1
EXHIBIT 99.7
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$550,000,000
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT
AMONG
KEY ENERGY GROUP, INC.
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO
PNC BANK, NATIONAL ASSOCIATION,
AS ADMINISTRATIVE AGENT
NORWEST BANK TEXAS, N.A.,
AS COLLATERAL AGENT
AND
PNC CAPITAL MARKETS, INC.
AS ARRANGER
DATED AS OF JUNE 6, 1997
AS AMENDED AND RESTATED THROUGH
SEPTEMBER 14, 1998
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TABLE OF CONTENTS
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SECTION 1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 Defined Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Other Definitional Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.1 Term Commitments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.2 Procedure for Term Loan Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.3 Repayment of Term Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.4 Revolving Commitments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
2.5 Procedure for Revolving Loan Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
2.6 Commitment Fees, etc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
2.7 Repayment of Loans; Evidence of Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
2.8 Optional Termination or Reduction of Revolving Commitments . . . . . . . . . . . . . . . . . . . 34
2.9 Optional Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
2.10 Mandatory Prepayments and Commitment Reductions . . . . . . . . . . . . . . . . . . . . . . . . 34
2.11 Conversion and Continuation Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
2.12 Minimum Amounts and Maximum Number of Eurodollar Tranches . . . . . . . . . . . . . . . . . . . 37
2.13 Interest Rates and Payment Dates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
2.14 Computation of Interest and Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
2.15 Inability to Determine Interest Rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
2.16 Pro Rata Treatment and Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
2.17 Illegality. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
2.18 Requirements of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
2.19 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
2.20 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
2.21 Change of Lending Office. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
2.22 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
2.23 Replacement of Lenders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
2.24 Reallocation of Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 3. LETTERS OF CREDIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
3.1 L/C Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
3.2 Procedure for Issuance of Letter of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
3.3 Fees, Commissions and Other Charges. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
3.4 L/C Participation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
3.5 Reimbursement Obligation of the Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
3.6 Obligations Absolute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
3.7 Letter of Credit Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
3.8 Applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 4. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
4.1 Financial Condition. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
4.2 No Change. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
4.3 Corporate Existence; Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
4.4 Corporate Power; Authorization; Enforceable Obligations. . . . . . . . . . . . . . . . . . . . . 51
4.5 No Legal Bar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
4.6 No Material Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
4.7 No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
4.8 Ownership of Property; Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
4.9 Intellectual Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
4.10 No Burdensome Restrictions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
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4.11 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
4.12 Federal Regulations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
4.13 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
4.14 Investment Company Act; Other Regulations. . . . . . . . . . . . . . . . . . . . . . . . . . 53
4.15 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
4.16 Purpose of Loans; Limitations on Use . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
4.17 Environmental Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
4.18 Accuracy of Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
4.19 Security Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
4.20 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
4.21 Labor Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
4.22 Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
4.23 Excluded Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
4.24 Oil and Gas Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
4.25 Year 2000 Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 5. CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
5.1 Conditions to Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
5.2 Conditions to Loans made on or after the Merger Date and occurrence of
Scheduled Revolving Termination Date . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
5.3 Conditions to Each Extension of Credit. . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 6. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
6.1 Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
6.2 Certificates; Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
6.3 Payment of Obligations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
6.4 Conduct of Business and Maintenance of Existence, etc.. . . . . . . . . . . . . . . . . . . . 67
6.5 Maintenance of Property; Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
6.6 Inspection of Property; Books and Records; Discussions. . . . . . . . . . . . . . . . . . . . 67
6.7 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
6.8 Environmental Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
6.9 Further Assurances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
6.10 Additional Collateral. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
6.11 Consummation of Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
6.12 Interest Rate Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
6.13 Subordinated Put Facility. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
6.14 Post-Closing Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 7. NEGATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
7.1 Financial Condition Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
7.2 Limitation on Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
7.3 Limitation on Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
7.4 Limitation on Guarantee Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
7.5 Limitation on Fundamental Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
7.6 Limitation on Sale of Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
7.7 Limitation on Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
7.8 Limitation on Capital Expenditures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
7.9 Limitation on Investments, Loans and Advances . . . . . . . . . . . . . . . . . . . . . . . . 83
7.10 Limitation on Optional Payments and Modifications of Debt Instruments and
Organizational Documentation, etc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
7.11 Limitation on Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . 85
7.12 Limitation on Sales and Leasebacks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
7.13 Limitation on Change of Fiscal Year. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
7.14 Limitation on Negative Pledge Clauses. . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
7.15 Limitation on Lines of Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
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7.16 Limitation on Consolidated Lease Expense................................................... 86
SECTION 8. EVENTS OF DEFAULT............................................................................. 86
SECTION 9. THE AGENTS.................................................................................... 89
9.1 Appointment................................................................................. 89
9.2 Delegation of Duties........................................................................ 89
9.3 Exculpatory Provisions...................................................................... 89
9.4 Reliance by Agents.......................................................................... 90
9.5 Notice of Default........................................................................... 90
9.6 Non-Reliance on Agents and Other Lenders.................................................... 91
9.7 Indemnification............................................................................. 91
9.8 Agents in Their Individual Capacities....................................................... 91
9.9 Successor Agents............................................................................ 92
SECTION 10. MISCELLANEOUS................................................................................ 92
10.1 Amendments and Waivers..................................................................... 92
10.2 Notices.................................................................................... 93
10.3 No Waiver; Cumulative Remedies............................................................. 94
10.4 Survival................................................................................... 94
10.5 Payment of Expenses and Taxes.............................................................. 94
10.6 Successors and Assigns; Participation and Assignments...................................... 95
10.7 Adjustments; Set-off....................................................................... 98
10.8 Counterparts............................................................................... 99
10.9 Severability............................................................................... 99
10.10 Integration............................................................................... 99
10.11 GOVERNING LAW............................................................................. 99
10.12 Submission To Jurisdiction; Waivers....................................................... 99
10.13 Acknowledgements.......................................................................... 100
10.14 WAIVERS OF JURY TRIAL..................................................................... 100
10.15 Confidentiality........................................................................... 100
10.16 Enforceability; Usury..................................................................... 101
10.17 Intercreditor Agreement................................................................... 101
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ANNEXES:
I Pricing Grid A
II Pricing Grid B
SCHEDULES:
1.1A Commitments; Lending Offices and Addresses
1.1B Mortgaged Property
1.1C Mortgaged Oil and Gas Properties
3.1 Existing Letters of Credit
4.4 Consents
4.8 Other Real Property Interests
4.15 Subsidiaries
4.19(b) UCC Filing Jurisdictions
4.19(c) Mortgage Filing Jurisdictions
4.19(d) Oil and Gas Mortgage Filing Jurisdictions
6.14(a)(i) Unperfected Vehicles
6.14(a)(ii) Newly Acquired Vehicles
7.2 Existing Indebtedness
7.3 Existing Liens
7.9(c) Additional Permitted Acquisitions
EXHIBITS:
A Form of Master Guarantee and Collateral Agreement
B Form of Mortgage Amendment
C Form of Oil and Gas Mortgage Amendment
D Form of Closing Certificate
E Form of Exemption Certificate
F Form of Assignment and Acceptance
G Form of Compliance Certificate
H Form of Intercreditor Agreement
I Form of Prepayment Option Notice
J Form of Pro Forma EBITDA Statement
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SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of June
6, 1997, as amended and restated through September 14, 1998, among KEY ENERGY
GROUP, INC., a Maryland corporation (the "Borrower"), the several banks and
other financial institutions or entities from time to time parties to this
Agreement (the "Lenders"), PNC BANK, NATIONAL ASSOCIATION, as Administrative
Agent for the Lenders hereunder (in such capacity, the "Administrative Agent"),
NORWEST BANK TEXAS, N.A., as Collateral Agent for the Lenders hereunder (in
such capacity, the "Collateral Agent") and PNC CAPITAL MARKETS, INC., as
arranger with respect to the credit facilities contained herein (in such
capacity, the "Arranger").
W I T N E S S E T H :
WHEREAS, the Borrower, the Lenders, the Administrative Agent
and the Collateral Agent are parties to the Amended and Restated Credit
Agreement, dated as of June 6, 1997 (as amended and restated through November
6, 1997 and as further amended prior to the date hereof, the "Existing Credit
Agreement");
WHEREAS, pursuant to the Existing Credit Agreement, the
Lenders have over time made revolving credit loans ("Existing Revolving Credit
Loans") to, and have issued letters of credit ("Existing Letters of Credit")
for the account of, the Borrower which are secured pursuant to the Security
Documents (as hereinafter defined);
WHEREAS, Midland Acquisition Corp., a New Jersey corporation
and a direct, wholly owned subsidiary of the Borrower ("Midland"), has made an
offer (the "Tender Offer") to purchase all the shares of common stock (and
associated common stock purchase rights) of Xxxxxx Production Services, Inc., a
Texas corporation ("Xxxxxx"), at a price of $17.50 per share;
WHEREAS, pursuant to the Agreement and Plan of Merger, dated
as of August 11, 1998, among the Borrower, Midland and Xxxxxx (the "Merger
Agreement") after the consummation of the Tender Offer, Midland will merge with
and into Xxxxxx and thereafter no later than the next day Xxxxxx will merge
with and into the Borrower (the "Merger", together with the Tender Offer, the
"Acquisition") with the Borrower being the surviving corporation of the Merger;
WHEREAS, in connection with the Acquisition, the Borrower has
requested that the Existing Credit Agreement be amended and restated to provide
senior credit facilities in the aggregate amount of $550,000,000 and the
Lenders are willing to makes such credit facilities available upon and subject
to the terms and conditions hereinafter set forth;
WHEREAS, this Second Amended and Restated Credit Agreement is
intended to confirm and evidence (i) the amendment and restatement and
continuation (but not payment) of the existing obligations of the Loan Parties
under the Loan Documents and (ii) the continuation as security for the
indebtedness and obligations under this Second Amended and Restated Agreement
and the other Loan Documents, without any release or termination whatsoever, of
all liens and security interests granted under and in connection with the
Existing Credit Agreement and the other Loan Documents;
ACCORDINGLY, the parties hereto hereby agree that on the
Closing Date, the Existing Credit Agreement is hereby amended and restated in
its entirety to read as follows:
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SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following
terms shall have the following meanings:
"Acquisition Documentation" collectively, the Tender Offer
Documents and the Merger Agreement and all exhibits and annexes
thereto in each case as amended, supplemented or otherwise modified
from time to time in accordance with Section 7.10.
"Adjustment Date": each date on or after the First Full Fiscal
Quarter Date that is the second Business Day following receipt by the
Lenders of both (i) the financial statements required to be delivered
pursuant to Section 6.1(a) or 6.1(b), as applicable, for the most
recently completed fiscal period (which shall be the First Full Fiscal
Quarter Date, in the case of the Adjustment Date occurring on or
immediately after the First Full Fiscal Quarter Date) and (ii) the
related compliance certificate required to be delivered pursuant to
Section 6.2(b) with respect to such fiscal period.
"Administrative Agent": as defined in the preamble hereto.
"Affiliate": as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is
under common control with, such Person. For purposes of this
definition, "control" of a Person means the power, directly or
indirectly, either to (a) vote 10% or more of the securities having
ordinary voting power for the election of directors of such Person or
(b) direct or cause the direction of the management and policies of
such Person, whether by contract or otherwise. Notwithstanding the
foregoing (i) no Subsidiary of the Borrower shall be deemed to be an
Affiliate of the Borrower and (ii) no Affiliate of any investment
company that controls the Borrower shall be deemed to be an Affiliate
of the Borrower solely because such investment company Affiliate is in
control of, is controlled by, or is under common control with, such
investment company.
"Agents": the collective reference to the Arranger, the
Collateral Agent and the Administrative Agent.
"Aggregate Exposure": with respect to any Lender at any time,
an amount equal to (a) until the Closing Date, the aggregate amount of
such Lender's Commitments at such time and (b) thereafter, the sum of
(i) the aggregate then unpaid principal amount of such Lender's Term
Loans and the undrawn amount of its Term Loan Commitments then in
effect and (ii) the amount of such Lender's Revolving Commitment then
in effect or, if the Revolving Commitments have been terminated, the
amount of such Lender's Revolving Extensions of Credit then
outstanding.
"Aggregate Exposure Percentage": with respect to any Lender
at any time, the ratio (expressed as a percentage) of such Lender's
Aggregate Exposure at such time to the Aggregate Exposure of all
Lenders at such time.
"Agreement": this Credit Agreement, as amended, supplemented
or otherwise modified from time to time.
"Applicable Margin": during the period from the Closing Date
until the first Adjustment Date, for each Type of Loan, the rate per
annum set forth under the relevant column heading below:
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Base Rate Loans Eurodollar Loans
--------------- ----------------
Revolving Loans 1.25% 2.75%
Tranche A Loans 1.25% 2.75%
Tranche B Loans 1.75% 3.25%
provided that from and after the occurrence of the Minimum Equity
Event each of the foregoing Applicable Margins shall be reduced by
.50%.
On and after the first Adjustment Date, the Applicable Margin with
respect to Revolving Loans, Tranche A Loans and Tranche B Loans will
be adjusted on each Adjustment Date to the applicable rate per annum
set forth under the heading "Applicable Margin for Loans which are
Eurodollar Loans" or "Applicable Margin for Loans which are Base Rate
Loans", as the case may be, on the Pricing Grid then in effect which
corresponds to the Consolidated Leverage Ratio as determined from the
financial statements and compliance certificate relating to the end of
the fiscal period immediately preceding such Adjustment Date;
provided, that in the event that the financial statements required to
be delivered pursuant to Section 6.1(a) or 6.1(b), as applicable, and
the related compliance certificate required to be delivered pursuant
to Section 6.2(b), are not delivered when due, then
(i) if such financial statements and
compliance certificate are delivered after the date such
financial statements and compliance certificate were required
to be delivered (but no more than 30 days after such date) and
the Applicable Margin increases from that previously in effect
as a result of the delivery of such financial statements, then
the Applicable Margin in respect of the Loans during the
period from the date upon which such financial statements were
required to be delivered until the date upon which they
actually are delivered shall, except as otherwise provided in
clause (iii) below, be the Applicable Margin as so increased;
(ii) if such financial statements and
compliance certificate are delivered after the date such
financial statements and compliance certificate were required
to be delivered and the Applicable Margin decreases from that
previously in effect as a result of the delivery of such
financial statements, then such decrease in the Applicable
Margin shall not become applicable until the date upon which
the financial statements and certificate actually are
delivered; and
(iii) if such financial statements and
compliance certificate are not delivered prior to the
expiration of 30 days after the date such financial statements
and compliance certificate were required to be delivered,
then, effective upon such expiration, for the period from the
date 30 days after which such financial statements and
compliance certificate were required to be delivered until two
Business Days following the date upon which they actually are
delivered, the Applicable Margin in respect of Loans shall be
that set forth under Level VI on the Pricing Grid then in
effect (it being understood that the foregoing shall not limit
the rights of the Administrative Agent and the Lenders set
forth in Section 8).
"Application": an application, in such form as the Issuing
Lender may specify from time to time, requesting the Issuing Lender to
issue a Letter of Credit.
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"Argentine Subsidiaries": Kenting, Servicios and Transportes.
"Arranger": as defined in the preamble hereto.
"Assignee": as defined in Section 10.6(c).
"Available Revolving Commitment": as to any Lender at any
time, an amount equal to the excess, if any, of (a) such Lender's
Revolving Commitment over (b) such Lender's Revolving Extensions of
Credit.
"Base Rate": for any day, a rate per annum equal to the
greater of (a) the Prime Rate in effect on such day, and (b) the
Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. For
purposes hereof: "Prime Rate" shall mean the rate of interest per
annum established from time to time by PNC Bank, National Association
as its prime rate in effect at its principal office in Pittsburgh (the
Prime Rate not being intended to be the lowest rate of interest
charged by PNC Bank, National Association in connection with
extensions of credit to debtors); and "Federal Funds Effective Rate"
shall mean, for any day, 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 on the
next succeeding Business Day by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day which is a Business
Day, the average of the quotations for the day of such transactions
received by the Administrative Agent from three federal funds brokers
of recognized standing selected by it. Any change in the Base Rate due
to a change in the Prime Rate or the Federal Funds Effective Rate
shall be effective as of the opening of business on the effective day
of such change in the Prime Rate or the Federal Funds Effective Rate,
respectively.
"Base Rate Loans": Loans the rate of interest applicable to
which is based upon the Base Rate.
"Board": the Board of Governors of the Federal Reserve System
of the United States (or any successor).
"Borrower": as defined in the preamble hereto.
"Business Day": (a) for all purposes other than as covered by
clause (b) below, a day other than a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by
law to close and (b) with respect to all notices and determinations in
connection with, and payments of principal and interest on, Eurodollar
Loans, any day which is a Business Day described in clause (a) and
which is also a day for trading by and between banks in Dollar
deposits in the interbank eurodollar market.
"Capital Expenditures": for any period, with respect to any
Person, the aggregate of all expenditures by such Person and its
Subsidiaries for the acquisition or leasing (pursuant to a Financing
Lease) of fixed or capital assets or additions to equipment (including
replacements and improvements during such period) which should be
capitalized under GAAP on a consolidated balance sheet of such Person
and its Subsidiaries; provided that "Capital Expenditures" shall not
include (i) expenditures for Permitted Acquisitions or (ii)
expenditures by any Person prior to the time such Person was acquired
by the Borrower or any Subsidiary in a Permitted Acquisition.
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"Capital Lease Obligations": as to any Person, the obligations
of such Person to pay rent or other amounts under any Financing Lease
and, for the purposes of this Agreement, the amount of such
obligations at any time shall be the capitalized amount thereof at
such time determined in accordance with GAAP.
"Capital Stock": any and all shares of capital stock of a
corporation, and any and all equivalent ownership interests in a
Person (other than a corporation).
"Cash Equivalents": (a) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States Government or
issued by any agency thereof and backed by the full faith and credit
of the United States, in each case maturing within one year from the
date of acquisition; (b) demand deposits, certificates of deposit,
time deposits, eurodollar time deposits or overnight bank deposits
having maturities of twelve months or less from the date of
acquisition issued by any Lender or by any commercial bank organized
under the laws of the United States or any state thereof having
combined capital and surplus of not less than $250,000,000; (c)
commercial paper of (i) an issuer rated at least A-1 by Standard &
Poor's Ratings Services or P-1 by Xxxxx'x Investors Service, Inc., or
carrying an equivalent rating by a nationally recognized rating
agency, if both of the two named rating agencies cease publishing
ratings of commercial paper issuers generally or (ii) the holding
company of any Lender, and, in either case, maturing within twelve
months from the date of acquisition; and (d) money market funds the
assets of which consist primarily of obligations of the types referred
to in clauses (a) through (c) above.
"Change of Control": a "Change of Control" shall be deemed to
occur if a "Change in Control" (as defined in the 0000 Xxxxxxxxx or,
if the 1997 Indenture shall have been terminated, as defined in the
1997 Indenture immediately prior to such termination) shall occur.
"Closing Date": the date on which the conditions precedent set
forth in Section 5.1 shall be satisfied and the initial Loans are made
hereunder, which date shall be no later than September 30, 1998.
"Code": the Internal Revenue Code of 1986, as amended.
"Collateral": all assets of the Loan Parties, now owned or
hereafter acquired, upon which a Lien is purported to be created by
any Security Document.
"Collateral Agent": as defined in the preamble hereto.
"Commercial Letter of Credit": as defined in Section 3.1(a).
"Commitment": as to any Lender, the sum of the Tranche A Term
Commitment, the Tranche B Term Commitment and the Revolving Commitment
of such Lender.
"Commitment Fee Rate": during the period from the Closing Date
until the first Adjustment Date 0.50% annum. On and after the first
Adjustment Date, the Commitment Fee Rate will be adjusted on each
Adjustment Date to the applicable rate per annum set forth under the
heading "Commitment Fee Rate" on the Pricing Grid then in effect which
corresponds to the Consolidated Leverage Ratio as determined from the
financial statements and compliance certificate relating to the end of
the fiscal period immediately preceding such Adjustment Date;
provided, that in the event that
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the financial statements required to be delivered pursuant to Section
6.1(a) or 6.1(b), as applicable, and the related compliance
certificate required to be delivered pursuant to Section 6.2(b), are
not delivered when due, then
(i) if such financial statements and
compliance certificate are delivered after the date such
financial statements and compliance certificate were required
to be delivered (but no more than 30 days after such date) and
the Commitment Fee Rate increases from that previously in
effect as a result of the delivery of such financial
statements, then the Commitment Fee Rate in respect of the
Loans during the period from the date upon which such
financial statements were required to be delivered until the
date upon which they actually are delivered shall, except as
otherwise provided in clause (iii) below, be the Commitment
Fee Rate as so increased;
(ii) if such financial statements and
compliance certificate are delivered after the date such
financial statements and compliance certificate were required
to be delivered and the Commitment Fee Rate decreases from
that previously in effect as a result of the delivery of such
financial statements, then such decrease in the Commitment Fee
Rate shall not become applicable until the date upon which the
financial statements and certificate actually are delivered;
and
(iii) if such financial statements and
compliance certificate are not delivered prior to the
expiration of 30 days after the date such financial statements
and compliance certificate were required to be delivered,
then, effective upon such expiration, for the period from the
date 30 days after which such financial statements and
compliance certificate were required to be delivered until two
Business Days following the date upon which they actually are
delivered, the Commitment Fee Rate in respect of Loans shall
be that set forth under Level VI on the Pricing Grid then in
effect (it being understood that the foregoing shall not limit
the rights of the Administrative Agent and the Lenders set
forth in Section 8).
"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with the Borrower within
the meaning of Section 4001 of ERISA or is part of a group which
includes the Borrower and which is treated as a single employer under
Section 414 of the Code.
"Compliance Certificate": a certificate duly executed by a
Responsible Officer substantially in the form of Exhibit G.
"Confidential Information Memorandum": the Confidential
Information Memorandum dated September 1998 with respect to the
Borrower and the credit facilities provided for herein.
"Consolidated" or "consolidated": when used in respect of any
Subsidiary or any financial statements or financial term relating to
the Borrower and its Subsidiaries, refers to the Borrower and the
Subsidiaries of the Borrower (including Excluded Subsidiaries) whose
accounts are consolidated with the Borrower's accounts in accordance
with GAAP.
"Consolidated Current Assets": at any date, all amounts
(other than cash and Cash Equivalents) that would, in conformity with
GAAP, be set forth opposite the
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caption "total current assets" (or any like caption) on a consolidated
balance sheet of the Borrower and its Subsidiaries at such date.
"Consolidated Current Liabilities": at any date, all amounts
that would, in conformity with GAAP, be set forth opposite the caption
"total current liabilities" (or any like caption) on a consolidated
balance sheet of the Borrower and its Subsidiaries at such date, but
excluding (a) the current portion of any Funded Debt of the Borrower
and its Subsidiaries and (b) without duplication of clause (a) above,
all Indebtedness consisting of Revolving Loans to the extent otherwise
included therein.
"Consolidated EBITDA": with respect to any Person for any
period, Consolidated Net Income of such Person for such period plus,
without duplication and to the extent reflected as a charge in the
statement of such Consolidated Net Income for such period, the sum of
(a) total income tax expense, (b) interest expense, (c) depreciation
and amortization expense, (d) amortization of intangibles (including,
but not limited to, goodwill) and organization costs, (e) any
extraordinary expenses or losses (including, whether or not otherwise
includable as a separate item in the statement of such Consolidated
Net Income for such period, losses on sales of assets outside of the
ordinary course of business), (f) any other noncash charges, (g) if
applicable, non-recurring transaction expenses incurred in connection
with the consummation of the Acquisition and related financings,
restructuring charges, write-off of goodwill and licensing agreements,
and (h) for the fiscal period ending June 30, 1999, only, minority
interest adjustments related to Xxxxxx, and minus, to the extent
included in the statement of such Consolidated Net Income for such
period, the sum of (a) interest income, (b) any extraordinary income
or gains (including, whether or not otherwise includable as a separate
item in the statement of such Consolidated Net Income for such period,
gains on the sales of assets outside of the ordinary course of
business) and (c) any other noncash income (other than any income
represented by a receivable that in the ordinary course would be
expected to be paid in cash), all as determined on a consolidated
basis.
"Consolidated Interest Coverage Ratio": for any period, the
ratio of (a) Consolidated EBITDA of the Borrower and its Subsidiaries
for such period to (b) Consolidated Interest Expense for such period;
provided that for purposes of calculating Consolidated EBITDA of the
Borrower and its Subsidiaries for any period of four full fiscal
quarters, the Consolidated EBITDA of any Person acquired by the
Borrower or its Subsidiaries which upon such acquisition becomes a
Consolidated Subsidiary or is merged into the Borrower or a Subsidiary
(including, without limitation, Xxxxxx and its Subsidiaries) during
such period shall be included on a pro forma basis for such period of
four full fiscal quarters (assuming the consummation of each such
acquisition and the incurrence or assumption of any Indebtedness in
connection therewith occurred on the first day of such period of four
full fiscal quarters and assuming only such cost reductions as are
related to such acquisition and are realizable on or before the date
of calculation) if the consolidated balance sheet of such acquired
Person and its consolidated Subsidiaries as at the end of the period
preceding the acquisition of such Person and the related consolidated
statements of income and stockholders' equity and of cash flows for
such period (i) have been previously provided to the Administrative
Agent and the Lenders and (ii) either (A) have been reported on
without a qualification arising out of the scope of the audit (other
than a "going concern" or like qualification or exception) by
independent certified public accountants of nationally recognized
standing or (B) have been found acceptable by the Administrative
Agent.
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"Consolidated Interest Expense": for any period, total
interest expense (including that attributable to Capital Lease
Obligations), both expensed and capitalized, of the Borrower and its
Subsidiaries for such period with respect to all outstanding
Indebtedness of the Borrower and its Subsidiaries (including, without
limitation, all commissions, discounts and other fees and charges owed
with respect to letters of credit and bankers' acceptance financing
and net costs under Interest Rate Protection Agreements and excluding
fees owed with respect to the Existing Credit Agreement and the
imputed interest attributable to Senior Subordinated Notes that are
original issue discount notes to the extent such net costs are
allocable to such period in accordance with GAAP), determined on a
consolidated basis in accordance with GAAP, net of interest income of
the Borrowers and its Subsidiaries for such period (determined on a
consolidated basis in accordance with GAAP).
"Consolidated Lease Expense": for any period, the aggregate
amount of fixed and contingent rentals payable by the Borrower and its
Subsidiaries, determined on a consolidated basis in accordance with
GAAP, for such period with respect to leases of real and personal
property; provided that amounts payable under Financing Leases and oil
and gas leases shall be excluded from Consolidated Lease Expense.
"Consolidated Leverage Ratio": on the date of any
determination thereof, the ratio of (a) Consolidated Total Debt on
such date, less the amount of cash and Cash Equivalents in excess of
$5,000,000 held by the Borrower and its Subsidiaries on such date to
(b) Consolidated EBITDA of the Borrower and its Subsidiaries for the
four full fiscal quarters ending on such date; provided that for
purposes of calculating Consolidated EBITDA of the Borrower and its
Subsidiaries for any period of four full fiscal quarters, the
Consolidated EBITDA of any Person acquired by the Borrower or its
Subsidiaries which upon such acquisition becomes a Consolidated
Subsidiary or is merged into the Borrower or a Subsidiary (including,
without limitation, Xxxxxx and its Subsidiaries) during such period
shall be included on a pro forma basis for such period of four full
fiscal quarters (assuming the consummation of each such acquisition
and the incurrence or assumption of any Indebtedness in connection
therewith occurred on the first day of such period of four full fiscal
quarters and assuming only such cost reductions as are related to such
acquisition and are realizable on or before the date of calculation)
if the consolidated balance sheet of such acquired Person and its
consolidated Subsidiaries as at the end of the period preceding the
acquisition of such Person and the related consolidated statements of
income and stockholders' equity and of cash flows for such period (i)
have been previously provided to the Administrative Agent and the
Lenders and (ii) either (A) have been reported on without a
qualification arising out of the scope of the audit (other than a
"going concern" or like qualification or exception) by independent
certified public accountants of nationally recognized standing or (B)
have been found acceptable by the Administrative Agent.
"Consolidated Net Income": with respect to any Person for any
period, the consolidated net income (or loss) of such Person for such
period, determined on a consolidated basis in accordance with GAAP.
"Consolidated Net Worth": at a particular date, as to any
Person, the amount which would be included under stockholders' equity
on a consolidated balance sheet of such Person and its Subsidiaries
determined on a consolidated basis in accordance with GAAP.
"Consolidated Senior Debt": with respect to the Borrower and
its Subsidiaries, consolidated Indebtedness of the Borrower and its
Subsidiaries determined on a
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consolidated basis in accordance with GAAP other than Subordinated
Indebtedness.
"Consolidated Senior Leverage Ratio": on the date of any
determination thereof, the ratio of (a) Consolidated Senior Debt on
such date, less the amount of cash and Cash Equivalents in excess of
$5,000,000 held by the Borrower and its Subsidiaries on such date to
(b) Consolidated EBITDA of the Borrower and its Subsidiaries for the
four full fiscal quarters ending on such date; provided that for
purposes of calculating Consolidated EBITDA of the Borrower and its
Subsidiaries for any period of four full fiscal quarters, the
Consolidated EBITDA of any Person acquired by the Borrower or its
Subsidiaries which upon such acquisition becomes aConsolidated
Subsidiary or is merged into the Borrower or a Subsidiary (including,
without limitation, Xxxxxx and its Subsidiaries) during such period
shall be included on a pro forma basis for such period of four full
fiscal quarters (assuming the consummation of each such acquisition
and the incurrence or assumption of any Indebtedness in connection
therewith occurred on the first day of such period of four full fiscal
quarters and assuming only such cost reductions as are related to such
acquisition and are realizable on or before the date of calculation)
if the consolidated balance sheet of such acquired Person and its
consolidated Subsidiaries as at the end of the period preceding the
acquisition of such Person and the related consolidated statements of
income and stockholders' equity and of cash flows for such period (i)
have been previously provided to the Administrative Agent and the
Lenders and (ii) either (A) have been reported on without a
qualification arising out of the scope of the audit (other than a
"going concern" or like qualification or exception) by independent
certified public accountants of nationally recognized standing or (B)
have been found acceptable by the Administrative Agent.
"Consolidated Total Debt": at any date, the aggregate
principal amount of all Indebtedness of the Borrower and its
Subsidiaries at such date, which on a consolidated basis in accordance
with GAAP would be required to be reflected on a consolidated balance
sheet of the Borrower and its Subsidiaries as a liability.
"Consolidated Working Capital": at any date, the excess of
Consolidated Current Assets on such date over Consolidated Current
Liabilities on such date.
"Contractual Obligation": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
other undertaking to which such Person is a party or by which it or
any of its property is bound.
"Convertible Subordinated Debentures": the 7% Convertible
Subordinated Debentures due 2003 issued by the Borrower pursuant to
the Indenture.
"Xxxxxx": as defined in the recitals hereto.
"Xxxxxx Change of Control": "change of control" as defined in
the Xxxxxx Indenture which occurs in connection with the Acquisition.
"Xxxxxx Indenture": the indenture, dated as of February 20,
1997, among Xxxxxx, certain Subsidiaries of Xxxxxx and U.S. Trust
Company of Texas, N.A., as trustee.
"Xxxxxx 9-3/8% Notes": the 9-3/8% Senior Notes due 2007 issued
by Xxxxxx pursuant to the Xxxxxx Indenture.
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"Xxxxxx Put Termination Date": 70 days after the earlier of
(i) the Closing Date and (ii) the date the Xxxxxx Change of Control
occurs.
"Default": any of the events specified in Section 8, whether
or not any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.
"Disqualified Stock": any Capital Stock that, by its terms
(or by the terms of any security into which it is convertible or for
which it is exchangeable), or upon the happening of any event, matures
or is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, or redeemable at the option of the holder thereof, in whole
or in part, on or prior to the date that is one year and one day after
the final maturity of the Loans as provided on the date hereof.
"Dollars" and "$": dollars in lawful currency of the United
States.
"Domestic Subsidiary": any Subsidiary of the Borrower
organized under the laws of any jurisdiction within the United States.
"Environmental Program": as defined in Section 5.1(n).
"Environmental Laws": any and all laws, rules, orders,
regulations, statutes, ordinances, codes, decrees, or other legally
enforceable requirements (including, without limitation, common law)
of any foreign government, the United States, or any state, local,
municipal or other governmental authority, regulating, relating to or
imposing liability or standards of conduct concerning protection of
the environment or of human health, or employee health and safety, as
has been, is now, or at any time hereafter is, in effect.
"Environmental Permits": any and all permits, licenses,
registrations, approvals, notifications, exemptions and any other
authorization required under any Environmental Law.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to
a Eurodollar Loan, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect on
such day (including, without limitation, basic, supplemental, marginal
and emergency reserves under any regulations of the Board or other
Governmental Authority having jurisdiction with respect thereto)
dealing with reserve requirements prescribed for eurocurrency funding
(currently referred to as "Eurocurrency Liabilities" in Regulation D
of the Board) maintained by a member bank of the Federal Reserve
System.
"Eurodollar Base Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate per annum of
interest determined on the basis of the rate for deposits in Dollars
for a period equal to such Interest Period commencing on the first day
of such Interest Period appearing on Page 3750 of the Dow Xxxxx
Markets screen as of 11:00 A.M., London time, two Business Days prior
to the beginning of such Interest Period. In the event that such rate
does not appear on Page 3750 of the Dow Xxxxx Markets screen (or
otherwise on such service), the "Eurodollar Base Rate" for purposes of
this definition shall be determined by reference to such other
comparable publicly available service for displaying eurodollar rates
as may be
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selected by the Administrative Agent or, in the absence of such
availability, by reference to the rate at which the Administrative
Agent is offered Dollar deposits at or about 11:00 A.M., New York City
time, two Business Days prior to the beginning of such Interest Period
in the interbank eurodollar market where its eurodollar and foreign
currency and exchange operations are then being conducted for delivery
on the first day of such Interest Period for the number of days
comprised therein.
"Eurodollar Loans": Loans the rate of interest applicable to
which is based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, a rate per annum
determined for such day in accordance with the following formula
(rounded upward to the nearest 1/100th of 1%):
Eurodollar Base Rate
------------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Eurodollar Tranche": the collective reference to Eurodollar
Loans, the then current Interest Periods with respect to all of which
begin on the same date and end on the same later date (whether or not
such Loans shall originally have been made on the same day).
"Event of Default": any of the events specified in Section 8,
provided that any requirement for the giving of notice, the lapse of
time, or both, has been satisfied.
"Excess Cash Flow": for any fiscal year of the Borrower, the
excess, if any, of (a) the sum, without duplication, of (i)
Consolidated Net Income for such fiscal year, (ii) an amount equal to
the amount of all non-cash charges (including depreciation and
amortization) deducted in arriving at such Consolidated Net Income,
(iii) decreases in Consolidated Working Capital for such fiscal year,
and (iv) an amount equal to the aggregate net non-cash loss on the
disposition of property by the Borrower and its Subsidiaries during
such fiscal year (other than sales of inventory in the ordinary course
of business), to the extent deducted in arriving at such Consolidated
Net Income over (b) the sum, without duplication, of (i) an amount
equal to the amount of all non-cash credits included in arriving at
such Consolidated Net Income, (ii) the aggregate amount actually paid
by the Borrower and its Subsidiaries in cash during such fiscal year
on account of Capital Expenditures (excluding the principal amount of
Indebtedness incurred in connection with such expenditures), (iii) the
aggregate amount of all prepayments of Revolving Loans during such
fiscal year to the extent accompanying permanent optional reductions
of the Revolving Commitments and all optional prepayments of the Term
Loans during such fiscal year, (iv) the aggregate amount of all
regularly scheduled principal payments of Funded Debt (including the
Term Loans) of the Borrower and its Subsidiaries made during such
fiscal year (other than in respect of any revolving credit facility to
the extent there is not an equivalent permanent reduction in
commitments thereunder), (v) the aggregate amount of all mandatory
prepayments of Funded Debt of the Borrower and its Subsidiaries made
during such fiscal year pursuant to Section 2.10(d), (vi) increases in
Consolidated Working Capital for such fiscal year, and (vii) an amount
equal to the aggregate net non-cash gain on the disposition of
property by the Borrower and its Subsidiaries during such fiscal year
(other than sales of inventory in the ordinary course of business), to
the extent included in arriving at such Consolidated Net Income.
"Excess Cash Flow Application Date": as defined in Section
2.10(c).
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"Excluded Vehicles": as defined in the Master Guarantee and
Collateral Agreement.
"Excluded Subsidiary" or "Excluded Subsidiaries": (a)
Production Systems, Inc., WellTech, Inc. (California), WellTech, Inc.,
WellTech Oilfield Services (Canada), Ltd., WellTech Oilfield Services
Limited, WellTech (Overseas) Limited, and Xxxxxxx Transport, Inc., (b)
Thunderbird Tool Company, (c) KEG Canal Properties, Inc., KEG Xxxxx
Xxxxxx, Inc., KEG Xxxx Heights, Inc., KEG Orleans Place, Inc., and
Pyramid Land Corporation, (d) Xxxxxx Production Services de Mexico,
S.A. de C.V. and Ubicadora de Tecnicos, S.A. de C.V. and (e) any other
entity which becomes a Subsidiary of Borrower after the date of this
Agreement if such entity has assets with a book value of $1,000,000 or
less and annual revenues of $1,000,000 or less; provided that all
entities deemed to be Excluded Subsidiaries under this subsection (e)
may not have, in the aggregate, assets with a book value exceeding
$5,000,000 or annual revenues exceeding $5,000,000.
"Existing Credit Agreement": as defined in the recitals
hereto.
"Existing Letters of Credit": as defined in Section 3.1.
"Existing Oil and Gas Mortgages": the Oil and Gas Mortgages
listed on Schedule 1.1C.
"Existing Mortgages": the Mortgages listed on Schedule 1.1B.
"Existing Revolving Credit Loans": as defined in the recitals
hereto.
"Facility": each of (a) the Tranche A Term Commitments and the
Tranche A Term Loans made thereunder (the "Tranche A Term Facility"),
(b) the Tranche B Term Commitments and the Tranche B Term Loans made
thereunder (the "Tranche B Term Facility"), and (c) the Revolving
Commitments and the extensions of credit made thereunder (the
"Revolving Facility").
"Financing Lease": any lease (or other similar arrangement
conveying the right to use) of property, real or personal, the
obligations of the lessee in respect of which are required in
accordance with GAAP to be capitalized on a balance sheet of the
lessee.
"First Fiscal Quarter Date": the last day of the first full
fiscal quarter of the Borrower completed after the Closing Date.
"Foreign Subsidiary": any Subsidiary of the Borrower organized
under the laws of any jurisdiction outside the United States.
"Funded Debt": as to any Person, all Indebtedness of such
Person that matures more than one year from the date of its creation
or matures within one year from such date but is renewable or
extendible, at the option of such Person, to a date more than one year
from such date or arises under a revolving credit or similar agreement
that obligates the lender or lenders to extend credit during a period
of more than one year from such date, including all current maturities
and current sinking fund payments in respect of such Indebtedness
whether or not required to be paid within one year from the date of
its creation and, in the case of the Borrower, Indebtedness in respect
of the
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Loans.
"GAAP": generally accepted accounting principles in the United
States in effect from time to time.
"Governmental Authority": any nation or government, any state
or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another
Person (including, without limitation, any bank under any letter of
credit) to induce the creation of which the guaranteeing person has
issued a reimbursement, counterindemnity or similar obligation, in
either case guaranteeing or in effect guaranteeing any Indebtedness,
leases, dividends or other obligations (the "primary obligations") of
any other third Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation
of the guaranteeing person, whether or not contingent, (i) to purchase
any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (1) for
the purchase or payment of any such primary obligation or (2) to
maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary
obligor, (iii) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation
of the ability of the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the owner of
any such primary obligation against loss in respect thereof; provided,
however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary
course of business. The amount of any Guarantee Obligation of any
guaranteeing person shall be deemed to be the lower of (a) an amount
equal to the stated or determinable amount of the primary obligation
in respect of which such Guarantee Obligation is made and (b) the
maximum amount for which such guaranteeing person may be liable
pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for
which such guaranteeing person may be liable are not stated or
determinable, in which case the amount of such Guarantee Obligation
shall be such guaranteeing person's maximum reasonably anticipated
liability in respect thereof as determined by the Borrower in good
faith.
"Hedge Obligations": as defined in the Master Guarantee and
Collateral Agreement.
"Indebtedness": of any Person at any date, without
duplication, (a) all indebtedness of such Person for borrowed money,
(b) all obligations of such Person for the deferred purchase price of
property or services (other than trade payables and accrued expenses
incurred in the ordinary course of such Person's business not more
than 150 days past due or being contested in good faith), (c) all
obligations of such Person evidenced by notes, bonds, debentures or
other similar instruments, (d) all indebtedness created or arising
under any conditional sale or other title retention agreement with
respect to property acquired by such Person, (e) all Capital Lease
Obligations of such Person, (f) all obligations, contingent or
otherwise, of such Person as an account party under acceptance, letter
of credit or similar facilities (other than obligations in respect of
undrawn letters of credit securing trade payables or performance
obligations incurred in the ordinary course of business not more than
150 days past due or being contested in good faith), (g) all
obligations of such Person to
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purchase, redeem, retire or otherwise acquire for value any Capital
Stock of such Person, (h) all Guarantee Obligations of such Person in
respect of Indebtedness of others and (i) all obligations of the kind
referred to in clauses (a) through (h) above secured by any Lien on
property (including, without limitation, accounts and contract rights)
owned by such Person, whether or not such Person has assumed or become
liable for the payment of such obligation (but if not so assumed, the
amount of such obligation shall be deemed not to exceed the fair
market value of the property subject to the Lien).
"Indenture": the Indenture, dated as of July 3, 1996, between
the Borrower and American Stock Transfer & Trust Company, as trustee.
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section
4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Insurance Policies": (i) the insurance policies the Borrower
is required to maintain pursuant to Section 6.5 and (ii) the insurance
policies the Borrower is required to maintain pursuant to Section 5.3
of the Master Guarantee and Collateral Agreement.
"Intercreditor Agreement": the Intercreditor and Collateral
Agency Agreement, substantially in the form of Exhibit H, as the same
may be amended, supplemented or otherwise modified from time to time.
"Interest Payment Date": (a) as to any Base Rate Loan, the
last day of each March, June, September and December to occur while
such Loan is outstanding, (b) as to any Eurodollar Loan having an
Interest Period of three months or less, the last day of such Interest
Period, (c) as to any Eurodollar Loan having an Interest Period longer
than three months, each day which is three months, or a whole multiple
thereof, after the first day of such Interest Period and the last day
of such Interest Period.
"Interest Period": as to any Eurodollar Loan, (a) initially,
the period commencing on the borrowing or conversion date, as the case
may be, with respect to such Eurodollar Loan and ending one, two,
three or six months thereafter, as selected by the Borrower in its
notice of borrowing or notice of conversion, as the case may be, given
with respect thereto; and (b) thereafter, each period commencing on
the last day of the next preceding Interest Period applicable to such
Eurodollar Loan and ending one, two, three or six months thereafter,
as selected by the Borrower by irrevocable notice to the
Administrative Agent not less than three Business Days prior to the
last day of the then current Interest Period with respect thereto;
provided that all of the foregoing provisions relating to Interest
Periods are subject to the following:
(i) if any Interest Period would otherwise end
on a day that is not a Business Day, such Interest Period
shall be extended to the next succeeding Business Day unless
the result of such extension would be to carry such Interest
Period into another calendar month in which event such
Interest Period shall end on the immediately preceding
Business Day;
(ii) any Interest Period that would otherwise
extend beyond the Schedule Termination Date shall end on the
Scheduled Termination Date;
(iii) any Interest Period that begins on the last
Business Day of a
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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 Business Day of a
calendar month; and
(iv) the Borrower shall select Interest Periods
so as not to require a payment or prepayment of any Eurodollar
Loan during an Interest Period for such Loan.
"Interest Rate Protection Agreement": any interest rate
protection agreement, interest rate futures contract, interest rate
option, interest rate cap or other interest rate hedge arrangement, to
or under which the Borrower or any Subsidiary is a party or a
beneficiary on the date hereof or becomes a party or a beneficiary
after the date hereof.
"Interest Rate Protection Agreement Obligation": in respect of
any Loan Party, the obligation of such Loan Party under an Interest
Rate Protection Agreement to make a payment to the counterparty
thereto in the event of a termination event or similar occurrence
thereunder.
"Interim Loan Agreement": the Bridge Loan Agreement, dated as
of the date hereof, among the Borrower, the Subsidiaries of the
Borrower party thereto, Xxxxxx Commercial Paper Inc., as
administrative agent, Xxxxxx Brothers Inc., as arranger and the
several lenders party thereto, as amended, supplemented or otherwise
modified from time to time in accordance with Section 7.10.
"Interim Loans": the principal amount of Indebtedness
outstanding under the Interim Loan Agreement (excluding the term loans
and/or exchange notes refinancing such Indebtedness).
"Investment Property": as defined in the Master Guarantee and
Collateral Agreement.
"Issuing Lender": (a) with respect to the Existing Letters of
Credit, Norwest Bank and any issuer under the Existing Credit
Agreement of an Existing Letter of Credit and (b) with respect to any
Letters of Credit issued after the Closing Date, any Lender designated
as "Issuing Lender" hereunder by the Borrower with the consent of the
Administrative Agent and such Lender, in its capacity as issuer of any
Letter of Credit.
"Kenting": Kenting Holdings (Argentina) S.A., an Argentine
corporation, and Kenting Drilling (Argentina) S.A., an Argentine
corporation.
"L/C Commitment": $20,000,000.
"L/C Fee Payment Date": the last day of each March, June,
September and December and the last day of the Revolving Commitment
Period.
"L/C Obligations": at any time, an amount equal to the sum of
(a) the aggregate then undrawn and unexpired amount of the then
outstanding Letters of Credit and (b) the aggregate amount of drawings
under Letters of Credit which have not then been reimbursed pursuant
to Section 3.5.
"L/C Participants": the collective reference to all the
Revolving Lenders other than the Issuing Lender.
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"Lenders": as defined in the preamble hereto (which shall
include the Issuing Lender).
"Letters of Credit": as defined in Section 3.1(a).
"Lien": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or
other security interest or any preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title
retention agreement and any capital lease having substantially the
same economic effect as any of the foregoing) and any filing of or
agreement to give any financing statement under the Uniform Commercial
Code (or equivalent statutes) of any jurisdiction.
"Loan": any loan made by any Lender under this Agreement.
"Loan Documents": this Agreement, the Notes, the Applications,
the Security Documents and the Intercreditor Agreement.
"Loan Parties": at any time, the Borrower and each Domestic
Subsidiary of the Borrower which, at such time, is, or is required by
the terms hereof to be, a party to a Loan Document.
"Majority Facility Lenders": with respect to any Facility,
the holders of more than 50% of the aggregate unpaid principal amount
of the Term Loans (and related undrawn Term Loan Commitments) or the
Total Revolving Extensions of Credit, as the case may be, outstanding
under such Facility (or, in the case of the Revolving Facility, prior
to any termination of the Revolving Commitments, the holders of more
than 50% of the Total Revolving Commitments).
"Majority Revolving Facility Lenders": the Majority Facility
Lenders in respect of the Revolving Facility.
"Margin Stock": as defined in Regulation U.
"Master Guarantee and Collateral Agreement": the Amended and
Restated Master Guarantee and Collateral Agreement executed and
delivered by the Borrower and each of its Domestic Subsidiaries
(including the Subsidiaries of Xxxxxx after the Merger Date),
substantially in the form of Exhibit A, as the same may be amended,
supplemented or otherwise modified from time to time.
"Material Adverse Effect": a material adverse effect on (a)
the Acquisition, (b) the business, assets, property, condition
(financial or otherwise) or prospects of the Borrower, its
Subsidiaries and the Excluded Subsidiaries taken as a whole or (c) the
validity or enforceability of this Agreement or any of the other Loan
Documents or the rights or remedies of the Administrative Agent, the
Collateral Agent or the Lenders hereunder or thereunder.
"Material Environmental Amount": an amount payable by the
Borrower and/or its Subsidiaries under any Environmental Law in excess
of $5,000,000 for remedial costs, compliance costs, compensatory
damages, punitive damages, fines, penalties or any combination
thereof.
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"Materials of Environmental Concern": any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum
products, polychlorinated biphenyls, urea-formaldehyde insulation,
asbestos, pollutants, contaminants, radioactive materials, and any
other substances of any kind, whether or not any such substance is
defined as hazardous or toxic under any Environmental Law, that is
regulated pursuant to or could give rise to liability under any
Environmental Law.
"Merger": as defined in the recitals hereto.
"Merger Agreement": as defined in the recitals hereto.
"Merger Date": the date the certificates and/or articles of
merger are filed with and accepted by the appropriate secretaries of
state as are necessary to be filed and accepted in order to effectuate
the merger of Xxxxxx (including any of its successors or assigns) into
the Borrower.
"Merger Loan Date": the date on which the conditions precedent
set forth in Section 5.2 shall be satisfied.
"Midland": as defined in the recitals to this Agreement.
"Minimum Equity Event": either (i) the receipt by the Borrower
of Net Cash Proceeds of at least $75,000,000 from the issuance of
Capital Stock of the Borrower after the Closing Date or (ii) one or
more issuances by the Borrower of its Capital Stock with a market
value at the time of issuance of at least $75,000,000 in the aggregate
in connection with the acquisition of one or more Persons or the
assets of one or more Persons; provided, no Default or Event of
Default shall have occurred and be in existence and provided, further,
that with respect to the issuance of Capital Stock of the type
referred to in clause (ii) above a Minimum Equity Event shall not be
deemed to occur unless and until the ratio of (a) Consolidated Total
Debt to (b) the sum of Consolidated Total Debt plus Consolidated Net
Worth of the Borrower and its Subsidiaries is equal to or less than
75%.
"Moody's": Xxxxx'x Investors Service, Inc.
"Mortgage": the collective reference to the Existing Mortgages
as amended by the Mortgage Amendments and any mortgage or deed of
trust to be made by the appropriate Loan Party in favor of, or for the
benefit of, the Collateral Agent, as provided for in the Loan
Documents, as the same may be amended, supplemented or otherwise
modified from time to time.
"Mortgage Amendment": each Mortgage Amendment substantially in
the form of Exhibit B to be entered into on or prior to the Closing
Date.
"Mortgaged Property": the real property listed on Schedule
1.1B, as to which the Collateral Agent has been granted a Lien
pursuant to the Mortgages and the real property as to which the
Collateral Agent shall be granted a Lien in accordance with Section
6.10.
"Multiemployer Plan": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
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"Net Cash Proceeds": (a) in connection with the Significant
Disposition, the proceeds thereof in the form of cash and Cash
Equivalents (including any such proceeds received by way of deferred
payment of principal pursuant to a note or installment receivable or
purchase price adjustment receivable or otherwise, but only as and
when received) of the Significant Disposition, net of attorneys' fees,
accountants' fees, investment banking fees, brokers' and underwriters'
commissions paid to third parties, amounts required to be applied to
the repayment of Indebtedness secured by a Lien expressly permitted
hereunder on any asset which is the subject of the Significant
Disposition (other than any Lien in favor of the Collateral Agent for
the benefit of the Lenders), the aggregate amount of reserves required
in the reasonable judgment of the Borrower to pay contingent
liabilities with respect to the Significant Disposition (provided that
amounts deducted from aggregate proceeds pursuant to this clause and
not actually paid by the Borrower or any of its Subsidiaries in
liquidation of such contingent liabilities shall be deemed to be Net
Cash Proceeds and shall be applied in accordance with Section 2.10(c)
at such time as the Borrower shall reasonably determine that such
amounts are not required to pay contingent liabilities with respect to
the Significant Disposition) and other customary fees and expenses
actually incurred in connection therewith and net of taxes paid or
reasonably estimated to be payable as a result thereof (after taking
into account any available tax credits or deductions and any tax
sharing arrangements with any Person other than the Borrower and its
Subsidiaries) and (b) in connection with any issuance or sale of
Capital Stock or debt securities or instruments or the incurrence of
Indebtedness, the cash proceeds received from such issuance or
incurrence, net of attorneys' fees, investment banking fees,
accountants' fees, underwriting discounts and commissions and other
customary fees and expenses actually incurred in connection therewith.
"1997 Convertible Subordinated Notes": the 5% Convertible
Subordinated Notes due 2004 issued by the Borrower pursuant to the
1997 Indenture.
"1997 Indenture": the Indenture, dated as of September 25,
1997, between the Borrower and American Stock Transfer & Trust
Company, as trustee.
"Non-Excluded Taxes": as defined in Section 2.19(a).
"Non-U.S. Lender": as defined in Section 2.19(b).
"Norwest Bank": Norwest Bank Texas, N.A.
"Note": as defined in Section 2.7(e).
"Obligations": the unpaid principal of and interest on
(including, without limitation, interest accruing after the maturity
of the Loans and Reimbursement Obligations and interest accruing after
the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to the
Borrower, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding) the Notes and all other
obligations and liabilities of the Borrower to the Arranger, the
Administrative Agent or to any Lender, whether direct or indirect,
absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under this Agreement, any other
Loan Document, the Letters of Credit, any Interest Rate Protection
Agreement entered into with any Lender or any other document made,
delivered or given in connection herewith or therewith, whether on
account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses (including, without limitation, all fees,
charges and disbursements of counsel
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to the Administrative Agent and the Collateral Agent) or otherwise.
"Odessa": Odessa Exploration Incorporated.
"Oil and Gas Mortgages": the collective reference to the
Existing Oil and Gas Mortgages as amended by the Oil and Gas Mortgage
Amendments and any mortgages in favor of the Collateral Agent, as
provided for in the Loan Documents, in form and substance reasonably
satisfactory to the Collateral Agent, covering the Oil and Gas
Properties.
"Oil and Gas Mortgage Amendment": each Oil and Gas Mortgage
Amendment substantially in the form of Exhibit C to be entered into on
or prior to the Closing Date.
"Oil and Gas Properties": the oil and gas properties described
in Schedule 1.1C which are mortgaged pursuant hereto and the oil and
gas properties as to which the Collateral Agent shall be granted a
Lien in accordance with Section 6.10.
"Participant": as defined in Section 10.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA (or any successor).
"Percentage": with respect to the applicable Facility, the
Tranche A Term Percentage, the Tranche B Term Percentage and the
Revolving Percentage.
"Permitted Acquisitions": the acquisition by the Borrower and
its Subsidiaries of (a) rigs and other well service equipment, (b)
well service companies and (c) oil and gas properties and related
equipment, provided that (i) the aggregate amount of cash
consideration paid with respect to such acquisitions does not exceed
$15,000,000, or (ii) after giving effect to such acquisitions and any
borrowings hereunder in connection therewith, (x) the Consolidated
Leverage Ratio shall not be more than the lesser of 3.75 to 1.00 or
the ratio set forth in subsection 7.1(a) applicable to the Borrower at
the time of such acquisition and (y) the sum of (1) the Borrower's
cash and Cash Equivalents on hand and (2) the aggregate Available
Revolving Commitments shall be at least $20,000,000, or (iii) after
giving effect to such acquisition the Consolidated Leverage Ratio is
not increased and such acquisition is funded solely with the
Borrower's Capital Stock.
"Person": an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.
"Plan": at a particular time, any employee benefit plan which
is covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.
"Pledged Notes" and "Pledged Stock": each as defined in the
Master Guarantee and Collateral Agreement.
"Pricing Grid": during the period from the Closing Date until
the Minimum Equity Event, Annex I and thereafter, Annex II.
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"Pro Forma Balance Sheet": as defined in Section 4.1(a).
"Pro Forma EBITDA Statement": an unaudited pro forma statement
of Consolidated EBITDA of the Borrower for any period of four full
fiscal quarters (including the notes thereto) substantially in the
form of Exhibit J hereto.
"Projections": as defined in Section 6.2(c).
"Properties": the collective reference to the real property
owned or leased by the Borrower or any of its Subsidiaries (or with
respect to Sections 6.8 and 10.5, any of the Excluded Subsidiaries).
"Proved Reserves": the estimated quantities of crude oil,
condensate, natural gas and natural gas liquids that adequate
geological and engineering data demonstrate with reasonable certainty
to be recoverable in future years from known reservoirs under existing
economic and operating conditions (i.e., prices and costs as of the
date the estimate is made).
"Put Facility": the collective reference to the "Loan
Documents" (as defined in the Interim Loan Agreement), the Interim
Loans and the term loans and/or exchange notes refinancing the Interim
Loans provided that the terms and provisions of such term loans and
exchange notes (including the subordination provisions) shall be as
provided in the Interim Loan Agreement and to the extent not provided
for therein shall be acceptable to the Administrative Agent and
provided further that until the Merger Date, the obligations of the
Borrower and its Subsidiaries under the Put Facility may be senior
Indebtedness and secured by the Collateral as provided in the Loan
Documents and on the Merger Date the obligations of the Borrower and
its Subsidiaries under the Put Facility shall be automatically
subordinated to the Obligations and the Put Facility shall no longer
be secured by the Collateral, as amended, supplemented or otherwise
modified from time to time in accordance with Section 7.10.
"Register": as defined in Section 10.6(e).
"Regulation U": Regulation U of the Board as in effect from
time to time.
"Reimbursement Obligation": the obligation of the Borrower to
reimburse the Issuing Lender pursuant to Section 3.5 for amounts drawn
under Letters of Credit.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty day
notice period is waived under subsection .13, .14, .16, .18, .19 or
.20 of PBGC Reg. Section 2615.
"Required Lenders": at any time, the holders of more than 50%
of (a) until the Closing Date, the Commitments then in effect and (b)
thereafter, the sum of (i) the aggregate unpaid principal amount of
the Term Loans then outstanding and, if the Term Loan Commitments have
not been terminated, the aggregate undrawn amount of the Term Loan
Commitments then in effect and (ii) the Total Revolving Commitments
then in effect or, if the Revolving Commitments have been terminated,
the Total Revolving Extensions of Credit then outstanding.
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"Required Prepayment Lenders": the Majority Facility Lenders
in respect of each Facility.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or
any of its property or to which such Person or any of its property is
subject.
"Responsible Officer": the chief executive officer, president
or chief financial officer of the Borrower, but in any event, with
respect to financial matters, the chief financial officer of the
Borrower.
"Revolving Borrowing Date": any Business Day specified in a
notice pursuant to Section 2.5 as a date on which the Borrower
requests the Revolving Lenders to make Revolving Loans hereunder.
"Revolving Commitment": as to any Lender, the obligation of
such Lender, if any, to make Revolving Loans to and/or issue or
participate in Letters of Credit issued on behalf of the Borrower
hereunder in an aggregate principal and/or face amount not to exceed
the amount set forth under the heading "Revolving Commitment" opposite
such Lender's name on Schedule 1.1A, as the same may be changed from
time to time pursuant to the terms hereof and as the same shall be
reduced pursuant to Section 2.4(c). The original amount of the Total
Revolving Commitments is $250,000,000.
"Revolving Commitment Period": the period from and including
the Closing Date to but not including the Revolving Termination Date,
or such earlier date on which the Revolving Commitments shall have
been terminated.
"Revolving Extensions of Credit": as to any Revolving Lender
at any time, an amount equal to the sum of (a) the aggregate principal
amount of all Revolving Loans held by such Lender then outstanding and
(b) such Lender's Revolving Percentage of the L/C Obligations then
outstanding.
"Revolving Lender": each Lender that has a Revolving
Commitment or that holds Revolving Loans.
"Revolving Loans": as defined in Section 2.4(a).
"Revolving Percentage": as to any Revolving Lender at any
time, the percentage which such Lender's Revolving Commitment then
constitutes of the Total Revolving Commitments (or, at any time after
the Revolving Commitments shall have expired or terminated, the
percentage which the aggregate principal amount of such Lender's
Revolving Loans then outstanding constitutes of the aggregate
principal amount of the Revolving Loans then outstanding).
"Revolving Termination Date": the earlier to occur of (i) 365
days after the Closing Date and (ii) termination or abandonment by the
Borrower of the Acquisition; provided, however, that in the event the
Merger Loan Date occurs on or before the date referred to in clause
(i) above, and the Term Loans are made to the full extent of the Term
Loan Commitments, the Revolving Termination Date will be extended to
the Scheduled Revolving Termination Date.
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"Scheduled Revolving Termination Date": the fifth anniversary
of the Closing Date.
"SEC": the Securities and Exchange Commission and any
successor thereto.
"Security Documents": the collective reference to each
Mortgage, each Oil and Gas Mortgage, the Master Guarantee and
Collateral Agreement and all other security documents hereafter
delivered to the Collateral Agent granting a Lien on any asset or
assets of any Person to secure the obligations and liabilities of the
Borrower hereunder and/or under any of the other Loan Documents or to
secure any guarantee of any such obligations and liabilities.
"Seller Indebtedness": Indebtedness of the Borrower which is
issued to the seller in a Permitted Acquisition as all or a portion of
the consideration for such Permitted Acquisition.
"Senior Subordinated Note Indenture": the indenture to be
entered into by the Borrower in connection with the issuance of Senior
Subordinated Notes containing, terms and conditions consistent with
those set forth in the definition of Senior Subordinated Notes or such
other terms and conditions approved by the Required Lenders and the
Administrative Agent, as amended, supplemented or otherwise modified
from time to time in accordance with Section 7.10.
"Senior Subordinated Notes": either (a) senior subordinated
notes, provided that such notes shall:
(i) be unsecured, provided that such notes may
provide for a covenant requiring equal and ratable security in
the event that any Indebtedness that is pari passu with or
subordinated to such notes is secured in a manner not
prohibited by this Agreement;
(ii) not amortize, or otherwise be subject to
scheduled redemptions, repurchases or other payments of
principal, prior to the date that is one year and one day
after the final maturity of the Loans as provided on the date
hereof, but may be accompanied by warrants to purchase common
stock of the Borrower;
(iii) bear interest (x) at a rate per annum not in
excess of 17% and (y) payable in cash at a rate per annum not
in excess of 14%;
(iv) be subordinated to the Loans in a manner no less
favorable to the Lenders than the Exchange Notes (as defined
in the Interim Loan Agreement) are to be subordinated to the
Loans (as provided on the date hereof) on and after the Merger
Date;
(v) provide for covenants, events of default and
remedies not materially less favorable (in each case, taken as
a whole) to the Borrower than those applicable to the Exchange
Notes (as defined in the Interim Loan Agreement) on the date
hereof, subject to modification where necessary to reflect
prevailing market terms at the time of issuance of such senior
subordinated notes for "high-yield" securities issued by
companies of comparable size, credit rating and capitalization
(including, without limitation, having in place a senior
secured credit facility) to the Borrower, provided, in any
event, that such covenants,
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events of default and remedies shall be no more restrictive of
the conduct of business by the Borrower than those in effect
on the Stepdown Date (as defined in the Interim Loan
Agreement) pursuant to the Interim Loan Agreement (it being
understood, in any event, that (x) there shall be no financial
maintenance covenants, (y) the indebtedness limitation
covenant shall be based only upon an "incurrence test" and (z)
there shall be a cross-payment default/cross-acceleration
default provision, rather than a simple cross-default
provision); and
(vi) not require prepayments or mandatory redemption
of such senior subordinated notes, except (A) in the event of
a "change of control" of the Borrower, subject to terms not
materially less favorable (taken as a whole) to the Borrower
than those contained in the Exchange Note Indenture (as
defined in the Interim Loan Agreement) on the date hereof, and
(B) in the event of an asset sale, so long as the proceeds
thereof are not required by this Agreement to be used to
prepay the Loans or reduce the Commitments or for reinvestment
in the Borrower's business, in each case in accordance with
this Agreement; or
(b) other Subordinated Indebtedness the terms and conditions of which
are reasonably satisfactory to the Administrative Agent and the
Required Lenders.
"Servicios": Servicios WellTech, S.A., an Argentine
corporation.
"Sharing Percentage": the percentage which the then
outstanding principal amount of the Interim Loans then constitutes of
the sum of (i) the then outstanding principal amount of the Interim
Loans and (ii) the then outstanding amount of Reimbursement
Obligations, Loans and, without duplication, the L/C Obligations.
"Significant Disposition": as defined in Section 7.6(d).
"Single Employer Plan": any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"Solvent": when used with respect to any Person, means that,
as of any date of determination, (a) the amount of the "present fair
saleable value" of the assets of such Person will, as of such date,
exceed the amount of all "liabilities of such Person, contingent or
otherwise", as of such date, as such quoted terms are determined in
accordance with applicable federal and state laws governing
determinations of the insolvency of debtors, (b) the present fair
saleable value of the assets of such Person will, as of such date, be
greater than the amount that will be required to pay the liability of
such Person on its debts as such debts become absolute and matured,
(c) such Person will not have, as of such date, an unreasonably small
amount of capital with which to conduct its business, and (d) such
Person will be able to pay its debts as they mature. For purposes of
this definition, (i) "debt" means liability on a "claim", and (ii)
"claim" means any (x) right to payment, whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured or
unsecured or (y) right to an equitable remedy for breach of
performance if such breach gives rise to a right to payment, whether
or not such right to an equitable remedy is reduced to judgment,
fixed, contingent, matured or unmatured, disputed, undisputed, secured
or unsecured.
"S&P": Standard & Poor's Ratings Group.
"Standby Letter of Credit": as defined in Section 3.1(a).
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"Subordinated Indebtedness": the Convertible Subordinated
Debentures, the 1997 Convertible Subordinated Notes, after the Merger
Date the Put Facility and the Senior Subordinated Notes and any other
Indebtedness of the Borrower subordinated to the prior payment in full
of the Obligations to at least the extent the 1997 Convertible
Subordinated Notes are subordinated to the Obligations or otherwise in
a manner acceptable to the Required Lenders as evidenced by their
written approval.
"Subsidiary": as to any Person at any date, a corporation,
partnership or other entity of which, at such date, shares of stock or
other ownership interests having ordinary voting power (other than
stock or such other ownership interests having such power only by
reason of the happening of a contingency) to elect a majority of the
board of directors or other managers of such corporation, partnership
or other entity are at the time owned, or the management of which is
otherwise controlled, directly or indirectly through one or more
intermediaries, or both, by such Person. Unless otherwise qualified,
all references to a "Subsidiary" or to "Subsidiaries" in this
Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower
(including on and after the Closing Date, Xxxxxx and its
Subsidiaries), but such references shall not include any Excluded
Subsidiary and reference to Subsidiaries of Xxxxxx shall not include
any Excluded Subsidiary.
"Subsidiary Guarantor": each Subsidiary of the Borrower which
is a party to the Master Guarantee and Collateral Agreement.
"Tender Offer": as defined in the recitals hereto.
"Tender Offer Documents: the collective reference to the Offer
to Purchase, dated August 17, 1998 by Midland and all associated
documents filed by the Borrower and/or Midland with the SEC in
connection with the Tender Offer prior to the Closing Date.
"Term Lenders": the collective reference to the Tranche A
Term Lenders and the Tranche B Term Lenders.
"Term Loan Borrowing Date": any Business Day specified in a
notice pursuant to Section 2.2 as a date on which the Borrower
requests the Term Lenders to make Term Loans hereunder.
"Term Loan Commitment Period": the period from and including
the Closing Date to and including, the earliest of (i) 365 days after
the Closing Date, (ii) the Merger Loan Date and (iii) the termination
or abandonment by the Borrower of the Acquisition.
"Term Loan Commitments": the Tranche A Term Commitments and
the Tranche B Term Commitments.
"Term Loans": the collective reference to the Tranche A Term
Loans and Tranche B Term Loans.
"Total Revolving Commitments": at any time, the aggregate
amount of the Revolving Commitments then in effect.
"Total Revolving Extensions of Credit": at any time, the
aggregate amount of the Revolving Extensions of Credit of the
Revolving Lenders outstanding at such time.
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"Tranche A Term Commitment": as to any Lender, the obligation
of such Lender, if any, to make a Tranche A Term Loan to the Borrower
hereunder in a principal amount not to exceed the amount set forth
under the heading "Tranche A Term Commitment" opposite such Lender's
name on Schedule 1.1A. The original aggregate amount of Tranche A
Term Commitments is $150,000,000.
"Tranche A Term Lender": each Lender that has a Tranche A
Term Commitment or is the holder of a Tranche A Term Loan.
"Tranche A Term Loan": as defined in Section 2.1.
"Tranche A Term Percentage": as to any Tranche A Term Lender
at any time, the percentage which such Lender's Tranche A Term
Commitment then constitutes of the aggregate Tranche A Term
Commitments (or, at any time after the Closing Date, the percentage
which the aggregate principal amount of such Lender's Tranche A Term
Loans then outstanding plus the undrawn amount of such Tranche A Term
Commitment then in effect constitute of the aggregate principal amount
of the Tranche A Term Loans then outstanding and the undrawn Tranche A
Term Commitments then in effect).
"Tranche B Term Commitment": as to any Lender, the obligation
of such Lender, if any, to make a Tranche B Term Loan to the Borrower
hereunder in a principal amount not to exceed the amount set forth
under the heading "Tranche B Term Commitment" opposite such Lender's
name on Schedule 1.1A. The original aggregate amount of Tranche B Term
Commitments is $150,000,000.
"Tranche B Term Lender": each Lender that has a Tranche B
Term Commitment or that holds a Tranche B Term Loan.
"Tranche B Term Loan": as defined in Section 2.1.
"Tranche B Term Percentage": as to any Tranche B Term Lender
at any time, the percentage which such Lender's Tranche B Term
Commitment then constitutes of the aggregate Tranche B Term
Commitments (or, at any time after the Closing Date, the percentage
which the aggregate principal amount of such Lender's Tranche B Term
Loans then outstanding plus the undrawn amount of such Tranche B Term
Loan Commitment then in effect constitute of the aggregate principal
amount of the Tranche B Term Loans and the undrawn Tranche B Term
Commitments then in effect then outstanding); provided, that solely
for purposes of calculating the amount of each installment of Tranche
B Term Loans (other than the last installment) payable to a Tranche B
Term Lender, such Term Lender's Tranche B Term Percentage shall be
calculated without giving effect to any portion of any prior mandatory
or optional prepayment attributable to such Term Lender's Tranche B
Term Loans that shall have been declined by such Term Lender (or, in
the case of any Term Lender that shall have acquired its Tranche B
Term Loans by assignment from another Person, by such other Person).
"Transferee": as defined in Section 10.6(g).
"Transportes": Transportes Dimopulos Sociedad de
Respondsibilidad Limitada, an Argentine limited partnership.
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"Type": as to any Loan, its nature as a Base Rate Loan or a
Eurodollar Loan.
"Uniform Customs": the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, as the same may be amended from time to time.
"United States": the United States of America.
"Vehicles": as defined in the Master Guarantee and Collateral
Agreement.
"Wholly Owned Subsidiary": as to any Person, any other Person
all of the Capital Stock of which (other than directors' qualifying
shares) is owned by such Person directly and/or through other Wholly
Owned Subsidiaries.
1.2 Other Definitional Provisions. (a) Unless otherwise
specified therein, all terms defined in this Agreement shall have the defined
meanings when used in the other Loan Documents or any certificate or other
document made or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto,
accounting terms relating to the Borrower and its Subsidiaries not defined in
Section 1.1 and accounting terms partly defined in Section 1.1, to the extent
not defined, shall have the respective meanings given to them under GAAP.
(c) 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 to any particular provision of this Agreement, and Section,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Term Commitments. Subject to the terms and conditions
hereof, (a) each Tranche A Term Lender severally agrees to make loans (each, a
"Tranche A Term Loan") to the Borrower up to four times during the Term Loan
Commitment Period in an aggregate amount not to exceed the amount of the
Tranche A Term Commitment of such Lender and (b) each Tranche B Term Lender
severally agrees to make loans (each, a "Tranche B Term Loan") to the Borrower
up to four times during the Term Loan Commitment Period in an aggregate amount
not to exceed the amount of the Tranche B Term Commitment of such Lender. The
Term Loans may from time to time be Eurodollar Loans or Base Rate Loans, as
determined by the Borrower and notified to the Administrative Agent in
accordance with Sections 2.2 and 2.11. On the Closing Date, all Existing
Revolving Credit Loans outstanding on the Closing Date shall be continued
(without payment thereof) as Term Loans hereunder.
2.2 Procedure for Term Loan Borrowing. The Borrower shall
give the Administrative Agent irrevocable notice (which notice must be received
by the Administrative Agent prior to 10:00 A.M., New York City time, (i) three
Business Days prior to the requested Term Loan Borrowing Date, if all or any
part of the Loans are to be Eurodollar Loans, or (ii) one Business Day prior to
such Term Loan Borrowing Date, otherwise) requesting that the Term Lenders make
the Term Loans on the Merger Date and specifying (x) the amount to be
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borrowed, (y) whether the borrowing is to be of Eurodollar Loans, Base Rate
Loans or a combination thereof and (z) if the borrowing is to be entirely or
partly Eurodollar Loans, the respective amounts of each such Type of Loan and
the respective lengths of the initial Interest Periods thereof; provided that
the initial Term Loans shall be made on the Closing Date and thereafter Term
Loans may be made two additional times prior to the Merger Date to prepay
Interim Loans as provided in Section 4.16(a) and to pay for Capital Stock of
Xxxxxx tendered under the Tender Offer and on the Merger Date and the Term
Loans shall be allocated on a pro rata basis between the Tranche A Term Loans
and the Tranche B Term Loans. Each borrowing under the Term Loan Commitments
shall be in an amount equal to (x) in the case of Base Rate Loans, $1,000,000
or a whole multiple thereof and (y) in the case of Eurodollar Loans, $5,000,000
or a whole multiple of $1,000,000 in excess thereof. Upon receipt of any such
notice the Administrative Agent shall promptly notify each Term Lender thereof
and of the amount of Term Loans constituting Tranche A Term Loans and Tranche B
Term Loans, respectively. Not later than 12:00 Noon, New York City time, on
each Term Loan Borrowing Date each Term Lender shall make available to the
Administrative Agent at the Funding Office an amount in immediately available
funds equal to the Term Loan or Term Loans to be made by such Lender. The
Administrative Agent shall credit the account of the Borrower on the books of
such office of the Administrative Agent with the aggregate of the amounts made
available to the Administrative Agent by the Term Lenders in immediately
available funds.
2.3 Repayment of Term Loans. (a) The Tranche A Term Loan of
each Tranche A Lender shall mature in sixteen consecutive quarterly
installments commencing on the date fifteen months after the Closing Date, each
of which shall be in an amount equal to such Lender's Tranche A Term Percentage
multiplied by the percentage set forth below opposite such installment of the
Tranche A Term Loans outstanding on the Merger Date (after giving effect to any
Term Loans made on such date):
Principal Amount
Installment of each Installment
----------- -------------------
1 to 4 4%
5 to 8 6%
9 to 12 7%
13 to 16 8%
(b) The Tranche B Term Loan of each Tranche B Lender shall
mature in nineteen consecutive quarterly installments commencing on the date
fifteen months after the Closing Date, each of which shall be in an amount
equal to such Lender's Tranche B Term Percentage multiplied by the percentage
set forth below opposite such installment of the Trance B Term Loans
outstanding on the Merger Date (after giving effect to any Term Loans made on
such date):
Principal Amount
Installments of each Installment
------------ -------------------
1 to 4 0.25%
5 to 8 0.25%
9 to 12 0.25%
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13 to 16 0.25%
17 to 18 24.00%
19 48.00%
(c) Notwithstanding the foregoing, the Term Loans shall be
paid in full on the Revolving Termination Date if the Revolving Termination
Date is not extended to the Scheduled Revolving Termination Date.
2.4 Revolving Commitments. (a) Subject to the terms and
conditions hereof, each Revolving Lender severally agrees to make revolving
credit loans ("Revolving Loans") to the Borrower from time to time during the
Revolving Commitment Period after the Term Loan Commitments have been fully
utilized in an aggregate principal amount at any one time outstanding which,
when added to such Lender's Percentage of the L/C Obligations then outstanding,
does not exceed the amount of such Lender's Revolving Commitment. During the
Revolving Commitment Period, the Borrower may use the Revolving Commitments by
borrowing, prepaying the Revolving Loans in whole or in part, and reborrowing,
all in accordance with the terms and conditions hereof.
(b) The Revolving Loans may from time to time be (i)
Eurodollar Loans, (ii) Base Rate Loans or (iii) a combination thereof, as
determined by the Borrower and notified to the Administrative Agent in
accordance with Sections 2.5 and 2.11, provided that no Revolving Loan shall be
made as a Eurodollar Loan after the day that is one month prior to the
Scheduled Revolving Termination Date.
(c) The Revolving Commitments shall be permanently reduced
(and each Revolving Lender's Commitment shall be ratably reduced) on the third
and fourth anniversary of the Closing Date by the amount set forth opposite
such anniversary below:
Anniversary Amount
----------- -----------
Third $25,000,000
Fourth $25,000,000
2.5 Procedure for Revolving Loan Borrowing. The Borrower may
borrow under the Revolving Commitments during the Revolving Commitment Period
on any Business Day after the Term Commitments have been fully utilized,
provided that the Borrower shall give the Administrative Agent irrevocable
notice (which notice must be received by the Administrative Agent prior to
12:00 Noon, New York City time, (a) three Business Days prior to the requested
Revolving Borrowing Date, if all or any part of the requested Revolving Loans
are to be Eurodollar Loans or (b) one Business Day prior to the requested
Borrowing Date, otherwise), specifying (i) the amount to be borrowed, (ii) the
requested Borrowing Date, (iii) whether the borrowing is to be of Eurodollar
Loans, Base Rate Loans, or a combination thereof and (iv) if the borrowing is
to be entirely or partly of Eurodollar Loans, the respective amounts of each
such Type of Loan and the respective lengths of the initial Interest Periods
therefor. Each borrowing under the Revolving Commitments shall be in an amount
equal to (x) in the case of Base Rate Loans, $1,000,000 or a whole multiple
thereof (or, if the then Available Revolving Commitments are less than
$1,000,000, such lesser amount) and (y) in the case of Eurodollar Loans,
$5,000,000 or a whole multiple of $1,000,000 in excess thereof. Upon receipt of
any such notice from the Borrower, the Administrative Agent shall promptly
notify each Lender thereof. Each Lender will make the amount of its pro rata
share of each borrowing available to the Administrative Agent for the account
of the Borrower at the office of the Administrative Agent specified in Section
10.2 prior to 11:00 A.M., New York City time, on the Borrowing Date
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requested by the Borrower in funds immediately available to the Administrative
Agent. The aggregate of the amounts made available to the Administrative Agent
by the Lenders will then be made available to the Borrower by the
Administrative Agent in accordance with the instructions of the Borrower in
like funds as received by the Administrative Agent.
2.6 Commitment Fees, etc. (a) The Borrower agrees to pay to
the Administrative Agent for the account of each Lender a commitment fee for
the period from and including the Closing Date to the last day of the Term Loan
Commitment Period or the Revolving Commitment Period, as applicable, computed
at the Commitment Fee Rate on the average daily amount of the unutilized Term
Loan Commitments and the Available Revolving Commitment, as applicable, of such
Lender during the period for which payment is made, payable quarterly in
arrears on the last day of each March, June, September and December and on the
last day of the Term Loan Commitment Period or the Revolving Commitment Period,
as applicable, commencing on the first of such dates to occur after the date
hereof.
(b) The Borrower agrees to pay to the Administrative Agent and
the Arranger the fees in the amounts and on the dates agreed to in writing from
time to time by the Borrower, the Administrative Agent and the Arranger.
(c) The Borrower agrees to pay to the Collateral Agent the
fees in the amount and on the dates agreed to in writing from time to time by
the Borrower and the Collateral Agent.
2.7 Repayment of Loans; Evidence of Debt. (a) The Borrower
hereby unconditionally promises to pay to the Administrative Agent for the
account of the appropriate Lender the then unpaid principal amount of each Term
Loan of such Lender as provided in Section 2.2 and the unpaid principal amount
of each Revolving Loan of each such Lender on the last day of the Revolving
Commitment Period (or such earlier date on which the Loans become due and
payable pursuant to Section 8). The Borrower hereby further agrees to pay
interest on the unpaid principal amount of the Loans from time to time
outstanding from the date hereof until payment in full thereof at the rates per
annum, and on the dates, set forth in Section 2.13.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of the Borrower to such
Lender resulting from each Loan of such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time under this Agreement.
(c) The Administrative Agent, on behalf of the Borrower, shall
maintain the Register pursuant to Section 10.6(e) and a subaccount therein for
each Lender, in which shall be recorded (i) the amount of each Loan made
hereunder, the Type thereof and each Interest Period applicable thereto, (ii)
the amount of any principal or interest due and payable or to become due and
payable from the Borrower to each Lender hereunder and (iii) both the amount of
any sum received by the Administrative Agent hereunder from the Borrower and
each Lender's share thereof.
(d) The entries made in the Register and the accounts of each
Lender maintained pursuant to Section 2.7(b) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Loans made
to such Borrower by such Lender in accordance with the terms of this Agreement.
(e) The Borrower agrees that, upon the request to the
Administrative Agent by any Lender, the Borrower will execute and deliver to
such Lender a promissory note of the Borrower evidencing any Loans of such
Lender, substantially in the form agreed to by the Administrative Agent and the
Borrower with appropriate insertions as to date and principal amount (a
"Note"). A Note and the obligation evidenced thereby may be assigned or
otherwise transferred in whole or in part only by registration of such
assignment or transfer of such Note and the obligation evidenced thereby in the
Register (and each Note shall expressly so provide). Any assignment or
transfer of all or part of an obligation evidenced by a Note shall be
registered in the Register only upon surrender for registration of assignment
or transfer of the Note evidencing such obligation, accompanied by an
Assignment and Acceptance substantially in the form of Exhibit F duly executed
by the Assignor thereof, and thereupon one or more new Notes shall be issued to
the designated Assignee and the old Note shall be returned by the
Administrative Agent to the Borrower marked "cancelled". No assignment of a
Note and the obligation evidenced thereby shall be effective unless it shall
have been recorded in the Register by the Administrative Agent as provided in
this Section 2.7(e).
2.8 Optional Termination or Reduction of Revolving
Commitments. The Borrower shall have the right, upon not less than three
Business Days' notice to the Administrative Agent, to terminate the Revolving
Commitments or, from time to time, to reduce the amount of the Revolving
Commitments; provided that no such termination or reduction of Revolving
Commitments shall be permitted if, after giving effect thereto and to any
prepayments of the Revolving Loans made on the effective date thereof, the sum
of the Total Revolving Extensions of Credit would exceed the Total Revolving
Commitments. Any such reduction shall be in an amount equal to $5,000,000, or
a whole multiple thereof, and shall reduce permanently the Revolving
Commitments then in effect.
2.9 Optional Prepayments. The Borrower may at any time and
from time to time prepay the Loans, in whole or in part, without premium or
penalty, upon at least three Business Days' irrevocable notice to the
Administrative Agent by the Borrower, specifying the date and amount of
prepayment and whether the prepayment is of Eurodollar Loans, Base Rate Loans
or a combination thereof, and, if of a combination thereof, the amount
allocable to each, provided that if a Eurodollar Loan is prepaid on any day
other than the last day of the Interest Period applicable thereto the Borrower
shall also pay any amounts owing pursuant to Section 2.20. Upon receipt of any
such notice, the Administrative Agent shall promptly notify each Lender
thereof. If any such notice is given, the amount specified in such notice shall
be due and payable on the date specified therein, together with (except
Revolving Loans that are Base Rate Loans) accrued interest to such date on the
amount prepaid. Partial prepayments of Loans shall be in an aggregate principal
amount of $5,000,000 or a whole multiple thereof. Subject to subsection 2.10(g)
below, partial prepayments of the Term Loans shall be applied to the prepayment
of the Tranche A Term Loans and the Tranche B Term Loans ratably. Amounts to be
applied to the installments of the Tranche A Term Loans and the Tranche B Term
Loans shall be applied ratably in accordance with the outstanding amounts
thereof and such amount prepaid may not be reborrowed.
2.10 Mandatory Prepayments and Commitment Reductions. (a)
Unless the Required Prepayment Lenders shall otherwise agree, 100% of the Net
Cash Proceeds of the Senior Subordinated Notes (to the extent such Net Cash
Proceeds are not used to prepay the Put Facility) shall be applied on the date
such Net Cash Proceeds are received to the prepayment of the Term Loans (or
reduction of Term Loan Commitments) as set forth in Section 2.10(f).
(b) Unless the Required Prepayment Lenders shall otherwise
agree, if any
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Capital Stock shall be issued by the Borrower or any of its Subsidiaries, an
amount equal to 100% of the Net Cash Proceeds thereof until such Net Cash
Proceeds aggregate $75,000,000 and thereafter 75% of the Net Cash Proceeds
thereof shall be applied on the date of such issuance or incurrence toward the
prepayment of the Term Loans (or reduction of Term Loan Commitments) as set
forth in Section 2.10(f) provided that so long as no Event of Default has
occurred or is continuing pursuant to Sections 8(a), 8(e)(i), 8(e)(ii), 8(f) or
8(k), Net Cash Proceeds of Capital Stock (other than Disqualified Stock) issued
by the Borrower may be used to prepay the Put Facility and to the extent so
used shall not be required to be used as mandatory prepayments or Term Loan
Commitment reductions hereunder.
(c) Unless the Required Prepayment Lenders otherwise agree,
if, for any fiscal year of the Borrower commencing with the fiscal year ending
June 30, 1999, there shall be Excess Cash Flow, the Borrower shall, on the
relevant Excess Cash Flow Application Date, apply 75% of such Excess Cash Flow
toward the prepayment of the Term Loans as set forth in Section 2.10(f),
provided that if (i) the Consolidated Leverage Ratio as of the last day of the
fiscal year immediately prior to such Excess Cash Flow Application Date shall
be less than 3.75 to 1.00 or (ii) the Minimum Equity Event shall have occurred,
the Borrower shall be required to apply only 50% of such Excess Cash Flow
toward such prepayment of the Term Loans. Each such prepayment and commitment
reduction shall be made on a date (an "Excess Cash Flow Application Date") no
later than five days after the earlier of (i) the date on which the financial
statements of the Borrower referred to in Section 6.1(a), for the fiscal year
with respect to which such prepayment is made, are required to be delivered to
the Lenders and (ii) the date such financial statements are actually delivered.
Notwithstanding anything to the contrary in this Section 2.10(c), (i) if the
Borrower prior to June 30 in any calendar year changes its fiscal year to
December 31 of such year as permitted by Section 7.13, Excess Cash Flow
prepayments required hereunder for such fiscal year shall be calculated as if
the fiscal year ended on June 30 of such year and the prepayment for the fiscal
year ending December 31 of such year shall be based on the six month period
ending on such date and (ii) if the Borrower after June 30 of any calendar year
changes its fiscal year to December 31 of such year as permitted by Section
7.13, the prepayment based on Excess Cash Flow for the fiscal year ending on
December 31 of such year shall be based on the six month period ending on such
date.
(d) Unless the Required Prepayment Lenders otherwise agree, if
the Borrower or any of its Subsidiaries shall receive Net Cash Proceeds from
the Significant Disposition permitted under Section 7.6(d) (i) prior to the
Merger Loan Date, 100% of the Net Cash Proceeds thereof, or (ii) on or after
the Merger Loan Date, 75% of the Net Cash Proceeds thereof, shall be applied on
the date such Net Cash Proceeds are received toward the prepayment of the Term
Loans and the reduction of the Term Loan Commitments as set forth in Section
2.10(f).
(e) To the extent the Borrower or any of its Subsidiaries or
Excluded Subsidiaries is to receive Net Cash Proceeds which otherwise would be
required to be used to prepay the Put Facility (other than Net Cash Proceeds
permitted by this Agreement to be so applied) or the Senior Subordinated Notes,
such Net Cash Proceeds shall be applied (unless the Required Prepayment Lenders
shall otherwise agree) within three days after the receipt thereof toward the
prepayment of the Term Loans (or toward reduction of the Term Loan Commitments)
as set forth in Section 2.10(f).
(f) Amounts to be applied in connection with prepayments of
Loans and Commitment reductions made pursuant to this Section 2.10 shall be
applied, to the permanent reduction of Term Loan Commitments and then to
prepayment of the Term Loans. The application of any prepayment pursuant to
this Section 2.10 shall be made first to Base Rate
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Loans and second to Eurodollar Loans, provided that at the request of the
Borrower the application of any prepayment to any Eurodollar Loan may be
delayed until the end of an Interest Period (or Interest Periods) so that such
application does not result in the incurrence by any Lender of any loss or
expense under Section 2.20, and during such delay, the Administrative Agent
shall hold the amount of such prepayment in a cash collateral account. Each
prepayment of the Loans under this Section 2.10 shall be accompanied by accrued
interest to the date of such prepayment on the amount prepaid.
(g) Notwithstanding anything to the contrary in Section 2.09,
2.10(f) or 2.16, with respect to the amount of any optional or mandatory
prepayment described in Section 2.09 or Section 2.10 that is allocated to
Tranche B Term Loans (such amounts, the "Tranche B Prepayment Amount"), at any
time when Tranche A Term Loans remain outstanding, the Borrower will, in lieu
of applying such amount to the prepayment of Tranche B Term Loans on the date
specified in Section 2.09 or 2.10 for such prepayment, give the Administrative
Agent telephonic notice (promptly confirmed in writing) requesting that the
Administrative Agent prepare and provide to each Tranche B Lender a notice
(each, a "Prepayment Option Notice") as described below. As promptly as
practicable after receiving such notice from the Borrower, the Administrative
Agent will send to each Tranche B Lender a Prepayment Option Notice, which
shall be in the form of Exhibit I, and shall include an offer by the Borrower
to prepay on the date (each a "Prepayment Date") that is 10 Business Days after
the date of the Prepayment Option Notice, the relevant Term Loans of such
Lender by an amount equal to the portion of the Prepayment Amount indicated in
such Lender's Prepayment Option Notice as being applicable to such Lender's
Tranche B Term Loans. On the Prepayment Date, (i) the Borrower shall pay to
the relevant Tranche B Lenders the aggregate amount necessary to prepay that
portion of the outstanding Tranche B Term Loans in respect of which such
Lenders have accepted prepayment as described above (such Lenders, the
"Accepting Lenders"), (ii) the Borrower shall pay to the Tranche A Lenders an
amount equal to 100% of the portion of the Tranche B Prepayment Amount not
accepted by the Accepting Lenders, and such amount shall be applied to the
prepayment of the Tranche A Term Loans.
(h) Notwithstanding anything to the contrary contained
herein, on or prior to the Merger Date any amounts required to prepay the Loans
hereunder or to reduce the Commitment shall, at the option of the Borrower, be
reduced by an amount equal to up to the Sharing Percentage of the amount
otherwise required to be prepaid hereunder on such date provided such amount is
used to permanently reduce the principal amount of the Interim Loans provided
that the amount not so used is promptly used to prepay the Loans.
2.11 Conversion and Continuation Options. (a) The Borrower may
elect from time to time to convert Eurodollar Loans to Base Rate Loans by
giving the Administrative Agent at least two Business Days' prior irrevocable
notice of such election, provided that any such conversion of Eurodollar Loans
may only be made on the last day of an Interest Period with respect thereto.
The Borrower may elect from time to time to convert Base Rate Loans to
Eurodollar Loans by giving the Administrative Agent at least three Business
Days' prior irrevocable notice of such election. Any such notice of conversion
to Eurodollar Loans shall specify the length of the initial Interest Period
therefor. Upon receipt of any such notice, the Administrative Agent shall
promptly notify each Lender thereof. All or any part of outstanding Eurodollar
Loans and Base Rate Loans may be converted as provided herein, provided that
(i) no Loan under a particular Facility may be converted into a Eurodollar Loan
(A) when any Event of Default has occurred and is continuing and the
Administrative Agent has or the Majority Facility Lenders in respect of such
Facility have determined in its or their sole discretion not to permit such a
conversion or (B) having an Interest Period in excess of one month prior to the
date which is the earlier of (y) 180 days after the Closing Date or (z) the
date the initial syndication of Loans is completed by the Arranger and (ii) no
Revolving Loan, may
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be converted into a Eurodollar Loan after the date that is one month prior to
the Scheduled Revolving Termination Date, (iii) no Tranche A Term Loan may be
converted into a Eurodollar Loan after the date that is one month prior to the
fifth anniversary of the Closing Date, and (iv) no Tranche B Term Loans may be
converted into a Eurodollar Loan after the date that is one month prior to the
final maturity of the Tranche B Term Loans.
(b) Any Eurodollar Loans may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
Borrower giving irrevocable notice to the Administrative Agent, in accordance
with the applicable provisions of the term "Interest Period" set forth in
Section 1.1, of the length of the next Interest Period to be applicable to such
Loans, provided that no Eurodollar Loan under a particular Facility may be
continued as such (i) when any Event of Default has occurred and is continuing
and the Administrative Agent has or the Majority Facility Lenders under the
relevant Facility have determined in its or their sole discretion not to permit
such a continuation, (ii) in the case of Revolving Loans, after the date that
is one month prior to the Scheduled Revolving Termination Date, (iii) in the
case of Tranche A Term Loans, after the date that is one month prior to the
fifth anniversary of the Closing Date, or (iv) in the case of Tranche B Term
Loans, the date that is one month prior to the final maturity of the Tranche B
Term Loans; and provided, further, that if the Borrower shall fail to give any
required notice as described above in this paragraph or if such continuation is
not permitted pursuant to the preceding proviso such Loans shall be
automatically converted to Base Rate Loans on the last day of such then
expiring Interest Period.
2.12 Minimum Amounts and Maximum Number of Eurodollar
Tranches. Notwithstanding anything to the contrary in this Agreement, all
borrowings, conversions, continuations and optional prepayments of Loans
hereunder and all selections of Interest Periods hereunder shall be in such
amounts and be made pursuant to such elections so that, (a) after giving effect
thereto, the aggregate principal amount of the Loans comprising each Eurodollar
Tranche shall be equal to $5,000,000 or a whole multiple of $1,000,000 in
excess thereof and (b) no more than twelve Eurodollar Tranches in respect of
all Loans shall be outstanding at any one time.
2.13 Interest Rates and Payment Dates. (a) Each Eurodollar
Loan shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such
day plus the Applicable Margin.
(b) Each Base Rate Loan shall bear interest at a rate per
annum equal to the Base Rate plus the Applicable Margin.
(c) If all or a portion of any principal of any Loan or
Reimbursement Obligations shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), such amounts shall bear interest at 2%
above the rate otherwise applicable thereto from the date of such non-payment
until such overdue principal is paid in full (as well after as before
judgment). If all or a portion of any interest shall not be paid when due
(whether at the stated maturity, by acceleration or otherwise), such amounts
shall bear interest at 2% above the rate otherwise applicable to the Loans or
Reimbursement Obligations on which such interest accrued from the date of such
non-payment until such overdue principal is paid in full (as well after as
before judgment). If all or a portion of any commitment fee or any other amount
payable hereunder shall not be paid when due (whether at the stated maturity,
by acceleration or otherwise), such amounts shall bear interest at a rate which
is 2% above the rate applicable to Base Rate Loans, in each case from the date
of such non-payment until such overdue commitment fee or other amount is paid
in full (as well after as before judgment).
(d) Interest shall be payable in arrears on each Interest
Payment Date, provided
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that interest accruing pursuant to paragraph (c) of this Section 2.13 shall be
payable from time to time on demand.
2.14 Computation of Interest and Fees. (a) Interest on Loans
and Reimbursement Obligations, commitment fees, letter of credit commissions
and interest on overdue interest, commitment fees and other amounts payable
hereunder shall be calculated on the basis of a 360-day year for the actual
days elapsed, except that, with respect to Base Rate Loans the rate of interest
on which is calculated on the basis of the Prime Rate, the interest thereon
shall be calculated on the basis of a 365- (or 366-, as the case may be) day
year for the actual days elapsed. The Administrative Agent shall as soon as
practicable notify the Borrower and the relevant Lenders of each determination
of a Eurodollar Rate. Any change in the interest rate on a Loan resulting from
a change in the Base Rate or the Eurocurrency Reserve Requirements shall become
effective as of the opening of business on the day on which such change becomes
effective. The Administrative Agent shall as soon as practicable notify the
Borrower and the relevant Lenders of the effective date and the amount of each
such change in interest rate.
(b) Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement shall be
conclusive and binding on the Borrower and the Lenders in the absence of
manifest error.
2.15 Inability to Determine Interest Rate. If prior to the
first day of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that, by
reason of circumstances affecting the relevant market, adequate and reasonable
means do not exist for ascertaining the Eurodollar Rate for such Interest
Period, or
(b) the Administrative Agent shall have received notice from
the Majority Facility Lenders in respect of the relevant Facility that the
Eurodollar Rate determined or to be determined for such Interest Period will
not adequately and fairly reflect the cost to such Lenders (as conclusively
certified by such Lenders) of making or maintaining their affected Loans during
such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to
the Borrower and the relevant Lenders as soon as practicable thereafter. If
such notice is given (x) any Eurodollar Loans requested to be made on the first
day of such Interest Period shall be made as Base Rate Loans, (y) any Loans
under the relevant Facility that were to have been converted on the first day
of such Interest Period to Eurodollar Loans shall be continued as Base Rate
Loans and (z) any outstanding Eurodollar Loans under the relevant Facility that
were to be continued on the first day of such Interest Period as Eurodollar
Loans shall be converted, on the first day of such Interest Period, to Base
Rate Loans. Until such notice has been withdrawn by the Administrative Agent,
no further Eurodollar Loans shall be made or continued as such, nor shall the
Borrower have the right to convert Loans under the relevant Facility to
Eurodollar Loans.
2.16 Pro Rata Treatment and Payments. (a) Each borrowing by
the Borrower from the Lenders hereunder, each payment by the Borrower on
account of any commitment fee and any reduction of the Commitments of the
Lenders shall be made pro rata according to the respective Percentages, as the
case may be, of the relevant Lenders.
(b) Except for payments made pursuant to Section 2.3, each
payment (including
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each prepayment) by the Borrower on account of principal of and interest on the
Term Loans shall be made pro rata according to the respective outstanding
principal amounts of the Term Loans then held by the Term Lenders (except as
otherwise provided in Section 2.10(g)). The amount of each principal
prepayment of the Term Loans shall be applied to reduce the then remaining
installments of the Tranche A Term Loans and Tranche B Term Loans, as the case
may be, pro rata based upon the then remaining principal amount thereof.
Amounts prepaid on account of the Term Loans may not be reborrowed.
(c) Each payment (including each prepayment) by the Borrower
on account of principal of and interest on the Revolving Loans shall be made
pro rata according to the respective outstanding principal amounts of the
Revolving Loans then held by the Lenders.
(d) Each payment made at any time when any amount hereunder is
due and payable shall be made pro rata according to the respective amounts then
due and payable to the relevant Lenders.
(e) All payments (including prepayments) to be made by the
Borrower hereunder whether on account of principal, interest, fees or
otherwise, shall be made without setoff or counterclaim and shall be made prior
to 12:00 Noon, New York City time, on the due date thereof to the
Administrative Agent, for the account of the Lenders, at the Administrative
Agent's office specified in Section 10.2, in Dollars and in immediately
available funds. Payments received by the Administrative Agent after such time
shall be deemed to have been received on the next Business Day. The
Administrative Agent shall distribute such payments to the Lenders promptly
upon receipt in like funds as received. If any payment hereunder (other than
payments on the Eurodollar Loans) becomes due and payable on a day other than a
Business Day, such payment shall be extended to the next succeeding Business
Day. If any payment on a Eurodollar Loan becomes due and payable on a day other
than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day unless the result of such extension would be to extend
such payment into another calendar month, in which event such payment shall be
made on the immediately preceding Business Day. In the case of any extension of
any payment of principal pursuant to the preceding two sentences, interest
thereon shall be payable at the then applicable rate during such extension.
(f) Unless the Administrative Agent shall have been notified
in writing by any Lender prior to a borrowing that such Lender will not make
the amount that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower a corresponding amount. If such amount is not made available to
the Administrative Agent by the required time on the Borrowing Date therefor,
such Lender shall pay to the Administrative Agent, on demand, such amount with
interest thereon at a rate equal to the daily average Federal Funds Effective
Rate for the period until such Lender makes such amount immediately available
to the Administrative Agent. A certificate of the Administrative Agent
submitted to any Lender with respect to any amounts owing under this Section
2.16(f) shall be conclusive in the absence of manifest error. If such Lender's
share of such borrowing is not made available to the Administrative Agent by
such Lender within three Business Days of such Borrowing Date, the
Administrative Agent shall also be entitled to recover such amount with
interest thereon at the rate per annum applicable to Base Rate Loans hereunder,
on demand, from the Borrower (together with any amounts due under Section 2.20,
calculated as if such Lender's failure to fund such amount were a failure of
the Borrower to borrow such amount after having given notice of such
borrowing). Nothing herein shall be deemed to limit the rights of the Borrower
against any defaulting Lender.
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(g) Unless the Administrative Agent shall have been notified
in writing by the Borrower prior to the date of any payment being made
hereunder that the Borrower will not make such payment to the Administrative
Agent, the Administrative Agent may assume that the Borrower is making such
payment, and the Administrative Agent may, but shall not be required to, in
reliance upon such assumption, make available to the Lenders their respective
pro rata shares of a corresponding amount. If such payment is not made to the
Administrative Agent by the Borrower within three Business Days of such
required date, the Administrative Agent shall be entitled to recover, on
demand, from each Lender to which any amount which was made available pursuant
to the preceding sentence, such amount with interest thereon at the rate per
annum equal to the daily average Federal Funds Effective Rate. Nothing herein
shall be deemed to limit the rights of the Administrative Agent or any Lender
against the Borrower.
2.17 Illegality. Notwithstanding any other provision herein,
if the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof shall make it unlawful for any Lender to
make or maintain Eurodollar Loans as contemplated by this Agreement, (a) the
commitment of such Lender hereunder to make Eurodollar Loans, continue
Eurodollar Loans as such and convert Base Rate Loans to Eurodollar Loans shall
forthwith be suspended and (b) such Lender's Loans then outstanding as
Eurodollar Loans, if any, shall be converted automatically to Base Rate Loans
on the respective last days of the then current Interest Periods with respect
to such Loans or within such earlier period as required by law. If any such
conversion of a Eurodollar Loan occurs on a day which is not the last day of
the then current Interest Period with respect thereto, the Borrower shall pay
to such Lender such amounts, if any, as may be required pursuant to Section
2.20.
2.18 Requirements of Law. (a) If after the date hereof the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof or compliance by any Lender with any request or directive
(whether or not having the force of law) from any central bank or other
Governmental Authority made subsequent to the date hereof:
(i) shall subject any Lender to any tax of any
kind whatsoever with respect to this Agreement, any Note, any Letter
of Credit, any Application or any Eurodollar Loan made by it, or
change the basis of taxation of payments to such Lender in respect
thereof (except for taxes covered by Section 2.19 and changes in the
rate of tax (whether characterized as income, franchise or other tax)
on the overall net income of such Lender);
(ii) shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement
against assets held by, deposits or other liabilities in or for the
account of, advances, loans or other extensions of credit by, or any
other acquisition of funds by, any office of such Lender which is not
otherwise included in the determination of the Eurodollar Rate
hereunder; or
(iii) shall impose on such Lender any other
condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting
into, continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit, or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrower shall promptly pay such Lender,
upon its demand, any additional amounts necessary to compensate such Lender on
an after-tax basis for such increased cost or reduced amount receivable. If any
Lender becomes entitled to claim any additional amounts pursuant to this
Section 2.18, it shall promptly notify the Borrower (with a copy to the
Administrative Agent) of the event by reason
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of which it has become so entitled.
(b) If any Lender shall have determined that the adoption of
or any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder or under or in respect of any Letter
of Credit to a level below that which such Lender or such corporation could
have achieved but for such adoption, change or compliance (taking into
consideration such Lender's or such corporation's policies with respect to
capital adequacy) by an amount deemed by such Lender to be material, then from
time to time, after submission by such Lender to the Borrower (with a copy to
the Administrative Agent) of a written request therefor, the Borrower shall pay
to such Lender such additional amount or amounts as will compensate such Lender
on an after-tax basis for such reduction.
(c) If any Lender becomes entitled to claim any additional
amounts pursuant to this subsection, it shall promptly notify the Borrower
(with a copy to the Administrative Agent) of the event by reason of which it
has become so entitled. A certificate as to any additional amounts payable
pursuant to this Section 2.18, together with a calculation thereof in
reasonable detail, shall be submitted by the affected Lender to the Borrower
(with a copy to the Administrative Agent) and such certificate shall be
conclusive in the absence of manifest error. The obligations of the Borrower
pursuant to this Section 2.18 shall survive the termination of this Agreement
and the payment of the Notes and all other amounts payable hereunder.
2.19 Taxes. (a) All payments made by the Borrower under this
Agreement and the Notes shall be made free and clear of, and without deduction
or withholding for or on account of, any present or future income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or assessed
by any Governmental Authority, excluding net income taxes and franchise taxes
(imposed in lieu of net income taxes) imposed on the Administrative Agent or
any Lender as a result of a present or former connection between the
Administrative Agent or such Lender and the jurisdiction of the Governmental
Authority imposing such tax or any political subdivision or taxing authority
thereof or therein (other than any such connection arising solely from the
Administrative Agent or such Lender having executed, delivered or performed its
obligations or received a payment under, or enforced, this Agreement or any
other Loan Document). If any such non-excluded taxes, levies, imposts, duties,
charges, fees, deductions or withholdings ("Non-Excluded Taxes") are required
to be withheld from any amounts payable to the Administrative Agent or any
Lender hereunder or under the Notes, the amounts so payable to the
Administrative Agent or such Lender shall be increased to the extent necessary
to yield to the Administrative Agent or such Lender (after payment of all
Non-Excluded Taxes) interest or any such other amounts payable hereunder at the
rates or in the amounts specified in this Agreement and the Notes, provided,
however, that the Borrower shall make payments net of and after deduction for
Non-Excluded Taxes and shall not be required to increase any such amounts
payable to any Non-U.S. Lender (as defined below) that fails to comply with
Section 2.19(b). Whenever any Non-Excluded Taxes are payable by the Borrower,
as promptly as possible thereafter the Borrower shall send to the
Administrative Agent for its own account or for the account of such Lender, as
the case may be, a certified copy of an original official receipt received by
the Borrower showing payment thereof. If the Borrower fails to pay any
Non-Excluded Taxes when due to the appropriate taxing authority or fails to
remit to the Administrative Agent the required receipts or other required
documentary evidence, the Borrower shall indemnify the Administrative Agent and
the Lenders for any Non-Excluded
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Taxes, incremental taxes, interest or penalties that may become payable by the
Administrative Agent or any Lender as a result of any such failure. The
agreements in this Section 2.19 shall survive the termination of this Agreement
and the payment of the Notes and all other amounts payable hereunder.
(b) Each Lender (or Transferee) that is not a corporation or
partnership created or organized in or under the laws of the United States, any
estate that is subject to federal income taxation regardless of the source of
its income or any trust which is subject to the supervision of a court within
the United States and the control of a United States fiduciary as described in
section 7701(a)(30) of the Code (a "Non-U.S. Lender") shall deliver to the
Borrower and the Administrative Agent (or, in the case of a Participant, to the
Lender from which the related participation shall have been purchased) on or
before the date on which it becomes a party to this Agreement (or, in the case
of a Participant, on or before the date on which such Participant purchases the
related participation) either:
(A) (x) two duly completed and signed copies of either
Internal Revenue Service Form 1001 (relating to such Non-U.S. Lender
and entitling it to a complete exemption from withholding of U.S.
Taxes on all amounts to be received by such Non-U.S. Lender pursuant
to this Agreement and the other Loan Documents) or Form 4224 (relating
to all amounts to be received by such Non-U.S. Lender pursuant to this
Agreement and the other Loan Documents), or successor and related
applicable forms, as the case may be, and (y) two duly completed and
signed copies of Internal Revenue Service Form W-8 or W-9, or
successor and related applicable forms, as the case may be; or
(B) in the case of a Non-U.S. Lender that is not a "bank"
within the meaning of Section 881(c)(3)(A) of the Code and that does
not comply with the requirements of clause (A) hereof, (x) a statement
in the form of Exhibit E (or such other form of statement as shall be
reasonably requested by the Borrower or the Administrative Agent from
time to time) to the effect that such Non-U.S. Lender is eligible for
a complete exemption from withholding of U.S. Taxes under Code Section
871(h) or 881(c), and (y) two duly completed and signed copies of
Internal Revenue Service Form W-8 or successor and related applicable
form.
Further, each Non-U.S. Lender agrees to deliver to the Borrower and the
Administrative Agent, and if applicable, the assigning Lender (or, in the case
of a Participant, to the Lender from which the related participation shall have
been purchased) two further duly completed and signed copies of such Forms
1001, 4224, W-8 or W-9, as the case may be, or successor and related applicable
forms, on or before the date that any such form expires or becomes obsolete and
promptly after the occurrence of any event requiring a change from the most
recent form(s) previously delivered by it to the Borrower or the Administrative
Agent (or, in the case of a Participant, to the Lender from which the related
participation shall have been purchased) in accordance with applicable United
States laws and regulations; unless, in any such case, any change in law or
regulation has occurred subsequent to the date such Lender became a party to
this Agreement (or in the case of a Participant, the date on which such
Participant purchased the related participation) which renders all such forms
inapplicable or which would prevent such Lender (or Participant) from properly
completing and executing any such form with respect to it and such Lender
promptly notifies the Borrower and the Administrative Agent (or, in the case of
a Participant, the Lender from which the related participation shall have been
purchased) if it is no longer able to deliver, or if it is required to withdraw
or cancel, any form or statement previously delivered by it pursuant to this
Section 2.19(b). A Non-U.S. Lender shall not be required to deliver any form or
statement pursuant to the immediately preceding sentences in this Section
2.19(b) that such Non-U.S. Lender is not
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legally able to deliver (it being understood and agreed that the Borrower shall
withhold or deduct such amounts from any payments made to such Non-U.S. Lender
that the Borrower reasonably determines are required by law and that payments
resulting from a failure to comply with this paragraph (b) shall not be subject
to payment or indemnity by the Borrower pursuant to Section 2.19(a)).
2.20 Indemnity. The Borrower agrees to indemnify each Lender
and to hold each Lender harmless from any loss or expense which such Lender may
sustain or incur as a consequence of (a) default by the Borrower in making a
borrowing of, conversion into or continuation of Eurodollar Loans after the
Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by the Borrower in making any
prepayment after the Borrower has given a notice thereof in accordance with the
provisions of this Agreement or (c) the making of a prepayment of Eurodollar
Loans on a day which is not the last day of an Interest Period with respect
thereto, or the assignment of any Eurodollar Loan on a day which is not the
last day of an Interest Period with respect thereto as a result of the
replacement of a Lender pursuant to Subsection 2.23. Such indemnification
shall not exceed the sum of (i) an amount equal to the excess, if any, of (A)
the amount of interest which would have accrued on the amount so prepaid, or
not so borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of
such Interest Period (or, in the case of a failure to borrow, convert or
continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Loans
provided for herein (excluding, however, the Applicable Margin included
therein, if any) over (B) the amount of interest (as reasonably determined by
such Lender) which would have accrued to such Lender on such amount by placing
such amount on deposit for a comparable period with leading banks in the
interbank eurodollar market plus (ii) any transaction costs of such Lender in
connection with the related funding or redeployment of funds. A certificate as
to any amounts payable pursuant to this Section 2.20, together with a
calculation thereof in reasonable detail, shall be submitted to the Borrower by
any affected Lender and such certificate shall be conclusive in the absence of
manifest error. This covenant shall survive the termination of this Agreement
and the payment of the Notes and all other amounts payable hereunder.
2.21 Change of Lending Office. Each Lender agrees that, upon
the occurrence of any event giving rise to the operation of Section 2.17,
2.18(a) or 2.19 with respect to such Lender, it will, if requested by the
Borrower, use reasonable efforts (subject to overall policy considerations of
such Lender) to designate another lending office for any Loans affected by such
event with the object of avoiding the consequences of such event; provided that
such designation is made on terms that, in the sole judgment of such Lender,
cause such Lender and its lending office(s) to suffer no material economic,
legal or regulatory disadvantage, and provided, further, that nothing in this
Section 2.21 shall affect or postpone any of the obligations of the Borrower or
the rights of any Lender pursuant to Section 2.17, 2.18(a) or 2.19.
2.22 Use of Proceeds. The Borrower shall use the proceeds of
the Loans only in the manner expressly contemplated by Section 4.16.
2.23 Replacement of Lenders. If no Event of Default then
exists, the Borrower may replace any Lender (the "Replaced Lender") if an event
occurs giving rise to the operation of Section 2.17 or Section 2.18, which
results in the Replaced Lender charging to Borrower increased costs in excess
of those being generally charged by the other Lenders and such Lender is not
able to eliminate the increased costs pursuant to Section 2.21. The Replaced
Lender shall be replaced with one or more banks, financial institutions, or
other entities which are reasonably acceptable to the Administrative Agent
(each a "Replacement Lender") under
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the terms set out in Section 10.6(c). Upon execution of the Assignment and
Acceptance referred to in Section 10.6(c), payment of amounts referred to in
Section 10.6(c), and delivery to the Replacement Lender of the appropriate Note
or Notes executed by Borrower, the Replacement Lender shall become a Lender
under this Agreement and the Replaced Lender shall no longer be a Lender under
this Agreement, except with respect to indemnification provisions under this
Agreement, which shall survive as to such Replaced Lender.
2.24 Reallocation of Commitments. At any time prior to 45 days
after the Closing Date, the Administrative Agent with the consent of the
Borrower (not to be unreasonably withheld) may reallocate the amount of the
Commitments among the Tranche A Term Commitments, the Tranche B Term
Commitments and the Revolving Commitments provided that (a) the aggregate
amount of the Revolving Commitments shall not be less than $150,000,00 and (b)
the aggregate amount of the Commitments and the Loans to be made hereunder
shall remain unchanged.
SECTION 3. LETTERS OF CREDIT
3.1 L/C Commitment. (a) Prior to the date hereof, Norwest Bank
has issued the Letters of Credit listed on Schedule 3.1 (the "Existing Letters
of Credit"), and subject to the terms and conditions hereof, the Lender
designated as Issuing Lender hereunder, in reliance on the agreements of the
other Lenders set forth in Section 3.4(a), agrees to issue letters of credit
(together with the Existing Letters of Credit, "Letters of Credit") for the
account of the Borrower, or for the joint and several account of the Borrower
and any Subsidiary, on any Business Day during the Revolving Commitment Period
in such form as may be requested by the Borrower and approved from time to time
by the Issuing Lender; provided, that such approval may not be unreasonably
withheld, delayed or conditioned; and provided, further, that the Issuing
Lender shall have no obligation to issue any Letter of Credit if, after giving
effect to such issuance, (i) the L/C Obligations would exceed the L/C
Commitment or (ii) the aggregate amount of the Available Revolving Commitments
would be less than zero. Each Letter of Credit shall (i) be denominated in
Dollars, (ii) be either (x) a standby letter of credit issued to support (I)
obligations of the Borrower or any of its Subsidiaries, contingent or
otherwise, which finance the working capital or business needs of the Borrower
or its Subsidiaries or (II) performance obligations of the Borrower and its
Subsidiaries, in each case, incurred in the ordinary course of business (a
"Standby Letter of Credit"), or (y) a commercial letter of credit in respect of
the purchase of goods or services by the Borrower or any of its Subsidiaries in
the ordinary course of business (a "Commercial Letter of Credit"), (iii) expire
no later than five Business Days prior to the Scheduled Revolving Termination
Date and (iv) expire no later than 365 days after its date of issuance,
provided that any Letter of Credit with a 365-day duration may provide for the
renewal thereof at the election of the Borrower (in accordance with procedures
to be established by the Issuing Lender) for additional 365-day periods (which
shall not expire later than five Business Days prior to the Scheduled Revolving
Termination Date).
(b) Each Letter of Credit issued after the Closing Date shall
be subject to the Uniform Customs and, to the extent not inconsistent
therewith, the laws of the State of New York.
3.2 Procedure for Issuance of Letter of Credit. The Borrower
may from time to time request that the Issuing Lender issue a Letter of Credit
by delivering to the Issuing Lender at its address for notices specified herein
an Application therefor, completed to the satisfaction of the Issuing Lender,
and such other certificates, documents and other papers and information as the
Issuing Lender may request. Upon receipt of any Application, the Issuing Lender
will process such Application and the certificates, documents and other papers
and
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information delivered to it in connection therewith in accordance with its
customary procedures and shall promptly issue the Letter of Credit requested
thereby (but in no event shall the Issuing Lender be required to issue any
Letter of Credit earlier than three Business Days after its receipt of the
Application therefor and all such other certificates, documents and other
papers and information relating thereto) by issuing the original of such Letter
of Credit to the beneficiary thereof or as otherwise may be agreed to by the
Issuing Lender and the Borrower. The Issuing Lender shall furnish a copy of
such Letter of Credit to the Borrower promptly following the issuance thereof.
The Issuing Lender shall promptly furnish to the Administrative Agent, which
shall in turn promptly furnish to the Lenders, notice of the issuance of each
Standby Letter of Credit (including the amount thereof). On each L/C Fee
Payment Date, the Issuing Lender shall promptly furnish to the Administrative
Agent, which shall in turn promptly furnish to the Lenders, notice of the
aggregate face amount of the Commercial Letters of Credit outstanding on such
date.
3.3 Fees, Commissions and Other Charges. (a) The Borrower
agrees that it will pay a commission on all outstanding Letters of Credit at a
rate per annum equal to 1/8 of 1% above the Applicable Margin then in effect
with respect to Loans that are Eurodollar Loans of the face amount of each such
Letter of Credit, of which 1/8 of 1% per annum will be a fronting fee for the
account of the Issuing Lender, and the remainder will be shared ratably among
the Revolving Lenders in accordance with their Revolving Percentages, payable
quarterly in arrears on each L/C Fee Payment Date after the issuance date.
(b) In addition to the foregoing fees and commissions, the
Borrower agrees that it shall pay or reimburse the Issuing Lender promptly upon
demand for such normal and customary costs and expenses as are incurred or
charged by the Issuing Lender in issuing, negotiating, effecting payment under,
or amending any Letter of Credit.
(c) The Administrative Agent shall, promptly following its
receipt thereof, distribute to the Issuing Lender and the L/C Participants all
fees and commissions received by the Administrative Agent for their respective
accounts pursuant to this Section.
3.4 L/C Participation. (a) Effective on the Closing Date in
respect of the Existing Letters of Credit, and effective on the date of
issuance thereof in respect of each Letter of Credit issued hereunder after the
Closing Date, the Issuing Lender in respect of each Letter of Credit
irrevocably agrees to grant and hereby grants to each L/C Participant, and, to
induce such Issuing Lender to issue Letters of Credit hereunder, each L/C
Participant irrevocably agrees to accept and purchase and hereby accepts and
purchases from such Issuing Lender, on the terms and conditions hereinafter
stated, for such L/C Participant's own account and risk an undivided interest
equal to such L/C Participant's Revolving Percentage in such Issuing Lender's
obligations and rights under such Letter of Credit and the amount of each draft
paid by such Issuing Lender thereunder. Each L/C Participant unconditionally
and irrevocably agrees with such Issuing Lender in respect of each Letter of
Credit that, if a draft is paid under any Letter of Credit issued by such
Issuing Lender for which such Issuing Lender is not reimbursed in full by the
Borrower in accordance with the terms of this Agreement, such L/C Participant
shall pay to such Issuing Lender upon demand at such Issuing Lender's address
for notices specified herein an amount equal to such L/C Participant's
Revolving Percentage of the amount of such draft, or any part thereof, which is
not so reimbursed.
(b) If any amount required to be paid by any L/C Participant
to the Issuing Lender pursuant to Section 3.4(a) in respect of any unreimbursed
portion of any payment made by the Issuing Lender under any Letter of Credit is
paid to the Issuing Lender within three Business Days after the date such
payment is due, such L/C Participant shall pay to the Issuing Lender on demand
an amount equal to the product of (i) such amount, times (ii) the
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daily average Federal Funds Effective Rate during the period from and including
the date such payment is required to the date on which such payment is
immediately available to the Issuing Lender, times (iii) a fraction the
numerator of which is the number of days that elapse during such period and the
denominator of which is 360. If any such amount required to be paid by any L/C
Participant pursuant to Section 3.4(a) is not made available to the Issuing
Lender by such L/C Participant within three Business Days after the date such
payment is due, the Issuing Lender shall be entitled to recover from such L/C
Participant, on demand, such amount with interest thereon calculated from such
due date at the rate per annum applicable to Loans that are Base Rate Loans
hereunder. A certificate of the Issuing Lender submitted to any L/C Participant
with respect to any amounts owing under this Section shall be conclusive in the
absence of manifest error.
(c) Whenever, at any time after the Issuing Lender has made
payment under any Letter of Credit and has received from any L/C Participant
its pro rata share of such payment in accordance with Section 3.4(a), the
Issuing Lender receives any payment related to such Letter of Credit (whether
directly from the Borrower or otherwise, including proceeds of collateral
applied thereto by the Issuing Lender), or any payment of interest on account
thereof, the Issuing Lender will distribute to such L/C Participant its pro
rata share thereof; provided that in the event that any such payment received
by the Issuing Lender shall be required to be returned by the Issuing Lender,
such L/C Participant shall return to the Issuing Lender the portion thereof
previously distributed by the Issuing Lender to it.
3.5 Reimbursement Obligation of the Borrower. The Borrower
agrees to reimburse the Issuing Lender on each date on which the Issuing Lender
notifies the Borrower of the date and amount of a draft presented under any
Letter of Credit and paid by the Issuing Lender for the amount of (a) such
draft so paid and (b) any taxes, fees, charges or other costs or expenses
incurred by the Issuing Lender in connection with such payment. Each such
payment shall be made to the Issuing Lender at its address for notices
specified herein in lawful money of the United States and in immediately
available funds. Interest shall be payable to the Issuing Lender on any and all
amounts drawn under Letters of Credit from the date of such drawing until the
date three Business Days after receipt by the Borrower from the Issuing Lender
of notice of such drawing at the rate set forth in Section 2.13(b) for Loans,
and thereafter until payment in full at the rate set forth in Section 2.13(c).
3.6 Obligations Absolute. The Borrower's obligations under
this Section 3 shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to
payment which the Borrower may have or have had against the Issuing Lender, any
beneficiary of a Letter of Credit or any other Person. The Borrower also agrees
with the Issuing Lender that, subject to Section 3.7, the Issuing Lender shall
not be responsible for, and the Borrower's Reimbursement Obligations under
Section 3.5 shall not be affected by, among other things, the validity or
genuineness of documents or of any endorsements thereon, even though such
documents shall in fact prove to be invalid, fraudulent or forged, or any
dispute between or among the Borrower and any beneficiary of any Letter of
Credit or any other party to which such Letter of Credit may be transferred or
any claims whatsoever of the Borrower against any beneficiary of such Letter of
Credit or any such transferee. The Issuing Lender shall not be liable for any
error, omission, interruption or delay in transmission, dispatch or delivery of
any message or advice, however transmitted, in connection with any Letter of
Credit, except for errors or omissions found by a final and nonappealable
decision of a court of competent jurisdiction to have resulted from the gross
negligence or willful misconduct of the Issuing Lender. The Borrower agrees
that any action taken or omitted by the Issuing Lender under or in connection
with any Letter of Credit or the related drafts or documents, if done in the
absence of gross negligence or willful misconduct and in accordance with the
standards of care specified in the Uniform Commercial Code of the
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State of New York, shall be binding on the Borrower and shall not result in any
liability of the Issuing Lender to the Borrower.
3.7 Letter of Credit Payments. If any draft shall be presented
for payment under any Letter of Credit, the Issuing Lender shall promptly
notify the Borrower of the date and amount thereof. The responsibility of the
Issuing Lender to the Borrower in connection with any draft presented for
payment under any Letter of Credit shall, in addition to any payment obligation
expressly provided for in such Letter of Credit, be to determine whether the
documents (including each draft) delivered under such Letter of Credit in
connection with such presentment are substantially in conformity with such
Letter of Credit.
3.8 Applications. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Section 3, the provisions of this Section 3 shall apply.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Arranger, the Administrative Agent, the
Collateral Agent and the Lenders to enter into this Agreement and to make the
Loans and issue or participate in the Letters of Credit, the Borrower hereby
represents and warrants to the Arranger, the Administrative Agent, the
Collateral Agent and each Lender that (provided that any representation or
warranty made with respect to Xxxxxx and its Subsidiaries which relates to
matters which occurred prior to the Closing Date shall be deemed to be made to
the best of the knowledge of the Borrower):
4.1 Financial Condition. (a) The unaudited pro forma
consolidated balance sheet of the Borrower as at June 30, 1998 (including the
notes thereto) (the "Pro Forma Balance Sheet"), copies of which have heretofore
been furnished to each Lender, has been prepared giving effect (as if such
events had occurred on such date) to (i) the consummation of the Acquisition,
(ii) the consummation of the acquisitions listed on Schedule 7.9(c), (iii) the
issuance of notes or borrowing of loans under the Put Facility to occur on or
prior to the Closing Date, (iv) the Loans to be made on or prior to the Merger
Date and the use of proceeds thereof and (v) the payment of estimated fees and
expenses in connection with the foregoing. The Pro Forma Balance Sheet has
been prepared based on the best information available to the Borrower as of the
date of delivery thereof and, based upon such information, presents fairly in
all material respects on a pro forma basis the estimated consolidated financial
position of the Borrower as of June 30, 1998, assuming that the events
specified in the preceding sentence had actually occurred at such date. The
Pro Forma EBITDA Statement for the fiscal year ending June 30, 1998 a copy of
which has heretofore been furnished to each Lender, has been prepared giving
effect (as if such events had occurred on July 1, 1997) to the consummation of
the Acquisition and the acquisitions listed on Schedule 7.9(c). Such Pro Forma
EBITDA Statement has been prepared based on the best information available to
the Borrower as of the date of delivery thereof and, based on such information,
presents fairly in all material respects on a pro forma basis the Consolidated
EBITDA of the Borrower for the one-year period ended June 30, 1998.
(b) The audited consolidated balance sheets of the Borrower as
at June 30, 1997 and the related audited consolidated statements of income and
of cash flows for the fiscal year then ended, reported on by KPMG Peat Marwick
LLP, copies of which have heretofore been furnished to each Lender, are
complete and correct and present fairly in all material respects the
consolidated financial condition of the Borrower as at such dates, and the
consolidated results of operations and consolidated cash flows for the fiscal
years then
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ended.
(c) The unaudited consolidated balance sheet of the Borrower
as at June 30, 1998 and the related unaudited consolidated statements of income
and of cash flows for the fiscal year then ended, copies of which have
heretofore been furnished to each Lender, are complete and correct and present
fairly in all material respects the consolidated financial condition of the
Borrower as at such date, and the consolidated results of operations and
consolidated cash flows for the fiscal year then ended and shall not differ in
any material respect from the audited consolidated balance sheet of the
Borrower as at June 30, 1998 and the related unaudited consolidated statements
of income and of cash flows for the fiscal year then ended to be delivered
pursuant to Section 6.1
All financial statements described in Section 4.1(b) and (c), including the
related schedules and notes thereto, if any, have been prepared in accordance
with GAAP applied consistently throughout the periods involved (except as
approved by such accountants and as disclosed therein). Except for contingent
obligations incurred in the ordinary course of business, the Borrower had at
the date of the most recent audited balance sheet referred to above no material
undisclosed liabilities, material Guarantee Obligations, material contingent
liability or material liability for taxes, nor any material long-term lease or
material unusual forward or long-term commitment, including, without
limitation, any interest rate or foreign currency swap or exchange transaction,
which is not reflected in such balance sheet or in the notes thereto. During
the period from June 30, 1997 to and including the date hereof there has been
no sale, transfer or other disposition by the Borrower or any of its
Consolidated Subsidiaries of any material part of their business or property.
(d) The audited consolidated balance sheet of Xxxxxx and its
Subsidiaries as at March 31, 1998 and the related consolidated statements of
income and of cash flows for the fiscal year ended on such date, reported on by
and accompanied by an unqualified report from KPMG Peat Marwick LLP contained
in the annual report of Xxxxxx on Form 10-K filed with the SEC, present fairly
the consolidated financial condition of Xxxxxx as at such date, and the
consolidated results of its operations and its consolidated cash flows for the
fiscal year then ended. The unaudited consolidated balance sheet of Xxxxxx and
its Subsidiaries as at June 30, 1998, and the related statements of income and
cash flows for the three month period ended on such date contained in the
quarterly report of Xxxxxx on Form 10-Q filed with the SEC, present fairly the
consolidated financial condition of Xxxxxx as at such date, and the
consolidated results of its operations and its consolidated cash flows for the
three month period then ended (subject to normal year-end audit adjustments).
To the best of the Borrower's knowledge, all such financial statements,
including the related schedules and notes thereto, have been prepared in
accordance with GAAP applied consistently throughout the periods involved
(except as approved by the aforementioned accountants and disclosed therein).
Except for contingent obligations incurred in the ordinary course of business,
to the best of the Borrower's knowledge, the balance sheets referred to above
reflect any material Guarantee Obligations, material contingent liabilities and
material liabilities for taxes, and any material long-term leases and material
unusual forward or long-term commitments, including, without limitation, any
interest rate or foreign currency swap or exchange transaction or other
obligation in respect of derivatives, in each case as of the date of such
balance sheets. During the period from March 31, 1998 to and including the
date hereof, there has been no disposition by Xxxxxx or any of its Subsidiaries
of any material part of its business or property.
4.2 No Change. (a) Since June 30, 1998, there has been no
development or event which has had or could reasonably be expected to have a
Material Adverse Effect, and (b) during the period from June 30, 1998 to and
including the date hereof no dividends or other
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distributions have been declared, paid or made upon the Capital Stock of the
Borrower nor has any of the Capital Stock of the Borrower been redeemed,
retired, purchased or otherwise acquired for value by the Borrower. Without
limiting the representation in the preceding sentence, since June 30, 1998
there has been no development or event which, to the best knowledge of the
Borrower, has had or could reasonably be expected to have a material adverse
effect on the business, operations, property, condition (financial or
otherwise) or prospects of Xxxxxx and its Subsidiaries taken as a whole.
4.3 Corporate Existence; Compliance with Law. Each Loan Party
(a) is duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization, except (in the case of any Subsidiary)
where the failure to do so could not reasonably be expected to have a Material
Adverse Effect, (b) has the power and authority, and the legal right, to own
and operate its property, to lease the property it operates as lessee and to
conduct the business in which it is currently engaged, except where the failure
to do so could not reasonably be expected to have a Material Adverse Effect,
(c) is duly qualified and in good standing under the laws of each jurisdiction
where its ownership, lease or operation of property or the conduct of its
business requires such qualification, except where the failure to be so
qualified could not reasonably be expected to have a Material Adverse Effect
and (d) is in compliance with all Requirements of Law except to the extent that
the failure to comply therewith could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect.
4.4 Corporate Power; Authorization; Enforceable Obligations.
Each Loan Party has the power and authority, and the legal right, to make,
deliver and perform each Loan Document to which it is a party and, in the case
of the Borrower, to borrow hereunder. Each Loan Party has taken all necessary
action to authorize the execution, delivery and performance of the Loan
Documents to which it is a party and, in the case of the Borrower, to authorize
the borrowings on the terms and conditions of this Agreement and the Notes. No
material consent or authorization of, filing with, notice to or other act by or
in respect of, any Governmental Authority or any other Person is required in
connection with (i) the transactions contemplated hereby including, without
limitation, the consummation of the Acquisition and (ii) the borrowings
hereunder or with the execution, delivery, performance, validity or
enforceability of this Agreement or any of the Loan Documents, except for those
obtained on or before the date of this Agreement and those listed in Schedule
4.4, except (x) the filings referred to in Section 4.19, (ii) prior to the
Merger Date, the approval of the Merger by the Xxxxxx shareholders and (iii)
prior to the Merger Loan Date, the approval by the Subsidiaries of Xxxxxx of
the transactions to be undertaken by them pursuant to Section 6.10. Each Loan
Document has been duly executed and delivered on behalf of each Loan Party
thereto. This Agreement constitutes, and each other Loan Document upon
execution will constitute, a legal, valid and binding obligation of each Loan
Party thereto, enforceable against each such Loan Party in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).
4.5 No Legal Bar. The execution, delivery and performance of
this Agreement and the other Loan Documents, the issuance of Letters of Credit,
the borrowings hereunder and the use of the proceeds thereof will not violate
any Requirement of Law or Contractual Obligation of any Loan Party and will not
result in, or require, the creation or imposition of any Lien on any of their
respective properties or revenues pursuant to any such Requirement of Law or
Contractual Obligation (other than the Liens created by the Security
Documents).
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4.6 No Material Litigation. Except Midland Acquisition Corp.
x. Xxxxxx Production Services, Inc. et al. (W.D. Tex. Midland/Odessa), which
suit shall be promptly dismissed by the Borrower without prejudice, no
litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of the Borrower,
threatened by or against the Borrower or any of its Subsidiaries or against any
of its or their respective properties or revenues (a) with respect to any of
the Loan Documents or any of the transactions contemplated hereby or thereby or
(b) which could reasonably be expected to have a Material Adverse Effect.
4.7 No Default. Neither the Borrower nor any of its
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect which could reasonably be expected to have a
Material Adverse Effect. No Default or Event of Default has occurred and is
continuing.
4.8 Ownership of Property; Liens. Each of the Borrower and its
Domestic Subsidiaries has title in fee simple to, or a valid leasehold interest
in, all its real property, and good title to, or a valid leasehold interest in,
all its other property, and none of such property is subject to any Lien except
as permitted by Section 7.3. As of the date hereof, the Borrower and its
Subsidiaries (other than Argentine Subsidiaries) have no fee interests in any
material real property other than the Mortgaged Property, the Oil and Gas
Properties and the real property described on Schedule 4.8.
4.9 Intellectual Property. The Borrower and each of its
Subsidiaries owns, or is licensed to use, all trademarks, tradenames,
copyrights, technology, know-how and processes necessary for the conduct of its
business as currently conducted, except for those the failure to own or license
which could not reasonably be expected to have a Material Adverse Effect
(collectively, the "Intellectual Property"). No material claim has been
asserted and is pending by any Person challenging or questioning the use of any
Intellectual Property or the validity or effectiveness of any Intellectual
Property, nor does the Borrower know of any valid basis for any such claim. To
the Borrower's knowledge, the use of Intellectual Property by the Borrower and
its Subsidiaries does not infringe on the rights of any Person where such
infringement could reasonably be expected to have a Material Adverse Effect.
4.10 No Burdensome Restrictions. No Requirement of Law or
Contractual Obligation of the Borrower or any of its Subsidiaries could
reasonably be expected to have a Material Adverse Effect.
4.11 Taxes. Each of the Borrower and its Domestic
Subsidiaries, and to the knowledge of the Borrower, its Argentine Subsidiaries
have filed or caused to be filed all material Federal, state and other tax
returns which are required to be filed and has paid all taxes shown to be due
and payable on said returns or on any assessments made against it or any of its
property and all other taxes, fees or other charges imposed on it or any of its
property by any Governmental Authority (other than any the amount or validity
of which are currently being contested in good faith by appropriate proceedings
and with respect to which reserves in conformity with GAAP have been provided
on the books of the Borrower); no material tax Lien has been filed; and, to the
knowledge of the Borrower, no claim is being asserted, with respect to any
material tax, fee or other charge.
4.12 Federal Regulations. No part of the proceeds of any
Loans will be used for any purpose which violates the provisions of the
Regulations T, U or X of the Board.
4.13 ERISA. Neither a Reportable Event nor an "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA) has occurred during the five-year period prior to the date on
which this representation is made or deemed made with respect to any Plan, and
each Plan has complied in all material respects with the applicable provisions
of ERISA and the Code. No termination of a Single Employer Plan has occurred,
and no Lien in favor of the PBGC or a Plan has arisen, during such five-year
period. The present value of all accrued benefits under each Single Employer
Plan (based on those assumptions used to fund such Plans) did not, as of the
last annual valuation date prior to the date on which this representation is
made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits by a material amount. Neither the Borrower nor any
Commonly Controlled Entity has had a complete or partial withdrawal from any
Multiemployer Plan which has resulted or could reasonably be expected to result
in a liability under ERISA which could reasonably be expected to result in a
Material Adverse Effect, and neither the Borrower nor any Commonly Controlled
Entity would become subject to any liability under ERISA which could reasonably
be expected to result in a Material Adverse Effect if the Borrower or any such
Commonly Controlled Entity were to withdraw completely from all Multiemployer
Plans as of the valuation date most closely preceding the date on which this
representation is made or deemed made. To the knowledge of the Borrower and the
Commonly Controlled Entities, no such Multiemployer Plan is in Reorganization
or Insolvent. The present value (determined using actuarial and other
assumptions which are reasonable in respect of the benefits provided and the
employees participating) of the liability of the Borrower and each Commonly
Controlled Entity for post retirement benefits to be provided to their current
and former employees under Plans which are welfare benefit plans (as defined in
Section 3(1) of ERISA) does not, in the aggregate, exceed the assets under all
such Plans allocable to such benefits by an amount in excess of $1,000,000.
4.14 Investment Company Act; Other Regulations. No Loan Party
is an "investment company" within the meaning of the Investment Company Act of
1940, as amended. No Loan Party is subject to regulation under any Requirement
of Law (other than Regulation X of the Board) which limits its ability to incur
Indebtedness.
4.15 Subsidiaries. Schedule 4.15 sets forth a complete list of
all the direct and indirect Subsidiaries of the Borrower on the Closing Date
after giving effect to the consummation of the Acquisition, and Schedule 4.15
shows, as to each such Subsidiary, its jurisdiction of its incorporation, its
authorized capitalization and the ownership of Capital Stock of such
Subsidiary.
4.16 Purpose of Loans; Limitations on Use. (a) Up to
$490,000,000 of the proceeds of the Loans may be used on and after the Closing
Date (i) to fund the Acquisition and to pay transaction costs associated
therewith, (ii) to refinance certain indebtedness of the Borrower, Xxxxxx and
their respective subsidiaries (including, without limitation the Existing
Credit Agreement and the Interim Loans), (iii) to pay fees and expenses in
connection with the Loan Documents, (iv) to pay holders of Xxxxxx 9-3/8% Notes
who have put their notes in connection with the Xxxxxx Change of Control on the
date such payment is to be made provided such date is no later than the Xxxxxx
Put Termination Date and (v) to finance the acquisitions listed on Schedule
7.9(c) provided that such acquisitions are consummated within 60 days of the
Closing Date. Notwithstanding the foregoing, any prepayment of the Interim
Loans with the proceeds of Loans hereunder shall take place on the same day as
payment is made under clause (iv) above (or the Xxxxxx Put Termination Date if
no Xxxxxx 9-3/8% Notes have been put by the Xxxxxx Put Termination Date and if
no Xxxxxx 9-3/8% Notes may thereafter be put as a result of a Xxxxxx Change of
Control) and only to the extent that the principal amount of the Interim Loans
exceed 101% of the principal amount of the Xxxxxx 9-3/8% Notes put (if any) in
connection with the Xxxxxx Change of Control plus interest, fees and expenses
paid in connection therewith.
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(b) The balance of proceeds of the Loans may be used for
working capital purposes and after the Merger Loan Date may be used to finance
Permitted Acquisitions and capital expenditures, to finance the repurchase from
time to time the outstanding Capital Stock of the Borrower to the extent
permitted by Section 7.7 and for general corporate purposes of the Borrower and
its Subsidiaries (including Excluded Subsidiaries) in the ordinary course of
business; provided, that the amount of proceeds of the Revolving Loans which
may be used for Permitted Acquisitions of oil and gas properties shall be
limited to an amount equal to the lesser of (a) $25,000,000 and (b) 65% of the
value of the oil and gas properties of Odessa Exploration Incorporated (after
giving effect to any such Permitted Acquisition), which value shall be
calculated as the present value discounted at 10% of future net revenue
relating to all proved developed producing reserves and proved undeveloped
reserves from such properties as at the most recent fiscal year end. In
addition, if at least 90% of the original outstanding principal amount of the
Convertible Subordinated Debentures or the 1997 Convertible Subordinated Notes
shall have been converted into common stock of the Borrower, the Borrower may
use proceeds of the Revolving Loans to repurchase or redeem the remaining
outstanding Convertible Subordinated Debentures or 1997 Convertible
Subordinated Notes, as applicable, as permitted by Section 7.10.
4.17 Environmental Matters. Other than exceptions to any of
the following that could not, individually or in the aggregate, reasonably be
expected to give rise to a Material Adverse Effect:
(a) the Borrower and each of its Subsidiaries: (i) are, and to
the knowledge of the executive management of the Borrower within the period of
all applicable statutes of limitation have been, in compliance with all
applicable Environmental Laws; (ii) hold all Environmental Permits (each of
which is in full force and effect) required for any of their current operations
or for any property owned, leased, or otherwise operated by any of them; (iii)
are, and to the knowledge of the executive management of the Borrower within
the period of all applicable statutes of limitation have been, in compliance
with all of their Environmental Permits; and (iv) reasonably believe that: each
of their Environmental Permits required for their continued operations will be
timely renewed and complied with, without material expense; any additional
Environmental Permits that may be required of any of them will be timely
obtained and complied with, without material expense; and compliance with any
Environmental Law that is or is reasonably expected by the Borrower's executive
management to become applicable to any of them will be timely attained and
maintained, without material expense.
(b) To the knowledge of the executive management of the
Borrower, Materials of Environmental Concern are not present at, on, under, in,
or about any real property now or formerly owned, leased or operated by the
Borrower or any of its Subsidiaries or at any other location (including,
without limitation, any location to which Materials of Environmental Concern
have been sent for re-use or recycling or for treatment, storage, or disposal)
which could reasonably be expected to (i) give rise to liability of the
Borrower or any of its Subsidiaries under any applicable Environmental Law or
otherwise result in costs to the Borrower or any of its Subsidiaries, or (ii)
interfere with the continued operations of the Borrower or any of its
Subsidiaries, or (iii) impair the fair saleable value of any real property
owned or leased by the Borrower or any of its Subsidiaries.
(c) There is no judicial, administrative, or arbitral
proceeding (including any notice of violation or alleged violation) under or
relating to any Environmental Law to which the Borrower or any of its
Subsidiaries is, or to the knowledge of the executive management of the
Borrower will be, named as a party that is pending or, to the knowledge of the
executive management of the Borrower, threatened.
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(d) Neither the Borrower nor any of its Subsidiaries has
received any written request for information, or been notified that it is a
potentially responsible party under or relating to the federal Comprehensive
Environmental Response, Compensation, and Liability Act or any similar
Environmental Law.
(e) Neither the Borrower nor any of its Subsidiaries has
entered into or agreed to any consent decree, order, or settlement or other
agreement, nor is subject to any judgment, decree, or order or other agreement,
in any judicial, administrative, arbitral, or other forum, relating to
compliance with or liability under any Environmental Law.
(f) To the knowledge of the executive management of the
Borrower, neither the Borrower nor any of its Subsidiaries has assumed or
retained, by contract or operation of law, any liabilities of any kind, fixed
or contingent, known or unknown, under or relating to any Environmental Law
except for contractual indemnities given in the ordinary course of business and
consistent with the Borrower's past business practice and with general practice
in the oil and gas well service industry.
For purposes of Section 8, each of the foregoing representations and warranties
contained in this Section 4.17 that is qualified by the knowledge of the
executive management of the Borrower shall be deemed not to be so qualified.
4.18 Accuracy of Information. No statement or information
contained in this Agreement, any other Loan Document, the Confidential
Information Memorandum or any other document, certificate or statement
furnished to the Arranger, the Administrative Agent or the Lenders, by or on
behalf of any Loan Party for use in connection with the transactions
contemplated by this Agreement or the other Loan Documents, contained as of the
date such statement, information, document or certificate was so furnished any
untrue statement of a material fact or, with all such statements and
information being taken as a whole, omitted to state a material fact necessary
in order to make the statements contained herein or therein not misleading. It
is understood that no representation or warranty is made concerning the
forecasts, estimates, pro forma information, projections and statements as to
anticipated future performance or conditions, and the assumptions on which they
were based contained in any such information, reports, financial statements,
exhibits or schedules, except that as of the date such forecasts, estimates,
pro forma information, projections and statements were generated, such
forecasts, estimates, pro forma information, projections and statements were
based upon good faith estimates and assumptions believed by management of the
Borrower and its Subsidiaries to be reasonable at such time. There is no fact
known to the executive management of the Borrower that could reasonably be
expected to have a Material Adverse Effect that has not been expressly
disclosed herein, in the other Loan Documents, or in such other documents,
certificates and statements furnished to the Administrative Agent and the
Lenders for use in connection with the transactions contemplated hereby and by
the other Loan Documents.
4.19 Security Documents. (a) The Master Guarantee and
Collateral Agreement is effective to create in favor of the Collateral Agent,
for the benefit of the Lenders, a security interest which has attached (as that
term is used in Section 9-203 of the New York UCC) in the Investment Property
and other instruments, negotiable documents, chattel paper and money described
therein, to the extent that the Loan Parties to the Master Guaranty and
Collateral Agreement have rights in such Collateral, and proceeds thereof and,
when the Pledged Notes and the stock certificates representing the Pledged
Stock described therein and other instruments, negotiable documents, chattel
paper and money described therein are delivered to the Collateral Agent, the
Master Guarantee and Collateral Agreement shall constitute a perfected first
priority Lien on, and security interest in, all right, title and interest of
the relevant
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pledgor in such Investment Property and other instruments, negotiable
documents, chattel paper and money and the proceeds thereof, as security for
the Obligations (as defined in the Master Guarantee and Collateral Agreement),
in each case prior and superior in right to any other Person, except for
inchoate tax liens for obligations to be paid in the ordinary course of
business; and except that (x) until the Merger Date, the Borrower's obligations
with respect to the Interim Loans will also be secured by such Collateral as
provided in the Loan Documents and (y) after the Merger Date, the Borrower's
obligations under the Xxxxxx Indenture will be secured by such Collateral as
provided in the Loan Documents.
(b) The Master Guarantee and Collateral Agreement is effective
to create in favor of the Collateral Agent, for the benefit of the Lenders, a
security interest which has attached (as that term is used in Section 9-203 of
the New York UCC) in the Collateral described therein (other than the
Collateral described in Section 4.19(a)), to the extent that the Loan Parties
to the Master Guarantee and Collateral Agreement have rights in such
Collateral, and proceeds thereof, and when financing statements in appropriate
form are properly filed (with all required filing fees being paid) in the
offices specified on Schedule 3 of the Master Guarantee and Collateral
Agreement and, with respect to vehicles included in the Collateral and covered
by certificates of title issued by any State, when the security interest of the
Collateral Agent has been noted on such certificate of title in accordance with
the certificate of title laws of such State, the Master Guarantee and
Collateral Agreement shall constitute a perfected Lien on, and security
interest in, all right, title and interest of the Loan Parties in substantially
all of such Collateral and the proceeds thereof, as security for the
Obligations (as defined in the Master Guarantee and Collateral Agreement), in
each case prior and superior in right to any other Person, other than with
respect to Liens expressly permitted by Section 7.3 and other than as provided
in clauses (x) and (y) of Section 4.19(a).
(c) Each Mortgage is effective to create in favor of the
Collateral Agent, for the benefit of the Lenders, a legal, valid and
enforceable Lien on the Mortgaged Properties described therein and each
Mortgage, which has been executed and delivered by the relevant Loan Party, and
properly filed and recorded (with all required filing and recording fees being
paid) in the office(s) specified on Schedule 4.19(c), constitutes a Lien on,
and security interest in, all right, title and interest of the Loan Parties in
the Mortgaged Property properly described therein, as security for the
Obligations (as defined in the relevant Mortgage), in each case prior and
superior in right to any other Person, other than with respect to Liens
expressly permitted by Section 7.3 and other than as provided in clauses (x)
and (y) of Section 4.19(a).
(d) Each Oil and Gas Mortgage is effective to create in favor
of the Collateral Agent, for the benefit of the Lenders, a legal, valid and
enforceable Lien on the Oil and Gas Properties described therein and each Oil
and Gas Mortgage, which has been executed and delivered by the relevant Loan
Party, and properly filed and recorded (with all required filing and recording
fees being paid) in the office(s) specified on Schedule 4.19(d), constitutes a
perfected Lien on, and security interest in, all right, title and interest of
the Loan Parties in the Oil and Gas Property properly described therein, as
security for the Obligations (as defined in the relevant Oil and Gas Mortgage),
in each case prior and superior in right to any other Person, other than with
respect to Liens expressly permitted by Section 7.3 and other than as provided
in clauses (x) and (y) of Section 4.19(a).
4.20 Solvency. The Borrower, its Subsidiaries and the Excluded
Subsidiaries, taken as a whole, are, and after giving effect to the incurrence
of all Indebtedness and the Acquisition and obligations being incurred in
connection herewith will be, Solvent.
4.21 Labor Matters. There are no strikes pending or, to the
knowledge of the Borrower, threatened against the Borrower or any of its
Subsidiaries which, individually or in
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the aggregate, could reasonably be expected to have a Material Adverse Effect.
The hours worked and payments made to employees of the Borrower and each of its
Subsidiaries have not been in violation of the Fair Labor Standards Act or any
other applicable Requirement of Law, except to the extent such violations could
not, individually or in the aggregate, be reasonably expected to have a
Material Adverse Effect. All material payments due from the Borrower or any of
its Subsidiaries on account of wages and employee health and welfare insurance
and other benefits have been paid or accrued as a liability on the books of the
Borrower or such Subsidiary.
4.22 Indentures. (a) All Indebtedness of the Borrower
hereunder constitutes "Senior Indebtedness" within the meaning of the Indenture
and the 1997 Indenture.
(b) After the Merger Date, all Indebtedness of the Borrower
hereunder will constitute "Senior Indebtedness" within the meaning of the Put
Facility and the Senior Subordinated Notes.
4.23 Excluded Subsidiaries. As of the Closing Date the
Borrower is in the process of dissolving all Excluded Subsidiaries listed in
clause (a) of the definition of Excluded Subsidiaries in Section 1.1, and the
Borrower expects to dissolve the Excluded Subsidiaries listed in clauses (c)
and (d) of the definition of Excluded Subsidiaries in Section 1.1 in the
ordinary of business when the assets of such corporations are disposed of.
4.24 Oil and Gas Properties. The Oil and Gas Properties
described in Schedule 1.1C constitute 80% of the value of the proved developed
producing and proved undeveloped reserves of Odessa Exploration Incorporated on
the Closing Date. For purposes of this Section, the value of such reserves
shall be calculated as the present value discounted at 10% of future revenue
relating to such reserves.
4.25 Year 2000 Matters. Any reprogramming required to permit
the proper functioning (but only to the extent that such proper functioning
would otherwise be impaired by the occurrence of the year 2000) in and
following the year 2000 of computer systems and other equipment containing
embedded microchips, in either case owned or operated by the Borrower or any of
its Subsidiaries (including any such systems and other equipment supplied by
others or with which the computer systems of the Borrower or any of its
Subsidiaries interface), and the testing of all such systems and other
equipment as so reprogrammed, will be completed by July 1, 1999. The costs to
the Borrower and its Subsidiaries that have not been incurred as of the date
hereof for such reprogramming and testing and for the other reasonably
foreseeable consequences to them of any improper functioning of other computer
systems and equipment containing embedded microchips due to the occurrence of
the year 2000 could not reasonably be expected to result in a Default or Event
of Default or to have a Material Adverse Effect. Except for any reprogramming
referred to above, the computer systems of the Borrower and its Subsidiaries
are and, with ordinary course upgrading and maintenance, will continue for the
term of this Agreement to be, sufficient for the conduct of their business as
currently conducted.
SECTION 5. CONDITIONS PRECEDENT
5.1 Conditions to Effectiveness and Loans on the Closing Date.
The effectiveness of the changes to the Existing Credit Agreement made pursuant
to this Agreement and the agreement of each Lender to make the Loans requested
to be made by it are subject to the satisfaction, prior to or concurrently with
the making of such Loans on the Closing Date, of the following conditions
precedent:
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(a) Loan Documents. The Administrative Agent shall have
received (i) this Agreement, executed and delivered by a duly authorized
officer of the Borrower, with a counterpart or a conformed copy for each
Lender, (ii) the Master Guarantee and Collateral Agreement, executed and
delivered by a duly authorized officer of the parties thereto, with a
counterpart or a conformed copy for each Lender, (iii) the Intercreditor
Agreement, executed and delivered by a duly authorized officer of the parties
thereto, (iv) the Mortgage Amendments and the (v) Oil and Gas Mortgage
Amendments.
(b) Related Agreements. The Administrative Agent shall have
received, with a copy for each Lender, true and correct copies, certified as to
authenticity by the Borrower, of (i) the Acquisition Documentation, (ii) the
Interim Loan Agreement and (iii) the Insurance Policies (or certificates
evidencing the effectiveness of such Insurance Policies and the material terms
thereof).
(c) Fees. The Lenders, Arranger and the Administrative Agent
shall have received all fees required to be paid, and all expenses for which
invoices have been presented, on or before the Closing Date.
(d) Put Facility. Prior to, or simultaneously with, the
Closing Date, the Borrower shall have received (i) $150,000,000 of gross
proceeds from the Interim Loans and (ii) an engagement letter (acceptable to
the Administrative Agent) providing for the refinancing thereof from the
proceeds of the issuance of Senior Subordinated Notes.
(e) Acquisition. The following transactions shall have been
consummated (and the Administrative Agent shall have received a certificate of
the Borrower to such effect, accompanied by copies of any documentary evidence
thereof reasonably requested by the Administrative Agent):
(i) all conditions precedent to the consummation of
the Tender Offer set forth in the Tender Offer Documents shall
have been satisfied or waived with the consent of the
Administrative Agent;
(ii) since the date thereof, the terms of the Tender
Offer and the Tender Offer Documents shall not have been
amended, waived or modified as to price, consideration,
conditions, termination or expiration or in any other material
respect without the prior approval of the Administrative
Agent;
(iii) since the date thereof, (A) the terms of the
Merger Agreement shall not have been amended, waived or
modified as to price, consideration, conditions, termination
or expiration or in any other material respect without the
prior approval of the Administrative Agent, and (B) the Board
of Directors of Xxxxxx shall not have withdrawn their approval
thereof;
(iv) the Borrower, together with its Subsidiaries,
shall, concurrently with the funding of the initial Loans
hereunder, have acquired at least 51% of the shares of the
common stock of Xxxxxx (or such higher percentage of the
common and other Capital Stock of Xxxxxx as is necessary under
applicable Requirements of Law in order to, without the
affirmative vote of any other holder of capital stock of
Xxxxxx, (A) permit the Merger to be consummated on or prior to
the date which is 150 days after the Closing Date and (B)
immediately appoint a majority of the Board of Directors of
Xxxxxx or such higher number of directors as is required to
approve the Merger independently of the votes of any
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other Xxxxxx shareholders);
(v) there shall be no material legal impediments to
consummation of the Merger;
(vi) all required actions shall have been taken so
that (a) the applicable state anti-takeover law shall be
inapplicable to the Acquisition and (b) any preferred stock
purchase rights or other "poison pill" arrangements of Xxxxxx
(including, without limitation, the Rights Agreement, between
Xxxxxx and Xxxxxx Trust Company of New York, as rights agent,
dated as of September 11, 1997) shall not have become, and
shall not become, exercisable;
(vii) all governmental and third party approvals
(including, without limitation, Xxxx-Xxxxx-Xxxxxx clearance)
necessary or, in the reasonable discretion of the
Administrative Agent, advisable in connection with the
Acquisition, this Agreement and the financings contemplated
hereby and the continuing operations of the Borrower and its
Domestic Subsidiaries shall have been obtained and be in full
force and effect, and all applicable waiting periods shall
have expired without any action being taken or threatened by
any competent authority which would restrain, prevent or
otherwise impose adverse conditions on the Acquisition or the
continuing operations of the Borrower;
(viii) there shall be in place no injunction or other
prohibition against the consummation of the Acquisition or the
financing contemplated hereby in effect or threatened, and no
litigation or proceeding pending or threatened which seeks to
enjoin the Acquisition or the financing contemplated hereby or
which could reasonably be expected to have a Material Adverse
Effect;
(ix) neither Xxxxxx nor any of its Subsidiaries shall
have taken, or be taking, any action (including any
reorganization, recapitalization, asset sale, stock purchase
or distribution to its stockholders) that, in the reasonable
good faith judgment of the Administrative Agent, could be
reasonably expected to have a material adverse effect on the
condition (financial or otherwise), business, operations,
assets or prospects of Xxxxxx or its Subsidiaries or on the
consummation of the Tender Offer or the Merger;
(x) all actions required to be taken under Xxxxxx'x
existing indentures and credit facilities shall have been
taken or are otherwise provided for such that the consummation
of the Tender Offer and the Merger does not constitute a
default, or an event of mandatory prepayment, thereunder (it
being understood that the put to be made upon the Xxxxxx
Change of Control will be initiated promptly after the Closing
Date).
(f) Regulations of Board. The Administrative Agent shall be
satisfied (i) that the Acquisition and the financing thereof comply with
Regulation T, U and X of the Board and (ii) with all other matters relating to
Regulation U.
(g) Solvency Certificate. The Lenders shall have received a
reasonably satisfactory solvency analysis certified by the chief financial
officer of the Borrower which shall document the solvency of the Borrower, its
Subsidiaries and the Excluded Subsidiaries considered as a whole after giving
effect to the Acquisition and the other transactions contemplated hereby.
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(h) Legal Opinions. The Administrative Agent shall have
received, with a counterpart for each Lender, the following executed legal
opinions:
(i) the executed legal opinion of Xxxx X. Xxxxxx,
Xx., Esq., general counsel to the Loan Parties, in form and
substance reasonably satisfactory to the Administrative Agent;
(ii) the executed legal opinion of Xxxxxx & Xxxxxx,
L.L.P., counsel to the Loan Parties, in form and substance
reasonably satisfactory to the Administrative Agent; and
(iii) the executed legal opinion of Skadden, Arps,
Slate, Xxxxxxx & Xxxx LLP, special New York counsel to the
Loan Parties, in form and substance reasonably satisfactory to
the Administrative Agent.
Each such legal opinion shall be in form and substance reasonably satisfactory
to the Administrative Agent and shall cover such matters incident to the
transactions contemplated by this Agreement as the Administrative Agent may
reasonably require.
(i) Business Plan. The Lenders shall have received, in each
case as set forth in the Confidential Information Memorandum, the following:
(i) a satisfactory business plan for the Borrower and
its Subsidiaries (including the Subsidiaries of Xxxxxx) for
the six fiscal years following the Closing Date;
(ii) a satisfactory written analysis of the business
and prospects of the Borrower and its Subsidiaries (including
the Subsidiaries of Xxxxxx) for the period from the Closing
Date through the final maturity of the Term Loans; and
(iii) satisfactory pro forma projected balance sheets
of the Borrower and its Subsidiaries (including the
Subsidiaries of Xxxxxx) as at the last day of each of the six
fiscal years of the Borrower following the Merger Date, and
the related consolidated statements of projected income and
cash flows for such fiscal years (including the assumptions
used in preparing such statements).
(j) Closing Certificate. The Administrative Agent shall have
received, with a counterpart for each Lender, a certificate of each Loan Party,
dated the Closing Date, substantially in the form of Exhibit D, with
appropriate insertions and attachments, executed by the President or any Vice
President and the Secretary or any Assistant Secretary of such Loan Party.
(k) Corporate Proceedings of Loan Parties. The Administrative
Agent shall have received, with a counterpart for each Lender, a copy of the
resolutions of the Board of Directors of each Loan Party authorizing (i) the
execution, delivery and performance of the Loan Documents to which it is a
party (including, but not limited to, the granting of any Liens provided for
therein), and (ii) in the case of the Borrower, the borrowings contemplated
hereunder.
(l) Lien Searches. The Administrative Agent shall have
received the results of a recent lien search in each of the jurisdictions where
assets of the Loan Parties are located, and such search shall reveal no liens
on any of the assets of the Borrower or its Subsidiaries
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except for liens permitted by Section 7.3 or discharged on or prior to the
Closing Date pursuant to documentation reasonably satisfactory to the
Administrative Agent.
(m) Environmental Audit Reports. The Administrative Agent
shall have received environmental reports reasonably satisfactory to it with
respect to the real properties owned or leased by the Borrower and its
Subsidiaries.
(n) Environmental Program. The Administrative Agent shall
have received a copy of the Borrower's environmental compliance manual
developed and implemented by the Borrower to promote compliance with and to
minimize prudently any liabilities or potential liabilities under any
Environmental Law that may affect the Borrower or any of its Domestic
Subsidiaries (the "Environmental Program").
(o) Investment Property; Stock Powers. The Collateral Agent
shall have received the Pledged Stock pledged pursuant to the Master Guarantee
and Collateral Agreement, together with an undated stock power for each such
certificate executed in blank by a duly authorized officer of the pledgor
thereof.
(p) Filings, Registrations and Recordings. Each document
(including, without limitation, any Uniform Commercial Code financing
statement) required by the Security Documents or the Existing Credit Agreement
or under law or reasonably requested by the Administrative Agent to be
delivered to the Collateral Agent or to be filed, registered or recorded in
order to (i) continue the liens on the Collateral under the Security Documents
with the same priority as under the Existing Credit Agreement immediately prior
to the Closing Date (subject to the Liens provided for in clauses (x) and (y)
of Section 4.19(a)) and (ii) create in favor of the Collateral Agent, for the
benefit of the Lenders, a perfected Lien on all Collateral that was to have
been perfected pursuant to Section 6.10 and 6.11 of the Existing Credit
Agreement immediately prior to the Closing Date, prior and superior in right to
any other Person (other than with respect to Liens expressly permitted by
Section 7.3), shall have been filed or be in proper form for filing,
registration or recordation in each jurisdiction in which the filing,
registration or recordation thereof is so required or requested , other than
those documents required to be filed, registered or recorded after the Closing
Date pursuant to Section 6.14.
(q) Existing Credit Agreement. To the extent requested by any
Lender, the Borrower shall execute and deliver a new Note in the amount of such
Lender's Commitment in replacement and substitution of (but not in payment of)
such Lender's note under the Existing Credit Agreement and the Administrative
Agent shall request all the Lenders who hold notes under the Existing Credit
Agreement to return such notes to the Administrative Agent for cancellation and
replacement (but not payment), if applicable. The Borrower shall have paid all
interest, fees and other amounts (other than principal) accrued under the
Existing Credit Agreement through the Closing Date.
5.2 Conditions to Loans made on or after the Merger Date and
occurrence of Scheduled Revolving Termination Date. The agreement of each
Lender to make its initial Loan on or after the Merger Date and the extension
of the Revolving Termination Date to the Scheduled Revolving Termination Date
is subject to the satisfaction of the following conditions precedent on or
prior to the date on which the initial Loan is made on or after the Merger
Date:
(a) Merger. Receipt by the Agent of satisfactory evidence
that the Merger has been completed in accordance with the Acquisition
Documentation and no provision thereof shall have been waived, amended,
supplemented or otherwise modified in a manner which could, in the opinion of
the Administrative Agent, reasonably be expected to be adverse to the
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interest of the Administrative Agent or the Lenders.
(b) Lien Searches. The Administrative Agent shall have
received the results of a recent lien search prior to the Merger Date in each
of the jurisdictions where assets of Xxxxxx and its Subsidiaries are located,
and such search shall reveal no liens on any of the assets of the such Persons
except for liens permitted by Section 7.3 or discharged on or prior to the
Merger Date pursuant to documentation reasonably satisfactory to the
Administrative Agent.
(c) Collateral. All actions required to be taken by Section
6.10 in respect of all Subsidiaries and assets acquired on the Merger Date
(including the delivery of legal opinions with respect thereto as provided in
Section 6.10) shall have been taken so that on the Merger Date (i) the
Collateral Agent, for the benefit of the Lenders, shall have a duly perfected
first priority security interest in all the Capital Stock and the Collateral of
Xxxxxx and its Subsidiaries (subject only to Liens expressly permitted by
Section 7.3, other than those documents required to be filed, registered or
recorded after the Closing Date pursuant to Section 6.10 or Section 6.14) and
(ii) Xxxxxx'x Subsidiaries shall have become Subsidiary Guarantors.
(d) Xxxxxx 9-3/8% Notes. All actions required under the Xxxxxx
Indenture shall have been taken such that the consummation of the Merger and
the financing thereof (including granting of lien's on assets of Xxxxxx and
guarantees by Xxxxxx'x Subsidiaries) does not constitute a default, or an event
of mandatory redemption, thereunder (it being understood that to the extent the
Merger Date occurs prior to the Xxxxxx Put Termination Date, the Borrower's
payment obligations in connection with the Xxxxxx Change of Control may remain
outstanding until such date);
(e) Environmental Audit Reports. The Administrative Agent
shall have received environmental reports prior to or concurrently with the
Merger Date reasonably satisfactory to it with respect to the real properties
owned or leased by Xxxxxx and its Subsidiaries.
5.3 Conditions to Each Extension of Credit. The agreement of
each Lender to make any extension of credit requested to be made by it on any
date (including, without limitation, its initial extension of credit) and the
occurrence of the Closing Date is subject to the satisfaction of the following
conditions precedent:
(a) Representations and Warranties. Except to the extent that
they are made as of a specific date, each of the representations and warranties
made by any Loan Party in or pursuant to the Loan Documents shall be true and
correct in all material respects on and as of such date as if made on and as of
such date.
(b) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the
extensions or credit requested to be made on such date.
(c) Additional Matters. All proceedings, and all documents,
instruments and other legal matters in connection with the transactions
contemplated by this Agreement and the other Loan Documents shall be reasonably
satisfactory in form and substance to the Administrative Agent, and the
Administrative Agent shall have received such other documents and legal
opinions in respect of any aspect or consequence of the transactions
contemplated hereby or thereby as it shall reasonably request.
(d) Borrowing Notice. The Borrower shall have delivered to the
Administrative
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Agent the applicable borrowing notice in accordance with the
relevant subsection of Section 2.
Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date of such extension of credit that the conditions contained in this
Section 5.3 have been satisfied.
SECTION 6. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments
remain in effect, any Loan or Letter of Credit remains outstanding and unpaid
or any other amount is owing to any Lender, the Arranger or the Administrative
Agent hereunder, the Borrower shall and, if applicable, shall cause each of its
Subsidiaries (and with respect to Section 6.8, each of the Excluded
Subsidiaries) to:
6.1 Financial Statements. Furnish to the Administrative Agent
for distribution to each Lender:
(a) as soon as available, but in any event within 95 days
after the end of each fiscal year of the Borrower, a copy of the audited
consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as
at the end of such year and the related audited consolidated statements of
income and retained earnings and of cash flows for such year, setting forth in
each case in comparative form the figures for the previous year, reported on
without a "going concern" or like qualification or exception, or qualification
arising out of the scope of the audit, by KPMG Peat Marwick LLP or other
independent certified public accountants of nationally recognized standing; and
(b) as soon as available, but in any event not later than 50
days after the end of each of the first three quarterly periods of each fiscal
year of the Borrower, the unaudited consolidated balance sheet of the Borrower
and its Consolidated Subsidiaries as at the end of such quarter and the related
unaudited consolidated statements of income and retained earnings and of cash
flows of the Borrower and its Consolidated Subsidiaries for such quarter and
the portion of the fiscal year through the end of such quarter, setting forth
in each case in comparative form the figures for the previous year, certified
by a Responsible Officer of the Borrower as being fairly stated in all material
respects (subject to normal year-end audit adjustments);
all such financial statements referred to in this Section 6.1(b) shall be
complete and correct in all material respects and shall be prepared in
reasonable detail and in accordance with GAAP applied consistently throughout
the periods reflected therein and with prior periods, subject to normal
year-end adjustments.
6.2 Certificates; Other Information. Furnish to each Lender:
(a) concurrently with the delivery of the financial statements
referred to in Section 6.1(a), (i) a certificate of the independent certified
public accountants reporting on such financial statements stating that in
making the examination necessary therefor no knowledge was obtained of any
Default or Event of Default, except as specified in such certificate and (ii)
copies of all reports or written communications providing advice,
recommendations or analysis to the management of the Borrower from such
independent certified public accountants with regard to their audit of the
financial statements referred to in Section 6.1(a) or the internal financial
controls and systems of the Borrower;
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(b) concurrently with the delivery of any financial statement
pursuant to Section 6.1, (x) a certificate of a Responsible Officer of the
Borrower stating that, to the best of each such Responsible Officer's
knowledge, during such period (i) no Subsidiary has been formed or acquired
(or, if any such Subsidiary has been formed or acquired, the Loan Parties have
complied with the requirements of Section 6.10 with respect thereto), (ii)
neither the Borrower nor any of its Subsidiaries has changed its name, its
principal place of business, its chief executive office, its principal place of
business, the location where records concerning the Collateral are kept or the
location of any material item of tangible Collateral without complying with the
requirements of this Agreement and the Security Documents with respect thereto
and (iii) each Loan Party has observed or performed all of its covenants and
other agreements, and satisfied every condition, contained in this Agreement
and the other Loan Documents to which it is a party to be observed, performed
or satisfied by it, and that such Responsible Officer has obtained no knowledge
of any Default or Event of Default except as specified in such certificate and
(y) in the case of quarterly or annual financial statements, (i) a Compliance
Certificate containing all information and calculations reasonably necessary
for determining compliance by the Borrower and its Subsidiaries with the
provisions of this Agreement (including but not limited to Sections 2.10 and
7.1) as of the last day of such fiscal quarter or fiscal year of the Borrower
and (ii) a Pro Forma EBITDA Statement for the four fiscal quarters ended on the
last day of such four quarters or fiscal year of the Borrower if during such
fiscal quarter period a Person acquired by the Borrower or a Subsidiary becomes
a Consolidated Subsidiary or is merged into the Borrower or a Subsidiary;
(c) as soon as available, and in any event no later than the
end of each fiscal year of the Borrower, a projected consolidated balance sheet
of the Borrower as of the end of the following fiscal year, and the related
consolidated statements of projected cash flow, projected retained earnings and
projected income for the following fiscal year, together with an operating
budget with respect to the following fiscal year, and, as soon as available,
significant revisions, if any, of such projections with respect to such fiscal
year (collectively, the "Projections"), which Projections shall in each case be
accompanied by a certificate of a Responsible Officer of the Borrower stating
that such Projections are based on estimates, information and assumptions
believed by such Responsible Officer to be reasonable and that such Responsible
Officer has no reason to believe that such Projections are incorrect or
misleading in any material respect;
(d) within 50 days after the end of each fiscal quarter of
each fiscal year of the Borrower, a narrative discussion and analysis of the
consolidated financial condition and results of operations of the Borrower and
its Subsidiaries for such fiscal quarter and for the period from the beginning
of the then current fiscal year to the end of such fiscal quarter, as compared
to the portion of the Projections, as applicable, covering such periods and to
the comparable periods of the previous year;
(e) within five days after the same are filed, copies of all
financial statements and reports which the Borrower or any of its Subsidiaries
may make to, or file with, the Securities and Exchange Commission or any
successor or analogous Governmental Authority of the United States; and
(f) promptly, such additional financial and other information
as any Lender may from time to time reasonably request.
6.3 Payment of Obligations. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent or (in the case
of trade payables and obligations other than for borrowed money) within 150
days after the due date, as the case may be, all its material obligations of
whatever nature, except where the amount or validity thereof is currently
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being contested in good faith by appropriate proceedings and reserves in
conformity with GAAP with respect thereto have been provided on the books
of the Borrower or its Subsidiaries, as the case may be.
6.4 Conduct of Business and Maintenance of Existence, etc.
(a) Continue to engage in business of the same general type as now conducted by
it, (b) preserve, renew and keep in full force and effect its existence and (c)
take all commercially reasonable action to maintain all rights, privileges and
franchises necessary or desirable in the normal conduct of its business,
except, in each case in clauses (a), (b) and (c) above, as otherwise permitted
pursuant to Section 7.5 and except, in the case of clause (c) above, to the
extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect; and (d) comply with all Contractual Obligations and
Requirements of Law except to the extent that failure to comply therewith could
not, in the aggregate, reasonably be expected to have a Material Adverse
Effect.
6.5 Maintenance of Property; Insurance. (a) Keep all material
property useful and necessary in its business in good working order and
condition, ordinary wear and tear excepted; (b) maintain with financially sound
and reputable insurance companies insurance on all its property in at least
such amounts and against at least such risks (but including in any event
general liability) as are usually insured against in the same general area by
companies engaged in the same or a similar business and otherwise comply with
Section 5.3 of the Master Guarantee and Collateral Agreement; and (c) furnish
to each Lender, upon written request, full information as to the insurance
carried.
6.6 Inspection of Property; Books and Records; Discussions.
Keep proper books of records and account in which full, true and correct
entries in conformity with GAAP or, in the case of Foreign Subsidiaries, in
conformity with generally accepted accounting principles in effect in the
jurisdiction where such Foreign Subsidiary is located at such time and, in the
case of the Borrower and its Domestic Subsidiaries, all Requirements of Law
shall be made of all dealings and transactions in relation to its business
and activities; and upon reasonable notice permit representatives of any
Lender to visit and inspect any of its properties and examine and make
abstracts from any of its books and records at any reasonable time and as often
as may reasonably be desired and to discuss the business, operations, properties
and financial and other condition of the Borrower and its Subsidiaries with
senior officers of the Borrower and its Subsidiaries and with its independent
certified public accountants.
6.7 Notices. Promptly give notice to the Administrative Agent
of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of the Borrower or any of its Subsidiaries or (ii) litigation,
investigation or proceeding which may exist at any time between the Borrower or
any of its Subsidiaries and any Governmental Authority, which in either case,
if not cured or if adversely determined, as the case may be, could reasonably
be expected to have a Material Adverse Effect;
(c) the following events, as soon as possible and in any event
within 30 days after the Borrower or any of its Subsidiaries knows or has
reason to know thereof: (i) the occurrence or expected occurrence of any
Reportable Event with respect to any Plan, a failure to make any required
contribution in a material amount to a Plan, the creation of any Lien in a
material amount in favor of the PBGC or a Plan or any withdrawal from, or the
termination, Reorganization or Insolvency of, any Multiemployer Plan or (ii)
the institution of proceedings or the taking of any other action by the PBGC or
the Borrower or any Commonly Controlled Entity
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or any Multiemployer Plan with respect to the withdrawal from, or the
terminating, Reorganization or Insolvency of, any Plan;
(d) (i) any release or discharge by the Borrower or any
Subsidiary of any Materials of Environmental Concern required to be reported
under Environmental Laws to any Governmental Authority which could reasonably
be expected to result in the assessment or payment of a Material Environmental
Amount; (ii) any condition, circumstance, occurrence or event that could
reasonably be expected to result in the assessment or payment of a Material
Environmental Amount, or could result in the imposition of any Lien or other
restriction on the title, ownership or transferability of any Mortgaged
Property; and (iii) any action to be taken by the Borrower or any Subsidiary
that could reasonably be expected to subject the Borrower or any Subsidiary to
the assessment or payment of a Material Environmental Amount; and
(e) any development or event which could reasonably be
expected to have a Material Adverse Effect.
Each notice pursuant to this Section 6.7 shall be accompanied by a statement of
a Responsible Officer of the Borrower setting forth details of the occurrence
referred to therein and stating what action the Borrower or the applicable
Subsidiary proposes to take with respect thereto.
6.8 Environmental Laws.
(a)(i) Comply with all Environmental Laws applicable to it,
and obtain, comply with and maintain any and all Environmental Permits
necessary for its operations as conducted and as planned; and (ii) take all
reasonable efforts to ensure that all of its tenants, subtenants, contractors,
subcontractors, and invitees comply with all applicable Environmental Laws, and
obtain, comply with and maintain any and all Environmental Permits, applicable
to any of them insofar as any failure to so comply, obtain or maintain
reasonably could be expected to adversely affect the Borrower or any of its
Subsidiaries. For purposes of this 6.8(a), noncompliance by the Borrower with
any applicable Environmental Law or Environmental Permit shall be deemed not to
constitute a breach of this covenant provided that, upon learning of any actual
or suspected noncompliance, the Borrower shall undertake reasonable efforts to
achieve compliance, and provided further that, in any case, such
non-compliance, and any other noncompliance with applicable Environmental Law,
individually or in the aggregate, could not reasonably be expected to give rise
to a Material Adverse Effect.
(b) Promptly comply in all material respects with all orders
and directives of all Governmental Authorities directed to the Borrower or any
of its Domestic Subsidiaries regarding Environmental Laws, other than such
orders and directives or parts thereof as are being contested in good faith and
by appropriate proceedings.
(c) Maintain the Environmental Program.
(d) Prior to acquiring any ownership or leasehold interest in
real property, or other interest in any real property which in the Borrower's
reasonable judgment could give rise to significant liability under any
Environmental Law, obtain a written environmental assessment report regarding
the environmental condition of such real property by a reputable independent
environmental consulting firm. Upon the request of the Administrative Agent, a
copy of each such environmental assessment report shall be delivered to the
Administrative Agent by the end of the calendar quarter in which the
acquisition closed, together with a list of all acquisitions of interests in
real property by the Borrower and the Subsidiaries in such quarter. Pursuant to
this Section 6.8(d), the Administrative Agent shall have the right, but shall
not have
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any duty, to obtain, review or discuss any such report.
(e) Promptly upon the Administrative Agent's request if there
has been an Event of Default which has not been fully and timely cured, permit
an Environmental Consultant whom the Administrative Agent in its discretion
designates to perform an environmental assessment (including, without
limitation: reviewing documents; interviewing knowledgeable persons; and
sampling and analyzing soil, air, surface water, groundwater, and/or other
media in or about property owned or leased by the Borrower, or on which
operations of the Borrower otherwise take place). Such environmental assessment
shall be in form, scope, and substance reasonably satisfactory to the
Administrative Agent. The Borrower shall cooperate fully in the conduct of such
environmental assessment, and shall pay the costs of such environmental
assessment immediately upon written demand by the Administrative Agent.
Pursuant to this section 6.8(e), the Administrative Agent shall have the right,
but shall not have any duty, to request and/or obtain such environmental
assessment.
6.9 Further Assurances. (a) Upon the request of the
Administrative Agent promptly perform or cause to be performed any and all acts
and execute or cause to be executed any and all documents (including, without
limitation, financing statements and continuation statements) for filing under
the provisions of the Uniform Commercial Code or any other Requirement of Law
which are necessary or advisable in the reasonable judgment of the Collateral
Agent to maintain in favor of the Collateral Agent, Liens on the Collateral
that are duly perfected in accordance with all applicable Requirements of Law.
(b) Notwithstanding any other provision herein, the Borrower
shall not be deemed to have failed to satisfy the conditions of Section 5.1(p)
or 5.2(c) or to be in violation of Section 6.10 or 6.14 for failure to have
caused a duly perfected Lien to be placed on any Vehicles (other than Excluded
Vehicles) covered by a certificate of title of any State if (i) the aggregate
fair market value of such unperfected Vehicles (the "Unperfected Amount") is
less than $5,000,000 and (ii) the Collateral Agent either has a duly perfected
first priority security interest in or has in its possession each document
(including, without limitation, certificates of title) in proper form for
filing, registration or recordation to give the Collateral Agent such duly
perfected first priority security interest in Excluded Vehicles having an
aggregate fair market value equal to or greater than the Unperfected Amount.
6.10 Additional Collateral. (a) With respect to any assets
acquired after the Closing Date by the Borrower or any of its Domestic
Subsidiaries that are intended to be subject to the Lien created by any of the
Security Documents but which are not so subject (other than any assets
described in paragraph (b), (c), (d) or (e) of this Section 6.10), promptly
(and in any event within 30 days after the acquisition or creation thereof):
(i) execute and deliver to the Collateral Agent such amendments to the Master
Guarantee and Collateral Agreement or such other documents as the Collateral
Agent shall reasonably deem necessary or advisable to grant to the Collateral
Agent a Lien on such assets, (ii) take all actions reasonably necessary or
advisable to cause such Lien to be duly perfected in accordance with all
applicable Requirements of Law, including, without limitation, the filing of
Uniform Commercial Code financing statements in such jurisdictions as may be
reasonably requested by the Collateral Agent (provided that for any Vehicles
that are covered by a certificate of title, the Borrower shall cause such Lien
to be duly perfected in accordance with all applicable Requirements of Law
within 90 days after the acquisition thereof), and (iii) if requested by the
Collateral Agent, deliver to the Collateral Agent within 30 days of such
request legal opinions relating to the matters described in clauses (i) and
(ii) immediately preceding, which opinions shall be in form and substance and
from counsel reasonably satisfactory to the Collateral Agent.
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(b) With respect to any Person (other than Xxxxxx or any
existing Subsidiary of Xxxxxx) that, subsequent to the Closing Date, becomes a
Domestic Subsidiary of the Borrower (including, without limitation, any Person
which had previously been an Excluded Subsidiary), promptly (and in any event
within 30 days after the acquisition or creation thereof) and, with respect to
any Domestic Subsidiary of Xxxxxx, on the Merger Date: (i) execute and deliver
to the Collateral Agent such amendments to the Master Guarantee and Collateral
Agreement as the Collateral Agent shall deem reasonably necessary or advisable
to grant to the Collateral Agent a Lien on the Capital Stock of such Subsidiary
which is owned by the Borrower or any of its Subsidiaries, (ii) deliver to the
Collateral Agent the certificates representing such Capital Stock, together
with undated stock powers duly executed and delivered in blank, (iii) cause
such new Domestic Subsidiary (A) to become a party to the Master Guarantee and
Collateral Agreement, pursuant to documentation which is in form and substance
reasonably satisfactory to the Collateral Agent, and (B) to take all actions
necessary or advisable to cause the Lien created by such security agreement
to be duly perfected in accordance with all applicable Requirements of Law,
including, without limitation, the filing of Uniform Commercial Code financing
statements in such jurisdictions as may be reasonably requested by the
Collateral Agent (provided that for any Vehicles that are covered by a
certificate of title, the Borrower shall cause such Lien to be duly perfected
in accordance with all applicable Requirements of Law within 90 days after the
acquisition thereof, provided, however, that with respect to Vehicles owned by
Xxxxxx and/or its Domestic Subsidiaries on the Closing Date, the Borrower shall
take such actions within 90 days after the Closing Date or, if later, 10 days
after the Merger Date), and (iv) if requested by the Collateral Agent, deliver
to the Collateral Agent within 30 days of such request legal opinions relating
to the matters described in clauses (i), (ii) and (iii) immediately preceding,
which opinions shall be in form and substance and from counsel reasonably
satisfactory to the Collateral Agent.
(c) With respect to any fee interest in any real property
acquired after the Closing Date by the Borrower or any of its Domestic
Subsidiaries (including any such property owned by Xxxxxx or any of its
Domestic Subsidiaries) having a purchase price (or, if acquired through a
merger or stock acquisition, a fair market value) in excess of $1,000,000,
promptly (and in any event within 90 days after the acquisition thereof or with
respect to real property owned on the Merger Date by Xxxxxx or its Domestic
Subsidiaries on the Merger Date (i) execute and deliver a first priority
mortgage or deed of trust, as the case may be (subordinate only to such
mortgages or deeds of trust as are necessary to permit the Borrower or such
Domestic Subsidiary to purchase such real property but subject to such
easements, rights of way, restrictions and other similar encumbrances as such
property may be subject at the time of acquisition), in favor of the Collateral
Agent, covering such real property, in form and substance reasonably
satisfactory to the Collateral Agent, (ii) provide to the Collateral Agent all
necessary documents reasonably requested by the Collateral Agent to confirm the
Borrower's or its Subsidiaries' ownership of such real property, (iii) if
requested by the Collateral Agent, provide the Lenders with any consents or
estoppels deemed necessary or advisable by the Collateral Agent in connection
with such mortgage or deed of trust, each of the foregoing in form and
substance reasonably satisfactory to the Collateral Agent and (iv) if requested
by the Collateral Agent, deliver to the Collateral Agent legal opinions
relating to the matters described in the preceding clauses (i) and (iii), which
opinions shall be in form and substance and from counsel reasonably
satisfactory to the Collateral Agent. Notwithstanding the foregoing, compliance
shall not be required with the foregoing provision of this paragraph (c) in
respect of any interest in real property which, at the time of acquisition
thereof by the Borrower or its Subsidiary, is subject to a legal or contractual
restriction that would prohibit the granting of a mortgage thereon to the
Collateral Agent; provided, that the aggregate book value of real property
owned by the Borrower and its Subsidiaries so subject may not exceed $7,500,000
at any time.
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(d) With respect to any Foreign Subsidiary created or acquired
after the Closing Date by the Borrower or any of its Domestic Subsidiaries,
promptly (and in any event within 150 days after the acquisition or creation
thereof) (i) execute and deliver to the Collateral Agent such amendments to the
Master Guarantee and Collateral Agreement (or comparable documentation) as the
Collateral Agent deems reasonably necessary or advisable in order to grant to
the Collateral Agent a perfected first priority security interest in the
Capital Stock (except for Liens permitted under Section 7.3) of such new
Foreign Subsidiary which is owned by the Borrower or any of its Domestic
Subsidiaries (provided that in no event shall more than 65% of the Capital
Stock of any such new Subsidiary be required to be so pledged), (ii) deliver to
the Collateral Agent the certificates representing such Capital Stock,
together with undated stock powers, in blank, executed and delivered by a duly
authorized officer of the Borrower or such Subsidiary, as the case may be, and
(iii) if requested by the Collateral Agent, deliver to the Collateral Agent
legal opinions relating to the matters described in the preceding clauses (i)
and (ii), which opinions shall be in form and substance and from counsel
reasonably satisfactory to the Collateral Agent.
(e) With respect to any oil and gas property acquired after
the Closing Date by the Borrower or any of its Domestic Subsidiaries having a
purchase price (or, if acquired through a merger or stock acquisition, a fair
market value) in excess of $1,000,000 and which, after giving effect to such
acquisition and assuming that a perfected first priority Lien thereon were not
granted to the Collateral Agent would result in the Collateral Agent having a
perfected first priority Lien on less than 80% in value (calculated as provided
in Section 4.24) of the reserves contained in all of the oil and gas properties
of the Borrower and its Domestic Subsidiaries, promptly (and in any event
within 30 days after the acquisition thereof) (i) execute and deliver a first
priority oil and gas mortgage (subordinate only to such oil and gas mortgages
as are necessary to permit the Borrower or such Domestic Subsidiary to purchase
such property but subject to such restrictions and other similar encumbrances
as such property may be subject at the time of acquisition), in favor of the
Collateral Agent covering such property, in form and substance reasonably
satisfactory to the Collateral Agent, and (ii) if requested by the Collateral
Agent, deliver to the Collateral Agent within 180 days of such request title
opinions relating to the matters described in the preceding clause reasonably
satisfactory to the Collateral Agent.
6.11 Consummation of Merger. (a) Use its best efforts to
consummate the merger of Midland and Xxxxxx in accordance with the Acquisition
Documentation and the Merger as promptly as practical.
(b) Unless Section 6.11(c) is applicable, within 10 Business
Days after the Closing Date in accordance with applicable Requirements of Law,
cause Xxxxxx to prepare and file with the SEC a preliminary proxy or
information statement relating to the Merger and the Merger Agreement.
Thereafter, cause Xxxxxx to use its best efforts to (i) respond promptly to any
comments made by the SEC with respect to such preliminary proxy statement or
information statement so that a definitive proxy statement or information
statement can be promptly mailed to its shareholders to obtain the necessary
approvals of the Merger and the Merger Agreement within the minimum time period
permitted by applicable Requirements of Law and (ii) duly call and give notice
of, or convene and hold, a special meeting of its shareholders for the purpose
of approving the Merger Agreement.
(c) To the extent that the Borrower and its Subsidiaries have
acquired at least 90% of the outstanding shares of each class of the Capital
Stock of Xxxxxx pursuant to the Tender Offer or otherwise, cause Xxxxxx to take
all necessary and appropriate action to cause the Merger to become effective
within 10 Business Days of such acquisition, without the meeting of the
shareholders of the Borrower, in accordance with applicable Requirements of
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Law.
6.12 Interest Rate Protection. Within 180 days after the
Closing Date, enter into one or more Interest Rate Protection Agreements for an
amount which (when added to the fixed rate Indebtedness of the Borrower and its
Subsidiaries) is at least equal to 50% of Consolidated Total Debt on terms and
conditions satisfactory to the Administrative Agent.
6.13 Subordinated Put Facility. Use reasonable efforts to
cause the issuance of the Senior Subordinated Notes and use the proceeds
thereof to prepay the Put Facility within six months after the Closing Date.
6.14 Post-Closing Actions.
(a) Vehicles.
(i) Within 30 days after the Closing Date,
deliver to the Collateral Agent each document (including,
without limitation, any certificates of title) required by the
Security Documents or under law or reasonably requested by the
Collateral Agent to be delivered to the Collateral Agent or to
be filed, registered or recorded in order to create in favor
of the Collateral Agent, for the benefit of the Lenders, a
perfected Lien on all of the Vehicles listed on Schedule
6.14(a)(i) covered by a certificate of title, prior and
superior in right to any other Person (other than with respect
to Liens expressly permitted by Section 7.3), which documents
shall be in proper form for filing, registration or
recordation in each jurisdiction in which the filing,
registration or recordation thereof is so required or
requested.
(ii) By November 17, 1998, deliver to the
Collateral Agent each document (including, without limitation,
any certificates of title) required by the Security Documents
or under law or reasonably requested by the Collateral Agent
to be delivered to the Collateral Agent or to be filed,
registered or recorded in order to create in favor of the
Collateral Agent, for the benefit of the Lenders, a perfected
Lien on all of the Vehicles listed on Schedule 6.14(a)(ii)
covered by a certificate of title, prior and superior in right
to any other Person (other than with respect to Liens
expressly permitted by Section 7.3), which documents shall be
in proper form for filing, registration or recordation in each
jurisdiction in which the filing, registration or recordation
thereof is so required or requested.
(b) Pledged Securities; Stock Powers.
(i) If the Capital Stock of Transportes is
certificated and possession of such certificate is required in
order to create a duly perfected Lien on such Capital Stock
under Argentine law, the Collateral Agent shall have received
within 150 days of the Closing Date 65% of the Capital Stock
of Transportes pledged pursuant to the Master Guarantee and
Collateral Agreement, together with an undated stock power for
such certificate executed in blank by a duly authorized
officer of the pledgor thereof.
(ii) The Collateral Agent shall have received
within 150 days of the Closing Date an additional 2% of the
Capital Stock of Servicios, pledged pursuant to the Master
Guarantee and Collateral Agreement, together with an undated
stock power for such certificate executed in blank by a duly
authorized
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officer of the pledgor thereof.
SECTION 7. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments
remain in effect, any Loan or Letter of Credit remains outstanding and unpaid
or any other amount is owing to any Lender, the Arranger, the Collateral Agent
or the Administrative Agent hereunder, the Borrower shall not, and, if
applicable, shall not permit any of its Subsidiaries to, directly or
indirectly:
7.1 Financial Condition Covenants.
(a) Consolidated Leverage Ratio. Permit the Consolidated
Leverage Ratio as of any date set forth below to exceed the ratio set forth
below opposite such date:
Consolidated
Date Leverage Ratio
---------- --------------
September 30, 1998 5.25 to 1.00
December 31, 1998 5.00 to 1.00
March 31, 1999 5.00 to 1.00
June 30, 1999 4.75 to 1.00
September 30, 1999 4.75 to 1.00
December 31, 1999 4.50 to 1.00
March 31, 2000 4.25 to 1.00
June 30, 2000 4.25 to 1.00
September 30, 2000 4.25 to 1.00
December 31, 2000 4.00 to 1.00
March 31, 2001 3.50 to 1.00
June 30, 2001 3.50 to 1.00
September 30, 2001 3.50 to 1.00
December 31, 2001 3.50 to 1.00
March 31, 2002 3.50 to 1.00
June 30, 2002 3.00 to 1.00
September 30, 2002 3.00 to 1.00
December 31, 2002 3.00 to 1.00
March 31, 2003 3.00 to 1.00
June 30, 2003 3.00 to 1.00
September 30, 2003 3.00 to 1.00
December 31, 2003 3.00 to 1.00
March 31, 2004 2.50 to 1.00
June 30, 2004 2.50 to 1.00
September 30, 2004 2.50 to 1.00
--------------
(b) Consolidated Interest Coverage Ratio. Permit the
Consolidated Interest Coverage Ratio for any period of four consecutive fiscal
quarters of the Borrower ending as of any date set forth below to be less than
the ratio set forth below opposite such date:
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Consolidated
Interest
Date Coverage Ratio
---------- --------------
December 31, 1998 2.00 to 1.00
March 31, 1999 2.25 to 1.00
June 30, 1999 2.25 to 1.00
September 30, 1999 2.50 to 1.00
December 31, 1999 2.75 to 1.00
March 31, 2000 2.75 to 1.00
June 30, 2000 3.00 to 1.00
September 30, 2000 3.00 to 1.00
December 31, 2000 3.50 to 1.00
March 31, 2001 3.50 to 1.00
June 30, 2001 4.00 to 1.00
September 30, 2001 4.00 to 1.00
December 31, 2001 4.00 to 1.00
March 31, 2002 4.00 to 1.00
June 30, 2002 4.00 to 1.00
September 30, 2002 4.00 to 1.00
March 31, 2003 4.00 to 1.00
June 30, 2003 4.00 to 1.00
September 30, 2003 4.00 to 1.00
December 31, 2003 4.00 to 1.00
March 31, 2004 4.00 to 1.00
June 30, 2004 4.00 to 1.00
September 30, 2004 4.00 to 1.00
; provided, that for the purposes of determining the ratio described above for
the fiscal quarters of the Borrower ending December 31, 1998, March 31, 1999
and June 30, 1999, Consolidated Interest Expense for the relevant period shall
be deemed to equal Consolidated Interest Expense for such fiscal quarter (and,
in the case of the latter two such determinations each previous fiscal quarter
commencing after September 31, 1998) multiplied by 4, 2, and 4/3, respectively.
(c) Consolidated Senior Leverage Ratio. (i) Permit the
Consolidated Senior Leverage Ratio as of any date set forth below to exceed the
ratio set forth below opposite such date:
Consolidated
Date Senior
---------- Leverage Ratio
--------------
September 30, 1998 3.75 to 1.00
December 31, 1998 3.75 to 1.00
March 31, 1999 3.75 to 1.00
June 30, 1999 3.50 to 1.00
September 30, 1999 3.50 to 1.00
December 31, 1999 3.25 to 1.00
March 31, 2000 3.25 to 1.00
June 30, 2000 3.25 to 1.00
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September 30, 2000 3.25 to 1.00
December 31, 2000 2.75 to 1.00
March 31, 2001 2.75 to 1.00
June 30, 2001 2.50 to 1.00
September 30, 2001 2.50 to 1.00
December 31, 2001 2.50 to 1.00
March 31, 2002 2.50 to 1.00
June 30, 2002 2.50 to 1.00
September 30, 2002 2.50 to 1.00
December 31, 2002 2.00 to 1.00
March 31, 2003 2.00 to 1.00
June 30, 2003 2.00 to 1.00
September 30, 2003 2.00 to 1.00
December 31, 2003 2.00 to 1.00
March 31, 2004 2.00 to 1.00
June 30, 2004 2.00 to 1.00
September 30, 2004 2.00 to 1.00
provided that each of the foregoing Consolidated Senior Leverage Ratios shall
be reduced by 0.05 for each $10,000,000 of the Xxxxxx 9-3/8% put and paid in
connection with the Xxxxxx Change of Control; provided that in no event shall
the Consolidated Senior Leverage Ratio be reduced to lower than 2.00 to 1.00.
(d) Consolidated Net Worth. Permit the Consolidated Net Worth
of the Borrower and its Subsidiaries to be less than the sum of (i) 90% of the
Consolidated Net Worth of the Borrower and its Subsidiaries on the Closing
Date, plus (ii) 75% of Consolidated Net Income of the Borrower and its
Subsidiaries (to the extent a positive number) for each fiscal quarter
completed after the Closing Date commencing with the fiscal quarter ending
December 31, 1998, plus (iii) 75% of the Net Cash Proceeds of any offerings or
issuances of Capital Stock of the Borrower or any of its Subsidiaries after the
Closing Date, plus (iv) 75% of the increase in the Consolidated Net Worth of
the Borrower and its Subsidiaries resulting from any conversion of the 1997
Convertible Subordinated Notes or any future convertible indebtedness of the
Borrower and its Subsidiaries.
7.2 Limitation on Indebtedness. Create, incur, assume or
suffer to exist any Indebtedness, except:
(a) Indebtedness of the Borrower under the Loan Documents;
(b) (i) Interim Loans not to exceed $150,000,000 until the
date on which all or part of the Interim Loans are prepaid as provided in
Section 4.16(a) and thereafter Indebtedness under the Put Facility not to
exceed the amount of the Interim Loans on such prepayment date (after giving
effect to such prepayment), (ii) on or after the later of the Merger Loan Date
and the date all or a portion of the Xxxxxx 9-3/8% Notes are put as a result of
a Xxxxxx Change of Control, Senior Subordinated Notes in an aggregate principal
amount not to exceed $150,000,000 (plus, in the case of Senior Subordinated
Notes that are original issue discount notes, an amount equal to the amount of
such discount, provided that the imputed interest represented thereby shall be
in compliance with clause (iii) of the definition thereof) provided the
proceeds thereof are used to prepay the Put Facility or prepay the Loans as
provided in Section 2.10 (and Guarantee Obligations of the Borrower's
Subsidiaries in connection with the foregoing as contemplated hereby) and (iii)
Indebtedness under the Put Facility or Senior Subordinated Notes arising from
the payment of interest by capitalizing such
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interest as additional Interim Loans or, in the case of the Senior Subordinated
Notes, the original issue discount;
(c) Indebtedness (i) of the Borrower to a Wholly Owned
Subsidiary, (ii) of a Domestic Wholly Owned Subsidiary to the Borrower or any
other Subsidiary, (iii) of Servicios to the Borrower or any Subsidiary in an
aggregate principal amount at any time outstanding not to exceed $5,000,000 in
excess of the amount of such Indebtedness outstanding on the date of this
Agreement and (iv) of any Foreign Subsidiary (other than Servicios) to the
Borrower or any Subsidiary in an aggregate principal amount at any time
outstanding (with respect to all such Foreign Subsidiaries of the Borrower) not
to exceed $1,000,000, provided that such Indebtedness referred to in clauses
(iii) and (iv) hereof, if to the Borrower or any Domestic Subsidiary, is
evidenced by a promissory note or promissory notes which has or have been
pledged to the Collateral Agent on terms and conditions reasonably satisfactory
to the Administrative Agent; provided, further, that any such Indebtedness
referred to in this clauses (c) provided to Odessa shall be for capital
expenditure purposes only.
(d) Indebtedness of the Borrower or any Subsidiary incurred to
finance the acquisition or construction of fixed or capital assets (whether
pursuant to a loan, a Financing Lease or otherwise) in an aggregate principal
amount not exceeding as to the Borrower and its Subsidiaries (i) $15,000,000 at
any time outstanding minus (ii) the amount of Indebtedness outstanding under
clauses (g) and (j) of this Section 7.2 and the amount of indebtedness
attributable to sale and leaseback transactions permitted pursuant to Section
7.12;
(e) Indebtedness of the Borrower and its Subsidiaries under
the Convertible Subordinated Debentures and the 1997 Convertible Subordinated
Notes;
(f) Indebtedness outstanding on the date hereof, or incurred
hereafter pursuant to existing commitments or agreements, and, in each case,
listed on Schedule 7.2 and any refinancings, refundings, renewals or extensions
thereof not increasing the principal amount thereof;
(g) Indebtedness of a Person which becomes a Subsidiary after
the date hereof in an aggregate principal amount at any time outstanding not
exceeding (i) $15,000,000, minus (ii) the sum of (A) the amount of Indebtedness
outstanding under clauses (d) and (j) of this Section 7.2 and (B) the amount of
indebtedness attributable to sale and leaseback transactions permitted pursuant
to Section 7.12, provided that (x) such Indebtedness existed at the time such
corporation became a Subsidiary and was not created in anticipation thereof and
(y) immediately after giving effect to the acquisition of such corporation by
the Borrower no Default or Event of Default shall have occurred and be
continuing, and any refinancings, refundings, renewals or extensions thereof
not increasing the principal amount thereof.
(h) Indebtedness constituting deposits to secure the
performance of bids, trade contracts (other than for borrowed money), leases,
statutory obligations, surety and appeal bonds and performance bonds and other
obligations of a like nature that are incurred in the ordinary course of
business, not to exceed $5,000,000 in the aggregate at any time outstanding;
(i) Indebtedness under Interest Rate Protection Agreements and
Hedge Obligations entered into the ordinary course of business for hedging
purposes and not for speculative purposes including, without limitation, the
agreement entered into for purposes of Section 6.12;
(j) Seller Indebtedness in an aggregate principal amount at
any time outstanding
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not exceeding (i) $15,000,000 minus (ii) the sum of (A) the amount of
Indebtedness outstanding under clauses (d) and (g) of this Section 7.2, and any
refinancings, refundings, renewals or extensions thereof not increasing the
principal amount thereof and (B) the amount of indebtedness attributable to
sale and leaseback transactions permitted pursuant to Section 7.12;
(k) Indebtedness in the form of Guarantee Obligations
permitted by Section 7.4;
(l) Indebtedness of Xxxxxx under the Xxxxxx 9-3/8% Notes until
the Merger Date and thereafter Indebtedness of the Borrower under the Xxxxxx
9-3/8% Notes; and
(m) Indebtedness incurred after the Merger Loan Date not
otherwise permitted by the foregoing clauses (a) through (l) in an aggregate
principal amount at any time outstanding of not to exceed $5,000,000.
7.3 Limitation on Liens. Create, incur, assume or suffer to
exist any Lien upon any of its property, assets or revenues, whether now owned
or hereafter acquired, except for:
(a) Liens for taxes not yet due or which are being contested
in good faith by appropriate proceedings, provided that adequate reserves with
respect thereto are maintained on the books of the Borrower or its Subsidiaries
in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's, landlord's or other like Liens arising in the ordinary course of
business which are not overdue for a period of more than 180 days or which are
being contested in good faith by appropriate proceedings and which, in any
case, do not encumber a material amount of the assets of the Borrower and its
Subsidiaries;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security legislation;
(d) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory obligations,
surety and appeal bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not in any case
materially detract from the value of the property subject thereto or materially
interfere with the ordinary conduct of the business of the Borrower or any
Subsidiary;
(f) Liens securing Indebtedness of the Borrower or any
Subsidiary incurred to finance the acquisition or construction of fixed or
capital assets, provided that (i) such Liens shall be created within 180 days
after the acquisition or construction of such fixed or capital assets, (ii)
such Liens do not at any time encumber any property other than the property
financed by such Indebtedness and the proceeds and products thereof, (iii) the
principal amount of Indebtedness secured thereby is not increased and (iv) the
proceeds of the Indebtedness secured by any such Lien shall at no time exceed
100% of the original purchase price of such property;
(g) Liens created pursuant to the Security Documents
(including Liens securing the Put Facility until the Merger Date and Liens
securing the Xxxxxx 9-3/8% Notes on and after the Merger Date);
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(h) Liens in existence on the date hereof listed on Schedule
7.3(h) securing Indebtedness permitted by Section 7.2(f) provided that no such
Lien is spread to cover any additional property after the Closing Date and that
the principal amount of Indebtedness secured thereby is not increased or (ii)
securing Indebtedness which is being repaid on the Closing Date, provided that
such Liens shall be released promptly following the Closing Date;
(i) Liens on the property or assets of a corporation which
becomes a Subsidiary after the date hereof securing Indebtedness permitted by
Section 7.2(g), provided that (i) such Liens existed at the time such
corporation became a Subsidiary and were not created in anticipation thereof,
(ii) any such Lien is not spread to cover any property or assets of such
corporation after the time such corporation becomes a Subsidiary, and (iii) the
principal amount of Indebtedness secured thereby is not increased;
(j) Liens on assets acquired in a Permitted Acquisition
securing Seller Indebtedness incurred in connection with such Permitted
Acquisition;
(k) Liens in favor of lessees on assets leased to such lessees
pursuant to Section 7.6(a); and
(l) the Permitted Exceptions (as defined in the Mortgages).
Notwithstanding the foregoing, until the Merger Date the foregoing limitations
shall not apply to Capital Stock owned by the Borrower or its Subsidiaries
which is Margin Stock to the extent the value of such Margin Stock exceeds 25%
of the value of the assets of the Borrower and its Subsidiaries.
7.4 Limitation on Guarantee Obligations. Create, incur, assume
or suffer to exist any Guarantee Obligation except:
(a) Guarantee Obligations made in the ordinary course of its
business by the Borrower or any Subsidiary in respect of Indebtedness and other
obligations of any of the Borrower or any of its Subsidiaries which
Indebtedness or other obligations are otherwise not prohibited under this
Agreement;
(b) the Guarantee Obligations of the Loan Parties pursuant to
the Master Guarantee and Collateral Agreement;
(c) the Guarantee Obligations of the Subsidiaries of the
Borrower under the Indenture and the 1997 Indenture;
(d) the Guarantee Obligations of the Subsidiaries under the
Xxxxxx Indenture;
(e) Guarantees Obligations of the Subsidiaries of the Borrower
in respect of the holders of the Put Facility and the Senior Subordinated Notes
provided that on and after the Merger Date such Guarantee Obligations are
subordinated to the Obligations to the same extent as the obligations of the
Borrower under Put Facility and the Senior Subordinated Notes are so
subordinated;
(f) Guarantee Obligations (in respect of obligations not
constituting Indebtedness) arising under agreements entered into by the
Borrower or any Subsidiary in the ordinary course of business; and
(g) Guarantee Obligations of the Borrower or its Subsidiaries
in respect of
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Indebtedness of its officers, directors and employees in an aggregate principal
amount not to exceed, at any time outstanding, $5,000,000 minus the amount of
loans or advances outstanding under Section 7.9(i).
7.5 Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign,
transfer or otherwise dispose of, all or substantially all of its property,
business or assets, or make any material change in its present method of
conducting business, except:
(a) any Subsidiary of the Borrower may be merged or combined
with or into the Borrower (provided that the Borrower shall be the continuing
or surviving corporation) or with or into any one or more Subsidiaries of the
Borrower provided that in the case of any such transaction involving a Wholly
Owned Subsidiary, such Wholly Owned Subsidiary shall be the continuing or
surviving corporation;
(b) any Subsidiary may be dissolved, liquidated or wound up or
may sell, lease, assign, transfer or otherwise dispose of any or all of its
assets (upon voluntary liquidation or otherwise) to Borrower or any Domestic
Wholly Owned Subsidiary of the Borrower, and the Borrower may sell, lease,
assign, transfer or otherwise dispose of any or all of its assets to any wholly
owned Subsidiary of the Borrower which is a party to the Master Guarantee and
Collateral Agreement;
(c) any Subsidiary may sell, lease, transfer or otherwise
dispose of any or all of its assets so long as (i) such transaction does not
violate Section 7.6 and (ii) the Borrower complies with the provisions of
Section 2.10(d) with respect to such transaction;
(d) the merger of Midland into Xxxxxx in accordance with the
Acquisition Documentation; and
(e) the Merger may be consummated in accordance with the terms
of the Merger Agreement.
7.6 Limitation on Sale of Assets. Convey, sell, lease, assign,
transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, receivables and leasehold interests), whether
now owned or hereafter acquired, or, in the case of any Subsidiary of the
Borrower, issue or sell any shares of such Subsidiary's Capital Stock to any
Person other than the Borrower or any Domestic Wholly Owned Subsidiary of the
Borrower, except:
(a) the sale, lease or other disposition of any property in
the ordinary course of business, including immaterial real property or
equipment and obsolete or worn out property, provided that (other than
inventory and light vehicles) the aggregate proceeds received from all assets
so sold, leased or disposed of in any fiscal year shall not exceed 5% of the
Borrower's Consolidated Net Worth as of the end of the immediately preceding
fiscal year;
(b) the sale of inventory and light vehicles in the ordinary
course of business;
(c) as permitted by Section 7.5(b); and
(d) the sale of Odessa (the "Significant Disposition").
To the extent the Required Lenders waive the provisions of this Section 7.6
with respect to the
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sale of any Collateral, or any Collateral is sold as permitted by this Section
7.6, such Collateral in each case shall be sold free and clear of the Liens in
favor of the Collateral Agent created by the Security Documents, and the
Collateral Agent shall take such actions as it deems appropriate in connection
therewith or may be reasonably requested by the Borrower to evidence such Lien
release, in each case at the Borrower's expense. Notwithstanding the foregoing,
until the Merger Date the foregoing limitations shall not apply to Capital
Stock owned by the Borrower or its Subsidiaries which is Margin Stock to the
extent the value of such Margin Stock exceeds 25% of the value of the assets of
the Borrower and its Subsidiaries.
7.7 Limitation on Restricted Payments. Declare or pay any
dividend (other than dividends payable solely in common stock of the Person
making such dividend) on, or make any payment on account of, or set apart
assets for a sinking or other analogous fund for, the purchase, redemption,
defeasance, retirement or other acquisition of, any shares of any class of
Capital Stock (including but not limited to in respect of any preferred Capital
Stock outstanding or dividends accumulated thereon on the Closing Date) of the
Borrower or any of its Subsidiaries or any warrants or options to purchase any
such Capital Stock or any of the Convertible Subordinated Debentures, 1997
Convertible Subordinated Notes, the Put Facility or the Senior Subordinated
Notes, whether now or hereafter outstanding, or make any other distribution in
respect thereof or purchase any thereof, either directly or indirectly, whether
in cash or property or in obligations of the Borrower or any Subsidiary, except
that the Borrower (a) may make open market purchases of its outstanding common
stock in an aggregate amount during the term of this Agreement not to exceed
$10,000,000, after the occurrence of the Minimum Equity Event, (b) may (i) make
scheduled payments of interest in respect of the Convertible Subordinated
Debentures, the 1997 Convertible Subordinated Notes, the Put Facility and the
Senior Subordinated Notes and may make prepayments of the Put Facility to the
extent provided in this Agreement, and (ii) if permitted by Section 7.10,
repurchase, redeem or defease the Convertible Subordinated Debentures after at
least 90% of the Convertible Subordinated Debentures have been converted or
repurchase, redeem or defease the 1997 Convertible Subordinated Notes after at
least 90% of the 1997 Convertible Subordinated Notes have been converted and
(c) may make cash payments required pursuant to Sections 11.1 and 11.3 of the
Indenture in connection with conversions of the Convertible Subordinated
Debentures or Section 10.3 of the 1997 Indenture in connection with conversions
of the 1997 Convertible Subordinated Notes, provided that (i) no more than 40%
of the aggregate consideration to any holder of the 1997 Convertible
Subordinated Notes upon conversion thereof may be in cash, (ii) after giving
effect to such payment and conversion, no Default or Event of Default shall be
continuing and (iii) after giving pro forma effect to such payment and
conversion as if it had occurred on the last day of the most recently ended
fiscal quarter, the Consolidated Leverage Ratio would not exceed 2.50 to 1.00.
Notwithstanding the foregoing, any Subsidiary of the Borrower may pay dividends
and other distributions to the Borrower and Servicios may pay dividends to its
shareholders.
7.8 Limitation on Capital Expenditures. Make or commit to make
any Capital Expenditure except for expenditures in the ordinary course of
business not exceeding, in the aggregate for the Borrower and its Subsidiaries
during any of the fiscal years of the Borrower set forth below, an amount equal
to the sum of (i) the amount set forth below opposite such fiscal year plus
(ii) an additional amount for any Person or business unit acquired by the
Borrower in a Permitted Acquisition since the Closing Date, such amount being
calculated as 10% of the net revenues, calculated in accordance with GAAP, of
such Person or business unit during such fiscal year (or, if such Person or
business unit was acquired after the beginning of such fiscal year, such
revenues for the portion of such fiscal year during which such Person or
business unit was owned by the Borrower):
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Fiscal Year Ending Amount
------------------ ------
1999 $62,000,000
2000 $64,000,000
2001 $66,000,000
2002 $68,000,000
2003 $70,000,000
2004 $72,000,000
Any amount permitted by the foregoing provision to be expended as Capital
Expenditures in any fiscal year and not so expended may be carried over for
expenditure in the immediately succeeding fiscal year.
7.9 Limitation on Investments, Loans and Advances. Make any
advance, loan, extension of credit or capital contribution to, or purchase any
stock, bonds, notes, debentures or other securities of or any assets
constituting a business unit of, or make any other investment in, any Person,
except:
(a) extensions of trade credit in the ordinary course of
business;
(b) investments in Cash Equivalents;
(c) acquisitions listed on Schedule 7.9(c) consummated within
60 days of the Closing Date;
(d) Permitted Acquisitions after the Merger Loan Date;
(e) loans by the Borrower or any Subsidiary to Servicios in an
aggregate principal amount at any time outstanding not to exceed the amount
thereof outstanding on the date of this Agreement plus $5,000,000;
(f) as permitted by subsection 7.2(c)(iv);
(g) investments by the Borrower in a Domestic Wholly Owned
Subsidiary and investments by any Subsidiary in the Borrower and in one or more
Domestic Wholly Owned Subsidiaries, provided, that any such investments
provided to Odessa shall be for capital expenditure purposes only;
(h) expense accounts for, and other expense advances to, its
directors, officers and employees in the ordinary course of business;
(i) loans and advances to its officers and employees in an
aggregate amount not to exceed, at any time outstanding, $5,000,000 minus the
amount of Guarantee Obligations outstanding under Section 7.4(g).
(j) the Borrower's purchase or redemption of its own Capital
Stock to the extent permitted by Section 7.7;
(k) current trade and customer accounts receivable that are
for goods furnished or services rendered in the ordinary course of business and
that are payable in accordance with Borrower's or any Subsidiary's customary
trade terms;
(l) Interest Rate Protection Agreements to the extent
permitted under this Agreement, and Hedge Agreements entered into in the
ordinary course of business for
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hedging purposes and not for speculative purposes;
(m) the Borrower may repurchase its Capital Stock and/or
options to purchase such stock held by directors, officers and employees of the
Borrower or any Subsidiary upon the death, disability, retirement or
termination of such directors, officers or employees or the exercise of such
options, or from the shareholders of Borrower so long as the purpose is to
acquire stock for reissuance to new employees of Borrower and its Subsidiaries;
provided, that the amount expended for such purposes shall not exceed
$1,000,000 in any fiscal year or $2,500,000 while this Agreement is in effect;
(n) the Borrower and its Subsidiaries may acquire and own
investments (including Indebtedness and other obligations) received in
connection with the bankruptcy or reorganization of suppliers and customers and
in settlement of delinquent obligations of, and other disputes with, customers
and suppliers arising in the ordinary course of business;
(o) investments acquired by the Borrower and its Subsidiaries
in connection with Permitted Acquisitions after the Merger Loan Date;
(p) investments acquired by the Borrower and its Subsidiaries
in connection with acquisitions listed on Schedule 7.9(c) made within 60 days
of the Closing Date;
(q) the Borrower's current investment in the Argent Classic
Convertible Arbitrage Fund L.P; and
(r) in connection with the consummation of the Acquisition
pursuant to the Acquisition Documentation.
7.10 Limitation on Optional Payments and Modifications of Debt
Instruments and Organizational Documentation, etc. (a) Make any optional
payment or optional prepayment on or redemption or purchase of any material
Indebtedness (other than the Loans) or preferred Capital Stock including,
without limitation, the Convertible Subordinated Debentures, the 1997
Convertible Subordinated Notes, the Put Facility, the Xxxxxx Notes and the
Senior Subordinated Notes, (b) amend, modify or change, or consent or agree to
any amendment, modification or change to any of the terms (i) the Put Facility
(other than any such amendment, modification or change to the terms of the
Interim Loans such that would satisfy in all respects the definition of "Senior
Subordinated Notes" contained in Section 1.1), the Senior Subordinated Notes or
the Acquisition Documents without the consent of the Required Lenders or (ii)
the Xxxxxx Notes without the consent of the Administrative Agent, or (c) amend,
modify or change in any material respect, or consent or agree to any amendment,
modification, or change in any material respect to the terms of (i) any of its
capitalization or organizational documents (including but not limited to in
respect of any preferred Capital Stock of any Loan Party), (ii) any
Indebtedness, or (iii) a material contract, to the extent such amendment,
modification or change could reasonably be expected to have a Material Adverse
Effect, or be materially adverse to the Lenders except that, (i) after 90% of
the original outstanding principal amount of Convertible Subordinated
Debentures have been converted into common stock of the Borrower, the Borrower
may, at any time when no Default or Event of Default has occurred and is
continuing, repurchase, redeem or defease the remaining outstanding Convertible
Subordinated Debentures and, after 90% of the original outstanding principal
amount of 1997 Convertible Subordinated Notes have been converted into common
stock of the Borrower, the Borrower may, at any time when no Default or Event
of Default has occurred and is continuing, repurchase or redeem the remaining
outstanding 1997 Convertible Subordinated Notes; provided that the Borrower may
not repurchase, redeem or defease such Convertible Subordinated Debentures at
any time when the Consolidated Leverage Ratio is or,
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after giving effect to such repurchase or redemption, would be, greater than
3.75, (ii) the Interim Loans may be prepaid as provided for in Section 2.10(h)
or 4.16(a) and the Put Facility may be prepaid as provided in Sections
2.10((a), 2.10(b) and 6.13, (iii) payment may be made to the holders of Xxxxxx
9-3/8% Notes pursuant to Section 4.16(a)(iv) and (iv) at any time when the
aggregate principal amount of the remaining outstanding Xxxxxx 9-3/8% Notes is
$7,500,000 or less and no Default or Event of Default has occurred and is
continuing, the Borrower may repurchase, redeem, defease or otherwise prepay
such Xxxxxx 9-3/8% Notes provided that any premium or other additional
compensation to be paid in connection therewith is on terms reasonably
acceptable to the Administrative Agent.
7.11 Limitation on Transactions with Affiliates. Enter into
any transaction, including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service, with any Affiliate (other
than the Borrower) unless such transaction (a) is otherwise permitted under
this Agreement, and (b) is upon fair and reasonable terms no less favorable to
the Borrower or such Subsidiary, as the case may be, than it would obtain in a
comparable arm's length transaction with a Person which is not an Affiliate;
provided, that any such transaction involving more than $5,000,000 must be
approved by a majority of the disinterested members of the Borrower's Board of
Directors.
7.12 Limitation on Sales and Leasebacks. Enter into any
arrangement with any Person providing for the leasing by the Borrower or any of
its Subsidiaries of real or personal property which has been or is to be sold
or transferred by the Borrower or such Subsidiary to such Person or to any
other Person to whom funds have been or are to be advanced by such Person on
the security of such property or rental obligations of the Borrower or such
Subsidiary, if, after giving effect thereto, the amount of all indebtedness
attributable to transactions consummated pursuant to this Section 7.12, plus
the amount of Indebtedness outstanding pursuant to clause (d), (g) and (j) of
Section 7.2, would exceed $15,000,000.
7.13 Limitation on Change of Fiscal Year. Permit the fiscal
year of the Borrower to change more than once during the lifetime of this
Agreement; provided, that such change is to a fiscal year ending the next
December 31 after such change.
7.14 Limitation on Negative Pledge Clauses. Enter into with
any Person any agreement, other than (a) this Agreement and the other Loan
Documents, (b) the Put Facility, (c) the Senior Subordinated Notes, (d) the
Xxxxxx Indenture and (e) any industrial revenue bonds, purchase money Liens or
Financing Leases permitted by this Agreement (in which cases, any prohibition
or limitation shall only be effective against the assets financed thereby)
which prohibits or limits the ability of the Borrower or any of its
Subsidiaries to create, incur, assume or suffer to exist any Lien upon any of
its property, assets or revenues, whether now owned or hereafter acquired.
7.15 Limitation on Lines of Business. Enter into any business,
either directly or through any Subsidiary, except for those businesses in which
the Borrower and its Subsidiaries are engaged on the date of this Agreement or
which are directly related thereto including any business in the oil and gas
well service industry, provided that Odessa shall not engage in any business,
except for those businesses in which it is engaged on the date of this
Agreement.
7.16 Limitation on Consolidated Lease Expense. Permit
Consolidated Lease Expense for any fiscal year of the Borrower and its
Subsidiaries to exceed $20,000,000.
SECTION 8. EVENTS OF DEFAULT
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If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Loan
or Reimbursement Obligation when due in accordance with the terms hereof; or
the Borrower shall fail to pay any interest on any Loan or Reimbursement
Obligation, or any other amount payable hereunder or under any other Loan
Document, within three days after any such interest or other amount becomes due
in accordance with the terms hereof; or
(b) Any representation or warranty made or deemed made by the
Borrower or any other Loan Party herein or in any other Loan Document or which
is contained in any certificate, document or financial or other statement
furnished by it at any time under or in connection with this Agreement or any
such other Loan Document shall prove to have been incorrect in any material
respect on or as of the date made or deemed made; or
(c) The Borrower or any other Loan Party shall default in the
observance or performance of any agreement contained in Section 7; or
(d) The Borrower or any other Loan Party shall default in the
observance or performance of any other agreement contained in this Agreement or
any other Loan Document (other than as provided in paragraphs (a) through (c)
of this Section 8), and such default shall continue unremedied for a period of
30 days; or
(e) The Borrower or any of its Subsidiaries shall (i) default
in making any payment of any principal of any Indebtedness (including, without
limitation, any Guarantee Obligation) or Interest Rate Protection Agreement
Obligation on the scheduled or original due date with respect thereto; or (ii)
default in making any payment of any interest on any such Indebtedness beyond
the period of grace, if any, provided in the instrument or agreement under
which such Indebtedness or Interest Rate Protection Agreement Obligation was
created; or (iii) default in the observance or performance of any other
agreement or condition relating to any such Indebtedness or Interest Rate
Protection Agreement Obligation or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or condition is to
cause, or to permit the holder or beneficiary of such Indebtedness (or a
trustee or agent on behalf of such holder or beneficiary) to cause, with the
giving of notice if required, such Indebtedness to become due prior to its
stated maturity or (in the case of any such Indebtedness constituting a
Guarantee Obligation or Interest Rate Protection Agreement Obligation) to
become payable; provided that a default, event or condition described in clause
(i), (ii) or (iii) of this paragraph (e) shall not at any time constitute an
Event of Default under this Agreement unless, at such time, one or more
defaults, events or conditions of the type described in clauses (i), (ii) and
(iii) of this paragraph (e) shall have occurred and be continuing with respect
to Indebtedness and/or Guarantee Obligations and/or Interest Rate Protection
Agreement Obligations of the Borrower and its Subsidiaries the outstanding
principal amount of which exceeds in the aggregate $5,000,000; or
(f) (i) The Borrower or any of its Subsidiaries (other than
Servicios) shall commence any case, proceeding or other action (A) under any
existing or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an
order for relief entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to it or its debts, or (B) seeking appointment of a receiver, trustee,
custodian, conservator or other similar official for it or for all or any
substantial part of its assets, or the Borrower or any of its Subsidiaries
(other than
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Servicios) shall make a general assignment for the benefit of its creditors; or
(ii) there shall be commenced against the Borrower or any of its Subsidiaries
(other than Servicios) any case, proceeding or other action of a nature
referred to in clause (i) above which (A) results in the entry of an order for
relief or any such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 60 days; or (iii) there shall be
commenced against the Borrower or any of its Subsidiaries (other than
Servicios) any case, proceeding or other action seeking issuance of a warrant
of attachment, execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of an order for any
such relief which shall not have been vacated, discharged, or stayed or bonded
pending appeal within 60 days from the entry thereof; or (iv) the Borrower or
any of its Subsidiaries (other than Servicios) shall take any action in
furtherance of, or indicating its consent to, approval of, or acquiescence in,
any of the acts set forth in clause (i), (ii), or (iii) above; or (v) the
Borrower or any of its Subsidiaries (other than Servicios) shall generally not,
or shall be unable to, or shall admit in writing its inability to, pay its
debts as they become due; or
(g) (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, (ii) any "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived, shall exist with respect to any
Plan or any Lien in favor of the PBGC or a Plan shall arise on the assets of
any Loan Party or any Commonly Controlled Entity, (iii) a Reportable Event
shall occur with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to terminate, any
Single Employer Plan, which Reportable Event or commencement of proceedings or
appointment of a trustee is, in the reasonable opinion of the Required Lenders,
likely to result in the termination of such Plan for purposes of Title IV of
ERISA, (iv) any Single Employer Plan shall terminate for purposes of Title IV
of ERISA, (v) any Loan Party or any Commonly Controlled Entity shall, or in the
reasonable opinion of the Required Lenders is likely to, incur any liability in
connection with a withdrawal from, or the Insolvency or Reorganization of, a
Multiemployer Plan or (vi) any other event or condition shall occur or exist
with respect to a Plan; and in each case in clauses (i) through (vi) above,
such event or condition, together with all other such events or conditions, if
any, could, in the sole judgment of the Required Lenders, reasonably be
expected to have a Material Adverse Effect; or
(h) One or more judgments or decrees shall be entered against
the Borrower or any of its Subsidiaries (other than Servicios) involving in the
aggregate a liability (not paid or fully covered by insurance) of $5,000,000 or
more, and all such judgments or decrees shall not have been vacated,
discharged, stayed or bonded pending appeal within 60 days from the entry
thereof; or
(i) Any of the Security Documents shall cease, for any reason,
to be in full force and effect, or any Loan Party or any Affiliate of any Loan
Party shall so assert, or any material Lien created by any of the Security
Documents shall cease to be enforceable and of the same effect and priority
purported to be created thereby; or
(j) Any Change of Control shall occur; or
(k) The Merger shall fail to be consummated within 150 days
after the Closing Date;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under
this Agreement and the other Loan Documents (including, without
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limitation, all amounts of L/C Obligations, whether or not the beneficiaries of
the then outstanding Letters of Credit shall have presented the documents
required thereunder) shall immediately become due and payable, and (B) if such
event is any other Event of Default, either or both of the following actions
may be taken: (i) with the consent of the Majority Facility Lenders, in respect
of a Facility, the Administrative Agent may, or upon the request of the
Majority Revolving Facility Lenders, the Administrative Agent shall, by notice
to the Borrower declare the Commitments, under such Facility, to be terminated
forthwith, whereupon the Revolving Commitments shall immediately terminate; and
(ii) with the consent of the Required Lenders, the Administrative Agent may, or
upon the request of the Required Lenders, the Administrative Agent shall, by
notice to the Borrower declare the Commitments to be terminated forthwith,
whereupon the Commitments shall immediately terminate; and (ii) with the
consent of the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent shall, by notice to
the Borrower, declare the Loans hereunder (with accrued interest thereon) and
all other amounts owing under this Agreement and the other Loan Documents
(including, without limitation, all amounts of L/C Obligations, whether or not
the beneficiaries of the then outstanding Letters of Credit shall have
presented the documents required thereunder) to be due and payable forthwith,
whereupon the same shall immediately become due and payable.
With respect to all Letters of Credit with respect to which
presentment for honor shall not have occurred at the time of an acceleration
pursuant to this paragraph, the Borrower shall at such time deposit in a cash
collateral account opened by the Administrative Agent an amount equal to the
aggregate then undrawn and unexpired amount of such Letters of Credit. Amounts
held in such cash collateral account shall be applied by the Administrative
Agent to the payment of drafts drawn under such Letters of Credit, and the
unused portion thereof after all such Letters of Credit shall have expired or
been fully drawn upon, if any, shall be applied to repay other obligations of
the Borrower hereunder and under the other Loan Documents. After all such
Letters of Credit shall have expired or been fully drawn upon, all
Reimbursement Obligations shall have been satisfied and all other obligations
of the Borrower hereunder and under the other Loan Documents shall have been
paid in full, the balance, if any, in such cash collateral account shall be
returned to the Borrower (or such other Person as may be lawfully entitled
thereto). Except as expressly provided above in this Section, presentment,
demand, protest and all other notices of any kind are hereby expressly waived.
SECTION 9. THE AGENTS
9.1 Appointment. Each Lender hereby irrevocably designates and
appoints the Agents as the agents of such Lender under this Agreement and the
other Loan Documents, and each Lender irrevocably authorizes each Agent, in
such capacity, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to such Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, no Agent shall have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against any Agent.
9.2 Delegation of Duties. Each Agent may execute any of its
duties under this Agreement and the other Loan Documents by or through agents
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. No Agent shall be responsible for the
negligence or misconduct of any agents or attorneys in-fact
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selected by it with reasonable care.
9.3 Exculpatory Provisions. Neither the Agents nor any of
their officers, directors, employees, agents, attorneys-in-fact or Affiliates
shall be (i) liable for any action lawfully taken or omitted to be taken by it
or such Person under or in connection with this Agreement or any other Loan
Document (except to the extent that any of the foregoing are found by a final
and nonappealable decision of a court of competent jurisdiction to have
resulted from its or such Person's own gross negligence or willful misconduct)
or (ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by any Loan Party or any officer
thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for
in, or received by any Agent under or in connection with, this Agreement or any
other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or the Notes or any other Loan
Document or for any failure of any Loan Party a party thereto to perform its
obligations hereunder or thereunder. No Agent shall be under any obligation to
any Lender to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this Agreement or any
other Loan Document, or to inspect the properties, books or records of any Loan
Party.
9.4 Reliance by Agents. Each Agent shall be entitled to rely,
and shall be fully protected in relying, upon any Note, writing, resolution,
notice, consent, certificate, affidavit, letter, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to
be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Borrower), independent accountants and other
experts selected by such Agent. The Agents may deem and treat the payee of any
Note as the owner thereof for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent. Each Agent shall be fully justified in failing or
refusing to take any action under this Agreement or any other Loan Document
unless it shall first receive such advice or concurrence of the Required
Lenders (or, if so specified by this Agreement, all Lenders) as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action, provided that in no event
shall the Lenders be obligated to indemnify the Agents for any amounts
described in the proviso to Section 9.7. Each Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and the
other Loan Documents in accordance with a request of the Required Lenders (or,
if so specified by this Agreement, all Lenders), and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Lenders and all future holders of the Notes.
9.5 Notice of Default. No Agent shall be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless such Agent has received written notice from a Lender or the
Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event
that the Administrative Agent receives such a notice, the Administrative Agent
shall give notice thereof to the Lenders. The Administrative Agent and the
Collateral Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Lenders (or,
if so specified by this Agreement, all Lenders); provided that unless and until
the Administrative Agent or the Collateral Agent shall have received such
directions, the Administrative Agent or the Collateral Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Lenders.
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9.6 Non-Reliance on Agents and Other Lenders. Each Lender
expressly acknowledges that neither any Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates has made any
representations or warranties to it and that no act by the Agents hereafter
taken, including any review of the affairs of a Loan Party or any Affiliate of
a Loan Party, shall be deemed to constitute any representation or warranty by
any Agent to any Lender. Each Lender represents to each Agent that it has,
independently and without reliance upon any Agent or any other Lender, and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and
their Affiliates and made its own decision to make its Loans hereunder and
enter into this Agreement. Each Lender also represents 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 credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of the Loan Parties and their Affiliates. Except for notices,
reports and other documents expressly required to be furnished to the Lenders
by the Administrative Agent hereunder, no Agent shall have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of any Loan Party or any Affiliate of
a Loan Party which may come into the possession of such Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates.
9.7 Indemnification. The Lenders agree to indemnify each Agent
in its capacity as such (to the extent not reimbursed by the Borrower and
without limiting the obligation of the Borrower to do so), ratably according to
their respective Commitments, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the Notes)
be imposed on, incurred by or asserted against any Agent in any way relating to
or arising out of, the Commitments, this Agreement, any of the other Loan
Documents or any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or any action taken or omitted
by any Agent under or in connection with any of the foregoing; provided that no
Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements which are found by a final and nonappealable decision
of a court of competent jurisdiction to have resulted from such Agent's gross
negligence or willful misconduct. The agreements in this Section 9.7 shall
survive the payment of the Notes and all other amounts payable hereunder.
9.8 Agents in Their Individual Capacities. Each Agent and its
Affiliates may make loans to, accept deposits from and generally engage in any
kind of business with any Loan Party as though such Agent were not an Agent
hereunder and under the other Loan Documents. With respect to its Loans made or
renewed by it and any Note issued to it and with respect to any Letter of
Credit issued or participated in by it, each Agent shall have the same rights
and powers under this Agreement and the other Loan Documents as any Lender and
may exercise the same as though it were not an Agent, respectively, and the
terms "Lender" and "Lenders" shall include each Agent in their individual
capacities.
9.9 Successor Agents. The Administrative Agent or the
Collateral Agent may resign as Administrative Agent or Collateral Agent, as the
case may be, upon 10 days' notice to the Lenders. If the Administrative Agent
or the Collateral Agent shall resign as Administrative Agent or Collateral
Agent under this Agreement and the other Loan Documents, then the Required
Lenders shall appoint from among the Lenders a successor agent in such
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capacity, which successor agent, so long as no Default or Event of Default
shall have occurred and be continuing, shall have been approved by the Borrower
(which approval shall not be unreasonably withheld or delayed), whereupon such
successor agent shall succeed to the rights, powers and duties of the
Administrative Agent or the Collateral Agent, as the case may be, hereunder.
Effective upon such appointment and approval, the terms "Administrative Agent"
and "Collateral Agent" shall mean such successor agent, and the former
Administrative Agent's or Collateral Agent's rights, powers and duties as such
shall be terminated, without any other or further act or deed on the part of
such former Administrative Agent or Collateral Agent or any of the parties to
this Agreement or any holders of the Notes. After any retiring Agent's
resignation as Agent, the provisions of this Section 9 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement and the other Loan Documents.
SECTION 10. MISCELLANEOUS
10.1 Amendments and Waivers. Neither this Agreement, any other
Loan Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 10.1. The
Required Lenders and each Loan Party which is party to the relevant Loan
Documents may, or, with the written consent of the Required Lenders, the
Administrative Agent and each Loan Party which is a party to the relevant Loan
Document may, from time to time, (a) enter into written amendments, supplements
or modifications hereto and to the other Loan Documents for the purpose of
adding any provisions to this Agreement or the other Loan Documents or changing
in any manner the rights of the Lenders or of the Loan Parties hereunder or
thereunder or (b) waive, on such terms and conditions as the Required Lenders
or the Administrative Agent, as the case may be, may specify in such
instrument, any of the requirements of this Agreement or the other Loan
Documents or any Default or Event of Default and its consequences; provided
that no such waiver and no such amendment, supplement or modification shall (i)
forgive the principal amount of any Loan or any L/C Obligation, extend the
scheduled date of any amortization payment in respect of any Term Loan or
extend the final scheduled date of maturity of any Loan, or reduce the stated
rate of any interest, fee or letter of credit commission payable hereunder or
extend the scheduled date of any payment thereof or increase the amount or
extend the expiration date of any Lender's Commitment, or waive any mandatory
prepayment or make any change in the application of any prepayment of the Loans
specified in Section 2.16(b) and (c) in each case without the consent of each
Lender directly affected thereby, (ii) extend the scheduled date or reduce the
amount of any reduction of the Revolving Commitments referred to in Section
2.4(c) without the consent of each Lender directly affected thereby, (iii)
amend, modify or waive any provision of this Section 10.1 or reduce any
percentage specified in the definition of Required Lenders or Required
Prepayment Lenders, or consent to the assignment or transfer by any Loan
Party of any of its rights and obligations under this Agreement and the other
Loan Documents or release all or a substantial portion of the Collateral (other
than in connection with any sale or other disposition of assets permitted by
Section 7.6) or any guarantee of the Obligations, in each case, without the
written consent of all the Lenders, (iv) reduce the percentage specified in the
definition of Majority Facility Lender with respect to any Facility without the
written consent of all the Lenders under such Facility, (v) amend, modify or
waive any provision of Section 9 without the written consent of the Agents, or
(vi) amend, modify or waive any provision of Section 3 without the written
consent of the Issuing Lender. Any such waiver and any such amendment,
supplement or modification shall apply equally to each of the Lenders and shall
be binding upon the Loan Parties, the Lenders, the Agents and all future
holders of the Notes. In the case of any waiver, the Loan Parties, the Lenders
and the Agents shall be restored to their former position and rights hereunder
and under the other Loan Documents, and any Default or Event
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of Default waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event of Default or
impair any right consequent thereon.
10.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice,
when received, addressed as follows in the case of the Borrower, the
Administrative Agent, the Collateral Agent and the Arranger, and as set forth
in Schedule 1.1A in the case of the Lenders, or to such other address as may be
hereafter notified by the respective parties hereto and any future holders of
the Notes:
The Borrower: Key Energy Group, Inc.
Xxx Xxxxx Xxxxxx, Xxxxx Xxxxx
Xxxx Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xx. Xxxxxxx X. XxXxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
The Administrative
Agent: PNC Bank, National Association
One PNC Plaza, Third Floor
000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Xx. Xxxxxx Xxxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
with a copy to: PNC Bank, National Association
One PNC Plaza, Fourth Floor Annex
000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Xx. Xxxxxx Xxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
The Collateral
Agent: Norwest Bank Texas, N.A.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Mr. Xxxx XxXxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders pursuant to Section 2.5, 2.8, 2.9 or 2.11 shall not be effective
until received. Any notice or delivery to or from or consent required of the
Borrower hereunder or pursuant to any other Loan Document may be made to or by
the Borrower.
10.3 No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of any Agent or any Lender, any right,
remedy, power or privilege hereunder or under the other Loan Documents shall
operate as a waiver thereof; nor shall any
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single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and privileges
herein provided are cumulative and not exclusive of any rights, remedies,
powers and privileges provided by law.
10.4 Survival. All representations and warranties made
hereunder, in the other Loan Documents and in any document, certificate or
statement delivered pursuant hereto or in connection herewith shall survive the
execution and delivery of this Agreement and the Notes and the making of the
Loans hereunder.
10.5 Payment of Expenses and Taxes. The Borrower agrees (a) to
pay or reimburse the Agents for all their reasonable out-of-pocket costs and
expenses incurred in connection with the development, preparation and execution
of, and any amendment, supplement or modification to, this Agreement and the
other Loan Documents and any other documents prepared in connection herewith or
therewith, and the consummation and administration of the transactions
contemplated hereby and thereby, including, without limitation, the reasonable
fees and disbursements of counsel (including any local counsel) to the Agents,
(b) to pay or reimburse each Lender and each of the Agents for all its costs
and expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the other Loan Documents and any such other
documents, including, without limitation, the fees and disbursements of counsel
(including the allocated fees and expenses of in-house counsel) to each Lender
and counsel to the Agents, (c) to pay, indemnify, and hold each Lender and each
Agent harmless from, any and all recording and filing fees and any and all
liabilities with respect to, or resulting from any delay in paying, stamp,
excise and other taxes, if any, which may be payable or determined to be
payable in connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, the other Loan Documents and any such other documents, and (d)
to pay, indemnify, and hold each Lender and each Agent and their respective
officers, directors, trustees, employees, affiliates, agents and controlling
persons (each, an "indemnitee") harmless from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever with
respect to the execution, delivery, enforcement, performance and administration
of this Agreement, the other Loan Documents and any such other documents,
including, without limitation, any of the foregoing relating to the use of
proceeds of the Loans or the violation of, noncompliance with or liability
under, any Environmental Law applicable to the Borrower, any of its
Subsidiaries, any of its Excluded Subsidiaries or any of the Properties (all
the foregoing in this clause (d), collectively, the "indemnified liabilities"),
provided that the Borrower shall have no obligation hereunder to any indemnitee
with respect to indemnified liabilities to the extent such indemnified
liabilities are found by a final and nonappealable decision of a court of
competent jurisdiction to have resulted from the gross negligence or willful
misconduct of such indemnitee. Without limiting the foregoing, and to the
extent permitted by applicable law, the Borrower agrees not to assert, and
hereby waives, and to cause each of its Subsidiaries not to assert and to so
waive, all rights for contribution or any other rights of recovery with respect
to all claims, demands, penalties, fines, liabilities, settlements, damages,
costs and expenses of whatever kind or nature, under or related to
Environmental Laws, that any of them might have by statute or otherwise against
any Indemnitee. The agreements in this Section 10.5 shall survive repayment of
the Notes and all other amounts payable hereunder and the termination of the
Commitments and, in the case of any Lender that may assign any interest in its
Commitments, Loans or Letter of Credit interest hereunder, shall survive the
making of such assignment, notwithstanding that such assigning Lender may cease
to be a "Lender" hereunder.
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10.6 Successors and Assigns; Participation and Assignments.
(a) This Agreement shall be binding upon and inure to the benefit of the
Borrower, the Lenders, the Agents, all future holders of the Notes and their
respective successors and assigns, except that the Borrower may not assign or
transfer any of its rights or obligations under this Agreement without the
prior written consent of each Lender.
(b) Any Lender may, without the consent of the Borrower, in
the ordinary course of its business and in accordance with applicable law, at
any time sell to one or more banks or other entities (each, a "Participant")
participating interests in any Loan owing to such Lender, any Note held by such
Lender, any Commitment of such Lender or any other interest of such Lender
hereunder and under the other Loan Documents. In the event of any such sale by
a Lender of a participating interest to a Participant, such Lender's
obligations under this Agreement to the other parties to this Agreement shall
remain unchanged, such Lender shall remain solely responsible for the
performance thereof, such Lender shall remain the holder of any such Note for
all purposes under this Agreement and the other Loan Documents, and the
Borrower and the Administrative Agent shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents. In no event
shall any Participant under any such participation have any right to approve
any amendment or waiver of any provision of any Loan Document, or any consent
to any departure by any Loan Party therefrom, except to the extent that such
amendment, waiver or consent would reduce the principal of, or interest on, the
Notes or any fees payable hereunder, postpone the date of the final maturity of
the Notes, consent to the assignment or transfer by the Borrower of any of its
rights and obligations under this Agreement and the other Loan Documents,
release all or a substantial portion of the Collateral (other than in
connection with any sale or other disposition of assets permitted by Section
7.6) or any guarantee of the Obligations, in each case to the extent subject to
such participation. The Borrower agrees that if amounts outstanding under this
Agreement and the Notes are due or unpaid, or shall have been declared or shall
have become due and payable upon the occurrence of an Event of Default, each
Participant shall, to the maximum extent permitted by applicable law, be deemed
to have the right of setoff in respect of its participating interest in amounts
owing under this Agreement and any Note to the same extent as if the amount of
its participating interest were owing directly to it as a Lender under this
Agreement or any Note, provided that, in purchasing such participating
interest, such Participant shall be deemed to have agreed to share with the
Lenders the proceeds thereof as provided in Section 10.7(a) as fully as if it
were a Lender hereunder. The Borrower also agrees that each Participant shall
be entitled to the benefits of Sections 2.18, 2.19 and 2.20 with respect to its
participation in the Commitments and the Loans outstanding from time to time as
if it was a Lender; provided that, in the case of Section 2.19, such
Participant shall have complied with the requirements of said Section and
provided, further, that no Participant shall be entitled to receive any greater
amount pursuant to any such Section than the transferor Lender would have been
entitled to receive in respect of the amount of the participation transferred
by such transferor Lender to such Participant had no such transfer occurred.
(c) Any Lender may, in the ordinary course of its business and
in accordance with applicable law, at any time and from time to time assign to
any Lender or any affiliate thereof or any Person under common management with
any such Lender or, with the consent of the Borrower, the Administrative Agent
and, in the case of an assignment of Commitments, the Issuing Lender (which, in
each case, shall not be unreasonably withheld, delayed or conditioned), to an
additional bank, financial institution or other entity (an "Assignee") all or
any part of its rights and obligations under this Agreement, the Letters of
Credit and the Notes pursuant to an Assignment and Acceptance, substantially in
the form of Exhibit F, executed by such Assignee, such assigning Lender (and,
in the case of an Assignee that is not then a Lender or an affiliate thereof or
a Person under common management with such Lender, by
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the Borrower, the Administrative Agent and, in the case of an assignment of
Revolving Commitments, the Issuing Lender) and delivered to the Administrative
Agent for its acceptance and recording in the Register; provided that (except
with the consent of the Borrower and the Administrative Agent) (i) no such
assignment to an Assignee (other than any Lender or any affiliate thereof or
any Person under common management with such Lender) shall be in an aggregate
principal amount of less than $5,000,000 (other than in the case of an
assignment of all of a Lender's interests under this Agreement and the Notes)
and (ii) subsequent to any such assignment the assigning Lender shall not
retain an aggregate principal amount of less than $5,000,000 in Commitments and
Loans. Such assignment need not be ratable as among any Commitments and/or
Loans of the assigning Lender. Upon such execution, delivery, acceptance and
recording, from and after the effective date determined pursuant to such
Assignment and Acceptance, (x) the Assignee thereunder shall be a party hereto
and, to the extent provided in such Assignment and Acceptance, have the rights
and obligations of a Lender hereunder with a Commitment as set forth therein,
and (y) the assigning 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 assigning Lender shall cease to be a party hereto).
Notwithstanding any provision of this paragraph (c) and paragraph (e) of this
Section 10.6, the consent of the Borrower shall not be required for any
assignment which occurs at any time when any Event of Default shall have
occurred and be continuing.
(d) A Note and the Obligation(s) evidenced thereby may be
assigned or otherwise transferred in whole or in part only by registration of
such assignment or transfer of such Note and the Obligation(s) evidenced
thereby on the Register (and each Note shall expressly so provide). Any
assignment or transfer of all or part of such Obligation(s) and the Note(s)
evidencing the same shall be registered on the Register only upon surrender for
registration of assignment or transfer of the Note(s) evidencing such
Obligation(s), accompanied by an Assignment and Acceptance duly executed by the
holder of such Note(s), and thereupon one or more new Note(s) in the same
aggregate principal amount shall be issued to the designated Assignee(s) and
the old Notes(s) shall be returned by the Administrative Agent to the Borrower
marked "cancelled." No assignment of a Note and the Obligation(s) evidenced
thereby shall be effective unless it has been recorded in the Register as
provided in this Section 10.6(d).
(e) The Administrative Agent shall maintain at its address
referred to in Section 10.2 a copy of each Assignment and Acceptance delivered
to it and a register (the "Register") for the recordation of the names and
addresses of the Lenders and the Commitment of, and principal amount of the
Loans owing to, each Lender from time to time and the registered owners of the
Obligation(s) evidenced by the Note(s). The entries in the Register shall be
conclusive, in the absence of manifest error, and the Borrower, the
Administrative Agent and the Lenders shall treat each Person whose name is
recorded in the Register as the owner of the Loan or the Obligation evidenced
by a Note recorded therein for all purposes of this Agreement. The Register
shall be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(f) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an Assignee (and, in the case of an Assignee that is
not then a Lender or an affiliate thereof or a Person under common management
with such Lender, by the Borrower, the Administrative Agent and the Issuing
Lender) together with payment to the Administrative Agent of a registration and
processing fee of $3,500, the Administrative Agent shall (i) promptly accept
such Assignment and Acceptance and (ii) on the effective date determined
pursuant thereto record the information contained therein in the Register and
give notice of
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such acceptance and recordation to the Lenders and the Borrower. On or prior to
such effective date, the Borrower, at its own expense, upon request, shall
execute and deliver to the Administrative Agent (in exchange for the Note of
the assigning Lender) a new Note to the order of such Assignee in an amount
equal to the Commitment assumed by it pursuant to such Assignment and
Acceptance and, if the assigning Lender has retained a Commitment, upon request
a Note to the order of the assigning Lender in an amount equal to the
Commitment retained by it hereunder. Such new Notes shall be dated the Closing
Date and shall otherwise be in the form of the Note replaced thereby.
(g) The Borrower authorizes each Lender to disclose to any
Participant or Assignee (each, a "Transferee") and any prospective Transferee
any and all financial information in such Lender's possession concerning the
Borrower and its Affiliates which has been delivered to such Lender by or on
behalf of the Borrower pursuant to this Agreement or which has been delivered
to such Lender by or on behalf of the Borrower in connection with such Lender's
credit evaluation of the Borrower and its Affiliates prior to becoming a party
to this Agreement.
(h) Nothing herein shall prohibit or restrict any Lender from
(i) pledging or assigning any Note to any Federal Reserve Bank in accordance
with applicable law or (ii) with the prior consent of the Administrative Agent
and the Borrower (which, in each case, shall not be unreasonably withheld or
delayed or conditioned), pledging its rights in connection with any Loan or
Note to any other Person.
10.7 Adjustments; Set-off. (a) Except to the extent that this
Agreement expressly provides for payments to be allocated to a particular
Lender or to the Lender of a particular Facility, if any Lender (a "Benefitted
Lender") shall at any time receive any payment of all or part of its Loans or
the Reimbursement Obligations owing to it, or interest thereon, or receive any
collateral in respect thereof then due and owing to such Lender (whether
voluntarily or involuntarily, by set-off, pursuant to events or proceedings of
the nature referred to in Section 8(f), or otherwise), in a greater proportion
than any such payment to or collateral received by any other Lender, if any, in
respect of such other Lender's Loans or the Reimbursement Obligations then due
and owing to such other Lender, or interest thereon, such Benefitted Lender
shall purchase for cash from the other Lenders a participating (or, at the
option of such Lender, a direct) interest in such portion of each such other
Lender's Loan and/or of the Reimbursement Obligations owing to each such other
Lender, or shall provide such other Lenders with the benefits of any such
collateral, or the proceeds thereof, as shall be necessary to cause such
Benefitted Lender to share the excess payment or benefits of such collateral or
proceeds ratably with each of the Lenders; provided that if all or any portion
of such excess payment or benefits is thereafter recovered from such Benefitted
Lender, such purchase shall be rescinded, and the purchase price and benefits
returned, to the extent of such recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice to the
Borrower, any such notice being expressly waived by the Borrower to the extent
permitted by applicable law, upon any amount becoming due and payable by the
Borrower hereunder or under the Notes (whether at the stated maturity, by
acceleration or otherwise) to set off and appropriate and apply against such
amount any and all deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by such Lender or any branch or
agency thereof to or for the credit or the account of the Borrower. Each Lender
agrees promptly to notify the Borrower and the Administrative Agent after any
such setoff and application made by such Lender, provided that the failure to
give
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such notice shall not affect the validity of such setoff and application.
10.8 Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts
(including by telecopy), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. Delivery of an executed
signature page of this Agreement by facsimile transmission shall be effective
as delivery of a manually executed counterpart hereof. A set of the copies of
this Agreement signed by all the parties shall be lodged with the Borrower and
the Administrative Agent.
10.9 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.10 Integration. This Agreement and the other Loan Documents
represent the agreement of the Borrower, the Administrative Agent, the Arranger
and the Lenders with respect to the subject matter hereof, and there are no
promises, undertakings, representations or warranties by the Administrative
Agent, the Arranger or any Lender relative to subject matter hereof not
expressly set forth or referred to herein or in the other Loan Documents.
10.11 GOVERNING LAW. THIS AGREEMENT AND THE NOTES AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND THE NOTES SHALL
BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF
THE STATE OF NEW YORK.
10.12 Submission To Jurisdiction; Waivers. The Borrower hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which it
is a party, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the Courts of the State
of New York, the courts of the United States for the Southern District of New
York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to the
Borrower at its address set forth in Section 10.2 or at such other address of
which the Administrative Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this Section 10.12 any special, exemplary, punitive or
consequential damages.
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10.13 Acknowledgements. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents;
(b) neither any Agent nor any Lender has any fiduciary
relationship with or duty to the Borrower arising out of or in connection with
this Agreement or any of the other Loan Documents, and the relationship between
the Agents and Lenders, on one hand, and the Borrower, on the other hand, in
connection herewith or therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated hereby
among the Lenders or among the Borrower and the Lenders.
10.14 WAIVERS OF JURY TRIAL. THE BORROWER, THE AGENTS AND THE
LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND
FOR ANY COUNTERCLAIM THEREIN.
10.15 Confidentiality. Each of the Agents and each Lender
agrees to keep confidential all non-public information provided to it by any
Loan Party pursuant to this Agreement that is designated by such Loan Party as
confidential; provided that nothing herein shall prevent the Agents or any
Lender from disclosing any such information (a) to the Agents any other Lender
or any affiliate or investment advisor of any Lender, (b) to any Transferee or
prospective Transferee which agrees to comply with the provisions of this
Section 10.15, (c) to the employees, directors, agents, attorneys, accountants
and other professional advisors of such Lender or its affiliates, (d) upon the
request or demand of any Governmental Authority having jurisdiction over such
Agent or such Lender, (e) in response to any order of any court or other
Governmental Authority or as may otherwise be required pursuant to any
Requirement of Law, (f) if requested or required to do so in connection with
any litigation or similar proceeding, (g) which has been publicly disclosed
other than in breach of this Section 10.15 or (h) in connection with the
exercise of any remedy hereunder or under any other Loan Document.
10.16 Enforceability; Usury. In no event shall any provision
of this Agreement, the Notes, or any other instrument evidencing or securing
the indebtedness of the Borrower hereunder ever obligate the Borrower to pay or
allow any Lender to collect interest on the Notes or any other indebtedness of
the Borrower hereunder at a rate greater than the maximum non-usurious rate
permitted by applicable law (herein referred to as the "Highest Lawful Rate"),
or obligate the Borrower to pay any taxes, assessments, charges, insurance
premiums or other amounts to the extent that such payments, when added to the
interest payable on the Notes, would be held to constitute the payment by the
Borrower of interest at a rate greater than the Highest Lawful Rate; and this
provision shall control over any provision to the contrary.
Without limiting the generality of the foregoing, in the event
the maturity of all or any part of the principal amount of the indebtedness of
the Borrower hereunder shall be accelerated for any reason, then such principal
amount so accelerated shall be credited with any interest theretofore paid
thereon in advance and remaining unearned at the time of such acceleration. If,
pursuant to the terms of this Agreement or the Notes, any funds are applied to
the payment of any part of the principal amount of the indebtedness of the
Borrower hereunder prior to the maturity thereof, then (a) any interest which
would otherwise thereafter
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accrue on the principal amount so paid by such application shall be canceled,
and (b) the indebtedness of the Borrower hereunder remaining unpaid after such
application shall be credited with the amount of all interest, if any,
theretofore collected on the principal amount so paid by such application and
remaining unearned at the date of said application; and if the funds so applied
shall be sufficient to pay in full all the indebtedness of the Borrower
hereunder, then the Lenders shall refund to the Borrower all interest
theretofore paid thereon in advance and remaining unearned at the time of such
acceleration. Regardless of any other provision in this Agreement, or in any of
the written evidences of the indebtedness of the Borrower hereunder, the
Borrower shall never be required to pay any unearned interest on such
indebtedness or any portion thereof, and shall never be required to pay
interest thereon at a rate in excess of the Highest Lawful Rate construed by
courts having competent jurisdiction thereof.
10.17 Intercreditor Agreement. Each Lender by its signature
hereto or by its execution of an Assignment and Acceptance substantially in the
form of Exhibit F hereby authorizes and directs and ratifies the execution and
delivery by the Administrative Agent of the Intercreditor Agreement and each
Lender agrees to be bound by the provisions thereof and shall have the rights
and obligations of a Lender under the Intercreditor Agreement as provided
therein to the same extent as if such Lender was a party thereto.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
KEY ENERGY GROUP, INC..
By: /s/ Xxxxxxx X. XxXxxxxx
---------------------------------
Title: Executive Vice President
PNC BANK, NATIONAL ASSOCIATION
as Administrative Agent and as a Lender
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------
Title: Senior Vice President
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NORWEST BANK TEXAS, N.A.
as Collateral Agent and Issuing Lender
By: /s/ Xxxx X. XxXxxxxx
--------------------------------
Title: Senior Vice President
95
Schedule 1.1A
Commitments; Lending Offices and Addresses
Name of Lender and Revolving Tranche A Term Tranche B Term
Information for Notices Commitment Commitment Commitment
PNC BANK, $250,000,000 $150,000,000 $150,000,000
NATIONAL ASSOCIATION
One PNC Plaza,Third Floor
000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Xx. Xxxxxx Xxxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
96
Schedule 1.1B
Mortgaged Property
97
Schedule 1.1C
Oil and Gas Properties Mortgaged
98
Schedule 3.1
Existing Letters of Credit
Account Party Issuer Amount Number Beneficiary
99
Schedule 4.4
Consents
100
Schedule 4.8
Other Real Property Interests
101
Schedule 4.15
Subsidiaries
102
Schedule 4.19(b)
UCC Filing Jurisdictions
103
Schedule 4.19(c)
Mortgage Filing Jurisdictions
104
Schedule 4.19(d)
Oil and Gas Mortgage Filing Jurisdictions
105
Schedule 6.11(e)
Mortgaged Properties to be Covered by Environmental Reports
106
Schedule 7.2
Existing Indebtedness
107
Schedule 7.3
Existing Liens
108
Schedule 7.9(C)
Additional Permitted Acquisitions
109
ANNEX I
PRICING GRID A
=================================================================================================================================
REVOLVING LOANS
=================================================================================================================================
Level Consolidated Leverage Applicable Margin for Loans Applicable Margin for Loans Commitment Fee Rate
Ratio which are Eurodollar Loans which are Base Rate Loans
---------------------------------------------------------------------------------------------------------------------------------
I less than or equal to 3.0 1.50 0.00 0.25
to 1.0
---------------------------------------------------------------------------------------------------------------------------------
II greater than 3.0 to 1.0 1.75 0.25 0.375
but less than or equal to
3.5 to 1.0
---------------------------------------------------------------------------------------------------------------------------------
III greater than 3.5 to 1.0 2.00 0.50 0.375
but less than or equal to
4.0 to 1.0
---------------------------------------------------------------------------------------------------------------------------------
IV greater than 4.0 to 1.0 2.25 0.75 0.50
but less than or equal to
4.5 to 1.0
---------------------------------------------------------------------------------------------------------------------------------
V greater than 4.5 to 1.0 2.50 1.00 0.50
but less than or equal to
5.0 to 1.0
---------------------------------------------------------------------------------------------------------------------------------
VI greater than 5.0 to 1.0 2.75 1.25 0.50
=================================================================================================================================
=================================================================================================================================
TRANCHE A TERM LOANS
=================================================================================================================================
Level Consolidated Leverage Applicable Margin for Loans Applicable Margin for Loans Commitment Fee Rate
Ratio which are Eurodollar Loans which are Base Rate Loans
---------------------------------------------------------------------------------------------------------------------------------
I less than or equal to 3.0 1.50 0.00 0.25
to 1.0
---------------------------------------------------------------------------------------------------------------------------------
II greater than 3.0 to 1.0 1.75 0.25 0.375
but less than or equal to
3.5 to 1.0
---------------------------------------------------------------------------------------------------------------------------------
III greater than 3.5 to 1.0 2.00 0.50 0.375
but less thank or equal
to 4.0 to 1.0
---------------------------------------------------------------------------------------------------------------------------------
IV greater than 4.0 to 1.0 2.25 0.75 0.50
but less than or equal to
4.5 to 1.0
---------------------------------------------------------------------------------------------------------------------------------
V greater than 4.5 to 1.0 2.50 1.00 0.50
but less than or equal to
5.0 to 1.0
---------------------------------------------------------------------------------------------------------------------------------
VI greater than 5.0 to 1.0 2.75 1.25 0.50
=================================================================================================================================
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2
==============================================================================================================================
TRANCHE B TERM LOANS
==============================================================================================================================
Level Consolidated Leverage Applicable Margin for Loans Applicable Margin for Loans Commitment Fee Rate
Ratio which are Eurodollar Loans which are Base Rate Loans
------------------------------------------------------------------------------------------------------------------------------
I less than or equal to 3.25 1.75 0.25
3.0 to 1.0
------------------------------------------------------------------------------------------------------------------------------
II greater than 3.0 to 1.0 3.25 1.75 0.375
but less than or equal
to 3.5 to 1.0
------------------------------------------------------------------------------------------------------------------------------
III greater than 3.5 to 1.0 3.25 1.75 0.375
but less thank or equal
to 4.0 to 1.0
------------------------------------------------------------------------------------------------------------------------------
IV greater than 4.0 to 1.0 3.25 1.75 0.50
but less than or equal
to 4.5 to 1.0
------------------------------------------------------------------------------------------------------------------------------
V greater than 4.5 to 1.0 3.25 1.75 0.50
but less than or equal
to 5.0 to 1.0
------------------------------------------------------------------------------------------------------------------------------
VI greater than > 5.0 to 3.25 1.75 0.50
1.0
==============================================================================================================================
111
ANNEX II
PRICING GRID B
==============================================================================================================================
REVOLVING LOANS
==============================================================================================================================
Level Consolidated Leverage Applicable Margin for Loans Applicable Margin for Loans Commitment Fee Rate
Ratio which are Eurodollar Loans which are Base Rate Loans
------------------------------------------------------------------------------------------------------------------------------
I less than or equal to 2.5 1.00 0.00 0.20
to 1.0
------------------------------------------------------------------------------------------------------------------------------
II greater than 2.5 to 1.0 1.25 0.00 0.25
but less than or equal to
3.0 to 1.0
------------------------------------------------------------------------------------------------------------------------------
III greater than 3.0 to 1.0 1.50 0.00 0.30
but less than or equal to
3.5 to 1.0
------------------------------------------------------------------------------------------------------------------------------
IV greater than 3.5 to 1.0 1.75 0.25 0.35
but less than or equal to
4.0 to 1.0
------------------------------------------------------------------------------------------------------------------------------
V greater than 4.0 to 1.0 2.00 0.50 0.40
but less than or equal to
4.5 to 1.0
------------------------------------------------------------------------------------------------------------------------------
VI greater than 4.5 to 1.0 2.25 0.75 0.50
==============================================================================================================================
==============================================================================================================================
TRANCHE A TERM LOANS
==============================================================================================================================
Level Consolidated Leverage Applicable Margin for Loans Applicable Margin for Loans Commitment Fee Rate
Ratio which are Eurodollar Loans which are Base Rate Loans
------------------------------------------------------------------------------------------------------------------------------
I equal to or lesser than 1.00 0.00 0.20
2.5 to 1.0
------------------------------------------------------------------------------------------------------------------------------
II greater than 2.5 to 1.0 1.25 0.00 0.25
but less than or equal to
3.0 to 1.0
------------------------------------------------------------------------------------------------------------------------------
III greater than 3.0 to 1.0 1.50 0.00 0.30
but less than or equal to
3.5 to 1.0
------------------------------------------------------------------------------------------------------------------------------
IV greater than 3.5 to 1.0 1.75 0.25 0.35
but less than or equal to
4.0 to 1.0
------------------------------------------------------------------------------------------------------------------------------
V greater than 4.0 to 1.0 2.00 0.50 0.40
but less than or equal to
4.5 to 1.0
------------------------------------------------------------------------------------------------------------------------------
VI greater than 4.5 to 1.0 2.25 0.75 0.50
==============================================================================================================================
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2
==============================================================================================================================
TRANCHE B TERM LOANS
==============================================================================================================================
Level Consolidated Leverage Applicable Margin for Loans Applicable Margin for Loans Commitment Fee Rate
Ratio which are Eurodollar Loans which are Base Rate Loans
------------------------------------------------------------------------------------------------------------------------------
I less than or equal to 2.75 1.25 0.20
2.5 to 1.0
------------------------------------------------------------------------------------------------------------------------------
II greater than 2.5 to 1.0 2.75 1.25 0.25
but less than or equal
to 3.0 to 1.0
------------------------------------------------------------------------------------------------------------------------------
III greater than 3.0 to 1.0 2.75 1.25 0.30
but less than or equal
to 3.5 to 1.0
------------------------------------------------------------------------------------------------------------------------------
IV greater than 3.5 to 1.0 2.75 1.25 0.35
but less than or equal
to 4.0 to 1.0
------------------------------------------------------------------------------------------------------------------------------
V greater than 4.0 to 1.0 2.75 1.25 0.40
but less than or equal
to 4.5 to 1.0
------------------------------------------------------------------------------------------------------------------------------
VI greater than 4.5 to 1.0 2.75 1.25 0.50
==============================================================================================================================
