. Except as
expressly provided above in this Section, presentment, demand, protest and all
other notices of any kind are hereby expressly waived.
60
55
10. THE ADMINISTRATIVE AGENT
10.1 Appointment. Each Lender hereby irrevocably designates
and appoints Chase as the Administrative Agent of such Lender under this
Agreement and the other Loan Documents, and each such Lender irrevocably
authorizes Chase, as the Administrative Agent for such Lender, to take such
action on its behalf under the provisions of this Agreement and the other Loan
Documents and to exercise such powers and perform such duties as are expressly
delegated to the Administrative Agent by the terms of this Agreement and the
other Loan Documents, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere in
this Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent.
10.2 Delegation of Duties. The Administrative Agent may
execute any of its duties under this Agreement and the other Loan Documents by
or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agents or
attorneys in-fact selected by it with reasonable care.
10.3 Exculpatory Provisions. Neither the Administrative Agent
nor any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except for its or such Person's own gross negligence or
willful misconduct) or (ii) responsible in any manner to any of the Lenders for
any recitals, statements, representations or warranties made by any Credit Party
or any officer thereof contained in this Agreement or any other Loan Document or
in any certificate, report, statement or other document referred to or provided
for in, or received by the Administrative Agent under or in connection with,
this Agreement or any other Loan Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
the Notes or any other Loan Document or for any failure of any Credit Party to
perform its obligations hereunder or thereunder. The Administrative Agent shall
not be under any obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to inspect the properties,
books or records of any Credit Party.
10.4 Reliance by Administrative Agent. The Administrative
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any Note, writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, telecopy, telex or teletype message, statement, order or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons and upon advice
and statements of legal counsel (including, without limitation, counsel to any
Credit Party), independent accountants and other experts selected by the
Administrative Agent. The
61
56
Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with the Administrative Agent. The
Administrative Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Required Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement and the Notes and the other Loan Documents in accordance with a
request of the Required Lenders, and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Notes.
10.5 Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Administrative Agent has received notice from a
Lender or HCC referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event that
the Administrative Agent receives such a notice, the Administrative Agent shall
give notice thereof to the Lenders. The Administrative Agent shall take such
action with respect to such Default or Event of Default as shall be reasonably
directed by the Required Lenders; provided that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders.
10.6 Non-Reliance on Administrative Agent and Other Lenders.
Each Lender expressly acknowledges that neither the Administrative Agent nor any
of its officers, directors, employees, agents, attorneys-in-fact or Affiliates
has made any representations or warranties to it and that no act by the
Administrative Agent hereinafter taken, including any review of the affairs of
any Credit Party shall be deemed to constitute any representation or warranty by
the Administrative Agent to any Lender. Each Lender represents to the
Administrative Agent that it has, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of HCC and each other Credit Party and made its
own decision to make its Loans hereunder and enter into this Agreement. Each
Lender also represents that it will, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigation as
it deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of HCC and each other Credit
Party. Except for notices, reports and other documents expressly required to be
furnished to the Lenders by the Administrative Agent hereunder, the
Administrative Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, operations,
property,
62
57
condition (financial or otherwise), prospects or creditworthiness of any Credit
Party which may come into the possession of the Administrative Agent or any of
its officers, directors, employees, agents, attorneys-in-fact or Affiliates.
10.7 Indemnification. The Lenders agree to indemnify the
Administrative Agent in its capacity as such (to the extent not reimbursed by
HCC, or the other Credit Parties and without limiting the obligation of HCC, and
each other Credit Party to do so), ratably according to the respective amounts
of their original Commitments, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the Notes)
be imposed on, incurred by or asserted against the Administrative Agent in any
way relating to or arising out of this Agreement, any of the other Loan
Documents or any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or any action taken or omitted
by the Administrative Agent under or in connection with any of the foregoing;
provided that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting solely from the Administrative
Agent's gross negligence or willful misconduct. The agreements in this
subsection shall survive the payment of the Notes and all other amounts payable
hereunder.
10.8 Administrative Agent in Its Individual Capacity. The
Administrative Agent and its Affiliates may make loans to, accept deposits from,
hold equity securities of, and generally engage in any kind of business with any
Credit Party as though the Administrative Agent were not the Administrative
Agent hereunder and under the other Loan Documents. With respect to its Loans
made or renewed by it and any Note issued to it and with respect to any Letter
of Credit issued or participated in by it, the Administrative Agent shall have
the same rights and powers under this Agreement and the other Loan Documents as
any Lender and may exercise the same as though it were not the Administrative
Agent, and the terms "Lender" and "Lenders" shall include the Administrative
Agent in its individual capacity.
10.9 Successor Administrative Agent. The Administrative Agent
may resign as Administrative Agent upon 10 days' notice to the Lenders. If the
Administrative Agent shall resign as Administrative Agent under this Agreement
and the other Loan Documents, then the Required Lenders shall appoint from among
the Lenders a successor agent for the Lenders, which successor agent shall be
subject to the approval of HCC. Upon receipt of such approval from HCC, such
successor agent shall succeed to the rights, powers and duties of the
Administrative Agent, and the term "Administrative Agent" shall mean such
successor agent effective upon its appointment, and the former Administrative
Agent's rights, powers and duties as Administrative Agent shall be terminated,
without any other or further act or deed on the part of such former
Administrative Agent or any of the parties to this Agreement or any holders of
the Notes. After any retiring Administrative Agent's resignation as
Administrative Agent, the provisions of this subsection shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement and the other Loan Documents.
63
58
11. MISCELLANEOUS
11.1 Amendments and Waivers. Neither this Agreement, any Note,
any other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
subsection. With the written consent of the Required Lenders, the Administrative
Agent, HCC and any other Credit Party thereto, may, from time to time, enter
into written amendments, supplements or modifications hereto and to the Notes
and the other Loan Documents for the purpose of adding any provisions to this
Agreement or the Notes or the other Loan Documents or changing in any manner the
rights of the Lenders or of the Credit Parties party thereto hereunder or
thereunder or waiving, on such terms and conditions as the Administrative Agent
may specify in such instrument, any of the requirements of this Agreement or the
Notes or the other Loan Documents or any Default or Event of Default and its
consequences; provided, however, that no such waiver and no such amendment,
supplement or modification shall (a) reduce the amount or extend the maturity of
any Note or any installment thereof, or reduce the rate or extend the time of
payment of interest thereon, or reduce any fee payable to any Lender hereunder,
or change the amount of any Lender's Commitments, in each case without the
consent of the Lender affected thereby, or (b) amend, modify or waive any
provision of this subsection or reduce the percentage specified in the
definition of Required Lenders or Majority Lenders, or consent to the assignment
or transfer by any Credit Party of any of its rights and obligations under this
Agreement and the other Loan Documents, in each case without the written consent
of all the Lenders (except as contemplated by this Agreement), or (c) amend,
modify or waive any provision of Section 10 without the written consent of the
then Administrative Agent. Any such waiver and any such amendment, supplement or
modification shall apply equally to each of the Lenders and shall be binding
upon each of the Credit Parties, the Lenders, the Administrative Agent and all
future holders of the Notes. In the case of any waiver, each of the Credit
Parties, the Lenders and the Administrative Agent shall be restored to their
former position and rights hereunder and under the outstanding Notes and any
other Loan Documents, and any Default or Event of Default waived shall be deemed
to be cured and not continuing; but no such waiver shall extend to any
subsequent or other Default or Event of Default, or impair any right consequent
thereon.
11.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy, telegraph or telex), and, unless otherwise expressly provided herein,
shall be deemed to have been duly given or made when delivered by hand, or three
days after being deposited in the mail, postage prepaid, or, in the case of
telecopy notice or overnight courier service, when received, or, in the case of
telegraphic notice, when delivered to the telegraph company, or, in the case of
telex notice, when sent, answerback received, addressed as follows in the case
of HCC and the Administrative Agent, and as set forth in Schedule I in the case
of the other parties hereto, or to such other address as may be hereafter
notified by the respective parties hereto and any future holders of the Notes:
HCC: Hanover Compressor Company
64
59
12001 North Houston-Rosslyn
Xxxxxxx, Xxxxx 00000
Attention: Chief Financial Officer
Telecopy: (000) 000-0000
The Administrative Agent: The Chase Manhattan Bank
One Chase Xxxxxxxxx Xxxxx, Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Agency Services
Telecopy: 000-000-0000
with a copy to: The Chase Manhattan Bank
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxx and Xxxx Xx Xxxxxxxx
Telecopy: 000-000-0000
provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders pursuant to subsection 2.4, 3.3, 3.4, 3.5 or 3.9 shall not be
effective until received. A copy of any notice, request or demand to or upon any
Credit Party pursuant to this Agreement or any other Loan Document (other than
any such requests made in the ordinary course of administering this Agreement
and the other Loan Documents) shall also be delivered to Xxxx, Gerber &
Xxxxxxxxx, Xxx Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000,
attention: Xxxxxxx X. Xxxxxx, Esq. (telecopy: (000) 000-0000).
11.3 No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Administrative Agent or any
Lender, any right, remedy, power or privilege hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.
11.4 Survival of Representations and Warranties. All
representations and warranties made hereunder and in any document, certificate
or statement delivered pursuant hereto or in connection herewith shall survive
the execution and delivery of this Agreement and the Notes.
11.5 Payment of Expenses and Taxes. HCC agrees (a) to pay or
reimburse the Administrative Agent for all its reasonable out-of-pocket costs
and expenses incurred in connection with the development, preparation and
execution of, and any amendment, supplement or modification to, this Agreement,
the Notes and the other Loan Documents and any other documents prepared in
connection herewith or therewith, and the consummation of the
65
60
transactions contemplated hereby and thereby, including, without limitation, the
reasonable fees and disbursements of counsel to the Administrative Agent, (b) to
pay or reimburse each Lender and the Administrative Agent for all its reasonable
costs and expenses incurred in connection with the enforcement or preservation
of any rights under this Agreement, the Notes, the other Loan Documents and any
such other documents, including, without limitation, reasonable fees and
disbursements of counsel to the Administrative Agent and to the several Lenders,
and (c) to pay, indemnify, and hold each Lender and the Administrative Agent
harmless from, any and all recording and filing fees and any and all liabilities
with respect to, or resulting from any delay in paying, stamp, excise and other
taxes, if any, which may be payable or determined to be payable in connection
with the execution and delivery of, or consummation of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, this Agreement, the Notes, the other Loan
Documents and any such other documents, and (d) to pay, indemnify, and hold each
Lender and the Administrative Agent and their respective directors, officers,
employees and agents harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of this
Agreement, the Notes, the other Loan Documents and any such other documents or
the use or the proposed use of proceeds thereof (all the foregoing,
collectively, the "indemnified liabilities"), provided, that HCC shall not have
any obligation hereunder to the Administrative Agent or any Lender with respect
to indemnified liabilities arising from (i) the gross negligence or willful
misconduct of the Administrative Agent or any such Lender, (ii) legal
proceedings commenced against the Administrative Agent or any such Lender by any
security holder or creditor thereof arising out of and based upon rights
afforded any such security holder or creditor solely in its capacity as such, or
(iii) legal proceedings commenced against the Administrative Agent or any such
Lender by any other Lender or by any Transferee (as defined in subsection 11.6).
The agreements in this subsection shall survive repayment of the Notes and all
other amounts payable hereunder and under the other Loan Documents.
11.6 Successors and Assigns; Participations; Purchasing
Lenders.
(a) This Agreement shall be binding upon and inure to the
benefit of HCC, the Lenders, the Administrative Agent, all future
holders of the Notes and their respective successors and assigns,
except that HCC may not assign or transfer any of its rights or
obligations under this Agreement without the prior written consent of
each Lender.
(b) Any Lender may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time
sell to one or more banks or other entities ("Participants")
participating interests in any Loan owing to such Lender, any Note held
by such Lender, any Commitment of such Lender or any other interest of
such Lender hereunder and under the other Loan Documents, provided that
each such sale shall be of Loans and Commitments in an aggregate amount
of at least $5,000,000, and provided, further, that no Lender may so
sell its Commitments so that less than $10,000,000 of such Commitments
are held by such Lender without participating
66
61
interests therein, unless such Lender (excluding Chase) so sells 100%
of its Commitments. In the event of any such sale by a Lender of
participating interests to a Participant, such Lender's obligations
under this Agreement to the other parties to this Agreement shall
remain unchanged, such Lender shall remain solely responsible for the
performance thereof, such Lender shall remain the holder of any such
Note for all purposes under this Agreement and the other Loan
Documents, and the Credit Parties and the Administrative Agent shall
continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under this Agreement and the
other Loan Documents. HCC agrees that if amounts outstanding under this
Agreement and the Notes are due or unpaid, or shall have been declared
or shall have become due and payable upon the occurrence of an Event of
Default, each Participant shall be deemed to have the right of setoff
in respect of its participating interest in amounts owing under this
Agreement and any Note to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under this
Agreement or any Note, provided that such Participant shall only be
entitled to such right of setoff if it shall have agreed in the
agreement pursuant to which it shall have acquired its participating
interest to share with the Lenders the proceeds thereof as provided in
subsection 11.7. HCC also agrees that each Participant shall be
entitled to the benefits of subsections 3.9, 3.11, 3.12 and 11.5 with
respect to its participation in the Commitments and the Loans
outstanding from time to time; provided, that no Participant shall be
entitled to receive any greater amount pursuant to such subsections
than the transferor Lender would have been entitled to receive in
respect of the amount of the participation transferred by such
transferor Lender to such Participant had no such transfer occurred.
(c) Any Lender, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time may
sell to any Lender or any Affiliate thereof and, with the consent of
HCC and the Administrative Agent (which in each case shall not be
unreasonably withheld), to one or more additional banks or financial
institutions ("Purchasing Lenders") all or any part of the assigning
Lender's rights and obligations under this Agreement, the Notes and the
other Loan Documents pursuant to an Assignment and Acceptance,
substantially in the form of Exhibit D, executed by such Purchasing
Lender, such assigning Lender (and, in the case of a Purchasing Lender
that is not then a Lender or an Affiliate thereof, by HCC and the
Administrative Agent) and delivered to the Administrative Agent for its
acceptance and recording in the Register, provided that each such sale
shall be of Loans and Commitments of an aggregate amount of at least
$5,000,000 and provided, further, that no Lender party to this
Agreement on the date hereof may so sell any of its initial Commitments
hereunder such that such Lender holds directly less than $10,000,000 of
such Commitments unless such Lender (excluding Chase) so sells 100% of
its Commitments. Such Assignment and Acceptance shall specify an
Effective Date which is not less than five Business Days after the date
of execution thereof. Upon such execution, delivery, acceptance and
recording, from and after the Effective Date determined pursuant to
such Assignment and Acceptance, (x) the Purchasing Lender thereunder
shall be a party hereto and, to the extent provided in such Assignment
and Acceptance, have the rights and obligations of a Lender hereunder
with a
67
62
Commitment as set forth therein, and (y) the assigning Lender
thereunder shall, to the extent provided in such Assignment and
Acceptance, be released from its obligations under this Agreement (and,
in the case of an Assignment and Acceptance covering all or the
remaining portion of an assigning Lender's rights and obligations under
this Agreement, such assigning Lender shall cease to be a party
hereto). Such Assignment and Acceptance shall be deemed to amend this
Agreement to the extent, and only to the extent, necessary to reflect
the addition of such Purchasing Lender and the resulting adjustment of
Commitment Percentages arising from the purchase by such Purchasing
Lender of all or a portion of the rights and obligations of such
assigning Lender under this Agreement and the Notes. On or prior to the
Effective Date determined pursuant to such Assignment and Acceptance,
HCC, at its own expense, shall execute and deliver to the
Administrative Agent in exchange for the surrendered Note or Notes a
new Note or Notes to the order of such Purchasing Lender in amounts
equal to the Commitment assumed by it pursuant to such Assignment and
Acceptance and, if the assigning Lender has retained a Commitment
hereunder, a new Note or Notes to the order of the assigning Lender in
an amount equal to the Commitment retained by it hereunder. Such new
Note or Notes shall be dated the Closing Date and shall otherwise be in
the form of the Note or Notes replaced thereby. The Note or Notes
surrendered by the assigning Lender shall be returned by the
Administrative Agent to HCC marked "canceled".
(d) The Administrative Agent shall maintain at its address
referred to in subsection 12.2 a copy of each Assignment and Acceptance
delivered to it and a register (the "Register") for the recordation of
the names and addresses of the Lenders and the Commitments of, and
principal amount of the Loans owing to, each Lender from time to time.
The entries in the Register shall be conclusive, in the absence of
manifest error, and HCC, the Administrative Agent and the Lenders may
treat each Person whose name is recorded in the Register as the owner
of the Loan recorded therein for all purposes of this Agreement. The
Register shall be available for inspection by HCC or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed
by a transferor Lender and Purchasing Lender (and, in the case of a
Purchasing Lender that is not then a Lender or an affiliate thereof, by
HCC and the Administrative Agent) together with payment to the
Administrative Agent of a registration and processing fee of $2,500,
the Administrative Agent shall (i) promptly accept such Assignment and
Acceptance (ii) on the Effective Date determined pursuant thereto
record the information contained therein in the Register and give
notice of such acceptance and recordation to the Lenders and HCC.
(f) HCC authorizes each Lender to disclose to any Participant
or Purchasing Lender (each, a "Transferee") and any prospective
Transferee any and all financial information in such Lender's
possession concerning any Credit Party and its affiliates which has
been delivered to such Lender by or on behalf of HCC pursuant to this
Agreement or which has been delivered to such Lender by or on behalf of
HCC in
68
63
connection with such Lender's credit evaluation of the Credit Parties
and their affiliates prior to becoming a party to this Agreement.
(g) If, pursuant to this subsection, any interest in this
Agreement or any Note is transferred to any Transferee which is
organized under the laws of any jurisdiction other than the United
States or any state thereof, the transferor Lender shall cause such
Transferee, concurrently with the effectiveness of such transfer, (i)
to represent to the transferor Lender (for the benefit of the
transferor Lender, the Administrative Agent and HCC) that under
applicable law and treaties no taxes will be required to be withheld by
the Administrative Agent, HCC or the transferor Lender with respect to
any payments to be made to such Transferee in respect of the Loans,
(ii) to furnish to the transferor Lender (and, in the case of any
Purchasing Lender registered in the Register, the Administrative Agent
and HCC) either U.S. Internal Revenue Service Form 4224 or U.S.
Internal Revenue Service Form 1001 (wherein such Transferee claims
entitlement to complete exemption from U.S. federal withholding tax on
all interest payments hereunder) and (iii) to agree (for the benefit of
the transferor Lender, the Administrative Agent and HCC) to provide the
transferor Lender (and, in the case of any Purchasing Lender registered
in the Register, the Administrative Agent and HCC) a new Form 4224 or
Form 1001 upon the expiration or obsolescence of any previously
delivered form and comparable statements in accordance with applicable
U.S. laws and regulations and amendments duly executed and completed by
such Transferee, and to comply from time to time with all applicable
U.S. laws and regulations with regard to such withholding tax
exemption.
(h) Nothing herein shall prohibit any Lender from pledging or
assigning any Note to any Federal Reserve Lender in accordance with
applicable law.
11.7 Adjustments; Set-off.
(a) If any Lender (a "benefitted Lender") shall at any time
receive any payment of all or part of its Loans or the Reimbursement
Obligations owing to it, or interest thereon, or receive any collateral
in respect thereof (whether voluntarily or involuntarily, by set-off,
pursuant to events or proceedings of the nature referred to in Section
9(g), or otherwise), in a greater proportion than any such payment to
or collateral received by any other Lender, if any, in respect of such
other Lender's Loans, or interest thereon, such benefitted Lender shall
purchase for cash from the other Lenders such portion of each such
other Lender's Loans or the Reimbursement Obligations owing to it, or
shall provide such other Lenders with the benefits of any such
collateral, or the proceeds thereof, as shall be necessary to cause
such benefitted Lender to share the excess payment or benefits of such
collateral or proceeds ratably with each of the Lenders; provided,
however, that if all or any portion of such excess payment or benefits
is thereafter recovered from such benefitted Lender, such purchase
shall be rescinded, and the purchase price and benefits returned, to
the extent of such recovery, but without interest. HCC agrees that each
Lender so purchasing a portion of another Lender's Loans
69
64
may exercise all rights of payment (including, without limitation,
rights of set-off) with respect to such portion as fully as if such
Lender were the direct holder of such portion.
(b) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice
to HCC, any such notice being expressly waived by HCC to the extent
permitted by applicable law, upon any amount becoming due and payable
by HCC hereunder or under the Notes (whether at the stated maturity, by
acceleration or otherwise) to set-off and appropriate and apply against
such amount any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time
held or owing by such Lender to or for the credit or the account of
HCC. Each Lender agrees promptly to notify HCC, the Administrative
Agent after any such set-off and application made by such Lender,
provided that the failure to give such notice shall not affect the
validity of such set-off and application.
11.8 Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts,
and all of said counterparts taken together shall be deemed to constitute one
and the same instrument. A set of the copies of this Agreement signed by all the
parties shall be lodged with HCC and the Administrative Agent.
11.9 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
11.10 Integration. This Agreement represents the agreement of
HCC, the Administrative Agent and the Lenders with respect to the subject matter
hereof, and there are no promises, undertakings, representations or warranties
by the Administrative Agent or any Lender relative to subject matter hereof not
expressly set forth or referred to herein or in the other Loan Documents and the
fee letter referred to in subsection 3.2.
11.11 GOVERNING LAW. THIS AGREEMENT AND THE NOTES AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND THE NOTES SHALL
BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK.
11.12 Submission To Jurisdiction; Waivers. HCC hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition
70
65
and enforcement of any judgement in respect thereof, to the
non-exclusive general jurisdiction of the courts of the State of New
York, the courts of the United States of America for the Southern
District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or
that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to such Person at its address set forth in subsection 11.2 or
at such other address of which the Administrative Agent shall have been
notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this subsection any special, exemplary, punitive or
consequential damages.
11.13 Acknowledgements. HCC hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the Notes and the other
Loan Documents;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship to any Credit Party, and the relationship
between Administrative Agent and Lenders, on one hand, and HCC, on the
other hand, is solely that of debtor and creditor; and
(c) no joint venture exists among the Lenders or among any
Credit Party and the Lenders.
11.14 WAIVERS OF JURY TRIAL. EACH OF HCC, THE ADMINISTRATIVE
AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY
IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR THE NOTES OR ANY
OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
11.15 Usury. It is expressly stipulated and agreed to be the
intent of HCC, the Administrative Agent and the Lenders at all times to comply
with the applicable law governing
71
66
the maximum rate or amount of interest payable on or in connection with the
Notes and the Loans. If the applicable law is ever judicially interpreted so as
to render usurious any amount or compensation called for under this Agreement or
any of the Notes or any of the other Loan Documents, or contracted for, charged,
taken, reserved or received with respect to any of the Loans, or if acceleration
of the maturity of any of the Notes, any prepayment by HCC, or any other
circumstance whatsoever, results in the Lenders, or any of them, having been
paid any interest in excess of that permitted by applicable law, then it is the
express intent of HCC, the Administrative Agent and the Lenders that all excess
amounts theretofore collected by the Lenders be credited on the principal
balances of the Notes (or, if the Notes have been or would thereby be paid in
full, refunded to HCC), and the provisions of such Note or Notes and the other
applicable Loan Documents immediately be deemed reformed and the amounts
thereafter collectible hereunder and thereunder reduced, without the necessity
of the execution of any new document, so as to comply with the applicable law,
but so as to permit the recovery of the fullest amount otherwise called for
hereunder and thereunder. The right to accelerate the maturity of any or all of
the Notes does not include the right to accelerate any interest which has not
otherwise accrued on the date of such acceleration, and the Lenders do not
intend to collect any unearned interest in the event of acceleration. All sums
or other compensation paid or agreed to be paid to the Lenders for the use,
forbearance or detention of the indebtedness evidenced hereby or by the Notes
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated and spread with respect to all of the Notes throughout the full term
of such indebtedness until payment in full of all such indebtedness so that the
rate or amount of interest on account of such indebtedness under all of the
Notes does not exceed the Maximum Lawful Rate or maximum amount of interest
permitted under applicable law. The term "Maximum Lawful Rate" as used herein as
to any Lender means the maximum non-usurious rate of interest which may be
lawfully contracted for, charged, taken, reserved, or received by such Lender
from HCC in connection with the Loans evidenced hereby under applicable law. The
provisions of this Section 11.15 shall control all agreements between HCC and
the Lenders.
72
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered in New York, New York by their
proper and duly authorized officers as of the day and year first above written.
HANOVER COMPRESSOR COMPANY
By
--------------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK,
as Administrative Agent and as a Lender
By
--------------------------------------
Name:
Title:
XXXXX FARGO BANK (TEXAS), NATIONAL
ASSOCIATION
By
--------------------------------------
Name:
Title:
THE BANK OF NOVA SCOTIA
By
--------------------------------------
Name:
Title:
73
CREDIT LYONNAIS, NEW YORK BRANCH
By
--------------------------------------
Name:
Title:
BANQUE PARIBAS
By
--------------------------------------
Name:
Title:
FIRST UNION NATIONAL BANK
By
--------------------------------------
Name:
Title:
BANKERS TRUST COMPANY
By
--------------------------------------
Name:
Title:
74
Acknowledged and agreed to
as of the date herof:
HANOVER MAINTECH, INC.
By
--------------------------------------
Name:
Title:
HANOVER/XXXXX, INC.
By
--------------------------------------
Name:
Title:
HANOVER LAND COMPANY
By
--------------------------------------
Name:
Title:
75
70
HANOVER COMPRESSOR COMPANY
CREDIT AGREEMENT DISCLOSURE SCHEDULES
GENERAL COMMENTS WITH RESPECT TO HCC DISCLOSURE SCHEDULE:
While HCC has endeavored to identify under each Schedule and (by way of
enumeration or cross reference) the particular items relevant thereto, items
listed under one Schedule may be relevant to another Schedule. Accordingly,
items listed under each Schedule are hereby incorporated by reference in each
other Schedule, but only to the extent relevant to such other Schedule.
Capitalized terms used herein and not otherwise defined have the
meanings ascribed to them in the Agreement.
76
SCHEDULE I
LENDERS AND COMMITMENTS
Name and Address Commitment
of Lender Percentage Commitment
-------------- ---------- ----------
The Chase Manhattan Bank 20.0% $40,000,000.00
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xx Xxxxxxxx
Telecopy: (000) 000-0000
with a copy to:
The Chase Manhattan Bank
One Chase Manhattan Plaza
Agency Services, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx Xxxxxxx
Telecopy: (000) 000-0000
Credit Lyonnais 17.5% 35,000,000.00
0000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx Xxxxxxx
Telecopy: (000) 000-0000
Xxxxx Fargo Bank (Texas), 17.5% 35,000,000.00
National Association
Post Oak Office
P.O. Box 4401
0000 Xxxx Xxx Xxxx., 0xx Xxxxx
Xxxxxxx, Xxxxx 00000-0000
Attention: Xxxxxxxx Xxxxx
Telecopy: (000) 000-0000
The Bank of Nova Scotia 15.0% 30,000,000.00
000 Xxxxxxxxx Xxxxxx Xxxxxxxxx,
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxxx
Telecopy: (000) 000-0000
With a copy to:
The Bank of Nova Scotia
0000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxx
Telecopy: (000) 000-0000
77
2
Banque Paribas 12.5% 25,000,000.00
0000 Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxx Xxxxxxx
Telecopy: (000) 000-0000
First Union Bank
0000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxxxxxx
Telecopy: (000) 000-0000 12.5% 25,000,000.00
Bankers Trust Company
Xxx Xxxxxxx Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxx
Telecopy: (000) 000-0000 5.0% 10,000,000.00
---------- ------- ------------------
Total 100% $200,000,000.00
78
Schedule II
SUBSIDIARIES
79
Schedule III
MATERIAL TRANSACTIONS
80
Schedule IV
MATERIAL CHANGES
81
Schedule V
REQUIRED CONSENTS
82
Schedule VI
SALE AND LEASEBACK TRANSACTIONS
83
Schedule VII
FORMS OF COMPRESSOR AND PRODUCTION EQUIPMENT LEASES
84
Schedule VIII
[INTENTIONALLY LEFT BLANK]
85
Schedule IX
ENVIRONMENTAL
86
Schedule X
EXISTING INDEBTEDNESS
87
Schedule XI
EXISTING LIENS
88
Schedule XII
ADDITIONAL EXISTING LIENS
89
Schedule XIII
AFFILIATE TRANSACTIONS
