1
EXHIBIT 10.6
SENIOR SECURED REVOLVING
CREDIT AGREEMENT
DATED AS OF FEBRUARY 9, 2001
AMONG
UNIVERSAL COMPRESSION, INC.,
AS BORROWER,
FIRST UNION NATIONAL BANK,
AS ADMINISTRATIVE AGENT,
BANK ONE, NA,
AS SYNDICATION AGENT,
AND
THE LENDERS SIGNATORY HERETO
$125,000,000 SENIOR SECURED REVOLVING CREDIT FACILITY
2
TABLE OF CONTENTS
PAGE
----
Section 1.01 Terms Defined Above.....................................1
Section 1.02 Certain Defined Terms...................................1
Section 1.03 Accounting Terms and Determinations....................20
ARTICLE II Commitments............................................21
Section 2.01 Loans and Letters of Credit............................21
Section 2.02 Borrowings, Continuations and Conversions, Letters of
Credit...............................................22
Section 2.03 Changes of Commitments.................................24
Section 2.05 Several Obligations....................................26
Section 2.06 Notes..................................................26
Section 2.07 Prepayments............................................26
Section 2.08 Borrowing Base.........................................28
Section 2.09 Assumption of Risks....................................29
Section 2.10 Obligation to Reimburse and to Prepay..................29
Section 2.11 Lending Offices........................................31
ARTICLE III Payments of Principal and Interest.....................32
Section 3.01 Repayment of Loans.....................................32
Section 3.02 Interest...............................................32
ARTICLE IV Payments; Pro Rata Treatment; Computations; Etc........33
Section 4.01 Payments...............................................33
Section 4.02 Pro Rata Treatment.....................................33
Section 4.03 Computations...........................................33
Section 4.04 Agent Reliance.........................................34
Section 4.05 Set-off, Sharing of Payments, Etc......................34
Section 4.06 Taxes..................................................35
ARTICLE V Capital Adequacy.......................................38
Section 5.01 Additional Costs.......................................38
Section 5.02 Limitation on LIBOR Loans..............................40
Section 5.03 Illegality.............................................40
Section 5.04 Base Rate Loans Pursuant to Sections 5.01, 5.02
and 5.03.............................................40
Section 5.05 Compensation...........................................40
Section 5.06 Replacement Lenders....................................41
ARTICLE VI Conditions Precedent...................................42
Section 6.01 Initial Funding........................................42
Section 6.02 Initial and Subsequent Loans and Letters of Credit.....45
Section 6.03 Conditions Precedent for the Benefit of Lenders........46
Section 6.04 No Waiver..............................................46
ARTICLE VII Representations and Warranties.........................46
Section 7.01 Corporate Existence....................................46
-ii-
3
PAGE
----
Section 7.02 Financial Condition....................................46
Section 7.03 Litigation.............................................47
Section 7.04 No Breach..............................................47
Section 7.05 Authority..............................................47
Section 7.06 Approvals..............................................47
Section 7.07 Use of Loans...........................................48
Section 7.08 ERISA..................................................48
Section 7.09 Taxes..................................................49
Section 7.10 Titles, etc............................................49
Section 7.11 No Material Misstatements..............................50
Section 7.12 Investment Company Act.................................50
Section 7.13 Public Utility Holding Company Act.....................50
Section 7.14 Subsidiaries...........................................50
Section 7.15 Location of Business and Offices.......................50
Section 7.16 Defaults...............................................50
Section 7.17 Environmental Matters..................................51
Section 7.18 Compliance with the Law................................52
Section 7.19 Insurance..............................................52
Section 7.20 Reserved...............................................52
Section 7.21 Hedging Agreements.....................................52
Section 7.22 Restriction on Liens...................................52
ARTICLE VIII Affirmative Covenants..................................53
Section 8.01 Reporting Requirements.................................53
Section 8.02 Litigation.............................................55
Section 8.03 Maintenance, Etc.......................................55
Section 8.04 Environmental Matters..................................55
Section 8.05 Further Assurances.....................................56
Section 8.06 Performance of Obligations.............................56
Section 8.07 Reserved...............................................56
Section 8.08 Reserved...............................................56
Section 8.09 Additional Collateral; Releases of Collateral..........56
Section 8.10 ERISA Information and Compliance.......................57
ARTICLE IX Negative Covenants.....................................58
Section 9.01 Debt...................................................58
Section 9.03 Investments, Loans and Advances........................60
Section 9.04 Dividends, Distributions and Redemptions...............60
Section 9.05 Reserved...............................................61
Section 9.06 Nature of Business.....................................61
Section 9.07 Reserved...............................................61
Section 9.08 Mergers, Etc...........................................61
Section 9.09 Proceeds of Notes; Letters of Credit...................61
Section 9.10 ERISA Compliance.......................................61
Section 9.11 Sale or Discount of Receivables........................63
Section 9.12 Reserved...............................................63
-iii-
4
PAGE
----
Section 9.13 Certain Financial Covenants............................63
Section 9.14 Sale of Properties.....................................64
Section 9.15 Environmental Matters..................................64
Section 9.16 Transactions with Affiliates...........................64
Section 9.17 Subsidiaries...........................................64
Section 9.18 Negative Pledge Agreements.............................65
ARTICLE X Events of Default; Remedies............................65
Section 10.01 Events of Default......................................65
Section 10.02 Remedies...............................................67
ARTICLE XI The Administrative Agent...............................68
Section 11.01 Appointment, Powers and Immunities.....................68
Section 11.02 Reliance by Administrative Agent.......................69
Section 11.03 Defaults...............................................69
Section 11.04 Rights as a Lender.....................................69
Section 11.05 Indemnification........................................70
Section 11.06 Non-Reliance on Administrative Agent and other
Lenders..............................................70
Section 11.07 Action by Administrative Agent.........................70
Section 11.08 Resignation or Removal of Administrative Agent.........71
ARTICLE XII Miscellaneous..........................................71
Section 12.01 Waiver.................................................71
Section 12.02 Notices................................................72
Section 12.03 Payment of Expenses, Indemnities, Etc..................72
Section 12.04 Amendments, Etc........................................75
Section 12.05 Successors and Assigns.................................75
Section 12.06 Assignments and Participations.........................75
Section 12.07 Invalidity.............................................77
Section 12.08 Counterparts...........................................77
Section 12.09 References.............................................77
Section 12.10 Survival...............................................77
Section 12.11 Captions...............................................77
Section 12.12 No Oral Agreements.....................................77
Section 12.13 Governing Law; Submission to Jurisdiction..............78
Section 12.14 Interest...............................................79
Section 12.15 Confidentiality........................................80
Section 12.16 Effectiveness..........................................81
Section 12.17 Exculpation Provisions.................................81
Section 12.18 Hedging Agreements.....................................81
-iv-
5
ANNEXES, EXHIBITS AND SCHEDULES
Annex I - List of Maximum Revolving Credit Amounts
Exhibit A - Form of Note
Exhibit B - Form of Borrowing, Continuation and Conversion Request
Exhibit C - Form of Compliance Certificate
Exhibit D - List of Security Instruments
Exhibit E - Form of Assignment Agreement
Exhibit F - Form of Letter of Credit Application
Exhibit G - Form of Notice of Account Designation
Exhibit H - Form of Borrowing Base Certificate
Schedule 1.01 - Equipment Fair Market Value Computation
Schedule 2.01(b) - Existing Letters of Credit
Schedule 7.02 - Liabilities
Schedule 7.03 - Litigation
Schedule 7.09 - Taxes
Schedule 7.10 - Titles, etc.
Schedule 7.14 - Subsidiaries and Partnerships
Schedule 7.17 - Environmental Matters
Schedule 7.19 - Insurance
Schedule 7.21 - Hedging Agreements
Schedule 7.22 - Negative Pledges
Schedule 9.01 - Debt
Schedule 9.02 - Liens
Schedule 9.03 - Investments, Loans and Advances
Schedule 9.16 - Transactions with Affiliates
-v-
6
THIS SENIOR SECURED REVOLVING CREDIT AGREEMENT dated as of February 9,
2001, is among: UNIVERSAL COMPRESSION, INC., a corporation formed under the laws
of the State of Texas (the "Borrower"); each of the lenders that is a signatory
hereto or which becomes a signatory hereto as provided in Section 12.06
(individually, together with its successors and assigns, a "Lender" and,
collectively, the "Lenders"); and FIRST UNION NATIONAL BANK, a national banking
association (in its individual capacity, "FUNB"), as administrative agent for
the Lenders (in such capacity, together with its successors in such capacity,
the "Administrative Agent").
R E C I T A L S
A. The Borrower has requested that the Lenders provide certain loans to
and extensions of credit on behalf of the Borrower; and
B. The Lenders have agreed to make such loans and extensions of credit
subject to the terms and conditions of this Agreement.
C. In consideration of the mutual covenants and agreements herein
contained and of the loans, extensions of credit and commitments hereinafter
referred to, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING MATTERS
Section 1.01 Terms Defined Above. As used in this Senior Secured Revolving
Credit Agreement, the terms "Administrative Agent," "Borrower," "Lender,"
"Lenders," and "FUNB" shall have the meanings indicated above.
Section 1.02 Certain Defined Terms. As used herein, the following terms
shall have the following meanings (all terms defined in this Article I or in
other provisions of this Senior Secured Revolving Credit Agreement in the
singular to have equivalent meanings when used in the plural and vice versa):
"ABS Facility" shall mean that certain $200,000,000 asset backed
securitization facility under that certain Indenture dated February 9, 2001,
between BRL Universal Compression Funding I, L.P., as Issuer, and Xxxxx Fargo
Bank, National Association, as Indenture Trustee.
"Accounts Receivable" shall mean, for any Person, all of such Person's
accounts, instruments, contract rights, chattel paper, documents, and general
intangibles arising from the sale of goods and/or the rendition of services by
such Person in the ordinary course of business, and the proceeds thereof and all
security and guaranties therefor, whether now existing or hereafter created, and
all returned, reclaimed or repossessed goods, and all books and records
pertaining to the foregoing.
7
"Additional Costs" shall have the meaning assigned such term in Section
5.01(a).
"Affected Loans" shall have the meaning assigned such term in Section
5.04.
"Affiliate" of any Person shall mean (i) any Person directly or indirectly
controlled by, controlling or under common control with such first Person, (ii)
any director or officer of such first Person or of any Person referred to in
clause (i) above and (iii) if any Person in clause (i) above is an individual,
any member of the immediate family (including parents, spouse and children) of
such individual and any trust whose principal beneficiary is such individual or
one or more members of such immediate family and any Person who is controlled by
any such member or trust. For purposes of this definition, any Person which owns
directly or indirectly 10% or more of the securities having ordinary voting
power for the election of directors or other governing body of a corporation or
10% or more of the partnership or other ownership interests of any other Person
(other than as a limited partner of such other Person) will be deemed to
"control" (including, with its correlative meanings, "controlled by" and "under
common control with") such corporation or other Person.
"Agreement" shall mean this Senior Secured Revolving Credit Agreement, as
the same may from time to time be amended or supplemented.
"Aggregate Commitments" at any time shall equal the amount calculated in
accordance with Section 2.03.
"Aggregate Maximum Revolving Credit Amounts" at any time shall equal the
sum of the Maximum Revolving Credit Amounts of the Lenders (not to exceed
$125,000,000), as the same may be reduced pursuant to Section 2.03(b).
"Alternate Currency" shall mean such foreign currencies which are readily
convertible into Dollars and are acceptable to the Administrative Agent.
"Applicable Lending Office" shall mean, for each Lender and for each Type
of Loan, the lending office of such Lender (or an Affiliate of such Lender)
designated for such Type of Loan on the signature pages hereof or such other
offices of such Lender (or of an Affiliate of such Lender) as such Lender may
from time to time specify to the Administrative Agent and the Borrower as the
office by which its Loans of such Type are to be made and maintained.
"Applicable Margin" shall mean:
(a) During the Initial Pricing Period, the applicable per annum
percentage determined as follows:
(i) If, on the Closing Date, the Borrower has not received a
credit rating on its senior secured Debt issued in conjunction with the
HY-SL Facility of BB or
8
better from S&P or Ba2 or better from Xxxxx'x, the Applicable Margin for
the Initial Pricing Period shall be (A) 1 1/2% per annum with respect to
Base Rate Loans, and (B) 2 1/2% per annum with respect to LIBOR Loans.
(ii) If, on the Closing Date, the Borrower has received a credit
rating on its senior secured Debt issued in conjunction with the HY-SL
Facility of BB or better from S&P or Ba2 or better from Xxxxx'x, the
Applicable Margin for the Initial Pricing Period shall be (A) 1 1/4% per
annum with respect to Base Rate Loans, and (B) 2 1/4% per annum with
respect to LIBOR Loans; provided, however, if, during the Initial Pricing
Period, the Borrower's credit rating on its senior secured Debt issued in
conjunction with the HY-SL Facility falls below BB from S&P or Ba2 from
Xxxxx'x, then the Applicable Margin shall revert back to the applicable
per annum percentage rate specified in (a)(i) of this definition.
(iii) The Applicable Margin for commitment fees shall be 1/2 of
1%.
(b) From and including August 9, 2001, and at all times thereafter,
the applicable per annum percentage is determined as follows:
(i) If, after the Initial Pricing Period, the Borrower has not
received a credit rating on its senior secured Debt issued in conjunction
with the HY-SL Facility of BB or better from S&P or Ba2 or better from
Xxxxx'x, the Applicable Margin shall be the applicable per annum
percentage set forth at the appropriate intersection in the table shown
below based on the Total Leverage Ratio as in effect from time to time:
Applicable Margin
-----------------
LIBOR Base Rate Commitment
Total Leverage Ratio Loans Loans Fees
-------------------- ----- --------- ----------
Greater than or equal to
4.25 to 1.0, but less than
4.75 to 1.0 2.50% 1.50% .50%
Greater than or equal to
3.75 to 1.0, but less than
4.25 to 1.0 2.25% 1.25% .50%
Greater than or equal to
3.25 to 1.0, but less than
3.75 to 1.0 2.00% 1.00% .50%
Greater than or equal to
2.75 to 1.0, but less than
3.25 to 1.0 1.75% .75% .375%
Less than 2.75 to 1.0 1.50% .50% .375%
(ii) If, after the Initial Pricing Period, the Borrower has
received a credit rating on its senior secured Debt issued in conjunction
with the HY-SL Facility of
-3-
9
BB or better from S&P or Ba2 or better from Xxxxx'x, the Applicable Margin
shall be the applicable per annum percentage set forth at the appropriate
intersection in the table shown below based on the Total Leverage Ratio as
in effect from time to time:
Applicable Margin
-----------------
LIBOR Base Rate Commitment
Total Leverage Ratio Loans Loans Fees
-------------------- ----- --------- ----------
Greater than or equal to
4.25 to 1.0, but less than
4.75 to 1.0 2.25% 1.25% .50%
Greater than or equal to
3.75 to 1.0, but less than
4.25 to 1.0 2.00% 1.00% .50%
Greater than or equal to
3.25 to 1.0, but less than
3.75 to 1.0 1.75% .75% .375%
Greater than or equal to
2.75 to 1.0, but less than
3.25 to 1.0 1.50% .50% .375%
Less than 2.75 to 1.0 1.25% .25% .300%
provided, however, if, after the Initial Pricing Period, the Borrower's
credit rating on its senior secured Debt issued in conjunction with the
HY-SL Facility falls below BB from S&P or Ba2 from Xxxxx'x, then the
Applicable Margin shall revert back to the applicable per annum percentage
rate specified in (b)(i) of this definition.
(c) For purposes of determining the Applicable Margin, the first
test period for EBITDAR will be calculated as of June 30, 2001.
Each change in the Applicable Margin resulting from a change in the Total
Leverage Ratio (which shall be calculated quarterly) shall take effect as of the
first day of the fiscal quarter for which the Total Leverage Ratio is
calculated.
"Assignment" shall have the meaning assigned such term in Section
12.06(b).
"Base Rate" shall mean, with respect to any Base Rate Loan, for any day,
the higher of (i) the Federal Funds Rate for any such day plus 1/2 of 1% or (ii)
the Prime Rate for such day. Each change in any interest rate provided for
herein based upon the Base Rate resulting from a change in the Base Rate shall
take effect at the time of such change in the Base Rate.
"Base Rate Loans" shall mean Loans that bear interest at rates based upon
the Base Rate.
-4-
10
"Borrowing Base" shall mean the sum of the Working Capital Borrowing Base
plus the Equipment Borrowing Base; provided, however, at no time shall the
Borrowing Base exceed the lesser of (i) $125,000,000 and (ii) the Aggregate
Maximum Revolving Credit Amounts.
"Borrowing Base Certificate" shall mean the certificate required by
Section 8.01(i), and otherwise being substantially in the form of Exhibit H.
"Business Day" shall mean, other than for Letters of Credit, any day other
than a day on which commercial banks are authorized or required to close in
Texas or in North Carolina and, where such term is used in the definition of
"Quarterly Date" or if such day relates to a borrowing or continuation of, a
payment or prepayment of principal of or interest on, or a conversion of or
into, or the Interest Period for, a LIBOR Loan or a notice by the Borrower with
respect to any such borrowing or continuation, payment, prepayment, conversion
or Interest Period, any day which is also a day on which dealings in Dollar
deposits are carried out in the London interbank market. With respect to Letters
of Credit, "Business Day" shall mean any day other than a day on which
commercial banks are authorized or required to close in the domicility of the
respective Issuing Bank.
"Capital Lease" shall mean a lease of (or other arrangement conveying the
right to use) real and/or personal Property, or a combination thereof, with
respect to which the lessee is required concurrently to recognize the
acquisition of an asset and the incurrence of a Debt in accordance with GAAP.
"Capital Lease Obligations" shall mean, as to any Person, all obligations
of such Person as lessee under any Capital Lease, which obligations are required
to be classified and accounted for as capital leases on a balance sheet of such
Person under GAAP, and the amount of such obligations shall be the capitalized
amount thereof determined in accordance with GAAP.
"Capital Stock" shall mean, (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock and (ii) with
respect to any Person that is not a corporation, any and all partnerships or
other equity interests of such Person.
"Change of Control" means the occurrence of one or more of the following
events: (i) any sale, lease, exchange or other transfer (in one transaction or a
series of related transactions, but other than by the granting of a Lien in
accordance with this Agreement or by way of consolidation or merger) of all or
substantially all of the assets of the Borrower and its Subsidiaries, or
Holdings and its Subsidiaries, in each case taken as a whole, to any Person or
"group" (as defined in Section 13(d)(3) of the Exchange Act) other than to the
Permitted Holders; (ii) the approval by the holders of Capital Stock of the
Borrower or of Holdings of any plan or proposal for the liquidation or
dissolution of the Borrower or Holdings (whether or not otherwise in compliance
with the provisions of this Agreement); (iii) any Person or "group" within the
meaning of Section 13(d) of the Exchange Act (other than the Permitted Holders
and Holdings) shall become the "beneficial owner" as defined in Rule 13d-3 under
the Exchange
-5-
11
Act, of shares representing more than 50% of the aggregate voting power
represented by the Capital Stock of the Borrower or of Holdings, or (iv) the
replacement of a majority of the Board of Directors of the Borrower or Holdings
over a two-year period from the directors who constituted the Board of Directors
of the Borrower or Holdings, as the case may be, at the beginning of such
period, and such replacement shall not have been approved by a vote of at least
a majority of the Board of Directors of the Borrower or Holdings, as the case
may be, then still in office who either were members of such Board of Directors
at the beginning of such period or whose election as a member of such Board of
Directors was previously so approved.
"CHP" means Xxxxxx Xxxxxx Partners III, L.P., a private investment fund
managed by Xxxxxx Xxxxxx, Inc., a Delaware corporation.
"Closing Date" shall mean February 9, 2001.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time and any successor statute.
"Commitment" shall mean, for any Lender, its obligation to make Loans and
to participate in the Letters of Credit as provided in Section 2.01(b) up to the
amount of such Lender's Maximum Revolving Credit Amount.
"Consolidated Current Assets" shall mean all assets of the Borrower and
its Consolidated Subsidiaries which under GAAP would be classified as current
assets.
"Consolidated Current Liabilities" shall mean all liabilities of the
Borrower and its Consolidated Subsidiaries which under GAAP would be classified
as current liabilities but excluding the current maturities on long-term Debt.
"Consolidated Net Income" shall mean with respect to the Borrower and its
Consolidated Subsidiaries, for any period, the aggregate of the net income (or
loss) of the Borrower and its Consolidated Subsidiaries after allowances for
taxes for such period, determined on a consolidated basis in accordance with
GAAP; provided that there shall be excluded from such net income (to the extent
otherwise included therein) the following: (i) the net income of any Person in
which the Borrower or any Consolidated Subsidiary has an interest (which
interest does not cause the net income of such other Person to be consolidated
with the net income of the Borrower and its Consolidated Subsidiaries in
accordance with GAAP), except to the extent of the amount of dividends or
distributions actually paid in such period by such other Person to the Borrower
or to a Consolidated Subsidiary, as the case may be; (ii) the net income (but
not loss) of any Consolidated Subsidiary to the extent that the declaration or
payment of dividends or similar distributions or transfers or loans by that
Consolidated Subsidiary is not at the time permitted by operation of the terms
of its charter or any agreement, instrument or Governmental Requirement
applicable to such Consolidated Subsidiary, or is otherwise restricted or
prohibited in each case determined in accordance with GAAP; (iii) the net income
(or loss) of any Person acquired in a pooling-of-interests transaction for any
period prior to the date of such transaction;
-6-
12
(iv) any extraordinary gains or losses, including gains or losses attributable
to Property sales not in the ordinary course of business; and (v) the cumulative
effect of a change in accounting principles and any gains or losses attributable
to writeups or write downs of assets.
"Consolidated Subsidiaries" shall mean each Subsidiary of the Borrower
(whether now existing or hereafter created or acquired) the financial statements
of which shall be (or should have been) consolidated with the financial
statements of the Borrower in accordance with GAAP.
"Debt" shall mean, for any Person the sum of the following (without
duplication): (i) all obligations of such Person (whether created or assumed)
for borrowed money or evidenced by bonds, debentures, notes or other similar
instruments (including principal, interest, fees and charges); (ii) all
obligations of such Person (whether contingent or otherwise) in respect of
bankers' acceptances, letters of credit, surety or other bonds and similar
instruments; (iii) all obligations of such Person to pay the deferred purchase
price of Property or services (other than for borrowed money); (iv) all Capital
Lease Obligations in respect of which such Person is liable (whether contingent
or otherwise); (v) all Operating Equipment Lease Obligations which require such
Person or its Affiliate to make payments over the term of such lease; (vi) all
Debt (as described in the other clauses of this definition) and other
obligations of others secured by a Lien on any asset of such Person, whether or
not such Debt is assumed by such Person; (vii) all Debt (as described in the
other clauses of this definition) and other obligations of others guaranteed by
such Person or in which such Person otherwise assures a creditor against loss of
the debtor or obligations of others; (viii) all obligations or undertakings of
such Person to maintain or cause to be maintained the financial position or
covenants of others or to purchase the Debt or Property of others; (ix)
obligations to deliver goods or services in consideration of advance payments;
(x) obligations to pay for goods or services whether or not such goods or
services are actually received or utilized by such Person; (xi) any capital
stock of such Person in which such Person has a mandatory obligation to redeem
such stock; (xii) any Debt of a Special Entity for which such Person is liable
either by agreement or because of a Governmental Requirement; and (xiv) all net
obligations of such Person under Hedging Agreements.
"Default" shall mean an Event of Default or an event which with notice or
lapse of time or both would become an Event of Default.
"Dollar Equivalent" shall mean, at any time of determination thereof, the
amount of Dollars involved which could be purchased with the applicable amount
of the Alternate Currency involved computed at the spot rate of exchange as
quoted or utilized by the Administrative Agent on the date of determination
thereof.
"Dollars" and "$" shall mean lawful money of the United States of America.
"Domestic Subsidiary" shall mean each Subsidiary of the Borrower which is
not a Foreign Subsidiary.
-7-
13
"EBITDAR" shall mean, for any period, the sum of Consolidated Net Income
for such period plus the following expenses or charges to the extent deducted
from Consolidated Net Income in such period: Total Interest Expense, taxes,
depreciation, amortization and rental expense excluding non-recurring charges.
EBITDAR will be:
(a) adjusted on a pro forma basis (reasonably acceptable to the
Administrative Agent) for acquisitions and divestitures including
projected synergies;
(b) calculated utilizing annualized results for the period from
and including the Closing Date up to but excluding the applicable
quarterly determination date; and
(c) from and after April 1, 2002, and at all times thereafter,
calculated on a rolling four-quarter basis.
"Effective Date" shall have the meaning assigned such term in Section
12.16.
"Eligible Accounts Receivable" shall mean all Accounts Receivable of the
Borrower and its Subsidiaries which have been created in the ordinary course of
the Borrower's and its Subsidiaries' business, upon which the Borrower's and its
Subsidiaries' right to receive payment is absolute and not contingent upon the
fulfillment of any condition whatsoever, and in which the Administrative Agent
has a perfected, first priority Lien (subject only to Excepted Liens and the
exceptions set forth in (ix) below), and such Accounts Receivable shall be
valued net of any reserves in connection therewith required to be established by
GAAP. The term "Eligible Accounts Receivable" shall not include (i) Accounts
Receivable which are unpaid more than 90 days from the invoice date thereof to
the extent such accounts exceed 15% of all Eligible Accounts Receivable; (ii)
any account for which there exists a right of set off, defense or discount,
except regular discounts allowed in the ordinary course of business to promote
prompt payment (and for which no defense or counterclaim has been asserted);
(iii) any account which represents an obligation of any local, state or federal
government agency or entity; (iv) any account which arises out of a contract or
order which, by its terms, forbids or makes void or unenforceable any assignment
by the Borrower to the Administrative Agent of the account receivable arising
with respect thereto; (v) any account arising from a "consignment"; (vi) any
account which arises from the sale or lease to or performance of services for,
or represents an obligation of, an employee, affiliate, partner, parent or
subsidiary of the Borrower; (vii) any accounts arising from sales of goods or
services in which the performance of the Borrower has been bonded; (viii) any
Accounts Receivable generated in the Operating Equipment Lease Facilities and
the ABS Facility (provided, however, that up to 15% of all Eligible Accounts
Receivable arising from the leasing of equipment by UCO Compression LLC acquired
in connection with the ABS Facility may be included as Eligible Accounts
Receivable, notwithstanding the absence of a perfected Lien in favor of the
Administrative Agent with respect to such Accounts Receivable, at any time prior
to the occurrence and continuance of a Trigger Event (as such term is defined in
the ABS Facility)); and (ix) Accounts Receivable generated by Foreign
Subsidiaries in excess of 35% of all Eligible Accounts Receivable even if the
Administrative Agent shall not have a Lien thereon; provided, however, no
Accounts
-8-
14
Receivable shall be Eligible Accounts Receivable if generated by a Foreign
Subsidiary which has incurred Debt and further provided, however, all Accounts
Receivable generated by a Foreign Subsidiary which has pledged such Accounts
Receivable as collateral for the Indebtedness may be Eligible Accounts
Receivable if such Accounts Receivable are not excluded by the other clauses of
this definition (except for this clause (ix)).
"Eligible Equipment" shall mean gas compression equipment of the Borrower
having a fair market value (as determined by Schedule 1.01) equal to the
incremental funded amount of the Aggregate Commitments in excess of the Working
Capital Borrowing Base, in which the Administrative Agent has a perfected, first
priority Lien (subject only to Excepted Liens).
"Eligible Inventory" shall mean at any time all inventory of raw materials
and work in process, then owned by the Borrower and its Subsidiaries (less any
reserve for obsolescence, any reserve for slow-moving inventory, or any other
similar contra-account to inventory all of which shall be satisfactory to the
Administrative Agent) and held for sale or disposition in the ordinary course of
business, in which the Administrative Agent has a perfected, first priority Lien
(subject only to Excepted Liens and the exception set forth in clause (iii)
below), valued at the lower of cost or market price; provided, however, the term
Eligible Inventory shall not include (i) any gas compression equipment of the
Borrower and its Subsidiaries to the extent same is deemed to be "inventory" as
a result of constituting finished goods under the Uniform Commercial Code of any
applicable jurisdiction, (ii) raw materials and work in progress once same are
incorporated into equipment which constitutes finished goods and (iii) inventory
of raw materials and work in progress owned by a Foreign Subsidiary in excess of
35% of all Eligible Inventory even if the Administrative Agent shall not have a
Lien thereon.
"Environmental Laws" shall mean any and all Governmental Requirements
pertaining to health or the environment in effect in any and all jurisdictions
in which the Borrower or any Subsidiary is conducting or at any time has
conducted business, or where any Property of the Borrower or any Subsidiary is
located, including without limitation, the Oil Pollution Act of 1990 ("OPA"),
the Clean Air Act, as amended, the Comprehensive Environmental, Response,
Compensation, and Liability Act of 1980 ("CERCLA"), as amended, the Federal
Water Pollution Control Act, as amended, the Occupational Safety and Health Act
of 1970, as amended, the Resource Conservation and Recovery Act of 1976
("RCRA"), as amended, the Safe Drinking Water Act, as amended, the Toxic
Substances Control Act, as amended, the Superfund Amendments and Reauthorization
Act of 1986, as amended, the Hazardous Materials Transportation Act, as amended,
and other environmental conservation or protection laws. The term "oil" shall
have the meaning specified in OPA, the terms "hazardous substance" and "release"
(or "threatened release") have the meanings specified in CERCLA, and the terms
"solid waste" and "disposal" (or "disposed") have the meanings specified in
RCRA; provided, however, that (i) in the event either OPA, CERCLA or RCRA is
amended so as to broaden the meaning of any term defined thereby, such broader
meaning shall apply subsequent to the effective date of such amendment and (ii)
to the extent the laws of the state in which any Property of the Borrower or any
Subsidiary is located establish a meaning for "oil," "hazardous
-9-
15
substance," "release," "solid waste" or "disposal" which is broader than that
specified in either OPA, CERCLA or RCRA, such broader meaning shall apply.
"Equipment Borrowing Base" shall mean at any time an amount equal to the
Eligible Equipment (on a dollar-for-dollar basis).
"Equipment Loans" shall mean loans made pursuant to Section 2.01(a)(ii).
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time and any successor statute.
"ERISA Affiliate" shall mean each trade or business (whether or not
incorporated) which together with the Borrower or any Subsidiary would be deemed
to be a "single employer" within the meaning of section 4001(b)(1) of ERISA or
subsections (b), (c), (m) or (o) of section 414 of the Code.
"ERISA Event" shall mean (i) a "Reportable Event" described in Section
4043 of ERISA and the regulations issued thereunder, (ii) the withdrawal of the
Borrower, any Subsidiary or any ERISA Affiliate from a Plan during a plan year
in which it was a "substantial employer" as defined in Section 4001(a)(2) of
ERISA, (iii) the filing of a notice of intent to terminate a Plan or the
treatment of a Plan amendment as a termination under Section 4041 of ERISA, (iv)
the institution of proceedings to terminate a Plan by the PBGC or (v) any other
event or condition which might constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any Plan.
"Event of Default" shall have the meaning assigned such term in Section
10.01.
"Excepted Liens" shall mean: (i) Liens for taxes, assessments or other
governmental charges or levies not yet due or which are being contested in good
faith by appropriate action and for which adequate reserves have been
maintained; (ii) Liens in connection with workmen's compensation, unemployment
insurance or other social security, old age pension or public liability
obligations not yet due or which are being contested in good faith by
appropriate action and for which adequate reserves have been maintained in
accordance with GAAP; (iii) operators', vendors', carriers', warehousemen's,
repairmen's, mechanics', workmen's, materialmen's, construction or other like
Liens arising by operation of law in the ordinary course of business or
statutory landlord's liens, each of which is in respect of obligations that have
not been outstanding more than 90 days or which are being contested in good
faith by appropriate proceedings and for which adequate reserves have been
maintained in accordance with GAAP; (iv) any Liens reserved in leases or farmout
agreements for rent or royalties and for compliance with the terms of the
farmout agreements or leases in the case of leasehold estates, to the extent
that any such Lien referred to in this clause does not materially impair the use
of the Property covered by such Lien for the purposes for which such Property is
held by the Borrower or any Subsidiary or materially impair the value of such
Property subject thereto; (v) encumbrances (other than to secure the payment of
borrowed money or the deferred purchase price of Property or services),
easements, restrictions, servitudes, permits, conditions, covenants, exceptions
or
-10-
16
reservations in any rights of way or other Property of the Borrower or any
Subsidiary for the purpose of roads, pipelines, transmission lines,
transportation lines, distribution lines for the removal of gas, oil, coal or
other minerals or timber, and other like purposes, or for the joint or common
use of real estate, rights of way, facilities and equipment, and defects,
irregularities, zoning restrictions and deficiencies in title of any rights of
way or other Property which in the aggregate do not materially impair the use of
such rights of way or other Property for the purposes of which such rights of
way and other Property are held by the Borrower or any Subsidiary or materially
impair the value of such Property subject thereto; (vi) deposits of cash or
securities to secure the performance of bids, trade contracts, leases, statutory
obligations and other obligations of a like nature incurred in the ordinary
course of business; and (vii) Liens permitted by the Security Instruments;
(viii) Liens arising out of fully bonded judgments; and (ix) Liens for
Borrower's title to Property leased under Capital Leases.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
or any successor statute or statutes thereto.
"Existing Letters of Credit" shall mean those letters of credit listed on
attached Schedule 2.01(b) and all reimbursement obligations pertaining to any
such letter of credit.
"Federal Funds Rate" shall mean, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight federal funds transactions with a member of the
Federal Reserve System arranged by federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day, provided that (i) if the date for which such rate is to be
determined is not a Business Day, the Federal Funds Rate for such day shall be
such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (ii) if such rate is not so
published for any day, the Federal Funds Rate for such day shall be the average
rate charged to the Administrative Agent on such day on such transactions as
determined by the Administrative Agent.
"Fee Letter" shall mean that certain letter agreement from First Union
Securities, Inc. to the Borrower and agreed to by FUNB dated January 12, 2001,
concerning certain fees in connection with this Agreement and any agreements or
instruments executed in connection therewith, as the same may be amended or
replaced from time to time.
"Financial Statements" shall mean the financial statement or statements of
Holdings and its Consolidated Subsidiaries described or referred to in Section
7.02.
"Foreign Credit Facility" shall mean any credit facility of any Subsidiary
of the Borrower (i) whose jurisdiction of incorporation is other than the United
States of America, any state thereof, the District of Columbia or any possession
thereof and (ii) which derives substantially all of its income from
jurisdictions other than the United States of America.
-11-
17
"Foreign Subsidiary" shall mean each Subsidiary of the Borrower that is
incorporated under the laws of any jurisdiction other than the United States of
America, any State thereof, or any territory thereof.
"Foreign Subsidiary Indebtedness" shall have the meaning assigned such
term in Section 9.01(i).
"GAAP" shall mean generally accepted accounting principles in the United
States of America in effect from time to time.
"Governmental Authority" shall include the country, the state, county,
city and political subdivisions in which any Person or such Person's Property is
located or which exercises valid jurisdiction over any such Person or such
Person's Property, and any court, agency, department, commission, board, bureau
or instrumentality of any of them including monetary authorities which exercises
valid jurisdiction over any such Person or such Person's Property. Unless
otherwise specified, all references to Governmental Authority herein shall mean
a Governmental Authority having jurisdiction over, where applicable, the
Borrower, its Subsidiaries or any of their Property or the Administrative Agent,
any Lender or any Applicable Lending Office.
"Governmental Requirement" shall mean any law, statute, code, ordinance,
order, determination, rule, regulation, judgment, decree, injunction, franchise,
permit, certificate, license, authorization or other directive or requirement
(whether or not having the force of law), including, without limitation,
Environmental Laws, energy regulations and occupational, safety and health
standards or controls, of any Governmental Authority.
"Hedging Agreements" shall mean any commodity, interest rate or currency
swap, cap, floor, collar, forward agreement or other exchange or protection
agreements or any option with respect to any such transaction.
"Highest Lawful Rate" shall mean, with respect to each Lender, the maximum
nonusurious interest rate, if any, that at any time or from time to time may be
contracted for, taken, reserved, charged or received on the Notes or on other
Indebtedness under laws applicable to such Lender which are presently in effect
or, to the extent allowed by law, under such applicable laws which may hereafter
be in effect and which allow a higher maximum nonusurious interest rate than
applicable laws now allow.
"Holdings" shall mean Universal Compression Holdings, Inc., a Delaware
corporation.
"HY-SL Facility" shall mean that certain $427,000,000 high yield synthetic
lease facility as described in the Offering Memorandum.
"Indebtedness" shall mean (without duplication) any and all amounts owing
or to be owing by the Borrower to the Administrative Agent, the Issuing Bank,
the Lenders and/or any Affiliate of any Lender in connection with the Loan
Documents and the Letter of Credit
-12-
18
Application, and any Hedging Agreements now or hereafter arising between the
Borrower and any Lender or any Affiliate of any Lender and permitted by the
terms of this Agreement and all renewals, extensions and/or rearrangements of
any of the foregoing.
"Indemnified Parties" shall have the meaning assigned such term in Section
12.03(a)(ii).
"Indemnity Matters" shall mean any and all actions, suits, proceedings
(including any investigations, litigation or inquiries), claims, demands and
causes of action made or threatened against a Person and, in connection
therewith, all losses, liabilities, damages (including, without limitation,
consequential damages) or reasonable costs and expenses of any kind or nature
whatsoever incurred by such Person whether caused by the sole or concurrent
negligence of such Person seeking indemnification.
"Initial Funding" shall mean the funding of the initial Loans or issuance
of the initial Letters of Credit upon satisfaction of the conditions set forth
in Sections 6.01 and 6.02.
"Initial Pricing Period" shall mean the period from and including the
Closing Date through August 9, 2001.
"Interest Coverage Ratio" shall mean the ratio of (i) EBITDAR for the
applicable Testing Period to (ii) Total Interest Expense for the applicable
Testing Period.
"Interest Period" shall mean, with respect to any LIBOR Loan, the period
commencing on the date such LIBOR Loan is made and ending on the numerically
corresponding day in the first, second, third or sixth calendar month
thereafter, as the Borrower may select as provided in Section 2.02 (or such
longer period as may be requested by the Borrower and agreed to by the Majority
Lenders), except that each Interest Period which commences on the last Business
Day of a calendar month (or on any day for which there is no numerically
corresponding day in the appropriate subsequent calendar month) shall end on the
last Business Day of the appropriate subsequent calendar month.
Notwithstanding the foregoing: (i) no Interest Period may end after the
Revolving Credit Termination Date; (ii) each Interest Period which would
otherwise end on a day which is not a Business Day shall end on the next
succeeding Business Day (or, if such next succeeding Business Day falls in the
next succeeding calendar month, on the next preceding Business Day); and (iii)
no Interest Period shall have a duration of less than one month and, if the
Interest Period for any LIBOR Loans would otherwise be for a shorter period,
such Loans shall not be available hereunder.
"Investment" shall mean, with respect to any Person, any direct or
indirect loan or other extension of credit (including, without limitation, a
guarantee) or capital contribution to (by means of any transfer of cash or other
property to others or any payment for property or services for the account or
use of others), or any purchase or acquisition by such Person of any Capital
Stock, bonds, notes, debentures or other securities or evidences of Indebtedness
issued by, any
-13-
19
Person. "Investment" shall exclude extensions of trade credit by Borrower and
its Subsidiaries on commercially reasonable terms in accordance with normal
trade practices of Borrower or such Subsidiary, as the case may be.
"Issuing Bank" shall mean, for any Letters of Credit issued on or after
the Closing Date, FUNB or any other Lender agreed to among the Borrower, the
Administrative Agent and such Lender to issue Letters of Credit. As to the
Existing Letters of Credit, the Issuing Bank for each Existing Letter of Credit
shall be as set forth on Schedule 2.01.(b).
"LC Commitment" at any time shall mean $50,000,000.
"LC Exposure" at any time shall mean the difference between aggregate face
amount of all undrawn and uncancelled Letters of Credit (including the Dollar
Equivalent of the face amounts of outstanding Offshore Currency Letters of
Credit) and the aggregate of all amounts drawn under all Letters of Credit and
not yet reimbursed.
"Lender Affiliate" shall mean (a) with respect to any Lender (i) an
Affiliate of such Lender or (ii) any entity (whether a corporate, partnership,
trust or otherwise) that is engaged in making, purchasing, holding or otherwise
investing in bank loans and similar extensions of credit in the ordinary course
of its business and is administered or managed by a Lender or an Affiliate of
such Lender and (b) with respect to any Lender that is a fund which invests in
bank loans and similar extensions of credit and is managed by the same
investment advisor as such Lender or by an Affiliate of such investment advisor.
"Letters of Credit Application" shall mean a letter of credit application,
in the form of Exhibit F, delivered to the Administrative Agent requesting the
issuance, reissuance, extension or renewal of any Letter of Credit and
containing the information set forth in Section 2.02(g).
"Letters of Credit" shall mean the Existing Letters of Credit, and the
letters of credit issued pursuant to Section 2.01(b) and all reimbursement
obligations pertaining to any such letters of credit, and "Letter of Credit"
shall mean any one of the Letters of Credit and the reimbursement obligations
pertaining thereto, and shall include Offshore Currency Letters of Credit.
"LIBOR" shall mean the rate of interest determined on the basis of the
rate for deposits in Dollars for a period equal to the applicable Interest
Period commencing on the first day of such Interest Period appearing on Bridge
Telerate Service (formerly Dow Xxxxx Market Service) Page 3750 as of 11:00 a.m.
(London time) two (2) Business Days prior to the first day of the applicable
Interest Period. In the event that such rate does not appear on Bridge Telerate
Service (formerly Dow Xxxxx Market Service) Page 3750, "LIBOR" shall be
determined by the Administrative Agent to be the rate per annum at which
deposits in Dollars are offered by leading reference banks in the London
interbank market to FUNB at approximately 11:00 a.m. (London time) two Business
Days prior to the first day of the applicable Interest Period for a
-14-
20
period equal to such Interest Period and in an amount substantially equal to the
amount of the applicable Loan.
"LIBOR Loans" shall mean Loans the interest rates on which are determined
on the basis of rates referred to in the definition of "LIBOR Rate".
"LIBOR Rate" shall mean, with respect to any LIBOR Loan, a rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) determined by the
Administrative Agent to be equal to the quotient of (i) LIBOR for such Loan for
the Interest Period for such Loan divided by (ii) 1 minus the Reserve
Requirement for such Loan for such Interest Period.
"Lien" shall mean any interest in Property securing an obligation owed to,
or a claim by, a Person other than the owner of the Property, whether such
interest is based on the common law, statute or contract, and whether such
obligation or claim is fixed or contingent, and including but not limited to the
lien or security interest arising from a mortgage, encumbrance, pledge, security
agreement, conditional sale or trust receipt or a lease, consignment or bailment
for security purposes. The term "Lien" shall include reservations, exceptions,
encroachments, easements, rights of way, covenants, conditions, restrictions,
leases and other title exceptions and encumbrances affecting Property. For the
purposes of this Agreement, the Borrower or any Subsidiary shall be deemed to be
the owner of any Property which it has acquired or holds subject to a
conditional sale agreement, or leases under a financing lease or other
arrangement pursuant to which title to the Property has been retained by or
vested in some other Person in a transaction intended to create a financing.
"Loan Documents" shall mean this Agreement, the Notes and the Security
Instruments.
"Loans" shall mean the loans as provided for by Section 2.01.
"Majority Lenders" shall mean, at any time while no Loans are outstanding,
Lenders having more than 50% of the Aggregate Commitments and, at any time while
Loans are outstanding, Lenders holding more than 50% of the outstanding
aggregate principal amount of the Loans (without regard to any sale by a Lender
of a participation in any Loan under Section 12.06(c)).
"Material Adverse Effect" shall mean any material and adverse effect on
(i) the assets, liabilities, financial condition, business, operations or
affairs of the Borrower and its Subsidiaries taken as a whole as reflected in
the Financial Statements, or from the facts represented or warranted in any Loan
Document or in the Offering Memorandum, or (ii) the ability of the Borrower and
its Subsidiaries taken as a whole to meet their obligations under the Loan
Documents on a timely basis.
"Maximum Revolving Credit Amount" shall mean, as to each Lender, the
amount set forth opposite such Lender's name on Annex I under the caption
"Maximum Revolving Credit Amounts" (as the same may be reduced pursuant to
Section 2.03(b) pro rata to each Lender
-15-
21
based on its Percentage Share or increased pursuant to Section 2.03(d)), as
modified from time to time to reflect any assignments permitted by Section
12.06(b).
"Xxxxx'x shall mean Xxxxx'x Investors Services, Inc.
"Multiemployer Plan" shall mean a Plan defined as such in Section 3(37) or
4001(a)(3) of ERISA.
"9-7/8% Senior Discount Notes" shall mean those certain unsecured 9-7/8%
Senior Discount Notes due 2008, issued pursuant to that certain Indenture dated
as of February 20, 1998, between TW Acquisition Corporation (now known as
Borrower) and the United States Trust Company of New York.
"Notes" shall mean the Notes provided for by Section 2.06, together with
any and all renewals, extensions for any period, increases, rearrangements,
substitutions or modifications thereof.
"Offering Memorandum" shall mean that certain Offering Memorandum dated
February 9, 2001 and pertaining to those certain Senior Secured Notes due
February 15, 2008 in the amount of $350,000,000 to be issued by BRL Universal
Equipment 2001 A, L.P. and BRL Universal Equipment Corp.
"Offshore Currency" shall mean any lawful currency (other than Dollars)
that the relevant Issuing Bank with respect to any Offshore Currency Letter of
Credit, in its sole reasonable opinion, at any time determines to be (a) freely
traded in the offshore interbank foreign exchange markets, (b) freely
transferable, and (c) freely convertible into Dollars.
"Offshore Currency Letter of Credit" shall mean any Letter of Credit
denominated in an Offshore Currency.
"Operating Equipment Lease" shall mean, as to any Person, any asset backed
securitization transaction (other than the ABS Facility) entered into for the
purpose of financing gas compression equipment and any operating lease
transaction relating to gas compression equipment that is treated as an
operating lease for purposes of accounting in accordance with GAAP but not for
tax purposes.
"Operating Equipment Lease Facility" shall mean each operating lease
transaction or asset backed securitization transaction (other than the ABS
Facility) contemplated by an Operating Equipment Lease, including, without
limitation, the HY-SL Facility.
"Operating Equipment Lease Obligations" shall mean, as to any Person, all
obligations of such Person as lessee under any Operating Equipment Lease.
"Other Taxes" shall have the meaning assigned such term in Section
4.06(b).
-16-
22
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions.
"Percentage Share" shall mean the percentage of the Aggregate Commitments
to be provided by a Lender under this Agreement as indicated on Annex I hereto,
as modified from time to time to reflect any assignments permitted by Section
12.06(b).
"Permitted Holder(s)" shall mean (i) WGCS and any Affiliate of WGCS and
(ii) each of CHP and Xxxxxx Xxxxxx Inc. and employees, management, directors and
Affiliates of the foregoing.
"Person" shall mean any individual, corporation, company, voluntary
association, partnership, joint venture, trust, unincorporated organization or
government or any agency, instrumentality or political subdivision thereof, or
any other form of entity.
"Plan" shall mean any employee pension benefit plan, as defined in Section
3(2) of ERISA, which (i) is currently or hereafter sponsored, maintained or
contributed to by the Borrower, any Subsidiary or an ERISA Affiliate or (ii) was
at any time during the preceding six calendar years sponsored, maintained or
contributed to, by the Borrower, any Subsidiary or an ERISA Affiliate.
"Post-Default Rate" shall mean, in respect of any principal of any Loan or
any other amount payable by the Borrower under this Agreement or any other Loan
Document, a rate per annum during the period commencing on the date of
occurrence of an Event of Default until such amount is paid in full or all
Events of Default are cured or waived equal to 2% per annum above the Base Rate
as in effect from time to time plus the Applicable Margin (if any), but in no
event to exceed the Highest Lawful Rate; provided however, for a LIBOR Loan, the
"Post-Default Rate" for such principal shall be, for the period commencing on
the date of occurrence of an Event of Default and ending on the earlier to occur
of the last day of the Interest Period therefor or the date all Events of
Default are cured or waived, 2% per annum above the interest rate for such Loan
as provided in Section 3.02(a)(ii), but in no event to exceed the Highest Lawful
Rate.
"Prime Rate" shall mean the rate of interest per annum publicly announced
from time to time by FUNB as its prime rate at its principal office in
Charlotte, North Carolina. Each change in the Prime Rate shall be effective from
and including the date such change is publicly announced as being effective.
"Principal Office" shall mean the principal office of the Administrative
Agent, presently located at 000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx
00000-0000.
"Property" shall mean any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
-17-
23
"Purchase Money Indebtedness" shall mean Indebtedness, the proceeds of
which are used to finance the acquisition, construction or improvement of
inventory, equipment or other property in the ordinary course of business.
"Quarterly Date" shall mean the last day of each March, June, September
and December, in each year, the first of which shall be March 31, 2001;
provided, however, that if any such day is not a Business Day, such Quarterly
Date shall be the next succeeding Business Day.
"Redetermination Rate" shall have the meaning assigned such term in
Section 2.08(a).
"Regulation D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System (or any successor), as the same may be amended or
supplemented from time to time.
"Regulatory Change" shall mean, with respect to any Lender, any change
after the Closing Date in any Governmental Requirement (including Regulation D)
or the adoption or making after such date of any interpretations, directives or
requests applying to a class of lenders (including such Lender or its Applicable
Lending Office) of or under any Governmental Requirement (whether or not having
the force of law) by any Governmental Authority charged with the interpretation
or administration thereof.
"Required Payment" shall have the meaning assigned such term in Section
4.04.
"Reserve Requirement" shall mean, for any Interest Period for any LIBOR
Loan, the average maximum rate at which reserves (including any marginal,
supplemental or emergency reserves) are required to be maintained during such
Interest Period under Regulation D by member banks of the Federal Reserve System
in New York City with deposits exceeding one billion Dollars against
"Eurocurrency liabilities" (as such term is used in Regulation D). Without
limiting the effect of the foregoing, the Reserve Requirement shall reflect any
other reserves required to be maintained by such member banks by reason of any
Regulatory Change against (i) any category of liabilities which includes
deposits by reference to which LIBOR is to be determined as provided in the
definition of "LIBOR" or (ii) any category of extensions of credit or other
assets which include a LIBOR Loan.
"Responsible Officer" shall mean, as to any Person, the Chief Executive
Officer, the President or any Vice President of such Person and, with respect to
financial matters, the term "Responsible Officer" shall include the Chief
Financial Officer of such Person. Unless otherwise specified, all references to
a Responsible Officer herein shall mean a Responsible Officer of the Borrower.
"Revolving Credit Termination Date" shall mean the earlier to occur of (i)
February 9, 2006 or (ii) the date that the Commitments are sooner terminated
pursuant to Sections 2.03(b) or 10.02.
-18-
24
"SEC" shall mean the Securities and Exchange Commission or any successor
Governmental Authority.
"Security Instruments" shall mean the Letters of Credit, the Fee Letter,
the agreements or instruments described or referred to in Exhibit D, and any and
all other agreements or instruments now or hereafter executed and delivered by
the Borrower or any other Person (other than participation or similar agreements
between any Lender and any other lender or creditor with respect to any
Indebtedness pursuant to this Agreement) in connection with, or as security for
the payment or performance of the Notes, or this Agreement, or reimbursement
obligations under the Letters of Credit, as such agreements may be amended,
supplemented or restated from time to time.
"Special Entity" shall mean any joint venture, limited liability company
or partnership, general or limited partnership or any other type of partnership
or company other than a corporation in which the Borrower or one or more of its
other Subsidiaries is a member, owner, partner or joint venturer and owns,
directly or indirectly, at least a majority of the equity of such entity or
controls such entity, but excluding any tax partnerships that are not classified
as partnerships under state law. For purposes of this definition, any Person
which owns directly or indirectly an equity investment in another Person which
allows the first Person to manage or elect managers who manage the normal
activities of such second Person will be deemed to "control" such second Person
(e.g. a sole general partner controls a limited partnership).
"S&P" shall mean Standard & Poors Ratings Group, a division of The
XxXxxx-Xxxx Companies, Inc.
"Subsidiary" shall mean (i) any corporation of which at least a majority
of the outstanding shares of stock having by the terms thereof ordinary voting
power to elect a majority of the board of directors of such corporation
(irrespective of whether or not at the time stock of any other class or classes
of such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time directly or indirectly owned or
controlled by the Borrower or one or more of its Subsidiaries or by the Borrower
and one or more of its Subsidiaries and (ii) any Special Entity.
"Taxes" shall have the meaning assigned such term in Section 4.06(a).
"Testing Period" shall mean (a) for any determination made during the
period from and including Closing Date through fiscal quarter ending March 31,
2002, a single period consisting of the fiscal quarter of the Borrower last
ended, utilizing annualized results for the period from and including the
Closing Date through such fiscal quarter end, and (b) for any determination made
from and including April 1, 2002, and at all times thereafter, a single period
consisting of the four consecutive fiscal quarters of the Borrower then last
ended (whether or not such quarters are all within the same fiscal year);
provided, however, that if a particular provision of this Agreement indicates
that a Testing Period shall be a different specified duration, such Testing
-19-
25
Period shall consist of the particular fiscal quarter or quarters then last
ended which are so indicated in such provision.
"Total Debt" shall mean, at any time (without duplication), the sum of (i)
100% of Debt reflected on the balance sheet of the Borrower in accordance with
GAAP, plus (ii) 82% of any amount funded (Debt and equity) under Operating
Equipment Lease Facilities including the HY-SL Facility, plus (iii) 85% of any
amount funded (Debt and equity) under the ABS Facility.
"Total Interest Expense" shall mean, for any period, the total
consolidated interest expense net of cash interest income of the Borrower and
its Consolidated Subsidiaries for such period (including, without limitation,
the cash equivalent of the interest expense associated with Capital Lease
Obligations and all interest paid on the 9 7/8 % Senior Discount Notes, but
excluding (i) upfront fees paid in connection with this Agreement, the ABS
Facility or HY-SL Facility, (ii) Debt or lease issuance costs which have to be
amortized, (iii) lease payments on any office equipment or real property and
(iv) any principal components paid on all lease payments) plus rental payments
made in connection with Operating Equipment Lease Obligations and the ABS
Facility (excluding any principal amortization components).
"Total Leverage Ratio" shall mean the ratio of Total Debt to EBITDAR.
"Type" shall mean, with respect to any Loan, a Base Rate Loan or a LIBOR
Loan.
"UCO Compression LLC" shall mean UCO Compression LLC, a Delaware limited
liability company, which is the bankruptcy remote, special purpose, wholly-owned
Subsidiary of the Borrower created to own and lease gas compression equipment in
conjunction with the ABS Facility.
"WGCS" shall mean Xxxxxxxxxxx Global Compression Services, L.P.
"WGCS Merger" shall mean the merger pursuant to that certain Agreement and
Plan of Merger dated as of October 23, 2000 among Enterra Compression Company,
WEUS Holding, Inc., Xxxxxxxxxxx International Inc., Holdings and the Borrower,
and related agreements.
"Wholly-Owned Subsidiary" shall mean, as to Holdings, any Subsidiary of
which all of the outstanding shares of capital stock or other equity interests,
on a fully-diluted basis, are owned by Holdings or one or more of the
Wholly-Owned Subsidiaries or by Holdings and one or more of the Wholly-Owned
Subsidiaries.
"Working Capital Borrowing Base" shall mean at any time an amount equal to
the sum of 50% of Eligible Accounts Receivable, plus 50% of Eligible Inventory.
"Working Capital Loans" shall mean loans made pursuant to Section
2.01(a)(i).
Section 1.03 Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
determinations with respect to
-20-
26
accounting matters hereunder shall be made, and all financial statements and
certificates and reports as to financial matters required to be furnished to the
Administrative Agent or the Lenders hereunder shall be prepared, in accordance
with GAAP, applied on a basis consistent with the audited financial statements
of the Borrower referred to in Section 7.02 (except for changes concurred with
by the Borrower's independent public accountants).
ARTICLE II
COMMITMENTS
Section 2.01 Loans and Letters of Credit.
(a) Loans.
(i) Working Capital Loans. Each Lender severally agrees, on
the terms and conditions of this Agreement, to make loans to the Borrower during
the period from and including (i) the Closing Date or (ii) such later date that
such Lender becomes a party to this Agreement as provided in Section 12.06(b),
to and up to, but excluding, the Revolving Credit Termination Date in an
aggregate principal amount at any one time outstanding up to, but not exceeding,
the amount of such Lender's Commitment as then in effect, minus the aggregate
outstanding principal amount of Equipment Loans made by such Lender; provided,
however, that the aggregate principal amount of all such Working Capital Loans
by all Lenders hereunder at any one time outstanding together with the LC
Exposure shall not exceed the Working Capital Borrowing Base as then in effect.
Subject to the terms of this Agreement, during the period from the Closing Date
to and up to, but excluding, the Revolving Credit Termination Date, the Borrower
may borrow, repay and reborrow the amount described in this Section 2.01(a)(i).
(ii) Equipment Loans. Each Lender severally agrees, on the
terms and conditions of this Agreement, to make loans to the Borrower during the
period from and including (i) the Closing Date or (ii) such later date that such
Lender becomes a party to this Agreement as provided in Section 12.06(b), to and
up to, but excluding, the Revolving Credit Termination Date in an aggregate
principal amount at any one time outstanding up to, but not exceeding, the
amount of such Lender's Commitment as then in effect, minus the sum of (A) the
aggregate outstanding principal amount of Working Capital Loans made by such
Lender and (B) the LC Exposure; provided, however, that the aggregate principal
amount of all such Equipment Loans by all Lenders hereunder at any one time
outstanding shall not exceed the Equipment Borrowing Base as then in effect.
Subject to the terms of this Agreement, during the period from the Closing Date
to and up to, but excluding, the Revolving Credit Termination Date, the Borrower
may borrow, repay and reborrow the amount described in this Section 2.01(a)(ii).
(iii) Maximum Amount of Loans. All Loans made by all Lenders
under Sections 2.01(a)(i) and 2.01(a)(ii) at any one time outstanding together
with the LC Exposure shall not exceed the Aggregate Commitments.
-21-
27
(iv) Overadvances. Notwithstanding anything contained in this
Section 2.01 to the contrary, but provided the Borrower is otherwise entitled to
a Working Capital Loan under the Working Capital Borrowing Base, the Borrower
shall be entitled to request an advance under the Working Capital Borrowing Base
up to the Aggregate Maximum Revolving Credit Amounts; provided, however, (i)
Borrower shall represent to the Administrative Agent in the borrowing request
(referenced in Section 2.02(c)) for such overadvance that Borrower owns
sufficient unencumbered equipment assets to pledge as Eligible Equipment to
eliminate the overadvance and (ii) in all such cases in which the overadvance is
$10,000,000 or less, Borrower or its Subsidiary shall within 15 days of the
making of such advance, either pledge additional equipment assets as Eligible
Equipment under Security Instruments in form and substance acceptable to the
Administrative Agent, having value sufficient to nullify the overadvance, or
repay such overadvance, and in all such cases in which the amount of the
overadvance is in excess of $10,000,000, then the Borrower or its Subsidiary
shall have five (5) Business Days to either pledge additional equipment assets
as Eligible Equipment under Security Instruments in form and substance
acceptable to the Administrative Agent, having value sufficient to nullify the
overadvance, or repay such overadvance.
(b) Letters of Credit. During the period from and including the
Closing Date to, but excluding, the 30th day prior to the Revolving Credit
Termination Date, the Issuing Bank, as issuing bank for the Lenders, agrees to
extend credit for the account of the Borrower at any time and from time to time
by issuing, renewing, extending or reissuing Letters of Credit; provided
however, the LC Exposure at any one time outstanding shall not exceed the lesser
of (i) the LC Commitment or (ii) the Working Capital Borrowing Base as then in
effect, minus the aggregate principal amount of all Working Capital Loans then
outstanding. The Lenders shall participate in such Letters of Credit according
to their respective Percentage Shares. Each of the Letters of Credit shall (i)
be issued by the Issuing Bank on a sight basis only, (ii) contain such terms and
provisions as are reasonably required by the Issuing Bank, (iii) be for the
account of the Borrower and (iv) expire not later than (A) 30 days before the
Revolving Credit Termination Date, with respect to commercial letters of credit,
and (B) 10 days before the Revolving Credit Termination Date, with respect to
standby letters of credit. The Borrower may request that one or more Letters of
Credit be issued in an Offshore Currency denomination as part of the LC
Exposure. The aggregate Dollar Equivalent of all Offshore Currency Letters of
Credit, as of the issuance date of any such Offshore Currency Letter of Credit,
shall not exceed $25,000,000 as determined by the Administrative Agent. No
Issuing Bank shall be obligated to issue an Offshore Currency Letter of Credit
if such Issuing Bank has determined, in its sole discretion, that it is unable
to fund obligations in the requested Offshore Currency; provided, however, the
Administrative Agent shall use its best efforts to locate suitable issuers if no
Issuing Banks are able to fund obligations in the requested Offshore Currency.
From and after the Closing Date, the Existing Letters of Credit shall be deemed
to be Letters of Credit issued pursuant to this Section 2.01(b).
(c) Limitation on Types of Loans. Subject to the other terms and
provisions of this Agreement, at the option of the Borrower, the Loans may be
Base Rate Loans or LIBOR
-22-
28
Loans; provided that, without the prior written consent of the Majority Lenders,
no more than ten (10) LIBOR Loans may be outstanding at any time.
Section 2.02 Borrowings, Continuations and Conversions, Letters
of Credit.
(a) Borrowings. The Borrower shall give the Administrative Agent
(which shall promptly notify the Lenders) advance notice as hereinafter provided
of each borrowing hereunder, which shall specify (i) the aggregate amount of
such borrowing, (ii) the Type and (iii) the date (which shall be a Business Day)
of the Loans to be borrowed, and (iv) (in the case of LIBOR Loans) the duration
of the Interest Period therefor.
(b) Minimum Amounts. All Base Rate Loan borrowings shall be in
amounts of at least $250,000 or the remaining balance of the Aggregate
Commitments, if less, or the amount of a borrowing to fund a Letter of Credit
pursuant to Section 2.10(b), if less, or any whole multiple of $250,000 in
excess thereof, and all LIBOR Loans shall be in amounts of at least $1,000,000
or the amount of a borrowing to fund a Letter of Credit pursuant to Section
2.10(b), if less, or any whole multiple of $500,000 in excess thereof.
(c) Notices. The initial borrowing and all subsequent borrowings,
continuations and conversions shall require advance written notice to the
Administrative Agent (which shall promptly notify the Lenders) in the form of
Exhibit B (or telephonic notice promptly confirmed by such a written notice),
which in each case shall be irrevocable, from the Borrower to be received by the
Administrative Agent not later than 12:00 p.m. Eastern time on the date of each
Base Rate Loan borrowing and three (3) Business Days prior to the date of each
LIBOR Loan borrowing, continuation or conversion. Without in any way limiting
the Borrower's obligation to confirm in writing any telephonic notice, the
Administrative Agent may act without liability upon the basis of telephonic
notice believed by the Administrative Agent in good faith to be from the
Borrower prior to receipt of written confirmation. In each such case, the
Borrower hereby waives the right to dispute the Administrative Agent's record of
the terms of such telephonic notice except in the case of gross negligence or
willful misconduct by the Administrative Agent.
(d) Continuation Options. Subject to the provisions made in this
Section 2.02(d), the Borrower may elect to continue all or any part of any LIBOR
Loan beyond the expiration of the then current Interest Period relating thereto
by giving advance notice as provided in Section 2.02(c) to the Administrative
Agent (which shall promptly notify the Lenders) of such election, specifying the
amount of such Loan to be continued and the Interest Period therefor. In the
absence of such a timely and proper election, the Borrower shall be deemed to
have elected to convert such LIBOR Loan to a Base Rate Loan pursuant to Section
2.02(e). All or any part of any LIBOR Loan may be continued as provided herein,
provided that (i) any continuation of any such Loan shall be (as to each Loan as
continued for an applicable Interest Period) in amounts of at least $1,000,000
or any whole multiple of $500,000 in excess thereof and (ii) no Default shall
have occurred and be continuing. If a Default shall have
-23-
29
occurred and be continuing, each LIBOR Loan shall be converted to a Base Rate
Loan on the last day of the Interest Period applicable thereto.
(e) Conversion Options. The Borrower may elect to convert all or
any part of any LIBOR Loan on the last day of the then current Interest Period
relating thereto to a Base Rate Loan by giving advance notice to the
Administrative Agent (which shall promptly notify the Lenders) of such election.
Subject to the provisions made in this Section 2.02(e), the Borrower may elect
to convert all or any part of any Base Rate Loan at any time and from time to
time to a LIBOR Loan by giving advance notice as provided in Section 2.02(c) to
the Administrative Agent (which shall promptly notify the Lenders) of such
election. All or any part of any outstanding Loan may be converted as provided
herein, provided that (i) any conversion of any Base Rate Loan into a LIBOR Loan
shall be (as to each such Loan into which there is a conversion for an
applicable Interest Period) in amounts of at least $1,000,000 or any whole
multiple of $500,000 in excess thereof and (ii) no Default shall have occurred
and be continuing. If a Default shall have occurred and be continuing, no Base
Rate Loan may be converted into a LIBOR Loan.
(f) Advances. Not later than 1:00 p.m. Eastern time on the date
specified for each borrowing hereunder, each Lender shall make available the
amount of the Loan to be made by it on such date to the Administrative Agent, to
an account which the Administrative Agent shall specify, in immediately
available funds, for the account of the Borrower. The amounts so received by the
Administrative Agent shall, subject to the terms and conditions of this
Agreement, be made available to the Borrower by depositing the same, in
immediately available funds, in an account of the Borrower, designated by the
Borrower and maintained at the Principal Office.
(g) Letters of Credit. The Borrower shall submit to the
Administrative Agent and the Issuing Bank a Letter of Credit Application not
later than 11:00 A.M. Eastern time, not less than three (3) Business Days prior
to the proposed date of issuance (or such shorter period as may be agreed to by
the Administrative Agent and the Issuing Bank) and at least thirty (30) Business
Days prior to the date of amendment, renewal or extension (or such shorter
period as may be agreed to by the Administrative Agent and the Issuing Bank) of
a Letter of Credit hereunder. Each Letter of Credit Application shall specify
(i) the amount of such Letter of Credit, (ii) the date (which shall be a
Business Day) such Letter of Credit is to be issued, amended, renewed or
extended, (iii) the duration thereof, (iv) the name and address of the
beneficiary thereof, (v) the form of the Letter of Credit and (vi) such other
information as the Administrative Agent and the Issuing Bank may reasonably
request, all of which shall be reasonably satisfactory to the Administrative
Agent and the Issuing Bank, subject to the terms and conditions of this
Agreement, on the date specified for the issuance, amendment, renewal or
extension of a Letter of Credit, the Issuing Bank shall issue, amend, renew or
extend such Letter of Credit to the beneficiary thereof. Promptly thereafter,
the Issuing Bank shall notify the Administrative Agent and the Borrower, in
writing, of such issuance, amendment, renewal or extension and such notice shall
be accompanied by a copy of such issuance, amendment, renewal or extension.
Promptly after receipt of such notice, the Administrative Agent shall notify
each
-24-
30
Lender, in writing, of such issuance, amendment, renewal or extension and if any
Lender so requests, the Administrative Agent shall provide such Lender with
copies of such issuance, amendment, renewal or extension.
Section 2.03 Changes of Commitments.
(a) The Aggregate Commitments shall at all times be equal to the
lesser of (i) the Aggregate Maximum Revolving Credit Amounts after adjustments
resulting from reductions pursuant to Section 2.03(b), or (ii) the Borrowing
Base as determined from time to time.
(b) The Borrower shall have the right to terminate or to reduce
the amount of the Aggregate Maximum Revolving Credit Amounts at any time, or
from time to time, upon not less than three (3) Business Days' prior notice to
the Administrative Agent (which shall promptly notify the Lenders) of each such
termination or reduction, which notice shall specify the effective date thereof
and the amount of any such reduction (which shall not be less than $1,000,000 or
any whole multiple of $500,000 in excess thereof) and shall be irrevocable and
effective only upon receipt by the Administrative Agent.
(c) The Aggregate Maximum Revolving Credit Amounts once
terminated or reduced may not be reinstated.
(d) The Borrower shall have the right, without the consent of the
Lenders but with the prior approval of the Administrative Agent, not to be
unreasonably withheld, to cause from time to time an increase in the Aggregate
Commitments of the Lenders by adding to this Agreement one or more additional
Lenders or by allowing one or more Lenders to increase their respective
Commitments; provided, however (i) no Event of Default shall have occurred
hereunder which is continuing, (ii) no such increase shall result in the
Aggregate Commitments hereunder exceeding $125,000,000, (iii) no Lender's
Commitment shall be increased without such Lender's consent, and (iv) on the
effective date of any such increase, there shall be no outstanding LIBOR Loans
hereunder.
Section 2.04 Fees.
(a) Commitment Fee. The Borrower shall pay to the Administrative
Agent for the account of each Lender a commitment fee, which shall accrue at the
Applicable Margin (Commitment Fee), on the daily average unused amount of the
Aggregate Commitments for the period from and including the Closing Date up to,
but excluding, the earlier of the date the Aggregate Commitments are terminated
or the Revolving Credit Termination Date. Accrued commitment fees shall be
payable quarterly in arrears on each Quarterly Date and on the earlier of the
date the Aggregate Commitments are terminated or the Revolving Credit
Termination Date.
(b) Letter of Credit Fees.
-25-
31
(i) The Borrower agrees to pay to the Administrative Agent,
for the account of each Lender and the Issuing Bank, commissions for
issuing the Letters of Credit on the daily outstanding amount of the
maximum liability of the Issuing Bank existing from time under such Letter
of Credit (including the Dollar Equivalent of the face amount of the
outstanding Offshore Currency Letter of Credit) (calculated separately for
each Letter of Credit) at a rate equal to the Applicable Margin for LIBOR
Loans, in effect from time to time during the term of each Letter of
Credit, provided that each Letter of Credit shall bear a minimum yearly
commission of $300.00. Each Letter of Credit shall be deemed outstanding
up to the available face amount of the Letter of Credit (including the
Dollar Equivalent of the face amount of the outstanding Offshore Currency
Letter of Credit) until the Issuing Bank has received from the Beneficiary
a written cancellation authorization, in form and substance acceptable to
the Issuing Bank or until the date the Letter of Credit expires by its
terms. Such commissions are payable quarterly in arrears on each Quarterly
Date and upon cancellation or expiration of each such Letter of Credit.
(ii) Out of the fees described in Section 2.04(b)(i), the
Administrative Agent shall pay to each Issuing Bank, for such Issuing
Bank's account, 0.125% per annum of each such fee as an issuing fee and
shall pay to the Lenders a pro rata share of the remaining portion of such
fees.
(iii) The Borrower shall pay to the Issuing Bank for its own
account, upon each drawing or payment under, issuance of, or amendment to,
any Letter of Credit, such amount as shall at the time of such event be
the administrative charge and reasonable out-of-pocket expenses which the
Issuing Bank or its Affiliate is generally imposing in connection with
such occurrence with respect to letters of credit.
(c) The Borrower shall pay to the Administrative Agent for its
own account such other fees as are set forth in the Fee Letter on the dates
specified therein to the extent not paid prior to the Closing Date.
Section 2.05 Several Obligations. The failure of any Lender to
make any Loan to be made by it or to provide funds for disbursements or
reimbursements under Letters of Credit on the date specified therefor shall not
relieve any other Lender of its obligation to make its Loan or provide funds on
such date, but no Lender shall be responsible for the failure of any other
Lender to make a Loan to be made by such other Lender or to provide funds to be
provided by such other Lender.
Section 2.06 Notes. The Loans made by each Lender shall be
evidenced by a single promissory note of the Borrower in substantially the form
of Exhibit A, dated (i) the Closing Date or (ii) the effective date of an
Assignment pursuant to Section 12.06(b), payable to the order of such Lender in
a principal amount equal to its Maximum Revolving Credit Amount as originally in
effect and otherwise duly completed and such substitute Notes as required by
Section 12.06(b). The date, amount, Type, interest rate and Interest Period of
each Loan made
-26-
32
by each Lender, and all payments made on account of the principal thereof, shall
be recorded by such Lender on its books for its Note, and, prior to any transfer
may be endorsed by such Lender on the schedule attached to such Note or any
continuation thereof or on any separate record maintained by such Lender.
Failure to make any such notation or to attach a schedule shall not affect any
Lender's or the Borrower's rights or obligations in respect of such Loans or
affect the validity of such transfer by any Lender of its Note.
Section 2.07 Prepayments.
(a) Voluntary Prepayments. The Borrower may prepay the Base Rate
Loans upon not less than one (1) Business Day's prior notice to the
Administrative Agent (which shall promptly notify the Lenders), which notice
shall specify the prepayment date (which shall be a Business Day) and the amount
of the prepayment (which shall be at least $1,000,000 or the remaining aggregate
principal balance outstanding on the Notes) and shall be irrevocable and
effective only upon receipt by the Administrative Agent, provided that interest
on the principal prepaid, accrued to the prepayment date, shall be paid on the
prepayment date. The Borrower may prepay LIBOR Loans on the same conditions as
for Base Rate Loans (except that prior notice to the Administrative Agent shall
not be less than three (3) Business Days for LIBOR Loans) and in addition such
prepayments of LIBOR Loans shall be subject to the terms of Section 5.05 and
shall be in an amount equal to all of the LIBOR Loans for the Interest Period
prepaid.
(b) Mandatory Prepayments.
(i) If, after giving effect to any termination or reduction of
the Aggregate Maximum Revolving Credit Amounts pursuant to Section 2.03(b), the
outstanding aggregate principal amount of the Loans plus the LC Exposure exceeds
the Aggregate Maximum Revolving Credit Amounts, the Borrower shall (A) prepay
the Loans on the date of such termination or reduction in an aggregate principal
amount equal to the excess, together with interest on the principal amount paid
accrued to the date of such prepayment and (B) if any excess remains after
prepaying all of the Loans because of LC Exposure, pay to the Administrative
Agent on behalf of the Lenders an amount equal to the excess to be held as cash
collateral as provided in Section 2.10(b) hereof.
(ii) Upon any redetermination of the amount of the Borrowing Base
in accordance with Section 2.08, if the redetermined Working Capital Borrowing
Base is less than the aggregate outstanding principal amount of the Working
Capital Loans plus the LC Exposure then the Borrower shall, with respect to any
such deficiency that is (A) equal to or less than $10,000,000, within fifteen
(15) days, or (B) greater than $10,000,000, within five (5) Business Days,
either (1) prepay the Working Capital Loans in an aggregate principal amount
equal to such deficiency, together with interest on the principal amount paid
accrued to the date of such prepayment or (2) grant or cause to be granted to
the Administrative Agent a first priority Lien (subject only to Excepted Liens)
in gas compression equipment of the Borrower or its Subsidiaries having a fair
market value (as determined by Schedule 1.01) equal to or greater than
-27-
33
the amount of such Working Capital Borrowing Base deficiency, which pledge of
Eligible Equipment shall (x) increase the amount of the Equipment Borrowing Base
by and amount equal to the fair market value (as determined by Schedule 1.01) of
such Eligible Equipment and (y) automatically convert Working Capital Loans in
an aggregate amount equal to such fair market value of Equipment Loans; provided
that if there remains a Working Capital Borrowing Base deficiency after
prepaying Working Capital Loans or converting such Working Capital Loans to
Equipment Loans by pledging gas compression equipment because the LC Exposure
continues to exceed the Working Capital Borrowing Base, then the Borrower shall
pay to the Administrative Agent on behalf of the Lenders an amount equal to such
remaining Working Capital Borrowing Base deficiency to be held as cash
collateral for the Letters of Credit as provided in Section 2.10(b).
(iii) Upon any redetermination of the amount of the Borrowing
Base in accordance with Section 2.08, if the redetermined Equipment Borrowing
Base is less than the aggregate outstanding principal amount of the Equipment
Loans then the Borrower shall either (A) prepay the Equipment Loans in an
aggregate principal amount equal to such deficiency, together with interest on
the principal amount paid accrued to the date of such prepayment or (B) give
written notice to the Administrative Agent to convert Equipment Loans equal to
the aggregate principal amount of such deficiency to Working Capital Loans.
(iv) Upon any release of Eligible Equipment pursuant to Section
8.09(b), the Borrower shall simultaneously prepay the Equipment Loans in an
aggregate principal amount equal to the fair market value of such Eligible
Equipment at the time the applicable Lien was created, together with interest on
the principal amount paid accrued to the date of prepayment.
(v) Upon any overadvance pursuant to Section 2.01(a)(iv), the
Borrower shall prepay the Working Capital Loans (or pledge assets) as required
by said Section 2.01(a)(iv).
(vi) Upon any disposition pursuant to Section 9.14(c), the
Borrower shall prepay Equipment Loans as provided in such section.
(c) Generally. Prepayments permitted or required under this
Section 2.07 shall be without premium or penalty, except as required under
Section 5.05 for prepayment of LIBOR Loans. Any prepayments on the Loans may be
reborrowed subject to the then effective Aggregate Commitments.
Section 2.08 Borrowing Base.
(a) The Borrowing Base shall be determined in accordance with
Section 2.08(b) and (c) by the Administrative Agent. Upon any redetermination of
the Borrowing Base, such redetermination shall remain in effect until the next
successive Redetermination Date. "Redetermination Date" shall mean the date that
the redetermined Borrowing Base becomes effective subject to the notice
requirements specified in Section 2.08(c). So long as any of the Aggregate
Commitments are in effect or any LC Exposure or Loans are outstanding hereunder,
-28-
34
this facility shall be governed by the then effective Borrowing Base. Until the
first redetermination of the Borrowing Base, $50,000,000 shall be available for
advance under the Working Capital Borrowing Base.
(b) The Borrowing Base will be redetermined 45 days following the
end of each fiscal quarter of the Borrower, commencing with the fiscal quarter
ending March 31, 2001. In addition, the Borrower shall have the right to require
the Administrative Agent to redetermine the Borrowing Base, but no more
frequently than once each calendar month.
(c) Based upon the information contained in the Borrowing Base
Certificate delivered pursuant to Section 8.01(i) and such other supplemental
information as the Administrative Agent may reasonably request, the
Administrative Agent will redetermine the Borrowing Base, such redetermination
to be in accordance with the Administrative Agent's normal and customary
procedures as such exist at that particular time.
(d) The Administrative Agent shall promptly notify the Borrower
and the Lenders of the new Borrowing Base. Any redetermination of the Borrowing
Base shall not be in effect until written notice is received by the Borrower.
Section 2.09 Assumption of Risks. The Borrower assumes all risks
of the acts or omissions of any beneficiary of any Letter of Credit or any
transferee thereof with respect to its use of such Letter of Credit. Neither the
Issuing Bank (except in the case of gross negligence or willful misconduct on
the part of the Issuing Bank or any of its employees as determined by final and
non appealable judgment of a court of competent jurisdiction), its
correspondents nor any Lender shall be responsible for the validity, sufficiency
or genuineness of certificates or other documents or any endorsements thereon,
even if such certificates or other documents should in fact prove to be invalid,
insufficient, fraudulent or forged; for errors, omissions, interruptions or
delays in transmissions or delivery of any messages by mail, telex, or
otherwise, whether or not they be in code; for errors in translation or for
errors in interpretation of technical terms; the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign any
Letter of Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part, which may prove to be invalid or ineffective for any reason;
the failure of any beneficiary or any transferee of any Letter of Credit to
comply fully with conditions required in order to draw upon any Letter of
Credit; or for any other consequences arising from causes beyond the Issuing
Bank's control or the control of the Issuing Bank's correspondents. In addition,
neither the Issuing Bank, the Administrative Agent nor any Lender shall be
responsible for any error, neglect, or default of any of the Issuing Bank's
correspondents; and none of the above shall affect, impair or prevent the
vesting of any of the Issuing Bank's, the Administrative Agent's or any Lender's
rights or powers hereunder, all of which rights shall be cumulative. The Issuing
Bank and its correspondents may accept certificates or other documents that
appear on their face to be in order, without responsibility for further
investigation of any matter contained therein regardless of any notice or
information to the contrary. In furtherance and not in limitation of the
foregoing provisions, the Borrower agrees that any action, inaction or omission
taken or not taken by the Issuing Bank or by any correspondent for the Issuing
Bank in good faith in
-29-
35
connection with any Letter of Credit, or any related drafts, certificates,
documents or instruments, shall be binding on the Borrower and shall not put the
Issuing Bank or its correspondents under any resulting liability to the
Borrower.
Section 2.10 Obligation to Reimburse and to Prepay.
(a) In connection with any Letter of Credit, the Borrower may
make funds available for disbursement by the Issuing Bank in connection with
such Letter of Credit. In such cases, the Issuing Bank shall use such funds
which the Borrower has made available to fund such Credit. In addition, the
Borrower may give written instructions to the Issuing Bank and the
Administrative Agent to make a Loan under this Agreement to fund any Letters of
Credit which may be drawn. In all such cases, the Borrower shall give the
appropriate notices required under this Agreement for a Base Rate Loan or a
LIBOR Loan. If a disbursement by the Issuing Bank is made under any Letter of
Credit, in cases in which the Borrower has not either provided its own funds to
fund a draw on a Letter of Credit or given the Administrative Agent prior notice
for a Loan under this Agreement, then the Borrower shall pay to the
Administrative Agent within two (2) Business Days after notice of any such
disbursement is received by the Borrower, the amount of each such disbursement
made by the Issuing Bank under the Letter of Credit (if such payment is not
sooner effected as may be required under this Section 2.10 or under other
provisions of the Letter of Credit), together with interest on the amount
disbursed from and including the date of disbursement until payment in full of
such disbursed amount at a varying rate per annum equal to (i) the then
applicable interest rate for Base Rate Loans through the second Business Day
after notice of such disbursement is received by the Borrower and (ii)
thereafter, the Post-Default Rate for Base Rate Loans (but in no event to exceed
the Highest Lawful Rate) for the period from and including the third Business
Day following the date of such disbursement to and including the date of
repayment in full of such disbursed amount. The obligations of the Borrower
under this Agreement with respect to each Letter of Credit shall be absolute,
unconditional and irrevocable and shall be paid or performed strictly in
accordance with the terms of this Agreement under all circumstances whatsoever,
including, without limitation, but only to the fullest extent permitted by
applicable law, the following circumstances: (i) any lack of validity or
enforceability of this Agreement, any Letter of Credit or any of the Security
Instruments; (ii) any amendment or waiver of (including any default), or any
consent to departure from this Agreement (except to the extent permitted by any
amendment or waiver), any Letter of Credit or any of the Security Instruments;
(iii) the existence of any claim, set-off, defense or other rights which the
Borrower may have at any time against the beneficiary of any Letter of Credit or
any transferee of any Letter of Credit (or any Persons for whom any such
beneficiary or any such transferee may be acting), the Issuing Bank, the
Administrative Agent, any Lender or any other Person, whether in connection with
this Agreement, any Letter of Credit, the Security Instruments, the transactions
contemplated hereby or any unrelated transaction; (iv) any statement,
certificate, draft, notice or any other document presented under any Letter of
Credit proves to have been forged, fraudulent, insufficient or invalid in any
respect or any statement therein proves to have been untrue or inaccurate in any
respect whatsoever; (v) payment by the Issuing Bank under any Letter of Credit
against presentation of a draft or certificate which appears on its face to
comply, but does
-30-
36
not comply, with the terms of such Letter of Credit; and (vi) any other
circumstance or happening whatsoever, whether or not similar to any of the
foregoing.
Notwithstanding anything in this Agreement to the contrary, the Borrower will
not be liable for payment or performance that results from the gross negligence
or willful misconduct of the Issuing Bank as determined by a final and non
appealable judgment of a court of competent jurisdiction, except (i) where the
Borrower or any Subsidiary actually recovers the proceeds for itself or the
Issuing Bank of any payment made by the Issuing Bank in connection with such
gross negligence or willful misconduct or (ii) in cases where the Administrative
Agent makes payment to the named beneficiary of a Letter of Credit.
(b) In the event of the occurrence of any Event of Default, a
payment or prepayment pursuant to Section 2.07(b) or the maturity of the Notes,
whether by acceleration or otherwise, an amount equal to the LC Exposure (or an
amount equal to the amount by which the LC Exposure exceeds the Working Capital
Borrowing Base in the case of Section 2.07(b)) shall be deemed to be forthwith
due and owing by the Borrower to the Issuing Bank, the Administrative Agent and
the Lenders as of the date of any such occurrence; and the Borrower's obligation
to pay such amount shall be absolute and unconditional, without regard to
whether any beneficiary of any such Letter of Credit has attempted to draw down
all or a portion of such amount under the terms of a Letter of Credit, and, to
the fullest extent permitted by applicable law, shall not be subject to any
defense or be affected by a right of set-off, counterclaim or recoupment which
the Borrower may now or hereafter have against any such beneficiary, the Issuing
Bank, the Administrative Agent, the Lenders or any other Person for any reason
whatsoever. Such payments shall be held by the Issuing Bank on behalf of the
Lenders as cash collateral securing the LC Exposure in an account or accounts at
the Principal Office; and the Borrower hereby grants to and by its deposit with
the Administrative Agent grants to the Administrative Agent a security interest
in such cash collateral. In the event of any such payment by the Borrower of
amounts contingently owing under outstanding Letters of Credit and in the event
that thereafter drafts or other demands for payment complying with the terms of
such Letters of Credit are not made prior to the respective expiration dates
thereof, the Administrative Agent agrees, if no Event of Default has occurred
and is continuing or if no other amounts are outstanding under this Agreement,
the Notes or the Security Instruments, to remit to the Borrower (i) amounts for
which the contingent obligations evidenced by the Letters of Credit have ceased
and (ii) amounts on deposit as cash collateral for Letters of Credit, to the
extent that the LC Exposure no longer exceeds the Working Capital Borrowing
Base, in connection with a redetermination of such Working Capital Borrowing
Base.
(c) Each Lender severally and unconditionally agrees that it
shall promptly reimburse the Issuing Bank an amount equal to such Lender's
Percentage Share of any disbursement made by the Issuing Bank under any Letter
of Credit that is not reimbursed according to this Section 2.10.
(d) Notwithstanding anything to the contrary contained herein, if
no Event of Default has occurred and is continuing and subject to availability
under the Aggregate
-31-
37
Commitments (after reduction for LC Exposure), to the extent the Borrower has
not reimbursed the Issuing Bank for any drawn upon Letter of Credit within one
(1) Business Days after notice of such disbursement has been received by the
Borrower, the amount of such Letter of Credit reimbursement obligation shall
automatically be funded by the Lenders as a Loan hereunder and used by the
Lenders to pay such Letter of Credit reimbursement obligation. If an Event of
Default has occurred and is continuing, or if the funding of such Letter of
Credit reimbursement obligation as a Loan would cause the aggregate amount of
all Loans outstanding to exceed the Aggregate Commitments (after reduction for
LC Exposure), such Letter of Credit reimbursement obligation shall not be funded
as a Loan, but instead shall accrue interest as provided in Section 2.10(a).
Section 2.11 Lending Offices. The Loans of each Type made by each Lender
shall be made and maintained at such Lender's Applicable Lending Office for
Loans of such Type.
ARTICLE III
PAYMENTS OF PRINCIPAL AND INTEREST
Section 3.01 Repayment of Loans. On the Revolving Credit
Termination Date the Borrower shall pay to the Administrative Agent, for the
account of each Lender, the outstanding aggregate principal and accrued and
unpaid interest under the Notes.
Section 3.02 Interest.
(a) Interest Rates. The Borrower will pay to the Administrative
Agent, for the account of each Lender, interest on the unpaid principal amount
of each Loan made by such Lender for the period commencing on the date such Loan
is made to, but excluding, the date such Loan shall be paid in full, at the
following rates per annum:
(i) if such a Loan is a Base Rate Loan, the Base Rate (as in
effect from time to time) plus the Applicable Margin, but in no event to
exceed the Highest Lawful Rate; and
(ii) if such a Loan is a LIBOR Loan, for each Interest Period
relating thereto, the LIBOR Rate for such Loan plus the Applicable Margin
(as in effect from time to time), but in no event to exceed the Highest
Lawful Rate.
(b) Post-Default Rate. Notwithstanding the foregoing, the
Borrower will pay to the Administrative Agent, for the account of each Lender
interest at the applicable Post-Default Rate on any principal of any Loan made
by such Lender, and (to the fullest extent permitted by law) on any other amount
payable by the Borrower hereunder, under any Loan Document or under any Note
held by such Lender to or for account of such Lender, for the
-32-
38
period commencing on the date of an Event of Default until the same is paid in
full or all Events of Default are cured or waived.
(c) Due Dates. Accrued interest on Base Rate Loans shall be
payable on each Quarterly Date commencing on March 31, 2001, and accrued
interest on each LIBOR Loan shall be payable on the last day of the Interest
Period therefor and, if such Interest Period is longer than three months at
three-month intervals following the first day of such Interest Period, except
that interest payable at the Post-Default Rate shall be payable from time to
time on demand and interest on any LIBOR Loan that is converted into a Base Rate
Loan (pursuant to Section 5.04) shall be payable on the date of conversion (but
only to the extent so converted). Any accrued and unpaid interest on the Loans
shall be paid on the Revolving Credit Termination Date.
(d) Determination of Rates. Promptly after the determination of
any interest rate provided for herein or any change therein, the Administrative
Agent shall notify the Lenders to which such interest is payable and the
Borrower thereof. Each determination by the Administrative Agent of an interest
rate or fee hereunder shall, except in cases of manifest error, be final,
conclusive and binding on the parties.
ARTICLE IV
PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; ETC.
Section 4.01 Payments. Except to the extent otherwise provided
herein, all payments of principal, interest and other amounts to be made by the
Borrower under this Agreement and the Notes shall be made in Dollars, in
immediately available funds, to the Administrative Agent at such account as the
Administrative Agent shall specify by notice to the Borrower from time to time,
not later than 11:00 a.m. Eastern time on the date on which such payments shall
become due (each such payment made after such time on such due date to be deemed
to have been made on the next succeeding Business Day). Such payments shall be
made without (to the fullest extent permitted by applicable law) defense,
set-off or counterclaim. Each such payment so received by the Administrative
Agent under this Agreement or any Note for account of a Lender shall be paid
promptly to such Lender in immediately available funds. Except as otherwise
provided in the definition of "Interest Period", if the due date of any payment
under this Agreement or any Note would otherwise fall on a day which is not a
Business Day such date shall be extended to the next succeeding Business Day and
interest shall be payable for any principal so extended for the period of such
extension. At the time of each payment to the Administrative Agent of any
principal of or interest on any borrowing, the Borrower shall notify the
Administrative Agent of the Loans to which such payment shall apply. In the
absence of such notice the Administrative Agent may specify the Loans to which
such payment shall apply, but to the extent possible such payment or prepayment
will be applied first to the Loans comprised of Base Rate Loans.
Section 4.02 Pro Rata Treatment. Except to the extent otherwise
provided herein each Lender agrees that: (i) each borrowing from the Lenders
under Section 2.01 and each
-33-
39
continuation and conversion under Section 2.02 shall be made from the Lenders
pro rata in accordance with their Percentage Share, each payment of fees under
Section 2.04 shall be made for account of the Lenders pro rata in accordance
with their Percentage Share, and each termination or reduction of the amount of
the Aggregate Maximum Revolving Credit Amounts under Section 2.03(b) shall be
applied to the Commitment of each Lender, pro rata according to the amounts of
its respective Commitment; (ii) each payment of principal of Loans by the
Borrower shall be made for account of the Lenders pro rata in accordance with
the respective unpaid principal amount of the Loans held by the Lenders; (iii)
each payment of interest on Loans by the Borrower shall be made for account of
the Lenders pro rata in accordance with the amounts of interest due and payable
to the respective Lenders; and (iv) each reimbursement by the Borrower of
disbursements under Letters of Credit shall be made for account of the Issuing
Bank or, if funded by the Lenders, pro rata for the account of the Lenders, in
accordance with the amounts of reimbursement obligations due and payable to each
respective Lender.
Section 4.03 Computations. Interest on LIBOR Loans and fees shall
be computed on the basis of a year of 360 days and actual days elapsed
(including the first day but excluding the last day) occurring in the period for
which such interest is payable, unless such calculation would exceed the Highest
Lawful Rate, in which case interest shall be calculated on the per annum basis
of a year of 365 or 366 days, as the case may be. Interest on Base Rate Loans
shall be computed on the basis of a year of 365 or 366 days, as the case may be,
and actual days elapsed (including the first day but excluding the last day)
occurring in the period for which such interest is payable.
Section 4.04 Agent Reliance. Unless the Administrative Agent
shall have received notice from a Lender before the date of any borrowing of the
proceeds of the Loan that such Lender will not make available to the
Administrative Agent such Lender's Percentage Share of such advance, the
Administrative Agent may assume that such Lender has made its Percentage Share
of such borrowing available to the Agent on the date of such borrowing in
accordance with Section 2.02(c) and the Administrative Agent may, in reliance
upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Lender shall not have so
made its Percentage Share of such borrowing available to the Administrative
Agent, such Lender agrees to immediately pay to the Administrative Agent on
demand such corresponding amount, together with interest on such amount, for
each day from the date such amount is made available to the Borrower until the
date such amount is paid to the Administrative Agent, at the overnight Federal
Funds Rate. If such Lender shall pay to the Administrative Agent such
corresponding amount and interest as provided above, such corresponding amount
so paid shall constitute such Lender's advance as part of such Borrowing for
purposes of this Agreement even though not made on the same day as the other
advances comprising such borrowing.
Section 4.05 Set-off, Sharing of Payments, Etc.
(a) The Borrower agrees that, in addition to (and without
limitation of) any right of set-off, bankers' lien or counterclaim a Lender may
otherwise have, each Lender shall
-34-
40
have the right and be entitled (after consultation with the Administrative
Agent), at its option, to offset balances held by it or by any of its Affiliates
for account of the Borrower at any of its offices, in Dollars or in any other
currency, against any principal of or interest on any of such Lender's Loans, or
any other amount payable to such Lender hereunder, which is not paid when due
(including applicable grace periods) (regardless of whether such balances are
then due to the Borrower), in which case it shall promptly notify the Borrower
and the Administrative Agent thereof, provided that such Lender's failure to
give such notice shall not affect the validity thereof.
(b) If any Lender shall obtain payment of any principal of or
interest on any Loan made by it to the Borrower under this Agreement (or
reimbursement as to any Letter of Credit) through the exercise of any right of
set-off, banker's lien or counterclaim or similar right or otherwise, and, as a
result of such payment, such Lender shall have received a greater percentage of
the principal or interest (or reimbursement) then due hereunder by the Borrower
to such Lender than the percentage received by any other Lenders, it shall
promptly (i) notify the Administrative Agent and each other Lender thereof and
(ii) purchase from such other Lenders participations in (or, if and to the
extent specified by such Lender, direct interests in) the Loans (or
participations in Letters of Credit) made by such other Lenders (or in interest
due thereon, as the case may be) in such amounts, and make such other
adjustments from time to time as shall be equitable, to the end that all the
Lenders shall share the benefit of such excess payment (net of any expenses
which may be incurred by such Lender in obtaining or preserving such excess
payment) pro rata in accordance with the unpaid principal and/or interest on the
Loans held by each of the Lenders (or reimbursements of Letters of Credit). To
such end all the Lenders shall make appropriate adjustments among themselves (by
the resale of participations sold or otherwise) if such payment is rescinded or
must otherwise be restored. The Borrower agrees that any Lender so purchasing a
participation (or direct interest) in the Loans made by other Lenders (or in
interest due thereon, as the case may be) may exercise all rights of set-off,
banker's lien, counterclaim or similar rights with respect to such participation
as fully as if such Lender were a direct holder of Loans (or Letters of Credit)
in the amount of such participation. Nothing contained herein shall require any
Lender to exercise any such right or shall affect the right of any Lender to
exercise, and retain the benefits of exercising, any such right with respect to
any other indebtedness or obligation of the Borrower. If under any applicable
bankruptcy, insolvency or other similar law, any Lender receives a secured claim
in lieu of a set-off to which this Section 4.05 applies, such Lender shall, to
the extent practicable, exercise its rights in respect of such secured claim in
a manner consistent with the rights of the Lenders entitled under this Section
4.05 to share the benefits of any recovery on such secured claim.
(c) Notwithstanding anything to the contrary contained in this
Agreement, the Lenders hereby agree that they shall not set off any funds in any
lock boxes whatsoever in connection with this Agreement, except for such lock
boxes which may be established in connection with this Agreement.
Section 4.06 Taxes.
-35-
41
(a) Payments Free and Clear. Any and all payments by the Borrower
hereunder shall be made, in accordance with Section 4.01, free and clear of and
without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Lender, the Issuing Bank and the Administrative
Agent, taxes imposed on its income, and franchise or similar taxes imposed on
it, by (i) any jurisdiction (or political subdivision thereof) of which the
Administrative Agent, the Issuing Bank or such Lender, as the case may be, is a
citizen or resident or in which such Lender has an Applicable Lending Office,
(ii) the jurisdiction (or any political subdivision thereof) in which the
Administrative Agent, the Issuing Bank or such Lender is organized, or (iii) any
jurisdiction (or political subdivision thereof) in which such Lender, the
Issuing Bank or the Administrative Agent is presently doing business which taxes
are imposed solely as a result of doing business in such jurisdiction (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If the Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder to the Lenders, the Issuing Bank or the Administrative Agent (i) the
sum payable shall be increased by the amount necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 4.06) such Lender, the Issuing Bank or the Administrative
Agent (as the case may be) shall receive an amount equal to the sum it would
have received had no such deductions been made, (ii) the Borrower shall make
such deductions and (iii) the Borrower shall pay the full amount deducted to the
relevant taxing authority or other Governmental Authority in accordance with
applicable law.
(b) Other Taxes. In addition, to the fullest extent permitted by
applicable law, the Borrower agrees to pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies that arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement, any
Assignment or any Security Instrument (hereinafter referred to as "Other
Taxes").
(c) INDEMNIFICATION. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, THE BORROWER WILL INDEMNIFY EACH LENDER AND THE ISSUING BANK AND
THE ADMINISTRATIVE AGENT FOR THE FULL AMOUNT OF TAXES AND OTHER TAXES
(INCLUDING, BUT NOT LIMITED TO, ANY TAXES OR OTHER TAXES IMPOSED BY ANY
GOVERNMENTAL AUTHORITY ON AMOUNTS PAYABLE UNDER THIS SECTION 4.06) PAID BY SUCH
LENDER, THE ISSUING BANK OR THE ADMINISTRATIVE AGENT (ON THEIR BEHALF OR ON
BEHALF OF ANY LENDER), AS THE CASE MAY BE, AND ANY LIABILITY (INCLUDING
PENALTIES, INTEREST AND EXPENSES) ARISING THEREFROM OR WITH RESPECT THERETO,
WHETHER OR NOT SUCH TAXES OR OTHER TAXES WERE CORRECTLY OR LEGALLY ASSERTED
UNLESS THE PAYMENT OF SUCH TAXES WAS NOT CORRECTLY OR LEGALLY ASSERTED AND SUCH
LENDER'S PAYMENT OF SUCH TAXES OR OTHER TAXES WAS THE RESULT OF ITS GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT. ANY PAYMENT PURSUANT TO SUCH INDEMNIFICATION
SHALL BE MADE WITHIN THIRTY (30) DAYS AFTER THE DATE ANY LENDER, THE ISSUING
BANK OR THE ADMINISTRATIVE AGENT, AS THE CASE MAY BE, MAKES WRITTEN DEMAND
THEREFOR. IF ANY LENDER OR THE ADMINISTRATIVE AGENT RECEIVES A REFUND OR CREDIT
IN RESPECT OF ANY
-36-
42
TAXES OR OTHER TAXES FOR WHICH SUCH LENDER, ISSUING BANK OR THE ADMINISTRATIVE
AGENT HAS RECEIVED PAYMENT FROM THE BORROWER IT SHALL PROMPTLY NOTIFY THE
BORROWER OF SUCH REFUND OR CREDIT AND SHALL, IF NO DEFAULT HAS OCCURRED AND IS
CONTINUING, WITHIN THIRTY (30) DAYS AFTER RECEIPT OF A REQUEST BY THE BORROWER
(OR PROMPTLY UPON RECEIPT, IF THE BORROWER HAS REQUESTED APPLICATION FOR SUCH
REFUND OR CREDIT PURSUANT HERETO), PAY AN AMOUNT EQUAL TO SUCH REFUND OR CREDIT
TO THE BORROWER WITHOUT INTEREST (BUT WITH ANY INTEREST SO REFUNDED OR
CREDITED), PROVIDED THAT THE BORROWER, UPON THE REQUEST OF SUCH LENDER, THE
ISSUING BANK OR THE ADMINISTRATIVE AGENT, AGREES TO RETURN SUCH REFUND OR CREDIT
(PLUS PENALTIES, INTEREST OR OTHER CHARGES) TO SUCH LENDER OR THE ADMINISTRATIVE
AGENT IN THE EVENT SUCH LENDER OR THE ADMINISTRATIVE AGENT IS REQUIRED TO REPAY
SUCH REFUND OR CREDIT.
(d) Lender Representations.
(i) Each Lender represents that it is either (1) a banking
association or corporation organized under the laws of the United States
of America or any state thereof or (2) it is entitled to complete
exemption from United States withholding tax imposed on or with respect to
any payments, including fees, to be made to it pursuant to this Agreement
(A) under an applicable provision of a tax convention to which the United
States of America is a party or (B) because it is acting through a branch,
agency or office in the United States of America and any payment to be
received by it hereunder is effectively connected with a trade or business
in the United States of America. Each Lender that is not a banking
association or corporation organized under the laws of the United States
of America or any state thereof agrees to provide to the Borrower and the
Administrative Agent on the Closing Date, or on the date of its delivery
of the Assignment pursuant to which it becomes a Lender, and at such other
times as required by United States law or as the Borrower or the
Administrative Agent shall reasonably request, two accurate and complete
original signed copies of either (A) Internal Revenue Service Form 4224
(or successor form) certifying that all payments to be made to it
hereunder will be effectively connected to a United States trade or
business (the "Form 4224 Certification") or (B) Internal Revenue Service
Form 1001 (or successor form) certifying that it is entitled to the
benefit of a provision of a tax convention to which the United States of
America is a party which completely exempts from United States withholding
tax all payments to be made to it hereunder (the "Form 1001
Certification"). In addition, each Lender agrees that if it previously
filed a Form 4224 Certification, it will deliver to the Borrower and the
Administrative Agent a new Form 4224 Certification prior to the first
payment date occurring in each of its subsequent taxable years; and if it
previously filed a Form 1001 Certification, it will deliver to the
Borrower and the Administrative Agent a new certification prior to the
first payment date falling in the third year following the previous filing
of such certification. Each Lender also agrees to deliver to the Borrower
and the Administrative Agent such other or supplemental forms as may at
any time be required as a result of changes in applicable law or
regulation in order to confirm or maintain in effect its entitlement to
exemption from United States
-37-
43
withholding tax on any payments hereunder, provided that the circumstances
of such Lender at the relevant time and applicable laws permit it to do
so. If a Lender determines, as a result of any change in either (i) a
Governmental Requirement or (ii) its circumstances, that it is unable to
submit any form or certificate that it is obligated to submit pursuant to
this Section 4.06, or that it is required to withdraw or cancel any such
form or certificate previously submitted, it shall promptly notify the
Borrower and the Administrative Agent of such fact. If a Lender is
organized under the laws of a jurisdiction outside the United States of
America, unless the Borrower and the Administrative Agent have received a
Form 1001 Certification or Form 4224 Certification satisfactory to them
indicating that all payments to be made to such Lender hereunder are not
subject to United States withholding tax, the Borrower shall withhold
taxes from such payments at the applicable statutory rate. Each Lender
agrees to indemnify and hold harmless the Borrower or Administrative
Agent, as applicable, from any United States taxes, penalties, interest
and other expenses, costs and losses incurred or payable by (i) the
Administrative Agent as a result of such Lender's failure to submit any
form or certificate that it is required to provide pursuant to this
Section 4.06 or (ii) the Borrower or the Administrative Agent as a result
of their reliance on any such form or certificate which such Lender has
provided to them pursuant to this Section 4.06.
(ii) For any period with respect to which a Lender has failed
to provide the Borrower with the form required pursuant to this Section
4.06, if any, (other than if such failure is due to a change in a
Governmental Requirement occurring subsequent to the date on which a form
originally was required to be provided), such Lender shall not be entitled
to indemnification under Section 4.06 with respect to taxes imposed by the
United States which taxes would not have been imposed but for such failure
to provide such forms; provided, however, that if a Lender, which is
otherwise exempt from or subject to a reduced rate of withholding tax,
becomes subject to taxes because of its failure to deliver a form required
hereunder, the Borrower shall take such steps as such Lender shall
reasonably request to assist such Lender to recover such taxes.
(iii) Any Lender claiming any additional amounts payable
pursuant to this Section 4.06 shall use reasonable efforts (consistent
with legal and regulatory restrictions) to file any certificate or
document requested by the Borrower or the Administrative Agent or to
change the jurisdiction of its Applicable Lending Office or to contest any
tax imposed if the making of such a filing or change or contesting such
tax would avoid the need for or reduce the amount of any such additional
amounts that may thereafter accrue and would not, in the sole
determination of such Lender, be otherwise disadvantageous to such Lender.
ARTICLE V
CAPITAL ADEQUACY
-38-
44
Section 5.01 Additional Costs.
(a) LIBOR Regulations, etc. The Borrower shall pay directly to
each Lender from time to time such amounts as such Lender may determine to be
necessary to compensate such Lender for any costs which it determines are
attributable to its making or maintaining of any LIBOR Loans or issuing or
participating in Letters of Credit hereunder or its obligation to make any LIBOR
Loans or issue or participate in any Letters of Credit hereunder, or any
reduction in any amount receivable by such Lender hereunder in respect of any of
such LIBOR Loans, Letters of Credit or such obligation (such increases in costs
and reductions in amounts receivable being herein called "Additional Costs"),
resulting from any Regulatory Change which: (i) changes the basis of taxation of
any amounts payable to such Lender under this Agreement or any Note in respect
of any of such LIBOR Loans or Letters of Credit (other than taxes imposed on the
overall net income of such Lender or of its Applicable Lending Office for any of
such LIBOR Loans by the jurisdiction in which such Lender has its principal
office or Applicable Lending Office); or (ii) imposes or modifies any reserve,
special deposit, minimum capital, capital ratio or similar requirements relating
to any extensions of credit or other assets of, or any deposits with or other
liabilities of such Lender, or the Commitment or Loans of such Lender or the
London interbank market; or (iii) imposes any other condition affecting this
Agreement or any Note (or any of such extensions of credit or liabilities) or
such Lender's Commitment or Loans. Each Lender will notify the Administrative
Agent and the Borrower of any event occurring after the Closing Date which will
entitle such Lender to compensation pursuant to this Section 5.01(a) as promptly
as practicable after it obtains knowledge thereof and determines to request such
compensation, and will designate a different Applicable Lending Office for the
Loans of such Lender affected by such event if such designation will avoid the
need for, or reduce the amount of, such compensation and will not, in the sole
opinion of such Lender, be disadvantageous to such Lender, provided that such
Lender shall have no obligation to so designate an Applicable Lending Office
located in the United States. If any Lender requests compensation from the
Borrower under this Section 5.01(a), the Borrower may, by notice to such Lender,
suspend the obligation of such Lender to make additional Loans of the Type with
respect to which such compensation is requested until the Regulatory Change
giving rise to such request ceases to be in effect (in which case the provisions
of Section 5.04 shall be applicable).
(b) Regulatory Change. Without limiting the effect of the
provisions of Section 5.01(a), in the event that at any time (by reason of any
Regulatory Change or any other circumstances arising after the Closing Date
affecting (A) any Lender, (B) the London interbank market or (C) such Lender's
position in such market), the LIBOR Rate, as determined in good faith by such
Lender, will not adequately and fairly reflect the cost to such Lender of
funding its LIBOR Loans, then, if such Lender so elects, by notice to the
Borrower and the Administrative Agent, the obligation of such Lender to make
additional LIBOR Loans shall be suspended until such Regulatory Change or other
circumstances ceases to be in effect (in which case the provisions of Section
5.04 shall be applicable).
-39-
45
(c) Capital Adequacy. Without limiting the effect of the
foregoing provisions of this Section 5.01 (but without duplication), the
Borrower shall pay directly to any Lender from time to time on request such
amounts as such Lender may reasonably determine to be necessary to compensate
such Lender or its parent or holding company for any costs which it determines
are attributable to the maintenance by such Lender or its parent or holding
company (or any Applicable Lending Office), pursuant to any Governmental
Requirement following any Regulatory Change, of capital in respect of its
Commitment, its Note, its Loans or any interest held by it in any Letter of
Credit, such compensation to include, without limitation, an amount equal to any
reduction of the rate of return on assets or equity of such Lender or its parent
or holding company (or any Applicable Lending Office) to a level below that
which such Lender or its parent or holding company (or any Applicable Lending
Office) could have achieved but for such Governmental Requirement. Such Lender
will notify the Borrower that it is entitled to compensation pursuant to this
Section 5.01(c) as promptly as practicable after it determines to request such
compensation.
(d) Compensation Procedure. Any Lender notifying the Borrower of
the incurrence of additional costs under this Section 5.01 shall in such notice
to the Borrower and the Administrative Agent set forth in reasonable detail the
basis and amount of its request for compensation. Determinations and allocations
by each Lender for purposes of this Section 5.01 of the effect of any Regulatory
Change pursuant to Section 5.01(a) or (b), or of the effect of capital
maintained pursuant to Section 5.01(c), on its costs or rate of return of
maintaining Loans or its obligation to make Loans or issue Letters of Credit, or
on amounts receivable by it in respect of Loans or Letters of Credit, and of the
amounts required to compensate such Lender under this Section 5.01, shall be
conclusive and binding for all purposes, provided that such determinations and
allocations are made on a reasonable basis. Any request for additional
compensation under this Section 5.01 shall be paid by the Borrower within thirty
(30) days of the receipt by the Borrower of the notice described in this Section
5.01(d).
Section 5.02 Limitation on LIBOR Loans. Anything herein to the
contrary notwithstanding, if, on or prior to the determination of any LIBOR Rate
for any Interest Period:
(i) the Administrative Agent determines (which determination
shall be conclusive, absent manifest error) that quotations of interest
rates for the relevant deposits referred to in the definition of "LIBOR
Rate" in Section 1.02 are not being provided in the relevant amounts or
for the relevant maturities for purposes of determining rates of interest
for LIBOR Loans as provided herein; or
(ii) the Administrative Agent determines (which determination
shall be conclusive, absent manifest error) that the relevant rates of
interest referred to in the definition of "LIBOR Rate" in Section 1.02
upon the basis of which the rate of interest for LIBOR Loans for such
Interest Period is to be determined are not sufficient to adequately cover
the cost to the Lenders of making or maintaining LIBOR Loans;
-40-
46
then the Administrative Agent shall give the Borrower prompt notice thereof, and
so long as such condition remains in effect, the Lenders shall be under no
obligation to make additional LIBOR Loans.
Section 5.03 Illegality. Notwithstanding any other provision of
this Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to honor its obligation to make or maintain LIBOR
Loans hereunder, then such Lender shall promptly notify the Borrower thereof and
such Lender's obligation to make LIBOR Loans shall be suspended until such time
as such Lender may again make and maintain LIBOR Loans (in which case the
provisions of Section 5.04 shall be applicable).
Section 5.04 Base Rate Loans Pursuant to Sections 5.01, 5.02 and
5.03. If the obligation of any Lender to make LIBOR Loans shall be suspended
pursuant to Sections 5.01, 5.02 or 5.03 ("Affected Loans"), all Affected Loans
which would otherwise be made by such Lender shall be made instead as Base Rate
Loans (and, if an event referred to in Section 5.01(b) or Section 5.03 has
occurred and such Lender so requests by notice to the Borrower, all Affected
Loans of such Lender then outstanding shall be automatically converted into Base
Rate Loans on the date specified by such Lender in such notice) and, to the
extent that Affected Loans are so made as (or converted into) Base Rate Loans,
all payments of principal which would otherwise be applied to such Lender's
Affected Loans shall be applied instead to its Base Rate Loans.
Section 5.05 Compensation. The Borrower shall pay to each Lender
within thirty (30) days of receipt of written request of such Lender (which
request shall set forth, in reasonable detail, the basis for requesting such
amounts and which shall be conclusive and binding for all purposes provided that
such determinations are made on a reasonable basis), such amount or amounts as
shall compensate it for any loss, cost, expense or liability which such Lender
determines are attributable to:
(i) any payment, prepayment or conversion of a LIBOR Loan
properly made by such Lender or the Borrower for any reason (including,
without limitation, the acceleration of the Loans pursuant to Section
10.01) on a date other than the last day of the Interest Period for such
Loan; or
(ii) any failure by the Borrower for any reason (including but
not limited to, the failure of any of the conditions precedent specified
in Article VI to be satisfied) to borrow, continue or convert a LIBOR Loan
from such Lender on the date for such borrowing, continuation or
conversion specified in the relevant notice given pursuant to Section
2.02(c).
Without limiting the effect of the preceding sentence, such compensation shall
include an amount equal to the excess, if any, of (i) the amount of interest
which would have accrued on the principal amount so paid, prepaid or converted
or not borrowed for the period from the date of such payment, prepayment or
conversion or failure to borrow to the last day of the Interest Period for such
Loan (or, in the case of a failure to borrow, the Interest Period for such Loan
-41-
47
which would have commenced on the date specified for such borrowing) at the
applicable rate of interest for such Loan provided for herein over (ii) the
interest component of the amount such Lender would have bid in the London
interbank market for Dollar deposits of leading banks in amounts comparable to
such principal amount and with maturities comparable to such period (as
reasonably determined by such Lender).
Section 5.06 Replacement Lenders.
(a) If any Lender has notified the Borrower and the
Administrative Agent of its incurring additional costs under Section 5.01 or has
required the Borrower to make payments for Taxes under Section 4.06, then the
Borrower may, unless such Lender has notified the Borrower and the
Administrative Agent that the circumstances giving rise to such notice no longer
apply, terminate, in whole but not in part, the Commitment of any Lender (other
than the Administrative Agent) (the "Terminated Lender") at any time upon five
(5) Business Days' prior written notice to the Terminated Lender and the
Administrative Agent (such notice referred to herein as a "Notice of
Termination").
(b) In order to effect the termination of the Commitment of the
Terminated Lender, the Borrower shall: (i) obtain an agreement with one or more
Lenders to increase their Commitment or Commitments and/or (ii) request any one
or more other banking institutions to become parties to this Agreement in place
and instead of such Terminated Lender and agree to accept a Commitment or
Commitments; provided, however, that such one or more other banking institutions
are reasonably acceptable to the Administrative Agent and become parties by
executing an Assignment (the Lenders or other banking institutions that agree to
accept in whole or in part the Commitment of the Terminated Lender being
referred to herein as the "Replacement Lenders"), such that the aggregate
increased and/or accepted Commitments of the Replacement Lenders under clauses
(i) and (ii) above equal the Commitment of the Terminated Lender.
(c) The Notice of Termination shall include the name of the
Terminated Lender, the date the termination will occur (the "Lender Termination
Date"), and the Replacement Lender or Replacement Lenders to which the
Terminated Lender will assign its Commitment and, if there will be more than one
Replacement Lender, the portion of the Terminated Lender's Commitment to be
assigned to each Replacement Lender.
(d) On the Lender Termination Date, (i) the Terminated Lender
shall by execution and delivery of an Assignment assign its Commitment to the
Replacement Lender or Replacement Lenders (pro rata, if there is more than one
Replacement Lender, in proportion to the portion of the Terminated Lender's
Commitment to be assigned to each Replacement Lender) indicated in the Notice of
Termination and shall assign to the Replacement Lender or Replacement Lenders
each of its Loans (if any) then outstanding and participation interests in
Letters of Credit (if any) then outstanding pro rata as aforesaid), (ii) the
Terminated Lender shall endorse its Note, payable without recourse,
representation or warranty to the order of the Replacement Lender or Replacement
Lenders (pro rata as aforesaid), (iii) the Replacement
-42-
48
Lender or Replacement Lenders shall purchase the Note held by the Terminated
Lender (pro rata as aforesaid) at a price equal to the unpaid principal amount
thereof plus interest and facility and other fees accrued and unpaid to the
Lender Termination Date, and (iv) the Replacement Lender or Replacement Lenders
will thereupon (pro rata as aforesaid) succeed to and be substituted in all
respects for the Terminated Lender with like effect as if becoming a Lender
pursuant to the terms of Section 12.06(b), and the Terminated Lender will have
the rights and benefits of an assignor under Section 12.06(b). To the extent not
in conflict, the terms of Section 12.06(b) shall supplement the provisions of
this Section 5.06(d). For each assignment made under this Section 5.06, the
Replacement Lender shall pay to the Administrative Agent the processing fee
provided for in Section 12.06(b). The Borrower will be responsible for the
payment of any breakage costs incurred in connection with the sale of Loans by
Terminated Lenders to Replacement Lenders, as if such Loans had been prepaid and
breakage costs had accrued thereto in accordance with Section 5.05.
ARTICLE VI
CONDITIONS PRECEDENT
Section 6.01 Initial Funding.
The obligation of the Lenders to make the Initial Funding is
subject to the receipt by the Administrative Agent and the Lenders of all fees
payable pursuant to Section 2.04 on or before the Closing Date and the receipt
by the Administrative Agent of the following documents and satisfaction of the
other conditions provided in this Section 6.01, each of which shall be
satisfactory to the Administrative Agent in form and substance:
(a) A certificate of the Secretary or an Assistant Secretary of
the Borrower setting forth (i) resolutions of its board of directors with
respect to the authorization of the Borrower to execute and deliver the Loan
Documents to which it is a party and to enter into the transactions contemplated
in those documents, (ii) the officers of the Borrower (y) who are authorized to
sign the Loan Documents to which Borrower is a party and (z) who will, until
replaced by another officer or officers duly authorized for that purpose, act as
its representative for the purposes of signing documents and giving notices and
other communications in connection with this Agreement and the transactions
contemplated hereby, (iii) specimen signatures of the authorized officers, and
(iv) the articles or certificate of incorporation and bylaws of the Borrower,
certified as being true and complete. The Administrative Agent and the Lenders
may conclusively rely on such certificate until the Administrative Agent
receives notice in writing from the Borrower to the contrary.
(b) A certificate of the Secretary or an Assistant Secretary of
Holdings setting forth (i) resolutions of its board of directors with respect to
the authorization of Holdings to execute and deliver the Loan Documents to which
it is a party and to enter into the transactions contemplated in those
documents, (ii) the officers of Holdings (y) who are authorized to sign the Loan
Documents to which Holdings is a party and (z) who will, until replaced by
another officer
-43-
49
or officers duly authorized for that purpose, act as its representative for the
purposes of signing documents and giving notices and other communications in
connection with this Agreement and the transactions contemplated hereby, (iii)
specimen signatures of the authorized officers, and (iv) the articles or
certificate of incorporation and bylaws of Holdings, certified as being true and
complete. The Administrative Agent and the Lenders may conclusively rely on such
certificate until they receive notice in writing from Holdings to the contrary.
(c) A certificate of the Secretary or an Assistant Secretary of
each Subsidiary party to a Loan Document, setting forth (i) resolutions of its
board of directors with respect to the authorization of such Subsidiary to
execute and deliver the Loan Documents to which it is a party and to enter into
the transactions contemplated in those documents, (ii) the officers of such
Subsidiary (y) who are authorized to sign the Loan Documents to which such
Subsidiary is a party and (z) who will, until replaced by another officer or
officers duly authorized for that purpose, act as its representative for the
purposes of signing documents and giving notices and other communications in
connection with this Agreement and the transactions contemplated hereby, (iii)
specimen signatures of the authorized officers, and (iv) the articles or
certificate of incorporation and bylaws of such Subsidiary, certified as being
true and complete. The Administrative Agent and the Lenders may conclusively
rely on such certificate until they receive notice in writing from the Borrower
to the contrary.
(d) Certificates of the appropriate state agencies with respect
to the existence, qualification and good standing of the Borrower, Holdings and
each Subsidiary party to a Loan Document.
(e) A compliance certificate which shall be substantially in the
form of Exhibit C, duly and properly executed by a Responsible Officer and dated
as of the Closing Date.
(f) The Notes, duly completed and executed.
(g) The Security Instruments, including those described on
Exhibit D, duly completed and executed in sufficient number of counterparts for
recording, if necessary.
(h) An opinion of Gardere Xxxxx Xxxxxx, counsel to the Borrower,
Holdings and the Subsidiaries party to a Loan Document, in form and substance
satisfactory to the Administrative Agent, as to such matters incident to the
transactions herein contemplated and as the Administrative Agent may reasonably
request.
(i) A certificate of insurance coverage of the Borrower
evidencing that the Borrower is carrying insurance in accordance with Section
7.19.
(j) Copies of Requests for Information or Copies (Form UCC-11) or
equivalent commercially obtained reports, listing all effective financing
statements which name any of the Borrower, Holdings or any Subsidiary party to a
Loan Document (under their present names and any previous names) as debtor and
which are filed in all jurisdictions in which such Persons own property or
conduct business, together with copies of such financing statements.
-44-
50
(k) Completion of an environmental review in form, scope and
substance satisfactory to the Administrative Agent.
(l) Since September 30, 2000, there shall not have been any
adverse change or any development involving a prospective adverse change in or
affecting the Properties, general affairs, management, financial position,
shareholders' equity or results of operation of the Borrower, Holdings or any
Subsidiary.
(m) All necessary approvals from any Governmental Authority or
other Person in connection with the Properties and the transactions contemplated
by the Loan Documents shall have been obtained and remain in effect, and all
applicable waiting periods shall have expired without any action by any
applicable authority.
(n) A borrowing notice in the form of Exhibit B duly completed
and executed by the Borrower.
(o) A Letter of Credit Application pertaining to each Letter of
Credit duly completed and executed by Borrower.
(p) A Notice of Account Designation substantially in the form of
Exhibit G, duly completed and executed by the Borrower.
(q) Evidence of the successful closing of the WGCS Merger.
(r) Evidence that all Debt assumed by the Borrower in conjunction
with the WGCS Merger does not differ materially from that presented in the pro
forma financial statements in the Offering Memorandum.
(s) No Default shall exist hereunder.
(t) The Borrower shall deliver, or cause to be delivered, to the
Administrative Agent on the Closing Date or as soon thereafter as is
practicable, but in any event within 90 days of the Closing Date, the original
certificates representing the stock pledged to the Administrative Agent pursuant
to the Security Instruments.
(u) Except as disclosed on Schedule 7.03, no material litigation
shall exist against the Borrower or any Subsidiary.
(v) Such other documents as the Administrative Agent or any
Lender or special counsel to the Administrative Agent may reasonably request.
Section 6.02 Initial and Subsequent Loans and Letters of Credit.
The obligation of the Lenders to make Loans to the Borrower upon the occasion of
each borrowing hereunder and to issue, renew, extend or reissue Letters of
Credit for the account of the Borrower
-45-
51
(including the Initial Funding) is subject to the further conditions precedent
that, as of the date of such Loans and after giving effect thereto:
(a) no Default shall have occurred and be continuing;
(b) no Material Adverse Effect shall have occurred; and
(c) the representations and warranties made by the Borrower in
Article VII and in the Security Instruments shall be true on and as of the date
of the making of such Loans or issuance, renewal, extension or reissuance of a
Letter of Credit with the same force and effect as if made on and as of such
date and following such new borrowing, except to the extent such representations
and warranties are expressly limited to an earlier date or the Majority Lenders
may expressly consent in writing to the contrary.
Each request for a borrowing or issuance, renewal, extension or
reissuance of a Letter of Credit by the Borrower hereunder shall constitute a
certification by the Borrower to the effect set forth in Section 6.02(c) (both
as of the date of such notice and, unless the Borrower otherwise notifies the
Administrative Agent prior to the date of and immediately following such
borrowing or issuance, renewal, extension or reissuance of a Letter of Credit as
of the date thereof).
Section 6.03 Conditions Precedent for the Benefit of Lenders. All
conditions precedent to the obligations of the Lenders to make any Loan are
imposed hereby solely for the benefit of the Lenders, and no other Person may
require satisfaction of any such condition precedent or be entitled to assume
that the Lenders will refuse to make any Loan in the absence of strict
compliance with such conditions precedent.
Section 6.04 No Waiver. No waiver of any condition precedent
shall preclude the Administrative Agent or the Lenders from requiring such
condition to be met prior to making any subsequent Loan or preclude the Lenders
from thereafter declaring that the failure of the Borrower to satisfy such
condition precedent constitutes a Default.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Administrative Agent and the
Lenders that (each representation and warranty herein is given as of the Closing
Date and shall be deemed repeated and reaffirmed on the dates of each borrowing
and issuance, renewal, extension or reissuance of a Letter of Credit as provided
in Section 6.02):
Section 7.01 Corporate Existence. Each of the Borrower and each
Subsidiary: (i) is a corporation duly organized, legally existing and in good
standing under the laws of the
-46-
52
jurisdiction of its incorporation; (ii) has all requisite corporate power, and
has all material governmental licenses, authorizations, consents and approvals
necessary to own its assets and carry on its business as now being or as
proposed to be conducted; and (iii) is qualified to do business in all
jurisdictions in which the nature of the business conducted by it makes such
qualification necessary and where failure so to qualify would have a Material
Adverse Effect.
Section 7.02 Financial Condition. The audited consolidated
balance sheet of Holdings and its consolidated subsidiaries as at March 31, 2000
and the related consolidated statement of income, stockholders' equity and cash
flow of Holdings and its consolidated subsidiaries for the fiscal year ended on
said date, with the opinion thereon of Deloitte Touche heretofore furnished to
each of the Lenders and the unaudited consolidated balance sheet of Holdings and
its consolidated subsidiaries as at September 30, 2000 and their related
consolidated statements of income, stockholders' equity and cash flow of
Holdings and its consolidated subsidiaries for the six (6) month period ended on
such date heretofore furnished to the Administrative Agent, are complete and
correct and fairly present the consolidated financial condition of Holdings and
its consolidated subsidiaries as at said dates and the results of its operations
for the fiscal year and the six (6) month period on said dates in all material
respects, all in accordance with GAAP, as applied on a consistent basis
(subject, in the case of the interim financial statements, to normal year-end
adjustments). Neither the Borrower nor any Subsidiary has on the Closing Date
any material Debt, contingent liabilities, liabilities for taxes, unusual
forward or long-term commitments or unrealized or anticipated losses from any
unfavorable commitments, except as referred to or reflected or provided for in
the Financial Statements or in Schedule 7.02. Since March 31, 2000, there has
been no change or event having a Material Adverse Effect. Since the date of the
Financial Statements, neither the business nor the Properties of the Borrower or
any Subsidiary have been materially and adversely affected as a result of any
fire, explosion, earthquake, flood, drought, windstorm, accident, strike or
other labor disturbance, embargo, requisition or taking of Property or
cancellation of contracts, permits or concessions by any Governmental Authority,
riot, activities of armed forces or acts of God or of any public enemy.
Notwithstanding anything in this Agreement to the contrary, as of the Closing
Date, the Financial Statements required and referenced in this Agreement shall
mean the pro forma financial statements contained in the Offering Memorandum
which give effect to the WGCS Merger.
Section 7.03 Litigation. Except as disclosed to the Lenders in
Schedule 7.03 hereto, at the Closing Date there is no litigation, legal,
administrative or arbitral proceeding, investigation or other action of any
nature pending or, to the knowledge of the Borrower threatened against or
affecting the Borrower or any Subsidiary which involves the possibility of any
judgment or liability against the Borrower or any Subsidiary not fully covered
by insurance (except for normal deductibles), and which would have a Material
Adverse Effect.
Section 7.04 No Breach. Neither the execution and delivery of the
Loan Documents, nor compliance with the terms and provisions hereof will
conflict with or result in a breach of, or require any consent which has not
been obtained as of the Closing Date under, the respective charter or by-laws of
the Borrower or any Subsidiary, or any Governmental
-47-
53
Requirement or any agreement or instrument to which the Borrower or any
Subsidiary is a party or by which it is bound or to which it or its Properties
are subject, or constitute a default under any such agreement or instrument, or
result in the creation or imposition of any Lien upon any of the revenues or
assets of the Borrower or any Subsidiary pursuant to the terms of any such
agreement or instrument other than the Liens created by the Loan Documents.
Section 7.05 Authority. The Borrower and each Subsidiary have all
necessary corporate power and authority to execute, deliver and perform its
obligations under the Loan Documents to which it is a party; and the execution,
delivery and performance by the Borrower and each Subsidiary of the Loan
Documents to which it is a party, have been duly authorized by all necessary
corporate action on its part; and the Loan Documents constitute the legal, valid
and binding obligations of the Borrower and each Subsidiary, enforceable in
accordance with their terms, except to the extent that the enforceability
thereof may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws generally affecting creditors' rights and by
equitable principles (regardless of whether enforcement is sought in equity or
at law).
Section 7.06 Approvals. No authorizations, approvals or consents
of, and no filings or registrations with, any Governmental Authority are
necessary for the execution, delivery or performance by the Borrower or any
Subsidiary of the Loan Documents or for the validity or enforceability thereof,
except for the recording and filing of the Security Instruments as required by
this Agreement and of the merger documents as required by the WGCS Merger.
Section 7.07 Use of Loans. The proceeds of the Loans shall be
used for working capital and other general corporate purposes. The Borrower is
not engaged principally, or as one of its important activities, in the business
of extending credit for the purpose, whether immediate, incidental or ultimate,
of buying or carrying margin stock (within the meaning of Regulation T, U or X
of the Board of Governors of the Federal Reserve System) and no part of the
proceeds of any Loan hereunder will be used to buy or carry any margin stock.
Section 7.08 ERISA.
(a) The Borrower, each Subsidiary and each ERISA Affiliate have
complied in all material respects with ERISA and, where applicable, the Code
regarding each Plan.
(b) Each Plan is, and has been, maintained in substantial
compliance with ERISA and, where applicable, the Code.
(c) No act, omission or transaction has occurred which could
result in imposition on the Borrower, any Subsidiary or any ERISA Affiliate
(whether directly or indirectly) of (i) either a civil penalty assessed pursuant
to section 502(c), (i) or (l) of ERISA or a tax imposed pursuant to Chapter 43
of Subtitle D of the Code or (ii) breach of fiduciary duty liability damages
under section 409 of ERISA.
-48-
54
(d) No Plan (other than a defined contribution plan) or any trust
created under any such Plan has been terminated since September 2, 1974. No
liability to the PBGC (other than for the payment of current premiums which are
not past due) by the Borrower, any Subsidiary or any ERISA Affiliate has been or
is expected by the Borrower, any Subsidiary or any ERISA Affiliate to be
incurred with respect to any Plan. No ERISA Event with respect to any Plan has
occurred.
(e) Full payment when due has been made of all amounts which the
Borrower, any Subsidiary or any ERISA Affiliate is required under the terms of
each Plan or applicable law to have paid as contributions to such Plan, and no
accumulated funding deficiency (as defined in section 302 of ERISA and section
412 of the Code), whether or not waived, exists with respect to any Plan.
(f) The actuarial present value of the benefit liabilities under
each Plan which is subject to Title IV of ERISA does not, as of the end of the
Borrower's most recently ended fiscal year, exceed the current value of the
assets (computed on a plan termination basis in accordance with Title IV of
ERISA) of such Plan allocable to such benefit liabilities. The term "actuarial
present value of the benefit liabilities" shall have the meaning specified in
section 4041 of ERISA.
(g) None of the Borrower, any Subsidiary or any ERISA Affiliate
sponsors, maintains, or contributes to an employee welfare benefit plan, as
defined in section 3(1) of ERISA, including, without limitation, any such plan
maintained to provide benefits to former employees of such entities, that may
not be terminated by the Borrower, a Subsidiary or any ERISA Affiliate in its
sole discretion at any time without any material liability.
(h) None of the Borrower, any Subsidiary or any ERISA Affiliate
sponsors, maintains or contributes to, or has at any time in the preceding six
calendar years, sponsored, maintained or contributed to, any Multiemployer Plan.
(i) None of the Borrower, any Subsidiary or any ERISA Affiliate
is required to provide security under section 401(a)(29) of the Code due to a
Plan amendment that results in an increase in current liability for the Plan.
Section 7.09 Taxes. Except as set out in Schedule 7.09, each of
the Borrower and its Subsidiaries has filed all United States Federal income tax
returns and all other tax returns which are required to be filed by them and
have paid all material taxes due pursuant to such returns or pursuant to any
assessment received by the Borrower or any Subsidiary. The charges, accruals and
reserves on the books of the Borrower and its Subsidiaries in respect of taxes
and other governmental charges are, in the opinion of the Borrower, adequate. No
tax lien has been filed and, to the knowledge of the Borrower, no claim is being
asserted with respect to any such tax, fee or other charge.
Section 7.10 Titles, etc.
-49-
55
(a) Except as set out in Schedule 7.10, the Borrower and its
Subsidiaries have good and marketable title to their material Properties, (i)
except in cases where the failure to have said good and marketable title would
not reasonably cause a Material Adverse Effect and (ii) free and clear of all
Liens, except Liens permitted by Section 9.02.
(b) All leases and agreements necessary for the conduct of the
business of the Borrower and its Subsidiaries are valid and subsisting, in full
force and effect and there exists no default or event or circumstance which with
the giving of notice or the passage of time or both would give rise to a default
under any such lease or leases, which would affect in any material respect the
conduct of the business of the Borrower and its Subsidiaries.
(c) The rights, Properties and other assets presently owned,
leased or licensed by the Borrower and its Subsidiaries including, without
limitation, all easements and rights of way, include all rights, Properties and
other assets necessary to permit the Borrower and its Subsidiaries to conduct
their business in all material respects in the same manner as its business has
been conducted prior to the Closing Date.
(d) All of the assets and Properties of the Borrower and its
Subsidiaries (taken as a whole) which are reasonably necessary for the operation
of its business are in good working condition and are maintained in accordance
with prudent business standards.
Section 7.11 No Material Misstatements. No written information,
statement, exhibit, certificate, document or report furnished to the
Administrative Agent and the Lenders (or any of them) by the Borrower or any
Subsidiary in connection with the negotiation of this Agreement contained any
material misstatement of fact or omitted to state a material fact or any fact
necessary to make the statement contained therein not materially misleading in
the light of the circumstances in which made and with respect to the Borrower
and its Subsidiaries taken as a whole. To Borrower's knowledge, there is no fact
peculiar to the Borrower or any Subsidiary which has a Material Adverse Effect
or in the future is reasonably likely to have (so far as the Borrower can now
reasonably foresee) a Material Adverse Effect and which has not been set forth
in this Agreement or the other documents, certificates and statements furnished
to the Administrative Agent by or on behalf of the Borrower or any Subsidiary or
otherwise prior to, or on, the Closing Date in connection with the transactions
contemplated hereby.
Section 7.12 Investment Company Act. Neither the Borrower nor any
Subsidiary is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
Section 7.13 Public Utility Holding Company Act. Neither the
Borrower nor any Subsidiary is a "holding company," or a "subsidiary company" of
a "holding company," or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company," or a "public utility" within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
-50-
56
Section 7.14 Subsidiaries. Except as set forth on Schedule 7.14,
the Borrower has no Subsidiaries.
Section 7.15 Location of Business and Offices. The Borrower's
principal place of business and chief executive offices are located at the
address stated on the signature page of this Agreement. The principal place of
business and chief executive office of each Subsidiary are located at the
addresses stated on Schedule 7.14.
Section 7.16 Defaults. Neither the Borrower nor any Subsidiary is
in material default nor has any event or circumstance occurred which, but for
the expiration of any applicable grace period or the giving of notice, or both,
would constitute a material default under any material agreement or instrument
to which the Borrower or any Subsidiary is a party or by which the Borrower or
any Subsidiary is bound which default would have a Material Adverse Effect. No
Default hereunder has occurred and is continuing.
Section 7.17 Environmental Matters. Except (i) as provided in
Schedule 7.17 or (ii) as would not have a Material Adverse Effect (or with
respect to (c), (d) and (e) below, where the failure to take such actions would
not have a Material Adverse Effect):
(a) Neither any Property of the Borrower or any Subsidiary nor
the operations conducted thereon violate any order or requirement of any court
or Governmental Authority or any Environmental Laws;
(b) Without limitation of clause (a) above, no Property of the
Borrower or any Subsidiary nor the operations currently conducted thereon or, to
the best knowledge of the Borrower, by any prior owner or operator of such
Property or operation, are in violation of or subject to any existing, pending
or threatened action, suit, investigation, inquiry or proceeding by or before
any court or Governmental Authority or to any remedial obligations under
Environmental Laws;
(c) All notices, permits, licenses or similar authorizations, if
any, required to be obtained or filed in connection with the operation or use of
any and all Property of the Borrower and each Subsidiary, including without
limitation past or present treatment, storage, disposal or release of a
hazardous substance or solid waste into the environment, have been duly obtained
or filed, and the Borrower and each Subsidiary are in compliance with the terms
and conditions of all such notices, permits, licenses and similar
authorizations;
(d) All hazardous substances, solid waste, and oil and gas
exploration and production wastes, if any, generated at any and all Property of
the Borrower or any Subsidiary have in the past been transported, treated and
disposed of in accordance with Environmental Laws and so as not to pose an
imminent and substantial endangerment to public health or welfare or the
environment, and, to the best knowledge of the Borrower, all such transport
carriers and treatment and disposal facilities have been and are operating in
compliance with Environmental
-51-
57
Laws and so as not to pose an imminent and substantial endangerment to public
health or welfare or the environment, and are not the subject of any existing,
pending or threatened action, investigation or inquiry by any Governmental
Authority in connection with any Environmental Laws;
(e) The Borrower has taken all steps reasonably necessary to
determine and has determined that no hazardous substances, solid waste, or oil
and gas exploration and production wastes, have been disposed of or otherwise
released and there has been no threatened release of any hazardous substances on
or to any Property of the Borrower or any Subsidiary except in compliance with
Environmental Laws and so as not to pose an imminent and substantial
endangerment to public health or welfare or the environment;
(f) To the extent applicable, all Property of the Borrower and
each Subsidiary currently satisfies all design, operation, and equipment
requirements imposed by the OPA or scheduled as of the Closing Date to be
imposed by OPA during the term of this Agreement, and the Borrower does not have
any reason to believe that such Property, to the extent subject to OPA, will not
be able to maintain compliance with the OPA requirements during the term of this
Agreement; and
(g) Neither the Borrower nor any Subsidiary has any known
contingent liability in connection with any release or threatened release of any
oil, hazardous substance or solid waste into the environment.
Section 7.18 Compliance with the Law. Neither the Borrower nor
any Subsidiary has violated any Governmental Requirement or failed to obtain any
license, permit, franchise or other governmental authorization necessary for the
ownership of any of its Properties or the conduct of its business, which
violation or failure would have (in the event such violation or failure were
asserted by any Person through appropriate action) a Material Adverse Effect.
Section 7.19 Insurance. Schedule 7.19 attached hereto contains an
accurate description of all material policies of fire, liability, workmen's
compensation and other forms of insurance owned or held by the Borrower and each
Subsidiary. All such policies are in full force and effect, all premiums with
respect thereto covering all periods up to and including the date of the closing
have been paid, and no notice of cancellation or termination has been received
with respect to any such policy. Such policies are sufficient for compliance
with all requirements of law and of all agreements to which the Borrower or any
Subsidiary is a party; are valid, outstanding and enforceable policies; provide
adequate insurance coverage in at least such amounts and against at least such
risks (but including in any event public liability) as are usually insured
against in the same general area by companies engaged in the same or a similar
business for the assets and operations of the Borrower and each Subsidiary; will
remain in full force and effect through the respective dates set forth in the
binders for said insurance without the payment of additional premiums; and will
not in any way be affected by, or terminate or lapse by reason of, the
transactions contemplated by this Agreement. Neither the Borrower nor any
Subsidiary has been refused any insurance with respect to its assets or
operations, nor has its coverage been
-52-
58
limited below usual and customary policy limits, by an insurance carrier to
which it has applied for any such insurance or with which it has carried
insurance during the last three years.
Section 7.20 Reserved.
Section 7.21 Hedging Agreements. Schedule 7.21 sets forth, as of the
Closing Date, a true and complete list of all Hedging Agreements (including
commodity price swap agreements, forward agreements or contracts of sale which
provide for prepayment for deferred shipment or delivery of oil, gas or other
commodities) of the Borrower and each Subsidiary, the material terms thereof
(including the type, term, effective date, termination date and notional amounts
or volumes), the net xxxx to market value thereof, all credit support agreements
relating thereto (including any margin required or supplied), and the counter
party to each such agreement.
Section 7.22 Restriction on Liens. Except as set forth on Schedule
7.22, neither the Borrower nor any of its Subsidiaries is a party to any
agreement or arrangement (other than this Agreement and the Security
Instruments), or subject to any order, judgment, writ or decree, which either
restricts or purports to restrict its ability to grant Liens to other Persons on
or in respect of their respective assets or Properties.
ARTICLE VIII
AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that, so long as any of the Commitments
are in effect and until payment in full of all Loans hereunder, all interest
thereon and all other amounts payable by the Borrower hereunder:
Section 8.01 Reporting Requirements. The Borrower shall deliver, or
shall cause to be delivered, to the Administrative Agent with sufficient copies
of each for the Lenders:
(a) Annual Financial Statements. As soon as available and in any event
within 120 days after the end of each fiscal year of Holdings, the audited
consolidated and unaudited consolidating statements of income, stockholders'
equity, changes in financial position and cash flow of Holdings and its
consolidated subsidiaries for such fiscal year, and the related consolidated and
consolidating balance sheets of Holdings and its consolidated subsidiaries as at
the end of such fiscal year, and setting forth in each case in comparative form
the corresponding figures for the preceding fiscal year, and accompanied by the
related opinion of independent public accountants of recognized national
standing acceptable to the Administrative Agent which opinion shall state that
said financial statements fairly present the consolidated and consolidating
financial condition and results of operations of Holdings and its consolidated
subsidiaries as at the end of, and for, such fiscal year and that such financial
statements have been prepared in accordance with GAAP, except for such changes
in such principles with which the independent
-53-
59
public accountants shall have concurred and such opinion shall not contain a
"going concern" or like qualification or exception, and a certificate of such
accountants stating that, in making the examination necessary for their opinion,
they obtained no knowledge, except as specifically stated, of any Default.
(b) Quarterly Financial Statements. As soon as available and in any
event within 60 days after the end of each of the first three fiscal quarterly
periods of each fiscal year of Holdings, consolidated and consolidating
statements of income, stockholders' equity, changes in financial position and
cash flow of Holdings and its consolidated subsidiaries for such period and for
the period from the beginning of the respective fiscal year to the end of such
period, and the related consolidated and consolidating balance sheets as at the
end of such period, and setting forth in each case in comparative form the
corresponding figures for the corresponding period in the preceding fiscal year,
accompanied by the certificate of a Responsible Officer, which certificate shall
state that said financial statements fairly present the consolidated and
consolidating financial condition and results of operations of Holdings and its
consolidated subsidiaries in accordance with GAAP, as at the end of, and for,
such period (subject to normal year-end audit adjustments).
(c) Notice of Default, Etc. Promptly after the Borrower knows that any
Default or any Material Adverse Effect has occurred, a notice of such Default or
Material Adverse Effect, describing the same in reasonable detail and the action
the Borrower proposes to take with respect thereto, and at the Lender's option,
a copy of the notice of such Default.
(d) Management Letters. Promptly after Borrower's or any Subsidiaries'
receipt thereof, a copy of any "management letter" addressed to the board of
directors of Borrower or such Subsidiary from its certified public accountants
and any internal control memoranda relating thereto.
(e) SEC Filings, Etc. Promptly upon its becoming available, each
financial statement, report, notice or proxy statement sent by the Borrower to
stockholders generally and each regular or periodic report and any registration
statement, prospectus or written communication (other than transmittal letters)
in respect thereof filed by the Borrower with or received by the Borrower in
connection therewith from any securities exchange or the SEC or any successor
agency.
(f) Other Matters. From time to time such other information regarding
the business, affairs or financial condition of the Borrower or any Subsidiary
(including, without limitation, any Plan or Multiemployer Plan and any reports
or other information required to be filed under ERISA) as any Lender or the
Administrative Agent may reasonably request.
(g) Hedging Agreements. As soon as available and in any event within
ten (10) Business Days after each Quarterly Date, a report, in form and
substance satisfactory to the Administrative Agent, setting forth as of the last
Business Day of such Quarterly Date a true and complete list of all Hedging
Agreements (including commodity price swap agreements, forward agreements or
contracts of sale which provide for prepayment for deferred shipment or delivery
-54-
60
of oil, gas or other commodities) of the Borrower and each Subsidiary, the
material terms thereof (including the type, term, effective date, termination
date and notional amounts or volumes), the net xxxx to market value therefor,
any new credit support agreements relating thereto not listed on Schedule 7.21,
any margin required or supplied under any credit support document, and the
counter party to each such agreement.
(h) Labor Disputes. Promptly upon becoming aware of any labor dispute
which could reasonably be expected to have a Material Adverse Effect, a notice
of such dispute describing same in detail and the action of the Borrower
proposes to take with respect thereto.
(i) Borrowing Base Certificate. Within 45 days after each fiscal
quarter end, the Borrower shall deliver to the Administrative Agent a Borrowing
Base Certificate, duly complete and executed by a Responsible Officer of the
Borrower.
The Borrower will furnish to the Administrative Agent, at the time it furnishes
each set of financial statements pursuant to paragraph (a) or (b) above, a
certificate substantially in the form of Exhibit C executed by a Responsible
Officer (i) certifying as to the matters set forth therein and stating that no
Default has occurred and is continuing (or, if any Default has occurred and is
continuing, describing the same in reasonable detail), and (ii) setting forth in
reasonable detail the computations necessary to determine whether the Borrower
is in compliance with Section 9.13(a), (b) and (c) as of the end of the
respective fiscal quarter or fiscal year.
Section 8.02 Litigation. The Borrower shall promptly give to the
Administrative Agent notice of any litigation or governmental investigation or
proceeding pending against the Borrower or any of its Subsidiaries which could
reasonably be expected to materially and adversely affect the business,
operations, property, assets, liabilities, condition (financial or otherwise) or
prospects of Borrower or any of its Subsidiaries.
Section 8.03 Maintenance, Etc.
(a) Generally. The Borrower shall and shall cause each Subsidiary to:
preserve and maintain its corporate existence and all of its material rights,
privileges, franchises, patents, trademarks, copyrights and licenses; keep books
of record and account in which full, true and correct entries will be made of
all dealings or transactions in relation to its business and activities; comply
with all Governmental Requirements if failure to comply with such requirements
will have a Material Adverse Effect; pay and discharge all taxes, assessments
and governmental charges or levies imposed on it or on its income or profits or
on any of its Property prior to the date on which penalties attach thereto,
except for any such tax, assessment, charge or levy the payment of which is
being contested in good faith and by proper proceedings and against which
adequate reserves are being maintained; upon reasonable notice, permit
representatives of the Administrative Agent or any Lender, during normal
business hours, to examine, copy and make extracts from its books and records,
to inspect its Properties, and to discuss its business and affairs with its
officers, all to the extent reasonably requested by such Lender or the
Administrative Agent (as the case may be).
-55-
61
(b) Proof of Insurance. Contemporaneously with the delivery of the
financial statements required by Section 8.01(a) to be delivered for each year,
the Borrower will furnish or cause to be furnished to the Administrative Agent
and the Lenders a certificate of insurance coverage from the insurer in form and
substance satisfactory to the Administrative Agent and, if requested, will
furnish the Administrative Agent and the Lenders copies of the applicable
policies.
(c) Operation of Properties. The Borrower will and will cause each
Subsidiary to operate its Properties or cause such Properties to be operated in
a careful and efficient manner in accordance with the practices of the industry
and in compliance with all applicable contracts and agreements and in compliance
in all material respects with all Governmental Requirements.
Section 8.04 Environmental Matters.
(a) Establishment of Procedures. The Borrower will and will cause each
Subsidiary to establish and implement such procedures as may be reasonably
necessary to continuously determine and assure that any failure of the following
does not have a Material Adverse Effect: (i) all Property of the Borrower and
its Subsidiaries and the operations conducted thereon and other activities of
the Borrower and its Subsidiaries are in compliance with and do not violate the
requirements of any Environmental Laws, (ii) no oil, hazardous substances or
solid wastes are disposed of or otherwise released on or to any Property owned
by any such party except in compliance with Environmental Laws, (iii) no
hazardous substance will be released on or to any such Property in a quantity
equal to or exceeding that quantity which requires reporting pursuant to Section
103 of CERCLA, and (iv) no oil, oil and gas exploration and production wastes or
hazardous substance is released on or to any such Property so as to pose an
imminent and substantial endangerment to public health or welfare or the
environment.
(b) Notice of Action. The Borrower will promptly notify the
Administrative Agent and the Lenders in writing of any threatened action,
investigation or inquiry by any Governmental Authority of which the Borrower has
knowledge in connection with any Environmental Laws, excluding routine testing
and corrective action.
Section 8.05 Further Assurances. The Borrower will and will cause each
Subsidiary to cure promptly any defects in the creation and issuance of the
Notes and the execution and delivery of the Security Instruments and this
Agreement. The Borrower at its expense will and will cause each Subsidiary to
promptly execute and deliver to the Administrative Agent upon request all such
other documents, agreements and instruments to comply with or accomplish the
covenants and agreements of the Borrower or any Subsidiary, as the case may be,
in the Security Instruments and this Agreement, or to further evidence and more
fully describe the collateral intended as security for the Notes, or to correct
any omissions in the Security Instruments, or to state more fully the security
obligations set out herein or in any of the Security Instruments, or to perfect,
protect or preserve any Liens created pursuant to any of the
-56-
62
Security Instruments, or to make any recordings, to file any notices or obtain
any consents, all as may be reasonably necessary or appropriate in connection
therewith.
Section 8.06 Performance of Obligations. The Borrower will pay the
Notes according to the reading, tenor and effect thereof; and the Borrower will
and will cause each Subsidiary to do and perform every act and discharge all of
the obligations to be performed and discharged by them under the Security
Instruments and this Agreement, at the time or times and in the manner
specified.
Section 8.07 Reserved.
Section 8.08 Reserved.
Section 8.09 Additional Collateral; Releases of Collateral.
(a) Lien on Gas Compression Equipment. All gas compression equipment
of the Borrower or its Subsidiary which is to become Eligible Equipment used in
the determination of the Equipment Borrowing Base shall be subject to a
first-priority Lien (subject only to Excepted Liens) in favor of the
Administrative Agent, which Lien will be created and perfected by and in
accordance with the provisions of security agreements and financing statements,
or other Security Instruments, all in form and substance satisfactory to the
Administrative Agent in its sole discretion and in sufficient executed (and
acknowledged where necessary or appropriate) counterparts for recording
purposes. In all such cases, Borrower shall supply the Administrative Agent with
a description of such equipment for purposes of amending and supplementing the
description of equipment in the Security Instruments together with the name of
the jurisdiction for filing perfection notices and the owner thereof. Borrower
and Administrative Agent shall forthwith execute such UCC-1 Forms as may be
needed. The Administrative Agent shall inform the Borrower as soon as reasonably
practicable of all recording data for such filings.
(b) Releases. So long as no Event of Default exists, the Borrower will
be entitled to releases of Eligible Equipment; provided, however, the aggregate
outstanding principal amount of the Equipment Loans shall be reduced by an
amount equal to the fair market value of such Eligible Equipment at the time the
applicable Lien was created. In such cases, Borrower shall deliver appropriate,
fully-competed release forms to the Administrative Agent and the Administrative
Agent shall execute and return same to Borrower or its counsel as soon as
reasonably practicable and in any event within five (5) Business Days.
Section 8.10 ERISA Information and Compliance. The Borrower will
promptly furnish and will cause the Subsidiaries and any ERISA Affiliate to
promptly furnish to the Administrative Agent with sufficient copies to the
Lenders (i) promptly after the filing thereof with the United States Secretary
of Labor, the Internal Revenue Service or the PBGC, copies of each annual and
other report with respect to each Plan or any trust created thereunder, (ii)
immediately upon becoming aware of the occurrence of any ERISA Event or of any
"prohibited transaction," as described in section 406 of ERISA or in section
4975 of the Code, in connection
-57-
63
with any Plan or any trust created thereunder, a written notice signed by a
Responsible Officer specifying the nature thereof, what action the Borrower, the
Subsidiary or the ERISA Affiliate is taking or proposes to take with respect
thereto, and, when known, any action taken or proposed by the Internal Revenue
Service, the Department of Labor or the PBGC with respect thereto, and (iii)
immediately upon receipt thereof, copies of any notice of the PBGC's intention
to terminate or to have a trustee appointed to administer any Plan. With respect
to each Plan (other than a Multiemployer Plan), the Borrower will, and will
cause each Subsidiary and ERISA Affiliate to, (i) satisfy in full and in a
timely manner, without incurring any late payment or underpayment charge or
penalty and without giving rise to any lien, all of the contribution and funding
requirements of section 412 of the Code (determined without regard to
subsections (d), (e), (f) and (k) thereof) and of section 302 of ERISA
(determined without regard to sections 303, 304 and 306 of ERISA), and (ii) pay,
or cause to be paid, to the PBGC in a timely manner, without incurring any late
payment or underpayment charge or penalty, all premiums required pursuant to
sections 4006 and 4007 of ERISA.
ARTICLE IX
NEGATIVE COVENANTS
The Borrower covenants and agrees that, so long as any of the Commitments
are in effect and until payment in full of Loans hereunder, all interest thereon
and all other amounts payable by the Borrower hereunder, without the prior
written consent of the Majority Lenders:
Section 9.01 Debt. Neither Holdings, the Borrower nor any Subsidiary
will incur, create, assume or permit to exist any Debt, except:
(a) the Notes or other Indebtedness or any guaranty of or suretyship
arrangement for the Notes or other Indebtedness;
(b) Debt (including unfunded commitments) of the Borrower or Holdings
existing on the Closing Date which is reflected in the Financial Statements or
is disclosed in Schedule 9.01, and any renewals, extensions, refinancings and
modifications (but not increases) thereof;
(c) accounts payable (for the deferred purchase price of Property or
services) from time to time incurred in the ordinary course of business which,
if greater than 90 days past the invoice or billing date, are being contested in
good faith by appropriate proceedings if reserves adequate under GAAP shall have
been established therefor;
(d) Debt of the Borrower under Hedging Agreements which are for bona
fide business purposes and are not speculative;
(e) Operating Equipment Lease Obligations;
-58-
64
(f) other Debt of the Borrower and its Domestic Subsidiaries incurred,
not to exceed $35,000,000 in the aggregate;
(g) Debt evidenced by Capital Lease Obligations and Purchase Money
Indebtedness; provided that in no event shall the aggregate principal amount of
Capital Lease Obligations and Purchase Money Indebtedness permitted by this
clause (g) exceed $30,000,000 at any time outstanding;
(h) Debt with respect to surety bonds, appeal bonds or customs bonds
required in the ordinary course of business or in connection with the
enforcement of rights or claims of the Borrower or any of its Subsidiaries or in
connection with judgments that do not result in a Default or an Event of
Default, provided that the aggregate outstanding amount of all cash surety
bonds, appeal bonds and custom bonds permitted by this clause (h) shall not at
any time exceed $5,000,000; and
(i) Debt of any Foreign Subsidiary of the Borrower or Holdings the
proceeds of which Debt are used for such Foreign Subsidiary's and/or its Foreign
Subsidiaries' working capital and general corporate purposes ("Foreign
Subsidiary Indebtedness").
(j) Debt for borrowed money assumed by the Borrower or one of its
Subsidiaries, or of a Subsidiary of the Borrower acquired, pursuant to an
acquisition or merger permitted pursuant to the terms of this Agreement,
provided that such Debt shall not exceed $65,000,000 in the aggregate at any
time and such Debt was not incurred in connection with, or in anticipation or
contemplation of such permitted acquisition or merger; and provided further that
the aggregate amount of Debt permitted pursuant to this clause (j) that has a
scheduled maturity date that is earlier than the scheduled Revolving Credit
Termination Date shall not exceed $30,000,000.
Section 9.02 Liens. Neither the Borrower nor any Subsidiary will
create, incur, assume or permit to exist any Lien on any of its Properties (now
owned or hereafter acquired), except:
(a) Liens securing the payment of any Indebtedness;
(b) Excepted Liens;
(c) Liens securing Capital Lease Obligations and Purchase Money
Indebtedness allowed under Section 9.01(g), but only on the Property under lease
or purchased;
(d) Liens on assets created in connection with (i) the HY-SL Facility,
(ii) the ABS Facility, (iii) any Operating Equipment Lease Facility, including,
without limitation, Liens on assets of any Subsidiary of the Borrower created
for the purpose and as condition to such Operating Equipment Lease Facility and
(iv) securing Operating Equipment Lease Obligations with respect to Operating
Equipment Leases and guaranties thereof, provided that such Liens do
-59-
65
not extend to or cover any Property or assets of the Borrower or any of its
Subsidiaries other than the Property subject to or pledged to such Operating
Equipment Leases, any Property or rights (including rights under subleases)
relating to such leased property and the equity interests of the lessee in any
such Operating Equipment Lease, provided, however, that at the time of entering
into (and immediately after giving effect to) any such lease, no Event of
Default shall have occurred or be continuing under this Agreement;
(e) Liens disclosed on Schedule 9.02;
(f) Liens arising out of Hedging Agreements with Lenders or Lender
Affiliates;
(g) Liens relating to Debt permitted under Section 9.01(f), provided
that the aggregate amount of Debt secured by such Liens shall not exceed
$20,000,000;
(h) Liens on assets of Foreign Subsidiaries under Foreign Credit
Facilities; and
(i) Liens securing acquired Debt permitted under Section 9.01(j);
provided, however, such Liens do not extend to or cover any property other than
the property or assets that secured such Debt prior to the time it was acquired
or assumed.
Section 9.03 Investments, Loans and Advances. Neither the Borrower nor
any Subsidiary will make or permit to remain outstanding any loans or advances
to or Investments in any Person, except that, so long as no Event of Default has
occurred and is continuing, the foregoing restriction shall not apply to:
(a) Investments, loans or advances reflected in the Financial
Statements or which are disclosed to the Lenders in Schedule 9.03;
(b) accounts receivable arising in the ordinary course of business;
(c) direct obligations of the United States or any agency thereof, or
obligations guaranteed by the United States or any agency thereof, in each case
maturing within one year from the date of creation thereof;
(d) commercial paper maturing within one year from the date of
creation thereof rated in the highest grade by S&P or Moody's;
(e) deposits maturing within one year from the date of creation
thereof with, including certificates of deposit issued by, any Lender or any
office located in the United States of any other bank or trust company which is
organized under the laws of the United States or any
-60-
66
state thereof, has capital, surplus and undivided profits aggregating at least
$100,000,000.00 (as of the date of such Lender's or bank or trust company's most
recent financial reports) and has a short term deposit rating of no lower than
A2 or P2, as such rating is set forth from time to time, by Standard & Poor's
Corporation or Xxxxx'x Investors Service, Inc., respectively;
(f) deposits in money market funds investing exclusively in
Investments described in Section 9.03(c), 9.03(d) or 9.03(e);
(g) other Investments, loans or advances not to exceed $100,000,000 in
any one fiscal year or $250,000,000 in the aggregate at any time outstanding;
and
(h) payroll advances and employee loans up to $5,000,000;
Section 9.04 Dividends, Distributions and Redemptions. The Borrower
will not declare or pay any dividend, purchase, redeem or otherwise acquire for
value any of its stock now or hereafter outstanding, return any capital to its
stockholders or make any distribution of its assets to its stockholders; except
that so long as there shall exist no Default or Event of Default (both before
and after giving effect to the payment thereof) (i) the Borrower may pay cash
dividends to Holdings so long as the proceeds thereof are immediately used by
Holdings to purchase shares of common stock or options to purchase shares of
common stock of Holdings held by former employees of the Borrower following the
termination of their employment by the Borrower or any of its Subsidiaries
provided that the aggregate amount of cash dividends paid pursuant to this
Section 9.04(i) shall not during any fiscal year of the Borrower exceed
$7,500,000; or (ii) the Borrower may make other distributions provided that the
aggregate amount of such distributions shall not exceed $5,000,000 during any
fiscal year.
Section 9.05 Reserved.
Section 9.06 Nature of Business. Neither the Borrower nor any
Subsidiary will allow any material change to be made in the character of its
business.
Section 9.07 Reserved.
Section 9.08 Mergers, Etc. Neither the Borrower nor any Subsidiary
will merge into or with or consolidate with any other Person, or sell, lease or
otherwise dispose of (whether in one transaction or in a series of transactions)
all or substantially all of its Property or assets to any other Person except
that (a) any Subsidiary of Borrower may be merged into or consolidated with or
sell, lease or otherwise dispose of all or substantially all of its Property or
assets to (i) Borrower, so long as Borrower is the surviving business entity, or
(ii) another Subsidiary of Borrower, and (b) the Borrower may merger into or
consolidate with any Person provided, in each case (i) immediately thereafter
and giving effect thereto, no event shall occur and be continuing which
constitutes a Default or Event of Default, and (ii) the Borrower is the
surviving business entity.
-61-
67
Section 9.09 Proceeds of Notes; Letters of Credit. The Borrower will
not permit the proceeds of the Notes or Letters of Credit to be used for any
purpose other than those permitted by Section 7.07. Neither the Borrower nor any
Person acting on behalf of the Borrower has taken or will take any action which
might cause any of the Loan Documents to violate Regulation T, U or X or any
other regulation of the Board of Governors of the Federal Reserve System or to
violate Section 7 of the Securities Exchange Act of 1934 or any rule or
regulation thereunder, in each case as now in effect or as the same may
hereinafter be in effect.
Section 9.10 ERISA Compliance. The Borrower will not at any time:
(a) Engage in, or permit any Subsidiary or ERISA Affiliate to engage
in, any transaction in connection with which the Borrower, any Subsidiary or any
ERISA Affiliate could be subjected to either a civil penalty assessed pursuant
to section 502(c), (i) or (l) of ERISA or a tax imposed by Chapter 43 of
Subtitle D of the Code;
(b) Terminate, or permit any Subsidiary or ERISA Affiliate to
terminate, any Plan in a manner, or take any other action with respect to any
Plan, which could result in any liability to the Borrower, any Subsidiary or any
ERISA Affiliate to the PBGC;
(c) Fail to make, or permit any Subsidiary or ERISA Affiliate to fail
to make, full payment when due of all amounts which, under the provisions of any
Plan, agreement relating thereto or applicable law, the Borrower, a Subsidiary
or any ERISA Affiliate is required to pay as contributions thereto;
(d) Permit to exist, or allow any Subsidiary or ERISA Affiliate to
permit to exist, any accumulated funding deficiency within the meaning of
Section 302 of ERISA or section 412 of the Code, whether or not waived, with
respect to any Plan;
(e) Permit, or allow any Subsidiary or ERISA Affiliate to permit, the
actuarial present value of the benefit liabilities under any Plan maintained by
the Borrower, any Subsidiary or any ERISA Affiliate which is regulated under
Title IV of ERISA to exceed the current value of the assets (computed on a plan
termination basis in accordance with Title IV of ERISA) of such Plan allocable
to such benefit liabilities. The term "actuarial present value of the benefit
liabilities" shall have the meaning specified in section 4041 of ERISA;
(f) Contribute to or assume an obligation to contribute to, or permit
any Subsidiary or ERISA Affiliate to contribute to or assume an obligation to
contribute to, any Multiemployer Plan;
(g) Acquire, or permit any Subsidiary or ERISA Affiliate to acquire,
an interest in any Person that causes such Person to become an ERISA Affiliate
with respect to the Borrower, any Subsidiary or any ERISA Affiliate if such
Person sponsors, maintains or contributes to, or at any time in the six-year
period preceding such acquisition has sponsored, maintained, or contributed to,
(1) any Multiemployer Plan, or (2) any other Plan that is subject to
-62-
68
Title IV of ERISA under which the actuarial present value of the benefit
liabilities under such Plan exceeds the current value of the assets (computed on
a plan termination basis in accordance with Title IV of ERISA) of such Plan
allocable to such benefit liabilities;
(h) Incur, or permit any Subsidiary or ERISA Affiliate to incur, a
liability to or on account of a Plan under sections 515, 4062, 4063, 4064, 4201
or 4204 of ERISA;
(i) Contribute to or assume an obligation to contribute to, or permit
any Subsidiary or ERISA Affiliate to contribute to or assume an obligation to
contribute to, any employee welfare benefit plan, as defined in section 3(1) of
ERISA, including, without limitation, any such plan maintained to provide
benefits to former employees of such entities, that may not be terminated by
such entities in their sole discretion at any time without any material
liability; or
(j) Amend or permit any Subsidiary or ERISA Affiliate to amend, a Plan
resulting in an increase in current liability such that the Borrower, any
Subsidiary or any ERISA Affiliate is required to provide security to such Plan
under section 401(a)(29) of the Code.
Section 9.11 Sale or Discount of Receivables. Neither the Borrower nor
any Subsidiary will discount or sell (with or without recourse) any of its notes
receivable or accounts receivable, except in the ordinary course of business.
Section 9.12 Reserved.
Section 9.13 Certain Financial Covenants.
(a) Current Ratio. The Borrower will not permit its ratio of (i)
Consolidated Current Assets to (ii) Consolidated Current Liabilities to be less
than 1.0 to 1.0 at any time.
(b) Total Debt to EBITDAR. The Borrower will not permit its Total
Leverage Ratio as of the end of any Testing Period to be greater than the ratios
and for the periods indicated below:
Period Ratio
------ -----
Closing Date through 3/31/02 4.75 to 1.00
4/01/02 and at all times thereafter 4.50 to 1.00
(c) Interest Coverage Ratio. The Borrower will not permit its Interest
Coverage Ratio as of the end of any Testing Period to be less than the ratios
and for the periods indicated below:
-63-
69
Period Ratio
------ -----
Closing Date through 3/31/02 2.00 to 1.00
4/01/02 through 3/31/04 2.25 to 1.00
4/01/04 and at all times thereafter 2.50 to 1.00
(d) Test and Calculations of Financial Ratios. Until the fiscal
quarter beginning April 1, 2002, the financial ratios set forth in Section
9.13(a), (b) and (c) will be tested on a quarterly basis beginning March 31,
2001. Said financial ratios will be calculated utilizing annualized results for
the period from and including the Closing Date through the applicable quarterly
determination date. From and including April 1, 2002 and at all times
thereafter, said financial ratios will be determined on a rolling four-quarter
basis.
Section 9.14 Sale of Properties. The Borrower will not, and will not
permit any Subsidiary to, sell, assign, convey or otherwise transfer any
Property; except that the Borrower and any Subsidiary:
(a) may sell or otherwise dispose of any Property which, in the
reasonable judgment of such Person, is obsolete, worn out or otherwise no longer
useful in the conduct of such Person's business;
(b) may sell or lease inventory or equipment to their respective
customers in the ordinary course of business; and
(c) may dispose of Property necessary to effectuate Operating
Equipment Lease Facilities otherwise permitted hereby; provided, however, 100%
of the net proceeds received in connection with any such disposition shall be
used to prepay the outstanding principal balance (if any) of the Equipment Loans
on a dollar for dollar basis.
Section 9.15 Environmental Matters. Neither the Borrower nor any
Subsidiary will cause or permit any of its Property to be in violation of, or do
anything or permit anything to be done which will subject any such Property to
any remedial obligations under any Environmental Laws, assuming disclosure to
the applicable Governmental Authority of all relevant facts, conditions and
circumstances, if any, pertaining to such Property where such violations or
remedial obligations would have a Material Adverse Effect.
Section 9.16 Transactions with Affiliates. Except for certain
transition service agreements entered into in conjunction with the WGCS Merger
on or prior to the Closing Date and disclosed to the Administrative Agent and
the Lenders on Schedule 9.16, neither the Borrower nor any Subsidiary will enter
into any transaction, including, without limitation, any purchase, sale, lease
or exchange of Property or the rendering of any service, with any Affiliate
-64-
70
unless such transactions are otherwise permitted under this Agreement, are in
the ordinary course of its business and are upon fair and reasonable terms no
less favorable to it than it would obtain in a comparable arm's length
transaction with a Person not an Affiliate.
Section 9.17 Subsidiaries. The Borrower shall not, and shall not
permit any Subsidiary to, create any additional Subsidiaries except for (a)
Subsidiaries formed in connection with Operating Equipment Lease Facilities
permitted hereunder, (b) Subsidiaries resulting from the WCG mergers or from
future mergers or acquisitions permitted hereunder and (c) new Subsidiaries
created by the Borrower in compliance with Section 9.03. Upon the creation of
any new Subsidiaries, the stock thereof shall be pledged as collateral for this
Agreement (subject to the 65% limitation for first-tier Foreign Subsidiaries).
Section 9.18 Negative Pledge Agreements. Neither the Borrower nor any
Subsidiary will create, incur, assume or permit to exist any contract, agreement
or understanding (other than this Agreement and the Security Instruments) which
in any way prohibits or restricts the granting, conveying, creation or
imposition of any Lien on any of its Property as may be required in connection
with this Agreement or restricts any Subsidiary from paying dividends to the
Borrower, or which requires the consent of or notice to other Persons in
connection therewith, except for any such contract, agreement or understanding
entered into in connection with an Operating Equipment Lease Facility or
otherwise existing as of the Closing Date.
ARTICLE X
EVENTS OF DEFAULT; REMEDIES
Section 10.01 Events of Default. One or more of the following events
shall constitute an "Event of Default":
(a) the Borrower shall default in the payment or prepayment when due
of any principal of or interest on any Loan, or any reimbursement obligation for
a disbursement made under any Letter of Credit, or any fees or other amount
payable by it hereunder or under any Security Instrument and such default, other
than a default of a payment or prepayment of principal (which shall have no cure
period), shall continue unremedied for a period of 5 Business Days; or
(b) the Borrower or any Subsidiary shall default in the payment when
due of any principal of or interest on any of its other Debt aggregating
$20,000,000 or more, or any event specified in any note, agreement, indenture or
other document evidencing or relating to any such Debt shall occur if the effect
of such event is to cause, or (with the giving of any notice or the lapse of
time or both) to permit the holder or holders of such Debt (or a trustee or
Administrative Agent on behalf of such holder or holders) to cause, such Debt to
become due prior to its stated maturity; or
-65-
71
(c) any representation, warranty or certification made or deemed made
herein or in any Security Instrument by the Borrower or any Subsidiary, or any
certificate furnished to any Lender or the Administrative Agent pursuant to the
provisions hereof or any Security Instrument, shall prove to have been false or
misleading as of the time made or furnished in any material respect; or
(d) the Borrower shall default in the performance of any of its
obligations under Article IX or any other Article of this Agreement other than
under Article VIII; or the Borrower shall default in the performance of any of
its obligations under Article VIII or any Security Instrument (other than the
payment of amounts due which shall be governed by Section 10.01(a)) and such
default shall continue unremedied for a period of thirty (30) days after the
earlier to occur of (i) notice thereof to the Borrower by the Administrative
Agent or any Lender (through the Administrative Agent), or (ii) the Borrower
otherwise becoming aware of such default; or
(e) the Borrower shall admit in writing its inability to, or be
generally unable to, pay its debts as such debts become due; or
(f) the Borrower shall (i) apply for or consent to the appointment of,
or the taking of possession by, a receiver, custodian, trustee or liquidator of
itself or of all or a substantial part of its property, (ii) make a general
assignment for the benefit of its creditors, (iii) commence a voluntary case
under the Federal Bankruptcy Code (as now or hereafter in effect), (iv) file a
petition seeking to take advantage of any other law relating to bankruptcy,
insolvency, reorganization, winding-up, liquidation or composition or
readjustment of debts, (v) fail to controvert in a timely and appropriate
manner, or acquiesce in writing to, any petition filed against it in an
involuntary case under the Federal Bankruptcy Code, or (vi) take any corporate
action for the purpose of effecting any of the foregoing; or
(g) a proceeding or case shall be commenced, without the application
or consent of the Borrower, in any court of competent jurisdiction, seeking (i)
its liquidation, reorganization, dissolution or winding-up, or the composition
or readjustment of its debts, (ii) the appointment of a trustee, receiver,
custodian, liquidator or the like of the Borrower of all or any substantial part
of its assets, or (iii) similar relief in respect of the Borrower under any law
relating to bankruptcy, insolvency, reorganization, winding-up, or composition
or adjustment of debts, and such proceeding or case shall continue undismissed,
or an order, judgment or decree approving or ordering any of the foregoing shall
be entered and continue unstayed and in effect, for a period of 60 days; or (iv)
an order for relief against the Borrower shall be entered in an involuntary case
under the Federal Bankruptcy Code; or
(h) a judgment or judgments for the payment of money in excess of
insurance coverage which causes, or could reasonably be expected to cause a
Material Adverse Effect, shall be rendered by a court against the Borrower or
any Subsidiary and the same shall not be discharged (or provision shall not be
made for such discharge), or a stay of execution thereof shall not be procured,
within thirty (30) days from the date of entry thereof and the Borrower or
-66-
72
such Subsidiary shall not, within said period of 30 days, or such longer period
during which execution of the same shall have been stayed, appeal therefrom and
cause the execution thereof to be stayed during such appeal; or
(i) the Loan Documents after delivery thereof shall for any reason,
except to the extent permitted by the terms thereof, cease to be in full force
and effect and valid, binding and enforceable in accordance with their terms,
or, with respect to the Security Instruments, shall cease to create a valid and
perfected Lien of the priority required thereby on any of the collateral
purported to be covered thereby, except to the extent permitted by the terms of
this Agreement, or the Borrower shall so state in writing; or
(j) the Borrower and its Domestic Subsidiaries shall fail to
collectively own gas compression equipment assets (free and clear of any Liens
except Excepted Liens and Liens securing Indebtedness) having a combined fair
market value in excess of $125,000,000; or (k) an event having a Material
Adverse Effect shall occur; or
(l) Holdings takes, suffers or permits to exist any of the events or
conditions referred to in paragraphs (e), (f), (g) or (h) or if any provision of
any Loan Document to which Holdings is a party shall for any reason cease to be
valid and binding on Holdings or if Holdings shall so state in writing, or if a
default occurs and is continuing beyond any applicable notice and cure period
under any Loan Document to which Holdings is a party; or
(m) any Subsidiary takes, suffers or permits to exist any of the
events or conditions referred to in paragraphs (e), (f), (g) or (h); or
(n) a Change of Control shall occur.
Section 10.02 Remedies.
(a) In the case of an Event of Default other than one referred to in
clauses (e), (f) or (g) of Section 10.01 or in clauses (m) and (n) to the extent
they relate to clauses (e), (f) or (g), the Administrative Agent, upon request
of the Majority Lenders, shall, by notice to the Borrower, cancel the
Commitments and/or declare the principal amount then outstanding of, and the
accrued interest on, the Loans and all other amounts payable by the Borrower
hereunder and under the Notes (including without limitation the payment of cash
collateral to secure the LC Exposure as provided in Section 2.10(b)) to be
forthwith due and payable, whereupon such amounts shall be immediately due and
payable without presentment, demand, protest, notice of intent to accelerate,
notice of acceleration or other formalities of any kind, all of which are hereby
expressly waived by the Borrower.
(b) In the case of the occurrence of an Event of Default referred to
in clauses (e), (f) or (g) of Section 10.01 or in clauses (m) and (n) to the
extent they relate to clauses (e), (f) or (g), the Commitments shall be
automatically canceled and the principal amount then outstanding of, and the
accrued interest on, the Loans and all other amounts payable by the
-67-
73
Borrower hereunder and under the Notes (including without limitation the payment
of cash collateral to secure the LC Exposure as provided in Section 2.10(b))
shall become automatically immediately due and payable without presentment,
demand, protest, notice of intent to accelerate, notice of acceleration or other
formalities of any kind, all of which are hereby expressly waived by the
Borrower.
(c) All proceeds received after maturity of the Notes, whether by
acceleration or otherwise shall be applied first to reimbursement of expenses
and indemnities provided for in this Agreement and the Security Instruments;
second to accrued interest on the Notes; third to fees; fourth pro rata to
principal outstanding on the Notes and other Indebtedness; fifth to serve as
cash collateral to be held by the Administrative Agent to secure the LC
Exposure; and any excess shall be paid to the Borrower or as otherwise required
by any Governmental Requirement.
(d) Hedging Agreements between the Borrower and any of its
Subsidiaries and the Administrative Agent or a Lender and/or any Lender
Affiliate are secured by the Security Instruments pari passu with all other
Indebtedness. As such, proceeds from Security Instruments shall be shared pro
rata on all Indebtedness. All proceeds received after maturity of the Notes,
whether by acceleration or otherwise, shall be applied first to reimbursement of
expenses provided for in the Security Instruments; next, all such proceeds shall
be split pro rata between the Hedging Agreements (which form part of the
Indebtedness) on the one hand and all other Indebtedness pursuant to this
Agreement on the other hand. Thereafter, all such proceeds applicable to the
Notes and other obligations under this Agreement shall be applied, first to
reimbursement of expenses and indemnities provided for in this Agreement; second
to accrued interest on the Notes; third to fees; fourth pro rata to principal
outstanding on the Notes and other Indebtedness; fifth to serve as cash
collateral to be held by the Agent to secure the LC Exposure; and any excess
shall be paid to the Borrower or as otherwise required by any Governmental
Requirement.
(e) Acceleration and termination of all Hedging Agreements involving
the Administrative Agent or Lenders or the Lender Affiliates shall be governed
by the terms of the Hedging Agreements.
ARTICLE XI
THE ADMINISTRATIVE AGENT
Section 11.01 Appointment, Powers and Immunities. Each Lender hereby
irrevocably appoints and authorizes the Administrative Agent to act as its
Administrative Agent hereunder and under the Security Instruments with such
powers as are specifically delegated to the Administrative Agent by the terms of
this Agreement and the Security Instruments, together with such other powers as
are reasonably incidental thereto. The Administrative Agent (which term as used
in this sentence and in Section 11.05 and the first sentence of Section 11.06
shall include reference to its Affiliates and its and its Affiliates' officers,
directors, employees,
-68-
74
attorneys, accountants, experts and Administrative Agents): (i) shall have no
duties or responsibilities except those expressly set forth in the Loan
Documents, and shall not by reason of the Loan Documents be a trustee or
fiduciary for any Lender; (ii) makes no representation or warranty to any Lender
and shall not be responsible to the Lenders for any recitals, statements,
representations or warranties contained in this Agreement, or in any certificate
or other document referred to or provided for in, or received by any of them
under, this Agreement, or for the value, validity, effectiveness, genuineness,
execution, effectiveness, legality, enforceability or sufficiency of this
Agreement, any Note or any other document referred to or provided for herein or
for any failure by the Borrower or any other Person (other than the
Administrative Agent) to perform any of its obligations hereunder or thereunder
or for the existence, value, perfection or priority of any collateral security
or the financial or other condition of the Borrower, its Subsidiaries or any
other obligor or guarantor; (iii) except pursuant to Section 11.07 shall not be
required to initiate or conduct any litigation or collection proceedings
hereunder; and (iv) shall not be responsible for any action taken or omitted to
be taken by it hereunder or under any other document or instrument referred to
or provided for herein or in connection herewith including its own ordinary
negligence, except for its own gross negligence or willful misconduct. The
Administrative Agent may employ Administrative Agents, accountants, attorneys
and experts and shall not be responsible for the negligence or misconduct of any
such Administrative Agents, accountants, attorneys or experts selected by it in
good faith or any action taken or omitted to be taken in good faith by it in
accordance with the advice of such Administrative Agents, accountants, attorneys
or experts. The Administrative Agent may deem and treat the payee of any Note as
the holder thereof for all purposes hereof unless and until a written notice of
the assignment or transfer thereof permitted hereunder shall have been filed
with the Administrative Agent. The Administrative Agent is authorized to release
any collateral that is permitted to be sold or released pursuant to the terms of
the Loan Documents.
Section 11.02 Reliance by Administrative Agent. The Administrative
Agent shall be entitled to rely upon any certification, notice or other
communication (including any thereof by telephone, telex, telecopier, telegram
or cable) believed by it to be genuine and correct and to have been signed or
sent by or on behalf of the proper Person or Persons, and upon advice and
statements of legal counsel, independent accountants and other experts selected
by the Administrative Agent.
Section 11.03 Defaults. The Administrative Agent shall not be deemed
to have knowledge of the occurrence of a Default (other than the non-payment of
principal of or interest on Loans or of fees or failure to reimburse for Letter
of Credit drawings) unless the Administrative Agent has received notice from a
Lender or the Borrower specifying such Default and stating that such notice is a
"Notice of Default." In the event that the Administrative Agent receives such a
notice of the occurrence of a Default, the Administrative Agent shall give
prompt notice thereof to the Lenders. In the event of a payment Default, the
Administrative Agent shall give each Lender prompt notice of each such payment
Default.
Section 11.04 Rights as a Lender. With respect to its Commitments and
the Loans made by it and its participation in the issuance of Letters of Credit,
FUNB (and any
-69-
75
successor acting as Administrative Agent) in its capacity as a Lender hereunder
shall have the same rights and powers hereunder as any other Lender and may
exercise the same as though it were not acting as the Administrative Agent, and
the term "Lender" or "Lenders" shall, unless the context otherwise indicates,
include the Administrative Agent in its individual capacity. FUNB (and any
successor acting as Administrative Agent) and its Affiliates may (without having
to account therefor to any Lender) accept deposits from, lend money to and
generally engage in any kind of banking, trust or other business with the
Borrower (and any of its Affiliates) as if it were not acting as the
Administrative Agent, and FUNB and its Affiliates may accept fees and other
consideration from the Borrower for services in connection with this Agreement
or otherwise without having to account for the same to the Lenders.
Section 11.05 INDEMNIFICATION. THE LENDERS AGREE TO INDEMNIFY THE
ADMINISTRATIVE AGENT AND THE ISSUING BANK RATABLY IN ACCORDANCE WITH THEIR
PERCENTAGE SHARES FOR THE INDEMNITY MATTERS AS DESCRIBED IN SECTION 12.03 TO THE
EXTENT NOT INDEMNIFIED OR REIMBURSED BY THE BORROWER UNDER SECTION 12.03, BUT
WITHOUT LIMITING THE OBLIGATIONS OF THE BORROWER UNDER SAID SECTION 12.03 AND
FOR ANY AND ALL OTHER LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES,
ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS OF ANY KIND AND
NATURE WHATSOEVER WHICH MAY BE IMPOSED ON, INCURRED BY OR ASSERTED AGAINST THE
ADMINISTRATIVE AGENT OR THE ISSUING BANK IN ANY WAY RELATING TO OR ARISING OUT
OF: (I) THIS AGREEMENT, THE SECURITY INSTRUMENTS OR ANY OTHER DOCUMENTS
CONTEMPLATED BY OR REFERRED TO HEREIN OR THE TRANSACTIONS CONTEMPLATED HEREBY,
BUT EXCLUDING, UNLESS A DEFAULT HAS OCCURRED AND IS CONTINUING, NORMAL
ADMINISTRATIVE COSTS AND EXPENSES INCIDENT TO THE PERFORMANCE OF ITS AGENCY
DUTIES HEREUNDER OR (II) THE ENFORCEMENT OF ANY OF THE TERMS OF THIS AGREEMENT,
ANY SECURITY INSTRUMENT OR OF ANY SUCH OTHER DOCUMENTS; WHETHER OR NOT ANY OF
THE FOREGOING SPECIFIED IN THIS SECTION 11.05 ARISES FROM THE SOLE OR CONCURRENT
NEGLIGENCE OF THE ADMINISTRATIVE AGENT OR THE ISSUING BANK, PROVIDED THAT NO
LENDER SHALL BE LIABLE FOR ANY OF THE FOREGOING TO THE EXTENT THEY ARISE FROM
THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE ADMINISTRATIVE AGENT.
Section 11.06 Non-Reliance on Administrative Agent and other Lenders.
Each Lender acknowledges and agrees that it has, independently and without
reliance on the Administrative Agent or any other Lender, and based on such
documents and information as it has deemed appropriate, made its own credit
analysis of the Borrower and its decision to enter into this Agreement, and 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 analysis and decisions in
taking or not taking action under this Agreement. The Administrative Agent shall
not be required to keep itself informed as to the performance or observance by
the Borrower of this Agreement, the Notes, the Security Instruments or any other
document referred to or provided for herein or to inspect the properties or
books of the Borrower. Except for notices, reports and other documents and
information 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
-70-
76
Lender with any credit or other information concerning the affairs, financial
condition or business of the Borrower (or any of its Affiliates) which may come
into the possession of the Administrative Agent or any of its Affiliates. In
this regard, each Lender acknowledges that Xxxxxx & Xxxxxx L.L.P. is acting in
this transaction as special counsel to the Administrative Agent only, except to
the extent otherwise expressly stated in any legal opinion or any Loan Document.
Each Lender will consult with its own legal counsel to the extent that it deems
necessary in connection with the Loan Documents and the matters contemplated
therein.
Section 11.07 Action by Administrative Agent. Except for action or
other matters expressly required of the Administrative Agent hereunder, the
Administrative Agent shall in all cases be fully justified in failing or
refusing to act hereunder unless it shall (i) receive written instructions from
the Majority Lenders (or all of the Lenders as expressly required by Section
12.04) specifying the action to be taken, and (ii) be indemnified to its
satisfaction by the Lenders against any and all liability and expenses which may
be incurred by it by reason of taking or continuing to take any such action. The
instructions of the Majority Lenders (or all of the Lenders as expressly
required by Section 12.04) and any action taken or failure to act pursuant
thereto by the Administrative Agent shall be binding on all of the Lenders. If a
Default has occurred and is continuing, the Administrative Agent shall take such
action with respect to such Default as shall be directed by the Majority Lenders
(or all of the Lenders as required by Section 12.04) in the written instructions
(with indemnities) described in this Section 11.07, 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 as it shall deem
advisable in the best interests of the Lenders. In no event, however, shall the
Administrative Agent be required to take any action which exposes the
Administrative Agent to personal liability or which is contrary to this
Agreement and the Security Instruments or applicable law.
Section 11.08 Resignation or Removal of Administrative Agent. Subject
to the appointment and acceptance of a successor Administrative Agent as
provided below, the Administrative Agent may resign at any time by giving notice
thereof to the Lenders and the Borrower, and the Administrative Agent may be
removed at any time with or without cause by the Majority Lenders. Upon any such
resignation or removal, the Majority Lenders shall have the right to appoint a
successor Administrative Agent. If no successor Administrative Agent shall have
been so appointed by the Majority Lenders and shall have accepted such
appointment within thirty (30) days after the retiring Administrative Agent's
giving of notice of resignation or the Majority Lenders' removal of the retiring
Administrative Agent, then the retiring Administrative Agent may, on behalf of
the Lenders, appoint a successor Administrative Agent. Upon the acceptance of
such appointment hereunder by a successor Administrative Agent, such successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent, and
the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder. After any retiring Administrative Agent's resignation or
removal hereunder as Administrative Agent, the provisions of this Article XI and
Section 12.03 shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as the Administrative
Agent.
-71-
77
ARTICLE XII
MISCELLANEOUS
Section 12.01 Waiver. No failure on the part of the Administrative
Agent or any Lender to exercise and no delay in exercising, and no course of
dealing with respect to, any right, power or privilege under any of the Loan
Documents shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege under any of the Loan Documents
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law.
Section 12.02 Notices. All notices and other communications provided
for herein and in the other Loan Documents (including, without limitation, any
modifications of, or waivers or consents under, this Agreement or the other Loan
Documents) shall be given or made by telex, telecopy, courier or U.S. Mail or in
writing and telexed, telecopied, mailed or delivered to the intended recipient
at the "Address for Notices" specified below its name on the signature pages
hereof or in the Loan Documents, except that for notices and other
communications to the Administrative Agent other than payment of money, the
Borrower need only send such notices and communications to the Administrative
Agent care of the Houston address of FUNB; or, as to any party, at such other
address as shall be designated by such party in a notice to each other party.
Except as otherwise provided in this Agreement or in the other Loan Documents,
all such communications shall be deemed to have been duly given when
transmitted, if transmitted before 1:00 p.m. local time on a Business Day
(otherwise on the next succeeding Business Day) by telex or telecopier and
evidence or confirmation of receipt is obtained, or personally delivered or, in
the case of a mailed notice, three (3) Business Days after the date deposited in
the mails, postage prepaid, in each case given or addressed as aforesaid.
Section 12.03 Payment of Expenses, Indemnities, etc.
(a) The Borrower agrees:
(i) whether or not the transactions hereby contemplated are
consummated, to pay all reasonable expenses of the Administrative Agent in
the administration (both before and after the execution hereof and
including advice of counsel as to the rights and duties of the
Administrative Agent and the Lenders with respect thereto) of, and in
connection with the negotiation, syndication, investigation, preparation,
execution and delivery of, recording or filing of, preservation of rights
under, enforcement of, and refinancing, renegotiation or restructuring of,
the Loan Documents and any amendment, waiver or consent relating thereto
(including, without limitation, travel, photocopy, mailing, courier,
telephone and other similar expenses of the Administrative Agent, the cost
of environmental audits, surveys and appraisals at reasonable intervals,
the
-72-
78
reasonable fees and disbursements of counsel and other outside consultants
for the Administrative Agent and, in the case of enforcement, the
reasonable fees and disbursements of counsel for the Administrative Agent
and any of the Lenders); and promptly reimburse the Administrative Agent
for all amounts expended, advanced or incurred by the Administrative Agent
or the Lenders to satisfy any obligation of the Borrower under this
Agreement or any Security Instrument, including without limitation, all
costs and expenses of foreclosure;
(ii) TO INDEMNIFY THE ADMINISTRATIVE AGENT AND EACH LENDER AND EACH OF
THEIR AFFILIATES AND EACH OF THEIR OFFICERS, DIRECTORS, EMPLOYEES,
REPRESENTATIVES, ADMINISTRATIVE AGENTS, ATTORNEYS, ACCOUNTANTS AND EXPERTS
("INDEMNIFIED PARTIES") FROM, HOLD EACH OF THEM HARMLESS AGAINST AND
PROMPTLY UPON DEMAND PAY OR REIMBURSE EACH OF THEM FOR, THE INDEMNITY
MATTERS WHICH MAY BE INCURRED BY OR ASSERTED AGAINST OR INVOLVE ANY OF THEM
(WHETHER OR NOT ANY OF THEM IS DESIGNATED A PARTY THERETO) AS A RESULT OF,
ARISING OUT OF OR IN ANY WAY RELATED TO (I) ANY ACTUAL OR PROPOSED USE BY
THE BORROWER OF THE PROCEEDS OF ANY OF THE LOANS OR LETTERS OF CREDIT, (II)
THE EXECUTION, DELIVERY AND PERFORMANCE OF THE LOAN DOCUMENTS, (III) THE
OPERATIONS OF THE BUSINESS OF THE BORROWER AND ITS SUBSIDIARIES, (IV) THE
FAILURE OF THE BORROWER OR ANY SUBSIDIARY TO COMPLY WITH THE TERMS OF ANY
SECURITY INSTRUMENT OR THIS AGREEMENT, OR WITH ANY GOVERNMENTAL
REQUIREMENT, (V) ANY INACCURACY OF ANY REPRESENTATION OR ANY BREACH OF ANY
WARRANTY OF THE BORROWER OR HOLDINGS SET FORTH IN ANY OF THE LOAN
DOCUMENTS, (VI) THE ISSUANCE, EXECUTION AND DELIVERY OR TRANSFER OF OR
PAYMENT OR FAILURE TO PAY UNDER ANY LETTER OF CREDIT, (VII) THE PAYMENT OF
A DRAWING UNDER ANY LETTER OF CREDIT NOTWITHSTANDING THE NON-COMPLIANCE,
NON-DELIVERY OR OTHER IMPROPER PRESENTATION OF THE MANUALLY EXECUTED
DRAFT(S) AND CERTIFICATION(S), (VIII) ANY ASSERTION THAT THE LENDERS WERE
NOT ENTITLED TO RECEIVE THE PROCEEDS RECEIVED PURSUANT TO THE SECURITY
INSTRUMENTS OR (IX) ANY OTHER ASPECT OF THE LOAN DOCUMENTS, INCLUDING,
WITHOUT LIMITATION, THE REASONABLE FEES AND DISBURSEMENTS OF COUNSEL AND
ALL OTHER EXPENSES INCURRED IN CONNECTION WITH INVESTIGATING, DEFENDING OR
PREPARING TO DEFEND ANY SUCH ACTION, SUIT, PROCEEDING (INCLUDING ANY
INVESTIGATIONS, LITIGATION OR INQUIRIES) OR CLAIM AND INCLUDING ALL
INDEMNITY MATTERS ARISING BY REASON OF THE ORDINARY NEGLIGENCE OF ANY
INDEMNIFIED PARTY, BUT EXCLUDING ALL INDEMNITY MATTERS ARISING SOLELY BY
REASON OF CLAIMS BETWEEN THE LENDERS OR ANY LENDER AND THE ADMINISTRATIVE
AGENT OR A LENDER'S SHAREHOLDERS AGAINST THE ADMINISTRATIVE AGENT OR LENDER
OR BY REASON OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT ON THE PART OF
THE INDEMNIFIED PARTY; AND
(iii) TO INDEMNIFY AND HOLD HARMLESS FROM TIME TO TIME THE INDEMNIFIED
PARTIES FROM AND AGAINST ANY AND ALL LOSSES, CLAIMS, COST
-73-
79
RECOVERY ACTIONS, ADMINISTRATIVE ORDERS OR PROCEEDINGS, DAMAGES AND
LIABILITIES TO WHICH ANY SUCH PERSON MAY BECOME SUBJECT (I) UNDER ANY
ENVIRONMENTAL LAW APPLICABLE TO THE BORROWER OR ANY SUBSIDIARY OR ANY OF
THEIR PROPERTIES, INCLUDING WITHOUT LIMITATION, THE TREATMENT OR DISPOSAL
OF HAZARDOUS SUBSTANCES ON ANY OF THEIR PROPERTIES, (II) AS A RESULT OF THE
BREACH OR NON-COMPLIANCE BY THE BORROWER OR ANY SUBSIDIARY WITH ANY
ENVIRONMENTAL LAW APPLICABLE TO THE BORROWER OR ANY SUBSIDIARY, (III) DUE
TO PAST OWNERSHIP BY THE BORROWER OR ANY SUBSIDIARY OF ANY OF THEIR
PROPERTIES OR PAST ACTIVITY ON ANY OF THEIR PROPERTIES WHICH, THOUGH LAWFUL
AND FULLY PERMISSIBLE AT THE TIME, COULD RESULT IN PRESENT LIABILITY, (IV)
THE PRESENCE, USE, RELEASE, STORAGE, TREATMENT OR DISPOSAL OF HAZARDOUS
SUBSTANCES ON OR AT ANY OF THE PROPERTIES OWNED OR OPERATED BY THE BORROWER
OR ANY SUBSIDIARY, OR (V) ANY OTHER ENVIRONMENTAL, HEALTH OR SAFETY
CONDITION IN CONNECTION WITH THE LOAN DOCUMENTS; PROVIDED, HOWEVER, NO
INDEMNITY SHALL BE AFFORDED UNDER THIS SECTION 12.03(A)(III) IN RESPECT OF
ANY PROPERTY FOR ANY OCCURRENCE ARISING FROM THE ACTS OR OMISSIONS OF THE
ADMINISTRATIVE AGENT OR ANY LENDER DURING THE PERIOD AFTER WHICH SUCH
PERSON, ITS SUCCESSORS OR ASSIGNS SHALL HAVE OBTAINED POSSESSION OF SUCH
PROPERTY (WHETHER BY FORECLOSURE OR DEED IN LIEU OF FORECLOSURE, AS
MORTGAGEE-IN-POSSESSION OR OTHERWISE).
(b) No Indemnified Party may settle any claim to be indemnified
without the consent of the indemnitor, such consent not to be unreasonably
withheld; provided, that the indemnitor may not reasonably withhold consent to
any settlement that an Indemnified Party proposes, if the indemnitor does not
have the financial ability to pay all its obligations outstanding and asserted
against the indemnitor at that time, including the maximum potential claims
against the Indemnified Party to be indemnified pursuant to this Section 12.03.
(c) In the case of any indemnification hereunder, the Administrative
Agent or Lender, as appropriate shall give notice to the Borrower of any such
claim or demand being made against the Indemnified Party and the Borrower shall
have the non-exclusive right to join in the defense against any such claim or
demand provided that if the Borrower provides a defense, the Indemnified Party
shall bear its own cost of defense unless there is a conflict between the
Borrower and such Indemnified Party.
(d) THE FOREGOING INDEMNITIES SHALL EXTEND TO THE INDEMNIFIED PARTIES
NOTWITHSTANDING THE SOLE OR CONCURRENT NEGLIGENCE OF EVERY KIND OR CHARACTER
WHATSOEVER, WHETHER ACTIVE OR PASSIVE, WHETHER AN AFFIRMATIVE ACT OR AN
OMISSION, INCLUDING WITHOUT LIMITATION, ALL TYPES OF NEGLIGENT CONDUCT
IDENTIFIED IN THE RESTATEMENT (SECOND) OF TORTS OF ONE OR MORE OF THE
INDEMNIFIED PARTIES OR BY REASON OF STRICT LIABILITY IMPOSED WITHOUT FAULT ON
ANY ONE OR MORE OF THE INDEMNIFIED PARTIES. TO THE EXTENT THAT AN INDEMNIFIED
PARTY IS FOUND TO HAVE COMMITTED AN ACT OF GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT, THIS CONTRACTUAL OBLIGATION OF INDEMNIFICATION SHALL CONTINUE BUT
SHALL ONLY EXTEND
-74-
80
TO THE PORTION OF THE CLAIM THAT IS DEEMED TO HAVE OCCURRED BY REASON OF EVENTS
OTHER THAN THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE INDEMNIFIED PARTY.
(e) The Borrower's obligations under this Section 12.03 shall survive
any termination of this Agreement and the payment of the Notes and shall
continue thereafter in full force and effect.
(f) The Borrower shall pay any amounts due under this Section 12.03
within thirty (30) days of the receipt by the Borrower of notice of the amount
due.
Section 12.04 Amendments, Etc. Any provision of this Agreement or any
Security Instrument may be amended, modified or waived with the Borrower's and
the Majority Lenders' prior written consent; provided that (i) no amendment,
modification or waiver which extends the final maturity of the Loans, increases
the Aggregate Maximum Revolving Credit Amounts, forgives the principal amount of
any Indebtedness outstanding under this Agreement, releases any guarantor of the
Indebtedness or releases all or substantially all of the collateral, reduces the
interest rate applicable to the Loans or the fees payable to the Lenders
generally, extends any Letter of Credit beyond its stated termination, affects
Section 2.03(a), this Section 12.04 or Section 12.06(a) or modifies the
definition of "Majority Lenders" shall be effective without consent of all
Lenders; (ii) no amendment, modification or waiver which increases the Maximum
Revolving Credit Amount of any Lender shall be effective without the consent of
such Lender; and (iii) no amendment, modification or waiver which modifies the
rights, duties or obligations of the Administrative Agent shall be effective
without the consent of the Administrative Agent.
Section 12.05 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
Section 12.06 Assignments and Participations.
(a) The Borrower may not assign its rights or obligations hereunder or
under the Notes or any Letters of Credit without the prior consent of all of the
Lenders and the Administrative Agent.
(b) Any Lender may, upon the written consent of the Administrative
Agent and the Borrower, which consent shall not be unreasonably withheld, assign
to one or more assignees all or a portion of its rights and obligations under
this Agreement pursuant to an Assignment Agreement substantially in the form of
Exhibit E (an "Assignment"); provided, however, that (i) any such assignment
shall be in the amount of at least $5,000,000 or such lesser amount to which the
Borrower has consented; (ii) the assignee or assignor shall pay to the
Administrative Agent a processing and recordation fee of $3,500 for each
assignment; and (iii) Borrower's consent shall not be required if an event of
Default has occurred and is continuing. Any such assignment will become
effective upon the execution and delivery to the
-75-
81
Administrative Agent of the Assignment and the consent of the Administrative
Agent, which consent shall not be unreasonably withheld. Promptly after receipt
of an executed Assignment, the Administrative Agent shall send to the Borrower a
copy of such executed Assignment. Upon receipt of such executed Assignment, the
Borrower, will, at its own expense, execute and deliver new Notes to the
assignor and/or assignee, as appropriate, in accordance with their respective
interests as they appear. Upon the effectiveness of any assignment pursuant to
this Section 12.06(b), the assignee will become a "Lender," if not already a
"Lender," for all purposes of this Agreement and the Security Instruments. The
assignor shall be relieved of its obligations hereunder to the extent of such
assignment (and if the assigning Lender no longer holds any rights or
obligations under this Agreement, such assigning Lender shall cease to be a
"Lender" hereunder except that its rights under Sections 4.06, 5.01, 5.05 and
12.03 shall not be affected). The Administrative Agent will prepare on the last
Business Day of each month during which an assignment has become effective
pursuant to this Section 12.06(b), a new Annex I giving effect to all such
assignments effected during such month, and will promptly provide the same to
the Borrower and each of the Lenders.
(c) Each Lender may transfer, grant or assign participations in all or
any part of such Lender's interests hereunder pursuant to this Section 12.06(c)
to any Person, provided that: (i) such Lender shall remain a "Lender" for all
purposes of this Agreement and the transferee of such participation shall not
constitute a "Lender" hereunder; and (ii) no participant under any such
participation shall have rights to approve any amendment to or waiver of any of
the Loan Documents except to the extent such amendment or waiver would (x)
forgive any principal owing on any Indebtedness or extend the final maturity of
the Loans, (y) reduce the interest rate (other than as a result of waiving the
applicability of any post-default increases in interest rates) or fees
applicable to any of the Commitments or Loans or Letters of Credit in which such
participant is participating, or postpone the payment of any thereof, or (z)
release any guarantor of the Indebtedness or release all or substantially all of
the collateral (except as provided in the Loan Documents) supporting any of the
Commitments or Loans or Letters of Credit in which such participant is
participating. In the case of any such participation, the participant shall not
have any rights under this Agreement or any of the Security Instruments (the
participant's rights against the granting Lender in respect of such
participation to be those set forth in the agreement with such Lender creating
such participation); provided, however, participants consent shall be necessary
with respect to any amendments which (i) extends the final maturity of the
Loans, (ii) increases the Aggregate Maximum Revolving Credit Amounts, (iii)
reduces the interest rate applicable to the Loans or the fees payable to the
Lenders generally, (iv) modifies the definition of "Majority Lenders", (v)
extends any Letter of Credit beyond its stated termination or (vi) releases all
or substantially all of the Collateral and all amounts payable by the Borrower
hereunder shall be determined as if such Lender had not sold such participation,
provided that such participant shall be entitled to receive additional amounts
under Article V on the same basis as if it were a Lender and be indemnified
under Section 12.03 as if it were a Lender. In addition, each agreement creating
any participation must include an agreement by the participant to be bound by
the provisions of Section 12.15.
(d) The Lenders may furnish any information concerning the Borrower in
the possession of the Lenders from time to time to assignees and participants
(including prospective
-76-
82
assignees and participants); provided that, such Persons agree to be bound by
the provisions of Section 12.15.
(e) Notwithstanding anything in this Section 12.06 to the contrary,
any Lender may assign and pledge its Note to any Federal Reserve Bank as
collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any operating circular issued by such Federal Reserve
System and/or such Federal Reserve Bank. No such assignment and/or pledge shall
release the assigning and/or pledging Lender from its obligations hereunder.
(f) Notwithstanding any other provisions of this Section 12.06, no
transfer or assignment of the interests or obligations of any Lender or any
grant of participations therein shall be permitted if such transfer, assignment
or grant would require the Borrower to file a registration statement with the
SEC or to qualify the Loans under the "Blue Sky" laws of any state.
Section 12.07 Invalidity. In the event that any one or more of the
provisions contained in any of the Loan Documents or the Letters of Credit,
shall, for any reason, be held invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other
provision of the Notes, this Agreement or any Security Instrument.
Section 12.08 Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument and any of the parties hereto may execute this Agreement by
signing any such counterpart.
Section 12.09 References. The words "herein," "hereof," "hereunder"
and other words of similar import when used in this Agreement refer to this
Agreement as a whole, and not to any particular article, section or subsection.
Any reference herein to a Section shall be deemed to refer to the applicable
Section of this Agreement unless otherwise stated herein. Any reference herein
to an exhibit or schedule shall be deemed to refer to the applicable exhibit or
schedule attached hereto unless otherwise stated herein.
Section 12.10 Survival. The obligations of the parties under Section
4.06, Article V, and Sections 11.05 and 12.03 shall survive the repayment of the
Loans and the termination of the Commitments. To the extent that any payments on
the Indebtedness or proceeds of any collateral are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid to
a trustee, debtor in possession, receiver or other Person under any bankruptcy
law, common law or equitable cause, then to such extent, the Indebtedness so
satisfied shall be revived and continue as if such payment or proceeds had not
been received and the Administrative Agent's and the Lenders' Liens, security
interests, rights, powers and remedies under this Agreement and each Security
Instrument shall continue in full force and effect. In such event, each Security
Instrument shall be automatically reinstated and the Borrower shall take such
action as may be reasonably requested by the Administrative Agent and the
Lenders to effect such reinstatement.
-77-
83
Section 12.11 Captions. Captions and section headings appearing herein
are included solely for convenience of reference and are not intended to affect
the interpretation of any provision of this Agreement.
Section 12.12 NO ORAL AGREEMENTS. THE LOAN DOCUMENTS EMBODY THE ENTIRE
AGREEMENT AND UNDERSTANDING BETWEEN THE PARTIES AND SUPERSEDE ALL OTHER
AGREEMENTS AND UNDERSTANDINGS BETWEEN SUCH PARTIES RELATING TO THE SUBJECT
MATTER HEREOF AND THEREOF. THE LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
Section 12.13 GOVERNING LAW; SUBMISSION TO JURISDICTION.
(a) THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS EXCEPT TO THE EXTENT THAT
UNITED STATES FEDERAL LAW PERMITS ANY LENDER TO CHARGE INTEREST AT THE RATE
ALLOWED BY THE LAWS OF THE STATE WHERE SUCH LENDER IS LOCATED. CH. 346 OF THE
TEXAS FINANCE CODE (WHICH REGULATES CERTAIN REVOLVING CREDIT LOAN ACCOUNTS AND
REVOLVING TRI-PARTY ACCOUNTS) SHALL NOT APPLY TO THIS AGREEMENT OR THE NOTES.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THE LOAN DOCUMENTS
SHALL BE BROUGHT IN THE COURTS OF THE STATE OF TEXAS OR OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF TEXAS, AND, BY EXECUTION AND DELIVERY OF
THIS AGREEMENT, THE BORROWER HEREBY ACCEPTS FOR ITSELF AND (TO THE EXTENT
PERMITTED BY LAW) IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
JURISDICTION OF THE AFORESAID COURTS. THE BORROWER HEREBY IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE
JURISDICTIONS. THIS SUBMISSION TO JURISDICTION IS NON-EXCLUSIVE AND DOES NOT
PRECLUDE THE ADMINISTRATIVE AGENT OR ANY LENDER FROM OBTAINING JURISDICTION OVER
THE BORROWER IN ANY COURT OTHERWISE HAVING JURISDICTION.
(c) THE BORROWER HEREBY IRREVOCABLY DESIGNATES CT CORPORATION SYSTEM,
INC., LOCATED AT 0000 XXXX XXXXXX, XXXXX 0000, XXXXXXX, XXXXX 00000, AS THE
DESIGNEE, APPOINTEE AND ADMINISTRATIVE AGENT OF THE BORROWER TO RECEIVE, FOR AND
ON BEHALF OF THE BORROWER, SERVICE OF PROCESS IN SUCH RESPECTIVE JURISDICTIONS
IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THE LOAN DOCUMENTS. IT IS
UNDERSTOOD THAT A COPY OF SUCH PROCESS SERVED ON SUCH ADMINISTRATIVE AGENT WILL
BE PROMPTLY FORWARDED BY OVERNIGHT COURIER TO THE BORROWER AT ITS ADDRESS SET
FORTH UNDER ITS SIGNATURE BELOW, BUT THE FAILURE OF
-78-
84
THE BORROWER TO RECEIVE SUCH COPY SHALL NOT AFFECT IN ANY WAY THE SERVICE OF
SUCH PROCESS. THE BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY
THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID,
TO THE BORROWER AT ITS SAID ADDRESS, SUCH SERVICE TO BECOME EFFECTIVE THIRTY
(30) DAYS AFTER SUCH MAILING.
(d) NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT
OR ANY LENDER OR ANY HOLDER OF A NOTE TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
THE BORROWER IN ANY OTHER JURISDICTION.
(e) THE BORROWER AND EACH LENDER HEREBY (I) IRREVOCABLY AND
UNCONDITIONALLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, TRIAL BY JURY IN
ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY SECURITY
INSTRUMENT AND FOR ANY COUNTERCLAIM THEREIN; (II) IRREVOCABLY WAIVE, TO THE
MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER
IN ANY SUCH LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL
DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; (III) CERTIFY
THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OF ADMINISTRATIVE AGENT OR COUNSEL
FOR ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT
SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVERS, AND (IV) ACKNOWLEDGE THAT IT HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT, THE SECURITY INSTRUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND
THEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED
IN THIS SECTION 12.13.
Section 12.14 Interest. It is the intention of the parties hereto that
each Lender shall conform strictly to usury laws applicable to it. Accordingly,
if the transactions contemplated hereby would be usurious as to any Lender under
laws applicable to it (including the laws of the United States of America and
the State of Texas or any other jurisdiction whose laws may be mandatorily
applicable to such Lender notwithstanding the other provisions of this
Agreement), then, in that event, notwithstanding anything to the contrary in any
of the Loan Documents or any agreement entered into in connection with or as
security for the Notes, it is agreed as follows: (i) the aggregate of all
consideration which constitutes interest under law applicable to any Lender that
is contracted for, taken, reserved, charged or received by such Lender under any
of the Loan Documents or agreements or otherwise in connection with the Notes
shall under no circumstances exceed the maximum amount allowed by such
applicable law, and any excess shall be canceled automatically and if
theretofore paid shall be credited by such Lender on the principal amount of the
Indebtedness (or, to the extent that the principal amount of the Indebtedness
shall have been or would thereby be paid in full, refunded by such Lender to the
Borrower); and (ii) in the event that the maturity of the Notes is accelerated
by reason of an election of the holder thereof resulting from any Event of
Default under this Agreement or otherwise, or in the event of any required or
permitted prepayment, then such
-79-
85
consideration that constitutes interest under law applicable to any Lender may
never include more than the maximum amount allowed by such applicable law, and
excess interest, if any, provided for in this Agreement or otherwise shall be
canceled automatically by such Lender as of the date of such acceleration or
prepayment and, if theretofore paid, shall be credited by such Lender on the
principal amount of the Indebtedness (or, to the extent that the principal
amount of the Indebtedness shall have been or would thereby be paid in full,
refunded by such Lender to the Borrower). All sums paid or agreed to be paid to
any Lender for the use, forbearance or detention of sums due hereunder shall, to
the extent permitted by law applicable to such Lender, be amortized, prorated,
allocated and spread throughout the full term of the Loans evidenced by the
Notes until payment in full so that the rate or amount of interest on account of
any Loans hereunder does not exceed the maximum amount allowed by such
applicable law. If at any time and from time to time (i) the amount of interest
payable to any Lender on any date shall be computed at the Highest Lawful Rate
applicable to such Lender pursuant to this Section 12.14 and (ii) in respect of
any subsequent interest computation period the amount of interest otherwise
payable to such Lender would be less than the amount of interest payable to such
Lender computed at the Highest Lawful Rate applicable to such Lender, then the
amount of interest payable to such Lender in respect of such subsequent interest
computation period shall continue to be computed at the Highest Lawful Rate
applicable to such Lender until the total amount of interest payable to such
Lender shall equal the total amount of interest which would have been payable to
such Lender if the total amount of interest had been computed without giving
effect to this Section 12.14. To the extent that Chapter 303 of the Texas
Finance Code is relevant for the purpose of determining the Highest Lawful Rate,
such Lender elects to determine the applicable rate ceiling under such Chapter
by the indicated weekly rate ceiling from time to time in effect.
Section 12.15 Confidentiality. For the purposes of this Section 12.15,
"Confidential Information" means information about the Borrower furnished by the
Borrower or its Affiliates (collectively, the "Disclosing Parties") to the
Administrative Agent or any of the Lenders, including, but not limited to, any
actual or pending agreement, business plans, ecological data and accounting
records, financial statements, or other financial data of any kind, any title
documents, reports or other information relating to matters of title, any
projects or plans, whether actual or prospective, and any other documents or
items embodying any such Confidential Information; provided that such term does
not include information that (a) was publicly known or otherwise known prior to
the time of such disclosure, (b) subsequently becomes publicly known through no
act or omission by the Administrative Agent or the Lenders or any Person acting
on behalf thereof, (c) otherwise becomes known to the Administrative Agent or
Lenders other than through disclosure by the Disclosing Parties or (d)
constitutes financial statements delivered to the Administrative Agent and the
Lenders under Section 8.01(a) that are otherwise publicly available. The
Administrative Agent and the Lenders will maintain the confidentiality of such
Confidential Information delivered to such Person, provided that each such
Person (a "Restricted Person") may deliver or disclose Confidential Information
to such Restricted Person's directors, officers, employees, agents, attorneys
and affiliates, who agree to hold confidential the Confidential Information
substantially in accordance with the terms of this Section 12.15, (iii) such
Restricted Person's financial advisors and other professional advisors who agree
to hold confidential the Confidential Information substantially
-80-
86
in accordance with the terms of this Section 12.15, (iv) any other Lender, (v)
any assignee to which such Restricted Person sells or offers to sell its Note or
any part thereof or any participation therein (if such Person has agreed in
writing prior to its receipt of such Confidential Information to be bound by the
provisions of this Section 12.15), (vi) any Person from which such Restricted
Person offers to purchase any security of the Borrower (if such Person has
agreed in writing prior to its receipt of such Confidential Information to be
bound by the provisions of this Section 12.15), (vii) any Governmental Authority
having jurisdiction over such Restricted Person, (viii) the National Association
of Insurance Commissioners or any similar organization, or any nationally
recognized rating agency that requires access to information about such
Restricted Person's investment portfolio, or (ix) any other Person to which such
delivery or disclosure may be necessary or appropriate (w) to effect compliance
with any Governmental Requirement applicable to such Restricted Person, (x) in
response to any subpoena or other legal process, (y) in connection with any
litigation to which such Restricted Person is a party or (z) if an Event of
Default has occurred and is continuing, to the extent such Restricted Person may
reasonably determine such delivery and disclosure to be necessary or appropriate
in the enforcement or for the protection of its rights and remedies under the
Notes and this Agreement. Each Lender, by its acceptance of a Note, will be
deemed to have agreed to be bound by and to be entitled to the benefits of this
Section 12.15 as though it were a party to this Agreement. On reasonable request
by the Borrower in connection with the delivery to any Lender of information
required to be delivered to such Lender under this Agreement or requested by
such Lender (other than a Lender that is a party to this Agreement or its
nominee), such Lender will enter into an agreement with the Borrower embodying
the provisions of this Section 12.15. The Borrower waives (on its own behalf and
on behalf of its Subsidiaries) any and all other rights it (or its Subsidiaries)
may have to confidentiality as against the Administrative Agent and the Lenders
arising by or under any contract, agreement, statute or law except as expressly
stated in this Section 12.15.
Section 12.16 Effectiveness. This Agreement shall be effective on the
Closing Date (the "Effective Date").
Section 12.17 EXCULPATION PROVISIONS. EACH OF THE PARTIES HERETO
SPECIFICALLY AGREES THAT IT HAS A DUTY TO READ THIS AGREEMENT AND THE SECURITY
INSTRUMENTS AND AGREES THAT IT IS CHARGED WITH NOTICE AND KNOWLEDGE OF THE TERMS
OF THIS AGREEMENT AND THE SECURITY INSTRUMENTS; THAT IT HAS IN FACT READ THIS
AGREEMENT AND IS FULLY INFORMED AND HAS FULL NOTICE AND KNOWLEDGE OF THE TERMS,
CONDITIONS AND EFFECTS OF THIS AGREEMENT; THAT IT HAS BEEN REPRESENTED BY
INDEPENDENT LEGAL COUNSEL OF ITS CHOICE THROUGHOUT THE NEGOTIATIONS PRECEDING
ITS EXECUTION OF THIS AGREEMENT AND THE SECURITY INSTRUMENTS; AND HAS RECEIVED
THE ADVICE OF ITS ATTORNEY IN ENTERING INTO THIS AGREEMENT AND THE SECURITY
INSTRUMENTS; AND THAT IT RECOGNIZES THAT CERTAIN OF THE TERMS OF THIS AGREEMENT
AND THE SECURITY INSTRUMENTS RESULT IN ONE PARTY ASSUMING THE LIABILITY INHERENT
IN SOME ASPECTS OF THE TRANSACTION AND RELIEVING THE OTHER PARTY OF ITS
RESPONSIBILITY FOR SUCH LIABILITY. EACH PARTY HERETO AGREES AND COVENANTS THAT
IT WILL NOT CONTEST THE VALIDITY OR ENFORCEABILITY OF ANY EXCULPATORY PROVISION
OF THIS AGREEMENT AND THE SECURITY INSTRUMENTS ON THE BASIS THAT THE PARTY HAD
NO NOTICE OR KNOWLEDGE OF SUCH PROVISION OR THAT THE PROVISION IS NOT
"CONSPICUOUS."
-81-
87
Section 12.18 Hedging Agreements. Notwithstanding anything to the
contrary contained herein, the terms and provisions of this Agreement shall not
apply to any Hedging Agreements, except to the extent necessary for all Hedging
Agreements with Lenders and/or their Affiliates to be secured by the Security
Instruments on a pari passu basis with other Indebtedness and for the proceeds
from the Security Instruments to be applied as set forth in Section 10.02(c)
hereof.
-82-
88
The parties hereto have caused this Agreement to be duly executed as of the
day and year first above written.
BORROWER: UNIVERSAL COMPRESSION, INC.
By: /s/ XXXXXXX X. XXXXXXXXXX
---------------------------------
Name: Xxxxxxx X. XxxxXxxxxx
Title: Senior Vice President
Address for Notices:
0000 Xxxxxxxxxx Xxxx
Xxxxxxx, Xxxxx 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: President
Copy to: General Counsel
Copy to:
Xxxxx X. Xxxxx
Gardere Xxxxx Xxxxxx LLP
0000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
89
LENDER AND Administrative Agent: FIRST UNION NATIONAL BANK,
Individually and as Administrative Agent
By: /s/ XXXXX XXXXXXXXX
--------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Vice President
Lending Office for Base Rate Loans and
LIBOR Loans:
000 Xxxxx Xxxxxxx Xxxxxx
00xx Xxxxx XX 0680
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Telecopier No.: (000) 000-0000
Address for Notices:
000 Xxxxx Xxxxxxx Xxxxxx
00xx Xxxxx XX 0680
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Syndication Agency Services
Telecopier No.: (000) 000-0000
With copy to:
First Union Securities, Inc.
0000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxxxxxx
Telecopier No.: (000) 000-0000
90
LENDERS: BANK ONE, NA
(Main Office Chicago),
Individually and as Syndication Agent
By: /s/ J. XXXXXXX XXXXX, XX.
----------------------------------
Name: J. Xxxxxxx Xxxxx, Xx.
Title: First Vice President
Lending Office for Base Rate Loans:
1 Bank One Plaza
0634, IFNP, 10
Xxxxxxx, XX 00000
Lending Office for LIBOR Loans:
1 Bank Xxx Xxxxx
XX 0 0000
Xxxxxxx, XX 00000
Address for Notices:
000 Xx. Xxxxxxx Xxx.
00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxx
Telecopier No.: (000) 000-0000
With copy to:
1 Bank One Plaza
0634, IFNP, 10
Xxxxxxx, XX 00000
Attention: Xxxxxx De Los Xxxxx
Telecopier No.: (000) 000-0000
91
LENDERS: NATIONAL WESTMINSTER BANK PLC
NATIONAL WESTMINSTER BANK PLC,
NEW YORK BRANCH
By: /s/ XXXXX X. XXXXXX
---------------------------------
Name: Xxxxx X. Xxxxxx
Title: Managing Director
NATIONAL WESTMINSTER BANK PLC,
NASSAU BRANCH
By: /s/ XXXXX X. XXXXXX
---------------------------------
Name: Xxxxx X. Xxxxxx
Title: Managing Director
Lending Office for Base Rate Loans
and LIBOR Loans:
00 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Address for Notices:
00 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxx
Telecopier No.: (000) 000-0000
With copy to:
000 Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxxx
Telecopier No.: (000) 000-0000
92
LENDERS: THE BANK OF NOVA SCOTIA
By: /s/ M.D. XXXXX
---------------------------------
Name: M.D. Xxxxx
Title: Agent
Lending Office for Base Rate Loans
and LIBOR Loans:
The Bank of Nova Scotia,
Atlanta Agency
000 Xxxxxxxxx Xxxxxx X.X.
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Telecopier No.: (000) 000-0000
Address for Notices:
The Bank of Nova Scotia,
Atlanta Agency
000 Xxxxxxxxx Xxxxxx X.X.
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxxxxx
Telecopier No.: (000) 000-0000
With copy to:
The Bank of Nova Scotia
Houston Representative Xxxxxx
0000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxx-Xxxx Xxxxx
Telecopier No. (000) 000-0000
93
LENDERS: BANKERS TRUST COMPANY
By: /s/ XXXXXX X. XXXXXXXXXX
---------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Director
Lending Office for Base Rate Loans
and LIBOR Loans:
000 Xxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Address for Notices:
000 Xxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: X. XXXXXXXXX
--------------------------
Telecopier No.: (000) 000-0000
With copy to:
000 Xxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: XXXXXX X. XXXXXXXXXX
--------------------------
Telecopier No.: (000) 000-0000
94
ANNEX I
MAXIMUM REVOLVING CREDIT AMOUNTS
AND PERCENTAGE SHARE
PERCENTAGE
SENIOR LENDER MAXIMUM COMMITMENT AMOUNT SHARE
------------- ------------------------- ----------
First Union National Bank $ 45,000,000 41%
Bank One, NA (Chicago) $ 20,000,000 18%
National Westminster Bank PLC $ 20,000,000 18%
The Bank of Nova Scotia $ 15,000,000 14%
Bankers Trust Company $ 10,000,000 9%
TOTAL $110,000,000.00 100%
Annex I-1
95
EXHIBIT A
FORM OF NOTE
$___________________ February ___, 2001
FOR VALUE RECEIVED, UNIVERSAL COMPRESSION, INC., a Texas corporation (the
"Borrower") hereby promises to pay to the order of
______________________________ (the " Lender"), at the principal office of FIRST
UNION NATIONAL BANK, as Administrative Agent (the "Agent"), at 000 Xxxxx Xxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000, the principal sum of
____________________________________________ Dollars ($____________) (or such
lesser amount as shall equal the aggregate unpaid principal amount of the Loans
made by the Lender to the Borrower under the Credit Agreement, as hereinafter
defined), in lawful money of the United States of America and in immediately
available funds, on the dates and in the principal amounts provided in the
Credit Agreement, and to pay interest on the unpaid principal amount of each
such Loan, at such office, in like money and funds, for the period commencing on
the date of such Loan until such Loan shall be paid in full, at the rates per
annum and on the dates provided in the Credit Agreement.
The date, amount, Type, interest rate, Interest Period and maturity of each
Loan made by the Lender to the Borrower, and each payment made on account of the
principal thereof, shall be recorded by the Lender on its books and, prior to
any transfer of this Note, endorsed by the Lender on the scheduleS attached
hereto or any continuation thereof.
This Note is one of the Notes referred to in the Senior Secured Revolving
Credit Agreement dated as of February 9, 2001, among the Borrower, the Lenders
which are or become parties thereto (including the Lender), and the Agent (as
the same may be amended or supplemented from time to time, the "Credit
Agreement"), and evidences Loans made by the Lender thereunder. Capitalized
terms used in this Note have the respective meanings assigned to them in the
Credit Agreement.
This Note is issued pursuant to the Credit Agreement and is entitled to the
benefits provided for in the Credit Agreement and the Security Instruments. The
Credit Agreement provides for the acceleration of the maturity of this Note upon
the occurrence of certain events, for prepayments of Loans upon the terms and
conditions specified therein and other provisions relevant to this Note.
Notwithstanding the provisions of this Note, in no event shall the interest
payable hereon, whether before or after maturity, exceed the maximum amount of
interest which, under applicable Law, may be contracted for, charged, or
received on this Note, and this Note is expressly made subject to the provisions
of the Credit Agreement which more fully set out the limitations on how interest
accrues hereon. In the event applicable law provides for an interest
Exhibit A-2
96
ceiling under Chapter 303 of the Texas Finance Code (the "Texas Finance Code")
as amended, for that day, the ceiling shall be the "weekly ceiling" as defined
in the Texas Finance Code and shall be used in this Note for calculating the
Highest Lawful Rate and for all other purposes. The term "applicable law" as
used in this Note shall mean the laws of the State of Texas or the laws of the
United States, whichever laws allow the greater interest, as such laws now exist
or may be changed or amended or come into effect in the future.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF TEXAS.
UNIVERSAL COMPRESSION, INC.
By:
Name:
Title:
Exhibit A-3
