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EXHIBIT 4.16
PARTICIPATION AGREEMENT
Dated as of December 8, 1998
Entered Into By and Among
XXXXXXXXXXX ENTERRA COMPRESSION COMPANY, L.P.,
as Lessee,
ABN AMRO BANK N.V.,
not individually, except as expressly
set forth herein, but as Administrative Agent,
Arranger and Syndication Agent,
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
as Documentation Agent,
and
The Lessors Listed on
Schedule I Hereto
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TABLE OF CONTENTS
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ARTICLE I Definitions................................................................................ 1.
ARTICLE II Purchase and Lease of Equipment............................................................ 2.
Section 2.1 Fundings; Payment of Purchase Price and Capitalized
Transaction Costs.................................................................. 2.
Section 2.2 Application of Funds; Sale and Lease of Equipment...................................... 3.
Section 2.3 Time and Place of Delivery Dates....................................................... 3.
Section 2.4 Arrangement Fee......................................................................... 3.
Section 2.5 Commitment Fee......................................................................... 4.
ARTICLE III Conditions to Delivery Date Closings....................................................... 4.
Section 3.1 Delivery Date Notice................................................................... 4.
Section 3.2 Appraisals............................................................................. 4.
Section 3.3 Participation Agreement................................................................ 5.
Section 3.4 Lease.................................................................................. 5.
Section 3.5 Lease Supplement....................................................................... 5.
Section 3.6 Financial Reports...................................................................... 5.
Section 3.7 Financing Statements................................................................... 5.
Section 3.8 Guaranty................................................................................ 5.
Section 3.9 Transaction Costs; Fees................................................................ 5.
Section 3.10 Opinions of Counsel................................................................... 6.
Section 3.11 Corporate Status and Proceedings...................................................... 6.
Section 3.12 Consents and Approvals................................................................ 6.
Section 3.13 Payment of Impositions................................................................ 6.
Section 3.14 Search Reports........................................................................ 6.
Section 3.15 Insurance............................................................................. 6.
Section 3.16 Proceedings Satisfactory, Etc......................................................... 7.
Section 3.17 Absence of Material Adverse Effect.................................................... 7.
Section 3.18 Representations and Warranties True; Absence of Defaults.............................. 7.
Section 3.19 Legal Requirements..................................................................... 7.
Section 3.20 Bills of Sale.......................................................................... 7.
Section 3.21 Title.................................................................................. 7.
ARTICLE IV General Provisions......................................................................... 7.
Section 4.1 Nature of Transaction.................................................................. 7.
Section 4.2 Replacements........................................................................... 8.
ARTICLE V Representations and Warranties............................................................. 8.
Section 5.1 Representations and Warranties of Lessee............................................... 8.
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Section 5.2 Representations and Warranties of Lessors............................................. 13.
Section 5.3 Representations and Warranties of Administrative Agent................................ 14.
ARTICLE VI Covenants................................................................................. 15.
Section 6.1 Affirmative Covenants of Lessee........................................................ 15.
Section 6.2 Negative Covenants of Lessee.......................................................... 18.
Section 6.3 Covenants of Agents and Lessors....................................................... 20.
ARTICLE VII General Indemnities............................................................................ 20.
Section 7.1 Indemnity............................................................................. 20.
Section 7.2 Excessive Use Indemnity............................................................... 21.
Section 7.3 Increased Capital Costs............................................................... 21.
Section 7.4 LIBO Rate Unlawful.................................................................... 22.
Section 7.5 Funding Losses........................................................................ 22.
Section 7.6 Actions of Affected Lessors........................................................... 23.
ARTICLE VIII General Tax Indemnity......................................................................... 23.
Section 8.1 General Tax Indemnity................................................................. 23.
Section 8.2 Contest............................................................................... 24.
Section 8.3 Gross Up.............................................................................. 25.
Section 8.4 Tax Returns........................................................................... 25.
Section 8.5 Withholding Tax Exemption............................................................. 26.
ARTICLE IX Administrative Agent............................................................................ 27.
Section 9.1 Appointment of Administrative Agent; Powers and
Authorization to Take Certain Actions............................................. 27.
Section 9.2 Reliance.............................................................................. 28.
Section 9.3 Action Upon Instructions Generally.................................................... 28.
Section 9.4 Indemnification....................................................................... 29.
Section 9.5 Independent Credit Investigation...................................................... 29.
Section 9.6 Refusal to Act........................................................................ 30.
Section 9.7 Resignation of Administrative Agent; Appointment of Successor......................... 30.
Section 9.8 Separate Administrative Agent......................................................... 30.
Section 9.9 Termination of Agency................................................................. 31.
Section 9.10 Compensation of Agency............................................................... 31.
Section 9.11 Limitations.......................................................................... 31.
ARTICLE X Amendments to Operative Agreements........................................................ 32.
Section 10.1 Amendments to Operative Agreements With Consent of Lessors........................... 32.
Section 10.2 Amendments to Operative Agreements Affecting
Administrative Agent............................................................ 33.
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ARTICLE XI Miscellaneous............................................................................. 33.
Section 11.1 Survival of Covenants................................................................ 33.
Section 11.2 APPLICABLE LAW....................................................................... 34.
Section 11.3 Distribution and Application of Rents and Other Payments............................. 34.
Section 11.4 Notices.............................................................................. 34.
Section 11.5 Transaction Costs; Other Expenses.................................................... 35.
Section 11.6 Counterparts......................................................................... 36.
Section 11.7 Severability......................................................................... 36.
Section 11.8 Successors and Assigns; Transfers.................................................... 36.
SECTION 11.9 JURY TRIAL........................................................................... 38.
Section 11.10 Captions; Table of Contents......................................................... 38.
Section 11.11 FINAL AGREEMENT..................................................................... 38.
Section 11.12 No Third. Party Beneficiaries...................................................... 38.
Section 11.13 Further Assurances.................................................................. 39.
Section 11.14 Reproduction of Documents........................................................... 39.
Section 11.15 Consideration for Consents to Waivers and Amendments................................ 39.
Section 11.16 Submission to Jurisdiction.......................................................... 39.
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LIST OF SCHEDULES AND EXHIBITS
Schedule I - Commitments of Lessors; Payment Instructions
Schedule II - Description of Equipment
Schedule X - Definitions
Exhibit A - Form of Lease
Schedule I - Description of Equipment
Exhibit A - Form of Lease Supplement
Exhibit B - Form of Delivery Date Notice
Schedule I - Equipment List and Purchase Price
Exhibit C - Form of Opinion of Lessee's Special Counsel
Exhibit D - Form of Officer's Certificate
Exhibit E - Form of Compliance Certificate
Exhibit F - Form of Investor's Letter
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PARTICIPATION AGREEMENT
THIS PARTICIPATION AGREEMENT, dated as of December 8, 1998 (this
"Participation Agreement"), is entered into by and among XXXXXXXXXXX ENTERRA
COMPRESSION COMPANY, L.P., a Delaware limited partnership, as Lessee ("Lessee"),
ABN AMRO BANK N.V., a bank organized under the laws of the Netherlands, not in
its individual capacity, except as otherwise expressly provided herein, but
solely as Administrative Agent for the Lessors (the "Administrative Agent"), ABN
AMRO BANK N.V., as Syndication Agent and Arranger (in such capacities, the
"Syndication Agent" and the "Arranger", respectively), CHASE BANK OF TEXAS,
NATIONAL ASSOCIATION, as Documentation Agent (in such capacity, the
"Documentation Agent"), and the several Lessors listed on Schedule I hereto
(together with their respective permitted successors, assigns and transferees,
each a "Lessor" and collectively the "Lessors").
WHEREAS, subject to the terms and conditions hereof, on each Delivery
Date Lessee will transfer to Administrative Agent, for the benefit of Lessors,
and Administrative Agent, on behalf of Lessors, will purchase and receive from
Lessee, certain gas compressor Equipment described on Schedule II hereto;
WHEREAS, upon the transfer of the Equipment on each Delivery Date,
Administrative Agent, on behalf of Lessors, will lease such Equipment to Lessee
and Lessee will lease such Equipment from Administrative Agent, for the benefit
of Lessors, pursuant to the terms of the Lease substantially in the form of
Exhibit A hereto; and
WHEREAS, on each Delivery Date Lessee shall execute and deliver to
Administrative Agent a Lease Supplement in the form of Exhibit A to the Lease
covering the Equipment purchased on such Delivery Date;
NOW, THEREFORE, in consideration of the mutual terms and conditions
herein contained, the parties hereto agree as follows:
ARTICLE I
Definitions
Capitalized terms used but not defined herein (including those used in
the foregoing recitals) shall have the meanings specified in Schedule X hereto
unless the context otherwise requires, which Schedule X shall for all purposes
constitute a part of this Participation Agreement.
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ARTICLE II
Purchase and Lease of Equipment
Section 2.1 Fundings; Payment of Purchase Price and Capitalized
Transaction Costs.
(a) Subject to the terms and conditions hereinafter set forth, and in
reliance on the representations and warranties contained herein or made pursuant
hereto, upon receipt of each Delivery Date Notice during the Interim Period,
each Lessor shall transfer to Administrative Agent on the specified Delivery
Date an amount equal to the product of the aggregate Purchase Price of the
Equipment plus all Capitalized Transaction Costs specified in such Delivery Date
Notice, multiplied by such Lessor's Commitment Percentage (each such transfer
being referred to herein as a "Funding"). In no event shall any Lessor be
required to provide funds under this Participation Agreement in an aggregate
amount exceeding such Lessor's Commitment. In no event shall Lessors be required
to provide funds under the Participation Agreement in an aggregate amount
exceeding the Appraised Value of the Equipment plus all Capitalized Transaction
Costs.
(b) Remittances pursuant to this Section 2.1 shall be made in
immediately available federal funds by wire transfer to the account of
Administrative Agent set forth below (or as otherwise specified by
Administrative Agent to each Lessor from time to time not less than three
Business Days prior to the date of the requested Funding) and must be received
by Administrative Agent by 2:00 p.m., New York time on the applicable Delivery
Date:
Bank: ABN AMRO Bank N.V.
New York Branch
New York, NY
ABA Routing #: 000000000
Account #: ____________________
Payee: ABN AMRO Bank N.V.
Reference: Xxxxxxxxxxx Enterra Compression Company, L.P.
(c) Unless Administrative Agent shall have been notified in writing by
any Lessor prior to any Delivery Date that such Lessor will not make available
the amount which would constitute its Commitment Percentage of the total
Purchase Price of the Equipment plus all Capitalized Transaction Costs specified
in a Delivery Date Notice, Administrative Agent may assume that such Lessor is
making such amount available to Administrative Agent, and Administrative Agent
may, in reliance upon such assumption, take such actions as are provided for in
Section 2.2. If any Lessor (a "Defaulting Lessor") fails to make such amount
available to Administrative Agent by the required time on the Delivery Date
therefor, such Defaulting Lessor shall pay to Administrative Agent, on demand,
such amount with interest thereon at a rate equal to the daily average Federal
Funds Effective Rate for the period until such Defaulting Lessor makes such
amount immediately available to Administrative Agent. A certificate of
Administrative Agent submitted to any Lessor with respect to any amounts owing
under this Section 2.1 shall be conclusive in the absence of manifest error.
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If such Defaulting Lessor's share of such Funding is not made available to
Administrative Agent by such Defaulting Lessor within three (3) Business Days of
such Delivery Date, Administrative Agent shall also be entitled to recover such
amount with interest thereon at the Alternate Base Rate plus the Applicable
Margin, on demand, from Lessee, to the extent Administrative Agent has advanced
a corresponding amount of the Funding to purchase Equipment to be leased to
Lessee.
Section 2.2 Application of Funds; Sale and Lease of Equipment. On each
Delivery Date, upon (a) receipt by Administrative Agent of all amounts to be
paid by the Lessors pursuant to Section 2.1, and (b) satisfaction or waiver of
each of the conditions set forth in Article III, (i) Administrative Agent shall
purchase, for the benefit of the Lessors, the Equipment to be acquired on such
Delivery Date and pay the Capitalized Transaction Costs, as specified in the
relevant Delivery Date Notice delivered pursuant to Section 3.1, (ii) in
consideration therefor, Administrative Agent, on behalf of the Lessors, shall
pay, from the funds made available by the Lessors pursuant to Section 2.1, an
amount equal to the aggregate Purchase Price of the Equipment being so sold and
purchased plus all Capitalized Transaction Costs related thereto in immediately
available federal funds remitted by wire transfer to the account specified by
Lessee in the relevant Delivery Date Notice, and (iii) Administrative Agent, on
behalf of the Lessors, shall lease to Lessee the Equipment so purchased by
Administrative Agent and Lessee shall accept delivery of and lease from
Administrative Agent such Equipment pursuant to the Lease. Each Lessor shall
hold an undivided interest in the Equipment equal to such Lessor's Investment
Percentage.
Section 2.3 Time and Place of Delivery Dates. Each Delivery Date
Closing shall take place on the Delivery Date set forth in the relevant Delivery
Date Notice, and the Initial Delivery Date Closing shall take place at the
offices of Winston & Xxxxxx, 00 X. Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx at 10:00 a.m.
Chicago time, subject to the following:
(i) no more than twelve Fundings and twelve Delivery Dates may
occur;
(ii) the Initial Delivery Date shall occur on a Business Day
on or prior to December 31, 1998;
(iii) each Subsequent Delivery Date shall occur on the monthly
anniversary of the previous Delivery Date or, if such date is not a
Business Day, on the first Business Day after such date;
(iv) in no event shall the aggregate amount advanced by the
Lessors exceed the Total Commitment; and
(v) in no event shall the last Delivery Date be later than the
first annual anniversary of the Initial Delivery Date.
Section 2.4 Arrangement Fee. Lessee shall pay the Arrangement Fee to
Administrative Agent and Documentation Agent on the Initial Delivery Date.
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Section 2.5 Commitment Fee. On the last Business Day of each March,
June, September and December, Lessee shall pay to Administrative Agent, for the
pro rata benefit of the Lessors, a commitment fee (the "Commitment Fee") equal
to the amount accrued on the unfunded portion of the Total Commitment from the
date hereof through such payment date and remaining unpaid at the rate of
two-tenths of one percent (.20%) per annum calculated on a 360-day year basis.
ARTICLE III
Conditions to Delivery Date Closings
The obligation of each Lessor and Administrative Agent to perform its
obligations on any Delivery Date, and of each Lessor to make its Funding, shall
be subject to the fulfillment to the satisfaction of (including, with respect to
writings, such writings being in form and substance reasonably satisfactory to
the addressee or beneficiary thereof), or the waiver in writing by, each Lessor
and Administrative Agent of the conditions precedent set forth in this Article
III on or prior to such Delivery Date (except that the obligation of any party
hereto shall not be subject to the performance or compliance of such party or of
any of such party's Affiliates).
Section 3.1 Delivery Date Notice. Lessee shall have delivered to
Administrative Agent and each Lessor, not later than 1:00 p.m. Eastern time not
later than the third (3rd) Business Day prior to the proposed Delivery Date, an
irrevocable notice (a "Delivery Date Notice") substantially in the form of
Exhibit B, specifying (i) the proposed Delivery Date, (ii) a description
(including model, make, serial number and location) of each item of Equipment to
be purchased on such Delivery Date and a representation and warranty that as of
the date Lessee takes possession of each such item of Equipment and at all times
thereafter, such item of Equipment will be equipment or inventory leased or held
for lease, (iii) the amount of the Advance being requested, specifying the
respective Purchase Prices of such Equipment and all Capitalized Transaction
Costs related thereto, (iv) the initial Rent Period for any such Advance to bear
interest at the LIBO Rate; and (v) the payees of such Advance and wire transfer
instructions for the disbursement of funds. All Equipment shall be acceptable to
the Required Lessors.
Section 3.2 Appraisals. At least three Business Days prior to each
Delivery Date, Administrative Agent and each Lessor shall have received an
Appraisal to their reasonable satisfaction opining:
(a) that the aggregate Appraised Value of the Equipment delivered prior
to such Delivery Date and the Equipment to be delivered on such Delivery Date is
reasonably expected to exceed the aggregate of all outstanding Advances as of
such Delivery Date, including the Advances to be funded on such Delivery Date.
(b) that the remaining economic useful life of each item of Equipment
is not less than six and seven tenths (6 7/10) years from the Lease Commencement
Date; and
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(c) that the values set forth in clause (a) above assume an increase
for inflation of 2.1% per annum, and that such inflation assumption is
reasonable.
Section 3.3 Participation Agreement. On or prior to the Documentation
Date, each of the Participants shall have received a fully executed counterpart
of this Participation Agreement.
Section 3.4 Lease. On or prior to the Documentation Date, each
Participant shall have received a fully executed counterpart of the Lease.
Section 3.5 Lease Supplement. On each Delivery Date, Lessee shall
execute and deliver to Administrative Agent and each Lessor a Lease Supplement
in form and substance reasonably satisfactory to Lessors and substantially in
the form of Exhibit A to the Lease (each, a "Lease Supplement"); provided,
however, with respect to each Lease Supplement, only Administrative Agent shall
receive the Lease Supplement marked "Counterpart No. 1 - Administrative Agent's
Original Copy". The Lease Supplement to be executed and delivered by Lessee on
each Delivery Date shall set forth in Schedule I thereto, a description of, the
location of and the Purchase Price for the Equipment covered thereby.
Section 3.6 Financial Reports. Lessee has delivered to Administrative
Agent and Lessors copies of the financial statements of Guarantor dated December
31, 1997, March 31, 1998, June 30, 1998 and September 30, 1998 prepared in
accordance with GAAP, applied on a consistent basis throughout the periods
covered thereby and on a basis consistent with prior periods (except as
disclosed therein and except, with respect to quarterly financial statements,
for notes thereto).
Section 3.7 Financing Statements. On or prior to each Delivery Date,
Administrative Agent shall have received from Lessee duly executed financing
statements covering all of Lessee's Equipment that Lessee intends to lease on
such Delivery Date, identifying Lessee as debtor and Administrative Agent as
secured party for the benefit of the Lessors, and describing the Lease as a
secured transaction, and such financing statements shall have been filed in (a)
the jurisdiction in which Lessee has its principal office and (b) each
jurisdiction in which any such Equipment is or is to be located.
Section 3.8 Guaranty. On or prior to the Documentation Date, each of
the Participants shall have received a fully executed counterpart of the
Guaranty.
Section 3.9 Transaction Costs; Fees. On or prior to each Delivery Date,
Lessor, on behalf of Lessee, shall have paid to Administrative Agent, for the
benefit of Administrative Agent and the Lessors, or to Documentation Agent, as
the case may be, as Capitalized Transaction Costs any Transaction Costs invoiced
and not previously paid. Such payment shall be made by wire transfer of
immediately available funds to the account specified for Administrative Agent at
Schedule I or as otherwise directed by Administrative Agent or Documentation
Agent.
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Section 3.10 Opinions of Counsel. On or prior to the Initial Delivery
Date, each Lessor and Administrative Agent shall have received the opinion of
Fulbright & Xxxxxxxx, L.L.P., special counsel for Lessee and Guarantor,
substantially to the effect of the matters set forth in Exhibit C. By its
execution hereof, Lessee expressly instructs Fulbright & Xxxxxxxx, L.L.P. to
execute and deliver such opinion to Administrative Agent and the Lessors.
Section 3.11 Corporate Status and Proceedings. On or prior to the
Initial Delivery Date, Administrative Agent shall have received:
(a) certificates of existence and good standing with respect to Lessee
and Guarantor from the Secretary of State of the State of its incorporation and
as to Lessee, from the State in which it has its principal place of business and
chief executive office, dated no earlier than the 15th day prior to the Initial
Delivery Date; and
(b) with respect to Lessee and Guarantor, an Officer's Certificate
substantially in the form of Exhibit D, dated the Initial Delivery Date, with
respect to such Person's governing documents, resolutions and incumbent
officers, representations and warranties and absence of defaults.
Section 3.12 Consents and Approvals. On or prior to the Initial
Delivery Date, all necessary consents, approvals and authorizations of, and
declarations, registrations and filings with, Authorities and nongovernmental
Persons required to consummate the transactions contemplated by this Agreement
and the other Operative Agreements shall have been obtained or made by Lessee
and shall be in full force and effect.
Section 3.13 Payment of Impositions. All Impositions payable on or
prior to each Delivery Date in connection with the execution, delivery,
recording or filing of any of the Operative Agreements, in connection with the
filing of any of the financing statements, and any other documents, in
connection with the consummation of any other transactions contemplated hereby
or by any of the other Operative Agreements, shall have been paid in full by
Lessee.
Section 3.14 Search Reports. Prior to each Delivery Date,
Administrative Agent shall have received reports acceptable to Administrative
Agent and counsel to the Lessors as to Lessee by the office of the Secretaries
of State and the appropriate county filing or recording offices (if applicable)
of each jurisdiction contemplated by Section 3.7, each dated as close to the
relevant Delivery Date as practicable, in respect of a search of the applicable
UCC files and any indices of Liens maintained by such offices (including, if
applicable, indices of judgment, revenue and tax liens).
Section 3.15 Insurance. On or prior to the Initial Delivery Date,
Administrative Agent shall have received (and each Lessor shall have received a
copy of) current certificates to the effect that insurance complying with
Section 7.1 of the Lease is in full force and effect, and there shall be no past
due premiums in respect of any such insurance.
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Section 3.16 Proceedings Satisfactory, Etc. All proceedings taken in
connection with such Delivery Date and all documents relating thereto shall be
reasonably satisfactory to each Participant and its counsel, and each
Participant and its counsel shall have received copies of such documents as such
Participant or its counsel may reasonably request in connection therewith, all
in form and substance reasonably satisfactory to such Participant and its
counsel.
Section 3.17 Absence of Material Adverse Effect. Since September 30,
1998, no Material Adverse Effect shall have occurred and be continuing.
Section 3.18 Representations and Warranties True; Absence of Defaults.
Each of the representations and warranties made by or on behalf of Lessee and
Guarantor under the Operative Agreements shall be true on and as of the
Documentation Date and each Delivery Date, and no Incipient Default or Event of
Default shall have occurred and be continuing on and as of the Documentation
Date and each Delivery Date.
Section 3.19 Legal Requirements. As of the Documentation Date and each
Delivery Date, the transactions contemplated by the Operative Agreements do not
and will not violate in any respect any Requirement of Law that would reasonably
be expected to have a Material Adverse Effect and do not and will not subject
the Administrative Agent or any Lessor to any adverse regulatory prohibitions or
constraints.
Section 3.20 Bills of Sale. On or prior to each Delivery Date, there
shall have been delivered to the Administrative Agent a xxxx of sale (each, a
"Xxxx of Sale"), in form and substance reasonably acceptable to the
Administrative Agent, with respect to each item of Equipment being purchased on
such Delivery Date, conveying title to such piece of Equipment to the
Administrative Agent, for the benefit of the Lessors, subject only to the
Permitted Liens.
Section 3.21 Title. The Administrative Agent, for the benefit of the
Lessors, shall have good and valid title to the Equipment being acquired on such
Delivery Date subject only to the Permitted Liens, and the Lessee shall have
granted the security interest pursuant to the Lease with respect to such
Equipment.
ARTICLE IV
General Provisions
Section 4.1 Nature of Transaction. It is the intent of the Participants
that: (a) the transaction contemplated hereby constitutes an operating lease
from Administrative Agent and Lessors to Lessee for purposes of Lessee's
financial reporting, (b) the transaction contemplated hereby preserves ownership
in the Equipment in Lessee for purposes of Federal and state income tax,
bankruptcy and UCC purposes, (c) the Lease grants a security interest in the
Equipment and the other Collateral to Administrative Agent for the benefit of
Administrative Agent and the Lessors, and (d) the
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obligations of Lessee to pay Fixed Rent and Variable Rent shall be treated as
payments of principal and interest, respectively. Nevertheless, Lessee
acknowledges and agrees that neither Administrative Agent nor any Lessor has
made any representations or warranties concerning the tax, accounting or legal
characteristics of the Operative Agreements and that Lessee has obtained and
relied upon such tax, accounting and legal advice concerning the Operative
Agreements as it deems appropriate. Except as specifically provided for herein
or in the Lease, Administrative Agent, for the benefit of the Lessors, shall
retain an interest in the Equipment, free and clear of all Liens other than
Permitted Liens, as security for the obligations of Lessee under the Operative
Agreements. Lessee shall not have any right, title or interest in the Equipment
except as expressly set forth in this Agreement or in the Lease.
Section 4.2 Replacements. Lessors hereby agree that they shall instruct
Administrative Agent to release a Part or Equipment from the Lease and evidence
such release by the execution and delivery of a termination statement or
amendment to an existing UCC financing statement and such other documents as may
be required to release the replaced Part or Equipment from the Lease and which
are in form and substance satisfactory to the Required Lessors subject to the
satisfaction of the conditions set forth in the Lease with respect to the
release of such Part or Equipment.
ARTICLE V
Representations and Warranties
Section 5.1 Representations and Warranties of Lessee. As of the
Documentation Date and each Delivery Date, Lessee makes the representations and
warranties set forth in this Section 5.1 to Administrative Agent and each
Lessor:
(a) Title. Administrative Agent, for the benefit of the Lessors, shall
have good and valid title to each item of Equipment listed on Schedule I to the
applicable Delivery Date Notice, and each such item of Equipment and all of the
other Collateral is free from all Liens except for Permitted Liens.
(b) Perfection of Security Interests. No filing, recordation or
registration is necessary or advisable in order to perfect the security interest
of Administrative Agent, for the benefit of the Lessors, in the Equipment and
other Collateral referred to in the foregoing subsection (a) other than (i) as
of the applicable Delivery Date, in the case of Equipment located in the United
States, the filing or recording of financing statements under Article 9 of the
applicable UCC in the jurisdictions in the United States contemplated by Section
3.7, provided, that no financing statement filings are required by the foregoing
after the applicable Delivery Date except in the jurisdiction constituting the
Lessee's principal place of business or (ii) in the case of any Sublease, if
requested by the Agent after the occurrence and during the continuance of an
Event of Default, the delivery to Administrative Agent of the chattel paper
original of any Sublease, and upon the actions described
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in the foregoing clauses (i) and (ii) the security interests in the Equipment
and the other Collateral are enforceable, properly perfected, first-priority
Liens, subject only to Permitted Liens.
(c) Appraisal Data. The information provided by Lessee to the Appraiser
and forming the basis for the conclusions set forth in the Appraisal, taken as a
whole, was true and correct in all material respects and did not omit any
information necessary to make the information provided not materially misleading
as of the time provided.
(d) Limited Partnership Existence. Lessee is a limited partnership duly
formed validly existing and in good standing under the laws of the State of
Delaware, and Lessee is duly qualified or licensed and in good standing as a
foreign limited partnership authorized to do business in each state where,
because of the nature of its activities or properties, such qualification or
licensing is required, except for such jurisdictions where the failure to be so
qualified or licensed would not have a Material Adverse Effect.
(e) Limited Partnership Authority. Lessee has all requisite limited
partnership power and authority to execute, deliver, and perform its obligations
under each Operative Agreement to which it is a party.
(f) Authorization; Non-Contravention. The execution and delivery by
Lessee of the Operative Agreements to which it is or will be a party, and the
performance by Lessee of its obligations under such Operative Agreements, have
been duly authorized by all necessary corporate action (including any necessary
stockholder action) on its part, and do not and will not: (i) violate any
provision of any law, rule or regulation or of any order, writ, judgment,
decree, determination or award, which violation or violations would have,
individually or in the aggregate, a Material Adverse Effect; (ii) violate any
provision of the certificate of limited partnership or limited partnership
agreement of Lessee; (iii) result in a breach of or constitute a default under
any indenture, loan or credit agreement, or any other agreement or instrument to
which Lessee is a party or by which Lessee or its properties may be bound or
affected, which breaches or default would have, individually or in the
aggregate, a Material Adverse Effect; or (iv) result in, or require, the
creation or imposition of any Lien of any nature upon or with respect to any of
the properties now owned or hereafter acquired by Lessee (other than the
security interest contemplated by the Lease); and Lessee is not in default under
or in violation of its certificate of limited partnership or limited partnership
agreement.
(g) Binding Effect. Each of the Operative Agreements to which Lessee is
or will be a party constitutes the legal, valid and binding obligation of
Lessee, enforceable against Lessee, in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency, arrangement,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity.
(h) Absence of Litigation, etc. Other than as described in filings made
by the Guarantor with the Securities and Exchange Commission pursuant to the
Exchange Act, as of the
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Documentation Date, there is no litigation (including, without limitation,
derivative actions), arbitration or governmental proceedings pending or, to the
knowledge of Lessee, threatened against Lessee or Guarantor or any stockholder
or equity holder of Lessee in which there is a reasonable possibility of an
adverse decision which would have a Material Adverse Effect.
(i) Consents, etc. No authorization, consent, approval, license or
formal exemption from, nor any filing, declaration or registration with, any
Authority, is or will be required in connection with the execution and delivery
by Lessee or Guarantor of the Operative Agreements to which it is or will be a
party, the performance by Lessee or Guarantor of its obligations under such
Operative Agreements or the ownership, leasing, operation and maintenance of the
Equipment as contemplated by the Operative Agreements, except as described in
Section 5.1(b).
(j) Location of Offices. The principal place of business and chief
executive office (as such term is used in Article 9 of the UCC) of Lessee is
located at 0 Xxxx Xxx Xxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000.
(k) ERISA. Relying upon the accuracy of the representations in Section
5.2(a) hereof, the execution and delivery of the Operative Agreements by Lessee
and Guarantor will not involve any prohibited transaction within the meaning of
ERISA or Section 4975 of the Code.
(l) Taxes. Lessee has filed or caused to be filed all United States
Federal and all other material tax returns that are required to be filed by
Lessee, and has paid or caused to be paid all taxes shown to be due and payable
on such returns or on any assessment received by Lessee, to the extent that such
taxes have become due and payable, except to the extent that taxes due, but
unpaid, are being contested in good faith by Lessee by appropriate action or
proceeding and has established or caused to be established reserves that are
adequate for the payment thereof in accordance with GAAP.
(m) Compliance with Laws. The Equipment, the properties from which it
is operated and serviced and the current operation thereof and thereon do not
violate any laws, rules, regulations, or orders of any Authorities that are
applicable thereto, including, without limitation, any thereof relating to
matters of occupational safety and health or Environmental Laws, except for such
violations as would not have, individually or in the aggregate, a Material
Adverse Effect.
(n) Disclosure. Neither this Participation Agreement, nor any offering
materials, nor the other Operative Agreements to which Lessee or Guarantor is or
will be a party nor the other documents and certificates furnished pursuant to
this Participation Agreement to Administrative Agent, Documentation Agent or the
Lessors, in connection with the transactions contemplated by this Participation
Agreement, contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained herein and
therein, in the light of the circumstances under which they were made, not
misleading as of the time furnished.
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(o) Impositions. No sales, use, excise, transfer or other tax, fee or
imposition shall result from the manufacture, transfer, lease or delivery of any
Equipment on or before any Delivery Date, except such taxes, fees or impositions
that have been paid in full by or on behalf of Lessee on or prior to the
applicable Delivery Date. The transactions contemplated by the Operative
Agreements are not subject to the U.S. federal excise tax imposed by Section
4051(a) of the Code.
(p) Certain Equipment Matters. Lessee is in the business of selling,
leasing or holding for lease the Equipment and the Equipment constitutes
"inventory" under any applicable UCC.
(q) Environmental Matters.
(1) The Equipment being acquired on such Delivery Date does
not contain any Hazardous Substances (other than lubricating oil and natural
gas) in amounts or concentrations which (i) constitute a material violation of,
or (ii) would reasonably be expected to give rise to material liability under,
any Environmental Law.
(2) The Equipment being acquired on such Delivery Date is in
compliance in all material respects with all applicable Environmental Laws.
(3) Neither Lessee nor any of its Subsidiaries has received
any notice of violation, alleged violation, non-compliance, liability or
potential liability asserting or identifying an actual or potential material
non-compliance with Environmental Laws with respect to the Equipment being
acquired on such Delivery Date, nor does the Lessee have knowledge that any such
notice will be received or is being threatened.
(4) No judicial proceeding or governmental or administrative
action is pending or, to the best knowledge of the Lessee, threatened, under any
Environmental Law to which the Lessee or any Subsidiary is or, to Lessee's
knowledge, will be named as a party with respect to the Equipment being acquired
on such Delivery Date, nor are there any consent decrees or other decrees,
consent orders, administrative orders or other orders, or other administrative
or judicial requirements outstanding under any Environmental Law with respect to
the Equipment being acquired on such Delivery Date.
(5) There has been no release or governmental notification or
request for information regarding a release or a threat of release of Hazardous
Substances at or from the Equipment being acquired on such Delivery Date, or
arising from, or generated by, operation of the Equipment being acquired on such
Delivery Date, in violation of or in amounts or in a manner that would
reasonably be expected to give rise to any material liability under any
Environmental Laws.
(r) Holding Company. Lessee is not subject to regulation as a "holding
company," an "affiliate" of a "holding company", or a "subsidiary company" of a
"holding company," within the meaning of the Public Utility Holding Company Act
of 1935, as amended.
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(s) Investment Company Act. Lessee is not an "investment company" or a
company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(t) Intellectual Property. To Lessee's knowledge or as represented in
writing by a vendor of the Equipment which writing has been provided to
Administrative Agent, there are no patents, patent rights, trademarks, service
marks, trade names, copyrights (other than software, that is not embedded in the
Equipment, used by Lessee in connection with accounting for and maintaining the
Equipment) licenses or other intellectual property rights with respect to the
Equipment, or proprietary, patented or patentable modifications or Parts used in
connection with the Equipment, the unavailability of which would have a material
adverse effect on the current Fair Market Value of the Equipment.
(u) Subjection to Regulation. Neither Administrative Agent,
Documentation Agent nor any Lessor will, solely by reason of entering into the
Operative Agreements or the consummation and performance of the transactions
contemplated thereby (other than upon the exercise of remedies under the Lease)
(i) be required to qualify to do business in any jurisdiction, (ii) become
subject to ongoing regulation by any Authority as a company engaged in the
business of Lessee in any jurisdiction or (iii) become subject to any other
ongoing regulation of its operations by any Authority (other than any taxing
Authority).
(v) Use of Proceeds. The use of the proceeds from the transaction
contemplated by the Operative Agreements will not violate or result in any
violation of Section 7 of the Exchange Act or any regulations issued pursuant
thereto, including, without limitation, Regulations T, U and X of the Board.
(w) Absence of Defaults. No Incipient Default or Event of Default has
occurred and is continuing and, since September 30, 1998, there has occurred no
Material Adverse Effect.
(x) Absence of Casualty. No Casualty has occurred with respect to the
Equipment being delivered on such Delivery Date.
(y) Insurance. All insurance coverages required by Section 7.1 of the
Lease are in full force and effect and there are no past due premiums in respect
of any such insurance.
(z) Financial Reports. The financial statements delivered by Guarantor
to Administrative Agent pursuant to Section 3.6 were prepared in accordance with
GAAP applied on a consistent basis and fairly present the financial condition of
Guarantor and its consolidated Subsidiaries at the dates thereof and the
consolidated results of their operations for the periods covered thereby. There
are no liabilities, contingent or otherwise, known to Lessee or Guarantor, not
disclosed in such financial statements as footnotes that individually, or in the
aggregate, would have a Material Adverse Effect.
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(aa) Private Offering. Neither Lessee nor Guarantor, nor anyone acting
on behalf of either of them, has taken or will take any action which will
subject the issue and sale of any interest being acquired by Administrative
Agent or the Lessors under the Operative Agreements to the requirements of
Section 5 of the Securities Act, and, assuming the truth and accuracy of the
representations set forth in Section 5.2(b), the issuance, sale and delivery of
such interests under the circumstances contemplated by this Agreement do not
require the registration of such interests under the Securities Act or the
qualification of any of the Operative Agreements under the Trust Indenture Act
of 1939, as amended.
(bb) Brokers, etc. Neither Guarantor nor Lessee has engaged or
authorized any broker, finder, investment banker or other third party to act on
its behalf, directly or indirectly, as a broker, finder, investment banker,
administrative agent or in any other like capacity in connection with any of the
Operative Agreements or the transactions contemplated thereby. Lessee shall be
responsible for, and shall indemnify, defend and hold Administrative Agent and
each Lessor harmless from and against any and all claims, liabilities or demands
by any Person for broker's, finder's, investment banker's or administrative
agent's fees, commissions or other entitlements with respect to the Operative
Agreements and the transactions contemplated thereby (except to the extent
arising from a breach of Sections 5.2(c) or 5.3(f)).
(cc) Subsidiaries. Lessee has no Subsidiaries.
(dd) Year 2000 Matters. The Guarantor has developed a plan to ensure
that the systems of the Guarantor and its Material Subsidiaries, including the
Lessee, are compliant in all material respects with the requirements to process
transactions in the year 2000. The Guarantor and its Material Subsidiaries plan
to achieve year 2000 compliance through a combination of upgrading to new
releases of existing software and replacement of existing software with new
fully compliant systems by mid-1999. The expenses and capital expenditures of
the Guarantor and its Material Subsidiaries associated with achieving year 2000
compliance would not reasonably be expected to have a Material Adverse Effect.
The Guarantor and its Material Subsidiaries are currently gathering information
from their key suppliers, vendors and financial institutions regarding year 2000
compliance.
(ee) Solvency. Lessee is not insolvent (as defined in Section 101 (29)
of Title 11 of the United States Code) and will not be rendered so insolvent as
a result of the transactions contemplated hereby or referred to herein.
Section 5.2 Representations and Warranties of Lessors. Each Lessor
hereby represents and warrants severally but not jointly to the other
Participants as set forth in this Section 5.2.
(a) ERISA. Such Lessor is not and will not be funding any of its
Commitment or performing any of its obligations under the Operative Agreements
with the assets of an "employee benefit plan" (as defined in Section 3(3) of
ERISA) which is subject to Title I of ERISA, or a "plan" (as defined in Section
4975(e)(1) of the Code).
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(b) Investment. The interest being acquired by such Lessor under the
Operative Agreements is being acquired for its own account, without any view to
the distribution thereof or any interest therein, provided that such Lessor
shall be entitled to assign, transfer or convey its interest in accordance with
Section 11.8.
(c) Brokers, etc. Such Lessor has not engaged or authorized any broker,
finder, investment banker or other third party to act on its behalf, directly or
indirectly, as a broker, finder, investment banker, administrative agent or in
any other like capacity in connection with any of the Operative Agreements or
the transactions contemplated thereby. Such Lessor shall be responsible for, and
shall indemnify, defend and hold Administrative Agent, each other Lessor and
Lessee harmless from and against any and all claims, liabilities or demands by
any Person for broker's, finder's, investment banker's or administrative agent's
fees, commissions or other entitlements with respect to the Operative Agreements
and the transactions contemplated thereby (except to the extent arising from a
breach of Sections 5.1(cc) or 5.3(f)).
Section 5.3 Representations and Warranties of Administrative Agent. ABN
AMRO Bank N.V., in its individual capacity as Administrative Agent, hereby
represents and warrants to the other Participants as set forth in this Section
5.2.
(a) Organization and Authority. Administrative Agent is a corporation
duly organized and validly existing in good standing under the laws of the
Netherlands and has the corporate power and authority to enter into and perform
its obligations under the Operative Agreements.
(b) Authorization; Binding Effect. The Operative Agreements to which
Administrative Agent is or will be a party have been or will be, on the date
required to be delivered hereby, duly authorized, executed and delivered by
Administrative Agent, and this Participation Agreement is, and such other
Operative Agreements are, or, when so executed and delivered by Administrative
Agent will be, valid, legal and binding agreements of Administrative Agent,
enforceable against Administrative Agent in accordance with their respective
terms, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, arrangement, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and by general principles of equity.
(c) Non-Contravention. Neither the execution and delivery by
Administrative Agent of the Operative Agreements to which it is or will be a
party, either in its individual capacity, as Administrative Agent, or both, nor
compliance with the terms and provisions thereof, conflicts with, results in a
breach of, constitutes a default under (with or without the giving of notice or
lapse of time or both), or violates any of the terms, conditions or provisions
of: (i) the charter or governing documents of Administrative Agent; (ii) any
bond, debenture, note, mortgage, indenture, agreement, lease or other instrument
to which Administrative Agent, either in its individual capacity, as
Administrative Agent or both, is now a party or by which it or its property,
either in its individual capacity, as Administrative Agent or both, is bound or
affected, where such conflict, breach, default or violation would be reasonably
likely to materially and adversely affect the ability of Administrative Agent,
either in its individual capacity, as Administrative Agent or both, to perform
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its obligations under any Operative Agreement to which it is or will be a party,
either in its individual capacity, as Administrative Agent or both; or (iii) any
of the terms, conditions or provisions of any law, rule, regulation, order,
injunction or decree of any Authority applicable to it in its individual
capacity, as Administrative Agent or both, where such conflict, breach, default
or violation would be reasonably likely to materially and adversely affect the
ability of Administrative Agent, either in its individual capacity, as
Administrative Agent or both, to perform its obligations under any Operative
Agreement to which it is or will be a party.
(d) Absence of Litigation, etc. There is no litigation, arbitration or
governmental proceedings pending or, to the best knowledge of Administrative
Agent, threatened against it which would be reasonably likely to materially and
adversely affect Administrative Agent's ability to perform its obligations under
the Operative Agreements to which it is party.
(e) Consents, etc. No authorization, consent, approval, license or
formal exemption from, nor any filing, declaration or registration with, any
Authority, is or will be required in connection with the execution and delivery
by Administrative Agent of the Operative Agreements to which it is party or the
performance by Administrative Agent of its obligations under such Operative
Agreements.
(f) Brokers, etc. Administrative Agent has not engaged or authorized
any broker, finder, investment banker or other third party to act on its behalf,
directly or indirectly, as a broker, finder, investment banker, administrative
agent or in any other like capacity in connection with any of the Operative
Agreements or the transactions contemplated thereby. Administrative Agent shall
be responsible for, and shall indemnify, defend and hold each Lessor and Lessee
harmless from and against any and all claims, liabilities or demands by any
Person for broker's, finder's, investment banker's or administrative agent's
fees, commissions or other entitlements with respect to the Operative Agreements
and the transactions contemplated thereby (except to the extent arising from a
breach of Sections 5.1(cc) or 5.2(c)).
ARTICLE VI
Covenants
Section 6.1 Affirmative Covenants of Lessee. Lessee covenants and
agrees with Lessors and Administrative Agent that during the Lease Term, and, if
Lessee has not purchased the Equipment pursuant to the Lease, for 90 days
thereafter, Lessee shall comply with each of the following provisions of this
Section 6.1.
(a) Limited Partnership Existence, etc. Subject to Section 6.2(h),
Lessee shall do or cause to be done all things necessary to preserve and keep in
full force and effect its corporate existence, rights and powers and its power
and authority to perform its obligations under the Operative Agreements,
including, without limitation, any necessary qualification or licensing in any
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foreign jurisdiction, except where the failure to be so qualified would not have
a Material Adverse Effect.
(b) Compliance With Laws. Lessee shall comply with all applicable
statutes, regulations, franchises, and orders of, and all applicable
restrictions imposed by, any Authority, in respect of the conduct of its
business and the ownership of its properties (including, without limitation,
applicable statutes, rules, ordinances, regulations and orders relating to
Environmental Laws), except for such instances of non-compliance which would not
have, individually or in the aggregate, a Material Adverse Effect.
(c) Punctual Payment. Lessee shall duly and punctually pay or cause to
be paid all Rent and all fees and other amounts from time to time owing
hereunder and under the other Operative Agreements, all in accordance with the
terms of this Agreement and the other Operative Agreements.
(d) Records and Accounts. Lessee shall keep true consolidated records
and books of account in which full, true and correct entries will be made in
accordance with GAAP and adequate accounts and reserves for all taxes (including
income taxes), all depreciation, depletion, obsolescence and amortization of its
properties, all contingencies, and all other reserves will be established.
(e) Change of Name or Location. Lessee shall furnish to Administrative
Agent notice on or before the 30th day prior to any relocation of its chief
executive office or principal place of business, or change of its name.
(f) Perfection and Maintenance of Security Interest. Lessee, at its
expense, shall cause, as soon as possible, but in any event no later than the
10th day after any request, financing statements (and continuation statements
with respect thereto) and all other documents necessary or reasonably requested
by Administrative Agent in connection with the establishment and perfection of
the security interest of Administrative Agent in the Collateral, to be recorded
or filed at the locations contemplated by Section 3.7, and in such manner, and,
at its expense, shall take, or shall cause to be taken, all such other action as
may be necessary or reasonably requested by Administrative Agent or the Required
Lessors in order to establish, preserve, protect and perfect the rights, titles
and interests of Administrative Agent, on behalf of the Lessors, to the
Collateral.
(g) Financial Statements, Certificates and Information.
(i) As soon as practicable and, in any event, within 120 days
after the end of each fiscal year of Lessee, Lessee shall deliver to
Administrative Agent and each Lessor consolidated balance sheets of
Lessee and its Subsidiaries as at the end of such fiscal year, and
consolidated statements of income for the fiscal year then ended, all
in reasonable detail, prepared in accordance with GAAP consistently
applied, and certified by a senior vice president or the principal
financial or principal accounting officer of Lessee.
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(ii) As soon as practicable and, in any event, within 60 days
after the end of each of the first three fiscal quarters in each fiscal
year of Lessee, Lessee shall deliver to Administrative Agent and each
Lessor consolidated balance sheets of Lessee and its Subsidiaries as at
the end of such fiscal quarter, and consolidated statements of income
for the portion of the fiscal year then ended, all in reasonable
detail, prepared in accordance with GAAP consistently applied, and
certified by a senior vice president or the principal financial or
principal accounting officer of Lessee, but subject, however, to normal
year-end adjustments and the notes thereto.
(iii) Concurrently with the delivery of each financial
statement pursuant to paragraphs (i) and (ii) of this Section 6.1(g),
Lessee shall deliver to Administrative Agent and each Lessor a
certificate substantially in the form of Exhibit E (a Compliance
Certificate) signed on behalf of Lessee by a senior vice president.
(h) Default and Acceleration of Material Debt. Lessee agrees that if an
Incipient Default or an Event of Default shall occur, or if an event or
condition shall occur that results in the acceleration of the maturity of
Indebtedness of Lessee in amounts exceeding twenty five million dollars
($25,000,000), or in the event that such acceleration should occur with respect
to Indebtedness of any Affiliates of Lessee, Lessee shall promptly notify
Administrative Agent thereof.
(i) ERISA Events. Promptly upon Lessee's becoming aware of the
occurrence of any matter or matters referred to in the following clauses (i),
(ii) and (iii) involving liability that may reasonably be expected to exceed,
individually or in the aggregate, $25,000,000, Lessee shall notify
Administrative Agent and each of the Lessors in writing specifying the nature
thereof, what action Lessee is taking or proposes to take with respect thereto,
and, when known, any action taken by the Internal Revenue Service with respect
thereto: (i) a "Reportable Event" as such term is defined in Section 4043 of
ERISA, (ii) an "Accumulated Funding Deficiency" as such term is defined in
Section 302 of ERISA, or (iii) a "Prohibited Transaction", as such term is
defined in Section 4975 of the Code or described in Section 406 of ERISA, in
connection with any Pension Plan (or any trust created thereunder).
(j) Notice of Defaults. Promptly upon, but in no event later than ten
(10) Business Days after Lessee shall have obtained Actual Knowledge thereof,
Lessee shall notify Administrative Agent and each Lessor in writing of the
existence of an Incipient Default or Event of Default, which notice shall
describe the nature of such Incipient Default or Event of Default and the action
Lessee is taking with respect thereto.
(k) Notice of Proceedings. Promptly upon Lessee's becoming aware of any
threatened or pending claim, action, suit, investigation or court or
administrative proceeding involving Lessee or any of its Subsidiaries which
would reasonably be expected to result in a Material Adverse Effect, Lessee
shall notify Administrative Agent and each of the Lessors specifying its nature
and the action Lessee is taking with respect thereto.
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(l) Additional Information. Promptly upon receipt of a written request
from Administrative Agent or any Lessor, Lessee shall deliver to such requesting
party such other data and information as from time to time may be reasonably
requested.
(m) Reports to Lessors. Lessee shall, concurrently with any notice,
delivery or other communication required to be delivered to Administrative Agent
pursuant to any Operative Agreement, deliver a copy of such notice, delivery or
other communication to each Lessor at such Lessor's current address.
(n) Payment of Taxes. Lessee and its Subsidiaries shall promptly pay
and discharge all taxes, assessments and governmental charges or levies imposed
upon them or upon their income or profit or upon any property, real, personal or
mixed, belonging to them, provided that neither Lessee nor any Subsidiary shall
be required to pay any such tax, assessment, charge or levy if the same shall
not at the time be due and payable or can be paid thereafter without penalty or
if the validity thereof shall currently be contested in good faith by
appropriate proceedings diligently pursued and if Lessee or such Subsidiary, as
the case may be, shall have set aside on its books reserves deemed by it
adequate with respect to such tax, assessment, charge or levy. Nothing in this
Section shall be deemed to modify or restrict Lessee's obligations under Article
VIII hereof.
Section 6.2 Negative Covenants of Lessee. Lessee covenants and agrees
with Lessors and Administrative Agent that during the Lease Term, and, if Lessee
has not purchased the Equipment pursuant to the Lease, for 90 days thereafter,
Lessee shall not and shall not permit any of its Subsidiaries to:
(a) Liens. Create, incur, assume or permit to exist any Liens
on the Equipment, except for Permitted Liens.
(b) Merger, Consolidation or Sale of Assets, Etc. Lessee will
not wind up, liquidate or dissolve its affairs, or effect any merger or
consolidation, and Lessee will not, and will not permit any consolidated
Subsidiary to, sell, lease or otherwise dispose of all or substantially all of
its property or assets (other than sales of inventory in the ordinary course of
business) except that this Section 6.2(b) shall not prohibit any of the
following transactions, or any agreement to effect the same:
(i) if, at the time thereof and immediately after
giving effect thereto, no Event of Default or Default shall have
occurred and be continuing, the merger of any other Person with and
into Lessee or a Subsidiary, if, (A) in any transaction involving
Lessee, Lessee is the surviving Person; (B) in any other transaction, a
Wholly-Owned Subsidiary is the surviving entity and Lessee and its
Subsidiaries shall be in compliance, on a pro forma basis after giving
effect to such transaction, with the covenants contained in this
Section 6.2 recomputed as of the last day of the most recently ended
fiscal quarter of Lessee and its Subsidiaries as if such transaction
had occurred on the first day of each relevant period for testing such
compliance, and Lessee (with respect to any merger with a Person not a
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consolidated Subsidiary of Lessee) shall have delivered to the Agents
an officer's certificate to such effect;
(ii) transactions and transfers of assets among or
between Lessee and/or Wholly-Owned Subsidiaries or among and between
Wholly-Owned Subsidiaries, in each case, not prohibited by Section
6.2(f); and
(iii) dispositions not otherwise permitted hereunder
which are made for fair market value; provided that (i) at the time of
any disposition, no Default or Event of Default shall exist or shall
result from such disposition, (ii) the aggregate sales price from such
disposition shall be paid in cash or otherwise on payment terms
satisfactory to Lessee or such Subsidiary, and (iii) the aggregate book
value of all assets of Lessee and its Subsidiaries, taken as a whole,
shall not be reduced at any time to an amount which is less than 80% of
the aggregate book value of all assets of Lessee and its Subsidiaries,
taken as a whole, on March 31, 1998, as reflected on Lessee's pro forma
balance sheet dated March 31, 1998.
(c) ERISA. Permit any Plan maintained by it to (i) engage in
any "prohibited transaction" (as defined in Section 4975 of the Code) which
could reasonably be expected to result in material liability for excise taxes or
fiduciary liability under Section 406 of ERISA, (ii) incur any "accumulated
funding deficiency" (as defined in Section 302 of ERISA) whether or not waived,
or (iii) terminate any Plan in a manner that could result in the imposition of a
lien or encumbrance on the assets of Lessee or any of its Subsidiaries pursuant
to Section 4068 of ERISA.
(d) Public Utility Holding Company. Directly or indirectly
own, control or hold with power to vote any "voting security" of an "electric
utility company" or a "gas utility company" or of a "holding company" holding
any "voting security" of either the foregoing, as such terms are defined in the
Public Utility Holding Company Act of 1935.
(e) Transactions with Affiliates. Lessee will not, and will
not permit any consolidated Subsidiary to, directly or indirectly, conduct any
business or enter into, renew, extend or permit to exist any transaction
(including the purchase, sale, lease or exchange of any assets or the rendering
of any service) or series of related transactions with any Person who is not
either (i) Guarantor or one of Guarantor's consolidated Subsidiaries or (ii)
Weatherford\Al-Rushaid Limited or Weatherford Saudi Arabia Limited, on terms
that are less favorable to Lessee or such consolidated Subsidiary, as the case
may be, than would be available in a comparable arm's length transaction.
Notwithstanding the foregoing, the restrictions set forth in this covenant will
not apply to (i) the payment of reasonable and customary regular fees to
directors of the General Partner of the Lessee who are not employees of Lessee;
(ii) loans and advances to officers, directors and employees of Lessee and the
Subsidiaries for travel, entertainment and moving and other relocation expenses
made in direct furtherance and in the ordinary course of business of Lessee and
the Subsidiaries; (iii) any other transaction with any employee, officer or
director of Lessee or any of the Subsidiaries pursuant to employee benefit or
compensation arrangements entered into in the ordinary course of business and
approved by the General Partner of Lessee or the Board of Directors of such
Subsidiary
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permitted by this Agreement; and (iv) customary underwriting or similar
transactions with an investment banking Affiliate.
Section 6.3 Covenants of Agents and Lessors. Administrative Agent and
Documentation Agent, each in its individual capacity, and each of the Lessors,
severally covenants and agrees with each of the other parties that: (a) it will
not directly or indirectly create, incur, assume or suffer to exist any Lessor
Liens arising by, through or under it on the Collateral, other than Permitted
Lessor Liens; (b) it will, at its own cost and expense, promptly take such
action in its individual capacity as may be necessary to discharge fully such
Lessor Liens created by it on the Collateral, other than Permitted Lessor Liens;
(c) it will not, except in compliance with the Operative Agreements, sell,
transfer or otherwise dispose of all or any part of the Equipment or the other
Collateral; and (d) it will not claim any depreciation with respect to the
Equipment during the term of the Lease.
ARTICLE VII
General Indemnities
Section 7.1 Indemnity. Whether or not the transactions contemplated
hereby are consummated, to the fullest extent permitted by applicable law,
Lessee waives and releases any claims now or hereafter existing against
Indemnitees on account of, and shall indemnify, reimburse and hold the
Indemnitees harmless on an after-tax basis from, any and all claims by third
parties (including, but not limited to, claims relating to trademark or patent
infringement and claims based upon negligence, strict liability in tort,
violation of laws, including, without limitation, Environmental Laws, statutes,
rules, codes or orders or claims arising out of any loss or damage to any
property or death or injury to any Person), any losses, damages or obligations
owing to third parties, any penalties, liabilities, demands, suits, judgments or
causes of action, and all legal proceedings (either administrative or judicial),
in each case whether or not the Indemnitee is a party thereto, and any costs or
expenses in connection therewith (including costs incurred in connection with
discovery) or in connection with the enforcement of this indemnity (including
reasonable attorneys' fees and expenses, and fees and expenses of internal
counsel, incurred by the Indemnitees), including, in each case, matters based on
or arising from the negligence of Indemnitees (subject to the proviso below),
which may be imposed on, incurred by or asserted against the Indemnitees in any
way relating to or arising in any manner out of:
(a) the registration, purchase, manufacture, financing, refinancing,
acceptance, rejection, transfer of title, taking or foreclosure of a security
interest in, ownership, delivery, condition, lease, sublease, assignment,
storage, transportation, possession, use, operation, return or other disposition
of any of the Equipment, or any defect in any such Equipment, arising from the
material or any article used therein or from the design, testing or use thereof,
or from any maintenance, service, repair, modification, overhaul or testing of
any such Equipment regardless of when such defect shall be discovered, whether
or not such Equipment is in the possession of Lessee and no matter where it is
located; or
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(b) this Participation Agreement, any other Operative Agreement or any
document or certificate delivered in connection therewith, the enforcement
hereof or thereof or the consummation of the transactions contemplated hereby or
thereby;
provided that Lessee shall not be obligated to indemnify an Indemnitee for any
such claim, loss, damage, liability, obligation, penalty, demand or suit to the
extent the same results directly from:
(i) the willful misconduct or gross negligence of such
Indemnitee; (provided that the failure of the Administrative Agent to
prominently display its Texas sales tax permit in its Houston, Texas
office shall not constitute willful misconduct or gross negligence for
this purpose);
(ii) the creation or existence of a Lessor Lien attributable
to such Indemnitee;
(iii) any claim or liability to the extent it arises solely
out of events occurring after Lessee's discharge of all its obligations
under the Lease; or
(iv) any Impositions described in Section 8.1 except any
amount necessary under this Section 7.1 to hold the Indemnitee harmless
(subject to Section 8.3) from all Impositions required to be paid by
such Indemnitee with respect to the receipt or accrual of such
indemnity under the laws of any Authority in the United States;
provided, however, that nothing in the preceding proviso shall be deemed to
exclude or limit any claim that any Indemnitee may have under any Operative
Agreement or applicable laws from Lessee for breach of its representations,
warranties or covenants.
Section 7.2 Excessive Use Indemnity. In the event that at the end of
the Lease Term: (a) Lessee elects the Sale Option; and (b) after paying to
Administrative Agent any amounts due under Section 11.3 of the Lease,
Administrative Agent does not have sufficient funds to reduce the Lease Balance
to zero, then Lessee shall promptly pay over to Administrative Agent the
shortfall unless Lessee delivers a report from the Appraiser in form and
substance satisfactory to the Required Lessors which establishes that the
decline in value in each item of Equipment which was sold pursuant to the Sale
Option from that amount anticipated for such date in the Appraiser's report
delivered with respect to such Equipment on the applicable Delivery Date was not
due to extraordinary use, failure to maintain or replace, failure to use,
workmanship or method of installation or removal or any other cause or condition
within the power of Lessee to control or effect (each an "Excessive Use").
Section 7.3 Increased Capital Costs. If any change in, or the adoption,
effectiveness, interpretation, reinterpretation or phase-in of, any law or
regulation, directive, guideline, decision or request (whether or not having the
force of law) of any court, central bank regulator or other Authority ("Change
in Law") affects or would affect the amount of capital required or expected to
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be maintained by any Lessor directly or by its parent company (including,
without limitation, any reserve requirements specified under regulations issued
from time to time by the Board of Governors of the Federal Reserve System and
then applicable to assets or liabilities consisting of and including
"Eurocurrency Liabilities" as defined in Regulation D of such Board of
Governors) on account of the execution, delivery and performance hereof or of
the Lease or the transactions contemplated in the Operative Agreements, and such
Lessor determines (in its sole and absolute discretion) that the rate of return
on it or its parent's capital as a consequence of the Funding made by such
Lessor hereunder to pay its share of the Purchase Price plus Capitalized
Transaction Costs is reduced to a level below that which such Lessor or its
parent could have achieved but for the occurrence of any such circumstances,
then, in any such case, upon written notification from time to time by Lessor to
Lessee, Lessee shall, within five (5) Business Days following receipt of the
statement referred to in the next sentence, pay directly to such Lessor
additional amounts sufficient to compensate Lessor or its parent for such
reduction in rate of return (subject to Section 8.3). A statement of a Lessor as
to any such additional amount or amounts (including calculations thereof in
reasonable detail) shall, in the absence of manifest error, be presumed correct.
In determining such amount, each Lessor shall use any method of averaging or
attribution that it (in its reasonable discretion) shall deem applicable.
Lessee shall have the right, if it receives from any Lessor any notice referred
to in this Section 7.3, upon three (3) Business Days notice to Administrative
Agent (which shall notify each Lessor), to convert the Interest Rate from the
LIBO Rate to the Alternate Base Rate at the end of the then current Rent Period.
Each Lessor will notify Lessee through the Administrative Agent of any event
occurring after the date of this Agreement which would entitle such Lessor to
compensation pursuant to this section as promptly as practicable after it
obtains knowledge thereof and determines to request such compensation.
Section 7.4 LIBO Rate Unlawful. If any Lessor shall determine in good
faith (which determination shall, upon notice thereof to Lessee, be conclusive
and binding on Lessee) that a Change in Law makes it unlawful, or the central
bank or other Authority asserts that it is unlawful, for such Lessor to make,
continue or maintain any amount of such Lessor's Funding on a LIBO Rate basis,
the obligations of such Lessor to make, continue or maintain any such Funding
shall, upon such determination, forthwith be suspended until such Lessor shall
notify Lessee that the circumstances causing such suspension no longer exist,
and all Variable Rent allocable to such Lessor, commencing with the Rent Period
in which such notice is given, shall automatically be determined on an Alternate
Base Rate plus the Applicable Margin basis beginning on the next immediately
succeeding Payment Date with respect thereto or sooner, if required by such law
or assertion.
Section 7.5 Funding Losses. Lessee agrees to reimburse each Lessor for
any loss or expense incurred (including any loss or expense incurred by reason
of the liquidation or reemployment of deposits or other funds acquired by such
Lessor to make, continue or maintain any portion of its Outstanding Investment
as a LIBO Rate financing) as a result of (i) the failure of any Delivery Date
Closing to occur on the Delivery Date specified in the applicable Delivery Date
Notice, (ii) any payment of all or any portion of the Lease Balance for any
reason on a date other than a Payment Date or (iii) any transfer pursuant to
Section 7.6 on a date other than a Payment Date. Each Lessor
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shall promptly notify Lessee in writing of the amount of any claim under this
Section 7.5, the reason or reasons therefor and the additional amount required
fully to compensate such Lessor for such loss or expense. Such written notice
(which shall include calculations in reasonable detail) shall, in the absence of
manifest error, be presumed correct.
Section 7.6 Actions of Affected Lessors. Each Lessor shall use
reasonable efforts (including reasonable efforts to change the booking office
for this transaction) to avoid or minimize any amounts which might otherwise be
payable pursuant to Section 7.3; provided, however, that such efforts shall not
be deemed by such Lessor, in its sole discretion, to be disadvantageous to it.
In the event that such reasonable efforts are insufficient to avoid or minimize
such amounts that might be payable pursuant to Section 7.3, then such Lessor
(the "Affected Lessor") shall use its reasonable efforts to transfer to any
other Lessor approved by Lessee (which itself is not then an Affected Lessor)
its rights and obligations hereunder; provided, however, that such transfer
shall not be deemed by such Affected Lessor, in its sole discretion, to be
disadvantageous to it (other than the economic disadvantage of ceasing to be a
Lessor). In the event that the Affected Lessor is unable, or otherwise is
unwilling, so to transfer its rights and obligations, Lessee may designate an
alternate financial institution to purchase the Affected Lessor's rights and
obligations hereunder, at the amount of such Lessor's Outstanding Investment
plus accrued Variable Rent, indemnities, and other amounts owing to such Lessor
and, subject to the provisions of Sections 7.5 and 11.8, the Affected Lessor
shall transfer its rights and obligations to such alternate financial
institution and such alternate financial institution shall become a Lessor
hereunder.
ARTICLE VIII
General Tax Indemnity
Section 8.1 General Tax Indemnity. Lessee agrees to pay or reimburse
Indemnitees for, and to indemnify and hold Indemnitees harmless on an after tax
basis from, all Impositions arising at, or relating to, any time prior to or
during the Interim Period or the Base Period or any Renewal Term, if any, or
upon any termination of the Lease or prior to, or upon the return of, the
Equipment to Administrative Agent, and levied or imposed upon Indemnitees or the
Equipment or other Collateral directly or otherwise, by any Federal, state,
provincial or local government or taxing authority in the United States or by
any foreign country or foreign or international taxing authority upon or with
respect to: (a) the Equipment or any other Collateral; (b) the exportation,
importation, manufacture, financing, refinancing, registration, purchase,
ownership, delivery, condition, lease, sublease, assignment, storage,
transportation, possession, use, operation, maintenance, repair, return, sale
(including to Administrative Agent or any Lessee pursuant to the Operative
Agreements), transfer of title or other disposition thereof; (c) the rentals,
receipts, or earnings arising from any of the Equipment; or (d) the Lease, this
Participation Agreement or any payment made thereunder; provided that this
Section 8.1 shall not apply to: (i) Impositions which are based upon or measured
by the Indemnitee's net income, except any such Imposition imposed upon the
Indemnitee by a state or foreign government or taxing authority by reason of the
presence of Equipment or any other
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Collateral therein; (ii) Impositions characterized under local law as franchise,
net worth, or shareholder's capital (excluding, however, any value added,
license, property or similar Impositions and any such Imposition imposed upon an
Indemnitee by a State or foreign government or taxing authority by reason of the
presence of Equipment or any other Collateral therein); and (iii) Impositions
based upon the voluntary transfer, assignment or disposition by Administrative
Agent or any Lessor of any interest in any of the Equipment (other than any
deemed transfer of any interest in any of the Equipment as a result of the
syndication of the transaction contemplated hereby, a transfer of any interest
in any of the Equipment pursuant to the exercise of remedies under the Operative
Agreements, transfers of any interest in any of the Equipment pursuant to the
exercise of the Lessee Purchase Option or Sale Option, a transfer of any
interest in any of the Equipment to Lessee or otherwise pursuant to the Lease);
and (iv) Impositions resulting from the gross negligence, willful misconduct or
fraud of such Indemnitee (provided that the failure of the Administrative Agent
to prominently display its Texas sales tax permit in its Houston, Texas office
shall not constitute willful misconduct or gross negligence for this purpose).
Notwithstanding the foregoing provisions of this Section 8.1, Lessee shall pay
or reimburse, and indemnify and hold harmless, any Lessor which has complied
with Section 8.5, from any deduction or withholding of any United States Federal
income or other tax.
Section 8.2 Contest. Lessee shall pay on or before the time or times
prescribed by law any Impositions (except any Impositions excluded by Section
8.1); provided, however, that Lessee shall be under no obligation to pay any
such Imposition so long as the payment of such Imposition is not delinquent or
is being contested by a Permitted Contest. If any claim or claims is or are made
against any Indemnitee for any Imposition which is subject to indemnification as
provided in Section 8.1, such Indemnitee shall as soon as practicable notify
Lessee and if, in the reasonable opinion of tax counsel acceptable to the
Indemnitee there exists a reasonable basis to contest such Imposition and if the
provisos of the definition of "Permitted Contest" continue to be satisfied and
so long as no Event of Default exists and no income tax or unindemnified claim
is also involved, and the Lessee admits in writing its duty to indemnify for
such claim, Lessee at its expense may, to the extent permitted by applicable law
to pursue such claim in its own name, contest such imposition, and subsequently
may appeal any adverse determination, in the appropriate administrative and
legal forums. If the above described conditions are satisfied but the claim
involves income tax or an unindemnified claim or must be pursued in the name of
the Indemnitee, and the amount at issue exceeds $25,000, then upon the request
of Lessee to such Indemnitee, the Indemnitee, at Lessee's expense, shall contest
any such Imposition through applicable administrative forums. Lessee shall pay
all expenses incurred by the Indemnitee in contesting any such Imposition
including, without limitation, all reasonable attorneys' and accountants' fees,
including the allocated costs of internal counsel, upon demand by the
Indemnitee. Lessee shall have the right to consult with respect to the conduct
of any proceedings controlled by the Indemnitee and Indemnitee shall consider
such consultations in good faith; provided, however, that such consultation
shall not interfere with the Indemnitee's control of such contest. Lessee shall
in all events be kept informed, to the extent practicable, of material
developments relative to such proceedings. The Indemnitee shall have the right
to participate in the conduct of any proceedings controlled by Lessee and the
Indemnitee shall in all events be kept informed, to the extent practicable, of
material developments relative to such
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proceedings. The Indemnitees agree that a contested claim for which Lessee would
be required to make a reimbursement payment hereunder will not be settled or
compromised without Lessee's prior written consent (which consent shall neither
be unreasonably delayed nor withheld other than in good faith), unless the
provisos of the definition of "Permitted Contest" would not continue to be
satisfied, an Event of Default occurs or the Indemnitee waives its right to
indemnification with respect thereto. The failure of an Indemnitee to timely
contest a claim against it for any Imposition which is subject to
indemnification under Section 8.1 and for which it has an obligation to Lessee
to contest under this Section 8.2 in the manner required by applicable law or
regulations where Lessee has timely requested that such Indemnitee contest such
claim shall relieve Lessee of its obligations to such Indemnitee under Section
8.1 with respect to such claim only to the extent such failure precludes
contest. If applicable law requires the payment of a contested Imposition as a
condition to, or regardless of, its being contested, and Lessee chooses to
contest such Imposition or to direct the Indemnitee to contest such Imposition
in accordance with this Section, then Lessee shall provide the Indemnitee with
the funds to pay such Imposition, such provision of funds to be deemed a
non-interest bearing loan by Lessee to the Indemnitee to be repaid by any
recovery of such Imposition from such contest and any remaining unpaid amount
not recovered to offset Lessee's obligation to indemnify the Indemnitee for such
Imposition. In the event that the Indemnitee receives a refund (or like
adjustment) in respect of any Imposition for which the Indemnitee has been
reimbursed by Lessee, the Indemnitee shall immediately remit the amount of such
refund (or like adjustment) to Lessee, net of all costs and expenses incurred by
such Indemnitee.
Section 8.3 Gross Up. If an Indemnitee shall not be entitled to an
immediate corresponding and equal deduction with respect to any payment or
Imposition which Lessee is required to pay or reimburse under Article VII,
Section 8.1 or Section 8.2 (each such payment or reimbursement under Article
VII, Section 8.1 or Section 8.2, an "original payment") and which original
payment constitutes income to such Indemnitee, then Lessee shall pay to such
Indemnitee on demand the amount of such original payment on a gross-up basis
such that, after subtracting all Impositions imposed on such Indemnitee with
respect to such original payment by Lessee (including any Impositions otherwise
excluded by Section 8.1 and assuming for this purpose that such Indemnitee was
subject to taxation at the maximum marginal Federal, state and local tax rates
applicable to such Indemnitee for the year in which such income is taxable),
such payments shall be equal to the original payment to be received (net of any
credits, deductions or other tax benefits then actually recognized that arise
from the payment by such Indemnitee of any amount, including taxes, for which
the payment to be received is made).
Section 8.4 Tax Returns. Except as otherwise provided in the third
sentence below, Lessee shall prepare and file (whether or not it is a legal
obligation of an Indemnitee) all tax returns or reports that may be required
with respect to any Impositions assessed, charged or imposed on the Equipment or
the Lease, including, but not limited to sales and use taxes, property taxes (ad
valorem and real property) and any other tax or charge based upon the ownership,
leasing, subleasing, rental, sale, purchase, possession, use, operation,
delivery, return or other disposition of any of the Equipment or upon the
rentals or the receipts therefrom (excluding, however, any tax based upon the
net income of an Indemnitee). Lessee may notify in writing all applicable
Authorities having
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jurisdiction with respect to personal property taxes that Lessee is the
appropriate party for receiving notices of (or copies of, if such Authority is
required by law to notify Administrative Agent) assessment, appeal and payment
with respect to the Equipment. If an Indemnitee is obligated by law to file any
such reports or returns, then Lessee shall at least 20 days before the same are
due, prepare the same and forward them to the Indemnitee, as appropriate, with
detailed instructions as to how to comply with all applicable filing
requirements, together with funds in the amount of any payment required pursuant
thereto. Indemnitee shall forward to Lessee at its address listed in Section
11.4 copies of all assessment and valuation notices it receives as soon as
practicable; provided that Indemnitee's failure to deliver such notices on a
timely basis shall not relieve Lessee of any obligations hereunder. The
Participants agree that neither they nor any corporation controlled by them, or
under common control with them, directly or indirectly will at any time take any
action or with respect to the filing of any income tax return, including an
amended income tax return, inconsistent with the intention of the parties
expressed in Section 4.1(b) and (d) hereof.
Section 8.5 Withholding Tax Exemption. Upon the execution of this
Agreement, each Lessor that is not incorporated under the laws of the United
States or a State thereof shall, and with respect to any date on which any
Indemnitee transfers any right, title or interest in the Equipment to a
transferee that is not incorporated under the laws of the United States or a
State thereof, such transferee shall deliver, at least five (5) Business Days
prior to any such transfer, to Lessee and Administrative Agent two duly
completed copies of United States Internal Revenue Service Form 1001 or 4224,
certifying in either case that such Lessor is entitled to receive payments under
this Agreement and the other Operative Agreements without deduction or
withholding of any United States Federal income taxes. Each Lessor which so
delivers a Form 1001 or 4224 further undertakes to deliver to Lessee and
Administrative Agent two additional copies of such form (or a successor form) on
or before the date that such form expires or becomes obsolete or after the
occurrence of any event requiring a change in the most recent forms so delivered
by it, and such amendments thereto or extensions or renewals thereof as may be
reasonably requested by Lessee or Administrative Agent, in each case certifying
that such Lessor is entitled to receive payments under this Agreement and the
other Operative Agreements without deduction or withholding of any United States
Federal income taxes, unless prior to the date on which any such delivery would
otherwise be required any change in treaty, law or regulation or in the
interpretation thereof by the applicable taxing Authority occurring after such
Lessor became a Lessor hereunder has rendered all such forms inapplicable and no
successor forms having substantially the same effect as Forms 1001 and 4224 have
been adopted by the IRS, and such Lessor advises Lessee and Administrative Agent
in writing that, as a result of such change in treaty, law or regulation or
interpretation, it is not capable of receiving payments without any withholding
of United States Federal income tax. In the event that any Indemnitee ceases to
be exempt from withholding of any United States Federal income taxes due to a
change in treaty, law, regulation or in the interpretation thereof by the
applicable taxing Authority, such Indemnitee shall, at the request of Lessee, if
such additional amounts can be reduced or eliminated, by transferring the
Equipment or any other Collateral to any branch or lending office of such
Indemnitee without incurring any adverse regulatory consequences or cost for
which Lessee is not willing on or prior to the transfer to indemnify such
Indemnitee and which does not adversely interfere with the business of such
branch or lending office, effect such transfer.
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ARTICLE IX
Administrative Agent
Section 9.1 Appointment of Administrative Agent; Powers and
Authorization to Take Certain Actions.
(a) Each Lessor irrevocably appoints and authorizes ABN AMRO Bank N.V.
to act as its administrative agent hereunder, with such powers as are
specifically delegated to Administrative Agent by the terms hereof, together
with such other powers as are reasonably incidental thereto. Each Lessor
authorizes and directs Administrative Agent to, and Administrative Agent agrees
for the benefit of the Lessors that it will, on the Documentation Date, the
Initial Delivery Date and each other Delivery Date, accept the documents
described in Article III of this Participation Agreement. Administrative Agent
accepts the agency hereby created applicable to it and agrees to receive all
payments and proceeds pursuant to the Operative Agreements and disburse such
payments or proceeds in accordance with the Operative Agreements. Administrative
Agent shall have no duties or responsibilities except those expressly set forth
in the Lease and this Participation Agreement. Administrative Agent shall not be
responsible to any Lessor (or to any other Person) (i) for any recitals,
statements, representations or warranties of any party contained in the Lease,
this Participation Agreement, or in any certificate or other document referred
to or provided for in, or received by any of them under, the Operative
Agreements, other than the representations and warranties made by Administrative
Agent in Section 5.3, or (ii) for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of the Collateral or the title
thereto (subject to Administrative Agent's obligations under Section 6.3) or of
the Lease or any other document referred to or provided for therein or (iii) for
any failure by Lessee, any Lessor or any other third party (other than
Administrative Agent) to perform any of its obligations under any Operative
Agreement. Administrative Agent may employ agents, trustees or
attorneys-in-fact, may vest any of them with any property, title, right or power
deemed necessary for the purposes of such appointment and shall not be
responsible for the negligence or misconduct of any of them selected by it.
Neither Administrative Agent nor any of its directors, officers, employees or
agents shall be liable or responsible for any action taken or omitted to be
taken by it or them hereunder, or in connection herewith, except for its or
their own gross negligence or willful misconduct.
(b) Administrative Agent shall not have any duty or obligation to
manage, control, use, operate, store, lease, sell, dispose of or otherwise deal
with any Equipment, any other Collateral or the Lease, or to otherwise take or
refrain from taking any action under, or in connection with, this Agreement, the
Lease or any related document to which Administrative Agent is a party, except
as expressly provided by the terms hereof, and no implied duties of any kind
shall be read into any Operative Agreement against Administrative Agent. The
permissive right of Administrative Agent to take actions enumerated in this
Agreement and the Lease shall never be construed as a duty, unless
Administrative Agent is instructed or directed to exercise, perform or enforce
one or more rights by the Required Lessors (provided that Administrative Agent
has received indemnification reasonably
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satisfactory to it). No provision of the Operative Agreements shall require
Administrative Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its obligations under the
Operative Agreements, or in the exercise of any of its rights or powers
thereunder. It is understood and agreed that the duties of Administrative Agent
are ministerial in nature.
(c) Except as specifically provided herein, Administrative Agent is
acting hereunder solely as administrative agent and is not responsible to any
party hereto in its individual capacity, except with respect to any claim
arising from Administrative Agent's gross negligence or willful misconduct
(provided that the failure of the Administrative Agent to prominently display
its Texas sales tax permit in its Houston, Texas office shall not constitute
willful misconduct or gross negligence for this purpose) or any breach of a
representation or covenant made in its individual capacity.
(d) Administrative Agent may accept deposits from, lend money to and
otherwise deal with Lessee or any of its Affiliates with the same rights as it
would have if it were not the named Administrative Agent hereunder.
Section 9.2 Reliance. Administrative Agent may rely upon, and shall not
be bound or obligated to make any investigation into the facts or matters stated
in, any certificate, notice or other communication (including any communication
by telephone, telecopy, telex, telegram, e-mail or cable) reasonably believed by
it to be genuine and correct and to have been made, 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 Administrative
Agent (including any expert selected by Administrative Agent to aid
Administrative Agent in any calculations required in connection with its duties
under the Operative Agreements).
Section 9.3 Action Upon Instructions Generally. Subject to Sections 9.4
and 9.6, upon written instructions of the Required Lessors, Administrative Agent
shall, on behalf of the Lessors, give such notice or direction, exercise such
right, remedy or power hereunder or in respect of any Equipment, and give such
consent or enter into such amendment to any document to which it is a party as
Administrative Agent as may be specified in such instructions. Administrative
Agent shall deliver to each Lessor a copy of each notice, report and certificate
received by Administrative Agent pursuant to the Operative Agreements.
Administrative Agent shall have no obligation to investigate or determine
whether there has been an Event of Default or an Incipient Default.
Administrative Agent shall not be deemed to have notice or knowledge of an Event
of Default or Incipient Default unless a Responsible Officer of Administrative
Agent is notified in writing of such Event of Default or Incipient Default. If
Administrative Agent receives notice of an Event of Default, Administrative
Agent shall give prompt notice thereof, at Lessee's expense, to each Lessor.
Subject to Sections 9.4 and 9.6 and Article X, Administrative Agent shall take
action or refrain from taking action with respect to such Event of Default as
directed by the Required Lessors; provided that, unless and until Administrative
Agent receives such directions, Administrative Agent may refrain from taking any
action, or may act in its discretion, with respect to such Event of Default.
Prior to the date the Lease
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Balance shall have become due and payable by acceleration pursuant to Section
8.2 of the Lease, Required Lessors may deliver written instructions to
Administrative Agent to waive, and Administrative Agent shall waive pursuant
thereto, any Event of Default and its consequences; provided that in the absence
of written instructions from all Lessors, Administrative Agent shall not waive
any (i) Payment Default or (ii) covenant or provision which, under Section 10.1,
cannot be modified or amended without the consent of all Lessors. As to any
matters not expressly provided for by this Agreement, Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting,
hereunder in accordance with instructions signed by the Required Lessors and
such instructions of the Required Lessors and any action taken or failure to act
pursuant thereto shall be binding on each Lessor.
Section 9.4 Indemnification. Each Lessor shall reimburse and hold
Administrative Agent harmless, ratably in accordance with its Outstanding
Investment at the time the indemnification is required to be given (but only to
the extent that any such indemnified amounts have not in fact been paid to
Administrative Agent by, or on behalf of, Lessee in accordance with Section
7.1), from any and all claims, losses, damages, obligations, penalties,
liabilities, demands, suits, judgments, or causes of action, and all legal
proceedings, and any reasonable costs or expenses in connection therewith,
including allocated charges, costs and expenses of internal counsel of
Administrative Agent and all other reasonable attorneys' fees and expenses
incurred by Administrative Agent, in any way relating to or arising in any
manner out of (i) any Operative Agreement, the enforcement hereof or thereof or
the consummation of the transactions contemplated thereby, or (ii) instructions
from the Required Lessors (including, without limitation, the costs and expenses
that Lessee is obligated to and does not pay hereunder), provided that no Lessor
shall be liable for any of the foregoing to the extent they arise from (a) the
gross negligence or willful misconduct of Administrative Agent (provided that
the failure of the Administrative Agent to prominently display its Texas sales
tax permit in its Houston, Texas office shall not constitute willful misconduct
or gross negligence for this purpose), (b) the inaccuracy of any representation
or warranty or breach of any covenant given by Administrative Agent in Section
5.3 or Section 6.3 hereof or in the Lease, (c) in the case of Administrative
Agent's handling of funds, the failure to act with the same care as
Administrative Agent uses in handling its own funds or (d) any taxes, fees or
other charges payable by Administrative Agent based on or measured by any fees,
commissions or compensation received by it for acting as Administrative Agent in
connection with the transactions contemplated by the Operative Agreements.
Section 9.5 Independent Credit Investigation. Each Lessor by entering
into this Agreement agrees that it has, independently and without reliance on
Administrative Agent or any other Lessor and based on such documents and
information as it has deemed appropriate, made its own credit analysis of Lessee
and its own decision to enter into this Agreement and each of the other
Operative Agreements to which it is a party and that it will, independently and
without reliance upon Administrative Agent or any other Lessor, 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 action under this
Agreement and any related documents to which it is a party. Administrative Agent
shall not be required to keep itself informed as to the performance or
observance by Lessee of any other
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document referred to (directly or indirectly) or provided for herein or to
inspect the properties or books of Lessee. Except for notices or statements
which Administrative Agent is expressly required to give under this Agreement
and for notices, reports and other documents and information expressly required
to be furnished to Administrative Agent alone (and not also to each Lessor, it
being understood that Administrative Agent shall forward copies of same to each
Lessor) hereunder or under any other Operative Agreement, Administrative Agent
shall not have any duty or responsibility to provide any Lessor with copies of
notices or with any credit or other information concerning the affairs,
financial condition or business of Lessee (or any of its affiliates) that may
come into the possession of Administrative Agent or any of its Affiliates.
Section 9.6 Refusal to Act. Except for notices and actions expressly
required of Administrative Agent hereunder and except for the performance of its
covenants in Section 6.3, Administrative Agent shall in all cases be fully
justified in failing or refusing to act unless (a) it is indemnified to its
reasonable satisfaction by the Lessors against any and all liability and
reasonable expense which may be incurred by it by reason of taking or continuing
to take any such action (provided that such indemnity shall not be required to
extend to liability or expense arising from any matter described in clauses (a)
through (d) of Section 9.4, it being understood that no action taken by
Administrative Agent in accordance with the instructions of the Required Lessors
shall be deemed to constitute any such matter) and (b) it is reasonably
satisfied that such action is not contrary to any Operative Agreement or to any
applicable law.
Section 9.7 Resignation of Administrative Agent; Appointment of
Successor. Subject to the appointment and acceptance of a successor
Administrative Agent as provided below, Administrative Agent may resign at any
time by giving notice thereof to each Lessor and Lessee. Upon any such
resignation, the Required Lessors at the time of the resignation shall have the
right (with the reasonable, prompt approval of Lessee unless an Event of Default
shall be continuing) to appoint a successor Administrative Agent which shall be
a financial institution having a combined capital and surplus of not less than
$100,000,000. If, within 30 calendar days after the retiring Administrative
Agent's giving of notice of resignation, a successor Administrative Agent is not
so appointed and does not accept such appointment, then the retiring
Administrative Agent may appoint a successor Administrative Agent and transfer
to such successor Administrative Agent all rights and obligations of the
retiring Administrative Agent. Such successor Administrative Agent shall be a
financial institution having combined capital and surplus of not less than
$100,000,000. Upon the acceptance of any appointment as Administrative Agent
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 duties and obligations as
Administrative Agent thereafter arising hereunder and under any related
document. If the retiring Administrative Agent does not appoint a successor, any
Lessor shall be entitled to apply to a court of competent jurisdiction for such
appointment, and such court may thereupon appoint a successor to act until such
time, if any, as a successor shall have been appointed as above provided.
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Section 9.8 Separate Administrative Agent. The Required Lessors may,
and if they fail to do so at any time when they are so required, Administrative
Agent may, for the purpose of meeting any legal requirements of any jurisdiction
in which any Equipment or Collateral may be located, appoint one or more
individuals or corporations either to act as co-agent jointly with
Administrative Agent or to act as separate administrative agent of all or any
part of the Equipment or Collateral or the Lease, and vest in such individuals
or corporations, in such capacity, such title to the Equipment or Collateral or
the Lease or any part thereof, and such rights or duties as Administrative Agent
may consider necessary or desirable. Administrative Agent shall not be required
to qualify to do business in any jurisdiction where it is not now so qualified.
Administrative Agent shall execute, acknowledge and deliver all such instruments
as may be required by any such co-agent or separate administrative agent more
fully confirming such title, rights or duties to such co-agent or separate
administrative agent. Upon the acceptance in writing of such appointment by any
such co-agent or separate administrative agent, it, she or he shall be vested
with such interest in the Equipment or Collateral and the Lease or any part
thereof, and with such rights and duties, not inconsistent with the provisions
of the Operative Agreements, as shall be specified in the instrument of
appointment, jointly with Administrative Agent (except insofar as local law
makes it necessary for any such co-agent or separate administrative agent to act
alone), subject to all terms of the Operative Agreements. Any co-agent or
separate administrative agent, to the fullest extent permitted by legal
requirements of the relevant jurisdiction, at any time, by an instrument in
writing, shall constitute Administrative Agent its attorney-in-fact and
administrative agent, with full power and authority to do all acts and things
and to exercise all discretion on its behalf and in its name. If any co-agent or
separate administrative agent shall die, become incapable of acting, resign or
be removed, the interest in the Equipment or Collateral and the Lease and all
rights and duties of such co-agent or separate administrative agent shall, so
far as permitted by law, vest in and be exercised by Administrative Agent,
without the appointment of a successor to such co-agent or separate
administrative agent.
Section 9.9 Termination of Agency. The agency created hereby shall
terminate upon the final disposition by Administrative Agent of all Collateral
at any time subject hereto and the final distribution by Administrative Agent of
all moneys or other property or proceeds received pursuant to the Lease in
accordance with its terms, provided that at such time Lessee shall have complied
fully with all the terms hereof.
Section 9.10 Compensation of Agency. As compensation for the
performance of Administrative Agent's obligations hereunder, Lessee shall pay to
Administrative Agent, on the Initial Delivery Date and on each anniversary of
the Initial Delivery Date occurring during the Lease Term, a fee (the "Agency
Fee") in the amount referred to in the Fee Letter Agreement.
Section 9.11 Limitations. It is expressly understood and agreed by and
among the parties hereto that, except as otherwise provided herein or in the
other Operative Agreements: (a) this Participation Agreement and the other
Operative Agreements to which Administrative Agent is a party are executed by
Administrative Agent, not in its individual capacity (except with respect to the
representations and covenants of Administrative Agent in Sections 5.3 and 6.3),
but solely as Administrative Agent under the Operative Agreements in the
exercise of the power and authority
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conferred and vested in it as such Administrative Agent; (b) each and all of the
undertakings and agreements herein made on the part of Administrative Agent are
each and every one of them made and intended not as personal undertakings and
agreements by Administrative Agent, or for the purpose or with the intention of
binding Administrative Agent personally, but are made and intended for the
purpose of binding only the Collateral unless expressly provided otherwise; (c)
actions to be taken by Administrative Agent pursuant to its obligations under
the Operative Agreements may, in certain circumstances, be taken by
Administrative Agent only upon specific authority of the Lessors; (d) nothing
contained in the Operative Agreements shall be construed as creating any
liability on Administrative Agent, individually or personally, or any
incorporator or any past, present or future subscriber to the capital stock of,
or stockholder, officer or director, employee or agent of, Administrative Agent
to perform any covenants either express or implied contained herein, all such
liability, if any, being expressly waived by the other parties hereto and by any
Person claiming by, through or under them; and (e) so far as Administrative
Agent, individually or personally, is concerned, the other parties hereto and
any Person claiming by, through or under them shall look solely to the
Collateral and Lessee for the performance of any obligation under any of the
instruments referred to herein; provided, however, that nothing in this Section
9.11 shall be construed to limit in scope or substance the general corporate
liability of Administrative Agent in respect of its gross negligence or willful
misconduct (provided that the failure of the Administrative Agent to prominently
display its Texas sales tax permit in its Houston, Texas office shall not
constitute willful misconduct or gross negligence for this purpose) or those
representations, warranties and covenants of Administrative Agent in its
individual capacity set forth herein or in any of the other agreements
contemplated hereby.
ARTICLE X
Amendments to Operative Agreements
Section 10.1 Amendments to Operative Agreements With Consent of
Lessors. This Participation Agreement and each of the other Operative Agreements
shall be changed, waived, discharged or terminated with respect to Lessee and
each Lessor upon the ratification in writing of such change, waiver, discharge
or termination by Lessee, Guarantor (as to the Guaranty only) and the Required
Lessors, in which case such change, waiver, discharge or termination shall be
effective as to each Lessor, Guarantor and Lessee; provided no such change,
waiver, discharge or termination shall, without the written ratification of each
Lessor:
(i) modify any of the provisions of this Section 10.1 or
Article III, change the definitions of "Commitment", "Commitment
Percentage", "Total Commitment" or "Required Lessors" or modify or
waive any provision of an Operative Agreement requiring action by the
foregoing, or release any Collateral or the Guaranty (except as
otherwise specifically provided in any Operative Agreement);
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(ii) modify, amend, waive or supplement any of the provisions
of Articles III, VII, VIII (except as otherwise expressly provided in
Section 9.3 hereof), X or XI, Sections 13.9 or 13.10 of the Lease or
Section 11.3 hereof, provided that the Required Lessors may waive an
Event of Default other than a Payment Default;
(iii) reduce, modify, amend or waive any indemnities in favor
of any Participant, whether pursuant to Articles VII or VIII or
otherwise (except that any Person may consent to any reduction,
modification, amendment or waiver of any indemnity payable to it);
(iv) modify, postpone, reduce or forgive, in whole or in part,
any Rent payment (other than pursuant to the terms of any Operative
Agreement), Lease Balance, Lessor Risk Amount, Lessee Risk Amount,
interest or, subject to clause (iii) above, any other amount payable
under the Lease or Participation Agreement, or modify the definition or
method of calculation of any Rent payment (other than pursuant to the
terms of any Operative Agreement), Lease Balance, Lessor Risk Amount,
Lessee Risk Amount or other amount payable hereunder;
(v) consent to any assignment of the Lease releasing Lessee
from its obligations in respect of the payments due pursuant to the
Operative Agreements or changing the absolute and unconditional
character of such obligations; or
(vi) permit the creation of any Lien on the Collateral or any
part thereof except as contemplated in the Operative Agreements, or
deprive any Lessor of the benefit of the security interest in the
Collateral granted by Lessee.
Section 10.2 Amendments to Operative Agreements Affecting
Administrative Agent. Without the prior written consent of Administrative Agent,
no amendment of, supplement to, or waiver or modification of, any Operative
Agreement shall adversely affect Administrative Agent's rights or immunities or
modify or increase the duties or obligations of Administrative Agent with
respect to any Operative Agreement.
ARTICLE XI
Miscellaneous
Section 11.1 Survival of Covenants. All claims pertaining to the
representations, warranties, covenants or indemnities of the Participants shall
survive the termination of the Lease to the extent such claims arose out of
events occurring or conditions existing prior to any such termination. Without
limiting the foregoing, the provisions of Article VII and Article VIII hereof
shall survive the termination of the Lease.
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Section 11.2 APPLICABLE LAW. THIS PARTICIPATION AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO THE CONFLICT-OF-LAWS PROVISIONS THEREOF.
Section 11.3 Distribution and Application of Rents and Other Payments.
Except as otherwise specifically provided for in the Lease or in Articles VII
and VIII hereof, all amounts of money received or realized by Administrative
Agent pursuant to the Lease which are to be distributed to the Lessors (after
payment of accrued but unpaid fees and expenses and indemnification payments
payable to Administrative Agent in its capacity as Administrative Agent that
remain unpaid for 30 days or more) shall be distributed to each Lessor pro rata,
in accordance with each Lessor's Outstanding Investment and without preference
or priority of any Lessor over another; provided, however, that in the case such
moneys are insufficient to pay in full the whole amount due, owing and unpaid,
then application shall be made in the manner set forth in Section 8.4 of the
Lease. All payments to the Lessors shall be made in accordance with Section 3.2
of the Lease.
Section 11.4 Notices. All notices, demands, declarations, consents,
directions, approvals, instructions, requests and other communications required
or permitted by the terms hereof shall be in writing and shall be deemed to have
been duly given when delivered personally, by facsimile (and confirmed, which
confirmation may be mechanical), nationally recognized overnight courier or
otherwise actually received or 5 Business Days after being deposited in the
United States mail certified, postage prepaid, addressed as follows:
If to Lessee:
Xxxxxxxxxxx Enterra Compression Company, L.P.
0 Xxxx Xxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: General Counsel
Fax: (000) 000-0000
If to Guarantor:
Xxxxxxxxxxx International, Inc.
0 Xxxx Xxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: General Counsel
Fax: (000) 000-0000
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If to Administrative Agent:
ABN AMRO Bank N.V.
Syndications
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxxxxxx
Fax: 000-000-0000
With a copy to:
ABN AMRO Bank N.V.
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attn: Credit Administration
Fax: (000) 000-0000
and
ABN AMRO Bank N.V.
0 Xxxxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxx Xxxxxxx
Fax: (000) 000-0000
If to Documentation Agent:
Chase Bank of Texas, National Association
000 Xxxxxx Xxxxxx
Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Attn: Ki Xxxxx
Fax: (000) 000-0000
If to the Lessors, to their respective addresses set forth on Schedule
I hereto or at such other place as any such party may designate by notice given
in accordance with this Section 11.4.
Section 11.5 Transaction Costs; Other Expenses. Lessee shall pay or
cause to be capitalized all Transaction Costs whether or not the transactions
contemplated hereby close. In addition, Lessee shall pay or reimburse
Administrative Agent and the Lessors for all other out-of-pocket costs and
expenses (including allocated fees of internal counsel) reasonably incurred in
connection with: (a) entering into, or the giving or (in the case of any
amendments, supplements, waivers or consents
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proposed by Lessee or Guarantor) withholding of, any future amendments,
supplements, waivers or consents with respect to the Operative Agreements
(including without limitation any legal services rendered in connection with or
arising under Section 6.1 hereof), it being understood that Lessee shall only be
required to pay for one firm of legal counsel to Administrative Agent and
Lessors in respect of any transaction under this clause (a); (b) any Casualty or
termination of the Lease or any other Operative Agreement; (c) the negotiation
and documentation of any restructuring or "workout," whether or not consummated,
of any Operative Agreement; (d) the enforcement of the rights or remedies under
the Operative Agreements; (e) further assurances requested pursuant to Section
11.13 hereof or any similar provision in other Operative Agreements; (f) any and
all out-of-pocket expenses of Administrative Agent in connection with the Sale
Option described in Section 11.3 of the Lease; (g) any transfer by
Administrative Agent or a Lessor of any interest in the Operative Agreements
during the continuance of an Event of Default; and (h) the fees referred to
herein.
Section 11.6 Counterparts. This Participation Agreement may be executed
in any number of counterparts and by different parties hereto on separate
counterparts, each executed counterpart constituting an original but all
together one agreement.
Section 11.7 Severability. Whenever possible, each provision of this
Participation Agreement shall be interpreted in such manner as to be effective
and valid under applicable law; but if any provision of this Participation
Agreement shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Participation Agreement.
Section 11.8 Successors and Assigns; Transfers. This Participation
Agreement shall be binding upon the parties hereto and their respective
successors and assigns, and shall inure to the benefit of the parties hereto and
their respective successors and permitted assigns. Lessee may not assign any of
its rights and obligations under any Operative Agreement except as expressly
provided in the Operative Agreements.
No Lessor shall assign, convey or otherwise transfer (including
pursuant to a participation) all or any portion of its right, title or interest
in, to or under any of the Operative Agreements, any Collateral and its interest
in the Equipment without the consent of Administrative Agent and, in the absence
of a continuing Event of Default, Lessee, except that without the prior written
consent of Administrative Agent or Lessee (x) any bank or similar financial or
commercial lending institution may pledge its interest in the ordinary course of
its business, provided, that no transfer upon a foreclosure pursuant to such a
pledge may occur unless the other provisions of this Section are complied with,
(y) any Lessor may transfer all or any portion of its interest to (A) any other
existing Lessor or (B) any Affiliate of such transferring Lessor and (z) any
Lessor may transfer any or all of such right, title and interest upon the
satisfaction of each of the following conditions:
(a) Required Notice and Effective Date. Any Lessor desiring to effect a
transfer of its interest hereunder shall give written notice of each such
proposed transfer to Lessee and
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Administrative Agent at least ten (10) days prior to such proposed transfer,
setting forth the name of such proposed transferee, the percentage or interest
to be retained by such Lessor, if any, and the date on which such transfer is
proposed to become effective. Except in the case of a transfer by a Lessor to
another existing Lessor or by a Lessor to an Affiliate, the transferring Lessor
shall pay to Administrative Agent a transfer fee of $3,000. In the event of a
transfer under this Section 11.8, any expenses incurred by the transferee in
connection with its review of the Operative Agreements and its investigation of
the transactions contemplated thereby shall be borne by such transferee or the
relevant Lessor, as they may determine, but shall not be considered costs and
expenses which Lessee is obligated to pay or reimburse under Section 11.5,
unless such transfer is being made pursuant to Section 7.6. No Lessor shall
effect a transfer of its interests hereunder to any Person not incorporated
under the laws of the United States or a State thereof unless such Person
delivers to the Administrative Agent, for the benefit of the Lessee, upon the
closing of such transfer, Forms 1001 or 4224 (or successor forms), in each case
certifying that such transferee is entitled to receive payments hereunder and
under the other Operative Agreements without deduction or withholding of any
United States Federal income taxes. The Administrative Agent shall transmit such
Forms to the Lessee immediately after such closing.
(b) Assumption of Obligations. Any transferee pursuant to this Section
11.8 shall have executed and delivered to Administrative Agent a letter
substantially in the form of the Investor's Letter attached hereto as Exhibit F,
and thereupon the obligations of the transferring Lessor under the Operative
Agreements shall be proportionately released and reduced to the extent of such
transfer. Upon any such transfer as above provided, the transferee shall be
deemed to be bound by all obligations (whether or not yet accrued) under, and to
have become a party to, all Operative Agreements to which its transferor was a
party, shall be deemed the pertinent "Lessor" for all purposes of the Operative
Agreements and shall be deemed to have made that portion of the payments
pursuant to the Participation Agreement previously made or deemed to have been
made by the transferor represented by the interest being conveyed; and each
reference herein and in the other Operative Agreements to the pertinent "Lessor"
shall thereafter be deemed a reference to the transferee, to the extent of such
transfer, for all purposes. Upon any such transfer, Administrative Agent shall
deliver to each Lessor and Lessee a new Schedule I to this Participation
Agreement, revised to reflect the relevant information for such new Lessor and
the Commitment of such new Lessor (and the revised Commitment of the transferor
Lessor if it shall not have transferred its entire interest).
(c) Employee Benefit Plans. No Lessor may make any such assignment,
conveyance or transfer to or in connection with any arrangement or understanding
in any way involving any employee benefit plan (or its related trust), as
defined in Section 3(3) of ERISA, or with the assets of any such plan (or its
related trust), as defined in Section 4975(e)(1) of the Code (other than a
governmental plan, as defined in Section 3(32) of ERISA), with respect to which
Lessee or such Lessor or any of their Affiliates is a party in interest within
the meaning of ERISA or a "disqualified person" within the meaning of the Code.
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(d) Amount of Commitment. Unless Lessee shall consent otherwise, no
Lessor may make any such assignment, conveyance or transfer if, as a consequence
thereof, the transferor (if such Lessor retains any part of its Commitment) or
transferee Lessor would have a combined Commitment and Outstanding Investment of
less than $5,000,000.
(e) Representations and Warranties. Notwithstanding anything to the
contrary set forth above, no Lessor may assign, convey or transfer its interest
to any Person, unless such Person shall have delivered to Administrative Agent
and Lessee a certificate confirming the accuracy of the representations and
warranties set forth in Section 5.2 with respect to such Person (other than as
such representation or warranty relates to the execution and delivery of
Operative Agreements).
Each transferee of a Lessor pursuant to this Section 11.8 shall be
entitled to the benefits of Articles VII and VIII; provided that no such
transferee shall be entitled to receive any greater amount pursuant to such
Sections than the transferor Lessor would have been entitled to receive in
respect of the amount of the Commitment transferred by such transferor Lessor to
such transferee if such transfer had not occurred.
SECTION 11.9 JURY TRIAL. THE PARTIES WAIVE ANY RIGHT TO A TRIAL BY JURY
IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS
PARTICIPATION AGREEMENT OR ANY OTHER OPERATIVE AGREEMENT OR UNDER ANY AMENDMENT,
INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE
DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY RELATIONSHIP
EXISTING IN CONNECTION WITH THIS PARTICIPATION AGREEMENT OR ANY OPERATIVE
AGREEMENT AND AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A
COURT AND NOT BEFORE A JURY.
Section 11.10 Captions; Table of Contents. Section captions and the
table of contents used in this Participation Agreement (including the exhibits
and schedules) are for convenience of reference only and shall not affect the
construction of this Participation Agreement.
Section 11.11 FINAL AGREEMENT. THIS PARTICIPATION AGREEMENT, TOGETHER
WITH THE OTHER OPERATIVE AGREEMENTS, REPRESENT THE ENTIRE FINAL AGREEMENT
BETWEEN THE PARTIES WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED HEREBY AND IN
THE OTHER OPERATIVE AGREEMENTS. THIS PARTICIPATION AGREEMENT CANNOT BE MODIFIED,
SUPPLEMENTED, AMENDED, RESCINDED OR CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES, EXCEPT BY AN
INSTRUMENT IN WRITING SIGNED BY THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
Section 11.12 No Third-Party Beneficiaries. Nothing in this
Participation Agreement or the other Operative Agreements shall be deemed to
create any right in any Person not a party hereto or
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thereto (other than as set forth in Section 13.8 of the Lease and the permitted
successors and assigns of Lessors, Administrative Agent and Lessee), and such
agreements shall not be construed in any respect to be a contract in whole or in
part for the benefit of any third party except as aforesaid.
Section 11.13 Further Assurances. Lessee, at its expense, will promptly
and duly execute and deliver all such documents and take such further action as
may be necessary or appropriate in order to effect the intent or purpose of this
Participation Agreement and the other Operative Agreements and to establish and
protect the rights and remedies created or intended to be created in favor of
the Lessors and Administrative Agent for the benefit of the Lessors, including,
without limitation, if requested by Required Lessors at the expense of Lessee,
the recording or filing of any Operative Agreement or any other document in
accordance with the laws of the appropriate jurisdictions.
Section 11.14 Reproduction of Documents. This Participation Agreement,
all documents constituting Schedules or Exhibits hereto, and all documents
relating hereto received by a party hereto, including, without limitation: (a)
consents, waivers and modifications that may hereafter be executed; (b) the
Bills of Sale and all other documents received by the Lessors or Administrative
Agent in connection with the receipt and/or acquisition of the Equipment; and
(c) financial statements, certificates, and other information previously or
hereafter furnished to Administrative Agent or any Lessor may be reproduced by
the party receiving the same by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. Each of the
Participants agrees and stipulates that, to the extent permitted by law, any
such reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by such party in the
regular course of business) and that, to the extent permitted by law, any
enlargement, facsimile, or further reproduction of such reproduction shall
likewise be admissible in evidence.
Section 11.15 Consideration for Consents to Waivers and Amendments.
Lessee hereby agrees that it will not, and that it will not permit any of its
Affiliates to, offer or give any consideration or benefit of any kind whatsoever
to any Lessor in connection with, in exchange for, or as an inducement to, such
Lessor's consent to any waiver in respect of, any modification or amendment of,
any supplement to, or any other consent or approval under, any Operative
Agreement unless such consideration or benefit is offered ratably to all
Lessors.
Section 11.16 Submission to Jurisdiction. Any suit by Administrative
Agent or any Lessor to enforce any claim arising out of the Operative Agreements
may be brought in any state or Federal court located in New York, New York
having subject matter jurisdiction, and with respect to any such claim, each
Participant hereby irrevocably: (a) submits to the jurisdiction of such courts;
and (b) consents to the service of process out of said courts by mailing a copy
thereof, by registered mail, postage prepaid, to such Participant at its address
specified in this Participation Agreement, and agrees that such service, to the
fullest extent permitted by law: (i) shall be deemed in every respect effective
service of process upon it in any such suit, action or proceeding; and (ii)
shall be taken and held to be valid personal service upon and personal delivery
to it. Lessee irrevocably waives, to the
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fullest extent permitted by law: (A) any claim, or any objection, that it now or
hereafter may have, that venue is not proper with respect to any such suit,
action or proceeding brought in such a court located in New York, New York
including, without limitation, any claim that any such suit, action or
proceeding brought in such court has been brought in an inconvenient forum; and
(B) any claim that Lessee is not subject to personal jurisdiction or service of
process in such forum. Lessee agrees that any suit to enforce any claim arising
out of the Operative Agreements or any course of conduct or dealing of
Administrative Agent or any Lessor shall be brought and maintained exclusively
in any state or Federal court located in New York, New York. Nothing in this
Section 11.16 shall affect the right of Administrative Agent or any Lessor to
bring any action or proceeding against Lessee or any Equipment or other
Collateral in the courts of any other jurisdiction. Lessee agrees that a final
judgment in any action or proceeding in a state or Federal court within the
United States may be enforced in any other jurisdiction by suit on the judgment
or in any other manner provided by law.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have caused this Participation
Agreement to be executed and delivered as of the date first above written.
WEATHERFORD ENTERRA COMPRESSION
COMPANY, L.P., as Lessee
By: /s/ Xxxxxx X. Xxxx
------------------------------------
Name Printed: Xxxxxx X. Xxxx
---------------------------
Title: Senior Vice President and Secretary
----------------------------------
ABN AMRO BANK N.V., not individually,
but solely as Administrative Agent for
the Lessors, Syndication Agent, and
Arranger
By: /s/ Xxxxxxxxx X. XxXxxxxxx
------------------------------------
Name Printed: Xxxxxxxxx X. XxXxxxxxx
---------------------------
Title: Vice President
----------------------------------
By: /s/ Xxxxxx X. Xxxx
------------------------------------
Name Printed: Xxxxxx X. Xxxx
---------------------------
Title: Vice President
----------------------------------
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, as Documentation Agent
By: /s/ Ki Xxxxx
------------------------------------
Name Printed: Ki Xxxxx
---------------------------
Title: Vice President
----------------------------------
LESSORS:
ABN AMRO BANK N.V.
By: /s/ Xxxxxxxxx X. XxXxxxxxx
------------------------------------
Name Printed: Xxxxxxxxx X. XxXxxxxxx
---------------------------
Title: Vice President
----------------------------------
By: /s/ Xxxxxx X. Xxxx
------------------------------------
Name Printed: Xxxxxx X. Xxxx
---------------------------
Title: Vice President
----------------------------------
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XXXXX XXXX XX XXXXX, NATIONAL
ASSOCIATION
By: /s/ Ki Xxxxx
------------------------------------
Name Printed: Ki Xxxxx
---------------------------
Title: Vice President
----------------------------------
BANQUE NATIONALE DE PARIS
By: /s/ Xxxxxx Xxxx
------------------------------------
Name Printed: Xxxxxx Xxxx
---------------------------
Title: Assistant Vice President
----------------------------------
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ Xxxxx X. Xxxx
------------------------------------
Name Printed: Xxxxx X. Xxxx
---------------------------
Title: Vice President
----------------------------------
FIRST UNION NATIONAL BANK
By: /s/ Xxxxxx X. Xxxxxxxxx
------------------------------------
Name Printed: Xxxxxx X. Xxxxxxxxx
---------------------------
Title: Senior Vice President
----------------------------------
SUNTRUST BANK, ATLANTA
By: /s/ Xxxxxx X. Xxxxx
------------------------------------
Name Printed: Xxxxxx X. Xxxxx
---------------------------
Title: Corporate Banking Officer
----------------------------------
By: /s/ Xxxx X. Xxxxxx, Xx.
------------------------------------
Name Printed: Xxxx X. Xxxxxx, Xx.
---------------------------
Title: First Vice President
----------------------------------
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BANK AUSTRIA CREDITANSTALT
CORPORATE FINANCE, INC.
By: /s/ Xxx Xxxx
------------------------------------
Name Printed: Xxx Xxxx
--------------------------
Title: Vice President
---------------------------------
By: /s/ R. Temhave
------------------------------------
Name Printed: R. Temhave
--------------------------
Title: /s/ Senior Vice President
---------------------------------
THE BANK OF NOVIA SCOTIA
By: /s/ F. C. H. Xxxxx
------------------------------------
Name Printed: F. C. H. Xxxxx
--------------------------
Title: Senior Manager Loan Operations
---------------------------------
DG BANK DEUTSCHE GENOSSENSCHAFTSBANK AG,
CAYMAN ISLANDS BRANCH
By: /s/ Xxxx X. Xxxxxxxx
------------------------------------
Name Printed: Xxxx X. Xxxxxxxx
--------------------------
Title: Vice President
---------------------------------
By: /s/ Xxxxxxxx Xxxxxxx
------------------------------------
Name Printed: Xxxxxxxx Xxxxxxx
--------------------------
Title: Senior Vice President
---------------------------------
THE ROYAL BANK OF SCOTLAND PLC
By: /s/ Xxxxx Xxxxx
------------------------------------
Name Printed: Xxxxx Xxxxx
--------------------------
Title: Corporate Manager
---------------------------------
THE BANK OF NEW YORK
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Name Printed: Xxxxx X. Xxxxx
--------------------------
Title: Assistant Vice President
---------------------------------
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SCHEDULE I
TO
PARTICIPATION AGREEMENT
AGENT AND LESSOR ADDRESSES; LESSOR COMMITMENTS
ADMINISTRATIVE AGENT AND
SYNDICATION AGENT: ABN AMRO BANK N.V.
(address set forth in Section 11.4)
DOCUMENTATION AGENT: CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
(address set forth in Section 11.4)
LESSORS:
1. ABN AMRO BANK N.V.
Commitment: $30,000,000; Commitment Percentage: 15.00000000%
Address for Notices ABN AMRO Bank N.V.
1325 Avenue of the Xxxxxxxx, Xxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Agency Services
Xxxxx Xxxxxxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Payment Instructions
ABN AMRO Bank N.V.
ABA Routing #000000000
F/O ABN AMRO Bank N.V.
Chicago CPU
Account #650-001-1789-41
Reference: Xxxxxxxxxxx Enterra Compression Company, L.P.
2. CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
Commitment: $20,000,000; Commitment Percentage: 10.00000000%
50
Address for Notices
000 Xxxxxx Xxxxxx
Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: Ki Xxxxx
Facsimile: (000) 000-0000
Telephone:(000) 000-0000
Payment Instructions
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
ABA Routing #000000000
For Further Credit to: Commercial Loan Clearing Account
Account #0000-000-0000
Reference: Xxxxxxxxxxx Enterra Compression Company, L.P.
3. BANQUE NATIONALE DE PARIS
Commitment: $20,000,000; Commitment Percentage: 10.00000000%
Address for Notices
000 Xxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxxx Xxxx
Facsimile: 000-000-0000
Telephone: 000-000-0000
Payment Instructions
BANQUE NATIONALE DE PARIS
ABA Routing# 000000000
For further credit to: BNP Houston Agency
Account #141011-001-69
Reference: Weatherford Enterra Compression Company, L.P.
Contact: Xxxxx Xxxx
4. THE FIRST NATIONAL BANK OF CHICAGO
Commitment: $20,000,000; Commitment Percentage: 10.00000000%
Address for Notices
0000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxx
Facsimile: 000-000-0000
Telephone: 000-000-0000
51
Payment Instructions
THE FIRST NATIONAL BANK OF CHICAGO
ABA Routing# 000000000
Name of Account: DES Incoming Clearing A/C
Account #00000000
Reference: Xxxxxxxxxxx Enterra Compression Company, L.P.
Contact: Xxxx Xxxxxx
5. FIRST UNION NATIONAL BANK
Commitment: $20,000,000; Commitment Percentage: 10.00000000%
Address for Notices
0000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxx
Facsimile: 000-000-0000
Telephone: 000-000-0000
Payment Instructions
FIRST UNION NATIONAL BANK
ABA Routing# 000000000
For further credit to: Attn: Xxxxxx Xxxxx RC3027
Account #465906
Reference: Xxxxxxxxxxx Enterra Compression Company, L.P.
6. SUNTRUST BANK, ATLANTA
Commitment: $20,000,000; Commitment Percentage: 10.00000000%
Address for Notices
00 Xxxx Xxxxx Xxxxx
00xx Xxxxx XX - 000
Xxxxxxx, XX 00000
Attention: Xxxx Xxxxxx
Facsimile: 000-000-0000
Telephone: 000-000-0000
Payment Instructions
SUNTRUST BANK
ABA Routing# 06100064
For further credit to: Wire Clearing
Account # 4088000112
Reference: Xxxxxxxxxxx Enterra Compression Company, L.P.
Contact: Xxxxx Xxxx
52
7. BANK AUSTRIA CREDITANSTALT CORPORATE FINANCE, INC.
Commitment: $15,000,000; Commitment Percentage: 7.5%
Address for Notices
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxxx Xxxxxx
Facsimile: 000-000-0000
Telephone: 000-000-0000
Payment Instructions
CHASE MANHATTAN BANK
ABA Routing# 000-000-000
For further credit to: Bank Austria Creditanstalt
Account #400921944
Reference: Xxxxxxxxxxx Enterra Compression Company, L.P.
8. THE BANK OF NOVA SCOTIA
Commitment: $15,000,000; Commitment Percentage: 7.5%
Address for Notices
0000 Xxxxxxxxx Xxxxxx
Xxxxx0000
Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxx
Facsimile: 000-000-0000
Telephone: 000-000-0000
Payment Instructions
THE BANK OF NOVA SCOTIA
ABA Routing# 000000000
For further credit to: Atlanta Agency
Account #0000000
Reference: Xxxxxxxxxxx Enterra Compression Company, L.P.
9. DG BANK
Commitment: $15,000,000; Commitment Percentage: 7.5%
Address for Notices
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx
Facsimile: 000-000-0000
Telephone: 000-000-0000
53
Payment Instructions
DG BANK
ABA Routing#845
Federal Reserve Bank of New York
Account #026008455
Reference: Xxxxxxxxxxx Enterra Compression Company, L.P.
10. THE ROYAL BANK OF SCOTLAND PLC
Commitment: $15,000,000; Commitment Percentage: 7.5%
Address for Notices
X.X. Xxx 00
0 Xxxxxxxx Xxxxxxx
Xxxxxxxx XX00 0XX Xxxxxxxx
Attention: Xxxxx Xxxxx
Facsimile: 00000 000000
Telephone:00000 000000
Payment Instructions
Northern Trust Company New York
S.W.I.F.T. Address - CNORUS33
Account #10408320230
For Account of Royal Bank of Scotland, London
Reference: Xxxxxxxxxxx Enterra Compression Company, L.P.
11. THE BANK OF NEW YORK
Commitment: $10,000,000; Commitment Percentage: 5%
Address for Notices
0 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxx
Facsimile: 000-000-0000
Telephone: 000-000-0000
Payment Instructions
THE BANK OF NEW YORK
ABA Routing# 000000000
GLA#111-556
Reference: Xxxxxxxxxxx Enterra Compression Company, L.P.
54
SCHEDULE II
TO
PARTICIPATION AGREEMENT
DESCRIPTION OF EQUIPMENT
55
SCHEDULE X
TO
PARTICIPATION AGREEMENT
DEFINITIONS
The following terms (or other terms used or defined in any Operative
Agreement which have meanings substantially similar or equivalent to the
meanings assigned to such terms) shall have the following meanings for all
purposes, and such meanings shall be equally applicable both to the singular and
plural forms of the terms defined. Reference to schedules and exhibits in this
Schedule X shall mean Schedules and Exhibits attached to the Participation
Agreement, except as otherwise indicated. All references to "the Equipment" or
"all of the Equipment" or words of similar import shall be deemed to refer to
all Equipment covered by the Lease Supplements then in effect.
Accounting Terms; Changes in GAAP. All accounting and financial terms
used herein and not otherwise defined herein and the compliance with each
covenant contained herein which relates to financial matters shall be determined
in accordance with GAAP applied by the Guarantor on a consistent basis, except
to the extent that a deviation therefrom is expressly stated. Should there be a
change in GAAP from that in effect on the Documentation Date, such that the
defined terms set forth in this Schedule X or the covenants set forth in the
Guaranty would then be calculated in a different manner or with different
components or would render the same not meaningful criteria for evaluating the
matters contemplated to be evidenced by such covenants, (a) the Guarantor, the
Lessee and the Lessors agree, within the 60-day period following any such
change, to negotiate in good faith and enter into an amendment to the Operative
Agreements in order to conform the defined terms set forth in this Section X or
the covenants set forth in the Guaranty, or both, in such respects as shall
reasonably be deemed necessary by the Required Lessors so that the criteria for
evaluating the matters contemplated to be evidenced by such covenants are
substantially the same criteria as were effective prior to any such change in
GAAP, and (b) the Guarantor shall be deemed to be in compliance with such
covenants during the 60-day period following any such change, or until the
earlier date of execution of such amendment, if and to the extent that the
Guarantor would have been in compliance therewith under GAAP as in effect
immediately prior to such change.
Interpretation. (a) In the Operative Agreements, unless a clear
contrary intention appears:
(i) the singular number includes the plural number and vice
versa;
SX-1
56
(ii) reference to any gender includes each other gender;
(iii) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to the applicable Operative Agreement as
a whole and not to any particular Article, Section or other
subdivision;
(iv) reference to any Person includes such Person's successors
and assigns but, if applicable, only if such successors and assigns are
permitted by the Operative Agreements, and reference to a Person in a
particular capacity excludes such Person in any other capacity or
individually, provided that nothing in this clause (iv) is intended to
authorize any assignment not otherwise permitted by the Operative
Agreements;
(v) except as expressly provided to the contrary in the
applicable Operative Agreement, reference to any agreement, document or
instrument shall mean such agreement, document or instrument as
amended, supplemented or modified and in effect from time to time in
accordance with the terms thereof;
(vi) unless the context indicates otherwise, reference to any
Article, Section, Schedule or Exhibit shall mean such Article or
Section or such Schedule or Exhibit of the applicable Operative
Agreement;
(vii) the word "including" (and with correlative meaning
"include") shall mean including, without limiting the generality of any
description preceding such term;
(viii) with respect to the determination of any period of
time, except as expressly provided to the contrary, the word "from"
shall mean "from and including" and the word "to" shall mean "to but
excluding"; and
(ix) reference to any law, rule or regulation shall mean such
as amended, modified, codified or reenacted, in whole or in part, and
in effect from time to time.
(b) The Article and Section headings and the Table of
Contents of any Operative Agreement are for convenience only and shall
not affect the construction thereof.
(c) No provision of any Operative Agreement shall be
interpreted or construed against any Person solely because that Person
or its legal representative drafted such provision.
SX-2
57
DEFINITIONS
"Actions" shall mean collectively, all actions, causes of action,
suits, proceedings (including any investigations, litigation or inquiries),
claims, demands or arbitration.
"Actual Knowledge" shall mean, as to any matter with respect to any
Person, the actual knowledge of such matter by a Responsible Officer of such
Person and shall include, without limitation, receipt of a notice of such matter
by any such Responsible Officer.
"Administrative Agent" shall mean ABN AMRO Bank N .V.
"Advances" shall mean any funds advanced by Administrative Agent to
purchase Equipment on behalf of Lessee pursuant to Section 2.2 of the
Participation Agreement.
"Affected Lessor" shall have the meaning provided in Section 7.6 of the
Participation Agreement.
"Affiliate" shall mean, with respect to any Person, any other Person
that, directly or indirectly, controls, is controlled by or is under direct or
indirect common control with, such Person. For the purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling" and
"controlled"), when used with respect to any Person, shall mean the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise. No
Person shall be considered an Affiliate of Administrative Agent unless such
Person directly or indirectly through one or more intermediaries controls, is
controlled by, or is under common control with, Administrative Agent solely in
its capacity as agent under the Lease.
"Agency Fee" shall have the meaning provided in Section 9.10 of the
Participation Agreement.
"Agent's Corporate Office" shall mean the principal corporate office of
Administrative Agent, which office is, on the date the Participation Agreement
is executed by all parties thereto, located at the address for Administrative
Agent set forth in Section 11.4 of the Participation Agreement.
"Agents" shall mean Administrative Agent and Documentation Agent,
collectively, and "Agent" shall mean either Administrative Agent or
Documentation Agent, as applicable.
"Allocation Fraction" of any item of Equipment shall mean a fraction,
the numerator of which is the Purchase Price of such Equipment and the
denominator of which is the aggregate Purchase Price of all of the Equipment
then subject to the Lease, including such Equipment.
"Alter" shall have the meaning provided in Section 5.5(a) of the Lease.
SX-3
58
"Alternate Base Rate" shall mean, for any period, an interest rate per
annum equal to the greater of (a) the prime rate for that day for loans
denominated in Dollars quoted by the Administrative Agent and (b)(i) the Federal
Funds Effective Rate most recently determined by Administrative Agent plus (ii)
one-half of one percent (0.50%). If said rate changes from time to time after
the date of the Participation Agreement, the Alternate Base Rate shall be
automatically increased or decreased, if appropriate and as the case may be,
without notice to Lessee or any Lessor, as of the effective time of each change.
"Applicable Margin" shall mean at any time and from time to time, a
percentage per annum equal to the applicable percentage set forth below for the
Performance Level set forth below:
PERFORMANCE LIBOR RATE ALTERNATE BASE RATE
LEVEL APPLICABLE MARGIN APPLICABLE MARGIN
----------- ----------------- -------------------
I .700% 0
II .750% 0
III .825% 0
IV .950% 0
V 1.20% 0
The Applicable Margin Percentage for each LIBO Rate Funding made pursuant to the
Participation Agreement shall be determined by reference to the Performance
Level in effect from time to time.
"Appraisal" shall mean each appraisal of the Equipment from an
Appraiser received pursuant to the terms of the Participation Agreement or the
Lease.
"Appraised Value" shall mean, with respect to any item of Equipment as
of any date of determination, the value in use of such Equipment at the end of
the Base Period as set forth on the Appraisal therefor.
"Appraiser" shall mean American Appraisal Associates, Inc., or such
other Person as is selected by Lessee and Administrative Agent.
"Arrangement Fee" shall mean the arrangement fee referred to in the Fee
Letter Agreement.
"Arranger" shall mean ABN AMRO Bank N.V.
"Assumed Interest Rate" shall mean, as of the date of any Funding, the
Interest Rate that would have been applicable for purposes of calculating
Variable Rent under the Lease in the event that the Delivery Date to which such
Funding relates had occurred on such date.
"Assurance" shall mean, as to any Person, any guaranty or other
contingent liability of such Person (other than any endorsement for collection
or deposit in the ordinary course of business) or
SX-4
59
obligations as an account party in respect of letters of credit, direct or
indirect, with respect to any obligation of another Person, through an agreement
or otherwise, including (a) any other endorsement or discount with recourse or
undertaking substantially equivalent to or having economic effect similar to a
guarantee in respect of any such obligation and (b) any agreement (i) to
purchase, or to advance or supply funds for the payment or purchase of, any such
obligation, (ii) to purchase securities or to purchase, sell or lease property
(whether as lessee or lessor), products, materials or supplies, or
transportation or services, in respect of enabling such other Person to pay any
such obligation or to assure the owner thereof against loss regardless of the
delivery or non-delivery of the securities, property, products, materials or
supplies, or transportation or services or (iii) to make any loan, advance or
capital contribution to or other investment in, or to otherwise provide funds to
or for, such other Person in respect of enabling such Person to satisfy any
obligation (including any liability for a dividend, stock liquidation payment or
expense) or to assure a minimum equity, working capital or other balance sheet
condition in respect of any such obligation. The amount of any Assurance shall
be an amount equal to the lesser of the stated or determinable amount of the
primary obligation in respect of which such Assurance is made or, if not stated
or determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder) as determined by such
Person in good faith.
"Authority" shall mean any: (a) Federal, state, local or (if any
Equipment or any component thereof has been moved outside of the United States)
foreign, tribunal, legislative body, governmental subdivision, administrative
agency or other governmental authority; or (b) arbitrator or panel of
arbitrators, in the case of each of clause (a) and (b) having or exercising
jurisdiction over Lessee, Administrative Agent, any Lessor or any Equipment (or
any component thereof).
"Bankruptcy Code" shall mean the United States Bankruptcy Code, as the
same may be amended and together with any successor statutes.
"Bankruptcy Law" means the Bankruptcy Code, and any applicable Federal,
state, local or other jurisdictional insolvency, reorganization, moratorium,
fraudulent conveyance or similar Law now or hereafter in effect for the relief
of debtors.
"Base Period" shall mean the period commencing on the Documentation
Date ending on the fifth anniversary thereof.
"Basic Rent" shall mean all installments of Fixed Rent, if any, and
Variable Rent due and payable by Lessee on each Payment Date during the Base
Period or Renewal Term, if any.
"Board" shall mean the Board of Governors of the Federal Reserve System
of the United States (or any successor).
"Board of Directors" shall mean, with respect to any Person, the Board
of Directors of such Person (or of its (managing) general partner or managing
member, as the case may be), or any committee thereof duly authorized to act on
behalf of such Board of Directors.
SX-5
60
"Business Day" shall mean any day on which:
(i) Federal and state chartered banks in Chicago, Illinois,
New York, New York and Houston, Texas are open for commercial banking
business; and
(ii) solely with respect to determinations of Variable Rent
and Rent Periods, dealings in Dollars are carried on in the London
interbank market.
"Business Transfer" shall have the meaning provided in Section 13.10 of
the Lease.
"Capital Lease" shall mean, as to any Person, any lease in respect of
which the rental obligation of such Person constitutes a Capitalized Lease
Obligation.
"Capital Stock" shall mean, with respect to any Person, any and all
shares, interests, rights to purchase, warrants, options, participations or
other equivalents (however designated) of such Person's equity, including all
common stock and preferred stock, any limited or general partnership interest
and any limited liability company membership.
"Capitalized Lease Obligation" shall mean, with respect to any Person,
the obligation of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) real or personal property that is
required to be classified and accounted for as a capital lease obligation on a
balance sheet of such Person under GAAP and, for purposes of the Operative
Agreements, the amount of such obligation at any date will be the capitalized
amount thereof at such date, determined in accordance with GAAP.
"Capitalized Transaction Costs" shall mean Transaction Costs which are
capitalized under the terms of the Participation Agreement and Lease.
"Casualty" shall mean any of the following events in respect of any
item of Equipment: (a) the loss of such Equipment or the use thereof due to
theft, disappearance, destruction, damage beyond repair or rendition of such
Equipment permanently unfit for normal use for any reason whatsoever; (b) any
damage to such Equipment which results in an insurance settlement with respect
to such Equipment on the basis of a total loss; (c) the permanent condemnation,
confiscation or seizure of, or requisition of title to or use of, such
Equipment; (d) as a result of any rule, regulation, order or other action by any
Authority, the use of such Equipment in the normal course of business shall have
been prohibited, directly or indirectly, for a period of six consecutive months,
unless Lessee, prior to the expiration of such six-month period, shall have
undertaken and shall be diligently carrying forward all steps which are
necessary or desirable to permit the normal use of such Equipment by the Lessee
thereof or, in any event, if use of such Equipment shall have been prohibited,
directly or indirectly, for a period of twelve consecutive months; or (e) the
operation or location of such Equipment, while under requisition for use by any
Authority, in any area excluded from coverage by any insurance policy then in
effect with respect to such Equipment required by the
SX-6
61
terms of Section 7.1 of the Lease, if Lessee shall be unable to obtain indemnity
in lieu thereof from such Authority; provided that for the purpose of the
foregoing clause (e), if such Equipment shall be returned to Lessee prior to the
Casualty Settlement Date in such condition that a Casualty would not otherwise
be deemed to exist with respect thereto, then such event shall, at the option of
Lessee, not constitute a Casualty.
"Casualty Amount" of any Equipment shall mean, with respect to any
Casualty, an amount equal to the product of (a) the Lease Balance on the date of
such Casualty and (b) the Allocation Fraction of such Equipment.
"Casualty Notice" shall have the meaning provided in Section 6.1 of the
Lease.
"Casualty Proceeds" shall have the meaning provided in Section 6.2 of
the Lease.
"Casualty Settlement Date" shall have the meaning provided in Section
6.1(a) of the Lease.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act.
"Change of Control" shall mean an event or series of events by which
(a) any "person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act as in effect on the Execution Date) or related persons constituting
a "group" (as such term is used in Rule 13d-5 under the Exchange Act in effect
on the Execution Date) is or becomes the "beneficial owner" (as defined in Rules
13d-3 and 13d-5 under the Exchange Act, as in effect on the Documentation Date,
except that a person or such group shall be deemed to have "beneficial
ownership" of all shares that any such person or such group has the right to
acquire without condition, other than the passage of time, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of 50% or more of the total voting power of the Voting Stock of the
Guarantor; (b) the Guarantor consolidates with or merges into another Person or
conveys, transfers or leases all or substantially all of its assets to any
Person, or any Person consolidates with, or merges into, the Guarantor, in each
of the foregoing cases, in a transaction not otherwise permitted by Section 4.02
of the Guaranty; (c) the Guarantor conveys, transfers or leases all or
substantially all of its assets to any Person; (d) the stockholders of the
Guarantor approve any plan of liquidation or dissolution of the Guarantor; or
(e) during any period of twelve consecutive months, individuals who, at the
beginning of such period, constituted the Board of Directors of the Guarantor
(together with any new directors whose election by such Board of Directors or
whose nomination for election by the stockholders of the Guarantor, as
applicable, was approved by a vote of not less than a majority of the directors
then still in office who were either directors at the beginning of such period
or whose election or nomination for election was previously so approved) cease
for any reason to constitute a majority of the Board of Directors of the
Guarantor then in office.
"Change of Control Event" shall mean (a) the execution of any
definitive agreement which when fully performed by the parties thereto, would
result in a Change of Control; or (b) the
SX-7
62
commencement of a tender offer pursuant to Section 14(d) of the Exchange Act
that would result in a Change of Control if completed.
"Code" shall mean the Internal Revenue Code of 1986, as amended, from
time to time, and the regulations promulgated thereunder.
"Collateral" shall mean all of Lessee's right, title and interest in
and to each of the following, whether now existing or hereafter arising or
acquired, and wherever located:
(a) the Equipment;
(b) the Subleases;
(c) all contracts necessary to purchase, operate and maintain
the Equipment, including all warranties;
(d) any rebate, offset or other similar rights under a
purchase order, invoice or purchase agreement with any manufacturer of
any Equipment;
(e) a copy of all books, manuals, logs, records, writings,
data bases, information and other property relating to, used or useful
in connection with, evidencing, embodying or incorporating any of the
foregoing; and
(f) all products, accessions and proceeds of and from any and
all of the foregoing Collateral (including proceeds which constitute
property of the types described in subsections (a), (b), (c), (d) and
(e) above and, to the extent not otherwise included, all payments under
insurance (whether or not Lessor is the loss payee thereof), or any
indemnity, warranty or guaranty, payable by reason of loss or damage to
or otherwise with respect to any of the foregoing Collateral.
"Commitment(s)" for each Lessor shall mean the amount set forth in
Schedule I to the Participation Agreement across from the name of such Lessor.
"Commitment Fee" shall have the meaning provided in Section 2.5 of the
Participation Agreement.
"Commitment Percentage" shall mean, with respect to each Lessor, the
quotient (expressed as a percentage) of such Lessor's Commitment divided by the
Total Commitment.
"consolidated" shall mean any Person whose financial condition and
results of operations are required in accordance with GAAP to be shown on a
consolidated basis with the financial condition and results of operations of the
Guarantor or Lessee, as the case may be.
SX-8
63
"Consolidated EBITDA" shall mean, for any period, the Consolidated Net
Income of the Guarantor and its consolidated Subsidiaries for such period,
increased (to the extent deducted in determining Consolidated Net Income) by the
sum of (a) all income taxes (including state franchise taxes based on income) of
the Guarantor and its consolidated Subsidiaries paid or accrued according to
GAAP for such period; (b) Consolidated Interest Expense of the Guarantor and its
consolidated Subsidiaries for such period; (c) depreciation and amortization of
the Guarantor and its consolidated Subsidiaries for such period determined in
accordance with GAAP; and (d) other non-cash charges (excluding any such
non-cash charges to the extent they require an accrual of, or reserve for, cash
charges for any future periods) for such period determined in accordance with
GAAP, and decreased (to the extent added in determining Consolidated Net Income)
by any non-cash credits for such period determined in accordance with GAAP.
"Consolidated Indebtedness" shall mean, at the date of any
determination thereof, Indebtedness of the Guarantor and its consolidated
Subsidiaries (other than Interest Rate Risk Indebtedness, Derivatives
Obligations, and contingent obligations in respect of letters of credit)
determined on a consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" shall mean (without duplication), with
respect to the Guarantor and its consolidated Subsidiaries for any period, the
aggregate amount of interest, whether expensed or capitalized, paid, accrued or
scheduled to be paid or accrued during such period in respect of (i) all
Indebtedness of the Guarantor and its consolidated Subsidiaries, plus (ii) the
Debentures, all determined on a consolidated basis in accordance with GAAP.
"Consolidated Net Income" of the Guarantor shall mean, for any period,
the net income or loss of the Guarantor and its Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP; provided, that there
shall be excluded, without limitation, from such net income (to the extent
otherwise included therein):
(a) net extraordinary gains and losses;
(b) net gains or losses in respect of dispositions of assets
other than in the ordinary course of business;
(c) the net income of any Person in which the Guarantor or any
consolidated Subsidiary has a joint equity interest, except to the
extent of the amount of dividends or other distributions actually paid
in cash to the Guarantor or such Subsidiary by such other Person during
such period;
(d) the net income of any Person accrued prior to the date it
becomes a consolidated Subsidiary or is merged into or consolidated
with the Guarantor or any consolidated Subsidiary or prior to the date
its assets are acquired by the Guarantor or any of the consolidated
Subsidiaries, except that the foregoing shall not apply to any business
acquisition accounted for as a pooling of interests;
SX-9
64
(e) the net income of any consolidated Subsidiary to the
extent that the declaration or payment of dividends or similar
distributions by that consolidated Subsidiary of that income is not at
the time permitted by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary;
(f) any gains or losses attributable to write-ups or
write-downs of assets other than in the ordinary course of business;
(g) foreign currency translations or adjustments; and
(h) pooling and restructuring charges incurred as a result of
the Merger.
"Corporation" shall mean corporations, joint stock associations and
business trusts.
"Credit Agreement" shall mean the Guarantor's Amended and Restated
Credit Agreement dated as of May 27, 1998, as it may from time to time be
amended, modified, restated or supplemented.
"Debenture Indenture" shall mean the Indenture dated as of October 15,
1997, from the Guarantor to The Chase Manhattan Bank, as Trustee, as amended and
supplemented to the Documentation Date.
"Debentures" shall mean the Guarantor's 5% Convertible Subordinated
Preferred Equivalent Debentures due 2027 issued pursuant to the Debenture
Indenture.
"Defaulting Lessor" shall have the meaning provided in Section 2.1(c)
of the Participation Agreement.
"Default Rate" shall mean, at any time, the rate per annum which is two
percent (2%) higher than the Interest Rate then in effect.
"Delivery Date(s)" shall mean each of the actual dates during the
Interim Period on which the transactions contemplated in Article II of the
Participation Agreement are completed.
"Delivery Date Closing" shall mean, with respect to a Delivery Date,
the completion of those transactions described in Article II of the
Participation Agreement.
"Delivery Date Notice" shall have the meaning provided in Section 3.1
of the Participation Agreement.
"Deposit Account" shall have the meaning provided in Section 6.2 of the
Lease.
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"Derivatives Obligations" shall mean, as to any Person all obligations
of such Person in respect of any swap transaction, forward rate transaction,
commodity swap, commodity option, interest rate option, foreign exchange
transaction, cap transaction, floor transaction, collar transaction, currency
swap transaction, cross-currency rate swap transaction, currency option or any
other similar transaction (including any option with respect to any of foregoing
transactions) or any combination of the foregoing transactions, entered into in
the ordinary course of business of such Person for the purpose of hedging and
not for speculative purposes.
"Distributions" shall mean, for any period of measurement, and include
with respect to any Corporation the following: (a) the declaration or payment of
any dividend or distribution on or in respect of shares of any class of capital
stock of such Corporation, except dividends payable solely in shares of such
Corporation's capital stock; and (b) any other loan, dividend, or distribution
for any purpose from such Corporation (however characterized), including
inter-company loans (other than loans to a Subsidiary by Lessee or another
Subsidiary) and guarantees, to or for the benefit of any or all of its
shareholders, whether paid on or in respect of shares of any class of the
capital stock of such Corporation or otherwise.
"Documentation Agent" shall mean Chase Bank of Texas, National
Association.
"Documentation Date" shall mean the date of execution and delivery of
the Lease, the Participation Agreement and the Guaranty.
"Dollar" and the sign "$" mean lawful money of the United States.
"Environmental Claim" shall mean any claim, notice of claim, complaint,
notice of violation, letter, or other assertion or inquiry of any kind
concerning any asserted or actual violation of or liability under any
Environmental Law or any asserted or actual violation or liability relating to
any Hazardous Substance.
"Environmental Law" shall mean all federal, state, provincial or local
laws, statutes, rules, regulations, ordinances and codes, together with all
final administrative orders, licenses, authorizations and permits of, and
written agreements with, any Governmental Authorities, in each case relating to
the protection of the environment or the disposal of hazardous waste.
"Environmental Violation" shall mean any activity, occurrence or
condition that violates or results in non-compliance with any applicable
Environmental Laws or results in a written complaint or other written claim from
a Governmental Authority with respect to any Environmental Laws.
"Equipment" shall mean each item of Equipment listed on Schedule I to
any Lease Supplement, and any substitutions therefor, replacements thereof and
additions thereto from time to time pursuant to the Operative Agreements.
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"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time, and all rules, regulations, rulings and
interpretations adopted by the U.S.
Department of Labor thereunder.
"ERISA Affiliate" shall mean (a) all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Guarantor, are treated as a single
employer under Section 414 of the Code and (b) any Subsidiary of the Guarantor.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Event of Default" shall have the meaning provided in Section 8.1 of
the Lease.
"FDIC" shall mean the Federal Deposit Insurance Corporation (or any
successor).
"Federal Funds Effective Rate" shall mean, for any day, an interest
rate per annum equal to the weighted average of the rates on overnight Federal
Funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers, as published for such day by the Federal Reserve Bank of
New York, or, if such rate is not so published for any day which is a Business
Day, the average of quotations for such day on such transaction received by
Administrative Agent from three Federal funds brokers of recognized standing
selected by it.
"Fee Letter Agreement" shall mean that certain letter agreement
regarding fees dated October 29, 1998 from Administrative Agent and
Documentation Agent to Guarantor.
"Fixed Rent" shall mean, for each Renewal Term, that portion of the
installment of Rent payable on such Payment Date representing amortization of
the Purchase Price for the Equipment and Capitalized Transaction Costs, if any,
as determined by Lessors pursuant to Section 3.1(b) of the Lease.
"Funding" shall have the meaning provided in Section 2.1 of the
Participation Agreement.
"GAAP" shall mean generally accepted accounting principles as in effect
from time to time as set forth in the opinions, statements and pronouncements of
the Accounting Principles Board of the American Institute of Certified Public
Accountants, the Financial Accounting Standards Board.
"Governmental Authority" shall mean any governmental authority of the
United States of America, any State of the United States, or of any other
foreign jurisdiction and any political subdivision of any of the foregoing, and
any central bank, agency, department, commission, board, bureau, court or other
tribunal having or lawfully asserting jurisdiction over either Agent, any
Lessor, the Guarantor, Lessee or any Equipment (or any component thereof).
"Guarantor" shall mean Xxxxxxxxxxx International, Inc., a Delaware
corporation.
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"Guarantor Debt Rating" shall mean, with respect to the Guarantor as of
any date of determination, the rating that has been most recently announced by
either S&P or Xxxxx'x, as the case may be, for any non-credit enhanced long-term
senior debt issued or to be issued by the Guarantor. For purposes of the
foregoing:
(a) if only one of S&P and Xxxxx'x shall have in effect a
Guarantor Debt Rating, the Applicable Margin shall be determined by
reference to the available rating;
(b) if, at any time, neither S&P nor Xxxxx'x shall have in
effect a Guarantor Debt Rating, the Applicable Margin shall be set in
accordance with Performance Level V under the definition of "Applicable
Margin";
(c) if the ratings established by S&P and Xxxxx'x shall fall
within different Performance Levels, the Applicable Margin shall be
based upon the lower rating; provided, however, that, if the higher of
such ratings is two or more Performance Levels above the lower of such
ratings, the Applicable Margin shall be based upon the rating that is
one Performance Level above the lower rating;
(d) if any rating established by S&P or Xxxxx'x shall be
changed, such change shall be effective as of the date on which such
change is announced publicly by the rating agency making such change;
and
(e) if S&P or Xxxxx'x shall change the basis on which ratings
are established by it, each reference to the Guarantor Debt Rating
announced by S&P or Xxxxx'x shall refer to the then equivalent rating
by S&P or Xxxxx'x, as the case may be.
"Guaranty" or Guaranty Agreement" shall mean the Guaranty Agreement
dated as of the Documentation Date between the Guarantor and Administrative
Agent, for the benefit of Lessors.
"Guaranty Default" shall have the meaning provided in Section 5.01 of
the Guaranty.
"Hazardous Substance" shall mean any hazardous materials, hazardous
waste, hazardous constituents, hazardous or toxic substances, petroleum products
(including crude oil or any fraction thereof), defined or regulated as such in
or under any Environmental Law, including, without limitation, polychlorinated
biphenyls.
"Impositions" shall mean all fees (including, but not limited to,
license, documentation, recording or registration fees) and taxes (including but
not limited to all income, sales, use, lease, sublease, gross receipts, personal
property, occupational, value added or other taxes, levies, imposts, duties,
assessments, charges or withholdings of any nature whatsoever), together with
any penalties, fines or additions to tax or interest thereon.
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"Incipient Default" shall mean an event or condition which, with the
giving of notice or the passage of time or both, would constitute an Event of
Default.
"Indebtedness" shall mean (without duplication), with respect to any
Person, (a) any liability (other than the Debentures) of such Person (i) for
borrowed money (whether or not the recourse of the lender is to the whole of the
assets of such Person or only to a portion thereof), or under any reimbursement
obligation relating to a letter of credit, bankers' acceptance or note purchase
facility, (ii) evidenced by a bond, note, debenture or similar instrument, (iii)
for the balance deferred and unpaid of the purchase price for any property or
any obligation upon which interest charges are customarily paid (except for
trade payables arising in the ordinary course of business), or (iv) for the
payment of money relating to the principal portion of any Capitalized Lease
Obligation; (b) any obligation of any Person secured by (or for which the holder
of such obligation has an existing right, contingent or otherwise, to be secured
by) a consensual Lien on property owned or acquired, whether or not any
obligation secured thereby has been assumed, by such Person; (c) all net
obligations of such Person as of the date of a required calculation of any
Derivatives Obligations; (d) all Assurances of such Person of the Indebtedness
of any other Person of the type referred to in clause (a) or (c); (e) Interest
Rate Risk Indebtedness of such Person; and (f) any amendment, supplement,
modification, deferral, renewal, extension or refunding of any liability of the
types referred to above.
"Indemnitee(s)" shall mean each of Administrative Agent, Arranger,
Syndication Agent and Documentation Agent, in both their individual and agent
capacities, the Lessors, any Affiliate of any of them and any assignee, officer,
director, employee, attorney or agent of any of them.
"Initial Delivery Date" shall mean the first Delivery Date completed
pursuant to Article II of the Participation Agreement.
"Interest Coverage Ratio" shall mean, at the end of each fiscal
quarter, the ratio of (a) Consolidated EBITDA for the fiscal quarter then ended
and for the immediately preceding three fiscal quarters to (b) Consolidated
Interest Expense (excluding interest accrued in respect of the Debentures but
not actually paid in cash) for such four fiscal quarters.
"Interest Rate" shall mean the rate per annum equal to the sum of the
LIBO Rate for such Rent Period plus the Applicable Margin, unless and to the
extent that the Alternate Base Rate plus the Applicable Margin shall apply as a
result of the application of provisions of Section 7.3 or 7.4 of the
Participation Agreement.
"Interest Rate Risk Indebtedness" shall mean all obligations and
Indebtedness of the Guarantor with respect to the program for the hedging of
interest rate risk provided for in any interest rate swap agreement, interest
rate cap agreement, interest rate collar agreement or similar arrangement
entered into by the Guarantor for the purpose of reducing the Guarantor's
exposure to interest rate fluctuations and not for speculative purposes,
approved in writing by Administrative Agent (such approval not to be
unreasonably withheld), as it may from time to time be amended, modified,
restated or supplemented.
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"Interim Period" shall mean the period commencing on the Documentation
Date and ending on the first anniversary thereof.
"Investment" shall mean the purchase or acquisition of any share of
capital stock, partnership interest, evidence of indebtedness or other equity of
any other Person; any loan, advance or extension of credit to, or contribution
to the capital of, any other Person (other than cash equivalents and other than
extensions of credit resulting from the sale of goods (where Lessee retains
title to or a security interest in any equipment sold) or rendering of services
in the ordinary course of the Lessee's equipment leasing business); any real
estate held for sale or investment; any commodities futures contracts held other
than in connection with bona fide hedging transactions; any other investment in
any other Person; and the making of any commitment or acquisition of any option
to make an Investment.
"Investment Percentage" shall mean, with respect to each Lessor as of
any date of determination, the quotient (expressed as a percentage) of such
Lessor's Outstanding Investment divided by the Lease Balance.
"IRS" shall mean the Internal Revenue Service.
"ISDA" shall mean the International Swaps and Derivatives Association,
Inc.
"Law" shall mean collectively, any law (including any zoning law or
ordinance, ERISA, or any Environmental Law), treaty, statute, rule, regulation,
ordinance, order, directive, code, interpretation, judgment, decree, injunction,
write, determination, award, permit, license, authorization, direction,
requirement or decision of or agreement with or by any Governmental Authority.
"Lease" shall mean that certain Master Lease Intended as Security,
dated as of December __, 1998 by and between Administrative Agent and Lessee,
substantially in the form of Exhibit A to the Participation Agreement, as
amended, modified or supplemented from time to time in accordance with the
Participation Agreement.
"Lease Balance" shall mean, as of any determination date, the aggregate
Purchase Price of all of the Equipment plus all Capitalized Transaction Costs,
minus all amounts of Fixed Rent, if any, actually paid to the date of
determination and all Reduction Amounts actually paid to the date of
determination.
"Lease Commencement Date" shall have the meaning provided in Section
2.2 of the Lease.
"Lease Supplement" shall have the meaning provided in Section 3.5 of
the Participation Agreement.
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"Lease Term" shall mean the Base Period (including the Interim Period)
and all exercised Renewal Terms, if agreed to by the parties.
"Lessee" shall mean Xxxxxxxxxxx Enterra Compression Company, L.P., a
Delaware limited partnership.
"Lessee Purchase Option" shall have the meaning provided in Section
11.1(b) of the Lease.
"Lessee Risk Amount" shall mean, on any date, an amount equal to the
product of (i) eighty-five and one-half percent (85.5%) times (ii) the aggregate
Purchase Price of all Equipment subject to the Lease plus all Capitalized
Transaction Costs.
"Lessor Commitment" shall mean, with respect to each Lessor, the amount
set forth opposite such Lessor's name on Schedule I to the Participation
Agreement.
"Lessor Liens" shall mean Liens or other conveyances resulting from any
act of or claim against Agent in its individual capacity (or any Person claiming
by, through or under Administrative Agent in its individual capacity) or any
Lessor, in each case arising out of any event or condition not related to the
exercise of such Person's rights or the performance of its duties expressly
provided under any Operative Agreement.
"Lessor Risk Amount" shall mean, on any date, an amount equal to the
product of (i) fourteen and one-half percent (14.5%) times (ii) the aggregate
Purchase Price of all Equipment subject to the Lease plus all Capitalized
Transaction Costs.
"Lessors" shall mean each of the Persons identified as a Lessor in
Schedule I to the Participation Agreement and those Persons to whom the
interests in the Lease and the Collateral shall have been transferred or
assigned by a Lessor from time to time in accordance with the provisions of the
Lease and the Participation Agreement.
"LIBO Rate" shall mean, relative to any Rent Period with respect to the
Lease Balance, the rate per annum determined by Administrative Agent to be:
(a) the offered rate per annum at which deposits in United
States Dollars appear on the Telerate Page 3750 (or any successor
page), or
(b) if such offered rate is not available, then the rate per
annum at which deposits in United States Dollars appear on the Reuters
Screen LIBO Page (or any successor page), or
(c) if neither of the foregoing offered rates is available,
the average (rounded upwards, if necessary, to the nearest 1/16 of 1%)
of the rates per annum at which Dollar deposits in immediately
available funds are offered to the Administrative Agent in the
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London interbank market, determined in any case as of 11:00 a.m.
(London time) two Business Days prior to the beginning of such Rent
Period for delivery on the first day of such Rent Period, and in an
amount approximately equal to the amount of the Lease Balance and for a
period approximately equal to such Rent Period.
"Lien" shall mean any lien, mortgage, pledge, assignment (including any
assignment of rights to receive payments of money), security interest, charge or
encumbrance of any kind including any conditional sale or other title retention
agreement or any lease (excluding, however (except with respect to the
Equipment) any lease that is not a Capital Lease) in the nature thereof (whether
voluntary or involuntary and whether imposed or created by operation of law or
otherwise), and any agreement to give a lien, mortgage, pledge, assignment
(including any assignment of rights to receive payments of money), security
interest, charge or other encumbrance of any kind; provided, however, that
"Lien" shall not include or cover (i) setoff rights and other standard
arrangements for netting payment obligations in the settlement of obligations,
arising under ISDA standard documents or otherwise customary in swap or hedging
transactions; and (ii) setoff rights of banks party to Derivative Obligations
which rights arise in the ordinary course of customary banking relationships.
"Material Adverse Effect" shall mean, relative to any occurrence of
whatever nature (including any adverse determination in any litigation,
arbitration or governmental investigation or proceeding) and after taking into
account actual insurance coverage and effective indemnification with respect to
such occurrence, (a) a material adverse effect on the financial condition,
business or operations of the Guarantor and its consolidated Subsidiaries taken
as a whole, (b) the impairment of (i) the ability of the Lessee and the
Guarantor collectively to perform their payment or other material obligations
under the Lease, the Guaranty or any other Operative Agreement or (ii) the
ability of either Administrative Agent or the Lessors to realize the material
benefits intended to be provided by the Guarantor and the Lessee (taken as a
whole) under the Operative Agreements or (c) the subjection of either Agent or
any Lessor to any civil or criminal liability arising in connection with the
Operative Agreements.
"Material Subsidiary" shall mean, at any date, a consolidated
Subsidiary the Capital Stock of which is owned by the Guarantor and/or one or
more Subsidiaries and that either (a) has total assets in excess of 5% of the
total assets of the Guarantor and its consolidated Subsidiaries, in each case as
determined in accordance with GAAP or (b) has gross net revenues in excess of 5%
of the consolidated gross revenues of the Guarantor and its consolidated
Subsidiaries based, in each case, on the most recent audited consolidated
financial statements of the Guarantor.
"Merger" shall have the meaning provided in the introduction to the
Credit Agreement.
"Xxxxx'x" shall mean Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" shall mean any plan which is a "multiemployer
plan" (as such term is defined in Section 4001(a)(3) of ERISA).
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"Net Worth" shall mean, as to the Guarantor and the Subsidiaries, on a
consolidated basis, at any date of determination thereof, the sum of (a) the par
value or stated value of its Capital Stock, plus (b) capital in excess of par or
stated value of shares of its Capital Stock, plus (or minus in the case of a
deficit), (c) retained earnings or accumulated deficit, as the case may be, plus
(d) and any other account which, in accordance with GAAP, constitutes
stockholders' equity, excluding (e) any treasury stock, and (f) the effects upon
net worth resulting from the translation of foreign currency denominated assets
into Dollars.
"Officer's Certificate" shall mean a certificate executed on behalf of
any entity by its President, one of its Vice Presidents, its Chief Financial
Officer, its Treasurer, its Assistant Treasurer or its Controller.
"Operative Agreement(s)" shall mean the Participation Agreement, the
Lease, the Lease Supplements, the Delivery Date Notices, the Guaranty, the
Subleases, the Bills of Sale and each UCC financing statement filed or to be
filed from time to time with respect to the security interests created pursuant
to the Lease.
"Other Lessors" shall have the meaning provided in Section 11.3 of the
Lease.
"Outstanding Investment" of any Lessor as of any date of determination
shall mean the aggregate amount funded by such Lessor pursuant to Section 2.1 of
the Participation Agreement (but excluding amounts returned to such Lessor
pursuant to Section 2.4 of the Participation Agreement), reduced by all Fixed
Rent, if any, paid to Administrative Agent for the account of such Lessor and
all Reduction Amounts paid to Administrative Agent for the account of such
Lessor.
"Part(s)" shall mean all parts, instruments, appurtenances,
accessories, furnishings and other equipment of whatever nature that may from
time to time be incorporated or installed in or attached to any Equipment.
"Partial Casualty" shall mean any loss, damage, destruction, taking by
eminent domain, loss of use or theft of any portion of a Equipment which does
not constitute a Casualty.
"Participant(s)" shall mean any or all of the parties to the
Participation Agreement.
"Participation Agreement" shall mean the Participation Agreement, dated
as of December 8, 1998, entered into among Lessee, Agents, Arranger and Lessors,
as amended, modified or supplemented from time to time in accordance with its
terms.
"Payment Date" shall mean with respect to the Base Period and each
Renewal Term, if any, (a) as to any Basic Rent calculated based on the Alternate
Base Rate, the last Business Day of each March, June, September and December to
occur while such Basic Rent is calculated based on the Alternate Base Rate, (b)
as to any Basic Rent calculated based on the LIBO Rate having a Rent Period of
three months or less, the last day of such Rent Period and (c) as to any Basic
Rent
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calculated based on the LIBO Rate having a Rent Period longer than three months,
each day which is three months after the first day of such Rent Period and the
last day of such Rent Period.
"Payment Default" shall mean an Event of Default described in Section
8.1(a) of the Lease.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Pension Plan" shall mean, with respect to any Person, a "pension plan"
as such term is defined in section 3(2) of ERISA which is subject to Title IV of
ERISA and to which such Person may have any liability or contingent liability,
including, but not limited to, liability by reason of having been a substantial
employer within the meaning of section 4063 of ERISA at any time during the
preceding five years, or by reason or being deemed to be a contributing sponsor
under section 4069 of ERISA.
"Performance Level" shall mean a reference to one of Performance Level
I, Performance Level II, Performance Level III, Performance Level IV or
Performance Level V.
"Performance Level I" shall mean, at any date of determination, the
Guarantor shall have a Guarantor Debt Rating in effect on such date of at least
A- by S&P and at least A3 by Xxxxx'x.
"Performance Level II" shall mean, at any date of determination, (a)
the Performance Level does not meet the requirements of Performance Level I and
(b) the Guarantor shall have a Guarantor Debt Rating in effect on such date of
at least BBB+ by S&P and at least Baa1 by Xxxxx'x.
"Performance Level III" shall mean, at any date of determination, (a)
the Performance Level does not meet the requirements of Performance Level I or
Performance Level II and (b) the Guarantor shall have a Guarantor Debt Rating in
effect on such date of at least BBB by S&P and at least Baa2 by Xxxxx'x.
"Performance Level IV" shall mean, at any date of determination, (a)
the Performance Level does not meet the requirements of Performance Level I,
Performance Level II or Performance Level III and (b) the Guarantor shall have a
Guarantor Debt Rating in effect on such date of at least BBB- by S&P and at
least Baa3 by Xxxxx'x.
"Performance Level V" shall mean, at any date of determination, the
Performance Level does not meet the requirements of Performance Level I,
Performance Level II, Performance Level III or Performance Level IV.
"Permitted Contest" shall mean actions taken by a Person to contest in
good faith, by appropriate proceedings initiated timely and diligently
prosecuted, the legality, validity or applicability to the Equipment or any
interest therein of any Person of: (a) any law, regulation, rule, judgment,
order, or other legal provision or judicial or administrative requirements; (b)
any term or
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condition of, or any revocation or amendment of, or other proceeding relating
to, any authorization or other consent, approval or other action by any
Authority; or (c) any Lien or Imposition; provided that the initiation and
prosecution of such contest would not: (i) result in, or materially increase the
risk of, the imposition of any criminal liability on any Indemnitee; (ii)
materially and adversely affect the security interests created by the Lease or
the right, title or interest of Administrative Agent or any Lessor in or to any
of the Equipment or the right of Administrative Agent or any Lessor to receive
payment of Rent or the Lease Balance or any interest therein; or (iii)
materially and adversely affect the fair market value, utility or remaining
useful life of the Equipment or any interest therein or the continued economic
operation thereof; and provided further that in any event adequate reserves in
accordance with GAAP are maintained against any adverse determination of such
contest.
"Permitted Lessor Liens" shall mean Lessor Liens: (a) for taxes of
Administrative Agent or Documentation Agent or a Lessor either not yet due or
being challenged by a Permitted Contest; (b) arising out of judgments or awards
against Administrative Agent or Documentation Agent or a Lessor with respect to
which at the time an appeal or proceeding for review is being prosecuted by a
Permitted Contest; and (c) arising out of Liens arising voluntarily (but
excluding consensual security interests created by way of the Lessors) in the
ordinary course of business of Administrative Agent or Documentation Agent or a
Lessor for amounts the payment of which is either not delinquent or is being
contested by a Permitted Contest.
"Permitted Liens" shall mean:
(a) when used with respect to the Lessee and the Equipment in
the Operative Agreements:
(i) any rights (including, without limitation,
security interests) in favor of Administrative Agent or Lessors under
the Operative Agreements and any rights of any Persons entitled to use
of the Collateral in accordance with Section 5.2 of the Lease; (ii) any
Lien, (including, without limitation, Liens of landlords, carriers,
warehousemen, mechanics, repairmen or materialmen) in favor of any
Person securing payment of the price of goods or services provided in
the ordinary course of business for amounts the payment of which is not
overdue or is being contested in good faith by appropriate proceedings
promptly initiated and diligently prosecuted, so long as such
proceedings do not involve any reasonable danger of sale, forfeiture or
loss of all or any material part of the Collateral and do not
materially adversely affect any Lien created in favor of Lessor under
the Lease; (iii) any Lessor Lien or any Lien arising out of any breach
by any Lessor of its obligations under the Operative Agreements; and
(iv) any Lien for current taxes, assessments or other governmental
charges which are not delinquent or the validity of which is being
contested by a Permitted Contest; (v) attachments, judgments and other
similar Liens arising in connection with court proceedings, provided
the execution or other enforcement of such Liens is effectively stayed
and the claims secured hereby are being contested in good faith and by
appropriate proceedings; (vi) reservations, exceptions, encroachments,
easements, rights-of-way, covenants, conditions, restrictions, leases,
zoning and land use restrictions and other similar
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title exceptions or encumbrances affecting real property that were not
incurred in connection with the incurrence of indebtedness, so long as
such Liens do not involve a reasonable danger of sale, forfeiture or
loss of all or any material portion of the Collateral and do not
materially adversely affect any Lien created in favor of Lessor under
the Lease; (vii) any Lien incurred in the ordinary course of business
to secure performance of statutory obligations; and (viii) Subleases
permitted under the Lease; and
(b) when used with respect to the Guarantor and its
Subsidiaries (other than, as to the Equipment only, the Lessee) in the
Guaranty:
(i) Liens, not otherwise permitted under any other
provision of this definition, securing Indebtedness permitted under the
Guaranty in an aggregate principal amount at any time outstanding which
does not exceed 12% of Net Worth; (ii) Liens for taxes or unpaid
utilities not yet delinquent or which are being contested in good faith
by appropriate proceedings; provided that adequate reserves with
respect thereto are maintained on the books of the Guarantor or the
Subsidiaries, as the case may be, in conformity with GAAP; (iii)
carriers', warehousemen's, mechanics', materialmen's, repairmen's or
other like Liens arising in the ordinary course of business and not
overdue for a period of more than 60 days or which are being contested
in good faith by appropriate proceedings; (iv) pledges or deposits or
deemed trusts in connection with workers' compensation, unemployment
insurance, pension, employment or other social security legislation;
(v) easements, rights-of-way, use restrictions, minor defects or
irregularities in title, reservations (including reservations in any
original grant from any government of any land or interests therein and
statutory exceptions to title) and other similar encumbrances incurred
in the ordinary course of business which, in the aggregate, are not
substantial in amount and which do not in any case materially detract
from the value of the property subject thereto or materially interfere
with the ordinary conduct of the business of the Guarantor or any
Subsidiary; (vi) judgment and attachment Liens not giving rise to an
Event of Default or Liens created by or existing from any litigation or
legal proceeding that are currently being contested in good faith by
appropriate proceedings, promptly instituted and diligently conducted,
and for which adequate reserves have been made to the extent required
by GAAP; (vii) Liens on the assets of any entity or asset existing at
the time such asset or entity is acquired by the Guarantor or any
Subsidiary, whether by merger, consolidation, purchase of assets or
otherwise; provided that such Liens (i) are not created, incurred or
assumed by such entity in contemplation of such entity's being acquired
by the Guarantor or any Subsidiary; (ii) do not extend to any other
assets of the Guarantor or any Subsidiary; and (iii) the Indebtedness
secured by such Lien is permitted pursuant to this Guaranty; (viii)
Liens securing Indebtedness of the Guarantor or its Subsidiaries not
prohibited by Section 4.04 of the Guaranty incurred to finance the
acquisition of fixed or capital assets, provided that (A) such Liens
shall be created not more than 90 days after the acquisition of such
fixed or capital assets, (B) such Liens do not at any time encumber any
property other than the property financed by such Indebtedness and (C)
the Liens are not modified to secure other Indebtedness and the amount
of Indebtedness secured thereby is not increased; (ix) Liens incurred
to secure the
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performance of tenders, bids, leases, statutory obligations, surety and
appeal bonds, government contracts, performance and return-of-money
bonds and other obligations of a like nature incurred in the ordinary
course of business (exclusive of obligations for the payment of
borrowed money); (x) leases or subleases granted to others not
interfering in any material respect with the business of the Guarantor
or any Subsidiary; (xi) Liens to secure obligations arising from
statutory or regulatory requirements; (xii) any interest or title of a
lessor in property subject to any Capitalized Lease Obligation or
operating lease which, in each case, is permitted under the Guaranty;
(xiii) Liens in favor of collecting or payor banks having a right of
setoff, revocation, refund or chargeback with respect to money or
instruments of the Guarantor or any Subsidiary on deposit with or in
possession of such bank; (xiv) any renewal or refinancing of or
substitution for, or any extension or modification of any maturity date
for any Indebtedness secured by, any Lien permitted by any of the
preceding clauses; provided that the debt secured is not increased nor
the Lien extended to any additional assets; and (xv) Liens granted or
Letters of Credit issued in connection with the obligations of Grant
Prideco, Inc. incurred in connection with the TBT Leases (as such terms
are defined in the Credit Agreement).
"Person" shall mean any individual, corporation, limited or general
partnership, limited liability company, joint venture, association, joint stock
company, trust, unincorporated organization or other entity, or any Governmental
Authority.
"Plan" shall mean an employee pension benefit plan which is covered by
Title IV of ERISA or subject to the minimum funding standards under Section 412
of the Code and is either (a) maintained by the Guarantor or Lessee or any ERISA
Affiliate for employees of the Guarantor or any ERISA Affiliate or (b)
maintained pursuant to a collective bargaining agreement or any other
arrangement under which more than one employer makes contributions and to which
the Guarantor or any ERISA Affiliate is then making or accruing an obligation to
make contributions or has within the preceding five plan years made
contributions.
"Purchase Price" shall mean, for any item of Equipment, the purchase
price therefor set forth in the Lease Supplement pursuant to which such item of
Equipment is subjected to the Lease.
"Reduction Amount" shall mean amounts paid by Lessee to Administrative
Agent, for the benefit of the Lessors, for the purchase of any Equipment
pursuant to Section 6.1 or 6.2 of the Lease, provided that "Reduction Amounts"
shall not include any Rents, or any costs, expenses or taxes to be paid by
Lessee in connection with any such purchase, sale or transfer.
"Regulation U" shall mean Regulation U of the Board (respecting margin
credit extended by banks), as the same is from time to time in effect, and all
official rulings and interpretations thereunder or thereof.
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"Regulation X" shall mean Regulation X of the Board (respecting
borrowers who obtain margin credit), as the same is from time to time in effect,
and all official rulings and interpretations thereunder or thereof.
"Related Person" shall mean, with respect to any Person, any trade or
business (whether or not incorporated) which, together with such Person, is
under common control as described in section 414 of the Code.
"Release" shall mean any release, pumping, pouring, emptying,
injecting, escaping, leaching, dumping, seepage, spill, leak, flow, discharge,
disposal or emission of a Hazardous Substance.
"Renewal Option" shall mean the meaning provided in Section 11.1(a) of
the Lease.
"Renewal Rent" shall mean, with respect to the Lease or any Lease
Supplement (as the context may require), all payments of Fixed Rent and Variable
Rent due and payable by Lessee on each Payment Date during the applicable
Renewal Term, if any, as agreed to by the parties to the Lease.
"Renewal Term" shall have the meaning provided in Section 2.3 of the
Lease.
"Rent" shall mean Basic Rent and/or Renewal Rent, as the context may
require.
"Rent Period" shall mean, for the Base Period or any Renewal Term, the
period beginning on the first day of such Base Period or Renewal Term and ending
on (but excluding) the date which numerically corresponds to such date one, two,
three or six months thereafter and each successive period of one, two, three or
six months commencing on the last day of such preceding one, two, three or six
month period and ending on (but excluding) such numerically corresponding day;
provided, however, that (a) if such Rent Period would otherwise end on a day
which is not a Business Day, then such Rent Period shall end on the next
following Business Day, unless (solely for purposes of determining Rent Periods
in connection with calculating Variable Rent on a LIBO Rate basis) such next
following Business Day is the first Business Day of a calendar month, in which
case such Rent Period shall end on the Business Day immediately preceding such
numerically corresponding day, and (b) no Rent Period may end later than the
last day of the Lease Term.
"Replaced Part" shall have the meaning provided in Section 5.4(a) of
the Lease.
"Replacement Equipment" shall mean any item of Equipment duly
substituted for another item of Equipment in accordance with the provisions of
the Operative Agreements, as contemplated by Sections 6.1 and 6.2 of the Lease.
"Replacement Part" shall have the meaning provided in Section 5.4(a) of
the Lease.
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"Reportable Event" shall mean an event described in Section 4043(c) of
ERISA with respect to a Plan as to which the 30-day notice requirement has not
been waived by the PBGC.
"Requirement of Law" shall mean, as to any Person, any law, treaty,
rule or regulation or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is
subject.
"Required Lessors" shall mean, at a particular time, the holders of at
least 51% of the aggregate Outstanding Investment.
"Responsible Officer" of any Person shall mean (a) when used in the
definition of the term "Actual Knowledge": (i) in the case of any business
corporation, the chairman of the board of directors of such corporation if such
chairman is an officer of such corporation, the president, any vice president or
any assistant vice president of such corporation, the secretary or any assistant
secretary of such corporation or the treasurer or any assistant treasurer of
such corporation; (ii) in the case of any partnership, a general partner (if
such general partner is an individual), or a Responsible Officer of a corporate
general partner, of such partnership or the general manager of such partnership
or any assistant general manager of such partnership; and (iii) in the case of
any commercial bank or trust company, the chairman or vice chairman of the board
of directors or trustees of such bank or trust company, the chairman or vice
chairman of the executive committee of the board of directors or trustees of
such bank or trust company, the president, any vice president, the secretary,
any assistant secretary, the treasurer, any assistant treasurer, the cashier,
any assistant cashier, any trust officer or any assistant trust officer of such
bank or trust company, the controller or any assistant controller of such bank
or trust company, any executive or senior assistant or second vice president of
such bank or trust company or any other individual who is employed by such bank
or trust company and customarily performs functions similar to those performed
by any of the other officers of such bank or trust company referred to herein,
and (b) when used in the Guaranty or otherwise with respect to either the
Guarantor or the Lessee, the President, the chief financial officer, the
controller or any vice president of such Person or an individual specifically
authorized by the Board of Directors of such Person to sign on behalf of such
Person.
"S&P" shall mean Standard & Poor's Ratings Group, a division of
XxXxxx-Xxxx, Inc.
"Sale Option" shall have the meaning provided in Section 11.1(c) of the
Lease.
"Schedule X" shall mean this Schedule to the Participation Agreement.
"Securities Act" shall have the meaning provided in Section 5.1(cc) of
the Participation Agreement.
"Sublease" shall mean a sublease of Equipment entered into in
accordance with Section 5.2 of the Lease.
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"Sublessee" shall mean the lessees or sublessee under any Sublease.
"Subsequent Delivery Date" shall mean each of the dates scheduled for a
Delivery Date Closing pursuant to a Delivery Date Notice occurring following the
Initial Delivery Date.
"Subsequent Delivery Date Closing" shall mean the Delivery Date Closing
relating to a Subsequent Delivery Date.
"Subsequent Delivery Date Notice" shall mean a Delivery Date Notice
relating to a Subsequent Delivery Date.
"Subsidiary" shall mean (a) a corporation a majority of whose Voting
Stock is at the time, directly or indirectly, owned by such Person, by one or
more subsidiaries of such Person or by such Person and one or more subsidiaries
of such Person, (b) a partnership in which such Person or a subsidiary of such
Person is, at the date of determination, a general or limited partner of such
partnership, but only if such Person or its subsidiary is entitled to receive
more than 50% of the assets of such partnership upon its dissolution, or (c) any
other Person (other than a corporation or partnership) in which such Person,
directly or indirectly, at the date of determination thereof, has (i) at least a
majority ownership interest or (ii) the power to elect or direct the election of
a majority of the directors or other governing body of such Person. Unless the
context otherwise clearly requires, references in the Guaranty or the
Participation Agreement to a "Subsidiary" or the "Subsidiaries" refer to a
Subsidiary or the Subsidiaries of the Guarantor or the Lessee, as the case may
be.
"Syndication Agent" shall mean ABN AMRO Bank N.V.
"Termination Date" shall mean the date the Lease Term, including any
Renewal Term, ends with respect to the Equipment pursuant to (a) Article VIII of
the Lease relating to termination as a result of an Event of Default, (b)
Article X of the Lease relating to early termination, or (c) Section 11.1 of the
Lease relating to the exercise of the Lessee Purchase Option or Sale Option.
"Total Capitalization" shall mean, at any date, the sum of Consolidated
Indebtedness and Net Worth and the outstanding principal amount of the
Debentures at such date.
"Total Commitment" shall mean $200,000,000.
"Transaction Costs" shall mean, without duplication,
(i) the Commitment Fee;
(ii) a fee in respect of legal fees of Winston &
Xxxxxx reasonably incurred on behalf of Administrative Agent
in connection with the negotiation, execution and delivery of
the Operative Agreements, and the transactions contemplated
thereby, and
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the reasonable out-of-pocket expenses of Winston & Xxxxxx in
connection with the foregoing;
(iii) the fees and expenses of the Appraiser;
(iv) the Arrangement Fee;
(v) the Agency Fee;
(vi) the upfront participation fee payable to the
Lessors; and
(vii) all costs of lien searches and perfection of a
first priority security interest in the Collateral.
"Transferree" shall have the meaning provided in Section 13.10 of the
Lease.
"UCC" shall mean the Uniform Commercial Code, as in effect from time to
time in any applicable jurisdiction.
"Variable Rent" shall mean, with respect to each Rent Period occurring
during the Base Period or any Renewal Term, an amount equal to interest accrued
on the Lease Balance outstanding during such period at the Interest Rate.
"Voting Stock" shall mean, with respect to any Person, securities of
any class or classes of Capital Stock in such Person entitling holders thereof
(whether at all times or only so long as no senior class of stock has voting
power by reason of any contingency) to vote in the election of members of the
Board of Directors or other governing body of such Person.
"Welfare Plan" shall mean, with respect to any Person, a "welfare plan"
as such term is defined in section 3(1) of ERISA to which such Person or any
Related Person to such Person may have any liability or contingent liability.
"Wholly-Owned Subsidiary" as to any Person shall mean, a Subsidiary of
which all issued and outstanding Capital Stock (excluding directors' qualifying
shares) is directly or indirectly owned by such Person.
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