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EXHIBIT 10.4
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PARTICIPATION AGREEMENT
among
HANOVER COMPRESSOR COMPANY,
as Lessee,
HANOVER EQUIPMENT TRUST 1998A,
a Delaware business trust,
as Lessor,
SOCIETE GENERALE FINANCIAL CORPORATION,
as Investor,
THE CHASE MANHATTAN BANK,
as Agent for the
Lenders
and
THE LENDERS PARTIES HERETO
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Dated as of July 22, 1998
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TABLE OF CONTENTS
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SECTION 1. THE LOANS...................................................................................... 1
1.1 Loans...................................................................................... 1
1.2 Credit Agreement........................................................................... 1
1.3 Collateral For Loans....................................................................... 1
1.4 Guarantee.................................................................................. 1
SECTION 2. INVESTOR CONTRIBUTION.......................................................................... 2
2.1 Investor Contribution...................................................................... 2
SECTION 3. SUMMARY OF THE TRANSACTIONS.................................................................... 2
3.1 Operative Agreements....................................................................... 2
3.2 Equipment Purchase and Lease............................................................... 2
3.3 Aggregate Tranche A Percentage; Tranche A Percentage....................................... 2
SECTION 4. THE CLOSINGS................................................................................... 3
4.1 Initial Closing Date....................................................................... 3
4.2 Subsequent Closing Dates................................................................... 3
4.3 Trust Company Authorization................................................................ 3
SECTION 5. FUNDING OF ADVANCES............................................................................ 3
5.1 General.................................................................................... 3
5.2 Procedures for Funding..................................................................... 4
SECTION 6. CONDITIONS OF THE CLOSING...................................................................... 4
6.1 General Conditions to the Investor's and the Lenders' Obligations to
Make Loans and Investor Contributions...................................................... 4
6.2 Conditions to the Investor's and the Lenders' Obligations to Make
Advances to pay Equipment Acquisition Costs................................................ 8
SECTION 7. REPRESENTATIONS AND WARRANTIES ................................................................ 10
7.1 Representations and Warranties of the Investor on the Initial Closing
Date....................................................................................... 10
7.2 Representations and Warranties of Lessor on the Initial Closing Date....................... 11
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7.3 Representations and Warranties of the Lessee on the Initial Closing
Date....................................................................................... 13
7.4 Representations and Warranties of the Trust Company on the Initial
Closing Date............................................................................... 13
7.5 Representations and Warranties of the Lessee on Equipment Closing
Dates...................................................................................... 15
7.6 Representations and Warranties of the Lessor on Equipment Closing
Dates...................................................................................... 17
SECTION 8. PAYMENT OF CERTAIN EXPENSES.................................................................... 18
8.1 Transaction Expenses....................................................................... 18
8.2 Brokers' Fees and Stamp Taxes.............................................................. 19
8.3 Certain Fees and Expenses.................................................................. 19
8.4 Credit Agreement and Related Obligations................................................... 19
8.5 Commitment Fees............................................................................ 20
8.6 Overdue Rate............................................................................... 20
8.7 Continuous Perfection of Security Interests................................................ 20
8.8 Oklahoma Equipment Subleases............................................................... 20
SECTION 9. OTHER COVENANTS AND AGREEMENTS................................................................. 21
9.1 Covenants of the Trust and the Investor and the Trust Company.............................. 21
9.2 Repayment of Certain Amounts on Maturity Date.............................................. 23
9.3 Amendment of Certain Documents............................................................. 23
9.4 Proceeds of Casualty....................................................................... 23
SECTION 10. CREDIT AGREEMENT.............................................................................. 24
10.1 Lessee's Credit Agreement Rights........................................................... 24
SECTION 11. TRANSFER OF INTEREST.......................................................................... 25
11.1 Restrictions on Transfer................................................................... 25
11.2 Effect of Transfer......................................................................... 25
SECTION 12. INDEMNIFICATION............................................................................... 26
12.1 General Indemnity.......................................................................... 26
12.2 General Tax Indemnity...................................................................... 27
SECTION 13. MISCELLANEOUS................................................................................. 31
13.1 Survival of Agreements..................................................................... 31
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13.2 No Broker, etc............................................................................. 31
13.3 Notices.................................................................................... 31
13.4 Counterparts............................................................................... 33
13.5 Amendments and Termination................................................................. 33
13.6 Headings, etc.............................................................................. 33
13.7 Parties in Interest........................................................................ 34
13.8 Governing Law.............................................................................. 34
13.9 Severability............................................................................... 34
13.10 Liability Limited.......................................................................... 34
13.11 Rights of Lessee........................................................................... 34
13.12 Further Assurances......................................................................... 34
13.13 Successors and Assigns..................................................................... 35
13.14 No Representation or Warranty.............................................................. 35
13.15 Highest Lawful Rate........................................................................ 35
13.16 Waiver..................................................................................... 36
Annex A Rules of Usage and Definitions
Exhibits
Exhibit A Form of Assignment of Leases and Consent to Assignment
Exhibit B Form of Security Agreement
Exhibit C Form of Guarantee
Exhibit D Form of Requisition
Exhibit E-1 Form of Opinion of Counsel to Lessee and Guarantor
Exhibit E-2 Form of Opinion of Counsel to Lessor and Trust Company
Exhibit E-3 Form of Opinion of Local Counsel to Lessee and Guarantor
Exhibit F Equipment Closing Certificate
Exhibit G Form of Supplement to Assignment of Lease
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PARTICIPATION AGREEMENT, dated as of July 22, 1998 (this
"Agreement"), among HANOVER COMPRESSOR COMPANY, a Delaware corporation (the
"Lessee"); HANOVER EQUIPMENT TRUST 1998A, a Delaware business trust (the "Trust"
or the "Lessor"); THE CHASE MANHATTAN BANK, a New York banking corporation, as
agent (in such capacity, the "Agent") for the Lenders; SOCIETE GENERALE
FINANCIAL CORPORATION, as investor (the "Investor"); WILMINGTON TRUST COMPANY,
in its individual capacity, and each of the financial institutions listed on the
signature pages hereof (each, a "Lender"; collectively, the "Lenders").
Capitalized terms used but not otherwise defined in this Agreement shall have
the meanings set forth in Annex A hereto.
Preliminary Statement
In consideration of the mutual agreements herein contained and
other good and valuable consideration, receipt of which is hereby acknowledged,
the parties hereto hereby agree as follows:
SECTION 1. THE LOANS
1.1 Loans. The Lenders have agreed to make loans to the Lessor
in an aggregate principal amount of up to $194,000,000 in order for the Lessor
to acquire the Equipment and to pay other Equipment Acquisition Costs, and in
consideration of the receipt of the proceeds of such Loans, the Lessor will
issue the Tranche A Notes and the Tranche B Notes.
1.2 Credit Agreement. The Loans shall be made and the Notes
shall be issued pursuant to the Credit Agreement. Pursuant to this Agreement and
the Credit Agreement, the Loans will be made to the Lessor from time to time at
the request of the Lessee.
1.3 Collateral For Loans. The Loans and the obligations of the
Lessor under the Credit Agreement shall be secured by, inter alia, (i) a first
priority assignment of the Lease, granted pursuant to the Assignment of Lease
and consented to by the Lessee pursuant to the Consent to Assignment (in each
case in the respective forms set forth on Exhibit A hereto), and (ii) a first
priority security interest in each piece of Equipment pursuant to a Security
Agreement in the form set forth on Exhibit B hereto.
1.4 Guarantee. The obligations of the Lessor under the Credit
Agreement shall be guaranteed by the Guarantors to the extent provided in the
Guarantee (in the form attached hereto as Exhibit C).
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SECTION 2. INVESTOR CONTRIBUTION
2.1 Investor Contribution. Subject to the terms and conditions
of this Agreement, and in reliance on the representations and warranties of each
of the parties hereto contained herein or made pursuant hereto, on each Closing
Date, the Investor shall make an investment in the Lessor (each, an "Investor
Contribution") in an amount equal to 3% of the amount of the Advance requested
by the Lessee in the Requisition for such Closing Date. The aggregate amount of
Investor Contributions made by the Investor shall not exceed the Investor
Commitment. The Lessor shall use the Investor Contributions to pay a portion of
the Equipment Acquisition Costs simultaneously and pro rata with the Loans
advanced by the Lenders. The Lessee shall have the right to prepay the Investor
Contribution, in connection with the exercise by the Lessee of its right to
direct the Lessor to prepay the Loans in accordance with Section 10.1(e).
SECTION 3. SUMMARY OF THE TRANSACTIONS
3.1 Operative Agreements. On the Initial Closing Date, each of
the respective parties thereto shall execute and deliver this Agreement, the
Lease, the Security Agreement, the Notes, the Guarantee, the Credit Agreement,
the Assignment of Lease, the Consent to Assignment, and such other documents,
instruments, certificates and opinions of counsel as agreed to by the parties
hereto.
3.2 Equipment Purchase and Lease. (a) On each Equipment
Closing Date and subject to the terms and conditions of this Agreement and the
Credit Agreement (i) the Investor will make an Investor Contribution in
accordance with Section 2 hereof, (ii) the Lenders will make Loans in accordance
with Section 5 hereof and the terms and provisions of the Credit Agreement,
which Loans will be secured by the Security Agreement executed and delivered by
the Lessor and joined in by the Lessee, (iii) the Lessor will purchase all
right, title and interest of Lessee in and to each piece of Equipment to be
purchased on such Equipment Closing Date and (iv) the Lessor will simultaneously
lease all of its right, title and interest in such Equipment to the Lessee by
executing and delivering a Lease Supplement.
(b) On each Equipment Closing Date, the Lessee shall certify
to the Agent on the Equipment Closing Certificate the Tranche A Percentage for
each piece of Equipment being acquired on such Equipment Closing Date. The
Tranche A Percentage so certified shall be the Tranche A Percentage for such
piece of Equipment for the duration of the Term.
3.3 Aggregate Tranche A Percentage; Tranche A Percentage. (a)
Notwithstanding any other provision of this Agreement or the other Operative
Agreements, the
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Lessee agrees that in no event shall the Lessee specify a piece of Equipment for
the Lessor to acquire and lease pursuant to the execution and delivery of a
Lease Supplement if the Aggregate Tranche A Percentage after giving effect to
the acquisition and lease pursuant to the execution and delivery of a Lease
Supplement of such Equipment would be less than 85% or more than 89.9%.
(b) Notwithstanding any other provision of this Agreement or
the other Operative Agreements, the Lessee agrees that in no event shall the
Lessee specify a piece of Equipment for the Lessor to acquire and lease pursuant
to the execution and delivery of a Lease Supplement if the Tranche A Percentage
with respect to such Equipment would be less than 85% or more than 89.9%.
SECTION 4. THE CLOSINGS
4.1 Initial Closing Date. All documents and instruments
required to be delivered on the Initial Closing Date shall be delivered at the
offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, 425 Lexington Avenue, New York, New York,
or at such other location as may be determined by the Agent and the Lessee.
4.2 Subsequent Closing Dates. The Lessee shall deliver to the
Lessor, the Investor and the Agent a Requisition appropriately completed, in
connection with each Closing Date.
4.3 Trust Company Authorization. The Investor agrees that,
with respect to each Closing Date, the satisfaction or waiver of the conditions
contained in Section 6 hereof shall constitute, without further act,
authorization and direction by the Investor to the Trust Company to take on
behalf of the Lessor the actions specified in Section 2.1 of the Trust
Agreement.
SECTION 5. FUNDING OF ADVANCES
5.1 General. To the extent funds have been made available to
the Lessor as Loans and Investor Contributions, the Lessor will: (i) acquire the
Equipment in accordance with the terms of this Agreement and the other Operative
Agreements; (ii) on behalf of the Lessee, pay Transaction Expenses; and (iii)
pay all other Equipment Acquisition Costs.
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5.2 Procedures for Funding. (a) Not less than three Business
Days prior to each proposed Closing Date, the Lessee shall deliver to the
Investor and the Agent, a requisition (a "Requisition"), appropriately
completed, in the form of Exhibit D hereto.
(b) Each Requisition shall: (i) be irrevocable; and (ii)
request funds in an amount of at least $200,000 (or such lesser amounts as shall
be equal to the total aggregate of the Available Commitments plus the Available
Investor Commitment at such time) for the payment of Equipment Acquisition Costs
or other Equipment Acquisition Costs which have previously been incurred and
were not the subject of and funded pursuant to a prior Requisition, in each case
as specified in the Requisition.
(c) So long as no Default or Event of Default has occurred and
is continuing and subject to the Lessor and the Agent having each received the
materials required by Section 6.1 and/or 6.2, as applicable, on each Closing
Date (i) the Lenders shall make Loans to the Lessor in an aggregate amount equal
to 97% of the funds specified in any Requisition, up to an aggregate principal
amount equal to the Available Commitments; (ii) the Investor shall make an
Investor Contribution in an amount equal to 3% of the funds specified in any
Requisition, up to an amount equal to the Available Investor Commitment; and
(iii) the total amount of such Loans and Investor Contribution made on such date
shall be used to pay the Equipment Acquisition Costs.
(d) Notwithstanding anything to the contrary in this
Agreement, (i) the Lenders shall not be required to make Loans with respect to a
piece of Equipment in an aggregate amount in excess of 97% of the amount
allocated to such piece of Equipment in the Requisition, and (ii) the Investor
shall not be required to make Investor Contributions with respect to a piece of
Equipment in an aggregate amount in excess of 3% of the amount allocated to such
piece of Equipment in the Requisition.
SECTION 6. CONDITIONS OF THE CLOSINGS AND ADVANCES
6.1 General Conditions to the Investor's and the Lenders'
Obligations to Make Loans and Investor Contributions. The agreement of each
Lender to make Loans, and the Investor to make Investor Contributions, is
subject to the satisfaction or waiver, immediately prior to or concurrently with
the making of such Loans and Investor Contribution, of the following conditions
precedent:
(a) Operative Agreements. Each of the Operative Agreements
entered into on the Initial Closing Date or subsequently on an
Equipment Closing Date shall have been duly authorized, executed,
acknowledged and delivered by the parties thereto and shall
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be in full force and effect, and no event of default thereunder or
default under Section 17.1(a) or (b) of the Lease shall exist (both
before and after giving effect to the transactions contemplated by the
Operative Agreements), and the Agent and the Investor shall have
received a fully executed copy of each of the Operative Agreements
(other than the Notes of which the Agent shall have received the
originals thereof);
(b) Taxes. All taxes, fees and other charges in connection
with the execution, delivery, and, where applicable, recording, filing
and registration of the Operative Agreements shall have been paid or
provisions for such payment shall have been made to the reasonable
satisfaction of the Agent and the Investor;
(c) Governmental Approvals. All necessary (or, in the
reasonable opinion of the Agent, the Investor and their respective
counsel, advisable) Governmental Actions, in each case required by any
law or regulation enacted, imposed or adopted on or after the date
hereof or by any change in fact or circumstances since the date hereof,
shall have been obtained or made and be in full force and effect;
(d) Insurance. The Agent and the Investor shall have received
evidence in form and substance reasonably satisfactory to them that all
of the requirements of Section 14 of the Lease shall have been
satisfied (which evidence shall include a report from a reputable
insurance broker certifying that all such requirements have been
satisfied and otherwise in form and substance satisfactory to Agent and
Investor);
(e) Legal Requirements. The transactions contemplated by the
Operative Agreements do not and will not violate in any respect any
Legal Requirements that would reasonably be expected to have a Material
Adverse Effect and do not and will not subject the Agent, any Lender or
the Investor to any adverse regulatory prohibitions or constraints;
(f) Corporate Proceedings of the Lessee and Each Guarantor. On
the Initial Closing Date, the Agent and the Investor shall have
received a copy of the resolutions or minutes, in form and substance
satisfactory to the Agent and the Investor, of the Board of Directors
of the Lessee and each Guarantor authorizing the execution, delivery
and performance of this Agreement, the Guarantee and the other
Operative Agreements to which it is a party, certified by the Secretary
or an Assistant Secretary of the Lessee or of such Guarantor as of the
Initial Closing Date, which certificate shall be in form and substance
reasonably satisfactory to the Agent and the Investor and shall state
that the resolutions or minutes thereby certified have not been
amended, modified, revoked or rescinded;
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(g) Lessee and Guarantor Incumbency Certificate. On the
Initial Closing Date, the Agent and the Investor shall have received a
certificate of the Lessee and each Guarantor, dated the Initial Closing
Date, as to the incumbency and signature of the officers of the Lessee
and each Guarantor executing any Operative Agreement reasonably
satisfactory in form and substance to the Agent and the Investor,
executed by the President or any Vice President and the Secretary or
any Assistant Secretary of the Lessee or of such Guarantor;
(h) Investor Incumbency Certificate. On the Initial Closing
Date, the Agent and the Lessee shall have received a certificate of the
Investor, dated the Initial Closing Date, as to the incumbency and
signature of the officers of the Investor executing any Operative
Agreements reasonably satisfactory in form and substance to the Agent
and the Lessee, executed by a Vice President and the Secretary or an
Assistant Secretary of the Investor;
(i) Corporate Proceedings of the Trust Company. On the Initial
Closing Date, the Agent, the Investor and the Lessee shall have
received a copy of the resolutions, in form and substance reasonably
satisfactory to the Agent, the Investor and the Lessee, of the Board of
Directors of the Trust Company authorizing the execution, delivery and
performance of the Operative Agreements to which it is a party,
certified by the Secretary or an Assistant Secretary of the Trust
Company as of the Initial Closing Date, which certificate shall be in
form and substance satisfactory to the Agent, the Investor and the
Lessee and shall state that the resolutions thereby certified have not
been amended, modified, revoked or rescinded;
(j) Trust Company Incumbency Certificate. On the Initial
Closing Date, the Agent, the Investor and the Lessee shall have
received a certificate of the Trust Company, dated the Initial Closing
Date, as to the incumbency and signature of the officers of the Trust
Company executing any Operative Agreement, satisfactory in form and
substance to the Agent, the Investor and the Lessee, executed by the
President or any Vice President, Assistant Vice President, or a duly
authorized Trust Officer and the Secretary or any Assistant Secretary
of the Trust Company;
(k) Corporate Documents. (i) The Agent and the Investor shall
have received true and complete copies of the certificate of
incorporation and by-laws of the Lessee, certified as of the Initial
Closing Date as complete and correct copies thereof by the Secretary or
an Assistant Secretary of the Lessee;
(ii) The Agent and the Lessee shall have received true and
complete copies of the articles of incorporation and by-laws of the
Investor, certified as of the Initial Closing
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Date as complete and correct copies thereof by the Secretary or an
Assistant Secretary of the Investor;
(l) Consents, Licenses and Approvals. All consents,
authorizations and filings required in order to allow Lessee to
consummate the transaction contemplated by this Agreement shall have
been obtained and be in full force and effect, except to the extent the
failure to obtain or maintain any such consent, authorization or filing
would not individually or in the aggregate have a Material Adverse
Effect;
(m) Fees. The Agent and the Arranger shall have received the
fees to be paid on the Initial Closing Date pursuant to the Fee Letter
which fees shall not be paid using the proceeds of the Loans or
Investor Contributions;
(n) Legal Opinions. (i) The Agent and the Investor shall have
received the executed legal opinion of ▇▇▇▇, Gerber & ▇▇▇▇▇▇▇▇▇,
counsel to the Lessee and each Guarantor, substantially in the form of
Exhibit E-1 hereto;
(ii) The Agent, the Lessee and the Investor shall have
received the executed legal opinion of Morris, James, Hitchens &
▇▇▇▇▇▇▇▇, counsel to the Lessor and the Trust Company, substantially in
the form of Exhibit E-2 hereto; and
(iii) The Agent, the Lessee, and the Investor shall have
received the executed legal opinions of (a) ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P.,
(b) Hinkle, Cox, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P. and (c) Mock,
Schwabe, Waldo, Elder, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, local counsel to the Lessee and
the Guarantors in (a) Texas and Louisiana, (b) New Mexico and (c)
Oklahoma, respectively, substantially in the form of Exhibit E-3
hereto;
(o) Actions to Perfect Liens. The Agent shall have received
evidence in form and substance satisfactory to it that all filings,
recordings, registrations and other actions, including the filing of
duly executed Lender Financing Statements and Lessor Financing
Statements, necessary or, in the opinion of the Agent or Investor,
desirable to perfect the Liens created by the Security Documents shall
have been completed;
(p) Lien Searches. The Agent and the Investor shall have
received the results of a recent search by a Person reasonably
satisfactory to the Agent, of the Uniform Commercial Code, judgement
and tax lien filings which may have been filed in each State in which
any Equipment is located with respect to personal property of the
Lessee, and the results of such search shall be satisfactory to the
Agent and the Investor;
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(q) Representations and Warranties. The representations and
warranties of the Lessor, the Lessee, the Investor and the Guarantor
contained herein and in each of the other Operative Agreements shall be
true and correct in all material respects on and as of each Closing
Date as if made on and as of each Closing Date (unless such
representations and warranties specifically refer to another date);
(r) Performance of Operative Agreements. The parties hereto
(other than the Investors or the Lenders) shall have performed in all
material respects their respective agreements contained herein and in
the other Operative Agreements on or prior to each such Closing Date;
and
(s) Default. There shall not have occurred and be continuing
any Default or Event of Default and no Default or Event of Default will
have occurred after giving effect to the Advance requested by such
Requisition.
6.2 Conditions to the Investor's and the Lenders' Obligations
to Make Advances to pay Equipment Acquisition Costs.
The obligations of the Investor to make each Investor
Contribution, and of the Lenders to make Loans to the Lessor, on an Equipment
Closing Date for the purpose of providing funds to the Lessor necessary to
acquire a piece of Equipment are subject to the satisfaction or waiver of the
following conditions precedent:
(a) Requisition. The Agent shall have received a fully
executed counterpart of the Requisition dated as of the Equipment
Closing Date (but delivered at least three Business Days prior to the
Equipment Closing Date), appropriately completed;
(b) ▇▇▇▇ of Sale. There shall have been delivered to the
Lessor, a ▇▇▇▇ of sale (the "▇▇▇▇ of Sale"), in form and substance
reasonably acceptable to the Agent, with respect to each piece of
Equipment being purchased on such Equipment Closing Date, conveying
title to such piece of Equipment to the Lessor, subject only to the
Permitted Exceptions;
(c) Title. The Lessor shall have good and valid title to the
Equipment being acquired on such Equipment Closing Date subject only to
the Permitted Exceptions, and the Lessor shall have granted the
security interest pursuant to the Security Agreement with respect to
the Equipment.
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(d) Lease Supplement. The Lessee shall have delivered a Lease
Supplement executed by the Lessee and the Lessor with respect to all
Equipment being acquired on such Equipment Closing Date to the Agent;
(e) Security Agreement Supplement. The Lessee shall have
delivered a supplement to the Security Agreement executed by the Lessor
and Lessee with respect to each piece of Equipment being acquired on
such Equipment Closing Date to the Agent. The Lien of the Security
Agreement, as supplemented, shall conform to the representations and
warranties set forth in Section 7.5(f);
(f) Supplement to Assignment of Lease. The Lessee shall have
executed and delivered an original Supplement to Assignment of Lease
executed by the Lessor with respect to each piece of Equipment being
acquired on such Equipment Closing Date, in the form of Exhibit G
hereto;
(g) Appraisal. The Agent and the Investor shall have received
an Appraisal of the Equipment being acquired on such Equipment Closing
Date and such Appraisal shall be in form and substance acceptable to
the Agent, the Investor and the Lessor;
(h) Default. There shall not have occurred and be continuing
any Default or Event of Default and no Default or Event of Default will
have occurred after giving effect to the Advance requested by such
Requisition;
(i) Local Opinions. With respect to each piece of Equipment
being acquired on such Equipment Closing Date
(i) the Agent and the Investor shall have received the
executed legal opinion of local counsel to the Lessee and the
Guarantors in the state in which such Equipment is located,
substantially in the form of Exhibit E-3 hereto;
(ii) the Agent, the Lessee and the Investor shall have
received the executed legal opinion of counsel to Lessor and the Trust
Company, substantially in the form of Exhibit E-2 hereto; and
(iii) the Agent and the Investor shall have received the
executed legal opinion of counsel to Lessee and the Guarantors,
substantially in the form of Exhibit E-1 hereto.
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SECTION 7. REPRESENTATIONS AND WARRANTIES
7.1 Representations and Warranties of the Investor on the
Initial Closing Date. The Investor represents and warrants to each of the other
parties hereto as of the Initial Closing Date as follows:
(a) Due Organization, etc. It is a duly organized and validly
existing corporation in good standing under the laws of the State of
Delaware and has the power and authority to carry on its business as
now conducted and to enter into and perform its obligations under this
Agreement, each Operative Agreement to which it is a party and each
other agreement, instrument and document executed and delivered by it
on the Closing Date in connection with or as contemplated by each such
Operative Agreement to which it is or will be a party.
(b) Authorization; No Conflict. The execution, delivery and
performance of each Operative Agreement to which it is a party has been
duly authorized by all necessary action on its part and neither the
execution and delivery thereof by the Investor, nor the consummation of
the transactions contemplated thereby by the Investor, nor compliance
by it with any of the terms and provisions thereof (i) requires or will
require any approval of (which approval has not been obtained) the
shareholders of, or approval or consent of any Person, (ii) contravenes
or will contravene any Legal Requirement applicable to or binding on it
as of the date hereof, (iii) does or will contravene or result in any
breach of or constitute any default under, or result in the creation of
any Lessor Lien upon the Equipment, its articles of incorporation or
by-laws, any indenture, mortgage, chattel mortgage, deed of trust,
conditional sales contract, bank loan or credit agreement or other
agreement or instrument to which it or its properties may be bound or
(iv) does or will require any Governmental Action by any Governmental
Authority other than any Governmental Action required solely due to the
nature of the Equipment.
(c) Enforceability, etc. Each Operative Agreement to which it
is a party has been duly executed and delivered by it and constitutes,
or upon execution and delivery will constitute, a legal, valid and
binding obligation enforceable against it in accordance with the terms
thereof except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in
equity or at law).
(d) ERISA. The Investor is making the Investor Contribution
contemplated to be made by it hereunder for its own account and with
its general corporate assets in the
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ordinary course of its business, and no part of such amount constitutes
(i) "plan assets" under 29 CFR 2510.3-101 or (ii) assets of a
"governmental plan" as defined under Section 3(32) of ERISA.
(e) Litigation. No litigation, investigation or proceeding of
or before any arbitrator or Governmental Authority is pending or
threatened by or against the Investor (a) with respect to any of the
Operative Agreements or any of the transactions contemplated hereby or
thereby, or (b) which would reasonably be expected to have a material
adverse effect on the assets, liabilities, operations, business or
financial condition of the Investor.
(f) Lessor Liens. The Equipment is free and clear of Lessor
Liens.
7.2 Representations and Warranties of Lessor on the Initial
Closing Date. Lessor represents and warrants to each of the other parties hereto
as of the Initial Closing Date as follows:
(a) Due Organization, etc. Lessor is a duly organized and
validly existing business trust in good standing under the laws of the
State of Delaware and has the power and authority to carry on its
business as now conducted and to enter into and perform its obligations
under this Agreement, each Operative Agreement to which it is a party
and each other agreement, instrument and document executed and
delivered by it on the Closing Date in connection with or as
contemplated by each such Operative Agreement.
(b) Authorization; No Conflict. The execution, delivery and
performance of each Operative Agreement to which it is a party has been
duly authorized by all necessary action on its part and neither the
execution and delivery thereof by the Lessor, nor the consummation of
the transactions contemplated thereby by the Lessor, nor compliance by
it with any of the terms and provisions thereof (i) requires or will
require any approval of (which approval has not been obtained) any
party or approval or consent of any Person, (ii) contravenes or will
contravene any Legal Requirement applicable to or binding on it as of
the date hereof, (iii) does or will contravene or result in any breach
of or constitute any default under, or result in the creation of any
Lessor Lien upon the Equipment or the Trust Agreement, any indenture,
mortgage, chattel mortgage, deed of trust, conditional sales contract,
bank loan or credit agreement or other agreement or instrument to which
it or its properties may be bound or (iv) does or will require any
Governmental Action by any Governmental Authority.
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(c) Enforceability, etc. Each Operative Agreement to which it
is a party has been duly executed and delivered by it and constitutes,
or upon execution and delivery will constitute, a legal, valid and
binding obligation enforceable against it in accordance with the terms
thereof except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in
equity or at law).
(d) Litigation. No litigation, investigation or proceeding of
or before any arbitrator or Governmental Authority is pending or
threatened by or against the Lessor (a) with respect to any of the
Operative Agreements or any of the transactions contemplated hereby or
thereby, or (b) which would reasonably be expected to have a material
adverse effect on the assets, liabilities, operations, business or
financial condition of the Lessor.
(e) Assignment. Lessor has not assigned or transferred any of
its right, title or interest in or under the Lease, any other Operative
Agreement or any Equipment, except in accordance with the other
Operative Agreements.
(f) No Default. The Lessor is not in default under or with
respect to any of its Contractual Obligations in any respect which
would reasonably be expected to have a material adverse effect on the
assets, liabilities, operations, business or financial condition of the
Lessor. No Default or Event of Default attributable to it has occurred
and is continuing.
(g) Use of Proceeds. The proceeds of the Loans and the
Investor Contribution shall be applied by the Lessor solely in
accordance with the provisions of the Operative Agreements.
(h) Chief Place of Business. The Lessor's chief place of
business, chief executive office and office where the documents,
accounts and records relating to the transactions contemplated by this
Agreement and each other Operative Agreement are kept are located at
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
(i) Federal Reserve Regulations. The Lessor is not engaged
principally in, and does not have as one of its most important
activities, the business of extending credit for the purpose of
purchasing or carrying any margin stock (within the meaning of
Regulation U of the Board), and no part of the proceeds of the Loans
will be used by it, directly or indirectly, to purchase or carry any
margin stock or to extend credit to others for the purpose of
purchasing or carrying any such margin stock or for any purpose that
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violates, or is inconsistent with, the provisions of Regulations of the
Board, including but not limited to, G, T, U or X of the Board.
(j) Investment and Holding Company Status. The Lessor is not
(i) an "investment company" as defined in, or subject to regulation
under the Investment Company Act of 1940 or (ii) a "holding company" as
defined in, or subject to regulation under, the Public Utility Holding
Company Act of 1935.
(k) Securities Act. Neither the Lessor nor any Person
authorized by the Lessor to act on its behalf has offered or sold any
interest in the Equipment or the Notes, or in any similar security or
interest relating to the Equipment, or in any security the offering of
which for the purposes of the Securities Act would be deemed to be part
of the same offering as the offering of the aforementioned securities
to, or solicited any offer to acquire any of the same from, any Person
other than, in the case of the Notes, the Agent, and neither the Lessor
nor any Person authorized by the Lessor to act on its behalf will take
any action which would subject the issuance or sale of any interest in
the Equipment or the Notes to the provisions of Section 5 of the
Securities Act or require the qualification of any Operative Agreement
under the Trust Indenture Act of 1939, as amended.
(l) ERISA. The Lessor is making the Lessor Contribution
contemplated to be made by it hereunder in the ordinary course of its
business, and no part of such amount constitutes (i) "plan assets"
under 29 CFR 2510.3-101 or (ii) assets of a "governmental plan" as
defined under Section 3(32) of ERISA.
(m) Lessor Liens. The Equipment is free and clear of all
Lessor Liens.
7.3 Representations and Warranties of the Lessee on the
Initial Closing Date. Each of the representations and warranties of the
Guarantors set forth in Section 9 of the Guaranty are hereby incorporated by
reference as if made by Lessee pursuant to the terms of this Agreement and shall
for all purposes be deemed to have been made by Lessee hereunder on the Initial
Closing Date.
7.4 Representations and Warranties of the Trust Company on the
Initial Closing Date. The Trust Company represents and warrants to each of the
other parties hereto that:
(a) Due Organization, etc. It is a banking corporation duly
organized and validly existing and in good standing under the laws of
the State of Delaware and has the power and authority to enter into and
perform its obligations under the Trust Agreement and has the corporate
power and authority to act as the trustee under the Trust
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Agreement and to enter into and perform the obligations under each of
the other Operative Agreements to which Trust Company or the Trust, as
the case may be, is or will be a party and each other agreement,
instrument and document to be executed and delivered by it on or before
the Initial Closing Date in connection with or as contemplated by each
such Operative Agreement to which the Trust Company or the Trust, as
the case may be, is or will be a party.
(b) Authorization; No Conflict. The execution, delivery and
performance of each Operative Agreement to which it is a party, either
in its individual capacity or (assuming due authorization, execution
and delivery of the Trust Agreement by the Investor) as the Trust, as
the case may be, has been duly authorized by all necessary action on
its part and neither the execution and delivery thereof, nor the
consummation of the transactions contemplated thereby, nor compliance
by it with any of the terms and provisions thereof (i) does or will
require any approval or consent of any Person (ii) does or will
contravene any current United States federal law, governmental rule or
regulation relating to its banking or trust powers, (iii) does or will
contravene or result in any breach of or constitute any default under,
or result in the creation of any Lien upon any of its property under,
its charter or by-laws, or any indenture, mortgage, chattel mortgage,
deed of trust, conditional sales contract, bank loan or credit
agreement or other agreement or instrument to which it is a party or by
which it or its properties may be bound or affected or (iv) does or
will require any Governmental Action by any Governmental Authority.
(c) Trust Agreement Enforceability, etc. The Trust Agreement
and, assuming the Trust Agreement is the legal, valid and binding
obligation of the Investor, each other Operative Agreement to which
Trust Company or the Trust, as the case may be, is a party have been,
or on or before the Closing Date will be, duly executed and delivered
by Trust Company or the Trust, as the case may be, and the Trust
Agreement and each such other Operative Agreement to the extent entered
into by the Trust Company constitutes, or upon execution and delivery
will constitute, a legal, valid and binding obligation enforceable
against Trust Company in accordance with the terms thereof except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).
(d) Litigation. No litigation, investigation or proceeding of
or before any arbitrator or Governmental Authority is pending or
threatened by or against the Trust Company with respect to any of the
Operative Agreements or any of the transactions contemplated hereby or
thereby.
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(e) Liens. The Trust Estate is free and clear of Lessor Liens
attributable to the Trust Company, and there are no Liens affecting the
title of the Trust to the Equipment or resulting from any act or claim
against the Trust Company arising out of any event or condition not
related to the ownership, leasing use or operation of the Equipment or
any other transaction contemplated by this Agreement or any of the
other Operative Agreements, including any Lien resulting from the
nonpayment by the Trust Company of any Taxes imposed or measured by its
net income.
7.5 Representations and Warranties of the Lessee on Equipment
Closing Dates. The Lessee hereby represents and warrants as of each Equipment
Closing Date as follows:
(a) Representations and Warranties. The representations and
warranties of the Lessee and the Guarantor set forth herein and in each of the
other Operative Agreements are true and correct in all material respects on and
as of such Equipment Closing Date as if made on and as of such Equipment Closing
Date (unless such representations and warranties specifically refer to another
date). The Lessee and each Guarantor are in compliance in all material respects
with their respective obligations under the Operative Agreements and there
exists no Lease Default or Lease Event of Default.
(b) No Default. No Default or Event of Default attributable to
Lessee will occur as a result of, or after giving effect to, the Advance
requested by the Requisition on such Equipment Closing Date.
(c) Authorization by the Lessee. The execution and delivery of
each Lease Supplement and other Operative Agreement delivered by the Lessee on
such Equipment Closing Date and the performance of the obligations of the Lessee
under each such Lease Supplement and other Operative Agreements have been duly
authorized by all requisite corporate action of the Lessee.
(d) Execution and Delivery by the Lessee. Each Lease
Supplement and other Operative Agreement delivered on such Equipment Closing
Date by the Lessee have been duly executed and delivered by the Lessee.
(e) Valid and Binding Obligations. Each Lease Supplement and
other Operative Agreement delivered by the Lessee on such Equipment Closing Date
is a legal, valid and binding obligation of the Lessee, enforceable against the
Lessee in accordance with its respective terms except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles (whether enforcement is sought by proceedings in
equity or at law).
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(f) Filing of UCC Financing Statements and Priority of Liens.
The UCC Financing Statements with respect to the Equipment being acquired on
such Equipment Closing Date have been filed with the appropriate Governmental
Authorities so that the liens created pursuant to each of the Security Agreement
and the Lease (together with the Assignment of Lease) constitutes a valid and
perfected security interest on each applicable piece of Equipment located
thereon in an amount not less than the Tranche A/B Equipment Cost with respect
to such Equipment subject, in all cases, to the Lessee's right to relocate the
Equipment.
(g) Insurance Coverage. The Lessee maintains insurance
coverage for each piece of Equipment being acquired by the Lessor on such
Equipment Closing Date which meets the requirements of Section 14.1 of the Lease
and all of such coverage is in full force and effect.
(h) Legal Requirements. Each piece of Equipment being acquired
by the Lessor on such Equipment Closing Date complies in all material respects
with all Legal Requirements (including all zoning and land use laws and
Environmental Laws).
(i) Consents, etc. All material consents, licenses and permits
required by all Legal Requirements for operation of each piece of Equipment
being acquired on such Equipment Closing Date have been obtained and are in full
force and effect.
(j) Environmental Matters.
(1) The Equipment being acquired on such Equipment
Closing Date does not contain any Hazardous Substances 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 Equipment
Closing Date is in compliance in all material respects with
all applicable Environmental Laws.
(3) Neither the Lessee nor any of its Subsidiaries has
received any notice of violation, alleged violation,
non-compliance, liability or potential liability regarding any
material non-compliance with Environmental Laws with regard to
the Equipment being acquired on such Equipment Closing Date,
nor does the Lessee have knowledge that any such notice will
be received or is being threatened.
(4) Hazardous Substances have not been transported or
discharged from the Equipment being acquired on such Equipment
Closing Date so as to create a material violation of any
Environmental Law, nor have any Hazardous Substances
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been generated, treated, or used with respect to the Equipment
being acquired on such Equipment Closing Date so as to create
a material violation of any applicable Environmental Law.
(5) 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 Equipment Closing 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
Equipment Closing Date.
(6) There has been no release or threat of release of
Hazardous Substances at or from the Equipment being acquired
on such Equipment Closing Date, or arising from or related to
the operations of the Lessee or any Subsidiary in connection
with the Equipment being acquired on such Equipment Closing
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.
(k) Location of the Equipment. Each piece of Equipment being
acquired on such Equipment Closing Date is located within the United States or
on lands covered by leases under the exclusive jurisdiction of the United States
of America pursuant to the Outer Continental Shelf Lands Act, as amended, 43
U.S.C. ss. ss. 1331, et seq. (1986).
(l) Conditions Precedent in Operative Agreements. All
conditions precedent contained in this Agreement and in the other Operative
Agreements required to be satisfied by Lessee relating to the acquisition of a
piece of Equipment by the Lessor have been satisfied in full or waived by the
Agent and the Lessee.
(m) ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ The acquisition of the Equipment being
acquired on such Equipment Closing Date does not conflict with, violate or
require the consent of, any Governmental Authority under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Antitrust Improvements Act of 1976, as amended.
7.6 Representations and Warranties of the Lessor on Equipment
Closing Dates. The Lessor hereby represents and warrants as of each Equipment
Closing Date as follows:
(a) Representations and Warranties; No Default. The
representations and warranties of the Lessor set forth herein and in each of the
other Operative Agreements are true
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and correct in all material respects on and as of such Equipment Closing Date as
if made on and as of such Equipment Closing Date (unless such representations
and warranties specifically refer to another date). The Lessor is in compliance
with its respective obligations under the Operative Agreements and there exists
no Default or Event of Default under any of the Operative Agreements. No Default
or Event of Default will occur as a result of, or after giving effect to, the
Advance requested by the Requisition on such Equipment Closing Date.
(b) Authorization by the Lessor. The execution and delivery of
each Lease Supplement, Security Agreement, Supplement to Assignment of Lease and
other Operative Agreement delivered by the Lessor on such Equipment Closing Date
and the performance of the obligations of the Lessor under each such Lease
Supplement, Security Agreement Supplement to the Assignment of Lease and other
Operative Agreement have been duly authorized by all requisite action of the
Lessor.
(c) Execution and Delivery by the Lessor. Each Lease
Supplement, Security Agreement, Supplement to the Assignment of Lease and other
Operative Agreement delivered by the Lessor on such Equipment Closing Date have
been duly executed and delivered by the Lessor.
(d) Valid and Binding Obligations. Each Lease Supplement,
Security Agreement, Supplement to the Assignment of Lease and other Operative
Agreement delivered by the Lessor on such Equipment Closing Date is a legal,
valid and binding obligation of the Lessor, enforceable against the Lessor in
accordance with its terms except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).
(e) Conditions Precedent in Operative Agreements. All
conditions precedent contained in this Agreement and in the other Operative
Agreements to be satisfied by the Lessee relating to the acquisition of a piece
of Equipment by the Lessor have been satisfied in full.
SECTION 8. PAYMENT OF CERTAIN EXPENSES
Lessee agrees, for the benefit of the Investor, the Trust Company, the
Lessor, the Agent and each of the Lenders, to:
8.1 Transaction Expenses. (a) On the Initial Closing Date,
pay, or cause to be paid, all reasonable fees, expenses and disbursements of one
counsel to each of the Lessor, the Trust Company, the Agent, and the Investor in
connection with the transactions contemplated
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by the Operative Agreements and incurred in connection with such Initial Closing
Date, including all Transaction Expenses, and all other reasonable expenses in
connection with such Initial Closing Date, including all expenses relating to
all fees, taxes and expenses for the recording, registration and filing of
documents.
(b) On each Equipment Closing Date, pay, or cause to be paid,
all reasonable fees, expenses and disbursements of each of the Lessor's, the
Trust Company's, the Agent's and the Investor's counsel in connection with the
transactions contemplated by the Operative Agreements and incurred in connection
with such Equipment Closing Date, including all Transaction Expenses arising
from such Equipment Closing Date, and all other reasonable expenses in
connection with such Equipment Closing Date, including all expenses relating to
each Appraisal, and all fees, taxes and expenses for the recording, registration
and filing of documents.
8.2 Brokers' Fees and Stamp Taxes. Pay or cause to be paid
brokers' fees with respect to brokers retained by or with the prior written
consent of Lessee and any and all stamp, transfer and other similar taxes, fees
and excises, if any, including any interest and penalties, which are payable in
connection with the transactions contemplated by this Agreement and the other
Operative Agreements.
8.3 Certain Fees and Expenses. Pay or cause to be paid (i) the
initial and annual Trust Company's fee and all expenses of the Trust Company and
any necessary co-trustees (including reasonable counsel fees and expenses) or
any successor owner trustee, for acting as trustee under the Trust Agreement,
(ii) all costs and expenses incurred by the Lessee, the Agent, the Investor, the
Trust Company or the Lessor in entering into any future amendments or
supplements with respect to any of the Operative Agreements, whether or not such
amendments or supplements are ultimately entered into, or giving or withholding
of waivers of consents hereto or thereto, which have been requested by the
Lessee, and (iii) all costs and expenses incurred by the Lessor, the Lessee, the
Investor, the Trust Company or the Agent in connection with any purchase of any
Equipment by the Lessee pursuant to Section 20 of the Lease.
8.4 Credit Agreement and Related Obligations. (a) Pay, on or
prior to the due date thereof, all costs, fees, indemnities, expenses and other
amounts (other than principal and interest on the Loans, but including breakage
costs and interest on overdue amounts pursuant to Section 2.14 of the Credit
Agreement or otherwise) required to be paid by the Lessor under any Operative
Agreement.
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(b) Pay to the Agent all fees specified in the Fee Letter at
the time and in the manner required by the Fee Letter, which fees may not be
paid by using the proceeds of the Loans or the Investor Contribution.
(c) Pay to the Lessor promptly after receipt of notice
therefor any additional amounts payable to the Investor in respect of the
Investor Contribution under Sections 2.13, 2.14 and 2.15 of the Credit Agreement
(it being agreed that the Investor is, for purposes of this Agreement, a
beneficiary of the provisions of Sections 2.13, 2.14 and 2.15 of the Credit
Agreement).
8.5 Commitment Fees. (a) Pay to the Agent for the account of
each Lender the Commitment Fee on each Commitment Fee Payment Date.
(b) The Commitment Fee shall be calculated on the basis of a
365- (or 366-, as the case may be) day year for the actual days elapsed. If all
or a portion of the Commitment Fee shall not be paid when due, such overdue
amount shall bear interest, payable by the Lessee on demand, at a rate per annum
equal to the applicable Overdue Rate, from the date of such non-payment until
such amount is paid in full (as well after as before judgment).
8.6 Overdue Rate. If all or a portion of the Investor Yield,
the Investor Contribution or any other amount owed to the Investor shall not be
paid when due, such overdue amount shall bear interest, payable on demand, at a
rate per annum equal to the applicable Overdue Rate, from the date of such
non-payment until such amount is paid in full (as well after as before
judgment).
8.7 Continuous Perfection of Security Interests. If the
Officer's Certificate required to be delivered by Lessee pursuant to Section
10.3(b) of the Lease shall indicate that any of the Equipment has been
relocated, then Lessee will provide to the Agent, together with the Officer's
Certificate, evidence in form and substance satisfactory to Agent that all
filings, recordings, registrations and other actions, including the filing of
duly executed Lender Financing Statements and Lessor Financing Statements,
necessary or, in the reasonable opinion of the Agent, desirable to perfect the
Liens granted by the Security Documents shall have been completed.
8.8 Oklahoma Equipment Subleases. With respect to any leases
or other agreements entered into by Lessee with respect to Equipment located in
the State of Oklahoma ("Oklahoma Subleases"), Lessee shall, within 60 days of
the Initial Closing Date (or the date any Oklahoma Sublease is subsequently
entered into), undertake to file, in accordance with 60 Okla. Stat. 1991 ss.
319, et. seq., the original Oklahoma Sublease instrument or a true copy thereof
in the chattel mortgage records of the office of the county clerk in the county
where the
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Equipment is located and provide Agent with reasonably satisfactory evidence of
Lessee's compliance with this Section 8.8.
SECTION 9. OTHER COVENANTS AND AGREEMENTS
9.1 Covenants of the Trust and the Investor and the Trust
Company. Each of the parties hereby agrees that so long as this Agreement is in
effect:
(a) Discharge of Liens. Each of the Investor, the Trust and
the Trust Company, in its individual capacity, will not create or permit to
exist at any time, and will, at its own cost and expense, promptly take such
action as may be necessary duly to discharge, or to cause to be discharged, all
Lessor Liens on the Equipment attributable to it or any of its Affiliates;
provided, however, that the Investor, the Trust and the Trust Company shall not
be required to so discharge any such Lessor Lien while the same is being
contested in good faith by appropriate proceedings diligently prosecuted so long
as such proceedings shall not cause Lessee or any other party hereto to be in
default under any of the Operative Documents and shall not involve any material
danger of impairment of the Liens of the Security Documents or of the sale,
forfeiture or loss of, and shall not materially interfere with the use or
disposition of, the Equipment or title thereto or any interest therein or the
payment of Rent.
(b) Trust Agreement. Without prejudice to any right under the
Trust Agreement of the Trust Company to resign, or the Investor's right under
the Trust Agreement to remove the institution acting as Trustee, each of the
Investor and the Trust Company hereby agrees with the Lessee and the Agent (i)
not to terminate or revoke the trust created by the Trust Agreement except as
permitted by the Trust Agreement, (ii) not to amend, supplement, terminate or
revoke or otherwise modify any provision of the Trust Agreement without the
prior written consent of any party adversely affected by such amendment and in
any event with prior notice to the Lessee and (iii) to comply with all of the
terms of the Trust Agreement, the nonperformance of which would adversely affect
such party. The Trust Company will provide each party hereto with a copy of any
amendment to the Trust Agreement within thirty (30) days after such amendment is
effective.
(c) Successor Trust Company. The Trust Company or any
successor may resign or be removed by the Investor as owner trustee, a successor
owner trustee may be appointed, and a corporation may become the owner trustee
under the Trust Agreement, only in accordance with the provisions of Section 8
of the Trust Agreement and with the consent of the Lessee, which consent shall
not be unreasonably withheld or delayed.
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(d) Indebtedness; Other Business. The Trust shall not contract
for, create, incur or assume any indebtedness, or enter into any business or
other activity, or hold title to any assets other than pursuant to or under the
Operative Agreements.
(e) No Violation. Neither the Investor nor the Trust Company
will instruct the Trust to take any action in violation of the terms of any
Operative Agreement.
(f) No Voluntary Bankruptcy. Neither the Investor nor the
Trust shall (i) commence, consent to, approve of or acquiesce to any case,
proceeding or other action under any existing or future law of any jurisdiction,
domestic or foreign, relating to bankruptcy, insolvency, reorganization,
arrangement, winding-up, liquidation, dissolution, composition or other relief
with respect to it or its debts, or (ii) seek appointment of a receiver,
trustee, custodian or other similar official for it or for all or any
substantial part of its assets, or make a general assignment for the benefit of
its creditors; and neither the Investor nor the Trust shall take any action in
furtherance of, or indicating its consent to, approval of, or acquiescence in,
any of the acts set forth in this paragraph.
(g) Change of Chief Place of Business. The Trust shall give
prompt prior notice to the Lessee and the Agent if the Trust's chief place of
business or chief executive office, or the office where the records concerning
the accounts or contract rights relating to the Equipment are kept, shall cease
to be located at the address set forth in Section 7.2(h) or if it shall change
its name.
(h) Loan Documents. Provided that no Lease Event of Default is
continuing, none of the Lenders, the Trust Company, the Lessor, the Agent nor
the Investor shall consent to or permit any material amendment, supplement,
waiver or other modification of the terms and provisions of the Credit
Agreement, the Notes or the Security Documents which would reasonably be
expected to adversely impact the Lessee, in each case without the prior written
consent of the Lessee.
(i) Disposition of Assets. The Trust shall not convey, sell,
lease, assign, transfer or otherwise dispose of any of its property, business or
assets, whether now owned or hereafter acquired, except to the extent expressly
authorized by the Operative Agreements.
(j) Compliance with Operative Agreements. It shall at all
times observe and perform all of the covenants, conditions and obligations
required to be performed by it under each Operative Agreement to which it is a
party.
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(k) Tax Reporting. No party hereto other than the Lessee will
file (or permit to be filed) any tax return taking the position that such party
(or its affiliates) is the owner of the Equipment for federal, state or local
tax purposes.
9.2 Repayment of Certain Amounts on Maturity Date. The
Investor, the Lessor and the Agent hereby agree that if (i) on the Maturity Date
(after giving effect to all payments made by the Lessee under the Lease and the
application of all sales proceeds pursuant to Section 8 of the Credit Agreement)
there remains any outstanding principal or accrued and unpaid interest under the
Tranche B Notes (the aggregate amount of such outstanding principal, the
"Tranche B Deficit") and (ii) during the Marketing Period the Lessor or the
Investor have received any Marketing Period Equity Return, then on the Maturity
Date the Investor shall pay to the Agent an amount up to the amount of the
Tranche B Deficit to be applied pursuant to Section 8 of the Credit Agreement,
but in no event greater than the Marketing Period Equity Return received by
Investor.
9.3 Amendment of Certain Documents. The Agent, for itself and
on behalf of the Lenders, hereby agrees for the benefit of the Trust and the
Investor that it will not amend, alter or otherwise modify, or consent to any
amendment, alteration or modification of, the Lease (including the definitions
of any terms used in such document) without the prior written consent of the
Trust and the Investor, as the case may be, if such amendment, alteration or
modification would adversely affect the interests of the Trust or the Investor.
Provisions requiring consent, include any amendment, alteration or modification
that would release the Lessee from any of its obligations in respect of the
payment of Basic Rent, Supplemental Rent, Termination Value, Maximum Residual
Guarantee Amount or the Purchase Option Price or any other payments in respect
of the Equipment as set forth in the Lease, or amend the provisions of Section 8
of the Credit Agreement, or reduce the amount of, or change the time or manner
of payment of, obligations of the Lessee as set forth in the Lease, or create or
impose any obligation on the part of the Trust or the Investor under the Lease,
or extend or shorten the duration of the Term, or modify the provisions of this
Section 9.3.
9.4 Proceeds of Casualty. Subject to Section 15 of the Lease,
the Lessor and the Investor agree, for the benefit of the Agent and the Lenders,
that if at any time either the Lessor or the Investor receives any proceeds as a
result, directly or indirectly, of any Casualty or Condemnation with respect to
the Equipment which the Lessor is entitled to retain and hold in accordance with
the terms of the Lease, the Lessor and the Investor agree that they will
promptly deposit such amounts in an account with the Agent. The Lessor and the
Investor also agree that they will execute and deliver such documents and
instruments as the Agent may request in order to grant the Agent, for the
benefit of the Lenders, a valid and perfected, first priority security interest
in such proceeds.
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9.5 Intercreditor Agreement. The Lessee, the Agent, the
Lenders, the Investor and the Lessor hereby agree and confirm that the
provisions of Section 8 of the Credit Agreement are intended to constitute an
intercreditor agreement and a subordination agreement under Section 510 of the
Bankruptcy Code or any similar provision therein.
SECTION 10. CREDIT AGREEMENT
10.1 Lessee's Credit Agreement Rights. Notwithstanding
anything to the contrary contained in the Credit Agreement, the Agent, the
Lenders, the Lessee, the Investor and the Trust hereby agree that:
(a) the Lessee shall have the right to give the notices
referred to in Section 2.3 of the Credit Agreement;
(b) the Lessee shall have the right to convert or continue
Loans in accordance with Section 2.6 of the Credit Agreement;
(c) the Lessee shall receive copies of all notices delivered
to the Lessor under the Credit Agreement and the other Operative Agreements and
such notices shall not be effective until received by Lessee;
(d) the Lessee shall have the right to select Interest Periods
in accordance with the terms of the Credit Agreement;
(e) the Lessee shall have the right to give notice of
prepayment of the Loans in accordance with the Credit Agreement, provided that
if the Lessee shall give notice of prepayment of the Loans, the Lessee shall
prepay a pro rata portion of the Investor Contribution;
(f) the Lessee shall have the right to cure, to the extent
susceptible to a cure, any Credit Agreement Default or Credit Agreement Event of
Default of the Lessor;
(g) the Lessee shall have the right to approve any successor
Agent pursuant to Section 7.9 of the Credit Agreement;
(h) the Lessee shall have the right, on behalf of the Lessor,
to select any Person or Persons (including the Lessee) to whom funds may be paid
at the discretion of the Lessor in accordance with Sections 8.1 and 8.2 of the
Credit Agreement;
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(i) the Lessee shall have the right to consent to any
assignment by a Lender, if required pursuant to Section 9.7 of the Credit
Agreement;
(j) the Lessee shall have the right to request that another
lending office be designated pursuant to Section 2.15(a) of the Credit
Agreement;
(k) Lessee shall have the right to cause a Lender to assign
its rights and delegate its obligation under the Credit Agreement pursuant to
Section 2.16 of the Credit Agreement;
(l) the Lessee shall have the obligation to notify the Agent
of the amounts or information specified in Section 5.8 of the Credit Agreement;
and
(m) without limiting the foregoing clauses (a) through (l),
and in addition thereto, (x) the Trust shall not exercise any right under the
Credit Agreement without giving the Lessee at least fifteen (15) Business Days'
prior written notice (or such shorter period as may be required but in no case
less than five (5) Business Days) and, following such notice, the Trust shall
take such action, or forbear from taking such action, as the Lessee shall direct
and (y) the Lessee shall have the right to exercise any other right of the Trust
under the Credit Agreement upon not less than two (2) Business Days' prior
written notice from the Lessee to the Trust. Notwithstanding the foregoing, the
Investor shall retain the exclusive right to direct the Trust with respect to
the exercise of the Excepted Rights.
SECTION 11. TRANSFER OF INTEREST
11.1 Restrictions on Transfer. The Investor may not, directly
or indirectly, assign, convey or otherwise transfer any of its right, title or
interest in or to the Trust Estate or the Trust Agreement nor shall there be any
change in control of the Investor without the consent of the Agent and the
Lessee, which consent shall not be unreasonably withheld or delayed. Any
transfer by the Investor as above provided, shall be effected pursuant to an
agreement in form and substance reasonably satisfactory to the Agent, the
Investor, the Trust Company, the Lessee and their respective counsel.
11.2 Effect of Transfer. From and after any transfer effected
in accordance with this Section 11, the transferor shall be released, to the
extent of such transfer, from its liability hereunder and under the other
documents to which it is a party in respect of obligations to be performed on or
after the date of such transfer; provided, however, that any transferor Investor
shall remain liable under the Trust Agreement to the extent that the transferee
Investor shall not have assumed the obligations of the transferor Investor
thereunder. Upon any transfer by the
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Investor as above provided, any such transferee shall assume the obligations of
the same entity, and the Lessor or Investor, as the case may be, and shall be
deemed the "same entity", as the case may be, for all purposes of such documents
and each reference herein to the transferor shall thereafter be deemed a
reference to such transferee for all purposes, except as provided in the
preceding sentence. Notwithstanding any transfer of all or a portion of the
transferor's interest as provided in this Section 11, the transferor shall be
entitled to all benefits accrued and all rights vested prior to such transfer
including rights to indemnification under any such document.
SECTION 12. INDEMNIFICATION
12.1 General Indemnity. The Lessee, hereby assumes liability
for and agrees to defend, indemnify and hold harmless each Indemnified Person on
an After Tax Basis from and against any Claims which may be imposed on, incurred
by or asserted against an Indemnified Person in any way relating to or arising
out of (a) the financing, refinancing, purchase, acceptance, rejection,
ownership, design, delivery, acceptance, nondelivery, leasing, subleasing,
possession, use, operation, repair, modification, transportation, condition,
sale, return, repossession (whether by summary proceedings or otherwise), or any
other disposition of the Equipment or any part thereof; (b) any latent or other
defects in any piece of Equipment whether or not discoverable by an Indemnified
Person or the Lessee; (c) a violation of Environmental Laws, Environmental
Claims or other loss of or damage relating to the Equipment; (d) the Operative
Agreements, or any transaction contemplated thereby; (e) any breach by the
Lessee of any of its representations or warranties under the Operative
Agreements or failure by the Lessee to perform or observe any covenant or
agreement to be performed by it under any of the Operative Agreements; and (f)
personal injury, death or property damage relating to the Equipment, including
Claims based on strict liability in tort; but in any event excluding (v) Claims
to the extent such Claims arise solely out of the gross negligence or willful
misconduct of such Indemnified Person, (w) Claims to the extent such Claims
arise solely out of events occurring after Lessee's discharge of all its
obligations under the Lease or (x) any Taxes including any Claim (or any portion
of a Claim) made upon an Indemnified Person by a third party that at its origin
is based upon a Tax (other than amounts necessary to make any payments hereunder
on an After Tax Basis, where the Lessee is otherwise specifically required to
make such payments on an After Tax Basis), (y) legal proceedings commenced
against an Indemnified Person by any security holder or creditor solely in its
capacity as such, or (z) legal proceedings commenced against an Indemnified
Person by any other Indemnified Person or by any transferee of an Indemnified
Person. The Lessee shall be entitled to control, and shall assume full
responsibility for the defense of any Claim; provided, however, that the Trust,
the Trust Company, the Agent and the Investor named in such Claim, may each
retain separate counsel at the expense of the Lessee in the event of and to the
extent of an actual conflict or a potential conflict. The Lessee and each
Indemnified Person agree to give each other prompt
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written notice of any Claim hereby indemnified against but the giving of any
such notice by an Indemnified Person shall not be a condition to the Lessee's
obligations under this Section 12.1, except to the extent failure to give such
notice materially prejudices Lessee's rights hereunder or with respect to the
defense or settlement of such Claim. After an Indemnified Person has been fully
indemnified for a Claim pursuant to this Section 12.1, and so long as no Lease
Event of Default shall have occurred and be continuing, the Lessee shall be
subrogated to any right of such Indemnified Person with respect to such Claim.
None of the Indemnified Persons shall settle a Claim without the prior written
consent of the Lessee, which consent shall not be unreasonably withheld or
delayed.
12.2 General Tax Indemnity. (a) The Lessee shall pay and
assume liability for, and does hereby agree to indemnify, protect and defend the
Equipment and all Tax Indemnitees, and hold them harmless against, all
Impositions on an After Tax Basis.
(b) Provided that no Default or Event of Default has occurred
and is continuing, if any Tax Indemnitee obtains a refund or a reduction in a
liability (but only if such reduction relates to a Tax not otherwise
indemnifiable hereunder and has not been taken into account in determining the
amount of a payment on an After Tax Basis) as a result of any Imposition paid or
reimbursed by the Lessee (in whole or in part), such Tax Indemnitee shall
promptly pay to the Lessee the lesser of (x) the amount of such refund or
reduction in liability and (y) the amount previously so paid or advanced by the
Lessee, in each case net of reasonable expenses not already paid or reimbursed
by the Lessee.
(c)(i) Subject to the terms of Section 12.2(g), the Lessee
shall pay or cause to be paid all Impositions directly to the taxing authorities
where feasible and otherwise to the Tax Indemnitee, as appropriate, and the
Lessee shall at its own expense, upon such Tax Indemnitee's reasonable request,
furnish to such Tax Indemnitee copies of official receipts or other satisfactory
proof evidencing such payment.
(ii) In the case of Impositions for which no contest is
conducted pursuant to Section 12.2(g) and which the Lessee pays directly to the
taxing authorities, the Lessee shall pay such Impositions prior to the latest
time permitted by the relevant taxing authority for timely payment. In the case
of Impositions for which the Lessee reimburses a Tax Indemnitee, the Lessee
shall do so within twenty (20) days after receipt by the Lessee of demand by
such Tax Indemnitee describing in reasonable detail the nature of the Imposition
and the basis for the demand (including the computation of the amount payable),
but in no event shall the Lessee be required to pay such reimbursement prior to
15 days before the latest time permitted by the relevant taxing authority for
timely payment. In the case of Impositions for which a contest is conducted
pursuant to Section 12.2(g), the Lessee shall pay such Impositions or reimburse
such Tax Indemnitee for such Impositions, to the extent not previously paid or
reimbursed pursuant
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to subsection (a), prior to the latest time permitted by the relevant taxing
authority for timely payment after conclusion of all contests under Section
12.2(g).
(iii) Impositions imposed with respect to a piece of Equipment
for a billing period during which the Lease expires or terminates with respect
to such Equipment (unless the Lessee has exercised the Purchase Option with
respect to the Equipment) shall be adjusted and prorated on a daily basis
between the Lessee and the Lessor, whether or not such Imposition is imposed
before or after such expiration or termination and each party shall pay or
reimburse the other for each party's pro rata share thereof.
(iv) At the Lessee's request, the amount of any indemnification
payment by the Lessee pursuant to subsection (a) shall be verified and certified
by an independent public accounting firm mutually acceptable to the Lessee and
the Tax Indemnitee. The fees and expenses of such independent public accounting
firm shall be paid by the Lessee unless such verification shall result in an
adjustment in the Lessee's favor of 10% or more of the payment as computed by
such Tax Indemnitee, in which case such fee shall be paid by such Tax
Indemnitee.
(d)(i) The Lessee shall be responsible for preparing and
filing any real and personal property or ad valorem tax returns in respect of
the Equipment. In case any other report or tax return shall be required to be
made with respect to any obligations of the Lessee under or arising out of
subsection (a) and of which the Lessee has knowledge, the Lessee, at its sole
cost and expense, shall notify the relevant Tax Indemnitee of such requirement
and (except if such Tax Indemnitee notifies the Lessee that such Person intends
to file such report or return) (A) to the extent required or permitted by and
consistent with Legal Requirements, make and file in its own name such return,
statement or report; and (B) in the case of any other such return, statement or
report required to be made in the name of such Tax Indemnitee, advise such Tax
Indemnitee of such fact and prepare such return, statement or report for filing
by such Tax Indemnitee or, where such return, statement or report shall be
required to reflect items in addition to any obligations of the Lessee under or
arising out of subsection (a), provide such Tax Indemnitee at the Lessee's
expense with information sufficient to permit such return, statement or report
to be properly made with respect to any obligations of the Lessee under or
arising out of subsection (a). Such Tax Indemnitee shall, upon the Lessee's
request and at the Lessee's expense, provide any data maintained by such Tax
Indemnitee (and not otherwise within the control of the Lessee) with respect to
the Equipment which the Lessee may reasonably require to prepare any required
tax returns or reports;
(e) If as a result of the payment or reimbursement by the
Lessee of any expenses of a Tax Indemnitee or the payment of any Transaction
Expenses incurred in connection with the transactions contemplated by the
Operative Agreements, any Tax
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Indemnitee, shall suffer a net increase in any federal, state or local income
tax liability, the Lessee shall indemnify such Tax Indemnitees (without
duplication of any indemnification required by subsection (a)) on an After Tax
Basis for the amount of such increase. The calculation of any such net increase
shall take into account any current or future tax savings realized or reasonably
expected to be realized by such Tax Indemnitees, in respect thereof, as well as
any interest, penalties and additions to tax payable by such Tax Indemnitees, in
respect thereof;
(f) As between the Lessee and the Lessor, the Lessee shall be
responsible for, and the Lessee shall indemnify and hold harmless the Trust
Company in its individual capacity and as the Lessor (without duplication of any
indemnification required by subsection (a)) on an After Tax Basis against, any
obligation for United States withholding taxes imposed in respect of the
interest payable on the Notes to the extent, but only to the extent, Lessor has
actually paid funds to a taxing authority with respect to such withholding taxes
(and, if the Lessor receives a demand for such payment from any taxing
authority, the Lessee shall discharge such demand on behalf of the Lessor);
(g)(i) If a written claim is made against any Tax Indemnitee
or if any proceeding shall be commenced against such Tax Indemnitee (including a
written notice of such proceeding), for any Impositions, such Tax Indemnitee
shall promptly notify Lessee in writing and shall not take action with respect
to such claim or proceeding without the consent of Lessee for thirty (30) days
after the receipt of such notice by Lessee; provided, that, in the case of any
such claim or proceeding, if action shall be required by law or regulation to be
taken prior to the end of such 30-day period, such Tax Indemnitee shall, in such
notice to Lessee, inform Lessee, and no action shall be taken with respect to
such claim or proceeding without the consent of Lessee before the end of such
shorter period; provided, further, that the failure of such Tax Indemnitee to
give the notices referred to this sentence shall not diminish Lessee's
obligation hereunder except to the extent such failure materially adversely
affects Lessee in contesting all or part of such claim.
(ii) If, within thirty (30) days of receipt of such notice
from the Tax Indemnitee (or such shorter period as the Tax Indemnitee has
noticed Lessee is required by law or regulation for the Tax Indemnitee to
commence such contest), Lessee shall request in writing that such Tax Indemnitee
contest such Imposition, the Tax Indemnitee shall, at the expense of Lessee, in
good faith conduct and control such contest (including, without limitation, by
pursuit of appeals) relating to the validity, applicability or amount of such
Impositions (provided, however, that (A) if such contest can be pursued
independently from any other proceeding involving a tax liability of such Tax
Indemnitee, the Tax Indemnitee, at Lessee's request, shall allow Lessee to
conduct and control such contest and (B) in the case of any contest that Lessee
is not entitled to control, the Tax Indemnitee may request Lessee to conduct and
control such contest if possible or
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permissible under applicable law or regulation) by, in the sole discretion of
the Person conducting and controlling such contest, (1) resisting payment
thereof, (2) not paying the same except under protest, if protest is necessary
and proper, (3) if the payment be made, using reasonable efforts to obtain a
refund thereof in appropriate administrative and judicial proceedings, or (4)
taking such other action as is reasonably requested by Lessee from time to time.
(iii) The party controlling any contest shall consult in good
faith with the non-controlling party and shall keep the non-controlling party
reasonably informed as to the conduct of such contest; provided that all
decisions ultimately shall be made in the sole discretion of the controlling
party. The parties agree that an Tax Indemnitee may at any time decline to take
further action with respect to the contest of any Imposition and may settle such
contest if such Tax Indemnitee shall waive its rights to any indemnity from
Lessee that otherwise would be payable in respect of such claim (and any future
claim by any taxing authority with respect to other taxable periods that are
based, in whole or in part, upon the resolution of such claim) and shall pay to
Lessee any amount previously paid or advanced by Lessee pursuant to this Section
12.2 by way of indemnification or advance for the payment of an Imposition, and
no other then future liability of the Lessee is likely with respect to such
Imposition.
(iv) Notwithstanding the foregoing provisions of this Section
12.2, a Tax Indemnitee shall not be required to take any action and Lessee shall
not be permitted to contest any Impositions in its own name or that of the Tax
Indemnitee unless (A) Lessee shall have agreed to pay and shall pay to such Tax
Indemnitee on demand and on an After Tax Basis all reasonable costs, losses and
expenses that such Tax Indemnitee actually incurs in connection with contesting
such Impositions, including, without limitation, all reasonable legal,
accounting and investigatory fees and disbursements, (B) in the case of a claim
that must be pursued in the name of an Tax Indemnitee (or an Affiliate thereof),
the amount of the potential indemnity (taking into account all similar or
logically related claims that have been or could be raised in any audit
involving such Tax Indemnitee for which Lessee may be liable to pay an indemnity
under this Section 12.2) is more than $25,000, unless the pursuit of such
contest is in a manner mutually satisfactory to the Tax Indemnitee and the
Lessee, but in no event shall such right prevent the Lessee from prosecuting or
continuing such contest, (C) the Tax Indemnitee shall have reasonably determined
that the action to be taken will not result in any material danger of sale,
forfeiture or loss of any piece of Equipment, or any part thereof or interest
therein, will not interfere with the payment of Rent, and will not result in
risk of criminal liability, (D) if such contest shall involve the payment of the
Imposition prior to the contest, Lessee shall provide to the Tax Indemnitee an
interest-free advance in an amount equal to the Imposition that the Tax
Indemnitee is required to pay (with no additional net after-tax cost to such Tax
Indemnitee), (E) in the case of a claim that must be pursued in the name of an
Tax Indemnitee (or an Affiliate thereof), Lessee shall have provided to such Tax
Indemnitee an opinion of independent tax
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counsel selected by the Lessee and reasonably satisfactory to such Tax
Indemnitee stating that a reasonable basis exists to contest such claim (or, in
the case of an appeal of an adverse determination, an opinion of such counsel to
the effect that there is substantial authority for the position asserted in such
appeal) and (F) no Event of Default shall have occurred and be continuing. In no
event shall a Tax Indemnitee be required to appeal an adverse judicial
determination to the United State Supreme Court. In addition, a Tax Indemnitee
shall not be required to contest any claim in its name (or that of an Affiliate)
if the subject matter thereof shall be of a continuing nature and shall have
previously been decided adversely by a court of competent jurisdiction pursuant
to the contest provisions of this Section 12.2, unless there shall have been a
change in law (or interpretation thereof) and the shall Tax Indemnitee have
received, at the Lessee's expense, an opinion of independent tax counsel
selected by the Lessee and reasonably acceptable to the Tax Indemnitee stating
that as a result of such change in law (or interpretation thereof), it is more
likely than not that the Tax Indemnitee will prevail in such contest.
SECTION 13. MISCELLANEOUS
13.1 Survival of Agreements. The representations, warranties,
covenants, indemnities and agreements of the parties provided for in the
Operative Agreements, and the parties' obligations under any and all thereof,
shall survive the execution and delivery of this Agreement, the transfer of the
Equipment to the Trust, any disposition of any interest of the Trust in the
Equipment or any interest of the Investor in the Trust, the payment of the Notes
and any disposition thereof and shall be and continue in effect notwithstanding
any investigation made by any party and the fact that any party may waive
compliance with any of the other terms, provisions or conditions of any of the
Operative Agreements. Except as otherwise expressly set forth herein or in other
Operative Agreements, the indemnities of the parties provided for in the
Operative Agreements shall survive the expiration or termination of any thereof.
13.2 No Broker, etc. Each of the parties hereto represents to
the others that it has not retained or employed any broker, finder or financial
adviser to act on its behalf in connection with this Agreement, nor has it
authorized any broker, finder or financial adviser retained or employed by any
other Person so to act, except for the Arranger, the fees of which shall be paid
by the Lessee in accordance with the Fee Letter. Any party who is in breach of
this representation shall indemnify and hold the other parties harmless from and
against any liability arising out of such breach of this representation.
13.3 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission), and, unless
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otherwise expressly provided herein, shall be deemed to have been duly given or
made (a) when delivered by hand, (b) one Business Day after delivery to a
nationally recognized courier service specifying overnight delivery, (c) three
Business Days after being deposited in the mail, certified or registered,
postage prepaid, or (d) in the case of facsimile notice, when sent and receipt
has been confirmed, addressed as follows in the case of the Lessee, the Trust,
the Trust Company and the Agent, and as set forth in Schedule 1.1 of the Credit
Agreement in the case of the Lenders:
If to the Lessee, to it at: Hanover Compressor Company
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
If to the Trust, to it at: Hanover Equipment Trust 1998A
c/o Wilmington Trust Company
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust
Administration
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
If to the Investor, to it at: Societe Generale Financial Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
Telecopy No.:
If to the Trust Company, to it at: Wilmington Trust Company
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust
Administration
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
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If to the Agent, to it at: The Chase Manhattan Bank
Loan and Agency Services Group
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
and
Credit and Lending
The Chase Manhattan Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
From time to time any party may designate a new address for purposes of notice
hereunder by notice to each of the other parties hereto.
13.4 Counterparts. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
13.5 Amendments and Termination. Neither this Agreement nor
any of the terms hereof may be terminated, amended, supplemented, waived or
modified except by an instrument in writing signed by the party against which
the enforcement of the termination, amendment, supplement, waiver or
modification shall be sought. This Agreement may be terminated by an agreement
signed in writing by the Trust, the Investor, the Lessee, the Agent and the
Lenders. Notwithstanding the foregoing provisions to the contrary, in the case
of the Lenders, the action of the Required Lenders shall control, except as
otherwise provided in Section 9.1 of the Credit Agreement.
13.6 Headings, etc.. The Table of Contents and headings of the
various Sections and Subsections of this Agreement are for convenience of
reference only and shall not modify, define, expand or limit any of the terms or
provisions hereof.
13.7 Parties in Interest. Except as expressly provided herein,
none of the provisions of this Agreement are intended for the benefit of any
Person except the parties hereto.
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13.8 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK.
13.9 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
13.10 Liability Limited. The Lessee and the Investor each
acknowledge and agree that the Trust Company is (except as otherwise expressly
provided herein or therein) entering into this Agreement and the other Operative
Agreements to which it is a party (other than the Trust Agreement), solely in
its capacity as trustee under the Trust Agreement and not in its individual
capacity and that Trust Company shall not be liable or accountable under any
circumstances whatsoever in its individual capacity for or on account of any
statements, representations, warranties, covenants or obligations stated to be
those of the Trust, except for its own gross negligence or willful misconduct
and as otherwise expressly provided herein or in the other Operative Agreements.
13.11 Rights of Lessee. Notwithstanding any provision of the
Operative Agreements, if at any time all obligations (i) of the Trust under the
Credit Agreement and the Security Documents and (ii) of the Lessee under the
Operative Agreements have in each case been satisfied or discharged in full,
then the Lessee shall be entitled to (a) terminate the Lease (to the extent not
previously terminated) and (b) receive all amounts then held under the Operative
Agreements and all proceeds with respect to the Equipment. Upon the fulfillment
of the obligations contained in clauses (i) and (ii) above, the Lessor shall
transfer to the Lessee all of its right, title and interest in and to the
Equipment (to the extent not previously transferred to the Lessee in accordance
with the Lease) and any amounts or proceeds referred to in the foregoing clause
(b) shall be paid over to the Lessee.
13.12 Further Assurances. The parties hereto shall promptly
cause to be taken, executed, acknowledged or delivered, at the sole expense of
the Lessee (other than with respect to the removal of Lessor Liens), all such
further acts, conveyances, documents and assurances as the other parties may
from time to time reasonably request in order to carry out and effectuate the
intent and purposes of this Agreement, the other Operative Agreements and the
transactions contemplated hereby and thereby (including, without limitation, the
preparation, execution and filing of any and all Uniform Commercial Code
financing statements and other filings or registrations which the parties hereto
may from time to time request to be filed or effected). The Lessee, at its own
expense, shall take such action as may be reasonably requested in order
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to maintain and protect all security interests provided for hereunder or under
any other Operative Agreement.
13.13 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
13.14 No Representation or Warranty. Nothing contained herein,
in any other Operative Agreement or in any other materials delivered to the
Lessee in connection with the transactions contemplated hereby or thereby shall
be deemed a representation or warranty by the Agent or the Arranger or any of
their Affiliates as to the proper accounting treatment or tax treatment that
should be afforded to the Lease and the Lessor's ownership of the Equipment and
the Agent expressly disclaims any representation or warranty with respect to
such matters.
13.15 Highest Lawful Rate. It is the intention of the parties
hereto conform strictly to applicable usury laws and, anything herein to the
contrary notwithstanding, the obligations of the Lessee, the Lessor or the
Investor or any other party under any Operative Agreement, shall be subject to
the limitation that payments of interest or of other amounts constituting
interest shall not be required to the extent that receipt thereof would be in
excess of the Highest Lawful Rate, or otherwise contrary to provisions of law
applicable to the recipient limiting rates of interest which may be charged or
collected by the recipient. Accordingly, if the transactions or the amount paid
or otherwise agreed to be paid for the use, forbearance or detention of money
under this Agreement, the Lease and any other Operative Agreement would exceed
the Highest Lawful Rate or otherwise be usurious with respect to the recipient
of any such amount, then, in that event, notwithstanding anything to the
contrary in this Agreement, the Lease or any other Operative Agreement, it is
agreed as follows as to the recipient of any such amount:
(a) the provisions of this Section 13.15 shall govern and
control over any other provision in this Agreement, the Lease and any other
Operative Agreement and each provision set forth therein is hereby so limited;
(b) the aggregate of all consideration which constitutes
interest that is contracted for, charged or received under this Agreement, the
Lease, or any other Operative Agreement shall under no circumstances exceed the
maximum amount of interest allowed by any Requirement of Law (such maximum
lawful interest rate, if any, with respect to such Lender herein called the
"Highest Lawful Rate"), and all amounts owed under this Agreement, the Lease and
any other Operative Agreement shall be held subject to reduction and (i) the
amount of interest which would otherwise be payable to the recipient hereunder
and under the Lease, the Loan Documents and any other Operative Agreement, shall
be automatically reduced to the amount allowed under any Requirement of Law and
(ii) any unearned interest paid in excess of
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the Highest Lawful Rate shall be credited to the payor by the recipient (or, if
such consideration shall have been paid in full, refunded to the payee);
(c) all sums paid, or agreed to be paid for the use,
forbearance and detention of the money under this Agreement, the Lease, or any
other Operative Agreement shall, to the extent permitted by any Requirement of
Law, be amortized, prorated, allocated and spread throughout the full term of
such indebtedness until payment in full so that the actual rate of interest is
uniform throughout the full term thereof; and
(d) if at any time the interest, together with any other fees,
late charges and other sums payable pursuant to or in connection with this
Agreement, the Lease, and any other Operative Agreement executed in connection
herewith or therewith, and deemed interest under any Requirement of Law exceeds
that amount which would have accrued at the Highest Lawful Rate, the amount of
interest and any such fees, charges and sums to accrue to the recipient of such
interest, fees, charges and sums pursuant to the Operative Agreement shall be
limited, notwithstanding anything to the contrary in the Operative Agreement to
that amount which would have accrued at the Highest Lawful Rate for the
recipient, but any subsequent reductions, as applicable, shall not reduce the
interest to accrue pursuant to the Operative Agreement below the recipient's
Highest Lawful Rate until the total amount of interest payable to the recipient
(including all consideration which constitutes interest) equals the amount of
interest which would have been payable to the recipient (including all
consideration which constitutes interest), plus the amount of fees which would
have been received but for the effect of this Section 13.15.
13.16 Waiver. EACH PARTY HERETO FOR THE BENEFIT OF THE PARTIES
HERETO AND THE GUARANTORS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAVES, TO THE
EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY
LEGAL ACTION OR PROCEEDING PURSUANT TO THE OPERATIVE AGREEMENTS ANY SPECIAL,
EXEMPLARY, PUNITIVE, INDIRECT OR CONSEQUENTIAL DAMAGES.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.
HANOVER COMPRESSOR COMPANY, as Lessee
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Treasurer
HANOVER EQUIPMENT TRUST 1998A
By: Wilmington Trust Company, not
individually but solely as Trustee
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Assistant Vice President
THE CHASE MANHATTAN BANK, as Agent and
as a Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
CREDIT LYONNAIS, as a Co-Agent and a
Lender
By: /s/ PHILIPPE SOUSTRA
-----------------------------------
Name: Philippe Soustra
Title: Senior Vice President
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38
FIRST UNION NATIONAL BANK, as a Co-Agent and a
Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President
BANK OF NOVA SCOTIA, as a Co-Agent and a Lender
By: /s/ F.C.H. ▇▇▇▇▇
---------------------------------------------
Name: F.C.H. ▇▇▇▇▇
Title: Senior Manager, Loan Operations
ABN AMRO BANK, as a Lender
By: /s/ W. ▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------------
Name: W. ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Group Vice President
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
FUJI BANK LIMITED, as a Co-Agent and a Lender
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Senior Vice President
SOCIETE GENERALE, as a Co-Agent and a Lender
By: /s/ THIERRY NAMUROY
---------------------------------------------
Name: Thierry Namuroy
Title: Vice President
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DRESDNER BANK AG, NEW YORK AND GRAND
CAYMAN BRANCHES, as a Co-Agent and a Lender
By: /s/ A.R. MARRE, FVR
---------------------------------------------
A. R. Marre, FVR
By: /s/ B. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------------------
Name: B. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
SUNTRUST BANK, as a Lender
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
---------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Vice President
SOCIETE GENERALE FINANCIAL CORPORATION, as
Investor
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
---------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
Title: Vice President
WILMINGTON TRUST COMPANY, in its individual
capacity, only to the extent expressly set
forth herein
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Assistant Vice President