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LOAN AGREEMENT
($100,000,000 U.S. LOAN FACILITY
AND
$25,000,000 CANADIAN LOAN FACILITY)
DATED AS OF SEPTEMBER 25, 1997
AMONG
NATIONAL-OILWELL, L.P.,
AS U.S. BORROWER,
NATIONAL-OILWELL CANADA LTD. AND DRECO ENERGY SERVICES LTD.,
AS CANADIAN BORROWER,
TEXAS COMMERCE BANK NATIONAL ASSOCIATION,
AS U.S. AGENT AND AS A U.S. LENDER,
XXXXX FARGO BANK (TEXAS), NATIONAL ASSOCIATION,
AS U.S. CO-AGENT AND AS A U.S. LENDER,
THE CHASE MANHATTAN BANK OF CANADA,
AS CANADIAN AGENT AND AS A CANADIAN LENDER,
THE BANK OF NOVA SCOTIA,
AS CANADIAN CO-AGENT, AS A U.S. LENDER AND AS A CANADIAN LENDER
AND
THE OTHER LENDERS NOW OR HEREAFTER
PARTIES HERETO
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TABLE OF CONTENTS
Page
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1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Certain Defined Terms . . . . . . . . . . . . . . . . . . . . 1
1.2 Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . 23
2. Commitments; Loans; BA's and Letters of Credit . . . . . . . . . . . 23
2.1 Loans and BA's . . . . . . . . . . . . . . . . . . . . . . . . 23
2.2 Letters of Credit . . . . . . . . . . . . . . . . . . . . . . 25
2.3 Certain Provisions Relating to Bankers' Acceptances . . . . . 30
2.4 Terminations, Reductions or Reallocations of Commitments . . 32
2.5 Commitment Fees . . . . . . . . . . . . . . . . . . . . . . . 34
2.6 Several Obligations . . . . . . . . . . . . . . . . . . . . . 34
2.7 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
2.8 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . 35
2.9 Currency Fluctuations . . . . . . . . . . . . . . . . . . . . 35
3. Borrowings, Prepayments and Interest Options . . . . . . . . . . . . 36
3.1 Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . 36
3.2 Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . 37
3.3 Interest Options . . . . . . . . . . . . . . . . . . . . . . . 37
4. Payments; Pro Rata Treatment; Computations, Etc. . . . . . . . . . . 42
4.1 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
4.2 Pro Rata Treatment . . . . . . . . . . . . . . . . . . . . . . 44
4.3 Certain Actions, Notices, Etc. . . . . . . . . . . . . . . . . 44
4.4 Non-Receipt of Funds by Any Agent . . . . . . . . . . . . . . 45
4.5 Sharing of Payments, Etc. . . . . . . . . . . . . . . . . . . 45
5. Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . 46
5.1 Initial Loans, Letters of Credit and Bankers' Acceptances . . 46
5.2 All Loans, Letters of Credit and Bankers' Acceptances . . . . 47
6. Representations and Warranties . . . . . . . . . . . . . . . . . . . 48
6.1 Organization . . . . . . . . . . . . . . . . . . . . . . . . . 48
6.2 Financial Statements . . . . . . . . . . . . . . . . . . . . . 48
6.3 Enforceable Obligations; Authorization . . . . . . . . . . . . 49
6.4 Other Debt . . . . . . . . . . . . . . . . . . . . . . . . . . 49
6.5 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . 50
6.6 Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
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6.7 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
6.8 Regulations G, U and X . . . . . . . . . . . . . . . . . . . . 50
6.9 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . 50
6.10 No Untrue or Misleading Statements . . . . . . . . . . . . . . 50
6.11 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
6.12 Investment Company Act . . . . . . . . . . . . . . . . . . . . 51
6.13 Public Utility Holding Company Act . . . . . . . . . . . . . . 51
6.14 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
6.15 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . 51
6.16 Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . 51
6.17 Environmental Matters . . . . . . . . . . . . . . . . . . . . 51
6.18 Collateral Covered . . . . . . . . . . . . . . . . . . . . . . 52
7. Affirmative Covenants. . . . . . . . . . . . . . . . . . . . . . . . 52
7.1 Taxes, Existence, Regulations, Property, Etc. . . . . . . . . 52
7.2 Financial Statements and Information . . . . . . . . . . . . . 52
7.3 Financial Tests . . . . . . . . . . . . . . . . . . . . . . . 53
7.4 Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . 53
7.5 Further Assurances . . . . . . . . . . . . . . . . . . . . . . 54
7.6 Books and Records . . . . . . . . . . . . . . . . . . . . . . 54
7.7 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . 54
7.8 Notice of Certain Matters . . . . . . . . . . . . . . . . . . 54
7.9 Capital Adequacy . . . . . . . . . . . . . . . . . . . . . . . 55
7.10 ERISA Information and Compliance . . . . . . . . . . . . . . . 55
8. Negative Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . 56
8.1 Borrowed Money Indebtedness . . . . . . . . . . . . . . . . . 56
8.2 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
8.3 Contingent Liabilities . . . . . . . . . . . . . . . . . . . . 57
8.4 Mergers, Consolidations and Dispositions of Assets . . . . . . 57
8.5 Redemption, Dividends and Distributions . . . . . . . . . . . 57
8.6 Nature of Business . . . . . . . . . . . . . . . . . . . . . . 57
8.7 Transactions with Related Parties . . . . . . . . . . . . . . 57
8.8 Loans and Investments . . . . . . . . . . . . . . . . . . . . 58
8.9 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . 58
8.10 Key Agreements . . . . . . . . . . . . . . . . . . . . . . . . 58
8.11 Organizational Documents . . . . . . . . . . . . . . . . . . . 58
8.12 Unfunded Liabilities . . . . . . . . . . . . . . . . . . . . . 58
8.13 Subordinated Indebtedness . . . . . . . . . . . . . . . . . . 58
8.14 Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . 59
8.15 Prohibitions of Liens or Subsidiary Dividends . . . . . . . . 59
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9. Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
9.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . 59
9.2 Right of Setoff . . . . . . . . . . . . . . . . . . . . . . . 62
9.3 Collateral Account . . . . . . . . . . . . . . . . . . . . . . 62
9.4 Preservation of Security for Unmatured Obligations . . . . . . 62
9.5 Currency Conversion After Maturity . . . . . . . . . . . . . . 63
9.6 Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . 63
10. Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
10.1 Appointment, Powers and Immunities . . . . . . . . . . . . . . 63
10.2 Reliance . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
10.3 Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
10.4 Material Written Notices . . . . . . . . . . . . . . . . . . . 66
10.5 Rights as a Lender . . . . . . . . . . . . . . . . . . . . . . 66
10.6 Indemnification . . . . . . . . . . . . . . . . . . . . . . . 66
10.7 Non-Reliance on Agents and Other Lenders . . . . . . . . . . . 66
10.8 Failure to Act . . . . . . . . . . . . . . . . . . . . . . . . 67
10.9 Resignation or Removal of Agent . . . . . . . . . . . . . . . 67
10.10 No Partnership . . . . . . . . . . . . . . . . . . . . . . . . 68
11. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
11.1 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
11.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
11.3 Expenses, Etc. . . . . . . . . . . . . . . . . . . . . . . . . 69
11.4 Indemnification . . . . . . . . . . . . . . . . . . . . . . . 69
11.5 Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . . . 70
11.6 Successors and Assigns . . . . . . . . . . . . . . . . . . . . 71
11.7 Limitation of Interest . . . . . . . . . . . . . . . . . . . . 73
11.8 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
11.9 Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
11.10 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 74
11.11 Venue; Governing Law . . . . . . . . . . . . . . . . . . . . . 74
11.12 Severability . . . . . . . . . . . . . . . . . . . . . . . . . 75
11.13 Tax Forms; Net Payments . . . . . . . . . . . . . . . . . . . 75
11.14 Interest Act (Canada) . . . . . . . . . . . . . . . . . . . . 76
11.15 Judgment Currency . . . . . . . . . . . . . . . . . . . . . . 76
11.16 Conflicts Between This Agreement and the Other Loan
Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
11.17 Limitation on Charges; Substitute Lenders;
Non-Discrimination. . . . . . . . . . . . . . . . . . . . . . . 76
11.18 Multiple Persons Comprising Canadian Borrower . . . . . . . . 77
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EXHIBITS*
A-1 -- Request for Extension of Credit (U.S. Borrower)
A-2 -- Request for Extension of Credit (Canadian Borrower)
B -- Rate Designation Notice
C -- Canadian Note
D -- U.S. Note
E -- Assignment and Acceptance
F -- Compliance Certificate
G -- Bankers' Acceptance Notice
H -- Canadian Dollar Note
I -- Subsidiaries (Showing Percentage Ownership)
J -- Existing Borrowed Money Indebtedness
* All Exhibits have been omitted from this filing. The company will
supplementally furnish a copy of any omitted exhibit to the Securities and
Exchange Commission upon request.
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LOAN AGREEMENT
THIS LOAN AGREEMENT is made and entered into as of September 25, 1997
(the "Effective Date"), by and among NATIONAL-OILWELL, L.P., a Delaware limited
partnership (the "U.S. Borrower"); NATIONAL-OILWELL CANADA LTD., a British
Columbia company, and DRECO ENERGY SERVICES LTD., an Alberta corporation
(collectively, the "Canadian Borrower"); each of the lenders which is or may
from time to time become a party hereto (individually, a "Lender" and,
collectively, the "Lenders", which terms shall include U.S. Lenders and
Canadian Lenders); TEXAS COMMERCE BANK NATIONAL ASSOCIATION ("TCB"), a national
banking association, as agent for the U.S. Lenders (in such capacity, together
with its successors in such capacity, the "U.S. Agent"), XXXXX FARGO BANK
(TEXAS), NATIONAL ASSOCIATION, as U.S. Co-Agent, THE CHASE MANHATTAN BANK OF
CANADA, as agent for the Canadian Lenders (in such capacity, together with its
successors in such capacity, the "Canadian Agent"), and THE BANK OF NOVA
SCOTIA, as Canadian Co-Agent.
The parties hereto agree as follows:
1. Definitions.
1.1 Certain Defined Terms.
Unless a particular term, word or phrase is otherwise defined or the
context otherwise requires, capitalized terms, words and phrases used herein or
in the Loan Documents (as hereinafter defined) have the following meanings (all
definitions that are defined in this Agreement in the singular have the same
meanings when used in the plural and vice versa):
Acceptance Fee means the fee payable in Canadian Dollars to each
Canadian Lender in respect of the Bankers' Acceptances accepted by such
Canadian Lender computed in accordance with Section 2.3(c).
Accounts, Equipment, General Intangibles and Inventory shall have the
respective meanings assigned to them in the Uniform Commercial Code enacted in
the State of Texas in force on the Effective Date.
Additional Interest means the aggregate of all amounts accrued or paid
pursuant to the Notes or any of the other Loan Documents (other than interest
on the Notes at the Stated Rate and any Acceptance Fee) which, under applicable
laws, are or may be deemed to constitute interest on the indebtedness evidenced
by the Notes or the other Obligations.
Adjusted LIBOR means, with respect to each Interest Period applicable to
a LIBOR Borrowing, a rate per annum equal to the quotient, expressed as a
percentage, of (a) LIBOR with
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respect to such Interest Period divided by (b) 1.0000 minus the Eurodollar
Reserve Requirement in effect on the first day of such Interest Period.
Affiliate means any Person controlling, controlled by or under common
control with any other Person. For purposes of this definition, "control"
(including "controlled by" and "under common control with") means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities or otherwise.
Agents means U.S. Agent and Canadian Agent, collectively.
Agreement means this Loan Agreement, as it may from time to time be
amended, modified, restated or supplemented.
Annual Financial Statements means the annual financial statements of a
Person, including all notes thereto, which statements shall include a balance
sheet as of the end of the applicable fiscal year and an income statement and a
statement of cash flows for such fiscal year, all setting forth in comparative
form the corresponding figures from the previous fiscal year, all prepared in
conformity with GAAP in all material respects. Whenever an Annual Financial
Statement is required by the terms of this Agreement to be audited, it shall be
accompanied by the opinion of independent certified public accountants of
recognized national standing, which shall state that such financial statements
present fairly in all material respects the financial position of such Person
and, if such Person has any Subsidiaries, its consolidated Subsidiaries as of
the date thereof and the results of its operations for the period covered
thereby in conformity with GAAP. If an Annual Financial Statement is not
required by the terms of this Agreement to be audited, it shall be certified by
the chief financial officer or other authorized officer of such Person as true,
correct and complete in all material respects. All Annual Financial Statements
(whether or not required to be audited) shall include unaudited consolidating
financial statements for the applicable Person, in Proper Form, certified by
the chief financial officer or other authorized officer of such Person as true,
correct and complete in all material respects.
Applicable BA Discount Rate means, as applicable to a Bankers'
Acceptance being purchased by any Canadian Lender on any day, the percentage
discount rate (expressed to two decimal places and rounded upward, if
necessary, to the nearest 1/100th of 1%) quoted by the Canadian Agent as that
at which the Canadian Agent would, in accordance with normal practice, at or
about 12:00 noon (Toronto, Ontario time), on such day, be prepared to purchase
Bankers' Acceptances in an amount and having a maturity date comparable to the
amount and maturity date of such Bankers' Acceptances.
Applicable Canadian Pension Legislation means, at any time, any pension
legislation then applicable to the Canadian Borrower, including the Pension
Benefits Act (Ontario), including all regulations made thereunder, and all
rules, regulations, rulings and interpretations made or issued by any
Governmental Authority having or asserting jurisdiction in respect thereof.
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Applications means all applications and agreements for Letters of
Credit, or similar instruments or agreements, in Proper Form, now or hereafter
executed by any Person in connection with any Letter of Credit now or hereafter
issued or to be issued under the terms hereof at the request of any Person.
The term "Application" as used herein shall include that certain Master
Commercial & Standby Letter of Credit Agreement dated executed or to be
executed by and between U.S. Borrower and TCB.
Assignment and Acceptance shall have the meaning ascribed to such term
in Section 11.6 hereof.
Availability Period means, for each Lender, the period from and
including the Effective Date to (but not including) the Termination Date.
BA Discount Proceeds means in respect of any Bankers' Acceptance being
purchased by a Canadian Lender on any day under Section 2.3, an amount (rounded
to the nearest whole Canadian cent, and with one-half of one Canadian cent
being rounded up) calculated on such day by multiplying:
(A) the face amount of such Bankers' Acceptance; by
(B) the quotient equal to one divided by the sum of one plus the
product of:
(i) the Applicable BA Discount Rate (expressed as a decimal)
applicable to such Bankers' Acceptance; and
(ii) a fraction, the numerator of which is the number of days
remaining in the term of such Bankers' Acceptance and the
denominator of which is 365;
with such quotient being rounded up or down to the nearest fifth
decimal place and .000005 being rounded up.
Bankers' Acceptance or BA means a xxxx of exchange denominated in
Canadian Dollars drawn by the Canadian Borrower on and accepted by a Canadian
Lender pursuant to Section 2.3 hereof.
Bankers' Acceptance Liabilities means, at any time and in respect of any
Bankers' Acceptance, the face amount thereof if still outstanding and unpaid
or, following maturity and payment thereof, the aggregate unpaid amount of all
Reimbursement Obligations at that time due and payable in respect of the
payment of such Bankers' Acceptance upon maturity.
Bankers' Acceptance Notice has the meaning specified in Section 2.3(a).
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Bankruptcy Code means (i) the United States Bankruptcy Code, (ii) the
Bankruptcy and Insolvency Act (Canada) and (iii) the Companies' Creditors
Arrangement Act (Canada), as the same may be amended and together with any
successor statutes.
Base Rate means, for any day, a rate per annum equal to the lesser of
(a) the applicable Margin Percentage from time to time in effect plus the
greater of (1) the applicable Prime Rate for that day and (2) the Federal Funds
Rate for that day plus 1/2 of 1% or (b) the Ceiling Rate. If for any reason
any applicable Agent shall have determined (which determination shall be
conclusive and binding, absent manifest error) that it is unable to ascertain
the Federal Funds Rate for any reason, the Base Rate shall, until the
circumstances giving rise to such inability no longer exist, be the lesser of
(a) the applicable Prime Rate plus the applicable Margin Percentage from time
to time in effect or (b) the Ceiling Rate.
Base Rate Borrowing means that portion of the principal balance of the
Loans at any time bearing interest at the Base Rate.
Borrowed Money Indebtedness means, with respect to any Person, without
duplication, (i) all obligations of such Person for borrowed money, (ii) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, (iii) all obligations of such Person under conditional sale or
other title retention agreements relating to Property purchased by such Person,
(iv) all obligations of such Person issued or assumed as the deferred purchase
price of Property or services (excluding obligations of such Person to
creditors for raw materials, inventory, services and supplies and deferred
payments for services to employees and former employees incurred in the
ordinary course of such Person's business), (v) all capital lease obligations
of such Person, (vi) all obligations of others secured by any Lien on Property
owned or acquired by such Person, whether or not the obligations secured
thereby have been assumed, (vii) all contingent obligations (excluding
reimbursement obligations in respect of amounts actually drawn under letters of
credit or due and payable in respect of matured bankers' acceptances) of such
Person in respect of outstanding letters of credit issued for the account of
such Person or bankers' acceptances drawn by such Person, (viii) all guarantees
of such Person, and (ix) Interest Rate Risk Indebtedness of such Person.
Borrowers means U.S. Borrower and Canadian Borrower, collectively.
Business Day means any day other than a day on which commercial banks
are authorized or required to close in Houston, Texas, Calgary, Alberta or
Toronto, Ontario.
Calculation Date means the last Business Day of each month.
Canadian Commitment means, as to any Canadian Lender, the obligation, if
any, of such Canadian Lender to make Canadian Loans, incur or participate in
Letter of Credit Liabilities relating to Canadian Letters of Credit and accept
and purchase Bankers' Acceptances in an aggregate principal amount at any one
time outstanding up to (but not exceeding) the amount, if any, set forth
opposite such Canadian Lender's name on the signature pages hereof under the
caption "Canadian
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Commitment", or otherwise provided for in an Assignment and Acceptance
Agreement (as the same may be increased or reduced from time to time pursuant
to Section 2.4 hereof).
Canadian Dollars or C$ means lawful money of Canada.
Canadian Dollar Notes means the Notes of Canadian Borrower evidencing
the Canadian Loans denominated in Canadian Dollars, in the form of Exhibit H
hereto.
Canadian Lender means each lender signatory hereto with (i) prior to the
Termination Date, a Canadian Commitment and (ii) on and after the Termination
Date, any outstanding Canadian Obligations.
Canadian Letter of Credit has the meaning assigned to such term in
Section 2.2 hereof.
Canadian Loan means a Loan made pursuant to Section 2.1(b) hereof.
Canadian Notes means the Notes of Canadian Borrower evidencing the
Canadian Loans denominated in Dollars, in the form of Exhibit C hereto.
Canadian Obligations means, as at any date of determination thereof, the
sum of the following (determined without duplication): (i) the aggregate
principal amount of Canadian Loans outstanding hereunder on such date, plus
(ii) the aggregate amount of the Bankers' Acceptance Liabilities outstanding on
such date, plus (iii) the aggregate amount of Letter of Credit Liabilities
outstanding on such date relating to Canadian Letters of Credit.
Canadian Prime Loans means Loans made pursuant to Section 2.1(b) hereof
which are denominated in Canadian Dollars.
Canadian Prime Rate means, on any day, as to Loans denominated in
Canadian Dollars made to Canadian Borrower, the greater of (a) the annual rate
of interest announced from time to time by Chase Canada as its prime rate then
in effect at its Principal Office, being the reference rate used by Chase
Canada for determining interest rates on commercial loans denominated in
Canadian Dollars to borrowers in Canada, and (b) an annual rate of interest
equal to the sum of (i) the CDOR Rate and (ii) 1.00% per annum. The Canadian
Prime Rate is a reference rate and does not necessarily represent the lowest or
best rate or a favored rate, and TCB, Chase Canada, each Agent and each Lender
disclaims any statement, representation or warranty to the contrary. TCB,
Chase Canada, any Agent or any Lender may make commercial loans or other loans
at rates of interest at, above or below the Canadian Prime Rate.
Capital Expenditures means, with respect to any Person for any period,
expenditures in respect of fixed or capital assets by such Person, including
capital lease obligations payable during such period (to the extent not already
included), which would be reflected as additions to Property, plant or
equipment on a balance sheet of such Person and its consolidated Subsidiaries,
if any,
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prepared in accordance with GAAP; but excluding expenditures during such period
for the repair or replacement of any fixed or capital asset which was destroyed
or damaged, in whole or in part, to the extent financed by the proceeds of an
insurance policy maintained by such Person. Capital Expenditures shall not
include Permitted Investments or the assets owned by any Person acquired by way
of a Permitted Investment or assets comprising substantially all of an entire
business which is acquired by the applicable Person.
CDOR Rate means, on any day, an annual rate of interest equal to the
average 30 day rate applicable to Canadian bankers' acceptances appearing on
the "Reuters Screen CDOR Page" (as defined in the International Swap Dealer
Association, Inc. (1991 ISDA) definitions, as modified and amended from time to
time) as of 12:00 noon (Toronto, Ontario time) on such day, or if such day is
not a Business Day, then on the immediately preceding Business Day; provided,
however, if such rate does not appear on the Reuters Screen CDOR Page as
contemplated, then the CDOR Rate on any day shall be calculated as the
arithmetic mean of the 30 day rates applicable to Canadian bankers' acceptances
quoted by the Canadian Lenders which are listed in Schedule I to the Bank Act
(Canada) as of 12:00 noon (Toronto, Ontario time) on such day, or if such day
is not a Business Day, then on the immediately preceding Business Day.
Ceiling Rate means, on any day, the maximum nonusurious rate of interest
permitted for that day by whichever of applicable United States federal or
Texas laws or, in the case of advances made in Canada by Canadian Lenders to
Canadian Borrower, whichever of applicable Canada federal or Ontario laws (or
the laws of any other jurisdiction whose usury laws are deemed to apply to the
Notes or any other Loan Documents despite the intention and desire of the
express choice of law provisions set forth herein) permits the higher interest
rate, stated as a rate per annum. On each day, if any, that Chapter One
establishes the Ceiling Rate, the Ceiling Rate shall be the "indicated rate
ceiling" (as defined in Chapter One) for that day. U.S. Agent may from time to
time, as to current and future balances, implement any other ceiling under
Chapter One by notice to Borrowers, if and to the extent permitted by Chapter
One. Without notice to Borrowers or any other Person, the Ceiling Rate shall
automatically fluctuate upward and downward as and in the amount by which such
maximum nonusurious rate of interest permitted by applicable law fluctuates.
Change of Control means a change resulting when any Unrelated Person or
any Unrelated Persons (other than any Person that Beneficially Owns at least
10% of the aggregate voting power of all classes of Voting Stock of the Parent
as of the date hereof) acting together which would constitute a Group together
with any Affiliates or Related Persons thereof (in each case also constituting
Unrelated Persons) shall at any time either (i) Beneficially Own more than 50%
of the aggregate voting power of all classes of Voting Stock of Parent or (ii)
succeed in having sufficient of its or their nominees elected to the Board of
Directors of Parent such that such nominees, when added to any existing
directors remaining on the Board of Directors of Parent after such election who
is an Affiliate or Related Person of such Person or Group, shall constitute a
majority of the Board of Directors of Parent. As used herein (a) "Beneficially
Own" means "beneficially own" as defined in Rule 13d-3 of the Securities
Exchange Act of 1934, as amended, or any successor provision thereto; provided,
however, that, for purposes of this definition, a Person shall not be deemed to
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Beneficially Own securities tendered pursuant to a tender or exchange offer
made by or on behalf of such Person or any of such Person's Affiliates until
such tendered securities are accepted for purchase or exchange; (b) "Group"
means a "group" for purposes of Section 13(d) of the Securities Exchange Act of
1934, as amended; (c) "Unrelated Person" means at any time any Person other
than Parent or any Subsidiary of Parent and other than any trust for any
employee benefit plan of Parent or any Subsidiary of Parent; (d) "Related
Person" of any Person shall mean any other Person owning (1) 5% or more of the
outstanding common stock of such Person or (2) 5% or more of the Voting Stock
of such Person; and (e) "Voting Stock" of any Person shall mean capital stock
of such Person which ordinarily has voting power for the election of directors
(or persons performing similar functions) of such Person, whether at all times
or only so long as no senior class of securities has such voting power by
reason of any contingency.
Chapter One means Chapter One of Title 79, Texas Revised Civil Statutes,
1925, as amended.
Chase Canada means The Chase Manhattan Bank of Canada.
Code means the Internal Revenue Code of 1986, as amended, as now or
hereafter in effect, together with all regulations, rulings and interpretations
thereof or thereunder by the Internal Revenue Service.
Collateral means all Property, tangible or intangible, real, personal or
mixed, now or hereafter subject to the Security Documents.
Commitment Fee Percentage means (i) on any day prior to October 1, 1997,
0.175% per annum and (ii) on and after October 1, 1997, the applicable per
annum percentage set forth at the appropriate intersection in the table shown
below, based on the Debt to Capitalization Ratio as of the last day of the then
most recently ended fiscal quarter of Parent calculated by U.S. Agent as soon
as practicable after receipt by U.S. Agent of all financial reports required
under this Agreement with respect to such fiscal quarter (including a
Compliance Certificate) (provided, however, that if the Commitment Fee
Percentage is increased as a result of the reported Debt to Capitalization
Ratio, such increase shall be retroactive to the date that U.S. Borrower was
obligated to deliver such financial reports to U.S. Agent pursuant to the terms
of this Agreement and provided further, however, that if the Commitment Fee
Percentage is decreased as a result of the reported Debt to Capitalization
Ratio, and such financial reports are delivered to U.S. Agent not more than ten
(10) calendar days after the date required to be delivered pursuant to the
terms of this Agreement, such decrease shall be retroactive to the date that
U.S. Borrower was obligated to deliver such financial reports to U.S. Agent
pursuant to the terms of this Agreement):
Debt to Commitment
Capitalization Ratio Fee Percentage
-------------------- --------------
Greater than 30% 0.225
Greater than 20% but
less than or equal to 30% 0.175
Less than or equal to 20% 0.15
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Commitment Percentage means, as to any Lender, the percentage equivalent
of a fraction the numerator of which is the amount of such Lender's U.S.
Commitment or Canadian Commitment, as the case may be, and the denominator of
which is the aggregate amount of the U.S. Commitments or Canadian Commitments,
as the case may be, of all Lenders.
Compliance Certificate shall have the meaning given to it in Section 7.2
hereof.
Contribution Agreements means those certain Contribution Agreements
dated concurrently herewith executed by and among, respectively, (i) U.S.
Borrower and the Guarantors in respect of the U.S. Obligations and (ii)
Canadian Borrower and the Guarantors in respect of the Canadian Obligations, as
they may from time to time be amended, modified, restated or supplemented.
Controlled Group means all members of a controlled group of corporations
and all trades or businesses (whether or not incorporated) under common control
which, together with any Borrower, are treated as a single employer under
Section 414 of the Code or under Applicable Canadian Pension Legislation.
Corporation means any corporation, limited liability company,
partnership, joint venture, joint stock association, business trust and other
business entity.
Cover for Letter of Credit Liabilities or any Bankers' Acceptance
Liabilities shall be effected by paying to U.S. Agent or Canadian Agent, as the
case may be, immediately available funds, to be held by U.S. Agent or Canadian
Agent, as the case may be, in a collateral account maintained by U.S. Agent or
Canadian Agent, as the case may be, at its Principal Office and collaterally
assigned to U.S. Agent or Canadian Agent, as the case may be, as security for
the applicable Obligations using documentation reasonably satisfactory to U.S.
Agent or Canadian Agent, as the case may be, in the amount required by any
applicable provision hereof. Such amount shall be retained by U.S. Agent or
Canadian Agent, as the case may be, in such collateral account until such time
as the applicable Letter of Credit shall have expired and the Reimbursement
Obligations, if any, with respect thereto shall have been fully satisfied or
the applicable Bankers' Acceptance shall have matured and the related Bankers'
Acceptance Liabilities shall have been fully satisfied; provided, however, that
at such time if a Default or Event of Default has occurred and is continuing,
U.S. Agent or Canadian Agent, as the case may be, shall not be required to
release such amount in such collateral account from the time of such collateral
assignment until such Default or Event of Default shall have been cured or
waived.
Debt to Capitalization Ratio means, as of any day, the ratio of (a)
Borrowed Money Indebtedness (exclusive of the categories of Borrowed Money
Indebtedness, other than obligations
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in respect of bankers' acceptances, described in clauses (vii), (viii) and (ix)
of the definition of "Borrowed Money Indebtedness" set forth in this Section
1.1) for Parent and its Subsidiaries (on a consolidated basis) as of such date
to (b) Total Capitalization as of such date.
Default means an Event of Default or an event which with notice or lapse
of time or both would, unless cured or waived, become an Event of Default.
Dollars, US$ and $ means lawful money of the United States of America.
Dual Lender means any Lender which has both a U.S. Commitment and a
Canadian Commitment.
EBITDA means, without duplication, for any period the consolidated net
earnings (excluding any extraordinary gains or losses) plus, to the extent
deducted in calculating such consolidated net earnings, depreciation,
amortization, other non-cash items, Interest Expense, and federal, state and
provincial income tax expense and minus, to the extent added in calculating
such consolidated net earnings, any non-cash items, in each case, for Parent
and its Subsidiaries (on a consolidated basis).
Environmental Claim means any third party (including Governmental
Authorities and employees) action, lawsuit, claim or proceeding (including
claims or proceedings at common law or under the Occupational Safety and Health
Act or similar laws relating to safety of employees) which seeks to impose
liability for (i) noise; (ii) pollution, contamination, protection or clean-up
of the air, surface water, ground water or land; (iii) solid, gaseous or liquid
waste generation, handling, treatment, storage, disposal or transportation;
(iv) exposure to Hazardous Substances; (v) the safety or health of employees or
(vi) the manufacture, processing, distribution in commerce, use, discharge or
storage of Hazardous Substances. An "Environmental Claim" includes, but is not
limited to, a common law action, as well as a proceeding to issue, modify or
terminate an Environmental Permit to the extent that such a proceeding attempts
to redress violations of an applicable permit, license, or regulation as
alleged by any Governmental Authority.
Environmental Liabilities includes all liabilities arising from any
Environmental Claim, Environmental Permit or Requirements of Environmental Law
under any theory of recovery, at law or in equity, and whether based on
negligence, strict liability or otherwise, including but not limited to
remedial, removal, response, abatement, investigative, monitoring, personal
injury and damage to Property or injuries to persons, and any other related
costs, expenses, losses, damages, penalties, fines, liabilities and
obligations, and all costs and expenses necessary to cause the issuance,
reissuance or renewal of any Environmental Permit including reasonable
attorneys' fees and court costs.
Environmental Permit means any permit, license, approval or other
authorization under any applicable Legal Requirement relating to pollution or
protection of health or the environment, including laws, regulations or other
requirements relating to emissions, discharges, releases or threatened releases
of pollutants, contaminants or hazardous substances or toxic materials or
wastes
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into ambient air, surface water, ground water or land, or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of pollutants, contaminants or Hazardous Substances.
ERISA means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and all rules, regulations, rulings and
interpretations adopted by the Internal Revenue Service or the U.S. Department
of Labor thereunder and, as the context may require, Applicable Canadian
Pension Legislation.
Eurodollar Rate means for any day during an Interest Period for a LIBOR
Borrowing a rate per annum equal to the lesser of (a) the sum of (1) the
Adjusted LIBOR in effect on the first day of such Interest Period plus (2) the
applicable Margin Percentage from time to time in effect and (b) the Ceiling
Rate. Each Eurodollar Rate is subject to adjustments for reserves, insurance
assessments and other matters as provided for in Section 3.3 hereof.
Eurodollar Reserve Requirement means, on any day, that percentage
(expressed as a decimal fraction and rounded, if necessary, to the next highest
one ten thousandth [.0001]) which is in effect on such day for determining all
reserve requirements (including, without limitation, basic, supplemental,
marginal and emergency reserves) applicable to "Eurocurrency liabilities," as
currently defined in Regulation D. Each determination of the Eurodollar
Reserve Requirement by any Agent shall be conclusive and binding, absent
manifest error, and may be computed using any reasonable averaging and
attribution method.
Event of Default shall have the meaning assigned to it in Section 9
hereof.
Exchange Rate means, on any day, (a) with respect to Canadian Dollars in
relation to Dollars, the spot rate as quoted by the Bank of Canada as its noon
spot rate at which Dollars are offered on such day for Canadian Dollars, and
(b) with respect to Dollars in relation to Canadian Dollars, the spot rate as
quoted by the Bank of Canada as its noon spot rate at which Canadian Dollars
are offered on such day for Dollars.
Exchangeable Shares means the "Exchangeable Shares" of Dreco Energy
Services Ltd. issued pursuant to that certain Combination Agreement dated as of
May 14, 1997 executed by and between National-Oilwell, Inc. and Dreco Energy
Services Ltd.
Federal Funds Rate means, for any day, a fluctuating interest rate per
annum equal for such day to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any such day which is a
Business Day, the average of the quotations for such day on such transactions
received by U.S. Agent from three Federal funds brokers of recognized standing
selected by U.S. Agent in its sole and absolute discretion.
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Financing Statements means all such Uniform Commercial Code or Canadian
provincial personal Property security financing statements as any Agent shall
reasonably require, in Proper Form, duly executed by U.S. Borrower (or any
other applicable Obligor) to give notice of and to perfect or continue
perfection of Agents' Liens in any applicable Collateral, as any of the
foregoing may from time to time be amended, modified, supplemented or restated.
Foreign Subsidiaries means Subsidiaries which are organized under the
laws of a jurisdiction other than the United States of America, any State of
the United States or any political subdivision thereof.
Funding Loss means, with respect to (a) any Borrower's payment of
principal of a LIBOR Borrowing on a day other than the last day of the
applicable Interest Period; (b) any Borrower's failure to borrow a LIBOR
Borrowing or to borrow funds by way of Bankers' Acceptances on the date
specified by such Borrower; (c) any Borrower's failure to make any prepayment
of the Loans (other than Base Rate Borrowings and Canadian Prime Loans) on the
date specified by such Borrower, or (d) any cessation of a Eurodollar Rate to
apply to the Loans or any part thereof pursuant to Section 3.3, in each case
whether voluntary or involuntary, any loss, expense, penalty, premium or
liability actually incurred by any Lender (including but not limited to any
loss or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by any Lender to fund or maintain a Loan).
GAAP means, as to a particular Person, such United States accounting
practice as, in the opinion of independent certified public accountants of
recognized national standing regularly retained by such Person, conforms at the
time to generally accepted accounting principles, consistently applied for all
periods after the Effective Date so as to present fairly the financial
condition, and results of operations and cash flows, of such Person. If any
change in any accounting principle or practice is required by the Financial
Accounting Standards Board, all reports and financial statements required
hereunder may be prepared in accordance with such change so long as the
applicable Person provides to Agents such disclosures of the impact of such
change as any Agent may reasonably require. No such change in any accounting
principle or practice shall, in itself, cause a Default or Event of Default
hereunder (but Borrowers, Agents and Lenders shall negotiate in good faith to
replace any financial covenants hereunder to the extent such financial
covenants are affected by such change in accounting principle or practice).
Governmental Authority means any governmental authority of the United
States of America, Canada, any State of the United States, any Province of
Canada, or of any other foreign jurisdiction and any political subdivision of
any of the foregoing, and any central bank, agency, department, commission,
board, bureau, court or other tribunal having or asserting jurisdiction over
any Agent, any Lender, any Obligor or their respective Property.
Guaranties means, collectively, (i) the Guaranties dated concurrently
herewith executed by Parent and each of the current Material Subsidiaries
(other than Foreign Subsidiaries) in favor of U.S. Agent, for the benefit of
U.S. Lenders, (ii) the Guaranties dated concurrently herewith executed
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by U.S. Borrower, Parent and each of the current Material Subsidiaries (other
than Foreign Subsidiaries) in favor of Canadian Agent, for the benefit of
Canadian Lenders and (iii) any and all other guaranties hereafter executed in
favor of any Agent, for the benefit of U.S. Lenders or Canadian Lenders,
relating to the Obligations, as any of them may from time to time be amended,
modified, restated or supplemented.
Hazardous Substance means petroleum products, and any hazardous or toxic
waste or substance defined or regulated as such from time to time by any law,
rule, regulation or order described in the definition of "Requirements of
Environmental Law".
Interest Coverage Ratio means, as of any day, the ratio of (a) EBITDA
for the 12 months ending on the last day of the immediately preceding calendar
month less Capital Expenditures by Parent and its Subsidiaries (on a
consolidated basis) during such period to (b) cash Interest Expense for such
period.
Interest Expense means, for any period, total interest expense
(including interest expense attributable to capitalized leases and net costs
under interest rate swap, collar, cap or similar agreements providing interest
rate protection), determined on a consolidated basis in accordance with GAAP.
Interest Options means the Base Rate, each Eurodollar Rate and, as to
the Canadian Dollar Notes only, the Canadian Prime Rate, and "Interest Option"
means any of them.
Interest Payment Dates means (a) for Base Rate Borrowings and for
Canadian Prime Loans, December 31, 1997 and the last day of each March, June,
September and December thereafter prior to the Maturity Date, and the Maturity
Date; and (b) for LIBOR Borrowings, the end of the applicable Interest Period
(and if such Interest Period exceeds three months' duration, quarterly,
commencing on the first quarterly anniversary of the first day of such Interest
Period) and the Maturity Date.
Interest Period means, for each LIBOR Borrowing, a period commencing on
the date such LIBOR Borrowing began and ending on the numerically corresponding
day which is, subject to availability as set forth in Section 3.3(c)(iii), 1,
2, 3 or 6 months thereafter, as any Borrower shall elect in accordance
herewith; provided, (1) unless Agents shall otherwise consent, no Interest
Period with respect to a LIBOR Borrowing shall commence on a date earlier than
three (3) Business Days after this Agreement shall have been fully executed;
(2) any Interest Period with respect to a LIBOR Borrowing which would otherwise
end on a day which is not a LIBOR Business Day shall be extended to the next
succeeding LIBOR Business Day, unless such LIBOR Business Day falls in another
calendar month, in which case such Interest Period shall end on the next
preceding LIBOR Business Day; (3) any Interest Period with respect to a LIBOR
Borrowing which begins on the last LIBOR Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last LIBOR Business
Day of the appropriate calendar month; (4) no Interest Period for a Loan shall
ever
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extend beyond the Maturity Date, and (5) Interest Periods shall be selected by
each Borrower in such a manner that the Interest Period with respect to any
portion of the Loans which shall become due shall not extend beyond such due
date.
Interest Rate Risk Agreement means an interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or similar
arrangement entered into by U.S. Borrower for the purpose of reducing U.S.
Borrower's exposure to interest rate fluctuations and not for speculative
purposes, approved in writing by U.S. Agent (such approval not to be
unreasonably withheld), as it may from time to time be amended, modified,
restated or supplemented.
Interest Rate Risk Indebtedness means all obligations and Indebtedness
of U.S. Borrower with respect to the program for the hedging of interest rate
risk provided for in any Interest Rate Risk Agreement.
Investment means the purchase or other acquisition of any securities or
indebtedness of, or the making of any loan, advance, transfer of Property
(other than transfers in the ordinary course of business) or capital
contribution to, or the incurring of any liability (other than trade accounts
payable arising in the ordinary course of business), contingently or otherwise,
in respect of the indebtedness of, any Person.
Issuer means the issuer (or, where applicable, each issuer) of a Letter
of Credit under this Agreement.
Key Agreements means all contracts, permits, licenses and other rights
acquired by any Obligor or to which any Obligor is a party or by which any
Obligor is bound and from time to time material to the ownership of assets or
the operations of any Obligor. The term "Key Agreements" includes any document
or paper evidencing, securing or otherwise relating to any Subordinated
Indebtedness and also includes all collective bargaining agreements.
Legal Requirement means any law, statute, ordinance, decree,
requirement, order, judgment, rule, or regulation (or interpretation of any of
the foregoing) of, and the terms of any license or permit issued by, any
Governmental Authority, whether presently existing or arising in the future.
Letter of Credit Liabilities means, at any time and in respect of any
Letter of Credit, the sum of (i) the amount available for drawings under such
Letter of Credit plus (ii) the aggregate unpaid amount of all Reimbursement
Obligations at the time due and payable in respect of previous drawings made
under such Letter of Credit. For the purpose of determining at any time the
amount described in clause (i), in the case of any Letter of Credit payable in
a currency other than Dollars or Canadian Dollars, such amount shall be
converted by Agent to Dollars by any reasonable method, and such converted
amount shall be conclusive and binding, absent manifest error.
Letters of Credit means the U.S. Letters of Credit and the Canadian
Letters of Credit.
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LIBOR means, for each Interest Period for any LIBOR Borrowing, the rate
per annum (rounded upwards, if necessary, to the nearest 1/16th of 1%) equal to
the average of the offered quotations appearing on Telerate Page 3750 (or if
such Telerate Page shall not be available, any successor or similar service as
may be selected by Agents and Borrowers) as of 11:00 a.m., Houston, Texas time
(in respect of a LIBOR Borrowing relating to the U.S. Loans) or 12:00 noon,
Toronto, Ontario time (in respect of a LIBOR Borrowing relating to the Canadian
Loans) (or, in either case, as soon thereafter as practicable) on the day two
LIBOR Business Days prior to the first day of such Interest Period for deposits
in Dollars having a term comparable to such Interest Period and in an amount
comparable to the principal amount of the LIBOR Borrowing to which such
Interest Period relates. If none of such Telerate Page 3750 nor any successor
or similar service is available, then "LIBOR" shall mean, with respect to any
Interest Period for any applicable LIBOR Borrowing, the rate of interest per
annum, rounded upwards, if necessary, to the nearest 1/16th of 1%, quoted by
U.S. Agent at or before 11:00 a.m., Houston, Texas time (in respect of a LIBOR
Borrowing relating to the U.S. Loans) or 12:00 noon, Toronto, Ontario time (in
respect of a LIBOR Borrowing relating to the Canadian Loans) (or, in either
case, as soon thereafter as practicable), on the date two LIBOR Business Days
before the first day of such Interest Period, to be the arithmetic average of
the prevailing rates per annum at the time of determination and in accordance
with the then existing practice in the applicable market, for the offering to
U.S. Agent or Canadian Agent, as the case may be, by one or more prime banks
selected by such Agent in its sole discretion, in the London interbank market,
of deposits in Dollars for delivery on the first day of such Interest Period
and having a maturity equal (or as nearly equal as may be) to the length of
such Interest Period and in an amount equal (or as nearly equal as may be) to
the LIBOR Borrowing to which such Interest Period relates. Each determination
by any Agent of LIBOR shall be conclusive and binding, absent manifest error,
and may be computed using any reasonable averaging and attribution method.
LIBOR Borrowing means each portion of the principal balance of the Loans
at any time bearing interest at a Eurodollar Rate.
LIBOR Business Day means a Business Day on which transactions in Dollar
deposits between lenders may be carried on in the London interbank market.
Lien means any mortgage, pledge, charge, encumbrance, security interest,
collateral assignment or other lien or restriction of any kind, whether based
on common law, constitutional provision, statute or contract, and whether or
not consensual, and shall include reservations, exceptions, encroachments,
easements, rights of way, covenants, conditions, restrictions and other title
exceptions.
Loans means the loans provided for by Section 2.1(a) and (b) hereof.
Loan Documents means, collectively, this Agreement, the Notes, the
Bankers' Acceptances, the Bankers' Acceptance Notices, the Guaranties, the
Contribution Agreements, all Applications, the Security Documents, the Notice
of Entire Agreement, all instruments, certificates and agreements now or
hereafter executed or delivered by any Obligor to any Agent or any Lender
pursuant to any
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of the foregoing or in connection with the Obligations or any commitment
regarding the Obligations, and all amendments, modifications, renewals,
extensions, increases and rearrangements of, and substitutions for, any of the
foregoing.
Majority Lenders means, at any time while the Commitments are
outstanding, Lenders having greater than 66-2/3% of the aggregate amount of
Commitments, and at any other time, Lenders having greater than 66-2/3% of the
aggregate amount of Obligations outstanding.
Margin Percentage means (i) on any day prior to October 1, 1997, 0.0%
per annum with respect to Base Rate Borrowings and Canadian Prime Loans and
0.50% per annum with respect to LIBOR Borrowings and (ii) on and after October
1, 1997, the applicable per annum percentage set forth at the appropriate
intersection in the table shown below, based on the Debt to Capitalization
Ratio as of the last day of the then most recently ended fiscal quarter of
Parent calculated by U.S. Agent as soon as practicable after receipt by U.S.
Agent of all financial reports required under this Agreement with respect to
such fiscal quarter (including a Compliance Certificate) (provided, however,
that if the Margin Percentage is increased as a result of the reported Debt to
Capitalization Ratio, such increase shall be retroactive to the date that U.S.
Borrower was obligated to deliver such financial reports to U.S. Agent pursuant
to the terms of this Agreement and provided further, however, that if the
Margin Percentage is decreased as a result of the reported Debt to
Capitalization Ratio, and such financial reports are delivered to U.S. Agent
not more than ten (10) calendar days after the date required to be delivered
pursuant to the terms of this Agreement, such decrease shall be retroactive to
the date that U.S. Borrower was obligated to deliver such financial reports to
U.S. Agent pursuant to the terms of this Agreement):
Canadian Prime Loans/
Debt to LIBOR Borrowings Base Rate Borrowings
Capitalization Ratio Margin Percentage Margin Percentage
-------------------- ----------------- -----------------
Greater than 30% 0.625 0.0
Greater than 20% but
less than or equal to 30% 0.50 0.0
Less than or equal to 20% 0.375 0.0
Material Adverse Effect means a material adverse effect on the
properties, business, operations, assets or condition (financial or otherwise)
of Parent and the other Obligors, taken as a whole, or on the ability of the
Obligors, taken as a whole, to perform their obligations under the Loan
Documents.
Material Subsidiary means (i) any Subsidiary of Parent which owns assets
the value of which comprises five percent (5%) or more of the book value of all
of the assets of Parent and its Subsidiaries (on a consolidated basis) or
having gross revenues for the immediately preceding fiscal
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year which comprises five percent (5%) or more of the gross revenues of Parent
and its Subsidiaries for such fiscal year (on a consolidated basis) and (ii)
any other Subsidiary of Parent (other than a Foreign Subsidiary) which any
Borrower from time to time designates as a "Material Subsidiary" by written
notice to Agents.
Maturity Date means the maturity of the Notes and the other Obligations,
September 30, 2002.
Maximum Canadian Available Amount means $25,000,000. In connection with
the application of any provision hereof using the term "Maximum Canadian
Available Amount", any amounts denominated in Canadian Dollars shall be
converted to Dollars using the then current Exchange Rate. The Maximum
Canadian Available Amount is subject to change pursuant to Section 2.4(c)
hereof.
Maximum U.S. Available Amount means $100,000,000. The Maximum U.S.
Available Amount is subject to change pursuant to Section 2.4(c) hereof.
Notes shall have the meaning assigned to such term in Section 2.7
hereof.
Notice of Entire Agreement means a notice of entire agreement, in Proper
Form, executed by Borrowers, each other Obligor and Agents, as the same may
from time to time be amended, modified, supplemented or restated.
Obligations means, as at any date of determination thereof, the sum of
the following: (i) the aggregate principal amount of Loans outstanding
hereunder on such date, plus (ii) the aggregate amount of the outstanding
Letter of Credit Liabilities on such date, plus (iii) the aggregate amount of
outstanding Bankers' Acceptance Liabilities on such date, plus (iv) all other
outstanding liabilities, obligations and indebtedness of any Obligor under any
Loan Document on such date.
Obligors means each Borrower, Parent and each Material Subsidiary.
Organizational Documents means, with respect to a United States
corporation, the certificate of incorporation, articles of incorporation and
bylaws of such corporation; with respect to a partnership, the partnership
agreement establishing such partnership; with respect to a trust, the
instrument establishing such trust and with respect to any other Person, the
agreements or instruments pursuant to which such Person was formed and by which
such Person is governed; in each case including any and all modifications
thereof as of the date of the Loan Document referring to such Organizational
Document and any and all future modifications thereof.
Parent means National-Oilwell, Inc., a Delaware corporation.
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Past Due Rate means, on any day, a rate per annum equal to the lesser of
(i) the Ceiling Rate for that day or (ii) the applicable Base Rate or Canadian
Prime Rate, as the case may be, plus two percent (2%).
PBGC means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA and any pension
commission or similar body constituted under any Applicable Canadian Pension
Legislation.
Permitted Dividends means (i) dividends or distributions by a
Subsidiary of a Borrower to such Borrower or redemption by a Subsidiary of any
of its stock held by any Borrower and (ii) so long as no Default or Event of
Default shall have occurred and be continuing (or would result therefrom), any
other dividends or distributions.
Permitted Investments means: (a) readily marketable securities issued
or fully guaranteed by the full faith and credit of the United States of
America or of Canada with maturities of not more than one year; (b) commercial
paper rated "Prime 2" by Xxxxx'x Investors Service, Inc. or "A-2" by Standard
and Poor's Ratings Services or the equivalent thereof by Dominion Bond Rating
Service Limited with maturities of not more than 180 days; (c) certificates of
deposit or repurchase obligations issued by any U.S. or Canadian domestic bank
having capital surplus of at least $100,000,000 or by any other financial
institution acceptable to Agents, all of the foregoing not having a maturity of
more than one year from the date of issuance thereof; (d) money market funds
the assets of which consist primarily of investments included in clauses (a),
(b) and (c) above; (e) loans made to Parent or U.S. Borrower or any Material
Subsidiary which has executed Guaranties in favor of the Agents and loans made
by a Person comprising the "Canadian Borrower" to another Person comprising the
"Canadian Borrower"; (f) loans not exceeding $20,000,000 in the aggregate at
any one time outstanding to Canadian Borrower (exclusive of loans permitted
under clause (e) above); (g) loans (exclusive of loans permitted under clause
(e) above or clause (h) below) not exceeding $10,000,000 in the aggregate at
any one time outstanding to any Material Subsidiary the equity interests in
which have been pledged to the Agents pursuant to the Security Agreements, or
(h) loans (exclusive of loans permitted under clauses (e), (f) or (g) above)
made to Subsidiaries so long as the aggregate unpaid principal balance of all
such loans does not exceed $3,000,000 at any time outstanding (the loans
described in clauses (e), (f), (g) and (h) above shall be subject to the last
sentence of Section 8.1 hereof).
Permitted Liens means each of the following: (a) artisans' or mechanics'
Liens arising in the ordinary course of business, and Liens for taxes, but only
to the extent that payment thereof shall not at the time be due or if due, the
payment thereof is being diligently contested in good faith and adequate
reserves computed in accordance with GAAP have been set aside therefor; (b)
Liens in effect on the Effective Date and disclosed to the Lenders in the
financial statements delivered on or prior to the Effective Date pursuant to
Section 6.2 hereof or in a schedule hereto, provided that neither the Borrowed
Money Indebtedness secured thereby nor the Property covered thereby shall
increase after the Effective Date without the prior written consent of the
Majority Lenders; (c) normal encumbrances and restrictions on title which do
not secure Borrowed Money Indebtedness and which do not have a material adverse
effect on the value or utility of the applicable Property;
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(d) Liens under the Loan Documents including, without limitation, Liens
securing Interest Rate Risk Indebtedness owed to one or more of the U.S.
Lenders (but not to any Person which is not, at such time, a U.S. Lender); (e)
Liens incurred or deposits made in the ordinary course of business (1) in
connection with workmen's compensation, unemployment insurance, social security
and other like laws, or (2) to secure insurance in the ordinary course of
business, the performance of bids, tenders, contracts, leases, licenses,
statutory obligations, surety, appeal and performance bonds and other similar
obligations incurred in the ordinary course of business, not, in any of the
cases specified in this clause (2), incurred in connection with the borrowing
of money, the obtaining of advances or the payment of the deferred purchase
price of Property; (f) attachments, judgments and other similar Liens arising
in connection with court proceedings, provided that the execution and
enforcement of such Liens are effectively stayed and the claims secured thereby
are being actively contested in good faith with adequate reserves made therefor
in accordance with GAAP; (g) Liens imposed by law, such as carriers',
warehousemen's, mechanics', materialmen's and vendors' Liens, incurred in good
faith in the ordinary course of business and securing obligations which are not
yet due or which are being contested in good faith by appropriate proceedings
if adequate reserves with respect thereto are maintained in accordance with
GAAP; (h) zoning restrictions, easements, licenses, reservations, provisions,
covenants, conditions, waivers, and restrictions on the use of Property, and
which do not in any case singly or in the aggregate materially impair the
present use or value of the Property subject to any such restriction or
materially interfere with the ordinary conduct of the business of any Obligor;
(i) Liens securing purchase money Borrowed Money Indebtedness permitted under
Section 8.1 hereof and covering the Property so purchased; (j) capital leases
and sale/leaseback transactions permitted under the other provisions of this
Agreement, and (k) extensions, renewals and replacements of Liens referred to
in clauses (a) through (j) of this definition; provided that any such
extension, renewal or replacement Lien shall be limited to the Property or
assets covered by the Lien extended, renewed or replaced and that the Borrowed
Money Indebtedness secured by any such extension, renewal or replacement Lien
shall be in an amount not greater than the amount of the Borrowed Money
Indebtedness secured by the Lien extended, renewed or replaced.
Person means any individual, Corporation, trust, unincorporated
organization, Governmental Authority or any other form of entity.
Plan means an employee pension benefit plan which is covered by Title IV
of ERISA or subject to the minimum funding standards under Section 412 of the
Code or any Applicable Canadian Pension Legislation and is either (a)
maintained by any Borrower or any member of the Controlled Group for employees
of any Borrower or any member of the Controlled Group or (b) maintained
pursuant to a collective bargaining agreement or any other arrangement under
which more than one employer makes contributions and to which any Borrower or
any member of the Controlled Group is then making or accruing an obligation to
make contributions or has within the preceding five plan years made
contributions.
Prime Rate means, on any day, (a) as to Loans made to U.S. Borrower, the
prime rate for that day as determined from time to time by TCB and (b) as to
Loans denominated in Dollars made to Canadian Borrower, the base rate for that
day for Loans denominated in Dollars quoted by Xxxxx
00
00
Xxxxxx. The Prime Rate is, in each case, a reference rate and does not
necessarily represent the lowest or best rate or a favored rate, and TCB, Chase
Canada, each Agent and each Lender disclaims any statement, representation or
warranty to the contrary. TCB, Chase Canada, any Agent or any Lender may make
commercial loans or other loans at rates of interest at, above or below the
Prime Rate.
Principal Office means (a) as to Obligations of U.S. Borrower, the
principal office of U.S. Agent, presently located at 000 Xxxx Xxxxxx, Xxxxxxx,
Xxxxxx Xxxxxx, Xxxxx 00000 and (b) as to Obligations of Canadian Borrower, the
principal office of Canadian Agent, presently located at First Canadian Place,
000 Xxxx Xxxxxx Xxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxx X0X 0X0.
Proper Form means in form and substance reasonably satisfactory to
Agents.
Property means any interest in any kind of property or assets, whether
real, personal or mixed, tangible or intangible.
Quarterly Dates means the last day of each March, June, September and
December, provided that if any such date is not a Business Day, then the
relevant Quarterly Date shall be the next succeeding Business Day.
Quarterly Financial Statements means the quarterly financial statements
of a Person, which statements shall include a balance sheet as of the end of
the applicable fiscal quarter and an income statement and a statement of cash
flows for such fiscal quarter and for the fiscal year to date, subject to
normal year-end adjustments, all setting forth in comparative form the
corresponding figures as of the end of and for the corresponding fiscal quarter
of the preceding year, prepared in accordance with GAAP in all material
respects except that such statements are condensed and exclude detailed
footnote disclosures and certified by the chief financial officer or other
authorized officer of such Person as fairly presenting, in all material
respects, the financial condition of such person as of such date. Quarterly
Financial Statements shall also include unaudited consolidating financial
statements for the applicable Person, in Proper Form, certified by the chief
financial officer or other authorized officer of such Person as true, correct
and complete in all material respects.
Rate Designation Date means that Business Day which is (a) in the case
of Base Rate Borrowings by the U.S. Borrower, 11:00 a.m., Houston, Texas time,
and, in the case of Base Rate Borrowings by the Canadian Borrower, 12:00 noon,
Toronto, Ontario time, in each case on the date of such borrowing and (b) in
the case of LIBOR Borrowings by the U.S. Borrower, 11:00 a.m., Houston, Texas
time, and, in the case of LIBOR Borrowings by the Canadian Borrower, 12:00
noon, Toronto, Ontario time, in each case, on the date three LIBOR Business
Days preceding the first day of any proposed Interest Period.
Rate Designation Notice means a written notice substantially in the form
of Exhibit B.
Refunding Bankers' Acceptance has the meaning specified in Section 2.3.
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Regulation D means Regulation D of the Board of Governors of the Federal
Reserve System from time to time in effect and includes any successor or other
regulation relating to reserve requirements applicable to member banks of the
Federal Reserve System.
Regulatory Change means with respect to any Lender, any change on or
after the date of this Agreement in any Legal Requirement (including, without
limitation, Regulation D) or the adoption or making on or after such date of
any interpretation, directive or request applying to a class of lenders
including such Lender under any Legal Requirements (whether or not having the
force of law) by any Governmental Authority.
Reimbursement Obligations means, as at any date, (i) the obligations of
any Borrower then outstanding in respect of Letters of Credit under this
Agreement, to reimburse the applicable Issuers for the amount paid by such
Issuers in respect of any drawing under such Letters of Credit and (ii) the
obligations of the Canadian Borrower then outstanding in respect of any
Bankers' Acceptance paid by any Canadian Lender on maturity thereof. Except
for Canadian Letters of Credit denominated in Canadian Dollars, Reimbursement
Obligations in respect of any Letter of Credit shall at all times be payable in
Dollars notwithstanding any such Letter of Credit being payable in a currency
other than Dollars
Request for Extension of Credit means a request for extension of credit
duly executed by the chief executive officer, chief financial officer or
treasurer of U.S. Borrower or Canadian Borrower, as the case may be, or any
other Person duly authorized by one of such officers, appropriately completed
and substantially in the form of Exhibit A-1 (U.S. Borrower) or Exhibit A-2
(Canadian Borrower) attached hereto, as the case may be.
Requirements of Environmental Law means all requirements imposed by any
law (including for example and without limitation The Resource Conservation and
Recovery Act and The Comprehensive Environmental Response, Compensation, and
Liability Act), rule, regulation, or order of any federal, state or local
executive, legislative, judicial, regulatory or administrative agency, board or
authority in effect at the applicable time which relate to (i) noise; (ii)
pollution, contamination, protection or clean-up of the air, surface water,
ground water or land; (iii) solid, gaseous or liquid waste generation,
handling, treatment, storage, disposal or transportation; (iv) exposure to
Hazardous Substances; (v) the safety or health of employees or (vi) the
manufacture, processing, distribution in commerce, use, discharge or storage of
Hazardous Substances.
Reset Date has the meaning specified in Section 2.9(a).
Secretary's Certificate means a certificate, in Proper Form, of the
Secretary or an Assistant Secretary of a corporation as to (a) the resolutions
of the Board of Directors of such corporation authorizing the execution,
delivery and performance of the documents to be executed by such corporation;
(b) the incumbency and signature of the officer of such corporation executing
such documents on behalf of such corporation, and (c) the Organizational
Documents of such corporation.
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Security Agreements means (i) security agreements, each in Proper Form,
executed or to be executed in favor of U.S. Agent, securing the U.S.
Obligations, covering all of the issued and outstanding equity interests in
any Material Subsidiary (other than Foreign Subsidiaries and other than
Subsidiaries which are wholly-owned direct Subsidiaries of Foreign
Subsidiaries) and 65% of the issued and outstanding equity interests (exclusive
of the Exchangeable Shares) in any Material Subsidiary which is a Foreign
Subsidiary of Parent (other than Foreign Subsidiaries which are direct
Subsidiaries of other Foreign Subsidiaries) and (ii) security agreements, each
in Proper Form, executed in favor of Canadian Agent, securing the Canadian
Obligations, covering the remaining 35% of the issued and outstanding equity
interests (exclusive of the Exchangeable Shares) in any Material Subsidiary
which is a Foreign Subsidiary of Parent (other than Foreign Subsidiaries which
are direct Subsidiaries of other Foreign Subsidiaries), as the same may from
time to time be amended, modified, restated or supplemented.
Security Documents means, collectively, the Security Agreements and any
and all other security documents now or hereafter executed and delivered by any
Obligor to secure all or any part of the Obligations, as any of them may from
time to time be amended, modified, restated or supplemented.
Stated Rate means the effective weighted per annum rate of interest
applicable to the Obligations; provided, that if on any day such rate shall
exceed the Ceiling Rate for that day, the Stated Rate shall be fixed at the
Ceiling Rate on that day and on each day thereafter until the total amount of
interest accrued at the Stated Rate on the unpaid principal balances of the
Notes and the other Obligations plus the Additional Interest equals the total
amount of interest which would have accrued if there had been no Ceiling Rate.
If the Obligations mature (or are prepaid) before such equality is achieved,
then, in addition to the unpaid principal and accrued interest then owing
pursuant to the other provisions of the Loan Documents, the applicable Borrower
promises to pay on demand to the order of the holder of the applicable
Obligations interest in an amount equal to the excess (if any) of (a) the
lesser of (i) the total interest which would have accrued on such Obligations
if the Stated Rate had been defined as equal to the Ceiling Rate from time to
time in effect and (ii) the total interest which would have accrued on such
Obligations if the Stated Rate were not so prohibited from exceeding the
Ceiling Rate, over (b) the total interest actually accrued on such Obligations
to such maturity (or prepayment) date. Without notice to any Borrower or any
other Person, the Stated Rate shall automatically fluctuate upward and downward
in accordance with the provisions of this definition.
Subordinated Indebtedness means all Borrowed Money Indebtedness of a
Person which has been subordinated on terms and conditions satisfactory to the
Majority Lenders, in their sole discretion, to all Borrowed Money Indebtedness
of such Person to Lenders, whether now existing or hereafter incurred.
Borrowed Money Indebtedness shall not be considered as "Subordinated
Indebtedness" unless and until Agents shall have received copies of the
documentation evidencing or relating to such Borrowed Money Indebtedness
together with a subordination agreement, in Proper Form, duly executed by the
holder or holders of such Borrowed Money Indebtedness and evidencing the terms
and conditions of subordination required by the Majority Lenders. The Lenders
and the
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Agents acknowledge that the subordination provisions relating to the the
Subordinated Indebtedness described on Exhibit J hereto which is owed to
Oilwell, Inc. and National Supply Company, Inc. does not require prior approval
by any Agent or any Lender.
Subsidiary means, as to a particular parent Corporation, any Corporation
of which more than 50% of the indicia of equity rights (whether outstanding
capital stock or otherwise) is at the time directly or indirectly owned by,
such parent Corporation.
Tangible Net Worth means, without duplication, the sum of (i) capital
stock, (ii) preferred stock, (iii) paid-in capital and (iv) retained earnings
minus the sum of any amount shown on account of any (a) patents, patent
applications, trademarks, service marks, copyrights and trade names and (b)
goodwill and other intangibles, in each case for Parent and its Subsidiaries
(on a consolidated basis) and determined in accordance with GAAP.
Taxes shall have the meaning ascribed to it in Section 4.1(d).
Termination Date means the earlier of (a) the Maturity Date or (b) the
date specified by either Agent in accordance with Section 9.1 hereof.
Texas Credit Code means Title 79, Texas Revised Civil Statutes, 1925, as
amended.
Total Canadian Exposure means, at any time and without duplication, the
sum of the aggregate principal amounts of the then outstanding Canadian Loans,
then outstanding Bankers' Acceptance Liabilities and then outstanding Letter of
Credit Liabilities in respect of Canadian Letters of Credit, in each case
expressed in Dollars using, where applicable, the then current Exchange Rate.
Total Capitalization means the sum of, without duplication, (i) Borrowed
Money Indebtedness (exclusive of the categories of Borrowed Money
Indebtedness, other than obligations in respect of bankers' acceptances,
described in clauses (vii), (viii) and (ix) of the definition of "Borrowed
Money Indebtedness" set forth in this Section 1.1) of Parent and its
Subsidiaries, on a consolidated basis and (ii) preferred stock and the
consolidated stockholders' equity (including paid-in capital and retained
earnings) of Parent and its Subsidiaries, on a consolidated basis, determined
in accordance with GAAP.
Unfunded Liabilities means, with respect to any Plan, at any time, the
amount (if any) by which (a) the present value of all benefits under such Plan
exceeds (b) the fair market value of all Plan assets allocable to such
benefits, all determined as of the then most recent actuarial valuation report
for such Plan, but only to the extent that such excess represents a potential
liability of any member of the Controlled Group to the PBGC or a Plan under
Title IV of ERISA or under Applicable Canadian Pension Legislation. With
respect to multi-employer Plans, the term "Unfunded Liabilities" shall also
include contingent liability for withdrawal liability under Section 4201 of
ERISA or under Applicable Canadian Pension Legislation to all multi-employer
Plans to
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which any Borrower or any member of a Controlled Group for employees of any
Borrower contributes in the event of complete withdrawal from such plans.
U.S. Commitment means, as to any U.S. Lender, the obligation, if any, of
such U.S. Lender to make U.S. Loans and incur or participate in Letter of
Credit Liabilities relating to U.S. Letters of Credit in an aggregate principal
amount at any one time outstanding up to (but not exceeding) the amount, if
any, set forth opposite such U.S. Lender's name on the signature pages hereof
under the caption "U.S. Commitment", or otherwise provided for in an Assignment
and Acceptance Agreement (as the same may be increased or reduced from time to
time pursuant to Section 2.4 hereof).
U.S. Lender means each lender signatory hereto with (i) prior to the
Termination Date, a U.S. Commitment and (ii) on and after the Termination Date,
any outstanding U.S. Obligations.
U.S. Letter of Credit shall have the meaning assigned to such term in
Section 2.2 hereof.
U.S. Loan means a Loan made pursuant to Section 2.1(a) hereof.
U.S. Notes means the Notes of U.S. Borrower evidencing the U.S. Loans,
in the form of Exhibit D hereto.
U.S. Obligations means, as at any date of determination thereof, the sum
of the following (determined without duplication): (i) the aggregate principal
amount of U.S. Loans outstanding hereunder on such date plus (ii) the aggregate
amount of the Letter of Credit Liabilities outstanding on such date relating to
U.S. Letters of Credit.
1.2 Miscellaneous. The words "hereof," "herein," and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not any particular provision of this Agreement. The
term "annualized" as used herein shall mean the multiplication of the
applicable amount for any given period by a fraction, the numerator of which is
365 and the denominator of which is the number of days elapsed in such period.
2. Commitments; Loans; BA's and Letters of Credit.
2.1 Loans and BA's. Each Lender severally agrees, subject to all of
the terms and conditions of this Agreement (including, without limitation,
Sections 5.1 and 5.2 hereof), to make Loans and, in the case of Canadian
Lenders, to accept and purchase Bankers' Acceptances, as follows:
(a) U.S. Loans. From time to time on or after the Effective Date and
during the Availability Period, each U.S. Lender shall make loans under this
Section 2.1(a) to U.S. Borrower in an aggregate principal amount at any one
time outstanding (including its Commitment Percentage of all Letter of Credit
Liabilities relating to U.S. Letters of Credit at such time) up to but not
exceeding such U.S. Lender's Commitment Percentage of the Maximum U.S.
Available Amount.
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Subject to the conditions in this Agreement, any such U.S. Loan repaid prior to
the Termination Date may be reborrowed pursuant to the terms of this Agreement;
provided, that any and all such U.S. Loans shall be due and payable in full at
the end of the Availability Period. Loans made under this Section 2.1(a) shall
be made and denominated in Dollars. The aggregate of all U.S. Loans to be made
by the U.S. Lenders in connection with a particular borrowing shall be equal to
the lesser of (i) the unutilized portion of the U.S. Commitments or (ii)
$1,000,000 or any integral multiple of $100,000 in excess thereof.
(b) Canadian Loans. From time to time on or after the Effective Date
and during the Availability Period, each Canadian Lender shall make loans under
this Section 2.1(b) to Canadian Borrower in an aggregate principal amount at
any one time outstanding (including such Canadian Lender's Commitment
Percentage of all Bankers' Acceptance Liabilities and all Letter of Credit
Liabilities relating to Canadian Letters of Credit at such time) up to but not
exceeding such Canadian Lender's Commitment Percentage of the Maximum Canadian
Available Amount. Subject to the conditions in this Agreement, any such
Canadian Loan repaid prior to the Termination Date may be reborrowed pursuant
to the terms of this Agreement; provided, that any and all such Canadian Loans
shall be due and payable in full at the end of the Availability Period. Loans
made under this Section 2.1(b) may, at the option of Canadian Borrower, be made
and denominated either in Dollars or in Canadian Dollars (but all Loans to be
made under a particular borrowing must be made and denominated in the same
currency). The aggregate of all Canadian Loans to be made by the Canadian
Lenders in connection with a particular borrowing shall be equal to the lesser
of (i) the unutilized portion of the Canadian Commitments or (ii)$1,000,000 or
any integral multiple of $100,000 in excess thereof (if the Loans are
denominated in Dollars) or C$1,000,000 or any integral multiple of C$100,000 in
excess thereof (if the Loans are denominated in Canadian Dollars).
(c) Bankers' Acceptances. From time to time on or after the
Effective Date and during the Availability Period, each Canadian Lender shall
accept and purchase Bankers' Acceptances drawn on it under Section 2.3 hereof
by Canadian Borrower in an aggregate principal amount at any one time
outstanding (including such Canadian Lender's Commitment Percentage of all
Canadian Loans outstanding at such time and all Letter of Credit Liabilities
relating to Canadian Letters of Credit at such time) up to but not exceeding
such Canadian Lender's Commitment Percentage of the Maximum Canadian Available
Amount. No Bankers' Acceptance may be made or accepted on or after the
Termination Date and all outstanding Bankers' Acceptances shall mature no later
than the end of the Availability Period. Loans made by way of Bankers'
Acceptances shall be made and denominated in Canadian Dollars.
(d) Borrowers, Agents and the Lenders agree that Chapter 15 of the
Texas Credit Code shall not apply to this Agreement, the Notes or any other
Obligation.
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2.2 Letters of Credit.
(a) Letters of Credit. Subject to the terms and conditions of this
Agreement, and on the condition that aggregate Letter of Credit Liabilities
relating to U.S. Letters of Credit shall never exceed $25,000,000 and that
aggregate Letter of Credit Liabilities relating to Canadian Letters of Credit
shall never exceed $25,000,000, (i) U.S. Borrower shall have the right, in
addition to U.S. Loans provided for in Section 2.1(a) hereof, to utilize the
U.S. Commitments from time to time during the Availability Period by obtaining
the issuance of standby letters of credit for the account of U.S. Borrower if
U.S. Borrower shall so request in the notice referred to in Section 2.2(b)(i)
hereof (such standby letters of credit as any of them may be amended,
supplemented, extended or confirmed from time to time, being herein
collectively called the "U.S. Letters of Credit") and Canadian Borrower shall
have the right, in addition to Canadian Loans provided for in Section 2.1(b)
hereof and Bankers' Acceptances provided for in Section 2.1(c) hereof, to
utilize the Canadian Commitments from time to time during the Availability
Period by obtaining the issuance of standby letters of credit for the account
of Canadian Borrower if Canadian Borrower shall so request in the notice
referred to in Section 2.2(b)(i) hereof (such standby letters of credit as any
of them may be amended, supplemented, extended or confirmed from time to time,
being herein collectively called the "Canadian Letters of Credit") and (ii) TCB
agrees to issue U.S. Letters of Credit and The Bank of Nova Scotia agrees to
issue Canadian Letters of Credit. The Letters of Credit will, at the request
of the applicable Borrower, be issued in currencies other than those expressly
provided for in this Agreement so long as the applicable Agent is reasonably
satisfied that such currency is readily available in the required amounts and
that such currency selection is not otherwise disadvantageous to any Agent or
any Lender. Upon the date of the issuance of a Letter of Credit, the
applicable Issuer shall be deemed, without further action by any party hereto,
to have sold to each U.S. Lender or Canadian Lender, as the case may be, and
each such U.S. Lender or Canadian Lender, as the case may be, shall be deemed,
without further action by any party hereto, to have purchased from the
applicable Issuer, a participation, to the extent of such Lender's Commitment
Percentage, in such Letter of Credit and the related Letter of Credit
Liabilities, which participation shall terminate on the earlier of the
expiration date of such Letter of Credit or the Termination Date. Any Letter
of Credit that shall have an expiration date after the end of the Availability
Period shall be subject to Cover or backed by a standby letter of credit in
form and substance, and issued by a Person, acceptable to the applicable Agent
in its sole discretion. TCB or, with the prior approval of U.S. Borrower, U.S.
Agent and the applicable U.S. Lender, another U.S. Lender shall be the Issuer
of each U.S. Letter of Credit and The Bank of Nova Scotia or, with the prior
approval of Canadian Borrower, Canadian Agent and the applicable Canadian
Lender, another Canadian Lender shall be the Issuer of each Canadian Letter of
Credit. Except as provided above, all U.S. Letters of Credit shall be
denominated in Dollars and all Canadian Letters of Credit shall, at the option
of Canadian Borrower, be denominated in either Dollars or Canadian Dollars.
Fees due in respect of a U.S. Letter of Credit shall be payable in Dollars and
fees due in respect of a Canadian Letter of Credit shall be payable (i) in
Dollars, if such Letter of Credit is denominated in Dollars and (ii) in
Canadian Dollars if such Letter of Credit is denominated in Canadian Dollars or
any other currency.
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(b) Additional Provisions. The following additional provisions shall
apply to each Letter of Credit:
(i) U.S. Borrower or Canadian Borrower, as the case may be,
shall give the appropriate Agent notice requesting each issuance of a
Letter of Credit hereunder as provided in Section 4.3 hereof and shall
furnish such additional information regarding such transaction as such
Agent may reasonably request. Upon receipt of such notice, such Agent
shall promptly notify each U.S. Lender or Canadian Lender, as the case
may be, of the contents thereof and of such Lender's Commitment
Percentage of the amount of such proposed Letter of Credit.
(ii) No U.S. Letter of Credit may be issued if after giving
effect thereto the sum of (A) the aggregate outstanding principal amount
of U.S. Loans plus (B) the aggregate Letter of Credit Liabilities
relating to U.S. Letters of Credit would exceed the Maximum U.S.
Available Amount. No Canadian Letter of Credit may be issued if after
giving effect thereto the sum of (A) the aggregate outstanding principal
amount of Canadian Loans plus (B) the aggregate Letter of Credit
Liabilities relating to Canadian Letters of Credit plus (C) the
aggregate Bankers' Acceptance Liabilities would exceed the Maximum
Canadian Available Amount. On each day during the period commencing
with the issuance of any Letter of Credit and until such Letter of
Credit shall have expired or been terminated, the U. S. Commitment or
Canadian Commitment, as the case may be, of each applicable Lender shall
be deemed to be utilized for all purposes hereof in an amount equal to
such Lender's Commitment Percentage of the amount then available for
drawings under such Letter of Credit (and any unreimbursed drawings
under such Letter of Credit).
(iii) Upon receipt from the beneficiary of any Letter of Credit
of any demand for payment thereunder, the applicable Issuer shall notify
the Agents and thereafter the U.S. Agent or the Canadian Agent, as the
case may be, shall promptly notify the applicable Borrower and each
applicable Lender as to the amount to be paid as a result of such demand
and the payment date therefor. If at any time prior to the expiration
date of a Letter of Credit any applicable Issuer shall have made a
payment to a beneficiary of a Letter of Credit in respect of a drawing
under such Letter of Credit, each applicable Lender will pay to the U.S.
Agent or the Canadian Agent, as the case may be, immediately upon demand
by such Issuer at any time during the period commencing after such
payment until reimbursement thereof in full by the applicable Borrower,
an amount equal to such Lender's U.S. Commitment Percentage or Canadian
Commitment Percentage, as the case may be, of such payment, together
with interest on such amount for each day from the date of demand for
such payment (or, if such demand is made after 11:00 a.m. Houston, Texas
time (in the case of a U.S. Letter of Credit) or 12:00 noon Toronto,
Ontario time (in the case of a Canadian Letter of Credit) on such date,
from the next succeeding Business Day) to the date of payment by such
Lender of such amount at a rate of interest per annum equal to (i) in
respect of U.S. Letters of Credit, the Federal Funds Rate, (ii) in
respect of Canadian Letters of Credit which are denominated in Dollars,
the Base Rate plus two percent (2%) and (iii) in respect of
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Canadian Letters of Credit which are denominated in Canadian Dollars,
the CDOR Rate. To the extent that it is ultimately determined that the
applicable Borrower is relieved of its obligation to reimburse the
applicable Issuer because of such Issuer's gross negligence or willful
misconduct in determining that documents received under any applicable
Letter of Credit comply with the terms thereof, the applicable Issuer
shall be obligated to refund to the paying Lenders all amounts paid to
such Issuer to reimburse Issuer for the applicable drawing under such
Letter of Credit.
(iv) U.S. Borrower or the Canadian Borrower, as the case may
be, shall be irrevocably and unconditionally obligated forthwith to
reimburse the appropriate Agent, on the date on which such Agent
notifies U.S. Borrower or the Canadian Borrower, as the case may be, of
the date and amount of any payment by the applicable Issuer of any
drawing under a Letter of Credit, for the amount paid by such Issuer
upon such drawing, without presentment, demand, protest or other
formalities of any kind, all of which are hereby waived. Such
reimbursement may, subject to satisfaction of the conditions in Sections
5.1 and 5.2 hereof and to the Maximum U.S. Available Amount or Maximum
Canadian Available Amount, as the case may be (after adjustment in the
same to reflect the elimination of the corresponding Letter of Credit
Liability), be made by the borrowing of Loans or, in the case of the
Canadian Borrower, by the issuance, acceptance and purchase of Bankers'
Acceptances. The applicable Agent will pay to each Lender such Lender's
Commitment Percentage of all amounts received from U.S. Borrower or the
Canadian Borrower, as the case may be, for application in payment, in
whole or in part, of the Reimbursement Obligation in respect of any
Letter of Credit, but only to the extent such Lender has made payment to
the applicable Agent in respect of such Letter of Credit pursuant to
clause (iii) above.
(v) U.S. Borrower or the Canadian Borrower, as the case may
be, will pay to the appropriate Agent at the Principal Office of such
Agent for the account of each applicable Lender a letter of credit fee
with respect to each Letter of Credit equal to the greater of (x) $500
or (y) the Margin Percentage applicable to LIBOR Borrowings multiplied
by the daily average amount available for drawings under each Letter of
Credit (and computed on the basis of the actual number of days elapsed
in a year composed of 360 days), in each case for the period from and
including the date of issuance of such Letter of Credit to and including
the date of expiration or termination thereof, such fee to be due and
payable quarterly in advance. After the occurrence of an Event of
Default which has not been cured or waived, the letter of credit fee
provided for the preceding sentence shall be increased by two percent
(2%) per annum, such increased fee to be due and payable upon demand by
the applicable Agent. In the event any Letter of Credit is drawn, that
portion of the applicable letter of credit fee provided for in the
preceding sentence relating to the period beyond the date of such
drawing shall be credited to the applicable Borrower's Reimbursement
Obligations relating thereto. The applicable Agent will pay to each
applicable Lender, promptly after receiving any payment in respect of
letter of credit fees referred to in this clause (v), an amount equal to
the product of such Lender's U.S. Commitment Percentage or Canadian
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Commitment Percentage, as the case may be, times the amount of such
fees. In addition to and cumulative of the above described fees, U.S.
Borrower or the Canadian Borrower, as the case may be, shall pay to the
appropriate Agent, for the account of the applicable Issuer, in advance
on the date of the issuance of the applicable Letter of Credit, a fee in
an amount equal to 1/8% of the face amount of the applicable Letter of
Credit (such fee to be retained by the applicable Issuer for its own
account).
(vi) The issuance by the applicable Issuer of each Letter of
Credit shall, in addition to the conditions precedent set forth in
Section 5 hereof, be subject to the conditions precedent (A) that such
Letter of Credit shall be in such form and contain such terms as shall
be reasonably satisfactory to applicable Agent, and (B) that U.S.
Borrower or the Canadian Borrower, as the case may be, shall have
executed and delivered such Applications and other instruments and
agreements relating to such Letter of Credit as the applicable Agent
shall have reasonably requested and are not inconsistent with the terms
of this Agreement. In the event of a conflict between the terms of this
Agreement and the terms of any Application, the terms hereof shall
control.
(vii) Each Issuer will send to U.S. Borrower or the Canadian
Borrower, as the case may be, and each applicable Lender, immediately
upon issuance of any Letter of Credit issued by such Issuer or any
amendment thereto, a true and correct copy of such Letter of Credit or
amendment.
(c) Indemnification; Release. U.S. Borrower or the Canadian
Borrower, as the case may be, hereby indemnifies and holds harmless each Agent,
each Lender and each Issuer from and against any and all claims and damages,
losses, liabilities, costs or expenses which such Agent, such Lender or such
Issuer may incur (or which may be claimed against such Agent, such Lender or
such Issuer by any Person whatsoever), REGARDLESS OF WHETHER CAUSED IN WHOLE OR
IN PART BY THE NEGLIGENCE OF ANY OF THE INDEMNIFIED PARTIES, in connection with
the execution and delivery of any Letter of Credit or transfer of or payment or
failure to pay under any Letter of Credit; provided that U.S. Borrower or the
Canadian Borrower, as the case may be, shall not be required to indemnify any
party seeking indemnification for any claims, damages, losses, liabilities,
costs or expenses to the extent, but only to the extent, caused by (i) the
willful misconduct or gross negligence of the party seeking indemnification, or
(ii) the failure by the party seeking indemnification to pay under any Letter
of Credit after the presentation to it of a request required to be paid under
applicable law. U.S. Borrower or the Canadian Borrower, as the case may be,
hereby releases, waives and discharges each Agent, each Lender and each Issuer
from any claims, causes of action, damages, losses, liabilities, reasonable
costs or expenses which may now exist or may hereafter arise, REGARDLESS OF
WHETHER CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE OF ANY OF THE INDEMNIFIED
PARTIES, by reason of or in
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connection with the failure of any other Lender to fulfill or comply with its
obligations to such Agent, such Lender or such Issuer, as the case may be,
hereunder (but nothing herein contained shall affect any rights U.S. Borrower
or the Canadian Borrower, as the case may be, may have against such defaulting
Lender or may have in respect of gross negligence or willful misconduct).
Nothing in this Section 2.2(c) is intended to limit the obligations of U.S.
Borrower or the Canadian Borrower, as the case may be, under any other
provision of this Agreement.
(d) Additional Costs in Respect of Letters of Credit. If as a result
of any Regulatory Change there shall be imposed, modified or deemed applicable
any tax (other than any tax based on or measured by net income), reserve,
special deposit or similar requirement against or with respect to or measured
by reference to Letters of Credit issued or to be issued hereunder or
participations in such Letters of Credit, and the result shall be to increase
the cost to any Lender of issuing or maintaining any Letter of Credit or any
participation therein, or materially reduce any amount receivable by any Lender
hereunder in respect of any Letter of Credit or any participation therein
(which increase in cost, or reduction in amount receivable, shall be the result
of such Lender's reasonable allocation of the aggregate of such increases or
reductions resulting from such event), then such Lender shall notify U.S.
Borrower or the Canadian Borrower, as the case may be, through the appropriate
Agent (which notice shall be accompanied by a statement setting forth in
reasonable detail the basis for the determination of the amount due), and
within 15 Business Days after demand therefor by such Lender through such
Agent, U.S. Borrower or the Canadian Borrower, as the case may be, shall pay to
such Lender, from time to time as specified by such Lender, such additional
amounts as shall be sufficient to compensate such Lender for such increased
costs or reductions in amount. Such statement as to such increased costs or
reductions in amount incurred by such Lender, submitted by such Lender to U.S.
Borrower or the Canadian Borrower, as the case may be, shall be conclusive as
to the amount thereof, absent manifest error, and may be computed using any
reasonable averaging and attribution method. Each Lender will notify U.S.
Borrower or the Canadian Borrower, as the case may be, through the appropriate
Agent of any event occurring after the date of this Agreement which will
entitle such Lender to compensation pursuant to this Section as promptly as
practicable after any executive officer of such Lender obtains knowledge
thereof and determines to request such compensation, and (if so requested by
U.S. Borrower or the Canadian Borrower, as the case may be, through the
appropriate Agent) will designate a different lending office of such Lender for
the issuance or maintenance of Letters of Credit by such Lender or will take
such other action as U.S. Borrower or the Canadian Borrower, as the case may
be, may reasonably request if such designation or action is consistent with the
internal policy of such Lender and legal and regulatory restrictions, can be
undertaken at no additional cost, will avoid the need for, or reduce the amount
of, such compensation and will not, in the sole opinion of such Lender, be
disadvantageous to such Lender (provided that no such U.S. Lender shall have
any obligation so to designate a different lending office which is not located
in the United States of America and no such Canadian Lender shall have any
obligation so to designate a different lending office which is not located in
Canada).
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2.3 Certain Provisions Relating to Bankers' Acceptances.
(a) Subject to the terms and conditions hereof, each Canadian Lender
severally agrees to accept and purchase Bankers' Acceptances drawn upon it by
the Canadian Borrower denominated in Canadian Dollars. The Canadian Borrower
shall notify the Canadian Agent by irrevocable written notice (each a "Bankers'
Acceptance Notice") by 12:00 noon (Toronto, Ontario time) two (2) Business Days
prior to the proposed date of any borrowing by way of Bankers' Acceptances.
Each borrowing by way of Bankers' Acceptances shall be in a minimum aggregate
face amount of C$1,000,000.00 and integral multiples of C$100,000.00 in excess
thereof. The face amount of each Bankers' Acceptance shall be C$100,000.00 or
any integral multiple thereof. Each Bankers' Acceptance Notice shall be in the
form of Exhibit G.
(1) Bankers' Acceptances shall be issued and shall mature on a
Business Day. Each Bankers' Acceptance shall have a term of 30, 60, 90
or, if available, 180 days excluding days of grace and shall mature on
or before the Maturity Date and shall be in form and substance
reasonably satisfactory to each Canadian Lender.
(2) To facilitate the acceptance of Bankers' Acceptances under
this Agreement, the Canadian Borrower shall, upon execution of this
Agreement and from time to time as required, provide to the Canadian
Agent drafts, in form satisfactory to the Canadian Agent, duly executed
and endorsed in blank by the Canadian Borrower in quantities sufficient
for each Canadian Lender to fulfill its obligations hereunder. In
addition, the Canadian Borrower hereby appoints each Canadian Lender as
its attorney to sign and endorse on its behalf, in handwriting or by
facsimile or mechanical signature as and when deemed necessary by such
Canadian Lender, blank forms of Bankers' Acceptances. The Canadian
Borrower recognizes and agrees that all Bankers' Acceptances signed
and/or endorsed on its behalf by a Canadian Lender shall bind the
Canadian Borrower as fully and effectually as if signed in the
handwriting of and duly issued by the proper signing officer of the
Canadian Borrower. Each Canadian Lender is hereby authorized to issue
such Bankers' Acceptances endorsed in blank in such face amounts as may
be determined by such Canadian Lender provided that the aggregate amount
thereof is equal to the aggregate amount of Bankers' Acceptances
required to be accepted by such Canadian Lender. No Canadian Lender
shall be responsible or liable for its failure to accept a Bankers'
Acceptance if the cause of such failure is, in whole or in part, due to
the failure of the Canadian Borrower to provide duly executed and
endorsed drafts to the Canadian Agent on a timely basis nor shall any
Canadian Lender be liable for any damage, loss or other claim arising by
reason of any loss or improper use of any such instrument except loss or
improper use arising by reason of the gross negligence or willful
misconduct of such Canadian Lender, its officers, employees, agents or
representatives. Each Canadian Lender shall maintain a record with
respect to Bankers' Acceptances (i) received by it from the Canadian
Agent in blank hereunder, (ii) voided by it for any reason, (iii)
accepted by it hereunder, (iv) purchased by it hereunder and (v)
canceled at their respective maturities. Each Canadian Lender further
agrees to retain such
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records in the manner and for the statutory periods provided in the
various Canadian provincial or federal statutes and regulations which
apply to such Canadian Lender.
(3) Drafts of the Canadian Borrower to be accepted as Bankers'
Acceptances hereunder shall be duly executed by a duly authorized
officer of the Canadian Borrower. Notwithstanding that any person whose
signature appears on any Bankers' Acceptance as a signatory for the
Canadian Borrower may no longer be an authorized signatory for the
Canadian Borrower at the date of issuance of a Bankers' Acceptance, such
signature shall nevertheless be valid and sufficient for all purposes as
if such authority had remained in force at the time of such issuance and
any such Bankers' Acceptance so signed shall be binding on the Canadian
Borrower.
(4) Promptly following receipt of a Bankers' Acceptance
Notice, the Canadian Agent shall so advise the Canadian Lenders and
shall advise each Canadian Lender of the face amount of each Bankers'
Acceptance to be accepted by it and the term thereof. The aggregate
face amount of Bankers' Acceptances to be accepted by a Canadian Lender
shall be determined by the Canadian Agent by reference to the respective
Canadian Commitments of the Canadian Lenders, except that, if the face
amount of a Bankers' Acceptance, which would otherwise be accepted by a
Canadian Lender, would not be C$100,000.00 or an integral multiple
thereof, such face amount shall be increased or reduced by the Canadian
Agent in its sole and unfettered discretion to the nearest integral
multiple of C$100,000.00.
(5) Each Bankers' Acceptance to be accepted by a Canadian
Lender shall be accepted at such Canadian Lender's office shown on the
signature pages hereof or as otherwise designated by such Canadian
Lender from time to time.
(6) On the relevant borrowing date, each Canadian Lender
severally agrees to purchase from the Canadian Borrower, at the face
amount thereof discounted by the Applicable BA Discount Rate, any
Bankers' Acceptance accepted by it and provide to the Canadian Agent,
for the account of the Canadian Borrower, the BA Discount Proceeds in
respect thereof after deducting therefrom the amount of the Acceptance
Fee payable by the Canadian Borrower to such Canadian Lender under
Section 2.3(c) in respect of such Bankers' Acceptance.
(7) Each Canadian Lender may at any time and from time to time
hold, sell, rediscount or otherwise dispose of any or all Bankers'
Acceptances accepted and purchased by it.
(8) The Canadian Borrower waives presentment for payment and
any other defense to payment of any amounts due to a Canadian Lender in
respect of a Bankers' Acceptance accepted by it pursuant to this
Agreement which might exist solely by reason of such Bankers' Acceptance
being held, at the maturity thereof, by such Canadian Lender in its own
right and the Canadian Borrower agrees not to claim any days of grace if
such
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Canadian Lender as holder sues the Canadian Borrower on the Bankers'
Acceptances for payment of the amount payable by the Canadian Borrower
thereunder.
(b) With respect to each Bankers' Acceptance, the Canadian Borrower,
prior to the occurrence and continuation of a Default, may give irrevocable
telephone or written notice (or such other method of notification as may be
agreed upon between the Canadian Agent and the Canadian Borrower) to the
Canadian Agent at or before 12:00 noon (Toronto, Ontario time) two (2) Business
Days prior to the maturity date of such Bankers' Acceptance followed by written
confirmation electronically transmitted to the Canadian Agent on the same day,
of the Canadian Borrower's intention to issue one or more Bankers' Acceptance
on such maturity date (each a "Refunding Bankers' Acceptance") to provide for
the payment of such maturing Bankers' Acceptance (it being understood that
payments by the Canadian Borrower and fundings by the Canadian Lenders in
respect of each maturing Bankers' Acceptance and each related Refunding
Bankers' Acceptance shall be made on a net basis reflecting the difference
between the face amount of such maturing Bankers' Acceptance and the BA
Discount Proceeds (net of the applicable Acceptance Fee) of such Refunding
Bankers' Acceptance). Any funding on account of any maturing Bankers'
Acceptance must be made at or before 12:00 noon (Toronto, Ontario time) on the
maturity date of such Bankers' Acceptance. If the Canadian Borrower fails to
give such notice, then subject to satisfaction of the conditions in Section 5
hereof and to the Maximum Canadian Available Amount, the Canadian Borrower
shall be irrevocably deemed to have requested and to have been advanced a
Canadian Prime Loan in the face amount of such maturing Bankers' Acceptance on
the maturity date of such Bankers' Acceptance from the Canadian Lender which
accepted such maturing Bankers' Acceptance, which Canadian Prime Loan shall
thereafter bear interest as such in accordance with the provisions hereof until
paid in full.
(c) An Acceptance Fee shall be payable by the Canadian Borrower to
each Canadian Lender in advance (in the manner specified in Section 2.3(a)(6))
in respect of, and as a condition precedent to the acceptance by such Canadian
Lender of, a Bankers' Acceptance to be accepted by such Canadian Lender
calculated at the rate per annum equal to the Margin Percentage applicable to
LIBOR Borrowings, calculated on the face amount of such Bankers' Acceptance and
computed on the basis of the number of days in the term of such Bankers'
Acceptance and a year of 365 days.
2.4 Terminations, Reductions or Reallocations of Commitments.
(a) Mandatory. On the Termination Date, all Commitments shall be
terminated in their entirety.
(b) Optional. U.S. Borrower or Canadian Borrower, as the case may
be, shall have the right to terminate or reduce the unused portion of the U.S.
Commitments or the Canadian Commitments, as the case may be, at any time or
from time to time, provided that (i) U.S. Borrower or Canadian Borrower, as the
case may be, shall give notice of each such termination or reduction to the
appropriate Agent as provided in Section 4.3 hereof and (ii) each such partial
reduction shall be in an integral multiple of $5,000,000. Notwithstanding the
foregoing, U.S. Borrower may not
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reduce the U.S. Commitments below the then outstanding principal balance of the
U.S. Obligations and Canadian Borrower may not reduce the Canadian Commitments
below the then outstanding principal balance of the Canadian Obligations. No
termination or reduction of the Commitments pursuant to this provision may be
reinstated without the prior written approval of Agents and the Lenders.
(c) Reallocations. Any Dual Lender may agree with Borrowers to
reallocate its existing U.S. Commitment and Canadian Commitment, so long as the
sum of such U.S. Commitment and Canadian Commitment remains unchanged. In
addition, with the prior written consent of all of the Dual Lenders, any U.S.
Lender may agree with Borrowers to convert a portion of its U.S. Commitment
into a Canadian Commitment, thereby becoming a Dual Lender, and any Canadian
Lender may agree with Borrowers to convert a portion of its Canadian Commitment
into a U.S. Commitment, in each case so long as (i) each Lender continues to be
a U.S. Lender with a U.S. Commitment of at least $1,000,000 and (ii) the sum of
such Lender's U.S. Commitment and Canadian Commitment remains equal to the
aggregate amount of such Lender's U.S. Commitment and Canadian Commitment prior
to such reallocation. Borrowers shall give written notice to the Agents of any
reallocation pursuant to this provision at least ten (10) Business Days prior
to the effective date of any such reallocation. No Lender shall be required to
agree to any such reallocation, but may do so at its option, in its sole
discretion. The following conditions precedent must be satisfied prior to any
such reallocation becoming effective:
(1) no Default or Event of Default shall have occurred and be
continuing;
(2) if, as a result of any such reallocation, the aggregate
U.S. Obligations would exceed the aggregate of all of the U.S.
Commitments, then the U.S. Borrower shall, on the effective date of such
reallocation, repay or prepay U.S. Loans (or provide Cover for Letter
of Credit Liabilities relating to U.S. Letters of Credit) in accordance
with this Agreement in an aggregate principal amount such that, after
giving effect thereto, the aggregate U.S. Obligations shall not exceed
the aggregate of all of the U.S. Commitments;
(3) if, as a result of any such reallocation, the Total
Canadian Exposure would exceed the aggregate of all of the Canadian
Commitments, then the Canadian Borrower shall, on the effective date of
such reallocation, repay or prepay Canadian Loans (or provide Cover
for Letter of Credit Liabilities relating to Canadian Letters of Credit
or for Bankers' Acceptance Liabilities) in accordance with this
Agreement in an aggregate principal amount such that, after giving
effect thereto, the Total Canadian Exposure shall not exceed the
aggregate of all of the Canadian Commitments;
(4) Borrowers shall have paid any amounts (or shall have
provided Cover) due under Sections 2.9(c) or (d) hereof on the date of
such reallocation;
(5) The Maximum Canadian Available Amount shall be adjusted to
equal the sum of all of the Canadian Commitments after giving effect to
such reallocation and the
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Maximum U.S. Available Amount shall be adjusted to equal the sum of all
of the U.S. Commitments after giving effect to such reallocation;
(6) participations by the Lenders in the outstanding Letters
of Credit and the Letter of Credit Liabilities and the outstanding Loans
of the Lenders shall be adjusted to give effect to such reallocation;
provided, however, that in lieu of requiring any prepayment of any
Bankers' Acceptances in order to make appropriate adjustments to give
effect to such reallocations, Canadian Borrower shall be required to
provide additional Cover for any applicable portion of the Bankers'
Acceptance Liabilities;
(7) each Lender whose U.S. Commitment or Canadian Commitment
shall be the subject of any reallocation shall have received from the
Borrowers a fee equal to the greater of $3,000.00 or 1/16% of the amount
of the increase or decrease, as the case be, in its Canadian Commitment.
2.5 Commitment Fees.
(a) U.S. Borrower shall pay to U.S. Agent for the account of each
U.S. Lender, and Canadian Borrower shall pay to Canadian Agent for the account
of each Canadian Lender, commitment fees for the period from the Effective Date
to and including the Termination Date at a rate per annum equal to the
Commitment Fee Percentage. Such commitment fees shall be computed (on the
basis of the actual number of days elapsed in a year composed of 360 days) on
each day and shall be based on the excess of (x) the aggregate amount of each
Lender's Commitment for such day over (y) the sum of (i) the aggregate unpaid
principal balance (in Dollars) of such Lender's Note or Notes on such day plus
(ii) the aggregate Letter of Credit Liabilities as to such Lender for such day
plus, in the case of Canadian Lenders only, (iii) the aggregate Bankers'
Acceptance Liabilities outstanding on such day. Accrued commitment fees shall
be payable in arrears on the Quarterly Dates prior to the Termination Date and
on the Termination Date, with any Canadian Obligations converted to Dollars at
the Exchange Rate on each such date for the purposes of each such calculation.
(b) All past due fees payable under this Section shall bear interest
at the Past Due Rate.
2.6 Several Obligations. The failure of any Lender to make any Loan
to be made by it or to accept and purchase any Bankers' Acceptance required to
be so accepted and purchased by it on the date specified therefor shall not
relieve any other Lender of its obligation to make its Loan or to accept and
purchase its Bankers' Acceptance on such date, but neither any Agent nor any
Lender shall be responsible or liable for the failure of any other Lender to
make a Loan or to accept and purchase any Bankers' Acceptance or to participate
in, or co-issue, any Letter of Credit. Notwithstanding anything contained
herein to the contrary, (i) if a U.S. Lender fails to make a U.S. Loan as and
when required hereunder, then upon each subsequent event which would otherwise
result in payments of principal being made to the defaulting U.S. Lender, the
amount which would have been paid to the defaulting U.S. Lender shall be
divided among the non-defaulting U.S. Lenders
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ratably according to their respective Commitment Percentages until the
Obligations of each U.S. Lender (including the defaulting U.S. Lender) are
equal to such U.S. Lender's Commitment Percentage of the total U.S. Obligations
and (ii) if a Canadian Lender fails to make a Canadian Loan or accept and
purchase any Bankers' Acceptance as and when required hereunder, then upon each
subsequent event which would otherwise result in payments of principal being
made to the defaulting Canadian Lender, the amount which would have been paid
to the defaulting Canadian Lender shall be divided among the non-defaulting
Canadian Lenders ratably according to their respective Commitment Percentages
until the Obligations of each Canadian Lender (including the defaulting
Canadian Lender) are equal to such Canadian Lender's Commitment Percentage of
the total Canadian Obligations.
2.7 Notes. The U.S. Loans made by each U.S. Lender shall be
evidenced by a single U.S. Note of U.S. Borrower in substantially the form of
Exhibit D hereto payable to the order of such U.S. Lender in a principal amount
equal to the U.S. Commitment of such U.S. Lender, and otherwise duly completed.
The Canadian Loans made by each Canadian Lender which are denominated in
Dollars shall be evidenced by a single Canadian Note of Canadian Borrower in
substantially the form of Exhibit C hereto payable to the order of such
Canadian Lender in a principal amount equal to the Canadian Commitment of such
Canadian Lender, and otherwise duly completed. The Canadian Prime Loans made
by each Canadian Lender shall be evidenced by a single Canadian Dollar Note of
Canadian Borrower in substantially the form of Exhibit H hereto payable to the
order of such Canadian Lender in a principal amount equal to two times the
Canadian Commitment of such Canadian Lender, and otherwise duly completed.
The promissory notes described in this Section are each, together with all
renewals, extensions, modifications and replacements thereof and substitutions
therefor, called a "Note" and collectively called the "Notes". Each Lender is
hereby authorized by each Borrower to endorse on the schedule (or a
continuation thereof) that may be attached to each Note of such Lender, to the
extent applicable, the date, amount, type of and the applicable period of
interest for each Loan made by such Lender to the applicable Borrower
hereunder, and the amount of each payment or prepayment of principal of such
Loan received by such Lender, provided, that any failure by such Lender to make
any such endorsement shall not affect the obligations of any Borrower under
such Note or hereunder in respect of such Loan.
2.8 Use of Proceeds. The proceeds of the Loans and of the acceptance
and purchase of Bankers' Acceptances shall be used by the Borrowers for
acquisitions, capital expenditures and other working capital and general
corporate purposes. Neither any Agent nor any Lender shall have any
responsibility as to the use of any proceeds of the Loans or of the acceptance
and purchase of Bankers' Acceptances.
2.9 Currency Fluctuations.
(a) Not later than 1:00 p.m. (Houston, Texas time) on each
Calculation Date, the U.S. Agent shall determine the Exchange Rate as of such
Calculation Date. The Exchange Rate so determined shall become effective on
the first Business Day immediately following the relevant
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Calculation Date (a "Reset Date") and shall remain effective until the next
succeeding Calculation Date.
(b) Not later than 4:00 p.m. (Houston, Texas time) on each Reset
Date, the U.S. Agent shall consult with the Canadian Agent and the Agents shall
determine the Total Canadian Exposure and the aggregate U.S. Obligations.
(c) If, on any Reset Date or on the date of any reallocation of the
U.S. Commitments and the Canadian Commitments pursuant to Section 2.4(c)
hereof, the sum of the aggregate U.S. Obligations and the Total Canadian
Exposure exceeds the aggregate of all of the U.S. Commitments and the Canadian
Commitments by five percent (5%) or more, then (i) the Agents shall give notice
thereof to the Lenders and Borrowers and (ii) the Borrowers shall within two
(2) Business Days thereafter, repay or prepay Loans (or provide Cover for
Letter of Credit Liabilities or Bankers' Acceptance Liabilities) in accordance
with this Agreement in an aggregate principal amount sufficient to reduce the
sum of the aggregate U.S. Obligations and the Total Canadian Exposure to the
aggregate of all of the U.S. Commitments and the Canadian Commitments.
(d) If, on any day prior to the Termination Date, the Total Canadian
Exposure exceeds the aggregate of all of the Canadian Commitments by five
percent (5%) or more, then (i) the Canadian Agent shall give notice thereof to
the Canadian Borrower and the Canadian Lenders and (ii) within two (2) Business
Days thereafter, the Canadian Borrower shall repay or prepay Canadian Loans (or
provide Cover for Letter of Credit Liabilities relating to Canadian Letters of
Credit or Bankers' Acceptance Liabilities) in accordance with this Agreement in
an aggregate principal amount such that, after giving effect thereto, the Total
Canadian Exposure shall not exceed the aggregate of all of the Canadian
Commitments.
3. Borrowings, Prepayments and Interest Options.
3.1 Borrowings. The applicable Borrower shall give the applicable
Agent notice of each borrowing to be made hereunder as provided in Section 4.3
hereof and the applicable Agent shall promptly notify each applicable Lender of
such request. Not later than 12:00 noon Houston, Texas time (in the case of
U.S. Loans) or 1:00 p.m. Toronto, Ontario time (in the case of Canadian Loans
which are not same day fundings and Bankers' Acceptances) or 2:00 p.m. Toronto,
Ontario time (in the case of Canadian Loans which are same day fundings) on the
date specified for each such borrowing hereunder, each applicable Lender shall
make available the amount of the Loan, if any, to be made by it on such date
and/or the proceeds of the acceptance and purchase of any Bankers' Acceptances,
if any, to be so accepted and purchased by it on such date to the applicable
Agent at its Principal Office, in immediately available funds, for the account
of the applicable Borrower. Such amounts received by the applicable Agent will
be held in an account maintained by the applicable Borrower with the applicable
Agent. The amounts so received by the applicable Agent shall, subject to the
terms and conditions of this Agreement, be made available to the applicable
Borrower by wiring or otherwise transferring, in immediately available funds,
such amount to an account designated by the applicable Borrower and approved by
the applicable Agent.
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3.2 Prepayments.
(a) Optional Prepayments. Except as provided in Section 3.3 hereof,
each Borrower shall have the right to prepay, on any Business Day, in whole or
in part, without the payment of any penalty or fee, any of the Obligations
(other than Obligations relating to Bankers' Acceptances) at any time or from
time to time, provided that the applicable Borrower shall give the applicable
Agent notice of each such prepayment as provided in Section 4.3 hereof. Each
optional prepayment on a Loan shall be in an amount equal to an integral
multiple of $3,000,000 (in respect of Loans denominated in Dollars) or
C$3,000,000 (in respect of Loans denominated in Canadian Dollars). Bankers'
Acceptances may not be prepaid.
(b) Interest Payments. Accrued and unpaid interest on the unpaid
principal balance of the Notes shall be due and payable on the Interest Payment
Dates.
(c) Payments and Interest on Reimbursement Obligations. Each
Borrower will pay to the applicable Agent for the account of each applicable
Lender the amount of each Reimbursement Obligation with respect to such
Borrower on the date on which the applicable Agent notifies the applicable
Borrower of the date and amount of the applicable payment by the Issuer of any
drawing under a Letter of Credit or payment of any Bankers' Acceptance on
maturity. The amount of any Reimbursement Obligation may, if the applicable
conditions precedent specified in Sections 5.1 and 5.2 hereof have been
satisfied, be paid with the proceeds of Loans or, in the case of Canadian
Obligations, of the acceptance and purchase or Bankers' Acceptances. Subject
to Section 11.7 hereof, each Borrower will pay to the applicable Agent for the
account of each applicable Lender interest on any Reimbursement Obligation at
(i) at the applicable Base Rate (with respect to Reimbursement Obligations
denominated in Dollars) or at the Canadian Prime Rate (with respect to
Reimbursement Obligations denominated in Dollars) plus the applicable Margin
Percentage from the date such Reimbursement Obligation arises until the date
five (5) Business Days thereafter and (ii) at the applicable Past Due Rate
thereafter until the same is paid in full.
3.3 Interest Options
(a) Options Available. The outstanding principal balance of the
Canadian Dollar Notes shall bear interest at the Canadian Prime Rate and the
outstanding principal balance of the other Notes shall bear interest at the
applicable Base Rate; provided, that (1) all past due amounts, both principal
and accrued interest, shall bear interest at the Past Due Rate, and (2) subject
to the provisions hereof, each Borrower shall have the option of having all or
any portion of the principal balances of its Notes (other than the Canadian
Dollar Notes) from time to time outstanding bear interest at a Eurodollar Rate.
The records of Agents and each of the Lenders with respect to Interest Options,
Interest Periods and the amounts of Loans to which they are applicable shall be
binding and conclusive, absent manifest error. Interest on the amount of each
advance against the Notes shall be computed on the amount of that advance and
from the date it is made. Notwithstanding anything in this Agreement to the
contrary, for the full term of the Notes the interest rate produced by the
aggregate of all sums paid or agreed to be paid to the holders of the Notes for
the use, forbearance
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or detention of the debt evidenced thereby (including all interest on the Notes
at the Stated Rate plus the Additional Interest) shall not exceed the Ceiling
Rate.
(b) Designation and Conversion. Each Borrower shall have the right
to designate or convert its Interest Options in accordance with the provisions
hereof. Provided no Event of Default has occurred and is continuing and
subject to the last sentence of Section 3.3(a) and the provisions of Section
3.3(c), each Borrower may elect to have a Eurodollar Rate apply or continue to
apply to all or any portion of the principal balance of its Notes (other than
the Canadian Dollar Notes). Each change in Interest Options shall be a
conversion of the rate of interest applicable to the specified portion of the
Loans, but such conversion shall not change the respective outstanding
principal balances of the applicable Notes. The Interest Options shall be
designated or converted in the manner provided below:
(i) The applicable Borrower shall give the applicable Agent
telephonic notice, promptly confirmed by a Rate Designation
Notice (and the applicable Agent shall promptly inform each
applicable Lender thereof). Each such telephonic and written
notice shall specify the amount of the Loan which is the subject
of the designation, if any; the amount of borrowings into which
such borrowings are to be converted or for which an Interest
Option is designated; the proposed date for the designation or
conversion and the Interest Period or Periods, if any, selected
by the applicable Borrower. Such telephonic notice shall be
irrevocable and shall be given to the applicable Agent no later
than the applicable Rate Designation Date.
(ii) No more than five (5) LIBOR Borrowings shall be in effect with
respect to the U.S. Loans at any time and no more than three (3)
LIBOR Borrowings shall be in effect with respect to the Canadian
Loans at any time. No single LIBOR Borrowing may include both
U.S. Loans and Canadian Loans.
(iii) Each designation or conversion of a LIBOR Borrowing shall occur
on a LIBOR Business Day.
(iv) Except as provided in Section 3.3(c) hereof, no LIBOR Borrowing
shall be converted to a Base Rate Borrowing or another LIBOR
Borrowing on any day other than the last day of the applicable
Interest Period.
(v) Each request for a LIBOR Borrowing shall be in the amount equal
to an integral multiple of $500,000.
(vi) Each designation of an Interest Option with respect to the U.S.
Notes shall apply to all of the U.S. Notes ratably in accordance
with their respective outstanding principal balances. Each
designation of an Interest Option with respect to the Canadian
Notes shall apply to all of the Canadian Notes ratably in
accordance with their respective outstanding principal balances.
If any Lender assigns an interest in any of its Notes
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when any LIBOR Borrowing is outstanding with respect thereto,
then such assignee shall have its ratable interest in such LIBOR
Borrowing.
(vii) The entire outstanding principal balance of the Canadian Dollar
Notes shall bear interest at the Canadian Prime Rate.
(c) Special Provisions Applicable to LIBOR Borrowings.
(i) Options Unlawful. If the adoption of any applicable Legal
Requirement after the Effective Date or any change after the Effective Date in
any applicable Legal Requirement or in the interpretation or administration
thereof by any Governmental Authority or compliance by any Lender with any
request or directive (whether or not having the force of law) issued after the
Effective Date by any central bank or other Governmental Authority shall at any
time make it unlawful or impossible for any Lender to permit the establishment
of or to maintain any LIBOR Borrowing, the commitment of such Lender to
establish or maintain such LIBOR Borrowing shall forthwith be canceled and the
applicable Borrower shall forthwith, upon demand by the applicable Agent to
such Borrower, (1) convert the LIBOR Borrowing of such Lender with respect to
which such demand was made to a Base Rate Borrowing; (2) pay all accrued and
unpaid interest to date on the amount so converted; and (3) pay any amounts
required to compensate each Lender for any additional cost or expense which any
Lender may incur as a result of such adoption of or change in such Legal
Requirement or in the interpretation or administration thereof and any Funding
Loss which any Lender may incur as a result of such conversion. If, when any
Agent so notifies any Borrower, such Borrower has given a Rate Designation
Notice specifying a LIBOR Borrowing but the selected Interest Period has not
yet begun, as to the applicable Lender such Rate Designation Notice shall be
deemed to be of no force and effect, as if never made, and the balance of the
Loans made by such Lender specified in such Rate Designation Notice shall bear
interest at the Base Rate until a different available Interest Option shall be
designated in accordance herewith.
(ii) Increased Cost of Borrowings. If the adoption after the
Effective Date of any applicable Legal Requirement or any change after the
Effective Date in any applicable Legal Requirement or in the interpretation or
administration thereof by any Governmental Authority or compliance by any
Lender with any request or directive (whether or not having the force of law)
issued after the Effective Date by any central bank or Governmental Authority
shall at any time as a result of any portion of the principal balances of the
Notes being maintained on the basis of a Eurodollar Rate:
(1) subject any Lender to any Taxes, or any deduction or
withholding for any Taxes, on or from any payment due
under any LIBOR Borrowing or other amount due hereunder,
other than income and franchise taxes of the United States
or its political subdivisions or such other jurisdiction
in which the applicable Lender has its principal office or
applicable lending office; or
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(2) change the basis of taxation of payments due from any
Borrower to any Lender under any LIBOR Borrowing
(otherwise than by a change in the rate of taxation of the
overall net income of such Lender); or
(3) impose, modify, increase or deem applicable any reserve
requirement (excluding that portion of any reserve
requirement included in the calculation of the applicable
Eurodollar Rate), special deposit requirement or similar
requirement (including, but not limited to, state law
requirements and Regulation D) against assets of any
Lender, or against deposits with any Lender, or against
loans made by any Lender, or against any other funds,
obligations or other Property owned or held by any Lender;
or
(4) impose on any Lender any other condition regarding any
LIBOR Borrowing;
and the result of any of the foregoing is to increase the cost to any Lender of
agreeing to make or of making, renewing or maintaining such LIBOR Borrowing, or
reduce the amount of principal or interest received by any Lender, then, within
15 Business Days after demand by any Agent (accompanied by a statement setting
forth in reasonable detail the applicable Lender's basis therefor), the
applicable Borrower shall pay to the applicable Agent additional amounts which
shall compensate each Lender for such increased cost or reduced amount. The
determination by any Lender of the amount of any such increased cost, increased
reserve requirement or reduced amount shall be conclusive and binding, absent
manifest error. Each Borrower shall have the right, if it receives from any
Agent any notice referred to in this paragraph, upon three Business Days'
notice to the applicable Agent (which shall notify each affected Lender),
either (i) to repay in full (but not in part) any borrowing with respect to
which such notice was given, together with any accrued interest thereon, or
(ii) to convert the LIBOR Borrowing which is the subject of the notice to a
Base Rate Borrowing; provided, that any such repayment or conversion shall be
accompanied by payment of (x) the amount required to compensate each Lender for
the increased cost or reduced amount referred to in the preceding paragraph;
(y) all accrued and unpaid interest to date on the amount so repaid or
converted, and (z) any Funding Loss which any Lender may incur as a result of
such repayment or conversion. Each Lender will notify the applicable Borrower
through the applicable Agent of any event occurring after the date of this
Agreement which will entitle such Lender to compensation pursuant to this
Section as promptly as practicable after it obtains knowledge thereof and
determines to request such compensation, and (if so requested by the applicable
Borrower through the applicable Agent) will designate a different lending
office of such Lender for the applicable LIBOR Borrowing or will take such
other action as the applicable Borrower may reasonable request if such
designation or action is consistent with the internal policy of such Lender and
legal and regulatory restrictions, will avoid the need for, or reduce the
amount of, such compensation and will not, in the sole opinion of such Lender,
be disadvantageous to such Lender.
(iii) Inadequacy of Pricing and Rate Determination. If, for any reason
with respect to any Interest Period, any Agent (or, in the case of clause 2
below, the applicable Lender) shall have
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determined (which determination shall be conclusive and binding upon each
Borrower, absent manifest error) that:
(1) any Agent is unable through its customary general
practices to determine any applicable Eurodollar Rate, or
(2) any applicable Eurodollar Rate will not adequately and
fairly reflect the cost to any Lender of making and
maintaining such LIBOR Borrowing hereunder for any
proposed Interest Period,
then the applicable Agent shall give the applicable Borrower notice thereof and
thereupon, (A) any Rate Designation Notice previously given by such Borrower
designating the applicable LIBOR Borrowing which has not commenced as of the
date of such notice from any Agent shall be deemed for all purposes hereof to
be of no force and effect, as if never given, and (B) until the applicable
Agent shall notify such Borrower that the circumstances giving rise to such
notice from such Agent no longer exist, each Rate Designation Notice requesting
the applicable Eurodollar Rate shall be deemed a request for a Base Rate
Borrowing, and any applicable LIBOR Borrowing then outstanding shall be
converted, without any notice to or from any Borrower, upon the termination of
the Interest Period then in effect with respect to it, to a Base Rate
Borrowing.
(iv) Funding Losses. Each Borrower shall indemnify each applicable
Lender against and hold each applicable Lender harmless from any Funding Loss
relating to Loans to such Borrower or relating to Bankers' Acceptances
requested by such Borrower. This indemnity shall survive the payment of the
Notes. A certificate of any Lender (explaining in reasonable detail the amount
and calculation of the amount claimed) as to any additional amounts payable
pursuant to this paragraph submitted to the applicable Borrower shall be
conclusive and binding upon such Borrower, absent manifest error.
(d) Funding Offices; Adjustments Automatic; Calculation Year. Any
Lender may, if it so elects, fulfill its obligation as to any LIBOR Borrowing
by causing a branch or affiliate of such Lender to make such Loan and may
transfer and carry such Loan at, to or for the account of any branch office or
affiliate of such Lender; provided, that in such event for the purposes of this
Agreement such Loan shall be deemed to have been made by such Lender and the
obligation of the applicable Borrower to repay such Loan shall nevertheless be
to such Lender and shall be deemed held by it for the account of such branch or
affiliate. Without notice to any Borrower or any other Person, each rate
required to be calculated or determined under this Agreement shall
automatically fluctuate upward and downward in accordance with the provisions
of this Agreement. Interest at the Canadian Prime Rate or any applicable Prime
Rate shall be computed on the basis of the actual number of days elapsed in a
year consisting of 365 or 366 days, as the case may be. All other interest
required to be calculated or determined under this Agreement shall be computed
on the basis of the actual number of days elapsed in a year consisting of 360
days, unless the Ceiling Rate would thereby be exceeded, in which event, to the
extent necessary to avoid exceeding the Ceiling Rate,
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the applicable interest shall be computed on the basis of the actual number of
days elapsed in the applicable calendar year in which such interest accrued.
(e) Funding Sources. Notwithstanding any provision of this Agreement
to the contrary, each Lender shall be entitled to fund and maintain its funding
of all or any part of the Loans in any manner it sees fit, it being understood,
however, that for the purposes of this Agreement all determinations hereunder
shall be made as if each Lender had actually funded and maintained each LIBOR
Borrowing during each Interest Period through the purchase of deposits having a
maturity corresponding to such Interest Period and bearing an interest rate
equal to the Eurodollar Rate for such Interest Period.
4. Payments; Pro Rata Treatment; Computations, Etc.
4.1 Payments.
(a) Except to the extent otherwise provided herein, all payments of
principal, interest, Reimbursement Obligations and other amounts to be made by
any Borrower hereunder, under the Notes and under the other Loan Documents
shall be made in (i) with respect to Bankers' Acceptance Liabilities and
Canadian Prime Loans, Canadian Dollars and (ii) in all other cases, in Dollars,
in immediately available funds, to the applicable Agent at its Principal Office
(or in the case of a successor U.S. Agent, at the principal office of such
successor U.S. Agent in the United States or in the case of a successor
Canadian Agent, at the principal office of such successor Canadian Agent in
Canada), not later than 11:00 a.m. Houston, Texas time (in the case of any
payment by the U.S. Borrower) or 12:00 noon Toronto, Ontario time (in the case
of any payment by the Canadian Borrower) on the date on which such payment
shall become due (each such payment made after such time on such due date to be
deemed to have been made on the next succeeding Business Day).
(b) Each Borrower shall, at the time of making each payment
hereunder, under any Note or under any other Loan Document, specify to the
applicable Agent Obligations payable by such Borrower hereunder or thereunder
to which such payment is to be applied. Each payment received by any Agent
hereunder, under any Note or under any other Loan Document for the account of a
Lender shall be paid promptly to such Lender, in immediately available funds.
If any Agent fails to send to any Lender the applicable amount by the close of
business on the date any such payment is received by such Agent if such payment
is received prior to 11:00 a.m. Houston, Texas time (in the case of any payment
to a U.S. Lender) or 12:00 noon Toronto, Ontario time (in the case of any
payment to a Canadian Lender) (or on the next succeeding Business Day with
respect to payments which are received after such time), such Agent shall pay
to the applicable Lender interest on such amount from such date at a rate of
interest per annum equal to (i) in respect of Obligations which are denominated
in Dollars, the Federal Funds Rate and (ii) in respect of Canadian Obligations
which are denominated in Canadian Dollars, the CDOR Rate.
(c) If the due date of any payment hereunder or under any other Loan
Document falls on a day which is not a Business Day, the due date for such
payments (except as otherwise provided in
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the definition of "Interest Period" set forth in Section 1.1 hereof) shall be
extended to the next succeeding Business Day and interest shall be payable for
any principal so extended for the period of such extension.
(d) All payments by any Borrower hereunder or under any other Loan
Document shall be made free and clear of and without deduction for or on
account of any present or future income, stamp, or other taxes, fees, duties,
withholding or other charges of any nature whatsoever imposed by any taxing
authority excluding in the case of each Lender taxes imposed on or measured by
its net income or franchise taxes imposed by the jurisdiction in which it is
organized or through which it acts for purposes of this Agreement (such non-
excluded items being hereinafter referred to as "Taxes"). If as a result of
any change in law (or the interpretation thereof) after the date that the
applicable Lender became a "Lender" under this Agreement any withholding or
deduction from any payment to be made to, or for the account of, a Lender by
any Borrower hereunder or under any other Loan Document is required in respect
of any Taxes pursuant to any applicable law, rule, or regulation, then such
Borrower will (i) pay to the relevant authority the full amount required to be
so withheld or deducted; (ii) to the extent available, promptly forward to the
applicable Agent an official receipt or other documentation reasonably
satisfactory to such Agent evidencing such payment to such authority; and (iii)
pay to the applicable Agent, for the account of each affected Lender, such
additional amount or amounts as are necessary to ensure that the net amount
actually received by such Lender will equal the full amount such Lender would
have received had no such withholding or deduction been required. Each Lender
shall determine such additional amount or amounts payable to it (which
determination shall, in the absence of manifest error, be conclusive and
binding on each Borrower). If a Lender becomes aware that any such withholding
or deduction from any payment to be made by any Borrower hereunder or under any
other Loan Document is required, then such Lender shall promptly notify the
applicable Agent and the applicable Borrower thereof stating the reasons
therefor and the additional amount required to be paid under this Section.
Each Lender shall execute and deliver to the applicable Agent and the
applicable Borrower such forms as it may be required to execute and deliver
pursuant to Section 11.13 hereof. To the extent that any such withholding or
deduction results from the failure of a Lender to provide a form required by
Section 11.13 hereof (unless such failure is due to some prohibition under
applicable Legal Requirements), the applicable Borrower shall have no
obligation to pay the additional amount required by clause (iii) above.
Anything in this Section notwithstanding, if any Lender elects to require
payment by any Borrower of any material amount under this Section, the
applicable Borrower may, within 60 days after the date of receiving notice
thereof and so long as no Default shall have occurred and be continuing, elect
to terminate such Lender as a party to this Agreement; provided that,
concurrently with such termination the applicable Borrower shall (i) if the
Agents and each of the other Lenders shall consent, pay that Lender all
principal, interest and fees and other amounts owed to such Lender through such
date of termination or (ii) have arranged for another financial institution
approved by the Agents (such approval not to be unreasonably withheld) as of
such date, to become a substitute Lender for all purposes under this Agreement
in the manner provided in Section 11.6; provided further that, prior to
substitution for any Lender, the applicable Borrower shall have given written
notice to the Agents of such intention and the Lenders shall have
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the option, but no obligation, for a period of 60 days after receipt of such
notice, to increase their Commitments in order to replace the affected Lender
in lieu of such substitution.
4.2 Pro Rata Treatment. Except to the extent otherwise provided
herein: (a) each borrowing from the Lenders under Section 2.1 hereof shall be
made (x) in the case of Canadian Loans, ratably from the Canadian Lenders in
accordance with their respective Canadian Commitments and (y) in the case of
U.S. Loans, ratably from the U.S. Lenders in accordance with their respective
U.S. Commitments; (b) each payment of commitment fees shall be made for the
account of the Lenders, and each termination or reduction of the Commitments of
the Lenders under Section 2.3 hereof shall be applied, pro rata, according to
the Lenders' respective Commitments; (c) each payment by any Borrower of
principal of or interest on the Loans or any Bankers' Acceptance shall be made
to the applicable Agent for the account of the applicable Lenders pro rata in
accordance with the respective unpaid principal amounts of the Loans held by or
Bankers' Acceptances accepted by such Lenders, and (d) the applicable Lenders
(other than the applicable Issuer) shall purchase from the applicable Issuer
participations in each Letter of Credit to the extent of their respective U.S.
Commitment Percentages or Canadian Commitment Percentages, as the case may be.
4.3 Certain Actions, Notices, Etc. Notices to the applicable Agent
of any termination or reduction of Commitments and of borrowings and optional
prepayments of Loans and requests for issuances of Letters of Credit shall be
irrevocable and shall be effective only if received by the applicable Agent not
later than 11:00 a.m. Houston, Texas time (in the case of U.S. Loans and U.S.
Letters of Credit) or 12:00 noon Toronto, Ontario time (in the case of Canadian
Loans and Canadian Letters of Credit)) on the number of Business Days prior to
the date of the relevant termination, reduction, borrowing and/or prepayment
specified below:
Number of Business Days
Prior Notice
------------
Termination or Reduction of
Commitments 5
Loan repayment 1
Base Rate Borrowings same day
and Canadian Prime Loans
Letter of Credit issuance 3
Selection of a Eurodollar Rate 3 LIBOR
Business Days
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Each such notice of termination or reduction shall specify the amount of the
applicable Commitment to be terminated or reduced. Each such notice of
borrowing or prepayment shall specify the amount of the Loans to be borrowed or
prepaid and the date of borrowing or prepayment (which shall be a Business
Day). The applicable Agent shall promptly notify the affected Lenders of the
contents of each such notice.
4.4 Non-Receipt of Funds by Any Agent. Unless the applicable Agent
shall have been notified by a Lender or a Borrower (the "Payor") prior to the
date on which such Lender is to make payment to such Agent of the proceeds of a
Loan (or funding of a drawing under a Letter of Credit or reimbursement with
respect to any drawing under a Letter of Credit or funding of a payment under a
Bankers' Acceptance or reimbursement with respect to any payment under a
Bankers' Acceptance) to be made by it hereunder or the applicable Borrower is
to make a payment to such Agent for the account of one or more of the Lenders,
as the case may be (such payment being herein called the "Required Payment"),
which notice shall be effective upon receipt, that the Payor does not intend to
make the Required Payment to such Agent, the applicable Agent may assume that
the Required Payment has been made and may, in reliance upon such assumption
(but shall not be required to), make the amount thereof available to the
intended recipient on such date and, if the Payor has not in fact made the
Required Payment to such Agent, the recipient of such payment (or, if such
recipient is the beneficiary of a Letter of Credit, the applicable Borrower
and, if such Borrower fails to pay the amount thereof to the applicable Agent
forthwith upon demand, the applicable Lenders ratably in proportion to their
respective Commitment Percentages) shall, on demand, pay to such Agent the
amount made available by such Agent, together with interest thereon in respect
of the period commencing on the date such amount was so made available by such
Agent until the date Agent recovers such amount at a rate of interest per annum
equal to (i) in respect of Obligations which are denominated in Dollars, the
Federal Funds Rate and (ii) in respect of Canadian Obligations which are
denominated in Canadian Dollars, the CDOR Rate.
4.5 Sharing of Payments, Etc. If a Lender shall obtain payment of
any principal of or interest on any Loan made by it under this Agreement, on
any Reimbursement Obligation or on any other Obligation then due to such Lender
hereunder, through the exercise of any right of set-off (including, without
limitation, any right of setoff or Lien granted under Section 9.2 hereof),
banker's Lien, counterclaim or similar right, or otherwise, it shall promptly
purchase from the other Lenders participations in the Loans made, or
Reimbursement Obligations or other Obligations held, by the other Lenders in
such amounts, and make such other adjustments from time to time as shall be
equitable to the end that all the Lenders shall share the benefit of such
payment (net of any expenses which may be incurred by such Lender in obtaining
or preserving such benefit) pro rata in accordance with the unpaid Obligations
then due to each of them. To such end all the Lenders shall make appropriate
adjustments among themselves (by the resale of participations sold or
otherwise) if such payment is rescinded or must otherwise be restored. Each
Borrower agrees, to the fullest extent it may effectively do so under
applicable law, that any Lender so purchasing a participation in the Loans
made, or Reimbursement Obligations or other Obligations held, by other Lenders
may exercise all rights of set-off, bankers' Lien, counterclaim or similar
rights with respect to such participation as fully as if such Lender were a
direct holder of Loans, Reimbursement Obligations
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or other Obligations in the amount of such participation. Nothing contained
herein shall require any Lender to exercise any such right or shall affect the
right of any Lender to exercise, and retain the benefits of exercising, any
such right with respect to any other indebtedness or obligation of any
Borrower.
5. Conditions Precedent.
5.1 Initial Loans, Letters of Credit and Bankers' Acceptances. The
obligation of each Lender or each Issuer to make its initial Loans or issue or
participate in the initial Letter of Credit hereunder or to accept and purchase
its initial Bankers' Acceptance hereunder (whichever shall first occur) is
subject to the following conditions precedent, each of which shall have been
fulfilled or waived to the satisfaction of Agents:
(a) Authorization and Status. Agents shall have received from the
appropriate Governmental Authorities certified copies of the Organizational
Documents (other than by-laws) of each Obligor, and evidence satisfactory to
Agents of all action taken by each Obligor authorizing the execution, delivery
and performance of the Loan Documents and all other documents related to this
Agreement to which it is a party (including, without limitation, a certificate
of the secretary of each such party which is a corporation setting forth the
resolutions of its Board of Directors authorizing the transactions contemplated
thereby and attaching a copy of its bylaws), together with such certificates as
may be appropriate to demonstrate the qualification and good standing of and
payment of taxes by each Obligor in the jurisdiction of its organization and in
each other jurisdiction where the failure to qualify would have a Material
Adverse Effect.
(b) Incumbency. Each Obligor shall have delivered to Agents a
certificate in respect of the name and signature of each of the officers (i)
who is authorized to sign on its behalf the applicable Loan Documents related
to any Loan, Letter of Credit and Bankers' Acceptance and (ii) who will, until
replaced by another officer or officers duly authorized for that purpose, act
as its representative for the purposes of signing documents and giving notices
and other communications in connection with any Loan, Letter of Credit and
Bankers' Acceptance. Each Agent and each Lender may conclusively rely on such
certificates until they receive notice in writing from the applicable Obligor
to the contrary.
(c) Notes. Agents shall have received the appropriate Notes of
Borrowers for each Lender, duly completed and executed.
(d) Loan Documents. Each Obligor shall have duly executed and
delivered the Loan Documents to which it is a party (in such number of copies
as Agents shall have requested). Each such Loan Document shall be in
substantially the form furnished to the Lenders prior to their execution of
this Agreement, together with such changes therein as Agents may approve.
(e) Fees and Expenses. Borrowers shall have paid to Agents all unpaid
fees in the amounts previously agreed upon in writing between any Borrower and
any Agent; and shall have in
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addition paid to Agents all amounts payable under Section 11.3 hereof, on or
before the date of this Agreement, except for amounts which the applicable
Agent, in its sole discretion, agrees may be paid at a later date.
(f) Insurance. Borrowers shall have delivered to Agents evidence
satisfactory to Agents regarding the existence of all insurance required to be
maintained by each Obligor by this Agreement and the Security Documents.
(g) Security Matters. All such action as Agents shall have requested
to perfect the Liens created pursuant to the Security Documents shall have been
taken, including, without limitation, where applicable, the filing and
recording of the Security Documents with the appropriate Governmental
Authorities. Agent shall also have received evidence satisfactory to it that
the Liens created by the Security Documents constitute first priority Liens,
except for the exceptions expressly provided for herein or therein, including,
without limitation, delivery of all applicable stock certificates (with stock
powers executed in blank), Uniform Commercial Code search reports and other
applicable personal property registry reports, satisfactory title evidence in
form and substance acceptable to Agent, and executed releases of any prior
Liens.
(h) Opinions of Counsel. Agents shall have received such opinions of
counsel to Obligors as Agents shall reasonably request with respect to Obligors
and the Loan Documents.
(i) Consents. Agents shall have received evidence satisfactory to
the Lenders that all material consents of each Governmental Authority and of
each other Person, if any, reasonably required in connection with (a) the
Loans, Letters of Credit and Bankers' Acceptances and (b) the execution,
delivery and performance of this Agreement and the other Loan Documents have
been satisfactorily obtained.
(j) Payment of Certain Outstanding Indebtedness. Agent shall have
received evidence satisfactory to Agent that all existing Indebtedness owing
under the credit facility provided to U.S. Borrower and certain of its
Affiliates by General Electric Credit Corporation and under the credit facility
provided to Dreco Energy Service Ltd. by The Bank of Nova Scotia shall have
been paid in full (or will be paid in full out of the initial advance
hereunder) and that all rights to further advances under such facility shall
have been terminated.
(k) Dreco Acquisition. Dreco Energy Services Ltd. shall have become
a wholly-owned Subsidiary (direct or indirect) of Parent (exclusive of the
Exchangeable Shares).
(l) Other Documents. Agents shall have received such other documents
consistent with the terms of this Agreement and relating to the transactions
contemplated hereby as Agents may reasonably request.
5.2 All Loans, Letters of Credit and Bankers' Acceptances. The
obligation of each Lender to make any Loan to be made by it hereunder or to
issue or participate in any Letter of Credit
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or to accept and purchase any Bankers' Acceptance is subject to (a) the
accuracy, in all material respects, on the date of such Loan or such issuance
or such acceptance and purchase of all representations and warranties of each
Obligor contained in this Agreement and the other Loan Documents; (b) the
applicable Agent shall have received the following, all of which shall be duly
executed and in Proper Form: (1) a Request for Extension of Credit as to the
Loan, Letter of Credit or Bankers' Acceptance, as the case may be, by the time
and on the Business Day specified under Section 4.3 hereof, (2) in the case of
a Letter of Credit, an Application, and (3) such other documents as the
applicable Agent may reasonably require; (c) prior to the making of such Loan
or the issuance of such Letter of Credit or the acceptance and purchase of such
Bankers' Acceptance, there shall have occurred no event which could reasonably
be expected to have a Material Adverse Effect; (d) no Default or Event of
Default shall have occurred and be continuing; (e) the making of such Loan or
the issuance of such Letter of Credit or the acceptance and purchase of such
Bankers' Acceptance shall not be illegal or prohibited by any Legal
Requirement, and (f) Borrowers shall have paid all fees and expenses of the
type described in Section 11.3 hereof and all other fees owed to any Agent or
any Lender under the Loan Documents which are due and payable, in each case,
prior to or on the date of such Loan or such issuance or such acceptance and
purchase. The submission by any Borrower of a Request for Extension of Credit
shall be deemed to be a representation and warranty that the conditions
precedent to the applicable Loan or Letter of Credit or Bankers' Acceptance
have been satisfied.
6. Representations and Warranties.
To induce the Lenders to enter into this Agreement and to make the Loans
and issue or participate in the Letters of Credit and accept and purchase
Bankers' Acceptances, U.S. Borrower and Canadian Borrower each represents and
warrants (such representations and warranties to survive any investigation and
the making of the Loans and the issuance of any Letters of Credit and the
acceptance and purchase of any Bankers' Acceptances) to the Lenders and Agents
as follows:
6.1 Organization. Each Obligor (a) is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization; (b) has all necessary power and authority to conduct its business
as presently conducted, and (c) is duly qualified to do business and in good
standing in the jurisdiction of its organization and in all jurisdictions in
which the failure to so qualify would reasonably be expected to have a Material
Adverse Effect.
6.2 Financial Statements. Borrowers have furnished to Agents: (i)
audited financial statements (including a balance sheet) as to Parent which
fairly present in all material respects, in accordance with GAAP, the
consolidated financial condition and the results of operations of Parent as at
the end of the fiscal year ended December 31, 1996, (ii) unaudited
consolidating financial statements (including a balance sheet) as to Parent and
as to each of the Persons comprising "Canadian Borrower" which fairly present
in all material respects, in accordance with GAAP, the financial condition and
the results of operations of the applicable Person, on a consolidating basis,
as at the end of the fiscal year ended August 31, 1996 (as to Dreco Energy
Services Ltd. and its Subsidiaries) or December 31, 1996 (as to all other
applicable Persons), (iii) unaudited financial
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statements (including a balance sheet) as to each of the Persons comprising
"Canadian Borrower" which fairly present in all material respects, in
accordance with GAAP, the consolidated financial condition and the results of
operations of the applicable Person as at the end of the fiscal year ended
August 31, 1996 (as to Dreco Energy Services Ltd. and its Subsidiaries) or
December 31, 1996 (as to all other applicable Persons); (iv) unaudited
financial statements (including a balance sheet) as to Parent and as to each of
the Persons comprising "Canadian Borrower" which fairly present in all material
respects, in accordance with GAAP (subject to year-end adjustments and the
absence of notes), the consolidated financial condition and the results of
operations of the applicable Person as at the end of the fiscal quarter ended
May 31, 1997 (as to Dreco Energy Services Ltd. and its Subsidiaries) or June
30, 1997 (as to all other applicable Persons) and (v) unaudited consolidating
financial statements (including a balance sheet) as to Parent and as to each of
the Persons comprising "Canadian Borrower" which fairly present in all material
respects, in accordance with GAAP, the financial condition and the results of
operations of the applicable Person as at the end of the fiscal quarter ended
May 31, 1997 (as to Dreco Energy Services Ltd. and its Subsidiaries) or June
30, 1997 (as to all other applicable Persons). No events, conditions or
circumstances have occurred from the date that such financial statements were
delivered to Agents through the Effective Date which would cause such financial
statements to be misleading in any material respect. There are no material
instruments or liabilities which should be reflected in such financial
statements which are not so reflected. For purposes of this Section 6.2 and
Section 7.2 hereof, financial statements as to each Person comprising the
"Canadian Borrower" shall be prepared in accordance with generally accepted
accounting principles in effect in Canada, and "GAAP" shall be deemed modified
accordingly.
6.3 Enforceable Obligations; Authorization. The Loan Documents are
legal, valid and binding obligations of each applicable Obligor, enforceable in
accordance with their respective terms, except as may be limited by bankruptcy,
insolvency and other similar laws and judicial decisions affecting creditors'
rights generally and by general equitable principles. The execution, delivery
and performance of the Loan Documents (a) have all been duly authorized by all
necessary action; (b) are within the power and authority of each applicable
Obligor; (c) do not and will not contravene or violate any Legal Requirement
applicable to any applicable Obligor or the Organizational Documents of any
applicable Obligor, the contravention or violation of which would reasonably be
expected to have a Material Adverse Effect; (d) do not and will not result in
the breach of, or constitute a default under, any material agreement or
instrument by which any Obligor or any of its Property may be bound, and (e) do
not and will not result in the creation of any Lien upon any Property of any
Obligor, except in favor of U.S. Agent as expressly contemplated therein. All
necessary permits, registrations and consents for such making and performance
have been obtained. Except as otherwise expressly stated in the Security
Documents, the Liens of the Security Documents will constitute valid and
perfected first priority Liens on the Property described therein, subject to no
other Liens whatsoever except Permitted Liens.
6.4 Other Debt. No Obligor is in default in the payment of any other
Borrowed Money Indebtedness or under any agreement, mortgage, deed of trust,
security agreement or lease to which it is a party and which default would
reasonably be expected to have a Material Adverse Effect.
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6.5 Litigation. There is no litigation or administrative proceeding,
to the knowledge of any executive officer of any Obligor, pending or threatened
against, nor any outstanding judgment, order or decree against, any Obligor
before or by any Governmental Authority which does or would reasonably be
expected to have a Material Adverse Effect. No Obligor is in default with
respect to any judgment, order or decree of any Governmental Authority where
such default would have a Material Adverse Effect.
6.6 Title. Each Obligor has good and marketable title to the
Collateral, if any, pledged (or purported to be pledged) by such Obligor
pursuant to the Security Documents, free and clear of all Liens (other than
Permitted Liens upon proceeds of Collateral, but not the original Collateral).
6.7 Taxes. Each Obligor has filed all material tax returns required
to have been filed and paid all taxes shown thereon to be due, except those for
which extensions have been obtained and those which are being contested in good
faith.
6.8 Regulations G, U and X. None of the proceeds of any Loan or
proceeds from the acceptance and purchase of Bankers' Acceptances will be used
for the purpose of purchasing or carrying directly or indirectly any margin
stock or for any other purpose that would constitute this transaction a
"purpose credit" within the meaning of Regulations G, U and X of the Board of
Governors of the Federal Reserve System, as any of them may be amended from
time to time.
6.9 Subsidiaries. As of the Effective Date, Parent has no
Subsidiaries other than as set forth on Exhibit I hereto. The percentage of
the issued and outstanding equity interests in each applicable Subsidiary which
is owned by Parent or one or more of its Subsidiaries is set forth on Exhibit I
hereto.
6.10 No Untrue or Misleading Statements. No representation or
warranty made by any Obligor in any Loan Document or in any document,
instrument or other writing furnished to the Lenders by or on behalf of any
Obligor in connection with the transactions contemplated in any Loan Document
does or will contain any untrue material statement of fact or will omit to
state any such fact (of which any executive officer of any Obligor has
knowledge) necessary to make the representations, warranties and other
statements contained herein or in such other document, instrument or writing
not misleading in any material respect.
6.11 ERISA. With respect to each Plan, each Borrower and each member
of the Controlled Group have fulfilled their obligations, including obligations
under the minimum funding standards of ERISA and the Code and are in compliance
in all material respects with the provisions of ERISA and the Code. No event
has occurred which could result in a liability of any Borrower or any member of
the Controlled Group to the PBGC or a Plan (other than to make contributions in
the ordinary course) that would reasonably be expected to have a Material
Adverse Effect. There have not been any nor are there now existing any events
or conditions that would cause any Lien provided under ERISA to attach to any
Property of any Borrower or any member of the Controlled Group.
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Unfunded Liabilities as of the date hereof do not exceed $1,000,000. No
"prohibited transaction" has occurred with respect to any Plan.
6.12 Investment Company Act. No Obligor is an investment company
within the meaning of the Investment Company Act of 1940, as amended, or,
directly or indirectly, controlled by or acting on behalf of any Person which
is an investment company, within the meaning of said Act.
6.13 Public Utility Holding Company Act. No Obligor is an "affiliate"
or a "subsidiary company" of a "public utility company," or a "holding
company," or an "affiliate" or a "subsidiary company" of a "holding company,"
as such terms are defined in the Public Utility Holding Company Act of 1935, as
amended.
6.14 Solvency. None of U.S. Borrower, Canadian Borrower, any other
Obligor, U.S. Borrower and its Subsidiaries, on a consolidated basis, or
Canadian Borrower and its Subsidiaries, on a consolidated basis, is
"insolvent," as such term is used and defined in (i) the Bankruptcy Code and
(ii) the fraudulent conveyance statutes of the State of Texas or of any
jurisdiction in which any of the Collateral may be located.
6.15 Fiscal Year. The fiscal year of each Obligor (other than Dreco
Energy Services Ltd. and its Subsidiaries) ends on December 31. The fiscal
year of Dreco Energy Services Ltd. currently ends on August 31, but by December
31, 1997 the fiscal year end of Dreco Energy Services Ltd. and its Subsidiaries
will be changed to December 31.
6.16 Compliance. Each Obligor is in compliance with all Legal
Requirements applicable to it, except to the extent that the failure to comply
therewith would not reasonably be expected to have a Material Adverse Effect.
6.17 Environmental Matters. Each Obligor has, to the best knowledge
of their respective executive officers, obtained and maintained in effect all
Environmental Permits (or the applicable Person has initiated the necessary
steps to transfer the Environmental Permits into its name or obtain such
permits), the failure to obtain which would reasonably be expected to have a
Material Adverse Effect. Each Obligor and its Properties, business and
operations have been and are, to the best knowledge of their respective
executive officers, in compliance with all applicable Requirements of
Environmental Law and Environmental Permits the failure to comply with which
would reasonably be expected to have a Material Adverse Effect. Each Obligor
and its Properties, business and operations are not subject to any (A)
Environmental Claims or (B), to the best knowledge of their respective
executive officers (after making reasonable inquiry of the personnel and
records of their respective Corporations), Environmental Liabilities, in either
case direct or contingent, arising from or based upon any act, omission, event,
condition or circumstance occurring or existing on or prior to the date hereof
which would reasonably be expected to have a Material Adverse Effect. None of
the officers of any Obligor has received any notice of any violation or alleged
violation of any Requirements of Environmental Law or Environmental Permit or
any Environmental Claim in connection with its Properties, liabilities,
condition (financial or otherwise), business or operations
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which would reasonably be expected to have a Material Adverse Effect. Neither
U.S. Borrower nor Canadian Borrower knows of any event or condition with
respect to currently enacted Requirements of Environmental Laws presently
scheduled to become effective in the future with respect to any of the
Properties of any Obligor which would reasonably be expected to have a Material
Adverse Effect, for which the applicable Obligor has not made good faith
provisions in its business plan and projections of financial performance.
6.18 Collateral Covered. As of the Effective Date, the Collateral
covered by the Security Documents constitutes all of the issued and outstanding
equity interests in all of the Subsidiaries of Parent.
7. Affirmative Covenants.
U.S. Borrower and Canadian Borrower each covenants and agrees with
Agents and the Lenders that prior to the termination of this Agreement it will
do or cause to be done, and cause each other Obligor (unless limited by the
language of the applicable provision to less than all of the Obligors) to do or
cause to be done, each and all of the following:
7.1 Taxes, Existence, Regulations, Property, Etc. At all times (a)
pay when due all material taxes and governmental charges of every kind upon it
or against its income, profits or Property, unless and only to the extent that
the same shall be contested diligently in good faith and adequate reserves in
accordance with GAAP have been established therefor; (b) do all things
necessary to preserve its existence, qualifications, rights and franchises in
all jurisdictions where such failure to qualify would reasonably be expected to
have a Material Adverse Effect; (c) comply with all applicable Legal
Requirements (including without limitation Requirements of Environmental Law)
in respect of the conduct of its business and the ownership of its Property,
the noncompliance with which would reasonably be expected to have a Material
Adverse Effect; and (d) cause its Property to be protected, maintained and kept
in good repair and make all replacements and additions to such Property as may
be reasonably necessary to conduct its business properly and efficiently.
7.2 Financial Statements and Information. Furnish to Agents and each
Lender each of the following: (a) as soon as available and in any event within
90 days after the end of each applicable fiscal year, beginning with the fiscal
year ending on December 31, 1997, audited Annual Financial Statements of Parent
and unaudited Annual Financial Statements of each Person comprising "Canadian
Borrower", (b) as soon as available and in any event within 45 days after the
end of each fiscal quarter of each applicable fiscal year, Quarterly Financial
Statements of Parent and of each Person comprising "Canadian Borrower"; (c)
concurrently with the financial statements provided for in Subsections 7.2(a)
and (b) hereof, such schedules, computations and other information, in
reasonable detail, as may be required by Agents to demonstrate compliance with
the covenants set forth herein or reflecting any non-compliance therewith as of
the applicable date, all certified and signed by an authorized officer of U.S.
Borrower as true and correct in all material respects to the best knowledge of
such officer and, commencing with the quarterly financial
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statement prepared as of September 30, 1997, a compliance certificate
("Compliance Certificate") in the form of Exhibit F hereto, duly executed by
such authorized officer; (d) by December 31 of each fiscal year, U.S.
Borrower's and Canadian Borrower's annual business plans for the next fiscal
year (including their balance sheets and income and cash flow projections for
such fiscal year) (Agents and Lenders acknowledge that such business plans
shall be subject to review and approval by the Board of Directors of the
applicable Person); (e) promptly upon their becoming publicly available, each
financial statement, report, notice or definitive proxy statements sent by any
Obligor to shareholders generally and each regular or periodic report and each
registration statement, prospectus or written communication (other than
transmittal letters) in respect thereof filed by any Obligor with, or received
by any Obligor in connection therewith from, any securities exchange or the
Securities and Exchange Commission or any successor agency, and (f) such other
information relating to the condition (financial or otherwise), operations,
prospects or business of any Obligor as from time to time may be reasonably
requested by any Agent. Each delivery of a financial statement pursuant to this
Section 7.2 shall constitute a restatement of the representations contained in
the last two sentences of Section 6.2.
7.3 Financial Tests. Have and maintain:
(a) Tangible Net Worth - Tangible Net Worth for Parent and its
Subsidiaries (on a consolidated basis) of not less than (1) at the end
of each fiscal quarter ending after the date hereof through and
including December 31, 1997, an amount equal to 85% of Tangible Net
Worth of Parent and its Subsidiaries, on a consolidated basis, as of
June 30, 1997 and (2) at the end of each fiscal quarter ending
thereafter, the amount referred to in clause (1) above plus 50% of the
Net Income (if positive) of Parent and its Subsidiaries, on a
consolidated basis (if positive), for the period from the Effective Date
through the last day of the fiscal quarter ending immediately prior to
the date of such calculation plus 100% of the net proceeds realized from
the issuance of any equity securities by Parent or its Subsidiaries
during that period.
(b) Debt to Capitalization Ratio - a Debt to Capitalization
Ratio of not greater than 40% at the end of each fiscal quarter ending
after the date hereof.
(c) Interest Coverage Ratio - an Interest Coverage Ratio of
not less than 3.00 to 1.00 at all times.
7.4 Inspection. Permit each Agent and each Lender upon 3 days' prior
notice (unless a Default or an Event of Default has occurred which is
continuing, in which case no prior notice is required) to inspect its Property,
to examine its files, books and records, except privileged communication with
legal counsel and classified governmental material, and make and take away
copies thereof, and to discuss its affairs with its officers and accountants,
all during normal business hours and at such intervals and to such extent as
any Agent may reasonably desire.
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7.5 Further Assurances. Promptly execute and deliver, at the expense
of U.S. Borrower or Canadian Borrower, as the case may be, any and all other
and further instruments which may be reasonably requested by any Agent to cure
any defect in the execution and delivery of any Loan Document in order to
effectuate the transactions contemplated by the Loan Documents, and in order to
grant, preserve, protect and perfect the validity and priority of the security
interests created by the Security Documents.
7.6 Books and Records. Maintain books of record and account which
permit financial statements to be prepared in accordance with GAAP.
7.7 Insurance. U.S. Borrower and Canadian Borrower will (and will
cause each other Obligor to) maintain insurance (including business
interruption insurance) with such insurers, on such of its Property, with
responsible companies in such amounts, with such deductibles and against such
risks as are usually carried by owners of similar businesses and properties in
the same general areas in which the applicable Obligor operates or as any Agent
may otherwise reasonably require, and furnish each Agent satisfactory evidence
thereof promptly upon request. These insurance provisions are cumulative of
the insurance provisions of the Security Documents. Each Agent shall be
provided with a certificate of the insurer that the insurance required by this
Section may not be canceled, reduced or affected in any material manner without
thirty (30) days' prior written notice to Agents.
7.8 Notice of Certain Matters. Give Agents written notice of the
following promptly after any executive officer of U.S. Borrower or Canadian
Borrower shall become aware of the same:
(a) the issuance by any court or governmental agency or authority of
any injunction, order or other restraint prohibiting, or having the effect of
prohibiting, the performance of this Agreement, any other Loan Document, or the
making of the Loans or the acceptance and purchase of Bankers' Acceptances or
the initiation of any litigation, or any claim or controversy which would
reasonably be expected to result in the initiation of any litigation, seeking
any such injunction, order or other restraint;
(b) the filing or commencement of any action, suit or proceeding,
whether at law or in equity or by or before any court or any Governmental
Authority involving claims with a specified amount in excess of $3,000,000
against any Obligor or which may reasonably be expected to result in a Default
hereunder; and
(c) any Event of Default or Default, specifying the nature and extent
thereof and the action (if any) which is proposed to be taken with the respect
thereto.
Borrowers will also notify Agents in writing at least 30 days prior to the date
that any Obligor changes its name or the location of its chief executive office
or principal place of business or the place where it keeps its books and
records.
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7.9 Capital Adequacy. If any Lender shall have determined that the
adoption after the Effective Date or effectiveness after the Effective Date
(whether or not previously announced) of any applicable law, rule, regulation
or treaty regarding capital adequacy, or any change therein after the Effective
Date, or any change in the interpretation or administration thereof after the
Effective Date by any Governmental Authority, central bank or comparable agency
charged with the interpretation or administration thereof, or compliance by any
Lender with any request or directive after the Effective Date regarding capital
adequacy (whether or not having the force of law) of any such Governmental
Authority, central bank or comparable agency has or would have the effect of
reducing the rate of return on such Lender's capital as a consequence of its
obligations hereunder, under the Letters of Credit, the Notes or other
Obligations held by it to a level below that which such Lender could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender's policies with respect to capital adequacy) by an amount deemed by
such Lender to be material, then from time to time, upon satisfaction of the
conditions precedent set forth in this Section, after demand by such Lender
(with a copy to the appropriate Agent) as provided below, pay (subject to
Section 11.7 hereof) to such Lender such additional amount or amounts as will
compensate such Lender for such reduction. The certificate of any Lender
setting forth such amount or amounts as shall be necessary to compensate it and
the basis thereof and reasons therefor shall be delivered as soon as
practicable to U.S. Borrower or Canadian Borrower, as the case may be, and
shall be conclusive and binding, absent manifest error. U.S. Borrower or
Canadian Borrower, as the case may be, shall pay the amount shown as due on any
such certificate within fifteen (15) Business Days after the delivery of such
certificate. In preparing such certificate, a Lender may employ such
assumptions and allocations of costs and expenses as it shall in good xxxxx
xxxx reasonable and may use any reasonable averaging and attribution method.
7.10 ERISA Information and Compliance. Promptly furnish to Agents:
(i) immediately upon receipt, a copy of any notice of complete or partial
withdrawal liability under ERISA and any notice from the PBGC under ERISA of an
intent to terminate or appoint a trustee to administer any Plan, (ii) if
requested by any Agent, promptly after the filing thereof with the United
States Secretary of Labor or the PBGC or the Internal Revenue Service or any
Governmental Authority having jurisdiction under Applicable Canadian Pension
Legislation, copies of each annual and other report with respect to each Plan
or any trust created thereunder, (iii) immediately upon becoming aware of the
occurrence of any "reportable event," as such term is used under ERISA for
which the disclosure requirements have not been waived, or of any "prohibited
transaction," as such term is defined in Section 4975 of the Code, in
connection with any Plan or any trust created thereunder, a written notice
signed by the President or the principal financial officer of the applicable
Borrower or the applicable member of the Controlled Group specifying the nature
thereof, what action the applicable Borrower or the applicable member of the
Controlled Group is taking or proposes to take with respect thereto, and, when
known, any action taken by the PBGC, the Internal Revenue Service, the
Department of Labor or any other applicable Governmental Authority with respect
thereto, (iv) promptly after the filing or receiving thereof by any Borrower or
any member of the Controlled Group of any notice of the institution of any
proceedings or other actions which may result in the termination of any Plan,
and (v) each request for waiver of the funding standards or extension of the
amortization periods required by ERISA or Section 412 of the Code promptly
after the request is
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submitted by Borrower or any member of the Controlled Group to the Secretary of
the Treasury, the Department of Labor, the Internal Revenue Service or any
other applicable Governmental Authority. To the extent required under
applicable statutory funding requirements, each Borrower will fund, or will
cause the applicable member of the Controlled Group to fund, all current
service pension liabilities as they are incurred under the provisions of all
Plans from time to time in effect, and comply with all applicable provisions of
ERISA, in each case, except to the extent that failure to do the same would not
reasonably be expected to have a Material Adverse Effect. Each Borrower
covenants that it shall and shall cause each member of the Controlled Group to
(1) make contributions to each Plan in a timely manner and in an amount
sufficient to comply with the contribution obligations under such Plan and the
minimum funding standards requirements of ERISA; (2) prepare and file in a
timely manner all notices and reports required under the terms of ERISA
including but not limited to annual reports; and (3) pay in a timely manner all
required PBGC premiums, in each case, except to the extent that failure to do
the same would not reasonably be expected to have a Material Adverse Effect.
8. Negative Covenants.
U.S. Borrower and Canadian Borrower each covenants and agrees with
Agents and the Lenders that prior to the termination of this Agreement it will
not, and will not suffer or permit any other Obligor to, do any of the
following:
8.1 Borrowed Money Indebtedness. Create, incur, suffer or permit to
exist, or assume or guarantee, directly or indirectly, or become or remain
liable with respect to any Borrowed Money Indebtedness, whether direct,
indirect, absolute, contingent or otherwise, except the following: (a)
indebtedness under this Agreement and the other Loan Documents and indebtedness
secured by Liens permitted by Section 8.2 hereof; (b) Borrowed Money
Indebtedness existing on the date of this Agreement and listed on Exhibit J
attached hereto, and subject to Section 8.10 hereof, all renewals, extensions
and replacements (but not increases other than increases in the Subordinated
Indebtedness described on Exhibit J hereto which is owed to Oilwell, Inc. and
National Supply Company, Inc. by reason of the addition of accrued interest in
accordance with the present terms of the documentation evidencing such
Subordinated Indebtedness) of any of the foregoing; (c) Interest Rate Risk
Indebtedness; (d) purchase money Borrowed Money Indebtedness (or Borrowed Money
Indebtedness under capital leases) to acquire (or lease) Equipment in the
ordinary course of business not exceeding, in the aggregate for all such
Borrowed Money Indebtedness for Parent and its Subsidiaries (on a consolidated
basis), $3,000,000 outstanding at any one time, and (e) other Borrowed Money
Indebtedness not exceeding, in the aggregate for Parent and each of its
Subsidiaries, at any one time outstanding, an amount equal to 12-1/2% of the
Tangible Net Worth of Parent and its Subsidiaries (on a consolidated basis) as
of the last day of the immediately preceding fiscal quarter. Without limiting
the foregoing, Borrowers agree that all Borrowed Money Indebtedness owing by
Parent to any of its Subsidiaries or owing by any Subsidiary of Parent to
Parent or to any other Subsidiary of Parent shall be subordinated in a manner
acceptable to the Majority Lenders and pursuant to documentation in Proper
Form.
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8.2 Liens. Create or suffer to exist any Lien upon any of its
Property now owned or hereafter acquired, or acquire any Property upon any
conditional sale or other title retention device or arrangement or any purchase
money security agreement; or in any manner directly or indirectly sell, assign,
pledge or otherwise transfer any of its Accounts or General Intangibles;
provided, however, that any Obligor may create or suffer to exist Permitted
Liens.
8.3 Contingent Liabilities. Directly or indirectly guarantee the
performance or payment of, or purchase or agree to purchase, or assume or
contingently agree to become or be secondarily liable in respect of, any
obligation or liability of any other Person except for (a) the endorsement of
checks or other negotiable instruments in the ordinary course of business; (b)
obligations disclosed to Agents in the financial statements delivered on or
prior to the Effective Date pursuant to Section 6.2 hereof (but not increases
of such obligations after the Effective Date); (c) guaranties of performance
(but not of any Borrowed Money Indebtedness) by a Subsidiary provided in the
ordinary course of business, and (d) those liabilities permitted under Section
8.1 hereof.
8.4 Mergers, Consolidations and Dispositions of Assets. In any
single transaction or series of transactions, directly or indirectly: (a)
liquidate or dissolve; (b) be a party to any merger or consolidation unless and
so long as (i) no Default or Event of Default has occurred that is then
continuing, (ii) immediately thereafter and giving effect thereto, no event
will occur and be continuing which constitutes a Default, (iii) an Obligor is
the surviving Person; (iv) the surviving Person ratifies and assumes each Loan
Document to which any party to such merger was a party, and (v) Agents are
given at least 30 days' prior written notice of such merger or consolidation;
(c) sell, convey or lease all or any part of its assets, except for sales and
leases of Inventory in the ordinary course of business and replacement of other
Property in the ordinary course of business, or (d) except for Liens in favor
of Agents as contemplated herein, pledge, transfer or otherwise dispose of any
equity interest in (or voting rights in respect of ) any Subsidiary of Parent
or any indebtedness of any Subsidiary of Parent or issue or permit any
Subsidiary of Parent to issue any additional equity interest.
8.5 Redemption, Dividends and Distributions. At any time: (a)
redeem, retire or otherwise acquire, directly or indirectly, any equity
interest in any Obligor or (b) make any distributions of any Property or cash
to the owner of any of the equity interests in any Obligor other than Permitted
Dividends. Notwithstanding the foregoing, the holders of the Exchangeable
Shares may exchange the Exchangeable Shares for shares of National-Oilwell,
Inc. in accordance with the terms of the Combination Agreement described in the
definition of "Exchangeable Shares" in Article I hereof.
8.6 Nature of Business. Change the nature of its business or enter
into any business which is substantially different from the business in which
it is presently engaged.
8.7 Transactions with Related Parties. Enter into any transaction or
agreement with any officer, director or holder of any equity interest in any
Obligor (or any Affiliate of any such Person) unless the same is upon terms
substantially similar to those obtainable from wholly unrelated sources
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(to the best knowledge of the executive officers of the applicable Obligor or
Affiliate, after making reasonable inquiry of the personnel and records of the
applicable Obligor or Affiliate).
8.8 Loans and Investments. Make any loan, advance, extension of
credit or capital contribution to, or make or, except as permitted by Sections
8.4 or 8.9 hereof, have any Investment in, any Person, or make any commitment
to make any such extension of credit or Investment, except (a) Permitted
Investments and (b) normal and reasonable advances in the ordinary course of
business to officers and employees.
8.9 Subsidiaries. Form, create or acquire any Subsidiary, except
that Parent (or any of its Subsidiaries) may form, create or acquire a wholly-
owned Subsidiary so long as (a) immediately thereafter and giving effect
thereto, no event will occur and be continuing which constitutes a Default; (i)
if such Subsidiary is a Material Subsidiary but is not a Foreign Subsidiary,
such Subsidiary shall execute and deliver to each Agent a Guaranty in
substantially the same form as the Guaranties executed concurrently herewith;
(ii) if such Subsidiary is a Material Subsidiary but is not Foreign Subsidiary,
the applicable owner(s) of the equity interests in such Subsidiary shall
execute and deliver to U.S. Agent such Security Documents as U.S. Agent may
reasonably require in order to create a valid, perfected, first priority Lien
upon all of the issued and outstanding equity interests in such Subsidiary,
(iii) if such Subsidiary is a Material Subsidiary and is Foreign Subsidiary and
is not a wholly-owned direct Subsidiary of another Foreign Subsidiary, the
applicable owner(s) of the equity interests in such Subsidiary shall execute
and deliver to U.S. Agent such Security Documents as U.S. Agent may reasonably
require in order to create a valid, perfected, first priority Lien upon 65% of
the issued and outstanding equity interests in such Subsidiary and shall
execute and deliver to Canadian Agent such Security Documents as Canadian Agent
may reasonably require in order to create a valid, perfected, first priority
Lien upon the remaining 35% of the issued and outstanding equity interests in
such Subsidiary and (iv) no Foreign Subsidiary may form, create or acquire a
Subsidiary which is not a Foreign Subsidiary, and (b) Agents are given at least
30 days' prior written notice of such formation, creation or acquisition.
8.10 Key Agreements. Terminate or agree to the termination of any Key
Agreement or amend, modify or obtain or grant a waiver of any provision of any
of the Key Agreements if such action would reasonably be expected to have a
Material Adverse Effect.
8.11 Organizational Documents. Amend, modify, restate or supplement
any of its Organizational Documents if such action would reasonably be expected
to materially and adversely affect any Collateral or Obligation or the ability
of any Obligor to perform its Obligations under any Loan Document, unless such
action shall be consented to in writing by Agents.
8.12 Unfunded Liabilities. Incur any Unfunded Liabilities after the
Effective Date or allow any Unfunded Liabilities in excess of $1,000,000, in
the aggregate, to arise or exist.
8.13 Subordinated Indebtedness. Except as expressly permitted in
writing by the Majority Lenders, Borrowers will not amend, modify or obtain or
grant a waiver of any provision of any
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document or instrument evidencing any Subordinated Indebtedness or purchase,
redeem, retire or otherwise acquire for value, deposit any monies with any
Person with respect to or make any payment or prepayment of the principal of or
any other amount owing in respect of, any Subordinated Indebtedness.
Notwithstanding the foregoing, the Subordinated Indebtedness listed on Exhibit
J hereto payable to Oilwell, Inc. and National Supply Company, Inc. may be
prepaid at any time, without any necessity of notice to or consent by any Agent
or any Lender.
8.14 Acquisitions. Acquire any real Property or any material personal
Property after the Effective Date with respect to which the aggregate
consideration for a single transaction would exceed $50,000,000.
8.15 Prohibitions of Liens or Subsidiary Dividends. Enter into any
agreement or contract which limits or restricts in any way (i) the granting of
Liens by any Obligor securing any of the Obligations or (ii) any dividends or
distributions by any Subsidiary of any Borrower to such Borrower or to another
Subsidiary of such Borrower.
9. Defaults.
9.1 Events of Default. If any one or more of the following events
(herein called "Events of Default") shall occur, then either Agent may (and at
the direction of the Majority Lenders, shall) do any or all of the following:
(1) without notice to U.S. Borrower, Canadian Borrower or any other Person,
declare the Commitments terminated (whereupon the Commitments shall be
terminated) and/or accelerate the Termination Date to a date as early as the
date of termination of the Commitments; (2) terminate any Letter of Credit
allowing for such termination, by sending a notice of termination as provided
therein and require the applicable Borrower to provide Cover for outstanding
Letters of Credit; (3) declare the principal amount then outstanding of and the
unpaid accrued interest on the Loans and Reimbursement Obligations and all fees
and all other amounts payable hereunder, under the Notes and under the other
Loan Documents to be forthwith due and payable, whereupon such amounts shall be
and become immediately due and payable, without notice (including, without
limitation, notice of acceleration and notice of intent to accelerate),
presentment, demand, protest or other formalities of any kind, all of which are
hereby expressly waived by U.S. Borrower and Canadian Borrower; provided that
in the case of the occurrence of an Event of Default with respect to any
Obligor referred to in clause (f), (g) or (h) of this Section 9.1, the
Commitments shall be automatically terminated and the principal amount then
outstanding of and unpaid accrued interest on the Loans and the Reimbursement
Obligations and all fees and all other amounts payable hereunder, under the
Notes and under the other Loan Documents shall be and become automatically and
immediately due and payable, without notice (including, without limitation,
notice of acceleration and notice of intent to accelerate), presentment,
demand, protest or other formalities of any kind, all of which are hereby
expressly waived by U.S. Borrower and Canadian Borrower, and (4) exercise any
or all other rights and remedies available to any Agent or any Lenders under
the Loan Documents, at law or in equity:
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(a) Payments - (i) any Obligor shall fail to make any payment
or required prepayment of any installment of principal on the Loans
payable under this Agreement or the other Loan Documents when due or
(ii) any Obligor fails to make any payment or required prepayment of any
Reimbursement Obligation or any interest with respect to the Loans or
any other fee or amount under this Agreement or the other Loan Documents
when due and, in the case of clause (ii) only, such failure to pay
continues unremedied for a period of five days; or
(b) Other Obligations - any Obligor shall default in the
payment when due of any principal of or interest on any Borrowed Money
Indebtedness having an outstanding principal amount of at least
$3,000,000 (other than the Loans and Reimbursement Obligations) and such
default shall continue beyond any applicable period of grace; or any
event or condition shall occur which results in the acceleration of the
maturity of any such Borrowed Money Indebtedness or enables (or, with
the giving of notice or lapse of time or both, would enable) the holder
of any such Borrowed Money Indebtedness or any Person acting on such
holder's behalf to accelerate the maturity thereof and such event or
condition shall not be cured within any applicable period of grace; or
(c) Representations and Warranties - any representation or
warranty made or deemed made by or on behalf of any Obligor in this
Agreement or any other Loan Document or in any certificate furnished or
made by any Obligor to Agents or the Lenders in connection herewith or
therewith shall prove to have been incorrect, false or misleading in any
material respect as of the date thereof or as of the date as of which
the facts therein set forth were stated or certified or deemed stated or
certified; or
(d) Affirmative Covenants - (i) default shall be made in the
due observance or performance of any of the covenants or agreements
contained in Section 7.3 hereof, (ii) default shall be made in the due
observance or performance of any of the covenants or agreements
contained in Sections 7.2, 7.4, 7.7 or 7.8 hereof and, in each case,
such default continues unremedied for a period of 20 days after notice
thereof is given by any Agent to U.S. Borrower or to Canadian Borrower,
or (iii) default is made in the due observance or performance of any of
the other covenants and agreements contained in Section 7 hereof or any
other affirmative covenant of any Obligor contained in this Agreement or
any other Loan Document and such default continues unremedied for a
period of 30 days after notice thereof is given by any Agent to U.S.
Borrower or to Canadian Borrower; or
(e) Negative Covenants - default is made in the due observance
or performance by U.S. Borrower or Canadian Borrower of any of the
covenants or agreements contained in Section 8 of this Agreement or of
any other negative covenant of any Obligor contained in this Agreement
or any other Loan Document; or
(f) Involuntary Bankruptcy or Receivership Proceedings - a
receiver, receiver-manager, interim receiver, monitor, conservator,
liquidator or trustee of any Obligor or of any
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of its Property is appointed by the order or decree of any court or
agency or supervisory authority having jurisdiction; or any Obligor is
adjudicated bankrupt or insolvent; or any of such Person's Property is
sequestered by court order and such order remains in effect for more
than 60 days; or a petition is filed against any Obligor under any state
or federal bankruptcy, reorganization, arrangement, insolvency,
readjustment or debt, dissolution, liquidation or receivership law or
any jurisdiction, whether now or hereafter in effect, and is not
dismissed within 60 days after such filing; or
(g) Voluntary Petitions or Consents - any Obligor commences a
voluntary case or other proceeding or order seeking liquidation,
reorganization, arrangement, insolvency, readjustment of debt,
dissolution, liquidation or other relief with respect to itself or its
debts or other liabilities under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it
or any substantial part of its Property, or consents to any such relief
or to the appointment of or taking possession by any such official in an
involuntary case or other proceeding commenced against it, or fails
generally to, or cannot, pay its debts generally as they become due or
takes any corporate action to authorize or effect any of the foregoing;
or
(h) Assignments for Benefit of Creditors or Admissions of
Insolvency - any Obligor makes an assignment for the benefit of its
creditors, or admits in writing its insolvency (including any admission
of its inability to pay its debts generally as they become due), or
consents to the appointment of a receiver, receiver-manager, interim
receiver, monitor, trustee, or liquidator of such Obligor or of all or
any substantial part of its Property; or
(i) Undischarged Judgments - a final non-appealable judgment
or judgments for the payment of money exceeding, in the aggregate,
$1,000,000 (exclusive of amounts covered by insurance) is rendered by
any court or other governmental body against any Obligor and such
Obligor does not discharge the same or provide for its discharge in
accordance with its terms, or procure a stay of execution thereof within
30 days from the date of entry thereof; or
(j) Security Documents - any Security Document for any reason
ceases to create a valid, perfected, first priority Lien on any of the
Collateral purported to be covered thereby and securing that portion of
the Obligations which is therein designated as being secured, or any
Obligor (or any other Person who may have granted or purported to grant
such Lien) will so state in writing or U.S. Agent shall cease to have a
valid, perfected, first priority Lien upon all of the issued and
outstanding equity interests in and to all Subsidiaries (other than
Foreign Subsidiaries) of Parent and upon 65% of the issued and
outstanding equity interests in and to Foreign Subsidiaries of Parent
securing the U.S. Obligations or Canadian Agent shall cease to have a
valid, perfected, first priority Lien upon the remaining 35% of the
issued and outstanding equity interests in and to Foreign Subsidiaries
of Parent securing the Canadian Obligations; or
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(k) Ownership Change or Encumbrance - Parent shall cease to
own, directly or indirectly, all of the issued and outstanding equity
interests in each of the Borrowers and each Material Subsidiary or any
Change of Control shall occur.
9.2 Right of Setoff. Upon the occurrence and during the continuance
of any Event of Default, each Lender is hereby authorized at any time and from
time to time, without notice to any Obligor (any such notice being expressly
waived by U.S. Borrower, Canadian Borrower and the other Obligors), to setoff
and apply any and all deposits (general or special, time or demand, provisional
or final but excluding the funds held in accounts clearly designated as escrow
or trust accounts held by U.S. Borrower, Canadian Borrower or any other Obligor
for the benefit of Persons which are not Affiliates of any Obligor), whether or
not such setoff results in any loss of interest or other penalty, and including
without limitation all certificates of deposit, at any time held, and any other
funds or Property at any time held, and other indebtedness at any time owing by
such Lender to or for the credit or the account of U.S. Borrower, Canadian
Borrower or any other Obligor against any and all of the Obligations
irrespective of whether or not such Lender or any Agent will have made any
demand under this Agreement, the Notes or any other Loan Document. Should the
right of any Lender to realize funds in any manner set forth hereinabove be
challenged and any application of such funds be reversed, whether by court
order or otherwise, the Lenders shall make restitution or refund to U.S.
Borrower or Canadian Borrower or the applicable other Obligor, as the case may
be, pro rata in accordance with their U.S. Commitments or Canadian Commitments,
as the case may be. Each Lender agrees to promptly notify U.S. Borrower,
Canadian Borrower and Agents after any such setoff and application, provided
that the failure to give such notice will not affect the validity of such
setoff and application. The rights of Agents and the Lenders under this
Section are in addition to other rights and remedies (including without
limitation other rights of setoff) which Agents or the Lenders may have. This
Section is subject to the terms and provisions of Sections 4.5 and 11.7 hereof.
Any amounts realized under this Section which constitute an asset of Canadian
Borrower shall only be applied to the payment of Canadian Obligations.
9.3 Collateral Account. U.S. Borrower hereby agrees, in addition to
the provisions of Section 9.1 hereof, that upon the occurrence and during the
continuance of any Event of Default, it shall, if requested by any Agent or by
the Majority Lenders (through any Agent), pay to U.S. Agent an amount in
immediately available funds equal to the then aggregate amount available for
drawings under all outstanding U.S. Letters of Credit, which funds shall be
held by U.S. Agent as Cover. Canadian Borrower hereby agrees, in addition to
the provisions of Section 9.1 hereof, that upon the occurrence and during the
continuance of any Event of Default, it shall, if requested by any Agent or by
the Majority Lenders (through any Agent), pay to Canadian Agent an amount in
immediately available funds equal to the sum of the then aggregate amount
available for drawings under all outstanding Canadian Letters of Credit plus
the unpaid principal balance of all outstanding Bankers' Acceptances, which
funds shall be held by Canadian Agent as Cover.
9.4 Preservation of Security for Unmatured Obligations. In the event
that, following (i) the occurrence of an Event of Default and the exercise of
any rights available to any Agent or any Lender under the Loan Documents, and
(ii) payment in full of the principal amount then outstanding
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of and the accrued interest on the Loans and Reimbursement Obligations and fees
and all other amounts payable hereunder and under the Loan Documents and all
other amounts secured by the Security Documents, any Letters of Credit or
Bankers' Acceptances shall remain outstanding and undrawn upon, the applicable
Agent shall be entitled to hold (and each Borrower and each other Obligor
hereby grants and conveys to Agent a security interest in and to) all cash or
other Property ("Proceeds of Remedies") realized or arising out of the exercise
of any rights available under the Loan Documents, at law or in equity,
including, without limitation, the proceeds of any foreclosure, as collateral
for the payment of any amounts due or to become due under or in respect of such
Letters of Credit and/or such Bankers' Acceptances. Such Proceeds of Remedies
shall be held for the ratable benefit of the U.S. Lenders or the Canadian
Lenders, as the case may be. The rights, titles, benefits, privileges, duties
and obligations of the applicable Agent with respect thereto shall be governed
by the terms and provisions of this Agreement and, to the extent not
inconsistent with this Agreement, the applicable Security Documents. The
applicable Agent may, but shall have no obligation to, invest any such Proceeds
of Remedies in such manner as such Agent, in the exercise of its sole
discretion, deems appropriate. Such Proceeds of Remedies shall be applied to
Reimbursement Obligations arising in respect of any such Letters of Credit, the
payment of any Lender's obligations under any such Letter of Credit and/or the
Obligations relating to any such Bankers' Acceptance when such Letter of Credit
is drawn upon or such Bankers' Acceptance matures, as the case may be. Nothing
in this Section shall cause or permit an increase in the maximum amount of the
Obligations permitted to be outstanding from time to time under this Agreement.
Any amounts realized under this Section which constitute an asset of Canadian
Borrower shall only be applied to the payment of Canadian Obligations.
9.5 Currency Conversion After Maturity. At any time following the
occurrence of an Event of Default and the acceleration of the maturity of the
Obligations owed to the Canadian Lenders hereunder, the Canadian Lenders shall
be entitled to convert, with two (2) Business Days' prior notice to Canadian
Borrower, any and all or any part of the then unpaid and outstanding LIBOR
Borrowings and Base Rate Borrowings of the Canadian Borrower to Canadian Prime
Loans. Any such conversion shall be calculated so that the resulting Canadian
Prime Loans shall be the equivalent on the date of conversion of the amount of
Dollars so converted. Any accrued and unpaid interest denominated in Dollars
at the time of any such conversion shall be similarly converted to Canadian
Dollars, and such Canadian Prime Loans and accrued and unpaid interest thereon
shall thereafter bear interest in accordance with the terms hereof.
9.6 Remedies Cumulative. No remedy, right or power conferred upon
any Agent or any Lender is intended to be exclusive of any other remedy, right
or power given hereunder or now or hereafter existing at law, in equity, or
otherwise, and all such remedies, rights and powers shall be cumulative.
10. Agents.
10.1 Appointment, Powers and Immunities. Each U.S. Lender hereby
irrevocably appoints and authorizes U.S. Agent to act as its agent hereunder,
under the U.S. Letters of Credit and under
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the other Loan Documents with such powers as are specifically delegated to U.S.
Agent by the terms hereof and thereof, together with such other powers as are
reasonably incidental thereto. Each Canadian Lender hereby irrevocably
appoints and authorizes Canadian Agent to act as its agent hereunder, under the
Canadian Letters of Credit and under the other Loan Documents with such powers
as are specifically delegated to Canadian Agent by the terms hereof and
thereof, together with such other powers as are reasonably incidental thereto.
Any Loan Documents executed in favor of any Agent shall be held by such Agent
for the ratable benefit of the applicable Lenders. None of the Agents ("Agents"
as used in this Section 10 shall include reference to their Affiliates and
their own and their Affiliates' respective officers, shareholders, directors,
employees and agents) (a) shall have any duties or responsibilities except
those expressly set forth in this Agreement, the Letters of Credit, and the
other Loan Documents, and shall not by reason of this Agreement or any other
Loan Document be a trustee or fiduciary for any Lender; (b) shall be
responsible to any Lender for any recitals, statements, representations or
warranties contained in this Agreement, the Letters of Credit or any other Loan
Document, or in any certificate or other document referred to or provided for
in, or received by any of them under, this Agreement, the Letters of Credit or
any other Loan Document, or for the value, validity, effectiveness,
genuineness, enforceability, execution, filing, registration, collectibility,
recording, perfection, existence or sufficiency of this Agreement, the Letters
of Credit, or any other Loan Document or any other document referred to or
provided for herein or therein or any Property covered thereby or for any
failure by any Obligor or any other Person to perform any of its obligations
hereunder or thereunder, or shall have any duty to inquire into or pass upon
any of the foregoing matters; (c) shall be required to initiate or conduct any
litigation or collection proceedings hereunder or under the Letters of Credit
or any other Loan Document except to the extent requested and adequately
indemnified by the Majority Lenders; (d) shall be responsible for any mistake
of law or fact or any action taken or omitted to be taken by it hereunder or
under the Letters or Credit or any other Loan Document or any other document or
instrument referred to or provided for herein or therein or in connection
herewith or therewith, including, without limitation, pursuant to its own
negligence, except for its own gross negligence or willful misconduct; (e)
shall be bound by or obliged to recognize any agreement among or between any
Borrower and any Lender to which such Agent is not a party, regardless of
whether such Agent has knowledge of the existence of any such agreement or the
terms and provisions thereof; (f) shall be charged with notice or knowledge of
any fact or information not herein set out or provided to such Agent in
accordance with the terms of this Agreement or any other Loan Document; (g)
shall be responsible for any delay, error, omission or default of any mail,
telegraph, cable or wireless agency or operator, and (h) shall be responsible
for the acts or edicts of any Governmental Authority. Any Agent may employ
agents and attorneys-in-fact and none of the Agents shall be responsible for
the negligence or misconduct of any such agents or attorneys-in-fact selected
by it with reasonable care. Without in any way limiting any of the foregoing,
each Lender acknowledges that none of the Agents (nor any Issuer) shall have
greater responsibility in the operation of the Letters of Credit than is
specified in the Uniform Customs and Practice for Documentary Credits (1993
Revision, International Chamber of Commerce Publication No. 500). In any
foreclosure proceeding concerning any Collateral, each holder of an Obligation
if bidding for its own account or for its own account and the accounts of other
Lenders is prohibited from including in the amount of its bid an amount to be
applied as a credit against the Obligations held by it or the Obligations held
by the other Lenders; instead, such
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holder must bid in cash only. However, in any such foreclosure proceeding, (i)
U.S. Agent may (but shall not be obligated to) submit a bid for all U.S.
Lenders (including itself) in the form of a credit against the U.S.
Obligations, and U.S. Agent or its designee may (but shall not be obligated to)
accept title to such collateral for and on behalf of all U.S. Lenders and (ii)
Canadian Agent may (but shall not be obligated to) submit a bid for all
Canadian Lenders (including itself) in the form of a credit against the
Canadian Obligations, and Canadian Agent or its designee may (but shall not be
obligated to) accept title to such collateral for and on behalf of all Canadian
Lenders
10.2 Reliance. Each Agent shall be entitled to rely upon any
certification, notice or other communication (including any thereof by
telephone, telex, telegram or cable) believed by it to be genuine and correct
and to have been signed or sent by or on behalf of the proper Person or
Persons, and upon advice and statements of legal counsel (which may be counsel
for any Borrower), independent accountants and other experts selected by such
Agent. None of the Agents shall be required in any way to determine the
identity or authority of any Person delivering or executing the same. As to
any matters not expressly provided for by this Agreement, the Letters of
Credit, or any other Loan Document, each Agent shall in all cases be fully
protected in acting, or in refraining from acting, hereunder and thereunder in
accordance with instructions of the Majority Lenders, and any action taken or
failure to act by U.S. Agent pursuant thereto shall be binding on all of the
U.S. Lenders and any action taken or failure to act by Canadian Agent pursuant
thereto shall be binding on all of the Canadian Lenders. Pursuant to
instructions of the Majority Lenders, the Agents shall have the authority to
execute releases of the Security Documents on behalf of the Lenders without the
joinder of any Lender. If any order, writ, judgment or decree shall be made or
entered by any court affecting the rights, duties and obligations of any Agent
under this Agreement or any other Loan Document, then and in any of such events
such Agent is authorized, in its sole discretion, to rely upon and comply with
such order, writ, judgment or decree which it is advised by legal counsel of
its own choosing is binding upon it under the terms of this Agreement, the
relevant Loan Document or otherwise; and if such Agent complies with any such
order, writ, judgment or decree, then it shall not be liable to any Lender or
to any other Person by reason of such compliance even though such order, writ,
judgment or decree may be subsequently reversed, modified, annulled, set aside
or vacated.
10.3 Defaults. None of the Agents shall be deemed to have knowledge
of the occurrence of a Default (other than the non-payment of principal of or
interest on Loans or Reimbursement Obligations) unless such Agent has received
notice from a Lender or a Borrower specifying such Default and stating that
such notice is a "Notice of Default." In the event that any Agent receives
such a Notice of Default, such Agent shall give prompt notice thereof to the
Lenders (and shall give each Lender prompt notice of each such non-payment).
Each Agent shall (subject to Section 10.7 hereof) take such action with respect
to such Notice of Default as shall be directed by the Majority Lenders and
within its rights under the Loan Documents and at law or in equity, provided
that, unless and until an Agent shall have received such directions, such Agent
may (but shall not be obligated to) take such action, or refrain from taking
such action, permitted hereby with respect to such Notice of Default as it
shall deem advisable in the best interests of the Lenders and within its rights
under the Loan Documents, at law or in equity.
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10.4 Material Written Notices. In the event that any Agent receives
any written notice of a material nature from any Borrower or any Obligor under
the Loan Documents, such Agent shall promptly inform each of the Lenders
thereof.
10.5 Rights as a Lender. With respect to its Commitments and the
Obligations, each of TCB and Chase Canada, in its capacity as a Lender
hereunder, shall have the same rights and powers hereunder as any other Lender
and may exercise the same as though it were not acting in its agency capacity,
and the term "Lender" or "Lenders" shall, unless the context otherwise
indicates, include each Agent in its individual capacity. Each Agent may
(without having to account therefor to any Lender) accept deposits from, lend
money to and generally engage in any kind of banking, trust, letter of credit,
agency or other business with any Borrower (and any of their Affiliates) as if
it were not acting as an Agent, and each Agent may accept fees and other
consideration from any Borrower (in addition to the fees heretofore agreed to
between any Borrower and any Agent) for services in connection with this
Agreement or otherwise without having to account for the same to the Lenders.
10.6 Indemnification. The Canadian Lenders and the U.S. Lenders,
respectively, agree to indemnify Canadian Agent and U.S. Agent, respectively
(to the extent not reimbursed under Section 2.2(c), Section 11.3 or Section
11.4 hereof, but without limiting the obligations of any Borrower under said
Sections 2.2(c), 11.3 and 11.4), ratably in accordance with the sum of the
applicable Lenders' respective Commitments, for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind and nature whatsoever, REGARDLESS OF
WHETHER CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE OF ANY INDEMNIFIED
PARTIES, which may be imposed on, incurred by or asserted against the
applicable Agent in any way relating to or arising out of this Agreement, the
Letters of Credit or any other Loan Document or any other documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby (including, without limitation, the costs and
expenses which any Borrower is obligated to pay under Sections 2.2(c), 11.3 and
11.4 hereof, interest, penalties, attorneys' fees and amounts paid in
settlement, but excluding, unless a Default has occurred and is continuing,
normal administrative costs and expenses incident to the performance of its
agency duties hereunder) or the enforcement of any of the terms hereof or
thereof or of any such other documents; provided that no Lender shall be liable
for any of the foregoing to the extent they arise from the gross negligence or
willful misconduct of the party to be indemnified. The obligations of the
Lenders under this Section 10.6 shall survive the termination of this Agreement
and the repayment of the Obligations.
10.7 Non-Reliance on Agents and Other Lenders. Each Lender agrees
that it has received current financial information with respect to each
Borrower and each other Obligor and that it has, independently and without
reliance on any Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis of each
Borrower and each other Obligor and decision to enter into this Agreement and
that it will, independently and without reliance upon any Agent or any other
Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under this Agreement or any of the other Loan
Documents. None of the Agents
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shall be required to keep itself informed as to the performance or observance
by any Obligor of this Agreement, the Letters of Credit or any of the other
Loan Documents or any other document referred to or provided for herein or
therein or to inspect the properties or books of any Obligor. Except for
notices, reports and other documents and information expressly required to be
furnished to the Lenders by an Agent hereunder, under the Letters of Credit or
the other Loan Documents, none of the Agents shall have any duty or
responsibility to provide any Lender with any credit or other information
concerning the affairs, financial condition or business of any Obligor (or any
of their affiliates) which may come into the possession of any Agent.
10.8 Failure to Act. Except for action expressly required of an Agent
hereunder, under the Letters of Credit or under the other Loan Documents, each
Agent shall in all cases be fully justified in failing or refusing to act
hereunder and thereunder unless it shall receive further assurances to its
satisfaction by the Lenders of their indemnification obligations under Section
10.6 hereof against any and all liability and expense which may be incurred by
it by reason of taking or continuing to take any such action.
10.9 Resignation or Removal of Agent. Subject to the appointment and
acceptance of a successor U.S. Agent or Canadian Agent, as the case may be, as
provided below, U.S. Agent and Canadian Agent, respectively, may resign at
any time by giving notice thereof to the U.S. Lenders and the Canadian Lenders,
respectively, and to U.S. Borrower and Canadian Borrower, respectively. Any
Agent may be removed at any time with or without cause by the Majority Lenders;
provided, that such Agent shall continue as U.S. Agent or Canadian Agent, as
the case may be, until such time as any successor shall have accepted
appointment hereunder as U.S. Agent or Canadian Agent, as the case may be.
Upon any such resignation or removal, (i) the Majority Lenders without the
consent of Borrower shall have the right to appoint a successor U.S. Agent or
Canadian Agent, as the case may be, so long as such successor U.S. Agent or
Canadian Agent, as the case may be, is also a Lender at the time of such
appointment and (ii) the Majority Lenders shall have the right to appoint a
successor U.S. Agent or Canadian Agent, as the case may be, that is not a
Lender at the time of such appointment so long as Borrowers consent to such
appointment (which consent shall not be unreasonably withheld). If no
successor U.S. Agent or Canadian Agent, as the case may be, shall have been so
appointed by the Majority Lenders and accepted such appointment within 30 days
after the retiring U.S. Agent's or Canadian Agent's, as the case may be, giving
of notice of resignation or the Majority Lenders' removal of the retiring U.S.
Agent or Canadian Agent, as the case may be, then the retiring Agent may, on
behalf of the applicable Lenders, appoint a successor U.S. Agent or Canadian
Agent, as the case may be, without the necessity of any consent on the part of
any Borrower or any Lender. Any successor U.S. Agent shall be a bank which has
an office in the United States and a combined capital and surplus of at least
$250,000,000 and any successor Canadian Agent shall be a bank which has an
office in Canada and a combined capital and surplus of at least C$250,000,000.
Upon the acceptance of any appointment as U.S. Agent or Canadian Agent, as the
case may be, hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent and the retiring Agent shall be discharged
from its duties and obligations hereunder and under any other Loan Documents.
Such successor Agent shall promptly specify by notice to Borrowers its
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Principal Office referred to in Section 3.1 and Section 4 hereof. After any
retiring Agent's resignation or removal hereunder as an Agent, the provisions
of this Section 10 shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as Agent.
10.10 No Partnership. Neither the execution and delivery of this
Agreement nor any of the other Loan Documents nor any interest the Lenders,
Agents or any of them may now or hereafter have in all or any part of the
Obligations shall create or be construed as creating a partnership, joint
venture or other joint enterprise between the Lenders or among the Lenders and
any Agent. The relationship between the Lenders, on the one hand, and any
Agent, on the other, is and shall be that of principals and agent only, and
nothing in this Agreement or any of the other Loan Documents shall be construed
to constitute any Agent as trustee or other fiduciary for any Lender or to
impose on any Agent any duty, responsibility or obligation other than those
expressly provided for herein and therein.
11. Miscellaneous.
11.1 Waiver. No waiver of any Default or Event of Default shall be a
waiver of any other Default or Event of Default. No failure on the part of any
Agent or any Lender to exercise and no delay in exercising, and no course of
dealing with respect to, any right, power or privilege under any Loan Document
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power or privilege thereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The remedies
provided in the Loan Documents are cumulative and not exclusive of any remedies
provided by law or in equity.
11.2 Notices. All notices and other communications provided for
herein (including, without limitation, any modifications of, or waivers or
consents under, this Agreement) shall be given or made by telex, telegraph,
telecopy (confirmed by mail), cable or other writing and telexed, telecopied,
telegraphed, cabled, mailed or delivered to the intended recipient at the
"Address for Notices" specified below its name on the signature pages hereof
(or provided for in an Assignment and Acceptance); or, as to any party hereto,
at such other address as shall be designated by such party in a notice (given
in accordance with this Section) (i) as to any Borrower, to Agents, (ii) as to
U.S. Agent, to U.S. Borrower and to each U.S. Lender, (iii) as to Canadian
Agent, to Canadian Borrower and to each Canadian Lender, (iv) as to any U.S.
Lender, to U.S. Borrower and Agents and (v) as to any Canadian Lender, to
Canadian Borrower and Agents. Except as otherwise provided in this Agreement,
all such notices or communications shall be deemed to have been duly given when
(a) transmitted by telex or telecopier or delivered to the telegraph or cable
office, (b) personally delivered (c) one Business Day after deposit with an
overnight mail or delivery service, postage prepaid or (d) three Business Days'
after deposit in a receptacle maintained by the United States Postal Service or
Canada Post, as the case may be, postage prepaid, registered or certified mail,
return receipt requested, in each case given or addressed as aforesaid.
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11.3 Expenses, Etc. Whether or not any Loan is ever made or any
Bankers' Acceptances ever accepted and purchased or any Letter of Credit ever
issued, Borrowers shall pay or reimburse within 10 days after written demand
(a) any Agent for paying the reasonable fees and expenses of legal counsel to
such Agent, together with the reasonable fees and expenses of each local
counsel to such Agent, in connection with the preparation, negotiation,
execution and delivery of this Agreement (including the exhibits and schedules
hereto), the Security Documents and the other Loan Documents and the making of
the Loans and the acceptance and purchase of Bankers' Acceptances and the
issuance of Letters of Credit hereunder, and any modification, supplement or
waiver of any of the terms of this Agreement, the Letters of Credit or any
other Loan Document; (b) any Agent for any Lien search fees, collateral audit
fees, appraisal fees, survey fees, environmental study fees, and title
insurance costs and premiums; (c) any Agent for reasonable out-of-pocket
expenses incurred in connection with the preparation, documentation,
administration and syndication of any of the Loan Documents (including, without
limitation, the advertising, marketing, printing, publicity, duplicating,
mailing and similar expenses) or any of the Obligations; (d) any Agent or any
Lender for paying all transfer, stamp, documentary or other similar taxes,
assessments or charges levied by any governmental or revenue authority in
respect of this Agreement, any Letter of Credit or any other Loan Document or
any other document referred to herein or therein; (e) any Agent for paying all
costs, expenses, taxes, assessments and other charges incurred in connection
with any filing, registration, recording or perfection of any security interest
contemplated by this Agreement, any Security Document or any document referred
to herein or therein, and (f) following the occurrence and during the
continuation of an Event of Default, any Lender or any Agent for paying all
amounts reasonably expended, advanced or incurred by such Lender or such Agent
to satisfy any obligation of any Obligor under this Agreement or any other Loan
Document, to protect the Collateral, to collect the Obligations or to enforce,
protect, preserve or defend the rights of the Lenders or Agents under this
Agreement or any other Loan Document, including, without limitation, fees and
expenses incurred in connection with such Lender's or such Agent's
participation as a member of a creditor's committee in a case commenced under
the Bankruptcy Code or other similar law, fees and expenses incurred in
connection with lifting the automatic stay prescribed in Section 362 of the
Bankruptcy Code and fees and expenses incurred in connection with any action
pursuant to Section 1129 of the Bankruptcy Code and all other customary out-
of-pocket expenses incurred by such Lender or such Agent in connection with
such matters, together with interest thereon at the Past Due Rate applicable to
U.S. Loans on each such amount from the due date of payment until the date of
reimbursement to such Lender or such Agent.
11.4 Indemnification. Borrowers, jointly and severally, shall
indemnify each Agent, each Lender and each affiliate thereof and their
respective directors, officers, employees and agents from, and hold each of
them harmless against, any and all losses, liabilities, claims or damages to
which any of them may become subject, REGARDLESS OF WHETHER CAUSED IN WHOLE OR
IN PART BY THE NEGLIGENCE OF ANY INDEMNIFIED PARTIES, insofar as such losses,
liabilities, claims or damages arise out of or result from any (i) actual or
proposed use by any Borrower of the proceeds of any extension of credit
(whether a Loan, a Bankers' Acceptance or a Letter of Credit) by any Lender
hereunder; (ii) breach by any Obligor of this Agreement or any other Loan
Document; (iii) violation by any Obligor of any Legal Requirement, or (iv)
investigation,
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litigation or other proceeding relating to any of the foregoing, and Borrowers,
jointly and severally, shall reimburse each Agent, each Lender, and each
Affiliate thereof and their respective directors, officers, employees and
agents, upon demand for any reasonable expenses (including reasonable legal
fees) incurred in connection with any such investigation or proceeding;
provided, however, that none of the Borrowers shall have any obligations
pursuant to this Section with respect to any losses, liabilities, claims,
damages or expenses incurred by the Person seeking indemnification by reason of
the gross negligence or willful misconduct of that Person or with respect to
any disputes between or among any and all of Agents, Lenders and Issuers.
Nothing in this Section is intended to limit the obligations of any Borrower
under any other provision of this Agreement. Each Agent and each Lender,
respectively, shall indemnify Borrowers and hold Borrowers harmless from and
against the gross negligence or willful misconduct of such Agent or such
Lender, as the case may be. Nothing in this Section shall render Canadian
Borrower liable in respect of the U.S. Obligations.
11.5 Amendments, Etc. No amendment or modification of this Agreement,
the Notes or any other Loan Document shall in any event be effective against
any Borrower unless the same shall be agreed or consented to in writing by the
applicable Borrower. No amendment, modification or waiver of any provision of
this Agreement, the Notes or any other Loan Document, nor any consent to any
departure by any Borrower therefrom, shall in any event be effective against
the Lenders unless the same shall be agreed or consented to in writing by the
Majority Lenders, and each such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given; provided,
that no amendment, modification, waiver or consent shall, unless in writing and
signed by each Lender affected thereby, do any of the following: (a) increase
any Commitment of any of the Lenders (or reinstate any termination or reduction
of the Commitments) or subject any of the Lenders to any additional
obligations; (b) reduce the principal of, or interest on, any Loan,
Reimbursement Obligation, fee or other amount due hereunder; (c) postpone or
extend the Maturity Date, the Termination Date, the Availability Period or any
scheduled date fixed for any payment of principal of, or interest on, any Loan,
Reimbursement Obligation, fee or other sum to be paid hereunder or waive any
Event of Default described in Section 9.1(a) hereof; (d) change the percentage
of any of the Commitments or of the aggregate unpaid principal amount of
Obligations, or the percentage of Lenders, which shall be required for the
Lenders or any of them to take any action under this Agreement; (e) change any
provision contained in Sections 2.2(c), 7.9, 11.3 or 11.4 hereof or this
Section 11.5, or (f) release any Person from liability under a Guaranty or
release all or substantially all of the security for the Obligations or release
Collateral (exclusive of Collateral with respect to which any Agent is
obligated to provide a release pursuant to this Agreement or any of the other
Loan Documents or by law) in any one (1) calendar year ascribed an aggregate
value on the most recent financial statements of the applicable Borrower
delivered to Agents in excess of $1,000,000. Notwithstanding anything in this
Section 11.5 to the contrary, no amendment, modification, waiver or consent
shall be made with respect to Section 10 without the consent of U.S. Agent to
the extent it affects U.S. Agent, as U.S. Agent or Canadian Agent to the extent
it affects Canadian Agent, as Canadian Agent.
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11.6 Successors and Assigns.
(a) This Agreement shall be binding upon and inure to the benefit of
Borrowers, Agents and the Lenders and their respective successors and assigns;
provided, however, that no Borrower may assign or transfer any of its rights or
obligations hereunder without the prior written consent of all of the Lenders,
and any such assignment or transfer without such consent shall be null and
void. Each Lender may sell participations to any Person in all or part of any
Loan or Bankers' Acceptance, or all or part of its Notes, Commitments or
interests in Letters of Credit or Bankers' Acceptances, in which event, without
limiting the foregoing, the provisions of the Loan Documents shall inure to the
benefit of each purchaser of a participation; provided, however, the pro rata
treatment of payments, as described in Section 4.2 hereof, shall be determined
as if such Lender had not sold such participation. No Lender that sells one or
more participations to any Person shall be relieved by virtue of such
participation from any of its obligations to Borrowers under this Agreement.
In the event any Lender shall sell any participation, such Lender shall retain
the sole right and responsibility to enforce the obligations of Borrowers
hereunder, including, without limitation, the right to approve any amendment,
modification or waiver of any provision of this Agreement other than
amendments, modifications or waivers with respect to (i) any fees payable
hereunder to the Lenders, (ii) the amount of principal or the rate of interest
payable on, or the dates fixed for the scheduled repayment of principal of, any
of the Obligations and (iii) the release of the Liens on all or substantially
all of the Collateral.
(b) Each U.S. Lender may assign to one or more U.S. Lenders or any
other Person all or a portion of its interests, rights and obligations under
this Agreement; provided, however, that (i) the aggregate amount of the
Commitments of the assigning U.S. Lender subject to each such assignment shall
in no event be less than $10,000,000 and (ii) other than in the case of an
assignment to another U.S. Lender (that is, at the time of the assignment, a
party hereto) or to an Affiliate of such U.S. Lender or to a Federal Reserve
Bank, Agents and, so long as no Event of Default shall have occurred and be
continuing, U.S. Borrower must each give its prior written consent, which
consents shall not be unreasonably withheld. Each Canadian Lender may assign
to one or more Canadian Lenders or any other Person all or a portion of its
interests, rights and obligations under this Agreement; provided, however, that
(i) the aggregate amount of the Commitments of the assigning Canadian Lender
subject to each such assignment shall in no event be less than $10,000,000 and
(ii) other than in the case of an assignment to another Canadian Lender (that
is, at the time of the assignment, a party hereto) or to an Affiliate of such
Canadian Lender, Agents and, so long as no Event of Default shall have
occurred and be continuing, Canadian Borrower must each give its prior written
consent, which consents shall not be unreasonably withheld. As a condition
precedent to any such assignment, the parties to each such assignment shall
execute and deliver to the applicable Agent, for its acceptance an Assignment
and Acceptance in the form of Exhibit E hereto (each an "Assignment and
Acceptance") with blanks appropriately completed, together with any Note or
Notes subject to such assignment and a processing and recording fee of $3,000
paid by the assignee (for which Borrowers will have no liability). Upon such
execution, delivery and acceptance, from and after the effective date specified
in each Assignment and Acceptance, (A) the assignee thereunder shall be a party
hereto and, to the extent provided in such Assignment and Acceptance,
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have the rights and obligations of a Lender hereunder and (B) the Lender
thereunder shall, to the extent provided in such Assignment and Acceptance, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such Lender shall cease
to be a party hereto except in respect of provisions of this Agreement which
survive payment of the Obligations and termination of the Commitments).
Notwithstanding anything contained in this Agreement to the contrary, any
Lender may at any time assign all or any portion of its rights under this
Agreement and the other Loan Documents as collateral to a Federal Reserve Bank;
provided that no such assignment shall release such Lender from any of its
obligations hereunder.
(c) By executing and delivering an Assignment and Acceptance, the
assignor and assignee thereunder confirm to and agree with each other and the
other parties hereto as follows: (i) other than the representation and
warranty that it is the legal and beneficial owner of the interest being
assigned thereby free and clear of any adverse claim, the applicable assignor
makes no representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in connection with
this Agreement or any of the other Loan Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement
or any of the other Loan Documents or any other instrument or document
furnished pursuant thereto; (ii) the applicable assignor makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of any Borrower or the performance or observance by any
Borrower of any of its obligations under this Agreement or any of the other
Loan Documents or any other instrument or document furnished pursuant hereto;
(iii) the applicable assignee confirms that it has received a copy of this
Agreement, together with copies of the financial statements referred to in
Section 6.2 hereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) the applicable assignee will, independently and
without reliance upon any Agent, the applicable assignor or any other Lender
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement and the other Loan Documents; (v) the applicable assignee
appoints and authorizes U.S. Agent or Canadian Agent, as the case may be, to
take such action as agent on its behalf and to exercise such powers under this
Agreement and the other Loan Documents as are delegated to such Agent by the
terms hereof, together with such powers as are reasonably incidental thereto;
and (vi) the applicable assignee agrees that it will perform in accordance with
their terms all obligations that by the terms of this Agreement and the other
Loan Documents are required to be performed by it as a Lender.
(d) The entries in the records of each applicable Agent as to each
Assignment and Acceptance delivered to it and the names and addresses of the
Lenders and the Commitments of, and principal amount of the Obligations owing
to, each Lender from time to time shall be conclusive, in the absence of
manifest error, and Borrowers, Agents and the Lenders may treat each Person the
name of which is recorded in the books and records of the applicable Agent as a
Lender hereunder for all purposes of this Agreement and the other Loan
Documents.
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(e) Upon the applicable Agent's receipt of an Assignment and
Acceptance executed by an assigning Lender and the assignee thereunder,
together with any Note or Notes subject to such assignment and the written
consent to such assignment (to the extent consent is required), such Agent
shall, if such Assignment and Acceptance has been completed with blanks
appropriately filled, (i) accept such Assignment and Acceptance, (ii) record
the information contained therein in its records and (iii) give prompt notice
thereof to the applicable Borrower. Within five Business Days after receipt of
notice, the applicable Borrower, at its own expense, shall execute and deliver
to the applicable Agent new Notes payable to the order of such assignee in the
appropriate amounts and, if the assigning Lender has retained Commitments
hereunder, new Notes to the order of the assigning Lender in the appropriate
amounts. Such new Notes shall be dated the effective date of such Assignment
and Acceptance and shall otherwise be in the forms required hereunder.
(f) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
11.6, disclose to the assignee or participant or proposed assignee or
participant, any information relating to any Borrower furnished to such Lender
by or on behalf of any Borrower.
11.7 Limitation of Interest. Borrowers and the Lenders intend to
strictly comply with all applicable federal and Texas laws, including
applicable usury laws (or the usury laws of any jurisdiction, including Canada,
whose usury laws are deemed to apply to the Notes or any other Loan Documents
despite the intention and desire of the parties to apply the usury laws of the
State of Texas). Accordingly, the provisions of this Section 11.7 shall govern
and control over every other provision of this Agreement or any other Loan
Document which conflicts or is inconsistent with this Section, even if such
provision declares that it controls. As used in this Section, the term
"interest" includes the aggregate of all charges, fees, benefits or other
compensation which constitute interest under applicable law, provided that, to
the maximum extent permitted by applicable law, (a) any non-principal payment
shall be characterized as an expense or as compensation for something other
than the use, forbearance or detention of money and not as interest, and (b)
all interest at any time contracted for, reserved, charged or received shall be
amortized, prorated, allocated and spread, in equal parts during the full term
of the Obligations. In no event shall Borrowers or any other Person be
obligated to pay, or any Lender have any right or privilege to reserve, receive
or retain, (a) any interest in excess of the maximum amount of nonusurious
interest permitted under the laws of the State of Texas or the applicable laws
(if any) of the United States or of any other applicable jurisdiction, or (b)
total interest in excess of the amount which such Lender could lawfully have
contracted for, reserved, received, retained or charged had the interest been
calculated for the full term of the Obligations at the Ceiling Rate. The daily
interest rates to be used in calculating interest at the Ceiling Rate shall be
determined by dividing the applicable Ceiling Rate per annum by the number of
days in the calendar year for which such calculation is being made. None of
the terms and provisions contained in this Agreement or in any other Loan
Document (including, without limitation, Section 9.1 hereof) which directly or
indirectly relate to interest shall ever be construed without reference to this
Section 11.7, or be construed to create a contract to pay for the use,
forbearance or detention of money at an interest rate in excess of the Ceiling
Rate. If the term of any Obligation is shortened by reason of acceleration of
maturity as a result of any Default or by any
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other cause, or by reason of any required or permitted prepayment, and if for
that (or any other) reason any Lender at any time, including but not limited
to, the stated maturity, is owed or receives (and/or has received) interest in
excess of interest calculated at the Ceiling Rate, then and in any such event
all of any such excess interest shall be canceled automatically as of the date
of such acceleration, prepayment or other event which produces the excess, and,
if such excess interest has been paid to such Lender, it shall be credited pro
tanto against the then-outstanding principal balance of the applicable
Borrower's obligations to such Lender, effective as of the date or dates when
the event occurs which causes it to be excess interest, until such excess is
exhausted or all of such principal has been fully paid and satisfied, whichever
occurs first, and any remaining balance of such excess shall be promptly
refunded to its payor.
11.8 Survival. The obligations of Borrowers under Sections 2.2(c),
2.2(d), 7.9, 11.3 and 11.4 hereof and all other obligations of Borrowers in any
other Loan Document (to the extent stated therein), the obligations of each
Issuer under the last sentence of Section 2.2(b)(iii) and the obligations of
the Lenders under Section 10.5 and 11.7 hereof, shall, notwithstanding anything
herein to the contrary, survive the repayment of the Loans and Reimbursement
Obligations and the termination of the Commitments and the Letters of Credit.
11.9 Captions. Captions and section headings appearing herein are
included solely for convenience of reference and are not intended to affect the
interpretation of any provision of this Agreement.
11.10 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
agreement and any of the parties hereto may execute this Agreement by signing
any such counterpart.
11.11 Venue; Governing Law. This Agreement and (except as therein
provided) the other Loan Documents are performable in Xxxxxx County, Texas,
which shall be a proper place of venue for suit on or in respect thereof. Each
Borrower irrevocably agrees that any legal proceeding in respect of this
Agreement or the other Loan Documents shall be brought in the district courts
of Xxxxxx County, Texas or the United States District Court for the Southern
District of Texas, Houston Division (collectively, the "Specified Courts").
Each Borrower hereby irrevocably submits to the nonexclusive jurisdiction of
the state and federal courts of the State of Texas. Each Borrower hereby
irrevocably waives, to the fullest extent permitted by law, any objection which
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to any Loan Document brought in any
Specified Court, and hereby further irrevocably waives any claims that any such
suit, action or proceeding brought in any such court has been brought in an
inconvenient forum. Each Borrower further (1) agrees to designate and maintain
an agent for service of process in the State of Texas in connection with any
such suit, action or proceeding upon request by any Agent and to deliver to
Agents evidence thereof and (2) irrevocably consents to the service of process
out of any of the aforementioned courts in any such suit, action or proceeding
by the mailing of copies thereof by certified mail, return receipt requested,
postage prepaid, to such Borrower at its address as provided in this Agreement
or as otherwise provided by applicable law.
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Nothing herein shall affect the right of any Agent or any Bank to commence
legal proceedings or otherwise proceed against any Borrower in any jurisdiction
or to serve process in any manner permitted by applicable law. Each Borrower
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. THIS AGREEMENT AND (EXCEPT AS THEREIN
PROVIDED) THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE APPLICABLE LAWS OF THE STATE OF TEXAS AND THE UNITED STATES
OF AMERICA FROM TIME TO TIME IN EFFECT; PROVIDED, HOWEVER, THAT, EXCEPT AS MAY
BE REQUIRED UNDER APPLICABLE LAWS, THE USURY LAWS OF THE STATE OF TEXAS OR THE
UNITED STATES OF AMERICA SHALL NOT APPLY TO ADVANCES MADE IN CANADA BY CANADIAN
LENDERS TO CANADIAN BORROWER, BUT RATHER THE USURY LAWS OF THE PROVINCE OF
ONTARIO AND THE FEDERAL LAWS OF CANADA APPLICABLE THEREIN SHALL GOVERN IN SUCH
CONTEXT.
11.12 Severability. Whenever possible, each provision of the Loan
Documents shall be interpreted in such manner as to be effective and valid
under applicable law. If any provision of any Loan Document shall be invalid,
illegal or unenforceable in any respect under any applicable law, the validity,
legality and enforceability of the remaining provisions of such Loan Document
shall not be affected or impaired thereby.
11.13 Tax Forms; Net Payments.
(a) Each U.S. Lender which is organized under the laws of a
jurisdiction outside the United States shall, on the day of the initial
borrowing from each such U.S. Lender hereunder and from time to time thereafter
if requested by U.S. Borrower or U.S. Agent, provide U.S. Agent and U.S.
Borrower with the forms prescribed by the Internal Revenue Service of the
United States certifying as to such U.S. Lender's status for purposes of
determining exemption from United States withholding taxes with respect to all
payments to be made to such U.S. Lender hereunder or other documents
satisfactory to such U.S. Lender, U.S. Borrower and U.S. Agent indicating that
all payments to be made to such U.S. Lender hereunder are not subject to United
States withholding tax or are subject to such tax at a rate reduced by an
applicable tax treaty. Unless U.S. Borrower and U.S. Agent shall have received
such forms or such documents indicating that payments to such U.S. Lender
hereunder are not subject to United States withholding tax or are subject to
such tax at a rate reduced by an applicable tax treaty, U.S. Borrower and U.S.
Agent shall be entitled to withhold taxes from such payments at the applicable
statutory rate.
(b) Except as provided in Section 11.13(a), (i) all payments (whether
of principal, interest, fees, reimbursements or otherwise) by Borrowers under
this Agreement and the other Loan Documents shall be made without set-off or
counterclaim and shall be made free and clear of and without deduction for any
present or future tax, levy, impost or any other charge, if any, of any nature
whatsoever now or hereafter imposed by any taxing authority and (ii) if the
making of such payments by any Borrower is prohibited by law unless such a tax,
levy, impost or other charge is deducted or
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withheld therefrom, the applicable Borrower shall pay to the relevant Agent, on
the date of each such payment, such additional amounts (without duplication of
any amounts required to be paid by the applicable Borrower hereunder) as may be
necessary in order that net amounts received by the Lenders after such
deduction or withholding shall equal the amounts which would have been received
if such deduction or withholding were not required. The applicable Borrower
shall confirm that all applicable taxes, if any, imposed on this Agreement or
transactions hereunder shall have been properly and legally paid by it to the
appropriate taxing authorities by sending official tax receipts or notarized
copies of such receipts to the relevant Agent within 30 days after payment of
any applicable tax. Notwithstanding the foregoing, in no event shall the
compensation payable under this Section (to the extent, if any, constituting
interest under applicable laws) together with all amounts constituting interest
under applicable laws and payable in connection with this Agreement and the
other Loan Documents exceed the Ceiling Rate.
(c) Each Canadian Lender is a resident of Canada for purposes of the
Income Tax Act (Canada).
11.14 Interest Act (Canada). Whenever interest is calculated on the
basis of a year of 360 or 365 days, for the purposes of the Interest Act
(Canada), the yearly rate of interest which is equivalent to the rate payable
hereunder is the rate payable multiplied by the actual number of days in the
year and divided by 360 or 365, as the case may be. All interest will be
calculated using the nominal rate method and not the effective rate method and
the deemed reinvestment principle shall not apply to such calculations.
11.15 Judgment Currency. The obligation of each Borrower to make
payments on any Obligation to the Lenders or to any Agent hereunder in any
currency (the "first currency") shall not be discharged or satisfied by any
tender or recovery pursuant to any judgment expressed in or converted into any
other currency (the "second currency") except to the extent to which such
tender or recovery shall result in the effective receipt by the applicable
Lender or the applicable Agent of the full amount of the first currency
payable, and accordingly the primary obligation of each Borrower shall be
enforceable as an alternative or additional cause of action for the purpose of
recovery in the second currency of the amount (if any) by which such effective
receipt shall fall short of the full amount of the full currency payable and
shall not be affected by a judgment being obtained for any other sum due
hereunder.
11.16 Conflicts Between This Agreement and the Other Loan Documents.
In the event of any conflict between the terms of this Agreement and the terms
of any of the other Loan Documents, the terms of this Agreement shall control.
11.17 Limitation on Charges; Substitute Lenders; Non-Discrimination.
Anything in Sections 3.3(c) or 7.9 notwithstanding:
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(1) No Borrower shall be required to pay to any Lender
reimbursement with regard to any costs or expenses described in such
Sections, unless such Lender notifies the applicable Borrower of such
costs or expenses within 90 days after the date paid or incurred;
(2) none of the Lenders shall be permitted to pass through to
any Borrower charges and costs under such Sections on a discriminatory
basis (i.e., which are not also passed through by such Lender to other
customers of such Lender similarly situated where such customer is
subject to documents providing for such pass through); and
(3) if any Lender elects to pass through to any Borrower any
material charge or cost under such Sections or elects to terminate the
availability of LIBOR Borrowings for any material period of time, the
applicable Borrower may, within 60 days after the date of such event and
so long as no Default shall have occurred and be continuing, elect to
terminate such Lender as a party to this Agreement; provided that,
concurrently with such termination such Borrower shall (i) if Agents and
each of the other Lenders shall consent, pay that Lender all principal,
interest and fees and other amounts owed to such Lender through such
date of termination or (ii) have arranged for another financial
institution approved by Agents (such approval not to be unreasonably
withheld) as of such date, to become a substitute Lender for all
purposes under this Agreement in the manner provided in Section 11.6;
provided further that, prior to substitution for any Lender, the
applicable Borrower shall have given written notice to Agents of such
intention and the Lenders shall have the option, but no obligation, for
a period of 60 days after receipt of such notice, to increase their
Commitments in order to replace the affected Lender in lieu of such
substitution.
11.18 Multiple Persons Comprising Canadian Borrower. The parties
recognize and acknowledge that "Canadian Borrower" is comprised of more than
one Person. All duties and obligations imposed on "Canadian Borrower"
hereunder or under any of the other Loan Documents shall be the joint and
several duties and obligations of each Person comprising "Canadian Borrower",
notwithstanding the manner in which any of such obligations shall be allocated
among the Persons comprising "Canadian Borrower" for the purposes of such
Persons' internal records and accounts. Whenever this Agreement or any of the
other Loan Documents requires the execution and delivery of any document or
instrument by "Canadian Borrower", such requirement may be satisfied by
execution and delivery by any single one of the Persons comprising "Canadian
Borrower", and execution and delivery of any document or instrument by any
single one of the Persons comprising "Canadian Borrower" shall be binding upon
each of the Persons comprising "Canadian Borrower".
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the Effective Date.
NATIONAL-OILWELL, L.P.,
a Delaware limited partnership, as U.S. Borrower
By: Its Sole General Partner, NOW Oilfield
Services, Inc., a Delaware corporation
By: /s/ XXXXXX X. XXXXXXXX
---------------------------------------
Name: Xxxxxx X. Xxxxxxxx
-------------------------------------
Title: Treasurer
------------------------------------
NATIONAL-OILWELL CANADA LTD.,
a British Columbia company,
as Canadian Borrower
By: /s/ XXXXXX X. XXXXXXXX
----------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
--------------------------------------------
Title: Assistant Treasurer
-------------------------------------------
DRECO ENERGY SERVICES LTD.,
an Alberta corporation, as Canadian Borrower
By: /s/ XXXX X. NATION
----------------------------------------------
Name: Xxxx X. Nation
--------------------------------------------
Title: Assistant Secretary
-------------------------------------------
Address for Notices:
National-Oilwell, Inc.
0000 Xxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxxxx
Telecopy No.: (000) 000-0000
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with a copies to:
Dreco Energy Services Ltd.
Suite 1340 Xxxxx Centre
0000 Xxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxx X0X 0X0 XXXXXX
Attention: Xx. Xxxxxx X. Xxxxxxx
Telecopy No.: (000) 000-0000
and
National-Oilwell Canada Ltd.
0000 Xxx Xxxxxx Xxxxxx III
000 Xxxxx Xxxxxx XX
Xxxxxxx, Xxxxxxx X0X 0X0 XXXXXX
Attention: X. X. Xxxxx
Telecopy No.: (000) 000-0000
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TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, as U.S. Agent and as a U.S. Lender
By: /s/ XXXX X. XXXX
----------------------------------------------
Xxxx X. Xxxx, Vice President
Address for Notices:
U.S. Commitment: 000 Xxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
$15,000,000 Attention: Manager, Structured Finance - Oil
Service
Telecopy No.: (000) 000-0000
Canadian Commitment:
$0
80
00
XXX XXXXX XXXXXXXXX XXXX XX XXXXXX,
as Canadian Agent and as a Canadian Lender
By: /s/ XXXXXXXXX XXXX
----------------------------------------------
Name: Xxxxxxxxx Xxxx
--------------------------------------------
Title: Vice President
-------------------------------------------
Address for Notices:
U.S. Commitment: First Canadian Place
000 Xxxx Xxxxxx Xxxx, Xxxxx 0000
$0 Toronto, Ontario M5X 1A4
Attention: Ms. Xxxxxxxxx Xxxx
Telecopy No.: (000) 000-0000
Canadian Commitment:
$10,000,000
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XXXXX FARGO BANK (TEXAS), NATIONAL
ASSOCIATION, as U.S. Co-Agent and as a U.S.
Lender
By: /s/ XXXXX X. XXXXXXXXX
----------------------------------------------
Name: Xxxxx X. Xxxxxxxxx
--------------------------------------------
Title: Vice President, Senior Relationship Mgr.
-------------------------------------------
Address for Notices:
U.S. Commitment: 0000 Xxxxxxxxx
0xx Xxxxx
$20,000,000 Attention: Xx. Xxxxx Xxxxxxxxx
Telecopy No.: (000) 000-0000
Canadian Commitment:
$0
82
00
XXX XXXX XX XXXX XXXXXX,
as Canadian Co-Agent and as a
Canadian Lender
By: /s/ XXXX XXXXXXX
----------------------------------------------
Name: Xxxx Xxxxxxx
--------------------------------------------
Title: Vice President and Office Head
-------------------------------------------
By: /s/ XXXX CEBRYK
----------------------------------------------
Name: Xxxx Cebryk
--------------------------------------------
Title: Relationship Manager
-------------------------------------------
U.S. Commitment:
Address for Notices:
$0
International Banking Division-Loan Accounting
00xx Xxxxx
Xxxxxxxx Commitment: 00 Xxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx XXXXXX X0X 0X0
$15,000,000 Attention: Assistant Manager
with a copies to:
The Bank of Nova Scotia
Corporate Banking Calgary
Xxxxx #0000, 000-0xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx XXXXXX X0X 0X0
Attention: Vice President
and to:
0000 Xxxxxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xx. Xxxx Xxxxxxxx
Telecopy No.: (000) 000-0000
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00
XXX XXXX XX XXXX XXXXXX,
as a U.S. Lender
By: /s/ F. C. H. XXXXX
----------------------------------------------
Name: F. C. H. Xxxxx
--------------------------------------------
Title: Senior Manager - Loan Operations
-------------------------------------------
U.S. Commitment:
Address for Notices:
$5,000,000
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Canadian Commitment: Attention: Xx. Xxxxx Xxxxxx
$0 with a copy to:
0000 Xxxxxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xx. Xxxx Xxxxxxxx
Telecopy No.: (000) 000-0000
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THE FUJI BANK, LIMITED HOUSTON AGENCY
By: /s/ XXXXXXX XXXXXX
----------------------------------------------
Name: Xxxxxxx Xxxxxx
--------------------------------------------
Title: Vice President & Manager
-------------------------------------------
Address for Notices:
U.S. Commitment: The Fuji Bank, Limited
0000 XxXxxxxx, Xxxxx 000
$15,000,000 Xxxxxxx, Xxxxx 00000
Attention: Xx. Xxxx X. Xxxxxxx
Telecopy No.: (000) 000-0000
Canadian Commitment:
$0
85
00
XXX XXXX XX XXX XXXX
By: /s/ XXXX X. XXXXXX, XX.
----------------------------------------------
Name: Xxxx X. Xxxxxx, Xx.
--------------------------------------------
Title: Vice President
-------------------------------------------
Address for Notices:
U.S. Commitment: One Wall Street
22nd Floor
$15,000,000 Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxx Xxxxxx
Telecopy No.: (000) 000-0000
Canadian Commitment:
$0
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CORESTATES BANK, N.A.
By: /s/ XXXXX XXXXXXX
----------------------------------------------
Name: Xxxxx Xxxxxxx
--------------------------------------------
Title: Vice President
-------------------------------------------
Address for Notices:
U.S. Commitment: 0000 Xxx Xxxxxx, X.X.
Xxxxx 0000
$15,000,000 Xxxxxxx, Xxxxx 00000
Attention: Mr. Xxxxx Xxxxxxx
Telecopy No.: (000) 000-0000
Canadian Commitment:
$0
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CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ PASCAL POUBELLE
----------------------------------------------
Name: Pascal Poubelle
--------------------------------------------
Title: Executive Vice President
-------------------------------------------
Address for Notices:
U.S. Commitment: 0000 Xxxxxxxxx
Xxxxx 0000
$15,000,000 Xxxxxxx, Xxxxx 00000
Attention: Xx. Xxx Xxxxxxxx
Telecopy No.: (000) 000-0000
Canadian Commitment:
$0
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