Exhibit 10.1
FIRST AMENDED AND RESTATED SENIOR
SECURED CREDIT AGREEMENT
Dated as of August 7, 2009
between
HILAND HOLDINGS GP,
LP
as Borrower
and
THE SECURITY NATIONAL BANK OF
ENID
as Lender
FIRST AMENDED AND RESTATED SENIOR
SECURED
CREDIT AGREEMENT
This First Amended and Restated
Senior Secured Credit Agreement is made, executed and delivered
effective as of August 7, 2009 (this “ Agreement
”), by and between HILAND HOLDINGS GP, LP, a Delaware limited
partnership (the “ Borrower ”), and THE SECURITY
NATIONAL BANK OF ENID, a national bank association (“S
NB ”).
W I T N E S S:
WHEREAS, SNB, concurrently with the
execution of this Agreement, has acquired from MidFirst Bank (and
its assignees) (i) that certain promissory note (or notes) of
Borrower payable to MidFirst Bank (the “Note” or
“Notes”), such Note or Notes having been issued by
Borrower pursuant to that certain Senior Secured Credit Agreement
dated as of September 26, 2006 and entered into by Borrower
and MidFirst Bank (the “Existing Credit Agreement”),
(ii) the Existing Credit Agreement, and (iii) all Loan
Document (as defined in the Existing Credit Agrrement), including
the Note or Notes, pertaining to the credit facility provided for
in the Existing Credit Agreement; and
WHEREAS, the Existing Credit
Agreement provided for an original credit facility to Borrower in
the original amount of $25,000,000, and the Borrower, subsequent to
the date of the Existing Credit Agreement, voluntarily reduced the
credit facility to $10,000,000 as evidenced by Borrower’s
letter to MidFirst Bank dated May 12, 2009, and further
voluntarily reduced the credit facility from $10,000,000 to
$3,000,000 as evidenced by Borrower’s letter to MidFirst Bank
dated August 4, 2009; and
WHEREAS, the Borrower has requested
SNB amend, renew and restate the existing (which has a current
outstanding principal balance of $1,204,616.71) so as to provide
for a maximum term credit facility of $3,000,000, and SNB is
willing to do so upon the terms and subject to the conditions set
forth in this Agreement;
WHEREAS, this Agreement amends,
restates and renews the original Credit Agreement between Borrower
and MidFirst Bank dated as of September 25, 2006, as
amended;
NOW, THEREFORE, in consideration of
the foregoing premises, the mutual agreements herein contained and
other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, each party hereto agrees as
follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01.
Certain Defined Terms . As used in this Agreement, the
following terms shall have the following meanings (such meanings to
be equally applicable to both the singular and plural forms of the
terms defined):
“ Advance ” means
an advance of funds by SNB to the Borrower pursuant to the Term
Loan.
“ Affiliate ” of
any Person means any other Person which, directly or indirectly,
controls or is controlled by or is under common control with such
Person (excluding any trustee under, or any committee with
responsibility for administering, any Plan). A Person shall
be deemed to be:
(a)
“controlled by” any other Person if such other Person
possesses, directly or indirectly, power: (i) to vote 10% or
more of the securities having at the time of any determination
hereunder voting power for the election of directors of such
Person; or (ii) to direct or cause the direction of the
management and policies of such Person whether by contract or
otherwise; or
(b)
“controlled by” or “under common control
with” such other Person if such other Person is the executor,
administrator, or other personal representative of such
Person.
Without limitation, each unit holder
holding 10% or more of the securities of the Borrower and each
Subsidiary of the Borrower and each subsidiary of any subsidiary of
the Borrower shall be considered an Affiliate of the
Borrower.
“ Applicable Rate
” means the rate of interest charged on the Loan, which is
National Prime Rate plus one percent (1%), but in no event less
than five percent (5%), to be adjusted as changes occur in the
National Prime Rate.
“ Borrowing ”
means a borrowing of an Advance made by SNB pursuant to
Section 2.01.
“ Business Day ”
means a day of the year on which banks are not required or
authorized by law to close.
“ Capital Expenditures
” means material payments for assets that will benefit more
than one accounting period, as determined in accordance with
GAAP.
“ Capitalized Lease
” means any lease of real or personal property to the
Borrower or any Subsidiary that is or should be capitalized on the
balance sheet of such Person in accordance with GAAP, together with
any other lease to such Person which is in substance a financing
lease, including, without limitation, any lease under which
(a) such Person has or will have an option to purchase the
property subject thereto at a nominal amount or an amount less than
a reasonable estimate of the fair market value of such property as
of the date the lease is entered into or (b) the term of the
lease approximates or exceeds the expected useful life of the
property leased thereunder.
“ Cash Equivalents
” means obligations issued by the United States government or
any agency thereof, and negotiable bank certificates of deposit and
bankers’ acceptances issued and payable in the United States;
in any case maturing not later than one year after
issuance.
“ Cash Interest Expense
” means for any Person for any period, total cash interest
expense (including without limitation that attributable to
Capitalized Lease obligations) of such Person for such period with
respect to all outstanding Debt of such Person (including, without
limitation,
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all commissions, discounts and other fees and
charges owed by such Person with respect to letters of credit and
bankers’ acceptance financing.
“ Change in Control
” shall be deemed to have occurred if (a) any sale,
lease, exchange or other transfer (in one transaction or a series
of related transactions) of all, or substantially all, of the
assets of the Borrower occurs; (b) any “person” as
such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the “
Exchange Act ”), or two or more persons acting in
concert, (i) is or becomes, directly or indirectly, the
“beneficial owner,” as defined in Rule 13d-3 under
the Exchange Act, of securities of the Borrower that represent 33%
or more of the combined voting power of the Borrower’s then
outstanding securities, or (ii) acquires the power (whether or
not exercised) to elect a majority of the members of the
Borrower’s Board of Directors.
“ Consolidated ”
refers to the consolidation of accounts (including without
limitation those of the Borrower and its Subsidiaries) in
accordance with GAAP.
“ Consolidated Cash
Flow ” means the cash flow available to the Borrower
including, without limitation, management fees paid to the
Borrower, dividends paid to the Borrower and amounts available from
Subsidiaries to be paid as dividends to Borrower under surplus
debentures or under sale/leaseback transactions during such period
all determined in each case without duplication, and all determined
in accordance with GAAP.
“ Consolidated Net
Worth ” means the sum of the shareholders’ equity
of the Borrower and its Consolidated Subsidiaries (excluding
unrealized portfolio gains and losses), calculated in accordance
with GAAP, but any capital units that are redeemable shall not be
counted toward unitholders’ equity.
“ Consolidated Total
Debt ” means at any date, the aggregate principal amount
of all Debt of the Borrower and its Subsidiaries at such date,
determined in accordance with GAAP.
“ Contingent Liability
” means any agreement, undertaking or arrangement by which
any Person (outside the ordinary course of business) guarantees,
endorses, acts as surety for or otherwise becomes or is
contingently liable for (by direct or indirect agreement,
contingent or otherwise, to provide funds for payment by, to supply
funds to, or otherwise to invest in, a debtor, or otherwise to
assure a creditor against loss) the Debt, obligation or other
liability of any other Person (other than by endorsements of
instruments in the course of collection), or for the payment of
dividends or other distributions upon the shares of any other
Person or undertakes or agrees (contingently or otherwise) to
purchase, repurchase, or otherwise acquire or become responsible
for any Debt, obligation or liability or any security therefor, or
to provide funds for the payment or discharge thereof (whether in
the form of loans, advances, unit purchases, capital contributions
or otherwise), or to maintain solvency, assets, level of income, or
other financial condition of any other Person, or to make payment
or transfer property to any other Person other than for fair value
received. The amount of any Person’s obligation under
any Contingent Liability shall (subject to any limitation set forth
therein) be deemed to be the lesser of (i) the outstanding
principal amount (or maximum permitted principal amount, if larger)
of the Debt,
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obligation or other liability guaranteed or
supported thereby or (ii) the maximum stated amount so
guaranteed or supported.
“ Contractual
Obligation ” means, relative to any Person, any
obligation, commitment or undertaking under any agreement or other
instrument to which such Person is a party or by which it or any of
its property is bound or subject.
“ Controlled Group
” means the Borrower and any corporation, trade or business
that is, along with the Borrower, a member of a controlled group of
corporations or a controlled group of trades or businesses as
described in sections 414(b) and 414(c), respectively, of the
Code or in section 4001 of ERISA.
“ Debt ” means,
with respect to any Person, at any date, without duplication,
(a) all obligations of such Person for borrowed money or in
respect of loans or advances; (b) all obligations of such
Person evidenced by bonds, debentures, notes or other similar
instruments; (c) all obligations in respect of letters of
credit which have been drawn but not reimbursed by the Person for
whose account such letter of credit was issued, and bankers’
acceptances issued for the account of such Person; (d) all
obligations in respect of Capitalized Leases of such Person;
(e) whether or not so included as liabilities in accordance
with GAAP, all obligations of such Person to pay the deferred
purchase price of property or services; (f) Debt of such
Person secured by a Lien on property owned or being purchased by
such Person (including Debt arising under conditional sales or
other title retention agreements) whether or not such Debt is
limited in recourse (it being understood, however, that if recourse
is limited to such property, the amount of such Debt shall be
limited to the lesser of the face amount of such Debt and the fair
market value of all property of such Person securing such Debt);
(g) any Debt of another Person secured by a Lien on any assets
of such first Person, whether or not such Debt is assumed by such
first Person (it being understood that if such Person has not
assumed or otherwise become personally liable for any such Debt,
the amount of the Debt of such person in connection therewith shall
be limited to the lesser of the face amount of such Debt and the
fair market value of all property of such Person securing such
Debt); (h) any Debt of a partnership in which such Person is a
general partner unless such Debt is nonrecourse to such Person; and
(i) all Contingent Liabilities of such Person; except that
Debt shall not include (x) unsecured current liabilities
incurred in the ordinary course of business and paid within 90 days
after the due date (unless contested diligently in good faith by
appropriate proceedings and, if requested by the Lender, reserved
against in conformity with GAAP) other than liabilities that are
for money borrowed or are evidenced by bonds, debentures, notes or
other similar instruments or (y) any obligations of such
Person under any Primary Policy.
“ Default ” means
any Event of Default or any event that would constitute an Event of
Default but for the requirement that notice be given or time elapse
or both.
“ Effective Date
” has the meaning specified in Section 3.01.
“ ERISA ” means
the Employee Retirement Income Security Act of 1974, as amended,
and any successor statute of similar import, together with the
regulations promulgated thereunder
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and under the Internal Revenue Code, in each
case as in effect from time to time. References to sections
of ERISA also refer to successor sections.
“ ERISA Event ”
means, with respect to the Borrower or any Subsidiary, (a) a
Reportable Event (other than a Reportable Event not subject to the
provision for 30-day notice to the PBGC under regulations issued
under section 4043 of ERISA), (b) the withdrawal of the
Borrower or any Affiliate from a Plan during a plan year in which
it was a “substantial employer” as defined in section
4001(a)(2) of ERISA if such withdrawal would have a Material
Adverse Effect on the Borrower, or on the Borrower and its
Subsidiaries taken as a whole, (c) the filing of a notice of
intent to terminate a Plan under a distress termination or the
treatment of a Plan amendment as a distress termination under
section 4041(c) of ERISA, (d) the institution of
proceedings to terminate a Plan by the PBGC under section 4042 of
ERISA, (e) the failure to make required contributions which
would result in the imposition of a Lien under section 412 of the
Code or section 302 of ERISA, or (f) any other event or
condition which might reasonably be expected to constitute grounds
under section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan.
“ Events of Default
” has the meaning specified in Section 6.01.
“ Executive Officer
” means, as to any Person, the president, the chief financial
officer, the chief executive officer, the general counsel, the
treasurer or the secretary.
“ Existing Indebtedness
” means the Debt of the Borrower or any Subsidiary reflected
on Schedule 1.1 attached hereto.
“ Financial Statements
” means the financial statements referred to in
Section 5.01(a).
“ Fiscal Year ”
means any period of twelve consecutive calendar months ending on
the last day of December.
“ Fiscal Quarter
” means any quarter of a Fiscal Year.
“ FRB ” means the
Board of Governors of the Federal Reserve System, and any
Governmental Authority succeeding to any of its principal
functions.
“ GAAP ” means
generally accepted accounting principles set forth from time to
time in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial
Accounting Standards Board (or agencies with similar functions of
comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the
date of determination.
“ Governmental
Authority ” means any nation or government, any state or
other political subdivision thereof, and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
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“ Internal Revenue Code
” means the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and rulings issued
thereunder.
“ Late Charge ”
has the meaning specified in Section 2.04.
“ Law ” means all
ordinances, statutes, rule, regulations, orders, injunctions,
policies, writs or decrees of any Governmental Authority or
political subdivision or agency thereof or any court or similar
entity or tribunal established by any thereof.
“ Lenders ” means
SNB and each Person that executes and delivers to SNB a
participation agreement acceptable to SNB and becomes a party to
this Agreement, as contemplated by the terms of
Section 7.07(a). SNB and each such other Person shall be
considered Lenders only so long as they retain interests
herein.
“ Lien ” means,
when used with respect to any Person, any interest in any real or
personal property, asset or other right held, owned or being
purchased or acquired by such Person for its own use, consumption
or enjoyment which secures payment or performance of any obligation
and shall include any mortgage, lien, pledge, encumbrance, charge,
retained title of a conditional vendor or lessor, or other security
agreement, mortgage, deed of trust, chattel mortgage, assignment,
pledge, retention of title, financing or similar statement or
notice, or other encumbrance arising as a matter of law, judicial
process or otherwise.
“
Loan Documents
” means this Agreement, the
Note, each Notice of Borrowing, each Guaranty, the Assignment
Agreement, the Pledge Agreement, each Security Agreement, and all
other agreements, instruments, certificates, financing statements,
documents, schedules or other written indicia delivered by the
Borrower or any of its Subsidiaries or any other Person in
connection with any of the foregoing.
“ Loan ” means
the Term Loan.
“ Material Adverse
Effect ” means, the occurrence of an event (including any
adverse determination in any litigation, arbitration, or
governmental investigation or proceeding), which has or could
reasonably be expected to have a materially adverse effect on
(a) the assets, business, financial condition or operations of
the Borrower and its Subsidiaries taken as a whole; or (b) the
ability of the Borrower to perform any of its payment or other
material obligations under any of the Loan Documents; or
(c) the legality, validity, binding effect or enforceability
against the Borrower or any Subsidiary of any Loan Document that by
its terms purports to bind the Borrower or any
Subsidiary.
“ Material Subsidiary
” means (a) each other Subsidiary of the Borrower and
Subsidiary of Subsidiaries of the Borrower that either (i) as
of the end of the most recently completed Fiscal Year of the
Borrower for which audited financial statements are available, has
assets that exceed 10% of the total Consolidated assets of the
Borrower and all its Subsidiaries as of the last day of such period
or (ii) for the most recently completed Fiscal Year of the
Borrower for which audited
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financial statements are available, has revenues
that exceed 10% of the Consolidated revenue of the Borrower and all
of its Subsidiaries for such period.
“ Multiemployer Plan
” means a “multiemployer plan” as defined in
section 4001(a)(3) of ERISA, and to which the Borrower or any
of the Subsidiaries is making, or is obligated to make,
contributions, or has made, or has been obligated to make,
contributions.
“ National Prime Rate
” shall mean the annual rate of interest, from day to
day, as published in the Wall Street Journal, Eastern Edition,
Money Rates section (or, if no longer available or published, a
similar publication) and designated as the Prime Rate, which is the
base rate on corporate loans at large U.S. money center commercial
banks, or if two (2) such rates are published, the higher of
the two (2) rates.
“
Net Income
” means fiscal year-to-date
after-tax net income from continuing operations as determined in
accordance with GAAP.
“ Net Worth ”
means the sum of the shareholders’ equity of the Borrower and
its Consolidated Subsidiaries, calculated in accordance with GAAP,
but any capital units that are redeemable shall not be counted
toward shareholders’ equity.
“ Note ” means
the Term Loan Note.
“ Notice of Borrowing
” has the meaning specified in
Section 2.01(c).
“ Obligations ”
means shall mean the obligations of the Borrower:
(a)
to pay the principal, interest, commitment fees and any other
liabilities of the Borrower to SNB under this Agreement and the
other Loan Documents in accordance with the terms
thereof;
(b)
to reimburse SNB, on demand, for all of SNB’s expenses and
costs, including, without limitation, the reasonable fees and
expenses of its counsel, in connection with the negotiation,
preparation, administration, amendment, modification, or
enforcement of this Agreement and the documents required
hereunder.
“ Operating Lease
” means any lease of real or personal property to the
Borrower or any Subsidiary that is not a Capitalized
Lease.
“ Organization
Documents ” means, for any corporation or cooperative,
the certificate or articles of incorporation, the bylaws, any
certificate of determination or instrument relating to the rights
of preferred shareholders of such corporation, any shareholder
rights agreement, and all applicable resolutions of the board of
directors (or any committee thereof) of such
corporation.
“ PBGC ” means
the Pension Benefit Guaranty Corporation (or any
successor).
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“ Permitted Investment
” means, at any time:
(a)
any evidence of Debt issued or
guaranteed by the United States Government;
(b)
commercial paper,
maturing not more than one year from the date of issue, which is
issued by (i) a corporation (except an Affiliate of the
Borrower) rated at least A-2 by S&P, P-2 by Moody’s or
D-2 by Duff & Phelps Credit Rating Company, or
(ii) any Lender (or its holding company);
(c)
any certificate
of deposit or bankers’ acceptance or eurodollar time deposit,
maturing not more than three years after the date of issue, which
is issued by either (i) a financial institution which is rated
at least BBB+ by S&P or Duff & Phelps Credit Rating
Company or Baa1 by Moody’s or 3 or above by the National
Association of Insurance Commissioners, or (ii) any
Lender;
(d)
any repurchase
agreement with a term of one year or less which (i) is entered
into with (A) any Lender, or (B) any other commercial
banking institution of the stature referred to in clause
(c)(i) , and (ii) is secured by a fully perfected Lien in
any obligation of the type described in any of clauses (a)
through (c) that has a market value at the time
such repurchase agreement is entered into of not less than 100% of
the repurchase obligation of such Lender (or other commercial
banking institution) thereunder;
(e)
investments in
money market funds that invest solely in Permitted Investments
described in clauses (a) through (d)
;
(f)
investments in
short-term asset management accounts offered by any Lender for the
purpose of investing in loans to any corporation (other than an
Affiliate of the Borrower) organized under the laws of any state of
the United States or of the District of Columbia and rated at least
A-1 by S&P or P-1 by Moody’s;
(g)
investments in
non-equity securities which are rated at least BBB by S&P or
Duff & Phelps Credit Rating Company or Baa3 by
Moody’s or 2 or above by the National Association of
Insurance Commissioners, provided that the value of such
investments held by the Borrower or by any Subsidiary that have any
of the lowest of such ratings does not exceed ten percent (10%) of
the value of all Permitted Investments held by such Person,
determined in accordance with GAAP, as applicable;
(h)
investment in
equity securities, including common and subordinated units, limited
to 10% of the consolidated assets;
(i)
investments in
non-equity securities which are not rated but are determined by the
Borrower’s investment managers to be of comparable quality to
investments permitted under clause (g) ; provided ,
however , that as promptly as practicable upon receipt of a
written notice from SNB stating that an investment is not permitted
under this clause (i) , the Borrower shall sell such
investment; and
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(j)
investments in
the capital units or preferred equity interests issued by a
Material Subsidiary, provided that all assets thereof are invested
solely in Permitted Investments described in clauses (a)
through (i) .
“ Person ” means
an individual, partnership, corporation (including a business
trust), joint stock company, trust, unincorporated association,
joint venture, limited liability company or other entity, or a
government or any political subdivision or agency
thereof.
“ Plan ” means
any “employee pension benefit plan,” as such term is
defined in ERISA, which is subject to Title IV of ERISA (other than
a Multiemployer Plan), and as to which any entity in the Controlled
Group has or may have any liability, including any liability by
reason of having been a substantial employer within the meaning of
section 4063 of ERISA for any time within the preceding five years
or by reason of being deemed to be a contributing sponsor under
section 4069 of ERISA.
“ Pledge Agreement
” has the meaning specified in
Section 3.01(g).
“ Pledged Collateral Market
Value ” means the cumulative value of the following in
each case owned by the Borrower and its Subsidiaries: (a) the
Hiland Common Units (as defined in Section 3.01 (g)(i) below), (b)
the Hiland Subordinated Units (as defined in Section 3.01 (g)(i)
below) and (c) any assets acquired after the Closing Date in which
a security interest has been granted to Lender and perfected, in
each case, pursuant to the terms hereof. For purposes of this
definition, the value of (i) the Hiland Common Units on any date
shall be the closing price for such Hiland Common Units as
reflected on the NASDAQ securities exchange on such date, (ii) the
Hiland Subordinated Units on any date shall be deemed to equal 85%
of the value of the Hiland Common Units on such date and (iii) the
assets referred to in clause (c) above shall be the fair market
value of such assets as reasonably valued by Lender and subject to
third-party verification as deemed necessary by the Administrative
Agent.
“ Quarterly Statement
” means a quarterly financial statement that otherwise meets
the requirements set forth in the definition of “Annual
Statement.”
“ Requirement of Law
” for any Person means the Organization Documents of such
Person, and any law, treaty, rule, ordinance or regulation or
determination of an arbitrator or a court or other governmental
authority, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its
property is subject.
“ S&P ” means
Standard & Poor’s, a division of The McGraw-Hill
Companies, Inc.
“ Security Agreement
” has the meaning specified in Section 3.01.
“ Senior Debt ”
means the Obligations.
“ Senior Debt Leverage
Ratio ” means the ratio of Senior Debt to Consolidated
Net Worth.
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“ Subsidiary ”
means a Person of which the indicated Person and/or its other
Subsidiaries, individually or in the aggregate, own, directly or
indirectly, such number of outstanding shares or other equity
interests as have at the time of any determination hereunder more
than 50% of the ordinary voting power; provided that, Hiland
Partners, LP, a Delaware limited partnership and its subsidiaries
and Hiland Partners GP, LLC, a Delaware limited liability company
and its subsidiaries shall not be considered
“Subsidiary” for the purposes of this Agreement.,
“Subsidiary” means a direct or indirect Subsidiary of
the Borrower.
“ Term Loan ”
means the Loan made to the Borrower by SNB pursuant to
Section 2.01.
“ Term Loan Commitment
” has the meaning specified in Section 2.01.
“ Term Loan Note
” has the meaning specified in Section 2.01.
“ Termination Date
” has the meaning specified in Section 2.01.
“ Welfare Plan ”
means any “employee welfare benefit plan” as such term
is defined in ERISA, as to which the Borrower has any
liability.
SECTION 1.02.
Computation of Periods . In this Agreement in the
computation of periods from a specified date to a later specified
date, the word “from” means “from and
including” and the words “to” and
“until” each mean “to but
excluding”.
SECTION 1.03.
Conventions . Unless otherwise defined or the context
otherwise requires, all financial and accounting terms used herein
or in any of the Loan Documents or any certificate or other
document made or delivered pursuant hereto shall be defined in
accordance with GAAP, as the context may require. When used
in this Agreement, the term “financial statements”
shall include the notes and schedules thereto, except that Borrower
shall not be required to furnish notes and schedules with any
Quarterly Statement. When used herein, the terms “best
knowledge of” or “to the best knowledge of” any
Person shall mean matters within the actual knowledge of such
Person (or an Executive Officer or general partner of such Person)
or which should have been known by such Person after reasonable
inquiry. The definition of any agreement, instrument or
document shall also include any amendment or modification of or
supplement to the same. References to the Borrower or any
Subsidiary shall also include its permitted successors and
assigns.
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ARTICLE II
AMOUNTS AND TERMS OF THE LOANS
SECTION 2.01. The Term Loan
Facility . Upon the terms and conditions set forth
herein, SNB shall make available to the Borrower, commencing on the
Effective Date and until the Termination Date, Advances under the
Term Loan in the aggregate maximum principal amount not to exceed
Three Million Dollars ($3,000,000) (the “Term Loan
Commitment”); provided, however, there shall be no
re-advances of principal once the Term Loan has been fully
advanced.
(a)
Generally . On the Effective Date subject to the
terms and conditions set forth herein, SNB shall provide to the
Borrower the Loan in the form of one or more Advances under the
Term Loan Facility which shall be used by the Borrower as set forth
herein and the initial Advance shall occur on the Effective Date
and shall be in the amount $2,500,000, including the existing
principal balance of $1,204,616.71. The Borrower shall not be
permitted to reborrow any amount or any portion of any amount
repaid by the Borrower under this Term Loan. The principal
balance of the Loan shall bear interest at the Applicable Rate,
which is National Prime Rate plus one percent (1%) but in no event
shall the Applicable Rate be less than five percent (5%). The
Applicable Rate shall be adjusted on the same date of any change in
the National Prime Rate.
(b)
Commitment
. Subject to the terms and
conditions set forth herein, Lender agrees to make Advances on the
Loan to the Borrower from time to time in an aggregate principal
amount that will not result in (i) the principal balance due
under the Loan exceeding fifty percent (50%) of the Pledged
Collateral Market Value.
(c)
Principal And
Interest Payments . Commencing with the
first day of September, 2009, and on the first day of each month
thereafter until the Maturity Date, the Borrower shall pay all
accrued interest on the Term Loan due as of the date of payment.
All principal and unpaid interest shall become fully due and
payable on December 31, 2009.
(d)
Default
Interest . Upon the occurrence
and during the continuance of an Event of Default, the Borrower
shall pay interest, on the unpaid principal balance under the Note
at a rate equal to the National Prime Rate plus seven percent
(7%).
(e)
Term
Note . The obligations of
the Borrower to repay the aggregate outstanding principal under the
Term Loan and to pay accrued interest, fees and expenses thereon
shall be evidenced by a promissory note, in a principal amount
equal to the Term Loan Commitment, in form and substance
satisfactory to SNB, to be executed and delivered to SNB
concurrently with the execution and delivery of this Agreement (as
amended, the “Term Note”). SNB is hereby authorized to
record the date, type, and amount of each Advance, the date and
amount of each payment or prepayment of principal thereof, on the
schedule annexed to and constituting a part of the Term Note, and
any such recordation shall constitute prima facie evidence
of the accuracy of the information so recorded absent manifest
error, provided that neither the failure to record nor any error in
such recordation shall affect the Borrower’s obligations
under the Term Note.
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SECTION 2.02. NOT
USED
SECTION 2.03.
Prepayments . (a) The Borrower shall have the
right to prepay an Advance, in whole or in part, without penalty or
premium, at any time.
(b)
All prepayments under this
Section 2.03 shall be made without set-off, deduction or
counterclaim, shall include payment of any accrued and unpaid
interest and fees in respect of the Loan and (if applicable), and
applications of prepayments to principal shall first be applied to
any installment of principal then due, and then be applied to the
principal due in the reverse order of maturity, and no partial
prepayment shall relieve the Borrower of the obligation to pay each
subsequent installment of principal when due.
SECTION 2.04.
Late Charges . Any payment owed by the Borrower under
any Loan Document not made by the Borrower within 10 days of the
date when due shall, at the option of SNB, bear late charges
thereon calculated at a rate equal to five percent (5%) of each
deliquent payment ( “ Late Charge
”).
SECTION 2.05.
Payments and Computations . (a) The Borrower shall make
each payment hereunder, irrespective of any right of counterclaim
or set-off, not later than 1:00 P.M. (Oklahoma time) on the
day when due to SNB.
(b)
Whenever any
payment due hereunder or under any other Loan Document shall be
stated to be due on a day other than a Business Day, such payment
shall be made on the next succeeding Business Day, and such
extension of time shall in such case be included in the computation
of payment of interest or fee, as the case may be; provided
, however , that such extension of time shall not be
applicable for purposes of calculating or complying with any of the
covenants contained herein.
(c)
All computations by SNB shall be
conclusive and binding for all purposes absent manifest error. Both
principal and interest are payable in lawful money of the United
States of America and in immediately available funds.
SECTION 2.06.
Taxes . (a) Any and all payments by the Borrower under
any Loan Document to or for the account of SNB shall be made, in
accordance with Section 2.05 or the applicable provisions of
such other documents, free and clear of and without deduction for
any and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto,
excluding , taxes imposed on SNB’s overall net income,
and taxes imposed on SNB in lieu of net income taxes, by the
jurisdiction under the laws of which SNB is organized or doing
business (other than as a result of the making of the Advances) or
any political subdivision thereof (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities
in respect of payments under any Loan Document being hereinafter
referred to as “ Taxes ”). If the Borrower
shall be required by law to deduct any Taxes from or in respect of
any sum payable under any Loan Document to SNB, (i) the sum
payable shall be increased as may be necessary so that after making
all required deductions (including deductions applicable to
additional sums payable under this Section 2.06) SNB receives
an amount equal to
13
the sum it would have
received had no such deductions been made, (ii) the Borrower
shall make such deductions and (iii) the Borrower shall pay
the full amount deducted to the relevant taxation authority or
other authority in accordance with applicable law.
(b)
In addition, the
Borrower shall pay any present or future stamp or documentary taxes
or any other excise or property taxes, charges or similar levies
that arise from any payment made under any Loan Document or from
the execution, delivery or registration of, performing under, or
otherwise with respect to, this Agreement or the Note(s) or
any other documents to be delivered hereunder (hereinafter referred
to as “Other Taxes”).
(c)
The Borrower
shall indemnify SNB for and hold it harmless against the full
amount of Taxes or Other Taxes (including, without limitation,
taxes of any kind imposed or asserted by any jurisdiction on
amounts payable under this Section 2.06) imposed on or paid by
SNB (as the case may be) and any liability (including penalties,
interest and expenses) arising therefrom or with respect
thereto. This indemnification shall be made within 30 days
from the date SNB makes written demand therefore.
(d)
Within 30 days
after the date of any payment of Taxes, the Borrower shall furnish
to SNB, at its address referred to in Section 7.02, the
original or a certified copy of a receipt evidencing such payment
to the extent such a receipt is issued therefor, or other written
proof of payment thereof that is reasonably satisfactory to
SNB.
SECTION 2.07.
Use of Proceeds . The proceeds of the Loans shall be
available and the Borrower agrees that it shall use the Loan
proceeds for general corporate purposes consistent with this
Agreement.
ARTICLE III
CONDITIONS TO EFFECTIVENESS AND LENDING
SECTION 3.01.
Conditions Prece
