Document:

Exhibit 4.4

 

 

 

 

 

 

 

 

 

 

 

BAKER HUGHES INCORPORATED

DIRECTOR COMPENSATION DEFERRAL PLAN

(Amendment and Restatement

Effective January 1, 2009)

 

 

 

 

 

 

 

 

 

 

 

Adopted by the Board of Directors on July 24, 2008

 

Exhibit 4.4

TABLE OF CONTENTS

 

 

Page

 

	
1.

	
PURPOSES OF THE PLAN; DEFINITIONS; INTERPRETATION AND CONSTRUCTION

	
1

	 	
1.1

	
General

	
1

	 	
1.2

	
Definitions

	
1

	 	
1.3

	
Interpretation and Construction

	
5

	
2.

	
ADMINISTRATION

	
5

	
3.

	
PARTICIPATION IN THE PLAN

	
6

	 	
3.1

	
Eligibility

	
6

	 	
3.2

	
Election to Participate

	
6

	
4.

	
COMPENSATION DEFERRALS

	
6

	 	
4.1

	
Time of Elections

	
6

	 	
4.2

	
Irrevocability of Elections

	
6

	 	
4.3

	
Retirement Income Deferrals

	
6

	
5.

	
ELECTION OF DEFERRAL VEHICLES

	
7

	 	
5.1

	
Stock Option-Related Deferral Vehicles

	
7

	 	
5.2

	
Cash-Based Deferral Vehicles

	
7

	
6.

	
SHARES AVAILABLE FOR STOCK OPTIONS

	
8

	 	
6.1

	
Number of Shares Available for Stock Options

	
8

	 	
6.2

	
Adjustments in Authorized Shares

	
8

	
7.

	
STOCK OPTIONS

	
9

	 	
7.1

	
Calculation of Exercise Price

	
9

	 	
7.2

	
Terms and Conditions of Options

	
9

	
8.

	
PAYMENT OF AMOUNTS IN ACCOUNTS

	
11

	 	
8.1

	
Payment Generally

	
11

	 	
8.2

	
Payment of Simultaneous Amounts

	
12

	 	
8.3

	
Unforeseeable Financial Emergency

	
12

	 	
8.4

	
Disability

	
12

	 	
8.5

	
Death

	
12

	 	
8.6

	
Debiting of Plan Accounts

	
12

	
9.

	
PROHIBITION AGAINST ASSIGNMENT OR ENCUMBRANCE

	
13

	
10.

	
AMENDMENT AND TERMINATION OF THE PLAN

	
13

	
11.

	
NATURE OF THE PLAN

	
13

	
12.

	
REORGANIZATION

	
13

	
13.

	
ACCELERATION OF VESTING OF STOCK OPTIONS

	
14

	
14.

	
MISCELLANEOUS

	
14

	 	
14.1

	
Severability

	
14

	 	
14.2

	
Requirements of Law

	
14

	 	
14.3

	
Securities Law Compliance

	
14

	 	
14.4

	
Compliance With Section 409A

	
14

	 	
14.5

	
Governing Law

	
14

 

Exhibit 4.4

 

 

 

BAKER HUGHES INCORPORATED

DIRECTOR COMPENSATION DEFERRAL PLAN

(Amendment and Restatement

Effective January 1, 2009)

 

1.          Purposes of the Plan; Definitions; Interpretation and Construction.

 

1.1          General.  The Baker Hughes Incorporated Director Compensation Deferral Plan, as amended and restated (the “Plan”), is intended to provide a means whereby non-employee directors of Baker Hughes Incorporated (the “Company”) may defer compensation otherwise payable and provide flexibility respecting the Company’s compensation policies.

 

1.2          Definitions.

 

“Account(s)” means all ledger accounts pertaining to a Participant or former Participant which are maintained by the Committee or Plan recordkeeper to reflect the Company’s obligation to the Participant or former Participant under the Plan.  The Committee or Plan recordkeeper shall establish any subaccounts that the Committee or Plan recordkeeper consider necessary to reflect the entire interest of the Participant or former Participant under the Plan.  Each of the subaccounts established by the Committee or Plan recordkeeper shall reflect credits and debits made to such subaccounts for earnings, losses, and distributions.

 

The Committee or Plan recordkeeper shall also maintain records that reflect a Participant’s or former Participant’s Grandfathered Amounts.

 

“Affiliate” means any entity which is a member of (i) the same controlled group of corporations within the meaning of section 414(b) of the Code with Baker Hughes, (ii) a trade or business (whether or not incorporated) which is under common control (within the meaning of section 414(c) of the Code) with Baker Hughes or (iii) an affiliated service group (within the meaning of section 414(m) of the Code) with Baker Hughes.

 

“Assets” means assets of any kind owned by Baker Hughes, including but not limited to securities of Baker Hughes’ direct and indirect subsidiaries and Affiliates.

 

“Baker Hughes” means Baker Hughes Incorporated, a Delaware corporation, and any successor by merger or otherwise.

 

“Beneficial Owner” or “Beneficial Ownership” shall have the meaning ascribed to the term in Rule 13d-3 of the General Rules and Regulations under the Exchange Act.

 

“Board” or “Board of Directors” means the Board of Directors of the Company.

 

“Change in Control” means the occurrence of any of the following events:

 

(a)          the individuals who are Incumbent Directors cease for any reason to constitute a majority of the members of the Board;

 

(b)          the consummation of a Merger of Baker Hughes or an Affiliate with another Entity, unless the individuals and Entities who were the Beneficial Owners of the Voting Securities of Baker Hughes outstanding immediately prior to such Merger own, directly or indirectly, at least 50 percent of the combined voting power of the Voting Securities of any of Baker Hughes, the surviving Entity or the parent of the surviving Entity outstanding immediately after such Merger;

 

 

Exhibit 4.4

 

 

(c)          any Person, other than a Specified Owner, becomes a Beneficial Owner, directly or indirectly, of securities of Baker Hughes representing 30 percent or more of the combined voting power of Baker Hughes’ then outstanding Voting Securities;

 

(d)          a sale, transfer, lease or other disposition of all or substantially all of Baker Hughes’ Assets is consummated (an “Asset Sale”), unless:

 

(1)          the individuals and Entities who were the Beneficial Owners of the Voting Securities of Baker Hughes immediately prior to such Asset Sale own, directly or indirectly, 50 percent or more of the combined voting power of the Voting Securities of the Entity that acquires such Assets in such Asset Sale or its parent immediately after such Asset Sale in substantially the same proportions as their ownership of Baker Hughes’ Voting Securities immediately prior to such Asset Sale; or

 

(2)          the individuals who comprise the Board immediately prior to such Asset Sale constitute a majority of the board of directors or other governing body of either the Entity that acquired such Assets in such Asset Sale or its parent (or a majority plus one member where such board or other governing body is comprised of an odd number of directors); or

 

(e)          The stockholders of Baker Hughes approve a plan of complete liquidation or dissolution of Baker Hughes.

 

“Committee” means the Compensation Committee of the Board or such other committee of the Board or the entire Board as the Board designates to administer the terms and provisions of the Plan, as specified in Section 2.

 

“Common Stock” means the Company’s common stock, $1.00 par value.

 

“Compensation” means a Director’s annual retainer.

 

“Deferral Vehicles” has the meaning specified in Section 5.

 

“Deferred Compensation” means the Compensation and Retirement Income deferred by a Participant with respect to any calendar year pursuant to an election as provided in Section 4.

 

“Designated Date” has the meaning specified in Section 5.2.

 

“Directors” means all non-employee directors of the Company.

 

“Disability” means the inability of the Participant to engage in any substantial activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months.

 

“Entity” means any corporation, partnership, association, joint-stock company, limited liability company, trust, unincorporated organization or other business entity.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Fair Market Value” means the price per share of Common Stock, based on the composite transactions in the Common Stock as reported by The Wall Street Journal, and shall be equal to the per share price of the last sale of Common Stock on the trading day prior to the date of grant of the Stock Option.

 

Exhibit 4.4

 

 

“Grandfathered Amounts” means amounts deferred under the Plan that were earned and vested within the meaning of Section 409A prior to January 1, 2005 and earnings thereon.

 

“Incumbent Director” means –

 

(a)          a member of the Board on July 24, 2008 or

 

(b)          an individual-

 

(1)          who becomes a member of the Board after July 24, 2008;

 

(2)          whose appointment or election by the Board or  nomination for election by Baker Hughes’ stockholders is approved or recommended by a vote of at least two-thirds of the then serving Incumbent Directors (as defined herein); and

 

(3)          whose initial assumption of service on the Board is not in connection with an actual or threatened election contest.

 

“Merger” means a merger, consolidation or similar transaction.

 

“Option Expiration Date” has the meaning specified in Section 7.2.

 

“Participant” means an eligible Director who elects to become a participant in the Plan.

 

“Person” shall have the meaning ascribed to the term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d) thereof, except that the term shall not include (a) Baker Hughes or any of the Affiliates, (b) a trustee or other fiduciary holding Baker Hughes securities under an employee benefit plan of Baker Hughes or any of the Affiliates, (c) an underwriter temporarily holding securities pursuant to an offering of those securities or (d) a corporation owned, directly or indirectly, by the stockholders of Baker Hughes in substantially the same proportions as their ownership of stock of Baker Hughes.

 

“Prime Rate Equivalents” has the meaning specified in Section 5.2.

 

“Retirement Income” means retirement benefits pursuant to the Company’s Director Retirement Policy.

 

“Section 409A” means section 409A of the Internal Revenue Code of 1986, as amended and Department of Treasury and Internal Revenue Service rules and regulations issued thereunder.

 

“Separation from Service” has the meaning ascribed to that term in Section 409A.

 

“S&P 500 Equivalents” has the meaning specified in Section 5.2.

 

“Shares” means the shares of Common Stock reserved for issuance under the Plan.

 

“Specified Owner” means any of the following:

 

Baker Hughes;

 

(a)          an Affiliate of Baker Hughes;

 

(b)          an employee benefit plan (or related trust) sponsored or maintained by Baker Hughes or any Affiliate of Baker Hughes;

 

Exhibit 4.4

 

 

(c)          a Person that becomes a Beneficial Owner of Baker Hughes’ outstanding Voting Securities representing 30 percent or more of the combined voting power of Baker Hughes’ then outstanding Voting Securities as a result of the acquisition of securities directly from Baker Hughes and/or its Affiliates; or

 

(d)          a Person that becomes a Beneficial Owner of Baker Hughes’ outstanding Voting Securities representing 30 percent or more of the combined voting power of Baker Hughes’ then outstanding Voting Securities as a result of a Merger if the individuals and Entities who were the Beneficial Owners of the Voting Securities of Baker Hughes outstanding immediately prior to such Merger own, directly or indirectly, at least 50 percent of the combined voting power of the Voting Securities of any of Baker Hughes, the surviving Entity or the parent of the surviving Entity outstanding immediately after such Merger in substantially the same proportions as their ownership of the Voting Securities of Baker Hughes outstanding immediately prior to such Merger.

 

“Stock Option” or “Stock Options” are the stock options issued to Participants in exchange for Deferred Compensation pursuant to Section 7, or if permitted by the Committee, pursuant to any other plan that would permit the grant of options under the Plan.

 

“Stock Option Price” means the price at which a Participant may purchase a Share pursuant to a Stock Option.

 

“Unforeseeable Financial Emergency” means a severe financial hardship of the Participant resulting from an illness or accident of the Participant or of the Participant’s spouse or dependent (as defined in section 152(a) of the Code), loss of the Participant’s property due to casualty (including the need to rebuild a home following damage to a home not otherwise covered by insurance), or other similar extraordinary and unforeseeable circumstance arising as a result of events beyond the control of the Participant.  The circumstances that will constitute an Unforeseeable Financial Emergency will depend upon the facts of each case, but, in any case, payment may not be made to the extent that the emergency is or may be relieved through reimbursement or compensation by insurance or otherwise or by liquidation of the Participant’s assets, to the extent the liquidation of such assets will not itself cause severe financial hardship.  Such foreseeable needs for funds as the desire to send a Participant’s child to college or to purchase a home will not be considered to be unforeseeable emergencies.  Whether an Unforeseeable Financial Emergency exists and the amount reasonably needed to satisfy the emergency will be determined by the Committee.

 

“Voting Securities” means the outstanding securities entitled to vote generally in the election of directors or other governing body.

 

1.3          Interpretation and Construction.  As used in the Plan, unless the context otherwise expressly requires to the contrary, references to the singular include the plural, and vice versa; references to the masculine include the feminine and neuter; references to “including” mean “including (without limitation),” and references to Sections mean the sections of the Plan.

 

2.          Administration.

 

The Plan shall be administered by the Committee.  The Committee is authorized to interpret the Plan and may, from time to time, adopt such rules and regulations, consistent with the provisions of the Plan, as it may deem advisable to carry out the Plan.  All determinations made by the Committee shall be final.  No member of the Committee shall have any right to vote or decide upon any matter relating to himself under the Plan or to vote in any case in which his individual right to claim any benefit under the Plan is particularly involved. The Committee may delegate to the Vice President of Human Resources or other officer of the Company its duties for the day-to-day administration of the Plan, including accepting deferral elections and accounting for deferrals and distributions under the Plan.  All expenses incurred in connection with the administration of the Plan shall be borne by the Company.

 

Exhibit 4.4

 

 

All determinations and decisions made by the Committee and the Board pursuant to the provisions of the Plan and all related orders and resolutions of the Committee and the Board shall be final, conclusive and binding on all persons, including the Company, its stockholders, Directors, Participants and the estates and beneficiaries of Directors and Participants.

 

3.          Participation in the Plan.

 

3.1          Eligibility.  Directors shall be eligible to participate in the Plan.  An individual shall be considered to be a Director until the close of business on the day preceding the earlier of the first date the individual (1) becomes a common-law employee of the Company or its subsidiaries or (2) ceases to be a member of the Board for any reason whatsoever.

 

3.2          Election to Participate.  An eligible Director may elect to become a Participant by electing to defer an integral percentage (from 1% to 100%) of his Compensation.  All elections shall be made in the form and manner prescribed by the Committee.

 

4.          Compensation Deferrals.

 

4.1          Time of Elections.  Compensation deferral elections shall be made with respect to each calendar year.  Except as specified in the following paragraph, any election by a Participant to defer Compensation under the Plan must be made on or before the December 31st preceding the calendar year to which the election relates or such earlier date as the Committee may determine.  Any such election shall apply to the Participant’s Compensation for the period commencing on January 1st of the applicable calendar year and ending upon December 31st of such calendar year.

 

If a directorship commences during a calendar year, any deferral election with respect to the first year of the directorship must be made by the Director within thirty (30) days of the date he or she first becomes a Director.  Any such deferral election will apply commencing on the date he or she first becomes a Director to the Participant’s Compensation for services performed subsequent to the election during the calendar year in which he or she first becomes a Director.

 

4.2          Irrevocability of Elections.  Any election to defer Compensation which may be made by a Participant shall be irrevocable once made with respect to the calendar year.  Any election to defer Compensation made by a Participant with respect to any calendar year shall be deemed to have been made with respect to each subsequent calendar year, unless the Participant changes such election prior to the expiration of the time for making the election with respect to the subsequent calendar year.

 

4.3          Retirement Income Deferrals.  Deferrals of Retirement Income were allowed prior to January 1, 2002.  Amounts attributable to such deferrals shall be paid in accordance with the Participants’ Retirement Income deferral elections made hereunder prior to January 1, 2002.

 

5.          Election of Deferral Vehicles.

 

At the time of making a deferral election, a Participant shall select one or more deferral vehicles (“Deferral Vehicles”) for the Participant’s Deferred Compensation respecting the applicable calendar year or years as described in Sections 5.1 and 5.2.

 

5.1          Stock Option-Related Deferral Vehicles.  The Participant’s Deferred Compensation shall be exchanged for Stock Options. All Stock Options granted in exchange for Deferred Compensation under the Plan shall be subject to all of the applicable terms and provisions of the Plan or such other plan from which the Stock Option is granted.

 

If Stock Options are elected, the Participant’s aggregate Deferred Compensation as of the last day of each calendar quarter which would otherwise have been paid during such quarter shall be increased by a multiplier of 4.4 and then divided by the Fair Market Value of the Company’s Common Stock on the last day of such quarter to determine the number of Stock Options to be granted in exchange for the Deferred Compensation.

 

Exhibit 4.4

 

 

5.2          Cash-Based Deferral Vehicles.  The Participant’s Deferred Compensation shall be credited to an Account established by the Committee as of the date or dates the Deferred Compensation would otherwise have been paid.  A Participant who elects a Cash-Based Deferral Vehicle shall also elect whether to receive Prime Rate Equivalents or S&P 500 Equivalents for the deferral period that commences on the date or dates such Deferred Compensation is credited to the Account and ending on the Designated Date.  All Deferred Compensation and interest and earnings equivalents credited to an Account shall be nonforfeitable pending payment as of the Designated Date.

 

(a)          Prime Rate Equivalents.  To the extent Prime Rate Equivalents are elected, interest equivalents will be credited to the Participant’s Account as of the last day of each calendar month based upon the average daily balance in the Account for the month and the prime lending rate as declared by Citibank, or such other lending institution as is selected by the Committee, to be in effect from time to time.

 

(b)          S&P 500 Equivalents.  To the extent S&P 500 Equivalents are elected, the earnings (or loss) equivalents will be credited (or debited) to the Participant’s Account as of the last day of each calendar quarter based upon the balance in the Account as of the last day of the quarter and the returns realized by the Standard & Poor’s 500 Index for the quarter.

 

(c)          Designated Date.  At the time of making a deferral election, a Participant shall specify the applicable time of payment of the Deferred Compensation (a “Designated Date”).

 

(1)          Any Designated Date respecting Deferred Compensation subject to Prime Rate Equivalents shall be as of the last day of a calendar month.

 

(2)          Any Designated Date respecting Deferred Compensation subject to S&P 500 Equivalents shall be as of the last day of a calendar quarter.

 

(3)          Except with respect to Grandfathered Amounts, a Designated Date must be either (a) a specified date or (b) a date that follows the occurrence of the Participant’s Separation from Service; provided, however, that in no event shall a Designated Date be more than ten years from the date of the Participant’s Separation from Service.

 

6.          Shares Available for Stock Options.

 

6.1          Number of Shares Available for Stock Options.  Subject to adjustment as provided in Section 6.2, the number of Shares of Common Stock reserved for issuance to Participants under the Plan shall be up to 500,000.  These Shares may consist of authorized but unissued Shares or previously issued Shares reacquired by the Company as treasury shares.  The number of Shares that are the subject of Stock Options under this Plan that are forfeited or terminated or expire unexercised shall again immediately become available to be issued as Stock Options under this Plan.  Shares approved pursuant to the Long Term Incentive Plan of Baker Hughes Incorporated, as amended, and the Baker Hughes Incorporated 1998 Employee Stock Option Plan, as amended, that have not been awarded under such plans, including Shares that are canceled, terminated, expired unexercised, settled in cash in lieu of Shares or in a manner such that all or some of the Shares covered thereby are not issued to a participant or are exchanged for a consideration that does not involve Shares, and Shares that are so canceled, terminated, expired unexercised, settled in cash in lieu of Shares or in a manner such that all or some of the Shares covered thereby are not issued to a participant or are exchanged for a consideration that does not involved Shares, and Shares that are so canceled, terminated, expired unexercised, settled in cash in lieu of Shares or in a manner such that all or some of the Shares covered thereby are not issued to a participant or are exchanged for a consideration that does not involve Shares, will immediately become available for Stock Options under this Plan.  The Shares described in the foregoing sentence shall be included in the up to 500,000 Shares reserved for issuance under this Plan.  The Committee shall determine the appropriate methodology for calculating the number of Shares issued pursuant to this Plan.

 

Exhibit 4.4

 

 

6.2          Adjustments in Authorized Shares.  The existence of outstanding Stock Options shall not affect in any manner the right or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the capital stock of the Company or its business or any merger or consolidation of the Company, or any issue of bonds, debentures, preferred or prior preference stock (whether or not such issue is prior to, on a parity with or junior to the Shares) or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business or any other corporate act or proceeding of any kind, whether or not of a character similar to that of the acts or proceedings enumerated above.

 

If there shall be any change in the Shares of the Company or the capitalization of the Company through merger, consolidation, reorganization, recapitalization, stock dividend, stock split, reverse stock split, split up, spin-off, combination of shares, exchange of shares, dividend in kind or other like change in capital structure or distribution (other than normal cash dividends) to stockholders of the Company, the Board, in its sole discretion, to prevent dilution or enlargement of Participants’ rights under the Plan, shall adjust, in an equitable manner, as applicable, the number and kind of Shares that may be issued under the Plan, the number and kind of Shares subject to outstanding Stock Options and other value determinations applicable to outstanding Stock Options.  In the event of a corporate merger, consolidation, acquisition of property or stock, separation, reorganization or liquidation, the Board shall be authorized to issue or assume Stock Options by means of substitution of new Stock Options, as appropriate, for previously issued Stock Options.

 

7.          Stock Options.

 

7.1          Calculation of Exercise Price.  The exercise price to be paid for each share of Common Stock deliverable upon exercise of each Stock Option granted shall be equal to the Fair Market Value per share of Common Stock at the time of grant as determined by the Committee.  The exercise price for each Stock Option shall be subject to adjustment as provided in Section 6.2.

 

7.2          Terms and Conditions of Options.  Stock Options shall be in such form as the Committee may from time to time approve and shall be subject to the following terms and conditions:

 

(a)          Exercise Periods for Stock Options.  Each Stock Option shall vest and become exercisable on the first anniversary of the date of grant.  Each Stock Option shall be exercisable from time to time, in whole or in part, at any time after one year from the date of grant and prior to the date which is ten years after the date of grant, subject to the provisions of clause (b) of this Section 7.2 (the “Option Expiration Date”).

 

(b)          Exercise Periods in the Event of Directorship Termination.  A Director’s directorship shall terminate at the close of business on the day preceding the day he or she ceases to be a member of the Board for any reason whatsoever. When a Director’s directorship is terminated, each of his or her Stock Options and all rights thereunder shall expire three years after the Director’s directorship terminates for any reason.  Any Stock Options unexercised at the time of the Director’s death (including the Director’s death which results in termination of his or her directorship or the Director’s death during the three-year period after his or her directorship terminates) may be exercised by the Director’s estate or by the Person or Persons who acquire the right to exercise his or her Stock Option by bequest or inheritance.

 

(c)          Transferability of Stock Options.  Except as otherwise provided in the Stock Option agreement, no Stock Option may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution.  Further, except as otherwise provided in the Stock Option agreement, all Stock Options granted under the Plan shall be exercisable during his or her lifetime only by the Participant.  Any attempted assignment of a Stock Option in violation of this Section shall be null and void.

 

(d)          Payment of Stock Option Price.  Stock Options granted under the Plan shall be exercised in the form and manner as the Committee shall determine from time to time.

 

Exhibit 4.4

 

 

Upon the exercise of any Stock Option, the Stock Option Price shall be payable to the Company in full either (i) in cash or its equivalent; (ii) by tendering previously acquired Shares having an aggregate fair market value at the time of exercise equal to the total Stock Option Price (provided that the Shares that are tendered must have been held by the Participant for at least six months prior to their tender to satisfy the Stock Option Price); (iii) by a combination of (i) and (ii); or (iv) any other method approved by the Committee in its sole discretion at the time of grant and as set forth in the Stock Option.

 

Subject to any governing rules or regulations, after the exercise of the Stock Option and full payment of the Stock Option Price in the form and manner as the Committee shall determine, the Director may pay the required fee and request a Share certificate based upon the number of Shares purchased under the Stock Option through the third-party administrator designated by the Committee to have this administrative duty.  In addition, the Company may, at its option, issue or cause to be issued Share certificates.

 

Unless otherwise determined by the Committee, all payments under all of the methods indicated above shall be paid in United States dollars.

 

(e)          Listing and Registration of Shares.  Each Stock Option shall be subject to the requirement that if at any time the Committee determines, in its discretion, that the listing, registration or qualification under the regulations of any securities exchange or under any state or federal law of the Shares subject to the Stock Option, or the consent or approval of any governmental regulatory body, is necessary or desirable as a condition of, or in connection with, the issue or purchase of the Shares under such Stock Option, the Stock Option may not be exercised in whole or in part unless such listing, registration, qualification, consent or approval shall have been effected or obtained and the same shall have been free of any conditions not acceptable to the Committee.

 

(f)          Amendment.  The Committee may, with the consent of the Person or Persons entitled to exercise any outstanding Stock Option, amend such Stock Option; provided, however, that any such amendment shall be subject to stockholder approval when required.  No amendment shall be made to an Option to extend the period of exercisability of the Option if such amendment would cause the Participant to become subject to taxation under Section 409A.

 

(g)          Investment Representations.  As a condition to the exercise of a Stock Option, the Company may require the person exercising such Stock Option to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required.

 

(h)          Uncertificated Shares.  To the extent that the Plan provides for issuance of certificates to reflect the transfer of Shares, the transfer of such Shares may be effected on a noncertificated basis, to the extent not prohibited by applicable law or the rules of any stock exchange.

 

(i)          No Fractional Shares.  No fractional Shares shall be issued or delivered pursuant to the Plan or any Stock Option agreement.  The Committee shall determine whether cash or other property shall be issued or paid in lieu of fractional Shares or whether such fractional Shares or any rights thereto shall be forfeited or otherwise eliminated.

 

(j)          Other Provisions.

 

(i)          The person or persons entitled to exercise, or who have exercised, a Stock Option shall not be entitled to any rights as a stockholder of the Company with respect to any Shares subject to such Stock Option until he or she shall have become the holder of record of such Shares.

 

(ii)          No Stock Option shall be construed as limiting any right which either the Company’s stockholders or the Board of Directors may have to remove at any time from the Board of Directors, with or without cause, any person to whom such Stock Option has been granted.

 

Exhibit 4.4

 

 

(iii)          Notwithstanding any provision of the Plan or the terms of any Stock Option agreement, the Company shall not be required to issue any Shares hereunder if such issuance would, in the judgment of the Committee, constitute a violation of any state or federal law or of the rules or regulations of any governmental regulatory body.

 

(iv)          Notwithstanding any provision of the Plan, the Committee may not exercise any discretion with respect to this Section 7 which would be inconsistent with the intent that the Plan meet the requirements of Rule 16b-3 promulgated by the Securities Exchange Commission under the Exchange Act.

 

8.          Payment of Amounts in Accounts.

 

8.1          Payment Generally.  Except as otherwise provided in this Section 8, the Deferred Compensation and interest and earnings equivalents credited to a Participant’s Account(s) with respect to a calendar year or years, as applicable, shall be paid in cash to the Participant in one lump sum as of the Designated Date elected by the Participant.  In the absence of a valid election of a Designated Date by the Participant, effective as of the date of the Participant’s deferral election for the applicable calendar year, the Participant’s Designated Date for such calendar year shall be deemed to be the date of the Participant’s Separation From Service.

 

8.2          Payment of Simultaneous Amounts.  It is recognized that a Participant may elect to defer Compensation with respect to more than one calendar year, so that Deferred Compensation and interest and earnings equivalents are credited to the Participant’s Accounts with respect to more than one calendar year, and the payment of such amounts with respect to more than one calendar year may, but need not, become payable to the Participant as of the same Designated Date.

 

8.3          Unforeseeable Financial Emergency.  In the event that the Committee, upon written petition of a Participant, determines in its sole discretion that such Participant has suffered an Unforeseeable Financial Emergency, such Participant shall be entitled to a distribution in an amount not to exceed the lesser of (a) the amount determined by the Committee as necessary to meet such Participant’s needs created by the Unforeseeable Financial Emergency or (b) the then value of such Participant’s interest in his or her Accounts.  Such benefit shall be paid in a single lump sum payment as soon as administratively practicable after the Committee has made its determination with respect to the availability and amount of such benefit.  If a Participant’s Accounts contain more than one distribution subaccount, such benefit shall be considered to have been distributed, first, from the subaccount with respect to which the earliest distribution would be made, then, from the subaccount with respect to which the next earliest distribution would be made, and continuing in such manner until the amount of such distribution has been satisfied.

 

8.4          Disability.  In the event of the Disability of the Participant, as determined in the sole discretion of the Committee, all cash payments that would otherwise be made on a later Designated Date under this Section 8 shall be accelerated by being made as soon as practicable, following the Committee’s determination of such Disability, in one lump sum.

 

8.5          Death.  In the event of the death of the Participant, all of the cash payments that would otherwise be made on later Designated Date under this Section 8, shall be accelerated by being made as soon as practicable following the death of the Participant.  A Participant, by written instrument filed with the Committee in such manner and form as it may prescribe, may designate one or more beneficiaries to receive payment of the Participant’s Deferred Compensation and interest or earnings equivalents in the event of the death of the Participant.  Any such beneficiary designation may be changed from time to time prior to the death of the Participant.  In the absence of a beneficiary designation on file with the Committee at the time of the Participant’s death, the Deferred Compensation and interest or earnings equivalents remaining to be paid to the Participant shall be paid to the executor or administrator of the Participant’s estate.

 

Exhibit 4.4

 

 

8.6          Debiting of Plan Accounts.  Once Deferred Compensation and interest or earnings equivalents have been paid, such amounts shall be debited from the Participant’s Account, and the Company shall no longer be accountable for such paid amounts.

 

9.          Prohibition Against Assignment or Encumbrance.

 

No right, title, interest or benefit hereunder shall ever be liable for or charged with any of the torts or obligations of a Participant or any Person claiming under a Participant, or be subject to seizure by any creditor of a Participant or any Person claiming under a Participant.  Except as to the selection of a “designated beneficiary” in the event of death, no Participant or any Person claiming under a Participant shall have the power to anticipate or dispose of any right, title, interest or benefit hereunder in any manner until the same shall have been actually distributed free and clear of the terms of the Plan.

 

10.          Amendment and Termination of the Plan.

 

Subject to the terms of the Plan, the Committee may at any time and from time to time alter, amend, modify, suspend or terminate the Plan in whole or in part, except that no amendment, modification, suspension or termination that would adversely affect in any material way the rights of any Participant under any Stock Option previously granted to such Participant under the Plan shall be made without the written consent of such Participant or to the extent stockholder approval is otherwise required by applicable legal requirements.  The Committee may terminate the Plan at any time with respect to periods following the date such termination is effected.  No amounts may be paid to a Participant or former Participant under the Plan to the extent such a payment would be an acceleration of payment of deferred compensation prohibited by Section 409A.

 

11.          Nature of the Plan.

 

The Plan constitutes an unfunded, unsecured liability of the Company to provide benefits in accordance with the provisions hereof.  The Company, at its election, may fund the payment of benefits under the Plan by setting aside and investing, in an account on the Company’s books, such funds as the Company may, from time to time, determine.  Neither the establishment of the Plan, the crediting of amounts to Accounts nor the setting aside of any funds shall be deemed to create a trust.  Legal and equitable title to any funds set aside pursuant to the Plan shall remain in the Company, and neither the Participants nor any persons claiming under the Participants shall have any security or other interest in such funds.  Any funds so set aside or acquired shall remain subject to the claims of the creditors of the Company, present and future. The Plan is not subject to Employee Retirement Income Security Act of 1974, as amended.

 

12.          Reorganization.

 

The Company shall not merge or consolidate with any other entity or entities, liquidate, dissolve, reorganize, or sell substantially all of its assets and business unless and until a succeeding or continuing entity or entities agrees to assume and discharge the obligations of the Company under this Agreement.  Upon the occurrence of such an event, the term “Company” as used in this Agreement shall be deemed to refer to such successor or survivor entity or entities.

 

13.          Acceleration of Vesting of Stock Options.

 

Notwithstanding any provision of the Plan to the contrary, in the event of an occurrence of a Change in Control, all Stock Options granted pursuant to the Plan shall become fully vested and immediately exercisable.

 

14.          Miscellaneous.

 

14.1          Severability.  If any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included.

 

Exhibit 4.4

 

 

14.2          Requirements of Law.  The issuance of Shares under the Plan shall be subject to all applicable laws, rules and regulations and to such approvals by any governmental agencies or national securities exchanges as may be required.  The Company shall receive the consideration required by law for the issuance of Shares under the Plan.

 

14.3          Securities Law Compliance.  All transactions under the Plan are intended to comply with all applicable conditions of Rule 16b-3 or its successor under the Exchange Act, unless determined otherwise by the Board.  To the extent any provision of the Plan or action by the Board fails to so comply, it shall be deemed null and void, to the extent permitted by law and deemed advisable by the Board.

 

14.4          Compliance With Section 409A.  Except with respect to Grandfathered Amounts, the Plan shall be operated in compliance with Section 409A and the provisions of Section 409A shall override any provisions of the Plan to the extent that they are inconsistent with Section 409A.  Except with respect to Grandfathered Amounts the terms of this Agreement reflect the manner in which the Plan has been operated in good faith compliance with Section 409A since January 1, 2005.

 

14.5          Governing Law.  The Plan shall be governed by the laws of the State of Texas, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of the Plan to the substantive law of another jurisdiction.

 

 

 

 

Exhibit 4.4

 

FIRST AMENDMENT TO

BAKER HUGHES INCORPORATED

DIRECTOR COMPENSATION DEFERRAL PLAN

(As Amended and Restated Effective January 1, 2009)

 

THIS AGREEMENT by Baker Hughes Incorporated (the “Company”),

 

W I T N E S S E T H:

 

WHEREAS, the Company sponsors the Baker Hughes Incorporated Supplemental Retirement Plan (the “Plan”); and

 

WHEREAS, pursuant to Section 14.04 of the Plan, the Company has the right to amend the Plan; and

 

WHEREAS, the Company desires to amend the Plan;

 

NOW, THEREFORE, the Company agrees that, effective January 1, 2009,  the Plan is amended by adding thereto the following new Section 8.7 which shall provide as follows:

 

8.7          Discretion to Select Payment Year.  The distributions under Sections 8.3, 8.4 and 8.5 shall in any event be made within 90 days after the Participant incurs an Unforeseeable Financial Emergency, incurs a Disability, or dies, as applicable.  Neither the Participant nor the beneficiary of the Participant shall be permitted to elect the taxable year in which any payment under Section 8.3, 8.4 or 8.5 shall be made.

 

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on the 18th day of December, 2008.

 

	
 

	
BAKER HUGHES INCORPORATED

	
 

	
 

	
 

	
 

	
 

	
 

	
By:

	/s/ Didier Charreton	
 

	
 

	
 

	
 

	
 

	
 

	
Title:

	Vice President, Human Resources	
 

 

 

Exhibit 4.4

 

Baker Hughes Incorporated Director Compensation Deferral Plan

SECOND AMENDMENT TO

BAKER HUGHES INCORPORATED

DIRECTOR COMPENSATION DEFERRAL PLAN

 

(As Amended and Restated Effective January 1, 2009)

 

THIS AMENDMENT by Baker Hughes Incorporated, a Delaware corporation (the “Company”),

 

W I T N E S S E T H:

 

WHEREAS, the Company previously established the Baker Hughes Incorporated Director Compensation Deferral Plan (the “Plan”); and

 

WHEREAS, the Company desires to amend the Plan;

 

NOW, THEREFORE, effective January 1, 2012, paragraphs (a) and (b) of Section 7.2 of the Plan are hereby amended to provide as follows:

 

“(a)  Exercise Periods for Stock Options. Each Stock Option shall vest and become exercisable on the earlier of (1) the first anniversary of the date of grant of the Stock Option or (2) the date on which the Director’s directorship terminates. Each Stock Option shall be exercisable from time to time, in whole or in part, at any time during the period that commences on (a) the earlier of (1) the first anniversary of the date of grant of the Stock Option or (2) the date on which the Director’s directorship terminates and ends on (b)(1)  the date that is ten years after the date of grant (the “Option Expiration Date”) or (2) the end of the Stock Option exercise period specified in clause (b) of this Section 7.2, as applicable.

 

(b) Exercise Periods in the Event of Directorship Termination. A Director’s directorship shall terminate at the close of business on the day preceding the day he or she ceases to be a member of the Board for any reason whatsoever. When a Director’s directorship is terminated, each of his or her Stock Options and all rights thereunder shall expire on the earlier of (1) the date that is five years after the Director’s directorship terminates for any reason or (2) the Option Expiration Date.  Any Stock Options unexercised at the time of the Director’s death (including the Director’s death which results in termination of his or her directorship) may be exercised by the Director’s estate or by the Person or Persons who acquire the right to exercise his or her Stock Option by bequest or inheritance.”

 

Adopted by the Governance Committee of the Board of Directors on July 25, 2013ex10-1.htm

Exhibit 10.1

 

 

 

SUBORDINATED LOAN AGREEMENT

dated as of June 28, 2017

 

between

 

ENSERVCO CORPORATION

as Borrower

 

and

 

CROSS RIVER PARTNERS, L.P.

as Lender

 

This instrument and the rights and obligations evidenced hereby are subordinate in the manner and to the extent set forth in that certain Subordination and Intercreditor Agreement (the “Subordination Agreement”) dated as of June 28, 2017 among, CROSS RIVER PARTNERS, L.P. (“Lender”), ENSERVCO CORPORATION, a Delaware corporation (the “Borrower”) and PNC BANK, NATIONAL ASSOCIATION (“PNC”), to the indebtedness (including interest) owed by the Borrower pursuant to that certain Amended and Restated Revolving Credit and Security Agreement dated as of September 14, 2014, among the Borrower, PNC, and the lenders from time to time party thereto, as such Amended and Restated Revolving Credit and Security Agreement has been and hereafter may be amended, supplemented or otherwise modified from time to time and to indebtedness refinancing the indebtedness under that agreement as contemplated by the Subordination Agreement; and each holder of this instrument, by its acceptance hereof, irrevocably agrees to be bound by the provisions of the Subordination Agreement. 

 

 

 

 

 

 

SUBORDINATED LOAN AGREEMENT

 

THIS SUBORDINATED LOAN AGREEMENT (this “Agreement”) is made and entered into as of June 28, 2017, by and between CROSS RIVER PARTNERS, L.P., a Delaware limited partnership (“Lender”) and ENSERVCO CORPORATION, a Delaware corporation (the “Borrower”).

 

RECITALS:

 

WHEREAS, pursuant to the terms of the Tenth Amendment to the Senior Credit Agreement (as defined herein), the Borrower has requested that the Lender make a subordinated loans in an aggregate principal amount of up to $2,500,000.00 to the Borrower; and

 

WHEREAS, subject to the terms and conditions of this Agreement, the Lender is willing to make the requested subordinated loans to the Borrower.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the Borrower and the Lender agree as follows:

 

ARTICLE I

 

DEFINITIONS; CONSTRUCTION

 

Section 1.1.     Definitions.  Any capitalized term used herein without definition shall have the meaning specified in the Senior Credit Agreement.  In addition to the other terms defined herein, the following terms used herein shall have the meanings herein specified (to be equally applicable to both the singular and plural forms of the terms defined):

 

“Affiliate” means, as to any Person, any other Person that, directly or indirectly, controls, is controlled by or is under common control with such Person or is a director or officer of such Person.  For purposes of this definition the term “control” (including the terms “controlling”, “controlled by” and “under common control with”) of a Person means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting stock, by contract or otherwise.  For purposes of this Agreement, the Borrower will not be considered an Affiliate of the Lender.

 

“Borrower” shall have the meaning in the introductory paragraph hereof.

 

“Business Day” shall mean any day other than a Saturday, Sunday or other day on which commercial banks in Denver, Colorado are authorized or required by law to close.

 

“Change in Control” shall mean: (a) 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”)) becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Borrower representing more than 50% of the total voting power represented by the Borrower’s then outstanding voting securities; or (b) a merger or consolidation of the Borrower whether or not approved by the board of directors of the Borrower, other than a merger or consolidation that would result in the voting securities of the Borrower outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least 60% of the total voting power represented by the voting securities of the Borrower or such surviving entity (or the parent of any such surviving entity) outstanding immediately after such merger or consolidation, or a change in the ownership of all or substantially all of Borrower’s assets to a person not related (within the meaning of income tax Regulations Section 1.409A-3(i)(5)(vii)(b)) to the Borrower; or (c) the replacement during any 12-month period of a majority of the members of the board of directors of the Borrower with directors whose appointment or election was not endorsed by a majority of the members before the date of the appointment or election

 

 

 

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“Closing Date” shall mean the date on which the conditions precedent set forth in Section 3.1 have been satisfied or waived in accordance with Section 8.2.

 

“Default Interest” shall have the meaning set forth in Section 2.6(d).

 

“Event of Default” shall have the meaning provided in Article VII.

 

“GAAP” shall mean generally accepted accounting principles in the United States applied on a consistent basis.

 

“Lender” shall have the meaning assigned to such term in the opening paragraph of this Agreement.

 

“Material Adverse Effect” shall mean, with respect to any event, act, condition or occurrence of whatever nature (including any adverse determination in any litigation, arbitration, or governmental investigation or proceeding), whether singularly or in conjunction with any other event or events, act or acts, condition or conditions, occurrence or occurrences whether or not related, a material adverse change in, or a material adverse effect on, (i) the business, results of operations, financial condition, assets, or liabilities of the Borrower and its Subsidiaries, taken as a whole, (ii) the ability of the Borrower to perform any of its obligations under the Subordinated Loan Documents, (iii) the rights and remedies of the Lender under any of the Subordinated Loan Documents or (iv) the legality, validity or enforceability of any of the Subordinated Loan Documents.

 

“Material Indebtedness” shall mean (i) Senior Debt and (ii) any other Indebtedness (other than the Subordinated Loan) of the Borrower or any of its Subsidiaries, individually or in an aggregate principal amount exceeding $35,000,000.00.

 

“Maturity Date” shall mean the Maturity Date as stated in the applicable Subordinated Promissory Note.

 

“Obligations” shall mean all amounts owing by the Borrower to the Lender pursuant to or in connection with this Agreement or any other Subordinated Loan Document, including without limitation, all principal, interest (including any interest accruing after the filing of any petition in bankruptcy or the commencement of any insolvency, reorganization or like proceeding relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), all reimbursement obligations, expenses, indemnification and reimbursement payments, costs and expenses (including all reasonable fees and expenses of counsel to the Lender incurred pursuant to this Agreement or any other Subordinated Loan Document), whether direct or indirect, absolute or contingent, liquidated or unliquidated, now existing or hereafter arising hereunder or thereunder, and all obligations and liabilities incurred in connection with collecting and enforcing the foregoing, together with all renewals, extensions, modifications or refinancings thereof.

 

“Payment Office” shall mean the office of the Lender located at 31 Bailey Avenue, Suite D, Ridgefield, CT 06877 or such other location as to which the Lender shall have given written notice to the Borrower.

 

 

 

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“PNC” shall mean PNC Bank, National Association, in its capacity as the Agent under the Senior Credit Agreement.

 

“Responsible Officer” shall mean any of the president, the chief executive officer, the chief financial officer, or a senior vice president of the Borrower or such other representative of the Borrower as may be designated in writing by any one of the foregoing with the consent of the Lender and, with respect to the financial covenants only incorporated by reference pursuant to Section 6.1, the chief financial officer of the Borrower.

 

“Required Lenders” shall mean the “Required Lenders”, as such term is defined in the Senior Credit Agreement.

 

“Senior Credit Agreement” shall mean that certain Amended and Restated Revolving Credit and Security Agreement, dated as of September 12, 2014, as it has been and may be further amended, by and among the Borrower, PNC, and the lenders from time to time party thereto.

 

“Senior Debt” shall mean the “Obligations”, as such term is defined in the Senior Credit Agreement.

 

“Senior Lenders” shall mean the “Lenders”, as such term is defined in the Senior Credit Agreement.

 

“Senior Loan Documents” shall mean the Senior Credit Agreement and the Other Documents, as that term is defined in the Senior Credit Agreement.

 

“Senior Credit Agreement Term” shall mean the “Term”, as such term is defined in the Senior Credit Agreement.

 

“Subordinated Loan” has the meaning set forth in Section 2.1.

 

“Subordinated Loan Commitment” shall mean the obligation of the Lender to make Subordinated Loans hereunder in an aggregate principal amount not exceeding $2,500,000.00.

 

“Subordinated Loan Documents” shall mean, collectively, this Agreement and the Subordinated Promissory Notes.

 

“Subordinated Loan Interest Rate” shall mean 10.0% per annum.

 

“Subordinated Promissory Note” shall mean the subordinated promissory notes of the Borrower payable to the order of the Lender in the principal amount stated therein, in substantially the form of Exhibit A.

 

“Subordination Agreement” shall mean that certain Subordination and Intercreditor Agreement, dated as of June 28, 2017, among the Borrower, the Lender and PNC.

 

“Termination Date” shall mean the date that no portion of any Subordinated Loan remains outstanding and unpaid, no other amount is owing to the Lender hereunder or under any of the other Subordinated Loan Documents and the Subordinated Loan Commitment has terminated.

 

“Warrant to Purchase Common Stock” shall have the meaning set forth in Section 3.1(b)(iv).

 

 

 

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Section 1.2.     Accounting Terms and Determination.  Unless otherwise defined or specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared, in accordance with GAAP as in effect from time to time, applied on a basis consistent with the most recent audited consolidated financial statement of the Borrower delivered pursuant to Section 9.7 of the Senior Credit Agreement.

 

Section 1.3.     Terms Generally.  The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”.  The word “will” shall be construed to have the same meaning and effect as the word “shall”.  In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including” and the word “to” means “to but excluding”.  Unless the context requires otherwise (i) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as it was originally executed or as it may from time to time be amended, restated, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (ii) any reference herein to any Person shall be construed to include such Person’s successors and permitted assigns, (iii) the words “hereof”, “herein” and “hereunder” and words of similar import shall be construed to refer to this Agreement as a whole and not to any particular provision hereof, (iv) all references to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles, Sections, Exhibits and Schedules to this Agreement and (v) all references to a specific time shall be construed to refer to the time in the city and province or state of the Lender’s principal office, unless otherwise indicated. 

 

ARTICLE II

 

AMOUNT AND TERMS OF THE SUBORDINATED LOANS

 

Section 2.1.     Subordinated Loan Commitment.  Subject to the terms and conditions set forth herein, the Lender agrees to make subordinated term loans (the “Subordinated Loans”) to the Borrower in a maximum aggregate principal amount equal to the Subordinated Loan Commitment.  The Borrower shall be entitled to borrow and, subject to the terms and conditions of the Subordination Agreement and the Subordinated Promissory Note, prepay the Subordinated Loans, but once repaid or prepaid, the Subordinated Loans may not be reborrowed.

 

Section 2.2     Subordinated Promissory Note. The Subordinated Loans shall be evidenced by Subordinated Promissory Notes, which shall be payable to the order of Lender upon the terms and conditions contained therein in a form acceptable to Lender, in its sole discretion. Payments of interest and principal shall be due monthly in the amounts and as set forth in the Subordinated Promissory Notes. All unpaid principal and unpaid accrued interest, if not sooner paid, shall be due and payable in full on the Maturity Date.

 

ARTICLE III

 

CONDITIONS PRECEDENT TO SUBORDINATED LOAN

 

Section 3.1.     Conditions to Effectiveness.  The obligations hereunder of the Lender to make the Subordinated Loans shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 8.2):

 

(a)     The Borrower shall have received all consents or waivers from PNC and the Senior Lenders that may be required pursuant to the Senior Credit Agreement in order for the Borrower to enter into this Agreement and incur the Obligations.

 

 

 

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(b)     The Lender shall have received the following:

 

(i)     a counterpart of this Agreement signed by or on behalf of the Borrower or written evidence satisfactory to the Lender (which may include telecopy transmission of a signed signature page of this Agreement) that the Borrower has signed a counterpart of this Agreement; 

 

(ii)     duly executed Subordinated Promissory Notes payable to the Lender; 

 

(iii)     a five year warrant to purchase 967,741 shares of the Borrower’s common stock at an exercise price of $0.31 per share (“Warrant No. 1”); and

 

(iv)     a five year warrant to purchase 645,161 shares of the Borrower’s common stock at an exercise price of $0.31 per share (“Warrant No. 2” and, together with Warrant No. 1, the “Warrants to Purchase Common Stock”).

 

(c)     all representations and warranties of the Borrower set forth in the Subordinated Loan Documents shall be true and correct in all material respects.

 

ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES

 

The Borrower represents and warrants to the Lender as follows:

 

Section 4.1.     Existence; Power.  The Borrower and each of its Subsidiaries (i) is duly organized, validly existing and in good standing as a corporation, partnership or limited liability company under the laws of the jurisdiction of its organization, (ii) has all requisite power and authority to carry on its business as now conducted, and (iii) is duly qualified to do business, and is in good standing, in each jurisdiction where such qualification is required, except where a failure to be so qualified could not reasonably be expected to result in a Material Adverse Effect.

 

Section 4.2.     Organizational Power; Authorization.  The execution, delivery and performance by the Borrower of the Subordinated Loan Documents to which it is a party are within the Borrower’s organizational powers and have been duly authorized by all necessary organizational action.  This Agreement has been duly executed and delivered by the Borrower, and constitutes, and each other Subordinated Loan Document to which the Borrower is a party, when executed and delivered by the Borrower, will constitute, valid and binding obligations of the Borrower, enforceable against it in accordance with their respective terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity.

 

Section 4.3.     Governmental Approvals; No Conflicts.  The execution, delivery and performance by the Borrower of this Agreement, and of the other Subordinated Loan Documents to which it is a party (a) do not require any consent or approval of, registration or filing with, or any action by, any Governmental Body, except those as have been obtained or made and are in full force and effect, (b) will not violate any Applicable Laws applicable to the Borrower or any of its Subsidiaries or any judgment, order or ruling of any Governmental Body, (c) will not violate or result in a default under any indenture, material agreement or other material instrument binding on the Borrower or any of its Subsidiaries or any of its assets or give rise to a right thereunder to require any payment to be made by the Borrower or any of its Subsidiaries and (d) will not result in the creation or imposition of any Lien on any asset of the Borrower or any of its Subsidiaries, except Liens (if any) created under the Subordinated Loan Documents.

 

 

 

-6-

 

 

Section 4.4.      Compliance with Laws and Agreements.  The Borrower and each Subsidiary is in compliance with (a) all Applicable Laws and all judgments, decrees and orders of any Governmental Body and (b) all indentures, agreements or other instruments binding upon it or its properties, except where non-compliance, either singly or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

 

Section 4.5.     Investment Company Act, Etc.  Neither the Borrower nor any of its Subsidiaries is (a) an “investment company” or is “controlled” by an “investment company”, as such terms are defined in, or subject to regulation under, the Investment Company Act of 1940, as amended, or (b) otherwise subject to any other regulatory scheme limiting its ability to incur debt or requiring any approval or consent from or registration or filing with, any Governmental Body in connection therewith, except those as have been obtained or made and are in full force and effect.

 

Section 4.6.      Taxes.  The Borrower and its Subsidiaries and each other Person for whose taxes the Borrower or any Subsidiary is liable have timely filed or caused to be filed all Federal income tax returns and all other material tax returns that are required to be filed by them, and have paid all taxes shown to be due and payable on such returns or on any assessments made against it or its property and all other taxes, fees or other charges imposed on it or any of its property by any Governmental Body, except where the same are currently being contested in good faith by appropriate proceedings and for which the Borrower or such Subsidiary, as the case may be, has set aside on its books adequate reserves in accordance with GAAP.  The charges, accruals and reserves on the books of the Borrower and its Subsidiaries in respect of such taxes are adequate, and no tax liabilities that could be materially in excess of the amount so provided are anticipated.

 

Section 4.7.      Margin Regulations.  None of the proceeds of any of the Subordinated Loan will be used, directly or indirectly, for “purchasing” or “carrying” any “margin stock” with the respective meanings of each of such terms under Regulation U of the Board of Governors of the Federal Reserve System as now and from time to time hereafter in effect or for any purpose that violates the provisions of the Regulation U.  Neither the Borrower nor its Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying “margin stock.”

 

ARTICLE V

 

The Lender represents and warrants to the Borrower as follows:

 

Section 5.1.     Existence; Power.  The Lender (i) is duly organized, validly existing and in good standing as a corporation, partnership or limited liability company under the laws of the jurisdiction of its organization, (ii) has all requisite power and authority to carry on its business as now conducted, and (iii) is duly qualified to do business, and is in good standing, in each jurisdiction where such qualification is required, except where a failure to be so qualified could not reasonably be expected to result in a Material Adverse Effect.

 

 

 

-7-

 

 

Section 5.2.    Investment Intent. Lender is making the Subordinated Loan without any present intention of distributing the Subordinated Loan, the Subordinated Promissory Notes, or interests therein to the general public.

 

Section 5.3.     Accredited Investor. Lender is an “accredited investor”, as such term is defined in Rule 501(a) of Regulation D (an “Accredited Investor”), promulgated under the Securities Act of 1933 (the “Securities Act”), and Lender will promptly notify Borrower in the event Lender no longer qualifies as an Accredited Investor.

 

Section 5.4.     No Registration. Lender understands and acknowledges that, if applicable: (a) the Subordinated Loan made by Lender and the Subordinated Promissory Notes issued by Borrower will be made or issued, as applicable, without registration under the Securities Act, in reliance on an exemption from registration set forth in Section 4(a)(2) of the Securities Act, or registration under any state securities laws, and accordingly, may be resold, pledged or otherwise transferred only in accordance with exemptions from registration under the Securities Act (to the extent such registration is or becomes applicable) and applicable state securities laws (if any); and (b) Borrower has not made nor is it making any representation, warranty or covenant, express or implied, as to the availability of any exemption from registration under the Securities Act (to the extent such registration is or becomes applicable) or any applicable state securities laws for the resale, pledge or other transfer of any of the Subordinated Loan, the Subordinated Promissory Notes, or that any of such portion of the Subordinated Loan or the Subordinated Promissory Notes purchased by them will be able to resell the Subordinated Loan or the Subordinated Promissory Notes at or above the price paid by Lender.

 

Section 5.5.     No Offering Memorandum. Lender acknowledges that: (a) it is not being provided with the disclosures that would be required if the making of the Subordinated Loan or issuance of the Subordinated Promissory Notes was registered under the Securities Act, nor is it being provided with any offering circular or prospectus prepared in connection with the making of the Subordinated Loan or the issuance of such Subordinated Promissory Notes; (b) it has conducted satisfactorily its own examination of Borrower and its Subsidiaries and the terms of the Subordinated Loan; (c) it has requested specific financial and other information from Borrower, which has been supplied, and it has carefully reviewed such materials; and (d) it has availed itself of public access to financial and other information concerning Borrower and its subsidiaries to the extent it deems necessary to make its decision to purchase the Subordinated Promissory Notes.

 

Section 5.6.     Investment Decision. Lender has made its investment decision based upon its own judgment, due diligence and advice from such advisers as it has deemed necessary and not upon any view expressed by any other Person, including any of the directors, officers, employee or agents of Borrower or its Subsidiaries. Neither such inquiries nor any other due diligence investigations conducted by Lender or its advisors or representatives, if any, shall modify, amend or affect Lender’s right to rely on Borrower’s representations and warranties contained herein. Initial Lender is not relying upon, and has not relied upon, any advice, statement, representation or warranty made by any Person by or on behalf of Borrower, except for the express statements, representations and warranties of Borrower made or contained in this Agreement. Furthermore, Lender acknowledges that nothing in this Agreement or any other materials presented by or on behalf of Borrower to Lender in connection with the making of the Subordinated Loan constitutes legal, tax or investment advice.

 

 

 

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ARTICLE VI

 

AFFIRMATIVE, NEGATIVE AND FINANCIAL COVENANTS

 

Section 6.1.     Until the Termination Date, the Borrower covenants and agrees that it shall comply with each of the covenants set forth in Articles VI and VII of the Senior Credit Agreement, which covenants are incorporated herein in their entirety, mutatis mutandis. 

 

Section 6.2.     Notwithstanding any provision of this Agreement to the contrary, and subject to the Subordination Agreement, while the Subordinated Loan is outstanding, Borrower shall have the right to issue debt that is senior, pari passu, or junior to the Obligations. 

 

Section 6.3    If, after the Closing Date, the Borrower shall issue subordinated debt to one or more lenders that includes pricing terms that are more advantageous to those lenders than the terms set forth herein, Borrower and Lender shall, reasonably promptly thereafter, amend this Agreement to incorporate such more advantageous terms herein; provided, however, that (i) to the extent that the definitive agreement governing Borrower’s issuance of such subordinated debt includes material terms which are more advantageous to Borrower than the corresponding material terms of this Agreement, such amendment shall incorporate such more advantageous terms herein; and (ii) any such amendment of this Agreement shall be in compliance with the terms of the Subordination Agreement. 

 

ARTICLE VII

 

EVENTS OF DEFAULT

 

Section 7.1.     If any of the following events (each an “Event of Default”) shall occur:

 

(a)     Any failure to pay any principal or interest under the Subordinated Promissory Notes when the same shall become due and payable, or the failure to pay any other sum due under the Subordinated Promissory Notes, if any, or any of the Subordinated Loan Documents when the same shall become due and payable.

 

(b)     the Borrower shall fail to observe or perform any covenant or agreement contained in Section 6.1, or Article VI or Article VII of the Senior Credit Agreement, as incorporated by reference in this Agreement pursuant to Article VI of this Agreement, and such failure shall remain unremedied for fifteen (15) days after the earlier of (i) any Responsible Officer of the Borrower becomes aware of such failure, or (ii) written notice thereof shall have been given to the Borrower by PNC or the Lender; or

 

(c)     the Borrower shall fail to observe or perform any covenant or agreement contained in the Senior Credit Agreement (other than those referred to in clause (b) above) or any other Senior Loan Document, and such failure shall remain unremedied for 35 days after the earlier of (i) any Responsible Officer of the Borrower becomes aware of such failure, or (ii) written notice thereof shall have been given to the Borrower by PNC or the Lender; or

 

 

 

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(d)     the Borrower or any of its Subsidiaries (whether as primary obligor or as guarantor or other surety) shall fail to pay any principal of, or premium or interest on, (i) any Material Indebtedness (other than Indebtedness under the Senior Credit Agreement and the other Senior Loan Documents) that is outstanding, when and as the same shall become due and payable (whether at scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument evidencing or governing such Indebtedness; or any other event shall occur or condition shall exist under any agreement or instrument relating to such Indebtedness and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such event or condition is to accelerate, or permit the acceleration of, the maturity of such Indebtedness; or (ii) any such Indebtedness shall be declared to be due and payable, or required to be prepaid or redeemed (other than by a regularly scheduled required prepayment or redemption), purchased or defeased, or any offer to prepay, redeem, purchase or defease such Indebtedness shall be required to be made, in each case prior to the stated maturity thereof; or

 

(e)     the Borrower or any of its Subsidiaries shall (i) commence a voluntary case or other proceeding or file any petition seeking liquidation, reorganization or other relief under any federal, state or foreign bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a custodian, trustee, receiver, liquidator or other similar official of them or any substantial part of their property, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (g) of this Section 7.1, (iii) apply for or consent to the appointment of a custodian, trustee, receiver, liquidator or other similar official for the Borrower or any of its Subsidiaries or for a substantial part of their assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors, or (vi) take any corporate action for the purpose of effecting any of the foregoing; or

 

(f)     an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the Borrower or any of its Subsidiaries or their debts, or any substantial part of their assets, under any federal, state or foreign bankruptcy, insolvency or other similar law now or hereafter in effect or (ii) the appointment of a custodian, trustee, receiver, liquidator or other similar official for the Borrower or any of its Subsidiaries or for a substantial part of their assets, and in any such case, such proceeding or petition shall remain undismissed for a period of 65 days or an order or decree approving or ordering any of the foregoing shall be entered; or

 

(g)     the Borrower or any of its Subsidiaries shall admit in writing its inability to pay, or shall fail to pay, its debts as they become due; or

 

(h)    any judgment or order shall be rendered against the Borrower or any of its Significant Subsidiaries that could reasonably be expected to have a Material Adverse Effect, and there shall be a period of 35 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or

 

(i)     a Change in Control shall occur or exist;

 

then, subject to the terms and conditions set forth in the Subordination Agreement, and in every such event (other than an event with respect to the Borrower or any of its Significant Subsidiaries described in clause (f) or (g) of this Section 7.1) and at any time thereafter during the continuance of such event, the Lender may, by notice to the Borrower, take any or all of the following actions, at the same or different times: (i) terminate the Subordinated Loan Commitment, whereupon the Subordinated Loan Commitment shall terminate immediately, (ii) declare the principal of and any accrued interest on the Subordinated Loan, and all other Obligations owing hereunder, to be, whereupon the same shall become, due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower, (iii) exercise all remedies contained in any other Subordinated Loan Document, and (iv) exercise any other remedies available at law or in equity; and that, if an Event of Default specified in either clause (f) or (g) shall occur, the Subordinated Loan Commitment shall automatically terminate and the principal of the Subordinated Loan then outstanding, together with accrued interest thereon, and all fees, and all other Obligations shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower.

 

 

 

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Section 7.2     Notwithstanding any provision of this Article VII to the contrary, Borrower’s failure to observe or perform any covenant or agreement contained in the Senior Credit Agreement shall not be considered an Event of Default if (i) Borrower and PNC execute an amendment or modification to the Senior Loan Agreement which results in such failure to observe or perform the covenant(s) or agreement(s) of the Senior Credit Agreement not triggering an event of default under the Senior Credit Agreement; or (ii) PNC elects to waive the event of default triggered by such failure to observe or perform the covenant(s) or agreement(s) of the Senior Credit Agreement.

 

ARTICLE VIII

 

MISCELLANEOUS

 

Section 8.1.      Notices.

 

(a)     Written Notices.  Except in the case of notices and other communications expressly permitted to be given by telephone, all notices and other communications to any party herein to be effective shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail, email, or sent by facsimile, as follows:

 

	
To the Borrower:
	
Enservco Corporation

501 South Cherry Street, Suite 1000

Denver, CO 80246

Email: idickinson@enservco.com

Facsimile: 720-974-3417

Attention: Ian Dickinson, CEO

	
 
	
 

	
To the Lender:
	
Cross River Partners, L.P.

31 Bailey Avenue, Suite D

Ridgefield, CT 06877

Email: rmurphy@cross-river.com

Attention: Richard Murphy

 

Any party hereto may change its address or facsimile number for notices and other communications hereunder by notice to the other parties hereto.  All such notices and other communications shall, when transmitted by overnight delivery, or faxed, be effective when delivered for overnight (next-day) delivery, or transmitted in legible form by facsimile machine, respectively, or if mailed, upon the third Business Day after the date deposited into the mail or if delivered, upon delivery.

 

(b)     Email Communications.  Notices and other communications to the Lender hereunder may be delivered or furnished by email.  Unless the Lender otherwise prescribes, notices and other communications sent to an email address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return email or other written acknowledgement); provided that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient.

 

 

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Section 8.2.      Waiver; Amendments.

 

(a)     No failure or delay by the Lender in exercising any right or power hereunder or any other Subordinated Loan Document, and no course of dealing between the Borrower and the Lender, shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power or any abandonment or discontinuance of steps to enforce such right or power, preclude any other or further exercise thereof or the exercise of any other right or power hereunder or thereunder.  The rights and remedies of the Lender hereunder and under the other Subordinated Loan Documents are cumulative and are not exclusive of any rights or remedies provided by law.  No waiver of any provision of this Agreement or any other Subordinated Loan Document or consent to any departure by the Borrower therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section 8.2, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given.

 

(b)      No amendment or waiver of any provision of this Agreement or the other Subordinated Loan Documents, nor consent to any departure by the Borrower therefrom, shall in any event be effective unless the same shall be in writing and signed by the Borrower and the Lender, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

 

(c)      Notwithstanding the foregoing, in the event that the Borrower and/or the Required Lenders under the Senior Credit Agreement agree upon a waiver or amendment of any of the terms and conditions in the Senior Credit Agreement, such waiver or amendment, if applicable, shall apply to this Agreement and the other Subordinated Loan Documents without any action on the part of the parties hereto.  The Lender agrees to execute a written waiver or amendment to memorialize any waiver or amendment effected pursuant to the preceding sentence.

 

Section 8.3.      Expenses; Indemnification.

 

(a)     Subject to the Subordination Agreement, the Borrower shall indemnify the Lender, and each Related Party of the Lender (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including the fees, charges and disbursements of any counsel for any Indemnitee), incurred by any Indemnitee or asserted against any Indemnitee by any third party arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Subordinated Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, or (ii) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Borrower, and regardless of whether any Indemnitee is a party thereto, provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or (y) result from a claim brought by the Borrower against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other Subordinated Loan Document, if the Borrower has obtained a final judgment in its favor on such claim as determined by a court of competent jurisdiction.

 

(b)     Subject to the Subordination Agreement, the Borrower shall pay, and hold the Lender harmless from and against, any and all present and future stamp, documentary, and other similar taxes with respect to this Agreement and any other Subordinated Loan Documents, any collateral described therein, or any payments due thereunder, and save the Lender harmless from and against any and all liabilities with respect to or resulting from any delay or omission to pay such taxes.

 

 

 

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(c)     To the extent permitted by applicable law, each party shall not assert, and hereby waives, any claim against any Indemnitee or the other party, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to actual or direct damages) arising out of, in connection with or as a result of, this Agreement or any agreement or instrument contemplated hereby, the transactions contemplated therein, the Subordinated Loan or the use of proceeds thereof.

 

(d)     All amounts due under this Section 8.3 shall be payable promptly after written demand therefor.

 

Section 8.4.    Successors and Assigns.  The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder, and, so long as no Default or Event of Default shall have occurred and is continuing, the Lender may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Borrower.  Any other attempted assignment or transfer by any party hereto shall be null and void.  Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby and, to the extent expressly contemplated hereby, the Related Parties of the Lender) any legal or equitable right, remedy or claim under or by reason of this Agreement.

 

Section 8.5.     Governing Law; Jurisdiction; Consent to Service of Process.

 

(a)     This Agreement and the other Subordinated Loan Documents shall be construed in accordance with and be governed by the law (without giving effect to the conflict of law principles thereof) of the State of Delaware.

 

(b)     Each party hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of state or Federal courts located within the City and County of Denver, State of Colorado, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or any other Subordinated Loan Document or the transactions contemplated hereby or thereby, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such Colorado state court or, to the extent permitted by applicable law, such Federal court.  Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

 

(c)     Each party hereto irrevocably and unconditionally waives any objection which it may now or hereafter have to the laying of venue of any such suit, action or proceeding described in paragraph (b) of this Section 8.5 and brought in any court referred to in paragraph (b) of this Section 8.5.  Each party hereto irrevocably waives, to the fullest extent permitted by applicable law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

 

(d)     Each party to this Agreement irrevocably consents to the service of process in the manner provided for notices in Section 8.1.  Nothing in this Agreement or in any other Subordinated Loan Document will affect the right of any party hereto to serve process in any other manner permitted by law.

 

 

 

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Section 8.6.     WAIVER OF JURY TRIAL.  EACH PARTY HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF THIS AGREEMENT OR ANY OTHER SUBORDINATED LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER SUBORDINATED LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

Section 8.7.    Counterparts; Integration.  This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by email or facsimile), and all of said counterparts taken together shall be deemed to constitute one and the same instrument.  This Agreement and the other Subordinated Loan Documents constitute the entire agreement among the parties hereto and thereto regarding the subject matters hereof and thereof and supersede all prior agreements and understandings, oral or written, regarding such subject matters.

 

Section 8.8.     Survival.  All covenants, agreements, representations and warranties made by the Borrower herein and in the certificates or other instruments delivered in connection with or pursuant to this Agreement shall be considered to have been relied upon by the Lender and shall survive the execution and delivery of this Agreement and the making of the Subordinated Loan, regardless of any investigation made by any the Lender or on its behalf and notwithstanding that the Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on the Subordinate Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid.  The provisions of Section 8.3 shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Subordinated Loan or the termination of this Agreement or any provision hereof.  All representations and warranties made herein, in the certificates, reports, notices, and other documents delivered pursuant to this Agreement shall survive the execution and delivery of this Agreement and the other Subordinated Loan Documents, and the making of the Subordinate Loans.

 

Section 8.9.     Severability.  Any provision of this Agreement or any other Subordinated Loan Document held to be illegal, invalid or unenforceable in any jurisdiction, shall, as to such jurisdiction, be ineffective to the extent of such illegality, invalidity or unenforceability without affecting the legality, validity or enforceability of the remaining provisions hereof or thereof; and the illegality, invalidity or unenforceability of a particular provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

 

 

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Section 8.10.     Confidentiality.  The Lender agrees to take normal and reasonable precautions to maintain the confidentiality of any confidential information provided to it by the Borrower or any Subsidiary, except that such information may be disclosed (i) to any Related Party of the Lender, including without limitation accountants, legal counsel and other advisors with a reasonable need for such information (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such information and instructed to keep such information confidential on substantially the same terms as provided herein), (ii) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (iii) to the extent requested by any regulatory agency or authority or self-regulatory body having or claiming authority to regulate or oversee any aspect of the Lender’s business or businesses, (iv) to the extent that such information becomes publicly available other than as a result of a breach of this Section 8.10, or which becomes available to the Lender or any of its Related Party on a non-confidential basis from a source other than the Borrower, (v) in connection with the exercise of any remedy hereunder or any suit, action or proceeding relating to this Agreement or the enforcement of rights hereunder, and (ix) subject to provisions substantially similar to this Section 8.10, to any actual or prospective assignee, or (vi) with the consent of the Borrower.  Any Person required to maintain the confidentiality of any information as provided for in this Section 8.10 shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such information as such Person would accord its own confidential information; provided that, in the case of clauses (ii) or (iii), with the exception of disclosure to regulatory authorities, the Lender agrees, to the extent practicable and legally permissible, to give the Borrower prompt prior notice so that it may seek a protective order or other appropriate remedy.

 

Section 8.11.     Interest Rate Limitation.  Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Subordinated Loan, together with all charges and other amounts which may be treated as interest on such Subordinated Loan under applicable law (collectively, the “Charges”), shall exceed the maximum lawful rate of interest (the “Maximum Rate”) which may be contracted for, charged, taken, received or reserved by a lender holding such a loan in accordance with applicable law, the rate of interest payable in respect of such Subordinated Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate.

 

Section 8.12.     Non-Recourse to Associated Persons.  The Lender agrees on behalf of itself and its successors, assigns and legal representatives, that no Person which is a partner, shareholder, member, owner, officer, director, supervisor, trustee or other principal (collectively, “Associated Persons”) of the Borrower or its successors or assigns, shall have any personal liability for the payment or performance of any of the Borrower’s obligations hereunder or under the Subordinated Promissory Notes and no monetary or other judgment shall be sought or enforced against any such Associated Persons or any of their respective successors or assigns.  Notwithstanding the foregoing, the Lender shall not be deemed barred by this Section 8.12 from asserting any claim against any Person based upon an allegation of fraud or misrepresentation.

 

Signature Page Follows

 

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

 

ENSERVCO CORPORATION

 

 

 

By: /s/ Ian E. Dickinson

Name: Ian E. Dickinson 

Its: President and Chief Executive Officer

 

 

 

CROSS RIVER PARTNERS, L.P.

 

By: Cross River Management, LLC

Its: General Partner

 

 

By: /s Richard A. Murphy

Name: Richard A. Murphy

Its: Managing Member

 

 

 

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EXHIBIT A

 

SUBORDINATED PROMISSORY NOTES

 

(attached)

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